I think its laudable to back firmly held beliefs with a large bet. One of the nice things about making a bet is that you need to be precise about the terms, in

I think its laudable to back firmly held beliefs with a large bet. One of the nice things about making a bet is that you need to be precise about the terms, in this case what everyone means by "bubble". The terms in this bet imply that it would not be a bubble if most of the companies went to zero but 1-2 dramatically increased in value. That makes sense if you are an investor in all of these companies, like YC (nearly) is. But most VCs hold only 1-2, so if there is a wide variance in outcomes (which is characteristic for startups) and the rest of the VC's portfolio are not quite as great as the listed companies (i.e. much more likely to go to zero) then there is a big risk of large drawdowns in VC funds. I think that is a reasonably likely scenario, which many people would call a bubble, but which wouldn't be reflected in the bet. Put another way, the bet is like saying YC's portfolio (or at least the synthetic portfolio described in the bet) is undervalued in aggregate, not that many specific companies are.