Quitting Banking to go after Cryptocurrencies

Hey monkey,
I recently read this article discussing bankers leaving their jobs in search of cryptocurrency 'gold'.


Richard Liu gave up a seven-figure salary this month to get into one of the hottest financial instruments around right now: initial coin offerings. The former China Renaissance deal-maker has since backed a clutch of cryptocoin sales that've raised millions -- sometimes in seconds -- often without a single product.

From Hong Kong and Beijing to London, accomplished financiers are abandoning lucrative careers to plunge into the murky world of ICOs, a way to amass quick money by selling digital tokens to investors sans banks or regulators. Cut out of the action, a growing cohort of banking professionals are instead applying their talents toward buying or hawking cryptocurrency.

Many are saying that traditional investment banks should start looking at this space. I believe much of allure of digital currencies is the seemingly unlimited barriers and gains.


The U.S. Securities and Exchange Commission signaled greater scrutiny of the red-hot sector when it warned on Tuesday that ICOs may be considered securities, though it stopped short of suggesting a broader clampdown. The regulator however did reaffirm its focus on protecting investors: part of the appeal of ICOs lies in the fact that -- for now -- anyone with a bold idea can raise money from anybody.

What's interesting is that ICOs (initial coin offerings) don't give you a shares of a company. Instead they give you virtual tokens, or cryptocurrencies, in hopes of spreading their technology.

What do you guys think of these? Is it all just a bubble as many individuals have suggested? Is there really value in these ICOs or are we looking at the next Dot Com bubble just on a different playing field?

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Comments (18)

Jul 26, 2017 - 6:38pm

So speculative it's ridiculous. Blockchain technology is solid, but all of these me-too crypto currencies smell like a pump and dump. It's taking advantage of dumb retail investors looking to make money quickly.

Be excellent to each other, and party on, dudes.
Jul 26, 2017 - 7:18pm

Agree with this statement. Blockchain tech is being integrated into some major tech companies and even some BB banks at this point, but the currency seems like an unregulated nightmare that no one knows how to value properly.

It's flashy and sells itself on the tech-addicted millennials who are throwing money at it with no idea what the hell they're doing. The people who understand cryptocurrency well will make a killing in the shortrun and the smart ones will take they winnings and run before it gets regulated or taxed like everything else in the U.S. and the bubble pops.

Jul 26, 2017 - 7:21pm

Lol the corrupt U.S. Government cant regulate or get her hands on cryptocurrencies that's the beauty of it. Hopefully BBs just sticks to advisory.

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Jul 27, 2017 - 11:30am

I am a part time miner of cryptocurrencies. I also did some bitcoin trading in 2011 back when they were very cheap. There might be some coins I will never access because I got out of crypto and the Mt Gox crash kept me out of it.

I think crypto has some uses. They need to make is scale and to ensure security and decentralization. Ethereum ICOs keep getting hacked, exchanges keep having issues (BTC-e recently) this makes the whole thing looks like a ponzi scheme.

I think the ICOs are ridiculous, I won't ramble on.

So why do I mine? I mine 2 coins - one for the profits and the other for the long term. Crypto is full of hustlers, liars and crooks. Then there are the good developers who want to make something useful.

Find good dev teams making good software and you can make some money.

Jul 27, 2017 - 11:54am

When I think about digital currencies I position it via two questions:
What drives traditional currency fluctuations?
What drives digital currencies?

The answers are quite different. To be completely fair, you could posit a third question:
What is the value of currency backed by? The answer used to be gold but that is no longer the case. So is it possible these things have a legitimate future place in commerce? Sure. The question you always have to ask as investor is whether it is probable. My personal opinion: See "Tulip Mania".

Jul 27, 2017 - 12:38pm

The amount of people who have far more invested than they can afford to lose in many cryptos and ICOs is unbelievable, a quick skim of some of the forums will show how apparent this is. It's a house of cards waiting to tumble.

Also, the fact that half the people who currently hold BTC / ETH / LTC have no idea about how to securely store them, nor about any of the upcoming important events (segwit etc.), really make me think that rather than being a gold rush, many are likely to get burnt.

I saw one ICO whitepaper for a crypto HF, seeking to raise something like $10m, and the guys behind it were super young with absolutely no experience whatsoever... Couldn't believe some of the positive sentiment I read on other forums about it. Sure there are some interesting ICOs on the horizon, but they are few and far between.

Best Response
Aug 4, 2017 - 1:57pm

Is it just me or do people trading crypto"currencies" look like a bunch of kids trading Magic The Gathering cards? They only have value in that subculture. A currency, by definition, is issued by a government and backed by that government and the economy of the country over which they preside. You're required by law to transact and accept payment in dollars in the US, for which you can buy all the goods and services the country has to offer, and the dollar itself is a commoditized IOU with no actual value. (value of the paper is maybe a fraction of a cent). So if you don't accept dollars, the government will park a tank in the lobby of your building, and if you do accept dollars you have access to the entire economy. Add to this the fixed amount of each cryptocurrency means the money supply can't expand/contract as needed, and so by default will limit any economy adopting them.

Compare that to Kanye/Doge Koin where the primary driver of any market price is some troll on a virtual exchange saying "yeah man, they're gonna be big, give me your money".

Besides, who the heck wants to calculate what the floating point market value of their 0.0005% BTC is worth at any given point in time when all they want to do is buy a bagel? Everyone just prefers to whip out a dollar bill and move on with their life.

Blockchain and other advanced algorithms are certainly useful and will see expanded utility, so that gravy train is totally worth jumping on. But CoCoLoCo Koin$ are probably going to all die out if the government doesn't crush them like a bug first: a simple edict reminding people that issuing currency is solely the right of the gov't will highlight that the whole bitcoin thing is a felony at best, and more likely just a huge fraud. Don't hinge your career on them.

...and my firm works directly with distributed ledgers so yes I "understand" bitcoin. It's garbage.

Get busy living
  • 4
Jan 28, 2018 - 1:36pm

i don't think you should quit banking to go after cryptocurrencies until you really understand what you're doing.

that being said, i wouldn't make a decision based on what people on this forum are saying. like honestly the comments on this thread and what most people say about cryptocurrencies (on both sides of the debate) are actually just retarded. i would read about it, look at the data, and trust your ability to interpret the data correctly like your education should have taught you to do.

the concept that something "does not have value because it does not produce cash flows" is a silly and disturbingly misguided attempt at applying financial theories learned in school. it depends what you mean by this phrase "produce cash flow." bloomberg or your laptop doesn't have a "output my cash flow$" button, but it has a lot of value. next time you go to an office building, ask yourself: "where do the cash flows come out of these objects in front of me?" Of course, we all understand that most things do not "output cash flows" and we would of course never take that as evidence that they are value-less. this is because the value is produced indirectly in service of other activities that produce cash flows. the same is true for many of these crypto-assets. it never ceases to amaze me how smart people can say such retarded things about valuation. (where do the cash flows come out of you? do i find them in your asshole? do i find them in your ear orifice or under your tongue? is the fact that I cannot find this location in your body an argument that you lack economic value? of course not. if you have economic value, it is because you contribute to an entity that creates cash flows and the fact that there is no part of you that has cash flows has nothing to do with it.)

the claim that it is a fad is also really silly. what does the word "fad" mean to you? define this term precisely when you use it and compare it to things that look like fads and are, look like fads and aren't fads and all the other combinations. the term "fad" operationally just means "this is a high growth event that is short lived and cannot continue." By this logic, fidget spinners are a fad but lululemon pants are not (because if something happens for a decade it is no longer very useful as an investor to call something a fad). Are you sure cryptocurrencies are a fad? Transaction volumes have grown at 50-100% year over year for almost a decade. When that happens we usually do not call this a fad in most other instances, especially since shorting something like that is a really fast way to become one of the poorest people you know. Sure, there are bubbles in the crypto-currency space, but this does not mean that this asset class is a fad.

the best argument that it is a fad is that a lot of people that invest in crypto-currencies are retards and weirdos. this is an indisputable fact and usually this is a good proxy for decision making (e.g., do what a lot of smart people do and not what retards do). but when someone calls it a fact that it is a fad or a bubble, ask them to show you a data-driven answer that doesn't use the intelligence of the typical crypto-enthusiast as a form of data. i think when you look at the quantitative data and inform it with sound monetary theory, you get a far different answer and you simply just do not get the answer that this is a bubble.

the argument that "i have not seen use cases in my life" is also just a really stupid argument. just thinking from first principles, this statement requires something like a negative existential proof, which shouldn't be something you should give much credit from a logic standpoint.

if you live in new york or san francisco, you didn't know people that voted for trump, but guess what he won. asking about usability by referencing the set of people you know is a terrible decision-making heuristic when the set of people you know is just not at all similar to the intended use of the product at the current moment in time. in this case, it's just plain wrong because people tend to associate with people similar to themselves. how many felon drug lords do you know or child pornographers do you know? well, guess what, those were the early adopters of this technology. so, yeah, of course you don't know those people and frankly that's a good thing. that doesn't disprove it was an incredibly useful technology for people that are unfortunately in that line of business. many of the future use cases will be legal, pro-social and good for society, but the best we can do is think about theoretically where it can be used at this point in time. but saying you haven't met people who have used the technology is actually just really stupid. it's like being a person from san francisco saying "i don't understand how trump won because i don't know any trump supporters." (it also becomes pretty clear why people

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