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Celsius acknowledges $1.2B hole in balance sheet
- AndrewKemendo 4y agoThe fact that the entire crypto market simply followed the public markets in the downturn, rather than being a haven for wealth that people flocked to for safety, means that "Crypto" is unambiguously just another speculative asset like Art (but worse).
- l33t2328 4y agoI’m confused what the alternative is. If it’s valuable and people lose value somewhere in their life, they will exchange their valuable thing to make up for it.
- dgfitz 4y ago
- l33t2328 4y agoI’m not sure why you’re being so abrasive.
- Nursie 4y ago> I’m confused what the alternative is. For years it has been claimed that cryptocurrency represented a great hedge against traditional assets and investments in the case of a downturn. Like many other claims made about the utility of cryptocurrency, this too has been shown not to be the case.
- trixie_ 4y agoLike stocks, don't confuse short term volatility with long term performance. The fed is expert at manipulating short term valuations, but their manipulations only hold for so long before they have to lower or raise rates again.
- Nursie 4y agoI'm not. Cryptocurrency has explicitly and repeatedly been touted as un or anti-correlated to the wider financial ecosystem, fiat currencies and the stock market, and has been loudly, noisily and never-endingly sold as a great hedge against these things, absent any evidence. The evidence is in now, and those theories are a bust.
- trixie_ 4y agoThere are many theories about everything. Sorry the ones you bought into didn’t work out. Most of us aren’t surprised that when the dollar is manipulated that other asset classes’ dollar values change as well.
- Nursie 4y agoI didn't buy into them, nor was I the slightest bit surprised. The point is that like most theories about cryptocurrency value that originate with cryptocurrency proponents, they have been shown to be wrong when exposed to the real world. To turn it back on you - I'm not sure why you're upset that a central bank currency is being manipulated, that's entirely the point of such a system, to allow manipulation by steering committees to attempt to smooth out the bumps and judders in the economy and keep things on an even keel. It's a good thing!
- trixie_ 4y agoI'm not upset either. The dollar is a stable because of manipulation though unfortunately over the long term it does lose value. The cost of stability. Crypto on the other hand I do expect to go up over the long term while being short term volatile. Let's check back in five years and see if that's the case.
- Nursie 4y agoWe can do that, and I'm not sure I would like to make a prediction about the price of any particular cryptocurrency asset that far ahead. But I'm also not sure what that has to do with my posts further up, which are saying that another claim about cryptocurrency, that it's a hedge against the stock market and the wider financial system, is wrong. If you're trying to say "Well it might work out, longer term!" then I'm not really sure it qualifies as hedge at that point, you're just talking about another investment which it turns out is quite strongly correlated to the general financial markets.
- biztos 4y agoShow me the IRL crypto party that rivals Art Basel. Speculation is one part of the art market, but at this point I really don’t think it’s as important as status. Plus, some of the art is really good as, you know, Art.
- iownzerobtc 4y agoHave you seen Art Basel lately? It is a IRL crypto party.
- trixie_ 4y agoFor every seller there is a buyer, and many are buying stocks and crypto right now at low prices. And why wouldn't they? The fed is manipulating the market with interest rates, just as they did during Corona. History proves in the long run holding dollars is good for short term stability, but it's a long term loser.
- SamBam 4y ago"For every seller there is a buyer" is the kind of meaningless statement one can make any time there is a major downturn or collapse in a market. 1929-1932, the Dow drops 90%. "For every seller there is a buyer, and many are buying stocks [...] right now at low prices." Some people eventually did great, so it's all wonderful, so long as you ignore the staggering pain of the Great Depression.
- SnowHill9902 4y agoThe market is like a theater with a small door.
- trixie_ 4y agoI guess it works both ways, people panic sell and panic buy. Neither are smart moves.
- FabHK 4y ago> History proves in the long run holding dollars is good for short term stability, but it's a long term loser. Right. That's why one should not hold huge quantities of money for long times, but invest in debt and equity. 10 yr real rates even on treasuries have been almost always positive [1], though shorter riskless real rates have gone negative [2]. [1] https://fred.stlouisfed.org/series/REAINTRATREARAT10Y https://fred.stlouisfed.org/series/REAINTRATREARAT10Y [2] https://fred.stlouisfed.org/series/REAINTRATREARAT1YE https://fred.stlouisfed.org/series/REAINTRATREARAT1YE
- bluelightning2k 4y agoIf I read it correctly it's more like a 1.8 bn hole. They are counting 600m of their own token, which already had only 170m or whatever of market cap, which presumably now is absolutely worthless. I don't mean worthless in a conceptual sense like all crypto, but this specific brand of made up money is based on the trust of a bankrupt lender. Nobody is buying that and counting it as 600m of asset is absurd. It's like writing yourself a bunch of IOUs and claiming it gives you wealth.
- voodootrucker 4y agoSo exactly like the federal reserve or the social security administration buying US bonds then?
- mushufasa 4y agono, in fact it's not exactly like that.
- bardworx 4y agoNothing like that.
- moralestapia 4y agoUS Bonds are not worthless, come on.
- aaaaaaaaata 4y agoNeither are the assets under discussion. Both are subjective.
- everfree 4y agoIt doesn't work quite as well if you're not a sovereign government.
- menzoic 4y agoIt only works until it fails. There's no real difference in the reality of what it is. The only difference is operational.
- adam_arthur 4y agoScam, after scam, after scam, after scam...
- sergiotapia 4y agoStill waiting to see even one single useful use case for cryptocurrency and block-chain storage. It's all a grift to take money away from stupid retail investors trying to get rich quick.
- mccorrinall 4y agoI pay my servers at vultr.com, my domains on porkbun.com and my drugs on $market with bitcoin :)
- msbarnett 4y agoI do all of those things with actual money.
- game-of-throws 4y agoIf you buy drugs on the darknet with USD you're playing a dangerous game
- msbarnett 4y agoThis is equally true of buying drugs on the darknet using BTC.
- mccorrinall 4y agoIf you understand how bitcoin works, you shouldn’t really worry. You can easily get rid of tainted coins.
- rsstack 4y agoBut all three of them also accept USD or your local currency. So the use case remains... evading the authorities? That's not a compelling use case for the general population.
- wklm 4y agogood luck liquidating this 720M of mining gear :)
- blobbers 4y ago
- xrd 4y agoIt would have been really interesting if any of these crypto companies bought a bunch of tanks when times were good. That sounds like a good sci-fi novel and an interesting ending.
- selimthegrim 4y agoMaybe they can pay the stamp fees under the NFA for the tank ammo with crypto
- sgjohnson 4y agoFor SOTs the NFA fee is just $5!
- 323 4y agoYou can't buy armed tanks as a private company. That's a sovereign privilege.
- darkmarmot 4y agoYou're right. You have to build them in secret like Cobra Command!
- blobbers 4y agoI appreciate that my initial comment somehow led to this comment. Did Cobra Command pay in crypto? (and if so, which coin did it use?)
- anigbrowl 4y agoJust buy the tank manufacturer. But seriously, there are lots of ways to invest in a private military capability that are legal and miles more efficient than tanks. Guarantee you that's happening.
- yomkippur 4y agoWhat's sad is that some pension funds have exposure to Celcius. Imagine teaching for decades only to find your retirement pension is reduced because the manager thought it was a good idea to put your money into a ponzi scheme
- Invictus0 4y agoI am not sympathetic to teachers or pension funds whatsoever. Teachers should take control of their investments like everyone else: either invest it yourself or make your pension managers invest it properly. Pension funds do all sorts of stupid things: they played a role in 2008, they invest in big oil and other anti-ESG stocks, and now this. They're huge pools of poorly governed funds, it's inevitable that they get abused.
- deleted 4y ago[deleted]
- yomkippur 4y ago
- charcircuit 4y agoIt wasn't a ponzi scheme. It was just a business that failed to make a profit. Not all investments will be on winners.
- yomkippur 4y ago
- tim333 4y agoI think it was an equity investment so it's more that the manager thought it would be a good idea to profit from said ponzi scheme.
- Barrera 4y agoAnd yet the site apparently continues to accept deposits: https://celsius.network https://celsius.network Business as usual. Oh yeah, check out our hello bar for that minor detail that withdrawal, swap, and transfers are "currently paused." These guys are going to prison.
- adrr 4y agoPeople were still buying hertz stock even though they were going through bankruptcy. They even tried to do secondary offering. Retail investors don’t operate with enough information to make financially sound decisions.
- Dylan16807 4y agoAnd those people might have been right??
- modeless 4y agoThat's the worst possible example since the retail investors were proven right about Hertz...
- civilized 4y agoCurrently paused due to "extreme market conditions". What conditions exactly? BTC is down from all-time high, but still worth about twice as much as it was only two years ago. Ethereum is worth over 4x as much. Is a two-year average appreciation rate of 40-100% per year so witheringly horrible that the Celsius business model couldn't survive it? Did crypto have to basically 2x every year without fail for Celsius to survive?
- jiggawatts 4y agoThis is covered in today’s Crypto Critics’ Corner podcast: https://youtu.be/m6xkCDP1z2s https://youtu.be/m6xkCDP1z2s
- jonathanyc 4y agoIs there something novel about how it happened, or could the same failure have occurred to a bank in the 1800s? If it fails and causes normal people to lose their money in the same way as a traditional bank, it should be subject to the same regulations.
- dcolkitt 4y agoOne thing to note is that while Celsius, a centralized and opaque yield platform, collapsed, not a single major DeFi protocol failed during a period of enormous stress. MakerDAO, Aave, Uniswap, Curve, Lido and Compound all had perfect 24/7 uptime with zero losses due to unrecoverable debt. This pretty clearly strengthens the case for pure and transparent DeFi, where anybody can inspect the health of the protocol or the rules of the immutable code. In contrast Celsius failed because it was an opaque black box that primarily lent to other opaque black boxes like Three Arrows Capital. For a long-time a lot of people just getting into crypto felt like the CeDeFi platforms like Celsius or BlockFi were "safer" than the pure on-chain protocols like Aave or Curve because they didn't have to worry about managing their own keys, there were humans in charge, and a nice corporate entity standing behind it their deposits. As it turns out, decentralized autonomous protocols were substantially safer.
- vkou 4y agoCelsius seems to have been either a ponzi scheme, or a group of morons doing dumb speculative investment on margin, or (most likely) both, but I'd like to point out that MakerDAO is down 70% YTD, Aave is down 60%, Uniswap is down 60%, etc, etc. You'd have been better off just buying bitcoin on margin (Since BTC is only down 53% YTD). The point of this post is that you can't make something out of nothing. None of these tokens/firms/etc have any idea of how they can make money in the crypto space, because there is no way to make money in the crypto space - because it doesn't produce anything. It's all just negative-sum speculation, and shitcoins investing into other shitcoins, and it all evaporates as soon as the Fed tightens its purse-strings. Miners make money, people selling shovels make money, everyone else is just trading baseball cards around.
- TimJRobinson 4y agoTheir tokens are down, but you don't have to buy them to use the platform, they're basically like shares in a company. I constantly use all those platforms without ever buying their tokens. AMZN being down 30% in the last 6 months has no impact on how useful Amazon or AWS are as products.
- m3kw9 4y agoI thought FTX is bailing out everybody
- aaaaaaaaata 4y agos/bailing/buying
- tim333 4y agoThe guy looked and specifically said not Celcius. - https://uk.investing.com/news/stock-market-news/sbfs-ftx-considered-buying-celsius-but-walked-away-after-seeing-a-2b-hole-in-finances--report-432SI-2679040 https://uk.investing.com/news/stock-market-news/sbfs-ftx-con...
- fourseventy 4y ago"wrapped bitcoin (wBTC) and a type of staked ether derivative (stETH)." Wtf is all if this crap? Feels like 2008 with piles of CDOs and weird derivatives
- wmf 4y agoCreating cool derivatives is one of the purposes of DeFi. BTC only exists on the Bitcoin blockchain but since Bitcoin doesn't really have smart contracts people "wrap" it into wBTC on Ethereum. I guess this is akin to a eurodollar. stETH is like a bond or certificate of deposit where you can lend ETH to be staked and receive a liquid claim against it.
- oliwarner 4y agoAnd $720M in mining assets. I say creditors get to beat them with sticks until it starts raining graphics cards.
- RichardHeart 4y agoI specifically warned everyone and begged them to remove their funds from there. For years...
- 5350-uiop-1130 4y agowhen i saw that the former head of institutional lending of celsius was in a porno i realised to stay away from this dodgy company.