I assume you are kidding about your comments on the WSJ.Originally Posted by Darth_Uno
A week ago, I gave my investment advisors a quiz, and it was on Jan 1, 2022 would you have rather invested in:
1) Chinese property developers.
2) Crypto
3) 5 year T Bills.
Likes pretty much everything in every caliber.
Nope.
That's a little loaded; you talking about cashing out at one year, or 5 years, or 20? Long term, I pick option 4 - just get more SPY and bonds, or a target retirement fund. Short term, if we could pick 'em right, we'd all be millionaires eh? People plenty smarter than me with a whole lot more resources have tried to crack the code.
I'm just saying if you think there might be something there, bet a little bit on black. If you don't think so...then just don't buy it. No different than Tesla or Gamestop. There's a lot of different reasons you might or might not invest in those, and a good deal of your success has to do with timing. With an S&P 500 fund or ETF, time is on your side. Just buy it and wait. And if SPY ain't worth more in 20 years, we all got problems.
Oh my...
My comments never addressed what would happen to cryptocurrency (of any sort) in the event of an EMP attack. You must've misread my post. I have no idea where you got the idea that I said anything about the effect of EMP on cryptocurrency.
As for EMP attacks on our nation, detonation altitude can extend the range of just a couple dozen weapons to cover our entire nation. Without the capability to quickly replace a destroyed electronic device (which would certainly occur in such a wide scale event), your cryptocurrency is useless even if it sits elsewhere in a server far away.
Crypto might be a lot of things, but a source of stability it is not.
''Politics is for the present, but an equation is for eternity.'' ―Albert Einstein
Full disclosure per the Pistol-Forum CoC: I am the author of Quantitative Ammunition Selection.
Sorry for my inappropriate use of quote.
I was addressing the silly EMP argument against crypto. Not your comment directly.
David S.
''Ah, I see'', said the blind man.
Happy Thanksgiving.
''Politics is for the present, but an equation is for eternity.'' ―Albert Einstein
Full disclosure per the Pistol-Forum CoC: I am the author of Quantitative Ammunition Selection.
How Crypto’s Collapse May Have Done the Economy a Favor
Crypto’s lack of connections with traditional finance means its problems haven’t spilled over to the economy
Greg IpUpdated Nov. 23, 2022 at 10:42 am ET
This year’s crypto collapse has all the hallmarks of a classic banking crisis: runs, fire sales, contagion.
Check out the bankruptcy filings of crypto platforms Voyager Digital Holdings Inc., Celsius Network LLC and FTX Trading Ltd. and hedge fund Three Arrows Capital, and you won’t find any banks listed among their largest creditors.
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While bankruptcy filings aren’t entirely clear, they describe many of the largest creditors as customers or other crypto-related companies. Crypto companies, in other words, operate in a closed loop, deeply interconnected within that loop but with few apparent connections of significance to traditional finance. This explains how an asset class once worth roughly $3 trillion could lose 72% of its value, and prominent intermediaries could go bust, with no discernible spillovers to the financial system.
“Crypto space…is largely circular,” Yale University economist Gary Gorton and University of Michigan law professor Jeffery Zhang write in a forthcoming paper. “Once crypto banks obtain deposits from investors, these firms borrow, lend, and trade with themselves. They do not interact with firms connected to the real economy.”
FTX’s Bankruptcy: Three Things to Know
FTX’s Bankruptcy: Three Things to Know
FTX’s Bankruptcy: Three Things to Know
The collapse of FTX has set off the largest crypto-related bankruptcy ever, and court filings are already shedding light on what went wrong and how complicated things could get. Here are three things to know about the company’s bankruptcy process. Photo: Lam Yik/Bloomberg News
A few years from now, things might have been different, given the intensifying pressure on regulators and bankers to embrace crypto. The crypto meltdown may have prevented that—and a much wider crisis.
Crypto has long been marketed as an unregulated, anonymous, frictionless, more accessible alternative to traditional banks and currencies. Yet its mushrooming ecosystem looks a lot like the banking system, accepting deposits and making loans. Messrs. Gorton and Zhang write, “Crypto lending platforms recreated banking all over again… if an entity engages in borrowing and lending, it is economically equivalent to a bank even if it’s not labeled as one.”
And just like the banking system, crypto is leveraged and interconnected, and thus vulnerable to debilitating runs and contagion. This year’s crisis began in May when TerraUSD, a purported stablecoin—i.e., a cryptocurrency that aimed to sustain a constant value against the dollar—collapsed as investors lost faith in its backing asset, a token called Luna. Rumors that Celsius had lost money on Terra and Luna led to a run on its deposits and in July Celsius filed for bankruptcy protection.
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Three Arrows, a crypto hedge fund that had invested in Luna, had to liquidate. Losses on a loan to Three Arrows and contagion from Celsius forced Voyager into bankruptcy protection.
Meanwhile FTX’s trading affiliate Alameda Research and Voyager had lent to each other, and Alameda and Celsius also had exposure to each other. But it was the linkages between FTX and Alameda that were the two companies’ undoing. Like many platforms, FTX issued its own cryptocurrency, FTT. After this was revealed to be Alameda’s main asset, Binance, another major platform, said it would dump its own FTT holdings, setting off the run that triggered FTX’s collapse.
Genesis Global Capital, another crypto lender, had exposure to both Three Arrows and Alameda. It has suspended withdrawals and sought outside cash in the wake of FTX’s demise. BlockFi, another crypto lender with exposure to FTX and Alameda, is preparing a bankruptcy filing, the Journal has reported.
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The density of connections between these players is nicely illustrated with a sprawling diagram in an October report by the Financial Stability Oversight Council, which brings together federal financial regulators.
To historians, this litany of contagion and collapse is reminiscent of the free banking era from 1837 to 1863 when banks issued their own bank notes, fraud proliferated, and runs, suspensions of withdrawals, and panics occurred regularly. Yet while those crises routinely walloped business activity, crypto’s has largely passed the economy by.
A diagram from an October report from the federal Financial Stability Oversight Council that illustrates the interconnected nature of the crypto universe.
To be sure, some investors, from unsophisticated individuals to big venture-capital and pension funds, have sustained losses, some life-changing. But these are qualitatively different from the sorts of losses that threaten the solvency of lending institutions and the broader financial system. While such losses can’t be ruled out, banks’ exposure to crypto comes primarily from supplying custodial and payment services and holding crypto companies’ cash, such as to back stablecoins.
Traditional finance had little incentive to build connections to crypto because, unlike government bonds or mortgages or commercial loans or even derivatives, crypto played no role in the real economy. It’s largely been shunned as a means of payment except where untraceability is paramount, such as money laundering and ransomware. Much-hyped crypto innovations such as stablecoins and DeFi, a sort of automated exchange, mostly facilitate speculation in crypto rather than useful economic activity.
SHARE YOUR THOUGHTS
Is the turmoil in crypto’s ultimately a good thing? Why or why not? Join the conversation below.
Crypto’s grubby reputation repelled mainstream financiers like Warren Buffett and JPMorgan Chase & Co. Chief Executive Jamie Dimon, and made regulators deeply skittish about bank involvement. In time this was bound to change, not because crypto was becoming useful but because it was generating so much profit for speculators and their supporting ecosystem.
Several banks have made private-equity investments in crypto companies and many including J.P. Morgan are investing in blockchain, the distributed ledger technology underlying cryptocurrencies. A flood of crypto lobbying money was prodding Congress to create a regulatory framework under which crypto, having failed as an alternative to the dollar, could become a riskier, less regulated alternative to equities.
Now, stained by bankruptcy and scandal, cryptocurrency will have to wait longer—perhaps forever—to be fully embraced by traditional banking. An end to banking crises required the replacement of private currencies with a single national dollar, the creation of the Federal Reserve as lender of last resort, deposit insurance and comprehensive regulation.
It isn’t clear, though, that the same recipe should be applied to crypto: Effective regulation would eliminate much of the efficiency and anonymity that explain its appeal. And while the U.S. economy clearly needed a stable banking system and currency, it will do just fine without crypto.
The Effects of FTX
Coverage of the crypto exchange's bankruptcy, selected by the editors
Likes pretty much everything in every caliber.
Investing is a tricky business. I've been through a few market crashes including the 87 and 08 crash. I was heavily invest in large cap growth stocks in 87 and I lost a lot of value. I won't put it into dollars but my lose was around 50%. A lot people went down with me.
Fast forward to 2008. I was still trying to leverage my investment using the same stocks, but I moved all of it into cash about 3 days before the crash. That's like having a premonition about a flight that will crash and not boarding. The market crashed and I wasn't in it.
So I learned a valuable lesson there. Don't get too greedy with your investments.
I like the idea of taking a few thousand to LV or a horse race and have some fun. That's a legit recreational expense but it isn't an investment.
In the P-F basket of deplorables.
I still can't see crypto as an investment. I see it as gambling that you get in at the right place and time in a Ponzi Scheme.
I think it is funny that the people who buy into crypto, knowing it is unregulated and warned that it is highly speculative at the least, are now crying about how much money they lost and who to blame. Look in the mirror.
With liberty and justice for all...must be 18, void where prohibited, some restrictions may apply, not available in all states.
Nobody ever accused me of being a genius. I barely graduated from HS. It wasn't my fault however because I was born a poor black child down in Mississippi, or something like that.
In the P-F basket of deplorables.
Nobody ever accused me of being a genius. I barely graduated from HS. It wasn't my fault however because I was born a poor black child down in Mississippi, or something like that.
"No free man shall ever be debarred the use of arms." - Thomas Jefferson, Virginia Constitution, Draft 1, 1776
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