I'm curious is to how liquid Binance actually is at this point. And I mean liquid in the old-fashioned sense with real money guaranteed by governments and central banks, not the crypto Monopoly money.
That's both fair and important question. Quick answer - Binance's liquidity is definitely not the same as with the old-fashioned institutions. It just can't be that way.
On the other hand, whatever liquidity they have, we can never be sure of how accurate it really is. Sure, they recently shared their proof of reserves but it means nothing without proof of liabilities. Finally, even if they would provide that too, it would also reflect the company's position at a certain time only. And we know how fast things change in crypto.
I've been a blockchain proponent, yet a crypto skeptic for about six years now and so I've always been skeptical of the rush by Big Tech VCs to fund centralized cash grabs which completely undermine the very concept of crypocurrencies.
“BlockFi, like Celsius and Voyager, offered exceptionally high-interest rates on customer crypto accounts. All three firms were able to do so thanks to crypto lending — loaning customer cryptocurrencies to trading firms in exchange for high interest and collateral. Three Arrows or 3AC was “one of BlockFi’s largest borrower clients,” Renzi said in a court filing, and the hedge fund’s bankruptcy forced BlockFi to seek outside financing.”
Thanks for the commentary. Definitely agree with this in principle. Though, I must note that the issue here isn't crypto per se. It's as you said - Ponzi Schemes that were at the core. It was done in the past with fiat, and now it's being done with crypto. But the problem is always people that act in a bad faith.
I'm curious is to how liquid Binance actually is at this point. And I mean liquid in the old-fashioned sense with real money guaranteed by governments and central banks, not the crypto Monopoly money.
That's both fair and important question. Quick answer - Binance's liquidity is definitely not the same as with the old-fashioned institutions. It just can't be that way.
On the other hand, whatever liquidity they have, we can never be sure of how accurate it really is. Sure, they recently shared their proof of reserves but it means nothing without proof of liabilities. Finally, even if they would provide that too, it would also reflect the company's position at a certain time only. And we know how fast things change in crypto.
Your thoughts?
I've been a blockchain proponent, yet a crypto skeptic for about six years now and so I've always been skeptical of the rush by Big Tech VCs to fund centralized cash grabs which completely undermine the very concept of crypocurrencies.
And, with regards to FTX, I've pointed this out before, but, I’m pretty sure this excerpt from a recent CNBC story (https://www.cnbc.com/2022/11/28/how-ftx-death-spiral-spelled-doom-for-blockfi-according-to-filing.html) is quite literally describing a Ponzi Scheme:
“BlockFi, like Celsius and Voyager, offered exceptionally high-interest rates on customer crypto accounts. All three firms were able to do so thanks to crypto lending — loaning customer cryptocurrencies to trading firms in exchange for high interest and collateral. Three Arrows or 3AC was “one of BlockFi’s largest borrower clients,” Renzi said in a court filing, and the hedge fund’s bankruptcy forced BlockFi to seek outside financing.”
Thanks for the commentary. Definitely agree with this in principle. Though, I must note that the issue here isn't crypto per se. It's as you said - Ponzi Schemes that were at the core. It was done in the past with fiat, and now it's being done with crypto. But the problem is always people that act in a bad faith.