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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

#41

Post by bhouston »

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…

I think that Alameda should release its actual numbers, rather than to keep them private. Sunlight is the best disinfectant to these types of rumours.

Right now I think that your response isn't any more credible than these other posts.

Re: Crypto trading firm Alameda Research might be insolvent

#42

Post by gus_massa »

michael_j_ward wrote: post #33

What the argument misses / why FTT is different than Terra 1) Alameda Research owns FTX, one of the largest and arguably most important crypto exchanges. 2) FTX offers fee discounts to FTT-stakers and additional discounts if you pay in FTT. [0] 3) Trading volume on FTX thus creates an organic demand cycle for FTT. The large firms will buy, stake, and then continuously refresh their supply. 4) The vast majority of the…

The problem with Terra was that the stakers got a guaranteed* 20% anual interest in dollars*. You can take a look at all the fine print and implementation details, or be a naysayer like me and read the 20% and claim it will collapse.

I can't find the details about FTT/FTX. How high is the guaranteed* anual interest in dollars*?

* With some mild assumptions, like the coins doesn't crash miserably. Past performance does not guarantee future results. YMMV.

Note: This year with a 7% inflation rate perhaps a 20% is not too unrealistic as in usual years with a 2% inflation.

Re: Crypto trading firm Alameda Research might be insolvent

#43

Post by HelloNurse »

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!

Fair point, but why do you seem to think you are defending Alameda? Collateralizing loans from fools with your own brand of worthless bullshit is the very definition of a Ponzi scheme.

Re: Crypto trading firm Alameda Research might be insolvent

#44

Post by Mistletoe »

This might explain why Sam Trabucco the former co-CEO abruptly left out of the blue a few months ago…

https://fortune.com/crypto/2022/08/25/sam-trabucco-quits-co-...

For those not in the know, Alameda is THE trading firm in crypto that everyone always assumes is causing liquidations. For them to be insolvent would be a huge deal.

It’s crazy to watch greed pollute the minds of crypto trading firms like Three Arrows Capital and Alameda. Zhu Su put it best in his own tweet long ago before the greed set in and he needed more and more gains.

https://twitter.com/zhusu/status/1092305648904065024

“Bad TA (technical analysis) is not just marginally bad--it can mean being net down trading an asset that has gone 1,500x and is still 250x from start date.”

“For much of 2017, Buy and Hold was actually the best performing strategy since Jan1 2013 of ALL TA strategies possible. This can easily become the case again if we go on a bull run at some point.”

Crypto gains are so large that there is no need to go crazy with trading and leverage and the crashes every four years are actually a great boon as long as you realize they will never go away.

Re: Crypto trading firm Alameda Research might be insolvent

#45

Post by rippercushions »

LatteLazy wrote: post #39

The title is contradicted by the article itself: if 88% of the firms equity were suddenly worthless (the worst car scenario), that would mean 12% remained. So they're not insolvent...

The definition of insolvency is not being able to pay your debts. Alameda claims $14.6B in assets vs $8B debts, which means they're solvent. If they actually only have 12% of $14.6 = $1.8B, they're way mucho insolvent.

Re: Crypto trading firm Alameda Research might be insolvent

#46

Post by bhouston »

cryptoanon wrote: post #32
PragmaticPulp wrote: post #21

Earlier quoted context omitted.

> 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.

I mean this guy as well as a bunch of people on Twitter who have been clout chasing ambulance chasers, running over the truth to chase a story. The formula is this: 1. Create an helpful explainer thread to explain some crisis (ex-post) 2. Start to make vague predictions about relatively easy to predict things (like that Celsius is going to go down, a couple days before it technically goes down). 3. Refer your readers…

"If it wasn't for these damn twitter personalities messing up the plans, they would have gotten away with it."

You sound like a Scooby Doo villain. If these companies are not run well, they can be brought down by mere twitter personalities. This is a stress test. Those who are run well, will survive this.

Another analogy: If you build a house out of straw (because you cut corners) should you blame the big bad wolf who can just blow it down?

Re: Crypto trading firm Alameda Research might be insolvent

#47

Post by tender_euler »

wokwokwok wrote: post #36
cryptoanon wrote: post #32

Earlier quoted context omitted.

I mean this guy as well as a bunch of people on Twitter who have been clout chasing ambulance chasers, running over the truth to chase a story. The formula is this: 1. Create an helpful explainer thread to explain some crisis (ex-post) 2. Start to make vague predictions about relatively easy to predict things (like that Celsius is going to go down, a couple days before it technically goes down). 3. Refer your readers…

> if you’re wrong, you’re not accountable to your actions because there was never any actual money on the line. I mean, that's the risk you run right? Either you're a regulated system where you can avoid this kind of thing, or you're an unregulated system where you go 'screw the man', but you don't get the protections that are associated with the traditional financial system. There's some deep irony about complaining…

>> if you’re wrong, you’re not accountable to your actions because there was never any actual money on the line.

> I mean, that's the risk you run right?

> Either you're a regulated system where you can avoid this kind of thing, or you're an unregulated system where you go 'screw the man', but you don't get the protections that are associated with the traditional financial system.

He does not mean companies operating in the unregulated crypto space. He means the author of articles like this one.

Re: Crypto trading firm Alameda Research might be insolvent

#48

Post by xwolfi »

cryptoanon wrote: post #40
phphphphp wrote: post #25

Earlier quoted context omitted.

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 ca…

3AC had been packed to the gills with uncollateralized loans. Since then, most lenders have recalled loans and cleaned up their toxic balance sheet.

How ?

Re: Crypto trading firm Alameda Research might be insolvent

#49

Post by LatteLazy »

rippercushions wrote: post #45
LatteLazy wrote: post #39

The title is contradicted by the article itself: if 88% of the firms equity were suddenly worthless (the worst car scenario), that would mean 12% remained. So they're not insolvent...

The definition of insolvency is not being able to pay your debts. Alameda claims $14.6B in assets vs $8B debts, which means they're solvent. If they actually only have 12% of $14.6 = $1.8B, they're way mucho insolvent.

Only the 5.8bn in FTT is being claimed to be worthless. Not the full 14.6bn in assets.

If that's true (and the article itself lists reasons it isn't true!?), that still leaves 8.8bn in other assets, vs 8.0bn in debts.

The article itself says the same when it says 88% of equity. Equity is assets less debts. So as long as they have any equity left at all, they're not insolvent.

Re: Crypto trading firm Alameda Research might be insolvent

#50

Post by jqpabc123 »

cryptoanon wrote: post #22
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?

They chose the crypto market for their "flywheel" scheme. Why?

Crypto attracts scammers like flies to crap.

And a big part of the reason is the lack of regulation and transparency.

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