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26 sats \ 2 replies \ @TheBTCManual 12 Nov 2022 \ on: It is "now doable for CZ to buy out customer liabilities and clean FTX assets"🧵 bitcoin
I am wondering once all this contagion works its way out will their be a solvent player who just cleans house and sweeps up all these distressed assets and customers, I mean you'll be picking up and established user base for pennies on the dollar, eventually its going to make business sense to buy it
I think they should just liquidate FTX and give whatever comes out of that to the creditors and customers and call it a day.
The reasoning of having to "save" financial companies mostly comes from the traditional finance industry where companies are the financial infrastructure. And so when those companies fail because of contagion they need to be saved, because they are too big to fail. The beautiful thing of bitcoin is that the infrastructure is external to any company, and so any and every company can be left to fail and liquidate.
Although there is sadly collateral damage in the short term, in the long term it is a very effective way of getting rid of the bad actors. A big part of why the traditional finance industry is so rotten is because there is not really a good way of doing this, which creates moral hazard.
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Sure companies will fail, that's the nature of the game, I have no problem with creative destruction, but no it's not a traditional finance thing, it's a capitalist thing, if your competitor's factory shuts down, if it's worth keeping those employees and customer base, why wouldn't you?
I am not talking about "saving" companies to help customers, I am talking about eventually some of these things get marked down to a point where it's worth taking on, Binance and Coinbase are already bidding for BlockFi. If you can spend lets say 200 million and acquire a bunch of customers cheaper than you would competing and marketing for them, why wouldn't you?
Even with acquisitions customer deposits are not guaranteed, they're all unsecured creditors. I don't mind companies going bust, its a good lesson in self custody, which I preach all the time.
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