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Peter Thiel-Backed Crypto Lender Vauld Suspends Withdrawals

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Re: Peter Thiel-Backed Crypto Lender Vauld Suspends Withdrawals

#41

Post by zeptonix »

gruez wrote: post #34
JumpCrisscross wrote: post #30

Earlier quoted context omitted.

> this bank has no FDIC insurance, no backstop, nothing This was partly true in the S&L crisis [1]. And for depositors in e.g. Cyprus or Iceland in '08. The difference, however, was depositors in S&Ls and Cypriot and Icelandic banks were legally depositors. The banks' assets were insufficiently liquid to accommodate them en masse . But those assets had value. And that value went, almost first and foremost, to the dep…

>(Given Coinbase's debt trades comparably to Russia's [2], the smart money is betting users will get nothing in a failure.) The intention of your comment is to paint coinbase debt as worthless, but after doing some research I came to a different conclusion: that russian debt isn't as worthless as I thought. Right now 10 year russian bond yields are at 9.15%[1], which is only a little over 6 percentage points above th…

PSA that the (severely underreported) inflation is ~8%, so both these yields are meaningless in real terms.

Re: Peter Thiel-Backed Crypto Lender Vauld Suspends Withdrawals

#42

Post by JumpCrisscross »

andsoitis wrote: post #33
JumpCrisscross wrote: post #26

Earlier quoted context omitted.

> Real estate is an outlier in your examples due to there being limited supply and people need shelter People need lots of things. The principal constraints on real estate are political. (The entire concept of real estate is a social construct.) Not physical space.

> People need lots of things. The principal constraints on real estate are political. (The entire concept of real estate is a social construct.) Not physical space. Even if (the amount of) physical space isn't one of the main constraints on real estate, any particular location may be more desirable relative to others, e.g. a gorgeous view, away from factories or highways.

> any particular location may be more desirable relative to others, e.g. a gorgeous view, away from factories or highways

It's politics, usually, keeping the factories and highways away. More fundamentally, the notion that a piece of paper (the deed) gives you certain rights (but not others) over some land is totally made up.

Re: Peter Thiel-Backed Crypto Lender Vauld Suspends Withdrawals

#44

Post by SilasX »

Barrera wrote: post #3

> A cryptocurrency lender backed by Peter Thiel and Coinbase Global Inc. suspended withdrawals, trading and deposits on its platform, citing volatile market conditions and financial difficulties facing key business partners. > The platform, Vauld, said Monday that it froze the operations after users pulled almost $200 million over the last three weeks. A sharp decline in cryptocurrency prices that began with the coll…

>When you're facing massive capital gains taxes, and have an inkling that those gains will turn to losses, the idea of lending out the asset, spending the cash without incurring tax, then getting the asset back starts to look attractive.

The better strategy (and the one used by the super rich) would be to borrow against the asset, as the loan isn't taxed. And if the lender's only recourse is your collateral, then you're insured against the cryptocurrency's collapse.

With the strategy you've described, you're still keeping a long position in the cryptocurrency, and have increased its volatility.

Re: Peter Thiel-Backed Crypto Lender Vauld Suspends Withdrawals

#45

Post by motohagiography »

gruez wrote: post #35
andsoitis wrote: post #33

Earlier quoted context omitted.

> People need lots of things. The principal constraints on real estate are political. (The entire concept of real estate is a social construct.) Not physical space. Even if (the amount of) physical space isn't one of the main constraints on real estate, any particular location may be more desirable relative to others, e.g. a gorgeous view, away from factories or highways.

Nah, it's social constructs all the way down. A location might have gorgeous views, but if it's in a rural area and urbanization intensifies (think pre-pandemic), it will left in the dust as jobs and businesses dry up. Same goes if it's in downtown and it gets hollowed out (eg. white flight).

Do animals have social constructs? Because they have dens and territory that they use to survive as well. Property is a pretty universal value.

Re: Peter Thiel-Backed Crypto Lender Vauld Suspends Withdrawals

#46

Post by JumpCrisscross »

motohagiography wrote: post #45
gruez wrote: post #35

Earlier quoted context omitted.

Nah, it's social constructs all the way down. A location might have gorgeous views, but if it's in a rural area and urbanization intensifies (think pre-pandemic), it will left in the dust as jobs and businesses dry up. Same goes if it's in downtown and it gets hollowed out (eg. white flight).

Do animals have social constructs? Because they have dens and territory that they use to survive as well. Property is a pretty universal value.

> they have dens and territory that they use to survive as well

A bear's den isn't its property any more than a park bench slept on becomes the slumberer's own.

Property, specifically, the system that relates a person to some land via a bundle of use rights, is a deep human construct. It likely goes back to the dawn of agriculture and civilization [1].

[1] https://books.google.com/books?id=f_roIy7ceEsC

Re: Peter Thiel-Backed Crypto Lender Vauld Suspends Withdrawals

#47

Post by notch656a »

cortesoft wrote: post #18
Barrera wrote: post #3

> A cryptocurrency lender backed by Peter Thiel and Coinbase Global Inc. suspended withdrawals, trading and deposits on its platform, citing volatile market conditions and financial difficulties facing key business partners. > The platform, Vauld, said Monday that it froze the operations after users pulled almost $200 million over the last three weeks. A sharp decline in cryptocurrency prices that began with the coll…

Matt Levine always likes to say that cryptocurrencies are relearning hundreds of years of financial lessons in just a few short years. He describes the current crypto crisis as a repeat of the 2008 financial crisis. Every single problem that cryptocurrencies face are extremely well known and studied phenomena in traditional economics. It is all very predictable.

If that's true, at that rate crypto will blaze past traditional finance in only a few years, and be hundreds of years ahead of traditional finance in a couple decades. Sounds pretty good to me.

Re: Peter Thiel-Backed Crypto Lender Vauld Suspends Withdrawals

#50

Post by cellis »

JumpCrisscross wrote: post #42
andsoitis wrote: post #33

Earlier quoted context omitted.

> People need lots of things. The principal constraints on real estate are political. (The entire concept of real estate is a social construct.) Not physical space. Even if (the amount of) physical space isn't one of the main constraints on real estate, any particular location may be more desirable relative to others, e.g. a gorgeous view, away from factories or highways.

> any particular location may be more desirable relative to others, e.g. a gorgeous view, away from factories or highways It's politics, usually, keeping the factories and highways away. More fundamentally, the notion that a piece of paper (the deed) gives you certain rights (but not others) over some land is totally made up.

This is true. It’s also true that “your body” is just a social construct. The rabbit hole of “property is just an idea” doesn’t end well for humans who seek agency.
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