After 35 years of stockbroking for some of the biggest houses and investors in Australia and the UK, the Secret Broker is regaling Stockhead readers with his colourful war stories — from the trading floor to the dealer’s desk.

The late great Tommy Cooper made a living out of performing magic tricks that all went wrong and when he died on stage, everyone laughed as they thought it was part of his act.

It wasn’t.

Then the laughter stopped.

This week we have seen the same thing happen in Cryptoland, where a stablecoin became unstable as the magical algorithm behind it failed to live up to its magical formula.

Only this time no one was laughing. They were crying.

Here’s why:

This fall has now magically made U$15bn disappear without a trace and this is the coin that backed up the stablecoin, which did this:

The bit that was meant to be stable was in fact sawn in half, live, in front of the audience’s eyes and the magician’s algorithm was unable to put both pieces back together.

Warren Buffett always said that if you can’t explain an investment to him, with only a crayon and a piece of paper, then he would not be interested.

If you visit the website that explains how all of the above would never happen, you will need to lie down for a few hours to recover.

Here is a little teaser for you from their white paper:

And there you go. What could possibly go wrong?

But hang on, it gets better.

The guys behind this coin had another stablecoin fail on them a couple of years earlier, but forgot to mention this when presenting to the public.

Their previous one was called ‘Basis Cash’ and according to an article released by CoinDesk it also failed to hold its peg to U$1.00.

If you travel in time and go back to 2017, you will find all the hype behind their magical formula in this article which partly has in its headline:

Crypto holy grail with stable token

If you find all of these links a bit tiring, then here is a video in which one of these guys explains it all to you.

Terra from Logan Kim on Vimeo.

To really get to know the man, there is nothing better than looking at some of his tweets.

And how’s that for a Twitter handle?

My, my. Hate to see his number plate.

The unfortunate thing about all of this is that the 100s of 1,000s of ordinary, spotty faced teenage investors will never see their capital again.

All U$15bn of it has magically disappeared forever.

At least Tommy made us laugh.

 

The Secret Broker can be found on Twitter here @SecretBrokerAU or on email at [email protected]

Feel free to contact him with your best stock tips and ideas.