VCs Leave America: Bank Turmoil Edition
Alright, if you’ve been following along you know that we’ve been tracking the efforts of venture capitalists — and particularly, a small conspiracy of them — that are trying to pull out of America and establish financial and categorical sovereignty for their rising VC state. So we’re going to start an ongoing series where we look at that process which is happening in real time, and stay tuned to some of the major developments in this space.
So the first major thing is happening in the wake of the blow up of SVB and serious concern about the overall banking system, is that we see crypto entering a bull run where the prices of Bitcoin and others has been steadily rising in the middle of numerous triumphant declarations from VCs and tech elite that the banking volatility is proof of use case for crypto.
This goes to show very cleanly that the VCs are going in a separate direction that is actually opposed to America and its economy: that is because, the way they have it set up, the worse the American economy does, the better they do. This is a trend that goes back to the cloud computing bubble (beginning after the 2008 bank crashes) and the pandemic, in which the tech industry grew at an astronomical pace as more than a million people died, including its own employees.
Cryptocurrency being the sovereign financial system controlled by venture capital, we’re seeing a really significant ramp up here and the “crypto winter” that so many people claimed was the end, was really a very temporary depression and part of a climb towards maturity which we are seeing in the market. Additionally, as predicted, venture capitalists are uploading the startup economy onto its own financial infrastructure, like one (one!!!) of a16z’s banks, Mercury, which is heavily advertising as the bank “for founder’s by founder’s”. Current industry messaging is that the tech industry can’t thrive in the traditional financial system because it is so special and different and the traditional banks aren’t for “innovators” “builders” “10x engineers” and so on. Horse shit but, here we are in the barn.
Coinbase released a report saying that the outlook for the crypto market is “reinforced to the upside... [More people] now appreciate the fundamental value proposition of having an alternative to the points of failure inherent in the traditional financial system”.
Facing both its purported problems in the traditional financial system, as well as ongoing legal disputes with the SEC over regulations, Coinbase is rapidly executing on its aggressive “go wide and deep” emerging strategy, which is an aggressive international expansion. Coinbase has announced that it will now be funding crypto-friendly politicians in the US as well as expanding its global offerings in places that have proven to be more friendly to crypto, including Brazil, Singapore and Switzerland.
Importantly, it is trying to set up an internationally-headquartered platform, OUTSIDE of the US jurisdiction, which would allow it to skirt American regulations and taxation.
El Salvador is already crypto-famous for adopting Bitcoin as legal currency in ’21, and for its planned “Bitcoin City”. Unveiling the plan in November 2021, its president Nayib Bukele announced the vision for the city as well as its plans to eliminate all taxation outside of VAT: "Invest here and make all the money you want.” He said that this week, “I'll be sending a bill to congress to eliminate all taxes (income, property, capital gains and import tariffs) on technology innovations, such as software programming, coding, apps and AI development”.
We are literally seeing countries bid, in real time, for the opportunity to host the venture capital state. Like we’ve talked about earlier in this blog, the main strategy that VC has for expansion is in the form of predatory “business development” deals with politicians, exchanging a tech presence, tech offices and factories, tech workers, and I guess just general “techness”, for free reign. We’ve watched this happen, for example, in Texas, which passed key legislation supporting the Bitcoin mining industry, which has been led by a Peter Thiel (Founder’s Fund + a16z conspiracy) Bitcoin mining company.
Many cities in America and many countries in the global south are in serious financial trouble due to the impact of American imperialism, colonialism, and capitalism. El Salvador’s GDP is 28.7 billion dollars; Coinbase alone has a market cap of 14.7 billion and a16z has 35 billion in assets under management, which means that El Salvador and countries like it, are dwarfed by the assets of a singular VC firm alone. This makes them obvious targets for predation, as we are already aware of what venture capital does to cities: drive its residents out, destroy all arts and culture, exploit cheap labor sources, and use the city as a company town that is continuously stripping resources and vitality as it grows and grows and grows until the city is dead. This is what we saw in the Bay Area and having exhausted much of the resource capture available there over the past 30+ years, tech is now hovering over Texas and Miami, where politicans have been seen feting VC dignitaries from Founder’s Fund and a16z.
Venture capital is a colonial force in and of itself. We think that VC getting recognition of sovereignty is going to be very difficult and complex, but in fact, what we will be seeing is huge amounts of competition between different countries, making the devil’s deal of trading sovereignty and a regulation-free, tax free operating environment, in exchange for the highly question honor of invasion by venture capital.
Financial sovereignty is the first priority of venture capitalists as that is the most foundational recipe for their full visions of a fascist state. We need to be very careful tracking the engagement of venture capital fintech startups with global sovereign bodies. Again, while Coinbase is a great example, venture capitals have portfolios with a huge number of companies, somewhere in the vicinity of a thousand in a16z’s case, including over 50 crypto startups. So we are looking at not just one company, but hundreds and thousands of startups, that will be coming along with these plans. While tracking Coinbase is the best indicator we have, as it is a venture capital cornerstone company — a startup that is chosen to build into an encompassing platform —, every other startup in Founder’s Fund and a16z is part of the full financial picture at work.
This situation is moving much faster than I anticipated. The political involvement of Coinbase should not be underestimated. We have never seen the VC industry deeply interfere in elections — Peter Thiel et al’s ongoing engagement with Trump started in the last election but backing from VC and all of their companies, openly, is a different situation than we have dealt with in the past and I don’t think we should underestimate what that looks like as a political force. Political interference will also be done with an eye towards securing sovereignty so we see yet another devil’’s deal where a politician is conferring sovereignty or enabling it in exchange for the backing of the VC ecosystem, whose full power we have never seen openly acting in this arena.
Stay tuned.