Was LIBRA as Bad as FTX Collapse?
The numbers paint a much different picture of how it's affecting the greater market
This is the worst situation in crypto I’ve ever seen!
Or is it?
That’s the narrative getting thrown around after the LIBRA scam, where a group of insiders backed by a VC used everyone as exit liquidity.
I’ve even seen some people say that LIBRA caused people who work in crypto to hate crypto more than retail hates crypto post-FTX.
That’s quite the accomplishment, considering crypto has never fully bounced back from that incident from a marketing and branding perspective.
There’s no denying that millions of people still think crypto is a scam after FTX, thanks in part to Operation Chokepoint 2.0 and the Biden admin.
And when people see a situation like LIBRA, it confirms it’s a scam in their heads.
But does that mean it’s as bad as what happened to FTX and Luna?
Is crypto finished?
Are our bags doomed?
Not so fast.
Sentiment is terrible, with the fear and greed index at 37/100.
It’s still not as bad as in September last year when crypto slipped down to 26/100!
That was right before Trump won the election, which sparked a monster rally.
But crypto is an emotional market, and when its users are sapped of euphoria-inducing green candles, they get loud with their discontent.
Since we topped in December, thanks to a tone shift from Jerome Powell, the market has been down only, with the biggest liquidation event in cryptos history happening in February.
That’s a crazy headline, but the market is much bigger now, with way more participants.
The actual percentage impact of that selloff was tiny compared to the other selloffs on this list.
The February crash wiped out 0.31% of the market.
FTX was an 18% wipeout; most FTX users were new retail investors.
FTX was everywhere, and it was the darling of the crypto world.
Even Tom Brady lost millions on FTX.
Additionally, when FTX collapsed, a massive contagion led to forced liquidations from all the hidden leverage in the system.
People still haven’t gotten their money back from FTX, which leaves a highly negative impression in the eyes of the masses.
The current LIBRA scam will prove to have a much smaller impact.
While FTX affected assets across multiple different ecosystems, LIBRA really only impacts the degenerate gamblers in the Solana memecoin casino.
The whole situation played out on Jupiter and Meteora, two massive Solana ecosystem apps.
But they still aren’t known apps among crypto casuals.
To top it off, the affected group is a hyper niche.
Yes, memecoins are getting more popular, but every chain has memecoins now, so it wasn’t an industry-wide event.
Even though Solana recently hit an all-time high in revenue generated and users, there are still people who only trade memecoins on Base
And many won’t go anywhere near memecoins no matter how many life-changing PNLs they see on the timeline.
The event seems much bigger than it is because a president is involved, and it is international.
But while people on FTX lost their life savings, the people who lost on LIBRA were essentially just gambling in a casino.
Which is why people like Hayden (The SBF 2.0 mastermind), are justified in their scams. They’re merely robbing from the degenerates and giving the money to themselves, arguably even bigger degenerates.
I mean, you’re definitely a massive degenerate if you pay off the sister of a president and call him an N-word, flexing on how you can get him to do whatever he wants.
Even Javier Milei himself basically says, “There’s no crying in the casino” during a recent interview.
But at the end of the day, Hayden didn’t rob your grandma of her Bitcoin sitting on FTX.
People don’t have much sympathy for gamblers because everyone collectively knows what they’re getting into.
And many consider them excessively money-driven and greedy.
I’m not justifying the behavior. All I’m doing is playing devil’s advocate.
Yes, insider trading is wrong, but at the same time, we all know the odds are stacked against us when gambling.
You could even argue that casinos are insiders, shading the lines and adjusting the odds to make winning over the long run impossible.
But hey, at least they're open and honest about their scam, which is enough for millions of people to fly into Vegas and willingly lose billions.
When FTX collapsed, you, your mom, dad, grandma, sister, and cousin were all affected.
With the whole LIBRA situation, it’s a fringe group of degenerate gamblers led by mop-haired autistic streamers egging them on to “lock in” or become a wage slave.
So, where does that leave crypto?
The sentiment is BAD right now, but it was even worse 5 months ago when the fear greed index hit 26/100, 11 points lower than the 37/100 it’s sitting at right now.
Sure, you could argue that we see lower prices because of that, but how much lower can it really go from here?
Some of these memecoin charts are already hilariously bad.
Crypto has been in these situations multiple times where it feels bleak, and then out of nowhere, a massive rally comes, and green candles erase the losses and mistakes made by the participants.
Euphoria floods the market, and last month's regret of buying Chat GPT wrapper memecoins is erased overnight.
If you still somehow think that this situation is FTX-level and there will be some contagion, it’s still historically a good time to buy.
If you bought the FTX lows on Bitcoin and Solana, you’d be up 6x and 30x respectively.
Right now, the market is essentially scraping the bottom.
Despite all of this, Bitcoin is sitting at just under $100,000. We’ve come a long way since the 2017 crash, and COVID crash.
And while a lot of coins may never bounce and make new all-time highs, the strongest projects will.
Many are predicting a flight back to “utility,” but that remains to be seen.