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Alameda's story has many parallels with Celcius (and 3AC): if something happens that proves Alameda is insolvent, will you return to this analysis and hold the
by phphphphp 4y ago
Alameda's story has many parallels with Celcius (and 3AC): if something happens that proves Alameda is insolvent, will you return to this analysis and hold the same viewpoint, that it's unhelpful to consider that their solvency may well hinge on value of illiquid nonsense assets? The problem Celcius had was not that they were lending to retail, it's that their entire investment thesis was based on insane bets with capital borrowed from retail investors. Celcius, Hodlnaut etc. were "lending" and "investing" with "credible" players like 3AC (who had a mythology much like Alameda's before they imploded).
Yes, some skepticism is required when considering whether or not Alameda is insolvent (or at risk of becoming insolvent) but the analysis is helpful in highlighting why Alameda might be at risk.
- cryptoanon 4y ago3AC had been packed to the gills with uncollateralized loans. Since then, most lenders have recalled loans and cleaned up their toxic balance sheet.
- xwolfi 4y agoHow ?
- RuggedPineapple 4y agoWhen it's collateralized with crypto it's uncollateralized. 3AC learned this. Like half the exchanges have learned this over the last year. There is no inherent value in any of them, there is no hard floor of assets, as the market continues to tank that 'collateral' becomes/remains worthless. It's turtles all the way down.
- vgatherps 4y agoThe 3AC saga wasn't because crypto collateralisation turned out to be bogus, it was just that lenders gave them un/undercollateralized loans. Their downbringing was taking cash liabilities, on leverage (the un/ndercollateralized part), and using that to make risky bets. They took a ton of leverage to bet that the GBTC/BTC spread would close (but it widened, a friend of mine called this killing them over a year in advance), iirc positions in stETH/ETH spreads, illiquid (but very profitable...) vc investments, as well as just going long crypto.
- phphphphp 4y ago3AC was a prop trading firm flush with cash… until the curtain was lifted and it turns out it was just a big fraud. Alameda is a prop firm flush with cash… Why do you assume that Alameda isn’t “packed to the gills” with financial gremlins? If you asked anybody in the space about 3AC or Alameda 12 months ago, you’d have heard the same thing about them: prop trading firms that have been hugely successful investing their own money and thus have billions upon billions of self-generated money to invest. Today, 3AC is gone and we are now discovering Alameda has huge liabilities and (potentially) mostly junk assets. What’s a bigger leap: Alameda is like 3AC, or that the information we’ve seen so far isn’t representative and actually alameda are doing great?
- Mistletoe 4y agoAlameda is helmed by quants from Jane Street etc., they are supposed to do better with regard to risk management, forecasting, bet sizing. Their whole M.O. is that they are smarter and actually do math and that is the source of their success. https://www.alameda-research.com/our-team https://www.alameda-research.com/our-team Whether that is true or not, I don’t know. But from their tweets and podcasts it does seem they approach things very differently and in a way that makes sense.
- neilc 4y ago> Alameda is helmed by quants from Jane Street etc., The CEO worked at Jane Street for less than 18 months and appears to have had a fairly junior role there. I'm sure they are smart folks but there's a limit to how much you can learn in 18 months, in your first job after college.
- blitzar 4y agoNobody is leaving Jane Street after 18 months - straight out of college, of their own accord.
- eldenwrong 4y agoWhat are you implying?