| In attempting to calculate a total for "investment" in the ecosystem my criteria is whether or not the investor considered it an investment. Consider Theranos as a non-crypto example. Fraud, yes, with two people convicted under those charges. Holmes was charged with defrauding investors and not convicted on those counts (IIRC). Balwani was. I think it's relatively safe to say the parallel between people investing in what ended up being a bubble, fraud, etc (from tulips on) was considered as investment from the source of funds - the investors. It's why they call it "speculative investment". Speculative but investment nonetheless. Any early money on moonshot tech companies could be characterized the same way. Just turns out for Facebook, Google, etc it worked out because the founders and team weren't defrauding from the start, executed well, etc. It helps that the fundamental premise of these companies didn't go against human nature and demonstrated tremendous value and therefore significant user adoption from day 1. Where it gets more complicated is going back to the original argument - money poured into the space for what ostensibly should have been work to legitimately further the ecosystem. Frankly I'm not entirely sure how to characterize it but the other issue here are situations like FTX (which I didn't include or mention). They did a lot of legitimate work for a while. How would this be accounted for in this distinction? What about companies like Coinbase that have had wildly swinging valuations? The other scary thing - what about companies/projects/etc that have taken investment but just haven't collapsed yet (due to outright fraud or otherwise)? So... Very complex scenario but I think it's safe to say the core point remains - there's been a ton of money, effort, and time (over the course of 14 years) committed to this space with essentially nothing to show in the real world. I've spent a lot of time analyzing on chain data and at best there are MAYBE 100m crypto "users" worldwide. If we say $100b of investment that's a user acquisition cost of $1000 - and investors can't even fully capitalize on those users due to the decentralized nature of crypto. Hell, let's call if $50b of non-fraud "legit" investment. That's still $500/user which is at least one order of magnitude beyond anything you see in the non-crypto space. If the entire crypto space was a tech startup funded by VCs they would have cut their loses, exited years ago, and crypto would essentially be back at the "investment" model of early Bitcoin (which IMO is perfectly fine and even preferred by many). Even the early web investment period (with the 2000 bubble burst) saw enough successes and returns within the span of a decade (1995-2005) to keep the money pouring in (and returning) to this day. |