What the Panic of 1907 Can Teach Us About the Current Crypto Rout
Wall Street has become conditioned to expect government bailouts or massive central bank intervention when financial conditions deteriorate. This was not always so. During the 19th and early 20th centuries, the responsibility to act as lender of last resort often fell to private citizens like J.P. Morgan or Cornelius Vanderbilt, reflecting their outsized stature in the economy at a time when the government was smaller. History doesn’t repeat but it often rhymes. There is no government backstop in crypto, so a new breed of white-knights has emerged that harken back to those titans of yore. On today’s episode of DeFi Decoded, Alex and Andrew discuss the efforts of Sam Bankman Fried, or SBF, who has swooped in to stabilize the industry, ask whether its ok that all these firms fail and ponder the question of what the industry will look like when this rout is over.