Voyager Digital bites the dust[Finance Fridays]

This is why it's important to start to understand the basics in fields like economics and finance.

Jul 08, 2022

Happy Friday my lovelies,

A lot of you really liked last week’s post on Saturday, about my 100 USD per hour offer on Wall Street. I’ve made a video with more details here.

Meanwhile, I have some pretty grave financial news for you. A few weeks back, we covered the cryptocurrency crash, where over 60 Billion USD of money was wiped out. Well the situation has continued to get worse, with more people losing a ton of money and major players starting to go bankrupt. Following the trend in the market, Voyager Digital, another major player in the cryptocurrency market has gone belly up.

Keep in mind that many of the people investing money into these projects are well-educated professionals (including those in tech). Greed really doesn’t care about your degree. Image source

Voyager is a crypto lending firm (like Celcius, which has also… faced troubles). Cryptocurrency lending refers to the process of loaning fiat money or a stable digital asset for a fixed period of time and an interest rate. This is similar to how we deposit money in the bank for a given interest rate.

There are some very interesting learnings from this fiasco that we must take away.

If it sounds too good to be true- Many of these projects were offering insane returns (20%+). Keep in mind for a group to give such high returns, they will have to make even higher profits. Ask yourself if you really see any of these projects making these high returns.
Beware of leverage and hype- The old adage goes that you sell your stocks when the shoe shiner starts giving you tips about the market. This holds true even now. If most players in the space are leveraged (they have borrowed money to invest), then that domain is very fragile. Tread those waters carefully. This was true in 1929. It was true in 2008. It’s proven true now.
Understand the fundamentals of the industry you’re getting into- Many talented engineers were stoked to work in Coinbase and these other projects. Many of those talented software devs are now jobless. Nobody can predict the future. However, many financial professionals and observers have been pointing to the unsustainable promises, sketchy practices, and Ponzi-scheme like structures of the projects. A combination of greed and ignorance blinded people and had them rushing headfirst into a slaughterhouse. It’s okay to ride the waves and try to make it in a risky space. But you need to have a backup in such cases. Most of the coders that have been hit hardest had no idea this was coming. As we say in MMA, “The most dangerous punch is the one you don’t see coming”. If you’re going to get into a space, learn at least the basics around it.

For those of you that want to learn more about this, I’d suggest watching the following Spencer Cornelia video. He’s one of those observers that has been covering the more dangerous promises/practices in the space. He covers this situation with his characteristic wit and stinging punchlines.

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Go kill all and Stay Woke,

Devansh <3

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