Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Ftx.com Has Probably Collapsed

forum.effectivealtruism.org

Post reply on HN
Print view View original

191–200 of 200 posts

Re: Ftx.com Has Probably Collapsed

#191

Post by TimJRobinson »

piva00 wrote: post #179
artdigital wrote: post #141

Earlier quoted context omitted.

To be fair, ftx as an exchange had none of that Degen culture. They didn’t even have an Earn product with high yield. You could loan out your crypto, but the rate fully depends on how many people want to actually borrow it. The FTT token itself was only used on the exchange to get some benefits like lower fees or free withdrawals and didn’t give any yield at all when staked. From a risk averse user perspective and so…

The shady thing in the whole cryptocurrency scheme is the lack of total transparency, aka: lack of regulations. Without regulations there's absolutely no incentive for them to be transparent, there are tons of perverse incentives to hide and cook the books though.

DeFi products like Uniswap, Balancer, GMX are all 100% open source and transparent. They can't lock customer funds or collapse because the funds are held by code, not humans who can secretly gamble it away.

It's frustrating that centralized opaque companies keep failing and yet people keep trusting them or lumping DeFi into the same bucket when they are night and day different. Decentralized Finance is the point of Crypto.

Re: Ftx.com Has Probably Collapsed

#192

Post by piva00 »

TimJRobinson wrote: post #191
piva00 wrote: post #179

Earlier quoted context omitted.

The shady thing in the whole cryptocurrency scheme is the lack of total transparency, aka: lack of regulations. Without regulations there's absolutely no incentive for them to be transparent, there are tons of perverse incentives to hide and cook the books though.

DeFi products like Uniswap, Balancer, GMX are all 100% open source and transparent. They can't lock customer funds or collapse because the funds are held by code, not humans who can secretly gamble it away. It's frustrating that centralized opaque companies keep failing and yet people keep trusting them or lumping DeFi into the same bucket when they are night and day different. Decentralized Finance is the point of C…

DeFi, where buggy code is the law and there's no reversing transactions in case of it.

No, thanks...

Re: Ftx.com Has Probably Collapsed

#193

Post by graeme »

RC_ITR wrote: post #165
graeme wrote: post #161

Earlier quoted context omitted.

Coinbase has those assets listed nice and separately but that is unlikely to hold up in bankruptcy court. SEC specifically forced Coinbase to disclose the following: “ "Because custodially held crypto assets may be considered to be the property of a bankruptcy estate, in the event of a bankruptcy, the crypto assets we hold in custody on behalf of our customers could be subject to bankruptcy proceedings and such custo…

1) I love the energy of taking a risk disclosure at more than face value (they are clearly speculating and write that because it is free to do so and it covers their asses, not because the SEC “forced” them). Show me the precedent where bankruptcy courts considered depositors as general creditors, since you are so sure that’s what will happen. 2) Will you please please please read the balance sheet. As a favor to me?…

Alright so I read the balance sheet:

1. The numbers you refer to are from the unaudited quarterly report

2. The last audited numbers are from their annual report, end date Dec 2021, during the tail end of bull market

3. $95 billion of the assets on the balance sheet are crypto assets. This is an unaudited figure, but there is no obligation to hold crypto 1:1 from what was deposited

4. Concentration of credit risk was a significant risk listed. This would apply to non insured funds at banks in excess of $250,000 and they also face risk of Tether or USDC imploding. We do not know the composition of their crypto assets. About 1/3rd of their audited crypto assets are classed as “other”

There’s plenty of room there for saying “I am shocked, shocked that our assets were not redeemable at market value en masse in the flash crash”

We’re talking about a company which has been repeatedly and publicly slapped by the SEC, in an industry full of accounting fraud, in a bear market, and which the markets rate as highly distressed.

Perhaps they risk criminal prosecution for missteps, but there are plenty of examples of that not being sufficient deterrent, of companies trying to dig themselves out of a hole.

You were referring to their unaudited 2022 balance sheet correct? I am not an expert so please tell me if I have missed something

Re: Ftx.com Has Probably Collapsed

#194

Post by eru »

adam_arthur wrote: post #183
eru wrote: post #173

Earlier quoted context omitted.

I believe in a weak form of the efficient market hypothesis that says by the time I have heard of any news, Goldman Sachs and the hedge funds will have already traded on them. Since hedge funds are allowed to short, that includes any estimates I could make about things being overvalued. All the news are priced in by the time they reach me. > Also certain sectors and companies will do better than others in this macro…

Well you haven’t been investing very long if you believe the banks have any idea what’s going on. They pretty much all had 5000 price targets on the S&P for 2022 Buy recommendations on stocks with wild overvaluation that later collapsed 90%. Just look what most banks and funds were doing during the dotcom bubble

Price targets and buy/sell recommendations are obviously rubbish. Regard them as PR.

You need to look at what people do, not what they say. And market prices are an aggregate of the former.

Btw, the efficient market hypothesis says that the current market price is basically the best 'price target' / forecast available. (Modulo an accumulation of interest and cost of carry etc.)

> Just look what most banks and funds were doing during the dotcom bubble

That's an interesting example to bring up!

If you had bought the Nasdaq composite index during that time, you would have done pretty already today.

We didn't so much have a dotcom bubble, as an irrational dotcom burst where tech stocks were perhaps irrationally underpriced for a long time.

Do keep in mind that I am not saying that market prices are a perfect predictor. Just that they are the best predictor we have.

In an efficient market, you would expect prices to look like a random walk. So prices going up or down isn't any evidence against EMH. (Someone consistently outpredicting the market would be evidence against EMH.)

Re: Ftx.com Has Probably Collapsed

#195

Post by adam_arthur »

eru wrote: post #194
adam_arthur wrote: post #183

Earlier quoted context omitted.

Well you haven’t been investing very long if you believe the banks have any idea what’s going on. They pretty much all had 5000 price targets on the S&P for 2022 Buy recommendations on stocks with wild overvaluation that later collapsed 90%. Just look what most banks and funds were doing during the dotcom bubble

Price targets and buy/sell recommendations are obviously rubbish. Regard them as PR. You need to look at what people do, not what they say. And market prices are an aggregate of the former. Btw, the efficient market hypothesis says that the current market price is basically the best 'price target' / forecast available. (Modulo an accumulation of interest and cost of carry etc.) > Just look what most banks and funds w…

Dotcom was an obvious bubble.

It doesn’t matter if the index level reached new highs 15 years after crashing. Valuing 15 years of company growth into today’s price almost always means that it’s a poor buy. You could obviously buy something more fairly valued today and enter later at a more optimal price.

Is cloudflare a good investment now at 12-15x sales? Almost certainly not. It becoming a $1T company 20 years from now doesn’t invalidate that

There are plenty of people who beat the market consistently, including myself. Warren Buffet, Michael Burry, Druckenmiller, Peter Lynch, Renaissance Capital.

Are they statistical outliers, or do they have an edge?

To me, it appears quite easy these days if you have any sense of fundamentals, which 90% of market participants seem to no longer have.

You literally have many companies that are direct peers/competitors trading at far different multiples. That alone is enough to invalidate the EMH.

Look at valuation differences between single tenant net lease retail stocks, for example. The biggest edge will be in smaller cap and less followed names. And there are thousands of them. Pretty easy to find small cap peers in RE that have better growth, same risk profile, and much lower valuation multiples, for example

Re: Ftx.com Has Probably Collapsed

#196

Post by eru »

adam_arthur wrote: post #195
eru wrote: post #194

Earlier quoted context omitted.

Price targets and buy/sell recommendations are obviously rubbish. Regard them as PR. You need to look at what people do, not what they say. And market prices are an aggregate of the former. Btw, the efficient market hypothesis says that the current market price is basically the best 'price target' / forecast available. (Modulo an accumulation of interest and cost of carry etc.) > Just look what most banks and funds w…

Dotcom was an obvious bubble. It doesn’t matter if the index level reached new highs 15 years after crashing. Valuing 15 years of company growth into today’s price almost always means that it’s a poor buy. You could obviously buy something more fairly valued today and enter later at a more optimal price. Is cloudflare a good investment now at 12-15x sales? Almost certainly not. It becoming a $1T company 20 years from…

Warren Buffet hasn't beaten the S&P 500 in a while.

> Look at valuation differences between single tenant net lease retail stocks, for example. The biggest edge will be in smaller cap and less followed names. And there are thousands of them. Pretty easy to find small cap peers in RE that have better growth, same risk profile, and much lower valuation multiples, for example

Less liquid markets are less efficient. People who go and exploit these mispricings help make the prices better, and the market pays them for it. (But that only works for as long as there are mispricings.)

> Is cloudflare a good investment now at 12-15x sales?

Please short cloudfare and make some easy money.

Re: Ftx.com Has Probably Collapsed

#197

Post by zucker42 »

JonahSussman wrote: post #45
woodruffw wrote: post #36

This is maybe tangential of me to say, but since this post is coming from an EA forum: I think the cozy relationship between EA and FTX has done immense damage to the public image and standing of the EA movement. I've never been an EA person (much less a utilitarian) but I can appreciate the meat and potatoes of applied ethics, especially when those ethics are applied consistently . The infusion of cryptocurrency fun…

I'm a bit behind on the times, but I'm failing to see how the philosophy of effective altruism and cryptocurrency are related. Do you know how the two got intertwined?

Effective altruism and cryptocurrency are related because SBF's pledge to donate his wealth represented a significant portion of total wealth pledged to EA, and the FTX Future fund represented a large portion of the present funding available for longtermist causes.

Re: Ftx.com Has Probably Collapsed

#198

Post by Nursie »

sacrosancty wrote: post #79
jshen wrote: post #43

Earlier quoted context omitted.

Many of us have been warning people for years that this would be the outcome. We were ridiculed for it.

Nobody was ridiculed for advising people to keep their coins in their own wallet. You were probably ridiculed for saying crypto is a ponzi. But Bitcoin's and Ethereum's prices are consistently higher now than they were 2 years ago. What's the bad outcome you've been warning about that actually happens?

> Bitcoin's and Ethereum's prices are consistently higher now than they were 2 years ago

Just wanted to come back and say - today the price (Currently ~$15950) has dipped below the price two years ago (~$16100)

So that didn't age so well!

Re: Ftx.com Has Probably Collapsed

#200

Post by AccountAccount1 »

AccountAccount1 wrote: post #199
AccountAccount1 wrote: post #10

SBF was a very positive force for EA, now that he's down everyone piles on him? shameless

5 days later: I was tragically wrong...sorry for the comment.

10 days later:

"Tragically wrong" is an understatement; monstrously wrong may do it justice...

Post reply on HN