It’s not about money; it’s about sending a message

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Hello, all you doomed humans. Judging by the state of things, Mark Twain’s quote “Nothing is certain except for death and taxes.” will come true soon. But, while we are waiting to die☠, the financial markets continue to remain crazier than ever. Though most of the fun is in crypto markets, in which you most likely won’t invest, it’s still fun to follow the madness. So, this week, I tried to see if the future of humanity is life on a blockchain.


Top of the pile

Crypt..oh not again

The mere mention of crypto makes peoples heads go like this👇

For a lot of normal people who believe in boring old stocks and bonds, looking at the brain shattering returns of crypto has been painful. I’ve noticed, talking about crypto, for these people is a bit like having to talk about their foot fetish with their therapist, it’s embarrassing. For the “crypto is a bubble crowd”, it is like an ill-shaped mole in a really sensitive part of your body, it hurts, it’s uncomfortable, but you have to talk about it.

If you’re a boring person who invests in boring stocks and bonds like me and you’re reading this and are wondering, “why the phak should I bother about crypto” it’s the same reason why we talk about Salman Kahn movies. They might be shit, but they are in the news, and a lot of people watch them. And keeping up with this crypto nonsense is a bit like trying to catch that one Chinese Bat that started the Corona pandemic, it ain’t possible.


The financial markets were a place where serious people with serious education who wore serious-looking clothes tried to make serious money and failed miserably but charged a lot. And, the markets felt professional for a long time, until the pandemic. And then the stupid virus hit, and the markets turned upside down. 

Until then, the serious people with serious-looking clothes more or less moved the markets. But then a bunch of drug-addled teenagers with acne, bad breath and ADD started stealing money from their moms, started trading, and started moving the markets. And then, looking at these teens having fun, a bunch of bored billionaires like Elon, Chamath, and Mark Cuban joined the party. These kids started messing with the serious people with serious clothes.

Remember that scene in The Dark Knight where the Joker torches a pile of money? The financial markets became precisely like that. They went from places for serious people with serious clothes to make money to a place for bored teens & billionaires to fuck with the serious people. 

The markets today resemble a wishing well. No matter how ridiculous the wish, these bored teens can make it come true. Do you want a bankrupt stock to go up 100%? Wish granted – Hertz, a bankrupt stock, rose 900%. Do you want a joke to become serious? Wish granted – Dogecoin a crypto that was created as a joke is up 28000% in the last 1-year . People often think Bitcoin is going crazy, that is until you compare it to Dogecoin. Now it looks like a liquid fund. 

In 2009 Bitcoin came into existence as Peer-to-Peer Electronic Cash System. It was decentralized and no single entity controlled it or regulated it. Inspired by Bitcoin, people launched other coins like Litecoin, Ethereum among others. But soon, things started getting ridiculous. In 2013 a dude named Jackson Palmer launched a new crypto call Dogecoin (DOGE). He launched it to mock the hype and craziness around crypto. It was meant as a sarcastic statement at how ridiculous crypto was and the logo of Coin was a Dog😂 , But little did he imagine that things would become serious and Doge would go up 28,000%+ in a single year.

As of writing this post, the total marketcap of Doge is $92 billion. For Context, Doge is bigger than companies like General Motors, Colgate Palmolive Ford, and Mondelez (Cadbury). 

Mr. Markus, who no longer works on dogecoin, couldn’t believe code he wrote in three hours on a Sunday gave rise to a cryptocurrency worth billions of dollars in total market value. “The idea of dogecoin being worth 8 cents is the same as GameStop being worth $325,” said Mr. Markus, 38 years old. “It doesn’t make sense. It’s super absurd. The coin design was absurd.”


A joke now is worth more than companies with billion is serious money😂

Dogecoin has always been a joke, and the joke keeps getting funnier. The Shiba Inuthemed cryptocurrency, whose community once sponsored the Jamaican Bobsled Team as part of a campaign called #CoolRunnings2, is today worth as much as Lloyds Banking Group, twice as much as Standard Chartered, and almost three times as much as Credit Suisse. This joke currency, created to mock Bitcoin and the rise of altcoins way back in 2013 and 2014, is today worth more than $70B and has rocketed to the top of the crypto list with enormous trading volume, growing ownership, and celebrity endorsements.

There are major deficiencies. Dogecoin has zero development. Few people run full nodes, and those who do often have difficulty downloading the chain or staying synced with the network. There’s no market infrastructure, barely any wallet software, and despite being more than 7 years old, many exchanges still don’t support it. There is no serious longterm narrative or use-case supporting its wide adoption. And it’s not clear whether DOGE holders are dogmatic about the coin’s long-term prospects

Galaxy Digital

Pouring kerosene on all this has been Elon Musk, the founder of Tesla and one of the world’s richest bored billionaires. My theory is this. Elon is bored, he hates regulations and regulators and wants to fuck with them. He did that first with the infamous funding secured tweet. He then encouraged the idiots trying to pump GameStop and since then he’s been tweeting a lot about Doge. And so far he’s gotten away with taunting and making fun of the regulators. But who knows how long his lucky streak will last?

Fun times we live in.

YOLO’ing in India

While most countries are slowly warming up to crypto investing, India seems to be taking a different approach. In India, crypto investing is allowed but not allowed. RBI had asked banks to stop offering banking services to crypto platforms in 2018 and the Indian supreme court quashed that order in 2020. Since then, the Govt, RBI, have been trying to stifle crypto in some really funny ways. The Fin Min wants to ban crypto but not ban crypto. The RBI, meanwhile has gone Mafia style and is strong-arming the banks from working with crypto platforms. And then the NPCI, which runs UPI, has left it to the banks to do whatever they want.

I have to admit, this regulating without regulating is a brilliant tactic😂 Is crypto banned in India? Yes, it is, but it’s not, but it soon will be, but it’s banned currently but not really.

The last time the RBI intervened in the crypto-currency space, it formally instructed banks to stop working with crypto-firms. This time, however, the RBI has passed on instructions directly to individual banks rather than issuing a new policy that applies to all banks at one, two of the founders explained. The said that the biggest issue is that the banks have not communicated the reason why they cut off services because if they sent a letter explaining the reasons, the crypto-firms could challenge such decisions legally.

But all that’s not stopping investors. WazirX, one of the popular crypto investing apps, is seeing so much activity that the platform is having a tough time dealing with the activity: 

Our signups have grown by over 300% in the past three months.

We’re witnessing a new all-time-high every day in trading volume, traffic, user signups, and active traders. We’re working on optimising our system to accommodate more users so that you can trade seamlessly on WazirX!


Crypto lottery

With the prices of Bitcoin and Ethereum skyrocketing, there was a growing demand from institutions and rich people for easy regulated access to crypto. It was easy to buy on exchanges like Binance, Coinbase etc., but the institutions don’t like the default risk that comes with exchanges. And there were no pure-play crypto ETFs and the SEC (SEBI for US) had been reluctant to give approvals. So in 2013, Grayscale Investments set up a trust called Grayscale Bitcoin Trust (GBTC) to offer Bitcoin exposure to accredited investors. In 2015, FINRA allowed the trust to be traded in the secondary markets over the counter (OTC).

The fund was available only to accredited investors (Rich people with a net worth above $200,000) through a private placement with a 6-month lock-up, and there was no direct redemption option. It operated like a close-ended fund. Post that, the units could trade on the OTC markets. And there was massive demand from institutions, funds like Cathie Wood’s ARK, retail investors in Schwab, Fidelity etc. This massive demand caused some insane premiums and discounts

In spite of all this, the fund was a monster hit. And look at the revenues it makes. It generates over $750 million with an AUM of $36 billion and a 2% expense ratio. That’s just stunning, it makes more money than all of Vanguard’s ETFs.

GBTC charges a 2% annual fee, which, when applied to its $36 billion in assets under management, equals revenue of a whopping $756 million. To put that in perspective, that’s more than double the implied revenue of the Invesco QQQ Trust (QQQ), the U.S.-listed ETF with the largest revenue haul. It’s even more than the combined haul of QQQ and the SPDR S&P 500 ETF Trust (SPY), which together generate $650.6 million in revenues. If you add the $10 billion Grayscale Ethereum Trust (ETHE) into the mix, Grayscale is pulling in an estimated $1 billion per year from just two products (it has another 12 much smaller products). For Grayscale to generate close to a $1 billion from just two products—the amount Vanguard takes in from all 82 of its ETFs—is truly impressive.

Living on a blockchain

Blockchain, the underlying tech that powers Bitcoin, evokes a lot of strong reactions. The spectrum of belief ranges from blockchain can solve death to blockchain is a glorified Excel sheet that causes pollution. But regardless of that, the VC bros seem to be betting big on the tech. Here’s an excerpt from this Union Square Ventures blogpost on an interesting use case for blockchain: 

Tokenized natural resources have the potential to become one of the largest crypto asset classes due to the sheer scale of the world’s natural assets. Blockchain technology, when combined with the social power of legitimacy and trusted oracles for climate data, will help realize Ostrum’s vision of governing commons at scale. By aligning financial incentives, this will unlock the true value of natural assets and aid in the resolution of the climate crisis.


At this rate, Bon Jovi will have to remix Livin’ On A Prayer to Livin’ On A Blockchain.

Blockchain jihad

Calling this crypto & blockchain crowd as a cult is a bit like calling murderers as killing enthusiasts. I personally don’t think blockchain is the secret of immortality, nor do I think it’s useless. But its usefulness lies somewhere between those two extremes. But, the crypto blockchain crowd are incredibly zealous. You can’t even make a joke. I think in 5 years, we’ll have crypto terrorists who’ll start blowing up people who don’t believe in it. In 7 years, we’ll have crypto jihadists, and in 10 years, the US will start invading countries, only this time, instead of oil, it will be over crypto & blockchains.

ESG bullshit

There are two versions of ESG – bullshit ESG and good ESG. But 99% of the assets are in bullshit ESG, and I despise it, and I’ve ranted against it at length too. A lot of institutions and money pools allocated billions to these ESG funds, and now it seems like there’s some realization. Japan’ Government Pension Investment Fund, with $1.6 trillion in assets, is having second thoughts.

But top officials of the pension fund have been talking up fiduciary duty lately. GPIF “can’t sacrifice returns for the sake of buying environmental names or ESG names,” a senior director at the fund’s investment strategy department told Bloomberg News in April.

At issue is poor performance. For instance, one of GPIF’s earliest ESG picks was a thematic social index, which invests in domestic companies that hire and promote women. The MSCI Japan Empowering Women Index, the so-called Win index, has fared poorly against the benchmark Topix Index. Performance is all-important to GPIF: the fund is required to pursue a real investment return of 1.7% to support an aging Japan.


Investing in a ESG fund and expecting to do good is a bit like trying not to fart to solve climate change. It’s absolute stupidity. I hope more people wake up to the nonsense and do ESG the right way, whatever that is.

And in what might just be a peak ESG moment, Direxion, an asset manager that specializes in leveraged ETFs, is launching clean energy leveraged ETFs🙄

A new dawn

The long wait for Indians is over. We will soon have a fundamentally solid company that doesn’t believe in bullshit like revenues, profitability and margins listing on NSE & BSE. Yep, Zomato finally filed its DRHP. Apart from the mountains of losses, potential competition in the form of Amazon, the other important thing is founder Deepinder Goyal just owns a 5.5% stake 😮

A few good pieces on the IPO:

How to read Zomato’s prospect(us)
Zomato IPO: Should You Place An Order To Buy Shares?

8 reads

Bull Market At a Time of National Pain

Why Do Fund Investors Neglect Base Rates?

CBDCs: Central Bank digital currencies


Trend Following is Dead, Long Live Trend Following

Transforming Tata

Sorry not sorry

Clearing the Mind Clutter


A nice conversation on rest, particularly important given that a lot of people are burnt now that they’re stuck at home.

Laugh a little

If you’re looking to watch something to forget about all the constant reminders of death, I high recommend Intolerant. Jim Jeffries is one of the best comedians out there.

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