Crypto Absolute Emergency!! [FTX Binance]
So as of right now. Yes, the market is down on the back of all of whats going on right here. Its big Monumental shifts in terms of whats happening in crypto and some of the divisions and power lines within crypto, so theres a lot going on for the most part Bitcoin. Yes, its going to trade down on this five percent is just fairly normal move for Bitcoin. Anyway, um now for FTX and their trading firm, Alameda supposed to be separate. But you know they have a lot of um lines into each other for sure um, most of their collateral and the problems that theyre having really centers around their collateral and their assets, which is FTD, ftt Solana and some of these Solana ecosystem ecosystem tokens. That FTX have obviously got themselves as well, so you can see its really Solana down 13 ftt token down 30 right now, thats really taking the brunt of things. Obviously every other token is going to react now in a really Chad move. Binance coin BNB coins are actually up, two percent, which is pretty outrageous, and it just shows you where the power lines are so lets go over everything where this started, and you know how its going to happen um, and so you know why binance are actually starting To sell down sailed down their ftt tokens, so Ive actually been putting updates in the private groups that we have, as part of the crypto investor course check that link.
If you want to see what the crypto investor course has and all of the private groups that we have there, which obviously discuss this stuff in real time, but essentially a few days ago, binance came out and uh take, took a shot across the bowels of FTX And were saying that theyre going to start selling down the ftt token now theres a few reasons for this, but the main one is that they werent happy with something that has been coming out over the last few weeks, which is how FTX are approaching regulation. So, as you can see here, FTX Equity last year, that was part of binances exit, so binance actually funded FTX in the very very early days and well see that later in the video. But they got some FTX tokens, which is ftt, which is the ticker to the region of 2.1 billion and some busd as well to recent. Due to recent Revelations that have come to light weve decided to liquidate. Any remaining ftt on our books happens to be around about 500 million or more worth of this ftt token, which, if you look at the floats and the daily trading volume, thats a lot to be dumping on the market and so expect the price to go down There but obviously theres the Alameda story as well, who have a ton of assets on their book, which is basically mostly Solana and ftt, and they have a lot of debts which are potentially being leveraged on the back of this collateral ftt.
If that collateral Falls in value, are those debts essentially rotten at that point, with more contagion to who theyre lending from and everything so thats why it gets very complicated? We will try to do this in a way that minimizes market impact dont, think thats worked out due to market conditions and limited liquidity, but thats always is always encourages collaboration between industry players. Our industry is in its nasancy and every time a project publicly fails. It hurts every user again. There was no real news about either Alameda or FTX being failing in any way. So why put that in? It may just be a kind of slip there or you know. Maybe you know people are asking. Does he know something that maybe other people dont know? We typically hold tokens for the long term and we have decided to be transparent with our actions here. More explanation of this as well. It says liquidating our FTD ftt is just post exit risk management learning from Luna. We gave support before they actually gave a lot of support to Luna and wanted to try and bail them out at that time started looking into everything and then obviously realized it was just unsavable Luna didnt treat them very well either. Even though binance was a big investor there, they obviously took a massive hit on that. They lost billions of dollars. You know holding on to that so theyre looking around trying to obviously make themselves stronger as well.
You know we wont pretend to make love of the after divorce. We are not against anyone, but we wont support people who Lobby against other industry players behind their backs. This is it this was the show on Bank list that basically sparked this all off. In my opinion, again links to everything down in the description that can be linked. This was um. You know coming from many other Twitter spats as well, FTX and and SPF made it very clear, essentially that they were willing to throw defy on the fire in order to get more regulation for their own centralized exchange. He was essentially spending billions in Washington and DC to lobby for regulation that would benefit his Exchange and be to the detriment of decentralized finance and all thats going on there. Essentially any D5 protocol that wanted to um, you know offer its product to U.S. Citizens would have to go through kyc and AML, which is essentially making it centralized at that point, destroying the fire and obviously betting uh. You know benefiting his exchange thats, how I read it thats, how most other industry players have read. It and hes been doing it for his own good thats. How most people are reading this situation, so binance, obviously taking a stand here and put putting you know their flag in the sand just to confirm this as well. You can see even a few days ago, uh binance literally this tweet from CZ binance is investing heavily in defy.
So, as we know, this FTX is, you know essentially trying to destroy defy. So here is the rift right and you have one company like binance, with ftt tokens and theyre thinking. We just have fundamental differences here. We need to get rid of this and thats what they did now. The result of that is uh dumpster fire of speculation of insolvencies and everything which you know CZ has never actually said or tried to spark. He must have known this probably would have happened, but actually hes just come out and been very open about what he was doing and why all the insolvencies and everything like that um all the rumors of at least um, are obviously you know just what the market Is going to do once it looks into the books of Alameda which Ill get onto if youre a customer of FTX, or you have ftt token youre looking to trade this. This is whats happening right now now: Caroline, who heads up Alameda research, tweeted out to CZ from binance that they were happy and willing to buy all of FTX. The ftt token from binance at 22, now whats, really important with Trading is levels. The price of something is always attracted to where the liquidity is now. A lot of people are questioning why theres 22 dollar Mark was so important for the head of Alameda to actually come out, and you know, buy the tokens from CZ right at this price.
So a lot of people are speculating here that potentially Alameda have a ton of these fct tokens that they use as collateral on their balance sheet to then go and buy other things and take loans against now. If you take a loan against collateral, you will have a liquidation price um. You know when, if youve ever traded on Leverage or anything like that, you know theres a liquidation price, where you borrow lots of money based on collateral and then collateral is used essentially to fund any losses. Now there is a liquidation price at some point that was now speculated to be 22., so uh putting that online. If youve ever been a Trader or been around Traders, you know you never ever open your trade to the market right, you never let the market market makers know your Red Line in the Sand or any price levels right. If you ever traded. You know you have to be extremely careful about opening your price to the market because once they know where your weak point is guess where the price is going, so its really um its really important this 22 level. Now what you can see here is that they danced around it for a while and its just been absolutely crated today, with a huge sell off now. What we cant confirm is if 22 was a liquidation threshold for Alameda or whether it just happened to be around 22 at the time of the tweet, and actually they were happy to see things go lower anyway, thats been tested and, as you can see, were basically Trading right down to 22 now were on the four hour chart here and there is a dead cat, a dead cat bouncing process.
I wouldnt be trading this dead cat bounce, see it went down all the way to 15 dead cat bounced up and now were looking at potential consolidation here. But this thing you know potentially goes a lot lower because you have the entire market now shorting this expecting things to go, lower and lower. Now ftt um, it depends how much ftt is actually used by Alameda as collateral to borrow against. If that is the case, an Alameda essentially are seeing their assets and their balance sheet fade away, thats a bigger problem for Alameda and thats. What the market is going to try and find out right now now its not the 500 million dollars or a billion dollars. Whatever binance have that theyre dumping thats, actually the problem, the problem potentially for Alameda is that they have a lot of ftt tokens that theyre, using as collateral that are now becoming less less worth worthless, essentially right, so thats a problem for any collateralized loans that they Have thats a big blow up, maybe between potentially in the region of eight to ten billion dollars, so its a big blow up and it depends whos lending that them that money also, but in the big scheme of things I dont believe this is anything like Luna Or 3ac, I think that was the real big leverage blower. Those guys were essentially leverage longing on collateral on an uncollateralized basis, Bitcoin and eth, and Avalanche and others right.
So they were taking other peoples money that they had no collateral for and leverage longing the market, whereas I think Alameda is potentially not in such a serious situation, but they could certainly Go Bus without FTX, though FTX and Alameda arent exactly the same, but obviously its A big problem, so, as you can see here, SPF now, FTX and SPF have been pretty quiet, probably got a lot of work on with trying to salvage. You know, whatever liquidity that they need. If youre, a customer of FTX, just listen to this competitor, is trying to go after us with false rumors FTX is fine. Our assets are fine. Well lets. Look through. This FTX has enough cover enough to cover all client Holdings right. We dont invest client assets, so FTX is nothing like Celsius was where they essentially lent out the vast majority of client assets to 3ac, who were just using things to go long on defy. I couldnt pay it back because theres no collateral there, so they were using client deposits to lend out to someone to get 10 yield that someone had nothing left when the crypto Market started to fall right. So this is very different. As you can see here, we have been processing all withdrawals and will continue to be from what Ive heard a lot of people are. You know having very slow withdrawals here, having to wait and maybe having withdrawal limits, so yeah not perfect, but you basically have the entire customer base now were drawing their funds all at once.
What you can see here, though, is that its heavily regulated, even when that slows us down, we have gaap audits with a billion dollars of excess cash. We have a long history of safeguarding client assets that remains through today. You can see they dont even invest treasuries. There was another option here which essentially says all client assets are held as is, and so they dont lend them out all the cash that they have either in the form of usdc usdt, stable coins or US dollars that are on the platform or any other fiat Currency they just keep them in cash; they dont even invest in t bills or anything like that. So from what IE would assume everything is here for FTX right, so theyre, not insolvent as such. Now the big problem is that when everyone stops using a service, suddenly your business makes no money right so beforehand. When everyone was saying, I think theres a one percent chance that FTX will go and solvent right as in no chance that was before, assuming that they still have people trading on their system, paying trading fees to fund their business. If 90 of everyone has withdrawn their money and is not trading, you now have no business, and so, if that happens, for long enough, you just you know, become insolvent right. You cannot pay your debts and you dont have any income so thats the issue right now. That is what SPF and FTX have to actually come out and and try and save.
For my from my point of view, what they would have to do is completely clear. Binances block of of stock or of tokens, but they said that they for some reason, binance dont, want to trade over the counter in a big block. They want to leak it out over the market over the long run, which is yes, absolutely a way to inflict the most amount of pain on SPF and FTX, because what theyll have to do now is try and support the fct token. Not only with binance is selling, but with everyone elses selling and short. You know future short positions as well. Theres also speculation here as well that some potential over the counter deal or OTC deal has been agreed but again uh difficult to understand if it has or hasnt you can see here, a lot of addresses are being looked at so chz, which is Chile. Is that token Loom ship link dydx all getting carted at the market to fund? You know. Other parts of the business so looks like those are getting sold off as well as part of that, but it says here I think, from what Ive seen its possible that Alameda and binance did get some form of OTC deal done. Otherwise, the actions are too random and inconsistent looks like I was right, so we have uh Shaka trades here um there seems to be an OTC desk, which is Genesis trading, potentially trading. This OTC deal of around 42 2 million dollars worth of ftt still far away from any large amount of the actual block of binances tokens to be cleared, though the main issue the market has with ftts value and Alameda is the amount of tokens that arent circulating.
That have value created out of thin air, and this is how that works. So, as you can see here, FTX have actually posted this themselves. Saying look. You can see our Revenue its right there in the open. We you can work it out by how much ftt that we burn each week. So many exchanges do this, where they take a percentage of the fees that they charge. Users in FTX this case its 33, so 33 of all trading fees goes towards and thats in dollars goes towards buying back ftt tokens. Now, what that does its the same as a stock buyback or a share buyback where you take profits, you buy back stock and you cancel the stock out the market that has the effect of increasing the value of the shares that are circulating in Supply. The problem comes when you have a bunch of tokens that arent circulating in Supply right who owns those, and so the valuation of the token, is supporting a lot of valuation of those tokens that arent being traded and so what are they being used for. So let me explain how that works. You have the ftt token here. You can see the circulating supplies around 250 million. The total Supply according to according to FTX, is around 330 million, so lets say youve got. You know around about two thirds in circulation right here now. If you go over to coin gecko, they have a much different story.
Circulating Supply according to them, is 133 million out of 328 million. Like you can see here, though, it doesnt really matter, you can see the fully diluted valuation is very, very different to the market cap. The market cap is the price of each coin. Multiplied by the amount of coins in circulating Supply its less than the total Supply who owns that extra 100. Odd million ftt Alameda other investors that maybe are locking them up and using that using those tokens. Those collateral to fund loans against thats. What the market is worried about right now, why thats important is because, as you can see, ftt, they actually burn a bunch of tokens every single week this week is a bumper burn, so even in this, this is. Why exchanges? You know they make a lot of money, because during times of high volume, they just make more money because theyre charging fees on more volume. They usually burn around two to three million dollars per week of FDT token, this week, its around 6.7 million dollars. That theyre going to burn but remember theyre, using this money to burn tokens that are in Supply, so theyre taking um these tokens out of Supply, so their their money goes further right, because their 6 million is being used to burn these out of circulating Supply. And so your money goes further and youre more able to actually prop up the price of these circulating tokens. And so whoever owns the rest of these is getting a great amount of paper assets that they can borrow against.
But when liquidity issues are faced and when you have to sell them off, you realize that the actual value of these tokens, once you need to sell, is not what your loans are backed against right. You said: well, these tokens are worth a few billion. Well, if you need to sell them right away, then theyre not and so thats the issue thats the insolvency and liquidity issue that the market is worried about with FTD ftt and specifically Alameda owning those potentially using that value to collateralize loans. Even if FTX is a perfectly profitable business, it is credit crunches that can make you insolvent right. Heres whats happened to FTX. So far now remember FTX have said they have all client assets. They dont loan them out. They are there to be withdrawn. You can see the huge Capital flight right here. This is a a bank run in the digital age that were seeing in real time, as you can see which sits in at the Luna as well. The ethereum on the exchange is basically being completely drained almost almost to zero. Here you know, theyve got a few hundred thousand left. You can see. The Bitcoin according to this chart is basically zilch uh 0.6 of a Bitcoin. I think I saw it as look at the stable coins, though theyve been absolutely drained from The Exchange. So you know, FTX is was, is you know a very uh large exchange, one of the biggest and obviously they have a lot of stable coins here.
Thats. All almost all been taken out right, a huge Capital flight away, so um in terms of FTX. They seem to be withdrawing everything like they said they have client assets there so very, very different to Luna and 3ac in crypto, not your keys, not your crypto. So if you have anything on exchanges that youre worried about use the blockchains to take custody of them, FTX is going to get walloped by this. Their business is going to suffer as a result with trading volumes way lower. You know so theyre definitely going to have to dig themselves out of a hole if they can and for Alameda. There may be massive liquidations there potential problems, but I dont think its anything like Luna or 3ac check all of the links to the um dashboards and everything that I use in this video down below. So you can check that out, link to the crypto investor course down there as well. We have private groups where you know all the Traders and investors are talking about all of this stuff in real time as well.