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Comment by the_jeremy | Hacker News Reader

> This matters for three reasons. ... First, over $15 billion in crypto value has been wiped out through luna and UST alone. ... Second, it raises questions about other stablecoins. ... Lastly and possibly most signifcantly[sic], the collapse of UST has caught the attention of powerful politicians and regulators.

To oversimplify, it only matters if you care about crypto. And if you do, you already cared about this.

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There will absolutely be contagion into the rest of the economy. A lot of funds are long crypto, they will have received margin calls so will have to liquidate other assets driving those prices down etc. It's still to be seen how much contagion there will be, but there will be some.

Tesla and micro strategy for example holds billions in crypto. If that gets more common then that would cause major contagion

Whenever people lose of money, that money has to be paid back to wherever they borrowed it from.

Expect to see some more bank bailouts down the line to cover the cost of all this.

There are very few banks lending money to crypto speculators.

People may have mortgaged their houses etc., but in those cases the bank gets the house.

The thing is that this "money" never existed in the first place. It was created out of thin air, and it vanished just the same.

It'd be nice if there were a form of money that were created with a locked inflation rate, distributed at random, fair to all, voted upon by its users, backed by a real-world asset, and freely tradable online. Oh well.

This isn't a matter of debt though, is it? The absolute worst case for a retail crypto investor is that they lose all of the money they put in. I can't imagine a bank signing off on a big loan to buy speculative assets.

So the money is already "paid back". Right?

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