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TerraUSD crash led to vanished savings, shattered dreams

wsj.com

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Re: TerraUSD crash led to vanished savings, shattered dreams

#31

Post by jmyeet »

I occasionally get asked by relatives and friends of what to invest in. Now I'm no expert but I guess in the valley of the blind the one-eyed man is king.

Thing is what I tell them seems to bore them because, well, it's boring. My advice is basically this:

Put your money in a broad index fund and don't look at it for 10 years.

In giving this advice you start to realize it's not what people want to hear. It's not that they want to get rich quick. They just want to make a lot of money really fast. It's completely different.

Crypto-skeptics such as myself could clearly see that the vast majority of Crypto Andys were motivated by nothing more than greed. There's no fundamental belief in blockchain technology. There's no correcting the (alleged) fundamental flaws in the traditional financial system. In fact, there's an awful lot of ignorance of why the financial system is the way it is and little motivation to learn (IME). It's just greed.

So when I see these people get wiped out, I feel bad because that must suck and it's probably not the right time to say "I told you so" (or even "I informed you thusly") but I hope at some point people take ownership for their foolish decisions and do better next time.

Re: TerraUSD crash led to vanished savings, shattered dreams

#32

Post by unmole »

ntoskrnl wrote: post #5

> TerraUSD was touted as a blue-chip cryptocurrency. Let me stop you right there. Terra was a barely 2 year old shitcoin. I don't think you know what "blue-chip" means.

The term blue-chip originates from gambling. I think it's perfectly fine to use it in the context of cryptocurrencies.

Re: TerraUSD crash led to vanished savings, shattered dreams

#33

Post by twoodfin »

toomuchtodo wrote: post #26
twoodfin wrote: post #21

Earlier quoted context omitted.

If you’re getting 15% returns you better realize you’re exposed to something !

In my experience in interfacing with unsophisticated investors, they aren’t aware of the risk. Should they do more due diligence? Likely. Should there be regulation to protect the unsophisticated? Also likely. Speedrunning securities regulations, as one does.

Agree that if we’re going to have regulations to protect unsophisticated investors from obscured risk, these nonsense “yield farming” ventures should be at the top of the list.

Re: TerraUSD crash led to vanished savings, shattered dreams

#35

Post by dubswithus »

hug wrote: post #23
sumy23 wrote: post #10

Earlier quoted context omitted.

People are so smug when they say “I told you so.” It really bothers me. On every negative story about crypto, so many people comment “hur dur financial regulation dur”. But that’s so easy to say after the fact. If these people really could foresee these events happening, then they could have made a lot of money by taking short positions. That would be a lot more impressive to me than taking cheap opportunities to fee…

It is the opposite of impressive, to me: Crypto is deeply troubled and unethical, but betting against it by shorting the market and gleefully taking advantage of someone losing their shirt is worse . Basically if I can lose your respect by not fucking people over, I don't want your respect. How's that for conviction?

Not really. It’s more likely experienced players in the market liquidate your position in times of great volatility.

Yes, there are good traders out there. But it doesn’t appear that the ones that short are anti-crypto.

Re: TerraUSD crash led to vanished savings, shattered dreams

#37

Post by dustyharddrive »

ceeplusplus wrote: post #12
Animats wrote: post #7

Oh, no. They had feeder funds. Stablegain [1] was feeding money into them: You can now earn up to 15% APY interest on your cash with Stablegains. This is 30x higher than in your traditional bank. You can deposit and withdraw using your preferred methods (ACH, wire transfer, USDC) with the help of our partner Circle. There are no long-term lock-up periods. Earn passive income every day We take care of all technical as…

The biggest scam Stablegains pulled was to advertise taking USDC (most trusted stablecoin, backed by real, audited reserves), as to imply they were providing USDC lending yield, when in reality they converted your money to UST funny money.

It’s worth mentioning USDC (Circle) reserves have never been audited, and they don’t even claim to hold dollars anymore (https://archive.today/2021.07.12-223553/https://www.ft.com/c...):

> Until March 2020, the attestations said USDC was backed by dollars, held in government-backed US depository institutions. After that, they said the reserves were held at institutions and in “approved investments”, but did not give precise details about what those investments were. By June, it changed the wording on its website from “backed by US dollars” to “backed by fully reserved assets”.

Re: TerraUSD crash led to vanished savings, shattered dreams

#39

Post by phailhaus »

sumy23 wrote: post #17
phailhaus wrote: post #15

Earlier quoted context omitted.

Short positions: * Have unlimited downside * Are more difficult to get your hands on It's not really reasonable to expect everyone bearish on crypto to also take uncapped risks.

You can buy short options that have capped downside.

Good point

Re: TerraUSD crash led to vanished savings, shattered dreams

#40

Post by joshjdr »

dubswithus wrote: post #29
jrmg wrote: post #19

Earlier quoted context omitted.

That assumes you are able to hold a short position for the indefinitely long irrational period in which the bubble can grow unpredictably large and your gains increasingly negative. It’s therefore also irrational to take a short position. The sensible thing to do was to stay away - and I think it’s perfectly fine for people who did so to smugly say ‘I told you so,’ presuming they did indeed do that.

Surely if you believe crypto is coming to an end in the next few years there is some way to profit.

Not buying and keeping your currency elsewhere may just be a totally reasonable alternative.
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