crypto

“You know, I think there was this early wave of managers who said, I was really early in crypto, so I know all the people who matter. That'll become really commoditized. There just aren't that many people who matter in crypto. It's actually really easy to get t…”

“And I, the analogy I use is that, to me, diversifying inside crypto is like, A champion, a world champion poker player trying to smooth out her earnings by playing slots on the way to the table. You know, you're actually increasing risk and decreasing expected…”

“Even still, I think some of the great VC funds, they don't understand how to sell. And this isn't VC. This is kind of VC where the liquidity comes way too early.”

“Debt is another area where I think we could do some stuff soon, but my commitment is to try to get into crypto and cards and art and cars and all kinds of other things.”

“A lot of the thesis we have with crypto blockchain is that a similar thing will happen with internet services in the same way that almost all software today is made by a group, a community of people who get together and build something. We think the same thing…”

“We speak with institutions all the time and by and large, some have very small investments in the space, either through a venture deal that they did Or maybe with, there was someone at the investment team that had great foresight and said, listen, we should st…”

“So whether it's Paul Tudor Jones or it's Elon Musk, Either and or both of those types of folks' participation in this asset class and on a very public level provides an unbelievable amount of air cover for more folks to participate in the space as well.”

“They have all capitulated from the career risk Of getting involved or being the guy in the investment committee that raises their hand and says, well, why don't we put 50 basis points into crypto or, you know, and capitulated to the career risk of not being th…”

“We had some very positive pronouncements out of the Office of the Controller of Currency around federally chartered banks being able to custody crypto. Federally chartered banks being able to run crypto network nodes. And what that did was lead to announcement…”

“And that's actually what we think blockchain and crypto is going to look like going forward. Mainstream users don't have to know that they're interacting with a blockchain. What's really cool is like in the future, we envision they'll get all of the benefits f…”

“Going from really supply demand dynamics for individual tokens to an investment paradigm that looks Quite analogous to equities with fundamentals that you can track, you can run valuation metrics, and you can put price targets on various tokens and really use …”

“And in crypto, the time from early stage to liquid is much shorter than an equity. So you can go from being this embryonic company to Being relevant in liquid crypto in six months and having a five hundred million or billion dollar network value.”

“I'd say everything in crypto is kind of solidly in that quantum mental bucket because you have a lot of real time data that's visible on the blockchain.”

“Crypto has tended to have a Four-year cycle. I believe that's tied to Bitcoin's halving cycle. The new supply issuance of Bitcoin gets cut in half every four years, roughly. We call that the halving. And as a result, you tend to have three good years of perfor…”

“People that use the crypto functionality in the PayPal app, 50% of them are daily active users.”

“The first crypto investments by the endowment world were in VC startups investing in the crypto space, because that didn't require board approval. It was just another VC fund.”

“That's what I love about crypto. You can have these concepts that you never really would have thought about otherwise, about being to own moments and media and people's lives.”

“My own bet is that stable coin is going to be a lot more interesting than crypto because I think that takes out the currency risk and just says, yes, I want to transact in a digital environment, but I want to do it without taking the risk that when I convert b…”

“And we ended up pursuing a small investment in the space at the end of that process, understanding that there's just huge unknowable risks around regulation, around the investment in tokens and their volatility, around how you're owning something and what you …”

“And I think relatively quickly, we came to appreciate that the trading strategies were not a good fit for us. And I do think, by the way, people can make fantastic money doing this, but we didn't really want to have our main bet be on the volatility of the ass…”

“We have made a couple of small commitments to some venture-oriented crypto players really viewing that as Something that could be significant, particularly in around DeFi and some of the things that we've seen where a lot of that business activity is happening…”

“I think of crypto as a commodity like gold, and I have a very hard time, or we as a firm have a very hard time investing in anything where the only investment case is that someone will pay more in the future than you do today.”

“We're fiduciaries, so we have to hang our, I always say we have to hang our hat on being able to evaluate why we're doing, is it fundamental value, and have kind of a framework around it, and I just think it's crypto in that regard. We don't want to put our he…”

“It is the beneficiary of just ridiculous, crazy liquidity in the world, and I don't get where the fundamental value is right now.”

“I kind of figured out, you know, again, it's like most people would say that's probably three percent of my net worth.”

“Now, crypto, interestingly, just as a category, has the highest level of engagement An interest in learning and probably the lowest level of investment probably doesn't surprise you. More people are interested to know what's going on in this space, but it has …”

“Stuff in crypto Has over the last 10 years gone down 50 to 85%. It's happened many times. I think it will happen again.”

“We think Solana is the iPhone moment. For crypto.”

“Arguably the hardest thing to do in the space over the last five years and probably over the next five is just general education.”

“It's impossible if you're trying to do that in crypto to manage for volatility and also manage for highest absolute returns.”

“While a lot of people get worried about exit liquidity, honestly, given our level of conviction in these assets, I'm more worried about entry liquidity. Will we be able to buy this at scale again?”

“So what we find is you cannot execute team-level governance in crypto. You need to do network-level governance, and that requires more active participation by investors into the community in order to have the legitimacy to change the protocol.”

“Because in crypto, you can bootstrap resources. Like, you can incentivize players in your ecosystem to participate by rewarding them with the project itself, like tokens in the project itself. You don't need to go pay somebody to do something. And that applies…”

“There's been so much noise and so little signal because all those trees have been growing to the sky. You're just like, I don't know who's a great all weather manager.”

“And that transition to Web three is probably going to play out over the course of the rest of my career, if not my lifetime. Crypto will be an important part of that, and you just can't ignore it.”

“So we're seeing an entire reinvention of finance, and frankly, of the web, in a decentralized way. And that's going to go from fringe to mainstream, despite the fact that there are bubbles in that market right now. The bubble will burst, but the same thing tha…”

“We don't ever do a good job lending on an LTV basis. We're more cash flow lenders. So the tokens and the crypto businesses that we understand why there might be future cash flows for, or where there's a real business model we'll pile into.”

“If you accept just as a store of value the total gold market at 11 trillion dollars, half of that, five and a half trillion dollars, if you just had generational shift where people said, you know what, I prefer this in the same way they prefer Bonobos to Docke…”

“On the crypto side, we haven't been investing in it As a currency. We haven't been investing in crypto per se, but we invest in digital asset infrastructure. So Paxos is digital asset infrastructure.”

“And so right now I hear the word constantly, we're in the early innings, but crypto has been going on since 2008 now, so we're 14 years into it. And there still isn't really a core use case other than speculation and capital raising. There's no businesses that…”

“Because we're not believers that this is going to be digital gold. I've also never been a big believer in gold.”

“We've now built up an allocation such that over time, it'll probably end up being about 10% of what we have in venture, and we're excited about it.”

“My hypothesis here in this entire technology ecosystem, and this goes back to the mistakes that I made in 13 and 15, is I don't think anybody understands which one of these technologies is going to win long term. And if they tell you they do, I think they're f…”

“The most alpha is usually found in the things that are annoying and hardest to do. Meaning if you have to set up a new wallet, if you got to get on some new exchange, if you got to learn some new protocol.”

“Unlike equity markets where companies will stay private for five, six, seven, 10 years in crypto, like the token might be liquid a year or a year and a half after you invest in it.”

“The goal in crypto is simply don't be the midwit. That's it. Just don't be the midwit, because there are a million reasons why a marginally smart person would look at all of this stuff and say, that's ridiculous. That that is never going to work. That there's …”

“I think at this point, It is considered a sub-allocation to venture capital by the vast majority of institutions, and it's just a much more volatile subset of venture capital because there, there's early liquidity, you know, portfolios start having marks, they…”

“The biggest mistake I made was, I think, prior to researching crypto and taking a deeper dive is I didn't take enough risk. I think the transformational moment in my life was when I saw the Greek crisis. I go back to that, and I saw that Even if you think you'…”

“And then regulatory risk. I don't think it's systemic anymore. I could be wrong. I think it was systemic in 2018. You could have seen some really aggressive action against crypto back then. Now, how can it be? Like, I think, 30, forty million Americans hold so…”

“Cambridge would have it right now, but I would say there's probably five X from then at least, like I'm taking a guess here in terms of client number. In terms of dollars, probably 10 X or 20 X.”

“We think that actually the biggest use cases in crypto are not going to be purely financial in nature. They're actually going to be things that map the social graph.”

“Wallet to wallet messaging is still one of the big unsolved things in crypto. The reason it's hard is because as soon as you open up wallet to wallet messaging, you get massive amounts of spam.”

“Price is rarely like a leading indicator for fundamental progress and traction.”

“Most of the capital in crypto today, it has been more risk seeking rather than focused on risk mitigation. So insurance is still kind of finding its legs.”

“I think what we've seen is in crypto, when the market trades down, everything trades down. And then when the market trades up, things tend to kind of diverge. So over short periods of time, you tend to have a lot of convergence or correlation. But over long pe…”

“There hasn't been as much demand for people that want to buy index funds in crypto. People want to pick tokens and catch the next a hundred X.”

“Crypto today is about 20 basis points of all global assets. So it's a trillion and a half asset class. Global assets are roughly 600 trillion.”

“I think regulation is more of an opportunity at this point than a risk.”

“And I do think that this emergent stuff in crypto that allows artists and other types of creators to basically monetize separate from their platform that they distribute through is very important to pay attention to. Because if you can disintermediate all thos…”

“I think that this is an economic and technological renaissance dressed up as a get rich quick scheme.”

“It's entrepreneurs building for capital markets instead of building for users. It's hard to put exactly unless you've been in like, 10,000 pitches Especially in unproven categories like crypto where it's unclear if you have product market fit or it's a complex…”

“I just think everything really great in crypto, I think most of it was forged in a bear market, or it survived a bear market. This is actually most of crypto, is these bear market moments.”

“To me, this feels more like 2008 than the crypto downturns of 2014 and 18. The macro thing with inflation, interest rates, the next few months will tell maybe the inflation was transitory or maybe it will lead to problems in real estate and credit markets. And…”

“I think of it as we need to build great products used by billions of people. And then I just assume the institutions will follow. The institutions are going to go where the growth and the money is, frankly. That's what comes first. So I feel like people are pu…”

“To me, a community is not when you look up to a leader like Steve Jobs. It's when you bump into somebody at a bar, and they're interested in that topic, and you actually feel an affinity. And that's how the PC felt back then, and that's how crypto feels today.”

“In our world, a lot of people may not have formal educations. They may not have the same pedigree, brand name resumes. We've hired a lot of people who have not gone to college. What we want to see is they've demonstrated excellence. That excellence can be thro…”

“There appears to be an ability for two different systems to coexist, because there are countries outside the US, there are the deep state, and those who fear the deep, you know, there's a duality in the society, and so crypto appeals to a certain section of so…”

“I think a lot of people in the crypto love to reinvent the wheel and love to describe these things in just like pretty complex language. And it's generally necessary. And I think a pretty good sign that someone's like full of BS.”

“You kind of think about who owns the customer relationship in crypto and it's generally wallets.”

“The high level here is I've come to believe that NFTs are probably how crypto goes mainstream.”

“The way to do investing in crypto would be really different. And it would look a lot more operational. It would look a lot more like a software company than it would a traditional investment firm.”

“We tend to think a lot of these things will overcorrect relative to the value that they've created and relative to the value that they will create.”

“However, on our platform, it is a highly engaged, if not the most engaged educational content on our platform, but there's no correlation to the follow through of capital into those strategies.”

“When you lift rates from a negative one and a half real to a positive one and a half real stuff just breaks because you would spend so many years with no volatility in rates that almost has broken the country of the UK. And now it's breaking the whole crypto b…”

“If I stay invested and my long-term thesis is correct, my clients are going to be unbelievably well-rewarded, and this is probably a really good time to buy. I'm willing to bet, obviously, the firm and my personal assets that five years from now, we're going t…”

“Every single investment committee is asking its staff What is our exposure to crypto? And so two percent of the portfolio is now consuming 110% of the discussion at the IC.”

“We've got some managers that are really leaning into human computer interaction that really starts to look like web three. And yes, crypto becomes kind of the secure and identity driven data layer of that. And that's what I'm excited about. But I think that's …”

“Axie famously worked until it stopped working. Some of that was tied to people's inherent tie-in with crypto. So they were compounding their bets by saying, hey, I'm going to have crypto, and therefore you have to get in with ETH, and then we're going to have …”

“There's basically no Silicon Valley investment in the last two years from multi vertical VCs.”

“Fifty million Americans own crypto.”

“Trading cards boomed during COVID. They obviously took a big tank along with crypto and all these other speculative things after, but already have started marching back and we're seeing record high auctions for a lot of the high end stuff.”

“And then we also entered crypto in November of 2020. And that was really to express one of those themes, which was monetary debasement and also captured some of the convexity of this new technology that was poorly understood at that time.”

“Not having a position today, despite the increased regulatory clarity, despite the institutionalization, despite the use cases, I think is becoming a bit more of a contrarian view than a consensus view.”

“And I look at the crypto space, I think, like, 99% of things in this industry are not investable, but one percent are.”