WEBVTT 00:08.840 --> 00:11.762 [SPEAKER_01]: All right, everybody, we're at the Audi Summit here, sponsored by the tie. 00:11.862 --> 00:19.647 [SPEAKER_01]: I'm joined by an esteemed guest, really excited to have GP, general partner of multi-coin capital, Spencer Applebaum. 00:20.770 --> 00:21.070 [SPEAKER_01]: How's it going? 00:21.090 --> 00:21.530 [SPEAKER_01]: I'm great to meet you. 00:21.570 --> 00:21.870 [SPEAKER_01]: How's it going? 00:21.890 --> 00:22.651 [SPEAKER_01]: I'm great to meet you. 00:23.251 --> 00:24.331 [SPEAKER_00]: Life's good, treating you well. 00:24.411 --> 00:24.631 [SPEAKER_00]: Yeah. 00:24.651 --> 00:25.712 [SPEAKER_00]: It's beautiful out here. 00:25.812 --> 00:29.473 [SPEAKER_00]: I came last year to the Audi Summit, the Typhots on a great event. 00:29.953 --> 00:30.833 [SPEAKER_00]: It's a really good crowd. 00:30.853 --> 00:40.357 [SPEAKER_00]: I was on a panel earlier today talking about how we yet trillion dollar finance to actually come on to public blockchain rail, which is obviously top of mind, but yeah, they do. 00:40.417 --> 00:41.977 [SPEAKER_00]: They got the food trucks out here. 00:42.057 --> 00:43.198 [SPEAKER_00]: It's just a great event. 00:43.218 --> 00:43.518 [SPEAKER_00]: Yeah. 00:44.438 --> 00:45.339 [SPEAKER_01]: It's been a ton of fun. 00:45.379 --> 00:52.082 [SPEAKER_01]: I feel like the quality of guests that we've had this year, particularly relative to any other year, it's just been up into the right. 00:52.322 --> 00:52.482 [SPEAKER_00]: Yeah. 00:52.522 --> 01:00.467 [SPEAKER_00]: And I think when you have a bear market, like we've seen in crypto, generally, that self-selects for people who really believe in the end, the studio wanted to be here. 01:00.707 --> 01:06.530 [SPEAKER_00]: So I think you have, you've had a lot of the tourists come in 2021 and 2022 when the market was up. 01:06.910 --> 01:11.032 [SPEAKER_00]: But like, you have to have a real thesis on the space and the technology behind it. 01:11.072 --> 01:13.874 [SPEAKER_00]: If you're going to come to something like this, in July by the way, 01:14.014 --> 01:15.314 [SPEAKER_01]: like Crypto 101 podcast. 01:15.334 --> 01:16.495 [SPEAKER_01]: You know, look at all these other boosts. 01:16.515 --> 01:17.155 [SPEAKER_01]: They're empty. 01:17.195 --> 01:18.755 [SPEAKER_01]: We're here working exactly. 01:18.776 --> 01:21.476 [SPEAKER_01]: And we've got the conviction, we're passionate. 01:21.536 --> 01:21.696 [SPEAKER_01]: Yeah. 01:21.756 --> 01:23.197 [SPEAKER_01]: I think we share that same passion. 01:23.637 --> 01:30.659 [SPEAKER_01]: And so multi-coin capital tells a little bit about what your guys' thesis is and how you chop up the crypto market. 01:30.699 --> 01:32.160 [SPEAKER_01]: I know it's multi-strategy. 01:32.200 --> 01:32.420 [SPEAKER_01]: Yeah. 01:33.200 --> 01:39.226 [SPEAKER_00]: Yeah, so for some context, multi-coin capital is a thesis-driven investment firm exclusively focused on crypto. 01:39.566 --> 01:44.011 [SPEAKER_00]: We launched our first fund, which is a liquid hedge fund that trades in the token markets. 01:44.311 --> 01:46.393 [SPEAKER_00]: We launched that in October of 2017. 01:46.413 --> 01:50.898 [SPEAKER_00]: I don't know how long you've been in crypto, but you might remember we went kind of from 01:51.378 --> 01:57.279 [SPEAKER_00]: public ICOs, which more or less broke every securities law imaginable to a real crypto venture market. 01:57.319 --> 02:02.880 [SPEAKER_00]: And so we raised our first venture fund in July of 2018, um, that was a 17 million dollar fund. 02:02.920 --> 02:09.782 [SPEAKER_00]: We've since raised a series of venture funds of which we're now investing out of venture fund three, which is a $422 million fund. 02:10.302 --> 02:15.723 [SPEAKER_00]: And we invest in both tokens and equity, but everything we do is in the crypto space. 02:15.763 --> 02:15.983 [SPEAKER_00]: So, 02:16.303 --> 02:25.046 [SPEAKER_00]: You might have noticed a lot of our pure set is starting to dabble in AI and robotics and other really buzzy industries, I think everyone has their own reason for doing that. 02:25.086 --> 02:31.388 [SPEAKER_00]: Maybe they believe we have an edge, but we still believe there's a lot of opportunity in crypto and public blockchains. 02:31.408 --> 02:34.849 [SPEAKER_00]: And so we're saying true to our roots and where we believe we have an edge. 02:35.289 --> 02:37.009 [SPEAKER_00]: Hopefully the beast don't get us. 02:37.969 --> 02:39.590 [SPEAKER_00]: Yeah, that's the high level about us. 02:39.870 --> 02:44.772 [SPEAKER_01]: awesome and tell us a little bit about what part of the market you guys are most focused on. 02:44.812 --> 02:51.234 [SPEAKER_01]: I've seen you guys have a prolific group of folks that are investing there that are also writing quite a bit. 02:51.594 --> 02:59.197 [SPEAKER_01]: So you guys have these thesis that come out and I'm sure the LPs get a first look but then they go out to the blog and I love reading these because I get to learn a lot. 02:59.237 --> 03:02.938 [SPEAKER_01]: I know deep in centralized physical infrastructure, something you guys have written about. 03:03.338 --> 03:07.060 [SPEAKER_01]: Tell me a little bit of the lay of the land, maybe even what the portfolio looks like, you know, 03:07.760 --> 03:10.201 [SPEAKER_01]: 20% deep in or whatever for sure. 03:10.642 --> 03:15.164 [SPEAKER_00]: Yeah, writing's been a very deep part of all our culture basically since the inception of the firm. 03:15.184 --> 03:15.384 [SPEAKER_00]: Yeah. 03:15.844 --> 03:18.966 [SPEAKER_00]: Um, you know, the I always joke about this. 03:18.986 --> 03:29.491 [SPEAKER_00]: I think we've had about 15 or 16 people on the multi-coin investment team in our history and only three people had worked in crypto before that and one person had invested before that. 03:29.731 --> 03:58.958 [SPEAKER_00]: So we're kind of a rag tag group of hello and in the early days of multi coin we wrote a lot because there wasn't really any real institutional research in the crypto space and it's probably if I had the point to one thing of, you know, when I joined I think the firm had something like 20 million dollars of AUM today were a two billion dollar institutional asset manager if I if I would say there's one thing that contributed to that success, it's our writing and public and it's done a few things for us one is it's helped us 04:00.439 --> 04:04.301 [SPEAKER_00]: attract founders who are building in specific areas that we're really excited about. 04:04.341 --> 04:13.167 [SPEAKER_00]: So, for just to use an example, we wrote a blog post, I want to say five years ago, on the opportunity for interest rate derivatives and defy. 04:13.187 --> 04:18.130 [SPEAKER_00]: If you think about the defy market, all the borrowing and lending that happens is variable rate. 04:18.210 --> 04:23.293 [SPEAKER_00]: So, if I'm lending on OVE at 5%, maybe tomorrow at 7% or maybe tomorrow it's 3%. 04:24.093 --> 04:27.756 [SPEAKER_00]: There's a huge opportunity to build derivatives so that people can hedge in their exposure. 04:28.456 --> 04:31.560 [SPEAKER_00]: And we wrote about that literally five years ago, nothing really came of it. 04:31.901 --> 04:39.251 [SPEAKER_00]: Until I want to say 18 months ago, someone reached out to us and said they had read that blog post and they were building and it changed their life. 04:39.772 --> 04:41.915 [SPEAKER_00]: And they were building an interest rates derivatives product. 04:42.035 --> 04:45.379 [SPEAKER_00]: And we ended up funding that investment literally five years later. 04:45.399 --> 04:45.500 [SPEAKER_00]: Wow. 04:46.180 --> 04:48.761 [SPEAKER_00]: Um, so we, we write a lot of them at a research. 04:48.781 --> 04:57.586 [SPEAKER_00]: We've written about deep and decentralized derivatives, uh, the opportunity for specialized stablecoin, FinTax, kind of the, the entire crypto stack and where we see the opportunity. 04:58.206 --> 05:09.512 [SPEAKER_00]: And all of the best deals, I think we've made in the history of the firm have come from people reading those articles, reaching out to us saying, Hey, we either agree with you or even in a lot of cases, hey, we disagree with you, but we want to do some intellectuals. 05:10.332 --> 05:12.234 [SPEAKER_00]: Yeah, we didn't believe you wrong over a phone call. 05:12.314 --> 05:12.914 [SPEAKER_00]: OK, great. 05:12.954 --> 05:15.136 [SPEAKER_00]: You prove us wrong over a phone call and we give you money. 05:15.216 --> 05:18.438 [SPEAKER_00]: So it's been a huge part of our success historically. 05:18.538 --> 05:18.819 [SPEAKER_01]: Awesome. 05:18.899 --> 05:26.425 [SPEAKER_01]: And kind of what does the portfolio look like in terms of the venture funds are typically 10-year-time horizon? 05:26.465 --> 05:26.625 [SPEAKER_01]: Yeah. 05:26.905 --> 05:31.671 [SPEAKER_01]: illiquid, you know, investors get their money back as the project sort of graduate. 05:31.751 --> 05:31.971 [SPEAKER_01]: Yeah. 05:32.071 --> 05:35.596 [SPEAKER_01]: But as far as I understand, there's also some liquid strategies that you guys use. 05:35.636 --> 05:35.916 [SPEAKER_00]: Yeah. 05:36.116 --> 05:36.657 [SPEAKER_00]: Exactly. 05:36.717 --> 05:39.721 [SPEAKER_00]: So we have two major lines of business. 05:39.801 --> 05:41.102 [SPEAKER_00]: We have a liquid hedge fund. 05:42.303 --> 05:43.484 [SPEAKER_00]: It's all fundamental focus. 05:43.504 --> 05:49.166 [SPEAKER_00]: We're not doing algorithmic trading or market making or arbitrage or anything like that. 05:49.266 --> 05:57.589 [SPEAKER_00]: We're basically trying to find assets in the public markets that give us a lot of the skew that you see in venture and that we think will compound over long periods of time. 05:57.609 --> 06:07.733 [SPEAKER_00]: So I would say our average hold time in the hedge fund is anywhere from several months to in most cases years and assets in that fund are primarily liquid crypto token. 06:09.153 --> 06:36.805 [SPEAKER_00]: hyper liquid and salana and z-cash and Camino and Gito and in those and then a small portion of the fun we've we've started to you can call it expand the mandate we think it's very much in mandate but we're so we've also started to own some equities that are crypto related right we have a we have a Robinhood position for example we've owned Coinbase historically there's lots of you know the I would say one of the more interesting trends that we've noticed in the last 12 months is the IPO window for crypto companies has really opened up and it's 06:37.985 --> 06:43.991 [SPEAKER_00]: six or seven companies in the last two years that have gone public and crypto and there's a lot of other groups with filings out right now. 06:44.391 --> 06:49.436 [SPEAKER_00]: And so as those companies come to the public markets, I think we'll be able to invest in them out of the hedge fund sets. 06:49.737 --> 06:50.878 [SPEAKER_00]: That's one part of our business. 06:50.898 --> 06:52.840 [SPEAKER_00]: And then we have the venture fund where 06:53.500 --> 06:54.762 [SPEAKER_00]: Um, you can think of it. 06:54.802 --> 06:57.545 [SPEAKER_00]: We're basically investing in tokens that don't exist yet. 06:57.665 --> 07:03.892 [SPEAKER_00]: So about two thirds of our current venture fund is made up of projects where we believe the value will accrue to the token. 07:04.212 --> 07:11.220 [SPEAKER_00]: And then a third equity in kind of picks and shovels companies that operate in around crypto, a lot of which are actually here this week. 07:11.840 --> 07:14.223 [SPEAKER_00]: Um, so that that's kind of how to think about what we do. 07:14.403 --> 07:23.536 [SPEAKER_01]: Where do you fall in the debate between tokens and equity when a company think the most recent big scuddle was around Venice? 07:23.817 --> 07:29.145 [SPEAKER_01]: They did a big equity race and the token holders still feel like they're not getting completely shafted, but yeah. 07:29.405 --> 07:38.616 [SPEAKER_01]: on the other end of the spectrum, you had projects like Axelor, we've got acquired by Coinbase, and the token pretty much went to funk because it was just equity that was acquired. 07:38.696 --> 07:40.058 [SPEAKER_01]: So where do you stand on this? 07:40.138 --> 07:41.199 [SPEAKER_00]: And how do you make sense of it? 07:41.319 --> 07:42.701 [SPEAKER_00]: Yeah, I actually have really strong opinions. 07:42.761 --> 07:43.262 [SPEAKER_00]: I've lost air. 07:43.302 --> 07:45.524 [SPEAKER_00]: And because we've learned a lot of these lessons of the hard way. 07:45.544 --> 07:46.486 [SPEAKER_00]: You've been learning, yeah. 07:46.506 --> 07:47.166 [SPEAKER_00]: Yeah, for sure. 07:48.688 --> 07:57.671 [SPEAKER_00]: It is a really bad idea in really any industry, but certainly in crypto where you have a token and equity to have diverging cap tables. 07:57.831 --> 08:05.234 [SPEAKER_00]: And so if you have a VC base, let's just say, that only owns the equity, but doesn't own tokens. 08:05.334 --> 08:06.474 [SPEAKER_00]: And then you want to token. 08:06.775 --> 08:13.037 [SPEAKER_00]: I think that's really net negative because at the end of the day, the vast majority of tokens, where we're at in 08:16.498 --> 08:20.401 [SPEAKER_00]: And so let's say you're a company doing, I'm just making it up, 100 million of revenue. 08:20.781 --> 08:24.284 [SPEAKER_00]: Some portion of that has to go to the equity and some portion of that has to go to the token. 08:24.384 --> 08:28.187 [SPEAKER_00]: If you have diverging cap tables, and how do you actually decide what goes to what? 08:28.247 --> 08:28.467 [SPEAKER_00]: Right. 08:28.527 --> 08:29.768 [SPEAKER_00]: So I think it's, and we'll get to say. 08:29.848 --> 08:30.308 [SPEAKER_00]: Exactly. 08:30.508 --> 08:35.212 [SPEAKER_00]: And so I think it's really important that the cap tables look the same for both the token and the equity. 08:35.652 --> 08:36.232 [SPEAKER_00]: I will say, 08:37.333 --> 08:48.265 [SPEAKER_00]: One another trend I've noticed recently is a lot of crypto venture firms have kind of gone sour on tokens and I think a lot of that is because of the market that we've seen over the last call it year. 08:48.605 --> 08:50.027 [SPEAKER_00]: They happens in every bear market though. 08:50.067 --> 08:51.028 [SPEAKER_00]: Right and I think 08:52.149 --> 09:10.463 [SPEAKER_00]: where actually we're literally doing this on the day that clarity text dropped publicly like 10 minutes ago, I haven't had a chance to read it yet, but assuming that clarity does pass, I think there's a real path towards tokens being able to accrue more value and you know, onshore issuers being able to drive cash flows to token holder. 09:10.503 --> 09:10.704 [SPEAKER_00]: Yeah. 09:10.824 --> 09:17.469 [SPEAKER_00]: And so we're actually leaning in more on tokens than we ever have, even though it feels like the venture industry in crypto as a whole has started to 09:18.870 --> 09:20.713 [SPEAKER_01]: Yeah, that's fascinating. 09:20.873 --> 09:24.098 [SPEAKER_01]: I was speaking with the former chairman of the CFTC this morning. 09:24.338 --> 09:26.481 [SPEAKER_01]: John Carth, because John Carlo, crypto dad. 09:26.501 --> 09:27.363 [SPEAKER_01]: Great, great guy. 09:27.563 --> 09:28.725 [SPEAKER_01]: Incredible person. 09:28.745 --> 09:30.668 [SPEAKER_01]: That was one of my favorite conversations we've had. 09:31.168 --> 09:33.973 [SPEAKER_01]: And here's basically saying, here's the skinny. 09:34.413 --> 09:43.206 [SPEAKER_01]: It doesn't matter if it passes or doesn't pass in the near term, because Mike Selig, Paul Atkins at the CFTC, like these guys have stuff loaded in the offer. 09:43.547 --> 09:46.831 [SPEAKER_01]: Project crypto, this stuff is going to run with or without. 09:47.412 --> 09:48.734 [SPEAKER_00]: And what's your take on that? 09:49.295 --> 09:49.815 [SPEAKER_00]: good point. 09:50.115 --> 09:52.456 [SPEAKER_00]: And one thing, let's assume it doesn't pass. 09:52.656 --> 09:58.058 [SPEAKER_00]: One thing that the industry really needs to do is spend the next two years while we have this friendly administration. 09:58.698 --> 10:04.760 [SPEAKER_00]: Getting the SEC and the CFTC to put out rulemaking that has obviously beneficial to the industry. 10:05.040 --> 10:15.383 [SPEAKER_00]: And then have all of the constituents, right, exchanges, custodians, market makers, traditional financial institutions, whoever adopt them and get them so embedded into their workflows that 10:15.683 --> 10:19.426 [SPEAKER_00]: you know, let's assume that the Republicans lose control in 2028. 10:19.947 --> 10:25.892 [SPEAKER_00]: By that time, it's so integrated into how the financial system works that you almost can't undo it. 10:25.932 --> 10:26.152 [SPEAKER_00]: Yeah. 10:26.452 --> 10:29.535 [SPEAKER_00]: Um, and so look, we're optimistic that clarity is going to pass. 10:29.955 --> 10:30.435 [SPEAKER_00]: Who knows? 10:30.776 --> 10:33.138 [SPEAKER_01]: And it does seem like, um, like the big banks, right? 10:33.158 --> 10:33.358 [SPEAKER_01]: Yeah. 10:33.878 --> 10:35.680 [SPEAKER_01]: They're still betting on. 10:35.700 --> 10:38.823 [SPEAKER_01]: I mean, Morgan Stanley just released a stake in ETF, our theory. 10:38.843 --> 10:40.385 [SPEAKER_01]: I'm stake in ETF for Solana. 10:41.106 --> 10:43.769 [SPEAKER_01]: They, you know, they know the stuff's not going away. 10:43.809 --> 10:46.611 [SPEAKER_01]: They're they're rolling stuff out for their wealth management clients. 10:46.632 --> 10:49.515 [SPEAKER_01]: They're rolling stuff out for their institutional trading counterparts. 10:50.255 --> 10:51.435 [SPEAKER_01]: I mean, you hear it here. 10:51.515 --> 10:53.096 [SPEAKER_01]: Fidelity was there in Vesco. 10:53.116 --> 10:54.836 [SPEAKER_01]: I mean, these guys all owns Morpho Tokyo. 10:54.856 --> 10:56.096 [SPEAKER_01]: I mean, we were just talking about that. 10:56.116 --> 10:57.997 [SPEAKER_01]: Yeah, this is so crazy. 10:58.217 --> 11:09.039 [SPEAKER_01]: And so it seems like it's becoming less, cryptos becoming less political, which is good, because it's now, of course, the big banks are here, the retails here. 11:09.880 --> 11:19.922 [SPEAKER_01]: And we have potentially a new scapegoat for the progressives to kind of naysay and poopu, 11:20.002 --> 11:20.503 [SPEAKER_01]: is AI. 11:20.923 --> 11:21.103 [SPEAKER_01]: Right. 11:21.183 --> 11:32.675 [SPEAKER_01]: And so it's like AI is taking a lot of the wind out of the sales of crypto because, you know, all my friends who were like typically buying crypto stuff, they're like, we've been trading micro on it and semi is like, triple lever this and that. 11:33.115 --> 11:35.477 [SPEAKER_01]: So we don't need to go chase, you know, our Coinbase account. 11:35.497 --> 11:36.759 [SPEAKER_01]: We're just doing it in our brokerage account. 11:37.499 --> 11:42.945 [SPEAKER_01]: But now you can see the anti-crypto army, you know, those same cast of characters, Liz Warren, Chuck Schumer, 11:43.285 --> 11:53.500 [SPEAKER_01]: starting to focus their gaze now on AI and that could be in that positive for crypto as that kind of outperformance starts to converge a little bit. 11:53.600 --> 11:57.326 [SPEAKER_01]: I think, um, and the policy stuff to be, you know, kind of more favorable in crypto. 11:57.446 --> 11:58.147 [SPEAKER_00]: Yeah and it just shows 11:58.327 --> 12:16.252 [SPEAKER_00]: you it was never really about crypto the technology it was about crypto and how much retail was speculating on it but yeah we've seen there's a hop-all of money earlier this year it was in gold and silver and then it was an oil right it's been in crypto before I'm sure it's going to be in crypto again right now it's an AI and it's 12:17.052 --> 12:24.078 [SPEAKER_00]: As a politician, you want to go where the attention is, and so right now the attention is AI, and that's why you're seeing a lot of the progressives go after it. 12:24.098 --> 12:26.160 [SPEAKER_00]: What, again, is it's kind of great for us? 12:26.200 --> 12:27.561 [SPEAKER_00]: Yeah, get the eyes off us. 12:27.681 --> 12:28.161 [SPEAKER_01]: Yeah. 12:28.402 --> 12:30.363 [SPEAKER_01]: I just want to kind of bring up things back to basics. 12:30.423 --> 12:35.407 [SPEAKER_01]: Fundamentals of sort of investing, verse trading, and, you know, 12:36.128 --> 12:37.148 [SPEAKER_01]: You do it both, right? 12:37.288 --> 12:39.249 [SPEAKER_01]: And how do you kind of differentiate in your mind? 12:39.669 --> 12:50.373 [SPEAKER_01]: This is a position that I want to, you know, put on overnight or for this week versus this is something that I think I want to hold on to for what's your time horizon for a long-term investment in crypto. 12:50.813 --> 12:57.315 [SPEAKER_00]: I think it's really important as an investor whether you're a liquid manager or a venture manager to know where you have edge. 12:57.975 --> 13:09.145 [SPEAKER_00]: And I think, you know, we've been running a public crypto fund for, I guess, nine years at this point, and we've learned where we have edge, which is an asset selection and investing over a long time horizon. 13:09.185 --> 13:18.234 [SPEAKER_00]: And so we don't really trade, I think the times in the past in the early days when we did try to trade, we, we almost universally lost money. 13:18.694 --> 13:23.619 [SPEAKER_00]: And so we, we just try to find assets in, we're, we're talking about the public market right now. 13:23.639 --> 13:23.939 [SPEAKER_00]: So ask 13:23.979 --> 13:36.467 [SPEAKER_00]: it's on the public side that we believe are fundamentally misunderstood by the market and therefore misprice that we can own for a long period of time, whose fundamentals are going to continue to compound over long stretches of time. 13:36.487 --> 13:43.331 [SPEAKER_00]: And so it's very rare I would say that, you know, we wake up one day and we decide, oh, I don't know, AI, we're talking about it already. 13:43.692 --> 13:49.595 [SPEAKER_00]: Oh, AI's really hot, like let's go buy an AI token because like we think that the memes are going to drive at higher or something like that. 13:49.635 --> 13:51.557 [SPEAKER_00]: That's just, there's nothing wrong with doing that. 13:53.858 --> 13:54.739 [SPEAKER_00]: the agent doing that. 13:54.839 --> 13:54.999 [SPEAKER_00]: Yeah. 13:55.119 --> 13:57.901 [SPEAKER_00]: And so everything we do is very long-term oriented. 13:58.081 --> 13:58.241 [SPEAKER_00]: Okay. 13:58.261 --> 13:59.002 [SPEAKER_00]: That makes a ton of sense. 13:59.022 --> 13:59.622 [SPEAKER_01]: Yeah. 13:59.682 --> 14:05.606 [SPEAKER_01]: What does the kind of portfolio break down look like in terms of asset allocation across crypto? 14:05.746 --> 14:06.087 [SPEAKER_00]: Yeah. 14:06.147 --> 14:06.747 [SPEAKER_00]: It's advertised. 14:06.767 --> 14:06.907 [SPEAKER_00]: Yeah. 14:06.927 --> 14:09.069 [SPEAKER_00]: We're a very concentrated fund. 14:09.189 --> 14:09.989 [SPEAKER_00]: So the... 14:10.830 --> 14:12.992 [SPEAKER_00]: what we usually say is in this is true. 14:13.052 --> 14:17.377 [SPEAKER_00]: I think our top eight positions make up about 90% of the portfolio. 14:17.397 --> 14:17.757 [SPEAKER_00]: Interesting. 14:17.777 --> 14:17.938 [SPEAKER_00]: Yeah. 14:17.998 --> 14:28.509 [SPEAKER_00]: And so we don't we don't do a top-down view of, you know, we want to have 10% allocated to deep in and 30% allocated to defy and 20% allocated to L1s. 14:28.569 --> 14:32.433 [SPEAKER_00]: It's very much a bottoms-up approach of do we like this asset? 14:32.733 --> 14:35.595 [SPEAKER_00]: if so what's the liquidity profile relative to our fund size? 14:36.595 --> 14:39.117 [SPEAKER_00]: How do we weigh it compared to other things that we like? 14:40.057 --> 14:42.299 [SPEAKER_00]: But you know some of the and we're we're public about this. 14:42.319 --> 14:49.303 [SPEAKER_00]: Some of our largest positions are our hyper liquid which we just published a 44 page research report on last week. 14:50.003 --> 14:55.086 [SPEAKER_00]: Solana, which we were the first money in Solana in April of 2018. 14:56.046 --> 14:59.288 [SPEAKER_00]: Robin Hood equities and other large position and so is Z-Cash. 14:59.408 --> 15:03.210 [SPEAKER_00]: So those are some of the core positions that we've been public about and are very excited about. 15:03.691 --> 15:05.792 [SPEAKER_00]: How does the firm decide 15:07.010 --> 15:21.912 [SPEAKER_01]: when to hit the cell button because I feel like with crypto investors, you know, you've think about these things over the course of the next 10 years, you know, I mean, is it maybe a thesis and validation, something happens, okay, we're going to sell, yeah, or is it like, hey, it hit our price target, how 15:21.972 --> 15:22.552 [SPEAKER_01]: guys think about that. 15:22.612 --> 15:24.233 [SPEAKER_00]: Yeah, it's a really good question. 15:24.313 --> 15:27.255 [SPEAKER_00]: I think there's really three reasons why we would sell something. 15:27.435 --> 15:29.656 [SPEAKER_00]: One, the most obvious is thesis invalidation. 15:29.697 --> 15:35.960 [SPEAKER_00]: That's really the nice part about investing in liquid crypto is as I was saying earlier, you get a lot of venture skew right? 15:35.980 --> 15:38.822 [SPEAKER_00]: Like you can make ten acts on a token in the public market. 15:38.862 --> 15:39.062 [SPEAKER_00]: Right. 15:39.182 --> 15:42.565 [SPEAKER_00]: But if you realize you're wrong three months after you buy it, you can sell it, right? 15:42.605 --> 15:44.427 [SPEAKER_00]: You know, and I had to click a zero on it, right? 15:44.467 --> 15:45.147 [SPEAKER_00]: Right. 15:45.528 --> 15:47.269 [SPEAKER_00]: So this is invalidation for sure. 15:47.890 --> 16:00.941 [SPEAKER_00]: Number two is look, we have a pot of money and, you know, if we get it really excited about something else, more so than one of the assets that we own, we might trim, you know, the asset that we currently own to be able to put on a new position. 16:01.001 --> 16:04.825 [SPEAKER_00]: So you always have to think about relative to your opportunity cost and what else you can own. 16:05.265 --> 16:12.606 [SPEAKER_00]: And then the third thing which really applies the most to assets that have demonstrable cash flows is the valuation question. 16:12.646 --> 16:20.248 [SPEAKER_00]: And so we actually, we were, I think we were pretty conservative in saying this, but we put in our high report, we did a valuation analysis. 16:20.768 --> 16:22.628 [SPEAKER_00]: I recommend everyone, everyone go read it. 16:23.608 --> 16:33.990 [SPEAKER_00]: But you know, it's hard, I don't really like the term price target because there's so much path dependency between where you are today and where the project might be when you hit the price target. 16:34.990 --> 16:39.313 [SPEAKER_00]: Let's say, I don't know, their market sharing increases by 50% in between now and then. 16:39.333 --> 16:42.535 [SPEAKER_00]: We'll shouldn't your price target probably be adjusted upward from where it is today. 16:42.615 --> 16:50.940 [SPEAKER_00]: It can be a static price target, but I will say, there are assets that trade in the crypto markets today that you can value on cash flows and fundamentals. 16:51.381 --> 16:57.825 [SPEAKER_00]: And if we believe that the market is appropriately pricing number or even over pricing them, we're happy to take liquidity where we can. 16:57.965 --> 16:58.165 [SPEAKER_01]: Yeah. 16:58.405 --> 17:08.394 [SPEAKER_01]: I want to cycle back to something you mentioned earlier, which I thought was a really key moment in altcoins, which was Apollo's invest in Morpho. 17:08.494 --> 17:12.078 [SPEAKER_01]: And from your standpoint, when I saw that, I was like, wow, this is super cool. 17:12.098 --> 17:14.720 [SPEAKER_01]: We have almost a trillion dollar private equity firm. 17:14.800 --> 17:16.281 [SPEAKER_01]: Yeah, they're buying crypto tokens. 17:16.301 --> 17:17.382 [SPEAKER_01]: That gives a passive bid. 17:17.783 --> 17:18.924 [SPEAKER_01]: Why do you think they did it? 17:19.847 --> 17:31.411 [SPEAKER_00]: I think they want to demonstrate to the rest of the market that they're not just, you know, we see some people launch tokenized T-Bill funds and like not really do that much with them. 17:31.791 --> 17:37.593 [SPEAKER_00]: I think taking an active position in a publicly traded token that probably the rest of Wall Street has never heard of. 17:38.273 --> 17:42.235 [SPEAKER_00]: signals that they're really serious about the industry and that they believe it's here to stay. 17:42.255 --> 17:42.355 [SPEAKER_00]: Yeah. 17:42.815 --> 17:48.418 [SPEAKER_00]: Um, I think that's one trend that we've really noticed lately is, and you mentioned I think Morgan Stanley earlier. 17:48.458 --> 17:48.738 [SPEAKER_00]: Yeah. 17:49.018 --> 17:50.579 [SPEAKER_00]: Um, we're seeing all these groups. 17:50.619 --> 17:54.861 [SPEAKER_00]: They're not, they're not launching these products because they think it's like optically good. 17:54.881 --> 18:02.304 [SPEAKER_00]: They're doing it because they believe in the industry long term and want to signal to everyone else that they're here to stay and that they believe they can make money while doing it. 18:02.624 --> 18:11.890 [SPEAKER_00]: Um, so I think Apollo really did it to show the rust of the traditional financial market that that crypto is a real market and they believe that there's a huge opportunity here. 18:11.910 --> 18:21.315 [SPEAKER_01]: Do you think there's any level of them actually beyond, uh, being an investor in the protocol, leveraging that protocol and the lent facility for their portfolio company? 18:21.375 --> 18:21.936 [SPEAKER_01]: Absolutely. 18:22.016 --> 18:22.656 [SPEAKER_01]: What would that look like? 18:23.136 --> 18:28.740 [SPEAKER_00]: Yeah, it's hard to say specifically, but we're talking about more foes, so I'll bring it up Coinbase, you know, 18:29.420 --> 18:31.881 [SPEAKER_00]: people in multi-coin, you know, we own crypto. 18:31.901 --> 18:33.761 [SPEAKER_00]: We've been yelling at them for a long time. 18:34.081 --> 18:38.042 [SPEAKER_00]: Hey, can we get a line of credit against our Bitcoin or our soul or our ether or whatever? 18:38.682 --> 18:49.265 [SPEAKER_00]: And they haven't been able to do it and it's really annoying because then we go to traditional banks and they basically say, oh, well, that's not even a real asset, but if you sell it tomorrow, then we'll give you a line of credit, right? 18:49.745 --> 18:54.786 [SPEAKER_00]: And so what Coinbase is doing now, though, is they're routing all of that flow to Morpho. 18:54.826 --> 19:01.768 [SPEAKER_00]: And so if you own Bitcoin on Coinbase, they'll actually allow you to basically deposit it in Morpho, borrow against it. 19:01.808 --> 19:11.930 [SPEAKER_00]: And the reason that they're doing that is DeFi is always going to have a lower cost of capital because it's a global liquidity pool where any retail lender around the world can put money into it, rather than 19:12.710 --> 19:15.733 [SPEAKER_00]: you know, they would probably need to go to say a specialty finance firm. 19:16.073 --> 19:27.001 [SPEAKER_00]: They could borrow at, I don't know, 7% or whatever, or you can just use defy where a retail user that owns USDC in Brazil is happy to just earn, let's say, 5% on their money. 19:27.362 --> 19:32.566 [SPEAKER_00]: And so Coinbase is the first company that we've seen routing to more full Robin Hood just announced it as well. 19:32.726 --> 19:35.468 [SPEAKER_00]: I think this is going to be a trend that we that we see a lot going for. 19:35.628 --> 19:36.229 [SPEAKER_01]: full disclosure. 19:36.249 --> 19:37.970 [SPEAKER_01]: I've got exposure to more foe. 19:38.030 --> 19:38.631 [SPEAKER_01]: Yeah, I think. 19:38.651 --> 19:39.051 [SPEAKER_01]: Totally. 19:39.171 --> 19:39.332 [SPEAKER_01]: Yeah. 19:39.352 --> 19:39.912 [SPEAKER_01]: There you go. 19:39.992 --> 19:42.615 [SPEAKER_01]: I think it's an incredible sort of technology. 19:42.875 --> 19:53.125 [SPEAKER_01]: And yeah, I mean, what do you make of, you know, a company that's, you know, kind of like secure ties or some of these products that are out there that are, they don't have a token. 19:53.205 --> 19:53.365 [SPEAKER_01]: Yeah. 19:53.465 --> 19:59.371 [SPEAKER_01]: You know, I'm not sure if that's in mandate, but they're enabling the rails for tokenization. 19:59.431 --> 20:04.413 [SPEAKER_00]: Yeah, so that's very much in mandate and we're not an investor in security as itself. 20:04.493 --> 20:11.817 [SPEAKER_00]: But a lot of companies that look like security eyes that I call them, they're basically building the picture picks and shovels financial rails for crypto. 20:13.118 --> 20:19.341 [SPEAKER_00]: I think, especially if you're building in a B2B context like a security is, I don't know if there's really that much reason to launch a token. 20:19.361 --> 20:22.102 [SPEAKER_00]: And so, you know, I know a lot of other folks will say, oh, 20:22.562 --> 20:27.165 [SPEAKER_00]: You know, no matter what you're doing, you should launch a token because the venture investor will get liquidity faster. 20:27.225 --> 20:29.986 [SPEAKER_00]: We say, look, if you don't have a reason to launch a token, don't do it. 20:30.006 --> 20:35.289 [SPEAKER_00]: Because it's an entirely, it's like launching a new product line, and you have a whole new community you have to worry about. 20:35.329 --> 20:37.070 [SPEAKER_00]: It can just become a headache. 20:37.150 --> 20:37.350 [SPEAKER_00]: Yeah. 20:37.490 --> 20:43.113 [SPEAKER_00]: And so, yeah, the secret sizes of the world are very much in mandate for sure on the venture side. 20:43.133 --> 20:46.315 [SPEAKER_00]: And again, now that the IPO window is kind of opened up, 20:51.418 --> 20:54.382 [SPEAKER_01]: What do you think of, you know, these debt codes, right? 20:54.402 --> 20:58.927 [SPEAKER_01]: Digital asset treasury companies were there, you know, microstrategy was the original one. 20:59.048 --> 21:02.732 [SPEAKER_01]: And, you know, what do you make of these are these net good? 21:02.812 --> 21:03.893 [SPEAKER_01]: Are they net bad? 21:04.014 --> 21:09.200 [SPEAKER_01]: And also, what do you make of, you know, microstrategy, selling 250 million dollars worth of Bitcoin? 21:09.240 --> 21:13.065 [SPEAKER_00]: Yeah, I think if they can be good or they can be bad depending on the way. 21:13.085 --> 21:14.026 [SPEAKER_00]: Yeah, that's both ways. 21:14.067 --> 21:17.551 [SPEAKER_00]: And it depends on how responsible they're managed. 21:17.611 --> 21:18.432 [SPEAKER_00]: Sure. 21:18.573 --> 21:23.479 [SPEAKER_00]: I think, you know, if they're hyper liquid, for example, there's a company called hyper liquid strategies. 21:23.820 --> 21:25.422 [SPEAKER_00]: They're per per per. 21:25.482 --> 21:26.183 [SPEAKER_01]: I've got exposure. 21:27.304 --> 21:46.824 [SPEAKER_00]: Um, they, they manage it terrifically and really what they're offering is a way for institutional U.S. investors to be able to access hype because otherwise, how, you know, if you're, if you're some say global macro hedge fund or a long short TMT fund, how are you really going to buy hype like the regulatory frameworks for you to be able to hold it, stake it custody, all those things. 21:46.904 --> 21:48.105 [SPEAKER_00]: It's, it's still very gray. 21:48.425 --> 21:52.729 [SPEAKER_00]: And so they just give those investors an opportunity to get exposure to height the asset. 21:52.789 --> 21:53.590 [SPEAKER_00]: And I think it's great. 21:54.050 --> 21:58.054 [SPEAKER_00]: I think there are other examples as companies who are not ran great. 21:59.435 --> 22:01.897 [SPEAKER_00]: Micro strategy is probably fits somewhere in the middle. 22:02.037 --> 22:07.902 [SPEAKER_00]: I think where we're out right now with with micro strategy is he probably he's been the main character for too long. 22:07.922 --> 22:10.465 [SPEAKER_00]: And I think he's had too much influence over the price of Bitcoin. 22:10.925 --> 22:12.066 [SPEAKER_00]: I think, you know, 22:14.468 --> 22:30.634 [SPEAKER_00]: He kind of I think he needs to take a break for a couple of months and and what we'll see where it goes, but yeah, my my opinion is he just had too much of an influence over the price of Bitcoin and he needs to not be the main character anymore, yeah, so kind of last question, but outside of clarity act. 22:30.654 --> 22:30.894 [SPEAKER_01]: Yeah. 22:31.995 --> 22:34.477 [SPEAKER_01]: what's going to kick this bear market to the dirt? 22:34.697 --> 22:36.938 [SPEAKER_01]: What's going to kick the bull market into high gear? 22:37.359 --> 22:40.281 [SPEAKER_01]: Is it just time right through a time correction? 22:40.681 --> 22:43.323 [SPEAKER_01]: Is it momentum and speculation starting to return? 22:43.783 --> 22:45.645 [SPEAKER_01]: Is it new valuation capture models? 22:45.685 --> 22:47.466 [SPEAKER_01]: Like in your or something completely different? 22:47.646 --> 22:48.827 [SPEAKER_01]: But what do you kind of think about? 22:50.068 --> 22:50.668 [SPEAKER_01]: in regards to that. 22:50.728 --> 22:52.269 [SPEAKER_00]: Yeah, I think this is two things. 22:52.349 --> 22:57.390 [SPEAKER_00]: So one thing that I think people really forget a lot about because it already passed is the genius bill. 22:57.570 --> 22:57.810 [SPEAKER_00]: Sure. 22:58.170 --> 22:59.310 [SPEAKER_00]: And, or genius act. 22:59.330 --> 22:59.711 [SPEAKER_00]: Yeah. 23:01.011 --> 23:12.814 [SPEAKER_00]: And what people don't realize is even though genius was passed a long time ago, it actually hasn't gone into production yet, meaning that companies can't actually leverage genius to launch stablecoins until January of 2020. 23:13.314 --> 23:13.754 [SPEAKER_00]: 27. 23:13.794 --> 23:19.035 [SPEAKER_00]: I think we're yeah, I think we're about a month past the comment like the comment notice period for it. 23:19.375 --> 23:26.277 [SPEAKER_00]: And so everyone's looking at stable coins and saying, oh, why is there still only whatever $300 billion dollars a duck they write in? 23:26.397 --> 23:30.397 [SPEAKER_00]: Why is there still only $300 billion of stable coins outstanding genius was passed? 23:30.457 --> 23:31.918 [SPEAKER_00]: I don't know four months ago or whatever. 23:31.938 --> 23:34.158 [SPEAKER_00]: It's like, well, it hasn't actually been implemented yet. 23:34.198 --> 23:37.819 [SPEAKER_00]: And so once that turns on in January, I think that's a really good catalyst on it. 23:37.999 --> 23:43.821 [SPEAKER_00]: And then I think the other catalyst is public chains, forget like the, the, well, I shouldn't say forget. 23:44.161 --> 23:52.604 [SPEAKER_00]: But the public chains like Solana, Ethereum, I think a lot of them right now are focused on building features that will actually allow institutions to bring assets on chains. 23:52.644 --> 23:57.806 [SPEAKER_00]: So things like privacy and KYC at the wall at layer and permission transfers. 23:57.866 --> 24:04.388 [SPEAKER_00]: And so I think once a lot of those features are live, institutions will feel a lot more comfortable issuing and trading assets on chain. 24:04.708 --> 24:05.809 [SPEAKER_00]: And I think that's probably, 24:06.389 --> 24:34.319 [SPEAKER_01]: What is going to drive the next bull market is exogenous ass that's coming on chain and being traded love it I can't wait and then people never in that uh for sure people you know looping it as Getting the the defy money legos back up to being neglecting exciting well look guys everybody at home watching I hope you enjoy that was my conversation with multi-coin capital Spencer Apple bomb GP thank you so much you bet enjoy the rest of the conference I'll see you around take care take care everybody