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SBF
@SBF_FTX
1) I have a lot of shitposts that are maybe half clever. But I think this is what I learned the most writing:
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SBF
@SBF_FTX
16) As are so many things in life. Some things have direct physical value. To some extent--to a very real extent--everything else is what we all make of it. Most value in the world is born from and sustained by our collective imagination.
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SBF
@SBF_FTX
4) I mean, in some sense, "fuck no". Try googling "GME earnings" and you'll realize why it's P/E ratio isn't usually listed.
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SBF
@SBF_FTX
5) But, in another sense, it is: you can sell GME, right now, for $462 per share. That implies a market cap over $30b. So who's right?
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SBF
@SBF_FTX
6) When people talk about cryptocurrencies, they generally don't talk about fully diluted valuations; they talk about circulating. The reason, basically: that's a better representation of what something has actually raised.
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SBF
@SBF_FTX
7) This can be generalized, though: if you buy $1 of something, it's market cap probably increased by more than $1. Don't believe me? Try buying $1b of BTC. Do you think it's price will increase by more or less than, uh... 0.11%?
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SBF
@SBF_FTX
8) And that's not just in crypto. If you buy $1B of the S&P500, you'd better expect price to increase by more than 1b/30T = 0.003%. This is because, when you buy something, *everyone*'s share prices increase, not just the people you're buying from. Market cap go brrrrrr.
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SBF
@SBF_FTX
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@SBF_FTX
9) So does that mean it's fake? Not necessarily! People have said that, many times: about BTC, and TSLA, and internet companies, and gold. They're often wrong.
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SBF
@SBF_FTX
10) It still matters that those other shares increased, *and the holders chose not to sell*. And people chose to buy anyway. The buyers and the holders and the sellers met, and agreed that TSLA was worth $822 per share. And
@elonmusk
chose not to sell (too much, I guess!).
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SBF
@SBF_FTX
11) So in some sense the world still does think that's really what the asset is worth, even if it hasn't really bought $800B of TSLA yet. Because the world, and
@elonmusk
, and the buyers, and the sellers, and the VC firms, all agree, I guess: That TSLA is more than its earnings
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SBF
@SBF_FTX
12) Because they see where it was, and where it is, and where it might be. In 15 years, will 20% of all cars be TSLA? How confident are you that the answer is 'no'?
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SBF
@SBF_FTX
13) So, ok, this has happeend before, but not like _this_. Not like
@wsbmod
. What changed? Social media. Love it or hate it, it's changed the world.
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SBF
@SBF_FTX
14) See, before, if a few friends decided to buy GME, they'd buy $3k, and pay a 1% spread. Then the internet came, and those 3 people became 10,000 people. So they bought $10m, and it went up 5%. And then hedge funds sold because it was "rich", and it went back down.
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SBF
@SBF_FTX
15) But now there's social media, and
@wsbmod
has 400k followers in a day. And so now it's not a few friends, or ten thousand message board readers. Now 1m people, together, decide to buy GME. And together they buy $1b.
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SBF
@SBF_FTX
16) And when they buy $1b, GME goes up in market cap by $10b. And then something new happens. For the first time, the masses, together, sometimes add up to a larger trade than the hedge funds. And so if the hedge funds short... Maybe GME goes up anyway.
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SBF
@SBF_FTX
17) And then there are the cascade effects: the liquidations and short squeezes and press and follow-on. And so GME goes up more.
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SBF
@SBF_FTX
18) And, of course,
@elonmusk
realized this first. Because he's popular enough--and his vision is compelling enough--that when _he_ fought for his company, it grew $800B.
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SBF
@SBF_FTX
19) And, of course, there's Bakkt, a company with no revenue or users (but a healthy dose of expenses!), looking towards a $3b+ listing. twitter.com/SBF_Alameda/st (If that gets you $3b, imagine what actual volume and revenue and profit gets you!)
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SBF
@SBF_FTX
1) BAKKT is about to go public. There are a number of "interesting" things in their deck. sec.gov/Archives/edgar
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SBF
@SBF_FTX
20) And, again, none of this says who's right, or who's wrong. Because, in the end, some things have direct physical value (or revenue, or something like that). To some extent--to a very real extent--everything else is what we all make of it.
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SBF
@SBF_FTX
21) Most value in the world is born from and sustained by our collective imagination.
Quote Tweet
SBF
@SBF_FTX
16) As are so many things in life. Some things have direct physical value. To some extent--to a very real extent--everything else is what we all make of it. Most value in the world is born from and sustained by our collective imagination.
Show this thread
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SBF
@SBF_FTX
22) So I don't know if these will go up or down. Maybe they're a bubble; maybe they're a rocket ship. Maybe they've found a new in-between. They're volatile and risky, and you should use your best judgement. Maybe you should go long, maybe short, and maybe neither.
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SBF
@SBF_FTX
23) Right now, on Robinhood, you can no longer buy GME; you can only sell. Maybe you gotta do what you gotta do, but that's not what we aim for. FTX was built by traders, for traders. And we want to give you the products you want.
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