Just like those HBS people who shoot down Bezos when he spoke about Amazon.
Thing is: common sense is right most of the times.
Most of the times BTC fad just dies out, most of the times Amazon never makes it to the point when they find the real cash cow of the company (AWS) and move from being a glorified Ebay to a 1.8T company
The thing is, I still don’t feel like the vision as stated is proven. I still haven’t heard a single person explain in cogent terms the value it provides and IMO if you can’t explain something that is supposedly a revolutionary technology and the utility it provides in simple terms you don’t understand it. It’s also curious to me how the fiat skeptics/crypto bulls always cheer when crypto trades up in fiat terms.
I’m not the type to conflate funding with utility, and while clearly there is massive interest in crypto, it’s still not clear to me that the entire space is more than just a speculative asset class. I don’t know anyone who uses it to purchase goods, in fact it seems that the bull case for it is that it shouldn’t be spent. Now that it’s gone from $20k to $60k in four months everyone suddenly believes in it. The absolute mania that has coincided with the price ascent alone makes me skeptical. It’s easy to cast aside naysayers when you see such a massive IPO amidst a speculative frenzy like we’re seeing in crypto and say “see, you’re wrong” but I think skepticism is healthy in certain cases and people buying coinbase and crypto now thinking they’re early to this party just feels like a suckers rally.
Companies that are IPOing these days are doing so after having been private for a decade. This results in early investors cashing out on the public markets after capturing the opportunity when the risk was still massive.
People are scared as hell of inflation and that's why the Fed was created. The "stable prices" thing is an elegant way to say "prevent inflation". Now people are really upset that the Fed not only won't allow deflation but it is pretty much encouraging inflation. They see this as a betrayal to the public and the reason why the Fed was created in the first place.
There is a misalignment between the Fed inflation preference of 2% and the public inflation preference which is 0% or even -2%
Enter crypto: what draws people to crypto is deflation. People love deflation, they gravitate towards crypto because deflation is hard built in protocol and it brings about financial nirvana for the saver: that is being able to increase one's net worth without doing any tangible work, manual or intellectual.
That's the value of Crypto, people have lost faith in the Fed. BTC gives people what they want (hard coded deflation) and has an amazing marketing story.
Why would people want deflation? Sure your dollars will be worth more but you’ll be out of work and the economy will be in shambles. People seem to hate the fed and its ability to print dollars until a liquidity crisis comes around. I will admit this fed is highly questionable for a few years now as it seems its primary motivation is boosting stock prices. If you’ve followed Powell from the beginning it’s hard to come up with another motivation he’s operating under. I think he won’t hint at a hike and then will leave his position before a hike is imminent as he doesn’t want to be blamed for a crash. It’s very concerning that the fed has basically become an extension of the White House and seemingly politically motivated.
> Why would people want deflation? Sure your dollars will be worth more but you’ll be out of work and the economy will be in shambles
The narrative is important on this.
When a recession happens, the message which is brought to the population is :
"Recession is bad, we must end the recession"
When inflation hits the message is (not that it's necessary given that people feel the diminishing purchasing power) : "Inflation is bad, we must end inflation".
Deflation has never been painted as the enemy by institutions, and I think rightfully so, because the population would struggle to see it as an enemy due to the fact that it's desirable at the individual level.
So crypto is the perfect enviornment for this. People make up their mind to buy crypto within close doors without thinking about macroeconomics...they only think about their dollars being worth more
> It’s very concerning that the fed has basically become an extension of the White House and seemingly politically motivated.
It has always been. Everybody wants to be popular and keep their job.
> because the population would struggle to see it [deflation] as an enemy due to the fact that it's desirable at the individual level.
Deflation can be ruinous at the individual level. If you are in debt (like many of the poorest members of our society) then significant deflation means that you'll have to pay back your creditors substantially more than you borrowed, and many won't be able to.
Consider, would you take a mortgage denominated in Bitcoin? Of course not! If its price continued to go up (i.e. it continued to be deflationary) then you wouldn't be able to pay back the loan and would face foreclosure.
> would you take a mortgage denominated in Bitcoin? Of course not! If its price continued to go up
Only so long as Bitcoin is pegged to the USD. Once Bitcoin becomes the basis of value, and the USD is pegged to Bitcoin instead, things become different. Bitcoin stabilizes. You take a loan in Bitcoin, you take a salary in Bitcoin. Bitcoin isn't going up anymore in this scenario because it's not related to fiat currency.
You're still thinking in terms of BTC going up in USD. 1 BTC = 1 BTC
I think BTC and crypto are already good ways to transfer value. I think it'll "stabalize" in time such that it'll be boring in terms of its volatility.
> It has always been. Everybody wants to be popular and keep their job.
That part is demonstrably false. The Fed has never been as dovish as it is now and at times has been extraordinarily hawkish and unkind to the equity markets- Paul Volker or Alan Greenspan, anyone?
The big difference to me is that there used to be this underlying assumption that if inflation went up, the fed must act, so people didn’t freak out because of a single hike. I also believe the fed operated in far greater silence, being “data-dependent” and not fully committing for years to a single policy. Because of that everyone wasn’t laser focused on the fed. These days it’s all anyone following the markets talks about. But because the markets are so keyed in on rates and every little thing Powell says, it just tells me the next crash won’t be caused by the fed but an externality which could be far more dangerous given how far the fed is willing to let this market run unchecked.
What I meant is that the Fed has always been political, just look at the mandate:
1) Price stability which is a way of saying keep inflation low. That's because the population was scarred by inflation in the past and wants institutions to protect against it.
2) Maximum employment: Is there anything more political than this? People were scarred by losing their jobs in the past and want institutions to protect against such thing.
If the Fed was harsh on equity markets before, then it solely means that in their perception it was the best way to be popular and keep their job.
Every human wants to be popular and keep their job, so that's the motive behind every choice, doesn't matter if you are the Fed chair or the POTUS or a McDonald's employee.
The only people who sort of have some freedom to sacrifice short term popularity in order to achive long term popularity are the ones which have their job as a guarantee: Dictators essentially...and only some of them.
Most people live paycheck to paycheck and aren't saving a significant percentage of their income. So I don't believe that they're scared of inflation, or see deflation as nirvana.
Um, public inflation preference is hardly deflationary. Would you like it if your mortgage became harder and harder to pay off every month? If your wages went down over time?
> people want to sit on their couch and enrich their net worth without doing any work
That doesn't scale. It's not possible for society to offer this to a majority of people in any short term scenario, because if 'enrich their net worth' means anything beyond a number going up, there needs to be increased production of goods and services that they consume. That means that you can only get this if you win the risk lottery. Longer term, if we get massive levels of automated production, the number of opportunities for this kind of life can increase, but deflation is much more likely to diminish the production capacity of a society than increase it.
In an economy in deflation the pressure is for wages to go down - either by reducing the number of jobs, or by reducing what they pay. It's hard to imagine a society accepting such a situation happily.
Nobody is thinking about what you just said before buying bitcoin.
And you know it.
And actually they might not be as ignorant as you might think. You have no control over Macroeconomics so you might as well play the game in order to have "your number going up" and let the Macroeconomic chips fall where they may.
Regardless of where the macroeconomics chips fall...you'd be better off with a higher number than a lower number.
> you'd be better off with a higher number than a lower number.
A small proportion of a big pie can be much more filling than a large proportion of a small pie.
But yes, whether running a whole economy on a deflationary currency is a good idea is an entirely separate question to whether some use of bitcoin makes sense.
Having said that, and speaking for at least myself, the (in my opinion) misguided narrative around deflation and 'store of value' that is common in bitcoin core world makes me much more interested in bitcoin cash and ethereum commmunities where niche economic philosophies I don't agree with are not as common as in bitcoin core.
There are so many interesting things we can do with smart contracts and a widespread settlement system that doesn't have gatekeepers. Creating value is much more interesting than storing it.
> A small proportion of a big pie can be much more filling than a large proportion of a small pie.
That works for pies, but not necessarily for human psychology. Rationally, yes, you'd prefer to have more in absolute value, but humans are not rational - they work on relative comparisons.
Having more of a small pie gives you an advantage in mate selection, influence (political/social) and options. So the richest man in a village that has $X is probably happier than the wall-street banker that has $10X but is surrounded by people who have $100X. That's just how our psychology works.
Not exactly, since there still has to be a proximity effect. You might see rich people on TV, but you're not in direct competition with them for anything. It's about your relative standing with regards to people who you actually compare yourselves to (like other people around your rank in the dating markets, for example)
We all measure our success with net worth in dollars. That plus the internet changed the game. Now we approximately know each person net worth and especially the net worth of the leaders in the standings.
Also just because Bezos is not around the village to steal your girl doesn't mean you don't think and predict what would happen if he were to come to the village and hit on your girl.
> A small proportion of a big pie can be much more filling than a large proportion of a small pie.
This is for sure. But with regards to pure "increasing one's net worth while sitting on the couch" then deflationary is always better than inflationary.
Of course there are other considerations. For sure there is a currency more deflationary than USD, but such currency doesn't give you access to the US equity and bond markets. So what you lose on the inflation side you recoup with the use side.
> Having said that, and speaking for at least myself, the (in my opinion) misguided narrative around deflation and 'store of value' that is common in bitcoin core world makes me much more interested in bitcoin cash and ethereum commmunities where niche economic philosophies I don't agree with are not as common as in bitcoin core.
I think if we are talking price prediction, then the only people who invest in crypto are the ones who embrace a "misguided narrative around deflation"
Those who have an academic view around deflation won't ever invest.
Those who don't care and stick to predicting price such as myself will invest in moderation to trade on the true believers we just mentioned.
If you are not the US government or a AAA+ company such as Microsoft ...then your creditors will get inflation back from you in the form of interest and then some.
Never in a million years the regular borrower would be able to increase their net worth with inflation.
Regular borrowers can't borrow anywhere near the consensus projected inflation rate.
Regular borrowers income increase somewhat in line with inflation. Houses bought on interest payments that seemed difficult to manage become easy to manage within a few years.
I know a large number of people at the moment who have ended up with an impressive property portfolio without even trying all that hard. They bought early in their career, and the value of the property they bought inflated, their income inflated, and their debt didn't keep pace.
Again. Back to the narrative and communication issue.
People ascribe credit for their rising income and increasing salary to their performance on the job....some more humble ascribe it their employer and their boss.
That's who takes credit for it. For sure not inflation and for sure it's not the Fed with their 2% target.
Inflation is in all the wrong places with regards to the narrative, for one reason or another only the negatives are outlined and the population somehow is very scared of it.
Deflation is in the opposite spot. When deflation happens the culprit in the narrative is the economic recession/depression and the wealthy who played roulette in the stock market etc. The negatives of deflation are only known to academics, wheras the positives are known to everybody (e.g. currency strenght of the USD when you go on a trip to Mexico)
It is clear to me that this might offend the economics professor, but that's the reality of it.
That's the reality we all have to trade on. Narrative is very important.
> People are scared as hell of inflation and that's why the Fed was created.
The rationale for the Federal Reserve Act was not inflation but financial crises, more or less like the 2008 one. Inflation in the U.S. before the Fed was rare and episodic, e.g. "not worth a continental". (BTW I think it's far from clear the Act made us better off wrt financial crises either, considering the 1930s for a start.)
then why the Fed was assigned the job of keeping prices stable?
All the other parameters in the economy such as the stock market, real estate, interest rate are free to fluctuate but the Fed can use its powers to keep prices stable and people employed.
Calling inflating prices "stable" is doubletalk, whether or not the policy is a good idea.
The inflation-targeting policy framework dates from 1980ish, influenced by Friedman's monetarism and "rational expectations", as I understand it (poorly). In the decades before that, after the Depression and WW2, the official policy was more Keynesian in flavor. But that was not the rationale to create the Fed, again.
More recently since 2008 and especially 2020, it's looking like a new regime again, and I wouldn't count on the next decade looking like the past several.
A lot of people got into Bitcoin early as well, but tried to build the wrong things.
For example I built an ebay clone in 2013.
It was never obvious at all. Practically all predictions were wrong. Even the predictions by bitcoin advocates of all stripes were wrong. Everyone was wrong. It is just that some people won big despite being wrong. I don't think Brain Armstrong foresaw that Bitcoin would turn into what it is today either.
In any case, building an exchange seems pretty hard. I wouldn't know where to start with all the legal stuff.
This is obvious just by looking at the labels. We continue to call these cryptocurrency, and that was what Armstrong saw. But in practice the only narrative that gets any real traction (and makes any sense) for BTC is the digital gold narrative and store of value.
People are scared as hell of inflation and that's why the Fed was created. The "stable prices" thing is an elegant way to say "prevent inflation". Now people are really upset that the Fed won't allow deflation and is pretty much encouraging inflation. They see this as a betrayal to the public and the reason why the Fed was created in the first place.
There is a misalignment between the Fed inflation preference of 2% and the public inflation preference which is 0% or even -2%
Enter BTC: what draws people to crypto is deflation. People love deflation, they gravitate towards crypto because deflation is hard built in protocol and it brings about financial nirvana for the saver: that is being able to increase one's net worth without doing any tangible work, manual or intellectual.
How much deflation is good? The point of Friedman-style 2% inflation seems to be to steadily, but not abruptly, drive up prices, increasing wages, increasing demand.
I see the personal, anti-social case for "giving in to our greed", as the time traveler put it [1], but what are the social benefits of lowering production, wages, demand?
The time traveler post is really great . But the most absolutely bit is the "giving in to our greed" :
"Why didn't we abandon Bitcoin, and move to another system? Well, we tried of course. We tried to step over to an inflationary cryptocurrency, but nobody with an IQ above 70 was willing to step up first and volunteer. After all, why would you voluntarily invest a lot of your money into a currency where you know your wealth will continually decline? The thing that made Bitcoin so dangerous to society was also what made it so successful. Bitcoin allows us to give into our greed."
The whole social benefits thing that we somehow had up to now was pure luck.
If bitcoin hodlers keep a low profile and don't spend there would not be any way to identify them and redistribute wealth. This is especially true for those who mined btc.
There's something very weird about this, since birth there were many beliefs (BTC will succeed when ATMs will be in bitcoin) that people followed, most of them ended up false but BTC and it's crowd is still going. Out of the wrong emerged a new true.
Not everyone was wrong. Hal Finney called it early as pointed out in "The Bitcoin Standard".
> While this view of Bitcoin might sound like it is a betrayal of Bitcoin's original vision of fully peer‐to‐peer cash, it is not a new vision. Hal Finney, the recipient of the first Bitcoin transaction from Nakamoto, wrote this on the Bitcoin forum in 2010: Actually there is a very good reason for Bitcoin‐backed banks to exist, issuing their own digital cash currency, redeemable for bitcoins. Bitcoin itself cannot scale to have every single financial transaction in the world be broadcast to everyone and included in the block chain. There needs to be a secondary level of payment systems which is lighter weight and more efficient. Likewise, the time needed for Bitcoin transactions to finalize will be impractical for medium to large value purchases. Bitcoin backed banks will solve these problems. They can work like banks did before nationalization of currency. Different banks can have different policies, some more aggressive, some more conservative. Some would be fractional reserve while others may be 100% Bitcoin backed. Interest rates may vary. Cash from some banks may trade at a discount to that from others. George Selgin has worked out the theory of competitive free banking in detail, and he argues that such a system would be stable, inflation resistant and self‐regulating.
Cryptos provide no value to the world at least today, and consume tremendous amounts of energy, it's probably a net negative.
Amazon has clearly some externalities, but it's obviouos that people 'want stuff' and they dominated on the industry shift to e-commerce.
Amazon will probably be around for a while, selling useful stuff to people.
If Crypto dissipated tomorrow, or by the stroke of a pen were made 'illegal' - the world wouldn't skip a beat. Nothing would change. A bunch of people who invested in 'Digital Baseball Cards' had them burned up in a fire but who cares. Nothing material to the economy has changed - other than some money changed hands for said 'Digital Baseball Cards'.
So Coinbase is not obvious in hindsight, and the kinds of valuation and leverage going on are not obvious either.
I suspect that 'Financial Populism' will remain and Coinbase will be around in one way or another, but they are in a different territory than most other new companies.
"common sense is right most of the times." <- there is basically no 'common sense' in crypto, or rather 'common sense' would imply that the value of crypto is still 'potential'. Since we don't actually use crypto for anything, but it is really cool and 'could be used', then 'common sense' would indicate we value it for it's potential and not much more.
Valuing things that have no material value in the order of 100's of billions is the opposite of common sense, I think future historians will probably wonder what we were thinking.
The same arguments you make against Crypto can be made against Central Banks and I'd say governments in general.
There are institutions which only exist because humans project themselves into the future and imagine the consequences that they'd suffer because of adverse events and they create institutions to protect them against such events.
People are scared as hell of inflation and that's why the Fed was created. The "stable prices" thing is an elegant way to say "prevent inflation". Now people are really upset that the Fed won't allow deflation and is pretty much encouraging inflation. They see this as a betrayal to the public and the reason why the Fed was created in the first place.
There is a misalignment between the Fed inflation preference of 2% and the public inflation preference which is 0% or even -2%
Enter crypto: what draws people to crypto is deflation. People love deflation, they gravitate towards crypto because deflation is hard built in protocol and it brings about financial nirvana for the saver: that is being able to increase one's net worth without doing any tangible work, manual or intellectual.
You can try to remove it but efforts will fail and it will take a whole lot of effort just to prevent it from getting bigger.
The government pretty much gave up on removing drugs, cash, tax evasion..
Crypto is the same thing, great for the individual, but very bad for society. Tragedy of the commons can't be solved , so the work is to contain because they can't extinguish it.
Better yet it can be extinguished but it would require government to do the one thing it can't possibly do:
> The same arguments you make against Crypto can be made against Central Banks and I'd say governments in general.
Governments have millions of extremely well organized heavily armed people who can kill you if you don't accept the medium of exchange they're proposing.
> Governments have millions of extremely well organized heavily armed people who can kill you if you don't accept the medium of exchange they're proposing.
Which medium of exchange are those extremely organized and heavily armed people compensated with?
When societal shifts happen they happen at a similar rate across every profession or job.
TikTok was just as big among military members compared to people of similar age demographic.
Observer was incorrect in his 'observations', but you're getting ridiculously conspiratorial here.
Governments and Central Banks create immense value, they serve many purposes.
They can do things we don't always agree with but that's inevitable.
If government disappeared civilization would halt.
If Central Banks disappeared, basically the same - everything would stop.
Most of the important things that the Central Banks do are published, you can watch it happen.
Aside from their obvious value, the very concept of a 'common medium of exchange' is also immensely useful for society.
Despite your claim, you're free to use 'Santa Claus Dollars' to do what you want, but that would server no purpose.
And you also don't have to hold currency - we live in an era of computers, you can immediately exchange any USD you have for any zillion other kinds of store of value or currencies.
You like Swiss Frans - go ahead - buy as many as you want.
Crypto serves no real purpose as a currency or a store of value - if BTC and every crypto went to $0 tommorrow, the only thing that would change is we'd stop wasting energy on factoring prime numbers.
Obsevers comments about 'governments extinguishing BTC' are nonsensica: nobody is trying to stop crypto, and frankly, as of today they don't care. If the US and EU decided together to ban crypto you can be assured that it would probably be worthless very quickly - there are very few people who want to put vast sums in an asset that could land them in jail.
Finally: "Better yet it can be extinguished but it would require government to do the one thing it can't possibly do:
A similarly deflationary dollar"
Is also missing the point because nobody wants hyper strong currency but a few people who misunderstand currency.
It would be nice to have dollars that increased in value over time, but that feature of currency would be very costly and having damaging effects on the economy.
What we want is a currency that maintains it's value but very slightly depreciates over time. Just a tiny bit. That's ideal. That way you don't have to worry about your current accounts falling in value, and if you want a better store of value you can do that.
If there is an issue with the Central Banks then we should address it because we need 'good money' a lot more than we need to collectively imagine that 'special long numbers' have some kind of value.
> If government disappeared civilization would halt.
People who are confident in themselves and have the guts to go alone...they don't want any government protection, matter of fact they never asked for it and don't want to pay for it.
Government doesn't leave these people a choice to opt out of their protection, hence they start prosecuting them
> if the US and EU decided together to ban crypto
Coinbase has 50m users, and that's just one exchange. Nobody has the political goodwill to upset hundreds of millions of cryptocurrency investors who'd vote them out next time around. Maybe only China and Russia can. For sure not the US or the EU
> Is also missing the point because nobody wants hyper strong currency but a few people who misunderstand currency.
BTC success proves that the majority of the population wants that, it might be ignorant but in the end academic papers are not how decisions are made in megasocial groups such as nation states. The population comes up with an idea about how things should be run and dealt with, then people expresses such idea via voting with their wallet, voting with their feet, proper ballots, pressure on institutions etc.
Your beloved Fed is the most political agent out there, which was created to calm the population's worries and in response to people worries about inflation and unemployment. Sure enough it's mandate is super political and the answer to people's worries:
1) Price stability which is a way of saying keep inflation low. That's because the population was scarred by inflation in the past and wants institutions to protect against it.
2) Maximum employment: Is there anything more political than this? People were scarred by losing their jobs in the past and want institutions to protect against such thing.
People are realizing that the Fed is not doing the best job it can possibly do with #1, instead it is actively hoping for more inflation. So they are looking around to see if there's any concept which is dealing with their worries in a better way and they found crypto
> If there is an issue with the Central Banks then we should address it because we need 'good money' a lot more than we need to collectively imagine that 'special long numbers' have some kind of value.
That's not what you do. You don't fight, you leave and go where are you served better. People hate inflation and want deflation (regardless of the macroeconomics implications, that's what they want. Period), and sure enough they are voting with their wallets and abandoning the Fed which has a 2% inflation target towards BTC which has an inflation target heavily in the negative and a limited supply
"People who are confident in themselves and have the guts to go alone...they don't want any government protection, matter of fact they never asked for it and don't want to pay for it."
???
Yeah, all those people living in 'countries' are kind of weak, what their 'laws', 'regulations', 'infrastructure' like roads, bridges, and 'education'.
More seriously "BTC success" - no, BTC is a total failure as a currency, nobody is using it.
People are piling in for a variety of reasons, but even as a 'store of value' it's probably the 'least good option' where real estate, stocks, bonds, commodities - or a very low cost ETF would serve considerably better.
Leaving it no reason to exist other than as a hyped up scheme.
I won't bother to respond to the rest of your treatise other than to point out the obvious, which is that BTC is not remotely a solution to any of the things you're hinting at as being wrong.
> I won't bother to respond to the rest of your treatise other than to point out the obvious, which is that BTC is not remotely a solution to any of the things you're hinting at as being wrong.
People who try and find "real solutions" to stuff, they miss out on narrative driven price appreciation.
Just saying...we are traders and investors not world builders.
Our job is to predict whatever goes on in people's minds and how will they express their vision in the capital markets...predict, anticipate and position. It's really all there is to it.
> Real estate, ETFs, stocks etc.
That's not what price says, price says that btc outperformed all those things, denying that is foolish, I remind you that the market is like the ocean, you don't fight the ocean, you position to ride the strong waves it provides us.
A 'store of value' is something that maintains it's price, not something wildly volatile, with regulatory unknowns that could affect price.
BTC is not a 'store of value' is a wild speculation.
"People who try and find "real solutions" to stuff, they miss out on narrative driven price appreciation.
Just saying...we are traders and investors not world builders."
Yes - it's clear that you're not a 'builder', but thankfully there are a lot of people out there not distracted by Ponzi schemes, who are actually 'doing things'.
> A 'store of value' is something that maintains it's price, not something wildly volatile, with regulatory unknowns that could affect price.
As Nassim teaches us, "long term stability is only achieved via short term volatility"
Also "stability=stasis"
> Yes - it's clear that you're not a 'builder', but thankfully there are a lot of people out there not distracted by Ponzi schemes, who are actually 'doing things'.
You are the one who is against and adversarial towards btc. People who are secure about themselves, they just ignore something if they don't agree with it, they don't hate on it and call it in a derogatory way.
If you are sure and secure about your strategy of increasing your net worth by doing things vs. trading, then why are you attacking btc with such vitriol?
Not sure. In fact, I invested in bitcoin some 8 years ago, just like Brian Armstrong I was optimistic about bitcoin not as a popular speculative eccentric store of value, but as the standard for digital money that would drive substantial portions of global finance.
That hasn't materialised at all. If I could see the number of merchants accepting bitcoin and their effective average turnover paid in bitcoin, the number of business to business transactions in bitcoin, the amount of loans being issued in bitcoin, remittance etc, 13 years after launch, today... I'd certainly not have invested in bitcoin or Coinbase, in retrospect, with the information today.
That's the crazy thing, and even with this new attention, I still haven't seen anything exciting around the corner. All price increases are now purely speculative, instead of changes in functionality or use.
HBS people were right. Amazon was successful because Bezos had access to investor money and was able to make losses for years and years, building up market share in the process. Most of the times, people don't have such access.
Yeah it was sold as re-investing but had they not done it, maybe a competitor that did it would have won instead. As for not being popular on Wall St... he got outside money so he couldn't be that unpopular.
During the 1990's that would have been uncommon, but not today.
Just the opposite, the amount of money chasing 'money losing operations' is extraordinary.
Most high flying startups today that have working capital needs (like 'food delivery') run at a loss in perpetuity with the backing of entities like SoftBank picking up where public markets used to.
I wouldn't dismiss how hard it is to get something like that off of the ground, but once it is, it's almost comical how badly you can screw up and still get money.
'Sonder' formerly 'Flatbook' spent years screwing everything up, they continue to screw up, but because they had a basis of a critical mass and some basis of operations, they've continually been able to get investors to hand over to a net money losing operation that doesn't look like it will have the scale to work.
So this issue is relevant to the overall 'Coinbase' picture because we're living in an era of tremendous liquidity, never really before seen in human history, and due to COVID, basically government/central-bank backed guarantees of money and credit. There's no real precedent for what we're doing right now.
Just like those HBS people who shoot down Bezos when he spoke about Amazon.
Thing is: common sense is right most of the times.
Most of the times BTC fad just dies out, most of the times Amazon never makes it to the point when they find the real cash cow of the company (AWS) and move from being a glorified Ebay to a 1.8T company