One of the things I have disliked the most about the crypto sector is the idea that people should “hodl” or “hold on for dear life.”

I have written many times here at AVC that one should take profits when they are available and diversify an investment portfolio.

The idea that an investor should hold on no matter what has always seemed ridiculous to me.

Now, the crypto markets are in the eighth month of a long and painful bear market and we are starting to see some signs of capitulation, particularly in the assets that went up the most last year.

Whether this is the long-awaited capitulation of the HODL crowd or not, I can’t say.

But capitulation would be a good thing for the crypto markets, releasing assets into the market that until now have been locked up by long-term holders.

Until then it is hard to get excited about buying anything in crypto.


Comments (Archived):

  1. LIAD

    For all but BTC I agree the hodl meme was a cunning marketing narrative to stop shitcoins from crashing post ICO .For BTC however, whose single use case is by process of elimination a SoV, hodl has been the life support of last resort. Without the strong hodl army BTC wouldn’t have survived previous crashes and the crypto industry may not have been birthed. Further, the profits from BTC directly bled into ETH from which everything else has flown. I think hodl BTC culture has been a godsend for crypto as a whole

    1. kidmercury

      Anything that goes from 19000 to 6000 in months is not a very good store of value.BTC is a non-state form of money, an insurance policy against collapse of nation states, just like gold

      1. jason wright

        use a wide angle lens.

        1. kidmercury

          Use relative volatility measures! 🙂

          1. jason wright

            the historical price chart has two lines. the wiggly one that goes up and down and up and down and up….and the straight one that tracks consistently up and to the right. don’t buy the financial establishment’s propaganda.

          2. kidmercury

            I don’t buy establishment propaganda but I do buy math. In order for something to be a store of value, it needs minimal down side volatility and sufficient liquidity relative to available assets. Bitcoin just doesn’t have it.

          3. jason wright

            not…yet. you don’t go from nothing to stability in the first chapter.

      2. LIAD

        Granted it sucks. At present. But that’s the only usecase which fits.Without hodl culture it will have died before we had the chance to pivot etc. I stick with my position.

        1. kidmercury

          If it sucks as a store of value, it won’t be used as a store of value — unless maybe by suckers. Pun intended 🙂 but fortunately there is another use case which I outlined

          1. LIAD

            It sucks today. Maybe not tomorrow.Plus .Even as money. Needs price stability. So both use cases. Same issue.

          2. kidmercury

            There is a third use case which is insurance against state money, that is what bitcoins real and only value proposition is, just like gold. Sometimes that insurance is incredibly valuable. In more stable times, not so much.

          3. jason wright

            it’s not just a store of value. it’s a unit of exchange, it’s a massive global infrastructure, and the default currency of the crypto ecosystem.

    2. fredwilson

      I still own and hold BTC. But that doesn’t mean I haven’t sold it from time to time

  2. jason wright

    allow me to translate. funds want in at the lowest possible price. they’ve carved out massive pre ICO discounts and the retail market will then unwittingly derisk their investment, but they want even more value. they want even more capital to be released and reinvested in ICOs *they* control. they also want in on promising projects approaching release maturity that they missed out on two and three years ago, but they don’t want to pay the market price. time to induce a crash. capitulation? dig in. this is a war between the financial establishment and the innovators who originally created the market. with an inevitable bitcoin ETF not that far off now is the very worst time to sell. Ryan Selkis said it in yesterday’s post.

  3. Girish Mehta

    AVC – August 2017.”So I don’t spend Bitcoin anymore.I hold it.It’s a store of value now. That much is clear”.I argued on that day that Bitcoin is not a store of value even though it was going up then (in the ~ 4-5Ks in that period if I remember correctly). Something that volatile is not a store of value, period.AVC – August 2018.”But capitulation would be a good thing for the crypto markets, releasing assets into the market that until now have been locked up by long-term holders”.Strange statement to make about a “store of value”.

    1. jason wright

      Well played. Your comment deserves a formal response. it goes to credibility. the reputation of a voice is hard won and easily lost. time for a sabbatical if this is to become the new normal. disappointing.

      1. Barabare

        I’d love for Fred to respond, but I suspect he might say that there is a difference between Bitcoin and the broader “cryptomarkets”. Bitcoin is potentially still a long term SOV play — digital gold or global censorship resistant currency that the government can’t seize. Yes, it’s volatile right now, but in 10 years..?But then you have alt coins. It makes a lot less sense for those assets. The shitcoins should die, the good utility coins should be used, and speculation/HODLing makes a lot less sense.

        1. Girish Mehta

          By definition, the term ‘long-term’ does not apply to most of those other cryptoassets. They haven’t been around long enough to be “locked up by long term holders”.Long-term holders is an oxymoron where those assets are concerned.

          1. jason wright

            you’re more sophisticated than i. i’m not good at self censorship.

        2. jason wright

          he should respond. some alt coins are shitcoins. not all alt coins are shitcoins. it requires analysis by the coin. Fred is not encouraging this. he and his industry clearly want the market to blindly dump. his very recent ‘Selling’ post wasn’t taking this approach. Fredcoin has hit a low.

          1. fredwilson

            I did respond. I would prefer people look at my entire body of posts on this topic over the time I have written them vs pulling any one quote and using it out of context

          2. LE

            People do that because a) They have seen that behavior in the media b) They have seen that behavior in politicians c) They get upvotes and attaboys (whatever that is) for doing so d) ‘entire body of posts’ would take work (nobody wants to read the entire bible, right?) e) That would mean being fair at their expense (no get ‘c’). f) People want to knock you down (it makes them feel better about themselves). Not talking about Girish but just people in general. Read the footnote: [1]My memory seemed to be that you had said that you were not selling any bitcoin and holding. You didn’t say ‘for dear life’ but that’s besides the point. That is what I remember. I also remember something similar with art that you buy. Or maybe because you said it with art I magnified what you said with bitcoin. Maybe that is what Girish did.Anyway that is the psychology of what is going on here.[1] That is good and not bad. If you’ve gotten to the point where people want to knock you down you have arrived and are very lucky.

          3. PhilipSugar

            That is the lawyerfication of the world. They are a scourge. Do you know what 10,000 lawyers drowning in the sea is? A good start. That is why politics sucks so bad. And now the press thinks they are lawyers.We talked about getting pulled over. You know what??? Sometimes a “well I fucked up, sorry I was wrong…” gets you a hell of a lot further that no I didn’t.

          4. PhilipSugar

            And let me add. If you are married and have not said this I guarantee your marriage has not lasted more than a decade, if that. If it is a quarter of a century then you have said that more times than you can count.

          5. LE

            Definitely say I am sorry. Even to the stepkids when I over freak out about something. Not often but happens. What I do is march into their room with a $20 bill “sorry and here is my ‘fine'”. My god that completely does the trick.The issue though is you can’t apologize to much or it loses the impact then it just becomes an easy way out.

          6. PhilipSugar

            I had a room mate that used to freak out when I would say I am going to pre-apologize for my bad behavior, coming up.

          7. jason wright

            you apologise… with money? is that sincere, or American culture?

          8. PhilipSugar

            We have a saying in American culture, money talks bullshit walks.

          9. LE

            No it is not American culture it is my way of solving a problem and showing sincerity. (And it works btw.)

          10. LE

            “well I fucked up, sorry I was wrong…”Let me ask you one thing. If you get pulled over and you are speeding but the cop is ‘fishing’ (he has no radar and he didn’t follow you) then wouldn’t you agree it is foolish to admit you did something wrong?Remember the story of when I was pulled over south bound NJTPKE right after iirc exit 8. Cop shot down the ramp after me (they wait there to pounce) and I denied I was going over the speed limit. Trooper shoots me some ridiculous number (like 95) and I say ‘no way’ and that is all I said. What he wanted me to say ‘no way I was going 80’ and then he could give me a ticket because I admitted to the crime. So I got a warning (I saved it) (This is a technique often used in other contexts (even tax collection) whereby they say you owe $100k so you come back with a number and they settle for that with no work. Happened in a township I had a business in. What did I do? I paid nothing at all. I figured they were crooks and I was going to expose their game when I figured it out.

          11. PhilipSugar

            I said sometimes. There is nothing more petty than a petty bureaucrat. I have had some epic battles. One where I told people on the historic commission I would sue each one of them personally, sue the town to not pay their lawyer bills because it was personal, and then sue them again because I am a crazy m’fer and have enough money to make them feel my pain. On public record at a public meeting. The owner of the Chesapeake Inn was the only other person there. He was biting his lip so hard I thought it was going to bleed. We became friends after that. (my property touches his, and I rent part of his place in Newark and Chesapeake City for work functions that is why I know the public house laws because I can’t just have a private event at his place, he has to have some way to serve the public even if it is greatly reduced)

          12. LE

            I have considered but have never done that strategy. Mainly because it only works once if you don’t actually follow through. So it’s kind of a ‘drug of last resort’. What’s amazing is that people with lots of money don’t typically do that. They actually spend the money on good lawyers to solve problems. And then the other side is all ‘no mas no mas’. When I mean ‘good lawyers’ I don’t mean who you would hire to sue them either. I mean a law firm that would scare the shit out of whoever the historic commission can afford to pay. How do you think Uber and Airbnb worked?Also in the past I have generally found it more useful to have fud rather than a direct threat like ‘will sue’. Reason? Because if you know the fate it’s easier emotionally to deal with the fate. Like the worst part of many medical problems is not when you know it’s when you don’t know. Then the mind runs rampant.Anyway this is like a kid I knew growing up. His father owned a plumbing supply store. He was (even at 12 or 13) filled with all of this mechanical knowledge. When the power went out at a bar mitzvah he actually had some clue about what would happen when the power went on (launched into a long explanation and doesn’t matter if he was right the mere fact that he knew all this at 13 was impressive even if not correct) (Or cared).Anyway he would always say ‘you have to be the crazy driver that others watch out for’. That is kind of what your strategy above is. True it does work to do that. But like with the ‘crazy person chasing dog’ that I’ve talked about when running only works a few times. Then the dog catches on and still chases you.

          13. jason wright

            and he has responded to that.… “I know that many crypto holders think that selling anything is a mistake. And it might be. Or it might not be. You just don’t know.” That was spot on. What’s changed?

          14. PhilipSugar

            My definition of a good entrepreneur: You look at the situation, you realistically evaluate and then you react.My definition of a big company moron: That is the way we always have done it we never are going to change.

          15. jason wright

            you did the right thing. this blog should benefit from a little more disorder from time to time. that would make it a better blog. it would become antifragile (Nassim Taleb). i think it is antifragile. let it become what it is.

      2. LE

        it goes to credibility. the reputation of a voice is hard won and easily lost. time for a sabbatical if this is to become the new normal. disappointing.Jason this is like everything thing wrong with the world in one fell swoop. This is what I was raised with. I would tell my Dad some idea or some thing that I wanted to do and he would dig up something I said or did10 years earlier (or 2 months earlier) and demand answers! Why had I changed my mind? My cousins did that as well. They would relish in any situation where they could claim I changed my thoughts or my mind. And believe me if you read my comments here you know that I am the type of person that almost never say things in a 100% way. (Note how I inserted ‘almost’ before never).

        1. jason wright

          ‘Selling’,1/3, 1/3, 1/3. Remember that post? You should. It was last week. Now it’s “capitulate”. The inconsistency is remarkable.

          1. LE

            You are talking about this?And, as a result of some really poor decisions earier in my career around selling or not selling public stocks that were distributed to me, I have developed an approach for selling stock that is distributed to me. I like to sell one third of the position immediately, put one third away for a long term hold, and actively manage the other third.(Note the great care that I went to to bold the important information.)’for selling stock’Fred is talking about stocks in that post. What does that have to do with the topic today which is crypto?

          2. jason wright

            any asset class representing value, whether stocks or tokens or cabbages. are tokens uniquely different, to be treated like hand grenades, and disposed of right quick?

          3. Girish Mehta

            The post is titled “Capitulation ?”. The sentence I quoted was about Capitulation. Not HODL.Its not about changing one’s mind when new facts present themselves.Lots of words loosely used. Like “Store of value”.

          4. jason wright

            capitulation is to no longer HODL. It is to FODL. You disagree?

          5. Girish Mehta

            FODL might be a way to characterize capitulation (if you happen to like such terminology).

          6. jason wright

            i made it up… to match HODL. I actually don’t like “capitulation”. It’s too much like ‘surrender’. too much like warfare. Fred’s is an army brat. perhaps that’s his conditioning.

        2. PhilipSugar

          I cannot express how much I agree with you.When did changing your mind require an apology??? When???? Do people not understand that acting like that just makes people dig into their positions? Ok, they can change their mind and move on. No issue.But no, you get people that say you can’t change your mind.I am going to go political. Frankly I think race relations are better in the South because people had to take a deep hard look and say they were wrong, Gay marriage??? I think us Catholics had to look in our heart and say we were wrong.

          1. LE

            Gay marriage???I saw that as more of ‘sell it before you smell it’ (meat/fish business saying) and in particular they did that because of falling power and membership and needed to. If they were powerful as they were in the past they wouldn’t.For example when I was growing up you would never ever go to synagogue if not dressed up in a jacket tie or suit. Now it’s like casual Friday (not that I go I haven’t been in years but when I did that is what I remember). And it’s at a really nice sanctuary (the one that Lewis Katz the billionaire killed in the plane crash a few years ago paid for). Way to big and fancy honestly considering the market.Right now they are struggling for membership and honestly things that would never have been acceptable in the past are kosher today with behavior.But that is not your point and I agree with your point.This is why all the nonsense about use of ‘the word’ that people hate so much really is a bad idea to me. Like when you have people loose jobs over use of a word (or even used in just commentary) you have a situation where you have now made things drastically worse not better. And if you used ‘the word’ years ago who fucking cares? Get over it. Even if you used it last week in private setting.

    2. sigmaalgebra

      Warning: It’s likely not healthy to be the only sane man in a funny farm!!!! 🙂

    3. PhilipSugar

      I think you deleted another comment. I do not find your comments offensive whatsoever. Exactly the opposite. We certainly do not always need to agree. My point has always been that if you are storing value and somebody has a basis on an order of magnitude lower than yours you better consider the pain train.

    4. fredwilson

      I was writing about spending it. I’ve stopped doing that .I don’t think I have ever advocated holding on for dear life.

      1. Girish Mehta

        I did not say you advocated HODL. I am not aware that you have ever used that term.

      2. Barabare

        You probably already know, but FYI in case not, “HODL” is not originally an acronym for “hold on for dear life”. That’s been reported and used by some as a “backronym”, but it was originally a typo of HOLD from some drunk guy on the bitcoin forums.

        1. jason wright

          i didn’t know that some people think it means ‘hold on for dear life’. i wondered why Fred was “qouting” it in his post. i assumed it was unattributed (i.e. made up) statist propaganda.

          1. kenberger

            Based on my daily barometer on this sort of thing, I agree. See my other comment in this sub-thread.

        2. kenberger

          True– i’m very much in the middle of the social and folklore of this sort of thing, and I take it a given that hodl is simply “hold”, as in long term. The dear life part is news to me.

      3. shane1900

        What do you suggest to do for those who invest as a living and that’s where their income comes from. I take it your monthly expenses are covered some other way?

    5. Lawrence Brass

      Your Honor, please consider the attached documents which contain the “strong views weakly held” post, exhibit C, which precede exhibits A and B presented by the claimants.Under the concepts described in this document in which the respondent clearly states his advocacy for the behavior described by the claimants, at a sufficiently earlier date, the defense respectfully requests the dismiss of the complaint.AVC – June 2016…;-)

      1. PhilipSugar

        This is where lawyers get us all in trouble. During hurricane Isabella I had just moved in and a tree with a 3 meter diameter fell and literally smoked my neighbors garage and commuter car. Now neither garage or car was great, but he could not rebuild the garage (historic district) and the car while crappy served him well to commute. My insurance company was instinsent that I don’t apologize. Yup, sorry that sucked, because it is an act of god it is on you, here is an envelope.

        1. Lawrence Brass

          Huge tree, could have been much worse.I can’t imagine you with your arms crossed. I do imagine you with your equipment cutting the fallen tree to pieces and chipping the branches and commuting them. :)Did the insurance company compensated them appropriately?Here you may demand payment in court for any damages to your property caused others’ trees, animals, cars, etc. But it takes time and endless patience. It is not very usual to have insurance that cover damages to other parties, except for cars for which is mandatory.

          1. PhilipSugar

            No, it is not my problem. Act of God. Actual legal term here. His problem. I gave him an envelope.

          2. LE

            This is a tough situation. I assume by ‘gave him an envelope’ you mean you paid for some or all of the damage?On the one hand you didn’t have to and it should in no way be expected that you should pay. Period. Really. After all normally an event is covered by insurance. And if it’s not the insurer shouldn’t be you. And it’s not like you did anything to make the tree fall ‘act of god’. On the other hand you have to live next to the guy. So you could look at the $X dollars as what I have called ‘an LE ad’. That is where I do something that doesn’t necessary make sense financially (or legally) by normal metrics but it possibly pays of in the long term in some other way.

          3. PhilipSugar

            Deductibles are high but his was low. We split. The insurance company was insistent that I do not admit fault. Frankly it would have cost me 10 times more to have the tree taken down or pay my deductible. I have an agreed price with a percentage deductible. I put the envelope in his foyer cabinet and told him he might look there before his kids found it, I didn’t know where it came from.

          4. jason wright

            force majeure here. we have too many gods.

          5. PhilipSugar

            And yes I did clear with my STIHL Farm Boss.

          6. Pointsandfigures

            Nice. I got a Husquervarna, They used to be made in Sweden but they make the little ones in China now. Not as good as they used to be

          7. PhilipSugar

            I love my Husquevarna trimmer. My STIHL is the old model. It is a BEAST. They are coveted. I use the most aggressive chains. Two different length bars. My Dad asked to borrow and I said no, I will come. Six horsepower of pure mean. I worked for a tree surgeon starting at age 11. I told the story of when my wife lent it to guys working on the house because their little one was struggling (and I had a fit because she will hurt you bad) they said what the hell is this?? She watches me use it and knows it literally cuts large logs like butter and the chips are so big she uses them for the rabbit.

        2. LE

          My insurance company was instinsent that I don’t apologize.Was that just general commentary and advice [1] or some kind of direct order ‘thall shall not’?Could they not pay if you apologized? (I am asking as a question when honestly it is more like a statement I am just hedging because details are missing).As far as apologize let’s say hypothetically they told you you can’t and if you do they aren’t paying (or something similar). So if you apologize verbally then what proof does anyone have that it will happen? We are not talking about an OJ level ‘crime’ here [2] you know.That said I don’t feel sorry for your neighbor in the traditional sense at least. If you are buying a house in a historic district then you know that an event (fair or unfair) in theory could mean you are in a similar position. Or at least you should. My dad owed a building in a historic area and he got paid by the city for an easement whereby he couldn’t modify the building facade. It had to stay the same as it was in the 1700’s (or something like that). IIrc the amount was enough that he went along with it.This was the building that my Dad scared away a bunch of liberal New Yorkers who had come down to buy a Pied-à-terre when he commented on an area in the basement with an arched entry way and said something like ‘that’s where they kept the slaves’. God you had to see the look on the realtor and the prospects faces when he said that. Of course as I have pointed out here a few times my Dad actually was a slave. Of course he ended up with a buyer that paid more a few years later.[1] And do you mean the agent or do you mean the adjuster or?[2] Where they actually searched the trash dump for his clothes dumped presumably at the airport trash can. Most crime investigations don’t ever go anywhere near that type of effort.

          1. PhilipSugar

            My neighbor and I both assumed that it was going on my insurance. It went on his. Because the houses are 150+years old the deductibles tend to be high. My wife had just been outside with the kids when the storm came in and she said she thought a bomb went off, it was so loud. I called my insurance company. They came over and said it was full of leaves, he hadn’t complained, act of god, he has to call his insurance company, don’t say you are sorry.

      2. Girish Mehta

        Willingness to change one’s mind is healthy.”When the facts change, I change my mind. What do you do, sir ?” – attributed to Keynes.

        1. Lawrence Brass

          Yes. The right to be wrong.

    6. TeddyBeingTeddy

      Oh, my Lord, You gone and set me freeOh, my Lord ain’t nothing holding on meOh, my Lord it’s a brand new daySomebody raise your hands and sing, “Oh, my Lord Lord Lord Lord…Mmmhmm”mmmhmm. mmmhmm. mmmhmm.

  4. William Mougayar

    The system is rigged with speculators that know nothing about the companies behind the coins they are holding. 165 hedge funds is 160 too many at this point. Their average hold time is 30 days, and they need to show profits or losses each quarter, so they just follow momentum, or get killed by it.But to your last wish, I’m not sure that this is flushing the dumb money yet.

    1. jason wright

      30 days? scary.

    2. Sebastian Wain

      The development community has also part of the responsability, many well known projects with millions in funding are very poor executing.

      1. William Mougayar

        True. Too much money doesn’t improve the chances of success. In fact, the opposite is often true. People forget that the Ethereum core technologies were developed based on an initial funding of only $18M (effectively reduced to under $15M due to Bitcoin’s 2014/2015 price drop). Today, an ICO raising less than $20M would be seen as not enough. Yet, in many cases, $20M is plenty to accomplish a lot, if you manage properly.

        1. PhilipSugar

          Let’s put this in to perspective. $20mm is 150 person YEARS of capital.

          1. William Mougayar

            But they were funding 45 engineers who delivered in 18 months.

          2. PhilipSugar

            That would be half of that money. Much less because you don’t just hire people instantly unless they suck, or are worse, consultants.I say to anybody here. I have a really strong track record. You give me $20mm and I will get what you need done for any blockchain project in under two years.You need eight developers, four ops people, four testers, four database people, two U/X people, add in another two managers.. Now that is going to take you a while to hire. Then pile in another four marketing people, and four management. If I used every connection I had and paid recruiters out the ying yang, and over paid the people that is three years of runway. If I didn’t have traction by then, time to give up.

          3. William Mougayar

            Considering the distributed nature of their teams, and the looseness of it all, they did a good job delivering with that money.

          4. Lawrence Brass

            That would be a fairly well paid highlander here in the south 🙂

          5. PhilipSugar

            All in for offices, benefits, everything else. In SF not so much.

    3. sigmaalgebra

      Solution: Start 512 crypto hedge funds. 256 take long positions and the other 256, short. At the end of the quarter, shutdown the losers and write glowing letters to the investors in the 256 winners.Of the 256 remaining funds, have 128 go short and the others go long. At the end of the quarter shut down the losers and write glowing letters to the investors in the other 128 emphasizing that your fund’s insightful, brilliant, prescient, fund managers have won two quarters in a row and are accepting more investments.That’s quarters and numbers of funds at the start of each quarter:1 5122 2563 1284 645 326 167 88 49 210 1So, at the beginning of quarter 10, that is 2 1/4 years, can write all the investors and exclaim that the fund’s insightful, brilliant, prescient, fund managers have won nine quarters in a row and are accepting more investments at 8 and 40!After the checks arrive invest the money in a stock index fund and retire to the Canadian Rockies, the south of France, Prince Edward Island, a nice village in Sweden, Austria (buy a citizenship for, IIRC, $25 million), Switzerland, Sardinia with a yacht to cruise the Mediterranean, etc. and have fun straightening out the garbage math too many physicists use in quantum mechanics, e.g.,David J. Griffiths, Introduction to Quantum Mechanics, Second Edition, ISBN 0-13-111892-7.Uh, David, buddy, the wave functions can be regarded as points in a Hilbert space but definitely do NOT form a Hilbert space: To review the elementary stuff, a Hilbert space is a complete inner product space, that is, is complete in the norm generated by the inner product and where complete means that every sequence that is Cauchy convergent in the norm is also convergent in the norm. So, the Hilbert space will have to contain some functions (points) that are not continuous and, therefore, not differentiable and, therefore, not wave functions. That is, the wave functions do not form a Hilbert space.Oh, by the way, David, differentiation under the integral sign needs a theorem. The nicest proofs are from the dominated convergence theorem — see W. Rudin, Real and Complex Analysis.Also, that the second order mixed partial derivatives are equal also needs a theorem; a really short proof is via Fubini’s theorem; again see Rudin. With sufficient background, the proof of Fubini’s theorem goes quickly, faster than the proof of the mixed partials result without Fubini’s theorem. For a proof without Fubini’s theorem, see, e.g., W. Fleming, Functions of Several Variables.Uh, on Fourier theory, if a wave function is zero outside an interval of finite length, then its Fourier transform is not and, thus, has frequencies as high as you please. And if the frequencies are zero outside a finite interval, then the wave function is not but extends infinitely far, essentially in violation of the speed of light.David, in the words of my high school plane geometry teacher, “Get that mess OFF the board”.I have a friend, student of a member of Bourbaki, who is trying to clean up that math; he has gotten good with D. Knuth’s TeX, has 500+ pages, and is still writing!

      1. William Mougayar

        Wow. Not sure how this will end.

        1. sigmaalgebra

          Ah, if you have some small concerns about those 512 crypto hedge funds, then here’s an alternative that uses just one fund and plays hard on the propensity of virality, fads, tribalism, being part of the in group, etc.:Start a crypto hedge fund that is not 2 & 20 but, say, 4 and 20. So, for the 4, the hedge fund managers keep 2 and the other 2 gets distributed to the existing investors, based on the amount and time of their investment, say, arithmetic of dollar-days.Then the 2 is incentive for existing investors to get their friends and neighbors to invest, to talk up the fund, etc.Soon declare the fund “closed” to new investments except when an existing investor invites in another investor. So, existing investors at high end upper east side NYC parties tell their friends “The fund managers are the masters. It’s closed, but I can get you in.”.Now, now, let’s don’t rush improperly to label this with pejorative associations with names like Ponzi and Madoff! Instead, this time it’s different!Ah, all the ways to make money with crypto without knowing anything about crypto but maybe knowing something about fads!!!Besides, as we know, NYC is big on fads: Since NYC can get all tribal, viral, and faddish about auto exhaust causing NYC to flood, crypto fund fads should find fertile ground.After all, what real evidence is there that NYC people are smarter than people in the flyover states? Tough to get rich on 440 acres of rural Kansas no matter how hard and smart work! Maybe the main difference is just that they are in NYC where, due to various accidents of geography, there’s lots of money sloshing around!!!!Ah, crypto, “it’s foolish but it’s fun!”.

  5. Mario Cantin

    I cashed out a portion of my portfolio near the peak, but I see this sector as being poised to deliver orders of magnitude more as smart entrepreneurs, innovators and investors are continuing to obsess over the technology; therefore, it is a good time IMO to keep purchasing tokens in projects led by strong teams while everyone else is bearish. Many projects will fail but good luck trying to anticipate the winners. Better to dollar cost average into a diversified crypto portfolio, even if the bottom hasn’t been reached yet. No risk, no gain.

  6. Andrew Cashion

    If there is any line of bullshit, to me it feels wall streety. So then what? The price goes down as the world amasses all types of “stuff” to play with Bitcoin.The “best” thing I’ve read is the euphoria didn’t match the euphoria.Another “best” thing I hear from money assholes is “my friend who worked at a hedge fund now does X”How long will the coin veil drag?

  7. george

    Flush it all out, it’s better in the long-term. POV: If you did your homework, your convictions remain high, then stay in but if you are a momentum investor you should be out by now anyway…

  8. Ben Che

    Blockchain offers some interesting capabilities in the area of creating trustless (well, more like distributed trust), decentralized systems, but the whole concept feels like its marred by its association with “cryptocurrency.” I understand that its the easiest way to get developer attention and interest for the ecosystem and that its proof-of-work/stake rely on financial incentives, but I’ve yet to see an implementation of a blockchain as a core, underlying technology independent from its currency applications, like TCP/IP in its usage as a foundational protocol for the applications of the modern web. Are there alternative ways to incentivize the distributed computational work required to make a blockchain work without tying it to some sort of token that is traded on markets and subject to hype cycles, value fluctuations, and general instability? All I know is that right now, building dApps feels like building a skyscraper on sinking sand.

    1. sigmaalgebra

      > building a skyscraper on sinking sandClose, but no cigar!!! :-)!!More like building a sand castle on a seashore waiting for high tide! :-)!!

  9. The Oracle of Omaha

    Warren Buffet is not known as The Oracle on a Bandwagon but rather as The Oracle of Omaha. His primary finance teacher was, unsuprisingly, a Jew. That Jew was named Benjamin Graham.Readers of this blog who follow Fred’s inane “analysis” about Crypto Nonsense are being mislead by a Fredu, who despite my repeated remonstrations, regularly fails to explicitly disclose his vested interest in Coinbase, one of the largest crypto exchanges in the world. In this way, Fred is clearly acting as a shill.—-A shill, also called a plant or a stooge, is a person who publicly helps or gives credibility to a person or organization without disclosing that they have a close relationship with the person or organization.…—-Readers of this blog who want learn some financial wisdom should read the following:—-Benjamin Graham’s landmark work – Security Analysis – came close to the end of The Great Depression. He must have been obviously been pained by how the bubble formed before 1929 and how far it went in the other direction through 1933. The quote is about a cautionary tale of not following market’s fads.The market behaves like a Popularity Contest in the short term. Stock prices change rapidly based on the environment, while the underlying value doesn’t change. People could chase fads and there could be various ways a stock might be manipulated in the short term. Traders could also move in and out based on a number of factors that have little to do with the value of the company. For instance, a trader could sell Google Inc. shares, just because Apple had a bad quarter. Social Psychology rules. Thus, it is a voting machine.However, if you measure over a 10-20 year period across multiple business cycles, the psychology factor gets subtracted out and the price movement would mostly reflect the real value of the company. This real value of the company can be measured through a number of metrics – including cash flow, Returns on Investment (finance), margin and EBITDA.Market psychology is hard to predict and thus a value investor should avoid getting on to the short term fads. Eventually the fads fade out and frauds get found out. What remains is the true value.

    1. Pointsandfigures

      Who gives a shit what religion Ben Graham was? I think we know Fred is invested in Coinbase. Just because you are invested doesn’t mean that you don’t look at all sides of an investment both good and bad. If you read and follow Buffett or other good investors they will point to both the upside and the downside. Good investors know where the holes are and are always looking at the downside because you need to strategize a plan of attack if it starts to go that way.

  10. LE

    One of the things I have disliked the most about the crypto sector is the idea that people should “hodl” or “hold on for dear life.”Interesting about the origins of HODL.This internet meme originated in a post on Bitcointalk back in 2013 when a user called GameKyuubi, who admitted to being drunk, confused the word hold with hodl The expression was quickly adopted by other users. It is nowadays accepted as an approach to cryptocurrency investing that is focused on long-term returns and patience This just shows that you companies and organizations should allow the market to decide what ‘rolls off the tongue’ and sounds cool. It can’t be invented in a conference room or brainstorming session. Often a good meme or name for something is simply mentioned in an article or blog post and just takes off because others like it and repeat it. It’s almost never intentional either. It just happens. It feels good and right and that is why people use it and repeat it.Can you imagine any group of people either coming up with HODL and/or green lighting it if someone raised in a meeting? Never.

  11. LE

    The idea that an investor should hold on no matter what has always seemed ridiculous to me.Bitcoin is no different than stock or other ‘investing’ (schmucking quotes used on purpose).Established players have a vested interest in new players and other established players not selling in order to keep the market price high on the asset. Nobody knows what anyone is actually doing with the asset. What they say and what they do are two different things. Would be naive to think otherwise. Not only aren’t you going to encourage selling you are going to actively try to discourage others from selling. This has been the way the stock market and many other markets work.

  12. Michael Elling

    “Until then it is hard to get excited about buying anything in crypto.” When I was on the sell-side that was a euphemism for sell.

  13. Adam Sher

    Buying crypto feels like buying a basket of 2007 vintage CDOs. Using the term investment in this type of speculative asset seems dishonest to me. I don’t understand how to underwrite a crypto asset and the explanations I’ve seen here and elsewhere have the fuzzy math required to invest in CDO and CDO squared.

  14. Pointsandfigures

    Technicians will find a way to correlate crypto and the Turkish Lira.