SoftBank invests in Binance Japan

Recently, PayPay, the Japanese payment giant under SoftBank, officially acquired 40% of Binance Japan.

Zhao Changpeng also released a photo of himself with Masayoshi Son.

Upon seeing this news, two thoughts immediately came to my mind:

First, Masayoshi Son has finally entered the crypto ecosystem.

Second, I recalled the story from years ago when Masayoshi Son bought Bitcoin and then sold it all during the bear market.

That was at the end of 2017, when ICOs were booming and Bitcoin was hitting its historical highs. Masayoshi Son probably bought Bitcoin at around $20,000. However, shortly after, in early 2018, when Bitcoin plummeted, Masayoshi Son sold his Bitcoin.

As a result, the industry speculated that Masayoshi Son lost $130 million on this investment. The reports were filled with sarcasm and mockery.

At that time, my view was:

On one hand, I believed that Masayoshi Son's understanding of Bitcoin was not as good as that of players in the crypto ecosystem, so his handling of this trade not only failed to make money but also resulted in losses, which was quite normal.

On the other hand, I was curious or quite puzzled—this investment in Bitcoin represented only a small portion of Masayoshi Son's asset allocation. The gains or losses from this money would not significantly impact his overall revenue, so why did he have to sell? Couldn't he just hold onto it without paying attention?

After all these years, looking back at my previous two views, I still maintain the first one. However, I no longer see the second one the same way.

Because after experiencing the ups and downs over the years, my experience tells me that if I were to encounter the same situation as Masayoshi Son did back then, I would likely make the same decision he did.

The reason behind this might be simple:

If you don't understand or don't have confidence in something, you won't touch it. Holding onto something you don't understand or don't believe in can often be very uncomfortable, and the emotions can be quite anxious; that feeling is unpleasant. If you're going to invest, you should put all your money into places you believe in or understand, or simply keep cash and wait for opportunities.

Over the years, there have been several assets that I have bought or even held for a while. When I was optimistic about them, I could indeed hold on; but once I lost confidence, they became a source of anxiety, and only by selling them could I regain my peace of mind and start looking for new opportunities.

As for the first point, Masayoshi Son's understanding of Bitcoin may not be as good as that of some players in the crypto ecosystem, so he might not comprehend the logic behind Bitcoin's future rise. This becomes easier to understand when combined with his current investment in Binance Japan.

In terms of viewing Bitcoin, Masayoshi Son's perspective may be very similar to that of Buffett, Munger, and Duan Yongping: they are not interested in things that do not generate cash flow.

Bitcoin and gold are both assets that do not produce cash flow.

Buffett, Munger, and Duan Yongping do not hold gold. I checked online, and it seems there are no public reports indicating that SoftBank holds gold either.

By this analogy, it is not surprising that Masayoshi Son sold his Bitcoin; similarly, it is also easy to understand why he invested in Binance Japan.

Because Binance Japan is an exchange. Partnering with the largest exchange can generate substantial intermediary fees, and in the future, it can expand into other ecosystems based on crypto assets. This is a business with stable cash flow and a clear business model. Moreover, with the recent regulatory developments in the U.S. and Japan preparing to relax regulations on crypto asset trading, entering the Japanese crypto ecosystem at this time holds great potential, and the business space is worth looking forward to.

From all perspectives, this is a business worth investing in.

In the photo released by Zhao Changpeng, a beaming Masayoshi Son is shyly smiling—this time, he has truly entered the crypto track that he understands and believes in.