On The Brink with Castle Island - Maneesh Gandhi & Michael Liddy (Evanston Capital) on The Institutional Allocator Landscape (EP.391)

Episode Date: January 25, 2023

Maneesh Gandhi and Michael Liddy of Evanston Capital join the show. In this episode we discuss: Evanston Capital's history and thoughts on the blockchain ecosystem Their views on the current market environment and how this crypto cycle compares to others The evolution of the crypto venture landscape and how Evanston Capital thinks about crypto venture structures Thoughts on the FTX collapse and its impact on the market How institutional limited partners are thinking about the crypto/blockchain ecosystem Potential areas of opportunity in the current market environment To learn more about Evanston Capital visit www.evanstoncap.com

On today's episode, I sat down with Mnish Gandhi and Mike Liddy at Evanston Capital. Evanston Capital is an active investor in hedge funds, private equity, venture capital, and they're also longtime investors in the blockchain ecosystem. In this episode, we discussed the post-FTX state of the market, the venture landscape, and much more. I think you'll enjoy this one. So without further ado, here's my conversation with Mnishin Mike at Evanston Capital. Matt Walsh and Nick Carter are partners at Castle Island Ventures.

All of these expressed by them or the guests on this podcast are solely their opinions and do not reflect the opinions of Castle Island Ventures. Guest and host may maintain positions in the assets discussed in this podcast. You should not treat any opinion expressed by anyone on this podcast as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of their personal opinion. This podcast is for informational purposes only. Brought down by bad mortgage investments, Lehman, which has 25,000 employees, will be liquidated. The federal government loans American International Group, AIG, $85 billion.

This is a different kind of market, and the Fed is asleep. The federal government is stepping it to. to stabilize Fannie Mae and Freddie Mac, the two mortgage giants that have been threatened by the housing crisis. The Bank of England has pumped 75 billion pounds more into Britain's ailing economy with a new round of quantitative easing. You've printed a couple trillion dollars and all of a sudden people start to worry. So out of this worry, we have something called the Bitcoin. Bitcoin. Mnich and Michael, thanks so much for joining us today on the podcast. Thank you for having us.

Yeah, thanks, Matt. Why don't we talk a little bit about Evanston Capital and how you guys got interested in the blockchain space? So I can start out with that. And me, I'm Anish, feel free to chime in. So Evanston Capital, we were founded back in 2002 by the former chief investment officer of Northwestern University's Endowment, a gentleman by the name of David Wagner. He was the CIO there for 10 plus years and was one of the early adopters of the endowment model pioneered by David Swenson. So over time, he migrated that portfolio from one that was traditional stocks, bonds, funds cash to one that was more than 50% invested in alternative assets. That alternative asset class

focus has carried over to Evanston Capital. So our firm's initial focus really centered around hedge funds, but over time, we've expanded the business to cover investing in private equity, venture capital, and more recently blockchain. So today, the firm manages around $4.5 billion in assets across our entire platform. And just given the lineage of the firm, our client base is primarily institutional, including a big chunk of small and medium-sized endowments and foundations. We celebrated the firm's hard to believe, 20th anniversary this past fall. I'd say we're pretty proud of that longevity as well as the fact that we're an independent employee-owned firm with about half of our 29 employees being equity owners of the business.

With respect to blockchain specifically, it is the newest leg of the stool here, but it's a space we've been researching and investing in since 2016. So in addition to doing our own research to build conviction over time, we've built a good network of relationships across blockchain dedicated managers and other industry players, participants, all of which has led us to make a handful of investments in the space, both via funds and direct asset purchases. I generally characterize us as pretty methodical in how we approach new asset classes. And that's kind of how it's played out in the blockchain space. It's been a very organic way in which it's grown here over the past five plus years or so. That's a great introduction, Mike. And what was it initially about blockchain? Do you remember when you guys first started looking at it? Was there an overarching thesis for why this might be exciting? Or was it more of a follow-all the talent that's coming into the space? What we generally do is we want to

want to talk to smart people, talk to smart managers. And when managers started coming to us and talking to us about Bitcoin and Ethereum, and back then it was all these ICOs going on, and that got our tentacles up in terms of, hey, this is something that we should be looking at because smart people are looking at it. And so that was really our entree into the space. And then it's really is a combination of doing your own homework to try to understand the space and then corroborating with talking to other folks. So it's in that way, I think, been a very organic process. So it's certainly been an interesting past year to be participating in this industry. There's been no shortage of horrible headbonds, catastrophic crypto failures.

How have you guys seen this impacting the industry and what you're trying to do? I think obviously last year was a tough year for the crypto space. I think most of us who eat and breathe the industry every day recognize that the centralized finance companies that failed last year and took much of the headlines aren't representative of the long-term vision for blockchain technology and the future we're all hoping will develop. I think we see DFI protocols, not these centralized finance firms, as kind of representing that future vision of blockchain in the finance sector. And I think when you look at these protocols, which have a predictable and this is a set of rules,

and have largely operated, as we would have hoped, not to say they've had a great year, obviously they've faced massive liquidations and volatility. You think about it, just kind of sad to see an industry that was initially really formed in the genesis of it to cure some of the evils seen in the 2008 financial crisis, suffer the same problems seen during that time from kind of our own centralized place. players. I mean, there's poor risk management, even fraud, in a few cases, opaque operations, ill-advised, a commingling of businesses, and you can kind of go on. I think when we look at now the impact from kind of what has happened, especially after the demise of FTX, I think the biggest

cost to the industry is just going to be their reputation of damage. It causes, especially kind of in the short term. I mean, unfortunately, most people do not understand the nuances between C-Fi and D5, or even know what blockchain even is. So we'll form their judgments based on the negative stream of headlines. But I think ultimately this hopefully just delays and slows down the industry progress, but will still mean that we can achieve and the industry can achieve the vision we hope for. I mean, it's not, I think, all bad, a positive byproduct of last year is that it has brought

the industry back to kind of earth. in 2021 just saw exuberance that just well surpassed where the nascent industry really was. And it forced the industry to do things that it needs to do, which is rethink about what needs to change to kind of achieve the long term and more sustainable success that we're open for. We'll look back and hopefully say this was painful but needed and hopefully we'll learn some of the lessons. I think the other positive is just if you look at venture investing in this environment, has become

probably that much more compelling. Entry valuations have come down significantly, return to more judicious and disciplined venture investing. Startups are again hyper-focused on proving their worth and building long-term value propositions rather than finding short-term quick ways to make money. And some of those are just frivolous stuff and some of these founders and startups that shouldn't really have been here

will hopefully kind of go away. That's spot on. As you're saying that, I was thinking, we're really going to find out who really understands this stuff and who has a long-term view. I think about Fidelity, where, of course, I used to work, and the woman that runs Fidelity understands crypto very well. And it's a very dynamic place. There's a lot of research and development that's gone into forming the point of view of what to build. You can't say that for all financial services firms. I think a lot of the blockchain and crypto innovation maybe comes

from the junior levels and gets pushed up. And it's more of an advocacy to, hey, we should do certain things, but you don't have that core belief maybe at the executive ranks that says, hey, we're going to charge forward. Yes, there's fraud, but that doesn't change our assumption. Do you guys have a view on how that'll play out both across the financial services industry, but also the allocator community? I'm sure it's the same type of dynamic at every investment committee under the sun where they're talking about an end or a large institutional allocator. During this period where we saw, we'll call it FOMO in the industry, there were institutions where, as you talked about, a mid-level younger person who understood and looked to learn about the technology

gained kind of the conviction because there was just so much excitement around this area, the maybe more skeptical senior people just said, okay, I'll take a pass and we can do this in a small way to get us started. And I think now that's going to be hard. I think those individuals are going to be stepping up and saying, why are we doing this? What we're going to need as an industry is just continue to show progress, continue to show real wins, real use case development. I think in the end, a lot of the institutional investors, we're all directed towards fundamentals and really let the price move up and down, but it's really about are these businesses really developing? Are they developing sales in DIPA, but they're getting long-term

success around user growth? That's the stuff that we focus as a firm quite a bit on, and I think these firms kind of will focus on that too. I think that the industry did itself a disservice during the bull market, because Like Manisha is saying, so much capital went to, honestly, the pursuit of pure speculation, times were good, and so the best way to build a user base momentum was by providing access to ways to speculate on price. But meanwhile, talking to allocators, other financial service industry people, pretty much the first question was always, well, what are the real world use cases of this technology? And so that's going to be the key. It's like if we're ultimately going to reach

the promise of, I think, this ideal of disintermediating real-world industries in ways that cut out the middlemen, increase efficiencies, give more power back to the users, like it's going to require rededication of founders and developers to focusing on bridging into these more durable real-world use cases. Yeah, I've been thinking a lot around what some of the problems that the bull market revealed to the industry. And I think you're spot on that the speculative nature of this got over-extituated. I also think about things like risk management, which you brought out monation. Do you guys have a perspective on any other problems that maybe we saw as a result of just the exuberance over the past couple of years? If we look at like venture managers specifically,

I think it did expose quite a bit of peak bull market behavior, raising too much money relative to the size of the opportunity set or deploying capital too quickly without valuation discipline or maybe starting to traffic in some areas that are outside your expertise. And so things that managers could get away with in the bull market, but all of a sudden come back to bite you when the tide pulls out. Definitely that from a specific to the venture managers. And then we've kind of talked about it. But I just think the bull market attracted a variety of pretty unsavory characters.

We were basically able to steal the industry narrative. So, I mean, obviously, SBF is the headliner, but Doquan with Terra and the Three Arrow's guys and Machinsky at Celsius, they collectively probably set the industry back a few years and sucked all the oxygen out of the room, away from the good actors looking to build the projects that actually can move the industry forward. So it's imperative incumbent upon the industry. Those are the people that take the voice of the industry going forward and help drive the direction. This industry has such a hard problem with this main character complex. It feels like every cycle there's these main characters that emerge and they get to the top and they just crumble under the weight of fraud. It's just we really need to get past that as an industry.

The industry just creates some incentives with this token appreciation and short-term wins to bring these characters or even turn these characters who maybe initially wanted to do the right thing into looking at short-term game for long term. So there are some fundamental things that we need to as an industry to figure out. Yeah, I totally agree. Maybe switching gears a little bit to the venture landscape and what it looks like in this industry right now. How do you guys segment the space?

How do you think about it? More broadly speaking, I guess, how do you see this evolving based on the current environment? The venture industry really came to age just recent. In 2021, I think there was, what, $31 billion deployed in that year into blockchain and crypto companies. There was only a fraction of that, this amount deployed when you add up all the years prior. And we've continued to see that type of deployment, especially early in 2022. And as such, the landscape is just really grown and evolved significantly. I mean, if you talk about the various types of venture participants today, there are a number. There's a group of

dedicated blockchain venture managers that have grown to a staggering number, more than 200 or 300. If you break this down, I would say that by 40 to 50 that were more established managers that were formed prior to 2020, but then we just saw an influx of so many more new managers during the mole market. The second main group would say is just the generalist venture firms who have entered into this space. We've seen this in the past to be in the bull markets. That's what we saw again with the bulk markets. And they've banned the early stage to late stage. firms. And the third are strategic and corporate investors. I mean, just as balance sheets have grown and success firms like Coinbase or Galaxy and others have been able to just use some of that money

to invest themselves. And so they've been pretty big players in what they're doing. And then I'd say the last group are these angel investors. I mean, just a lot of people who've made a lot of money in this industry. And they've just themselves become active investors and been on the cap tables for this. I mean, as we look for, I mean, this is a really changing time. I think the landscape's going to change very significantly, probably more so for the better. I mean, many of these investor types have already cut back or stopped investing, including the generalist venture firms and even some corporates and some angels. And we think when you look at this dedicated blockchain manager group,

I think a number of them are just going to go away. They'll deploy their funds and probably will have a tough time raising their next fund. The reality is the bull market just brings a lot of managers that might, probably hard to say, but had no business raising capital, but could do so in a bull market. And we also think the fund sizes will just go down across the board and the size of funds. I think Mike alluded to this, were just staggering and almost was built on this bull market being there permanently. And so as the bear market comes, operatives fall off and sentiment has changed, you think these fund sizes would generally. I think that's right. I mean, I remember back in 2017, 2018, we used to talk a lot around just the risk around portfolio companies not being able to raise follow-on capital downstream

from generalists. There's just no generalists that were open for business for blockchain-oriented companies. And so that certainly changes the way you think about underwriting. You need to get paid for that risk. You need to have companies that do more with less and can get to either profitability or some sort of a liquidity event contemplating that future. And then, of course, the generalists came in as they tend to do. I think it happens in most of the bull runs. Even the ICO area, you saw some generalists really get in. There have been a bunch of generalists that have gotten burned in this cycle, though,

where maybe they've done one or two deals, and some of them are high-profile failures. Do you think that will change the fundamental presence of some of these generalists for the next couple of years in this industry? I think it has to. It's part of why we've been proponents of blockchain dedicated managers since the start because of how complicated this technology can be and how quickly the industry moves. It kind of need to be 24-7 in it to do it right. Also because these founders and entrepreneurs, they need specialized value add from their venture investors.

So if it's bootstrapping network liquidity or token economic design or feedback on U.S., things like that, The managers that have the dedicated expertise, we think have a leg up versus the generalists where this might be one small piece of their overall strategy. It's not like there aren't some dedicated blockchain managers sitting out there with egg on their face with some ill-timed or poor investments or association with FTCS, things like that, but I do think it shines a pretty bright light on the level of due diligence or underwriting rigor some of these generalists venture managers brought to these deals. And I can argue in many cases it was pretty lacking.

So post this drawdown, post-FTX, I think the former blockchain champions within these shops are just going to have less of a voice. It's going to be a struggle to bring deals to the table. The deals they did do are probably showing tough marks because they were done without valuation discipline at the top of the market. If you're a generalist looking to go out and market your next fund, you're probably de-emphasizing any talk about blockchain right now because one, you don't want to talk about these marks and two, investors don't want to talk about blockchain right now. So I think all in,

it's probably going to be a while now before the generalist species step back in. And that creates hopefully a vacuum and an opportunity for the dedicated managers who still have dry powder to step in and with less competition. I'm chuckling because I was speaking with a generalist manager a few weeks ago, and they're saying that they had done maybe 20% of their generalist fund into crypto-related deals. And they said, the next time they go out to fundraise, they'll be talking about fintech, but not about crypto. I'd imagine we'll see a lot of that. Have you guys seen venture managers adapting to the current environment by changing pace or changing investment activity, changing focus? How have you seen that unfold?

Largely is in ways you'd expect. So notably, just a slower pace of deployment, funds that we're getting deployed in a year in 2021 and managers coming back within a year for their next fund. Now we're talking about deploying over the course of three years, which is a function of less deal flow for sure, but I think also just an acknowledgement by venture managers that it's a tough fundraising environment. So you're going to keep that dry powder is more precious in this type of environment. Maniche alluded to this, just exhibiting more valuation discipline. Obviously, it's largely a function of the market decline and the pendulum of power, I think, swinging back in the favor of investors versus founders. But I think a lot of venture managers have told us here that it's nice to have the time now to properly diligence deals and vet founders at a normal cadence versus the bull market where it's like the hot deal.

You're in or you're out within a night. And then the market for specialist managers has grown. But I'd say we've seen a bit of a narrowing of focus. focus on your true domain expertise or investing in what you know best versus maybe some managers were taking flyers and emerging areas that they were a year or two ago. And I think what we've seen as part of that is a little bit more focus on infrastructure and middleware. I think that there was this narrative developing last year that all of the building blocks for the industry were in place and they're perfect. And so now it's all about building the consumer application

experience on top. But I think part of what FDX showed is there's still a long ways to go on infrastructure. Things as basic as fiat on and off ramps and self-custody solutions and things like that. So not to say that the consumer application side isn't an important and growing area of opportunity, but just that there's probably still a lot to do on the core building blocks. The last thing I would say is just increased focus on supporting existing investments. existing founders, making sure founders are being smart and how they're thinking about runway and making sure they can make this raise last through the bear market and all the normal value-ad pieces to finding talent and customers and connecting with peers.

And these are the things that the good venture managers do in a bear market that help them build a real brand, like a sustainable brand and ultimately ensures you're getting access to the best deal flow down the line. It also speaks to the value of more established managers. I mean, we could say this whole universe is pretty emerging, but they're obviously managers who've been around through a few and bearable markets. But we're seeing those firms that have been here and seen this, obviously being able to handle this much better, knowing what to do.

I mean, if you're going through your first bear market, or it could be even through your first recession upcoming for a lot of these people's in their lives, how do you handle that? And I think it's important is you got to move quick. And I think we've been seeing that from the more established guys. They've been through this. They can know what to do. They move quick with their portfolio companies,

and especially to focus on runway and health and preserving the company through a more difficult environment. I guess that applies to the venture fund itself, too, because you want to have people that are not going to get spooked that, hey, we've seen this before. It's a pullback. We're not losing our underlying belief in the industry. What are you guys hearing from LPs in terms of how their things, thinking about the space. The paradox of this is that some of this sets up to be probably great vintage years, but that's when people are most fearful of investing. It's a muddy time because you've

had things in crypto that obviously have gotten people to rethink their deployment there. But it's also been a muddy time just more on the macro side. So even if you step out of crypto, we've seen LPs of really all types curtail or even pause their investments into new private equity and venture funds really focus on the existing. I mean, the macro and the recessionary concerns are there, the denominator effect where liquid investments are marked down more than the liquids. It can look like your liquor exposure is even higher than you thought. And just a certainty around future cash flows right now and the distribution activity with market type, you know, market shuddering and things. So generally there's been a lot of cautiousness no matter

what asset class in the alternative space. And I mean, think about it. Many LPs are position with a lot of exposure right now to risky assets. They've come out of a long bowl run where they've been able to take more risk over time. So I think people are going to be re-looking at where they are and overall kind of risk. I mean, when you look at specifically crypto, there's no doubt there's been a real 180-degree shift. I mean, with that said, there's still interest. So we're seeing investors, especially those that have done some work, understand the space. I think they understand the big picture here and may have that opportunity to buy into where we're going and what's going to happen in potential opportunity of investing in some of those

cutting-edge companies for the future. And I think many of them understand the current environment could be a really attractive entry point. Now the question is, can they be positioned just to pull the trigger just with their overall portfolio issues? The denominator effect, I guess, is real across all of venture. I'd be curious how that unfolds over the next few quarters in terms of venture managers taking markdowns. And when you think about it from a game theoretical perspective, it's probably better to have all of the venture managers take huge markdowns because you're going to have these really ugly denominator effects at a lot of big allocators, I would imagine. That's correct. I think there's been some geographical pockets that still

seem to be more active. I mean, we hear Asia and Middle East tends to still have a little more more interest. So I think there's still areas where they've had a different position right now in their portfolios that we're seeing more activity. Going back, we've talked a little bit about FTX and some of the broader scandals that have happened. But do you think this fundamentally changes the way anyone thinks about the industry? Or do you think eventually we'll just get to the point where, hey, Madoff was a fraud and Sam Bankman-Fraid was a fraud? And this had nothing to do with the underlying technology. I think the latter. As time goes on, there will be an appreciation that this was a bad actor, and there are bad actors in every industry. There's fraud in every industry, and

one fraud does not invalidate the entire thesis of blockchain technology. And as you get into the weeds with people and try to disentangle centralized versus defy and things like that, I think that there is an appreciation that arguably what blockchain can ultimately bring, hopefully solves a lot of the problems created by somebody like at SBF. So that would be our operating assumption and hope. I think it's largely borne out in conversations with folks we've had who are fairly knowledgeable on the space. Mike, you bring up a good point around just some of the tooling that we could have seen a lot of this if we were actually just spending the time as an industry. So on chain, you can see all of these tokenized projects that he was affiliated with where

they said they had X amount of tokens, and turns out it was a lot more, and there was a bunch moving through his personal wallets. And you can't do that in an equity context. You can't do that in a fixed income context. You can certainly do it in a public blockchain context, but there weren't any products that were built that folks were using for diligence. So it kind of burns as an industry that it was perfectly set up to catch these type of things, and the infrastructure just wasn't there. Maybe even with it being there, the bull market was such that, as you said, some of these things were ID'd on SBF in terms of the cold wallets aren't really there with FDX and things like that. In some respects, people just didn't want to hear it. They're like so

caught up in the bull market that you could have told them anything and it was still been we're all in. We've always as a firm really thought about is just having skepticism in our investing efforts. I think it's a core view and belief. And I think that's what happens at bull markets. We sometimes make people beyond skepticism where they're just such big figures in the industry that that we almost assume that they're doing the right thing. I think this industry has skeptical people, very technical people. So we all have that mindset, but we sometimes lose that mindset in certain periods. And we just get too busy in certain periods.

So I'm hopeful that we'll all share that. And I think it's investing 101. You've got to make sure what we're investing is for real. That makes a ton of sense. One of the things I would be curious to get your guys' perspective on is just the fun structures that you see in the crypto space. So this has been something that folks have wrestled with, I guess, since the dawn of this industry is open-ended funds versus closed-ended and these hybrid funds. How do you guys think about it?

This is something we've thought a lot about. We have a lot of familiar just with these structures, just investing across the different alternative asset classes. But our takeaways for venture, we are strong proponents of closed-end structures. We just don't believe that open-ended structures may be fit as well for this more liquid long-term. term asset class. There is a hybrid nature to this space, which is unique that comes from tokens. So, and we have seen a fair share open-ended structures, especially for managers that kind of launched early on. I mean, the concern with open-end structures that they just create, can create misalignment, you can create set of issues for a long-term asset class. I mean, give you some

examples of that is things that you'll deal with at open-ended structures. You could have redemption If you've got a structure here where everyone has liquidity and open liquidity that can occur. And the reality is does the manager with these type of portfolios, even if they're doing liquid tokens, really have the liquidity to pay these down, especially if you get material redemptions. And the reality is most of the tokens in the space are very liquid. And there's very few that are really a liquid in nature. So we've seen this. It's not a new thing for the industry.

In 2018, there are a number of open-ended funds. that got caught into this, and I think a few will probably repeat that again this year. And the other thing that you kind of have to watch out just is the payout of significant incentive fees. We have a strong year and in the cyclical nature of an industry, you get these strong performance fees, and these aren't unrealized gains. There's no exits or companies being sold. So it just does not align well for investors who then may next get whipsod the next year

and you've put all this money in someone's pocket. So I think we would view closed-in-structures price is the approach. Now, the question is this 10-year life with the additional extension years that you typically find, and you find these in general as venture firms, is this the right one? Is that too long for a space that should have and hopefully can have some early liquidity due to the token investments? And I think it's just too early to tell. You could see an iteration of vintage of funds or 2018 that did have some meaningful distribution

activity. So they did prove that you can get some money out early here. But it's probably too early to tell if this should be an 80-year life or six-year life, probably right now to stay with the longer. When you look at this industry within the blockchain space, there's a bunch of categories where just don't really have folks yet. So I'm thinking about things like private equity. You don't really have dedicated private equity blockchain folks yet. You don't have really secondary players at scale that are kicking the tires on either companies or funds. How do you see that evolving just in terms of all the categories that you see in other types of industries? Do you think they'll come to the blockchain space and on what timeline?

They will develop. I think there are areas that we've even thought about in this environment where you could have more distressed players. Because they're going to use some more distress opportunities. And there's a real specific knowledge you need to do in that. I mean, I don't think we want to see every manager out there doing this because they don't have the expertise to handle that. On the secondary side, there's a lot of opportunities probably. in the market today. The realities you just need a more developed and fully developed industry.

And if anything, the bare market buy takes you step back. We were already seeing the expansion of venture firms, some early stage, late stage firms and some of that lead stage activity may slow. And some of those late stage firms may end up being back in the early stage camp year going forward. So I think as the industry matures and the types of opportunities further develop, will continue to see this develop further. One of the things that could be a positive coming out of all of this is just a little bit more regulatory clarity. If you told me that the one good thing that happens after FTX is we just get clarity on the spot market for these assets in the United States, I might take that trade off as bad as that sounds. That's a type of thing that could really

accelerate the industry. How do you guys think about the regulatory landscape right now and how that will evolve? We're not the experts on this. I don't think any of our views are going to be particularly groundbreaking. I mean, you and Nick are certainly more informed on this stuff than us. But I guess our view from a distance is that I think you're right. If there was going to be any knee-jerk draconian legislation passed post-SPF, I think we probably would have already had it. And so now we're appear to be entering what looks like going to be a pretty dysfunctional legislative period here for two years, even by U.S. Congress standard. So I don't know if, We have much hope that will get any common sense crypto legislation passed through Congress.

And then from the regulatory perspective, I know one of the things you and Nick talk a lot about is the importance of getting regulatory clarity on who's regulating the spot market. Hopefully that is something that's on the docket and maybe even some framework around stable coins, which have obviously been hugely important to the growth of the industry. but I'm sure we'll also continue to see a lot of the same regulation by enforcement approach that we have seen the past few years, particularly by the SEC and other folks who are maybe not as friendly to crypto. So hopefully we get a few incremental wins, but probably, at least in our view, the water stayed pretty muddy. I was talking to someone at a large exchange the other day,

and they're saying there's probably like a field goal here. We're not talking about a Hail Mary pass to get some of this done. We could probably all agree that. that stable coins are important and they could proliferate the dollar in a pretty meaningful way and probably makes sense to have some common sense bipartisan legislation there. So maybe we could start with something like that. I'm cautiously optimistic. Knock on wood. Yeah, I think the chance for more narrow legislation might be the place to start on anything

really broad right now. That makes sense. Well, this has been fun, guys. Where can we send people that want to learn more about your guys' thoughts and to get in touch? Yeah, you can go to our website at evansdencap.com. Awesome. Well, guys, I appreciate you coming on the podcast today. Thanks for doing it.

We'll have to have you again this time next year and see how things have changed. Awesome. Thank you for having us, man. Thank you, Matt. Thanks for listening to another episode of On the Brink with Castle Island. To find out more about Castle Island, visit castle island. To listen to all of our podcast episodes, please go to On the Brink-Podcast.com or just click on the tab in our website.

Thanks for listening.