Emin Gun Sirer of Avalanche (AVAX) reinstates that investors who leave the cryptocurrency space will eventually come back.

Emin Gun Sirer expressed:  Let’s talk about “Economic Hotel California,” where you can check it any time you like, but you can never leave.

There is indeed too much money chasing too few worthy assets. So much that at some point even memestocks and memecoins start looking attractive compared to overinflated equity and blue-chip crypto (L1’s like ETH, AVAX, and others).

Barring a stablecoin failure, there really are too few alternatives. Sure, you can rotate into stables, but then what? You’ll just eat up the 5+% inflation. Might as well hold a ticket to something that can appreciate.

What else are you going to do? Buy FB stock? Can’t imagine anything more boring. That’s a company that has saturated its target so thoroughly that it’s now looking for virtual universes beyond our own.

The root cause for all this isn’t just the inflationary post-pandemic recovery policies at central banks, it is a more fundamental lack of investment options.

We are now paying for the lack of R&D spending in the ’00s and ’10s, coupled with the unchecked emergence of large monopolistic tech companies.

Where are the nanotech companies I should be investing in? They don’t exist because of the DoD budget cuts of the 2000-2015 era. Luckily, a few vaxx companies came through, but where are the nanobots, nanomotors, nano everything else? Not funded in years past.

Where are the software startups? They don’t exist because surveillance capitalism gobbled up everyone who could code to keep dossiers on people and build an ad-serving infinite-scroll timeline where people share inappropriate personal details.

Software competition now happens internally at large monopolistic companies. You want to build a better web experience? Gotta work at Google, and pray that they don’t get bored and cancel your product because ad revenue is so much sweeter elsewhere.

These companies aren’t anti-competitive across the board. They compete viciously between each other. But they also leave little room for innovation for small companies to emerge.

A side project at any monopoly-tech company has far greater scale on its first day than a startup trying to grow organically. Innovative young minds just fold and decide to work at FANG because otherwise they are at a huge disadvantage.

Lack of investment options is palpable worldwide. There are very few innovators because they get gobbled up. Lots of money chases the few worthy projects, while others decide they missed the boat and go gambling on memes.

So if you’re wondering why there’s so much money chasing so few credible innovators and what we need to do, there’s my answer: fund technical innovation in promising areas, and break up large monopolies to create a healthier corporate landscape.

Until then, we are going to be in our current reality. We will see rotations in and out of assets. People can see that assets are overinflated, which will make them antsy and rotate out in oversized reactions to small news. But there’s nowhere to go and they will cycle in.