“Did you own a lot of crypto?” my lunch companion asked?
“Actually, I never put a dime into that.”
“That’s impressive.”
Since the market peak in 2021, crypto has been crushed. What was supposed to be the future looks increasingly like the past.
The NASDAQ Crypto Index of major tokens is down by more than half.
FTX has collapsed, and Binance may not be far behind. Even Coinbase stock is down nearly 80%.
In 2021, I saw countless crypto startup deals.
Each one sounded like an incredible opportunity. If I didn’t hop on this trend now, I might be left behind!
But then I dug just a bit beneath the surface.
Company after company had no product in market. That means no customers and not a single dollar coming in the door.
Except from fundraising.
Pre-launch companies raised at $100 million valuations or more, day after day.
Meanwhile, I was investing in companies with real products and customers at much lower prices. Startups with hundreds of thousands in revenue were available at prices below $20 million.
I realized that a lot of crypto startups are just fundraising exercises. They create hype, pull in checks, and take them to the nightclub in South Beach.
Okay, maybe I wasn’t seeing anything promising in crypto startups. But how about the tokens themselves?
I researched Solana, Elrond and others. Some of the technology was impressive.
But as I considered buying Solana in the fall of 2021, its market cap was around $100 billion.
“In anything speculative, I want to see the possibility of a 100x return,” I told a friend. “So what, Solana is going to be worth $10 trillion? I don’t think so.”
Despite the innovative tech, the price seemed obscene. Over time, markets came around to my opinion, and the price fell 90%.
Before I dislocate my shoulder patting myself on the back, let me explain something. This took no special insight.
I just applied to crypto the same criteria I apply to all my startup investments.
I want to see a product in market with real customers. I want to see a few hundred thousand a year in revenue, growing fast.
I want to see a real business.
If a crypto company hits those benchmarks, I’d be happy to invest. But good luck finding one.
My hunch is that crypto is over. I expect to see all those hot 2021 crypto deals become zeros.
It’s been 14 years since the introduction of bitcoin. We’ve yet to find a use case aside from speculation
Meanwhile, in just a few months, LLM’s are widely used across the world.
My lesson here: focus on the business. Don’t focus on hype, FOMO, or the actions of the crowd.
If you buy slices of great businesses at reasonable prices, you can win. If you throw money at every passing fad, you’re toast.
What do you think the future holds for crypto? Leave a comment and let us know!
If you enjoyed this post, subscribe for more like this!
More on tech:
Late Stage Startups Face Bleak Funding Environment
Save Money on Stuff I Use:
This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 with great returns.
More on Fundrise in this post.
If you decide to invest in Fundrise, you can use this link to get $100 in free bonus shares!
I’ve used Misfits for years, and it never disappoints! Every fruit and vegetable is organic, super fresh, and packed with flavor!
I wrote a detailed review of Misfits here.
Use this link to sign up and you’ll save $15 on your first order.
Tremendous 
Leave a comment