The State of Crypto

Give me a lever long enough and a fulcrum on which to place it, and I shall bankrupt everyone

SBF (probably)

Crypto is unravelling… fast. If you’ve been living under a crypto rock, FTX went bankrupt. Led by Sam Bankman-Fried (SBF), FTX was one of the largest crypto exchanges in the world. From Sequoia Capital to Tom Brady, FTX was the hot investment. They held billions in customer funds. While it’s not clear quite what happened yet, it’s clear that a significant portion of those customer funds are no longer there. More recently, BlockFi just announced that they are stopping withdrawals as well.

Crypto has always been a crazily levered industry… it just turns out the leverage went even further than most knew. The high yield crypto savings accounts we always sketch, but FTX was a major exchange that just rugged everyone. Despite all of this, I am still a crypto bull. None of this fundamentally changes what my bull case for Bitcoin is, but it sure does make crypto look like a shit show. The reality is that crypto is and always has been a shit show, the tide just came in further than normal this time.

This won’t be the death of Bitcoin or Ethereum, but it is a reminder how easy it is to get rekt. Stay safe y’all.