🪙 Crypto bubble bursts in 2022 — 90% of projects blow up

“I said in 2020, I predicted in 2021, the biggest loser in 2022 would be crypto. By the way, Friedberg, you agreed with me, and we nailed it.”

“a really interesting product of the crypto ecosystem and the model that so many kind of crypto businesses have engaged in over the years, which is if you can fester the belief, then there is a business. If you cannot fester the belief, there is no business. That there isn't a fundamental productivity driver. It's about building a belief system.”

“So these things are more similar than they are different. Coachella and Burning Man, the same. NFTs and part of the art market, the same. Everybody that runs to you with why it's so different, I would just have a grain of salt and say, you don't need to be different.”

“And I think the NFTs are really just one more kind of example where this beautiful narrative has formed, the digitization of art. But it is no different than any other form of assets that we tell ourselves a story around.”

“The floor price of a board ape has now dropped by 53%. If you remember, OpenSea raised $300 million at a $13.3 billion valuation December 2021 in a round led by Kotu and Paradigm. To put that in perspective, that was nine whole months ago. My how the world has changed. Friedberg, what's your take on NFTs and this whole boondoggle?”

“But that also has to happen on the crypto markets, in the crypto markets. And if you look at that chart, what it really tells you is that the baseline price of Bitcoin, where things seemed, you know, where rational supply and demand were meeting each other before all these, you know, 5, 10,000, 3500 to 5,000. ... That's still 75% from you.”

“just because there's a future technology platform doesn't tell you what the pricing should be. And the price action got decoupled from the level of progress in the space. ... And that's where it just got ahead of itself. That was the tulip part of it.”

“I mentioned at our predictions episode last year that all of these smaller things are going to get blown out. These quote unquote cryptocurrencies, even though many of them don't really act like a currency. And, you know, maybe Bitcoin itself persists. And it seems to me like that's always going to have good staying power.”

“it's like the.com crash all over again. I mean, basically you had an extremely promising technology. ... the price action got totally decoupled from the level of progress in the space. And people were not valuing these things based on real customers, real usage and real use cases, but it became very speculative.”

“Bitcoin's price is down 71% from the all-time high, 69K in November of 2021, bottomed out at 17,000 or so on June 18th. Ethereum's price down 78%.”

“If you deployed two-thirds of your fund into crypto assets with no board seat in the past 12 months, are you going to call Harvard and Penn and say, hey, I need some more right now? I don't think you're going to make that call.”

“you realize what a mirage we were in that certain assets that had no underlying value, they weren't cars, airline tickets or homes, were also being exacerbated during all of this.”

“Everybody's going to get to flip their NFTs and your board ape is going to become worth a million dollars. Your Bitcoin is going to be a million dollars each. ... This is not reality, folks.”

“And I'd say, especially with crypto, is with all the other crypto downturns, there were always, you know, the crypto accounts saying hodl or buy the dip or, you know, they had the laser eyes going. I don't see any of that right now.”

“No governance in crypto is leading to a lot of weird stuff, I can tell you.”

“That's all of crypto now anyways.”

“If you're in other areas like value, you've had a pretty good rally. If you're in crypto, you're just starting to get smoked now.”

“No, the crypto markets are like a sponge for liquidity. And the more liquidity there is out there, the more money can flow into a more speculative asset class.”

“The crypto bubble will burst. There's a lot of scammy nonsense going on. 90% of these projects are not going to yield value... rising interest rates are going to affect the crypto market. There's a lot of leveraged trades into crypto assets. Those will start to de-lever... 90% of them are probably going to start to blow up next year.”

“Crypto projects that actually don't deliver a product in 2022 are just going to be lost... It's time for crypto to put up or shut up... it's going to be a big shakeout there.”