What a week it has been, nothing but pure chaos.
Before anything else, DELETE YOUR FTX APP, DO NOT UPDATE IT, it has been confirmed in the FTX telegram that they have been hacked. This is the most financial advice I can give.
This new contagion could just be the start of the “climax of Act Three” in crypto’s very own, three-act structure. And it is scary to think there might be another leg downward.
The key now is true, survival.
If you did not already know, here’s a TLDR on what happened with FTX;
– Balance sheet of Alameda’s Research was leaked
– It showed $14.6B in assets, $8B in liabilities
– Majority of its holdings in assets are in $FTT, the exchange token of FTX
– FTX was at risk of insolvency (not being able to back user funds 1:1)
– Further revealed FTX’s flywheel strategy
– $584M worth of FTT transferred from one Binance account to another, confirmed by CZ in preparation for the sale
– CZ tweeted his plan to liquidate the remaining FTT on Binance books
– FTT dumped 15% from its weekly highs
– Alameda faces external margin calls, look’s for FTX for liquidity
– Caroline of Alameda offers to buy Binance’s FTT for $22
– Alameda also held other tokens, Solana the biggest among many others
– People started to withdraw their funds on FTX, some waited 4 hours
– SBF tweeted FTX are fine and assets are fine, now that tweet is deleted
– Sell pressure for FTT broke the $22 level mark
– FTX paused withdrawals
– Binance to fully acquired FTX with the discretion to pull out of the deal at any time
– CZ tweets 2 biggest takeaways amidst this saga, along with the need for Merkle-tree proof of reserves
– Binance backs out of the deal, after glancing at FTX’s books
– Sequoia to mark down its $213.5M FTX investment to 0
– FTX reached an agreement with Justin Sun of TRON to establish a facility to allow holders of TRX, BTT, JST, SUN and HT to swap assets
– SBF made a public apology
– Reuters estimates FTX hole to amount to $8B
– FTX re-enable withdrawals, but only in the Bahamas
– FTX users are using a loophole to withdraw funds
– FTX NFT Trading is now paused
– SBF seeks to raise $9.1B to rescue FTX
– SEC launches investigation into SBF
– SBF resigned as CEO of FTX
– Alameda and FTX file for bankruptcy, liabilities range from $10-$50B
-SBF $16B network now worth $0
– CZ warns more companies could fail in the coming weeks following the saga with FTX
– GameStop ends partnership with FTX, a full refund for customers
– NBA Basketball team Miami Heat terminates partnership with FTX in stadium naming rights
– FTX officially halted withdrawals
– FTX just got hacked, delete your app
⌛ Here’s Where It All Went Wrong For SBF
📰 (REVEALED) Proof Of Reserves For Binance, Kucoin, Crypto.com and OKX
🌒 A Darker Story Between CZ and SBF
📂 FTX files for bankruptcy, what it means for crypto
🌍 FTX debacle affected Africa more than we know
🕹️ FTX was audited in… the metaverse????
STEP 1: Step away from trading
Revenge trading is a death spiral.
For those who have lost money in the markets, or have funds stuck somewhere, the impulse to trade right now may kick in.
But what’s more important – making x% return now, or waiting for the next bull market?
STEP 2: Get a cold wallet, or two… or three
With CeFi collapsing and exchanges becoming insolvent, it may be best to control your own crypto.
Whether it’s on a hot or cold wallet, having ownership of your funds is imperative in these conditions.
STEP 3: Set aside funds for the “casino”
Whether you’re in a trade now or planning to take one, remember to keep funds aside for the bear market.
Make sure you’re properly bankrolled for when the next opportunity comes around, and not scrambling for funds then.
STEP 4: Separate your assets
Crypto has shown us that both on-chain and off-chain solutions are risky.
You can do this not only by diversifying in non-crypto assets like banks, equities, etc, but also by storing your funds on multiple exchanges/hot/ cold wallets.
STEP 5: (Probably) Don’t buy the dip
Since the top, buying any dip has likely left you underwater.
Before rushing to buy the dip, ask yourself whether it’s for immediate gain or long-term hodling.
Will you be able to stomach another long-term loss?
These words from CZ are the biggest lesson this year. Memorize it and add it to the checklist whenever you assess anything in Crypto. Because, these lessons will be easily forgotten during the bull market, but those who use learnings as a north star will remain resilient. Onwards.
This entire FTX saga is brutal and difficult to rebound from. But as long as you are alive and healthy, there WILL be future opportunities for you.
Reach out to those who are affected as well, be there for them, be there for your friends, and be there for your family.
I have to reiterate again, THERE WILL BE FUTURE OPPORTUNITIES FOR YOU, DON’T DO ANYTHING STUPID.
It feels like you lost a loved one, especially when you have been working on that capital for a long time, but you gonna need some time to be able to come back to an objective centre before you can put your one foot forward again.