Sherrinford's Shortform

Sherrinford

Sherrinford's Shortform — LessWrong

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Several posts in this or the ea forum seem to suggest that it's kind of standard among people in the community to have invested a large share of their personal wealth into crypto, and in ftx in particular.

Why should this be assumed? Are there statistics on that?

I used to believe that most people have a diversified portfolio, both inside and outside of the communities. Isn't that the case?

3Dagon4y

I think it's ... not common nor standard, but not uncommon that especially younger people in techie communities have an outsized share of their net worth in crypto. I doubt they INVESTED the majority, but if they invested a small-ish amount very early, it will have become the lion's share in the explosion of a few years ago. Depending on the population/segment you're talking about, most people have no significant portfolio, just savings and debt. Many will add real-estate before financial investments. Then there are a fair subset of (again, mostly younger) people who are RobinHood-style traders. Buy for fun, maybe make a lot, maybe lose most of what you put in. It's a minority who have enough assets and long-term focus to actually design and implement a portfolio. Of that minority, a majority is diversified via mutual funds, often in retirement accounts.

1Sherrinford4y

So if I understand you correctly, some techies in the lw and ea communities have put some money in there and due to the strong increase of crypto prices, the worth of their crypto assets had increased a lot. Now that a lot of it is dust in the wind, these people have lost a lot, but if it had only grown from a small-ish amount, they are not really worse off than they would have been with conservative investements, right? I am asking because I still don't fully understand posts like this. I think I understand the "job security" part and also would understand if it was about the monetary loss to important EA causes, both because SBF gave money to EA. But the text explicitly mentions "personal savings" even before job security, and does not explicitly mention EA causes.

Dagon4y20

Ah, misunderstood "people in the community", and answered for a much larger community of rationalist and adjacent techies.

I don't really follow the EA side of things that closely (I support the stated mission behind the name, but it seems to have become rather cultish on many topics). I presume the post you reference is mostly about Sam Bankman-Fried and his circle - he's the CEO/founder for FTX, and also a fairly vocal/visible EA ... Participant? Donor? Unsure of exact descriptor, but I can imagine that many in that group are afraid for him and his loss of wealth (and loss of status due to seemingly bad behavior), as well as many of them being personally invested in that particular branch of crypto.

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