The Mark Moss Show - Major Crypto Crash

cryptocurrency market cap is literally melting down. It's like a sea of red. But it's not just the cryptocurrency market, it's the entire market. We're talking about the NASDAC. We're talking about this, the tex stocks, we're talking about um, you know the tech darleans that are down. I think exchanges down or that index is down by more than some of the big darlens they're like Zoom and Shopify and Peloton are down like eighty percent or more. Um.

But even other things like gold is down. I mean, we're seeing um things getting hammered all the way across the board, and even some of the big Darlin's like um Tesla. Even Tesla is getting absolutely crushed right now UM and even safe haven assets. Now today it looks like gold is doing a little bit better than it has been, but typically people think about gold as being

that safe haven hedge. But yeah, even even uh even Tesla looks like it's getting absolute crushed right now, which I wonder if that's going to affect Elon must bid for buying Twitter M it's down about um since it's November high. Uh so that's interesting. The whole world is melting down, and of course the cryptocurrency markets are being completely hammered. If you look at um coin market cap, which is kind of a listing of all the cryptocurrencies that are out there, you can see, um, what do

we have nineteen thousand four D cryptocurrencies listed here? And if you scroll through, I mean, it's just a sea of red. The only green that I see at the time that I'm talking to you right now is uh us D coin U s D C. I see binance coin b U s D and I see shoot man, uh true us D. So basically we have the stable coins are the only things that are still in the green here, and that is uh, that's the big story.

The big story is the stable coins themselves and So the big, big story is the stable coins, and in particular U s T so us T is a terror lunas stable coin, and there's big things happening with that, and it appears to be I don't want to say it's the cause of all the market panic. It's certainly not the cause, but it's definitely exaggerated. So I want to break that down. I want to break down what

the heck the stable coins are. We're gonna talk about the different types of different categories, how they're used, why they're used, um, what the government wants to do about regulating these things, um. And then we're gonna talk about um the only two that I think are the ones that you even want to be in. I want to then talk about it from a historical perspective, because the reality is is that stable coins are nothing new. It's a matter of fact. I like talk about history of

the time. History doesn't just repeat at rhymes, uh, and it's it's rhyming and it's repeating right now. So this is nothing new. We've seen this before. UM. So I'm gonna give you that a historical perspective, and then I'm gonna give you the warnings and uh, some ways that you can pretend potentially protect yourself. So lots of cover today on the Markmall Show. Thanks for tuning in. If you're not tuning in on a regular basis, then you

certainly should. You're probably missing out and so make sure to set a re minder to be with me each and every time at this same time, at the same channel. So at the time of my recording, as I said, it's an absolute blood bath. We see Bitcoin is down on the seven day ethereums down, um finance coin x r P, Cardano Salona fift. I mean, it's just an absolute murder out there. And like I said, the the

markets are melting down. But the big thing that's dragging down all the markets, including a lot of the big hedge funds, including a lot of the blue chip stocks like the Tesla's, and including the entire cryptocurrency market cap, like I said, is this terror Luna situation that's going on. And so let's talk about that real quickly. So the first thing is we're talking about stable coins. So stable coins are the big um darling of cryptocurrencies. Of course,

it's like this defy. DEFY stands for decentralized finance, which a lot of people believe is one of the biggest use cases to come out of cryptocurrencies, because supposedly everything needs to be decentralized, right, isn't that the big isn't that the big technological revolution that you talk about all the time mark Um everything should be decentralized, will not. That's not exactly right. No, I do talk about the decentralized revolution, which is what we're witnessing, which is what

we're living through right now. Which, yes, the technological revolution is decentralization. However, unpopular opinion is not everything needs to be decentralized. Let me say it again for the people in the back. Not everything needs to be decentralized. So defy decentralized finance. Okay, really is it really decentralized? So let's think about this. If I was going to make a loan to somebody, I should know who that person is and what the percentage chance or the risk that

they may or may not pay me back. I don't think anybody listening to this would ever want to loan money that you've worked for, your hard earned money that you've saved up, loan that to someone who you don't know, who they are, and you don't know what they're going to use it for, and nor do you know what the percentage chance the probability of them paying you back is. That would be insane. I hope nobody here whatever think about doing that. UM, And if you would think about

doing that, I think you should rethink that. And so that thou think about that. In terms of decentralized finance, what does that mean? Finance should be centralized. There should be a central entity that's looking at the credit worthiness of the borrower and determining if it's a good or bad deal. They should determine that one person is less risky and gets a better rate, someone is more risky pays a higher rate. Somebody has to do that essential entity.

We don't need that to be decentralized. What other things don't need to be decentralized, Well, lots of things. UM for example, tracking UM logistics on on the supposedly on the blockchain. Well, you could substitute the word blockchain for database and so let's track them in a database. And we do that now already amazing, isn't it? All? Right? Now back to the lesson at hand. So this defied movement, this decentralized finance movement has really been opened up. Why

I'd buy what's called yield farming. And so people are chasing, chasing higher than average yield. So, for example, you put your money in the bank. When you put your money in the bank, the bank uses that money to create more money by loaning it back out. Now, the bank pays you interest on that money, because of course they're using that money to make more money. Now, it used to be that you could actually live off the amount

of interest that you get from the bank. When I was a kid, you could make a tent on your money sitting in the bank. You have a million bucks, that would be a hundred thousand dollars a year hud dollars a year of passive income coming just from putting your money in the bank and then leaning it back out. Today, the problem is the bank gives you zero point zero five percent. I mean, basically, they give you nothing for having your money in the bank. So a lot of

people are chasing this yield. How can they get away to get this yield away, to get these better than the average returns, And so people start going out further and further in the risk curve. In order to do that, they they start chasing all types of risky investments, obviously options trading and cryptocurrency investing, anything they can do to try to get better returns than what the market would bear. And so um they've done that. Now this yield farming

seems like a great idea. And so we have defied decentralized finance. We have c FI, which is centralized finance. So the cea FI are players like Block five, um, players like celsius, um, players like Nexo, Crypto, dot Com, etcetera. So those are c FI centralized finance applications. And the thing with c FI is they supposedly cut out the middleman and they give more of those distributions back to you. Um. Now those have their own risk and reward scenarios, as

defied does as well. Now we're finding out first and foremost the dangers that these DeFi can pose, as millions, hundreds of millions of dollars, billions of dollars are evaporating from people's accounts right before of very eyes. I'm gonna explain all that to you and more and how to protect yourself from that in a second. By the way, you're listening to the markma Show. We're talking about bitcoin, We're talking about cryptocurrencies. We're talking about the decentralized revolution

that we are witnessing right now. And we're we're witnessing a meltdown of the financial system and it's taking down this decentralized revolution with it. However, it's not all what it seems, so I want to explain that to you and show you how you can navigate this. UM. I'll be back with that and more in a minute, So don't go away. I'll be right back. All right, Welcome back. You are listening to the Mark Moa Show. We're talking

about bitcoin, We're talking about cryptocurrencies. We're talking about the decentralized revolution that we are living through right now as we speak now. Before the break, I was setting up this, uh, this thing about cryptocurrencies and this decentralized revolution we're talking about, UM defy decentralized finance. I was explaining the difference between

DEFY and c FI, which is centralized finance. So centralized finances, the Celsius, the block five, the next the crypto dot com, central entity, central come puns that are that are handling this versus supposedly DEFY that's somewhat decentralized. Now I was making the case that not everything needs to be decentralized, all right, But now that you understand that, So now

we have these decentralized protocols. The one that's blowing up right now and dragging the entire market down with us is called Terra Luna or its symbol as u ST. Now it's grown very very fast. It's grown very very big because they throw out a nineteen point five percent about a tent interest rate. So I can make zero percent in my bank, I can make eight to twelve percent through one of these centralized finance fis, or I could make tent by using one of these DeFi protocols

like Tara Luna, staking it on the anchor protocol. Now, let's just ask a question. You've probably heard the saying there's no such thing as free lance. You've probably heard the saying that if something is too good to be true, then it probably is is. So ask yourself if the banks which are pretty much risk free, I mean, your money is f d I c ensured if they pay you zero point zero five, someone else could pay you ten percent, and then um Tera Luna on anchor pays you.

Why do you think they can pay Because you're taking an enormous amount of risk, and so the first thing is you always have to think about your risk adjusted return. So there's a enormous amount of risk for doing this, and we're finding out exactly how much risk we have. So we're talking about this defy and we're talking specifically about these stable coins. So a stable coin now means that the token itself. So in this case, this U S T token is equal to one dollar and UM

not the dollar superstable. We can see the prices of milk, steak, food, gas, cars going all over the place, but it's always pegged to a dollar. So as the dollar, that's always worth one dollar. Whatever dollar comby you, that's what it's worth, all right. Now, we have a couple of different versions of these stable coins that I think are important to dig into before we go too far into this story. Um so stable coins have become very very popular. The

first one was tether. Tether became this first one and basically if I put a doll, if I give them a dollar US dollar, they'll give me back a token that UM is equal to one dollar. It's redeemable for one dollar. Anytime I want, I could go redeem that token get my dollar back. Now, they were supposed to be holding those dollars in an account, so they had my reserves in an account. Anytime we want, we can go exchange those That's how it's supposed to work. Now,

we've had lots of stable coins start popping up. And the reason why they really gained a lot of popularity is if I'm in Bitcoin or some other cryptocurrency position and I want to I'm trading them in and out. I'm in and out. I'm in now. Um, it's hard

to go in and out of US dollars. And so we've created this token, and they created this token that allows me to sell my position in this cryptocurrency and go into the stable coin temporarily, and then I can go back into position when I want, and so it allows me to stay within this crypto ecosystem. Well, Tether grew really really fast. It gained a lot of reserves, gained a lot of notoriety, and so of course they're stable coins popped up. Um, we have a lot of

different stable coins of Tether. We have die which is another moment. We'll break that in the second US d coin, true US d um d g x UH, and on and on and on. But I don't want to go into all the particulars of each and every coin. What I want to do is I want to break down um really the two different types that we have, or

really maybe the three different types that we have. Okay, So the first one, which is what they're supposed to be and what I think most people believe they are, and they're find out the hard way they're not, is that they're backed. They're backed with dollars. So I give them a dollar, they give me a token, They hold my dollar until I'm ready to exchange it. Now, if they keep all those dollars in their account, that would mean they're fully reserved, all the dollars they've accepted they're

sitting in their account. That's okay, because at any time people can go redeem and get their dollars, no big deal.

The problem is when they start going into what's called a fractional reserve, meaning when you give them your dollar they only hold on to fifty cents of it, or they only hold on to ten cents of it, and the other fifty cents or other ninety cents they go do something else with like put it into another asset, or try to gamble or trade with it to try to earn more money on that float on your money, all right, So this is where the problem comes in again.

Full reserve, they have all the money. Everyone go get it, no big deal. Fractional reserve is a problem. If everybody wanted to go cash in their money, it would create a run. They won't have enough money to pay it all back. In addition, depend on what they're doing with the rest of that money, they're putting it more at risk, and if they lose it, they may not have your money to give back to you. And that's part of

the problem. So real quickly. The only coins that I'm aware of, and if I'm wrong, please feel free to hit me up on social media let me know. The only two coins that I'm aware of that are fully regulated and fully backed by U S dollars are you s d C, which is the Circle coin, and g U s D, which is the Gemini coin. So US d C and g U s D, they're both federally regulated and backed by US dollars one to one. As far as I'm aware, every other stable coin out there

is not fully reserved. Now why is that important? Well, let me tell you. Uh So, One, it's important because as we can see us, t Tera Luna coin is getting attacked right now, and as it turns out, they don't have the money to pay back. So instead of having those dollars, what they did is they put those dollars into another token they have called Terra Luna. So if I want to redeem my dollar stable coin for a dollar, what they do is they don't give me

my dollar back because they don't have it. What they do is they give me a dollar's worth of this new token. The problem is, what if that new token isn't worth a dollar. Now, that's the problem that we've run into, and that's the problem that we're seeing melt

down the entire ecosystem. To give you an idea of exactly what is going on, well, before we go into that, I wanna I'm gonna break down the mechanics of how that, how that works, but I want to explain to you, like I said, the difference of fully reserved or fractional reserve, because I think that's a key piece and I dig into history at the time, because history continues to repeat and there's a parallel throughout history that explains us to

us this is this is nothing new. The period in time that I'm talking about is in the United States and really happened all around the world, and it was called free banking. Free banking was a time before we had central banking. So today we have central banking, which means that we have people at the top, central planners that are planning the entire banking system. Free banking would be the opposite. Free banking would mean there was competition.

That means people could start different banks, and they could have different business models, and they could compete against each other. Now you probably you know which camp I'm in when it comes to that. I'm a free market person. I believe in free market um competition. I believe competition makes better products, better service, better prices. Central planning, to my opinion,

always fails. Well it's not just my opinion. Throughout history, central planning always fails because it lacks the competition, it lacks the profit incentive, it lacks the information that comes in a free market UM system. So free banking uh per Wikipedia, it says that in the strictest versions of free banking UM, there is no role at all for a central bank or the supply of central bank money.

Central bank money is supposed to be permanently frozen. There is therefore no government agency acting as a monopoly as a lender of last resort. Sounds sounds quite different than what we have before. And I'm gonna tell you why I think this is preferable. I'm gonna tell you what the history of this shows us. And then, like I said, I want to show you how it's exactly the parallel to what's happening today. Don't go away, all right, welcome back.

You're listening to the markma Show. We're talking about bitcoin, We're talking about cryptocurrencies. We're talking about the decentralized revolution of course all the time, and today specifically we are talking about defy decentralized finance. We're talking about stable coins. We're talking specifically about terra lunar stable coins, which are blowing up the entire ecosystem. Now, before the Breakoup was explaining how there's really two different types um stable coins.

We thought they were reserved, they had full reserves, meaning they were holding our dollars and we could redeem them for dollars whenever we want However, we found out that most stable coins are not reserved, meaning they're not holding our dollars, and instead they are fractally reserved and stare holding a little bit maybe fifty percent of your dollars or ten percent of your dollars, and the oif ninety percent are being loaned out and are at risk in

some other assets. Now I was explaining how this is actually nothing new, and this is actually how the banking system works. So the banking system that we have in the world today, central banking is built on actional reserve. You put ten dollars in the bank, and nine of

them get lent back out. The problem is those dollars get lent back out and going to somebody else's bank, and then they keep ten percent and loan out, and it happens over and over and over again, until we have so much leverage in the system that if even just a few percent of people, less than temperati of the people went to the banks to get their money out,

the banking system would collapse. This is actually what happened in Canada as they started to freeze everybody's accounts from the from the Trucker protest that um very quickly they decided to reverse their position because the banks were going broke. But I wanted to liken this back to a period of time known as free banking. So free banking was

before central banking. And it says, per Wikipedia, the strictest versions of free banking, there's either no role at all for the central bank or the supply of central bank money is supposed to be permanently frozen. Um. There's no UM, no government agency acted as a monopoly as a lender

of last resort. And so in the central banking system, the central Bank, the Federal Reserve of the United States, is the lender of last resort, and so if a bank RT too bankrupt, the fire reserve can step in and backstop them, basically print more money out of thin air to give them money to keep them from going bankrupt. Now, the historical reference of this is really going back into the eighteenth and the nineteenth centuries. UM. It was defended by most notably Adam Smith, who Adam Smith is it

was an amazing author. If you haven't read his books, you definitely should. Um. And really, if we go back into the United States, and we saw it through Australia, Switzerland, Scotland, et cetera. But in the United States specifically from the period of eighteen thirty seven to eighteen sixty four that's referred to the era of free banking. Now, a lot of people, specifically people that are proponents of the central banking model and people that have been raised to think

the central banking model is good. So people that have gotten economics degrees and so forth have been taught that the that the free banking era was bad, that all these different banks that were that were starting up on their own and creating their own currencies was a big problem because they were continually going out of business and blowing up and people were losing their money. Now that is true, However, maybe the reasons for why that happened

isn't necessarily true. But basically, um, you would have a bank open up and they would create their own form of currency. And I could choose, as a person in a free country, which of these free banking models I want to go with. So bank A says, hey bank, He says, hey, Mark, We're going to hold all your money for you, and it's gonna be always there for you, and anytime you want you can come get it. Um and we're just gonna hold it and we're not going

to pay you any interest on that. Okay, that's my choice. They can hold it. I ron nothing. Um, let's say Bank B Bank number two says, hey, Mark, we'll hold your money. However, um, we're only gonna hold seventy five cent of it. We're gonna go do some loans, but they're gonna be very very safe loans, gonna be very very careful, and we're gonna pay you, say, five percent on your money. And then bank number three or banks see,

they say, Mark, we're only gonna hold of your money. However, we're gonna we're gonna loan the seventy out, but we're really good at this. Um, we're gonna be really careful, but we're gonna pay you fifteen percent on your money. So now those are three different competing models. Ones fully reserved, one's barely fraction reserved, and ones massively fraction reserved. They all one gives me no return five percent or say fiftent.

Now I get to choose which of those I want based off of the return that I'm getting and the risk that I'm accepting. All Right, so I think that's a good model. I personally do UM. I can choose my risk. They can operate. Now in a free market, the bad banks will fell, They're gonna make bad decisions, they're going to fail, and people will lose their money. It's going to happen, and men's all the time. People invest in the things all the time. They lose their money.

But it allows this competition to happen, and it creates a market. One man's loss is another man's gain, unfortunately UM And that's exactly what these stable coins are doing. So they create their own token, just like the free banks create their own dollars. They create their own token, and they have different levels of reserve. Some are more reserved, some are less reserved, and they have different risk models.

What are they doing with that money? And it's up to me in a free market to decide if I want to use one of these and if so, which one I want to use, and how much risk I'm able to take. Now, some of the problems of complications come from do I really know what their business model is? Is it opaque, is it transparent? Is it non transparent? And that's part of the thing. You always need to be able to quantify your risk. Now, Um, that's how

the free banking system work. Now, a lot of historians, most economic professors, would have you believe that the free barn banking system failed because these banks constantly blew up and people lost their money. Again, which is true, and that's why we need the central bank to come and back stop all these so people don't lose their money. It's not entirely true, all right. So let me let me just break this down before we go into the

rest of it here. So, um, if we look at this, what really happened is that the general banking banking laws that the government enforced upon these banks, they made these banks operate within this structure, and the banking laws restricted their activities in a bunch of important ways, all right.

Most importantly, the US free banks could only have one office, and they had to provide security for their notes by gold reserves, but also by purchasing and surrendering to state banking authorities certain securities the state law deemed acceptable for the purpose. So let me think about this a second. So one that they allow me to operate, um in a competitive environment, I have to abide by their rules,

and their rules hold back my competitive ability. So UM, One I have to provide reserves in gold, but also I have to put the money into whatever the banking committee, the banking authorities tell me I can put it into.

Here is a big, big problem. So instead of holding all my dollars in a full reserve system, now the actual bank authorities are forcing that bank to not hold full reserves but instead put some of those reserves into the assets they want them to go into, such as the securities generally included bonds of state governments, and it was the depreciation of these bonds that was the chief cause of free bank failures in various episodes when many banks in a state failed. So I gotta love the government.

They didn't allow the free banks to operate freely. They didn't allow them to actually compete. Instead, they mandated one you can only have one bran edge to the money you have. You can't actually hold it. Instead, you have to be you're forced to buy risky government debt. And it was the risky government debt that went bad on them. So then the collateral they were holding went bad and they weren't able to pay their depositors back. When the

depositors saw this happening, what do you think happened. The depositors went to get their money out of the banks. The run on the banks caused the banks to collapse. Whenever you have your money in a bank or in any type of asset, if you're holding Tesla stock and you see it down right now, you might be freaking out. You might go, shoot, I better sell that now. I'm happy to take sixty cents on the dollar back right now, because I could lose even more. And that's exactly what

happens in this fractional reserve banking system. They see, oh shoot, they loaned some of the money to this government bonds. These bonds blew up. I'm not getting my money back. I better go get my money back first before everybody else shows up. UM. I'm gonna explain more about this free banking concept, how that worked, UM, and then I want to apply it back to what's happening with US, UM,

the US dollar stable coins, specifically Terry Luna. And then we'll talk about some of the things that you should be doing to protect yourself. UM. That and a lot more. When I come back. You're listening to the Mark Moa show talking about bitcoin, cryptocurrencies, the Decentralized Revolution, and specifically today Defy, decentralized finance, stable coins, and what's happening with Terror Luna and so much more in a second when I come back, don't go away, all right, Welcome back.

You're listening to the Markma Show. We're talking about bitcoin, cryptocurrencies, the decentralized Revolution Nation every week. Today we're talking specifically about decentralized finance, Defy, We're talking about UM, this Terror Luna blow up that's happening, and I was talking about before the break, I was talking about the historical context of this and so UM. Stable coins, whether they're fully

reserved or fractionally reserved, is nothing new. As a matter of fact, this is an exact parallel, in my opinion, to the free banking model the United States went through from eighteen thirty seven to eighteen sixty four. I went into a little bit of a tangent telling you that everything you've learned is wrong about free banking and that it didn't blow up because they were necessarily bad businesses.

They blew up mostly because the government mandated how they operate and really forced them into a model that caused them to collapse, mainly by forcing them to buy government bonds of state governments that when they failed, the collateral

they held failed as well. Another thing that really caused a free banking to fail to fail is that the lack of branch banking in turn caused state issued bank notes to be discounted at varying rates once they had traveled any considerable distance from their sources, which was an inconvenience.

So what does that mean? So um, In addition, UM, they were so restricted they could they could only have one office, all right, And so what happens is then instead of um two things, instead of having this economy of scale where like a bank could grow and they could have multiple offices and they could bet they could be if I'm an econmy scale, the bigger problem is that if I bought Mark's currency from Mark's free bank in the city, and then I traveled to another city,

there was no Mark's bank there, and there was no marks currency to use, and nobody wanted to accept Mark's currency because it was a hundred miles away and it was hard to travel back then. And so what would happen is someone would say, um, well, I'll take that Mark's currency, but because I'm going to have to drive a hundred miles or they couldn't drive back then, sorry, they had to go by horseback. Since I'm gonna have to travel a hundred miles to redeem it, I want

a ten haircut now. Uh. Let me give you a modern day example of this. The US dollar is the reserve currency of the world. Um. The U S dollars recognized everywhere around the world. For the most part. I spend a lot of time down in Mexico. In Mexico, they accept dollars pretty much everywhere. Um. There's a little place that I like to go to on the Baja Peninsula. It's about a about a fourteen hour drive from my house.

It's about because it's deep in Mexico. It's probably three to four hours from any major town, major town where like there might be an a t M for example, there's no et M s there. There's no consistent power that they don't really have any electricity. They don't have any internet, there's no cell phones. Um. The reason why I go to this place in the middle nowhere is

because the waves are really really good. And I'm not gonna tell you the name of because I don't want to let people showing up there but I spent a lot of time there. Now, when you go there, they want paceos. Pacos is the currency of the dollar. Everybody uses paces there. Now in some of these places they will accept the dollar. The problem is that they're going

to have to drive. They have cars. Now they're gonna have to drive about two hours to the nearest town where they could find a bank to turn those dollars back into paceos. So, yes, they'll take the pager. Yes they'll take the dollars, but at a massive discount. And that's exactly what happened. It's free banking. Because they couldn't have multiple branches. Um, it caused them to have to discount their currencies. All right, Now, that was a big tangent.

Give you a little historical lesson to show you that this is exactly where we're at today. So these banks were limited in what they were able to do because of the government regulations. And then, um, they did not hold all of those dollars in reserve, and so that caused these bank runs and the things to happen. And so back to the stable coins. The stable coins are doing the same way, the same thing. They're not holding of those reserves and Basically, anytime you don't have something

fully reserved, you're gonna open yourself up to runs. At some point, some attack is going to happen where they're gonna come and say, hey, this person did something risky. There's a chance we may not get our money back, and people will start running for the exits, Like like at a movie theater if somebody yelled fire, there's two exits, and everybody's gonna start running for those exits, and everybody

will start trying to pull their money out. UM. Fractally reserved assets are always dangerous in this regard, specifically in this case. So, like I was saying earlier, U s d C and g U s D as far as I know, are the only two UM coins that are UM backed. Now as a side note, I mean just taking a look at the damage and destruction that's happened here UM. So that the way this this specific Terry Luna coin works is that I give them a dollar and they don't hold that dollar. Instead they turn that

dollar into value on the Terror Luna token. Now that Terry Luna token, just a couple of weeks ago, was worth about nine two dollars seven dollars. I mean almost a hundred dollars. Just a couple weeks ago, that token was worth about a hundred bucks. So if I wanted my dollar back, they would give me a dollar's worth of that token. The problem is is that has been

absolutely plummeting. As a matter of fact, there's a couple weeks it was worth about a hundred dollars and today, at the time of this recording, it's worth one one dollar and seven cents. As a matter of fact, we've seen the market cap drop I mean almost nine. I mean, it's just a complete blood bath on this. And so instead of holding my dollars, they put it into this risky asset. The problem is that risky asset became worth next to nothing um and now that's bringing down the

rest of the market. The terror Luna stable coin had a valuation of about um where are we here, about eighteen billion Today it's down to about nine billion. I mean, capital is just getting completely liquidated. Now. What's happened since then? Now a lot of people believe this might have been an attack, and as a matter of fact, I've been having lots of conversations talking about this. Of course, is all speculative at this point. But this is what Wall

Street hedge funds do. They spot a weakness or an imbalance in the market and they go place wagers and bets against it. They've been doing this for a long time. They've been doing it since the eighties. Remember hearing stories of corporate raters. You have famous people like Carl Icon who have made their name off of, you know, doing corporate rating. Things like that. Movies have been made, like the movie Wall Street was made about doing that. And

they find these companies that might be overleveraged. UM, they borrow money, they attack them, they short them, and they crush it. I don't I don't like it. I'm not a fan of it. Unfortunately, it hurts a lot of people. But this is uh, this is capitalism. I guess now some risks that you need to be aware of. I think that all stable coins that are not reserved are

at risk. Once it happens to this one, they're going to come after the rest, So all the other stable coins UM, specifically tether, I would be very cautious of holding money. If you want to hold money and stable coins, I would take it out of those and put it into one of the two I mentioned USDC, N g U S d UM. The other thing I'd be careful of is that this is going to cause a lot of contagion. We saw Haro Luna trying to raise about a billion and a half dollars to try to help

prop it back up. One of the companies that was putting a lot of money in was Celsius. Now a lot of you might know Celsius that was referencing earlier as a centralized finance company. Why would they be willing to put up so much money to help a competitor. Well, probably because they invested a lot of their client's money into that protocol itself, and so they have this interest

to try to prop it back up. So I'm afraid that as is continue to get worse, it might start taking down companies like Celsius, companies like block Fire, et cetera. So I'd be very very careful with where you have your money right now today. Now it's also been dragging down Bitcoin, partially because everything's coming down, but also because they had they had a big chunk of their money,

their dollars in bitcoin as well. They were forced to liquidate that entire balance, about a billion dollars a Bitcoin was dumped onto the market, which has also brought that down. Now, if this continues to spread, if they go after Tether next, if Celsius gets pulled into this, if this can happen, it could really bring down on the entire market cap of almost everything. This is a risk that you have

to be aware of now. It seems like right now from conversation I've been having today, this is having a big positive results on bitcoin. We're hearing that people institutional buyers are lining up trying to get orders into buy bitcoin. But there could be more short term pain before we see a turnaround. That's just the truth. I don't want

to admit it. I don't want to believe it. I hope it's not the case, but I think that could very well be because the way the markets are right now, all these big hedge funds, they're looking for some way to find yield, and one of the easiest ways to find yield is to go attack these companies and make giant windfalls. It's rumored that maybe the company who did the attack on Tera Luna could have made as much

as eight hundred million dollars. Anyway, that's a big lesson only hold coins that are fully reserved, watch out for everything else. You're listening to the Mark mo Show talking about bitcoin, cryptocurrencies, UH, the decentralized Revolution, and today the stable coins. Thanks so much for listening.