The bear market has lasted 7 months.
Most of us struggled to keep up with everything.
Here's the most important events (you need to know) in 2 minutes:
Most of us struggled to keep up with everything.
Here's the most important events (you need to know) in 2 minutes:
In this thread we will cover:
- Grayscale's GBTC
- Luna Death Spiral
- Celsius Lending
- Three Arrows Capital
- Voyager Digital
- stETH
- FTX & SBF
Let's dive in ⬇
- Grayscale's GBTC
- Luna Death Spiral
- Celsius Lending
- Three Arrows Capital
- Voyager Digital
- stETH
- FTX & SBF
Let's dive in ⬇
Grayscale Bitcoin Trust (GBTC)
They launched the first publicly traded Bitcoin fund in the U.S.
There was a lot of demand for GBTC as a result.
But a 6 month unlock period meant that investors could face either a premium or a discount.
So what happens when the price falls:
They launched the first publicly traded Bitcoin fund in the U.S.
There was a lot of demand for GBTC as a result.
But a 6 month unlock period meant that investors could face either a premium or a discount.
So what happens when the price falls:
When the value of Bitcoin started to fall - GBTC started to trade at a discount.
For crypto firms this was bad, but it wasn't the end of the world.
A lot more funds began to take greater risks to recoup their losses.
And then:
For crypto firms this was bad, but it wasn't the end of the world.
A lot more funds began to take greater risks to recoup their losses.
And then:
Luna Collapsed
On May 7 - the death spiral that we feared and @AlgodTrading predicted took place.
Billions of dollars wiped from the balance sheets in a few days.
And many large funds were invested into the Terra ecosystem.
The losses led to a "contagion" effect in crypto.
On May 7 - the death spiral that we feared and @AlgodTrading predicted took place.
Billions of dollars wiped from the balance sheets in a few days.
And many large funds were invested into the Terra ecosystem.
The losses led to a "contagion" effect in crypto.
@AlgodTrading But this wasn't the end either.
Yes, a lot of retail investors took a big hit.
But lenders who were exposed to this death spiral had it worse.
This was the stuff you didn't see.
Why?
Because companies like Celsius and 3AC aren't transparent with their holdings to the public.
Yes, a lot of retail investors took a big hit.
But lenders who were exposed to this death spiral had it worse.
This was the stuff you didn't see.
Why?
Because companies like Celsius and 3AC aren't transparent with their holdings to the public.
@AlgodTrading Celsius
As crypto prices fell, this caused a liquidation cascade across crypto.
Celsius was not primed to handle this.
On June 13 - all withdrawals, including swaps between accounts were paused.
Are they bankrupt? We don't know yet...
But that's the most likely scenario.
As crypto prices fell, this caused a liquidation cascade across crypto.
Celsius was not primed to handle this.
On June 13 - all withdrawals, including swaps between accounts were paused.
Are they bankrupt? We don't know yet...
But that's the most likely scenario.
@AlgodTrading Three Arrows Capital (3AC)
3AC has been ordered to liquidate and as a fund they are now insolvent.
Over-leveraged trading with uncollateralized borrowing led to their downfall.
And not just their own.
They damaged Voyager and crypto lending institutions in the process:
3AC has been ordered to liquidate and as a fund they are now insolvent.
Over-leveraged trading with uncollateralized borrowing led to their downfall.
And not just their own.
They damaged Voyager and crypto lending institutions in the process:
@AlgodTrading Voyager Digital
They issued a loan of 15,250 BTC and 350 million in USDC to 3AC.
3AC wasn't able to pay this back.
Voyager issued a notice of default to 3AC.
Like Celsius - they have also suspended all trading, deposits and withdrawals.
And the most recent event was:
They issued a loan of 15,250 BTC and 350 million in USDC to 3AC.
3AC wasn't able to pay this back.
Voyager issued a notice of default to 3AC.
Like Celsius - they have also suspended all trading, deposits and withdrawals.
And the most recent event was:
@AlgodTrading Lido Staked Eth (stETH)
What is stETH?
stETH is Ethereum staked and locked up for the Beacon Chain.
It is redeemable 1:1 once Ethereum 2.0 goes live.
When prices are falling and companies are collapsing - confidence is low.
Confidence matters because:
What is stETH?
stETH is Ethereum staked and locked up for the Beacon Chain.
It is redeemable 1:1 once Ethereum 2.0 goes live.
When prices are falling and companies are collapsing - confidence is low.
Confidence matters because:
@AlgodTrading Investors began to de-risk
Yes, even out of Ethereum.
Retail investors and large firms like Celsius and 3AC started to sell stETH for ETH.
On June 23 - stETH tokens traded at a 95% discount for ETH.
This caused mass liquidation and yet another death spiral.
Yes, even out of Ethereum.
Retail investors and large firms like Celsius and 3AC started to sell stETH for ETH.
On June 23 - stETH tokens traded at a 95% discount for ETH.
This caused mass liquidation and yet another death spiral.
@AlgodTrading The Future
As @cz_binance said - acquisitions are possible but "not all projects are worth saving".
No one wants to bail out an entire industry.
No one should have to.
Companies with any sort of potential are being bought at a fraction of their true value.
As @cz_binance said - acquisitions are possible but "not all projects are worth saving".
No one wants to bail out an entire industry.
No one should have to.
Companies with any sort of potential are being bought at a fraction of their true value.
@AlgodTrading @cz_binance SBF & FTX
The whole of twitter seems to be talking about Sam these days.
He's taken a step to acquire such crypto companies.
Examples are (rumoured) to include:
• BlockFi
• Robinhood
• Bitvo
• Embed
SBF & FTX are clearly gearing themselves up for the next bull run.
The whole of twitter seems to be talking about Sam these days.
He's taken a step to acquire such crypto companies.
Examples are (rumoured) to include:
• BlockFi
• Robinhood
• Bitvo
• Embed
SBF & FTX are clearly gearing themselves up for the next bull run.
@AlgodTrading @cz_binance Final Thoughts
This domino collapse or "contagion" will not stop.
Smaller exchanges, crypto lenders and over-leveraged traders will be the next to go.
As well as funds with lots of short term debt.
It'll be interesting to see who's still here 6 months from now.
This domino collapse or "contagion" will not stop.
Smaller exchanges, crypto lenders and over-leveraged traders will be the next to go.
As well as funds with lots of short term debt.
It'll be interesting to see who's still here 6 months from now.
@AlgodTrading @cz_binance There's a lot of resources out there to learn about these events.
Most of them are a waste of your time.
Here's a great video by @BanklessHQ explaining the link between 3AC and your money:
youtu.be youtu.be
Most of them are a waste of your time.
Here's a great video by @BanklessHQ explaining the link between 3AC and your money:
youtu.be youtu.be
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