Tech savvy Milennials and Gen Z alike are discussing Bitcoin, Dogecoin and NFTs, as the blockchain-based assets have become their own thing, as opposed to stocks and gold preferred for investment by previous generations. Created by a mysterious inventor known only by a pseudonym Satoshi, crypto is also attractive as an unregulated asset that goes beyond Wall Street. But even an encrypted currency can’t offer security in unstable markets, and the collapse of crypto exchange FTX has highlighted this grim reality.
Know your assets beyond trends
It has also prompted the former COO of venture capital firm SoftBank Marcelo Claure, to warn people against investing based on the fear of losing out or FOMO. He went on to add that the FTX debacle has forced him to think and arrive at the conclusion that people should only invest in things that they fully understand. He finally admits that he got it wrong, possibly because he was investing in something everyone was after.
Who is Marcelo Claure?
These assertions were made in a tweet by the man who helped clear the mess left for SoftBank after the WeWork debacle, that involved a failed IPO after the company’s massive losses were revealed. SoftBank is also a part of investors including Sequoia, which bet big on FTX before the crypto firm came crashing down, and wiped off 94 per cent of its founder’s wealth. It has also been reported that $1 billion of clients’ money is also missing from FTX.
Reality check for crypto enthusiasts
This year alone, the value of a stablecoin introduced by Terra and the native token of FTX, has plummeted, lending credence to the argument that cryptocurrencies stand on shaky ground. While both fiascos wiped off billions from the wealth of investors, FTX’s collapse has been compared to the Lehmann Brothers crash which brought the 2008 economic crisis out in the open.
Claure has also faced disappointment after investing his time in sorting out SoftBank’s affairs, as he expected a paycheque worth billions of dollars after years. But it turned out that SoftBank’s CEO Masayoshi Son had a relatively small amount in mind for him. Irked by the low compensation despite playing a key role at the firm, Claure quit SoftBank earlier this year.