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Crypto trading firm Alameda Research might be insolvent

dirtybubblemedia.substack.com

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Re: Crypto trading firm Alameda Research might be insolvent

#21

Post by PragmaticPulp »

cryptoanon wrote: post #8

I really do not like this article and the discourse here for several reasons: 1. The entire Coindesk article lacks meaningful substance. For instance, we have zero idea about what those $7.4 billion of “loans” are. It’s really irresponsible to say that they’re insolvent. If you believe, so, you are applying no more rigor to your understanding of the space than the idiots who say HODL YOLO HFSP. If the liabilities are…

> 4. Recently they have cropped up a set of anonymous people who purport themselves to be insiders only to reveal complete ignorance about the topic at hand (otteroo on Twitter, for instance).

Can you clarify this? By “they” do you mean this Substack? I didn’t see anything about “otteroo” or Twitter insiders in a quick search of the Substack, but I didn’t exhaustively search the entire backlog.

Re: Crypto trading firm Alameda Research might be insolvent

#22

Post by cryptoanon »

jqpabc123 wrote: post #4

Who needs government regulation? Crypto investors do if they don't want to get swindled. Laws don't prevent crime and regulation is no guarantee either but it does act as a deterrent to the most blatant scams.

How is that related to this article?

Re: Crypto trading firm Alameda Research might be insolvent

#23

Post by [deleted] »

cryptoanon wrote: post #8

I really do not like this article and the discourse here for several reasons: 1. The entire Coindesk article lacks meaningful substance. For instance, we have zero idea about what those $7.4 billion of “loans” are. It’s really irresponsible to say that they’re insolvent. If you believe, so, you are applying no more rigor to your understanding of the space than the idiots who say HODL YOLO HFSP. If the liabilities are…

[deleted]

Re: Crypto trading firm Alameda Research might be insolvent

#24

Post by HelloNurse »

janmo wrote: post #3
HelloNurse wrote: post #2

> Total liabilities: $8 billion, of which $7.4 billion is “loans,” $7.4 billion's worth of fools. What a large market!

They only had $154m in cash equivalent, the rest of their assets was in illiquid crap.

Of course. The problem is lending genuine money to an organization designed around turning money (in the best case) into illiquid crap.

Re: Crypto trading firm Alameda Research might be insolvent

#25

Post by phphphphp »

cryptoanon wrote: post #8

I really do not like this article and the discourse here for several reasons: 1. The entire Coindesk article lacks meaningful substance. For instance, we have zero idea about what those $7.4 billion of “loans” are. It’s really irresponsible to say that they’re insolvent. If you believe, so, you are applying no more rigor to your understanding of the space than the idiots who say HODL YOLO HFSP. If the liabilities are…

Alameda's story has many parallels with Celcius (and 3AC): if something happens that proves Alameda is insolvent, will you return to this analysis and hold the same viewpoint, that it's unhelpful to consider that their solvency may well hinge on value of illiquid nonsense assets? The problem Celcius had was not that they were lending to retail, it's that their entire investment thesis was based on insane bets with capital borrowed from retail investors. Celcius, Hodlnaut etc. were "lending" and "investing" with "credible" players like 3AC (who had a mythology much like Alameda's before they imploded).

Yes, some skepticism is required when considering whether or not Alameda is insolvent (or at risk of becoming insolvent) but the analysis is helpful in highlighting why Alameda might be at risk.

Re: Crypto trading firm Alameda Research might be insolvent

#26

Post by pixelpoet »

velavar wrote: post #20
pixelpoet wrote: post #6

I'm continually surprised by how many "major" crypto firms I've never heard of before (being familiar with the space) suddenly are regarded as big names when they go under. Wake me up when it's Kraken or something, i.e. a company someone may actually have heard of.

The reason that a lot of retail investors may not have heard of Alameda Research is that they are an institutional investor and don't lend directly to customers (afaik?). However, they do pack the monetary heft to make a lot of the interest payouts by companies such as Celsius possible. It's as if Jane street failed, a company that an normal BofA user may not be familiar with.

Thanks, that makes sense.

Re: Crypto trading firm Alameda Research might be insolvent

#27

Post by HelloNurse »

pixelpoet wrote: post #6

I'm continually surprised by how many "major" crypto firms I've never heard of before (being familiar with the space) suddenly are regarded as big names when they go under. Wake me up when it's Kraken or something, i.e. a company someone may actually have heard of.

I consider remembering the names of "crypto firms" and their products an index of contamination: I might not be ignoring them well enough to protect my savings.

Re: Crypto trading firm Alameda Research might be insolvent

#30

Post by SilverBirch »

cryptoanon wrote: post #8

I really do not like this article and the discourse here for several reasons: 1. The entire Coindesk article lacks meaningful substance. For instance, we have zero idea about what those $7.4 billion of “loans” are. It’s really irresponsible to say that they’re insolvent. If you believe, so, you are applying no more rigor to your understanding of the space than the idiots who say HODL YOLO HFSP. If the liabilities are…

>If the liabilities are collateralized by assets on their balance sheet, then the financial risk is not to Alameda but the lender!

Ok, this is kind of a fair point, if these loans are collateralized by the assets, then it's the lenders who have a problem. But that does actually mean there's someone out there who is going to get absolutely mugged. It's also a bit of a question who, other than some other SBF entity, would make these loans - who is accepting FTT as collateral? It also means that you need to apply that logic to their assets, meaning their supposed $14.6Bn you probably need to regard around $12Bn minimum to be absolutely worthless.

I would absolutely not say they for sure insolvent, but these numbers do clearly look very worrying.

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