Conversation

SBF
@SBF_FTX
Replying to
@SBF_FTX
9) And then more would no longer have been profitable, because of those 30% and decreased crypto value. The same way stop losses become cascading liquidations, on a longer timescale ripples through the industry would have become waves.
1
85
SBF
@SBF_FTX
10) FTX had its all-time high volume that day, around $5B. We didn't celebrate. It would have been like bringing Champaign to a funeral.
6
152
SBF
@SBF_FTX
11) Anyway, crypto recovered, everything was fine. And then, a year later, things crashed again, this weekend. From top to bottom, BTC fell $12k, wiping about $500B off of global crypto market cap.
Image
5
144
SBF
@SBF_FTX
12) The crash was three times as big as last year, with roughly $10B of liquidations and hundreds of billions of volume. Last time, crypto came dangerously close to ending. This time... everything's ok, more or less.
1
181
SBF
@SBF_FTX
13) Why? Partially it's a lower _percentage_ decrease in price. But also partially: *No one in crypto tried to build a business that blows out if BTC goes down to $50k.*
1
156
SBF
@SBF_FTX
14) No matter your long-term outlook, touching $50k was totally possible. We were there a few weeks ago! Even people who were "irresponsibly long" generally made more in the run-up to $50k than the lost in the crash down to it.
3
128
SBF
@SBF_FTX
15) So market cap was down, but the industry kept running as usual, and no one really worried too much. And, partially because of that, BTC is already back up more than halfway from the bottom. The liquidations are over.
1
114
SBF
@SBF_FTX
16) Once again, FTX had a record day, with $30B in volume. (See March 12th on that graph? What is that, volume for ants?)
Image
3
250
SBF
@SBF_FTX
17) But this time, we could take a step back and reflect, because the industry wasn't on fire (and neither was the world!) FTX wasn't on fire, either. Last year, FTX, like most exchanges, had significant downtime. It took weeks to go through the support backlog from 3/12.
3
117
SBF
@SBF_FTX
18) This time, FTX has 0 downtime, and in fact set its new record low for latency thanks to recent improvements. The industry, in general, handled it much better. But FTX in particular has grown a lot in the last year.
2
228
SBF
@SBF_FTX
Replying to
@SBF_FTX
20) Spot exchanges are *extremely* correlated with net crypto inflows/buying. When people are taking USD --> BTC, Coinbase and Kraken do great. When people are going back and forth, derivatives exchanges do better. Q1 was *great* for Coinbase, and Kraken: unprecedented inflows.
1
106
SBF
@SBF_FTX
21) So does that mean Q2 will be bad? Not really -- their volume is about the same as Q1, maybe down a bit. But other exchanges are up, a lot; about 1.5-2x in April!
2
87
SBF
@SBF_FTX
22) ....so where are things going? I don't know! It depends on what the future of crypto looks like, and crypto exchanges. Are they primarily institutions that let people turn fiat into BTC? Or are they core clearinghouses for transactions, risk, deltas, and capital?
1
97
SBF
@SBF_FTX
24) Finally, earlier I posted a mystery graph; the most common guess was "DOGE volume". Which isn't quite right, but also isn't a coincidence. DOGE does turn out to have been the largest driver of the graph historically.
Image
6
128
SBF
@SBF_FTX
25) And, finally, one more tidbit. FTX has grown a lot! It's now trading about $20B/day, a bit over 3x Coinbase. FTX's userbase has also grown; it's up about 3500% since 2019. It's still less than 2% of Coinbase's.
46
687