It is a fascinating Terra/Luna death spiral, which can actually be followed live. They took finance lessons from Erdogan it seems.
They are “printing” new Luna to try to support the Terra. 300M to 4,9B in the last few days.
Tether has also broken its peg, though it’s considerably closer to par than Terra. In theory it doesn’t have quite the same death spiral potential as an algo coin, but given how shifty they’ve been about their collateral, anything could happen.
Oh and Binance suspended withdrawals because of “scheduled maintenance”
It is really sad, the first 3 posts at the Luna Reddit forum right now are all about National Suicide Helpline numbers or suicide related stories.
I’d give you an angry upvote if I could!
KevinC
3007
It’s sad but my sympathy faltered when many of the comments were blaming “plandemocrats” etc. for causing the coin to crash.
Cryptobros, man. Woof.
Aceris
3008
The thing about tether is they actually do redemptions, and given the lack of transparency about this process, it’s entirely possible that tether will stay close to $1 unless and until those redemptions start failing, even as the true value of the assets backing tether gets very small.
And though it pains me to say it, exactly the same thing happened in traditional markets with CDOs - CDOs whose “true” value on a risk/return basis was pennies on the dollar were still being valued at close to par due to a lack of transparency and a market dependent on that par being maintained - until the capitalization in the system ran out - and “this might stop paying in a year and so is almost worthless” became “this has stopped paying now and is worthless”.
Of course the question becomes, is tether:
- an intentional scam intended to siphon off as much of that misvaluation as possible for the controllers of the system - even if that means accelerating the collapse.
- An intentional scam to prop up BTC and drive business to exchanges.
- An unintentional scam.
If (1) I think it collapses quite soon. If (2) or (3) it could carry on for a very long time if BTC is able to fall gracefully without the system self-destructing.
I have zero empathy for Crypto Bros, but what is pissing me off is that I am convinced the crypto crash is also dragging the stock market lower. Absolutely convinced that the Wall Street crowd is heavily intro crypto and their pessimism and angst about crypto is turing them bearish on legit investments.
Eh, there’s plenty of non-crypto bad news for people to worry about. UK GDP shrank in March, it was just announced.
LeeAbe
3011
From everything I have heard/read they have definitely jumped on board, but everything crypto is getting hit worse than the regular market. Stocks like HOOD were down something like 12% yesterday because of their heavy crypto association. Seems like all tech is getting hammered though.
Yep.
It by no means is a perfect analog, but there are some striking similarities between crypto and the CDO collapse.
And mortgage-based CDOs are:
- a financial product that exists entirely within a “regulated” market (yes, good one, I know), and
- based at least down a number of layers (and sometimes only theoretically), on actual assets/contracts/real estate.
Lol
Oh no, the 500$ in crypto I have is doing bad!
Welp, that is why I only put in “fun” money.
We will see if it goes back up.
Depending on which coins you put money into, it likely will. If history is any guide, at least.
Well, like any investor, I diversified. That 500$ was spread across like 5 different coins.
Thrag
3016
We’ve already clearly established, dad, that not all investments are good or sensible. Still doesn’t make crypto any less flawed.
One sign to me that Crypto – and especially Bitcoin – is probably still not ready to run with the big dogs of more traditional assets (which especially in bond markets but also in the tech sector in traditional stocks, I cannot state clearly enough are often as based upon almost as much illusion and smoke and mirrors as crypto) is the impact the 2022 crash is having on Coinbase stock.
In theory, anyway, Coinbase should be at least moderately agnostic to movement within the coin marketplace to at least some partial extent (though any financial exchange is likely to take it on the chin if there’s a mass rush to “cash out” and withdraw funds, for sure.) But that stock probably shouldn’t fall at a faster rate than the biggest “assets” it exchanges.
Aceris
3019
This is nonsense. Private VC valuations can be very smoke and mirrors (which is kind of priced into the whole VC business), and occasionally one of them survives through an IPO, but many of those survivors face a rude awakening valuation wise.
If you look at the NASDAQ, there are inflated P/E ratios aplenty, because there’s more hope for growth here than in the rest of the economy, but surprisingly little outright smoke and mirrors in comparison to the VC world.
Thrag
3020
Okay, I guess you weren’t referring to posters in the thread with the “kids”? I just was riffing on your line.
Should we just get out of the way a list of arguments not being made in the thread:
- Only crypto is flawed
- Regulation solves all problems
- There does not exist a single informed crypto investor
- Everyone involved in crypto in any way is a scammer
