May 23, 2024 - Economy

Crypto industry's lack of narrative allows memes to get all the attention, investor says

Photo illustration of Regan Bozman.

Regan Bozman, Lattice co-founder. Photo illustration: Aïda Amer/Axios. Photo: Courtesy of Lattice

There's no driving narrative from the crypto industry to inspire grassroots investors to believe its future is in making stuff that will be useful in the world, says Regan Bozman of Lattice, an investor in early stage companies.

Why it matters: We're in the middle of a crypto boom, which means a lot of financial power is gathering with no clear place for that energy to flow — so a lot of it is going into memecoins.

The big picture: Bozman's thinking on this is heavily informed by that of Travis Kling, of Ikigai Asset Management, who wrote a popular series of social media posts recently about financial nihilism.

  • The basic idea: In a world where it's harder than ever for young people to attain stability, they are going to take bets rather than make safe investments.
  • With the cost of things like homes growing as fast as they have, relative to income, safe investments — like S&P index funds and treasuries — don't grow fast enough. Betting is actually rational in this world.

What they're saying: "The vast majority of people in crypto are here to make money," Bozman tells Axios.

  • That is, while investors like him might be investing to help crypto projects achieve their useful ends, that's not what the masses have come for.
  • "The crypto industry hasn't packaged and bundled a new narrative that people can get excited about," Bozman says, but he actually took that a bit further.

The friction point: Crypto's big investors, the VC funds, have been focused on the roads and tunnels of the industry, funding more and more blockchains, bridges and exchanges — never quite satisfied with the ones that have come so far.

  • Each one promises that it will be the one that's fast enough, flexible enough to bring a bright new future.
  • Most of what they bring are new tokens and coins, which VCs bought low and sold high to retail investors, until they fiddle into nothingness from then on.

"I think folks are tired of hearing the same narrative," Bozman says.

  • He's still investing in a better future, but that doesn't necessarily mean he thinks those investments will pay off in the near term.

Put all this together, and we arrive at the mania for meme coins right now.

  • To Kling, this means that in this cycle, retail is likely to just skip any pretense that the technology has value and place very short-term bets on funny ideas that pop.

The bottom line: "Meme coins are just more fun," Bozman says.

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