The crypto boom w. ICOs is very similar to Yahoo during the dot com bubble. Yahoo ad revenue was entirely supported by spend from other, overhyped startups. Yahoo effectively became a levered bet on dot coms
ICOs have done the same, creating a massive amount of shadow convexity
ICOs have done the same, creating a massive amount of shadow convexity
Not only are ICOs:
(1) Locking up ETH, raising ETH's market cap
(2): Creating wealth out of of thin air in the form of new tokens
But also:
(1) Recycling that same ETH back into the market b/c they have trouble selling to fiat
(2) When then goes on to invest in other ICOs.
(1) Locking up ETH, raising ETH's market cap
(2): Creating wealth out of of thin air in the form of new tokens
But also:
(1) Recycling that same ETH back into the market b/c they have trouble selling to fiat
(2) When then goes on to invest in other ICOs.
Ultimately $1, of ETH invested into ICOs, ends up creating *substantially* more than $1 of new market cap for the space.
This is a massive systemic risk IMO. It's easy to hide shadow convexity in a bull market, but in a bear market it comes cascading down.
This is a massive systemic risk IMO. It's easy to hide shadow convexity in a bull market, but in a bear market it comes cascading down.
When the ICOs slow down, the music stops playing. And we're most likely on the precipice of SEC comments on ICOs. Stay cautious out there
