Anytime I read an article about crypto, I feel as if I'm reading the review to a fantasy novel. Like, is any of this real? The words all sound made up.
$420.69 million dollar round.
69 investors (one of whom was the Ontario Teachers Pension Plan - one of the largest retirement funds in Canada).
When I think "prudent retirement planning based on low risk, sound long-term principles" I think of a group of bros giggling at how many weed and sex references they could jam into their sales pitch.
This is very disturbing. It's people's retirements plans they are gambling with (yes, crypto is gambling).
Similarly Quebec's Caisse de dépôt invested in now bunkrupt Celsius.
Don't tell me they exhausted all the investment opportunities and crypto was their only choice. They could as well put the money into 1000 random start-ups and be better off risk wise
Obviously there were other choices. But large investment fund managers now mostly operate on the FOMO principle. They don't want to look stupid by missing out on the next big thing. But if they take a loss then they can explain it away because "everyone else was doing it".
At a more fundamental level, this is just another example of the principal-agent problem. Pension fund managers optimize for their own careers rather than for the financial health of retirees. This is one of the reasons why all defined benefit pension plans should be eliminated and replaced by defined contribution plans.
sigh Whether the bonds have a positive yield and how currency is issued have no relation. There have been plenty of positive yield bonds during the gold standard. Indeed, "hard money" standards tend to make borrowing at high interest rates more necessary.
This is like the bizarre argument sometimes made that hard money will end war; that's not how it works. The war will happen anyway and a means will be found to pay for it. Gold was heavily used as an inter-governmental currency in WW2 - resulting in a few very expensive shipwrecks.
Well, yes. That's why bonds have a positive and also variable yield. I guess the parent poster doesn't understand the difference between yield and coupon.
I think we need to have a serious discussion about wealth caps. The last couple weeks have made it absolutely undeniable that wealth is not in any way correlated with being capable of using it well. No single person should have that much influence over that many resources.
When money can be printed, you should expect most wealth to flow to people who get closer to the money printer.
When money can’t be stolen and can only be created by means of enormous effort, money should flow to those capable of maximally converting human effort into positive emotional responses.
Even the names of the people are on-the-nose parody.
FTX's founder is Sam Bankman-Fried. Sam rhymes with scam, and as of yesterday he's officially a fried bankman. All this would be too ridiculous for a novel.
Yes it is all made up. Or about 95% made up with a tiny amount of actual USD or Euros
Just listen to Sam Bankman-Fraud on a financial podcast describe his magical ponzi box. Well now the thing anyone with a brain would have said sounds like a scam has been exposed as a scam.
This might be satire, but in case it isn't: there are plenty of very rich people that are very dumb. And plenty of brilliant people that are destitute. This disparity is even moreso skewed in industries like finance, which tends to favor luck way more than, e.g., in startup land where you need things like customers and product market fit, so "faking it until you make it" is much harder.
Most of the "investment" that companies like OpenSea/FTX/etc. have been getting is pure gambling by the likes of a16z and other institutional investors. There's no traditional "exit" to pursue here, and the whole strategy is essentially a pump and dump (often involving arcane tokenomics) where VCs dump on retail and make 10-100x returns.
There's no technology, no value, hardly any users, and if you're not sure who the sucker is, it's probably you.
and the whole strategy is essentially a pump and dump (often involving arcane tokenomics) where VCs dump on retail and make 10-100x returns.
A lot of people didn't see this. VCs used their reputation to pump a token. Then they dump the token almost immediately on retail. This was a much faster way to make money than waiting years for a traditional startup to exit.
VCs were in on the scams.
This is why I lost complete respect for a16z and hate that crypto-shill Garry Tan will run Y Combinator.
> This is why I lost complete respect for a16z and hate that crypto-shill Garry Tan will run Y Combinator.
Even though I understand this from an ethical standpoint, this is the entire job of venture capital: make a ton of money as fast as possible while minimizing risk. Crypto is literally the perfect vehicle for this. They can't do this in traditional markets because actual hedge funds like Jane Street and Two Sigma will absolutely demolish them. So I think that a16z, Sequoia, etc. have been brilliantly making their clients a lot of money. If we had money in their fund, we'd both probably be very happy campers.
I blame governments for being slow regulating crypto and I blame individuals for being greedy. Imo, blaming VCs for making money is like blaming water it's wet.
You're saying this as if VC were some natural phenomenon and not people. VC are people, VC i one of those things that are mostly only people. Those people choose to use financial vehicules and strategies that are not ethical.
> make a ton of money as fast as possible while minimizing risk.
I like to think that the right way to do this is by creating lots of lasting value. Many VC wins make them money and create value for the company, employees, users, world.
It’s not exclusive that they must create fake bullshit to make money. Funding Apple makes money and results in hardware, software, and innovation. Pumping lottery and Ponzi schemes just exploits value from poor suckers.
I blame governments for being slow regulating crypto and I blame individuals for being greedy. Imo, blaming VCs for making money is like blaming water it's wet.
I'm not blaming them. I just lost respect for them.
Crypto is a transfer of wealth from the poor to the rich. This is because the poor is hoping to get rich quick. But the rich has all the inside information in an unregulated environment as well as the ability to pump and dump.
Occasionally, someone poor makes money and tells his friends about his new lambo - hoping to get others into the scam/ponzi.
Regulations, i.e. centralized control via the SEC, doesn't help the poor. All of the massive returns since the SEC's entry into the crypto market in 2017 have been reserved for venture capital funds.
Before 2017, ordinary people were able to participate in Ethereum's token crowdsale and subsequently get returns of 1000X.
Narratives like yours are peddled to the poor to manufacture consent for anti-capitalist "consumer protection" laws that deprive them of investment options, so that insiders gain a competitive advantage over them.
99% of projects that had ICOs before 2017 are dead. All investors were wiped out. Founders who raised money were free to use the money however they want, including for personal purchases, insider trading, etc. Guess who got wiped out the most? The uninformed poor people.
The market capitalization of projects that did token sales before 2017 is orders of magnitude greater than the amount invested in token sales before 2017, meaning investors in pre-2017 token sales are, in the aggregate, massively up.
This is what venture capital investing is: you invest in 100 projects to hit one homerun.
Here is a good paper showing that token sale investments were primarily small, and opening up the venture capital market to the broader public:
You need to insist otherwise because thousands of regulator jobs, and dozens of venture capital funds, depend on it. The poor are just the propaganda fodder the insiders cynically use to gain a political mandate for their repression of the poor.
There's a massive difference between ICOs and VC investments.
1. VCs can fire the CEO/founder of the startup. You can't fire anyone and have zero control as an ICO investor.
2. VCs sit in the board of the startup and get to review performance and finances. ICOs were completely private from their investors. Token founder using $1m project money to buy a yacht? Nothing you can do nor would you know about it.
3. In the US, VCs are registered with the SEC in order to invest in startups. ICOs started by allowing anyone to invest, which preyed on the poor and uninformed.
The market capitalization of projects that did token sales before 2017 is orders of magnitude greater than the amount invested in token sales before 2017, meaning investors in pre-2017 token sales are, in the aggregate, massively up.
The few lucky ones who invested in Ethereum and held are massively up. The thousands of other projects scammed investors.
Massively more people invested in Ethereum than the type of scam projects that were most likely to belly flop.
As the study I referenced states, the vast majority of token sale investments were small. This points to a market where people acted rationally, in risking only small amounts on speculative investments, and makes it more likely that a typical token sale investor would spread their investments across a large number of projects.
It therefore stands to reason that there was significant overlap across token sale portfolios on larger and better known sales like Ethereum's.
>>VCs can fire the CEO/founder of the startup. You can't fire anyone and have zero control as an ICO investor.
Not every one can be a VC. Every one could invest in Bitcoin in 2009, and Ethereum in 2015.
The code for these projects is open, with no permissioning on who can release a client or run one. Moreover any one can fork the chain.
It's an entirely different governance mechanism than that of traditional shareholder controlled startups, and the experiment should not have been stifled by SEC regimentation, under the false call of "investor protection" made by those employed by regulatory agencies and venture capital funds who had a clear financial conflict of interest in benefiting from centralized control over investment activity.
Both median absolute return and median excess return are negative. Which of the pre-2017 tokens are you claiming is still up? And why are we choosing 2017? And where have these returns actually come from?
Of course the median is down - most projects fail, but the appreciation of tokens from successful pre-2017 token sales, like Ethereum's, is massively greater than the cumulative amount invested in token sales pre-2017.
People like Sequoia and the Ontario Teachers' Pension Plan who invested tens of millions into FTX last year, and whose investment is most likely worthless now?
Smart people make bad investments too, often out of FOMO.
The FOMO can get institutionalised. When you are incentivised to chase funding (as a GP) if you aren't doing the cypto thing, your LPs will go with another fund and/or you'll get redeemed. And if you have to go in on crypto, FTX was supposed to be a sure bet
Here’s SBF describing that he totally understood the ponzi nature of these coins but that he basically didn’t expect there to be “people calling bullshit in a coordinated manner.”
Strong "how do you do, fellow kids" energy. Companies draping themselves in tired, culturally-exhausted trappings in an attempt to conceal their sociopathy under a guise of countercultural relatability. It's just as transparently grotesque when Musk does it.
I called the top, but it was the wrong one. It really is mindblowing how irrational a market can become, to the point that seemingly everyone agrees thing have become untethered, and the market will still run another 25%.
Matt Damon talking about it was the top. You could tell immediately. Even with Binance now being the last dog standing worth anything (worth, lol), it's all a house of cards. Who will be the last bag-holders until this thing finally has it's death rattle.
Hope it ends already, and the this wonderful technology can go back to doing what it does best become a utility and not a vehicle for speculation.
