I am confused as how this is a story about crypto and not story about Celsius. If Robinhood stopped withdrawals, would we be having a conversation about solvency about of US government? It is interesting, but it shows that crypto has an oddly rabid opponent base.
Just to put it in perspective, everything is falling today.
For the record, I don't disagree with some of the criticisms, but the knee-jerk reaction to anything crypto is just odd.
minor edit: I have minor stake in crypto, but nothing that would make me retire/commit suicide over losses.
Yeah, I'm also not a whole-heart fan of everything cryptocurrencies, it has plenty of problems. But I have the same perspective as you, both bases have very intense knee-jerk reactions to anything happening.
I think it has to do with how new the field is. People reacted to the internet in the same way when it was new. No, I'm not saying cryptocurrencies are as useful as the internet is. But when the internet first appeared, people who didn't like the internet, grouped everything on the internet together. I was called porn-addicted because someone had heard there was porn on the internet and that I worked with the internet, so obviously I must be doing something related to porn.
Similarly people hear "cryptocurrency" and they immediately think of scams, although there is currencies that obviously aren't scams (Bitcoin, for one). But they've seen a scam using Bitcoin, so everything related to Bitcoin must be a scam too.
I have nothing to gain/lose by cryptocurrencies going up/down, so I don't really care. But it makes me slightly scared to see how for example many HN users react to cryptocurrencies, when this audience usually seems pretty calm and collected to me.
Makes me wonder what other subjects gets treated the same way as cryptocurrencies, but I don't realize it yet.
> I am confused as how this is a story about crypto and not story about Celsius.
Because it's a relatively small eco system and everything is tied together. As soon as one domino is falling the whole eco system follows.
And look at the graph of the top 20 cryptos, they all follow the exact same graph as BTC. Anything bad happening at a relatively large scale to BTC = BTC goes down = the whole crypto world panics = they all go down
I would question the characterization of small. Even today, total crypto market cap is just shy of 1T. Even relative to more established plays it is nothing to sneeze at.
But note that the same could be argued about USD system("Look at this market today. Everything is falling. Everything is tied together. One bad inflation reading and domino is falling down and the whole ecosystem follows."). I am exaggerating for effect, but not that much.
> Even today, total crypto market cap is just shy of 1T.
That doesn't mean there's that much money in it.
I bought a glass jar of sand on vacation, for $5. That doesn't make the beach worth trillions based on how many $5 jars it could be made into, but that's how crypto market caps are calculated.
Maybe not, but that's how market cap is calculated in the stock market also, and it's considered an important metric in the stock market regardless.
"Market cap—or market capitalization—refers to the total value of all a company's shares of stock. It is calculated by multiplying the price of a stock by its total number of outstanding shares. For example, a company with 20 million shares selling at $50 a share would have a market cap of $1 billion."[1]
That's the same thing as Bitcoin's market cap being calculated at $438 billion right now, because there's 19.06 million coins multiplied by the current going price of $23k.
Lost private keys I get (but we don't know for sure how much are lost, we can only take a guess based on wallets that haven't had activity in a decade, I'm sure it's a decent percent of those but not all of them), but I'm not following on the other examples. Why would those others make a difference?
There's intrinsic value to, say, McDonalds, because they own something like 50k acres of prime retail real estate. The same is not true for a cryptocurrency coin.
Intrinsic value is an interesting term, but say we are not talking about McDonalds, but rather say Acacia Research ( ticker: ACTG ). Is their value intrinsic or imaginary? Without going down the rabbit hole of what is 'value' rabbit hole, the argument of value ( intrinsic or not ) may not hold much; mostly because value is what is valuable at a given time.
You will find not argument from me saying that crypto has tons of scams going, but.. quite honestly, same is true in regular finance. Traditional finance is just more regulated. And, before we get to that point in other posts, it seems like crypto regulation was just hatched the other day.
I don't think market cap is really the best metric to look at for the meaningful "size" of a speculation-driven market like cryptocurrency. Admittedly, I'm far from the most financially-savvy, but it seems to me that more relevant figures are the number of people invested in the market and the percentage of people's income/wealth invested in it.
Actually, probably even more relevant (though more difficult to measure) than the absolute number of people invested in the market is some kind of measure of the "distribution" or "spread" of such people—something like distinct groups of people without direct connections to each other, since (positive) interest in cryptocurrency seems to cluster somewhat based on word of mouth networks.
Would actually be an interesting kind of study to do, finding the most useful ways to measure the "size" of a market of this nature. I would guess that there are probably at least 2-3 different measures of "size" that would be relevant to different kinds of effects on the market, but I'm afraid that's about where my understanding of all this ends.
People like to generalize. Celsius is supposed to be backed by enough collateral for customer funds to be safe, just like many other crypto projects. If it turns out it can't honor the agreement it will become a story about crypto because the alternative are government-insured accounts, which would honor the agreement.
Also, it looks even worse because these are not even "extreme market conditions" by crypto standards.
I suppose that partially explains it. The concern from the opponents is based on ecological impact and any bad news is a way to bring it down ( not completely unlike fossil fuels ).
Just to put it in perspective, everything is falling today.
For the record, I don't disagree with some of the criticisms, but the knee-jerk reaction to anything crypto is just odd.
minor edit: I have minor stake in crypto, but nothing that would make me retire/commit suicide over losses.