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September's cover of Fortune was quite the jinx https://content.fortune.com/wp-content/uploads/2022/07/COV.W...
I think SBF realized marketing is everything. Being the face of crypto, sponsoring sports stadiums, being on the cover of a widely distributed magazine, all part of the same playbook.
"We’re going to look back at a generation of successful founders and VCs with the realization that all of their talent was in creating a company during the bull market." - random tweet I came across that's very relevant here.
This is great, he was lecturing how stock exchanges should work & on the cover of Fortune as the next Warren Buffet all of what.. 8 weeks ago? SV fintech keeps reinventing all the mistakes of 19th century banking. BNPL is the next explosion btw.
BNPL has already exploded though, but good call. Klarna is down about 90% in the private markets, Affirm about the same from all time high. Another good candidate is "AI-powered" insurance i.e Lemonade.
Speaking generally, insurance was one of the first industries to deploy technology effectively in their core business. They are still doing that.
The issue with companies like Lemonade is that they are rebranding the same product as "AI" (afaik, Lemonade is just taking share by offering cheaper prices...doesn't sound quite as appealing as "AI").
I’m a little ignorant to the whole crypto ecosystem, so can someone give me a quick rundown on the chain of events that led to this? Seems a little out of left field. BTX, from the outside looking in, looked to be one of the more well run, stable crypto exchanges. $1.02 billion in revenue with $388M in net income in 2021. They didn’t go on any crazy hiring spree when they didn’t have to. Liquidity crisis implies that…
FTX bet customer funds through the CEO’s hedge fund on an FTX token [1]. The token price fell when this was revealed [2]. The hedge fund, and thus FTX, had less money than they owed lenders and customers. FTX found a bail-out in Binance; otherwise everyone would have lost their money. [1] https://www.coindesk.com/business/2022/11/02/divisions-in-sa... [2] https://www.coindesk.com/markets/2022/11/08/ftt-plummets-as-..…
Earlier quoted context omitted.
BNPL has already exploded though, but good call. Klarna is down about 90% in the private markets, Affirm about the same from all time high. Another good candidate is "AI-powered" insurance i.e Lemonade.
ZIRP is a hell of a drug. There's not a lot of innovation to be had on lending that is actually going to be considered legal. Unless they obfuscate it with AI, they are going to run afoul of some sort of anti-discriminatory laws. Credit score&history, income, capital.. go. Most of what BNPL actually turned out to be was just dumb money.
Wonder whether we will ever see the actual datasets that BNPL founders saw that made them decide it is a safe business. Probably like you said ZIRP,bullmarket delinquency percentages.
Earlier quoted context omitted.
Now it is clear that he was lying. They stopped processing withdrawals according to on chain data.[0] [0]: https://www.theblock.co/post/184176/ftx-appears-to-have-stop...
> They stopped processing withdrawals If you look at the comments on https://news.ycombinator.com/item?id=33518961 that article missed that FTX uses multiple addresses for withdrawals.
>Our teams are working on clearing out the withdrawal backlog as is. This will clear out liquidity crunches; all assets will be covered 1:1. This is one of the main reasons we’ve asked Binance to come in. It may take a bit to settle etc.
SBF said "We don't invest client assets (even in treasuries)". [0] He then says the purpose of the transaction with Binance is to "clear out the liquidity crunches". [1] How could there be a liquidity crunch if assets are not invested? You can't do a bank run on an entity that doesn't function as a bank and doesn't invest clients assets... Something is shifty. [0] https://twitter.com/sbf_ftx/status/158959828579870720…
> SBF said "We don't invest client assets (even in treasuries)" We know that was false when it was said, given the Alameda balance sheet. (FTX invested in Alameda which made risky loans to crypto folks and bought FTT, which FTX minted [1].) [1] https://www.coindesk.com/business/2022/11/02/divisions-in-sa...
Alameda invested in FTT which is minted by FTX which is not the same thing.
You know what this makes me kind of wonder... back earlier in the year SBF made a big show of coming in and investing in a bunch of the companies that were collapsing due to the LUNA/3AC/Celsius problems. He stepped in and to some extent halted the unwinding of some of these issues. It turns out now that it's likely FTX is underwater, and Binance is basically doing the same thing - coming in, picking them up cheap an…