, 4 tweets, 2 min read Read on Twitter
Early stage crypto has become completely incestuous: this is the CELR ICO page

- $30m spread out over > 48 firms
- At least 5 other ICOs investing. Those same VCs invested in those ICOs too...

This does two things:
1. Valuations of SAFTS overinflated compared to liquid tokens

Most funds don't have the sophistication to manage a long / short liquid book and are more comfortable with VC like deals

ICOs also need somewhere to put the $$ they raised and the easiest thing to do is buy more
2. This creates massive implied leverage

Ex: $10m invested into QTUM for 10% creates $100m in MCAP

Same $10m is then invested in CELR for 10% creating another $100m mcap

Initial $10m creates many multiples of its value as its passed around like a baton

Crypto is VERY fragile
Check this out:

1. crypto fund invests $10m into project YY for 10% of tokens. This creates $100m MCAP and $90m of YY tokens held in reserve

2. project YY has plenty of tokens so doesnt need all $10m. They invest that $10m BACK into the fund

3. Voila. $100m of phantom MCAP
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