For those of you with finance interests, this is how I think about the "risk capital waterfall".

At the font you have the money printer, brring along, injecting liquidity into the market. This is cash, which offers near zero nominal yield and a negative real yield, and "cash-like" things such as treasuries. These are "as good as gold" (yeah, right) and offer a negative real yield (gross yield less inflation). What does capital generating a negative real yield do? It chases those sick gainz in other asset classes.

Next is the institutional grade debt. This is cities, municipalities, states (reminder that they hate you), etc, issuing debt. Good stuff, sometimes tax advantaged, still negative real yield in most cases.

Next is public company debt, investment grade bonds. S&P and Dow Jones Industrial names issuing bonds in the public debt market, used to be 40% of a smart portfolio. Now it trades like a shitcoin and has a yield that keeps up with inflation, sometimes.

Now we're in the equity markets, stonks. The shit that has been normalized as something "everyone should have in their portfolio" ever since the money was broken in 1971. Decent yield, but pretty crowded trade and valuations have been growing towards absolute insanity for the past 50 years, seldom interrupted by reality.

Next bucket is private equity, buyouts baby. Barbarians at the Gate started it and now it's a multi trillion dollar asset class. This is where all the young smart ivy leaguers go to waste their talents on financial engineering. Sweet returns though.

Private credit is basically the same as private equity but they're in the debt in those same deals. Gotta throw a few sheckles to those UMich and UNC grads.

Venture capital, the utter pinnacle of speculation, zero due diligence, and enjoying the smell of ones own farts. These guys absolutely incinerate capital, but every once in a while they hit the fuckin lotto on a unicorn like uber or something. And then they spend the rest of their careers "growth hacking" or whatever and blowing more money on Theranos.

Next, like it or not, is crypto. ICOs, IEOs, DeFi, tokens, etc. Virtually all of this is literally straight up scams. Sometimes explicitly so. It's wild, but when you think about the great risk capital waterfall and how the bucket at the top is absolutely pumped full of printed money, it isnt shocking that these levels of "yield" and (very real) risk exist. Gotta get those gainz so I can one day afford a 2 bedroom ranch on a lot 10 square feet larger than the structure with a super quaint kitchen inside the living room which doubles as a bedroom. And at $1.2m its a steal!

Bitcoin, however, renders the overwhelming majority of the risk capital waterfall unnecessary for the retail investor. Finally, we have money that just works. You can work hard for it, save it, and preserve the purchasing power of your money without having to become a stonk lord or CFA. Just stay humble and stack sats. When the allocators of capital slipping down the waterfall chasing yield and eating risk realize this, bitcoin will turn the finance world upside down and shake loose all the rent seekers.