Crypto investing philosophy is weird

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I don’t know much about Mark Carnegie, “Australia’s highest-profile cryptocurrency investor,” but I enjoyed these quotes about the Terra blockchain and its blown-up cryptocurrency Luna:

“We owned some luna,” Mr Carnegie said from Singapore, where he lives. “We net ended up square or maybe down a bit. With a Ponzi scheme you are trying to get in and out early.” …

“Everyone who should be using the technology isn’t because they hate the crypto bros. Quite rightly they should hate them because they are such scumbags.”

He said Mr Kwon and other crypto entrepreneurs operating stablecoins were engaged in a form of banking where their financial reserves could not cover, at any one time, their liabilities.

“They have no view of history and no historical context,” he said. “They feel they are discovering everything for the first time. It was leveraged fractional banking, which has been run a gazillion times again and again.”

See I would quibble that what Terra actually rediscovered was death-spiral financing, not leveraged banking, but I agree with the general sentiment. If you come to crypto because (1) you are very self-confident and (2) you don’t know anything about traditional finance and don’t want to find out, then you will have a lot of fun repeating and magnifying the historical errors of traditional finance.

Also: “With a Ponzi scheme you are trying to get in and out early”! A reasonable trading approach. A problem in a lot of crypto investing is that if there is some token that makes some attractive promises, and it has gone up a lot and well-regarded investors are buying it, you cannot be entirely sure if they are buying it because (1) they have an informed belief that the attractive promises are true and the thing will be worth money in the long term or (2) they think it’s a Ponzi but want to get in and out early.