Can belief be a business model?

Key Points

1. Bill Gross, known as the 'Bond King,' attracted irrational premiums from retail investors for his bond funds, despite their open-ended nature and eventual underperformance.

2. Investors paid premiums as high as 72% above NAV for Gross's funds, but these premiums eroded over time, leading to significant underperformance relative to NAV.

3. Similar behavior is observed in crypto, where investors pay premiums for funds tied to figures like Adam Back and Jack Mallers, driven by belief rather than fundamentals.

4. The article questions whether crypto 'superheroes' can generate enough yield to justify such premiums, drawing parallels to Gross's skepticism about fairy-tale endings in finance.

5. Examples like BSTR Holdings and Twenty One Capital show crypto funds copying strategies (e.g., MicroStrategy's bitcoin-per-share model) and relying on investor belief in their leaders.