Mar 15, 2021 · 1h 6m · capital-allocators
Crypto for Institutions 3: Seth Ginns – Investing Beyond Bitcoin (Capital Allocators, EP.182)
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In this episode of Capital Allocators, host Ted Seides speaks with Seth Ginns, Managing Partner at CoinFund, about evaluating digital assets beyond Bitcoin through fundamental analysis, Layer 1 smart contract ecosystems, DeFi cash flows, and institutional portfolio construction.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Ted holds 20.4% of the talking time here. How this is scored →
Ted as informed peer 3.5 Guest teaching 4.5 Guest disagreement 0.0 Ted pushing back 0.1
speaking balance: gold is Ted, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 1:03:10 Defense of sell-side research consensus
Seth takes an explicit contrarian stand against common buy-side orthodoxy, pushing back against the idea that sell-side research is useless.
Hardest push from Ted ▶ 8:02 Ted presses on managing side investing with public equity workloadTed interrupts the smooth narrative flow to demand how Seth was realistically able to execute angel deals and crypto research while working full-time as a large-cap equity analyst.
Biggest teaching moment ▶ 26:10 Expanding NFTs into structured on-chain financial collateralSeth broadens Ted's conception of NFTs from simple collectibles to programmable real-estate titles and real-time sensorized collateral in structured DeFi debt.
Ted holds their own ▶ 47:06 Ted frames institutional corporate balance sheet dynamicsTed demonstrates commanding domain context by framing specific corporate allocations across Tesla, MassMutual, and MicroStrategy to anchor the macro adoption discussion.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Ted as informed peer | Guest teaching | Guest disagreement | Ted pushing back | Why |
|---|---|---|---|---|---|---|
| Crypto for Institutions Mini-Series Overview and Seth Ginns Profile | 0 | 0 | 0 | 0 | Monologue introduction by Ted Seides outlining the institutional crypto miniseries, partner sponsors, and Seth Ginns' career path. | |
| Supporting Institutional Crypto Sponsors: Chainalysis, Falcon X, MG Stover, Bitwise | 0 | 0 | 0 | 0 | Sponsor advertisement segment reading copy for Chainalysis, Falcon X, MG Stover, and Bitwise. | |
| Seth Ginns' Journey from Public Equities to Early-Stage Investing | 4 | 3 | 0 | 1 | Ted probes Seth on how an active public equity analyst found time to build a real estate and angel portfolio. Seth details his macro deflation thesis following the GFC. | |
| Early Crypto Bets: Coinbase Angel Round and Ethereum ICO | 3 | 4 | 0 | 0 | Ted asks how Seth filtered angel deals, leading Seth to explain his sizing framework and early participation in the Coinbase angel round and Ethereum ICO. | |
| The Institutional Shift and the Rise of Crypto Fundamentals | 4 | 5 | 0 | 0 | Ted asks what institutional inflection points occurred over the past decade. Seth explains how the post-2017 developer influx established fundamental valuation metrics comparable to equities. | |
| Challenger Layer 1s, Ethereum Bottlenecks, and Scaling Architectures | 4 | 6 | 0 | 0 | Ted questions where investable interest lies beyond Bitcoin and Ethereum and asks about network bottlenecks. Seth breaks down challenger Layer 1 architectures and Layer 2 scaling. | |
| The Mechanics of DeFi and Governance Token Incentives | 3 | 6 | 0 | 0 | Ted asks how decentralized finance translates into real cash flows and use cases. Seth details borrowing protocols, DEX trading volumes, and the incentive mechanics of governance tokens. | |
| Non-Fungible Tokens: Mainstream Collectibles and Structured DeFi Assets | 3 | 7 | 0 | 0 | Ted asks for a breakdown of non-fungible tokens. Seth explains consumer NFT adoption via NBA Top Shot before describing the frontier use case of NFT-backed structured debt products. | |
| CoinFund's Origins and the 'Quantamental' On-Chain Research Method | 5 | 5 | 0 | 0 | Ted asks for a definition of liquid crypto investing and how on-chain metrics integrate with fundamental equity research. Seth describes CoinFund's quantamental tracking of wallet data and smart contracts. | |
| Idea Sourcing, Community Governance, and Protocol Case Studies | 4 | 5 | 0 | 0 | Ted asks how CoinFund sources ideas and conducts diligence. Seth explains engaging directly with development teams in Discord and Telegram communities and examines Aave and SushiSwap. | |
| Portfolio Construction, Halving Cycles, and Technical Market Regimes | 5 | 5 | 0 | 0 | Ted asks about portfolio construction, sizing rules, and regime identification. Seth outlines his four-year Bitcoin halving cycle framework and reliance on long-term technical support indicators. | |
| Risk Management, Re-Underwriting Rules, and Active Crypto Alpha | 4 | 5 | 0 | 0 | Ted asks how risk management and active alpha generation work in digital assets. Seth explains his 20-25% relative drawdown re-underwriting trigger. | |
| Corporate Treasury Adoption, Central Bank Digital Currencies, and Token Incentives | 5 | 6 | 0 | 0 | Ted asks about the impact of corporate treasury purchases and the central banking response. Seth explains CBDCs and theorizes how token incentives could disrupt traditional business models like ridesharing. | |
| Navigating Regulatory Headwinds, Banking Charters, and Institutional Custody | 5 | 5 | 0 | 0 | Ted references prior regulatory discussions and asks about the crypto bear case. Seth highlights OCC banking guidance, BNY Mellon custody, and the challenge of non-stifling wallet KYC. | |
| Institutional Onboarding and the Convergence of Traditional Capital Markets | 4 | 5 | 0 | 0 | Ted explores institutional onboarding catalysts and transitions to concluding questions on personal habits and market philosophy. Seth defends the value of sell-side consensus. |
Statements from this episode (27)
Ginns: Invested in the Ethereum ICO in 2014
“And I started to see a lot of really interesting buzz around Ethereum. This was just at the ICO period in 2014, but I said, I want to put a little bit of a bet here. I think this is quite interesting. A lot of people who understand way more about what's happen…”
Ginns: PayPal's Spinoff Filing Was the First SEC Filing Mentioning Bitcoin
“I remember the first SEC filing that mentioned Bitcoin and kind of feeling a level of validation, a level of
Excitement around this coming into the, just the first fold of mainstream.
And it was the S one where PayPal spun out of eBay.”
Ginns: Crypto Investing Now Functions Like Equities With Trackable Fundamentals
“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 …”
Ginns: Mainstream Investors Will Hear Much More About Polkadot in 2021
“Polkadot is one challenger base layer, and I think that the broader mainstream investment community will start to hear a lot about developments in the Polkadot ecosystem over the course of this year.”
Ginns: Total Collateral Locked in DeFi Grew from Under $700M to ~$40B
“Immense amount of activity in DeFi going from under seven hundred million of collateral locked in the system at the beginning of 2020 To around forty billion today.”
Ginns: DEX trading volume jumped from $4.5B to $60B in six months
“July of last year, four and a half billion or so of trading volumes. That was more than all of 2019 combined. Fast forward to January of this year, sixty billion of trading volume.”
Ginns: DeFi governance token votes act as management decisions, not just proxy votes
“These voting rights, though, go beyond voting rights that you would see in a proxy statement for an equity. They're actually voting rights. You can propose changes to the way that the protocol operates and bring a vote on that. So they end up almost being mana…”
Ginns: NBA Top Shot generated $100M revenue in first 4-5 months
“Now it had generated a hundred million of revenue in the first Four months, five months of the marketplace.”
Ginns: Future crypto users will not need to know which blockchain they use
“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…”
Ginns: Crypto analysis is inherently quantamental due to on-chain data
“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.”
Ginns: Crypto projects can reach $500M-$1B liquid value within six months
“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.”
Ginns: Aave outpaced lending peers through rapid innovation and novel products
“So we saw this greater level of engagement. We saw a fast pace of innovation, and then we were tracking engagement with the protocol itself and really just saw that they were seeing a lot of adoption and outpacing Some of their peers really because of the new …”
Ginns: Bitcoin Halvings Drive 4-Year Cycles Followed by 70-80% Corrections
“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…”
Ginns: Institutional Adoption Could Turn Current Bitcoin Cycle into a Super Cycle
“So I think we could pull forward the next Bitcoin cycle, have this be a super cycle.”
Ginns: CoinFund re-underwrites liquid holdings after 20-25% drawdown vs Bitcoin
“So if we have a, depending on the volatility of the asset, if we have a 20 to 25% relative drawdown versus Bitcoin, let's make sure that our thesis is playing out. Let's make sure we understand the dynamics that are at play. And the re-underwriting decision ca…”
Ginns: Bitcoin is analogous to a Series C or D venture investment
“So even large cap, you could think of Bitcoin as being a, maybe a series C, a series D type venture investment.”
Ginns: Institutions Move Beyond Bitcoin in 3 to 6 Months
“And I think we're certainly seeing in the institutional conversations that we're having a very quick progression from either Bitcoin alone or Bitcoin and Ethereum to start to looking at a broader set of crypto assets. And it's not a two year progression. It's …”
Ginns: Tesla's Purchase Forced Corporate Boards to Consider Bitcoin
“And then I think Elon, there's really a dynamic around Tesla's purchase, where if you were your typical board a few months ago, you were saying, do we really need to consider Bitcoin? This seems like a fringe dynamic. When Elon buys, it becomes, why aren't we …”
Ginns: China's Digital RMB Pilot Catalyzed Western Central Bank Interest
“At the beginning of last year, China launched a pilot of the digital RMB, and before that pilot launched, there was very little talk of central bank digital currencies among the western big central banks. After that successful pilot, the rest of twenty-twenty …”
Ginns: OCC guidance enabled BNY Mellon's crypto custody plans
“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…”
Ginns: Bitcoin's all-time high reflects regulatory de-risking
“And I think Bitcoin breaking out to a new all-time high and continuing to move higher is really a reflection of that regulatory de-risking to a good extent.”
Ginns: 50% of PayPal Crypto Users Are Daily Active Users
“People that use the crypto functionality in the PayPal app,
50% of them are daily active users.”
Ginns: Early Institutional Crypto Buying Concentrated in Hedge Funds and Corporates
“This initial wave of institutional purchasing has been concentrated in hedge funds. And in corporate balance sheets, the few very big corporate balance sheets.”
Ginns: The Wall Street Journal is the most underrated source of alpha
“I think the journal is the most underrated source of context and alpha in like any asset class that you're investing in. Everyone assumes it's information that's already out there, so you're not going to get much value from it, and the reality is most people, …”
Ginns: Sell-side research is massively underrated and essential for markets
“I just think the sell side research and their work around estimates and consensus is incredibly important for equity market functioning and massively underrated and people complain about it all the time.”
Ginns: Working in a secular growth industry creates asymmetric career upside
“There's no substitute to working in a growth industry. Having this secular growth tailwind for your business, whether you're employee number three or the founder or employee number 1000, it's just luck breaks in your favor much more often. You see so many diff…”