Our Crypto Investment strategy (slow and steady investing for the win)

[DaKini]

Two I am most excited about, team checks out, research is good and has big plans.

I have already researched a tiny fraction (say 10 or so) of the countless coins out there. Aside from the obviously meme coins, nearly all have some very interesting and - at first glance - viable use case described. The truth is however, which coin to choose? It always bails out to "i like it / i don't like it". No one knows which of the coins will survive. And I doubt that the vast majority will do so.

If the paper-pushing part of every large transaction is eliminated, that's a huge gain.

Well, I may be biased because I come from europe, but here in the SEPA world, we don't have much issues with paper pushing.
- Waive your card - done.
- Open web page of bank, enter transaction - done.
Payments arrive the next day usually in the entire EU.

Of course that doesn't hold true for really large transactions (say, thousands).
But here is the catch: thats a feature not a bug!
The paper pushing the bank has to do is to avoid criminals taking your money, or diverting it; in short it is there that the transaction takes place safely and legally.
If i wire 10k€ to any other party, I *want* it to be checked. And that takes time.
Technically, the current payment systems could wire money at a very fast rate, but the bureocracy (which artifically slows the process down) is there for a reason.

[vand]

I wonder if we can get a progress update from OP?

Yield? No cash flow last I checked.
Diversification? Correlation to risky assets is approaching 1. So nope.
Inflation hedge? Didn’t work.

Still no proof for being a net positive to humanity except as a dumping ground for greed and speculation.

Thesis busted?

[GilesMM]

The events of the past week have been a disaster for crypto with one of the most respected traders wiped out almost overnight. The future of the currency is in grave doubt at this point. Stay tuned.

[scottish]

The events of the past week have been a disaster for crypto with one of the most respected traders wiped out almost overnight. The future of the currency is in grave doubt at this point. Stay tuned.

Has some fundamental attribute of crypto currency changed with the collapse of FTX?    Surely the loss of one exchange can't destroy everything...

[Travis]

The events of the past week have been a disaster for crypto with one of the most respected traders wiped out almost overnight. The future of the currency is in grave doubt at this point. Stay tuned.

Has some fundamental attribute of crypto currency changed with the collapse of FTX?    Surely the loss of one exchange can't destroy everything...

It was the third largest exchange, and the latest in a series of exchanges to go under due to fraud and mismanagement.  Cryptocurrency wasn't meant to be stored and traded like this, but we keep coming back to this story.

https://www.cnbc.com/2022/11/13/sam-bankman-frieds-alameda-quietly-used-ftx-customer-funds-without-raising-alarm-bells-say-sources.html

[clifp]

The events of the past week have been a disaster for crypto with one of the most respected traders wiped out almost overnight. The future of the currency is in grave doubt at this point. Stay tuned.

Has some fundamental attribute of crypto currency changed with the collapse of FTX?    Surely the loss of one exchange can't destroy everything...

We have had financial exchange failures in the US before, and plenty of failing exchanges have been bought by bigger/healthier exchanges.

The difference is that when they failed they didn't take their customer's money with them.  Since the Crypto exchange act more like a brokerage than an exchange like NASDAQ, it is particularly worrying. 

Most of my money is at Schwab, there is Securities Investor Protection Corporation, and Schwab has a policy at Lloyds of London for additional protection up to 1.15 million in cash. Crypto exchanges have none of these protections. 

Still, even if a second-tier brokerage went bust like Interactive Brokerage and their customers lost some much less all of their money, I'd be very concerned.

If the number 2 brokerage Vanguard went broke, and customers lost money. I'd be in state of mild to severe panic.  How would you react?

[GilesMM]

Since crypto has no intrinsic value (i.e. is not an investment), a lot of trust in the traders is required.  When one of the largest and most trusted traders collapses in a few days without any particular explanation, taking the customers accounts into bankruptcy, it puts the entire scheme in doubt.

[MustacheAndaHalf]

When one of the largest and most trusted traders collapses in a few days without any particular explanation, taking the customers accounts into bankruptcy, it puts the entire scheme in doubt.

That's false.  FTX made improper loans to another company, apparently committing fraud by using customer assets as part of the loan.  Binance announced it was dumping FTT tokens, which were a big part of that loan.  The assets in the loan fell in value, and no longer covered the loan.  Both the other company and FTX became insolvent.  Binance considered buying FTX, and FTX claims others were looking into it, but nobody wanted the billions in losses.  FTX collapsed when no buyers could be found to cover its loans - loans which were likely fraudulent.
https://www.coindesk.com/business/2022/11/10/ftx-used-customer-funds-among-other-assets-to-prop-up-alameda-research-in-may-reuters/

[MustacheAndaHalf]

Most of my money is at Schwab, there is Securities Investor Protection Corporation, and Schwab has a policy at Lloyds of London for additional protection up to 1.15 million in cash. Crypto exchanges have none of these protections. 

Still, even if a second-tier brokerage went bust like Interactive Brokerage and their customers lost some much less all of their money, I'd be very concerned.

If the number 2 brokerage Vanguard went broke, and customers lost money. I'd be in state of mild to severe panic.  How would you react?

Schwab has $7 trillion assets under management, and their insurance only covers $0.0006 trillion in aggregate.  The insurance isn't the main thing protecting assets.

Schwab’s coverage with Lloyd's of London and other London insurers, combined with SIPC coverage, provides protection of securities and cash up to an aggregate of $600 million

https://www.schwab.com/legal/sipc-account-protection

Brokerages like Vanguard, IBKR and Schwab custody assets at an unrelated institution (typically a big bank).  Two unrelated companies simultaneously partcipating in the same fraud is extremely rare - if its ever happened.  That is the main reason why brokerages are so safe from fraud.

[Travis]

https://twitter.com/carlquintanilla/status/1591826041567412224?s=46&t=Gjkle2Ph22W8rYnNi8pRHw

More confidence in crypto bank accounting.

[GuitarStv]

When one of the largest and most trusted traders collapses in a few days without any particular explanation, taking the customers accounts into bankruptcy, it puts the entire scheme in doubt.

That's false.  FTX made improper loans to another company, apparently committing fraud by using customer assets as part of the loan.  Binance announced it was dumping FTT tokens, which were a big part of that loan.  The assets in the loan fell in value, and no longer covered the loan.  Both the other company and FTX became insolvent.  Binance considered buying FTX, and FTX claims others were looking into it, but nobody wanted the billions in losses.  FTX collapsed when no buyers could be found to cover its loans - loans which were likely fraudulent.
https://www.coindesk.com/business/2022/11/10/ftx-used-customer-funds-among-other-assets-to-prop-up-alameda-research-in-may-reuters/

Is it really fraud?  Crypto exchanges are supposed to be regulated under the Bank Secrecy Act . . . but last I read, the act hadn't been amended to cover digital asset service providers so my understanding was that it's still the wild west and caveat emptor.  Has that changed?

[clifp]

Is it really fraud?  Crypto exchanges are supposed to be regulated under the Bank Secrecy Act . . . but last I read, the act hadn't been amended to cover digital asset service providers so my understanding was that it's still the wild west and caveat emptor.  Has that changed?

I think by the layman's definition of fraud, what FTX did surely qualifies. If it is legally fraud, is well above my pay grade and legal knowledge.
My understanding is that the FTX customer agreement did say that the crypto you "owned" on the exchange wasn't segregated from the exchange's assets.
I don't know how many pages the agreement was, but if it is like most 10+ page click to accept an agreement with lots of legal language nobody reads them.
Given the lack of regulation, what FTX, and understand Coinbase does the same thing, is probably not strictly illegal.  But it is a completely alien concept for most Americans and Europeans, the money you deposit with a bank or brokerage is yours, not the bank.

Loaning money like Sam did between two companies he control, again is likely legal, but is also a common source of successful shareholder lawsuits, when it goes badly.
The entire creating a cryptocurrency that is pegged to the fortunates of FTX and then using that as collateral for loans to Alemeda may or may not be legal, but is dodgy as hell.

[HPstache]

@Eco_eco updates?

[Glenstache]

But it is a completely alien concept for most Americans and Europeans, the money you deposit with a bank or brokerage is yours, not the bank.

This is a slightly different distinction, but with the repeal of Glass-Steagall, the speculative investment and retail banking portions of companies have become very commingled. Yes, the money you deposit is still "yours" and backed up by FDIC, but those dollars also support speculative investment and can be used to cover losses. This is distinct from retail banks making boring loans on houses, etc.
https://en.wikipedia.org/wiki/Separation_of_investment_and_retail_banking

And this is also different from a crypto saying that your bits are commingled with their bits, since trackability is supposedly one of the defining features of blockchains, if I understand correctly. If their model was to treat it as a fiat currency, but without the essential tools of a central bank and treasury to adjust supply and rates, then it was a bad model.

[scottish]

Since crypto has no intrinsic value (i.e. is not an investment), a lot of trust in the traders is required.  When one of the largest and most trusted traders collapses in a few days without any particular explanation, taking the customers accounts into bankruptcy, it puts the entire scheme in doubt.

What about "Trust in the code!"?    Blockchain is inherently trustworthy, that's why it's the future.   Isn't it?   It's not like a bunch of tech-bros got together and created a virtual currency out of thin air.

[scottish]

The events of the past week have been a disaster for crypto with one of the most respected traders wiped out almost overnight. The future of the currency is in grave doubt at this point. Stay tuned.

Has some fundamental attribute of crypto currency changed with the collapse of FTX?    Surely the loss of one exchange can't destroy everything...

We have had financial exchange failures in the US before, and plenty of failing exchanges have been bought by bigger/healthier exchanges.

The difference is that when they failed they didn't take their customer's money with them.  Since the Crypto exchange act more like a brokerage than an exchange like NASDAQ, it is particularly worrying. 

Most of my money is at Schwab, there is Securities Investor Protection Corporation, and Schwab has a policy at Lloyds of London for additional protection up to 1.15 million in cash. Crypto exchanges have none of these protections. 

Still, even if a second-tier brokerage went bust like Interactive Brokerage and their customers lost some much less all of their money, I'd be very concerned.

If the number 2 brokerage Vanguard went broke, and customers lost money. I'd be in state of mild to severe panic.  How would you react?

Well I'm in Canada.   We have government insurance for the first 100K CAD and I never have that much cash.   The remaining assets would hopefully be recoverable in kind.

"Don't panic" isn't just for hitchikers and aircraft pilots.

[GilesMM]

When one of the largest and most trusted traders collapses in a few days without any particular explanation, taking the customers accounts into bankruptcy, it puts the entire scheme in doubt.

That's false.  FTX made improper loans to another company, apparently committing fraud by using customer assets as part of the loan.  Binance announced it was dumping FTT tokens, which were a big part of that loan.  The assets in the loan fell in value, and no longer covered the loan.  Both the other company and FTX became insolvent.  Binance considered buying FTX, and FTX claims others were looking into it, but nobody wanted the billions in losses.  FTX collapsed when no buyers could be found to cover its loans - loans which were likely fraudulent.
https://www.coindesk.com/business/2022/11/10/ftx-used-customer-funds-among-other-assets-to-prop-up-alameda-research-in-may-reuters/

It's interesting you are so confident in what transpired at FTX. I presume you are buying the Crypto dip?

[roomtempmayo]

When one of the largest and most trusted traders collapses in a few days without any particular explanation, taking the customers accounts into bankruptcy, it puts the entire scheme in doubt.

That's false.  FTX made improper loans to another company, apparently committing fraud by using customer assets as part of the loan.  Binance announced it was dumping FTT tokens, which were a big part of that loan.  The assets in the loan fell in value, and no longer covered the loan.  Both the other company and FTX became insolvent.  Binance considered buying FTX, and FTX claims others were looking into it, but nobody wanted the billions in losses.  FTX collapsed when no buyers could be found to cover its loans - loans which were likely fraudulent.
https://www.coindesk.com/business/2022/11/10/ftx-used-customer-funds-among-other-assets-to-prop-up-alameda-research-in-may-reuters/

It's interesting you are so confident in what transpired at FTX. I presume you are buying the Crypto dip?

I've always thought the crypto-as-money idea was ridiculous for the simple reasons that states would never allow non-state actors to control the money supply, and if push came to shove states would use the police and armies to prevent it.  The technologies that would matter in that confrontation would only be those of force.  The rest is just window dressing and wishful thinking.

However, if someone figures out some ways to use blockchain to reduce transaction costs in real ways and capture that new efficiency, I might very well be interested. 

It seems that blockchain has a real future, it's just probably not attached to play money.

[Telecaster]

Is it really fraud?  Crypto exchanges are supposed to be regulated under the Bank Secrecy Act . . . but last I read, the act hadn't been amended to cover digital asset service providers so my understanding was that it's still the wild west and caveat emptor.  Has that changed?

I don't think we know enough to know if fraud was committed yet.  It appears FTX lost most of the money by loaning it to a sister company, Alameda Research which lost it on speculative trading and sketchy projects like Serum.     As I understand it, the test for fraud would be if FTX made affirmative statements to investors that deposits would not be used in that manner.   

[clifp]

But it is a completely alien concept for most Americans and Europeans, the money you deposit with a bank or brokerage is yours, not the bank.

This is a slightly different distinction, but with the repeal of Glass-Steagall, the speculative investment and retail banking portions of companies have become very commingled. Yes, the money you deposit is still "yours" and backed up by FDIC, but those dollars also support speculative investment and can be used to cover losses. This is distinct from retail banks making boring loans on houses, etc.
https://en.wikipedia.org/wiki/Separation_of_investment_and_retail_banking

I believe the most expensive bank failure from the perspective of the American taxpayer, was the S&L crisis of the early 1980s.  This was cause almost entirely by boring loans, mostly residential mortgages.  The rapid rise in interest rates left many S&L holding mortgages paying 5 and 6%, and then having to pay depositors 8-9%. Unlike today, where banks and S&Ls sell the vast majority of loans to Freddie and Fannie Mae, S&L held on to many of their mortgages, causing many banks to become insolvent. The FSLIC (saving &loan equivalent to FDIC) was undercapitalized and poorly managed.  In all S&L cost taxpayers over $160 billion in 1985 dollars.  In contrast, TARP which bailed out some banks for the riskier loans and trading losses made money for the American taxpayer.,

Thank god, us taxpayer aren't on the hook for crypto bailouts, but I fear it will be a very expensive lesson for many people especially younger investors.

[Glenstache]

But it is a completely alien concept for most Americans and Europeans, the money you deposit with a bank or brokerage is yours, not the bank.

This is a slightly different distinction, but with the repeal of Glass-Steagall, the speculative investment and retail banking portions of companies have become very commingled. Yes, the money you deposit is still "yours" and backed up by FDIC, but those dollars also support speculative investment and can be used to cover losses. This is distinct from retail banks making boring loans on houses, etc.
https://en.wikipedia.org/wiki/Separation_of_investment_and_retail_banking

I believe the most expensive bank failure from the perspective of the American taxpayer, was the S&L crisis of the early 1980s.  This was cause almost entirely by boring loans, mostly residential mortgages.  The rapid rise in interest rates left many S&L holding mortgages paying 5 and 6%, and then having to pay depositors 8-9%. Unlike today, where banks and S&Ls sell the vast majority of loans to Freddie and Fannie Mae, S&L held on to many of their mortgages, causing many banks to become insolvent. The FSLIC (saving &loan equivalent to FDIC) was undercapitalized and poorly managed.  In all S&L cost taxpayers over $160 billion in 1985 dollars.  In contrast, TARP which bailed out some banks for the riskier loans and trading losses made money for the American taxpayer.,

Thank god, us taxpayer aren't on the hook for crypto bailouts, but I fear it will be a very expensive lesson for many people especially younger investors.

The S&L crisis was a bit more nuanced than that. The industry was indeed having a squeeze from changing market conditions, but this turned into a crisis and bailout due to the deregulation of the industry (parallel to repeal of Glass Steagall). The S&Ls were able to start making much less "boring" loans including into junk bonds, and risky commercial ventures (anybody remember Milken?). Climbing interest rates definitely squeezed the S&Ls, but it is less clear that it would have been a crisis requiring bailout in the absence of use of depositor money for risky investments.

From Investopedia:
https://www.investopedia.com/terms/s/sl-crisis.asp

In 1982, in response to the poor prospects for S&Ls under current economic conditions, President Ronald Reagan signed Garn-St. Germain Depository Institutions Act, which eliminated loan-to-value ratios and interest rate caps for S&Ls, and also allowed them to hold 30% of their assets in consumer loans and 40% in commercial loans. No longer were S&Ls governed by Regulation Q, which led to a tightening of the spread between the cost of money and the rate of return on assets.

With reward uncoupled from risk, zombie thrifts began paying higher and higher rates to attract funds. S&Ls also began investing in riskier commercial real estate and even riskier junk bonds. This strategy of investing in riskier and riskier projects and instruments assumed that they would pay off in higher returns. Of course, if those returns didn’t materialize, it would be taxpayers [through the Federal Savings and Loan Insurance Corporation (FSLIC)]—not the banks or S&Ls officials—who would be left holding the bag. That's exactly what eventually happened.

So, lack of regulation to force responsible behavior and bad actors making risky decisions with depositor money ends in disaster once again. At least this one was not federally underwritten.

[MustacheAndaHalf]

When one of the largest and most trusted traders collapses in a few days without any particular explanation, taking the customers accounts into bankruptcy, it puts the entire scheme in doubt.

That's false.  FTX made improper loans to another company, apparently committing fraud by using customer assets as part of the loan.  Binance announced it was dumping FTT tokens, which were a big part of that loan.  The assets in the loan fell in value, and no longer covered the loan.  Both the other company and FTX became insolvent.  Binance considered buying FTX, and FTX claims others were looking into it, but nobody wanted the billions in losses.  FTX collapsed when no buyers could be found to cover its loans - loans which were likely fraudulent.
https://www.coindesk.com/business/2022/11/10/ftx-used-customer-funds-among-other-assets-to-prop-up-alameda-research-in-may-reuters/

It's interesting you are so confident in what transpired at FTX. I presume you are buying the Crypto dip?

You seem incapable of admitting you're wrong.  You claimed FTX collapsed "without any particular explanation", and now you're ignoring the source I cited and pretending to measure my confidence instead.  Do you prefer CNN, NPR or Fox News?  All of them have stories on what happened - all of them show you are wrong.

https://edition.cnn.com/2022/11/14/business/ftx-crypto-collapse-updates-hnk-intl/index.html
https://www.npr.org/2022/11/15/1136641651/ftx-bankruptcy-sam-bankman-fried-ftt-crypto-cryptocurrency-binance
https://www.foxbusiness.com/markets/ftx-faces-criminal-probe-bahamas-company-collapses-loses-1-billion-crypto

[GilesMM]

You seem incapable of admitting you're wrong.  You claimed FTX collapsed "without any particular explanation", and now you're ignoring the source I cited and pretending to measure my confidence instead.  Do you prefer CNN, NPR or Fox News?  All of them have stories on what happened - all of them show you are wrong.

https://edition.cnn.com/2022/11/14/business/ftx-crypto-collapse-updates-hnk-intl/index.html
https://www.npr.org/2022/11/15/1136641651/ftx-bankruptcy-sam-bankman-fried-ftt-crypto-cryptocurrency-binance
https://www.foxbusiness.com/markets/ftx-faces-criminal-probe-bahamas-company-collapses-loses-1-billion-crypto

It's not a question of right or wrong.  I'm not satisfied with the explanation whatsoever and I don't think anyone else interested in crypto is either.  If you like the simple story in the news and are content, bully for you. Are you actioning that?  Most of crypto is down at least 30% since this dumpster fire erupted.

SBF has been tweeting that he may  be willing to explain things from his view, which, so far, he has not.

[Glenstache]

You seem incapable of admitting you're wrong.  You claimed FTX collapsed "without any particular explanation", and now you're ignoring the source I cited and pretending to measure my confidence instead.  Do you prefer CNN, NPR or Fox News?  All of them have stories on what happened - all of them show you are wrong.

https://edition.cnn.com/2022/11/14/business/ftx-crypto-collapse-updates-hnk-intl/index.html
https://www.npr.org/2022/11/15/1136641651/ftx-bankruptcy-sam-bankman-fried-ftt-crypto-cryptocurrency-binance
https://www.foxbusiness.com/markets/ftx-faces-criminal-probe-bahamas-company-collapses-loses-1-billion-crypto

It's not a question of right or wrong.  I'm not satisfied with the explanation whatsoever and I don't think anyone else interested in crypto is either.  If you like the simple story in the news and are content, bully for you. Are you actioning that?  Most of crypto is down at least 30% since this dumpster fire erupted.

SBF has been tweeting that he may  be willing to explain things from his view, which, so far, he has not.

Out of genuine curiousity, what specific questions do the crypto-interested-persons have about the FTX implosion? Or, what are the red flags as to why the explanations listed above are not adequate?

[MustacheAndaHalf]

You seem incapable of admitting you're wrong.  You claimed FTX collapsed "without any particular explanation", and now you're ignoring the source I cited and pretending to measure my confidence instead.  Do you prefer CNN, NPR or Fox News?  All of them have stories on what happened - all of them show you are wrong.

https://edition.cnn.com/2022/11/14/business/ftx-crypto-collapse-updates-hnk-intl/index.html
https://www.npr.org/2022/11/15/1136641651/ftx-bankruptcy-sam-bankman-fried-ftt-crypto-cryptocurrency-binance
https://www.foxbusiness.com/markets/ftx-faces-criminal-probe-bahamas-company-collapses-loses-1-billion-crypto

It's not a question of right or wrong.  I'm not satisfied with the explanation whatsoever and I don't think anyone else interested in crypto is either.  If you like the simple story in the news and are content, bully for you. Are you actioning that?  Most of crypto is down at least 30% since this dumpster fire erupted.

SBF has been tweeting that he may  be willing to explain things from his view, which, so far, he has not.

That's not what you said - what you said was "without any particular explanation", which I notice you deleted when replying to me.  Here is the part you got wrong, again:

When one of the largest and most trusted traders collapses in a few days without any particular explanation, taking the customers accounts into bankruptcy, it puts the entire scheme in doubt.

"without any particular explanation", not without any explanation that you believe.  Which is why I quoted various news sources, none of which agree with your claim.

[achvfi]

I wonder currently all this crypto dog shit asset drawdown is flowing into growth stocks. Time and again people seem to pile into same stocks that performed great in last few years.

[GilesMM]

You seem incapable of admitting you're wrong.  You claimed FTX collapsed "without any particular explanation", and now you're ignoring the source I cited and pretending to measure my confidence instead.  Do you prefer CNN, NPR or Fox News?  All of them have stories on what happened - all of them show you are wrong.

https://edition.cnn.com/2022/11/14/business/ftx-crypto-collapse-updates-hnk-intl/index.html
https://www.npr.org/2022/11/15/1136641651/ftx-bankruptcy-sam-bankman-fried-ftt-crypto-cryptocurrency-binance
https://www.foxbusiness.com/markets/ftx-faces-criminal-probe-bahamas-company-collapses-loses-1-billion-crypto

It's not a question of right or wrong.  I'm not satisfied with the explanation whatsoever and I don't think anyone else interested in crypto is either.  If you like the simple story in the news and are content, bully for you. Are you actioning that?  Most of crypto is down at least 30% since this dumpster fire erupted.

SBF has been tweeting that he may  be willing to explain things from his view, which, so far, he has not.

Out of genuine curiousity, what specific questions do the crypto-interested-persons have about the FTX implosion? Or, what are the red flags as to why the explanations listed above are not adequate?

The entire industry is cloaked in secrecy. Just look at the name! There is no transparency whatsoever. News outlets are furiously trying to piece together what may have happened, partly from old Tweets and anonymous sources. Where did all the money flow and when and how? Where is the missing billion or more dollars? What was actually going on with FTT tokens and how many were on the Alameda and FTX balance sheet?  There is no way to know what similar shenanigans are under way with other crypto companies, thus the continuing collapse. NPR today said we are entering a “crypto ice-age”.

[MustacheAndaHalf]

You seem incapable of admitting you're wrong.  You claimed FTX collapsed "without any particular explanation", and now you're ignoring the source I cited and pretending to measure my confidence instead.  Do you prefer CNN, NPR or Fox News?  All of them have stories on what happened - all of them show you are wrong.

https://edition.cnn.com/2022/11/14/business/ftx-crypto-collapse-updates-hnk-intl/index.html
https://www.npr.org/2022/11/15/1136641651/ftx-bankruptcy-sam-bankman-fried-ftt-crypto-cryptocurrency-binance
https://www.foxbusiness.com/markets/ftx-faces-criminal-probe-bahamas-company-collapses-loses-1-billion-crypto

It's not a question of right or wrong.  I'm not satisfied with the explanation whatsoever and I don't think anyone else interested in crypto is either.  If you like the simple story in the news and are content, bully for you. Are you actioning that?  Most of crypto is down at least 30% since this dumpster fire erupted.

SBF has been tweeting that he may  be willing to explain things from his view, which, so far, he has not.

Out of genuine curiousity, what specific questions do the crypto-interested-persons have about the FTX implosion? Or, what are the red flags as to why the explanations listed above are not adequate?

The entire industry is cloaked in secrecy. Just look at the name! There is no transparency whatsoever.

You keep making false statements about crypto.  The Bitcoin blockchain code is publicly available - you can download and read it.  The entire history of all transactions on that blockchain is also publicly available.  The Bitcoin blockchain is 100% transparent and available for viewing.  You don't let the facts get in the way of your opinions, do you?

[GilesMM]

You seem incapable of admitting you're wrong.  You claimed FTX collapsed "without any particular explanation", and now you're ignoring the source I cited and pretending to measure my confidence instead.  Do you prefer CNN, NPR or Fox News?  All of them have stories on what happened - all of them show you are wrong.

https://edition.cnn.com/2022/11/14/business/ftx-crypto-collapse-updates-hnk-intl/index.html
https://www.npr.org/2022/11/15/1136641651/ftx-bankruptcy-sam-bankman-fried-ftt-crypto-cryptocurrency-binance
https://www.foxbusiness.com/markets/ftx-faces-criminal-probe-bahamas-company-collapses-loses-1-billion-crypto

It's not a question of right or wrong.  I'm not satisfied with the explanation whatsoever and I don't think anyone else interested in crypto is either.  If you like the simple story in the news and are content, bully for you. Are you actioning that?  Most of crypto is down at least 30% since this dumpster fire erupted.

SBF has been tweeting that he may  be willing to explain things from his view, which, so far, he has not.

Out of genuine curiousity, what specific questions do the crypto-interested-persons have about the FTX implosion? Or, what are the red flags as to why the explanations listed above are not adequate?

The entire industry is cloaked in secrecy. Just look at the name! There is no transparency whatsoever.

You keep making false statements about crypto.  The Bitcoin blockchain code is publicly available - you can download and read it.  The entire history of all transactions on that blockchain is also publicly available.  The Bitcoin blockchain is 100% transparent and available for viewing.  You don't let the facts get in the way of your opinions, do you?

Great!  Go ahead and study the FTX meltdown using the publicly available transaction info for us and tell us what you find out.  Give us a summary of the transactions.

[MustacheAndaHalf]

You seem incapable of admitting you're wrong.  You claimed FTX collapsed "without any particular explanation", and now you're ignoring the source I cited and pretending to measure my confidence instead.  Do you prefer CNN, NPR or Fox News?  All of them have stories on what happened - all of them show you are wrong.

https://edition.cnn.com/2022/11/14/business/ftx-crypto-collapse-updates-hnk-intl/index.html
https://www.npr.org/2022/11/15/1136641651/ftx-bankruptcy-sam-bankman-fried-ftt-crypto-cryptocurrency-binance
https://www.foxbusiness.com/markets/ftx-faces-criminal-probe-bahamas-company-collapses-loses-1-billion-crypto

It's not a question of right or wrong.  I'm not satisfied with the explanation whatsoever and I don't think anyone else interested in crypto is either.  If you like the simple story in the news and are content, bully for you. Are you actioning that?  Most of crypto is down at least 30% since this dumpster fire erupted.

SBF has been tweeting that he may  be willing to explain things from his view, which, so far, he has not.

Out of genuine curiousity, what specific questions do the crypto-interested-persons have about the FTX implosion? Or, what are the red flags as to why the explanations listed above are not adequate?

The entire industry is cloaked in secrecy. Just look at the name! There is no transparency whatsoever.

You keep making false statements about crypto.  The Bitcoin blockchain code is publicly available - you can download and read it.  The entire history of all transactions on that blockchain is also publicly available.  The Bitcoin blockchain is 100% transparent and available for viewing.  You don't let the facts get in the way of your opinions, do you?

Great!  Go ahead and study the FTX meltdown using the publicly available transaction info for us and tell us what you find out.  Give us a summary of the transactions.

You said "There is no transparency whatsoever", and I provided an example of transparency.  Now you want to change the goalposts and ignore what you said.

[theolympians]

The events of the past week have been a disaster for crypto with one of the most respected traders wiped out almost overnight. The future of the currency is in grave doubt at this point. Stay tuned.

The FTX scandal undermined the concept of "Effective Altruism", billionaires only taking what they need and donating the rest. That turned out to be completely false and cynical.

[theolympians]

The events of the past week have been a disaster for crypto with one of the most respected traders wiped out almost overnight. The future of the currency is in grave doubt at this point. Stay tuned.

Has some fundamental attribute of crypto currency changed with the collapse of FTX?    Surely the loss of one exchange can't destroy everything...

The exchanges seem to act as the personal bank accounts of the owners. It system isn't regulated so there is no consumer protection to speak of. In fact I remember crypto bros talking up how safe and untraceable crypto is and how ahead of the curve the platforms are. I think there was another couple recently that scammed million upon millions and the theft was tracked to them.

I think a false assumption most of those involved in this stuff is that unregulated, difficult to trace, and "blockchain" is inherently more trustworthy than a bank. It isn't, it seems worse. There are charlatans in the banking and the crypto world. With banking there are established protections, with crypto there is NOTHING.

We have had financial exchange failures in the US before, and plenty of failing exchanges have been bought by bigger/healthier exchanges.

The difference is that when they failed they didn't take their customer's money with them.  Since the Crypto exchange act more like a brokerage than an exchange like NASDAQ, it is particularly worrying. 

Most of my money is at Schwab, there is Securities Investor Protection Corporation, and Schwab has a policy at Lloyds of London for additional protection up to 1.15 million in cash. Crypto exchanges have none of these protections. 

Still, even if a second-tier brokerage went bust like Interactive Brokerage and their customers lost some much less all of their money, I'd be very concerned.

If the number 2 brokerage Vanguard went broke, and customers lost money. I'd be in state of mild to severe panic.  How would you react?

[lifeanon269]

Great!  Go ahead and study the FTX meltdown using the publicly available transaction info for us and tell us what you find out.  Give us a summary of the transactions.

The events of the past week have been a disaster for crypto with one of the most respected traders wiped out almost overnight. The future of the currency is in grave doubt at this point. Stay tuned.

The FTX scandal undermined the concept of "Effective Altruism", billionaires only taking what they need and donating the rest. That turned out to be completely false and cynical.

It really is sad that the industry has betrayed the original promise of bitcoin and the genuine merit that it has. But anyone taking the downfall of these institutions as anything other than a shining example of the importance of bitcoin is completely misunderstanding something. People placed trust in these institutions (just as they have in other fraudulent institutions long before "crypto" came along) and those institutions betrayed that trust which lead to many people losing a lot of money. It is sad indeed. But that's entirely one of the very benefits that bitcoin provides to people when used directly and properly. If you think that benefit goes away because of a defunct and scandalous third-party institution's downfall, then you're missing something in the narrative here. If anything, I think a lot more people came away realizing the importance of something like bitcoin as opposed to thinking we need more trust in custodial third-parties. The more and more trust that continues to be betrayed, the more and more people will go seeking an alternative.

I think this is an important read.

https://www.nbcnews.com/think/opinion/bitcoin-vs-ftx-crypto-king-sam-bankman-fried-problem-rcna57964

[theolympians]

What is "funny" is many pro-crypto's "don't trust institutions" or the government, but gave money to SBF and his pixie girlfriend. They lack the trust in their own gov't and banks, but trust hucksters on tik-tok?

I'll admit I've made some bad investment choices based on emotion and speculating on individual stocks. They tanked. My money was made on index funds and dollar-cost averaging. This crypto thing, though it is always denied, is based on speculation and get-rich-quicker than later mentality.

It seems like an extension of the 60's don't trust anyone over thirty mentality. It built on that by adding "anyone with a brain doesn't trust the government", and "banks fail, remember the depression" It strikes the same cord and was designed to. It is not new. As an earlier poster wrote, in the long run governments are not going to let outsiders control the money supply. They are not going to allow completely un-trackable stuff floating around forever.

From what I've heard, this 3rd largest FTX brokerage, or whatever it was, lumped most of the money it took in and provided BS tokens to suckers, I mean customers. The heads then used the money as their personal bank account and using the fund to buy access, companies to provide the illusion of solid growth, and to attract more investors.

Prior to the collapse, everyone lauded them. In reality no one had a clue, or were on their payroll. Let that sink in. There is nothing new under the sun. I saw an interview months before the collapse with SBF where he described his business model. Gee, it sounds like a ponzi. The think he thought himself too smart to have any insight. He thought (as many criminals do) that since he was brilliant enough to call a color that everyone knows is "blue" ,"red", that changed everything.

I didn't mean to insult those who put their money into FTX by calling them suckers. I will take a leap and say that most fraudsters consider those that give them money "suckers". I too was a sucker when I went off track and stock picked on my emotional and very poorly informed choices. Thankfully it was money I could afford to lose. It was lost.

If you invest in crypto, I hope you are successful. However, there are lessons in all of this is if we choose to see.

[mistymoney]

Great!  Go ahead and study the FTX meltdown using the publicly available transaction info for us and tell us what you find out.  Give us a summary of the transactions.

The events of the past week have been a disaster for crypto with one of the most respected traders wiped out almost overnight. The future of the currency is in grave doubt at this point. Stay tuned.

The FTX scandal undermined the concept of "Effective Altruism", billionaires only taking what they need and donating the rest. That turned out to be completely false and cynical.

It really is sad that the industry has betrayed the original promise of bitcoin and the genuine merit that it has. But anyone taking the downfall of these institutions as anything other than a shining example of the importance of bitcoin is completely misunderstanding something.

I find this post rather chilling, honestly. It comes off as quasi-religious. As if bitcoin has some higher purpose, other than just being money. Even if bitcoin did have an "original promise" of something wonderful doesn't mean that millions (or billions) of people can't twist it to whatever they want it to be.

The incredible depths of corruption we see in every facet of our society is a pretty disgusting testament to human nature. Thinking that some kind of non or less traceable or regulatable currency is going to be somehow do something grand is niave at best. In its' heyday, crypto was/is the currency of choice for kidnappers, ransomeware attackers, drug dealers, child porn purveyors, and all sorts of nefarious goings on. I don't know what grand ideals on bitcoin you've been sold but anything involving a whole lot of people and money is going to go corrupt as quickly as it can.

Regulations are put in place to try to stop that, usually after something big happens. Which is where all the major regulations in US currency stem from. Are regulators/regulations corrupt/corruptible? Of course they are, they involve people and money. In addition to corruption, honest mistakes can also occur that have a net negative on people.

But the idea that bitcoin has some great promise to socieity to fulfill is madness. people and money is an inheriently corrupt/corruptable system. Current stats show that most people are assholes. We need to design systems that account for that. In money and elsewhere.

Kind of like anarchy. It's a wonderful philosophical ideal - if the majority of people weren't assholes, with a large propostion of those assholes murders, raptist, theives, pedophiles, etc.  And then a lot of garden variety assholes who just cheat a little or are mean.

[mistymoney]

It really is sad that the industry has betrayed the original promise of bitcoin and the genuine merit that it has. But anyone taking the downfall of these institutions as anything other than a shining example of the importance of bitcoin is completely misunderstanding something.

oh and my final thought on this. If you think so highly of bitcoin it is likely you have a lot of money in bitcoin, and have therefore lost a lot of money over the past year, with btc down over 70 percent.

So I question your motivations in defending bitcoin. the entire network is based on confidence in the currency, and people will to buy or trade on it, so while bitcoin may rally in the future after a bunch of cryptos are wiped out, or btc may also go worthless, all depending on whatever confidence people have in bitcoin, and you're here preaching about the "promise of bitcoin".

Call me cynical, but people and money.....

[Vashy]

It really is sad that the industry has betrayed the original promise of bitcoin and the genuine merit that it has. But anyone taking the downfall of these institutions as anything other than a shining example of the importance of bitcoin is completely misunderstanding something.

oh and my final thought on this. If you think so highly of bitcoin it is likely you have a lot of money in bitcoin, and have therefore lost a lot of money over the past year, with btc down over 70 percent.

So I question your motivations in defending bitcoin. the entire network is based on confidence in the currency, and people will to buy or trade on it, so while bitcoin may rally in the future after a bunch of cryptos are wiped out, or btc may also go worthless, all depending on whatever confidence people have in bitcoin, and you're here preaching about the "promise of bitcoin".

Call me cynical, but people and money.....

At some point this whole bitcoin religion became just a really good case study for the sunk cost fallacy.

[beee]

If bitcoin's original promise is to be a currency, then there's no point to own it right now.
Own it the day it becomes a widely accepted currency. Everyone will have exactly the same amount of money they have right now.
Billionaires will have their billions in bitcoin, poor people will be poor with bitcoin.
No transfer of wealth will happen just because one currency is replaced with another.

[BicycleB]

It comes off as quasi-religious. As if bitcoin has some higher purpose, other than just being money. Even if bitcoin did have an "original promise" of something wonderful doesn't mean that millions (or billions) of people can't twist it to whatever they want it to be.

Wait...are you saying that bitcoin is (ahem) a sort of "misty money"?

That is suspiciously on brand for your screen name! ;)

[mistymoney]

It comes off as quasi-religious. As if bitcoin has some higher purpose, other than just being money. Even if bitcoin did have an "original promise" of something wonderful doesn't mean that millions (or billions) of people can't twist it to whatever they want it to be.

Wait...are you saying that bitcoin is (ahem) a sort of "misty money"?

That is suspiciously on brand for your screen name! ;)

LOL!

[Eco_eco]

@Eco_eco updates?

I'm back over a year later - sorry to resurrect an old thread (which might be better left dormant).

With the strong bear market our crypto market we've continued our overall strategy of a risk weighted portfolio with heavy loading towards the projects with the widest adoption - currently this is 40% BTC, 50% ethereum and 10% in other projects. Fortunately with the crash we had other risk management strategies in place (no funds held in custodian exchanges, no lending/debt, etc) and so avoided any major losses, other than the very large over all drop in values.

Our crypto investments are currently showing a good return compared with the DCA average cost, but are a long way off the peak from the hyper-hyper COVID market. I continue to think crypto has a place in our portfolio.

[Simpli-Fi]

I’ve been DCA $50 a week since June 2021 with Swan…quite pleased with the “value” however not impressed with the number of transactions to turn it back into USD.

I only attempted it once to confirm the path…I’m sure there are streamlined methods.

But I still don’t hold the keys…and some say “not your key, not your coin”