Nov 19, 2021 - Economy

A billionaire's crypto win

Photo of people taking pictures of the U.S. Constitution on their phones

People take pictures of a copy of the U.S. Constitution during an auction at Sotheby's last night. Photo: Yuki Iwamura/AFP via Getty Images

The story of a group of cryptocurrency traders failing to buy a copy of the Constitution shows just how much of a gulf there still is between the real world and the crypto world.

Driving the news: Hedge fund billionaire Ken Griffin outbid a group of 17,437 donors in an auction at Sotheby's last night, promising to pay $47.4 million for the document.

  • Because he had promised Sotheby's he would bid on the work, using something called an "irrevocable bid," or third-party guarantee, he was entitled to a $4.2 million rebate, bringing his net price down to $43.2 million.

Why it matters: As crypto adoption spreads, the asset class is going to be increasingly enmeshed with systems that have existed for centuries, like 277-year-old Sotheby's. The shenanigans show that players fluent in the old ways still have a narrow edge in the game.

Catch up quick: ConstitutionDAO this week raised about $47 million to bid on the document.

  • Think of ConstitutionDAO as a more pseudonymous, crypto-centric version of a GoFundMe or Kickstarter project, as Axios' Scott Rosenberg and Peter Allen Clark write.

Between the lines: The DAO wasn't legally allowed to bid on the Constitution. Instead, an old-fashioned LLC had to be constructed to make the bid, with extremely opaque governance ties between the DAO and the LLC.

The bottom line: Memes have become powerful enough to propel crypto participants into areas they barely understand.

  • But Griffin, a noted crypto skeptic, knew exactly how much money his opponents had and, therefore, exactly what he needed to bid to win the document.
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