Cryptocurrencies and Markets

A timeline of FTX from 2019 until today. Or this week anyway. Rise and fall of crypto exchange FTX

Crypto was the sure thing. Just like the Dot Com stocks of the late 1990s and real estate in 2005. "You can't lose money in real estate" said everyone who would go on to lose money in real estate.

2021:

July - A $900 million funding round valued FTX at $18 billion.

On November 6th of this year, one of the firms that invested in FTX's crypto-token, FTT, said they would liquidate their positions.

On the 7th, the CEO of FTX basically said "everything is fine."

On the 8th there was what amounts to an old-fashioned Run on the Bank. The value of FTT collapses 72% as everyone tries to head for the exits.

On the 10th FTX stopped taking new clients and ceased withdrawals by existing clients.

If you click thru there is a laundry list of funds, and capital groups that invested in FTX. That list includes at least one teachers pension, if I'm reading things correctly.

And of course the vultures speculators have arrived. FTX Scrambles for Funds as Regulators Take Action

One investment firm that manages funds based on crypto has estimated that there is about a 20-30% chance that FTX will be bailed out.

Speculators are paying 10 cents to each dollar to buy trapped deposits on FTX.

"Trapped" because they have suspended withdrawals.

FTT has lost about 89% of its value this month. I'm not sure if you can say this is spilling over into other cryptocurrencies, because they've been coming down, but Bitcoin lost 17% of its value this month.

And the problems go on. The Securities Commission of the Bahamas freezes FTX assets, appoints provisional liquidator. It seems some of the stuff done by the CEO of FTX early in the summer may have violated the Bahama's Securities laws. (That is where FTX is incorporated.)

I'm not saying that you can't make money in cryptocurrencies, but it isn't quite what people think it is. It certainly isn't a sure thing. What is?

Since the mid 1990s, and maybe longer than that, Americans have been looking for the quick fix. The Dot Com stocks. The sure thing of real estate. Now cryptocurrencies and the related stuff. You could make decent returns on a lot of that, but not any random dot-com, or random piece of real estate. When did hard work, and diligent saving/investing become a bad thing?