Thursday, November 10, 2022


This is not something I would normally write about, but I noticed two interesting things lately. 

One, with the apparent collapse of FTX (which had 32B in "assets" in January), the crypto industry continues its consolidation. If you want to read about what happened to FTX, try here: EXCLUSIVE Behind FTX's fall, battling billionaires and a failed bid to save crypto,

The short version: everyone in crypto seems to have no idea of basic financial principles and becomes over-leveraged in quite embarrassing and incredibly risky ways, leading to collapse as soon as there's a market reversal. It's not quite that simple, but it's close.

A normal consolidation consists of a company buying other companies in their sector. This consolidation seems to consist of firm after firm going bankrupt, leaving fewer players. 

Now, an enormous amount of leverage is in the hands of Binance. Centralization, though, means that if (when) Binance collapses, the floodgates will open. 

I think there's a narrow use case for crypto in companies that have insecure banking systems. The problem is that it's not really being used for that right now. Honestly, I can't even tell you what it's being used for right now, because there's so much grift and con involved that's hard to separate out of the mix. 

The second interesting thing: remember when El Salvador's president, Nayib Bukele, made a grand proclamation that the country was going to buy Bitcoin? Since September of last year, they've bought 107M in Bitcoin. 

As of today, it's worth 42M. Oops, sorry. 41M now. You can actually follow it here: NAYIB BUKELE PORTFOLIO TRACKER $

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