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It seems to me it's a decision that trades off the risk of moral hazard for risk of contagion. To me, the rules were crystal clear -- if you have more than $250

It seems to me it's a decision that trades off the risk of moral hazard for risk of contagion. To me, the rules were crystal clear -- if you have more than $250k in your account, that excess cash should be seen as "at risk". Workarounds include depositing money in a brokerage account (and buying risk-free t-bills) or spreading it out across multiple bank accounts. Smart and risk-aware people did that, dumb people didn't (or alternatively, through specific rules that Silicon Valley Bank set, were prevented from taking their money elsewhere). But as always, system tends to take decisions that increase moral hazards as time goes on. Swift and easy solution in the moment, but bad in the long run. (Probably not productive to bring crypto into this discussion in my view.)

ddorian43 4y ago
> that excess cash should be seen as "at risk". Are you willing to loose your job & house because of the contagion? > (Probably not productive to bring crypto into this discussion in my view.) You aren't even a bagholder I'm afraid. Bagholder is having a stock that has fallen 90%. You (I think) have nothing and anonymous. Again, I thought crypto was an !insane! ponzi since when bitcoin was $300 (that's when I studied it a little).
- ftxbagholder123 4y ago
  Which contagion though? The average person has between $5-6k in their bank accounts. There was certainly lots of talk on Twitter about this thing spreading -- and it's very possible that it might have -- but it was not a given. The loudest arguments for contagion came from the same people who had the biggest incentives to see SVB "bailed out". Hardly a coincidence. Just look at how vocal otherwise libertarian David Sachs was. I don't think there is an official definition of bagholder as far as I'm aware.
  - ddorian43 4y ago
    > Which contagion though? Many people out of a job on Monday(including me). Many other banks getting a bank run. You should do therapy on the damage of the hype of crypto. For your own sake.
    - ftxbagholder123 4y ago
      I felt really stupid and angry after the collapse of FTX as you know, and truthfully, I could probably have used some professional therapy at the time. But at this point, I'm trying to look forward instead, and to me that is likely having an equally good (and positive) effect on my mental health as therapy would have had. Hopefully you can do the same as you search for the next chapter. Best of luck.
      - ddorian43 4y ago
        > But at this point It's also the reasons why you had to invest in it in the first place. Not just that it failed. I only give advice on things I believe & do myself. I did the similar thing with leveraged etfs and know well the why & aftermaths.

ddorian43 4y ago

> that excess cash should be seen as "at risk". Are you willing to loose your job & house because of the contagion? > (Probably not productive to bring crypto into this discussion in my view.) You aren't even a bagholder I'm afraid. Bagholder is having a stock that has fallen 90%. You (I think) have nothing and anonymous. Again, I thought crypto was an !insane! ponzi since when bitcoin was $300 (that's when I studied it a little).

ftxbagholder123 4y ago
Which contagion though? The average person has between $5-6k in their bank accounts. There was certainly lots of talk on Twitter about this thing spreading -- and it's very possible that it might have -- but it was not a given. The loudest arguments for contagion came from the same people who had the biggest incentives to see SVB "bailed out". Hardly a coincidence. Just look at how vocal otherwise libertarian David Sachs was. I don't think there is an official definition of bagholder as far as I'm aware.
- ddorian43 4y ago
  > Which contagion though? Many people out of a job on Monday(including me). Many other banks getting a bank run. You should do therapy on the damage of the hype of crypto. For your own sake.
  - ftxbagholder123 4y ago
    I felt really stupid and angry after the collapse of FTX as you know, and truthfully, I could probably have used some professional therapy at the time. But at this point, I'm trying to look forward instead, and to me that is likely having an equally good (and positive) effect on my mental health as therapy would have had. Hopefully you can do the same as you search for the next chapter. Best of luck.
    - ddorian43 4y ago
      > But at this point It's also the reasons why you had to invest in it in the first place. Not just that it failed. I only give advice on things I believe & do myself. I did the similar thing with leveraged etfs and know well the why & aftermaths.