Crypto End Game Goes Through DeFi’s Black Box

Crypto End Game Goes Through DeFi’s Black Box

An already dire situation in the cryptoverse took another ominous turn Saturday, when Bitcoin dropped below $20,000 for the first time since 2020. A abrupt downward lurch saw "digital gold" trade near $18,700, with a market cap of around $361 billion. At the highs in November, Bitcoin's market cap was $1.27 trillion. Saturday's swoon was the 12th straight on Bloomberg's data, according to which Bitcoin is mired in its worst streak of daily losses on record. Of course, pricing varies across pla
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9 thoughts on “Crypto End Game Goes Through DeFi’s Black Box

  1. Since I noticed this morning that bitcoin was under 20,000 I was wondering at what time in the day you would write this. Thank you
    Bitcoin is an EM with the only commodity being lost or forgotten passkeys

  2. Part of me revels in the Schadenfreude; the other part wonders to what extent the fiasco will affect real finance. At the very least, the bitcoin bros will be spending less than they thought they would.

    1. It being a long weekend I wonder if China and Russia don’t have something to do with this just to see what will happen. I am not generally prone to conspiracy theories but, war is war.

      1. Many of us speak about effects of losses. If the area is already down 70% I’d imagine we’d have seen the largest portion by now right? Speaking on “retail.”
        Anyone got a status on nfts trading for etherium?

  3. Thanks for the detailed description of the status of bitcoin it helped me understand the significance of the downward trajectory of the whole bitcoin universe. It reminded me of the CDO squared from the banking crisis. But the main difference in the housing crisis you had a house even if it was worth less as long as you made your payments you kept it. So the very thing that bitcoin enthusiasts love is it being decentralized might be it’s undoing. Because there is no central governing force there is no way to resolve this.

  4. I’m 60 years old and I know many in my cohort whose children (or their spouses) are obsessed with Bitcoin. It’s all on margin and they will have to be bailed out. I don’t believe crypto crash will NOT have an economic impact. It will contribute to a drain in liquidity and have a dampening effect on the economy quite quickly. Maybe that plays out to be ironic that inflation is reduced by the collapse in Bitcoin.

  5. Thank you for the attempt to simplify the stETH market. Your time, focus and small trades there have helped shine some light into this tangled muck.

    We’ve seen the same phenomenon at work that Nick Langman refers to. Agree there will be some impact.

    But Dr. H is rightly cautioning us not to shrug and see it as a trivial thing.

    Remember when the Icelandic bank defaults were considered nothing to be concerned about? Oops!

    On that note, just before I read our Dear Leader’s post, I read a surprisingly illuminating article from Nikkei Asia. The author noted that “the three biggest crypto lenders have raised roughly $34 billion from over six million people.” That’s not a trivial amount. Is it?

  6. H-Man, other than crypto, I can usually understand why something goes up or down in value. Stocks are valued on earnings, bonds are valued on interest rates, commodities on supply or demand. Crypto seems to be valued on hope and belief — factors that shift with the wind. And factors which have no value. When the wind is with you, crypto has managed to thrive but when the wind is in your face, it has gone into a deadly stall. Which reminds me of tulip bulbs until no one wanted a tulip bulb. So I guess it gets down to “who wants a bitcoin” or any other variation?

    1. The difference is that tulip bulbs can be cultivated to grow beautiful flowers, whereas crypto doesn’t even have that capability. In fact, bitcoin mining consumes energy and is yet another contributor to the defiling of the only planet proven capable (for now) of sustaining human life. Crypto thus has negative value. A functioning society would have banned it at the outset.

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