Whilst crypto is a factor, I don’t think it’s the main one here. If FTX/Alameda had held the bulk of their reserves in BTC or ETH, this wouldn’t have happened. Although granted, they may not have got anywhere as big as they did get if they had done this—it seems likely that the $16B was mostly illiquid paper wealth that they couldn’t’ve spent fast even if they wanted to.
As someone who’s rode out 3 previous crypto crashes of ~90%, ~70% and ~93%[1], I think in the long run it’s still a good bet, and I’m still holding[2] (If I had cashed out at either of the first two peaks I’d have much less than I do now, and even now I’ve got ~what I had at the 3rd peak. There is less potential in multiples though now than there was; maybe another 10-100x is possible in the next decade? [Not financial advice!]).
In general, I still think EAs should be ~risk neutral with their investments (i.e. much more risk taking than the average investor), given the value of spending on EA work scales ~linearly with money spent (vs. value gained from personal consumption scaling logarithmically, not to mention starting at a much lower QALY/$ rate!). This is especially so for those who have secured their own financial independence, and are investing money that is surplus to their own personal/family requirements. This may mean that the median EA investor loses money, but that shouldn’t matter so much if the ultimate total is higher—we are all on the same team.
Whilst crypto is a factor, I don’t think it’s the main one here. If FTX/Alameda had held the bulk of their reserves in BTC or ETH, this wouldn’t have happened. Although granted, they may not have got anywhere as big as they did get if they had done this—it seems likely that the $16B was mostly illiquid paper wealth that they couldn’t’ve spent fast even if they wanted to.
As someone who’s rode out 3 previous crypto crashes of ~90%, ~70% and ~93%[1], I think in the long run it’s still a good bet, and I’m still holding[2] (If I had cashed out at either of the first two peaks I’d have much less than I do now, and even now I’ve got ~what I had at the 3rd peak. There is less potential in multiples though now than there was; maybe another 10-100x is possible in the next decade? [Not financial advice!]).
In general, I still think EAs should be ~risk neutral with their investments (i.e. much more risk taking than the average investor), given the value of spending on EA work scales ~linearly with money spent (vs. value gained from personal consumption scaling logarithmically, not to mention starting at a much lower QALY/$ rate!). This is especially so for those who have secured their own financial independence, and are investing money that is surplus to their own personal/family requirements. This may mean that the median EA investor loses money, but that shouldn’t matter so much if the ultimate total is higher—we are all on the same team.
Yes, I know the pain of thinking of what the money could’ve been spent on (saving lives etc)
Although I have diversified a fair bit into (similarly high risk) start-up investing over the last year or so.