10 sats \ 2 replies \ @andyleroy 4 Jul 2022 \ parent \ on: 🌊⚡️ The Bitcoin Ecosystem Moment (pt. 1) bitcoin
Thanks, and I agree, the investments in a BTC/LN first company accelerates the investment return on any hodling/BTC savings.
Given your numbers here of a 100x return over 30 years type prospect however, it seems that any other venture backed investment return in the space would pale in comparison to simply holding bitcoin, especially given the risk correlation and the possible initial capital outlays that could accumulate more btc short term?
Does this imply that any level of venture funding in the bitcoin/lightning space almost necessitates a prior large level of bitcoin holding - in essence making the investment worth it?
Does long term capital into the space require 1 of:
- Investment from a firm/nation state/prior business model with large btc accumulation
- Contribution from not-strictly-monetarily motivated companies/individuals who want to push forward the adoption/mission of bitcoin?
While answering the question "VC investment vs. stacking BTC", I'd say it's certainly a function of how much net worth you have.
However, once there's more market proof demonstrating that BTC infrastructure & lightning companies can actually have profitable business models, we'll see more traditional VCs entering the space.
Their LPs are often large insurance funds, pension funds, & other systematic long-term capital that diversify into VCs for better risk-adjusted returns.
Most of those might indirectly invest in bitcoin infrastructure companies years before investing in bitcoin itself.
To recap; the chances of "old/systematic money" investing in Bitcoin startups first (instead of bitcoin), are much higher than you'd think.
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Thanks for all your insight here, I appreciate it
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