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$3B in Bitcoin was sold in a last-ditch attempt to save UST from collapse

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Re: $3B in Bitcoin was sold in a last-ditch attempt to save UST from collapse

#291

Post by acchow »

lamontcg wrote: post #108
joosters wrote: post #4

"Sold" It's hard to show that they really sold these coins. Certainly, the LFG transferred the coins to some different exchanges. But did they truly sell them? If I was running a dodgy ponzi scheme and saw it collapsing catastrophically, I don't think I'd be throwing good money after bad trying to futilely patch it up. Much better to stash the remaining assets away somewhere and personally cash out later on. Also, “I…

> “In a sense, the market is going to take that as kind of bullish.” I mean everything is a bit oversold right now on negative emotions, both in the crypto space and in the stock markets. There's probably going to be a positive bounce just because markets don't move in straight lines. There is always the chance that something else explodes due to stress tomorrow and hits the headlines and crypto and/or stocks start m…

How does anyone determine what oversold is?

S&P has only retraced to March 2021. Nasdaq to Oct 2020. A bunch of COVID plays like Zoom, Peloton, etc only back to summer 2019 levels. That's only 3 years back.

If you look at the dot-com boom, S&P bottomed out in 2002 back to 1997 levels. That's a 5 year retracement. Currently S&P has barely gone back 14 months.

The GFC was worse - bottomed in Dec 2008 hitting 1996 levels - a 12 year retracement. I'd say going back beyond an entire economic cycle is probably actually oversold.

Re: $3B in Bitcoin was sold in a last-ditch attempt to save UST from collapse

#292

Post by spywaregorilla »

lkrubner wrote: post #263
lamontcg wrote: post #108

Earlier quoted context omitted.

> “In a sense, the market is going to take that as kind of bullish.” I mean everything is a bit oversold right now on negative emotions, both in the crypto space and in the stock markets. There's probably going to be a positive bounce just because markets don't move in straight lines. There is always the chance that something else explodes due to stress tomorrow and hits the headlines and crypto and/or stocks start m…

"everything is a bit oversold right now on negative emotions" No!!! The Fed is raising rates. That is reality. That is not an emotion. That is absolute economic fact. Inflation is high and will remain high for at least a year (maybe longer). The period from 2008 to 2022 is going to be remembered as an abnormal period when we experienced abnormally low rates. The low rates fueled speculation, and bid up certain stocks…

> The era of low rates is over. It is possible that you might live another 100 years and never again see a 14 year stretch where rates average as low as they did from 2008 to 2022.

The interest rate is currently at 1%. In the 80s it hit 20%. I expect it'll go negative in the next 20 years.

Re: $3B in Bitcoin was sold in a last-ditch attempt to save UST from collapse

#293

Post by simonh »

mdoms wrote: post #227
caffeine wrote: post #197

Earlier quoted context omitted.

> The fact that crypto is correlated with tech stock valuations should be raising eyebrows Because fiat volatility in inflation/rate hikes respectively (ie the NPV of a USD) completely dominates the other factors. The volatile leg here is the fiat dollar, and everything denominated in it is whipsawing around as its value changes.

Unlike volatility in crypto markets?

Yes, unlike crypto markets which don't move anything else no matter how volatile they are, because they are economically irrelevant.

Re: $3B in Bitcoin was sold in a last-ditch attempt to save UST from collapse

#294

Post by jcranmer »

jpmattia wrote: post #81
onlyrealcuzzo wrote: post #40

Earlier quoted context omitted.

Only 3.87% of Tether was backed by dollars: https://siliconangle.com/2021/05/13/tether-releases-reserve-... So it could drop pretty far.

> Only 3.87% of Tether was backed by dollars For comparison: Citibank had only 11.73% Tier 1 capital in their 2021 report: https://www.citigroup.com/citi/investor/quarterly/2021/ar20_... Couldn't find a breakout of their Tier 1, but it includes high-quality credit items as well, so actual dollars is well below 11.73%. So in other words: SiliconAngle.com is writing clickbait and doesn't understand modern banking.

Tether's latest report says that it held about $140 million more in assets than liabilities, out of a $78 billion liability. It also says it holds about $5 billion in cryptocurrencies. So a 3% fall in cryptocurrencies would make Tether literally insolvent--or about an averagely bad day in cryptocurrency.

Let that sink in for a minute: Tether, by its own admission is barely solvent, so barely solvent a single not-especially-bad day would render them insolvent.

Now consider that this barely solvent state has persisted for their entire reports--they've always cited a very-barely-solvent state of their finances. Given that Tether has already admitted to lying in the past (and essentially cooking the books to mislead the public into thinking they were solvent), and that the books always seem to come out just perfectly not-quite-insolvent despite investing in very volatile assets, is it more likely that Tether has somehow found an investment strategy that just barely keeps them solvent, or that they are in fact insolvent and using every it's-technically-not-lying trick they can to get people not to realize it?

For what it's worth, as far as I understand it, Tether's Tier 1 capital isn't 3.87% but... 0.0%. Nothing Tether has produced has indicated any capital that can be raided to provide extra assets in the case that assets lose value--note that such capital isn't a part of the asset/liability ratio.

Re: $3B in Bitcoin was sold in a last-ditch attempt to save UST from collapse

#295

Post by ericsoderstrom »

gruez wrote: post #224
muttantt wrote: post #139

"stablecoins", NFTs, etc. are just HYIPs reimagined.

NFTs maybe, but stablecoins? How are they comparable to "HYIPs" (high yield investment program)? Specifically, where are the "high yields"?

20% APY for staking UST

Re: $3B in Bitcoin was sold in a last-ditch attempt to save UST from collapse

#297

Post by jcranmer »

Quinner wrote: post #166
caymanjim wrote: post #101

Earlier quoted context omitted.

Real banks practice fractional-reserve banking, where they are required to hold a percentage of assets as cash or central bank deposits. It's well-regulated and diversified. It's audited. Individual account holders' deposits are insured (FDIC in the US). This is all well-known and understood and reliable. Runs can still happen, shady accounting practices can still happen, and sometimes banks fail. Sometimes they fail…

In the US, the required reserve ratio has been 0% since March 2020. I personally wouldn't view the traditional financial system as about as trustworthy as things get.

The ratio you're talking about is the amount that needs to be in the bank's account with the Federal Reserve as a fraction of its total liabilities. Only the money in that bank account qualifies for that reserve ratio; holding on to a literal stack of dollar bills in a bank vault somewhere does not.

That ratio is 0% because it's been judged that there are better ways to require solvency than doing that (chiefly, requiring capital buffers).

Re: $3B in Bitcoin was sold in a last-ditch attempt to save UST from collapse

#298

Post by vmception »

low_tech_love wrote: post #257

“Analysis from the company shows that 52,189 bitcoins were moved to a single account at crypto exchange Gemini” Oh yeah sure they saw their coin going to s*%t and thought “yeah let’s just throw away a couple billion dollars just so people won’t think we are scammers”. Sure. The Vatican has started a process to canonize these saints.

uh yes exactly? thats the only reason they bought the bitcoin in the first place

Terra Luna was already stupid enough, its stupid to make this part controversial because that was the purpose of this collateral, just as its stupid to not believe the bitcoin was sold after transfer to the exchanges (many people believe that its still owned, or was given to some whales to bail just them out, or the founder keeps it for himself)

https://bitcoinist.com/terra-luna-will-buy-10-billion-worth-...

https://www.bloomberg.com/news/newsletters/2022-04-19/crypto...

Re: $3B in Bitcoin was sold in a last-ditch attempt to save UST from collapse

#299

Post by minsc_and_boo »

eric_cc wrote: post #230
minsc_and_boo wrote: post #190

Earlier quoted context omitted.

It's worse than that. Every dollar taken out of crypto is at the expense of someone else. Those coiners trying to change $1->$2 are heavily incentivized to lie, manipulate, and convince the naive in the public to put their $1 in. You could say this is everything with a public market, but with stocks or bonds you also have a legally binding contract to organizational assets that have value . Buybacks, issuing new unit…

You’re thinking about short term traders who want to accumulate more $USD. And sure, they are one actor in the bitcoin eco. Others use bitcoin as their primary currency. And still others would prefer BTC as their currency but, due to tax laws and infrastructure, are hindered from doing so. You’re judging all current btc owners by bucketing them into one easy-to-consume cliche. Not all btc users give a shit about more…

>Others use bitcoin as their primary currency.

No, not really.

While some crypto-enthusiasts are using BTC as hobby money (in which most payment processors convert to USD right away anyway) the vast majority of people using BTC are speculators.

Re: $3B in Bitcoin was sold in a last-ditch attempt to save UST from collapse

#300

Post by vmception »

dstroot wrote: post #296

Does anyone have insight to what legal exposure (if any) creator Do Kwon has? In an regulated market does he just walk away?

in a regulated market all you would simply have are some codified fiduciary duties and standardized disclosures

Terra Luna and TerraUSD's algorithmic operations were all disclosed publicly and scrutinized in the open sphere

Do Kwon stated publicly why he was buying the bitcoin - to repurchase Terra Luna and TerraUSD because its shitty broken product that might need to be rebought to temporarily help restore its peg - and Do Kwon has stated publicly now why the bitcoin sold - to repurchase Terra Luna and TerraUSD because its shitty broken product that might need to be rebought to temporarily help restore its peg

I think in a regulated market he just walks away just like all investment banks and bankers do

There are plenty of Exchange Traded Notes (ETNs) that obtusely say "this is dogshit and its going to fall to zero during a period of volatility" and then fall to zero during a period of volatility

Thats exactly what Terra Luna and TerraUSD did

all regulation would do is standardize the way the disclosure is done, really the most likely thing that comes from this is a regulator mandated additional sentence in a brokerage firm's 40 page disclaimer that you surely will read after consulting your financial advisor.

Its up to the consumer/investor, it always is.

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