This is Hamamoto from TIMEWELL
This is Hamamoto from TIMEWELL.
The World Economy and Technology Are in Major Flux
In a world where the global economy and technology are in major flux, situations that investors and entrepreneurs cannot afford to miss keep emerging. From a conversation between renowned investor Jason Calacanis—who has been running at the front lines of the startup world for more than 14 years—and his partner Alex Wilhelm, with his sharp analytical mind, economic policy going forward, the crisis in the cryptocurrency market, and the explosive growth of the AI industry all came into sharp relief.
In this article, we put the spotlight on the Federal Reserve's interest rate policy shift, the deadly spiral of the algorithmic stablecoin "TerraUSD" and the Luna token behind it, and the latest developments at rapidly growing companies like OpenAI, Anthropic, and Canva—explaining in accessible terms why these changes are having such a major impact on startup investment and entrepreneurial decision-making.
Jason points out that the Fed's hint at short-term rate cuts has stimulated investor demand for capital. As market participants look forward to a low-interest-rate environment, individual investors and family offices are showing an increasing tendency to make risk-on investments given the abundant liquidity. He also shares that behind his own decision to deploy hundreds of thousands of dollars into new startups was not only confidence that the overall economy is solid but also expectations for growth markets looking ahead.
Meanwhile, in the cryptocurrency market, a major failure lurking in the shadow of past brilliant success was revealed. The algorithmic stablecoin "TerraUSD (UST)"—which had drawn attention for its high yields and unique incentives—and the simultaneously operated "Luna" token saw their market values plummet due to a chain reaction of problems, with vast sums of money going up in flames. While supported by abundant liquidity and credit, the systemic complexity and shifts in market participant psychology are described as having ultimately caused the loss of stability. In parallel, regulatory authorities have moved to strengthen rules in the crypto market, and this has become a cautionary example for investors and entrepreneurs.
And in the technology sector, OpenAI's monthly revenue surpassed $1 billion for the first time, with plans to expand further into advertising, as the growth of AI companies is accelerating sharply. The trajectory of Anthropic, Canva, and Figma that follows hints at new possibilities as tech giants, and the situation in which company valuations are rapidly rising will serve as a major tailwind for the technology investment market going forward. In particular, this is contrasted with the reality that AI pilot projects being tried and tested inside large enterprises are not always delivering results quickly, showing the arrival of an era in which the agility unique to startups is demanded.
- The Fed's Policy Shift and New Trends in Startup Investment Strategy
- The Collapse of Algorithmic Stablecoin TerraUSD and the Reality of the Crypto Market
- The Rapidly Growing AI Industry and the Transformation of Startup Strategy
- Summary
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The Fed's Policy Shift and New Trends in Startup Investment Strategy
In recent years, the Federal Reserve's monetary policy has become a major topic. As Jason Calacanis points out, Federal Reserve Chairman Jerome Powell's latest remarks at Jackson Hole suggested the possibility of a short-term rate cut of 0.25%. Powell described the situation as "policy is still within a restrictive range, but the balance of risks is changing," hinting at a temporary easing of the interest rate environment alongside market expectations. Market participants thought that this small rate cut would lower the cost of debt financing, resulting in abundant liquidity and improved investor psychology.
This trend is a tailwind for startups and growth companies. This is because a low-interest-rate environment reduces corporate financing costs and makes cash management easier. In fact, Jason himself states that behind his decision to deploy $400,000 into the market in a recent investment deal was his confidence in the current economic environment. He says that even in global markets, family offices and affluent individuals are actively investing, with angel checks for startups and LP capital becoming increasingly active. Behind this is the reality that credit easing has combined with growing overall market growth expectations.
Also noteworthy for investors trying to read market trends is the emergence of new prediction markets like Polymarket. Jason and Alex discussed betting on the Fed's rate cut on Polymarket, with participants betting on specific numerical changes to predict the market's future direction. These moves are valued as a bold step for measuring the impact that economic policy has on markets, while also serving as material for investors and entrepreneurs to revisit their own risk management strategies.
Furthermore, What Is Important for Startups
Furthermore, what is important for startups is making appropriate judgments about the timing and scale of fundraising. Jason points out from his own experience that if companies run out of money before they mature, it becomes a major impediment to business growth. For example, early investments in already famous companies like Uber and Robinhood—whose subsequent valuations rose dramatically—are something that gives courage to many founders. However, at the same time, as the market environment fluctuates, there is also the risk that interest rates on excess cash decline, so those with abundant funds tend to take new risks, with moves seeking high returns advancing.
Here, organizing the key points in startup investment strategy once, the following items emerge:
A low-interest-rate environment makes corporate fundraising easier and broadens investment opportunities for growth companies
Market participants use futures markets like Polymarket to predict specific economic policy trends and hedge risks
In an environment of abundant liquidity, investors with surplus funds show an increased tendency to make high-risk, high-return bets
Startups Need
Startups need to make appropriate judgments about the timing and scale of fundraising and prepare for long-term growth strategy
The above points are extremely important as keys to future startup investment success. Not only investors, but founders themselves are required to correctly evaluate their own market value and future growth potential and establish appropriate funding plans. Jason emphasizes that in such capital management, individual investment decisions must be based on real numbers and market environment, not mere emotional reasoning. As a specific example of his, he cites the method of making small "learning bets" on growth companies and using the knowledge gained from the results for larger investments in the future.
Furthermore, fluctuations in interest rate policy also affect the asset valuation of technology companies. There is a relationship where technology stock valuations decline during high interest rates and rise when transitioning to a low-interest-rate environment, and this effect is particularly pronounced in fields such as AI and cloud services. Jason uses specific charts to explain how massive capital flows change before and after the Fed's policy is announced, vividly conveying the moment-to-moment changes in market psychology. As a result, major changes occur in individual company valuations and capital inflows to startups, and he explains the importance of always keeping up with the latest information.
Also, not only interest rate trends but also various corporate initiatives as future market expansion strategies attract attention. For example, companies continue to create new market value through monetization via advertising and expansion of subscription models, and through providing innovative services leveraging technology in addition to conventional business models. In this situation, it is indispensable not only for the overall economy to be supported by liquidity, but also for individual entrepreneurs to strategically work toward their next success through self-improvement. The Fed's policy shift is just one aspect of this, and the ability to read subtle changes in the market and respond flexibly is what is being tested to achieve true success.
In this way, the fine-tuning of the Fed's monetary policy is not merely a temporary phenomenon but an important element with deep influence on the entire global economy, and revising startup investment strategy with this understanding will be a major step toward future success. Entrepreneurs and investors need to constantly be sensitive to changes in the market environment and understand how their decision-making is affected, thereby building a foundation for the next leap forward.
The Collapse of Algorithmic Stablecoin TerraUSD and the Reality of the Crypto Market
The cryptocurrency market is a world where innovation and risk exist side by side. The algorithmic stablecoin "TerraUSD (UST)" that once gathered high expectations operated under an extremely complex mechanism, with a system adopted that linked to the Luna token. In this system, the idea was that by burning (destroying) a fixed amount of Luna tokens in exchange for issuing UST, value would be maintained at a certain level. In theory, UST had a mechanism capable of maintaining a $1 peg, but in practice, due to movements of market participants and changes in incentives, it plunged into an unexpected major crash.
Specifically, the Anchor protocol that was temporarily popular for providing high yields (around 20%) to UST holders saw large amounts of funds withdrawn from the protocol, causing investors to start moving to exchange UST for Luna to hold. This led to a sharp decline in demand for UST, and as it lost stability, excessive issuance also occurred on the Luna side. The entire market fell into a negative spiral called the "death spiral," and ultimately both values collapsed to nearly zero.
This phenomenon not only created a fundamental question about system design, but was a technical failure as well. Since UST was not backed by direct assets like legal currency-backed stablecoins (e.g., USDC or USDT), it carried the risk of maintaining value only on algorithms and the trust of market participants. As an example of a complex game theory-based incentive structure collapsing rather than a simple mechanism, this crash dealt a major shock to the entire crypto market.
Some market participants tried to pursue profits through arbitrage (trading) by exchanging and burning as calculated, but as a result the system's balance collapsed at once. Furthermore, the exchange mechanism of UST and Luna was also problematized from the perspective of its relationship with external regulation in the cryptocurrency market. Federal regulatory authorities have taken a strict stance toward such unverified mechanisms, and it is highly likely that future legal development and regulatory strengthening regarding algorithmic stablecoins will proceed.
This Collapse Also Made
This collapse also made the risks of entering the cryptocurrency market clear once again. For example, conventional stablecoins (USDC, USDT) are backed by actual legal currency, government bonds, and corporate credit, and are therefore considered to have a certain level of reliability. However, projects like UST that depend on algorithms saw surface-level incentives suddenly trigger anxiety among market participants and lead to rapid declines in asset value. Such situations became a major blow particularly for investors who had committed large sums to the cryptocurrency market.
On the other hand, in response to this problem, regulatory authorities in the United States and other countries are strengthening their moves to improve transparency and soundness in the cryptocurrency market. For example, the US Genius Act includes provisions for detailed investigation of payment stablecoins that are not internally collateralized, and strict responses are expected for systems without guaranteed stability. This is expected to prompt investors to move funds to more secure stablecoins, potentially contributing to the healthy development of the overall cryptocurrency market.
Also, the lesson demonstrated by this collapse does not stop merely with system design failure. It also gives deep food for thought about the risk of market participants handling complex financial products and assets without sufficient understanding, and the possibility of inaccurate information being conveyed in low-transparency operational structures. In particular, elements such as anonymity and offshore operations ended up shaking investor trust, carrying the risk of credit supply leveling off or collapsing.
In this way, the TerraUSD and Luna tragedy confronts us with the reality that innovative ideas in the cryptocurrency market do not necessarily succeed. Investors and entrepreneurs need to calmly evaluate the mechanisms and risks of the overall system without being misled by surface-level appeal. There is no doubt that in a market saturating with new technologies and services one after another, accurate information gathering, transparent operations, and legal development are indispensable. This case provides major implications for the future state of cryptocurrency asset management as a good example, and can also be said to serve as a warning bell to the entire economy.
The Rapidly Growing AI Industry and the Transformation of Startup Strategy
In the Technology Industry, the Rapid Growth of Artificial Intelligence (AI)
In the technology industry, the rapid growth of artificial intelligence (AI) is giving us a premonition of the arrival of a new era. The sight of OpenAI achieving the first $1 billion monthly revenue and planning further expansion into advertising models and subscription services feels like momentum that exceeds previous market forecasts. OpenAI's success is not just a record of numbers—it is recognized as a challenge that overturns conventional wisdom in both technological innovation and business model terms. And advanced companies like Anthropic, Canva, and Figma are similarly being pressed to revisit corporate strategy and fundraising methods amid rapid growth.
In OpenAI's case, the background of its growth is not only technological innovation but also the dramatic increase in number of users. With over 700 million weekly users, providing highly useful services to not just enterprises but individual users as well, the revenue model is becoming more diversified. In particular, the prospects for API-based use, operational efficiency, and advertising revenue are becoming topics. As a result, the strategy of how to lead free users to paid services, or how to enrich advanced subscription plans for enterprises, will be the key to future market expansion.
Also, Anthropic has significantly increased its revenue this period through the development of advanced language models, leading to fundraising round scale being expanded to twice the initial figure. These rapidly growing companies are creating new business opportunities in a market where company valuations are reaching astronomical numbers and the competitive environment is becoming even more intense. Furthermore, design tool companies like Canva and Figma are seeing their corporate value soar dramatically in line with growing demand in the creative industry and enterprise market. In particular, Canva's valuation has risen from approximately $40 billion last year to $60 billion this period, showing major progress not only in user numbers but also in revenue scale.
In the rapidly evolving AI industry, the challenges companies face are also diverse. For example, there are cases where securing hardware such as GPUs becomes a bottleneck amid the need for enormous computational resources, and the reality that enterprise-level pilot projects cannot always deliver results in a short period of time. However, even in such difficult circumstances, startups are leveraging agility to realize rapid development and market deployment. Free from bureaucratic procedures like large companies, accumulating success cases through experimental attempts and "learning bets" is extremely important in securing competitive advantage.
Also, the evolution of AI technology is having a major impact on business reform within companies. Efficiency tools leveraging AI are emerging one after another across diverse departments including sales, legal, and accounting, with conventional business processes being greatly transformed. For example, AI-powered automatic recording and summarization of meetings, and automatic responses in customer support, are dramatically improving business efficiency within companies. This leads to semi-automation of work that humans previously performed, allowing companies to focus on more strategic activities, while cost reduction effects from technology adoption are also expected.
Furthermore, Behind the Market Growth in the AI Field
Furthermore, behind the market growth in the AI field is the emergence of new revenue models such as advertising and subscriptions. Companies are exploring strategies of shifting services previously provided for free to paid members, or acquiring revenue from diverse user groups through advertising income. In fact, OpenAI has introduced premium plans for some services to increase per-user revenue, and in addition to conventional spending models, revenue from new API usage fees is also growing steadily. These revenue expansion measures have extremely important significance not only for short-term growth but also for medium-to-long-term corporate survival.
The rapid growth of AI is also drawing in the overall market's sense of anticipation. Investors around the world are becoming more aggressive than ever in pouring money into AI-related companies, leading to rapid rises in valuations and stock prices not uncommonly. Companies are competing to acquire excellent talent and invest in technology development to expand market share. In this situation, startups are increasingly required to make more rapid decisions and deploy flexible strategies in order to compete with large companies. The attitude of responding to market needs through small-scale experimental initiatives without fear of failure, and continuing to accumulate improvements, is a factor that is highly valued in the market.
In this way, the rapidly growing AI industry is bringing transformation in many directions: technological innovation, diversification of revenue models, and business reform within companies. To win in fierce market competition, it is indispensable to always incorporate the latest information and technology and build flexible strategies. Startups, not bound by conventional frameworks, need to continue challenging themselves to expand market share with approaches different from existing large companies.
In this article, we have explained in detail the fine-tuning of the Federal Reserve's interest rate policy and the resulting changes in the startup investment environment, the collapse of algorithmic stablecoin "TerraUSD" and the Luna token, and the current state and future prospects of the rapidly growing AI industry—based on rich examples and conversation content. The short-term rate cut hinted at by the Fed has led to a decline in financing costs and is driving investors to make proactive investments in startups amid abundant liquidity. Market participants are being pressed to manage risks through concrete economic policy predictions—such as betting on future developments on Polymarket—and to revisit their own investment strategies.
On the other hand, in the cryptocurrency market, as the collapse of UST and Luna shows, the systemic complexity and opaque operational structure caused market participants to lose trust, with the risk of vast sums disappearing in an instant becoming clear. This case teaches us that it is indispensable to verify whether there is solid backing and transparency, without being misled by the surface-level appeal of high yields and incentives. There are also signs that regulatory authorities are proceeding with legal development toward healthification of the crypto market in response to such cases, and investors and entrepreneurs will be required to aim for safer asset management going forward.
Also, in the AI Industry Field
Also, in the AI industry field, OpenAI's monthly revenue reaching $1 billion for the first time is something to marvel at in terms of growth speed. From the trajectories of companies like Anthropic, Canva, and Figma as well, the possibility is suggested that technological innovation and diversification of revenue models will greatly change the overall industry going forward. Business process reform within companies and a new entrepreneurial spirit different from conventional companies are thought to determine survival in the fiercely competitive market. Startups, not fearing failure, will need to continue generating next-generation services and products through rapid experimentation and repeated improvements—this will be the key to future success.
Organizing the most important points covered in this article once more:
Changes in the Fed's interest rate policy are having a major impact on the startup investment environment and capital liquidity
The collapse of the algorithmic stablecoin is a serious failure case caused by insufficient system transparency and complex incentive design, and investors need sufficient risk assessment
In the AI Industry, Rapid Growth
In the AI industry, rapid growth and diversification of revenue models are advancing, and startups' rapid response and flexible strategies will play an important role in future market competition
These points are extremely important for understanding the trends in the modern economy and technology. The market changes daily, and to adapt to it, not only investors but also entrepreneurs need to constantly gather the latest information and revisit their strategies. As many cases show, clinging to a single success model is dangerous, and flexible thinking and rapid response are required. Real experience in the field and number-based judgment will be major factors determining future success. To entrepreneurs, investors, and engineers, we hope that this article's cases will be useful in applying to your own decision-making, managing risks based on accurate information, and serving as a useful hint for seizing opportunities in growth markets.
Reference: https://www.youtube.com/watch?v=FCZb-zDMnwU
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