<instructions>Your goal is to analyze the following comment and estimate how highly it will be upvoted by the Hacker News community.</instructions><comment><author>tjbiddle</author><text>Paywall: &lt;a href=&quot;https:&amp;#x2F;&amp;#x2F;web.archive.org&amp;#x2F;web&amp;#x2F;20220617125537&amp;#x2F;https:&amp;#x2F;&amp;#x2F;www.wsj.com&amp;#x2F;articles&amp;#x2F;battered-crypto-hedge-fund-three-arrows-capital-considers-asset-sales-bailout-11655469932&quot; rel=&quot;nofollow&quot;&gt;https:&amp;#x2F;&amp;#x2F;web.archive.org&amp;#x2F;web&amp;#x2F;20220617125537&amp;#x2F;https:&amp;#x2F;&amp;#x2F;www.wsj.c...&lt;/a&gt;</text><parent_chain></parent_chain></comment><story><title>Battered Crypto Hedge Fund Three Arrows Capital Considers Asset Sales, Bailout</title><url>https://www.wsj.com/articles/battered-crypto-hedge-fund-three-arrows-capital-considers-asset-sales-bailout-11655469932</url></story>
<instructions>Your goal is to analyze the following comment and estimate how highly it will be upvoted by the Hacker News community.</instructions><comment><author>chollida1</author><text>The crypto community continues to speed run the history of traditional finance.&lt;p&gt;This weeks lesson is that in an up market its leverage that makes you money and in a down market its the unwinding of leverage that kills you.&lt;p&gt;They are also learning that interconnectedness will hurt more in a downturn.  You can be perfectly delta hedged( don&amp;#x27;t care which way the market moves) and its the counter party risk that will sink you.&lt;p&gt;Now as these firms start to unwind they spill over to the next one.  The collateral taht you lent to the failed firm is now gone and your once well hedge d and collateralized position is now in shambles because someone else can&amp;#x27;t pay you.&lt;p&gt;TradFi normally solves this by having a firm have oversite on everyones positions and have everyone pay money into a pot to help bail out failed counterparties so they don&amp;#x27;t spill over to other firms.&lt;p&gt;Crypto has tried to solve this by strict liquidation rules that tend to make things worse by turning firms into forced sellers when they may have been able to ride things out, thereby forcing markets down even more.  To the point where its a profitable trading strategy to intentionally force the market down to liquidate leveraged longs.&lt;p&gt;As more crypto firms fail, they&amp;#x27;ll end up selling their best collateral first(BTC and ETH) forcing down the price even more.&lt;p&gt;$5,000 BTC and $200 ETH are in site if Tether starts to fail.  Tehter has lent money to almost all these firms but doesn&amp;#x27;t mark down its positions from what it originally held them at.&lt;p&gt;If tether holds we may get out of this with $10-15,000 BTC but if Binance&amp;#x2F;FTX walk away from Tether then we&amp;#x27;ll be down another 80% from here I bet.&lt;p&gt;TL&amp;#x2F;DR its going to get alot uglier than it currently is due to the interconnected nature of the crypto markets.  We&amp;#x27;ll find out that pretty much everyone was linked to everyone else as there are only so many ways to make money in crypto and everyone piled into them.&lt;p&gt;Defi is about to find out how hard it is to make money when no one wants to stake.</text><parent_chain></parent_chain></comment><story><title>Battered Crypto Hedge Fund Three Arrows Capital Considers Asset Sales, Bailout</title><url>https://www.wsj.com/articles/battered-crypto-hedge-fund-three-arrows-capital-considers-asset-sales-bailout-11655469932</url></story>