The Aptos token debacle: Have we reached peak craziness?

Welcome to the Cryptohunt Jam, where we spend one minute a day to explain crypto. In plain English.

This weeks’ favorite crypto media punching bag is Aptos token. The project rose from the ashes of the Facebook’s canceled Libra Coin - actually one of our earliest episodes on this podcast if you want to catch up on that. And the news was a doozie: They raised $150m in their initial token sale, valuing the project at $2bn market value.

But on the first day of trading, things immediately crashed. Over the course of a day, that value shrank to half, and original investors were left with large losses.

And on the face of it, we should have seen this coming. The project promised to build a lightning fast blockchain with 100s of thousands of transactions per second, but was only able to deliver 4. That’s even slower than Bitcoin, putting it right into the last place here. And there was more: The company didn’t even say how tokens were allocated before the sale, and just 1 day before it became clear that they would keep almost 50% to themselves.

This all sounds bad, and like a money grab, right? So why were investors piling in money anyways?

Well, let’s not be so fast to judge. The team had a rocket scientist track record of working on some pretty remarkable stuff way back when Facebook poured endless amounts of money into the project. And an early investor’s bet is as much on people as it is on the product itself. Investing in crypto is risky in the first place, but doing it at launch can be even more unpredictable. Many companies with good ideas need that capital to at least have a shot at the goal, and investors know the risks are high.

So - have we reached peak crypto investment craziness yet? You’ll be the judge as always, but we like to know more about projects than Aptos had revealed to the public. But hey - valuation is just one thing, the people behind it might still make something great of it. We keep our fingers crossed, more people working towards something in this space is a good thing.

This podcast is produced by Cryptohunt.it the easiest place to learn crypto. Copywriting is done by Arndt Voges, Social Media is done by Brett Holleman, Design is done by Carmen Rincon and my name is Christian Byza, Co-Founder of Cryptohunt and I am your host of this daily show.

Disclaimer: This podcast references our opinion and is for information purposes only. It is not intended to be investment advice. Do your own research and seek a duly licensed professional for investment advice.