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Since its origin, Crypto has been a wild speculative market, where excellence in storytelling commands a price premium.
The average daily volatility of Crypto is several times higher than traditional assets such as gold or equity.
Storytelling is prevalent in all capital markets, but why is it particularly comprehensive and uninterrupted in Crypto?
I can think of two reasons.
Most clear: its permitted nature. Anyone can buy a token (no KYC), and one can launch a token (pump. Fun’s success).
A second and more subtle reason: weak legal protection for token holders.
As a professional investor, all these are questions with which you have to test:
- Will your Dao launch another token?
- Does protocols have revenue for private equity rather than tokens?
- What do your token market agreements look?
- Will the founders sell their allocation quietly on the private OTC market?
All these questions (without any answer) create uncertainty for investors, which shrinks the most impure gambler to the available market pie.
In return, the companies produce encouragement to ignore the rules of profit and loss and play the story instead, or the Felip Montelagra of Thia Research is called “called”Story“Recently in one thing.
“Anyone who decides what the story decides what token product-markets do and do not care about the customers, and decide who gets more capital or low capital to invest. This is a distorted balance.”
To ensure this, the story is and has always been part of the investment.
Investment is fundamentally a social, not natural, science.
And social sciences will always include elements of the subject – unlike mainstream economics, where the economy can be revised neatly with a supply and explanation on the demand graph.
In the 1980s, CEO of Great American Food and Tobacco, F. Ross Johnson focused on RJR Nabisco on the poor market evaluation of his shares despite his great cash flow.
In the revered trade book BarbaricJohnson made a famous complaint:
“It is plain as nose on your face that this company has been evaluated wildly … We have tried to keep food and tobacco businesses together, and have not done it. Diversification is not working. We are sitting on food assets that are worth 25x worth of income and we trade on 9x earnings, because we are still looking as a tobacco company.”
Negative cultural perceptions of tobacco redeemed the possibilities of RJR Nabisco.
But in the case of crypto, the problem is even more fundamental.
Sucking fundamental property rights.
As Montelegra argued, most companies play a game of “narrative stalinism” because weak token holders increase the cost of capital and entry obstacles for more risk institutional investors.
From the point of view of an investor of a basic thing, wishing an ALT season is therefore “the number goes up” is a pure hopium. You are better than betting on a token with real revenue flow, but first: fix the problem of property rights.
Fundamental companies
Despite the problems prevalent in Crypto Capital Markets, a handful of companies have punched against their weight. Revenue -generating companies are rare, but they exist.
Within finance, Jupiter, Radium and Athena are all million-dollars-generating businesses. Hyperlicid Peps Dex stands out on top, with $ 1-2 million In daily revenue.
If you like businesses did not do business for the “circular” economy of DEFI, Anochen Private Credit is Maple Finance, which is killed monthly. $ 1 million Revenue in May. Or reshuffle, a gambling app that generates an annual $ 100 million + “Net Gaming Revenue.”
Even the newborn depin sector has some of its own breakouts, namely data-scrapping grass (alleged) Eight data annual revenue) And real-time kinematic network geodate, all are making $ 2-3 million Annual recurring revenue (Arrest).
The debate around the right ways to give importance to the tokens is also particularly loud, as seen around the real economic value (RV) in the recent point. This suggests that an increasing class of investors is moving away from speculation, and is towards more rigorous approaches for evaluation.
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