The demise of a DAT company

Yesterday, several well-known media outlets in the encryption ecosystem reported a piece of news, which I divided into three parts:

The $1 billion Ethereum DAT plan led by Li Lin, Shen Bo, Xiao Feng, Cai Wensheng, and others has been put on hold, and the funds raised have been returned. This plan is the largest DAT dominated by Asian investors.

Regarding the reasons for the suspension, the relevant news reported the following:

Industry insiders speculate that the main reason for the stagnation is due to the bear market following the 1011 incident, and recently, the stock prices of many DAT companies have also seen significant declines.

As for the subsequent plans, the news reported it this way:

Regarding whether the plan will be restarted, relevant individuals stated that investors' interests will be prioritized, and currently, it is pending market observation, follow the trend.

When the news about these celebrities preparing for this Ethereum DAT company first came out, I started paying attention to it. There are two main reasons:

First, in my impression, some of these people are able to focus on long-term interests and reject short-term actions.

Secondly, some of these individuals made significant contributions to the early growth of Ethereum.

In my opinion, forming this Ethereum-based DAT company led by such individuals is a relatively rational company that is not swayed by market emotions and can make its own independent judgments.

Moreover, the target they are investing in is Ethereum. In my view, looking at the long term, the choice of this target is undoubtedly correct. From the perspective of target selection, the risk is quite manageable.

Therefore, this DAT company is worth paying attention to, at least it is much more rational than some brainless claims that Ethereum will reach XXX dollars by the end of this year and XXX dollars next year.

The only point I had doubts about at that time was:

Is it a suitable time to enter the market when Ethereum has already risen to over $4000? Is it possible to find a more appropriate entry point?

Of course, if we look at it from a longer-term perspective, entering at 4000 dollars is also possible, but the entire team may have to endure the pressure brought by the market in the short term.

Time has come to the present, in recent days the market has been filled with news of daily crashes------------- I have been waiting for this day for several months.

I check every day whether Ethereum has dropped below $2500 and whether the S&P 500 index has been hit hard.

Then I happened to see the message above that I divided into three parts.

I divided the message into three parts because each part is worth pondering and exploring.

Let's first look at the second paragraph, to summarize: the reason for putting the plan on hold is due to the bear market.

According to common sense, if you have a long-term positive outlook on an asset and believe in its potential for the future, shouldn't you enter the market when it is bearish, being greedy when others are fearful?

I can't comment on whether entering the market at the current price of 3000 dollars is a good idea, but it's definitely better than entering at the previous price of 4000 dollars, right?

Why are people now hesitant to enter the market even though prices have dropped?

Is it because the fundamentals of Ethereum have changed?

I also seem to not see any news proving that the fundamentals of Ethereum have changed.

I also thought of another explanation: the team believes that the current price level is still not good.

But if that's the case, then we can definitely wait a little longer for a lower price. There's no need to return the funds to investors right now; instead, we should intensify our efforts to raise capital and tell investors: the price is low now, making it a better time to enter the market. We need the money to seize this opportunity.

So this explanation seems to be unreasonable.

The third paragraph seems to explain the deeper reasons for suspending the plan. In summary: it remains to be seen, and one should act according to the circumstances.

What does this phrase “顺势而为” mean?

What I can think of is the “trading mindset” of the vast majority of people:

The market is rising now, so I (regardless of the method used) judge that the market will continue to rise in the future, which means I have the ability to predict that the market will continue to rise for a period of time. It is at this time that I will buy.

On the contrary, the market is falling, and I judge that the market will continue to fall, so I can't buy anymore.

Actually, if we follow this kind of “trading mindset,” there are countless meme coins in the market that can put this strategy to use. There's really no need to target Ethereum----------because you already have the ability to judge the market's next trends, so why not look for a more volatile asset?

There is another sentence in the third paragraph that is worth pondering: “Relevant parties have stated that they will place the interests of investors first.”

“Put the interests of investors first”?

Isn't it the best practice to prioritize investors' interests by buying a long-term potential asset when the price is lower?

Is buying only when the market is rising steadily really putting the interests of investors first?

I guess the real meaning that this sentence wants to express is probably not “putting the interests of investors first”, but rather “putting the emotions of investors first”.

Why?

Because the vast majority of investors often care more about emotions and short-term market feedback. When you buy something, if it doesn't rise in three days, they get anxious. If you talk to them about what will happen in a few years or even a year, they are not patient enough to listen. They are more interested in why it hasn't risen in the past three days. If you can't comfort them at this point, then it becomes a problem.

And the current encryption ecosystem is facing such an environment.

In a market environment that is not very ideal, if one enters the market at this time, what should investors do if the price of Ethereum drops further?

So it's better to put the plan on hold to avoid the risk of investors' money facing potential losses in the short term. As for the long-term potential and future prospects that were once envisioned, it's simply impossible to explain that to investors at this time, and even if explained, it may not be useful.

The situation where investors appear is a problem that many fund managers will face.

In the past few days, I watched an interview with Lin Yuan, which talked about this issue.

During the interview, the journalist asked him: What will you do if your investors have objections to your investments?

He answered very straightforwardly: Why bother with them? The agreement has already been written.

The reporter asked again: How do you explain it to them?

He answered just as bluntly: no explanation.

Regarding Lin Yuan, I appreciate many of his views, but I also think some of them are half water and half fire.

However, after watching this interview, I truly believe that he is a very interesting person.

Warren Buffett and Charlie Munger have shared some very strong views on how to treat investors.

A questioner asked the two why they don't split Berkshire Hathaway's stock to lower the price per share and allow more investors the opportunity to participate.

The two old gentlemen responded quite straightforwardly (the gist being): We do not want too many investors to buy our stocks; we want to maintain this threshold. Investors who do not agree with our approach should sell our stocks and look for other investors.

Later, because too many gangs on Wall Street used the names of the two old gentlemen to issue a bunch of “copycat” stocks, the two old gentlemen were forced to issue a portion of B shares. However, after that, there were no similar stock splits again.

Whether it's Lin Yuan, Buffett, or Munger, what they express seems very similar to me: that is, fund managers should not be disturbed by the emotions of investors. Moreover, the best practice is to initially filter out investors using strict standards. People with different philosophies and values should not have their money accepted, and such people don't need to come together; it is even less likely that they can work together to reach the shores of victory.