Transcription
Hello, it's Crypto and I hope you are doing well. We have finished a week that has been complicated. We have a lot of news on macroeconomics. Unfortunately, we still have no end to this shutdown which is putting a lot of pressure on the NASDAQ and the S&P 500, which is putting a lot of pressure on BTC. Yes, I know, in this image, it looks like there's glass everywhere and you might think that altcoins are about to take off. We even see some tweets saying that it's here, it's the return of Altcoin Season. I will show you that unfortunately this is not yet the case and that above all, something is happening at the stablecoin level and that there has been a collapse of a certain number of stablecoins which could jeopardize a large part of crypto. I will explain to you concretely what happened, the impact it could have afterwards, and give you important points to watch on BTC because yes, BTC finished its closing on the CME, which is also very important for determining the future of next week. Before we start, I remind you that on Tuesday, November 11th at 7 PM, I am organizing a masterclass to take stock of this cycle, where we concretely are. Where will we be this time? It's different. How do we manage our risk? What is the impact of trading versus investing versus DeFi? What is concretely happening? There is no time limit. There will be a lot, a lot of things. To receive the link, it's in the comments, in the description to register, and I'll see you on Tuesday. In any case, you will see, it will be very interesting. We will come back to this news. This one is Stream Finance, which has a stablecoin called X USD, sorry, which had a stablecoin X USD which had a hole of 93 million dollars due to October 10th, 2025. October 10th, you may not remember, I hope you do. It's 20 billion dollars that were liquidated on the entire market. 93 million dollars in a hole of 400 million TVL for Stream Finance. That hurts. Especially since Stream Finance was correlated with many, many other stablecoins, and that's something that hurts, a lot, because as a result, there was a repercussion in many other protocols, many curators. I will explain what curators are. And so we see that we are seeing dead bodies resurface little by little, and unfortunately, I don't think it's over. This could have a long-term impact on crypto in general. Altcoins, Ethereum, basically, I'll explain everything to you right now. You need to understand that Stream Finance is a protocol that issued X USD, which is similar to Ethena's USDE, which is basically something algorithmic based on a short and a long. I will explain that to you in a few moments. It's called a delta-neutral, except they were destroyed by Binance on October 10th, 2025. I will also explain to you later by what mechanism and how much it can impact you. You too, it's important to understand what happened. Except that behind this X USD, we realize that there are many other protocols, many other curators who are basically specialized companies for risk management. We will have R7 Labs, MV Capital, we will have Varamort, and many others, who are spread out a bit everywhere, and curators are normally specialized in pure and hard risk management. Except that we realize that there was a leveraging, meaning that some used X USD as collateral to re-borrow, buy back X USD, and re-borrow to farm the yield offered by Stream Finance and offer the yield, for example, through their own token. For example, we will see Trivi, we will find Elixir which is on Morphe, we will find de USD which has been completely wiped out, and certainly others that will appear later. What's important to understand is that where we should have had risk specialists, what we call curators, well, we mostly had forms of hedge funds that were on the real G, so with a lot of leverage. And when one part defaults, at some point we find ourselves having to unwind positions and unwind at a loss. And that's exactly what's happening now. The only problem is that you need to understand the impact it can have. You might think that this is simply in the world of stablecoins. Except that the reality is that the mechanism behind it, and many protocols used the same mechanism, is that we build a delta-neutral position. Delta-neutral is a bit the foundation of USDE. USDE is Ethena's algorithmic token, which relies on a short position and a long position, and the two cancel each other out, creating what is called a delta-neutral position. This means there is no volatility in this position. The short position, meaning selling, cancels out the long position, and we just collect the fees. The fees generated by the funding rates of the short position. So, the fees paid mainly by the platform to hold a position, which happens every 8 hours. And here we have the fees that can be recovered by the token we hold. Generally, it's ETH, and ideally staked ETH with STETH. To know that here, we recover about 3%, we recover 3%, which makes a position of 6, 7, 8% approximately when annualized. Except that this is an equilibrium, and the equilibrium can be violently broken when there is a wick, a very violent liquidation wick like we experienced on October 10th. And here, this wick you see, it's on Binance, the gap that occurred in the USDE depeg. Now, there wasn't a depeg in the strict sense for Ethena, but in this case, we had a lot of fear on Binance, and as a result, we had a real purge. Except that some people, they don't have the deals that Binance and other protocols have. There are stablecoins like Stream Finance that have filed for bankruptcy today, who unfortunately are trying to do the same thing but didn't have the same deal at all. And the problem is that they were hit by Binance's auto-leveraging. Maybe that doesn't mean anything to you. It's a mechanism nicknamed ADL, which gives the right, when there is too much volatility for the maintenance of the entire ecosystem, and mainly Binance, to close any position without asking questions. Positive or negative position. And so, when there is high volatility with more than 20 billion dollars liquidated, you can imagine that it falls into this category. And when we have this equilibrium here, we will just clean up a little bit to find just the equilibrium of the short and the long, which makes a delta-neutral position. If we unfortunately find ourselves with a short that is in profit, which is withdrawn by ADL because it allows to recover, well, here what is called net profit, meaning net profit in Binance's maintenance funds, which allows to buy back negative positions. I won't go into too much detail, but you need to understand that the basic perpetual is an equilibrium between negative and positive positions. Especially when there are gaps, I will explain this a bit later, between perpetual and spot. This implies that these gaps can create bad debt. And to do this, Binance uses ADL to close positions that are net positive in order to compensate for the bad debt. And when you are short in a falling market, you are in profit, and that's very good. And what happens is that these shorts were cut while the long here was on STETH, which collapsed afterwards. This leads to the position that was neutral no longer being so, and then a collapse occurs. And this mechanism had a drastic and dramatic impact on all these protocols that did the same thing without having the same deals. Even if we can question Ethena, USDE, unfortunately, I don't think we will know if there is a big impact or at least not right away. In the various information, we can see that apparently they are not or very, very little affected, but that doesn't mean we don't have absolute certainty yet. You need to understand that the impact we are seeing with Stream Finance, and especially what we have been able to look at, is that with Stream Finance, we are talking about a loss of 93 million dollars, which when put into perspective, might represent 2, 3, 4 billion dollars in losses across all protocols with all the leverage that had been put in place. This is to explain to you how insidious the mechanism can be because it's possible that behind Trivi, behind RE7 Labs, behind a curator, behind another protocol, there is still leverage, another company that has been set up. Something we saw happen with greater magnitude with Terra Luna. Terra Luna with UST, which was used as leverage by large companies that took stakes in companies like Three Arrows Capital, which then, during its collapse, led to a second crash. And that's why you need to be very careful during this end-of-year period because we risk having repercussions and we don't know where, unfortunately. And so you need to adjust your risk and understand what ADL is, and understand that even if you have a positive position in a moment of what is called a liquidity squeeze, meaning a liquidity compression, well, you can find your positive position closed, and you need to be very careful, and especially not to be on just one platform, but on several platforms, because when there are many liquidations, it can cause problems, and that's why many are interested in this day on Binance, and why many funds are asking themselves whether they should investigate Binance or not, because I think there are a number of losses that are mainly linked to this mechanism and the closure of what happened here. I think we are likely to have more information coming out in the coming week, and we will need to be aware of what is happening and the impact could be on Ethereum, because I just remind you that the majority of people own STETH to get a yield, generally derived from Ethereum. STETH is staked Ethereum for ST. ST being the denomination of the Lido protocol, which is used to stake what is called liquid staking Ether directly. All this to say that we could have repercussions on Ether and waves of liquidation and very significant selling pressure on Ether if these protocols are forced to liquidate their positions to be able to repay those who invested in their stablecoins. To be monitored very, very closely, especially when we see all these green candles, we might think it's the return of altcoins. I just think we need to zoom out a little. The best example for me is to zoom out to 4 hours to show you, just to show you that unfortunately, since March 2024, we have been in a dramatic decline. Yes, we have a re-acceleration, but it's just a very small acceleration here compared to everything that happened there. So, let's take maximum distance. It's positive that we have valuation on this side, but it doesn't mean we should go all-in and that we should stay grounded. And if we zoom out even more to show you the impact and the representation of what we are seeing now, be very careful, especially when we take Total 3 divided by Total to give us the percentage of all altcoins, to give us the dominance. We see that we have barely moved this week. So, it means there is no real movement on this side, and there is nothing to FOMO about. So please, be very careful with leverage, be very careful with everything that can happen, because yes, we can FOMO, but we must especially be careful with leverage and the impact it can have on capital. Especially since we still have BTC in retracement. We don't know how far it will go. We bought back a large part, which gave us a re-acceleration on BTC, but we will see that later. It might not be enough again, and we could very well have a continuation of the downtrend. We have a certain number of figures on artificial intelligence where we stop, for example, the number of hires, because potentially we have enough people. Does this mean that at some point, there will be a questioning of artificial intelligence and therefore perhaps a more powerful retracement, and what will happen to cryptos at that time? Perhaps a squeeze again and again. Will BTC hold up better than the NASDAQ? We don't know yet. We are underperforming for now, but we have already seen that in the big crashes of the NASDAQ, sometimes we could fall much less if we had fallen beforehand. So, to be monitored, but you need to be aware of it again in our risk management. S&P 500, same principle, and we see that there are capital outflows. Unfortunately, on November 6th, we had 239 million injected, and 558 million came out of BTC in terms of ETFs. So, this also means that selling pressure is very present, and the CME closing, which was important, which took place Friday evening, unfortunately did not regain the level I would have liked, which was 107, 108. At that point, we would have had a very good signal of recovery. We have something that validates the fact that 100,000 dollars is a major support. We have no break, but we also have no validation of a restart. So, we are still in this zone of uncertainty, unfortunately, and it must be priced in. Don't forget that we are at the end of 2025. The end of 2025 is gradually starting. Q4 is progressing quietly, even if we think we can have a good valuation in November and potentially part of December. We must especially prepare for the end of the 4-year cycle, whether it is validated or not. The question is not there. Don't forget the worst advice for an investor is "this time it's different." I'm not saying to bet 100%. I'm just saying that risk management is not 1, it's not 0, it's a mix of the two, and that's how you correctly manage a position. I hope this video helps you understand everything that is happening, perhaps things you haven't seen, understand the implication of the closing we are having now, which is neither positive nor negative, and which is, for me, a reflection of what we are seeing in macroeconomics where we also have uncertainty linked, indeed, to the shutdown, linked to whether or not the Fed will lower rates again, and we have a liquidity contraction in macroeconomics. Naturally, we also take a hit from this, and that's perfectly logical. We just need to try to be as impartial as possible, and I know it's difficult not to have confirmation bias, not to have only one vision, and that's what's most difficult, especially in cryptocurrency where emotions are even stronger and constantly rising or falling from one day to the next, we can go from fear to greed. It's very difficult to manage when you're not used to it. If this video helped you, don't forget a little like, subscribe, and I'll see you very soon.