News for hackers. Stuff that matters.

A comment on The Cryptocurrency Crash Is Replaying 2008 as Absurdly as Possible. Parent comment

Re:The Cryptocurrency Crash Is Replaying 2008 as Absurdly as... by netheril96 on Thursday May 12, 2022 @09:11PM (#31362068)
> I don't think FAANG, Berkshire, Exxon and Pfitzer are going to notice if all of crypto dropped to zero right now.

If some investors are invested in both FANNG and crypto, when they face margin call in the latter they may have to sell the former to cover their position.

[ Parent | on HN ]
Re:The Cryptocurrency Crash Is Replaying 2008 as Absurdly as... by chii on Friday May 13, 2022 @12:01AM (#31363174)
do most investors really take out margin loans to buy stocks?

I can understand _some_ investors do it, but i'd imagine it's not a majority.

[ Parent | on HN ]
Re:The Cryptocurrency Crash Is Replaying 2008 as Absurdly as... by netheril96 on Friday May 13, 2022 @07:04AM (#31365835)
> do most investors really take out margin loans to buy stocks?

In the scenario I describe, those investors take margin loans to long or short crypto, and when they fail, they sell other assets to cover themselves.

This is just one possibility I describe.

> but i'd imagine it's not a majority.

No one knows. It may take only one institutional investor who lost a gigantic amount of money in crypto trading and were therefore forced to sell stocks to shake the stock market.

[ Parent | on HN ]