VCs Invest For Protection

A theory about why early investors got involved in BitCloud, particularly focusing on self-protection strategies.

"The way they launched this is extremely dubious. It's possible that the investors bought in to protect themselves. Because the value of the coin scales in a certain way, if you understand how it scales, you can set up a blockade against character assassination by buying enough of your own coin to drive the prices up so most people can't buy it.

If you have the resources, you could buy a significant chunk of your own coin, which would drive the price up so high that you would own the vast majority of coins that will ever be issued. For these mega firms, maybe that's what they did. I don't know if they really believe in the idea or if they did it as potential protection against future downside that happens to come with enormous potential upside.

I don't judge anybody that did it because it makes perfect sense - turning a few million into billions of dollars is literally why they exist. But it's worth remembering that saying every major investment firm is involved in this is kind of like saying every major influencer is involved - the company didn't give anybody a chance to opt out."