THE BASIS POINT

Linette Lopez with cold truth on 2023 VC & crypto meltdowns

 
 

Business Insider columnist Linette Lopez pulls no punches — as usual — in her 2 most recent pieces on Miami’s crypto meltdown and whether VCs will learn anything from this bank crisis. The Basis Point’s perspective skews supportive of fintech, housing, banking, but it’s also critical to look at the cold truth on these themes. And few are better airing these truths than Linette. So here are some excerpts and links to her current posts.

LINETTE LOPEZ ON VC BANK CRISS LESSONS

Since the stunning collapse of Silicon Valley Bank, I’ve seen the tech world point a lot of fingers. I’ve seen venture-capital titans and tech gurus blame the regulators, the banking system, the Federal Reserve, Joe Biden, the bank’s communications team, and anyone else within shouting distance of this mess. But I have yet to see any of these grown-ups take some of the blame for themselves.

There has been little self-reflection on the part of the industry that was so closely tied to Silicon Valley Bank. And in the midst of these immature excuses from VCs and shallow recriminations from billionaire investors, the seeds of the next bubble are being planted.

Do not expect any apologies from the leaders of Silicon Valley. The culture they built told us they were here to “move fast and break things” and in the true spirit of caveat emptor, we should have listened. The destruction wrought by SVB could be a moment for Silicon Valley to take a step back and reflect on its relationship with growth, the way it raises capital, and how it nurtures companies. But it won’t be.

LINETTE LOPEZ ON MIAMI CRYPTO MELTDOWN

When I visited Miami in January 2021, the gentle winds of stimulus cash and pandemic-era savings had turned the city into the capital of crypto and a paradise for a new type of too-online stock jockey. But when I returned in January this year, signs of the market’s meteorological reversal were everywhere.

Not that the city’s longtime residents are rattled by any of this. Miami has been home to many a frenzy — the land grabs of the 1920s, the cocaine boom of the ’80s, and the real-estate bust of 2008. Every time there is a boom, the city is invaded. And every time there is an inevitable bust, the carpetbaggers clear.

The real-estate broker told me that during this boom, they took a lot of young men in the crypto world to see properties, though they rarely bought anything. They were cosplaying as wealthy real-estate gurus, the broker said, “trying to be an expert in something they didn’t really understand,” and they were often uninterested in whether a prospective deal made financial sense. There was a lack of grounding in their property viewings, often espoused by the improbable combination of naivety and a new girlfriend at every meeting.

The people who survive in the city, whatever the weather, are those who make a living supporting its glamorous lifestyle. They work in nightlife, hospitality, real estate, and anything that can provide the infrastructure for revelers’ good time. Like so many speculators before them, the crypto kids came and went, barely leaving a mark in the sand. Some of the wealth that came into Miami over the past few years will stick. But just like in the wider market crash, much of it is gone forever.

Go read her posts in full…

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Reference:

VCs ‘will learn nothing’ as post-SVB era plays out

Miami’s brutal crypto meltdown

 

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