WHEN WILL THE GOOD DAYS RETURN??

I don’t know about you, but over the last couple weeks I honestly started to feel like the bear market was finally starting to just give up and slowly ebb away.

BTC had finally broken out to trade above 20k again for the first time in what felt like forever. Then miraculously managed to even trade through 21k. That was just 7 days ago. And now, blood on the streets again and two months of hard work clearing out the sellers at 19k evaporated overnight. Thank you Sam Bankman-Fried (SBF) and Alameda, your unlimited greed on display for the whole world to see as you single handedly wipe out billions upon billions of ordinary people’s money again.

When will it end?

This bear market is so long in the tooth already and so unbearable, did we really need another Luna moment to get even more people calling crypto a scam and the regulators more anxious than ever to just jump on top of it all and take away more of our freedoms?

FFS the actions of the few greedy little pigs who sit comfortably in the 1% and yield more power than they have any clue how to handle makes me sick to my guts.

I really hope this is the end of SBF, with everything he’s contributed to crypto over the years, at the end of the day he’s just a whizz kid risk taker with too much money and way too much power and influence.

FTX has been implicated in so many controversial crypto episodes, not least the collapse of Luna and cozying up to US regulators to crack down on crypto and enforce regulations that benefit him and his crypto empire.

Please go now, and good riddance.

For those who don’t know who SBF is and have never heard of Alameda Research, here is a brief intro and explanation about how they are responsible for the blood bath in the crypto markets right now.

Sam Bankman-Fried founded Alameda Research in 2017 when he started arbitraging the higher price of Bitcoin in Japan against the price of Bitcoin in America. He used his connections from MIT to raise tens of millions of dollars and was able to buy Bitcoin in the States, sell it higher in Japan, bring back the profits and do it all over again. It quickly grew into a proprietary quantitative crypto trading firm, which basically means they used their own technology and money to leverage trade and arbitrage digital assets for profit.

He was very successful but needed better platforms and exchange offerings to take advantage of the many opportunities in early day crypto back then, so SBF decided to build his own exchange that would rival Binance and Coinbase. That was mid-2019.

FTX was a hit and grew to $10 billion a day in trading volumes. With all this success it didn’t take long before SBF using Alameda moved into venture capital funding and were able to secure very large positions in the ICO presales of some big protocols like Solana. This and many others made them billions. This all before his 30th birthday.

So, what on earth happened?

On November 2nd a report surfaced that showed that the assets on the balance sheet of Alameda Research was almost entirely made up of the FTX token $FTT. To the tune of $3,66 billion with another $2,16 billion of $FTT as collateral. This and billions more tied up in illiquid altcoins, was all that was offsetting the billions in liabilities in the company’s books from leverage trading, derivative exposure and who knows what other high tech fancy financial instruments they’d cooked up. Essentially this meant that one of the largest trading firms and market makers in crypto was technically insolvent and was directly connected to the third biggest centralized crypto exchange FTX. The market quickly realized that this could possibly lead to another massive contagion effect like we saw when Terra collapsed. Gd knows how many other exchanges, hedge funds, lending platforms, etc. are exposed to FTX?

Soon after the report was released, Binance CEO CZ tweeted that Binance would be selling off its entire holdings of $FTT ($580 mil) which caused the price to plummet ($FTT has lost 95% of its value), pretty much knocking the final nail in FTX and Alameda’s coffin.

After that the market panicked and customers ran to withdraw their funds out of FTX. $1 Billion was hastily removed in 24 hrs. which led to FTX stopping withdrawals, indicating that they didn’t have the funds to pay out all their customers. It seems certain now that FTX will be going the same way as Luna, Celsius and Three Arrows Capital.

I spent some time digging on twitter and YouTube and it’s becoming clear that this story goes much deeper than anyone knows and is much more sinister than just using illiquid shitcoins to prop up your balance sheet or using too much leverage on your trading desk. SBF is apparently being implicated in “the misuse of customer funds”, fraud and racketeering. I don’t know how much of any of these allegations is true but what we know for sure is that Binance CEO CZ only needed a few hours of due diligence to hastily backtrack from potentially buying out his rival FTX for cents on the dollar. So, what did he find that scared him away so quickly.

I’m sure the full details of the depth of greed at Alameda and that of its youthful founder Sam Bankman-Fried will all be revealed in the coming days and weeks. Apparently SBF has already filed for bankruptcy after making the Forbes 400 most wealthy people in the world list with an estimated net worth of $22 billion before this shitstorm of the last couple days. Some are even calling for prison time for the prodigal trader genius who amassed a multi-billion-dollar fortune in the shortest time ever in the history of the world. Can I say easy come easy go now, or is that too much?

Whatever the outcome for SBF and FTX, the damage to crypto cannot be overstated. Never mind that Bitcoin is now trading at two and a half year lows and hundreds of billions of dollars have been wiped out, Crypto’s reputation as a world changing technology is at an all-time low.

Please can 2023 bring some good news and recovering market, I don’t know how much longer I can take of this.

Thanks for reading.

Clayton

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