Why Possible Insolvencies by Celsius and 3AC Could Spell Disaster for Crypto - Ep. 364
Mika Honkasalo, independent crypto researcher, discusses what is happening with Celsius and Three Arrows Capital, the importance of having proper risk management, and the contagion effects on the industry.
Show highlights:
- why is it so significant that Celsius paused withdrawals
- what is stETH and why is it important to understand the Celsius situation
- how the Luna/UST debacle started a contagion effect in the crypto space
- why Celsius’s investors won’t bail the company out
- what will happen to Celsius’s retail customers
- what Three Arrows Capital (3AC) is and whether they have a solvency problem
- how 3AC was levered long and whether they had poor risk management
- who will be hurt if 3AC goes under
- what would be the effect of 3AC and Celsius collapsing
- which types of funds that Mika will be eyeing to see if they also end up in a similar situation to 3AC and Celsius
- why Mika would counsel anyone who keeps their money with centralized crypto lenders to scrutinize their practices
Thank you to our sponsors!
Crypto.com: https://crypto.onelink.me/J9Lg/unconfirmedcardearnfeb2021
Ava Labs: https://avax.network
EPISODE LINKS
Mika Honkasalo
- Twitter: https://twitter.com/mhonkasalo
- Substack: https://mhonkasalo.substack.com/
- Mika’s writings on The Block: https://www.theblockcrypto.com/author/mika-honkasalo
Mika’s blog post on the stETH-ETH peg: https://mhonkasalo.substack.com/p/stetheth-peg-not-a-peg-presents-a?s=r
Celsius announcement that they would be withholding assets: https://twitter.com/CelsiusNetwork/status/1536169010877739009?s=20&t=hL-ZsBSKZOLF-whTwNmjgw
Nexo’s offer to buy Celsius assets:
https://twitter.com/Nexo/status/1536256598993211393?s=20&t=vKmJCZGNToaOqZU-TEjcDg
Celsisus’s investors unlikely to bail out company:
Celsius hires restructuring lawyers:
Why staked ETH is part of Celsius’s and 3AC’s woes:
Conor Ryder on the stETH liquidity problem
https://twitter.com/ConorRyder/status/1537130483007508480?s=20&t=pZGZf17ed_DyOS18CHExmQ
The DeFi Edge on the 3AC situation: https://twitter.com/thedefiedge/status/1537465349976694786?s=20&t=Q29mo3EKSASasTenHVEm4Q
Who else has exposure to 3AC:
3AC withholding $1M in assets from 8 Blocks Capital:
https://twitter.com/Danny8BC/status/1537224378554806272?s=20&t=Q29mo3EKSASasTenHVEm4Q
Meltem Demirors explains the problem from the balance sheet perspective:
https://twitter.com/Melt_Dem/status/1537155214897201153?s=20&t=Q29mo3EKSASasTenHVEm4Q
Adam Levitin on Celsius bankruptcy
https://twitter.com/AdamLevitin/status/1536932912674836481?s=20&t=Q29mo3EKSASasTenHVEm4Q
degentrading on Why Celsius and 3AC going under should cause you to worry
https://twitter.com/hodlKRYPTONITE/status/1536902115540742144?s=20&t=Q29mo3EKSASasTenHVEm4Q
Learn more about your ad choices. Visit megaphone.fm/adchoices
Available Results
Generated results are saved to your library for reuse and search.
Choose Template
Pick the result you want. You can review provider and model before generating.
A concise first-pass summary for understanding the episode quickly.
A comprehensive, source-grounded extraction of the reusable knowledge in an episode.
A comprehensive extraction focused on opportunities, strategy, markets, and company building.
Explicit actions, next steps, habits, recommendations, and things to avoid.
Repeatable methods, frameworks, mental models, processes, and systems.
A dedicated inventory of concrete resources named in the episode.
A concise first-pass summary for understanding the episode quickly.
A detailed readable summary organized by chapter or topic.
A navigable map of subjects, topic flow, and suggested chapters.
A comprehensive, source-grounded extraction of the reusable knowledge in an episode.
Reusable atomic knowledge units extracted from the episode.
A comprehensive extraction focused on health practices, protocols, claims, and safety caveats.
A comprehensive extraction focused on opportunities, strategy, markets, and company building.
Explicit actions, next steps, habits, recommendations, and things to avoid.
A dedicated inventory of concrete resources named in the episode.
A dedicated analysis of warnings, limitations, trade-offs, weak evidence, and uncertainty.
A concise first-pass summary for understanding the episode quickly.
A detailed readable summary organized by chapter or topic.
A navigable map of subjects, topic flow, and suggested chapters.
A comprehensive, source-grounded extraction of the reusable knowledge in an episode.
Reusable atomic knowledge units extracted from the episode.
A comprehensive extraction focused on health practices, protocols, claims, and safety caveats.
A comprehensive extraction focused on opportunities, strategy, markets, and company building.
Scientific findings, mechanisms, studies, hypotheses, and the limits of the evidence discussed.
Technologies, AI models, technical methods, capabilities, limitations, and adoption implications.
Investment theses, assets, catalysts, valuation reasoning, time horizons, and risks.
Chronologies, actors, causes, consequences, turning points, and competing historical interpretations.
Policies, proposals, stakeholders, arguments, implementation constraints, and predicted effects.
Career paths, skills, hiring signals, workplace decisions, transitions, and limitations of the advice.
Behavioral mechanisms, biases, motivation, habits, emotions, interventions, and evidence limitations.
Economic mechanisms, incentives, indicators, market structure, forecasts, and uncertainty.
Leadership principles, team systems, organizational design, culture, feedback, and failure modes.
Audience, positioning, messaging, acquisition, retention, experiments, metrics, and failed approaches.
Teaching methods, learning strategies, practice, feedback, assessment, and effectiveness evidence.
Theses, premises, arguments, objections, values, thought experiments, and unresolved questions.
Communication patterns, conflict, boundaries, expectations, repair methods, and contextual limitations.
Books, papers, authors, courses, and other learning resources mentioned in the episode.
Repeatable methods, frameworks, mental models, processes, and systems.
Explicit actions, next steps, habits, recommendations, and things to avoid.
Memorable statements and important claims with attribution and source context.
A dedicated inventory of concrete resources named in the episode.
A dedicated analysis of warnings, limitations, trade-offs, weak evidence, and uncertainty.