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Elites have started saying the quiet part out loud
by Greg Barker
Mike Novogratz infamously likened Bitcoin to a pyramid scheme
This week we witnessed the latest — and perhaps more striking — sign that crypto might not be the future of finance. On Tuesday, Sam Bankman-Fried, founder of FTX, a huge crypto exchange, opened a can of worms by describing “yield farming” — crypto’s makeshift alternative to traditional bank lending — as a Ponzi scheme.
“You start with a company that builds a box,” he said in the latest episode of Bloomberg’s Odd Lots podcast, and “maybe for now actually ignore what it does or pretend it does literally nothing … pour another $300 million in the box and you get a psych and then it goes to infinity … then everyone makes money.”
A stunned guest host and journalist Matt Levine replied with the following: “that was so much more cynical than how I would’ve described farming. You’re just like, ‘well, I’m in the Ponzi business and it’s pretty good’”.
Yes, this actually happened. Here was the most prominent figure in the crypto space, on an extremely renowned financial podcast, openly admitting a major part of the crypto ecosystem was a sham.
Defining whether or not something is — or has become — a Ponzi scheme has been long forgotten; it involves working out if an investment’s…
