Commentary: Why I’m still not taking crypto seriously
LONDON: I keep on being told that it’s time I took crypto seriously. Crypto, goes the refrain, has “gone mainstream” – from BlackRock to UBS, every major investor is at the very least “exploring” it these days, while the big firms have tens of millions of retail investors each.Governments are bullish, too: Britain is taking a “forward-looking approach” with the chancellor hoping to turn the country into a global crypto hub, putting the United Kingdom right up there with El Salvador, where Bitcoin is now legal tender.I can joke, but if I haven’t bought into crypto, then the joke is actually on me, or so people keep saying.
And yet, try as I might to take it seriously, I keep on coming up against new ways to find crypto absurd.Recently, the comedy came courtesy of the nominatively determined Sam Bankman-Fried, CEO and founder of crypto exchange FTX, a company recently valued at US$32 billion.
On Apr 25, Bankman-Fried, himself recently valued at US$24 billion, appeared on Bloomberg’s and was asked to explain how a newish crypto phenomenon called yield-farming works.Yield-farming – a rather complex practice that essentially offers investors a chance to turn their crypto into more crypto, by borrowing money from the customers, giving them a “governance token” in exchange, and farming out this crypto into other coins and “DeFi” projects offering high yields – has long raised eyebrows.That’s not just because of the unusually high returns it promises, but also due to concerns that retail investors don’t really understand it and thus are not fully aware of the risks involved.You might think therefore that Bankman-Fried, whose platform offers this very thing, might try to dress it up as a grown-up financial product.Not so much.
