, Columnist
FTX Had Some Luna Trouble
Also a Carvana debt truce, a Tesla margin loan, title paper and AI Money Stuff.
A rough model you could have for the crypto credit crisis of 2022 is:
One way to put this is that big serious players in crypto are long crypto volatility at a small scale, but short crypto volatility at a large scale.1 At the level of napkin math, you could say “if Thing X goes down, I will make $200 million, and I would like to make $200 million”; more volatility means more trades. But at a more conceptual level, if Thing X goes down, that increases the chances that you will also go down. If Thing X goes down by 50%, you make money. If Thing X goes down by 100%, you go bankrupt and become an international fugitive. You are long a put spread I guess.