Clinamenic
Binary & Tweed
You get to witness a mutual reterritorialization in real time.
COINBASE for Crypto has come
Clinamenic
Binary & Tweed
And they can also opt for fixed term deposits for additional APY which stacks with the "Earn in NEXO" option.
Clinamenic
Binary & Tweed
Absolutely crazy, compared to traditional retail banks. And it's still nothing compared to some of the DeFi protocols out there. Total gluttonous mayhem.
vimothy
yurp
much better for them if they earn nexos, since I issue them.
vimothy
yurp
its a crazy crazy market. really is shades of 2008
vimothy
yurp
it turns out its exactly like the old one, who would've guessed
Clinamenic
Binary & Tweed
Human nature, technologically extended.
vimothy
yurp
one thing we've not discussed here but which is relevant is the pro-cyclicality of leverage. this explains why the financial system (including crypto) has such a tendency towards the formation of bubbles. what happens is that when asset prices rise, net worth and collateral values rise, borrowers become more creditworthy and so lenders can extend more credit. as borrowers have greater access to credit, they can purchase more assets, leading to higher collateral values etc etc, leading to firms extending more credit and so on in an inflationary asset-price spiral. clearly, there's a lot of this going on in crypto, which probably explains a lot of the insane explosion in prices over the last few years.
Clinamenic
Binary & Tweed
Yeah there was an animated Ray Dalio video essay that explained similar cycles, with credit and debt most generally.
Do you think the liberal economic model is developing in such a direction that we may be able to sustain bubble conditions for extended periods of time, provided we can effectively absorb panic-driven downturns? I'm kinda under the impression that's what has been happening in crypto, and I think @toko made a similar point upthread, stating how resilient the market has proven to be.
Clinamenic
Binary & Tweed
Cause another difference with crypto is that the markets are active 24/7, which at least on a formal basis isn't true with stock markets - correct me if I'm wrong though. And so you get a culture upon the market whereby investors and traders are psychoaffectively plugged-in more or less constantly, and the oscillations between fear and greed become palpable and, dare I say, more quantifiable.
Clinamenic
Binary & Tweed
I think with crypto it also has to do with a younger mean age of investor, and the generational cultural differences that entails. Memes convey market sentiment, and so the sentiment of the market is established dynamically and memetically, largely in response to world events, in relation to which many of us are mere spectators, consumers even.
vimothy
yurp
one thing you have to understand is the impact of 2008 on what central banks understand their role to be. the downturn following the collapse of Lehman was so severe that cbs have all become aligned on the idea that in a crisis following the collapse of a bubble, the impact should be absorbed by central bank balance sheets. this can be seen in response to the repo crisis of 2019 and the supply chain crisis in 2020, neither of which even made much of an impact in the popular imagination, such was the extent of the response of the authorises
vimothy
yurp
the net effect of the responses to the fin crises in 2008, 2019 and 2020 has been to inflate a massive bubble (really multiple bubbles), with the crypto bubble as an epiphenomenon of this wider trend. whether this is sustainable in the long term remains to be seen. however, growth in asset prices cannot remain above growth in output indefinitely (at some point asset holders own everything). in addition, there are a number of complicating factors for policy makers. one is that they dont want to maintain this level of support in perpetuity. a move to tighter policies threatens to pop the bubble and cause a crash (producing the same leveraged price spiral but in reverse). another is the growth of inflation (caused by the response to the supply chain crisis). and another still is the emergence of the energy crisis with the war in the ukraine.
vimothy
yurp
as to whether crypto in particular can sustain bubbles indefinitely, or whether they are more resilient to asset price deflation in general, that's somewhat unknown, but seems like wishful thinking to me. the existence of stablecoins like tether obviously provides some level of support for asset prices, but obviously the issuing entities are national governments backed by tax receipts from large economies and are obviously relatively more risky than say the fed. should one of tethers larger counterparties collapse, the effect on tether and therefore the broader crypto economy would likely be substantial
Clinamenic
Binary & Tweed
What do you make of modern monetary theory? From what little I know of it, the assertion is that deficit spending isn't inherently bad like we presumed, but is only bad if concurrent with certain other conditions or trends.
Clinamenic
Binary & Tweed
Does it imply that a high debt to GDP ratio isn't necessarily a bad thing, and that the devil is in the details?