FULLSTACK WEEKLY 6.15.22
💎 What's going on with Celsius, 3AC Next? Druckenmiller's thoughts on Crypto, the Markets and why your Jpegs aren't a store of value. 💎
💀Celsius Impending Doom
👨🏻🦲Lex Luthor Hiring Freeze
🧠Drucks Thoughts
📉Markets
👾Jpeg’s, a Store of Value?
5 Min Read
FullStack is a team bringing you the inside stories surrounding crypto, fintech, and investing. If you like what we are doing follow along and subscribe.
Celsius
The story of the week is the absolute dismembering of Celsius. For the unpardonable sin of over-leveraging user funds, fate had finally come to collect her pound of flesh. Interestingly, what seemed like a forgone conclusion took a turn. Currently, users’ funds are locked to prevent a bank run, and FTX may or may not be throwing Celsius a lifeline, which means, fate may have to wait a little longer to collect.
But let’s step back and re-cap. After the UST implosion, rumors started to circulate that Celsius might be in trouble. There were a series of intense twitter threads involving the founder of Celsius -Alex Mashinsky- leading up to the withdrawal freeze. In one post, Mashinsky stated, “…do you know even one person who has a problem withdrawing from Celsius? why spread FUD and misinformation.” Within 24hrs, users would have all of their assets stuck in Celsius.
The Celsius freeze has sent ripples through crypto and it still remains to be seen who is swimming without their trunks on. The latest victim is rumored to be 3 Arrows Capital, which at its peak amassed an AUM of around 5B. The group is now suspected to be receiving numerous margin calls.
TLDR: We owe people money. We don’t have cash rn. We will generate the cash.
Coinbase: Hiring Freezes, Dirty Laundry and Cuts
Coinbase first came under scrutiny for its hiring freeze, which took place last month. CEO Brian Armstrong also more recently threatened to fire a presumed employee that was airing the company's dirty laundry to the public. A petition surfaced this week and is assumed to have come from an internal source, calling out the management team for numerous mistakes and demanding the exits of the Chief Product Officer, Chief People Officer, and Coinbase’s Chief Operating Officer.
The company is not alone in its recent employee cuts, crypto companies and tech companies alike have been laying off employees. This week alone there were reported cuts at Blockfi, Coin Metrics and larger corporations like Tesla, and Sea Limited. Find a more robust list of companies cutting here.
Macro: Drucks Interview
Stanley Druckenmiller has a great interview from the Sohn conference here.
TLDR: The Fed has been behind the curve since last year, yet in March ‘22 they were still buying bonds! We’re entering an inflation/ yield environment he’s never seen before, so good luck! BUT CRYPTO - he’d be shocked if blockchain isn’t a force 5-10 years from now.
My favorite Fed quote is, “The FED operates like they’re driving 70 down the freeway, but they can only steer based on what they see in the rearview mirror.”
Markets: Shotgun Root Canal
Inflation is running at a 40-year high. The Fed announced today that they would raise rates by 75 basis points, the largest increase since 1994. Crypto markets fell below 1 Trillion for the first time since Jan. 21’. We’ve seen a significant decrease in DeFi Total Value Locked: AAVE 2B, COMP 900M, MPL 736M, SLND 250M. There are general macro concerns over EU peripheral debt, the Bank of Japan, cross-asset volatility, treasury volatility, credit card debt, very low market liquidity, mortgage-backed securities, credit spreads and credit default swaps.
Per WSJ, White House officials seem to be admitting that the collateral damage from Russia sanctions "has been wider than expected". They had originally believed sanctioning food and energy would have a negligible effect on inflation.
All of this said, we probably still have a bit lower to go.
👾Jpeg’s, a Store of Value?
Based on the last 3 months of data, this chart is the TIE's NFT Blue Chip PFP index which includes BAYC, MAYC, Azuki, Doodles, Clone X, Cool Cats, World of Women, and CryptoPunks with a uniform weighting of 12.5% applied to each collection.
Looks like our JPEGs might not get us in the “tres commas club” after all…