[HN Gopher] Peter Thiel's fund wound down 8-year Bitcoin bet bef...
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Peter Thiel's fund wound down 8-year Bitcoin bet before market
crash
Author : SirLJ
Score : 78 points
Date : 2023-01-19 20:10 UTC (2 hours ago)
(HTM) web link (worldnewsera.com)
(TXT) w3m dump (worldnewsera.com)
| hristov wrote:
| I would not put much weight on this article. The fund is entirely
| private, it does not need to disclose its holdings in public
| government submitted documents. This article does not cite any
| sources.
|
| It is always a good idea to use a heavy doze of skepticism when
| confronted with statements about someone's brilliance at market
| timing. Especially when those statements are not backed by any
| evidence. Peter Thiel previously had to disclose more of his
| trading and, other than his decision to put half a million in a
| tiny startup called facebook made a long time ago, he has not
| shown any brilliant market timing.
| cft wrote:
| The original source is two Financial Times San Francisco
| journalists:
| https://www.ft.com/content/0a1d5597-7145-4035-987b-ff033bba3...
| hristov wrote:
| Who do not site their source.
| guywithahat wrote:
| A blogger spamming their article.
|
| Alternatively Hacker News only lets you post a link once.
| So if someone posted the FT link at a bad time, you
| wouldn't be able to post it again and it wouldn't get
| exposure. This gives the link a second chance
| Kareem71 wrote:
| Someone needs to build a browser extension that flags news
| links for which their main subject comes from an undisclosed
| source
| WJW wrote:
| Go for it mate. Don't wait for someone else to do it.
| rwmj wrote:
| Isn't it all on the public blockchain somewhere?
| hristov wrote:
| Oh and by the way, Peter Thiel is an investor in Ycombinator
| who runs Hacker News so it is pretty much a given that any
| comment criticizing his brilliance will be downvoted
| immediately.
| rnk wrote:
| Let's see if that is true. I don't think it is. Peter Thiel
| and the dark enlightenment is a bad thing for the world. NYT
| article. https://www.nytimes.com/2021/09/21/books/review/the-
| contrari...
|
| I'll never be a billionaire, but if I were, I hope I don't
| think the solution to all problems is pushing for things that
| benefit me personally.
| WeylandYutani wrote:
| I never believed in the "tech douchebags are going to make
| the world better" hype but I can see the appeal for the
| general HN audience. Those who fund big tech are no
| different than those who fund big oil.
| lordfrito wrote:
| Your sacrifice will not be in vain, I will tell your story.
| mrguyorama wrote:
| Ten minutes later and multiple downvotes on your post. I
| don't even know what could possibly be considered
| controversial in your post.
| dkrich wrote:
| This episode from beginning to end is extremely interesting to
| me. Admittedly one of my areas of interest for the past several
| years has been studying bubbles from various eras but I think
| there is a lot to take from this story.
|
| First, bubbles typically uncover something revolutionary but
| because of the hype and hoopla, leverage, and endless promotion,
| the markets overshoot what is possible currently to a ridiculous
| extent and most lose huge sums of money. In the aftermath where
| once the sky was the limit everyone swears the idea off and
| leaves it for dead.
|
| An example: the Florida land boom of the 1920's. This is one of
| the wildest stories that many people who live in Florida don't
| even know about. They don't realize that nearly all of Florida
| was developed within the past 100 years and that major cities
| like Miami, Boca Raton, West Palm Beach, and on up the coast were
| created during this boom basically out of thin air by
| speculators. Throughout there were shameless promotions including
| one orchestrated by Charles Ponzi after he was released from
| prison as well as the creation of South Beach, the founder of
| whom ended up losing everything after spending huge amounts on
| land plots and promotional advertising. Anyone studying that era
| will see amazing similarities to the crypto bubble.
|
| But the interesting part of that story is that those who were
| engaged in land speculation in Florida were absolutely correct in
| seeing the potential for the area as were the rest of the
| promoters and speculators of which there were many. But the
| population and development of the time just wasn't enough to keep
| up with the spend at the time. Essentially they were early.
|
| With crypto, it was pretty much ignored until it wasn't. Then it
| hit a critical mass and the promoters seeing an opportunity to
| grift, came out of the woodwork. Once it hit a critical mass in
| price, people started to believe the hype and retrofitted use
| cases to it. Then after it crashed, most said "see I knew it was
| a stupid idea." Jamie Dimon was saying this as recently as this
| morning on CNBC.
|
| This is the second part of the story that's interesting. Many
| people argue "crypto has no tangible value, it's just fake
| money." Well, that may be true but those same people take as self
| evident that things like gold, Monet and Van Gogh paintings, and
| tons of other things that arguably have no tangible value are
| worth vast sums of money. It's all subjective.
|
| The bottom line is that things are worth what groups of people
| believe they are worth at a given time. This is a very difficult
| concept for most to wrap their minds around because it seems
| counterintuitive. Amazon stock is clearly worth $2 trillion
| because it's a massive company built by a forward-thinking
| genius. But when it was worth a few billion most thought it was
| too expensive. At each point in time the price wasn't right or
| wrong, it just reflected what people agreed it was worth.
|
| With cryptos they aren't inherently valuable or worthless, they
| are worth something if there is at least one person who is
| willing to pay for it, regardless of how stupid you think it is.
|
| So I would not be that surprised to one day see cryptos reemerge
| with new and better and clearer use cases which in hindsight will
| seem obvious but still very few will have capitalized on them.
| I'm not inherently bullish on crypto either. I've never owned
| any. But I also have been around enough to know that the crowd is
| smarter than I am and just because it seems stupid that something
| is happening in the market does not make it wrong. The fact that
| even now the price is over $20k is somewhat telling that the
| popular narrative is in complete disagreement with the
| fundamentals.
| neilv wrote:
| This article seems to be suggesting that Thiel was pumping while
| the fund was dumping.
| moloch-hai wrote:
| That is the inference to draw.
|
| Actually saying in print that Thiel was doing that might be
| risky.
| hiq wrote:
| https://archive.ph/ec2Pp
| HorizonXP wrote:
| About 4-5 months too late IMO, but smart move. Cash is king for
| the foreseeable future.
| jandrese wrote:
| I like to think he saw the FTX commercial during the Superbowl
| and realized it was time to sell.
| logifail wrote:
| As they say on Wall Street, "Nobody rings a bell at the top or
| the bottom of a market".
|
| Timing their exit to lock in $1.8bn of paper gains does look
| great ... with the benefit of hindsight. If the valuations had
| gone in the other direction, presumably there would be plenty
| of people saying what a stupid move it was to sell.
| thaumasiotes wrote:
| > As they say on Wall Street, "Nobody rings a bell at the top
| or the bottom of a market".
|
| Completely untrue. There are uncountable numbers of people
| ringing both of those bells at the top and bottom of the
| market.
|
| It's just hard to notice, because the bells ring at every
| other position of the market too.
| rcme wrote:
| "Their decision looks great in hindsight. If something
| totally different happened they would look stupid" sounds
| like an amazing compliment, but the tone of your comment
| sounds like you didn't mean to compliment them?
| nbardy wrote:
| Site is down.
|
| Here's the google cache:
|
| https://webcache.googleusercontent.com/search?q=cache:8E9sp-...
| endymi0n wrote:
| This wasn't the market crash. The real one is still to come.
| mi_lk wrote:
| ok. How do we capitalize it?
| rcme wrote:
| Take out Tether-denominated loans.
| kyleyeats wrote:
| I've been reading a lot of the Coinfessions account on Twitter.
| It's where people post crypto horror stories anonymously.
|
| It's weird to think that they "generated" 1.8bn. If I made 1.8bn
| selling sandwiches, you could probably find evidence of it
| somewhere, like in product packaging in dumps. But here the only
| thing left behind is a bunch of guys going "Yeah I left my
| position open and drained my life savings by accident."
|
| Like, every bit of that money represents money that someone else
| lost, and basically nothing else. I can't wrap my head around it.
| theragra wrote:
| Strictly speaking, this is not true. Crypto is used by many
| countries with tight/problematic banking regimes to
| send/exchange money. Ironically, both by Ukrainians and
| russians, for example. Another thing is buying drugs on the
| darknet. Whatever your opinion of that is, the fact is crypto
| has some usages, though not a lot rn.
| colordrops wrote:
| Those are pretty big use cases but not "authorized".
| Nevertheless, they are real use cases.
| badrabbit wrote:
| You ever heard of the lottery? Guess what? Every bit of it is
| money someone lost and half of it funds your government. Wait
| till you hear about options trading and people committing
| suicide over bad trades.
| brianwawok wrote:
| You aren't wrong, but people have very different mindsets.
|
| People play the lotto for fun. They think hey maybe I'll get
| lucky and win. Sure there are addicts , but I don't think
| default behavior is "if I play this I'll be rich "
|
| Crypto is literally "if I trade this I'll get rich".
|
| But, both are roughly 0 sum games in the end as you rightly
| pointed out.
| klyrs wrote:
| First off, I'd like to commend you for using landfill volume as
| a proxy for productivity. It's refreshingly honest and I wish
| economists would take note.
|
| That said, there _are_ last-gen GPUs and ASICs going to
| landfills. Some people are actually getting paid to make the
| inputs to the otherwise-ephemeral pseudocurrency. Not to
| mention all of the CO2 released into the atmosphere... you can
| 't see it but that $1.8B put it there.
| dougmwne wrote:
| And the paper clip factories churn on.
| samwillis wrote:
| Do not click this link, you will loose at least 6hrs of
| your life:
|
| https://www.decisionproblem.com/paperclips/index2.html
| honkler wrote:
| some use freight activity as a measure of economy, atleast
| "real economy".
| RC_ITR wrote:
| And therefore completely ignore the 50% of the global
| economy that is services.
| honkler wrote:
| aka fake economy.
| RC_ITR wrote:
| Yeah, the _illusion_ of electricity and the Internet...
| Tostino wrote:
| Not entirely, most services require some products as
| inputs, so they are still measured in some way.
| RC_ITR wrote:
| What about electricity generation requires a shipping
| container?
| honkler wrote:
| freight in this context generally includes commercial
| rail freight.
| brg wrote:
| Energy production is kit a self contained endeavor.
| Transformers, steel, copper, pipe, valves, digital
| equipment for monitoring and control systems are just
| some of the necessary inputs for construction and
| maintenance.
|
| Beyond that, efficient use energy production requires
| some place for it to be used, Generally home and industry
| appliances.
| canadianfella wrote:
| [dead]
| WeylandYutani wrote:
| All of the crypto companies have had layoffs since the crash.
| The big exchanges are downsizing- but obviously there's still
| some money in it.
| dsfyu404ed wrote:
| People doing "economist things" but with money at stake (i.e.
| financial analysts) already do that stuff.
| samwillis wrote:
| My pet theory is that the massive excess in GPUs from the
| crypto explosion are being fed back into the AI explosion we
| are seeing now.
|
| In reality I wander how many former mining GPU farms are now
| doing AI training...
| [deleted]
| a4isms wrote:
| In the movie "Quicksilver," Kevin Bacon plays some kind of
| (commodities) trader who lost an enormous amount of money
| betting the wrong way and retires from trading to become a bike
| courier.
|
| He has a friend over at his loft, and while looking at pictures
| from his finance days, she asks, "What happened to all the
| money?"
|
| His reply is a classic:
|
| "It's still there, it's just in other people's pockets."
|
| ----
|
| That's all I see in crypto speculation. It's a game that
| involves shuffling money between players, without actually
| creating new wealth.
|
| (Also, the casino is betting against you and sometimes isn't
| satisfied with their rake, so they "rug pull" and leave
| everyone holding worthless chips. But that is another issue.)
|
| This is very different from, say, selling software that runs a
| business. Your software is not just transferring money from
| your customer to you, it's literally creating new wealth by
| making your customer more productive.
| jaywalk wrote:
| And the "new wealth" being "created" for your customer comes
| from... other people's pockets.
| eldritch_4ier wrote:
| This is obviously not true. If there was no new wealth in
| the world than there was 50 years ago, we wouldn't be so
| much more well off despite have billions more people.
| wmf wrote:
| New wealth is being created in the world but not by
| crypto.
| darepublic wrote:
| It's definitely subjective. I.e. if we harm the
| livability of the earth to create new tech saying there
| is more wealth is not false per se but based on your pov
| WeylandYutani wrote:
| That's just humanity being parasites. Apparently the only
| possible growth we can come up with is population
| increase.
| [deleted]
| diegocerdan wrote:
| The function of Store of Value (SoV) of any money is acquired
| by common belief of it's worth. It happened with gold in a
| very long time-span. People holding gold would not benefit of
| the increase of price as it took too long.
|
| Gold... what if this common belief can be upgraded to a
| better form of money?
|
| Bitcoin is energy quite energy intense and slow in the number
| of transactions but gold has many drawbacks too! It's a heavy
| rock, can't be easily split for payments, you have to spend
| efforts in custody and can't be transferred digitally.
|
| Bitcoin... what if this common belief can be upgraded to a
| better form of money?
|
| Ethereum is way more complex than Bitcoin but solves through
| clever engineering most of it's drawbacks. Let the Market
| decide which form of money is best.
| a4isms wrote:
| I spoke about crypto _speculation_ , and I was explicit
| about that. I choose not to debate speculative claims about
| crypto's potential for becoming a useful "store of value"
| or "currency for commerce" at this time and in this place.
|
| As to letting the market decide things, I lived through the
| Bre-X scandal, where the market decided to invest in a fake
| mine, and real lives were ruined. I believe in regulated
| marketplaces.
| [deleted]
| ElectricalUnion wrote:
| > That's all I see in crypto speculation. It's a game that
| involves shuffling money between players, without actually
| creating new wealth.
|
| Just shuffling money between players is downplaying it.
|
| "Crypto" often just sends "value" to the bitbucket either
| intentionally or because of operational errors.
| kumarvvr wrote:
| As long as crypto is touted as "investment", this is bound to
| happen.
|
| Crypto isn't about mining anymore.
| FatActor wrote:
| I get tired of hearing day after day about billionaires making
| not just billions, but 10's and 100's of billions without doing
| much of anything except having impeccable timing... and a lot
| of money to invest.
| rcme wrote:
| Timing is everything, as they say.
| 323 wrote:
| How legit is this site? There is this blub in their About which
| is not very reassuring (I never heard of them):
|
| > _World News Era is the world leader in online news and
| information and seeks to inform, engage and empower the common
| men and all age groups. World News Era has millions of daily
| readers._
|
| https://worldnewsera.com/about-us/
| wmf wrote:
| This is blogspam. FT is the original "source" for this rumor.
| cft wrote:
| https://archive.ph/8XLr6 original
| RcouF1uZ4gsC wrote:
| > Founders Fund sold out of the vast majority of its entire
| cryptocurrency portfolio by the end of March 2022
|
| In Feb 2022, when I saw crypto ads during the Super Bowl, it
| seemed like a warning sign that something was about to go bad and
| the existing players were looking for suckers.
| gpderetta wrote:
| On the London tube there were self referential ads saying "when
| you see crypto ads in the tube it is time to buy". /Facepalm
| neilv wrote:
| That might be brilliant evil, if they preempted the catchy
| old sayings about when to get out of the market.
| wmf wrote:
| That reminds me of the old sayings "those who do not
| understand history--screw it, it's time to buy" and "fortune
| favors the people who buy things from Superbowl ads".
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