TL, DR: BitcoinVN does not have any exposure to the wider crypto market credit contagion and a strong balance sheet in which company-owned cold storage reserves exceed any custodial user funds by a multiple.
As most readers are probably aware, since the entirely foreseeable and expected catastrophic implosion of UST the wider crypto market is experiencing an ongoing deleveraging event as credit contagion spreads throughout the ecosystem.
The difference to previous algo-stablecoin implosions is in the size of the implosion. While the previous failures were mostly contained to retail crypto users as bagholders, the extent of the latest pre-programmed disaster has reached institutional scale and various major companies in the industry have direct or indirect exposure to the current credit contagion.
As defaulting parties rip holes into balance sheets of previously healthy entities, an increasing number of projects in the crypto space start realizing that their counterparty exposure puts themselves at risk of bankruptcy.
In their logical self-interest to survive they will be looking to reduce any open credit lines. and loans and thereby put even more pressure on organizations.whose balance sheets have holes to fill.
Pressure from distressed entities to obtain fast liquidity will rise (resulting in the fire sale of any liquid assets on the balance sheet in a scramble for liquidity – thereby eroding the health of balance sheets of other firms in the industry) as businesses and individuals with open credit lines and claims might no longer be able to have these claims honored.
As such we would like to take the preventative step to assure that any of the deposits BitcoinVN users have on BitcoinVN are not exposed to any troubled counterparties and that the company possesses a strong balance sheet and liquidity position which exceeds current liabilities by a multiple.
While we offer limited custodial holdings on our exchange to take away the “threshold fear”.for people looking to opt out of the fiat monetary system,.we have always been strong advocates and provided funding and resources.to make self-custody more accessible to everyone.
Furthermore some guidance:
- Anyone telling you to not make self-custody of your coins a priority is a bad actor.
- Understand counterparty risks and mitigate them wherever possible.
- Learn and use multisig (e.g. Nunchuk)
- The markets will only turn after a maximum pain event, so expect more.entities to not survive and/or implement severe haircuts. No bailouts!
We’re entering the stage of the cycle where the reckoning for the reckless gambling.and hyping up of unsustainable vaporware is serving the bills.
And while reading the Bible instead of the latest “whitepaper” marketing junk.would have been the better choice:
Human nature will never change however – so we expect we can recycle this article in a. similar manner within the next 5 years when people lose everything – again.
Slow and steady wins the race – especially on a sound money standard.
Stay safe and learn self-custody.