Why does everyone hate Hedera now?
An interesting vibe shift and a lesson in how crypto works right now
I have to admit that when I first came across this phenomena, it surprised me. Suddenly, everyone hates Hedera.
I’d always thought of Hedera as the younger, better-liked sister to Algorand. People always spoke highly of Hedera. If I made a video about Hedera, people jumped on you if you mentioned anything unfavorably.
That’s different today. Now everyone seems to hate Hedera. The sentiment is some of the worst I’ve seen. It’s like the negative side of Algorand, condensed into a few months as if making up for lost time.
But from what I can see, nothing has changed about Hedera. And that’s what is so puzzling to me.
The Blackrock Hedera news
I don’t know for certain if this is the origin of the Hedera hate I’ve been seeing, but it seemed to have started here. For a brief summary, Hedera announced that a money market Blackrock fund would be launched on Abrdn, the first of its kind in the blockchain space.
YouTubers, myself included, shouted this out as a great partnership. HBAR’s price soared on the news (which has become a rarity in the crypto world these days, as retail is typically pretty weary of these announcements).
Then Blackrock disputed the parntership. Everyone called us YouTubers shills for promoting it, and the price fell back down.
Hedera says that they and abrdn worked in conjunction with Blackrock, and that Blackrock also approved the press release they put out. Sure, no money changed hands, but to me that’s still a partnership. There is nothing about the word partnership that infers “exchange of money.”
On my other newsletter which focuses on local news, I have an agreement with a local parenting blog where I send parenting traffic her way and she sends news traffic my way. No money is exchanged, but it’s still a partnership. What else would you call that?
Hedera HBAR hate
It seems like that launched a wave of vitriol against Hedera. I see things like the governing council criticized, and the token release schedule criticized, which everyone seemed to be fine with five minutes ago (metaphorically speaking).
I’ve seen takes where people seem mad that tokens are released at all. How exactly do you think crypto works?
But the whole situation tells me more about how crypto valuation really works. I’ve been studying stock valuations how to build models for doing so, and I wondered how that would apply to crypto.
Frankly, I don’t think it does. Things like user adoption, real world uses — none of that seems to influence crypto price. Sentiment - vibes and memes - seems to be the only thing that really boosts a crypto’s price.
(In some ways it is the same though. The extreme price upside potential balances against the high amount of risk associated with cryptocurrency. If the promise was, say, 10% per year of growth, people would just buy index funds instead because they have far less downside for the same return.)
Think Hedera’s token release schedule or the total number of tokens affect its price? Then how do you explain Ethereum and Solana, without fixed supply, that continually crush it in price? Too centralized? Again, Solana which was essentially a VC scam that’s continued into a viable coin. Not enough use cases? Memecoins you’ve never heard of have worked their way into the top 50.
Do I wish it was that way? No, I do not. But, it is what it is, and I always believe in dealing with reality as it is, not as you wish it is. Or, as I put it to someone on Twitter the other day, being rational is a superpower. Unless you expect the world to be rational… then it’s kryptonite.
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