09/08/2026
COST OF CAPITAL, CRYPTO AND ADVERTISING
Capital theory is developing. Crypto is part of the change. Meme cryptocurrency is part of the developments. Capital and Time are relevant. If a meme cryptocurrency’s market cap pumps to millions and dumps to zero in a few hours, capital was created and destroyed in a few hours. Usually the result during such a short time is a zero sum transfer of capital from some to others. Mainstream capital markets of equity and debt have longer terms, but it also causes transfers of capital.
Cost of capital is relevant. For crypto to be a competitive sort of capital, the costs must compete with mainstream capital. Crypto competes favourably with regard to exposure. It’s much easier to get in contact with capital providers with crypto than with equity, via websites like pump.fun, partly because of securities law, which prevents the selling of equity to the public, without a legal prospectus. Crypto however has a big cost disadvantage, relating to exposure. It costs almost nothing to form a meme cryptocurrency, but to get such a currency visible costs a lot of advertising. Someone opined 40 USD of advertising, raises 100 USD at meme cryptocurrencies. 40% is not a competitive cost of capital compared to equity and debt. The 40% is a once off cost, not recurring every year.
When 40% is paid to raise 100%, that leaves only 60% for actual development work. At equity, much more than 60% is left for development work, which makes equity, at present, for long term investing, superior. Debt/Bond capital can leave even more capital available than equity. Therefore, crypto investors, who want to invest capital, in the crypto environment, for the long term, will have to find projects, without the large upfront advertising expenses. Ipparts Exchange (IPPAEX) is such a project. Intequity (capital of ideas), which is a goodwill kind of capital, is used at IPPAEX. No paid advertising is used at present. As capital becomes available, advertising expenses will be incurred by IPPAEX, but not nearly 40% of capital raised.