The dominoes keep falling one after the other. After Terra-Luna, Celsius, 3AC, Voyager, FTX, now comes the turn of BlockFi. And in the meantime, inflation continues to break records.
Game Domino BlockFi
Based in the state of New Jersey, BlockFi primarily catered to small investors looking to borrow dollars. For that it was enough to give bitcoin or shitcoins as collateral. Loans received in minutes, with no credit checks on borrowers.
Obviously, the unmentionable strategy is to wait for shitcoins to lose value to trigger margin calls. BlockFi could then liquidate its customers and raise exorbitant fees along the way.
The lender recently claimed to have more than 650,000 individual customers, who are also attracted by the temporal rewards of deposits. Therefore BlockFi was also investing its customers’ money. And especially at Three Arrows Capital (3AC) which went bankrupt after the Terra-Luna ponzi was implemented.
Leaked documents suggest the firm managed to lose $285 million during the latest bull run:
BlockFi did well to secure a credit facility from FTX ($400 million). Unfortunately, FTX has gone bankrupt in the meantime… For this, don’t miss the paper: “We must save the SBF soldier”.
BlockFi’s bankruptcy filing reveals liabilities between $1 billion and $10 billion. We do not know the exact number.
On the other hand, we know that the company has money for more than 100,000 entities (including the US government…) and that its liquid assets are only 256 million dollars in cash.
The Financial Times reports that the lending platform has just taken FTX to court to seize its Robinhood shares. These amount to 575 million dollars.
In short, the maximizers were right and many are joining our ranks. More than 200,000 BTC left Coinbase in the last four days of last week. Not your key, not your coin!
There is no magic. Only bitcoin draws and rugs that promote influencers need to go to jail.
Despite appearances, the worst is yet to come. So The Economist wrote last week about Europe’s energy crisis. “A serious economic crisis will test Europe’s strength from 2023,” writes the British magazine.
Admittedly, gas stocks are currently 95% full, and there is an entire fleet of tankers full to the brim going around the European coast.
However, the natural gas delivered in the first quarter of next year will sell for around €125 per megawatt hour (MWh). Although its normal price is usually around 20 euros…
Admittedly, wholesale electricity prices in Germany fell from €800/MWh in August to less than €200 this week. But we were on 20 euros before the war took hold of Ukraine. In Cologne, the provider RheinEnergie will charge private individuals twice as much electricity from January.
There will probably be no shortage, but at what cost? And this, even as Russia continues to sell gas to us!
Between January and October, European countries imported 18 billion cubic meters of Russian liquefied natural gas (LNG). That’s a 42% increase compared to the same period in 2021, reports the Financial Times.
In addition to all this is the fact that the old continent and the United States plan to strengthen their sanctions soon. Their insurance companies (which cover 90% of the global shipping market) should stop insuring ships carrying Russian oil. Unless the latter was purchased under a certain ceiling price.
That said, China and India, which have so far taken most of Russia’s surplus barrels, can insure their own ships.
The Russian Energy Minister, Alexander Novak, has warned that Russia will not supply the countries that surrender to the West. “Cap could lead to oil shortage”he declared.
Russia could reduce its exports by several million barrels per day. Not to mention OPEC, which could add fuel to the fire when the price of a barrel is already fluctuating between 80 and 90 dollars.
A long return above $100 would risk blowing up the Western financial system and creating hyperinflation in the process.
Unfortunately this Great Reset seems to be taking a little more shape with each passing day:
Especially since the only LNG gas available in sufficient quantity to supply Europe will only be delivered from 2026…
The future looks so inflationary that ex-IMF pundit Olivier Blanchard suggests in the FT that central banks raise their inflation target to 3% a year.
Glassnode Summary Weekly Report
The plebs keep piling up! Entities with less than 1 BTC are benefiting from balances by adding more than 96,000 BTC since FTX dropped. They now have over 1.21 million BTC, an all-time high. That is still 6.3% of the approximately 19 million bitcoins in circulation.
Other interesting metrics include latent bitcoiner losses. They currently represent 56% of bitcoin’s market capitalization.
In other words, you are not alone in having to tackle this photography essential. Hodl!
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Journalist reporting on the Bitcoin revolution. My papers deal with bitcoin through geopolitical, economic and libertarian prisms.