The Crypto Profiteers and the Coinbase IPO

With Elon Musk putting 8% of Tesla’s corporate cash into Bitcoin, he might as well be advertising that he’s actually Satoshi Nakaomoto. In 2020, billionaires have been using Bitcoin and crypto to expand their wealth faster than they would be able to in a regulated financial system.

This week we’ve seen an incredible NFT craze which also appears like a crypto profiteer gig. Dolphin Entertainment Inc, ticker $DLPN, announced that it’s opening up an NFT division. The stock was up 236% today, and another 55% in the after hours market.

The worst crypto profiteer however is Coinbase, that pretends its valuation is far higher than what it should be, while charging absurdly high transaction fees. Coinbase CEO Brian Armstrong owns close to $14 billion of company stock ahead of market debut.

If that’s not Silicon Valley playing greed-God, I don’t know what is. Jack Dorsey has for a long time been pumping Bitcoin while buying it on the side with his own personal wealth.

Brian Armstrong, Coinbase’s co-founder and CEO, owns 39.6 million shares of the company heading into its direct listing. Based on an average private market price this year of $343.58, his stake is worth $13.6 billion. Unlike most tech founders, Armstrong will be able to sell shares right away after Coinbase goes public.

The 2020 Bubble Market created by the Fed has resulted in a situation where the 1% have been able to profit faster and better than ever before in human history. Crypto is a vehicle for their profits. Bitcoin is the new driver of how the rich get richer in a financial system that’s not being regulated properly, at least in the United States.

That crypto is about decentralization might be the biggest lie told on the internet between 2015 and 2022. With ownership of Bitcoin and crypto, the exact opposite has taken place. It’s the grandest centralized pump and dump in the history of a new asset class.

Crypto is not tethered to anything fundamental in the world, just as the supply-demand is completely manipulated and artificial of Bitcoin. The NTF craze is the latest absurd sign that crypto is a vast marketplace of profiteers.

Coinbase is just Silicon Valley’s version of that profiteering even as Binance is a way more innovative company. Most of Armstrong’s wealth appreciation has come in the past year or so as the value of Coinbase’s stock in private trades jumped more than 10-fold. It’s not as if Brian Armstrong is a visionary or even a good businessman, he’s just another crypto profiteer.

NFTs and the Coinbase IPO will boost Bitcoin even higher with billionaires mostly making the wealth. That’s not about a better technology (blockchain) or about the decentralization or democratization of wealth. Crypto popularized the long hold called HODL, which for the Reddit crowd turned into being a ‘diamond hand’.

All of this is pretty perverse in reality. Diamond hands stand to lose most of their investing wealth and crypto is entirely tethered to the price of Bitcoin, which is itself manipulated now and in the hands of the world’s billionaires.

Hey, Brian, welcome to the “decabillionaires” club, a club of founders that are like professional heisters of how to scam your way to unimaginable wealth. The crypto bros are having good days, as the world keeps struggling with a pandemic. The second bull market for Bitcoin could see its price rise near $120,000 before it plummets again.

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