11-09-2022, 03:46 AM
[SERIOUS] Regardless of a bailout, the worst has likely yet to come
<!-- SC_OFF --><div class="md"><p>So now we know that SBF was actually swimming naked the entire time. What we thought was Chad behavior earlier in the year buying up distressed assets/exchanges was likely his attempt to shield himself from liquidations that he was also probably very close to triggering.</p> <p>A bailout for FTX is good news <em>in the short term</em> for the reason that funds are safu and another ill-fated Chapter 11 has been avoided, but its worth considering the broader implications here. </p> <p>Why didnt Alameda bail out FTX? Well thats because Alameda has huge debt obligations of their own. They have ~14BN in assets to ~7BN in liabilities, but lots of those assets are illiquid. $3.66b FTT, $2.16b “FTT collateral”, $3.37b crypto ($292m SOL, $863m “locked SOL”), $134m USD & $2b “equity securities. Theyre incredibly low on cash flow.</p> <p>FTX will live on, but Alameda doesnt look great considering their biggest bag is FTT and CZ more likely than not has very little interest in salvaging an illiquid shitcoin when he has his own exchange/exchange token and will probably let it die. His interest is now in FTX and has no duty to Alameda.</p> <p>Alameda has been borrowing against this FTT and using it as collateral in several different loan agreements as well as defi positions (Blockfi, Genesis, AAVE, ABRA). This will leave Alameda and its lenders taking a huge hit and scrounging for liquidity, and of course their next biggest bag is $SOL. Alameda needs to unwind some big positions and probably will not be able to avoid liquidation without dumping a sizeable portion of their SOL bag, and what will happen to Solana when their biggest proponent is forced to sell? </p> <p>Theres likely going to be big ripple effects from this, and unfortunately ALOT of this is going to be up to CZ and what he wants to salvage</p> </div><!-- SC_ON --> submitted by <a href="https://www.reddit.com/user/marsangelo"> /u/marsangelo </a> <br/> <span><a href="https://www.reddit.com/r/CryptoCurrency/comments/ypvmjc/serious_regardless_of_a_bailout_the_worst_has/">[link]</a></span> <span><a href="https://www.reddit.com/r/CryptoCurrency/comments/ypvmjc/serious_regardless_of_a_bailout_the_worst_has/">[comments]</a></span>
<!-- SC_OFF --><div class="md"><p>So now we know that SBF was actually swimming naked the entire time. What we thought was Chad behavior earlier in the year buying up distressed assets/exchanges was likely his attempt to shield himself from liquidations that he was also probably very close to triggering.</p> <p>A bailout for FTX is good news <em>in the short term</em> for the reason that funds are safu and another ill-fated Chapter 11 has been avoided, but its worth considering the broader implications here. </p> <p>Why didnt Alameda bail out FTX? Well thats because Alameda has huge debt obligations of their own. They have ~14BN in assets to ~7BN in liabilities, but lots of those assets are illiquid. $3.66b FTT, $2.16b “FTT collateral”, $3.37b crypto ($292m SOL, $863m “locked SOL”), $134m USD & $2b “equity securities. Theyre incredibly low on cash flow.</p> <p>FTX will live on, but Alameda doesnt look great considering their biggest bag is FTT and CZ more likely than not has very little interest in salvaging an illiquid shitcoin when he has his own exchange/exchange token and will probably let it die. His interest is now in FTX and has no duty to Alameda.</p> <p>Alameda has been borrowing against this FTT and using it as collateral in several different loan agreements as well as defi positions (Blockfi, Genesis, AAVE, ABRA). This will leave Alameda and its lenders taking a huge hit and scrounging for liquidity, and of course their next biggest bag is $SOL. Alameda needs to unwind some big positions and probably will not be able to avoid liquidation without dumping a sizeable portion of their SOL bag, and what will happen to Solana when their biggest proponent is forced to sell? </p> <p>Theres likely going to be big ripple effects from this, and unfortunately ALOT of this is going to be up to CZ and what he wants to salvage</p> </div><!-- SC_ON --> submitted by <a href="https://www.reddit.com/user/marsangelo"> /u/marsangelo </a> <br/> <span><a href="https://www.reddit.com/r/CryptoCurrency/comments/ypvmjc/serious_regardless_of_a_bailout_the_worst_has/">[link]</a></span> <span><a href="https://www.reddit.com/r/CryptoCurrency/comments/ypvmjc/serious_regardless_of_a_bailout_the_worst_has/">[comments]</a></span>