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Celsius Appears insolvent, and it's taking the whole crypto market with it

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Re: Celsius Appears insolvent, and it's taking the whole crypto market with it

#61

Post by ogogmad »

dave_sullivan wrote: post #49
arka2147483647 wrote: post #46

Earlier quoted context omitted.

Real markets, or the companies within, make something that people need. They have equipment, customers, etc. Maybe they are important enough that the state has to bail them out. Maybe they get restructured or merged. Anyways, there is some kind of floor to which they can fall, and which will catch them. What kind of "floor" is there for crypto? By definition it is not tied to anything non digital? Right?

A company can go out of business and cease to function. What would cause the Bitcoin network to cease to function? There will always be a market price and it will fluctuate. But the end of Bitcoin? Would be like the end of BitTorrent, not gonna happen.

[EDIT: Made my argument clearer.]

Not a finance expert, but I disagree with what you're saying:

There's a feedback loop between:

1. The price of BTC, which depends on people's willingness to mine it (without which, BTC doesn't have security).

2. The willingness to mine BTC, which depends on the price. Why would you mine BTC if you're not sure whether you'll be able to sell it for more than you mined it for?

A decline in 1 can trigger a decline in 2, which can trigger a decline in 1, which can trigger a decline in 2.

BTC can have an end. Oh, and BTC is not like BitTorrent.

Re: Celsius Appears insolvent, and it's taking the whole crypto market with it

#62

Post by qayxc »

dave_sullivan wrote: post #48
suzzer99 wrote: post #8

Earlier quoted context omitted.

Except the real financial markets have a bottom where contrarian investors will step in and stop the free fall. What tangible value is there for a contrarian investor in crypto?

"Historical upside potential". If it crashes 90% and then goes back to 30% of its peak a couple years later, pundits will declare bitcoin collapsed, but the people that bought around the bottom will make out like bandits. I dont see many failure modes for crypto itself. The exchanges and all the speculative bullshit built around it are a big problem, but the network itself will survive and there is a price where peop…

> I say this as someone that bought my first bitcoin at $5 and sold my last one for $4500. I left a lot on the table.

It's called gambling and you should consider yourself lucky. Very, very lucky. You basically whine about 90000% ROI when it could've been 900000%. Let that sink in for a moment.

Consider this: many small-scale investors entered the market right at, or very near recent peaks. What would someone say who bought in a year ago for like $50k, not $5? They'd be down over 50% at the moment and there's simply no guarantee the market will recover to the $60k+ levels seen in October and November last year.

Add on top of that people who invested by means of putting their life savings (again, not as uncommon as you might think) into shady operations like Celsius due to their dubious claims of %10 annual returns. They're completely screwed if things go sideways and Celsius closes its doors.

Re: Celsius Appears insolvent, and it's taking the whole crypto market with it

#63

Post by thetis »

cm2187 wrote: post #39
jazzyjackson wrote: post #4

My favorite part of this is that because their reserves are illiquid, Celsius is forced to take out loans from other exchanges in order to pay out withdrawals. Each of these transactions/bailouts was visible on the blockchain and immediately called out on Twitter, accelerating withdrawals. A run on the exchange. If one major exchange goes bust and people learn that they have no recourse to recover funds, expect to se…

It is so amusing to see crypto redoing 100 years of financial scandals at accelerated pace: mass money laundering, ponzi schemes, non separation of client and firm money by brokers, market manipulation, inability to sustain a “bank”run, misleading marketing material sold to retail investors. This is something fascinating for a finance professional. The paradox being that crypto is proving the benefits of heavy financ…

and don't forget the "i lost my bitcoin password so i lost all my assets" and "my hard drive has been destroyed so i lost all my bitcoins"

All those stories were solved across 120y of crisis and financials regulations. Not all of course, but finance, as a basis of the XXI century economy is far more robust that it was

Re: Celsius Appears insolvent, and it's taking the whole crypto market with it

#64

Post by willcipriano »

thematrixturtle wrote: post #52
sph wrote: post #50

Earlier quoted context omitted.

WTF is the Dramaverse? My search engine isn't helping.

https://www.reddit.com/r/SubredditDrama/comments/vbhb9v/conc...

So this is how Reddit manufactures consent, fun.

Re: Celsius Appears insolvent, and it's taking the whole crypto market with it

#65

Post by hoseja »

thetis wrote: post #63
cm2187 wrote: post #39

Earlier quoted context omitted.

It is so amusing to see crypto redoing 100 years of financial scandals at accelerated pace: mass money laundering, ponzi schemes, non separation of client and firm money by brokers, market manipulation, inability to sustain a “bank”run, misleading marketing material sold to retail investors. This is something fascinating for a finance professional. The paradox being that crypto is proving the benefits of heavy financ…

and don't forget the "i lost my bitcoin password so i lost all my assets" and "my hard drive has been destroyed so i lost all my bitcoins" All those stories were solved across 120y of crisis and financials regulations. Not all of course, but finance, as a basis of the XXI century economy is far more robust that it was

Solved mostly by applying monopolized violence.

Re: Celsius Appears insolvent, and it's taking the whole crypto market with it

#67

Post by zebogen »

tarsinge wrote: post #58

Regarding the investment part (not the marketing or insurances obv.) how is that different from what an investment bank does when it invest in long term products? If the funds are in e.g. long term bonds, real estate, mortgages... the investors can't get back all of their money all at once, it will take years to mature, also the capital they are required to hold are only a few percent, so they are also technically in…

I think it is similar in that it is possible for a fund to become insolvent, but consumers are protected by the Investment Company Act of 1940. This requires the companies that run mutual funds to rely on a custodian bank to hold their assets. This way, if the fund does go bankrupt, the company operating it cannot access them to ensure that investors are paid out instead of being rug pulled. It limits the amount of leverage the fund can have, requires them to maintain a cash buffer, and required them to report regularly on their financial condition.

Fraud is still possible, of course, but consumers have WAY more protections with fiat investments.

https://www.sec.gov/investment/laws-and-rules

Re: Celsius Appears insolvent, and it's taking the whole crypto market with it

#68

Post by janmo »

dkrich wrote: post #47

They were assuring customers of their stability, let’s see, six days ago: https://blog.celsius.network/damn-the-torpedoes-full-speed-a... Surely there are going to be criminal charges forthcoming. Doing everything they can to prevent people withdrawing up to and including blatantly lying. If history is any guide this isn’t close to over yet.

One day before the halting of the withdrawals the CEO of Celsius was bragging that they were "winning". https://twitter.com/ClarityToast/status/1536185339643105280

Re: Celsius Appears insolvent, and it's taking the whole crypto market with it

#69

Post by janmo »

I had been warning about Celsius for months, in fact I even published this blog post last year: https://rorodi.substack.com/p/the-biggest-crypto-lending-com...

Also posted it here on HN but it did not get much traction. What really baffles me is that major VCs have put hundreds of millions into what pretty much every one who has watched one or two episodes of "American Greed", would immediately recognise as being a ponzi scheme.

I e-mailed the regulators, the VCs etc... They did nothing, and now it is too late.

Re: Celsius Appears insolvent, and it's taking the whole crypto market with it

#70

Post by Tostino »

nicbou wrote: post #56
SrslyJosh wrote: post #40

Earlier quoted context omitted.

A currency is only useful if you can actually buy things you need with it, and that means (among other things) you need its value to be relatively stable. Everyone (or almost everyone) pushing cryptocurrency is, in one way or another, a speculator, so their incentives are not aligned at all with people who might actually want to use it as a currency.

Even if you could do that, the barriers are insane compared to cash and cards. Just the security practices required to avoid fraud are absurd, but since scammers can irreversibly empty your wallet, they're required. There's no credit card company to call, no fraud detection, no withdrawal limits, no way to lock your stolen card. The same applies to personal information. Lose your key, lose your money. It requires the…

Few inside are capable of it for years on end without a mistake.
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