You know that crypto speculators have been suffering. Big drops in the value of cryptocurrencies have exposed some of the firms that were swimming naked when the tide went out. Now, the founder of FTX, Sam Bankman-Fried, a mega-crypto owner, says that there are certain crypto exchanges that are already operating in insolvency. Forbes's Steven Ehrlich reports: The question on everybody’s mind in the crypto world is whether we’ve reached the market bottom. Nearly $2 trillion in crypto market value has evaporated since November. Two bellwether digital assets Luna, a $40 billion crypto asset … [Read more...]
MELTDOWN: The Long Term Pain of Crypto Losses
Many cryptocurrency speculators are just now waking up to the extreme levels of risk they assumed when buying their crypto assets. Prices for cryptocurrencies across the board have fallen dramatically, as can be seen in bitcoin's fall of -51.25% year-to-date, and -66.6% since its peak in November 2021, only eight months ago. Now crypto speculators have to calculate how much it will take to get them back to even. It's not a small amount. Even the volatility of crypto might not be enough to get them there soon. A 70% loss in crypto, which for peak investors is only a hair's breadth … [Read more...]
Bitcoin Nears $20,000 as Speculators Flee Crypto
Bitcoin prices dipped again last night as speculators continued to flee cryptocurrencies. The drop is causing trouble for some hedge funds, which apparently weren't hedged enough. The Wall Street Journal reports: Cryptocurrencies extended their slide Wednesday, with bitcoin on the verge of falling below $20,000 for the first time since December 2020. Bitcoin’s price fell to around $20,526.57 in early U.S. trading. That marks a 6.7% drop from Tuesday’s 5 p.m. ET price and a 70% plunge from a high of $68,990.90 reached in November 2021, according to CoinDesk. The rout in cryptocurrencies … [Read more...]
CRYPTO PLUNGE: Freefall Puts Innocent at Risk
No shock this house of cards is under pressure again. Teachers, police officers, and firemen are in the fray thanks to bad decisions by so-called experts. Innocent investors shouldn't have to suffer like this. Celsius, one of the world's largest crypto-lenders has informed its users that it is pausing all withdrawals, swaps, and transfers due to "extreme market conditions." Vicky Ge Huang reports for The Wall Street Journal: “We are taking this necessary action for the benefit of our entire community in order to stabilize liquidity and operations while we take steps to preserve and protect … [Read more...]
CRYPTO: Has the Fire Gone Out?
In The Wall Street Journal, Peter Santilli and Corrie Driebusch write that "Last year cryptocurrencies were on fire and appeared to gain more legitimacy after years of being considered a fringe, speculative product." In the last six months, crypto has lost $1 trillion in market value. It's fair to ask, has the fire gone out? Santilli and Driebusch write: In November, bitcoin and ethereum, two of the most popular cryptocurrencies, reached all-time highs. Bitcoin’s value at 5 p.m. on Nov. 9 was $67,802.30; ethereum was worth $4,800. They are now down 58% and 60%, respectively, from those … [Read more...]
STABLECOIN DEATH SPIRAL? TerraUSD Becomes Terra0.5USD Overnight
A selloff is currently hitting cryptocurrencies, and one, in particular, is beginning to look like an emperor with no clothes. TerraUSD, a so-called "stablecoin," because of its purported peg to the dollar at 1 to 1, has lost around half its value overnight. The loss was so great, according to industry analysts, that it could even enter what's known as a "death spiral." According to The Wall Street Journal, TerraUSD uses " financial engineering to maintain its link to the dollar." Does that sound very "stable," to you? Caitlin Ostroff and Elaine Yu explain the breakdown, writing: The … [Read more...]
DIGITAL GOLD? Bitcoin-Stock Correlation Heightens, Frightening Investors
Your Survival Guy is no fan of cryptos especially with actors like Matt Damon cashing in where you invest, but they win. Now the price of bitcoin has dropped below $40,000 as it becomes increasingly correlated to the performance of tech stocks. The Wall Street Journal's Caitlin Ostroff reports: It is becoming a more common occurrence: When stocks fall, so does bitcoin. Bitcoin, the world’s largest cryptocurrency by market value, fell below $38,000 Friday to its lowest dollar value since August 2021, according to CoinDesk. It later regained some ground and was trading at $38,705.70, down … [Read more...]
Where Will Bitcoin Go Next? The Moon, or the Basement?
Your Survival Guy is not in the predictions business. Trying to calculate what someone else will pay for an asset at a future date is something best left to oracles and seers. Buying something and hoping someone else will buy it at a higher price is speculation, not investing. But you're asking me about Bitcoin, so I'm watching it, though not with the intention of buying. I like the blockchain technology that underlies cryptocurrencies, but am wary of the currencies themselves. Here's what Patricia Kowsmann wrote about the recent plunge in bitcoin prices in The Wall Street Journal: Bitcoin … [Read more...]
BLACKROCK’S BITCOIN-ESG PARADOX: You Can’t Have It All
You know that you can't have it all. You can't say one thing and do another. That's the fastest way to break the trust of the people around you. You know BlackRock has been selling environmental, social, and governance (ESG) funds, promising investors they'll change the world by lowering greenhouse gas emissions. It's all a game to charge higher fees for funds, and to drive the EGOs of those in charge. But what you won't see anything about in the glossy ESG brochures is BlackRock's investments in bitcoin mining. That's because mining bitcoin is energy-intensive, generating massive amounts … [Read more...]
THE NEXT BIG SHORT: Paulson Predicts Crypto Will Go to Zero
You may remember hedge fund manager John Paulson from the movie The Big Short. He was the one that couldn’t believe what was happening in the real estate market and believed the system would implode. He was right. Now he’s dead against cryptocurrencies, much like Your Survival Guy. In a recent interview with Bloomberg's David Rubenstein, Paulson described cryptocurrencies as "a limited supply of nothing." He also predicted the speculative asset would go to zero. The NY Post reports: Hedge fund manager John Paulson made $20 billion predicting the downfall of the US housing market in 2008. … [Read more...]