FTX doesn’t seem to be able to pay its customers, so the value here looks like it’s negative (“in debt to customers;” and Binance may bail out customers rather than give money to FTX owners for the sale).
I mean, if you interpret “liquidity crunch” in the most optimistic way, then there’s still value from the sale. But I think that would be somewhat naive here given the drop of FTT token (which, according to the balance sheet that was floated recently, made up a lot of FTX/Alameda reserves) and the general prior for crypto that “liquidity crunch” is usually a euphemism for “sorry it’s gone.”
What also looks very serious is the fact that they have to sell to their competitor who was attacking them, as opposed to being able to sell to other buyers. If it was a more innocuous “liquidity crunch,” wouldn’t you be able to show balance sheets to interested buyers and offer them a good price and not give anything to the immediate competitor who’s been defecting (or retaliating, depending on how one sees it) against you? (But maybe there are other reasons why Binance is a good fit and I’m not aware of them.)
Some of the thoughts in this post and thread seem pretty half baked and very uncertain, I think the pace of writing should be lower.
For example, the withdrawals might be at $6B this morning, that would break systems in a purely ops or make movement of money impractical for very innocent, mundane reasons. This experience adds a lot of confusion and noise when reported and echoed.
The “Satan’s Apple” seems excessively abstract, looking at this from a regular business expansion/portfolio theory seems like more useful and this would benefit from more time.
The “Satan’s Apple” seems excessively abstract, looking at this from a regular business expansion/portfolio theory seems like more useful and this would benefit from more time.
It refers to a part of the text that was removed after receiving feedback that it would be better if we just stuck to the facts, given all the uncertainty. (Charles’ comment is one example of this, we got some more elsewhere)
FTX doesn’t seem to be able to pay its customers, so the value here looks like it’s negative (“in debt to customers;” and Binance may bail out customers rather than give money to FTX owners for the sale).
I mean, if you interpret “liquidity crunch” in the most optimistic way, then there’s still value from the sale. But I think that would be somewhat naive here given the drop of FTT token (which, according to the balance sheet that was floated recently, made up a lot of FTX/Alameda reserves) and the general prior for crypto that “liquidity crunch” is usually a euphemism for “sorry it’s gone.”
What also looks very serious is the fact that they have to sell to their competitor who was attacking them, as opposed to being able to sell to other buyers. If it was a more innocuous “liquidity crunch,” wouldn’t you be able to show balance sheets to interested buyers and offer them a good price and not give anything to the immediate competitor who’s been defecting (or retaliating, depending on how one sees it) against you? (But maybe there are other reasons why Binance is a good fit and I’m not aware of them.)
Illiquidity is not the same thing as insolvency.
Some of the thoughts in this post and thread seem pretty half baked and very uncertain, I think the pace of writing should be lower.
For example, the withdrawals might be at $6B this morning, that would break systems in a purely ops or make movement of money impractical for very innocent, mundane reasons. This experience adds a lot of confusion and noise when reported and echoed.
The “Satan’s Apple” seems excessively abstract, looking at this from a regular business expansion/portfolio theory seems like more useful and this would benefit from more time.
What do you mean by this?
It refers to a part of the text that was removed after receiving feedback that it would be better if we just stuck to the facts, given all the uncertainty. (Charles’ comment is one example of this, we got some more elsewhere)
Obviously I was too optimistic here :-(