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Battered Crypto Hedge Fund Three Arrows Capital Considers Asset Sales, Bailout

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Re: Battered Crypto Hedge Fund Three Arrows Capital Considers Asset Sales, Bailout

#101

Post by shuntress »

yata69420 wrote: post #87
shuntress wrote: post #74

Earlier quoted context omitted.

Sure. Speculation certainly will continue and real money will continue to change hands. But are we at least done pretending that crypto currency (at least, as it exists now) will ever have any practical purpose beyond being a fungible entity upon which gamblers speculate?

> But are we at least done pretending that crypto currency (at least, as it exists now) will ever have any practical purpose beyond being a fungible entity upon which gamblers speculate? No, I don't think that's happened yet. I still know tons of people excited to build for "web3". I don't think we need "rich" websites with javascript, "smart" phones in everyone's pocket, or "social media" at all. But those all happe…

It's difficult to get a clear picture of what exactly people think "web3" is. My general experience is that people who are caught up in web3 hype seem to actually just want simpler self-hosted/distributed resource redundancy.

Re: Battered Crypto Hedge Fund Three Arrows Capital Considers Asset Sales, Bailout

#102

Post by CapmCrackaWaka »

shuntress wrote: post #92
CapmCrackaWaka wrote: post #78

Earlier quoted context omitted.

The physicality of an underlying asset isn’t what makes people trade stocks, commodities, options or anything else. If you’re day trading soybean futures, it’s not the ideal of soybeans that wakes you up in the morning. It’s the money you could make. Bitcoin is a unique speculative asset because it’s value is based entirely on human interest, nothing else. I think crypto is here to stay as a speculative asset class.…

Soybeans exist and people consume them. Obviously you can speculate on whether the price of soy beans will go up or down but they will always (excluding, of course, obviously unreasonable scenarios) have some value because the soybeans themselves have some value. The producers and consumers of soybeans are extremely likely to continue producing and consuming soybeans even if no one speculates on the value of soybeans…

All kinds of speculative assets exist solely to hedge and make money on. The algorithmic traders on Wall Street aren’t trading soybeans futures because they can eat them. They’re making money. If people see price fluctuations in anything, and I mean literally anything, there will be people trying to capture those alphas.

I should also point out I’m not bullish on crypto. I just acknowledge it’s unique asset class, and I don’t think it’ll just disappear.

Re: Battered Crypto Hedge Fund Three Arrows Capital Considers Asset Sales, Bailout

#103

Post by DebtDeflation »

code4life wrote: post #99
DebtDeflation wrote: post #56

Earlier quoted context omitted.

>$5,000 BTC and $200 ETH are in site if Tether starts to fail. IMO, pre-2017 prices for BTC (<$1000) returning is inevitable. If Tether fails, then pre-2014 prices (<$100) are more likely. BTC was at $5K a little over 2 years ago, anyone who thinks the bottom is at that level is deluding themselves.

You could be a millionaire if you are right.

You can be right and still go broke shorting something. "The market can stay irrational longer than you can stay solvent." And shorting crypto has additional challenges beyond shorting traditional securities.

Re: Battered Crypto Hedge Fund Three Arrows Capital Considers Asset Sales, Bailout

#104

Post by arcticbull »

abiro wrote: post #52
chollida1 wrote: post #2

The crypto community continues to speed run the history of traditional finance. This weeks lesson is that in an up market its leverage that makes you money and in a down market its the unwinding of leverage that kills you. They are also learning that interconnectedness will hurt more in a downturn. You can be perfectly delta hedged( don't care which way the market moves) and its the counter party risk that will sink…

> Tehter has lent money to almost all these firms Do you have a source for this?

Yep the Tether Papers from Protos. [1] On-chain analysis which accounts for 70% of all Tether issuances.

[1] https://protos.com/tether-papers-crypto-stablecoin-usdt-inve...

Re: Battered Crypto Hedge Fund Three Arrows Capital Considers Asset Sales, Bailout

#105

Post by shuntress »

CapmCrackaWaka wrote: post #102
shuntress wrote: post #92

Earlier quoted context omitted.

Soybeans exist and people consume them. Obviously you can speculate on whether the price of soy beans will go up or down but they will always (excluding, of course, obviously unreasonable scenarios) have some value because the soybeans themselves have some value. The producers and consumers of soybeans are extremely likely to continue producing and consuming soybeans even if no one speculates on the value of soybeans…

All kinds of speculative assets exist solely to hedge and make money on. The algorithmic traders on Wall Street aren’t trading soybeans futures because they can eat them. They’re making money. If people see price fluctuations in anything, and I mean literally anything, there will be people trying to capture those alphas. I should also point out I’m not bullish on crypto. I just acknowledge it’s unique asset class, an…

I understand that speculative trading exists.

I'm saying people will continue to speculate on soybeans because they will always have some value.

With a purely speculative asset, the market will eventually run out of "bigger fools". At that point, any speculative trader will look at the asset and say "Why would I pay more for this than the 0 dollars it is worth?"

Re: Battered Crypto Hedge Fund Three Arrows Capital Considers Asset Sales, Bailout

#106

Post by pcthrowaway »

blitzar wrote: post #42
djbebs wrote: post #16

Earlier quoted context omitted.

That no different from any margin loan

It is no different at all. However, in traditional finance that is called a "margin loan" in defi it is called a "crypto interest account paying 20% with 0 chance of losing all your money"

Who in their right mind would say that a collateralized borrow has 0 chance of losing money? That's the whole point of requiring collateral

Re: Battered Crypto Hedge Fund Three Arrows Capital Considers Asset Sales, Bailout

#107

Post by FabHK »

DebtDeflation wrote: post #57
joosters wrote: post #24

Earlier quoted context omitted.

As per Matt Levine: ... The way the traditional system works is that if you have a margin loan, and the value of your collateral declines, your broker calls you up and says “hey we need more collateral,” and you either post more collateral and it’s fine, or you don’t post more collateral and your broker liquidates your position. Or sometimes you say something like “hang on I’ve got another call, I’ll call you back af…

For every seller, there must be a buyer. With a defi "code is law" approach, if every contract automatically tries to execute a sell at the same time, the price will fall until there are enough matching buyers, and if there still aren't enough buyers when BTC hits $0.0000001 then the sell orders will just not execute. Smart contracts do not eliminate the problem of liquidity risk, they merely assume it away.

Yes. It seems not appreciated by some that price need not move continuously, but it can jump, and it can also go to zero (or if it cannot: no buyer can be found at the smallest possible positive price).

Re: Battered Crypto Hedge Fund Three Arrows Capital Considers Asset Sales, Bailout

#108

Post by ryan93 »

chollida1 wrote: post #2

The crypto community continues to speed run the history of traditional finance. This weeks lesson is that in an up market its leverage that makes you money and in a down market its the unwinding of leverage that kills you. They are also learning that interconnectedness will hurt more in a downturn. You can be perfectly delta hedged( don't care which way the market moves) and its the counter party risk that will sink…

Congratulations you are the 1 millionth person on Hacker News to say "speed run the history of traditional finance"

Re: Battered Crypto Hedge Fund Three Arrows Capital Considers Asset Sales, Bailout

#109

Post by vishnugupta »

drexlspivey wrote: post #98
vishnugupta wrote: post #80

Earlier quoted context omitted.

Take increasing risks in search for higher yield? Check Leveraged trading to ratchet up profits? Check Margin called when the risky bet doesn't pay off? Check Counter party risk? Check Contagion + domino effect? Check Fire sale of decent quality assets putting down pressure on its prices thus hurting the whole ecosystem? Check

What's the counterparty risk?

A bunch of crypto fintechs had lent to 3AC are in a spot of bother.

https://www.ft.com/content/126d8b02-f06a-4fd9-a57b-9f4ceab3d...

Re: Battered Crypto Hedge Fund Three Arrows Capital Considers Asset Sales, Bailout

#110

Post by chollida1 »

ryan93 wrote: post #108
chollida1 wrote: post #2

The crypto community continues to speed run the history of traditional finance. This weeks lesson is that in an up market its leverage that makes you money and in a down market its the unwinding of leverage that kills you. They are also learning that interconnectedness will hurt more in a downturn. You can be perfectly delta hedged( don't care which way the market moves) and its the counter party risk that will sink…

Congratulations you are the 1 millionth person on Hacker News to say "speed run the history of traditional finance"

Umm, thanks?
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