The email arrived on a Tuesday morning in Prague, sandwiched between a Discord moderation ping and a gas fee alert. A friend from my DeFi Summer days โ back when we were all convinced we'd retire on yield farming โ forwarded me the Financial Times piece with a single line: "Read this and tell me we're not all playing the wrong game."
It was September 13. The story: a venture capital firm called Vy Capital holds roughly $40 billion worth of SpaceX shares. That's about 3.4% of the company. According to Bloomberg data, this makes them the fifth-largest shareholder in SpaceX, ahead of Sequoia Capital and Andreessen Horowitz in disclosed holdings. The Firm โ and I'm capitalizing it deliberately, because there's something almost monastic about the way these people operate โ first invested in SpaceX in 2016, when the company was valued at around $15 billion. SpaceX's estimated valuation this year sits at approximately $1.75 trillion.
I put down my coffee. Then I picked it back up, because Prague in September is cold and I needed the warmth.
Here's what stopped me cold: Vy Capital has only a few dozen employees. Its core investment team is four people. Four people. They stopped accepting external investors last year. And their assets under management went from $27 billion at the end of last year to $50 billion in June this year โ nearly double in six months.
We're living in an era where everyone in crypto is chasing the same dopamine hit. Point Farming. Airdrop farming. The endless grind of "interact with the protocol, hope for a token, dump it on day one." I've done it. I've written about it. I've organized parties where the entire conversation was about which wallet had the best odds. Meanwhile, a four-person firm in โ I don't even know where their office is, nobody does โ quietly holds the most consequential position in the most important private company on Earth.
That's the first lesson, and it's not a lesson about venture capital. It's about attention. The loudest rooms rarely hold the most value. In bear markets especially, survival and accumulation are quiet acts. The people making real moves aren't tweeting about them. Let me walk you through why this story matters for anyone who still believes decentralization is the future, because the parallels are uncomfortable and illuminating in equal measure.
The Ethics of the Long Hold
I need to tell you about 2017 before I can tell you why this SpaceX story matters.
I was twenty-five, a junior cybersecurity analyst in Prague, bored out of my mind doing compliance checks for a firm that treated blockchain like a rumor it was legally required to investigate. I joined a Telegram group for a project called "Project Aether" โ a DeFi protocol that promised to reinvent lending. I didn't audit the code. I organized meetups in Old Town Square instead. Fifty people showed up to test the beta. I was the hype man, the evangelist, the person who made strangers believe.
When the rug pull came โ a reentrancy vulnerability that drained $15,000 in user funds โ I felt something crack inside me. Not because I lost money. Because I'd convinced people to trust something I hadn't properly understood. The betrayal wasn't the code's fault. It was mine, and it was the community's, because we had built a culture of enthusiasm that outpaced our rigor.
Vy Capital's approach to SpaceX is the inverse of everything I learned in 2017, and it took me years to see the wisdom in it.
In 2016, SpaceX suffered a catastrophic failure โ the Falcon 9 rocket exploded during a launch test. This is the moment when most investors flee. The narrative collapses, the fear index spikes, the Twitterati declare the company dead. John Hering, who runs Vy Capital, invested over $100 million in SpaceX shortly after that failure. Not despite the explosion. Around it.
I want to be careful here, because I've spent my career arguing against the cult of the lone genius. But there's a principle embedded in that decision that the crypto industry has almost entirely abandoned: the willingness to price an asset against the crowd's emotional state rather than its own momentum.
When I raise this with people, they usually say something like: "But that's just rich people's privilege. They can afford to wait." And there's truth to that. Patient capital is easier when you already have capital. But that's not the whole story, because I've watched plenty of well-funded crypto funds behave with the impulse control of a slot machine addict. The difference isn't resources. It's a philosophy about what creates value over time, and whether you're optimizing for the quarter or the decade.
Hering's relationship with Musk runs deeper than a typical check-writer's. Since 2019, he's been involved in the early business development of Starlink โ hiring personnel, building financial models. He held a SpaceX employee badge. He's currently a director at The Boring Company, Musk's tunneling venture, and Vy Capital participated in that company's recent $3 billion financing round. They also committed $700 million to Musk's Twitter acquisition in 2022, and Vy Capital is the largest external investor in Neuralink, the brain-computer interface company.
Read that list again. SpaceX. Starlink. The Boring Company. Neuralink. Twitter/X. This isn't a portfolio. It's a constellation of bets on a single thesis: that the future will be built by people who think in decades and move through institutions, not around them.
Now let me tell you why this makes me uncomfortable as someone who has built his entire identity around decentralization.
The Social Layer of Capital
Here's the part of the story that nobody is talking about, and I think it's the most important part.
In 2020, I helped launch a yield aggregator called VaultPrime during DeFi Summer. We hit 300% APYs. I threw parties in my apartment where friends tested interfaces while I wrote documentation on napkins. The energy was electric, the conviction absolute. Then an oracle manipulation vulnerability drained $2 million, and I had to organize a community call to explain that our code had lied to us.
I learned something in that failure that I've carried ever since: trust is not built through code. It's built through presence โ through showing up when things go wrong, through being a known face and a known voice.
Vy Capital operates on this principle at scale, and it's why they've outperformed the most sophisticated technical analysts in venture capital.
John Hering doesn't just invest in Musk's companies. He embeds in them. When Starlink needed someone to build financial models and hire early team members, Hering was there. When The Boring Company needed a director, he took the seat. This is the social layer of capital โ the layer that most crypto projects completely ignore, to their ruin.
I've watched hundreds of crypto protocols launch with beautiful whitepapers and zero social fabric. They attract mercenary liquidity that vanishes the moment the APY drops below a competitor's. They hire anonymous developers who disappear at the first sign of legal trouble. They build "decentralized governance" frameworks that nobody participates in because nobody on the team has ever had a real conversation with the people they're supposedly serving.
Vy Capital expects that if its investment judgments materialize, SpaceX's valuation will exceed $10 trillion in the next five to seven years. That's a bet on the future of humanity in space โ Starlink's satellite constellation, Starship's long-term potential, the possibility of Mars settlement. But it's also a bet on a specific kind of relationship between investor and founder, one built on radical presence over decades.
In a letter to investors, Vy Capital stated that since its establishment in 2014, it has achieved a total internal rate of return of 41% and has distributed $4.6 billion to investors. A 41% IRR over a decade is extraordinary. But the mechanism isn't secret sauce. It's the social layer. It's Hering's badge at SpaceX and his seat at The Boring Company. It's the $700 million commitment to Twitter during a period when most institutional capital wouldn't touch the deal. It's being the friend who shows up at the afterparty, not just the dinner.
I think about this constantly in my own work. The Prague Whisper Network โ my Telegram group from 2017, the people I organized those Old Town Square meetups with โ those relationships outlasted every token, every protocol, every trend. When the bear market hit in 2022 and my savings were halved and my project was dead, I didn't survive on charts. I survived on the social capital I'd accumulated in bars and Discord servers and late-night phone calls.
That's why I host my Crypto Cocktail series in Prague's Jewish Quarter. Not because I think developers and traders and skeptics are secretly going to solve the world's problems over vodka. Because the relationships form a substrate that the technology can build on. The code is the layer; the people are the protocol.
But here's where I have to challenge the narrative.
The Danger of Confusing Access With Insight
I've been celebrating this story, and I believe the celebration is earned. But I'd be a coward if I didn't say the uncomfortable part out loud, because the uncomfortable part is where the real lessons live.
Vy Capital's success is not a template for decentralization. It's a validation of the opposite: extreme centralization of decision-making, information asymmetry, and preferential access to a generational founder.
Think about what a four-person investment team actually means. It means that four humans โ four โ decide how to deploy $50 billion. It means there is no committee, no governance token, no community vote, no progressive decentralization roadmap. It means the firm stopped accepting external investors last year, which is another way of saying: we found our edge and we're keeping it for ourselves.
Now compare that to the entire crypto industry's obsession with "community governance." We've spent years building infrastructure for decentralized decision-making, and the model that produced the best returns in the same period is basically a high-conviction partnership of four people who know one guy really well.
I'm not saying decentralization is wrong. I'm saying we have to be honest about why it's hard, and what we're willing to sacrifice for it.
The mistake I see over and over โ and I've made it myself, in 2017, in 2020, in 2021 โ is confusing access with insight. Being in the room isn't the same as understanding the room. Attending the party doesn't mean you know how the music was chosen. When Hering invested over $100 million after the Falcon 9 failure, he wasn't just acting on access. He was acting on a deep, multi-year thesis about Musk's ability to execute through chaos. The access mattered because the thesis was already there. Without the thesis, the access is just a seat at a table where you don't speak the language.
A lot of crypto founders have the access. They've raised from the right funds and presence at the right conferences. What they lack is the thesis โ the willingness to hold, to wait, to build the financial model and hire the team before there's any guarantee of return.
This is where my own bear market experience becomes relevant. In 2022, when everything was collapsing, I noticed something about the people who survived. They weren't the ones with the best technical roadmaps. They weren't the ones with the largest communities. They were the ones with the tightest social circles โ the people who had genuinely earned each other's trust over years, not over pivots.
Survival is the first layer of value. You can't build long-term returns on short-term relationships. Vy Capital's 41% IRR didn't come from being clever about exits. It came from being present for a decade.
But I want to take this further, because there's a specific crypto parallel that makes this story even more important.
The Sequencer Problem, Minus the Marketing
One thing I've spent a lot of time writing about is the state of Layer2 scaling โ and I keep coming back to a single uncomfortable fact: the sequencer in most L2 systems is functionally a single centralized node. The entire "decentralized sequencing" narrative has been a PowerPoint slide for about two years now. We've shipped the marketing before we shipped the mechanism.
The Vy Capital story is the crypto industry's sequencer problem, but inverted. Instead of a decentralized system with a centralized reality, Vy Capital is a centralized system with a transparent reality. They're not pretending to be decentralized. They're not issuing a governance token to create the illusion of community ownership. They're just four people making concentrated bets based on deep conviction and a decade-long relationship with a founder they believe in.
And here's the uncomfortable part: that model worked better in the same period than almost any decentralized protocol, because it aligned incentives properly rather than performatively.
I've written about this in the context of Cosmos's IBC interoperability, which is technically elegant but has produced an application ecosystem that's fragmented and where ATOM captures almost no value. The problem isn't the technology. The problem is that the social layer โ the layer where incentives are designed and relationships are built โ failed to align with the technical layer.
The same issue runs through the entire DeFi ecosystem. Liquidity mining APYs are a subsidy mechanism, not a value proposition. Stop the incentives and the TVL evaporates. The real users were never there. They were renting their liquidity to the highest bidder, and the protocol was paying to dress its windows.
Vy Capital didn't have this problem with SpaceX. They didn't need liquidity mining or yield farming or any of the mechanisms we've invented to manufacture demand. They had a thesis, a relationship, and a willingness to hold through volatility. The demand was real because the conviction was real.
This is the bridge between the SpaceX story and the crypto industry: most of our "innovation" in incentive design is a substitute for genuine conviction. We don't have a long enough time horizon to develop real thesis, so we engineer artificial reasons for people to stay. And they don't. They never do.
I think about the NFT party I threw in 2021 โ 200 people in a loft, QR codes plastered on the walls, the minting contract failing under gas limits, the crushing weight of letting my community down. I reimbursed those gas fees out of my own pocket. I organized a follow-up event where I stood in front of people and explained exactly what had gone wrong. Not because it was good marketing. Because it was the only way to preserve the social layer that the project's survival depended on.
Capital doesn't work that way. Capital is cold. But the relationships that deploy capital are warm, and the firms that understand this โ whether they're four-person VC shops or decentralized autonomous organizations โ are the ones that survive.
So where does this leave us?
What Four People Knew That Ten Thousand Don't
I don't have a neat conclusion for you, because neat conclusions are mostly lies we tell ourselves to feel better about uncertainty. But I have a direction, and I'll share it.
Vy Capital expects SpaceX to be worth over $10 trillion in five to seven years. I have no idea if that's right. But I know the firm has earned something rarer than a return: the right to be believed over a long enough time horizon that the belief starts to shape the outcome.
That's the real lesson for the crypto industry. Not that centralization beats decentralization. That conviction beats noise, and conviction takes time.
My Prague Whisper Network from 2017 produced nothing except relationships and a few memorable nights. But those relationships became DeFi Summer parties, which became bear market cocktail hours, which became an institutional dinner in 2025 that raised a $5 million community-governed fund. Three years of whispers built the loudest room I've ever stood in.
Vy Capital's four-person team did something similar, at a scale I can only imagine. They didn't build a brand. They didn't optimize for press coverage. They found one person they believed in โ the most consequential technologist of our era โ and they stayed present for a decade, through rocket explosions and regulatory chaos and whatever the hell Twitter became.
Walls crumble when the party truly begins. But the party doesn't stay open forever. And the people who know that are the ones who build something real.
The network breathes in Prague, pulses in Ethereum. But the signal comes from somewhere quieter. Somewhere four people are sitting, not tweeting, not farming points, just holding.
So here's my question for you, and I'm asking it sincerely: what are you holding? Not in your wallet โ we can all see those balances. In your convictions. In your relationships. In the messy, ambiguous, decade-long bets that don't pay off until they do.
The bear market isn't here to kill the industry. It's here to separate the mercenaries from the missionaries. Vy Capital solved that puzzle with four people. Maybe the rest of us can learn something from how they stayed quiet enough to hear themselves think.
The guest list was wrong. The vibe was right.
I'll see you at the next cocktail hour.