Globalization has occurred to people, products and corporations — but what about our money?
GLOBALIZATION + WHAT IS MONEY = BITCOIN
What is money? It’s one of the more popular questions of the last few years. Especially in 2020 and 2021, when the grand, new U.S. administration decided to act as if a drunken sailor had taken over the keys to the printing press.
“You get money, you get money, and you get …” CTRL+P … CTRL+P … CTRL+P …
So — what is money?
It’s a question I asked early in my journey that started in the depths of the Great Financial Crisis (GFC). I asked this question for years before and after the infamous month of September 2008, when the global financial system ground to a halt.
BANK RUNS AND LIQUIDITY CRISES
A historic day, September 16, 2008, the day of the breaking of the buck … The day when global money market funds were no longer worth a dollar due to a liquidity crunch manufactured by the world’s most prominent banks, corporations, hedge funds, elites and global financiers — a crunch precipitated by professionals, not retail.
The systemic plumbing was frozen. Since May, the cryptocurrency ecosystem has been facing its own liquidity crisis.
This new digital asset class consists of many new and naive players, many who’ve never seen what happens when financial plumbing freezes. Pain has been felt and narratives have been shattered as the meltdown and deleveraging moved across the intertwined system. The market is taking no prisoners, much the same way it always does in the traditional financial system. Leverage and greed are a double-edged sword. The two have no mercy on anyone in their path. No player goes unscathed. Neither did bitcoin or traditional markets as the spillover from leverage and degen trading made its way across the globe, one financial participant and asset at a time.
So, we sit here, facing our first real and broad liquidity crisis in Bitcoin.
This is a crisis precipitated by greed, exposed by Terra/LUNA’s algorithm which attempted to codify the behaviors and role of the Federal Reserve Board. Through these mechanisms we learned they provided a facility for ex-Wall Street sharks to target as they swam amongst cryptocurrency liquidity pools, exchanges, and newly-formed cryptocurrency hedge funds.