WEBVTT - The Mark Moss Show Nov 14, 2022 0:00:00.040 --> 0:00:02.880 Hello, and welcome to another episode of The Mark Moss Show, 0:00:02.880 --> 0:00:06.000 where of course we talk about the decentralized revolution each 0:00:06.000 --> 0:00:08.640 and every week, the way the world is changing, and 0:00:08.640 --> 0:00:11.319 it's changing rapidly right before our very eyes. We look 0:00:11.360 --> 0:00:14.000 at through the lens of politics, finance, and technology, and 0:00:14.040 --> 0:00:19.119 of course that technology is bitcoin. It's the decentralized revolution 0:00:19.160 --> 0:00:22.239 that is changing the world. Now, who we got a 0:00:22.280 --> 0:00:25.560 big show to cover today because there are big things 0:00:25.880 --> 0:00:29.240 happening in the cryptocurrency market. Well, this big thing happening 0:00:29.280 --> 0:00:32.000 in the world, a big thing happening in the markets, um, 0:00:32.880 --> 0:00:37.280 and there is big things happening in the cryptocurrency space, 0:00:37.840 --> 0:00:42.240 and it's important to understand what's actually happening because it's 0:00:42.280 --> 0:00:45.800 like a microcosm. It's like, uh, it's like a little 0:00:45.960 --> 0:00:49.519 model that we can see and we can understand easier, 0:00:50.200 --> 0:00:53.440 and we can see it happen in much shorter time frames. 0:00:53.880 --> 0:00:57.920 But it's exactly, uh, it's exactly what's happening in the 0:00:57.920 --> 0:01:00.960 bigger financial system, and it's exactly what's happening in the 0:01:01.040 --> 0:01:05.040 bigger global landscape. What's happened to other countries and will 0:01:05.040 --> 0:01:08.000 eventually happen to the United States as well. And so 0:01:08.200 --> 0:01:10.559 if you can understand what's happening here in the crypto space, 0:01:10.640 --> 0:01:13.640 which you should, um, then you can understand everything else. 0:01:13.680 --> 0:01:15.959 So we've got lots of cover today. I'm excited to 0:01:15.959 --> 0:01:20.200 get into this. UM. I am wearing my hottle shirt today. 0:01:21.240 --> 0:01:24.760 I have changed. I've broken from my normal uniform of 0:01:24.760 --> 0:01:28.000 a black shirt to represent my hottle shirt because that's 0:01:28.000 --> 0:01:29.839 what we need to do today. We have to hoddle. 0:01:30.440 --> 0:01:34.080 The price of bitcoin is plunging, the cryptocurrency market is 0:01:34.120 --> 0:01:36.800 plunging based off of the news that I am going 0:01:36.880 --> 0:01:40.959 to unpack for you, So let's jump into it. What 0:01:41.040 --> 0:01:45.679 am I talking about? Well, another one bites the dust? 0:01:45.880 --> 0:01:48.040 How about that? How's that for a title? Another one 0:01:48.040 --> 0:01:51.360 bites the dust, and I am talking about another pillar, 0:01:51.680 --> 0:01:56.320 a giant in the cryptocurrency space is done for game 0:01:56.360 --> 0:02:00.160 over Now, We've been talking about this for a while. UM, 0:02:00.200 --> 0:02:02.880 this kind of domino effect that happened, and really we 0:02:02.920 --> 0:02:07.680 saw the cryptocurrency markets plunge, Bitcoin plunge, cryptocurrency markets plunged 0:02:08.120 --> 0:02:12.040 when Tara Luna the stable coin broke And I'm not 0:02:12.040 --> 0:02:14.560 going to go through all that again. Hopefully remember that. 0:02:14.600 --> 0:02:16.680 If not, don't worry you can go back and check 0:02:16.720 --> 0:02:19.000 it out on the podcast. Just check out your favorite 0:02:19.000 --> 0:02:21.920 podcast player for the Markmas Show and you'll find those episodes. 0:02:21.960 --> 0:02:26.920 But we saw Tera Luna, which was this algorithmically programmed 0:02:26.960 --> 0:02:30.959 stable coin was a horrible idea, UM, and they were 0:02:31.000 --> 0:02:33.440 trying to keep this pigs. They created their own token 0:02:33.480 --> 0:02:35.960 from thin air, and they were trying to keep it 0:02:36.000 --> 0:02:41.880 algorithm algorithmically pegged at dollar parody. And then they took 0:02:41.880 --> 0:02:44.280 a bunch of the money that they had made from 0:02:44.320 --> 0:02:46.680 selling this made up token out of thin air and 0:02:46.680 --> 0:02:49.560 put into bitcoin. When it all started to come apart, 0:02:49.639 --> 0:02:52.160 when the peg was being broken and they're made up 0:02:52.160 --> 0:02:55.120 token started losing value, they were forced to dump all 0:02:55.120 --> 0:02:57.320 their bitcoin into the market, and it brought the price 0:02:57.360 --> 0:02:59.920 of bitcoin down. When the price of bitcoin came down, 0:03:00.040 --> 0:03:02.079 then it's created this domino effect where then we saw 0:03:02.160 --> 0:03:05.480 Celsius go down, we saw three Arrows Capital go down, 0:03:05.680 --> 0:03:07.919 we saw Voyager go down, we saw block Fire go down, 0:03:07.919 --> 0:03:10.400 and it was like this domino effect. Um. It was 0:03:10.440 --> 0:03:13.400 pretty interesting. Now. I said at the time, and I'm 0:03:13.440 --> 0:03:17.360 gonna unpack for you again that pegs are always meant 0:03:17.400 --> 0:03:22.680 to be broken because somebody is trying to artificially engineer value, 0:03:23.000 --> 0:03:26.880 trying to artificially engineer the way the markets work by 0:03:27.080 --> 0:03:30.799 creating this arbitrary value pegging it. But that's not how 0:03:30.840 --> 0:03:34.839 markets work. Value is always subjective. People say, well, there's 0:03:34.880 --> 0:03:36.960 no intrinsic value. You've got the Peter Shifts of the 0:03:36.960 --> 0:03:40.440 world saying that bitcoin isn't like gold. Gold has intrinsic value. 0:03:40.480 --> 0:03:44.600 Bitcoin doesn't know. That's false. There is no such thing 0:03:44.760 --> 0:03:49.240 as intrinsic value. Period All value is always subjective. It's 0:03:49.280 --> 0:03:51.920 always subjective of giving you examples of that over and 0:03:52.000 --> 0:03:54.280 over and so the problem is when you try to 0:03:54.800 --> 0:03:57.480 engineer value, when you try to gamify it, when you 0:03:57.520 --> 0:04:00.880 try to force it like fiat. Current. See, a lot 0:04:00.880 --> 0:04:03.760 of people don't really understand what that word fiat means. 0:04:03.800 --> 0:04:05.320 It's a new word. As a matter of fact, I 0:04:05.400 --> 0:04:09.000 would like credit bitcoin for bringing that word fiat back 0:04:09.040 --> 0:04:15.720 to kind of main um the mainstream. Fiat means by decree, 0:04:16.000 --> 0:04:20.280 so all things have value because we believe they have value. Collectively, 0:04:20.400 --> 0:04:24.279 the market agrees that certain things have certain values. But 0:04:24.560 --> 0:04:28.760 fiat means that it's not up to the market. We decree, 0:04:28.800 --> 0:04:30.720 by decree, we give it value. So that's exactly what 0:04:30.720 --> 0:04:33.520 happened with these pegs is they try to buy, decree 0:04:33.560 --> 0:04:36.760 give something value, and sometimes the market goes along with 0:04:36.760 --> 0:04:38.280 it for a while, and then the market says, we 0:04:38.520 --> 0:04:40.280 don't value it anymore. And now we see this happen 0:04:40.320 --> 0:04:43.400 all over the place. UH is typically known as bubbles. 0:04:43.440 --> 0:04:45.799 So the famous one that people want to point Bitcoin 0:04:45.839 --> 0:04:49.040 too is the tulip bubble. And they'd say, they point 0:04:49.080 --> 0:04:50.800 to Bitcoin is no different than to the bubble. So 0:04:50.839 --> 0:04:53.240 back in Holland, I think it was the sixteen hundreds. 0:04:53.520 --> 0:04:56.440 Um in Holland, they have tulips to the flowers, and 0:04:56.640 --> 0:04:58.599 all of a sudden, for some reason, they started becoming 0:04:58.600 --> 0:05:00.920 more and more valuable, and certain tulips were worth more 0:05:00.960 --> 0:05:04.120 than others, and then it turned into a mania where 0:05:04.160 --> 0:05:07.760 collectively the market started paying more. Well, then tulips went 0:05:07.760 --> 0:05:09.680 from this price to this price, so then people were like, okay, 0:05:09.680 --> 0:05:11.559 we'll pay more, and I'll pay more, and the price 0:05:11.560 --> 0:05:15.120 of tulips went straight up like a skyrocket. And then 0:05:15.560 --> 0:05:18.520 all of a sudden people figured out that they were 0:05:18.560 --> 0:05:22.080 just flowers and that they were great valued way too high, 0:05:22.320 --> 0:05:24.599 and nobody wanted them anymore, and then the price came 0:05:24.800 --> 0:05:27.599 straight back down. Now, one thing I'll point out is 0:05:27.640 --> 0:05:30.640 that very simply, Look, I'll make the financial markets super 0:05:30.680 --> 0:05:33.080 simple for you. That's my goal. Take these financial subjects, 0:05:33.120 --> 0:05:35.799 these complex financial subjects, and make them very easy to understand. 0:05:36.000 --> 0:05:38.000 And so look, I'm gonna make it super simple. It's 0:05:38.000 --> 0:05:43.440 not oversimplifying this outworks. Markets stopped going up when there's 0:05:43.440 --> 0:05:48.000 no more buyers. Also, markets stopped going down when there's 0:05:48.000 --> 0:05:51.279 no more sellers. So in this example of the tulip mania, 0:05:51.600 --> 0:05:53.800 which by the way I should I didn't prepare this 0:05:53.920 --> 0:05:59.680 part to the mania, six thirty six is when it happened, 0:06:00.200 --> 0:06:03.800 and it happened over just a very short period of time. Uh, 0:06:04.440 --> 0:06:09.680 sixteen thirty six. Sixteen thirty seven speculations drove the value 0:06:09.680 --> 0:06:13.440 of tulip bulbs to extremes. At the market's peak, the 0:06:13.560 --> 0:06:17.479 rarest tulip bulbs traded for as much as six times 0:06:17.839 --> 0:06:23.760 the average person's annual salary. Wow, think about that, six 0:06:23.880 --> 0:06:30.640 times the average annual wage, which is in the United States, 0:06:31.240 --> 0:06:36.279 the average annual wages fifty three thousand dollars a year, 0:06:37.440 --> 0:06:40.040 fifty three grand a year. So time six, that's how 0:06:40.120 --> 0:06:42.480 much the two loops were going for. So anyway, um, 0:06:42.680 --> 0:06:45.200 as it started going higher, higher, higher, higher, higher, and 0:06:45.240 --> 0:06:47.360 then all of a sudden there was no more buyers 0:06:47.680 --> 0:06:50.000 and they said, uh, you know what, we don't we 0:06:50.000 --> 0:06:51.679 don't think it's worth that, we're not gonna buy anymore. 0:06:51.920 --> 0:06:54.800 And then the whole thing crashing and it never came back. 0:06:54.839 --> 0:06:58.640 So trying to compare bitcoined two is ridiculous. But the 0:06:58.680 --> 0:07:01.440 point is is that the mark get collectively agreed that 0:07:01.480 --> 0:07:04.400 they would give it value and they did. All right, 0:07:04.680 --> 0:07:07.920 now let's jump into what happened here. Another one bites 0:07:07.920 --> 0:07:09.840 the death. So when you're trying to peg things, you're 0:07:09.840 --> 0:07:12.160 trying to create this artificial value, it always is meant 0:07:12.160 --> 0:07:17.120 to be broken. Now, the most famous example of this, well, 0:07:17.240 --> 0:07:19.360 real quickly, we're talking about, just so that you know, 0:07:19.600 --> 0:07:23.720 we're talking about the ft X cryptocurrency exchange is the 0:07:23.800 --> 0:07:28.600 second largest cryptocurrency exchange. I'll call it a cryptocurrency casino. 0:07:28.840 --> 0:07:30.800 That's what it is. It's gambling, and I'm gonna explain 0:07:30.840 --> 0:07:34.080 to you why it's gambling. Um, I know a lot 0:07:34.160 --> 0:07:36.720 of you guys think that crypto is this innovation and 0:07:36.760 --> 0:07:38.760 it's the hottest thing ever, and it's gonna be worth 0:07:38.800 --> 0:07:41.680 all this money. It's really a casino. And when I 0:07:41.880 --> 0:07:44.440 unpack and uncover all this for you, you're going to 0:07:44.520 --> 0:07:50.360 see exactly why. And Japan Bank of England UH and 0:07:50.640 --> 0:07:53.040 the e c B and yes, even the United States 0:07:53.160 --> 0:07:55.760 is also a casino as well. Once I unpack all this, 0:07:55.800 --> 0:07:57.840 it's gonna be super easy to understand. Before we get 0:07:57.840 --> 0:07:59.720 into the f t X, what happened to Sam bankman 0:07:59.760 --> 0:08:01.920 Free how they how he lost the second the second 0:08:02.000 --> 0:08:04.840 largest exchange. I want to rewind the clock just to 0:08:04.840 --> 0:08:06.680 give you a little bit of a better example. We're 0:08:06.680 --> 0:08:08.160 gonna go through history. I know you love it when 0:08:08.160 --> 0:08:10.040 I give you a history lesson, and I want to 0:08:10.040 --> 0:08:14.160 go back to the story of George Soros. Everybody's favorite villains, 0:08:14.160 --> 0:08:16.680 certainly not my favorite guy, but it's an important story 0:08:16.720 --> 0:08:20.559 to understand. How did George Soros get so rich? Well, 0:08:20.800 --> 0:08:22.640 he was, he was a trader, one of the most 0:08:22.680 --> 0:08:25.800 successful investors and traders in history, by the way. But 0:08:25.840 --> 0:08:29.520 he got famously rich by making a billion dollars in 0:08:29.560 --> 0:08:34.320 a single day, um back in the nineties. Now a 0:08:34.360 --> 0:08:36.599 billion dollars was a lot more money back in the 0:08:37.040 --> 0:08:38.640 nineties and is today. And so we made that in 0:08:38.679 --> 0:08:40.920 a single day, And how did he do that, well, 0:08:41.400 --> 0:08:43.440 I'm gonna break that down for you. I want to 0:08:43.520 --> 0:08:46.280 explain to you what he did and how this translates 0:08:46.280 --> 0:08:49.400 into what's happening with f t X, how finance just 0:08:49.440 --> 0:08:51.280 to took out fd X, what this means for you 0:08:51.320 --> 0:08:54.360 if you're in the cryptocurrency market, and how it's just 0:08:54.400 --> 0:08:58.840 a smaller um microcosm of actually what's happening with the 0:08:58.880 --> 0:09:02.600 central banks around the world, including the United States dollar 0:09:02.640 --> 0:09:04.680 in the federal reserves. I'm gonna explain all of that. 0:09:04.960 --> 0:09:08.120 You do not want to miss this. It's gonna be 0:09:08.200 --> 0:09:10.240 expensive lesson if you missed this, because this is going 0:09:10.280 --> 0:09:11.920 to happen to you no matter whe're a in the world. 0:09:12.080 --> 0:09:13.720 If you're just tuning in, you're listening to the Mark 0:09:13.760 --> 0:09:17.560 Moss Show breaking down the decentralized Revolution, and I'm gonna 0:09:17.559 --> 0:09:20.040 explain to you what happened in the cryptocurrency space this 0:09:20.080 --> 0:09:23.080 week and how it's coming for the rest of financial markets. 0:09:23.360 --> 0:09:24.800 Don't miss this. I'll be right back with more in 0:09:24.840 --> 0:09:27.120 a minute. Don't go away, right back, all right, welcome back. 0:09:27.120 --> 0:09:28.920 If you're just tuning in, you're listening to the Mark 0:09:29.000 --> 0:09:31.680 Moss Show, I'm breaking down what happened this week in 0:09:31.720 --> 0:09:36.400 the cryptocurrency markets. How the second largest exchange I'm talking about, 0:09:36.440 --> 0:09:39.200 f t X, was just taken out by the number 0:09:39.240 --> 0:09:42.160 one exchange, their competitor, Buyinance. Before we get into that, 0:09:42.200 --> 0:09:44.200 I wanna, I wanna, I wanna. I'm gonna break down 0:09:44.200 --> 0:09:46.400 this whole thing for you so you can understand what 0:09:46.400 --> 0:09:48.920 happened here. How it was just a small example of 0:09:48.920 --> 0:09:51.560 what's happening in the greater financial system. But I'm gonna 0:09:51.600 --> 0:09:54.160 give you this story real quick about George Soros and 0:09:54.200 --> 0:09:57.560 how he broke the British pound. And so what happened is, again, 0:09:58.200 --> 0:10:01.560 all value is subject, all values created by the market. 0:10:01.720 --> 0:10:03.880 Whenever you try to force it, that's when you create 0:10:03.920 --> 0:10:06.400 the problem. So the British pound, so you know, all 0:10:06.440 --> 0:10:08.880 these countries in Europe had their own currencies. So the 0:10:09.080 --> 0:10:11.840 in in Britain they had the pound. In German Germany 0:10:11.840 --> 0:10:13.679 they had the mark. And what happened is the British 0:10:13.720 --> 0:10:17.640 pound was shadowing the German mark in in thees. Even 0:10:17.640 --> 0:10:20.600 though the two countries were completely different countries, they had 0:10:20.600 --> 0:10:24.240 different economical basis, imports, exports, all of that. At the time, 0:10:24.280 --> 0:10:27.600 Germany was a much stronger um country, at the time 0:10:27.840 --> 0:10:31.160 and they still are today. But the UK they wanted 0:10:31.200 --> 0:10:34.240 to keep the value of their pound at two point 0:10:34.360 --> 0:10:37.080 seven marks, so you could always exchange one pound for 0:10:37.200 --> 0:10:40.959 two point seven marks. They picked that number. That's an 0:10:41.080 --> 0:10:45.040 arbitrary number. They decreed Fiat by decree, we say that 0:10:45.120 --> 0:10:47.960 one pound is worth two point seven, but the market 0:10:48.040 --> 0:10:52.520 doesn't always agree. The problem is that in Britain they 0:10:52.520 --> 0:10:57.520 had very high interest rates um and they had equally 0:10:57.640 --> 0:11:01.240 high inflation, so the value value of their dollar was 0:11:01.280 --> 0:11:04.080 going down. Their dollars the pounds were buying less and 0:11:04.160 --> 0:11:07.160 less goods right when inflation. When you hear about inflation, 0:11:07.200 --> 0:11:09.079 the FED is trying to fight inflation. That that means 0:11:09.120 --> 0:11:11.640 they're trying to fight prices going up, the cost of gas, 0:11:11.720 --> 0:11:14.000 the price of homes, the price of food is going 0:11:14.080 --> 0:11:16.720 too high. It's not that the prices are going higher, 0:11:17.040 --> 0:11:19.480 is that the value of the dollar was going down, 0:11:19.520 --> 0:11:21.840 so it takes more of those dollars to buy those things, 0:11:21.880 --> 0:11:24.679 so that those work in opposite. So what happened is 0:11:24.720 --> 0:11:27.600 in Britain they had high interest rates and they had 0:11:27.600 --> 0:11:32.680 it high inflation, but they also demanded that remember that 0:11:32.720 --> 0:11:37.480 the pound exchange two point seven for one mark. They 0:11:37.520 --> 0:11:40.000 had to do that in order to enter into something 0:11:40.040 --> 0:11:43.960 called the e r M, and it's exchange rate mechanisms. 0:11:44.000 --> 0:11:47.439 So European Union, the EU was forming, and they're trying 0:11:47.440 --> 0:11:49.800 to figure out how all these countries could work and 0:11:49.840 --> 0:11:52.000 how these different currencies could be exchanged for each other. 0:11:52.000 --> 0:11:53.520 So Britain want to enter to the e r M. 0:11:54.080 --> 0:11:58.560 Now many speculators, gamblers, traders, whatever you want to call them, 0:11:58.960 --> 0:12:02.760 George Soros being one of them. He wondered how long 0:12:03.320 --> 0:12:08.000 could these fixed exchange rates really work? How long could 0:12:08.000 --> 0:12:12.360 they fight against market forces? And so speculators like George 0:12:12.360 --> 0:12:16.240 Soros began to take up short positions against the pound. 0:12:16.640 --> 0:12:19.440 They were basically saying, look, we don't believe that it's 0:12:19.480 --> 0:12:23.800 worth two point seven marks. We don't believe that um, 0:12:23.840 --> 0:12:25.800 and we can see that you have high inflation, high 0:12:25.840 --> 0:12:28.240 interest rates, and and we know that it's not worth that, 0:12:28.280 --> 0:12:29.840 and we know that it's going to drop in value, 0:12:30.080 --> 0:12:33.640 that the pound will lose value, so we're gonna bet 0:12:33.800 --> 0:12:36.679 that it's going to go down. Now what happened is 0:12:36.960 --> 0:12:40.040 so they're selling it short, they're put they're trying to 0:12:40.080 --> 0:12:43.959 push the value of the pound down, and the UK 0:12:44.120 --> 0:12:45.560 didn't want that to happen. So what do they do? 0:12:45.720 --> 0:12:47.400 They try to defend it. How do they defend it? 0:12:47.480 --> 0:12:50.000 Will they start buying it? So Soros and the speculators 0:12:50.000 --> 0:12:53.080 are selling it down, shorten it and the UK is 0:12:53.120 --> 0:12:55.439 forced to buy it to try to prop it back up. 0:12:55.640 --> 0:12:59.640 And what they did is they raised interest rates um 0:12:59.720 --> 0:13:03.000 to double digits to try to attract more investors to 0:13:03.080 --> 0:13:06.120 buy the pound. So, um, hey, right now if you 0:13:06.120 --> 0:13:09.960 put your you know, if you buy dollars from the U. S. Treasury, 0:13:10.000 --> 0:13:13.800 they'll pay you about almost five percent right now, and 0:13:13.840 --> 0:13:16.679 so that's attracting more investment capital. People are like, we'll 0:13:16.679 --> 0:13:19.800 shoot um, losing money sitting in the Argentina paso or 0:13:19.800 --> 0:13:21.880 the Turkish lira or the pace or whatever it is. 0:13:21.960 --> 0:13:23.640 So we'll put our money into the dollar at the 0:13:23.640 --> 0:13:26.679 treasury will make four or um and if they continue 0:13:26.720 --> 0:13:29.000 to raise rates, more and more money will come into 0:13:29.000 --> 0:13:31.000 the dollars. That's exactly what the Bank of England did 0:13:31.120 --> 0:13:33.560 or the UK did. They raised interest rates to double 0:13:33.559 --> 0:13:36.760 digits to try to attract more investors to help buy 0:13:36.880 --> 0:13:40.600 up the pound to fend off the attack of George 0:13:40.600 --> 0:13:44.920 Soros and the speculators. Now what happened though, is now 0:13:45.000 --> 0:13:48.439 that now they had to pay out all this interest expense. Right, 0:13:48.480 --> 0:13:51.400 they raised rates to attract investors. The investors came, but 0:13:51.480 --> 0:13:54.880 now they had to pay out the money. But the 0:13:54.920 --> 0:13:57.760 British government realized that it was going to lose billions 0:13:57.760 --> 0:14:01.400 of dollars trying to artificy sually prop up the pound. 0:14:01.920 --> 0:14:08.120 So after trying and spending billions of dollars, they gave up. Basically, 0:14:08.200 --> 0:14:10.760 they had to withdraw from this e r M that 0:14:10.800 --> 0:14:13.800 they are in the exchange rate mechanism. And when that happened, 0:14:14.559 --> 0:14:16.520 it plunged. They gave up the peg. They said forget it, 0:14:16.600 --> 0:14:19.080 We're gonna withdraw out of the RM, and the pound 0:14:19.320 --> 0:14:22.200 crashed in value, and Stros and the other speculators that 0:14:22.240 --> 0:14:24.760 had all these short bets piled up. They made a 0:14:24.760 --> 0:14:27.280 billion dollars off of this one trade. Now, why do 0:14:27.400 --> 0:14:29.360 I break that story down for you, because that's exactly 0:14:29.400 --> 0:14:31.640 what happened with Harry Luna. I'm sorry with Terry Luna. 0:14:31.640 --> 0:14:33.360 It's exactly what happened now with f t X, and 0:14:33.360 --> 0:14:35.680 it's exactly what's happening in Japan, Bank of England and 0:14:35.680 --> 0:14:37.600 will happen in the United States as well, so let's 0:14:37.600 --> 0:14:40.560 break this down a little bit. So, um, you might 0:14:40.640 --> 0:14:43.800 know who Sam Bankman Freed is UM from f t X. 0:14:43.800 --> 0:14:45.880 F t X, as I said, is the second largest 0:14:45.920 --> 0:14:50.280 cryptocurrency casino are they call him exchanged? Now, like I said, 0:14:50.360 --> 0:14:53.040 when this whole thing broke down where Tara Luna crashed 0:14:53.040 --> 0:14:55.240 and then Celsius crashed in three AARs capital crash and 0:14:55.320 --> 0:14:58.760 Voyager and blocked by the whole thing, Sam Bankman Freed, 0:14:59.440 --> 0:15:02.760 the founder of f t X, came out as the savior. 0:15:03.440 --> 0:15:07.560 Everybody applauded him. Hey, he came out. He saved everybody. Congratulations. 0:15:07.800 --> 0:15:10.920 He was featured on like Time magazines and the Financial 0:15:10.960 --> 0:15:14.040 Times and all these articles that he was the savior. 0:15:14.120 --> 0:15:17.080 He was going to backstop everything. He was the smartest guy. 0:15:17.120 --> 0:15:19.600 He's like under thirty years old. He's worth billions of dollars. 0:15:19.720 --> 0:15:21.400 He's the smartest guy that we leave all his money 0:15:21.440 --> 0:15:24.720 to charity. Now he's meeting with presidents and political leaders 0:15:24.760 --> 0:15:28.240 and his influencing regulations and all these things. So let's 0:15:28.240 --> 0:15:30.720 talk about this. So he started building out all these 0:15:30.800 --> 0:15:34.160 UM companies and he committed millions of hundreds of millions 0:15:34.200 --> 0:15:39.360 of dollars to that in May of two ft X 0:15:39.400 --> 0:15:42.920 CEO Sam Bankman Fried has warned that more crypto exchanges 0:15:42.960 --> 0:15:46.880 are headed towards insolvency, but there yet to be exposed. 0:15:46.920 --> 0:15:50.680 So he's saying, hey, look, there's way more crypto exchanges 0:15:50.680 --> 0:15:53.320 that are going to be insolvent or bankrupt, right, but 0:15:53.440 --> 0:15:57.240 we just haven't found that yet. Um crypto billionaire has 0:15:57.280 --> 0:15:59.840 recently provided some hefty loans to bell at a number 0:15:59.840 --> 0:16:01.960 of struggling crypto firm so he, like I said, he 0:16:02.000 --> 0:16:06.120 was bailing him out. He was titled cryptos bailout King. 0:16:06.280 --> 0:16:08.640 People are starting to think like the Federal Reserve is 0:16:08.640 --> 0:16:11.840 meant to backstop the banks, and maybe f t X 0:16:11.960 --> 0:16:14.920 and Sam Bankman freed, which will call SPF moving forward, 0:16:15.320 --> 0:16:18.160 SPF and f t X will be like the Federal Reserve, 0:16:18.200 --> 0:16:20.520 They're going to bail out the crypto exchanges. It's kind 0:16:20.520 --> 0:16:24.480 of the same thing, right, Not really, um, he said, 0:16:24.560 --> 0:16:27.240 quote there are companies that are basically too far gone 0:16:27.520 --> 0:16:30.400 and it's not practical to back stop them for reasons 0:16:30.440 --> 0:16:33.800 like a substantial hole in the balance sheet. So he's like, look, um, 0:16:33.880 --> 0:16:35.680 we're we we bailed out a few of these companies, 0:16:35.760 --> 0:16:38.320 but there's way more that are way worse and we're 0:16:38.320 --> 0:16:40.520 just not gonna do him. He bailed out f t 0:16:40.760 --> 0:16:45.120 X and f SPF bailed out UM Block five million 0:16:45.160 --> 0:16:49.520 dollar revolving line of credit. Uh, the quantitative trading firm Alameda, 0:16:49.640 --> 0:16:51.520 remember that name, We're gonna come back to it, committed 0:16:51.520 --> 0:16:56.880 five million of financing Voider Digital UM In May, Bankman 0:16:56.920 --> 0:17:01.360 Freed purchased a stake in robin Hood, and they also 0:17:01.360 --> 0:17:04.680 acquired Canadian crypto trading platform bit Vote, as well as 0:17:04.720 --> 0:17:07.919 in Bed Financial Technologies. They're buying all these things up 0:17:08.040 --> 0:17:13.440 left and right. Okay, But then in July, SPF says 0:17:13.520 --> 0:17:16.800 that f t X has up to two billion dollars 0:17:16.840 --> 0:17:19.719 for further billouts. He says that f t X has 0:17:19.760 --> 0:17:22.720 a few billion on hand to continue assisting in struggling firms. 0:17:22.720 --> 0:17:26.520 According to a Reuter's article, um but he said that 0:17:26.560 --> 0:17:30.000 he felt the worst liquidity crisis were now in the past. 0:17:30.080 --> 0:17:32.160 So hey, I think we're past the worst of it. 0:17:32.320 --> 0:17:34.520 We did our best, We bailed out these companies, and 0:17:34.720 --> 0:17:36.360 you know, by the way, we got an extra two 0:17:36.359 --> 0:17:38.879 billion dollars laying around if you want us to use anymore. 0:17:39.240 --> 0:17:41.240 But this is only the beginning, and it gets so 0:17:41.400 --> 0:17:43.040 much better. And like I said, you need to understand 0:17:43.080 --> 0:17:46.119 what's happening here, because it really is what's happening in 0:17:46.119 --> 0:17:50.120 the United States and Japan and every everywhere for that matter. 0:17:50.359 --> 0:17:51.840 You're listening, if you're just tuning and you're listening to 0:17:51.880 --> 0:17:55.119 the Mark Moas Show breaking down the Decentralized Revolution, and 0:17:55.160 --> 0:17:58.560 I'm explaining how f t X just fell from grace 0:17:58.640 --> 0:18:00.919 it crashed hopefully didn't losing money on the way, and 0:18:00.960 --> 0:18:02.560 how it's coming for the rest of the world. Like 0:18:02.600 --> 0:18:04.040 I'm gonna break this whole thing down. You don't want 0:18:04.080 --> 0:18:06.120 to miss it. Super interesting. I gotta go through it fast. 0:18:06.160 --> 0:18:08.480 I'll be right back. Don't go away, all right, Welcome back. 0:18:08.520 --> 0:18:10.040 If you're just tuning in, you're listening to the Mark 0:18:10.160 --> 0:18:12.960 Moss Show, I'm in the middle of breaking down how 0:18:13.000 --> 0:18:16.639 the second largest cryptocurrency exchange just blew up. Sam Bankman 0:18:16.720 --> 0:18:20.520 freed we call him SPF and his exchange f t X, 0:18:21.119 --> 0:18:23.399 and they absolutely crashed. So he was the savior. He 0:18:23.400 --> 0:18:26.960 bailled everybody out, um and uh he said, hey, we 0:18:27.000 --> 0:18:29.359 have a few billion dollars two billion dollars on hand, 0:18:29.480 --> 0:18:31.240 just in case anyone else wants to get billed out. 0:18:31.359 --> 0:18:33.560 But we think the worst is behind us. All right. 0:18:33.600 --> 0:18:37.240 That was July. Now in this is important. So October, 0:18:38.800 --> 0:18:42.440 just a couple of weeks ago, SPF Sam Bankman Freed, 0:18:42.480 --> 0:18:46.320 the founder of crypto exchange f t X, said, quote 0:18:46.560 --> 0:18:52.399 no more bailouts. Interesting, So um, the SPF and f 0:18:52.440 --> 0:18:55.960 t X are looking to raise fresh funding. He clarified 0:18:56.160 --> 0:18:59.280 that the company f t X will no longer pursue 0:18:59.359 --> 0:19:03.359 bailout acquisitions. They're not gonna do that anymore. On twenty 0:19:03.760 --> 0:19:06.399 sam Bankman Freed said f t X is planning a 0:19:06.480 --> 0:19:09.440 new funding round to raise capital. They wanted to raise 0:19:09.480 --> 0:19:13.320 a billion dollars of capital at a thirty two billion 0:19:13.400 --> 0:19:19.040 dollar valuation. So October twenty five, a few weeks ago, 0:19:19.400 --> 0:19:22.280 they were raising a billion dollars at a thirty two 0:19:22.600 --> 0:19:27.320 billion dollar valuation. Well then November two, a couple of 0:19:27.320 --> 0:19:32.399 weeks later, coin base breaks an article and says, divisions 0:19:32.440 --> 0:19:35.639 in Sam Bankman Freed's crypto empire, which is Alameda and 0:19:35.760 --> 0:19:39.720 ft X blur on his trading titan Alameda's balance sheet. 0:19:39.840 --> 0:19:44.000 So um, what happens is he owned two companies and 0:19:44.080 --> 0:19:47.200 let me let me break down how this works, how insidious? 0:19:47.200 --> 0:19:50.280 This is? All right, I'm gonna try to be a 0:19:50.280 --> 0:19:52.399 little bit vague, but i'm gonna give you some examples. 0:19:52.800 --> 0:19:56.199 So f t X is an exchange where you can 0:19:56.240 --> 0:19:58.760 go exchange one crypto token for another. You can exchange 0:19:58.760 --> 0:20:00.760 your bitcoin for a theory m or for Cardana or 0:20:00.760 --> 0:20:03.119 Salona or whatever any of the other twenty tokens they 0:20:03.119 --> 0:20:06.040 have on their all. Right, then he created another company 0:20:06.080 --> 0:20:10.280 called Alameda, and Alameda is what's known as a market maker. 0:20:12.560 --> 0:20:15.679 Remember that markets are supposed to be free. Remember that 0:20:15.800 --> 0:20:18.399 values are supposed to be set by the free market. 0:20:18.760 --> 0:20:21.800 But what market makers do is they get into the 0:20:21.840 --> 0:20:26.000 market and they buy and sell to push a certain valuation. 0:20:26.080 --> 0:20:29.159 So here's how it works. Um a market cap of 0:20:29.280 --> 0:20:33.040 Tesla stock or Amazon stock, or bitcoin or f t 0:20:33.200 --> 0:20:36.760 t token, it's all the same. You have the price 0:20:36.800 --> 0:20:39.760 of the stock or the price of the token times 0:20:40.160 --> 0:20:42.560 the total amount of stock or tokens that are available 0:20:42.640 --> 0:20:45.280 gives you a market cap. So if I created marks 0:20:45.320 --> 0:20:48.600 token out of thin air, I created ten of them, 0:20:48.680 --> 0:20:52.960 and one person buys one of those tokens for a dollar, 0:20:53.640 --> 0:20:56.080 then I would say the market cap of Marks tokens 0:20:56.160 --> 0:20:59.800 is now ten dollars. Someone bought one for a dollar, 0:21:00.480 --> 0:21:02.600 and there's ten of them in existence as ten dollars. 0:21:02.920 --> 0:21:05.879 Now what happens is who bought that one token for 0:21:05.920 --> 0:21:09.480 a dollar? Well? What if it was my buddy over 0:21:09.560 --> 0:21:12.680 here known as a market maker. So there's ten tokens, 0:21:12.720 --> 0:21:14.800 and they're going to buy and sell these tokens to 0:21:14.840 --> 0:21:16.920 each other. They're gonna buy it for a dollar, sell 0:21:16.920 --> 0:21:18.240