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The Cryptocurrency Crash Is Replaying 2008 as Absurdly as Possible
- rvz 4y agoExactly. Maybe that is why it is the justification for more regulations for stablecoins. Highly likely that is going to happen or introducing their own CBDCs like China or both co-existing once the regulatory framework around stablecoins becomes clearer. Then we will see which ones will comply or not. As for the crypto-maximalists screaming about Bitcoin as a peer-to-peer electronic cash system for on-chain payments and as a currency, it is safe to say that experiment has totally failed and that was found out the hard way.
- mirceal 4y agoIs it safe to say that Bitcoin failed?
- randomhodler84 4y agoIt is not safe to say, but rvz likes to keep saying it. When the blocks stop, it has failed. It’s a timechain, a decentralized clock. Tick Tock Next Block.
- rvz 4y ago> It is not safe to say, but rvz likes to keep saying it. Yes it is. Assuming you have read the whole article, it is safe to say that it has failed in its original purpose. I and and many others keep saying it because it is an irrefutable fact after many years of its existence. In the case of the author on Bitcoin and the contents of this article, he has made that totally clear. Hence, can one use it for on-chain payments as described in Satoshi's white-paper which was supposed to be better than the current system or even as a currency? Please think about your response to this question before answering.
- jakupovic 4y agoJust because you keep repeating something doesn't make it true, same goes for your statements. Tick-tock next block ...
- rvz 4y ago> Just because you keep repeating something doesn't make it true My 'statements' and that 'something' that I am repeating are based on the contents of the article. That is why I am assuming you also have read all of it before commenting here and some of the author's previous articles. So when are you going to refute them and answer a simple question? Or did you just rush here to comment knowing that you cannot answer the question and just repeat 'Tick-tock next block' after the next commenter? Is that why you cannot refute me or the article?
- jakupovic 4y ago"As for the crypto-maximalists screaming about Bitcoin as a peer-to-peer electronic cash system for on-chain payments and as a currency, it is safe to say that experiment has totally failed and that was found out the hard way." Crypto has not failed. These are your words, not from the article. You are wrong, as you don't have any proof. Also, the onus is on you to prove your statement. Right now it's baseless and doesn't further conversation. Is that clearer? Or do you need more words to explain your baseless position.
- nradov 4y agoSo far cryptocurrency has failed for everything except facilitating certain illegal transactions (buying drugs, paying ransoms, evading currency controls). Someday we might find a real use case for it and then you can claim success, but that hasn't happened yet.
- jakupovic 4y agoHere we go again with baseless statements generalizing crypto success or not. Please prove or at least give a source for a sweeping statement you make: "So far cryptocurrency has failed for everything except facilitating certain illegal transactions (buying drugs, paying ransoms, evading currency controls)." Unless you can prove above it's worthless, and obviously you don't know this and as such your sweeping generalizations are worth exactly 0 (choose your currency). There are problems with any currency/commodity/anything, but saying X is failed/stupid/useless or anything else is worthless without proof, and as I was saying in my previous comments, none can predict future, so these general statements about future or present are completely pointless and go against HN standards, as again ther is no proof.
- deleted 4y ago[deleted]
- ElDji 4y agoSo basically bitcoin died again. Oops.
- kayamon 4y agohttps://99bitcoins.com/bitcoin-obituaries/ https://99bitcoins.com/bitcoin-obituaries/
- davidgerard 4y agoarchive: https://archive.ph/cNkr5 https://archive.ph/cNkr5
- CPLX 4y agoYeah but is crypto causing the crash or just a symptom of it? It doesn’t seem like all the large investment banks and reinsurers are flirting with insolvency due to crypto exposure. They definitely were due to CDO and mortgages. That distinction seems substantive.
- quantified 4y agoThere’s bleed in various areas. Institutional investors own stocks in the companies involved. Microstrategy made owning Bitcoin part of its business. Stupid abounds.
- fartcannon 4y agoAn opportunistic scapegoating by the banks, maybe. There's quite a lot of astroturfing about crypto (for and against these days). I'd expect a couple decades of conspiracy theories about their role at the very least. But Bitcoin was created as a response to the banks failures in 2008, so maybe they're trying to get ahead of that message returning this time around. Anyone work in PR for mortgage companies? What kinda position are you taking right now?
- nradov 4y agoMortgage companies have been laying off employees and cutting expenses since the Federal Reserve started raising interest rates several months ago. That industry has always gone through boom and bust cycles, and the boom just ended.
- quantified 4y agoMatt Levine writes well about it: [https://www.bloomberg.com/opinion/articles/2022-05-10/another-algorithmic-stablecoin-isn-t https://www.bloomberg.com/opinion/articles/2022-05-10/anothe...]
- arrakis2021 4y agoIt’s fascinating read. Still, the amount of brain power Matt has dedicated to this makes me feel like it would be better spent elsewhere.
- quantified 4y agoWere that there were other topics to occupy his mind. I just like the way he thinks about them and voice he gives to the explanations.
- ludamad 4y agoI mean, I don't disagree that crypto is a noisy space, but at the limit this is an annoying argument as Matt Levine quit finance/law to write, and writes about finance/law as a logical venue. Indeed, he originally felt his time could be spent better than selling products to people to lower their taxes
- solveit 4y agoMatt is clearly having the time of his life gawking at the stuff crypto people do.
- sharadov 4y ago200 Billion in crypto wiped out in 24 hrs is bound to cause ripple effects in traditional finance as well. "Crypto has at least started to work its way into the real financial system. Some traditional investors also own crypto; if their crypto goes down they might have to sell regular stuff. Some public companies are exposed to crypto (because they are crypto exchanges, because they have levered crypto holdings, etc.), so your boring old index fund might go down when crypto goes down". https://www.bloomberg.com/opinion/articles/2022-05-12/crypto-crash-contagion-could-go-beyond-bitcoin-ethereum-tether https://www.bloomberg.com/opinion/articles/2022-05-12/crypto...
- Barrin92 4y ago>so your boring old index fund might go down when crypto goes down I need someone to explain to me how my S&P 500 blackrock ishares are going to die from crypto. I don't think FAANG, Berkshire, Exxon and Pfitzer are going to notice if all of crypto dropped to zero right now.
- ohiovr 4y ago2008: What do you mean credit default swaps on synthetic collateralized debt obligations will lead to a recession? That sounds like nonsense! 2022: What do you mean monkey pictures in block chains will lead to a recession? That sounds like nonsense!
- t_mann 4y agoIf a recession comes, it won't be because of NFTs. 'Traditional' finance has become hooked after a decade of loose monetary policy, that was always going to end in pain.
- ohiovr 4y agoTulips come in a variety of colors.
- low_tech_love 4y agoI don’t there’ll be a recession, just a bunch of very disappointed people with less money than they started with.
- sonotathrowaway 4y agoThat sounds like a recession.
- vmception 4y agoIts actually more like 2008, since its traders getting liquidated in complex products. Except obvious ones, instead of obfuscated provenance. The monkey pictures are … actually doing fine, maybe just “okay”, have you looked? Anybody trading ApeCoin though? It hit airdrop price, was tempting
- airbreather 4y agoAuthor of the article has a long and deep/irrational inherent bias against crypto, so regardless whether you are pro or anti be very careful of taking his opinion. I am semi pro crypto, depending on the use etc, but have personally always found this author to be a total dick, an opinion originating when I engaged with him via some correspondance after a published article a long time ago.
- freediver 4y agoCurious what use of crypto are you pro for?
- lampshades 4y agoFwiw, I'm very pro crypto and I enjoyed the article.
- low_tech_love 4y agoI love the fact that crypto people are not satisfied with creating one pseudocurrency out of thin air; as soon as that has the tiniest semblance of stability (in this case ether) they go and create other ones “backed” by it. How did we reach the kind of socioeconomic climate where people are actually willing to put their hard-earned money into such a thing?
- JumpCrisscross 4y ago> How did we reach the kind of socioeconomic climate where people are actually willing to put their hard-earned money into such a thing? They’re unregulated slot machines. Go and look at the Terra/Luna Twitter and Reddit. It’s filled with casual to addiction-level gambling tells. The responsible ones acknowledge they’re putting a few hundred in and will likely lose it but maybe it goes up. The less fortunate treat it like an investment.
- aeternum 4y agoThe regulated companies didn't do much better: CVNA -91% PTON -91% RIVN -90% FVRR -90% HOOD -90% U -85% ROKU, DKNG, RBLX, the list goes on .. and we call those investments.
- andrew991116 4y agoGo ask a CFA and they’ll tell you that buying stocks in these companies is not investing, but speculating. Nothing in these company’s fundamentals warrants any investment. If you buy a stock based on the idea that someone will buy it at a higher price without considering it’s intrinsic value, it’s speculating.
- chii 4y agoit's fine to speculate, as long as the person doing the speculating knows what they're doing. The only problem happens when you speculate, but think you're investing.
- 4y ago
- danans 4y agoIt will interesting to see what Bitcoin's price floor is when we get to maximum crypto-pessimism. Intuitively, that seems like it would be the price of its aspiration to be "digital gold", in the sense of it being an asset-of-last-resort that has little to no economically productive value, just like the piles at the United States Bullion Depository at Fort Knox. Heck if I know what that is, though. $10k, $5k? Or are there structural risks that would preclude it from ever being used that way? Is there price or policy regime which will trigger a catastrophic loss of confidence and collapse, or like gold, is there a reality of its existence that can't be negated.
- vmception 4y agoSame here, to me its just another crypto decline. I build in this space all the time, declines are great for builders, and we mostly earn crypto and can immediately cash it out if desired. We don't need a bullish or bearish hypothesis. Transaction fees get cheaper. The economy is big enough to extract value regardless and we’re always accumulating professional experience (niche coveted coding skills) and network. In these crashes there is always an illiquid whale. In this crash that illiquid whale is Do Kwon liquidating the bitcoin he just bought to prop up Terra/Luna, and maybe Microstrategy. They’ll stop selling eventually. Some funds aren’t going to get new limited partners to pump their favorite assets. I would love to see how crypto performs in a market where sentiment isnt supported by the Federal Reserve, we havent seen that yet, even though crypto was never a direct beneficiary I think the limited partners in the last round of hedge/vc funds were fairly direct beneficiaries.