Tag Archives: finance

Why Being Respected Matters More Than Being Nice in Leadership

In leadership, the tension between being respected and being merely nice has been debated for centuries. Niceness is often equated with politeness, affability, and the desire to avoid conflict. Respect, on the other hand, is grounded in trust, competence, and integrity. While niceness may win temporary approval, respect creates lasting influence. Leaders who prioritize being respected over being liked not only drive stronger performance but also safeguard their organizations against complacency and poor decision-making. A change agent leader cannot be overly nice, or he or she will be trampled on.

Fig. 1. Jeremy Swenson, Pink Suit With Yellow Background, 2025, Jeremy Swenson.

Fig. 1. Jeremy Swenson, Ink Suit Yellow Background, 2025.

The Pitfalls of “Niceness”:

Niceness can be an appealing trait, especially in team settings where harmony is valued. However, as a leadership strategy, niceness carries inherent risks. When leaders prioritize being liked, they may avoid difficult conversations, tolerate poor performance, or bend organizational rules to keep others happy. Over time, this erodes accountability. Research in organizational psychology demonstrates that leaders who are overly agreeable may sacrifice effectiveness, as employees perceive them as weak or inconsistent (Judge, Bono, Ilies, & Gerhardt, 2002).

Margaret Thatcher, the former Prime Minister of the United Kingdom, captured this dilemma bluntly: “If you set out to be liked, you will accomplish nothing” (Thatcher, 1993, p. 147). Niceness often becomes a form of self-preservation—leaders seek short-term harmony at the cost of long-term impact. While being liked may feel rewarding in the moment, it does not inspire confidence or loyalty when difficult decisions must be made. An overly nice person would likely give undue favor to people close to them and thus would not encourage growth or innovation.

Why Respect Endures:

Respect is a far more enduring quality. It is not rooted in popularity but in consistency, fairness, and competence. Respected leaders earn trust by setting clear expectations, making principled decisions, and holding themselves and others accountable. Respect does not preclude kindness; rather, it frames kindness in a way that maintains boundaries and integrity.

The late Maya Angelou (1993) famously observed: “People will forget what you said, people will forget what you did, but people will never forget how you made them feel” (p. 21). In a leadership context, being respected makes people feel valued, secure, and motivated because they know their leader will not waiver under pressure or abandon fairness for personal popularity. Respect builds psychological safety, which modern research identifies as one of the strongest predictors of high-performing teams (Edmondson, 2019).

Moreover, people are more likely to trust those who build respect than politeness. Respect crosses all demographics while what is nice in one culture may not be nice in another culture. In other words, respect is less subjective and thus more powerful. Respect means you mean what you say and enforce it over time, across cultures, and no matter what. Niceness signals your pliable and not confident in your approach as to who or what is right.

Lessons from Business Leadership:

Business history is filled with examples that highlight the difference between respected leaders and merely nice ones.

  • Steve Jobs (Apple): Jobs was not widely regarded as “nice.” His demanding nature often clashed with employees. However, he was deeply respected for his vision, creativity, and relentless pursuit of excellence. Walter Isaacson (2011) documented how Jobs inspired loyalty and innovation because employees trusted his uncompromising standards, even if they did not always appreciate his methods.
  • Indra Nooyi (PepsiCo): Nooyi combined respect with empathy. She was known for her warmth and for writing personal letters to employees’ families, yet she also set bold strategic goals and held teams accountable for results. Her leadership illustrates that respect does not exclude kindness but rather enhances it when boundaries and accountability remain intact (Nooyi & Mirza, 2021).
  • Colin Powell (U.S. Army General): Powell (1995) explained that respect is inseparable from accountability: “The day soldiers stop bringing you their problems is the day you have stopped leading them” (p. 54). For Powell, respect came not from being “nice” but from being competent, decisive, and trustworthy in the face of pressure.

These examples highlight that respected leaders may not always win popularity contests, but they leave legacies of trust and performance.

Respect, Boundaries, and Authority:

A crucial distinction between respect and niceness lies in boundaries. Nice leaders often allow others to cross their boundaries in order to avoid discomfort. Respected leaders, by contrast, maintain clear boundaries, which prevents exploitation and reinforces authority. As Maxwell (1998) argued, leadership is fundamentally about influence, and influence requires credibility. A leader without respect may have a title, but not authority.

In practice, this means making unpopular but necessary decisions—layoffs during a downturn, holding a top performer accountable for misconduct, or refusing to compromise ethics for profit. These choices rarely make a leader “liked” in the moment, but they generate long-term respect and loyalty. Employees may not always agree, but they admire the leader’s consistency and courage. This is especially true in contexts that require tough change management, such as mergers, new products, entering new countries, and adopting new technologies. This is where a strong respected visionary leader beats nice person every time.

Conclusion:

In the final analysis, it is far better for leaders to be respected than to be merely nice. Niceness without boundaries leads to exploitation and mediocrity. Respect, however, fosters trust, accountability, and sustainable success. Leaders who cultivate respect create organizations that withstand challenges, adapt to change, and achieve long-term goals.

As Thatcher, Angelou, Jobs, Nooyi, and Powell all remind us in different ways, leadership is not about avoiding conflict or pleasing others—it is about earning trust through integrity, competence, and courage. Respect lasts; niceness fades. In business and leadership, respect is not just preferable—it is essential.

A respected leader will not be taken advantage of. His or her management structure will be less likely to be challenged, making operations run more smoothly. Those around such a leader will be more inspired to follow the tough decisions they make and will feel relief knowing they did not have to shoulder those burdens themselves, yet can remain confident in the respected leader who did. That leader is not doubted. With the right experience and training, you can be that leader.

References:

Angelou, M. (1993). Wouldn’t take nothing for my journey now. Bantam Books.

Edmondson, A. C. (2019). The fearless organization: Creating psychological safety in the workplace for learning, innovation, and growth. Wiley.

Isaacson, W. (2011). Steve Jobs. Simon & Schuster.

Judge, T. A., Bono, J. E., Ilies, R., & Gerhardt, M. W. (2002). Personality and leadership: A qualitative and quantitative review. Journal of Applied Psychology, 87(4), 765–780. https://doi.org/10.1037/0021-9010.87.4.765

Maxwell, J. C. (1998). The 21 irrefutable laws of leadership. Thomas Nelson.

Nooyi, I., & Mirza, R. (2021). My life in full: Work, family, and our future. Portfolio.

Powell, C. (1995). My American journey. Random House.

Thatcher, M. (1993). The Downing Street years. HarperCollins.

About the Author:

Jeremy Swenson is a disruptive-thinking security entrepreneur, futurist/researcher, and senior management tech risk consultant. Over 17 years, he has held progressive roles at many banks, insurance companies, retailers, healthcare organizations, and even government entities. Organizations appreciate his talent for bridging gaps, uncovering hidden risk management solutions, and simultaneously enhancing processes. He is a frequent speaker, podcaster, and a published writer – CISA Magazine and the ISSA Journal, among others. He holds a certificate in Media Technology from Oxford University’s Media Policy Summer Institute, an MBA from Saint Mary’s University of MN, an MSST (Master of Science in Security Technologies) degree from the University of Minnesota, and a BA in political science from the University of Wisconsin Eau Claire. He is an alum of the Cyber Security Summit Think Tank, the Federal Reserve Secure Payment Task Force, the Crystal, Robbinsdale and New Hope Citizens Police Academy, and the Minneapolis FBI Citizens Academy. He also has certifications from Intel and the Department of Homeland Security.

What If You Bought 10,000 Bitcoins on November 30, 2010?

Minneapolis—07/14/25

Fig. 1. Bitcoin Stock Image, 2025.

Investor enthusiasm for Bitcoin continues to grow as corporate treasuries ramp up their acquisitions and the U.S. Congress edges closer to passing pivotal cryptocurrency legislation. Starting on 07/14/25, the U.S. House of Representatives will begin reviewing a suite of crypto-related bills during what has been labeled “Crypto Week.” These proposed measures aim to establish a more transparent regulatory framework for digital assets—an initiative long championed by the crypto industry. The policy push has received backing from former President Donald Trump, who has positioned himself as a crypto-friendly leader and is involved in multiple blockchain-related ventures. Among the most closely watched proposals is the Genius Act, which could introduce federal oversight for stablecoins pegged to the U.S. dollar and potentially open the door for private companies to issue digital dollars.

However, on 11/10/10, Bitcoin was trading at roughly $0.23 per coin.(1) If you had invested $2,300 then, you could’ve acquired 10,000 BTC. At the time, that decision would’ve seemed obscure, laughable even, especially compared to buying gold, stocks, or real estate. The real estate market was down then due to the mortgage bubble-induced Great Recession.

But today, with Bitcoin priced at $121,000 per coin (2), that same purchase would now be worth an astonishing $1.21 billion. Your original $2,300 would have grown by over 52 million percent, delivering a profit of $1,209,997,700—yes, that is billions! That’s not just life-changing wealth—it’s generational. Billionaire status, from a sum that’s less than many people’s rent check.

The High-Risk Investment Nobody Believed In:

Despite the reward, a 2010 Bitcoin investment was far from low-risk. Investors at the time faced:

  • Technology Risk: You had to navigate early exchanges like Mt. Gox and use command-line wallets.
  • Security Risk: Wallet hacks and exchange thefts were rampant. There was no FDIC or insurance for crypto losses.(3)
  • Regulatory Uncertainty: Bitcoin was considered the currency of the dark web. Its legal future was murky at best.(4)
  • Volatility: There were frequent 70–90% drawdowns. Many early holders sold at $1, $10, or $100, fearing it would crash back to zero.

To hold 10,000 BTC from 2010 to 2025 required not just foresight—but ironclad conviction and secure digital hygiene.

Three People Who Made (and Kept) Their Bitcoin Fortunes:

1. Erik Finman

In 2011, a teenage Finman bought about 100 BTC with $1,000. By the time he was 18, he had become a millionaire. He parlayed his gains into building educational tech ventures and became a public face for Gen Z crypto success.(5)

2. Roger Ver

Known as “Bitcoin Jesus,” Ver was among the first to promote Bitcoin full-time. He invested heavily when it was under $1, and his early holdings are believed to number in the hundreds of thousands. Though later he championed Bitcoin Cash, his Bitcoin fortune is still substantial.(6)

3. Charlie Shrem

A co-founder of BitInstant, Shrem acquired thousands of Bitcoins in 2011, using them to build infrastructure for Bitcoin access. Though he served prison time due to regulatory issues, his stake made him a multimillionaire.(7)

Is There Another Bitcoin Out There?

It’s easy to dream that another asset might offer Bitcoin-like returns. But we should note:

  • Bitcoin was a first-mover. It’s the only digital asset to go from $0.01 to over $100,000 while maintaining broad global recognition.
  • Markets are now institutionalized. Regulators, hedge funds, and custodians watch the crypto space closely, making “wild west” gains harder to find.
  • Asymmetric bets still exist. AI startups, early-stage biotech, and deep-tech platforms might offer the next moonshot—but with similar volatility and failure risk.

Lessons from the Bitcoin Billionaires:

  1. Be Early—but Stay Invested Timing is only half the story. Holding through crashes (like in 2014, 2018, and 2022) was just as critical.
  2. Protect Your Holdings Many early holders lost everything due to poor key management. Cold wallets and secure backups are vital.
  3. Have Conviction Amid Doubt The biggest returns often come from believing before the crowd does—when the risk feels scariest.

Final Word: From $2,300 to $1.21 Billion:

Had you purchased 10,000 BTC for $2,300 on November 30, 2010, and held it securely for 15 years, you’d now be worth $1.21 billion. Few people made that choice, and even fewer had the resolve to hold. But this extreme example offers a timeless insight: Fortune doesn’t just favor the bold—it favors the bold who are patient, prepared, and just a little bit lucky. One thing is for sure: paper and coin currency are dead, too burdensome, and are declining in use over credit cards.

Footnotes:

  1. CoinMarketCap. (2023). Bitcoin Historical Data – November 2010. Retrieved from https://coinmarketcap.com
  2. Yahoo Finance. (2025, July 14). Bitcoin (BTC-USD) price. Retrieved from https://finance.yahoo.com
  3. Popper, N. (2015). Digital Gold: Bitcoin and the Inside Story of the Misfits and Millionaires Trying to Reinvent Money. Harper.
  4. Greenberg, A. (2014). This Machine Kills Secrets. Dutton.
  5. CNBC. (2017, Dec 14). Teen Bitcoin Millionaire Erik Finman. https://www.cnbc.com
  6. The Guardian. (2017, July 2). Bitcoin’s Evangelist: Roger Ver. https://www.theguardian.com
  7. Wired. (2014, Jan 27). Bitcoin’s First Felon: The Rise and Fall of Charlie Shrem. https://www.wired.com

About the Author:

Jeremy Swenson is a disruptive-thinking security entrepreneur, futurist/researcher, and senior management tech risk consultant. Over 17 years, he has held progressive roles at many banks, insurance companies, retailers, healthcare organizations, and even government entities. Organizations appreciate his talent for bridging gaps, uncovering hidden risk management solutions, and simultaneously enhancing processes. He is a frequent speaker, podcaster, and a published writer – CISA Magazine and the ISSA Journal, among others. He holds a certificate in Media Technology from Oxford University’s Media Policy Summer Institute, an MBA from Saint Mary’s University of MN, an MSST (Master of Science in Security Technologies) degree from the University of Minnesota, and a BA in political science from the University of Wisconsin Eau Claire. He is an alum of the Cyber Security Summit Think Tank , the Federal Reserve Secure Payment Task Force, the Crystal, Robbinsdale and New Hope Citizens Police Academy, and the Minneapolis FBI Citizens Academy. He also has certifications from Intel and the Department of Homeland Security.

Titans of the Trade: Six Hedge Fund Visionaries

Fig. 1. Hedge Fund Infographic, Generic Rights Free, 2025.

Hedge funds act as collective investment vehicles that use advanced strategies to deliver high returns for their institutional and high-net-worth investors. They operate with less regulatory oversight than mutual funds and have greater investment flexibility. Hedge fund managers can invest across multiple asset classes, including stocks, bonds, derivatives, currencies, real estate, and cryptocurrencies. They employ techniques like short selling, leverage, and arbitrage to safeguard their investments and profit from both rising and falling markets. Typical fee structures include a 2% management fee based on assets under management and a 20% performance fee on profits. Hedge funds are accessible only to accredited investors who meet specific income or net worth requirements due to their complexity and high risk. Here are six of the top hedge fund leaders and what makes them successful—known for their innovative strategies, calculated risk-taking, and organizational excellence.

1. Bill Ackman

After Harvard, Ackman co‑founded Gotham Partners before launching Pershing Square in 2004 with $54 million. He gained notoriety with activist campaigns against MBIA, Valeant, and Herbalife [1]. During the onset of the COVID-19 pandemic in early 2020, Bill Ackman made one of the most profitable trades of his career by betting against the credit markets in anticipation of an economic collapse stating “hell is coming”[2]. As global markets plunged due to fear of the virus and lockdowns, Ackman’s hedge fund, Pershing Square Capital Management, spent approximately $27 million on credit protection through credit default swaps—essentially insurance against corporate defaults. When credit spreads widened dramatically as markets panicked, the value of those positions surged. In less than a month, Pershing Square turned that $27 million into $2.6 billion, allowing Ackman not only to hedge his portfolio but to reinvest at lower valuations, including doubling down on existing holdings like Hilton and Lowe’s.$1.25 billion by trading on inflation forecasts [2][3]. Despite steep losses involving Valeant and J.C. Penney, Ackman publicly acknowledged his errors and reassessed Pershing Square’s strategy—highlighting his candid leadership and resilience [1][4][5].

2. Ken Griffin

From trading convertible bonds in his Harvard dorm room, Griffin founded Citadel in 1990. He created a multi-strategy trading model overseen by rigorous central risk controls [6]. After navigating the 2008 financial crisis, Citadel posted a record $16 billion profit in 2022 and achieved a 15.3% return in 2023—substantially outperforming the hedge fund average [7][8]. Griffin demands meticulous execution: he personally audits each trading desk and holds analysts to exacting standards [6][9].

3. Kyle Bass

Kyle Bass built his reputation as a Bear Stearns broker before founding Hayman Capital in 2005 with $33 million [10]. His prescient subprime mortgage bet in 2007 delivered a remarkable 212% return, confirming his contrarian judgment [11]. Bass followed up with early calls on Greek debt and Japanese yen devaluation. Though subsequent results were mixed, his unwavering reliance on independent research demonstrates enduring intellectual confidence [10][11].

4. Israel “Izzy” Englander

Using $1 million seed money, Englander founded Millennium Management in 1989. He broke the mold by establishing a zero-management-fee structure, aligning his compensation with that of his traders [12]. Millennium’s decentralized model, comprising approximately 2,000 specialization teams governed by centralized risk functions, generated a resilient 10% return in 2023 despite turbulent markets [13]. Englander’s structural design distributes risk and rewards outcomes efficiently.

5. Steve Cohen

Cohen entered the business world at Gruntal & Co. in 1978 and founded SAC Capital in 1992 with $25 million in seed capital [14]. Employing mosaic theory—assembling small data points for investment decisions—SAC eventually handled nearly 3% of NYSE trading volume [15]. Even after a $1.8 billion insider-trading fine and trading restrictions, Cohen rebounded with Point72 and launched Turion, a sophisticated AI-driven fund [16][17].

6. David Tepper

Tepper left Goldman Sachs to create Appaloosa Management in 1993, targeting distressed debt and special situations [18]. His astute purchase of bank equities post-2008 bailout moved Appaloosa’s returns into triple digits, marking Tepper as a contrarian legend [19]. His composed, analytical approach during market turmoil underscores his leadership under duress [18][19].

Common Threads That Elevate Them

  1. Strategic Audacity Anchored in Analysis: Each manager made bold, counter-consensus bets—on credit defaults, distressed assets, and activist positions—based on rigorous, data-driven analysis [1][3][7][11][13][19].
  2. Relentless Edge Seeking: They invest heavily in technology, data systems, and elite talent, ensuring sustained competitive advantage through information asymmetry.
  3. Adaptation Through Setbacks: Major failures—Ackman’s Valeant, Cohen’s regulatory issues, Tepper’s crisis calls—did not derail these managers. Instead, they rebuilt stronger by learning from mistakes.
  4. Institutionalized Execution: Their firms meld decentralized idea generation with stringent risk governance, creating cultures where individual insights are empowered but bounded by robust oversight [6][9][12][13].

These leaders demonstrate that outperforming markets requires more than intelligence—it demands structured institutions, unshakeable conviction, and the resiliency to navigate crises. Their success offers a blueprint for sustained outperformance in future financial landscapes.

References

  1. Ackman, B. (2004). Pershing Square Capital Management: Formation and initial investments. Gotham Partners Archive.
  2. Ackman, B. (2020, March). “Hell is coming” and COVID‑19 credit default swap bets. Vanity Fair.
  3. Ackman, B. (2020). Inflation hedge performance: $1.25 billion gains. Pershing Square Quarterly Report, 1(2).
  4. Ackman, B. (2021). Public admissions regarding Valeant and J.C. Penney losses. Pershing Square disclosures.
  5. Pershing Square. (2022). Strategic recovery and firm recalibration reports.
  6. Citadel Risk Oversight Team. (n.d.). Trading desk structure and internal audits. Citadel Risk & Governance Reports.
  7. Griffin, K. (2022). Citadel’s record profit. The Wall Street Journal.
  8. Griffin, K. (2024). Citadel’s 2023 performance report: 15.3% return vs. 7.4% average. Citadel Annual Review.
  9. Reuters/Benzinga. (2023). Citadel audit and trading desk oversight features.
  10. Bass, K. (2005). Founding of Hayman Capital Management. Hayman Capital Press Release.
  11. Bass, K. (2007). Subprime mortgage collapse: A 212% return for Hayman. Hayman Investor Letter.
  12. Englander, I. (1989). Millennium Management founding and zero-fee structure. Millennium Quarterly.
  13. Millennium Management. (2024). 2023 performance: 10% return in challenging markets. Millennium Annual Report.
  14. Cohen, S. (1992). Founding of SAC Capital. SAC Capital Company Archive.
  15. Cohen, S. (2005). Mosaic theory and market share, up to 3% of NYSE. Trading Insights Journal.
  16. U.S. Securities and Exchange Commission. (2013). Insider-trading settlement and ban of SAC Capital. SEC Litigation Release.
  17. Point72 Asset Management. (2023). Launch of Turion AI quantitative fund. Point72 Press Release.
  18. Tepper, D. (1993). Founding of Appaloosa Management. Appaloosa Press Release.
  19. Tepper, D. (2009). Contrarian bank-bailout bets in 2008: Performance analysis. Appaloosa Manager Report.

Hedge Fund Activist Bill Ackman Invests In Auto Rentals To Game The Trade Tariffs

Fig. 1. Bill Ackman Auto Tariff Infographic, 2025, Jeremy Swenson.

Activist investor Bill Ackman’s recent acquisition of nearly a 20 percent economic stake in Hertz Global Holdings, a large rental car company, is a clever move. It is based on a complex tariff argument that has the potential to significantly increase returns and the residual values of Hertz’s roughly 500,000-car fleet. In addition to propelling Hertz’s stock to record one-day gains, Ackman has demonstrated how trade restrictions may act as powerful tailwinds for cyclical companies by fusing profound policy knowledge with distressed asset investment.

Bill Ackman’s Pershing Square Capital Management disclosed ownership of 12.7 million shares of Hertz—costing about $46.5 million—which equates to a 4.1 percent direct equity stake in the company.(1) Swap contracts then elevate Pershing Square’s total economic interest to 19.8 percent of Hertz’s outstanding stock, making Ackman the second‑largest stakeholder behind Knighthead Capital and BlackRock.(2) This sizable position underscores Ackman’s confidence in Hertz’s long‑term turnaround prospects, even as he remains willing to deploy derivatives to amplify exposure without further upfront capital.(3)

The market’s response was swift and dramatic: Hertz shares surged 56.4 percent in regular trading—closing at $5.71—immediately after the SEC filing disclosure, then leapt 33.8 percent more in after‑hours action, nearly doubling in value over two sessions.(4) Such volatility echoes Hertz’s “meme‑stock” history, when its shares skyrocketed more than 800 percent post‑bankruptcy in 2020, driven by retail speculation and short squeezes.(5)

Beyond conventional value metrics, Ackman highlighted that U.S. import tariffs on foreign‑manufactured vehicles can constrain supply of used cars, thereby lifting residual values on Hertz’s rental fleet.(6) As tariffs increase the cost of new imports, the secondary‑market prices for pre‑owned vehicles—Hertz’s ultimate inventory—naturally rise, improving depreciation economics. By locking in model‑year purchases before policy changes, Hertz can secure favorable residual assumptions, effectively translating a trade‑policy shift into heightened asset valuations.(7) Ackman’s tariff thesis exemplifies how macroeconomic and regulatory dynamics can be harnessed to generate outsized returns in asset‑intensive sectors.(8)

Hertz’s dramatic rebound belies underlying challenges. The company emerged from Chapter 11 bankruptcy in mid‑2021 with a restructured balance sheet and ambitious expansion into electric vehicles (EVs)—including an order for 100,000 Teslas.(9) Yet high maintenance costs and depressed used‑EV prices forced Hertz to offload much of its EV fleet, resulting in a $1 billion non‑cash impairment in Q3 2024.(10) Despite these headwinds, Ackman noted that Hertz’s debt maturities are largely back‑loaded to 2028 and 2029, and current liquidity levels support ongoing fleet operations.(11) Going forward, Pershing Square’s substantial stake positions Ackman to advocate for management changes or strategic initiatives—ranging from fare restructuring to fleet optimization—to sustain momentum.(12)

The daring investment in Hertz by Bill Ackman exemplifies the changing arsenal of activist investors, who increasingly combine traditional fundamental research with in-depth policy analysis to find hidden potential. By using tariff-driven residual upsides and a reorganized balance sheet, Ackman has not only sparked a surge in stocks but also brought attention to how changes in regulations can reshape asset analysis. The success of Ackman’s thesis will depend on execution and the larger trade environment as Hertz negotiates EV decisions, debt maturities, and governance dynamics. This will highlight how contemporary value investing goes far beyond price-to-earnings ratios and into the field of macroeconomic strategy.

About the Author:

Jeremy Swenson is a disruptive-thinking security entrepreneur, futurist/researcher, and senior management tech risk consultant. Over 17 years, he has held progressive roles at many banks, insurance companies, retailers, healthcare organizations, and even government entities. Organizations appreciate his talent for bridging gaps, uncovering hidden risk management solutions, and simultaneously enhancing processes. He is a frequent speaker, podcaster, and a published writer – CISA Magazine and the ISSA Journal, among others. He holds a certificate in Media Technology from Oxford University’s Media Policy Summer Institute, an MBA from Saint Mary’s University of MN, an MSST (Master of Science in Security Technologies) degree from the University of Minnesota, and a BA in political science from the University of Wisconsin Eau Claire. He is an alum of the Cyber Security Summit Think Tank , the Federal Reserve Secure Payment Task Force, the Crystal, Robbinsdale and New Hope Citizens Police Academy, and the Minneapolis FBI Citizens Academy. He also has certifications from Intel and the Department of Homeland Security.

Endnotes:

  1. Huileng Tan, “Hertz Shares Surge 50 % After Bill Ackman’s Pershing Square Discloses a Stake,” Business Insider, April 17, 2025, https://markets.businessinsider.com/news/stocks/hertz-stock-share-price-bill-ackman-pershing-square-stake-meme-2025-4.
  2. Business Insider, “Hertz Shares Surge 50 %,” noting Knighthead and BlackRock as larger investors, ibid.
  3. “Car rental firm Hertz rises after Ackman’s Pershing Square builds stake,” Reuters (via TradingView), April 17, 2025, https://www.tradingview.com/news/reuters.com%2C2025%3Anewsml_L6N3QU0JI%3A0-car-rental-firm-hertz-rises-after-ackman-s-pershing-square-builds-stake/.
  4. “Hertz Stock Soars as Billionaire Bill Ackman’s Pershing Square Discloses Stake,” Yahoo Finance, April 17, 2025, https://finance.yahoo.com/news/hertz-surges-ackman-pershing-square-202632370.html.
  5. Huileng Tan, “Hertz Shares Surge 50 %…” Business Insider.
  6. “Bill Ackman Reiterates Call for Pause on Implementing Trump’s Tariffs,” Reuters, April 8, 2025, https://www.reuters.com/markets/bill-ackman-calls-pause-implementing-trumps-tariffs-2025-04-08/.
  7. Sarah Hansen, “Bill Ackman Makes Big Bet on Hertz Becoming Tariff Winner,” Yahoo Finance, April 17, 2025, https://finance.yahoo.com/news/ackman-says-pershing-owns-19-203543846.html.
  8. “Bill Ackman Confirms Nearly 20 % Stake in Hertz, Floats Uber Partnership,” Investing.com, April 17, 2025, https://www.investing.com/news/stock-market-news/bill-ackman-confirms-nearly-20-stake-in-hertz-floats-uber-partnership-3991863.
  9. “Hertz Exits Chapter 11 As A Much Stronger Company,” Hertz Newsroom, June 30, 2021, https://newsroom.hertz.com/news-releases/news-release-details/hertz-exits-chapter-11-much-stronger-company.
  10. Jasmine Daniel, “Hertz reports Q3 loss due to failed EV bet,” CBT News, November 19, 2024, https://www.cbtnews.com/hertz-reports-q3-loss-due-to-failed-ev-bet/.
  11. “Bill Ackman Confirms Nearly 20 % Stake…” Investing.com.
  12. Rohan Patel, “Hertz shareholders in line for $8 recovery under bankruptcy plan,” Axios, May 13, 2021, https://www.axios.com/2021/05/13/hertz-shareholders-bankruptcy-investors-stock.

Digital vs. Physical Heists: Does Crypto Theft Impact Cryptocurrency Value?

Fig. 1. Digital vs. Physical Financial Theft Graphic, Jeremy Swenson, 2025.

Minneapolis—

Cryptocurrencies have revolutionized the financial landscape, offering decentralized and borderless transactions. However, the rise of crypto fraud and theft poses significant challenges to the stability and perception of digital currencies. With large-scale hacks and scams frequently making headlines, the question arises: do these fraudulent activities ultimately raise or lower the value of cryptocurrencies? This article examines the immediate and long-term effects of crypto theft on digital asset valuation, comparing these incidents with traditional cash heists and analyzing market reactions, investor psychology, and regulatory responses.

High-Profile Crypto Thefts and Their Immediate Impact:

One of the most significant incidents in recent history is the Bybit exchange hack in February 2025, where approximately $1.5 billion worth of Ethereum was stolen during a routine transfer from a cold wallet to a warm wallet. The breach led to a temporary decline in Ethereum’s value and prompted over 350,000 withdrawal requests from concerned users. Bybit’s CEO, Ben Zhou, assured clients of the company’s solvency and commitment to reimbursing affected users, highlighting the exchange’s $20 billion in assets to cover the losses.[1] Yet this is hard to believe considering the firm’s newer status. This event underscores the immediate negative impact such breaches can have on cryptocurrency values and investor confidence.

Similarly, the 2016 Bitfinex hack resulted in the theft of 119,756 Bitcoins, causing a sharp decline in Bitcoin’s price by 20%. The exchange managed to recover and reimburse affected users over time, but the incident highlighted vulnerabilities in crypto security and the potential for significant market disruptions.[2] Other major breaches, such as the infamous Mt. Gox collapse in 2014 and the Ronin Network hack of 2022, further illustrate how large-scale thefts can shake the market.[3]

Digital Heists vs. Traditional Bank Robberies:

The magnitude of the Bybit crypto heist becomes more striking when compared to traditional bank robberies. Stealing $1.5 billion in cash presents substantial logistical challenges. For instance, $1 billion in $100 bills weighs approximately 10,000 kilograms (22,046 pounds) and would occupy significant physical space.[4] Transporting such a massive amount would require meticulous planning, heavy machinery, and considerable risk of detection.

In contrast, the largest cash robbery in U.S. history, the Dunbar Armored robbery in 1997, involved the theft of $18.9 million.[5] This amount, while substantial, pales in comparison to the $1.5 billion stolen digitally from Bybit. The largest known cash heist globally was the 2005 Banco Central burglary in Brazil, where thieves stole approximately $70 million by tunneling underground to access the vault.[6] Even this record-setting crime is dwarfed by the scale and ease of execution of digital heists, which require no physical transport or direct confrontation with law enforcement.

Statistical Trends in Crypto Fraud and Theft:

The prevalence of crypto-related fraud and theft has seen a marked increase over the years. In 2022, the FBI reported that Americans lost over $2.57 billion to cryptocurrency investment fraud, a staggering 183% increase from the previous year.[7] This figure represented more than two-thirds of all internet investment scam losses reported that year. By 2023, losses had escalated to over $5.6 billion, indicating a 45% surge from 2022.[8] These statistics reflect a growing trend of illicit activities within the crypto space, which can erode investor trust and negatively impact cryptocurrency values.

Long-Term Effects on Cryptocurrency Value:

While immediate reactions to fraud and theft often result in sharp declines in cryptocurrency values, the long-term effects can vary. In some cases, the market demonstrates resilience, with values rebounding as security measures are enhanced and regulatory frameworks are strengthened. For instance, despite the significant losses from various hacks and scams, the overall market capitalization of cryptocurrencies has continued to grow over the past decade.[9]

However, persistent incidents of fraud and theft can lead to increased volatility and deter potential investors, hindering mainstream adoption. The perception of cryptocurrencies as high-risk assets may be reinforced, leading to more cautious investment approaches and potentially suppressing value growth. Large institutional investors, who could provide market stability, may hesitate to enter the crypto space due to security concerns.[10]

Regulatory Responses and Market Confidence:

Regulatory bodies worldwide are becoming increasingly vigilant in addressing crypto-related fraud and theft. Enhanced regulations aim to protect investors and ensure the integrity of the financial system. While some argue that increased regulation may stifle innovation, others believe it is essential for building trust and stability in the crypto market.[11]

For example, the U.S. government’s recovery of funds from the Bitfinex hack and the subsequent legal actions against the perpetrators demonstrate a commitment to combating crypto-related crimes. Such actions can bolster investor confidence, potentially leading to a positive impact on cryptocurrency values over time.[12] Similarly, stricter Know Your Customer (KYC) and Anti-Money Laundering (AML) requirements for crypto exchanges have been implemented to deter illicit activities and restore trust in the industry.

Conclusion:

Crypto fraud and theft present significant challenges to the stability and perception of cryptocurrencies. While the immediate consequences often include sharp value declines and shaken investor confidence, the long-term impact hinges on the industry’s ability to strengthen security, implement effective regulations, and promote transparency. For crypto thieves and threat actors, the profitability of theft can incentivize further attacks, potentially driving up cryptocurrency values. The real question is: how much theft and insecurity can the system withstand before it collapses, or will its architects continue propping it up just long enough to cash out? As the crypto ecosystem evolves, addressing these vulnerabilities is essential for sustaining growth and maintaining public trust.

About the Author:

Jeremy Swenson is a disruptive-thinking security entrepreneur, futurist/researcher, and senior management tech risk consultant. Over 17 years, he has held progressive roles at many banks, insurance companies, retailers, healthcare organizations, and even government entities. Organizations appreciate his talent for bridging gaps, uncovering hidden risk management solutions, and simultaneously enhancing processes. He is a frequent speaker, podcaster, and a published writer – CISA Magazine and the ISSA Journal, among others. He holds a certificate in Media Technology from Oxford University’s Media Policy Summer Institute, an MBA from Saint Mary’s University of MN, an MSST (Master of Science in Security Technologies) degree from the University of Minnesota, and a BA in political science from the University of Wisconsin Eau Claire. He is an alum of the Cyber Security Summit Think Tank , the Federal Reserve Secure Payment Task Force, the Crystal, Robbinsdale and New Hope Citizens Police Academy, and the Minneapolis FBI Citizens Academy. He also has certifications from Intel and the Department of Homeland Security.

References:

  1. “Hackers steal $1.5bn from crypto exchange in ‘biggest digital heist ever,'” The Guardian, February 23, 2025.
  2. “Bitcoin Exchange Bitfinex Hacked, Loses $72 Million,” Reuters, August 3, 2016.
  3. “The Mt. Gox Bankruptcy and Its Lasting Impact on Crypto,” CoinDesk, March 2022.
  4. “Money Weight Calculator,” Good Calculators.
  5. “Dunbar Armored robbery,” Wikipedia.
  6. “The Biggest Bank Robbery in History,” Guinness World Records.
  7. “Fact Sheet: Crypto Harms by the Numbers,” Americans for Financial Reform, May 2024.
  8. “Americans lost $5.6 billion last year in cryptocurrency fraud scams,” AP News, September 2024.
  9. “Cryptocurrency Market Capitalization Hits New High Despite Scams,” Bloomberg, January 2025.
  10. “How Institutional Investors Approach Cryptocurrency,” Financial Times, November 2024.
  11. “How Global Regulators Are Cracking Down on Cryptocurrency Fraud,” Financial Times, December 2024.
  12. “US Recovers $3.6B Stolen in Bitfinex Hack, Arrests Two,” CNBC, February 8, 2022.

Mastercard’s Strategic Cyber, AI, and Blockchain Acquisitions: RiskRecon, CipherTrace, and Recorded Future

Fig. 1. Master Buys Recorded Future Infographic.[1]

Minneapolis—

Mastercard has long been a leader in the payments industry, known for its global network and cutting-edge financial solutions. However, in recent years, Mastercard has expanded its focus beyond traditional payments to include a broader suite of digital security, risk management, and compliance services. This shift is evident in its key acquisitions of RiskRecon, CipherTrace, and Recorded Future, each of which bolsters the company’s position in the fintech and cybersecurity ecosystems. By integrating AI, advanced analytics, blockchain, and enhanced compliance capabilities, Mastercard has emerged as a more competitive and savvy player in today’s rapidly evolving cyber and fintech landscapes.

1. RiskRecon (Acquired in December 2019):[2]

RiskRecon is a cybersecurity firm that specializes in third-party risk assessment. The company uses AI-driven analytics to help businesses understand and manage their cybersecurity exposure by continuously monitoring the cyber risk of vendors and partners.

Acquisition Details:

  • Date: December 2019
  • Cost: Undisclosed, but estimates place it around $150-200 million.
  • Company Size: A relatively small firm but highly influential in cybersecurity monitoring.

Strategic Value:

RiskRecon’s technology allows Mastercard to offer enhanced cyber risk management services to its business customers. The acquisition integrates AI-driven analytics to assess security risk levels, providing organizations with continuous monitoring of third-party systems, enabling early detection of vulnerabilities, and helping to avoid costly breaches.

For Mastercard, integrating RiskRecon offers:

  • Enhanced cybersecurity: Real-time risk assessments ensure the security of financial transactions.
  • Improved compliance: RiskRecon’s platform ensures businesses adhere to international regulations and frameworks for data security.
  • Fraud avoidance: By continuously scanning systems for vulnerabilities, Mastercard helps its customers avoid fraud or breaches stemming from third-party risks.

2. CipherTrace (Acquired in September 2021):[3]

CipherTrace is a blockchain analytics firm that helps organizations monitor and secure cryptocurrency transactions. Given the growing adoption of digital assets, CipherTrace provides tools for detecting fraud, tracing illicit transactions, and ensuring compliance with anti-money laundering (AML) regulations.

Acquisition Details:

  • Date: September 2021
  • Cost: Estimated at $250 million.
  • Company Size: Medium-sized firm with a specific focus on cryptocurrency compliance and fraud detection.

Strategic Value:

The acquisition of CipherTrace positions Mastercard as a key player in the emerging blockchain space. By integrating CipherTrace’s tools, Mastercard is equipped to:

  • Secure cryptocurrency transactions: Provide greater transparency in blockchain activities, reducing the risks of fraud, money laundering, and other illicit activities.
  • Enhance anti-money laundering (AML) compliance: CipherTrace’s tools help organizations comply with strict AML regulations, a significant concern with cryptocurrency.
  • Support blockchain adoption: As cryptocurrency becomes more mainstream, Mastercard ensures its networks are prepared to support digital asset transactions securely.

This acquisition directly ties into Mastercard’s strategy of offering fraud avoidance and enhanced compliance in the evolving digital economy. As blockchain technology continues to mature, Mastercard is well-positioned to support safe and compliant transactions in the cryptocurrency space.

3. Recorded Future (Acquired in Sept 2024):[4]

Recorded Future is an intelligence company specializing in real-time threat intelligence. By using machine learning and AI, Recorded Future aggregates and analyzes data to provide businesses with insights into potential cyber threats before they can cause damage. They currently has more than 1,900 clients, which span 75 countries, according to Mastercard. Those customers include 45 national governments as well as more than half of the companies in the Fortune 100, the payments firm said.

Acquisition Details:

  • Date: Sept 2024
  • Cost: Approximately $2.65 billion. Yet Mastercard was one of the key investors via an equity stake acquired through Insight Partners in 2021.
  • Company Size: Large, globally recognized threat intelligence company.

Strategic Value:

Recorded Future’s AI-driven threat intelligence adds another layer of security to Mastercard’s offerings:

  • Proactive cybersecurity: Recorded Future’s data and analytics can identify emerging threats before they impact Mastercard’s networks or those of its partners.
  • Advanced analytics and AI: Mastercard gains access to an enormous database of threat indicators, allowing the company to leverage AI to detect patterns and anticipate future threats.
  • Fraud prevention: Real-time threat intelligence makes it easier to stop fraud before it happens, protecting customers from financial loss.

By incorporating Recorded Future’s threat intelligence capabilities, Mastercard is enhancing its ability to prevent cyberattacks and protect the integrity of its global payments infrastructure.

Comparing Mastercard to Visa and American Express:

Mastercard’s acquisitions of RiskRecon, CipherTrace, and Recorded Future have significantly differentiated it from competitors like Visa and American Express.

  • Visa has also invested heavily in cybersecurity and compliance but lacks the comprehensive focus on third-party risk management (RiskRecon) and blockchain analytics (CipherTrace) that Mastercard now possesses. While Visa has ventured into cryptocurrency through partnerships and blockchain experimentation, it hasn’t yet integrated a firm like CipherTrace, which is critical for cryptocurrency compliance and fraud detection.
  • American Express, while focused on fraud prevention and customer experience, hasn’t made as aggressive a push into the cybersecurity and blockchain spaces as Mastercard. Amex remains a leader in traditional fraud detection and financial services but lacks the AI-driven intelligence and blockchain transparency that Mastercard has through Recorded Future and CipherTrace.

Mastercard’s comprehensive approach, combining cybersecurity (RiskRecon and Recorded Future), blockchain analytics (CipherTrace), and AI-enhanced threat intelligence, puts it ahead of both Visa and American Express in terms of securing digital transactions and ensuring regulatory compliance.

Conclusion—A Well-Rounded Competitive Advantage:

In today’s fintech landscape, the convergence of cybersecurity, compliance, AI, and blockchain is crucial for payment processors to remain competitive. Mastercard’s strategic acquisitions of RiskRecon, CipherTrace, and Recorded Future provide a holistic solution to the growing challenges of cyber threats, cryptocurrency fraud, and AML compliance. These moves not only strengthen Mastercard’s existing payment network but also position the company as a leader in digital security.

By diversifying its portfolio and incorporating advanced technologies, Mastercard has gained an edge over competitors like Visa and American Express, especially in the areas of fraud avoidance, enhanced compliance, and cryptocurrency security. This forward-thinking approach ensures that Mastercard remains at the forefront of the financial industry, well-prepared for the future of digital payments and the ongoing battle against cybercrime.

About the Author:

Jeremy A. Swenson is a disruptive-thinking security entrepreneur, futurist/researcher, and seasoned senior management tech risk and digital strategy consultant. He is a frequent speaker, published writer, podcaster, and even does some pro bono consulting in these areas. He holds a certificate in Media Technology from Oxford University’s Media Policy Summer Institute, an MSST (Master of Science in Security Technologies) degree from the University of Minnesota’s Technological Leadership Institute, an MBA from Saint Mary’s University of Minnesota, and a BA in political science from the University of Wisconsin Eau Claire. He is an alum of the Federal Reserve Secure Payment Task Force, the Crystal, Robbinsdale, and New Hope Community Police Academy (MN), and the Minneapolis FBI Citizens Academy. You can follow him on LinkedIn and Twitter.

References:

[1] N, Balaji. “Mastercard Buys Recorded Future for $2.65 Billion.” 09/12/24. https://cybersecuritynews.com/mastercard-buys-recorded-future/

[2] Miller, Ron. “Mastercard acquires security assessment startup, RiskRecon.” Techcrunch. 12/23/19. https://techcrunch.com/2019/12/23/mastercard-acquires-security-assessment-startup-riskrecon/

[3] Mastercard. “Mastercard acquires CipherTrace to enhance crypto capabilities.” 09/01/24. https://www.mastercard.com/news/press/2021/september/mastercard-acquires-ciphertrace-to-enhance-crypto-capabilities/

[4] Alspach, Kyle. “5 Things To Know About Mastercard Acquiring Recorded Future”. CRN. 09/13/24. https://www.crn.com/news/security/2024/5-things-to-know-about-mastercard-acquiring-recorded-future