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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

#71

Post by CaptainZapp »

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 the major difference is that such investments are usually in substantial assets.

Something that definitely can't be said of some of those fantasy funny coins.

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

#72

Post by epmatsw »

janmo wrote: post #69

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 p…

Seems like the common thread in these failures is outsized “guaranteed” returns. Are there other large systems or companies still paying out double digit rates now?

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

#73

Post by leobg »

janmo wrote: post #69

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 p…

Good work!

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

#74

Post by UncleMeat »

datalopers wrote: post #7

The crypto market is crashing for the same reason real financial markets are crashing. The problems with Celsius are an irrelevant blip.

I was told that btc was a store of value. If it is strongly correlated with the broad market… what does it achieve?

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

#75

Post by MrMan »

hoseja wrote: post #65
thetis wrote: post #63

Earlier quoted context omitted.

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.

not sure I want to live in a world where violence is evenly distributed, look at the US right now. that is still only a small number of shootings a day. imagine when there is no monopoly on violence, you won't be able to do anything but join a militia or work as a slave to a local militia

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

#76

Post by janmo »

epmatsw wrote: post #72
janmo wrote: post #69

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 p…

Seems like the common thread in these failures is outsized “guaranteed” returns. Are there other large systems or companies still paying out double digit rates now?

Yes: Bitfinex, Crypto.com. Nexo, BlockFi, Ledn.

I predict that they will all eventually collapse. It is a bit delayed with them because there is a locking period for most of them, this means that they will be in trouble in the coming days/weeks as they will have to honour massive withdrawals.

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

#77

Post by MrMan »

UncleMeat wrote: post #74
datalopers wrote: post #7

The crypto market is crashing for the same reason real financial markets are crashing. The problems with Celsius are an irrelevant blip.

I was told that btc was a store of value. If it is strongly correlated with the broad market… what does it achieve?

high beta ! and no laws

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

#78

Post by ethanbond »

hoseja wrote: post #65
thetis wrote: post #63

Earlier quoted context omitted.

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.

Uh, yeah. Why do people act like this is a bad thing?

I’m a big fan of the fact that when someone is pissed off at me they’re not allowed to just punch me in the face. I’m also a big fan of the fact that someone CAN metaphorically punch me in the face if I manage to piss off a whole slew of people, elected by and comprised of my compatriots, with various systems designed to mitigate emotionality and unfairness.

Duh this is a strictly good thing, when paired with democracy.

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

#79

Post by hoseja »

MrMan wrote: post #75
hoseja wrote: post #65

Earlier quoted context omitted.

Solved mostly by applying monopolized violence.

not sure I want to live in a world where violence is evenly distributed, look at the US right now. that is still only a small number of shootings a day. imagine when there is no monopoly on violence, you won't be able to do anything but join a militia or work as a slave to a local militia

I'm just pointing out those "120 years of evolution" are not about some clever solutions but the state forcibly preventing hustlers from parting fools and their money so the legitimacy of state parting everyone and their money isn't questioned.

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

#80

Post by pa7x1 »

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…

We are also experiencing record-levels of inflation due to Central Bank monetary policies, which have led to massive asset bubbles and wealth inequality due to Cantillon effect of said policies. So it's hard to think the status quo is working as intended. Cryptocurrencies are antithetical to centralized monetary policy not regulation.

Regulation can exist and probably will exist, there are some proposals currently on the table. There is currently no regulation because regulators are laggards, not because it's contrary in spirit to cryptocurrencies.

Fraud is not an intrinsic characteristic to cryptocurrencies, it's an intrinsic characteristic to human nature. Regulation simply provides tools to fight fraud, either by making it more difficult to execute or by establishing discouraging penalties.

That the alternative monetary policy proposed by cryptocurrencies is better than the status-quo is still to be seen.

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