Where's the crypto top?

Sam Bankman-Fried's FTX and Anthony Scaramucci's SALT brought the star firepower to an invite-only event on all things crypto in the sunny Bahamas last week.

State of play: Some 2,000 people attended Crypto Bahamas, which featured not only conversations about dealmaking and the development of various protocols, but a panel with Bill Clinton and Tony Blair; parties with Steve Aoki, Katy Perry and Orlando Bloom; and even a tour of a ship with child star Brock Pierce.

Of note: For some attendees, the opulence of the event reflects how crypto's fortunes have become disconnected from the broader venture capital industry and raises the question: Where is the crypto top?

• "Valuations in crypto across the board are way too high," Amy Wu, who runs FTX's $2 billion venture fund, said on stage during a panel with Lucinda.
• "It's priced in right that people think there is 100x more to go — or even more in this industry. And yet, we haven't seen a lot of those use cases yet," she added.

On the ground at Crypto Bahamas, LPs and fund managers also say they've anecdotally continued to see interest in crypto as investors chase yields amid rising interest rates and a pullback in VC valuations.

• "I think interestingly ... you could have a weird situation where the general economy is slowing down, the interest environment is rising, the stock market is flat ... but crypto markets rally for macro reasons," Jeremy Allaire, Circle CEO, said.
• "But I do think the market for crypto is fairly well priced," he added.
• Many old-school finance players are now hopping in. Case in point: Apollo recently hired Christine Moy, previously of JPMorgan, to lead its digital asset strategy. And more are rumored to come.

• Crypto-specific funds, meanwhile, remain abundant.

Zooming out: Crypto conferences have a tendency to go very, very big and at times over the top — giving attendees a sense that the money has outrun the reality of an industry that is still trying to really become mainstream.

• Meaning the question, "Is this the top?" may only get louder this year, with the famous Consensus conference launching in June.

The bottom line: Given the new level of institutional support, no one Lucinda spoke to appeared to believe this will be like the crypto crash of 2018, but anxiety that capital is about to get tougher is rising.

💭 Thought bubble: In the meantime, the funding disconnect between crypto companies and other venture-backed businesses means the former will have more firepower to say hire even more talent away from the latter.