A crazy year for stocks, bonds and cryptoassets is slowly coming to an end. Central bankers are currently tasked with putting out the economy’s burning house with a hammer and investors are hoarding cash for calmer times. As Winston Churchill said, “Never waste a good crisis”. Therefore, we have outlined a few ways to join the exclusive crypto millionaire club this year.
1. Be a crypto billionaire in 2021
Anyone under 30 who has amassed a fortune of more than $20 billion in less than five years has done so. Many people in the crypto world recognized Bitcoin’s potential early on, investing and building businesses whose value propelled them into the elite circle of multi-billionaires.
Penthouses, politics and philanthropy are part of the daily life of this elite club of crypto-billionaires.
This year, a series of crypto bankruptcies began with Terra Luna in March. Fortunately, there was a charismatic crypto billionaire in crypto heaven: Sam Bankman Fried, aka SBF. The 30-year-old studied computer science at the elite university of MIT, worked for well-known Wall Street companies and was involved in cryptocurrencies early on – a well-known pattern. The founder of the hedge fund Alameda Research and the crypto exchange FTX as well as the programmer of the token FTT had accumulated a fortune of around 22 billion dollars in just five years through his numerous projects. He was one of the 100 richest people in the world. He used his unimaginable fortune not only to constantly renew his outfit, consisting of sneakers and t-shirts, but also to save other crypto companies from bankruptcy. As recently as August 2022, it bailed out BlockFi and Voyager Digital operations with capital raises and spent over $1 billion bailing out the crypto industry, though its own business operations also took a hit. suffered from the crypto crash. His reserves from successful financing rounds for his business seemed to know no bounds. However, a single 450-word newspaper article on November 2, 2022 abruptly changed his fortunes, reputation, and overall confidence in the crypto industry. The legally separate units of the Alameda hedge fund and the FTX exchange were more closely linked than expected. The fund used customer funds that were on the exchange, gave the exchange the FTT token as collateral, and happily wagered billions of customer funds. The balance sheets of both companies showed high positions in the FTT token, the value of which was suddenly questioned by other market participants. A resulting “bank run” on the FTX exchange showed that client funds were not fully available for withdrawal. With crypto exchange treating client funds as receivables and not deposits, exchange FTX filed for bankruptcy and SBF’s fortunes plummeted from $22 billion to hundreds of millions on the same day – the largest one person’s loss of fortune for a long time. Now the once charming founder is in custody in the Bahamas awaiting extradition to US justice.
What remains is a young crypto millionaire who can now experience the regulatory process up close and a few lonely penthouses reminiscent of better times.
2. Be a founder of a regenerative finance startup
“Leveraging Deep Tech to enable a carbon-neutral future for generations to comesounds truly inspiring and gives hope for a future without polycrises in a time of uncertainty.
This is exactly the sentiment blockchain company founders are currently able to evoke in investors who are securing record rounds of funding despite a challenging market environment.
The founder of office rental platform WeWork Adam Neumann had disappeared from the media headlines in the spring of 2022. In May, the press announced $70 million in funding for his new venture, FlowCarbon. This startup uses blockchain technology to enable trading based on CO2 certificate tokens. It solves the problem of the regionally heterogeneous and opaque carbon credit market by leveraging the most transparent and global technology for financial transactions, according to the company’s marketing materials. Thanks to FlowCarbon, customers can secure quick and inexpensive access to CO2 certificates, which are required by law for real estate development projects in particular. FlowCarbon is not the only company looking to revolutionize carbon credit trading using blockchain technology: the founders of Toucan Protocol or Senken were able to generate significant investments this year amid the crypto crash, which also made these millionaire founders – at least based on the book value of their stock.
3. Introduce a major new blockchain
The principle of blockchain technology has existed for 13 years: a decentralized, byzantine and error-free ledger. Although only Bitcoin and Ethereum blockchains currently operate stably, without crashes and with a true semi-decentralized network, there are still many attempts to reinvent the blockchain wheel. Cardano, Polkadot, Solana, Binancechain, Cosmos and many others were introduced to the crypto sky just a few months ago as the blockchains of the future and have been able to raise a lot of money from investors, often at the benefit of the founders.
The team led by former Facebook employees Mo Shaikh and Avery Ching was able to raise around $300 million in venture capital in recent years to build the Aptos blockchain. With technical innovations such as parallel execution and the associated capacity to process 160,000 transactions per second, as well as a programming language specially developed for Aptos, expectations were very high. According to developers and marketing teams, other blockchains were on the brink of extinction. In October 2022, the APT native token was listed on all crypto exchanges so that smaller investors could also participate in the big new blockchain. As later revealed, an overwhelming portion of the tokens were in the hands of the founding team and venture capitalists. A thug who thinks badly of it. At
4. Short sellers of cryptocurrencies or stocks
A broken watch is right twice a day, has been ridiculed by crash prophets in recent years. Short sellers borrow stocks and sell them immediately, hoping to buy back the borrowed stocks at a lower price. With the exception of a DAX stock or two, short sellers profiting from lower prices have had a hard time in the steadily rising market in recent years. Fundamentals like price-to-earnings ratio have already been partially replaced by price-to-sell ratio and are tying up value investors. Tesla shares were not only notorious for being outrageously expensive, but also for driving any short seller who held that view out of business or into madness. Not surprisingly, this group of investors also includes a higher than average number of outspoken crypto naysayers.
But what takes time will end up being good. Because this year, after a long test of patience, they were finally right. As the portfolios of some star tech investors have become third parties, short sellers betting against companies that have been criticized for years have reaped big profits. Companies like MicroStrategy were among the most shorted stocks on exchanges, with a short selling rate of around 40%. A report by s3 Partners calculated that short sellers of Coinbase shares would net around $1.3 billion in profits in 2022. Digital asset provider Coinshares noted that September 2022 saw a new high for cryptocurrency , with $158 million, the company seeing the highest volume of its cryptocurrency decline products.
However, it is important to remember that short sellers will buy back their positions when stock market sentiment turns positive again, often contributing to an upward rally.
5. Through sponsorship deals from crypto companies.
Anyone who thinks the salaries of DAX board members are excessive must have fainted at the sight of Twitch leaks in 2021: the Twitch platform acquired by Amazon allows streamers – especially those who broadcast live computer games – to obtain their streams via a payment system remunerated by subscriptions or advice from their fans.
The best known platform earners Critical Role (approximately $10 million annual salary) or xQcOW ($8.5 million annual salary) or DrDisrespect ($3 million annual salary) earn council salaries of directors of DAX or the salaries of the board of directors of MDAX only thanks to their streams. But it does not stop at these revenues, because the money from the sponsorship contracts is added to it.
In 2021, for example, former crypto exchange FTX signed eSports gaming team TSM – a professional team of computer gamers – for $210 million and was paying them salaries in the millions until recently. For comparison, in 1868 the United States bought Alaska for $1.2 million, which would be about $140 million today, adjusted for inflation. According to Businessinsider, a campaign by many streamers and youtubers has recently started apologizing to viewers for promoting various crypto platforms after many fans opened accounts on tips from internet celebrities and have now suffered a loss. total. Fees and commissions for marketing campaigns are said to be in the millions, but were not addressed in the apology letters.
The opinions, information and analyzes presented here are advertising communications which do not meet the legal requirements to guarantee the impartiality of an investment recommendation or an investment strategy recommendation and do not correspond to the representation of the author’s employer. The selection of transferable securities and other financial instruments is also for informational purposes and does not constitute an offer, invitation or recommendation to buy or sell financial instruments. It is only intended to facilitate your investment decision. independent and is not a substitute for proper advice to investors and investments. Please note that transferable securities and other financial instruments are subject to price fluctuations and other risks which may even lead to the total loss of your investment. Past performance is not a reliable indicator of future performance.