Messari Daily Brief March 15, 2021: This Won't End Well

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There’s this really lazy critique that people make with high growth stonks, crypto assets, and other “bubbles.” They react to soaring prices with a shake of the head and a pithy “this won’t end well” and the person on the other side of the conversation nods violently in agreement.

You can usually separate people who know what they are talking about from those who are just giving the safe non-contrarian “contrarian” answer by simply asking “why not?”

If the answer is simply “[x] has gone up 10x in a month, and there’s no fundamental reason for it” you can usually disregard the rest of the person’s investment advice and theses on the topic in question. If the answer is more nuanced, then it’s probably worth listening to.

I’ve felt this way three times in the past several years.

With ICOs, I thought "this won’t end well near-term because very few of these projects have working products, BUT long-term this is a transformational way to organize capital around networks vs. firms.” With DeFi, I thought, “this won’t end well near-term because there is too much systemic over-leverage and interdependency, but long-term this is going to replace traditional financial services.” Now with NFTs, I think, “this won’t end well near-term, but long-term these primitives will be a tool used to show provenance for discrete assets from gaming goods and art, to stocks and home titles.

”Because I suck at trading, I’ve sat out the initial euphoria stage of each one of these bubbles (very sadly), but entered at something akin to the “Series A”. No 1000 baggers for me or overnight moonshots, but a couple of loooooong-term 100 baggers (legendary only by boomer standards) and more blissful sleep not flipping tokens and getting bogged down on tax esoterica. It’s (arguably?) ok to leave money on the table if it helps you maintain your sanity and keeps you operating within your risk profile.

Just don’t be one of those people who doesn’t do the work, and dismisses the next exciting market with a lazy half-witted answer that every faux skeptic gives. It doesn’t make you sound smart. It makes it sound like you missed.

Tomorrow: The Faustian Grayscale Bargain

Headlines that matter

• INTEL: Loom, Rune, Cosmos, MTA, Enjin (+ 20 updates)
• CMS/Alameda back $5 million round for DeFi lending Protocol Alchemix (CoinDesk)
• Social currency platform Roll hacked for $6mm (The Block)
• Barstool’s Portnoy admits he "f-d up bitcoin (Decrypt)
• 6,000 XRP holders volunteer as third-party defendants in SEC lawsuit (CoinTelegraph)
• How rollups make Ethereum transactions cheaper (Decrypt)
• Ross Ulbricht on decentralizing social media (Ross’s Blog)
• NFTs and Lord Joseph Duveen and Nic Carter’s take and hard copyright questions
• Daily Shade: My bitcoin during bear markets, “our bitcoin” during bull markets.