@molly0xfff @pluralistic Well if you put money in something with no intrinsic value..... Outside of moneylaundering, is there a use case for crypto?

@molly0xfff The root cause of this merry-go-round is that restrictions on what firms can do with their capital has lead them them into bucketter asset-classes where shares can never be redeemed for the underlying asset.

Any sustained departure of spot price and NAV is a tell-tale sign that there is no delivery, and sheep are being lead to the bucket shop floor.

The Martin Act of 1921 attempted to ban bucket shops without delivery, which lead to more layers, the roaring 20s and 1929.

@molly0xfff Of course, the 1920s were very different.

Back then, they were not so crazy to waste money on something that has no value at all.

@molly0xfff It seems like we have yet to learn the lessons of Beanie Babies.

@molly0xfff If only the rest of us were insulated from the reckless greed of crypto...but, we're not, even as I own no crypto.
I am old enough to have had parents who were adults in 1929. They owned no stocks but paid the price, nonetheless.
The only silver lining was that the crash made my dad, and millions like him, a lifelong New Deal Democrat.

@molly0xfff
So the criminals, money launderers, and scammers will go out of business? How terrible...
(OK, I do understand many regular people have invested in crypto, and they will lose out too. That's not great, but for the rest.. )

@molly0xfff ohhh DATCO: that's a term I would have needed lately, when I expressed concerns that a company that produces chips I actually was interested in using considered it more important to announce they're now accumulating bitcoin rather than to inform about new chipsets. https://sequans.com/sequans-announces-384m-strategic-investment-to-launch-bitcoin-treasury-initiative/

@molly0xfff Turns out that while sometimes Number Goes Up... sometimes Number Goes Down too. Hopefully the damage will be relatively confined though given how opaque (or at least obscured) a lot of crypto is it's hard to say for sure.

@molly0xfff it gets even more fun - there are companies like yieldmax, who run an ETF like MSTY, which more or less directly tracks MSTR. the purpose of MSTY is to print dividends every month, but its been tanking, and moved to printing divs once a week. and its aging like the cryptkeeper. its chart is a red ski slope right now

@molly0xfff The best way to learn about these was IMO to play Railroad Tycoon 2. The first part of the game is to build a railroad - the second is to invest in your competitors and to take them over. To do the latter it was very tempting to maximally use your leverage to buy as much of their stock as you could, re-maximizing when you got the chance.

That did mean that if they ever dropped slightly, you'd be getting a margin call from the bank, which resulted in forced selloffs. Which themselves cause the stock to drop a bit, making you further behind and getting another margin call .. until you have nothing left except for a debt.

I hope these companies are smarter with investing in real life than I was as a 16-year old gamer in a low-stakes game.

@molly0xfff

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