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FTX held less than 2 BTC 🤯 !! …Good news for Bitcoin sell pressure?
3 sats \ 10 comments \ @SatoshiNakanodo 13 Nov 2022 bitcoin
From Nik Bhatia’s newsletter, The Bitcoin Layer…
“ As for FTX’s bitcoin, it only held less than 2 BTC! The bankrupt exchange has $1.4 billion in client claims on bitcoin. For FTX clients, this is awful news. For bitcoin sell-side pressure, this is good news. The remainder from the FTX fallout will be comprised of impacted counterparties selling their bitcoin either to post margin elsewhere, or to redeem client withdrawals.”
Source: https://thebitcoinlayer.substack.com/p/the-highest-drama-ftx-creditors-damaged?utm_source=post-email-title&publication_id=459118&post_id=84202207&isFreemail=true&utm_medium=email
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5 sats \ 0 replies \ @AJ1992 13 Nov 2022
The fact that they held all their collateral and holdings in their own fucking token shows anyone that knows anything about crypto the people running FTX we're not smart. At all.
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6 sats \ 7 replies \ @siggy47 13 Nov 2022
Yes, but it also points out how easily bitcoin's price can be manipulated with "paper" leveraged bitcoin. It's the same way central banks suppress the price of gold.
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1 sat \ 6 replies \ @SatoshiNakanodo OP 13 Nov 2022
If it’s true they only held 2 btc, that begs the question… was FTX directly responsible for any of bitcoin’s price movements? If so, how?
Obviously, I’m not an economist.
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6 sats \ 4 replies \ @fiatbad 13 Nov 2022
Re-hypothecation. Pretty much promises to pay Bitcoin to someone in the future, even if you don't have it currently. We call it "paper Bitcoin".
This can still happen with Bitcoin, as @siggy47 just pointed out. But it is theoretically much more difficult to do a lot of re-hypothecation with Bitcoin sense there's no money printer to back it up. It can still happen, but it should be less of a problem under a Bitcoin Standard than it is with the current systems we have in place.
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5 sats \ 2 replies \ @2big2fail 13 Nov 2022
at the moment of withdrawal they would buy bitcoin and send it to you.
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20 sats \ 1 reply \ @SatoshiNakanodo OP 14 Nov 2022
Ah, this just dawned on me… Paper bitcoin keeps the price of actual Bitcoin suppressed. It’s also probably why the feds approved bitcoin futures but not an ETF. It’s like an escape valve on the escape valve.
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0 sats \ 0 replies \ @siggy47 14 Nov 2022
You should check out Willy Woo's twitter thread take on "paper" bitcoin: https://twitter.com/woonomic/status/1571062841595269120?t=VWb45fnx72cBlHVYPEKJwA&s=19
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2 sats \ 0 replies \ @02174b3c39_lntxbot 16 Nov 2022
Yes it can still happen, if you buy paper bitcoin you accept the risk. If it's supposed to be "physical" bitcoin, you can check.
Wrapping has proved faithless, but presumably you took the risk for a reason.
This is what is different, with bitcoin you choose, with legacy finance, they made all the rules and all you get to do is follow them, while a few in power, like a Gensler, get to break them, "for the public good," of course.
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1 sat \ 0 replies \ @siggy47 13 Nov 2022
Well, if they created wrapped bitcoin and lie about having one to one reserves, that wrapped bitcoin can be shorted easily. This is true regarding any exchange and any blockchain that wraps coins
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0 sats \ 0 replies \ @mf 13 Nov 2022
🤣🤣🤣🤣🤣🤣
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