Here's the 30 second summary of the FTX drama that is blowing up in crypto.
1/ How FTX (a multi billion dollar co) almost died overnight
2/ And why this is a god tier strategic move by @cz_binance
1/ How FTX (a multi billion dollar co) almost died overnight
2/ And why this is a god tier strategic move by @cz_binance
OK so it starts years ago. Binance was an early investor in FTX
But FTX starts growing like crazy. They become the #2 biggest exchange
Steph curry, tom brady, they cut huge marketing deals.
SBF becomes the famous "fro of crypto"
Steph curry, tom brady, they cut huge marketing deals.
SBF becomes the famous "fro of crypto"
They started as friends, now competitors.
Binance #1
FTX #2
(coinbase and others are smaller)
Binance decides to sell it's stake in FTX.
As part of the buyout, they agreed to take $2B of it in "FTT" -- a token that FTX created that it uses for trading fees.
Binance #1
FTX #2
(coinbase and others are smaller)
Binance decides to sell it's stake in FTX.
As part of the buyout, they agreed to take $2B of it in "FTT" -- a token that FTX created that it uses for trading fees.
So now - Binance and FTX are friendly competitors
Binance owns a sh*t ton of FTT ($2B)
There's not a lot of FTT trading volume (this is important soon)
Binance owns a sh*t ton of FTT ($2B)
There's not a lot of FTT trading volume (this is important soon)
Two days ago, CZ comes out and says SBF has been talking sh*t about them to regulators
lobbying in a way that would hurt binance
So he announces publicly on twitter to his 7M followers that he's going to DUMP his entire $2B FTT stash
lobbying in a way that would hurt binance
So he announces publicly on twitter to his 7M followers that he's going to DUMP his entire $2B FTT stash
Anyone holding FTT knows this is bad news.
$2B of sell pressure would crush price
So they start to panic sell
Price of FTT drops like 15-20% overnight.
Nobody wants to buy FTT (too risky, a whale is about to dump) and everyone wants to sell. Number go down.
$2B of sell pressure would crush price
So they start to panic sell
Price of FTT drops like 15-20% overnight.
Nobody wants to buy FTT (too risky, a whale is about to dump) and everyone wants to sell. Number go down.
Enter Alameda - the hedgefund/market maker Sam started before FTX
They are kings.
But news leaks showing the emperor has no clothes
They have ~$12B in assets, $7b ish in liabilities...but half their "assets" are in FTT token
which is plummeting & illiquid
Alemeda might die
They are kings.
But news leaks showing the emperor has no clothes
They have ~$12B in assets, $7b ish in liabilities...but half their "assets" are in FTT token
which is plummeting & illiquid
Alemeda might die
If alemeda is in trouble, FTX might be too.
They are sorta sister companies. Market makers on FTX. And possibly hold/trade customer deposits. The relationship has been unclear for years. (achilles heel?)
They are sorta sister companies. Market makers on FTX. And possibly hold/trade customer deposits. The relationship has been unclear for years. (achilles heel?)
But most people think of FTX as a blue chip company. Sam is famous. He's a genius right?
They wait for he or alemeda to show they are in good health
*narrator* but they were not in good health
They wait for he or alemeda to show they are in good health
*narrator* but they were not in good health
Sam tweets saying everything is "fine"
but it feels to all of crypto like a girlfriend saying "i'm fine"
but she's not fine.
but it feels to all of crypto like a girlfriend saying "i'm fine"
but she's not fine.
Alemeda's CEO comes out and says they will "happily" buy the FTT token as it plunges
But something tells us that it's not so happy, even with the exclamation mark
But something tells us that it's not so happy, even with the exclamation mark
24 hours pass
if they had the financial strength, they would have shown it by now
This starts to feel like the "steady lads" moment right before luna collapsed
if they had the financial strength, they would have shown it by now
This starts to feel like the "steady lads" moment right before luna collapsed
People freak out. start withdrawing funds from FTX
Ya know, just in case it collapses like celsius, blockfi, voyager, luna all did in the past year
$1B+ of withdrawals
FTX is facing a liquidity crunch
Ya know, just in case it collapses like celsius, blockfi, voyager, luna all did in the past year
$1B+ of withdrawals
FTX is facing a liquidity crunch
More silence (wtf), withdrawls paused on FTX (double wtf)
Then today - @SBF_FTX comes out and says they are entering a "strategic transaction" with binance
strategic transaction?
best code phrase since
strategic transaction?
best code phrase since
CZ clears it up
"FTX was in trouble. We bought them to save them"
Binance basically started a rumor, made a threat, and ended up buying its biggest competitor overnight.
magnus carlsen approves
"FTX was in trouble. We bought them to save them"
Binance basically started a rumor, made a threat, and ended up buying its biggest competitor overnight.
magnus carlsen approves
For now the drama ends
crypto crisis averted
if ftx failed...that would have been devestating for all of crypto
crypto crisis averted
if ftx failed...that would have been devestating for all of crypto
Sam had become the main character
you never want to be the main character
you never want to be the main character
go subscribe to the @MilkRoadDaily if you like to get your crypto news in plain jane english like this
and now some of the high quality memes to dull the pain
oh important thing I didn't mention. The deal is not done. pending DD
more room for tomfoolery in the coming days
more room for tomfoolery in the coming days
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