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Comment by fallingknife | Hacker News Reader

I keep reading this but I haven't seen any signs of more major drops that would be indicative of forced liquidations since the initial FTX news. That's not to say it's necessarily false, but I just haven't seen any evidence yet of a larger market contagion.

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This article mostly focuses on smaller dominos. The serious domino is Genesis which is only mentioned in passing.

Depending on the size of the hole Genesis might outside the other non-ftx ones combined, and is structurally much more important than them.

There is a major panic ongoing, but most of it is happening behind closed doors.

Despite the appearance, this is not the story of a bunch of degenerate kids playing with made-up money.

Real serious money is at stake, billions of it, people are losing their shirts, or something else.

Is it really billions or is that some people bought some worthless tokens at a low price then later a crowd valued those tokens at a high price. Then when the tokens are devalued the original people claim that they lost 'billions'. Of course some people who bought at a middle price lost real money but did that add up to billions?

Actual billions were invested, but the crypto market cap reached $3 trillion during the heady days of exactly one year ago. That's already shrunk to $800B and will keep doing so for quite a while.

How does a financial panic happen behind closed doors when I can see the prices of every token? How are people losing their shirts if the asset prices aren't dropping? This isn't a scenario with illiquid assets and murky pricing.

This is a Mexican standoff situation.

For two: BlockFi and Gemini Earn both have stopped withdrawing. This means a lot of people have a lot of crypto that they may or may not ever get back.

I suspect it will take some time, but at the ecosystem level, contagion is already here. Time will tell if it spreads beyond to the markets (but it feels inevitable at some level).

This is perhaps a sign? "Gemini, BlockFi, Genesis announcing new restrictions as FTX contagion spreads"

https://www.cnbc.com/2022/11/16/genesis-lending-unit-halts-w...

You ever played Jenga? Each of these companies represents a block.

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