Mike Maples Jr, one of the founding partners of the venture capital firm Floodgate, recently came out with a short analysis between ‘Fast Money’ and ‘Slow Money’ and how they relate to the cryptocurrency market.
Maples described ‘Fast Money’ investors as “treat[ing] the market like it is a voting machine, a pulse of the current times” and ‘Slow Money’ investors as “treat[ing] the market like it is a weighing machine”. He continued to describe how liquidity is very important to ‘Fast Money’ investors since they will come and go from the market in days, weeks, or months, whereas ‘Slow Money’ investors do not really need liquidity since they will hold for years and maybe even decades.
He also pointed out that the terms not only apply to investors, but also startup founders and how they run their companies and seek investors.
“When fundraising, “Fast Money” founders focus on raising the most money they can at the highest price that they can, with the least governance possible, and the most attractive vesting schedule that can be negotiated. They might also try to exploit market timing to sell their businesses for a “quick flip.” In the case of crypto, they can leverage immediate liquidity to make fast money with just a whitepaper.”
““Slow Money” founders believe long-term greatness requires years and even decades of commitment to building a great team, culture, business model, ecosystem of partners, and an increasing competitive moat. … They want to create a product or service that is used by hundreds of millions or billions of people, and that takes many years. They optimize for long-term success.”
He added how “[s]low money investors can help with the various aspects of long-term value creation including recruiting, operational help, category design, go-to-market, and other issues of business building”. Maples continues with highlighting that there is nothing inherently incorrect or correct with either method, but that individuals need to evaluate their strengths, weaknesses, and goals to make sure that they are pursuing the correct strategy based on what they want. Overall, Maples believes that “Slow Money founders, builders, and investors will be the biggest winners in crypto” since “the people who create value in a focused way for the longest time will rise above the rest”.
Cryptocurrencies experience both fast and slow money
The cryptocurrency market is no stranger to ‘Fast Money’ since the market evolves very quickly and there are plenty within the space who day trade cryptocurrencies, gossip about the latest whitepaper, and claim of ways to make money really quickly. However, as Maples points out, this is a speculative game and these individuals must rely on knowing information before the rest of the market, which is not necessarily sustainable nor safe for the long-run. Nevertheless, this is a cycle that has repeated itself in the history of traditional financial markets and, within the past couple years, in the cryptocurrency market. This leads to volatile fluctuations in prices and massive bull and bear markets. Currently, there has been a high concentration of cryptocurrency speculation with the alphabet soup of tokens that are available, but even back during the 2014 cryptocurrency crash there were plenty of speculative bets being made by individuals attempting ‘Fast Money’ returns.
However, there are still plenty of cryptocurrency projects that have been aiming towards steady and sustainable growth by creating real value for its users. Since Maples mentioned Jeff Bezos of Amazon in his analysis as a ‘Slow Money’ founder, a good comparison of the current cryptocurrency market and fast vs. slow money innovation would be the Dot-com market boom and bust during the 1990s. There was a craze of investment and innovation that led to sky-high valuations, but it quickly became too much and the overvalued companies had to fail in order to let the real innovative companies, like Amazon, shine through and later flourish.
Dash has been one of the coins that has been steadily improving its technology and its integrations to provide added value for consumers. Taking the 90 day exponential moving average to smooth out abnormalities, Dash’s transactions per day has steadily increased from around 1,200 transactions at the start of 2017 to around 23,500 transactions this month. This indicates steady adoption and usage of Dash in consumers’ everyday lives.
Part of Dash’s strategy to create this steady value growth has been its focus on integrations, which is key to adoption since to have a decentralized, digital, peer-to-peer cryptocurrency consumers need to buy and sell goods and services with Dash. DiscoverDash.com has been the merchant directory for Dash accepting businesses for the past year. Below is a chart displaying the steady and sustainable growth of Dash merchant adoption.
This growth of merchant adoption is steadily being advanced by Dash community members and merchants organically adopting Dash. These merchants range from online shops to physical storefronts, which provide consumers multiple options of where to shop and thus increases their overall utility. This makes Dash ascribe to a ‘Slow Money’ growth by building the foundations necessary for long-term growth.
Dash grows steadily, but innovates rapidly
As Maples also pointed out, “Slow Money does not mean slow movement” since innovators always need to develop new methods to stay ahead of competitors. Dash is no different in that a significant portion of the Dash Treasury funds go to funding Dash Core Group developers and researchers. This is intended to ensure that Dash maintains record low transaction costs, extremely fast confirmation times, great security, and consumer friendliness. These developers are constantly working to find and implement improvements, fix any bugs that arise, and innovate new methods of using Dash. Plus, the decentralized nature of Dash allows many community members to research and propose solutions of their own. This has allowed Dash, in only a few short years, to develop a network that has the capacity to handle nearly half as many transactions as PayPal.
These features of Dash have allowed it to remain at top of its class when compared to its peers. Unfortunately, this ‘Slow Money’ focus on development and technological and user improvement has caused Dash to take a temporary publicity backseat to more flashy coins. However, as Maples eluded to, this will allow superior products like Dash to emerge victorious when all the dust settles and the valueless propositions that did not focus on hard work and value added features fall to the wayside.