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Comment by pixelpoet | Hacker News Reader

I'm continually surprised by how many "major" crypto firms I've never heard of before (being familiar with the space) suddenly are regarded as big names when they go under.

Wake me up when it's Kraken or something, i.e. a company someone may actually have heard of.

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I'm not sure if this is sarcasm or not, but just in case it's sincere: Alameda are considered a lynch-pin of the crypto industry, they're holding up pretty much everything... and by extension, FTX is far more important than Kraken. If Alameda implode, it'll be far worse than 3AC's implosion. I don't think it's possible to kill the crypto industry, but Alameda's implosion would be the most likely event to cause it.

> I don't think it's possible to kill the crypto industry, but Alameda's implosion would be the most likely event to cause it.

As a bystander, it's hard to grasp the likeliness of this happenning, can someone elaborate on what would be able to trigger it?

Hard to say, because we can only speculate on the true state of Alameda. Sam Bankman-Fried owns both Alameda and FTX and so while they’re separate entities, they are co-mingled in many ways.

Assuming FTX is a profitable enterprise (a big question in the current market) then any problems Alameda faces could be addressed by SBF leveraging FTX in some way to bail Alameda out… but it’s also plausible that FTX is dependent upon Alameda and that Alameda’s faltering could take down FTX.

My guess is that an Alameda implosion is unlikely because, as far as I can tell, they’re not engaging in fraudulent behaviour, just crypto hubris… and so, worst case, they have to scale back their activity… but if they are reliant on third-party capital, and the current economic trend continues… it seems plausible that could trigger major problems in the crypto world.

The whole point of crypto was to be decentralized. For one company to go down and cause the industry to implode means the industry is on the wrong path and needs to be reset.

Or it could be that the idea that it could actually work that way was just wrong. The creators of bitcoin adopted the delusions of goldbugs, tried to replicate it in a digital form. Adapting 19th century ideas about money to 21st century technology, and expected it to work.

Once the investors got in the whole point became making it more centralised just with the dominant players being ones they control.

I don't think anyone, even proponents of cryptocurrencies think that the industry as a whole is 'on the right path'.

A decentralized system can still die if nobody wants to use it anymore. If prices continue to fall as a result of more and more flywheels and ponzi schemes coming to light, and more and more people keep losing their shirts as a result of companies getting hacked/going backrupt/etc., then we may start seeing negative feedback loops as more and more people give up and leave.

Arguably this has already started happening.

Bitcoin is still the same as ever, it has survived and recovered from lots of exchange collapses after a few years.

But there are tens of millions of new people (or even more) since the MtGox collapse in 2014 who haven't learned the lesson and ,,chasing yields'' or lending against their crypto tokens / leveraging their positions (the new forms of financializing BTC, aka not holding your own keys).

I personally know somebody who lost all his BTC / ETH by lending against it and buying more when BTC price was over $50k.

I work for another (much smaller) crypto market maker.

Alameda imploding would definitely cause a lot of specific assets to nosedive in the short-term, and a lot of volatility, but I think it'd be impossible for it to destroy crypto (perhaps the Solana blockchain, since they're heavily invested, but even that seems like a stretch).

That volatility would also be a ton of opportunity (for other market makers).

Things that could conceivably destroy crypto are more along the lines of coordinated regulation from an influential, multinational group, like the entirety of the G7

> Things that could conceivably destroy crypto are more along the lines of coordinated regulation from an influential, multinational group, like the entirety of the G7

Sounds like a plan.

The reason that a lot of retail investors may not have heard of Alameda Research is that they are an institutional investor and don't lend directly to customers (afaik?). However, they do pack the monetary heft to make a lot of the interest payouts by companies such as Celsius possible.

It's as if Jane street failed, a company that an normal BofA user may not be familiar with.

Thanks, that makes sense.

Alameda is closely tied to FTX, which is big enough to have an arena in Miami named after it.

> This purported leak of Alameda’s financials demonstrates that the firm’s largest asset is its holdings of “FTX Token (FTT),” issued by none other than SBF’s FTX Exchange.

Not to be that guy, but this is probably the biggest and most well known of all crypto trading firms, and the source of SBFs fortune initially.

I consider remembering the names of "crypto firms" and their products an index of contamination: I might not be ignoring them well enough to protect my savings.

Just because you didn't heard of it, doesn't mean its not a big name. Also Kraken is a Exchange not a trading firm.

Of course my awareness isn't what decides if a firm is a major one, and I did refer to crypto firms in general.

In any case, apparently these guys are a big deal and I hadn't heard of them. Maybe it's European bias, and I'm not a crypto expert or anything, just interested.

The wallstreet equivalent would be Blackrock being insolvent

Most laypeople haven't heard of blackrock either

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