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Thank you! That’s been a big pet peeve of mine in this discussion, where people casually throw around “illiquid” when the currency is really “liquid but collaps
by SilasX 4y ago
Thank you! That’s been a big pet peeve of mine in this discussion, where people casually throw around “illiquid” when the currency is really “liquid but collapsed in value”, which is what was going on with FTT and SOL. Earlier comment:
https://news.ycombinator.com/item?id=33539326 https://news.ycombinator.com/item?id=33539326
- dwater 4y ago“Liquidity refers to the ease with which an asset, or security, can be converted into ready cash without affecting its market price.” https://www.investopedia.com/terms/l/liquidity.asp https://www.investopedia.com/terms/l/liquidity.asp You have misunderstood the meaning of liquid.
- SilasX 4y agoNo, I didn’t. Read the linked comment and its follow-up. Of course it’s a valid concept. But people hastily use it as a drop in replacement for any situation in which they would like more money for any reason, and to blur the difference between illiquidity and insolvency. Just like in the situation the parent described! In the case of FTX, the value of their cryptos had already fallen, and they would take that haircut even if given extensive time to make that sale. There was nothing that would make the cash flows match.