Does anyone have a view on how "contained" crypto is? I.e. do these failures lead to anything other than pretend value going back to zero? Is there anything real that somehow depends on crypto (like what happened with mortgages)?
https://money.cnn.com/2000/11/09/technology/overview/
In the grand scheme of things crypto is still relatively small, another dot-com bubble or not even that. It's going to be a sideshow for the bloodbath that happens in the public equity and corporate debt markets (and eventually, the housing market), which is just getting started.
… in 2000. That would be $2.85T today, going by the official CPI inflation calculator.[0]
[0] https://data.bls.gov/cgi-bin/cpicalc.pl?cost1=1.7&year1=2000...
Tether's $70B market cap is currently over 50% of ETH's and nearly 20% of BTC's. The whole thing looks like an incredible shitshow.
I don't think that's obvious at all when you have entities like Tether with unclear off-chain financials. Only the on-chain stuff is transparent and works as you explained.
Meaning that crypto is very corellated with the stock market index, and if big selling happens on crypto, the statistical arbitrage algos will sell the stock market to exploit the correlation.
E.g. there's a big correlation between tech stocks and cryptocurrencies, but it could just be that investors consider them both in a single category (risky assets) and thus buy / sell at the same time.
Does this actually happen?
https://www.bloomberg.com/opinion/articles/2022-06-15/crypto...
I just want to block quote the second paragraph, but instead, just the first sentence.
“The deeper problem, always, is when you add leverage. Someone who gambled $40,000 on Bitcoin now has $20,000, fine. But someone who bought a Bitcoin with $20,000 of their own money and $20,000 borrowed from someone else now has roughly nothing, which is worse.”
Just the five US big tech companies (AAPL, MSFT, META, AMZN, GOOGL) are down a combined ~$3.4 trillion so far from the highs.