Yeah but the same is true of FTT under the assumption that FTX/Alameda rely on FTT for emergency liquidity.
I guess if someone had faith that FTX/Alameda would never sell a lot of it at once, but instead slowly sell over many years while keeping the exchange operating with profits, then FTT could be worth something for buyers. But on this model it doesn’t make sense to use it as collateral, let alone in any relation to backup for customer funds.
(TBC, we’re not 100% what happened, but ifFTT was involved in securing customer funds, that’s very dumb at best and quite possibly illegal, as discussed by Matt Levine.)
You probably know all of this – I’m just commenting because IMO it’s misleading to think of FTT price dropping as “the thing that was life or death for them.” (Or maybe it was in a “proximate cause” kind of way, but the real problem was the reliance on FTT in the first place.)
it’s misleading to think of FTT price dropping as “the thing that was life or death for them.” (Or maybe it was in a “proximate cause” kind of way, but the real problem was the reliance on FTT in the first place.)
It’s more like FTT was a quasi peg, they needed to keep it up at $>20. The fight that was life and death was keeping it that high with their resources.
Yeah but the same is true of FTT under the assumption that FTX/Alameda rely on FTT for emergency liquidity.
I guess if someone had faith that FTX/Alameda would never sell a lot of it at once, but instead slowly sell over many years while keeping the exchange operating with profits, then FTT could be worth something for buyers. But on this model it doesn’t make sense to use it as collateral, let alone in any relation to backup for customer funds.
(TBC, we’re not 100% what happened, but if FTT was involved in securing customer funds, that’s very dumb at best and quite possibly illegal, as discussed by Matt Levine.)
You probably know all of this – I’m just commenting because IMO it’s misleading to think of FTT price dropping as “the thing that was life or death for them.” (Or maybe it was in a “proximate cause” kind of way, but the real problem was the reliance on FTT in the first place.)
Yes, I think we’re agreed.
It’s more like FTT was a quasi peg, they needed to keep it up at $>20. The fight that was life and death was keeping it that high with their resources.