Pt. 1: The collision of financial value, cultural value, community value. Worlds are colliding. When culture becomes finance and when community is at the center of culture, the meaning of asset ownership changes. Financial value, cultural value, and community value have now merged together. Owning certain assets that have community value or sentimental value, like CryptoPunks or Bored Apes (BAYC) or sports cards, may drive a different type of behavior around asset ownership. Will holders of a certain rare sports card sell because they can achieve financial returns? Possibly, but now sentimental value must be factored in. Will holders of a CryptoPunk or Bored Ape (BAYC) sell because they can return meaningful capital? Possibly, but then they forego something that may be hard to put a monetary value on - entry into a community or an online identity (see the pfp phenomenon that we discussed on the “All that glitters gold” podcast). In a world where 💎🤲 (diamond hands) may feature more going forward, we must think about how investors can utilize those assets in ways where they can hold onto those assets but still gain access to capital to live their lives. Both traditional financial institutions and emerging companies may do well to think about liquidity and what it means to value new types of assets in the age of Community x Capital. We pose the questions in Part 1. We’d love to hear your answers. And stay tuned for Part 2 of this discussion coming out soon.
In a world where community-driven investing is now a defining feature of the retail investing world in equities and crypto, how should people create an investment framework? Perhaps the framework for investing becomes different in a world where any asset in the world can be investable and tradable. A modern day investment thesis looks a lot different in a world where memes matter and riches are made from primary research on Reddit rather than by roaming retail stores to understand consumer behavior (as many hedge funds would do). Crypto has unlocked the ability for individuals to create wealth at the same time as institutions. There is power in that. And therefore, the people who may be best suited to invest into many of these community-driven assets may be those who are doing their primary research by spending time in Reddits or Discords. Welcome to the modern world of investing.