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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

#71

Post by jerf »

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…

This is a popular idea, but it's not just wrong, it's both systematically and personally dangerous. I am entitled to come to conclusions based on the partial information I have. If someone doesn't like those conclusions, it's on them to increase my access to information.

The alternative means that anyone and everyone can hide anything they like behind partial information, then declare any suspicions baseless and groundless based on their own hiding of information.

I speak only to this. Whether the linked article did a good job of their analysis I don't know. I'm just saying, the idea that people are not entitled to come to conclusions based on partial information is not valid. The conclusions come to should be hedged and made with the understanding that information is partial, but there is no obligation to not come to them. Otherwise you're obligating yourself to walk naked into almost any old scam you can imagine. This idea doesn't scale out into the real world where people happily abuse this.

Re: Crypto trading firm Alameda Research might be insolvent

#73

Post by phphphphp »

chinathrow wrote: post #53
phphphphp wrote: post #11

Earlier quoted context omitted.

I'm not sure if this is sarcasm or not, but just in case it's sincere: Alameda are considered a lynch-pin of the crypto industry, they're holding up pretty much everything... and by extension, FTX is far more important than Kraken. If Alameda implode, it'll be far worse than 3AC's implosion. I don't think it's possible to kill the crypto industry, but Alameda's implosion would be the most likely event to cause it.

> I don't think it's possible to kill the crypto industry, but Alameda's implosion would be the most likely event to cause it. As a bystander, it's hard to grasp the likeliness of this happenning, can someone elaborate on what would be able to trigger it?

Hard to say, because we can only speculate on the true state of Alameda. Sam Bankman-Fried owns both Alameda and FTX and so while they’re separate entities, they are co-mingled in many ways.

Assuming FTX is a profitable enterprise (a big question in the current market) then any problems Alameda faces could be addressed by SBF leveraging FTX in some way to bail Alameda out… but it’s also plausible that FTX is dependent upon Alameda and that Alameda’s faltering could take down FTX.

My guess is that an Alameda implosion is unlikely because, as far as I can tell, they’re not engaging in fraudulent behaviour, just crypto hubris… and so, worst case, they have to scale back their activity… but if they are reliant on third-party capital, and the current economic trend continues… it seems plausible that could trigger major problems in the crypto world.

Re: Crypto trading firm Alameda Research might be insolvent

#74

Post by mritchie712 »

rufusroflpunch wrote: post #56
stephc_int13 wrote: post #55

Being an avid HN reader, I've been loosely following the crypto/NFT market with various sentiments oscillating between disbelief and facepalm. The real question would be: is there anything that is not a scam in this market?

Owning and holding Bitcoin is not a scam. That's about it.

It'd be pretty easy to create a "defi credit union" that's not a scam, it'd just be hard to cut thru all the noise. Give 3% to 5% yields on saving, lend at 8% to 12%. The problem is people see "230% yields" (which are scams) and wouldn't know your legit 5% yield is for real.

Re: Crypto trading firm Alameda Research might be insolvent

#75

Post by moomin »

zby wrote: post #61
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! What does that mean? How collateralization changes Alameda risk? It reduces the lender risk a bit - but it does not touch the borrower risk at all: https://www.investopedia.com/terms/c/collateral.asp "In the event that the borrower does default, the lender can seize the collateral and se…

I think OP is assuming things work the way US mortgages work, where you can walk away from the house. I think OP is labouring under a misapprehension here.

Re: Crypto trading firm Alameda Research might be insolvent

#76

Post by cryptoanon »

boc wrote: post #60
cryptoanon wrote: post #52

Earlier quoted context omitted.

Sure you can say this is a stress test - I’m just saying it’s misinformation. I am annoyed by people who spread misinformation for clout. Applies to both the bullish credit and the bearish crowd.

You have no evidence that this post is misinformation. You’re just choosing to believe it’s untrue.

I do not have the burden of proof.

Re: Crypto trading firm Alameda Research might be insolvent

#77

Post by polygamous_bat »

cryptoanon wrote: post #66
phphphphp wrote: post #58

Earlier quoted context omitted.

3AC was a prop trading firm flush with cash… until the curtain was lifted and it turns out it was just a big fraud. Alameda is a prop firm flush with cash… Why do you assume that Alameda isn’t “packed to the gills” with financial gremlins? If you asked anybody in the space about 3AC or Alameda 12 months ago, you’d have heard the same thing about them: prop trading firms that have been hugely successful investing thei…

I’m not saying alameda is not insolvent. Im saying that the burden of proof is on the author to prove that they are insolvent.

That is the craziest proposition that I have heard today. The author posited a hypothesis based on whatever public information they could gather. Either Alameda comes out to refute it, or they don't (they haven't yet, as far as I know), in which case people can draw their own conclusion. The fact that SBF, one of the most outspoken mouthpieces of the crypto boom, has chosen to remain silent, provides some circumstantial evidence at best. But this is not a court of law, it's investigative journalism, which I think is the part you're missing.

Re: Crypto trading firm Alameda Research might be insolvent

#78

Post by shawabawa3 »

pixelpoet wrote: post #19
StevigeHoning wrote: post #16

Earlier quoted context omitted.

Just because you didn't heard of it, doesn't mean its not a big name. Also Kraken is a Exchange not a trading firm.

Of course my awareness isn't what decides if a firm is a major one, and I did refer to crypto firms in general. In any case, apparently these guys are a big deal and I hadn't heard of them. Maybe it's European bias, and I'm not a crypto expert or anything, just interested.

The wallstreet equivalent would be Blackrock being insolvent

Most laypeople haven't heard of blackrock either

Re: Crypto trading firm Alameda Research might be insolvent

#79

Post by HelloNurse »

cryptoanon wrote: post #51
HelloNurse wrote: post #43

Earlier quoted context omitted.

> 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.

What if the loans are minted DAI? How is that a Ponzi?

Loans are money. Collaterals can be "minted DAI", whatever it is, or anything else that a fool can be convinced is valuable: that is the opportunity for Ponzi schemes.

Re: Crypto trading firm Alameda Research might be insolvent

#80

Post by adamsmith143 »

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…

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

Doesn't take a genius to figure out why a hedge fund needs 7B in loans. They aren't a tech giant expanding in a new direction or acquiring competitors. It's pretty clear why a hedge fund needs a massive cash infusion. Also interesting that they collateralize the loans with Tokens majority owned by Alameda and FTX so it's unlikely were they forced to liquidate to pay off their loans that they could get any where near the quoted value of the tokens.

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