11 Comments

By the way, this devastation isn't over. A lot of adjacent companies are going to feel it

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I’m giving a guest lecture for one of my favorite finance profs from the early 2000’s at UST in St. Paul. I had 20 slides on crypto and most are relevant... but If you’re ok with it, I’d like to pull up this substack and go through your stances and past posts about it. You have laid all this out beautifully. The prof tells me the class needs a reality check, most of my lecture is based on market mechanics and what they don’t teach in academic finance. I now have a large amount of info to sift through regarding Sam Bankman-Fried’s activities incestuously wrapped up in FTX

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Sure, no problem (just tell them where to find me and they might want to sign up for the free emails @pointsnfigures1). There is tremendous possibility with crypto---but it's all on chalkboards right now.

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I have a full bibliography giving credit because unlike some elected officials, I make every attempt not to plagiarize!

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You might see a few new young subscribers after my lectures today. I hope so. I had a kid arguing “store of value” with me until I told him I’d buy all his FTT on the spot for a nickel and not a penny more. How’s your store of value when I marked you at $0.05 and I’m all the bids you have? My old prof stood and clapped. Not sure why.

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all for it and thank you. Wouldn't it be funny to be trading FTT in a pit? I can hear the brokers screaming, "what's bid?".......hahahahahaha

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More like the shrieks from the floor when I run away after shoving .05 settlement!

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Your comment is spot on with what would have happened if we followed SBF on his ideas of disintermediation. Screwed is the proper term here for any customer clearing FTX. Disintermediation is not a good idea and this just proves FTX was a house of cards. Eventually crypto will be a valid financial product and this is probably the shake out needed to clear up the space. Probably more downside but the haze is clearing.

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Commentary from our ML Tech team:

Crypto markets were stunned by the sudden collapse of FTX and its acquisition by the largest exchange Binance. The exchange experienced a massive bank run after concerns spread earlier this week regarding the amount of high risk assets, including billions of FTT, on the balance sheet of Alameda Research, a trading firm with the same founder, Sam Bankman-Fried. Following this, Binance CEO Changpeng "CZ" Zhao compared FTX to Luna on Twitter and announced he would sell his significant stake in FTT.

After facing billions in withdrawal requests, the exchange eventually halted withdrawals for a few hours before announcing a non-binding rescue agreement from Binance to deal with the "significant liquidity crunch."

Many questions remain for the coming days. If the deal is completed, customers should face no credit losses from FTX. But the terms for FTT tokens and FTX shareholders may turn out to be quite unfavorable. It remains to be seen what may happen with Alameda Research and the company's OTC and lending counter parties. There could also be a contagion effect from the sudden drop in value of FTT, SOL, and prices in general which may lead to further liquidity squeezes.

After such a high profile collapse, there will likely be a push toward more transparency in centralized exchange reserve balances and towards increased oversight from regulators.

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And to think that Corzine walked. Maybe if they rightfully threw his ass in jail...

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I missed the crypto up

And

I missed the down

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