From what understand, money doesn’t just disappear. When you’re at a poker table playing, the sum of money everyone started with is the same at the end(when someone loses $100, other(s) gain $100). If I sell you a crypto for $100 and it drops to $0, I would still have your $100. In this case, wouldn’t someone/some groups of people get all the money that is currently being lost?
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If that was all that was going on.
Remember the big Japanese economic melt down of the 80s. It turned out the various major corporations had a gentlemen’s agreement to loan each other money with their real estate as collateral, and they kept valuing their office buildings downtown ever more and more till the ground of the Emperor’s Palace was valued more than the entire state of California.
FTX had their own coins which they would give to valued customers, Binance does this with their BNC. except FTX made far more than they passed out….and borrowed on those coins, invested that money…lost that money. when someone questioned where the money went, word got out and lots of people pulled their money out. everyone in the know knew ftx was in trouble, Binance offered to buy ftx like banks did when the mortgage securities crashed…but shortly after they saw what a disaster was happening and backed off, that’s when a full on bank run began. FYI that’s why real money in real banks is guaranteed so when the poorly run bank runs out of money the fed steps in and eventually you get up to 50k back on each account.
fun fact. nobody looses money on stocks or other investments. you put your money in to purchase a share of something the market says its worth so much, it says that because that’s what someone is willing to give you money for. if the company goes broke and your value plummets, well that is the current value.
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