November 10, 2022
🇺🇸 Axios observes Veteran's Day, so no newsletter tomorrow. Join us in thanking those that serve, past and present. See you Monday.
Situational awareness: FTX lent billions of dollars worth of customer assets to fund risky bets via its Alameda Research arm, the WSJ reports, citing a source.
1 big thing: Implosion
If Tuesday was crypto's Bear Stearns moment — the day that a central player in a financial ecosystem collapsed into the arms of a much bigger rival — then Wednesday was its Lehman Brothers moment, with that same central player simply imploding into a balance-sheet hole of unknowable size, Axios' Felix Salmon reports.
Why it matters: The collapse of FTX is the most consequential failure the crypto world has seen since Mt. Gox disappeared overnight in 2014.
- "It looks likely that a new cascade of margin calls, deleveraging and crypto company/platform failures is starting," J.P. Morgan analysts wrote in a research note on Wednesday.