Andreessen Horowitz Went All In on Crypto at the Worst Possible Time (wsj.com) 41
As cryptocurrency prices soared last year, no investor bet more on the sector than Andreessen Horowitz. The timing wasn't good. From a report: The storied venture-capital firm had developed a reputation as Silicon Valley's greatest crypto bull, thanks largely to a 50-year-old partner named Chris Dixon who was one of the earliest evangelists for how the blockchain technology powering cryptocurrencies could change business. His unit was one of the most-active crypto investors last year, and in May announced a $4.5 billion crypto fund, the largest ever for such investments.
The timing wasn't good. Prices for bitcoin and other cryptocurrencies have plunged this year in the midst of a broad market downturn, erasing billions of dollars in paper gains for Andreessen's funds. Consumer demand has vanished for some of the firm's most-prized crypto startups, while others are facing increased scrutiny from regulators. Andreessen's flagship crypto fund shed around 40% of its value in the first half of this year, according to people familiar with the matter. That decline is much larger than the 10% to 20% drops recorded by other venture funds, which have largely avoided the risky practice of purchasing volatile cryptocurrencies, according to fund investors. Despite the record cash pile, Andreessen has dramatically slowed the pace of its crypto investments this year.
The timing wasn't good. Prices for bitcoin and other cryptocurrencies have plunged this year in the midst of a broad market downturn, erasing billions of dollars in paper gains for Andreessen's funds. Consumer demand has vanished for some of the firm's most-prized crypto startups, while others are facing increased scrutiny from regulators. Andreessen's flagship crypto fund shed around 40% of its value in the first half of this year, according to people familiar with the matter. That decline is much larger than the 10% to 20% drops recorded by other venture funds, which have largely avoided the risky practice of purchasing volatile cryptocurrencies, according to fund investors. Despite the record cash pile, Andreessen has dramatically slowed the pace of its crypto investments this year.
IT SHALL RETURN! (Score:1, Funny)
Like tulips after winter!
This is news how? (Score:5, Insightful)
When you invest in vapourware, you are basically throwing money away...
Re:This is news how? (Score:4)
When you invest in vapourware, you are basically throwing money away...
The news (still written by humans) is here as a human reminder of just how gullible we still are.
P.T. Barnum wasn't a trickster. He was merely a historian.
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If the icons chosen for the article had included the monty python foot then it would fall under the comedic sorts of stories we used to occasionally see.
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He lost more than money, he lost the reputation of a visionary. Next time he tries to predicts publicly what is going to be big they'll ask him how's that crypto working for ya.
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hah 'visionary', how about 'deluded person'
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I predicted this. Does that make me a visionary?
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Re:This is news how? (Score:5, Insightful)
if you like a stock at $20, you should love it at $10. The point is not to panic and sell, but rather buy more and hold on to it. After the stocks rebound, you'll be even more ahead.
Reminds me of a quote from the 2000 movie Boiler Room, when the protagonist is trying to milk his mark for more money after the stock he is pushing has dropped by 50%. He gets the mark to invest all his available cash right before the stock goes to $0. Although in this case the quote was "I liked [the stock] at $8, I love it at $4."
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You are describing "dollar cost averaging" which works when there is a reasonable chance of a financial investment recovering. As there is no logical "floor" besides $0.00 that a cryptocurrency can go to, it's a pretty risky proposition.
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This is great advice, for real stock in real companies.
The problem has been, continues to be, and likely will always be that crypto isn't a tangible investment in anything. It's literally make believe, as evidenced by the 100s of me-too crypto currencies that have sprouted up. Why invest money in one coin when 10 more will come out next week and steal all the gullible money?
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>zero interest rates were never a good idea and I don't see them coming back.
If you already had more than enough money, they were great. Free money? Or even when the gov't was paying people to take money. Nice gig if you can get it.
All you need is another crisis to shift even more wealth to the wealthy. This was simply one mechanism.
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Not to mention the companies issuing those stocks that went into terminal decline.
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Good point. I mean Marc Andreessen.
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https://en.wikipedia.org/wiki/... [wikipedia.org] is a person, however.
The markets are doing just fine (Score:5, Insightful)
Crypto drops in price because they are running out of suckers because the government is slowly but surely regulating it as the security that it is. Eventually the Ponzi scheme will go bust. It's been a lot of legalization of marijuana to which isn't helping matters.
Drugs, money laundering, ransomware and securities fraud are the backbone of crypto. And that backbone is slowly being stripped. That's a good thing. We don't want a phony bologna financial instrument with no government backing to be directly integrated into our financial system.
Because as soon as that happens you can bet your ass the 1% will bundle crypto into securities like they did with mortgages and start passing them around until there's a giant market crash. And then we'll all be bailing out a bunch of too big to fail Banks again
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Despite the Federal reserves best efforts the economy grew last quarter. And profits are and continue to be at record highs.
The inflationary pressures we are seeing is just a natural occurance after the past couple years. Between gearing up to meet demand - and don't forget the normal creeping inflation that is always with us, this is just adjusting back to some state of normalcy.
Crypto drops in price because they are running out of suckers because the government is slowly but surely regulating it as the security that it is. Eventually the Ponzi scheme will go bust. It's been a lot of legalization of marijuana to which isn't helping matters.
Well - crypto is just doing exactly what it was designed to do. REmove money from idiots, a very few original people make out well, and everyone else is getting validation that they are indeed idjits.
But what caught my eye was the legalization of we
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COVID messed that up. It's left them scrambling to recover 2 years of lost revenue, and so they
Re:The markets are doing just fine (Score:5, Interesting)
Honestly I think it's just price gouging. We've had close to 40 years of non stop mega mergers. COVID did play a role, but only in as much as it reduced corporate profits temporarily. The corps had been holding off on using the power they gained to price gouge in the hopes of more mega mergers. The rule was that they could merge as much as they want as long as prices stayed flat, and they took the long view. COVID messed that up. It's left them scrambling to recover 2 years of lost revenue, and so they started to exert the power we gave them against us.
It reminds me of the time I had a part time video business. The first two years I lost money. A lot of investment in equipment, and getting started required me giving prive breaks to get my foot in the door.
Year three, I started to turn a profit. I was happy. Showed the wife the figures, Then she claimed I definitely didn't make a profit because I didn't cover the first two years. She's business oriented, and after a couple more years, when my original editing equipment was wearing out - this was pre computerized editing - I decided I had no business being in business when there is no profit unless there is constant profit.
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The modern version of this is driving for Uber until you realize you made $20K wearing out a car that cost $20K.
A friend of the wife's just did exactly that. So very true.
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Of course it's price gouging. CEOs are stating as much in their earnings calls when they say they are having "no problems passing on cost increases and more" to the consumer.
M&A is just a shell game for investment banks to charge fees. Corporate mergers unlock "synergy" and "economies of scale" and "eliminate redundancies", but then spinning off a division "unlocks value". How can both be true? Answer, neither are true, but banks still make billions of dollars in fees. I read a report once that claimed
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But what caught my eye was the legalization of weed? Wassup with that?
I believe they were insinuating that the only "legit" use for crypto is to buy illicit things in a quasi-untraceable way, and because cannabis is becoming acceptable in more jurisdictions, there are less people using crypto.
It's fucking horseshit, but I believe that's what they were getting at.
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But what caught my eye was the legalization of weed? Wassup with that?
I believe they were insinuating that the only "legit" use for crypto is to buy illicit things in a quasi-untraceable way, and because cannabis is becoming acceptable in more jurisdictions, there are less people using crypto.
It's fucking horseshit, but I believe that's what they were getting at.
Okay - I wasn't sure if was about baked people thinking crypto was a good investment or something. Came out of left field.
Some days I get confused! 8^)
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>But what caught my eye was the legalization of weed? Wassup with that?
One of the big uses of cryptocurrency is to buy drugs. It's been going on for quite some time, perhaps you have heard of it?
The legalization of cannabis has put a dent in the illegal drug trade for cannabis. Thus, the need for any cryptocurrency to transact these deals goes down.
Now, how big of a drop this is is probably quite debatable, since cannabis is only one of the goods and services available.
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>But what caught my eye was the legalization of weed? Wassup with that?
One of the big uses of cryptocurrency is to buy drugs. It's been going on for quite some time, perhaps you have heard of it?
The legalization of cannabis has put a dent in the illegal drug trade for cannabis. Thus, the need for any cryptocurrency to transact these deals goes down.
Now, how big of a drop this is is probably quite debatable, since cannabis is only one of the goods and services available.
Looking at the prices of legal cannabis, they must have had to sell a metric shitload of it to make much profit. I understand illegal vicodin has a hella profit though.
Anyhow, kinda shows how stupid the war on drugs was. A 14 dollar preroll about the cost of a six-pack of decent beer.
Who cares? (Score:4, Insightful)
What's the story here? (Score:5, Insightful)
Some random investor lost money with tulips and now invests less in tulips? Did I just sum up this story, yes?
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Some random investor lost money with tulips and now invests less in tulips? Did I just sum up this story, yes?
I think it's like a Nelson Muntz moment: https://www.youtube.com/watch?... [youtube.com]
We can all watch people getting what they asked for. And for me it's knowing there are people out there dumber than me.
Re:What's the story here? (Score:5, Insightful)
I'd like some more stories about people who're smarter than me, not another slew of people stupider than me. I try to orient myself by looking up, not down.
Re: What's the story here? (Score:2)
I think it is inspiring. I do stupid things all the time, so it is nice to see rich, credentialed people get it wrong after doing more research than I have the patience for.
Maybe some day, I'll think of something like cuecat, or Juicero, or shitgobblercoin and never have to post on slashdot from work again.
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I can't help but be frustrated to see that people who are too stupid to find their own ass with both hands actually for some weird reason having financial success. It makes you wonder whether this economy is any different than a lottery, i.e. no skill required, it's all just pure luck.
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I like this and will steal it. The only comment I'd make though is sometimes it's useful to look at the mistakes of others to find out what /not/ to do, but I agree when it's people doing obviously stupid stuff, this might not have a lot of utility.
How to make a small fortune in crypto: (Score:5, Funny)
How a crypto fund works (Score:2)
1. Get a lot of people to buy in. ....
2. Don't invest the cash pile in crypto because that's too risky.
3.
4. Profit
Even now, we see Crypto Bro spin (Score:5, Insightful)
"Prices for bitcoin and other cryptocurrencies have plunged this year in the midst of a broad market downturn"
The plunge in imagined value for these ridiculous cryptocurrencies is unrelated to any downturn in legitimate stocks.