• The Informer Post
  • Posts
  • Messari Founder Says Greater Fool Theory Will Soon Crush DeFi Traders

Messari Founder Says Greater Fool Theory Will Soon Crush DeFi Traders

September 12, 2020

Messari co-founder Ryan Selkis is putting decentralized finance (DeFi) traders on notice.

In a tweetstorm, Selkis predicts that the growing DeFi bubble will pop sooner than most people expect.

“We’re nearing the apex of ponzi economics, rug pulls, and ‘yield’ hopping, and ETH fees are going to eat too heavily into non-whale profits.”

The Messari chief executive also highlights the similarities between the DeFi bubble and the ICO boom of 2017.

“ICOs boomed for a while because everyone (laughably) thought there would be a coordinating utility token for every industry. DeFi is just one big pool of capital sloshing around a small group of insiders and mercenaries who will soon run out of victims to fleece.”

Selkis compares the space to greater fool investing – the theory that you can make money on overvalued investments by selling them to new, gullible investors later on.

Still, Selkis is a fan of the innovation that DeFi represents, and he says a better way to invest in it is to put some money into a few blue-chip DeFi assets and forget about them for 3-5 years.

“I LOVE this experimentation. Like ICOs, yield farming/ incentivized liquidity provisioning is a novel innovation in capital formation. Smart people are making a killing. But I don’t recommend DeFi to most people because I don’t recommend high-stakes Vegas poker to fish.”

Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any losses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.

Featured Image: Shutterstock/GrandeDuc