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Eric @econoar
, 6 tweets, 2 min read Read on Twitter
1/ Quick thread on crypto valuations and gain multiples. I’m tired of seeing bubble graphs that point out BTC and ETH’s >1000x multiples and saying it’s not sustainable. Crypto allows anyone to participate in early “funding rounds” unlike private rounds of traditional companies.
2/ Let’s use Facebook, which is currently valued at $600bn. If you look at the graph of $FB stock since IPO, then you’d be led to believe that FB has only risen ~5.5x since IPO. This is not a fair comparison to crypto, we need to look at the early funding rounds for FB.
3/ Here’s a schedule of $FB funding rounds before IPO. In total they raised around $2.5bn. In looking at their original Series A, the company was valued at $85.3mn. So, early investors of Facebook are up 7033x. Sound familiar now?
4/ The point is, BTC and ETH allowed any investor to find the product early and with no barrier to entry. We measure price gains in crypto from nearly 0 because that’s when early investors got in. A very select few got in extremely early, just like traditional companies.
5/ $BTC and $ETH gains aren’t unheard of, they are actually extremely common for wealthy investors who can get into companies early. Crypto breaks down this barrier and allows anyone to be that investor. Comparing a stock graph to a crypto graph from the beginning is misleading.
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