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200 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 th

200 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.
- rglullis 4y ago
  How much of FAANG's customers would cease to exist and stop spending if crypto went to zero?
  - blibble 4y ago
    probably less than 1%
    - rglullis 4y ago
      How much of a hit it would be on FAANG's market cap if their revenue went down by 1%?
      - blibble 4y ago
        0
        rglullis 4y ago
        Right, because stock markets never go down when tech companies show signs of declining revenue.
        blibble 4y ago
        crypto is so insignificant it will be regarded as noise on their PnL
- lxgr 4y ago
  How is "going down" (by some percentage) the same thing as "dropping to zero"?
  - thfuran 4y ago
    If they wouldn't be affected by crypto going down by 100%, why would they be affected by crypto going down by less than that?
- netheril96 4y ago
  > I don't think FAANG, Berkshire, Exxon and Pfitzer are going to notice if all of crypto dropped to zero right now. If some investors are invested in both FANNG and crypto, when they face margin call in the latter they may have to sell the former to cover their position.
  - chii 4y ago
    do most investors really take out margin loans to buy stocks? I can understand _some_ investors do it, but i'd imagine it's not a majority.
    - netheril96 4y ago
      > do most investors really take out margin loans to buy stocks? In the scenario I describe, those investors take margin loans to long or short crypto, and when they fail, they sell other assets to cover themselves. This is just one possibility I describe. > but i'd imagine it's not a majority. No one knows. It may take only one institutional investor who lost a gigantic amount of money in crypto trading and were therefore forced to sell stocks to shake the stock market.
- deleted 4y ago
  [deleted]
- sb057 4y ago
  1) There are a number of publicly-traded crypto-centric companies, such as Coinbase, Riot Blockchain, Marathon Digital Holdings, and MicroStrategy. Although not part of any major index, investment firms that are undoubtedly have significant exposure to them. 2) There are plenty of crypto ETFs, such as GBTC and BITO, where selloffs there could cause liquidations elsewhere. 3) Major companies themselves now have significant crypto holdings. The most famous being Tesla, but investment banks have been piling into it over the past year. SPY's own State Street announced a 425-man team to head a new division last June.
mthehacker 4y ago
By fading the print out after a few interesting paragraphs, you don't make me want to subscribe you just piss me off. That's because you suckered me into reading something I couldn't finish without paying. If you told me that at the beginning of the article, I would have more respect for you and, who knows, might have even considered subscribing. If you are sincere honest journalist don't function like a pimp.
- lukewrites 4y ago
  This sort of stuff makes me a militant user of archive.is https://archive.ph/20220512234058/https://www.bloomberg.com/opinion/articles/2022-05-12/crypto-crash-contagion-could-go-beyond-bitcoin-ethereum-tether https://archive.ph/20220512234058/https://www.bloomberg.com/...
- ukoki 4y ago
  For anyone else looking for access: This particular article is the web version of the excellent daily Money Stuff newsletter by Matt Levine which you can subscribe to for free https://www.bloomberg.com/account/newsletters/money-stuff https://www.bloomberg.com/account/newsletters/money-stuff . It's probably the best newsletter covering the financial industry
- sharadov 4y ago
  Just subscribe to Matt Levine's Money Stuff newsletter which I do. And am not a journalist but have been frequently called a pimp :-) And, sorry that you are having a bad day, go punch a pillow or something..

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.

rglullis 4y ago
How much of FAANG's customers would cease to exist and stop spending if crypto went to zero?
- blibble 4y ago
  probably less than 1%
  - rglullis 4y ago
    How much of a hit it would be on FAANG's market cap if their revenue went down by 1%?
    - blibble 4y ago
      0
      - rglullis 4y ago
        Right, because stock markets never go down when tech companies show signs of declining revenue.
        blibble 4y ago
        crypto is so insignificant it will be regarded as noise on their PnL
lxgr 4y ago
How is "going down" (by some percentage) the same thing as "dropping to zero"?
- thfuran 4y ago
  If they wouldn't be affected by crypto going down by 100%, why would they be affected by crypto going down by less than that?
netheril96 4y ago
> I don't think FAANG, Berkshire, Exxon and Pfitzer are going to notice if all of crypto dropped to zero right now. If some investors are invested in both FANNG and crypto, when they face margin call in the latter they may have to sell the former to cover their position.
- chii 4y ago
  do most investors really take out margin loans to buy stocks? I can understand _some_ investors do it, but i'd imagine it's not a majority.
  - netheril96 4y ago
    > do most investors really take out margin loans to buy stocks? In the scenario I describe, those investors take margin loans to long or short crypto, and when they fail, they sell other assets to cover themselves. This is just one possibility I describe. > but i'd imagine it's not a majority. No one knows. It may take only one institutional investor who lost a gigantic amount of money in crypto trading and were therefore forced to sell stocks to shake the stock market.
deleted 4y ago
[deleted]
sb057 4y ago
1) There are a number of publicly-traded crypto-centric companies, such as Coinbase, Riot Blockchain, Marathon Digital Holdings, and MicroStrategy. Although not part of any major index, investment firms that are undoubtedly have significant exposure to them. 2) There are plenty of crypto ETFs, such as GBTC and BITO, where selloffs there could cause liquidations elsewhere. 3) Major companies themselves now have significant crypto holdings. The most famous being Tesla, but investment banks have been piling into it over the past year. SPY's own State Street announced a 425-man team to head a new division last June.

mthehacker 4y ago

By fading the print out after a few interesting paragraphs, you don't make me want to subscribe you just piss me off. That's because you suckered me into reading something I couldn't finish without paying. If you told me that at the beginning of the article, I would have more respect for you and, who knows, might have even considered subscribing. If you are sincere honest journalist don't function like a pimp.

lukewrites 4y ago
This sort of stuff makes me a militant user of archive.is https://archive.ph/20220512234058/https://www.bloomberg.com/opinion/articles/2022-05-12/crypto-crash-contagion-could-go-beyond-bitcoin-ethereum-tether https://archive.ph/20220512234058/https://www.bloomberg.com/...
ukoki 4y ago
For anyone else looking for access: This particular article is the web version of the excellent daily Money Stuff newsletter by Matt Levine which you can subscribe to for free https://www.bloomberg.com/account/newsletters/money-stuff https://www.bloomberg.com/account/newsletters/money-stuff . It's probably the best newsletter covering the financial industry
sharadov 4y ago
Just subscribe to Matt Levine's Money Stuff newsletter which I do. And am not a journalist but have been frequently called a pimp :-) And, sorry that you are having a bad day, go punch a pillow or something..