Jason Calacanis, an investor, and aspiring media tycoon believe that venture capital interest in cryptocurrency will wane in the near future.
Calacanis predicted a wave of litigation against promoters of crypto projects in an interview with Bloomberg’s “Odd Lots” podcast following retail investors’ losses due to the momentum and buzz created by some financial institutions and investment moguls.
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According to Calacanis, venture capitalists are actively promoting crypto tokens as securities. “The vast majority of tokens, in my opinion, are securities, but they are being pushed on retail investors.”
“This is going to blow up in our faces,” one venture capitalist predicted.
Calacanis, who invested early in Uber and Calm, two future unicorns, declined to name specific investors. Chamath Palihapitiya, Calacanis’ friend, co-podcaster, and billionaire co-owner of the Golden State Warriors comes to mind.
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Palihapitiya is a former Facebook executive who now works as a “pro-social” venture capitalist.
As the “SPAC King,” he promoted a slew of acquisition firms that are now heavily in debt, or as the guy who boasted about buying SOL, Solana’s native token, at a discount while looking for someone to offload it to.
Jason has abandoned his Chamath persona. Calacanis and former PayPal executive David Sachs, who is also a co-host of Calacanis’ “All In” podcast, are not responsible for their colleagues’ potentially fraudulent behavior.
Calacanis is mostly correct in his assessment that many crypto tokens are either outright Ponzi schemes or risky “prelaunch companies” that should be made more transparent.
However, it demonstrates how powerful and influential people protect themselves. Calacanis, a former journalist, has no qualms about speaking out against injustice, which frequently results in an internet backlash.
According to him, venture capital firms broke securities laws by promoting worthless tokens and then withdrawing from them. It lacks any sort of bite, however.
Calacanis came perilously close to achieving morality on another occasion, but he couldn’t quite pull it off.
Palihapitiya believed that when it came to investing in China, the ethnic cleansing of Uyghurs was “below my line of concern.”
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True, investors must pick and choose their battles. Finding high-quality products, working with capable founders, and possibly doing anything else you can to help a business grow are all important parts of maximizing profits.
Palihapitiya claims to have loftier goals as the CEO of venture capital firm Social Capital and an advocate for combating climate change and improving the lives of the poor.
While Palihapitiya’s lack of sympathy for the plight of the Uyghurs is understandable, he is not alone in his feelings.
This is what happens when money and ethics collide. By definition, an aristocratic point of view must come to an end.
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Palihapitiya erred by saying the quiet part aloud. Michael Kinsley, a former New Republic editor, coined the phrase “Kinsley gaffe” to describe politicians who “speak an unpalatable truth.”
Calacanis claimed that “the people who are creating” cryptocurrency scams are “99 percent responsible,” distinguishing himself from “generic venture capitalists” or “early investors.”
Platforms and exchanges, on the other hand, are nearly flawless. In case you missed it, he’s a Robinhood Markets investor.
Calacanis isn’t even wrong this time. Personal stakes and relationships have clearly muddled his cognitive dissonance.
People “should be able to gamble or use their money as they see fit,” he said, but “qualified investors” should be able to trade cryptocurrency.
He believes that the majority of those who lost money while investing in cryptocurrencies were aware of the risks and should accept responsibility for their actions.
I’m not bothered by Calacanis’ description of cryptocurrency as a “peak grift.” He believes that by allowing anyone to participate in the cryptocurrency market, the traditional financial system is being overthrown.
Drawing lines separates people and distorts the market, whereas leaving everything open allows low-income hustlers like Palihapitiya to enter.
Cryptography may require additional safeguards in the future. Increased regulation has slowed “really high risk, high reward” investments like SPAC, according to Calacanis.
But I’m not sure who gets to draw the line, or whether the concept of completely free markets has any merit. Both sides of the regulatory divide must continue to receive reports of public-sector scams.