29th December 2024 > > NFK 2 of 9, Do Kwon, & El Salvador.

tl;dr

The second of the nine NFKs. Bankman-Fried will soon have company. El Salvador lands another painful body blow right in the mid-riff of the anti-libertarians.

Market Snap

Market Wrap

Another week of illiquidity-driven price action awaits us, from which one should draw no conclusions about the prospects for cryptos in 2025. The overarching narrative of increasing institutional investor adoption remains intact despite recent drawdowns triggered by misplaced speculation from Jerome Powell. We will soon have greater clarity on Trump’s plans for a US BTC reserve, which certainly has scope to disappoint or excite in equal measure. Let us hope it is the latter. More corporations will continue to add BTC to their balance sheet though there are many who will not go down that path, at least for now.

Occasional Series – Project K: Paws for Thought. NFK 2 of 9

https://www.curiouscryptos.com/projectk

Curious Cryptos’ Commentary – And another one goes

After much palaver, Montenegro’s Minister of Justice has signed the extradition warrant transferring Do Kwon to the US to face a multitude of charges related to securities fraud that would see him spend much of the rest of his life behind bars, if he is convicted. With a bit of luck, him and Bankman-Fried will be cell mates, whiling away the long, so very long, years talking about how much better life could have been if only they had conducted their business affairs with a healthy dose of decency and honesty.

Do Kwon was the founder of Terraform Labs whose whole shaky edifice was built upon the algorithmic stablecoin TerraUSD and its sister token LUNA. I have been telling everyone since forever that any algorithmic stablecoin is destined to implode at some point, and that implosion is guaranteed to happen at the very worst possible time. That is how markets work. Kwon is an alleged charlatan, an alleged fraudster, an alleged liar, and probably has no grace. We are not saddened by this latest news.

Curious Cryptos’ Commentary – El Salvador

El Salvador owns BTC as part of its treasury reserves, whilst also recognising BTC as legal tender. The government has a publicly declared policy of adding one BTC per day to its reserves. You can track it all here:

https://bitcoin.gob.sv/

If we look at this screen grab, you can see one BTC accruing to El Salvador’s citizens daily (the yellow line if you are in any doubt):

…

The International Monetary Fund (IMF) is one of those early technocratic inventions misguidedly designed (without malice) to slowly ease the levers of power away from democratically elected governments, and into the hands of the great and good, who answer to no-one but themselves. The IMF is responsible for the utter impoverishment of millions of some of the most vulnerable citizens of our world, and the ruination of the dreams and hopes for many, many more people than can ever be counted.

The IMF is an organisation which does have concern and compassion, but only for itself. It is scared by the threat to its very existence from the crypto revolution, but cannot, or does not want to understand why this may be so. Which explains why it has had long and tortuous discussions with El Salvador about a “bail-out” package with strings attached, most of which have been focussed on El Salvador ditching its BTC strategy.

Bells were ringing out on 20th December, when the IMF announced an agreement to lend $1.4bn to El Salvador in exchange for concessions on the BTC front. El Salvador said thank you very much, pocketed the cash, and then did this:

That first sharp 10x increase in buying BTC was on the very day of the announcement of the IMF loan, with more BTC purchases following shortly afterwards. Lovely. Hats off all round.

The dinosaurs do not recognise the meteorite even after it has hit.