Opinion
Pfeffer argues venture capital on average underperforms buyouts or loses money.
“So I figure that, I think that probably the asset class is somewhere between, on average, money losing to simply underperforming relative to, say, buyouts or whatever, as an asset class.”
Insight
Pfeffer compares crypto diversification to playing slots on the way to poker.
“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…”
Prediction Not checkable as stated
Pfeffer predicts utility protocols will disrupt industries but tokens won't capture value.
“I think they're going to be successful. I think they're going to get a lot of users. I think they're going to be very disruptive. I think they're going to destroy, they'll create a lot of user surplus and destroy a lot of equity value. I just don't think the n…”
Prediction Not checkable as stated
Pfeffer predicts most native utility crypto tokens will eventually go to zero.
“They wouldn't just stop using it, but they might switch to a fee model where basically you're paying miners to maintain the network, but maybe you're paying them in digital fiat or a store value protocol that might be Bitcoin or something else. So I think that…”
Insight
Pfeffer argues Bitcoin entry price is immaterial due to its binary payoff.
“Whether you're buying Bitcoin at 700 dollars or 7000 dollars or 17,000 dollars is frankly less material because you're either going to lose all your money or make a big multiple. There's no way it's going to be worth if whatever it is, 9000 dollars today, four…”
Prediction Not checkable as stated
Pfeffer predicts software agents will manage utility tokens, hiding them from consumers.
“So I just don't see you and I or anyone else in 10 years dealing with inventories of dozens of protocol crypto assets on our own to do whatever we want to do in our daily lives. We're just not. We're going to, you know, there's going to be some software that's…”
Opinion
Pfeffer refuses to buy Ethereum at current valuation due to token velocity.
“I think it's going to be very successful. I'm just not sure I would buy ETH at the current value because of that math.”
Opinion
Pfeffer claims capital impairment odds in top buyout funds are extremely remote.
“And we think the odds of us if we invest in a top GP of there being capital impairment in a fund are just zero or, you know, very remote.”
Opinion
Pfeffer admits Bitcoin is more likely to go to zero than multiply.
“In fact, it is probably more likely to go to zero than a huge multiple, but the multiple is sufficiently high for a small investment to make it make sense.”
Disclosure
Pfeffer caps family office entrepreneurial venture exposure at 15% of assets.
“Notionally, the idea is, look, even at peak, you don't want more than, say, call it, 15% of assets at cost exposed to the entrepreneurial venture of the moment.”
Disclosure
Pfeffer exited all fund crypto holdings except Bitcoin due to valuation concerns.
“Came to the view that I said, you know what, actually, look, at the time it was, I just don't see how the current values of anything but Bitcoin can be justified, and we got out of everything but Bitcoin, and that enabled us to take our basis plus a return out”
Disclosure
Pfeffer's family office builds a new business from scratch every few years.
“Our ideal model would be to try to build a sizable business every few years from scratch, but with a limited part of our capital, and the rest is just portfolio, and we invest in all kinds of things.”
Disclosure
Pfeffer initially allocated a low single-digit percentage to Bitcoin all at once.
“Low single digit percentage. And we did it all at once.”
