Latest / CRYPTO 101 / Ep. 692 The Inventor of the DAT: What is Next for Digital Asset Treasuries w/ Cosmo Jiang of Pantera Capital

Transcript

Ep. 692 The Inventor of the DAT: What is Next for Digital Asset Treasuries w/ Cosmo Jiang of Pantera Capital · CRYPTO 101

• 0:00
  [SPEAKER_00]: Welcome to the Crypto101 podcast, presented by Gemini.
• 0:04
  [SPEAKER_00]: Your bridge to the future of money.
• 0:14
  [SPEAKER_00]: all right everybody welcome back to another action pack high caliber episode here of the crypto 101 podcast.
• 0:22
  [SPEAKER_00]: I'm your co-host Bryce as always joined my buddy across country say and dry I hope during like as hurricane seasons passing.
• 0:31
  [SPEAKER_00]: But Brendan, how are you doing, my man?
• 0:32
  [SPEAKER_01]: It is passing.
• 0:34
  [SPEAKER_01]: Stand dry over here, stand warm.
• 0:36
  [SPEAKER_01]: I'll tell you a lot of talk to a lot of people.
• 0:39
  [SPEAKER_01]: We're entering into chili season.
• 0:40
  [SPEAKER_01]: We're staying warm, but man, you know, here for another exciting podcast price.
• 0:45
  [SPEAKER_01]: I mean, we've had some bangers here recently.
• 0:47
  [SPEAKER_01]: I don't want to like pat our own back too much over high price sells, but shout out to Super Producer Tevo for bringing all these guests in here.
• 0:55
  [SPEAKER_01]: Um, because this is another one that we're really excited for a definitely a name that they a lot of the listeners have heard of.
• 1:02
  [SPEAKER_01]: And uh, yeah, man, just another good interview.
• 1:05
  [SPEAKER_00]: Absolutely.
• 1:05
  [SPEAKER_00]: I'm going to speak in a winter.
• 1:07
  [SPEAKER_00]: I'm I'm curious.
• 1:08
  [SPEAKER_00]: We're going to be talking to our guest today.
• 1:10
  [SPEAKER_00]: Cosmo Jang, who's the general partner or one of the general partners of Pantera Capital.
• 1:15
  [SPEAKER_00]: We're going to be talking about if this is crypto winter or have we been in crypto
• 1:24
  [SPEAKER_00]: tough questions, but we're going to dive into it.
• 1:27
  [SPEAKER_00]: But first, Cosmo, we'd love to welcome you to the cryptocurrency 101 podcast.
• 1:30
  [SPEAKER_00]: How are you doing today?
• 1:32
  [SPEAKER_02]: Hey, great man.
• 1:33
  [SPEAKER_02]: Really nice to meet you guys.
• 1:34
  [SPEAKER_02]: Price, Brendan, excited to be here.
• 1:36
  [SPEAKER_00]: Sweet.
• 1:37
  [SPEAKER_00]: No, it's been a it's been a volatile ride in the crypto market, but nothing really out of the ordinary.
• 1:43
  [SPEAKER_00]: Like the way I think about it.
• 1:44
  [SPEAKER_00]: Like, you know, you've had 20 drawdowns of 30% or more over the course of the past handful of years, seven eight years.
• 1:52
  [SPEAKER_00]: So this is just kind of par for the course.
• 1:54
  [SPEAKER_00]: But
• 1:55
  [SPEAKER_00]: You know, before we dive into a little bit about your background and what Panteras up to, how are you thinking about this crypto correction that we're in again, recording this end of November, markets have had a lot of volatility.
• 2:08
  [SPEAKER_02]: I think it's really, I was always really important to put things in context and, and Bryce, you said the exact right stat, which is that Bitcoin eats a lot of these, and we're all seeing 30% pull plus pullbacks multiple times during any uptrend.
• 2:21
  [SPEAKER_02]: And so this is within the realm of
• 2:23
  [SPEAKER_02]: uh, of reasonable volatility when it comes to this asset class, uh, the reality is that you don't get the, uh, you know, since we, when we first launch our first Bitcoin fund in 2013, since then Bitcoin is catering or, you know, grown at a compound annual growth rate of over if around 80%.
• 2:40
  [SPEAKER_02]: you don't get the 80% annualized return if you don't also have similarly large pullbacks.
• 2:45
  [SPEAKER_02]: And so we believe the long-term trend is intact, which is the super long-term vision of crypto's gonna go from tens of milling to users to billions over time.
• 2:55
  [SPEAKER_02]: And if that's true, then if there's a lot of upside, there's also gonna need large magnitude down side too.
• 3:02
  [SPEAKER_02]: And we think this is just one of those wiggles along the way.
• 3:06
  [SPEAKER_00]: Yeah, it's funny.
• 3:07
  [SPEAKER_00]: We always have a say in here that risk and reward are two sides of the same coin, right?
• 3:13
  [SPEAKER_00]: Or the same crypto token.
• 3:15
  [SPEAKER_00]: You can't have your cake and eat it too.
• 3:18
  [SPEAKER_00]: So you have to have the high returns, but also endure the volatility and volatility is a gift to the faithful as kind of as a saying here in crypto that Michael sailors really embodied.
• 3:29
  [SPEAKER_00]: And, you know, Michael Sailor invented the digital asset treasury company.
• 3:33
  [SPEAKER_00]: So we want to kind of get your thoughts as well here later in the episode on digital asset treasures, just so the audience kind of knows what to expect.
• 3:41
  [SPEAKER_00]: You know, Pantera was instrumental in one of the latest Solana digital asset treasures, or deaths called the Solana company.
• 3:49
  [SPEAKER_00]: But before we dive in all that, let's just get acquainted with who you are.
• 3:53
  [SPEAKER_00]: How'd you become a partner at Pantera?
• 3:56
  [SPEAKER_00]: And what gets you excited about crypto, why do you kind of go all in on this industry?
• 4:02
  [SPEAKER_02]: So I'm really a tech investor by training.
• 4:05
  [SPEAKER_02]: I'd say I had a very track by a very track by career coming into this.
• 4:11
  [SPEAKER_02]: I graduated from Harvard where I studied math and then, first job at a school was banking at Evercore.
• 4:17
  [SPEAKER_02]: And then in private equity after that covering all sorts of companies, consumer, financials, distressed.
• 4:23
  [SPEAKER_02]: Um, and then, uh, but I decided I really love the idea of taking a lot of shots and making a lot of, making a lot of investments early in my career, you know, making a lot of stakes to learn from there when they're in my career.
• 4:34
  [SPEAKER_02]: And so I switched from private equity to the public markets and spent most of my career in, uh, in a long short equity hedge fund called H. Wood, H. Wood was a multi-billion dollar single manager hedge fund where, uh, I, I rose to lead all of our coverage across consumer
• 4:52
  [SPEAKER_02]: your retailers like Dix or Sporting Goods or Costco to the large media and internet companies like Facebook, Google, Spotify, et cetera.
• 5:01
  [SPEAKER_02]: And so it's really cool to have that lens on the world.
• 5:04
  [SPEAKER_02]: And that's how it was going through that, the reality was crypto was never really relevant for my day job, for a very long time, until entering 2020, 2021.
• 5:15
  [SPEAKER_02]: And when all of a sudden, every of my coverage universe,
• 5:21
  [SPEAKER_02]: LVMH talking about their NFT and LVMH from Nike and talking about launching NFTs, whether it was universal music talking about a digital, a digital, manifest band, whether it was Spotify talking about tokenizing royalties.
• 5:36
  [SPEAKER_02]: And all of a sudden it became incumbent upon me if my job was to try to be the best analyst on the street on these names to learn about crypto really deeply.
• 5:46
  [SPEAKER_02]: And as I did, I came to discover that, wow, there's so many real businesses now being built.
• 5:50
  [SPEAKER_02]: There's this rich universe of tokens that represent real economic value.
• 5:55
  [SPEAKER_02]: And there's a real opportunity now to apply that fundamental investing skill set into the token markets.
• 6:02
  [SPEAKER_02]: And so I'd always wanted to launch my own on fund.
• 6:06
  [SPEAKER_02]: I always thought I'd be in equities, and I realized that if I think about where I want to spend my time,
• 6:13
  [SPEAKER_02]: The the hardest part about being an investor is optimizing for return on time and when I when I think about that it's really I really think about a three ways it's like one where is the high secular growth.
• 6:24
  [SPEAKER_02]: Two words are the most misunderstanding and three words are the least amount of competition and it just so clearly crypto across all three and so I decided to leave equity is and go all in on digital assets ended up launching my own fund.
• 6:37
  [SPEAKER_02]: And then soon thereafter was realized that there's a real opportunity to accelerate my growth as well as others and decided to merge my practice from Panteras and talk about our public markets investing practice here a few years ago.
• 6:50
  [SPEAKER_02]: Wow.
• 6:51
  [SPEAKER_00]: What a story.
• 6:52
  [SPEAKER_00]: I love that and it's such a cool journey and so many people come into the crypto world from so many different backgrounds and that's a really cool cool story and yeah, I mean, you know, you ran your own fun, you know, what is, you know, the focus now of your work at Pantera, is it still in, you know, public blockchain equities, is it in the liquid tokens market?
• 7:15
  [SPEAKER_00]: How do you kind of think about what your practices today?
• 7:18
  [SPEAKER_00]: So give it over your pentera.
• 7:20
  [SPEAKER_02]: Pentera does everything across the crypto ecosystem.
• 7:22
  [SPEAKER_02]: We were fortunate to be fortunate, you know, for looking to be the first institutional fund investing in blockchain since 2013.
• 7:30
  [SPEAKER_02]: And so over time, that means we're built out a large practice really with a core and early stage venture.
• 7:36
  [SPEAKER_02]: But also, but also in the digital token markets, so liquid tokens, and today we invest at a revenge fund as well as our liquid token fund.
• 7:45
  [SPEAKER_02]: I think because we also have a lot of people including myself with particular equity expertise, we have a very strong view on how all this is going to play out in both the equity and the token world.
• 7:56
  [SPEAKER_02]: We were earlier this year, that ended up happening to end up in us being the first ones to really start this huge boom in deaths in digital asset treasures that are early this year.
• 8:07
  [SPEAKER_02]: And so we have some specific strategies around digital asset treasures.
• 8:12
  [SPEAKER_02]: We have specific strategies around digital around liquid tokens as well as venture.
• 8:15
  [SPEAKER_02]: And I oversee investment strategy broadly, but especially everything that's later stage growth oriented in public markets.
• 8:24
  [SPEAKER_01]: Yeah, I mean, this whole time and crypto has been interesting here lately because the market's heading down.
• 8:33
  [SPEAKER_01]: People are feeling the pain and what we hate to see is that a lot of people experience one bear market and it wipes them out or it's enough to get them to capitulate and say I'm done.
• 8:44
  [SPEAKER_01]: I think the unique thing here is that Pantera has weathered four bear markets already, right?
• 8:50
  [SPEAKER_01]: We're now seeing the fear and greed index hitting a 10, which is historically a really, really low point, generally around the time of either being extremely oversold or near a bottom.
• 8:59
  [SPEAKER_01]: You also have the weekly RSI hitting its lowest point since 2022, which is the relative strength index.
• 9:05
  [SPEAKER_01]: It's lowest point since almost December of 2022.
• 9:07
  [SPEAKER_01]: And for people who don't know, that was right around the time that the market bottomed after the whole FTAX, Teraluna, Alameda, that whole crash that we had after the last bull market.
• 9:20
  [SPEAKER_01]: And so we're at an interesting point now, but I'm just curious, like, how are you thinking about the market as it stands right now and potentially just as it moves forward and also to add to that just like, how did we get here.
• 9:35
  [SPEAKER_00]: How did we get here and where we're going.
• 9:38
  [SPEAKER_02]: Yeah, totally.
• 9:38
  [SPEAKER_02]: Why don't we start with how to be dead here because it's always helpful context.
• 9:43
  [SPEAKER_02]: Maybe even if you if you'll if you'll indulge me going back a little bit because I think it's so important to put everything in the context of in the in a larger context, if you go back to.
• 9:53
  [SPEAKER_02]: 2821 like that was a time of sputch such excitement right that was the boom of defy summer that was a start of all this uh of all this incredible way of a defy innovation and uh and we saw a lot of users in capital coming to the space
• 10:08
  [SPEAKER_02]: Ultimately, as is a case with any early stage tech, there's large boom and bust, and we saw that excitement turned into speculative access.
• 10:17
  [SPEAKER_02]: So we turned the page 2022, and all of a sudden we saw that bursting of that bubble, and a lot of things coming down.
• 10:23
  [SPEAKER_02]: Not just in crypto to be clear across all asset classes, just as the bubble burst on everything, but I heard crypto particularly in particular.
• 10:32
  [SPEAKER_02]: and especially uncovered a lot of fraud and a lot of the excesses had to be washed away.
• 10:38
  [SPEAKER_02]: And so when we turned in 2023, the story became well, all of a sudden all these headwids started buffeting the industry, whether that was, you know, users feeling like they had been lying to or cheated and so they left the industry, they stopped using functions as much.
• 10:53
  [SPEAKER_02]: Whether it was capital providers who had lost money and felt like they had to stop out of
• 10:59
  [SPEAKER_02]: whether it was, you know, regulators who, you know, Fred Cannelly had probably underpleased the industry feeling like they had to overplease in a reaction to that.
• 11:09
  [SPEAKER_02]: And so, that resulted in this very severe bear market.
• 11:14
  [SPEAKER_02]: As we turn the page though to 2024, things started to lighten up, some of those headwinds started to become tailwinds, ultimately culminating in, you know, this massive, you know, a few things, one was along to the ETFs,
• 11:29
  [SPEAKER_02]: Um, the, you know, the regulatory political shift that happened with the new presidential administration that came in was very substantial, uh, and then coming to 2025, it's now all, all those headwinds that really were having holding the industry back all the center of huge tailwinds, right, from the user perspective, users felt like, wow, there's really interesting things to do again in crypto, so they're coming back capital providers.
• 11:52
  [SPEAKER_02]: realizing that these these ECS have really opened up the ability to access crypto It's made it a lot easier and safer and they're perspective and they're starting to Allocate in very meaningful way and then regulators and the political establishment of realizes that now it's so important to be pro industry Because there's like there's no benefit to being anti-tech and so everyone's very aligned in being pro industry across both Democrats and Republicans It's like not a partisan thing at all
• 12:18
  [SPEAKER_02]: And so, I'm really excited when we think about it from a long-term perspective that we're in a very bullish environment and that there's so many because there's so many head ones that are no tailwinds.
• 12:32
  [SPEAKER_02]: Now, 2020, five has ended up playing out like a little bit more volatile, right?
• 12:36
  [SPEAKER_02]: The after we saw, we saw the, the general, the broader markets really pull back very hard early this year on macro concerns around tariffs and shut down.
• 12:46
  [SPEAKER_02]: And that pulled down everything, not just crypto, but crypto was impacted.
• 12:50
  [SPEAKER_02]: And then we saw a little bit of bump throughout the summer, which was really nice.
• 12:55
  [SPEAKER_02]: Just as things really bottomed out in April, after everyone got really, really bearish.
• 13:00
  [SPEAKER_02]: And then we started to see all this good positive news flow.
• 13:02
  [SPEAKER_02]: And really momentum driven by digital acid treasuries, which Pentea helped jump star.
• 13:07
  [SPEAKER_02]: And now we're starting to see that pull back a little bit, right?
• 13:10
  [SPEAKER_02]: A lot of the buying pressure that's come from the digital asset strategies has has dissipated and to a small extent is turned into like a minor amount of selling, not at any amount of selling that impacts the market, but impact sentiment.
• 13:23
  [SPEAKER_02]: And then we've seen that a lot of the, you know, some of the macro conditions have started to get choppy again, whether that's people worried about the fed, pulling back on rate cuts and not being as being a little bit more hawkish.
• 13:36
  [SPEAKER_02]: whether that's the government shutdown, potentially lawy spending, and a lot of consumer data points showing that, consumers are feeling a little stretched.
• 13:44
  [SPEAKER_02]: And so we're just in a weird point where there's a lot of concern about the economy, and the AI boom is starting to see show some signs of cracking.
• 13:52
  [SPEAKER_02]: And so overall risk assets are pulling back at the same time in crypto, the digital asset treasures are pulling back.
• 13:57
  [SPEAKER_02]: And so that's where we're getting this little bit of a sentiment pullback right now.
• 14:02
  [SPEAKER_02]: As I look forward,
• 14:04
  [SPEAKER_02]: I really try to keep a few frameworks in mind.
• 14:07
  [SPEAKER_02]: One is like, what's my long-term view?
• 14:08
  [SPEAKER_02]: What's my medium-term view?
• 14:09
  [SPEAKER_02]: It's my short-term view.
• 14:11
  [SPEAKER_02]: I'd say I'm a long-term basis.
• 14:12
  [SPEAKER_02]: I'm incredibly bullish for all the reasons we just talked about.
• 14:16
  [SPEAKER_02]: On a medium-time frame, there's so many things to look forward to, like, market structure legislation that's likely to come out the next few months because then you'd launch a new ETF and all the marketing that's going to help drive that.
• 14:27
  [SPEAKER_02]: And just all this innovation that's going to come out of, that's going to come out and all the interaction with DeFi that's
• 14:34
  [SPEAKER_02]: on stable coins and tokenization and so all that's going to continue to push the force the space forward and the medium term basis.
• 14:41
  [SPEAKER_02]: On a sure time frame, we don't really operate on a short time frame, we view ourselves as long-term investors.
• 14:47
  [SPEAKER_02]: But I would say that all signs point to on a very, very local basis exactly what Brendan pointed out, which is that fear and greed index at an all-time low, you know, our side at oversold,
• 14:58
  [SPEAKER_02]: It just feels like here we're set up, probably for a technical bounce.
• 15:02
  [SPEAKER_02]: I don't know how long it bounce that is.
• 15:03
  [SPEAKER_02]: I don't know if that means we pull back again and a few weeks from now.
• 15:06
  [SPEAKER_02]: But certainly, if I were someone who is trying to allocate capital, it feels like now is a great time to be putting something that capital work over the next month or two because on a medium and long term basis, man, there are so many good things going on.
• 15:20
  [SPEAKER_01]: Yeah, I think it's hard to look at the fundamentals and not be excited about the future.
• 15:27
  [SPEAKER_01]: You said regulatory changes.
• 15:28
  [SPEAKER_01]: You said new ETFs.
• 15:30
  [SPEAKER_01]: You said just everything else that is going on.
• 15:34
  [SPEAKER_01]: And when you look back at this, I think the important thing to understand is that there wasn't anything fundamentally wrong with crypto.
• 15:42
  [SPEAKER_01]: There wasn't a corruption.
• 15:43
  [SPEAKER_01]: There wasn't like a hack.
• 15:45
  [SPEAKER_01]: It wasn't like blockchain failed us in what we thought.
• 15:48
  [SPEAKER_01]: You know, we had last month and what we saw with the largest liquidation of an ever and that happened and that was Basically entirely due to a centralized parties issue and how they handled their exchanges and their services and their Deleveraging systems and all of that and
• 16:04
  [SPEAKER_01]: You know, now people are kind of looking back to what you kind of just reference, and we're at an area where you would imagine some sort of bounce happens, right, you know, maybe it's today, maybe it's next week, you know, but we're saying as we zoom out again, I think it's it's hard to be bearish about the long term, but that kind of begs the question like if we do get a bounce, is it going to be a moment where the bottoms in or is it going to be a dead cat bounce followed by more continuation to the downside and it seems like there's kind of two parties here.
• 16:33
  [SPEAKER_01]: there are the people who really believe that there's a lot of long-term value, and then there's the other side that's saying, but wait, we're kind of in that four-year cycle, we just had that large liquidation event.
• 16:45
  [SPEAKER_01]: We saw what happened last time during some of these large liquidation events, and it made us go into a bear market for a year, a year plus, and we saw kind of over a year of selling, and that's where we went from, you know, 2021 to almost
• 17:00
  [SPEAKER_01]: with this decline and I see people trying to argue that again now personally and I want to loop you in on this but do we need a one-year plus bear market to recover and do we have to kind of follow that having structure like we have seen in the past?
• 17:18
  [SPEAKER_02]: I have a few thoughts there.
• 17:19
  [SPEAKER_02]: One is that I don't believe the four-year cycle has is like a real thing.
• 17:25
  [SPEAKER_02]: I think you probably
• 17:29
  [SPEAKER_02]: Just over time, the amount of supply reduction from Bitcoin really doesn't matter relative to everything the else that's going on in the market.
• 17:36
  [SPEAKER_02]: And the reality is if you go and this is because I'm more of a student of the traditional markets and not and not crypto for a very long time, but I just when I first entered the industry and everyone talked about the four year cycle, I just thought, huh, that's funny, like.
• 17:50
  [SPEAKER_02]: I know that the traditional markets have had a four year cycle recently, but like and it just so happens that and it's coincident with the with the big point having for, you know, for some strange reason, but like truly every time that there's been having there's been a major macroeconomic event that's driven that right 2012 that we had.
• 18:07
  [SPEAKER_02]: We had the we had yours on debt crisis 2016.
• 18:11
  [SPEAKER_02]: We have Brexit 2020.
• 18:12
  [SPEAKER_02]: We had COVID 2020 and It's a election year.
• 18:17
  [SPEAKER_02]: That is true.
• 18:18
  [SPEAKER_02]: Sorry.
• 18:19
  [SPEAKER_00]: It's every elect like you as election year
• 18:21
  [SPEAKER_02]: Right.
• 18:22
  [SPEAKER_02]: You're right.
• 18:22
  [SPEAKER_02]: That's true, too.
• 18:23
  [SPEAKER_02]: Right.
• 18:23
  [SPEAKER_02]: And so like I don't know if it's like maybe there is some like some astrological power to this that for some reason, like our human mythology is such that our life follows for your patterns, but you're borrowing that like we're
• 18:45
  [SPEAKER_02]: Um, and like if macro happens up to all four years cycle forever, like first of all, that'd be crazy.
• 18:52
  [SPEAKER_02]: But like who knows, maybe that's possible.
• 18:53
  [SPEAKER_02]: But like if that is a case and I expect crypto too as well.
• 18:56
  [SPEAKER_02]: But if it doesn't, like it does feel like we're in a period where, yeah, things look, you know, relatively healthy on an underlying macro basis.
• 19:03
  [SPEAKER_02]: And so it doesn't seem like, you know, crypto for any reason needs to diverge from that.
• 19:07
  [SPEAKER_02]: And so I don't think we need to go through this, you know, massive one year bare, bare cycle or something.
• 19:12
  [SPEAKER_02]: Some people would argue like,
• 19:14
  [SPEAKER_02]: If you look at everything excluding Bitcoin, we've been in a bear market all year for everything that's Bitcoin.
• 19:20
  [SPEAKER_02]: Other assets have not performed very well, and so if you really want to make that argument, arguably things haven't been that haven't been hunky-dory for some time, and we're already going through that digestion of that, maybe the October 10 event was the final punctuation.
• 19:34
  [SPEAKER_01]: And it's funny that you say that because we just had Matt Hogan from Bitwise on and he said the same thing in fact We've had a couple of guests now that have said this they said guys I don't think I don't think it's a matter of us going into a bear market It's likely been the fact that we've been in a bear market and that this isn't anything new for kind of all the reasons that you just said and that we're probably a lot closer to the back half of this
• 19:58
  [SPEAKER_01]: And I think myself and Bryce, and again, a lot of the guests that we've had on here recently, we would also agree with the idea behind the four year having, and that it's probably not as influential as it used to be.
• 20:10
  [SPEAKER_01]: And I don't think that it holds as much weight and significance as a lot of people think that it does, at least not anymore.
• 20:16
  [SPEAKER_01]: Um, especially Bryce, I mean, you pulled up this statistic before and when you look at the amount of Bitcoin being bought up by like treasuries and dats and how much being is being mined compared to what what the having is like it just doesn't really have as much weight as it used to, right?
• 20:31
  [SPEAKER_00]: Yeah, I think there's only like 20 million Bitcoin, my 20 million dollars worth of Bitcoin mind every day and like it trades a hundred billion dollars a day and there's all these new cohorts that are entering the space like sovereign wealth funds and you know everybody just you know taking you know like heart like Harvard's endowment right a percentage or two of their you know public you know it's like the largest position now in their in their endowment
• 21:01
  [SPEAKER_00]: I thought it was it was really interesting, but but let's kind of zoom in here on on the dat stuff because the salon and company I believe is something that you played a big part in.
• 21:13
  [SPEAKER_00]: So what is the salon and company and can you give us a high level on like what dat's our digital asset treasures are in general?
• 21:20
  [SPEAKER_02]: Definitely.
• 21:21
  [SPEAKER_02]: So if we rewind the clock, you know, the OG digital acid treasury was microstrategy, right?
• 21:28
  [SPEAKER_02]: Microstrategy, Michael said we decided that he would launch a, he would transition a software company into a Bitcoin accumulation vehicle and that he believed the best way to maximize shareholder value over time was to acquire as much Bitcoin as he could.
• 21:44
  [SPEAKER_02]: He really wrote the playbook for how you can continue to acquire a big coin in a per share a creative way.
• 21:49
  [SPEAKER_02]: And, in effect, we executed basically from 2020 onward.
• 21:52
  [SPEAKER_02]: So it's been coming on five years now.
• 21:57
  [SPEAKER_02]: The second one to really do this with MetaPlan in Japan, they realized, wow, that really worked in the U.S., one of the three deployments of Japanese market.
• 22:03
  [SPEAKER_02]: And that also went on to see extraordinary turns that they started in 2024.
• 22:08
  [SPEAKER_02]: And as an investor, I always thought, well, it's kind of weird that microstrategy trades at two times nab for premium to nab for such a long time.
• 22:17
  [SPEAKER_02]: But the reality is it has, and so as an investor, it's important just to look at these market anomalies and try to really understand what's going on.
• 22:26
  [SPEAKER_02]: And we came to the conclusion that there's a lot of really interesting financial, financial engineering going on with microstrategy that causes this
• 22:38
  [SPEAKER_02]: that a lot of the reasons that people thought micostrategy would die didn't end up killing it like launch of the ETFs.
• 22:45
  [SPEAKER_02]: And then we just realized that, wow, like it'd be really cool to have one of these Bitcoin treasury companies, but instead launch it with a different asset, like Solana.
• 22:56
  [SPEAKER_02]: And so we actually were, we are making what was then, a very non-consensus bet to back anchor invest in the first, in the first,
• 23:06
  [SPEAKER_02]: You know, at the time, we were calling them microstrategy copycats because I hadn't invented the word did it last to treasury or that yet, but like when we were calling them microstrategy copycats, we we had a funding defied dev court, which was the first non Bitcoin treasury company to be launched in the US.
• 23:22
  [SPEAKER_02]: this was back in early April.
• 23:26
  [SPEAKER_02]: At the time, I thought, wow, this is going to be a super non-consensus like once in a lifetime thing, like this is going to be the only one we ever do, but then lo and behold the next week, you know, Tether, Softband, Cantor called me up and say, hey, we actually may think about launching a Bitcoin competitor to this.
• 23:40
  [SPEAKER_02]: I thought, oh, well, I could see that makes sense.
• 23:43
  [SPEAKER_02]: Like I could see why there could be two Bitcoin ones.
• 23:45
  [SPEAKER_02]: Maybe there could be two Bitcoin ones.
• 23:46
  [SPEAKER_02]: Maybe there could be one or two ethons and one or two salons over time.
• 23:51
  [SPEAKER_02]: And so we need to be coming the largest investor in that one as well.
• 23:56
  [SPEAKER_02]: It's called 21 capital now, led by Jack Mollers.
• 24:00
  [SPEAKER_02]: But at the time I also thought, wow, like, this is pretty crazy to get to in a row.
• 24:04
  [SPEAKER_02]: I think I thought it would be too in that.
• 24:05
  [SPEAKER_02]: There would be no more digital.
• 24:08
  [SPEAKER_02]: But then we say here, you know, seven months later, there's been over a hundred of these launch in the US, you know, tens of billion dollars of capital raise.
• 24:14
  [SPEAKER_02]: And so I'm really humbled and, you know,
• 24:17
  [SPEAKER_02]: How bold excited that we were part of the origins of kicking this whole thing off with with the recognition that Microsoft really really was that was the pioneer of this, but we really, you know, added the fire that that ultimately jumped started this huge boom this year.
• 24:31
  [SPEAKER_02]: And so as a result, you know, my team and myself were usually the first call for any any guys thinking about launching a digital asset treasury.
• 24:38
  [SPEAKER_02]: And so we've been, we've been at the forefront of evaluating how these work, when they don't work, then the stakes have been made.
• 24:44
  [SPEAKER_02]: We backed all the largest ones, like BitMine with Tom Lee, the ETH digital acid treasury.
• 24:50
  [SPEAKER_02]: And we just realized that, wow, we've built all this knowledge about what works, what doesn't work.
• 24:57
  [SPEAKER_02]: We're really the pioneer in thinking about how to think about
• 25:05
  [SPEAKER_02]: And that we had created so much success for ETH with BitMine.
• 25:09
  [SPEAKER_02]: But our first love was really Solana.
• 25:12
  [SPEAKER_02]: And DeFi DevCorp, by the way, has done well.
• 25:14
  [SPEAKER_02]: But like it hasn't reached the incredible scale that something like BitMine has.
• 25:18
  [SPEAKER_02]: As we just thought, Madonna, me that we really should take on the burden of responsibility to launch our own Solana digital asset treasury because we have all this knowledge and expertise and because we really want Solana to succeed in a similar way.
• 25:32
  [SPEAKER_02]: And so that's ultimately why
• 25:34
  [SPEAKER_02]: a culminated in us launching Solana company, ticker HSDT because we just think there's a real opportunity to have a skilled high-performing Solana digital asset treasury and we think we have the skills to help do that.
• 25:47
  [SPEAKER_00]: I love it.
• 25:47
  [SPEAKER_00]: And central to this discussion because it really has been one of the most polarizing things I've seen in crypto.
• 25:53
  [SPEAKER_00]: We've seen
• 25:54
  [SPEAKER_00]: a lot of trash talk which is normal for crypto we've seen a lot of people get rich so is that there's an element of jealousy there's an element of man i wish i thought of that and so and you know you're you're at the the tip of the spear with this and so i really wanted to get your thoughts on
• 26:16
  [SPEAKER_00]: And they're basically, you know, same and keeping an open for discussion and I know, you won't be providing legal advice or anything like that.
• 26:24
  [SPEAKER_00]: These are just discussion points.
• 26:26
  [SPEAKER_00]: But, but I want to get your thoughts on what they're doing because they're alleged, you know, they're alleging that all these digital asset treasury companies are funds and they're not really operating companies, which is pretty provably false because they do have operating companies and stuff.
• 26:42
  [SPEAKER_00]: You know, we're opening up for comment.
• 26:44
  [SPEAKER_00]: We think we should de-list all of these deaths from any index that we have.
• 26:50
  [SPEAKER_00]: And I just kind of want to get your thought on like, what's really going on here?
• 26:53
  [SPEAKER_00]: And also that dropped on October 10th, you know, JP Morgan was kind of talking about this on October 10th, which was also the day of the big liquidation, just as I know.
• 27:05
  [SPEAKER_02]: So it is interesting that this index discussion is around.
• 27:10
  [SPEAKER_02]: I think if we go to the core of it, index inclusion is not what causes debts to be successful.
• 27:16
  [SPEAKER_02]: And so whether or not MSCI and S&P and NASDAQ eventually, whether or not they decide to include microstrategy and other debts into their index or not, like,
• 27:27
  [SPEAKER_02]: It's mildly helpful if they do, but like that's not at all what what will create success.
• 27:32
  [SPEAKER_02]: And so I think there's a lot of like there's much hell of a blue about nothing.
• 27:35
  [SPEAKER_02]: In this space about whether index inclusion helpful, but like not at all the thesis and not all what we were underwriting when we invested in debts.
• 27:44
  [SPEAKER_02]: That said, I think the core of it is that.
• 27:46
  [SPEAKER_02]: There's a misunderstanding of what these businesses really are, and, you know, it took me some time to come around to this, too, but when I think about what these are, these actually look a lot like financial services companies or banks, if you will.
• 28:00
  [SPEAKER_02]: If you think about what a bank is, a bank is actually a pile of cash, right?
• 28:04
  [SPEAKER_02]: They're a pile of dollars, and then they go out and try to generate yield on those dollars.
• 28:08
  [SPEAKER_02]: And all the banks are valued on what's called book value per share, or the number of dollars per share that they have on their balance sheet.
• 28:14
  [SPEAKER_02]: And they go out and try to grow their book value per share, either by a combination of their operating business, which is a reading loans, or by participating in financial engineering, which is issuing debt, issuing
• 28:30
  [SPEAKER_02]: If you're in, you know, high performing banks like a GP Morgan, they trade at two times book value because they earn a high yield or a high return of capital or high growth rate on their book value per share.
• 28:40
  [SPEAKER_02]: Whereas less well performing banks, you know, take your random XYZ regional bank.
• 28:45
  [SPEAKER_02]: They trade below one times book value because they don't grow their book value very fast.
• 28:51
  [SPEAKER_02]: If he translate that to a debt, a debt is exactly that except replaced dollars with your token, right?
• 28:57
  [SPEAKER_02]: In the case of a salana company, rich face of a salana, our jobs to grow salana per share, you know, it's not dollars per share, but it's salana per share.
• 29:03
  [SPEAKER_02]: And we can do that through a combination of our operating operations, which are trying to generate yield on our salana through staking or defy, as well as through financial engineering, which is through issuing a variety of instruments into the market.
• 29:17
  [SPEAKER_02]: And so from that perspective, actually, these business models have existed for since the dawn of time.
• 29:24
  [SPEAKER_02]: Really, these business models are just banks.
• 29:25
  [SPEAKER_02]: They just happen to be crypto-fripped of the nominated.
• 29:28
  [SPEAKER_02]: And so I think there's a little bit of a mindset shift that needs to happen from people who are seeing this sort of first time.
• 29:35
  [SPEAKER_02]: I myself was the most very skeptical of this for a long time and talk really, really did the work in dug in, but once I came to that analogy, I was like, wow, these actually, this actually makes a lot of sense.
• 29:45
  [SPEAKER_02]: Now, that's not to say, I think there's a lot of, you know, scaryness and flood around that's because three out is a lot of them will be uninteresting outcomes, you know, if you, if you were to invest in a basket of startups or a basket of banks.
• 29:58
  [SPEAKER_02]: Most of them will be not very interesting investments, right?
• 30:01
  [SPEAKER_02]: Most of them, many of them may even lose money, but a few of them will be really great investments.
• 30:06
  [SPEAKER_02]: And so I think when people look at that, if they look at the vast majority of them, you know, kind of being not super interesting or trading down, I just put everything in context and realize that for any set of you businesses, for any industry, most of the things are not very interesting.
• 30:22
  [SPEAKER_02]: But there are one or two major winners that can go on a compound
• 30:27
  [SPEAKER_02]: you know, generational returners for your portfolio.
• 30:29
  [SPEAKER_02]: And so that's how I think deaths are playing out and people are right now focusing too much on everything else and not the big winners that might emerge from this.
• 30:36
  [SPEAKER_00]: Yeah.
• 30:37
  [SPEAKER_00]: No, it's totally right.
• 30:38
  [SPEAKER_00]: And, yeah, a lot of questions kind of still, you know, surrounding, you know, I think, you know, all these deaths and, you know, just in terms of share price, it seemed like they on the announcement, they just shot up because people got really speculative and then share price normalizes.
• 30:54
  [SPEAKER_00]: But, you know, the story is still being written.
• 30:56
  [SPEAKER_00]: I think, like you said, people just need to get their minds around it.
• 30:58
  [SPEAKER_00]: Like if you look back, like,
• 31:00
  [SPEAKER_00]: You know, I bring this, you know, example up in the past with like Facebook or Netflix like back in the early days people were like we don't know how to value these things these are new, you know, equities in a sense that we just we don't understand attention or clicks and like how that's going to, you know, turn into advertising, but the visionaries did right and like.
• 31:20
  [SPEAKER_00]: you know, it just takes people, you know, betting on themselves and going through adversity.
• 31:24
  [SPEAKER_00]: And I think that's what the debt model is right now.
• 31:26
  [SPEAKER_00]: It's just the markets trying to come to a agreement on how to value them.
• 31:30
  [SPEAKER_00]: And we'll certainly see.
• 31:33
  [SPEAKER_00]: And yeah, I'm super optimistic and really excited about what you guys are working on.
• 31:37
  [SPEAKER_00]: But I want to touch on, like you've mentioned this theme of like being pretty, pretty optimistic on Solana in particular.
• 31:44
  [SPEAKER_00]: And I just kind of wanted you to riff for a couple of minutes on just why you chose Solana as opposed to Ethereum or any of the other L ones that are out there.
• 31:54
  [SPEAKER_00]: I do know you said you were involved with the bit mine immersion one, which is all about Ethereum.
• 31:59
  [SPEAKER_00]: So I take it you guys aren't like super short Ethereum and bearish on it, but you know what kind of gave you that confidence to support Solana so strongly.
• 32:09
  [SPEAKER_02]: So a couple of things there.
• 32:10
  [SPEAKER_02]: One is that we do believe we will live in a multi-chain world in the future.
• 32:14
  [SPEAKER_02]: I feel strongly that there are multiple blockchains that have reached the scale to have meaningful adoption and network effects, the Bitcoin, there's Ethereum, there's Solana, all the Ethereum L2s in the UVM ecosystem.
• 32:26
  [SPEAKER_02]: And so I do think that, you know, no matter what, even if there are more chains, at the very least, there will be at least a three chain world in the future.
• 32:35
  [SPEAKER_02]: And that, you know, for you and me, our everyday consumers,
• 32:38
  [SPEAKER_02]: We may not realize that there's multiple chains, because our user interfaces, all the fintech apps that we use may end up abstracting that all the way, but the realities under the hood, they're doing different chains for different use cases.
• 32:50
  [SPEAKER_02]: And then the second thing I say, if you go back in history, and I always try to like bring in the historical context, and you think about how block hands developed, you know, the first block chain that really took off in a major way was Bitcoin in 2009, right?
• 33:04
  [SPEAKER_02]: Blockchain technology, though, or their concept of
• 33:08
  [SPEAKER_02]: But the first blockchain that really took off in a digitally native way with scale was Bitcoin.
• 33:14
  [SPEAKER_02]: And it really wasn't a response to, hey, we would love a non-sovereign store value, some way to transfer value back and forth in a censorship-resistant way that with instant settlement and low cost.
• 33:24
  [SPEAKER_02]: And the reality is that worked out great, right?
• 33:27
  [SPEAKER_02]: People started to really love it, it gained a lot of traction.
• 33:30
  [SPEAKER_02]: but fast forward a few years to 2013, people thought, well, we really love that Bitcoin thing.
• 33:35
  [SPEAKER_02]: But what if instead of just transferring value back and forth, what if we could do more than that?
• 33:39
  [SPEAKER_02]: What if we could program in more complex transactions?
• 33:43
  [SPEAKER_02]: What if we could have all sorts of programs run on blockchain and settle like that?
• 33:47
  [SPEAKER_02]: And that's why Ethereum was born.
• 33:49
  [SPEAKER_02]: Ethereum was really born in response to, we really love that Bitcoin thing, but let's do more.
• 33:55
  [SPEAKER_02]: Now, Bitcoin, Ethereum succeeded in doing more and you fast-forward a few years as more active developers actually started building on Ethereum.
• 34:01
  [SPEAKER_02]: Ethereum started to get Ethereum itself also isn't the newest technology and started getting slow and started getting congested as this congestion pricing mechanism.
• 34:11
  [SPEAKER_02]: And so all of a sudden people thought, well, we really love that Ethereum thing and we'll continue building on it, but what if we could do that except better right and really salon and a generation of L ones was launched in response to that in 2020, which was like we really love that Ethereum thing, but let's do it better and so when I think about what salon is today, like salon was the one that ultimately broke out and really scaled from that generation of of high performance L ones.
• 34:38
  [SPEAKER_02]: And so today, there are only really those three chains I have massively scaled and if I are to think about them each in isolation and why Solana could be a relative winner amongst them, it's that I was go back to basically principles and I try to use a lot of case studies from my prior life as an investor or just this pattern recognition I've built over time.
• 35:00
  [SPEAKER_02]: And one of the biggest stocks of my early career was Amazon, right?
• 35:04
  [SPEAKER_02]: Amazon did something really simple, which is a disrupted retail.
• 35:07
  [SPEAKER_02]: And it did it by falling this very basic thing.
• 35:10
  [SPEAKER_02]: Jeff Bezos used to always say that there's this, you know, holy trim, uh, trifecta of consumer wants that will never change.
• 35:17
  [SPEAKER_02]: They were, they are that consumers will want cheaper, they want faster, and they'll want more accessibility.
• 35:22
  [SPEAKER_02]: Like, no matter what, you can count of those things, those three things, always being true.
• 35:26
  [SPEAKER_02]: And it was really on the back of keeping that simple vision that caused Amazon to gain so much here and be a massive winter in retail.
• 35:32
  [SPEAKER_02]: And one thing about Islam is like, wow, that's that's exactly the vision.
• 35:35
  [SPEAKER_02]: It's faster, it's, you know, it settles, it's four-year milliseconds for block.
• 35:40
  [SPEAKER_02]: It settles transactions and it has finality and under a second, you know, it's cheaper.
• 35:45
  [SPEAKER_02]: It's, it costs less than a fraction of penny per transaction versus, you know, many dollars in traditional, in our traditional finance rails
• 35:57
  [SPEAKER_02]: And then it's more accessible, certainly than our traditional finance rails because it's anyone in the world with a smart phone and a new connection can access a lot and have a salon a wallet.
• 36:06
  [SPEAKER_02]: You can't say that about a bank account.
• 36:08
  [SPEAKER_02]: And for all those reasons like wow, salon is faster, cheaper, more accessible.
• 36:12
  [SPEAKER_02]: And that's why the technology can work in can scale.
• 36:15
  [SPEAKER_02]: Now, there's a lot of technologies that are really great, but don't succeed.
• 36:19
  [SPEAKER_02]: And so the question becomes how's that actually playing out into fundamentals?
• 36:22
  [SPEAKER_02]: And when we look at the
• 36:27
  [SPEAKER_02]: If you look at total growth and crypto transactions, if you look at total growth and crypto developers in a number of applications being built, Solana has been the largest share gain across all of those for any fundamental metric that matters.
• 36:41
  [SPEAKER_02]: And ultimately, that's translating to real profitability.
• 36:44
  [SPEAKER_02]: Solana, as a chain, generate over two million dollars of annualized free cash flow in the first half of this year.
• 36:50
  [SPEAKER_02]: I don't think people realize that all this incredible growth,
• 36:56
  [SPEAKER_02]: It's translating into real hard cash and and that's really important like if you're the fundamental investor that's trying to find high quality businesses it's like you want to find that product market fit you want to find real real profit ability and that's what's along is proving out.
• 37:10
  [SPEAKER_02]: And so that's why we're just so excited to be you know invested as long as yes we still love Bitcoin yes we still love Ethereum.
• 37:18
  [SPEAKER_02]: But like you look at Bitcoin, Bitcoin's 1500x since we first launched our Bitcoin fund.
• 37:23
  [SPEAKER_02]: It's like as much as we love Bitcoin, it's not going to 1500x again.
• 37:26
  [SPEAKER_02]: I mean, never say never, but something crazy would have to have after-to-our-world for that to happen.
• 37:31
  [SPEAKER_02]: But Salana is still early in its journey.
• 37:33
  [SPEAKER_02]: And so we think Salana has massive massive upside-to-had event, and that's why we're so excited.
• 37:38
  [SPEAKER_00]: Yeah, no, hey, that's that's some alpha and yeah, full disclosure.
• 37:41
  [SPEAKER_00]: You know, I've got, you know, exposure to to all these assets that we're talking about.
• 37:45
  [SPEAKER_00]: And, you know, Matt Hogan also did mention he got, he's like Solana is in the sweet spot for Bitwise as well.
• 37:51
  [SPEAKER_00]: He said, because it's, I think he said, one 25th the size market cap of Bitcoin.
• 37:59
  [SPEAKER_00]: But the amount of flows that it's taking into it's ETFs are like, you know, if you scale it,
• 38:07
  [SPEAKER_00]: what Bitcoin's taken into the ETF's relative to its market capsize.
• 38:12
  [SPEAKER_00]: So, yeah, I think there's a really bright future for Solana as well.
• 38:18
  [SPEAKER_00]: But I wanted to round out our data discussion here with just a couple questions on staking and lending and just how do you kind of like think about these different mechanisms to generate yield?
• 38:31
  [SPEAKER_00]: Are you doing them like everything everywhere all at once?
• 38:35
  [SPEAKER_00]: Do you guys, you know, how do you select between, hey, we're going to lend here?
• 38:39
  [SPEAKER_00]: I mean, because again, it does sound a little bit like, you know, a hedge fund.
• 38:42
  [SPEAKER_00]: And I know you used to run hedge funds, but how do you think about yield generating opportunities?
• 38:48
  [SPEAKER_02]: So, I think this is where Solana Company can really stand out because a pentera where I, you know, a general partner and also a director at Solana Company,
• 38:57
  [SPEAKER_02]: But Pintera is the asset manager for Solana Company.
• 39:00
  [SPEAKER_02]: We're applying everything that we've learned about Solana, all the relationships, all the research we have, all the de-factivity we currently participate in.
• 39:08
  [SPEAKER_02]: We're using those to really help accelerate what Solana Company is doing.
• 39:13
  [SPEAKER_02]: And we run an actively managed hedge fund strategy in liquid tokens, and we want that knowledge to be used.
• 39:20
  [SPEAKER_02]: And so, Solana Company, though, is going to be slightly different in that it's very focused if the goal is to maximize value per share for U.S. investors.
• 39:30
  [SPEAKER_02]: We really care about Solana Company really cares about doing things in a risk adjusted way to maximize yield.
• 39:47
  [SPEAKER_02]: Um, to potential, you know, KYC AML considerations that a US company would have and we're taking all those to an account, but assuming that we get comfortable with all those risk factors, we do want to be aggressive about maximizing yield and finding really interesting opportunities.
• 40:02
  [SPEAKER_02]: I think there's a lot in Sloan and DeFi when you look at protocols like Camino, like Drift, like Jupiter, there's a lot of interesting ways to deploy capital and generate.
• 40:13
  [SPEAKER_02]: high double digit rates of return.
• 40:15
  [SPEAKER_02]: That's well above what you can get with just peer-staking.
• 40:18
  [SPEAKER_02]: And so we're gonna take it a step at a time, but we're really interesting exploring all those as long as we can satisfy all those risk conditions.
• 40:25
  [SPEAKER_00]: Awesome.
• 40:26
  [SPEAKER_00]: And then the last question around deaths is around the net asset value multiple, the MNAV, the premium to NAV, they've got it set a couple of ways.
• 40:37
  [SPEAKER_00]: What is the right premium to NAV that some of these deaths should logically command?
• 40:43
  [SPEAKER_00]: I've seen some as high as 20X.
• 40:46
  [SPEAKER_00]: And I've seen some that have now gone down to, you know, well below one.
• 40:50
  [SPEAKER_00]: What are the factors driving that and where does your sort of bounds lay?
• 40:59
  [SPEAKER_02]: So, the most important thing about investing in any asset class is really think about what the projected growth is going to look like for this asset.
• 41:08
  [SPEAKER_02]: And so, when you think about what that is, it's goals to maximize tokens per share.
• 41:13
  [SPEAKER_02]: And so, if you believe a deck can grow its tokens per share over time,
• 41:20
  [SPEAKER_02]: Because if I'm going to have a dad today that owns one salana per share, but I think a few years from now it's going to own two salana per share.
• 41:28
  [SPEAKER_02]: I'm probably more able to pay more than one for that.
• 41:32
  [SPEAKER_02]: And so that's why things in theory should trade a can trade above one times a half.
• 41:37
  [SPEAKER_02]: When you think about it though, a lot of the dads they are businesses and so they have cost too.
• 41:41
  [SPEAKER_02]: And so the starting point is really if you have, if you just go buy an ETF, you'll always have one times a half minus
• 41:48
  [SPEAKER_02]: you know, 25 basis point expense ratio that you're paying a bit wise or fidelity or whoever else every year.
• 41:54
  [SPEAKER_02]: And so, you know, it's one minus 25 basis points a year.
• 41:57
  [SPEAKER_02]: If you look at a debt, you know, there are much higher expenses because of the public company.
• 42:00
  [SPEAKER_02]: And so, you know, it's one, it's probably your starting point is probably closer to something like 0.9.
• 42:05
  [SPEAKER_02]: That's like the status quo, if a debt forever fails to generate any growth, then it probably only deserves to trade at 0.9 or something below that.
• 42:13
  [SPEAKER_02]: And many
• 42:14
  [SPEAKER_02]: can we will not be successful in growing their tokens per share and that's why they should trade out of minor discount.
• 42:20
  [SPEAKER_02]: Now if there are a lot of data that will perform very well and those that are the guys that know how to use the capital markets effectively then know how to generate yield effectively and you know if you're if you're doing something like staking staking in salana right now is around a 7% annualized yield and so you're willing to pay something for 7% annualized yield right you know your tokens for sure and grow at least that much every year and you know
• 42:43
  [SPEAKER_02]: A different people will put different multiples on it, but let's say that 0.9 with staking gets you to something like 1.1 or 1.2, and then if someone with really strong financial and ear and capability, the ability to tap capital markets to a special way, or fast to do a creative M&A, can grow your tokens per share even faster than that.
• 43:02
  [SPEAKER_02]: Maybe you can justify something closer to 1.5 or 2x or even 2x plus.
• 43:05
  [SPEAKER_02]: I think when we get to something like 10x, 5x, 10x, we're starting to get like a little crazy, and that's like meme like speculative type action.
• 43:14
  [SPEAKER_02]: If we get like below 0.8, it's starting to look like probably too cheap because there's going to be consolidation and there's always the ability for management teams to do buybacks or return capital.
• 43:23
  [SPEAKER_02]: And so I feel like the range to me is something in that like 0.8 to 2x plus range is where most of these should trade over time with with
• 43:33
  [SPEAKER_02]: right around now, or maybe a little above now, a little below now.
• 43:36
  [SPEAKER_02]: But what are two really all start winners trading well above that?
• 43:40
  [SPEAKER_01]: Yeah.
• 43:42
  [SPEAKER_01]: Yeah, it's been interesting because there has been a lot of thought about like how do we price these things properly, they blew up onto the scene and they just had this fantastic run and then they were overpriced and then now I kind of feel like they're underpriced and I think that they're just going through like that's in general I think are just going through a maturity process of people getting used to these things and you're right it's balancing out and I think that that's all.
• 44:07
  [SPEAKER_01]: like a pretty reasonable area for it.
• 44:10
  [SPEAKER_00]: And then in typical crypto fashion they're just speed running market movement.
• 44:15
  [SPEAKER_00]: Yeah, it's like living a full crash cycle like in in a month's time.
• 44:20
  [SPEAKER_01]: Yeah, which is always yeah, it's always fascinating and people always forget that.
• 44:25
  [SPEAKER_01]: but crypto does move like a thousand miles an hour and the stuff that would take like years or a decade in the like normal markets or what it took the normal markets to go through in the past.
• 44:35
  [SPEAKER_01]: Crypto you're right, right.
• 44:36
  [SPEAKER_01]: Just speed runs it and we see these really, really quick and I think these quick cycles create volatility.
• 44:44
  [SPEAKER_01]: But
• 44:44
  [SPEAKER_01]: Transitioning us to kind of just the current state of the market.
• 44:47
  [SPEAKER_01]: I mean, there's so many different things going on.
• 44:50
  [SPEAKER_01]: If you look at like the macro backdrop, you have fed policy interest rates inflation liquidity cycles, you have all of these things that are shaping the the demand for a lot of these cryptos that we look at, like, especially the large caps.
• 45:05
  [SPEAKER_01]: So my question for you is like, how do you think all of these things that I mentioned like,
• 45:11
  [SPEAKER_01]: Fed policy interest rates inflation liquidity cycles.
• 45:13
  [SPEAKER_01]: How do you think that that shaping demand for assets like Bitcoin Ethereum or even Solana?
• 45:20
  [SPEAKER_02]: I do think that the broader macro conditions are really constructive right now.
• 45:24
  [SPEAKER_02]: I think in the near term we're seeing a lot of choppyness because if there's a lot of concern around whether inflation still running hard, whether employment is coming up a little too fast and whether the Fed is going to react in
• 45:38
  [SPEAKER_02]: uh, in the correct way to help manage that, manage that.
• 45:41
  [SPEAKER_02]: But as I think about going forward, it's like liquidity.
• 45:44
  [SPEAKER_02]: The Fed is on its way to continue to cut rates, whether or not it happens in December.
• 45:48
  [SPEAKER_02]: It'll certainly happen sometime next year.
• 45:50
  [SPEAKER_02]: Um, and probably copyrights multiple times.
• 45:52
  [SPEAKER_02]: That's good for risk asset prices, which big win, Solana, and ETHR.
• 45:56
  [SPEAKER_02]: If, as we think about liquidity conditions are getting a lot better, you know, the,
• 46:01
  [SPEAKER_02]: uh... the rally is the government shut down really hindered liquidity a lot but we're going to see that come back and uh... conference it's not just the u.s. which is engaged getting engaged in stimulus but countries of all around the world to China Europe um... to pan Korea all these places are engaging in stimulus measures and so global liquidity is really increasing and then uh...
• 46:22
  [SPEAKER_02]: So global liquidity is increasing rates are coming down and I do think the underlying economy is so strong because of all the all the innovation that's happening in blockchain in AI, that's all going to drive a major productivity boom.
• 46:34
  [SPEAKER_02]: And so I think broadly speaking, these are all really positive things that are going on for asset class.
• 46:40
  [SPEAKER_01]: Well, speaking of AI, I mean, you've had your your eye on the AI sector as well, right, Cosmo?
• 46:46
  [SPEAKER_01]: Yeah.
• 46:47
  [SPEAKER_01]: It's it's an interesting one because we do hear a lot about it and we always have guests come on and we love to get different opinions on it But what do you think about the two working together?
• 46:57
  [SPEAKER_01]: Like what could the two sectors of blockchain tech and crypto and then AI on the other end?
• 47:03
  [SPEAKER_01]: What could Seeing those two sectors work together look like and what could that unlock?
• 47:09
  [SPEAKER_02]: I think it really starts with the entrepreneurs and what you think about it
• 47:13
  [SPEAKER_02]: blockchain and AI are both just branches of math, right?
• 47:16
  [SPEAKER_02]: I wouldn't give a group of watching a scriptography AI used to be called statistics, and so like all these things are just as branches of math, and I set the math in college, a lot of my classes were much smaller, and a much smarter enough setting math, and their PSD programs, and everyone in this space has an experience in both cryptography and in statistics.
• 47:35
  [SPEAKER_02]: And so in our group of entrepreneurs at Pentera, we also see a lot of people with AI experience that publish AI papers.
• 47:43
  [SPEAKER_02]: And if you look in the AI world, a lot of them do have cryptography experience.
• 47:46
  [SPEAKER_02]: And so there's already this really natural blending of talent that exists out of that intersection.
• 47:52
  [SPEAKER_02]: And then when you think about what they are, philosophically, AI is all about creating infinite content, infinite abundance, right?
• 47:58
  [SPEAKER_02]: There's going to be infinite AI generating content, there's going to be infinite AI identities and AI agents out there.
• 48:04
  [SPEAKER_02]: Whereas blockchain is all about creating authenticity or verifying authenticity.
• 48:10
  [SPEAKER_02]: And so they're very gin and yang and how they fit together and how they can help.
• 48:14
  [SPEAKER_02]: And so we actually spent a lot of time at this intersection because we do believe the two fastest growing sectors of our economy are blockchain and AI.
• 48:23
  [SPEAKER_02]: And so we're spending a lot of time at that intersection at two.
• 48:26
  [SPEAKER_02]: And it's not that blockchain that has solved everything for AI or anything.
• 48:29
  [SPEAKER_02]: It is very useful in a lot of ways, whether that's in helping coordinate resource aggregation like all these deep in protocols that are aggregating data or computer energy to power AI models, whether this is a concept of open source and open systems stuff like stuff like bit tensor or our investment in open mind, which are enabled open source development for AI.
• 48:50
  [SPEAKER_02]: Or, or if it's around identity, right, we're invested in Worldcoin, which is also founded by Sam Malman, the same Sam Alman that founded Open AI, because he really sees blockchain as a, as a necessary tool for Identity Authentification in a world that's dominated by AI.
• 49:06
  [SPEAKER_02]: And so all of those three areas we think are,
• 49:08
  [SPEAKER_02]: really worth exploring.
• 49:09
  [SPEAKER_02]: And in addition to on the flip side, AI agents are obviously going to use blockchain rails for all their activity because it's just a better solution and they don't have the creative distinct biases that we do.
• 49:21
  [SPEAKER_02]: And so we're really excited about the intersection we're spending a lot of time there.
• 49:25
  [SPEAKER_01]: And we've talked to a couple of the agent guys and we've had them on the podcast and talking about it and the things are like AI agents.
• 49:31
  [SPEAKER_01]: They're not humans.
• 49:32
  [SPEAKER_01]: You can't go get them a bank it like, you know, you can't just go get a bank with anyone right because they're not even beings.
• 49:38
  [SPEAKER_01]: They don't have a social security number.
• 49:40
  [SPEAKER_01]: You can't go set them up with the bank account.
• 49:42
  [SPEAKER_01]: So what do you do you set them up with the crypto wallet and all of the sudden they're able to actually try to transact and do things and it gives them a lot more freedom and the other part of this that I find ironic.
• 49:52
  [SPEAKER_01]: is that there's two areas where everyone's saying it's a bubble we could be at the top right now and it's AI and crypto right the two areas that you said are the fastest growing in the US economy it's where all the attention is towards and for all these different reasons you know maybe it's AI maybe it's chat bots maybe it's defense and on crypto maybe it's stable coins maybe it's tokenization maybe it's payment solutions maybe it's all these other things and they both
• 50:19
  [SPEAKER_01]: ways to succeed, and I think ways that they will succeed, yet people are still looking at both of these AI and crypto, and saying they're a bubble, we could be at the top, it's over extended.
• 50:30
  [SPEAKER_01]: How are we going to actually make money off these things?
• 50:32
  [SPEAKER_01]: And that's the most common thing that I see.
• 50:34
  [SPEAKER_01]: How are we going to capitalize off of this from a monetary standpoint?
• 50:38
  [SPEAKER_01]: And so are the companies that are investing in these?
• 50:41
  [SPEAKER_01]: And it's funny because Bryce, like you said earlier,
• 50:45
  [SPEAKER_01]: like the internet and social media and these different platforms and people like how are they actually going to capitalize off of all of this and all of their users and it's cool that they have this but how do they make money fast forward to 2025 I mean they are the most valuable companies on the earth and it's like how could they not make money at this point you look at it and they've capitalized on it a gazillion different ways and there were trillions of dollars and it's funny what's happened in like seriously less than less than
• 51:15
  [SPEAKER_01]: They have gone from, how are these things ever going to be possible?
• 51:19
  [SPEAKER_01]: They're a bubble to now being these like trillion dollar valuation companies that are just the behemoths of the world.
• 51:27
  [SPEAKER_00]: Just a tale as old as time, it seems like.
• 51:30
  [SPEAKER_00]: And you know, people are going to call for bubbles.
• 51:34
  [SPEAKER_00]: And all the fast growing things, because of how much exciting things they're going on.
• 51:38
  [SPEAKER_00]: But Cosmine, we're at the top of the hour.
• 51:41
  [SPEAKER_00]: And that's all the time of yours that we have.
• 51:43
  [SPEAKER_00]: So before we let you go, we just want to thank you.
• 51:47
  [SPEAKER_00]: The inventor of the DAT Cosmosell, who's the general partner, and one of the general partners at Pantera Capital,
• 51:52
  [SPEAKER_00]: Where could people kind of follow along with your story, your journey, and any resources you want to share?
• 51:57
  [SPEAKER_00]: We'll have those below in the show notes.
• 51:59
  [SPEAKER_02]: Yeah, awesome.
• 52:00
  [SPEAKER_02]: You guys can find me on Twitter at Cosmo Under Sworjang, and then, you know, you should, we encourage everyone to follow over during a Pantera.
• 52:08
  [SPEAKER_02]: You can go to our website, PanteraCapital.com.
• 52:11
  [SPEAKER_02]: Subscribe to our monthly blockchain letter where we talk about all the things that we're seeing and we're excited about.
• 52:16
  [SPEAKER_02]: incredible.
• 52:17
  [SPEAKER_00]: Thank you so much for joining us today and for your generous time and everybody at home watching.
• 52:22
  [SPEAKER_00]: Thank you for your support and your interest.
• 52:24
  [SPEAKER_00]: Come back next week same time same place.
• 52:26
  [SPEAKER_00]: We'll have some more great guests for you.
• 52:28
  [SPEAKER_00]: Take care.