Pether (9)

This move bore a striking resemblance in several respects to the pound short that Quantum Fund carried out in 1992.

In 1990, when Britain joined the ERM, it pegged its currency, the pound, to the German mark, allowing the two to move only within a 6 percent band.

The trouble began with Germany. After reunification, the German government poured massive investment into East Germany, and inflation followed.

Germany had once seen its economy collapse under hyperinflation in the aftermath of World War I, so it responded immediately with ten rate hikes. The rest of Europe screamed in protest.

Every country begged Germany to slow down, but Germany refused to ease off, insisting that its own circumstances came first.

The higher rates strengthened the mark, and because the currency had been tied to it, Britain had no choice but to raise its own rates in defense of the pound.

The difference was that Germany’s economy was strong enough to withstand the hikes, while Britain’s was not. Unemployment soared, companies that could not survive the high rates went bankrupt, and the economy slid into recession.

Common sense said Britain should have abandoned the ERM at that point and let the pound fall. But that would have meant admitting that Britain’s economy was weaker than Germany’s.

For a Britain still locked in a struggle with Germany over Europe’s hegemony, that was unthinkable. Britain had once ruled the world, and it had been one of the victors of World War II.

So Britain chose, to the very end, to defend the pound. That was when George Soros slipped into the gap.

He realized the pound was overvalued, and that Britain would not be able to keep this up for long. The Quantum Fund he led declared war on the pound, and the scent of easy money drew in hedge fund after hedge fund.

They leveraged up as hard as they could and dumped pound shorts by the truckload. Britain responded by raising short-term interest rates to 15 percent and buying pounds in defense.

It was a fight that would end only when one side died. If the hedge funds could not endure the strong pound and the punishing rates, they would die. If Britain ran out of dollars with which to defend the currency, Britain would die instead.

And the result?

The first to blink was Britain. In less than a month, it gave up and withdrew from the ERM. The pound then crashed, and George Soros and the hedge funds bought the battered currency back at bargain prices, closing out their shorts for astronomical profits.

It was a shocking event: a massive nation brought low by a hedge fund attack.

(Omitted)

Then how would this Pether short-selling crisis end?

For now, it was impossible to predict the outcome.

If the short failed, Pether would continue functioning as the reserve currency of the crypto market, just as it did now. But if Pether collapsed, the risk was enormous: it could drag down the entire cryptocurrency market with it.

Leonard Chang was back in Hong Kong.

From his office in Central, he watched the flood of real-time articles roll in. Market sentiment was split right down the middle.

In just a few days, more than $15 billion worth of sell orders had hit the market, yet Pether still held steady between $1.00 and $0.999. That was because Pether Limited was buying up the incoming volume as fast as it came in.

Perhaps because of that, the market, which had initially taken a shock, had already begun to recover. Institutional redemption requests were also pouring in from every direction.

Normally, Pether traded on exchanges, but to prevent market disruption, institutions moving more than $10 million were handled separately through the site’s redemption system.

Calls came in from all sides. He calmly explained the situation to the major investors.

"There’s nothing to worry about. As you can see, the peg is holding steady. We have more deposits on hand than the amount we’ve issued."

And because Pether was indeed trading without any problems, the investors were reassured and hung up.

He kept watching the articles as they appeared in real time.

Continue Capital’s short strategy was subtle and meticulous.

Who on earth came up with this idea?

By inserting a clause about unstaking into DeFi, they had even managed to pull in institutions that had deposited into the PN Protocol and push them into the Pether short.

Leonard Chang thought of the Korean man he had met at the party—the one who had appeared with the head of Saudi PIF’s overseas investment division. That man was none other than the co-CEO of Continue Capital.

Continue Capital was already famous as the most successful investment firm of the twenty-first century. But however great its achievements might have been, they were still nowhere near his.

Leonard Chang had made more money than anyone in human history, and he had done it in the shortest amount of time.

More importantly, the source of that wealth was fundamentally different.

Make your money through ordinary investing, and you were just one of countless players in ‍‍‌‌⁠​​⁠‌​​‍​​‍​‌​⁠‍‌‍⁠⁠‌⁠‌‍‌‍‌‌‌‍⁠​‌​‌​‌‍‌‌‌⁠‍​​‌‍⁠‌‌⁠⁠the market. But he was the absolute ruler of the cryptocurrency market.

A vast market worth $3 trillion was moving at his fingertips.

Not long ago, the old guard of finance had refused to acknowledge cryptocurrency at all.

Famous investors had gone on television to laugh at him, mocking Vantcoin and every other coin as worthless trash.

And now?

Vantcoin, once dismissed as digital garbage, had blown past $80,000, and Coinmax had grown larger than the stock exchanges of many developed countries.

That had forced the financial world to rush into crypto investment and launch related products. Companies, too, were buying up Vantcoin and Elderium.

Leonard Chang believed crypto was only just beginning. Humanity had moved from barter to physical currency, which then evolved into credit money. And the final form of that credit money was CBDC.

Almost every developed nation was now researching and preparing to issue one.

Because a CBDC would still run on blockchain, it would require a number of intermediary institutions to create and verify blocks.

The company best suited to that role was Newcurrency Enterprise, which operated the world’s largest exchange and issued the world’s largest stablecoin.

Central banks in Britain, Canada, and Switzerland had all come to him for advice.

If CBDC succeeded, he would hold the flow of future money in the palm of his hand.

A brilliant future spread out before him.

And then… at that very moment, someone pointed a knife ‍‍‌‌⁠​​⁠‌​​‍​​‍​‌​⁠‍‌‍⁠⁠‌⁠‌‍‌‍‌‌‌‍⁠​‌​‌​‌‍‌‌‌⁠‍​​‌‍⁠‌‌⁠⁠at his throat.

Leonard Chang murmured under his breath, “You’re really trying to challenge me?”

He was famous for getting out of his seat and investigating whether the paperwork matched reality. During the Lao Hu Coffee short, he had even hired ten thousand part-timers and had them check every branch one by one to see how many customers came in and how many cups were sold.

If he had become a detective, wouldn’t he have made his name as a legendary one?

“Have a safe trip.”

After hanging up, I went back to the materials, only for my phone to ring again.

It was someone I hadn’t expected.

I answered.

“Hello.”

The other person spoke in a calm voice.

"Did you get home safely that night?"

“Yes. I had a good time, thanks to you.”

"I thought you’d been up to something pretty interesting. What was your goal?"

“I figured it might make money.”

But that wasn’t all.

This was a fight over who ‍‍‌‌⁠​​⁠‌​​‍​​‍​‌​⁠‍‌‍⁠⁠‌⁠‌‍‌‍‌‌‌‍⁠​‌​‌​‌‍‌‌‌⁠‍​​‌‍⁠‌‌⁠⁠would hold the hegemony of crypto in the years to come.

"I thought I could do a lot with Representative Han."

He was the emperor of cryptocurrency. If he could be of help in what came next, I would have gladly joined hands with him. But to me, he was an obstacle.

There was no place for him in the metaverse world that Syd was building.

Because of me, Snow Crash was growing even faster, and the future was being pulled forward piece by piece.

Since I had no way of knowing what other variables might appear, it was better to eliminate dangerous factors completely when the opportunity came.

“You say that like you don’t know me very well.”

"What do you mean?"

“I don’t work with scammers.”

This was where the largest number of cryptocurrency investors in Korea had gathered.

The channel had been born alongside Vantcoin and the exchanges, and as the crypto market grew, it left behind countless slang expressions of its own.

After crypto crashed, it spent a long time in darkness, but a second coin boom had recently brought it roaring back to life.

Korea was now caught in a full-blown coin frenzy.

As Vantcoin doubled from $40,000 to $80,000, altcoins that had risen tenfold were appearing one after another.

On top of that, leveraged options were everywhere.

Stories that someone had turned one million won into one billion in a single day circulated like urban legend, and investors threw themselves into the buying rush one after another.

With the market this hot, all kinds of coins were flooding out.

When Lion Coin took off, copycats like Tiger Coin and Jaguar Coin were launched in its wake.

No one could really say what those coins were supposed to be used for, but people bought them anyway on the promise that the price would rise.

And then, amid that rising market, a massive negative catalyst appeared.

The Pether short-selling crisis.

Once the Pether short began in earnest, the entire crypto market started to shake. Vantcoin fell back under $80,000, and altcoins began dropping one after another by more than 10 percent.

Korea had a highly developed banking system. As a result, most trading in the won market was done in cash, and many people didn’t even understand the concept of stablecoins, let alone what Pether was.

But everyone knew about Coinmax and Leonard Chang. He was the biggest star in the market.

Either way, what mattered now was that the market was going down.

The investors were furious together.