The Pomp Podcast - 468: Jason Yanowitz and Michael Ippolito on Crypto Media

Episode Date: January 12, 2021

Jason Yanowitz and Michael Ippolito are cofounders of Blockworks, a new media business focused on helping institutional investors understand Bitcoin and digital assets. In this conversation, we discuss the current state of media companies, the challenges institutions face when trying to learn about Bitcoin and crypto, and how Jason and Mike helped Pomp launch The Pomp Podcast.  ======================= OKCoin.com is the leading crypto exchange for both beginners and experienced users. You can fund your account in under 2 minutes, and get access to the most advanced trading engine, all while paying the lowest trading fees in the industry (0.1%). Visit www.okcoin.com/pomp and open your account today.  ======================= Own crypto in multiple exchanges and wallets? Sync them to CoinStats so you track and manage them from one place. Track 8000+ coins and 300+ exchanges all from the Coinstats platform. Try it for free or go to coinstats.app/pomp and get 40% off your premium subscription. ======================= Pomp writes a daily letter to over 100,000 investors about business, technology, and finance. He breaks down complex topics into easy to understand language, while sharing opinions on various aspects of each industry. You can subscribe at https://www.pompletter.com =======================

What's up, everyone? This is Anthony Pompliano. Most of you know me as Pomp. You're listening to The Pomp Podcast, simply the best podcast out there. Let's kick this thing off. Jason Yonowitz and Michael Ippolito are co-founders of BlockWorks, a new media business focused on helping institutional investors understand Bitcoin and digital assets. In this conversation, we discuss the current state of media companies, the challenges institutions face when trying to learn about Bitcoin and crypto, and how Jason and Mike helped me launch the Pomp Podcast. I really enjoyed talking to these guys, and I think you'll enjoy it as well.

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sinking system between multiple exchanges and wallets. Lastly, don't forget that I write a daily letter to over 110,000 investors. Yeah, 110,000 investors about business, technology, and finance. I break down complex topics into easy to understand language while sharing my personal opinion on various aspects of each industry. You can subscribe at pompletter.com. Again, pompletter.com. All right, let's get into this episode with Jason and Mike. I hope you guys enjoy it. Anthony Pompliano is a partner at Morgan Creek Digital. All opinions expressed by Pomp or his guests on this podcast are solely their opinions and do not reflect the opinions of Morgan Creek Digital or Morgan Creek Capital Management. You should not treat any opinion

expressed by Pomp as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his opinion. This podcast is for informational purposes only. All right, guys. Bang, bang. I've got the original OGs of this podcast back together. We'll get to that story in a second. But I've got Jason and Mike, co-founders of BlockWorks here. Thanks so much for doing this, guys. Yeah, thanks for having us, Bob. All right, let's jump right into your background. Where did you guys meet and how did you start BlockWorks? yeah um we met at uh we both went to emory uh emory university down in atlanta um so we both went to school down there um we came to new york live together uh mike and i were kind of our only two friends who didn't go and uh do the traditional path of working in banking like most of our other

friends did and i was a most of our friends studied business and mike was a i think a classics guy or psychics major i was a history major so we were kind of our uh two friends were fits and around mike was working consulting i worked um at this venture firm and then went into uh it's like software company but anyways blockworks was a kind of a funny founding story with blockworks i went to uh i went to this crypto event on a sunday i i've been pretty into bitcoin since i lived in budapest hungary actually weirdly enough and i went to this blockchain event with, you know, Amanda Gutterman, Consensus. Amanda was speaking, talking about like why Ethereum was going to change the world. And before the event, there was this like side hustle

consulting event about how to build a consulting firm. So I show up at this event. It's like 1pm on a Sunday. I learned how to create a side hustle and consulting. 2pm, I go hear Amanda Gutterman blow my mind about how crazy Ethereum is. I come back to the apartment. I sit Mike down for a real serious conversation. I say, look, buddy, I'm launching a consulting firm to help Fortune 500s understand Ethereum and blockchain. You want it? You're my friend who has consulting knowledge. And I'll let you say it. Yeah. And I was like, yeah, that sounds like a really stupid idea. No offense there, Jason. But I mean, honestly, like I had worked at a really small, like a boutique consulting firm. And the thing there is you're selling your brand and trust and

all that kind of stuff. And it's really hard to do if you don't have a name, especially if you're two 23-year-old guys, which is what we were at the time. But that was the beginning. We were the only two within our friend group that really got bitten by the Bitcoin bug. So we took the very traditional route of we were passing podcasts back and forth with one another. We were passing articles, getting plugged into Twitter, all the super classic things that everyone does when they first get into the space. And the light bulb didn't really go off until we actually started go to New York. And we went to a couple of them, but it all really connected at this one event that it was an expensive event. We each paid like 200 bucks to get in and we were just super pissed off

because the event sucked. You know, you're like watching these people on stage. And we were just kind of sitting there and we're like, oh my God. And everyone in this room paid the same amount of money to organize this event actually made. And what we were going to do was we were going to host events to help us build that brand image or that kind of name and trust in the space that would eventually lead to consulting. But that's how we got started as an events company. And so we have a bunch of hilarious stories, I think, that we're going to talk about today. One of them probably starts with the event that I spoke at. Was this the first one you guys ever threw or was this one of the early ones you threw? This was one of the early ones. So we

hosted one in February uh basically Mike and I would wake Mike and I had a full-time job so we'd wake up at 4 a.m every single day we spent no money on marketing for the event we still three years later spent zero dollars on marketing to this day and uh we'd wake up at 4 a.m we'd each message about 300 people on LinkedIn between 4 and 6 a.m out of the 10,000 people we messaged about 220 showed up everyone paid like 50 bucks a pop then we hadn't then we quit our jobs like that psychos we were after kind of one success event. After one event. We had this plan. We were like planning out, yeah, we're going to do this for like 12 months. Our salaries are going to support us, blah, blah, blah. One month later, we both quit our jobs. Mike pulls trigger, quits his

event, says you got to join me. I quit my job. And we host a May event, May 10th, about 10 days after we both quit our jobs, lost money that we're complete idiots. And then the third event we had was June 28th, 2018. I think it was called like capital raising in the age of blockchain or something and we had some guys from like grayscale and genesis speak and i think you were in maybe japan or you were overseas but we had we emailed you the funny story here is we emailed you a dozen times we were ruthless about cold emailing and cold calling back then i scraped your email somehow and emailed you like 10 11 12 times on the 12th email you responded you said look guys i don't know who you are i don't know who you are but if i come speak at your event will you stop emailing

me he said sure absolutely Mr. Pobliano and so you show up with Paulina we have this like like bad little uh you know venue in Chinatown you show up with Paulina you speak we auto subscribe you to our newsletter and uh the rest is history yeah so I don't even know if you remember this part you called us back into your office the next day after that to talk about stuff. And that was, that was like a pivotal moment for me and Jason, you know, getting that email from you. And it was something really innocuous. It was like, so, so what are you guys doing? Like as a business, like, what are you really doing here? And, you know, we got that email and we were like, oh man, he wants to invest. I looked at Mike, I knew it. He wants to invest.

Guys, I, uh, I liked the newsletter. What are you guys up to? I look at Mike, I go, he wants to buy us no doubt no doubt no i i the uh the thing i remember is when uh i went to the event it was in a little you know sketchy part of town uh of chinatown there and when i was walking into the event you had to like go through this like real like weird looking place and like go upstairs or whatever and there was like you know a second there i was like i might be walking into like a complete scam these guys might try to kill me uh and then i got just like oh okay this is like a nice thing there's like food here they must know what they're doing uh and then a bunch of people came like i don't

know it's like 200 300 people whatever it was so i was like all right like maybe they actually do know what they're doing yeah look we've i mean since the beginning we've always tried to help kind of the investor crowd to understand crypto but at the beginning we had to do some some kind of ridiculous things to uh to get folks there like at the beginning mike would just ruthlessly call cold call family office investors to try to get them to show up and i would uh buy ubers for these people to make sure that they actually showed up and we'd have ubers pick them up at their door so pulled a whole bunch of tricks to get people to get there but at the end of the day i mean people showed up and um yeah and then we launched the pod and then you kind of called us

in and launched the podcast with you and that kind of kicked off the whole business so so the part uh the story you guys have told me since then is uh i don't remember how a podcast came i don't think i even knew really what a podcast was and at some point it was like oh we should like do a podcast and i was like i don't got time for that and you guys were like well what like basically if uh all you do is you just walk in the room record the conversation and leave and everything else is done like would you do it and i was like sure and i thought that you guys like knew what you're doing all this stuff because yeah we could do that and then later on i found out that you guys like went home and googled like how do you create a podcast like what is a microphone or whatever i mean i've

literally never opened garage band in my life and i taught myself on youtube how to learn garage band overnight we're like yeah pomp we got this we have i was like we have a graphic designer who can do this we pulled up like 99 designs and uh and uh mike reached out to a college buddy who did music and we made uh made the jingle so that's that's when people hear the pomp podcast or what used to be off the chain. That's, that's the kind of origin story. So what's the biggest takeaway from how you guys got started in terms of like, there's a ton of ridiculous things, but you survived and eventually thrived. Like what was your biggest takeaways started? I mean, there's a, there's a lot of takeaways, but honestly, I think one of the big takeaways, especially running

a bootstrap business is just to do stuff. And when you do stuff, you kind of create your own luck. Honestly, like that was a good, a great example that is just us kind of linking up with you. You know, we hosted a couple of events before that. They were like, good. We made a little bit of money, lost a little bit of money, but nothing really happened until, you know, meeting you opened up this whole new line of business for us in the form of podcasts. And that lesson has replicated itself a bunch of ways.

But basically, if you just kind of put yourself out there and do a whole bunch of different stuff, not everything is going to work, but there are going to be some things that work super, super well. So you kind of end up creating your own luck just by trying a whole bunch of different things and doing stuff. Yeah, mine is. The thing I would say is just ruthlessly cold call and cold email people. And just don't take no for an answer at the beginning when you're launching a business. I mean, if we stopped emailing you after those first 11 emails, right? Who knows what would have happened? And, and I mean, we've, we saw that so many times, like, I don't know. I remember we sold one time we sold a family office dinner.

We said 15 family offices were going to show up. It was the night before we had two attending out of 15 and Mike scraped every single family office investor in New York city and cold called every single one. And we got 18 to show up. So I don't know. It's just be ruthless with your outreach and good thing. Everyone wanted family offices back then. I had no idea what a family office was. Everyone's like, we want these family offices. We want these family offices. Honestly, the only reason we

successfully got them is if we had known how hard it was to get in touch, we just never would have even tried. Um, but yeah, those are, those are the early days. Hey, it worked. Uh, so you guys built out a pretty large business. Um, there's podcasts, there's ad sales, uh, you've got a newsletter. Um, and then you decided like, Hey, we want to kind of take a step back and, uh, really be intentional about what we do moving forward. The name went from Blockworks Group to just Blockworks, a big rebrand there. And you're now relaunching as this financial media company. I think what you're doing is really interesting. So talk through a little bit just about the kind of focus on financial media and specifically helping institutional investors

learn about digital assets. Yeah, maybe I'll take kind of the two-year evolution of what got us to here. And then Mike, you can kind of talk to the editorial side of things, but I mean, just to fill the listeners in after we launched that podcast with you, since then we've taken, we have 19 more podcasts in our network. We work with folks like we've built shows with like Charlie Schramm and we worked with Meltem Demirz and Jill Carlson, and we studied billionaires and Ted Seides of Capital Allocators and Peter McCormick. So we've got the largest podcast network in the space. One of the largest podcast networks in financial media in general. Our events business grew from these 6 to 10 p.m. events to large-scale conferences that we hosted

in places like New York and Chicago and London. We've built a very successful events and podcasting business over the last few years that does one thing really well, which is help investors understand digital assets. What you're talking about now is on January 12th, I'm not sure when this podcast is coming out, maybe January 12th or 13th, we've just launched our editorial business and maybe Mike. Mike is kind of our operating editor-in-chief right now, so he can talk to that side. Yeah. So basically, we figured this out pretty quickly, even when we were just hosting the tinier events. But ever since we've moved into the space, there has not been a good source of knowledge for institutions in crypto. And it's been really interesting to watch, even over the

course of the last five or six months, when you see the types of people that are getting involved in this space, the kind of Paul Tudor Joneses and the Stanley Druckenmillers of the world, right that's one group of institutions that's kind of the macro hedge funds but as this space continues to grow and onboard new cohorts of people they're going to be some kind of like the corporate people or the enterprise blockchain people who are going to be want to be interested in how is this going to help my business then there's going to be a whole other group of people like kind of the tech people the developer focus crowd but then there's this whole big crowd of people which is the finance crowd and that gets grouped in our space we just call them the

institutions, but it's really a whole bunch of different groups of people, right? It's kind of the macro finance guys, like the hedge fund traders, but there are also RIAs and kind of wealth management, there are investment banks, commercial banks, insurance companies, all these people are paying attention to crypto now, and they want to learn more. And, you know, the space up until this point has been entirely retail, right? And so many of the media companies that exist, built their audience, built their company serving the audience that existed, which was at that time a retail audience. So there really hasn't been much opportunity until now to actually build a media company that is exclusively focused on serving that new cohort of people that are

going to come in. And that's what we're really focused on doing on the editorial side of things. So yeah, that's a little bit about our site. And when you think about the existing media and kind of content. Bitcoin and crypto are very unique, I think, in that there's people who are creating content on Twitter, Instagram with memes, Reddit, private WhatsApp groups, kind of like there's all this like user generated content in the community. And then you've got crypto native organizations like the CoinDesks, the Blocks, you know, and many others. And then you've got like the traditional folks who are the CNBCs, the Bloombergs, the Yahoo Finances that are trying to cover this from more of a traditional viewpoint. And then you've got this like explosion

of podcasts and YouTube channels. And so there's all this content. But what it sounds like you guys are really saying is like all that content is focused on educating the retail sector. Really what you guys are doing is more almost B2B type media where you're going to go and try to create content that is valuable to these institutional investors and help them get up to speed? Is that a fair way to kind of look at the competitive landscape, if you will, and how do you guys think you're going to fit into this? Totally. Yeah. I mean, even like anecdotally, if you listen to what Michael Saylor was saying, there's a bunch of pod, he's been on the kind of podcast circuit recently, and he describes what it was like educating his board about making that

investment decision. And literally, if you listen to them, he was like, I was sending them YouTube videos. That is, that is incredible. First of all, the bet that he made is incredible, but the fact that, you know, a board of a public company had to learn about this space and probably the biggest investment that company has ever made through YouTube videos is absolutely nuts. And it shows you how early that like, that's insane. And to even use like a more micro example, like let's say you're an RIA or something like that. Right. And you're thinking about, you care about one thing. How am I going to build my business, right? So you've got all these clients now that are asking you, Bitcoin just hit 40,000. What is this? Should I be putting this in my portfolio? Why

isn't it already in my portfolio? Why can't you talk to me about this? So what they're thinking is, I got to understand what this stuff is. And I got to understand how I'm going to get paid off it. How is this going to fit into my existing infrastructure? So you can kind of imagine the frustration of someone like that who genuinely wants to learn and get onboarded. And A, they get bombarded in this twitter community is like have fun staying poor but all right which is you know it is what it is but you can imagine the frustration they get that on twitter and then they go to a lot of these these sites and it's like really deep dives into defy and zk snarks and all that stuff and they just kind of throw their hands up and say this isn't for me you know

i don't care about this doesn't connect with my life so really when we say we're building an institutionally focused brand you gotta really put yourself in the shoes of these people and try to understand why are they caring about the space? And that's the guiding light for content. I mean, Pomp, you speak to these folks all day long. I just pulled up another crypto media company, one of the ones that you just mentioned. Let me read these three articles. Trade Santa is giving away Christmas gifts. Reef Finance debuts as the first Polkadot project on Binance launch pool. Cyber Vein announces proof of contribution consensus mechanism. I'm a 50-year-old gray-haired hedge fund manager looking to allocate 2% to Bitcoin. I'm throwing my hands up and I'm

closing that page and telling my investment committee that we have no interest in Bitcoin, right? But there's so many different aspects of this space that just don't get covered, right? From the asset managers to how Bitcoin is intertwined with things like central banking, Fed activity, it's just not getting covered from an institutional light. And that's the next extension of our business is this editorial arm. Got it. And so when you guys think about the body of work that goes into this, is this going to be audio, written, video, a combination? Like how do you think about the actual editorial output of what you're going to have? I think it's a combination of all those things. I think when it comes to content, it has to conform to a specific

medium. So when it comes to things like podcasts, podcasts are really good for what we're doing now. Like long form conversations, expositions, kind of deep dives on specific things. That's great that that works really well on podcasts um written serves a different need written is you're kind of covering a certain space right and people kind of go there for more information right so you got to find a way to just cover a certain specific space um and deliver just short form kind of better better content um and then i think video is another really interesting medium as well but i think overall with the mix we're kind of i mean jason can talk a little bit more about the reasons why we decided to play in certain mediums. But the overall guiding light of the content,

the audience that you're serving is the same, but it has to be different depending on the medium. So on the editorial side of things, Pom, so we've just doubled the size of the company in the last 30 days. And we're hiring for a lot more roles for any listeners out there who are interested in joining a crypto media company. But Mike is kind of our operating editor-in-chief. He's just built a team. We've hired kind of a senior person from Real Vision. We've hired reporters from places like American Banker, Bloomberg, an ex-CoinDesk employee. So yeah, we're quickly building the editorial team. But again, everything is focused on helping that more traditional investor understand the space. Got it. And so when you think through the types of stories,

give us an example of what a hedge fund manager or somebody at an institution would come to you to read about? So they're not reading about cyber chain or whatever other crazy thing, sushi swap, and kind of all the really nuanced, highly speculative, but yet highly experimental and potentially highly innovative things, but just two in the weeds. What is the type of content that they'll be reading? Yeah. So we kind of segment our content into four different buckets. One is asset management. So literally just covering the space of asset management within crypto. It's such an interesting space, right? The people that are managing money, it's still, like we talked about before, so small, right? But the returns that these people are generating now

are crazy. And they've got some really interesting strategies. And they're just really interesting people. So one is actually just covering the space of asset management within crypto. The other is finance and financial services, right? So that's really focusing on some of those institutions we were talking about before, maybe if they're not buying large chunks of Bitcoin, but maybe it's like an investment bank that's buying a crypto company to start a trading desk. Or maybe it's a bank or large asset manager that's kind of moving into custody, basically covering existing financial services and how they're starting to play in this space. Three is macro.

So Jason kind of mentioned this before, but there are some topics like central banking and CBDCs are a really good one, that that's a really great overlay in between, obviously, Digital currencies is an idea that was born in crypto, but that cuts right to the heart of kind of traditional finance, right? Because it's central banking. So there are areas around kind of interest rates and currencies and central banking and monetary policy that really intersect with crypto. And then finally, the last one is a strong markets focus, right? So really focusing on things like market structure, what traders are doing, all that kind of good stuff. Got it. And how did you guys think about like from a business perspective, there's so many

media models today right there's uh subscription there's advertising um there's literally like lead generation there is um affiliates e-commerce yeah yeah but like how did you guys think of or how are you thinking about monetizing uh the business moving forward yeah um so the first thing that we did is we looked at every single media company right and this is everything from hodinkee with watches to the wall street journal to bloomberg which is more of a data company to things like Morning Brew. We looked at every single media company. Our business has always been based around sponsorships and advertisements. So we have a really simple business. We help investors understand crypto by giving them information and insights. We build an audience

that really trusts us. And we allow brands to tap into that audience. Some of our big clients are like Fidelity Digital Assets, Coinbase, BlockFi, CME Group. They come to us because they want to meet investors interested in crypto. And we'll allow them to tap into that audience through advertisements and sponsorships. We looked at subscription models. We looked at affiliate media models. Basically, our conclusion was, if you look at the evolution of digital media over the last, I don't know, 10, 20 years, really decade, I guess I'd call it, B2C media raised a bunch of money and basically got their lunch eaten by social media. Big companies like Vox and BuzzFeed made huge bets that they would leverage social media to build their platforms.

What they didn't understand though, is that the value accrued to social media and that it didn't actually accrue to these digital media companies. So what you've seen is basically the evolution of two different types of media companies, B2B media companies, right? One of our advisors is a man by the name of Sean Griffey. He runs Industry Dive, really niche media company from an outsider point of view inside the company. They do 40, 50, 60 million in revenue and they're profitable, right? So that's kind of B2B media companies that serve their audience. That's what we are on the kind of more like webinar, newsletter, or editorial front is a B2B media company that monetizes through sponsorships and ads. And then on the podcast front, you look at the podcast space,

Wondery just got bought for what? 300 million by Amazon. Gimlet got bought for 200 million by Spotify, the podcast space is booming right now. And so what we're trying to do is basically leverage talent to sit at the, talent is sitting at the center of this B2B media company, which we think is a really unique model. And we think that every media company in the world needs to have a talent strategy, no different than how CNBC has Andrew Ross Sorkin and how Vox had Kara Swisher, right? And the Pop Podcast has Pop, duh. And the Pop Podcast has Pop. No. So, uh, how do you guys feel or see the, uh, institutional kind of openness, uh, really changing the sentiment changing? Obviously we're talking about kind of your strategy as to how

you're going to move forward. Uh, I tend to agree that this is really smart for you to do and will be highly successful. Um, but the sentiment in 2018 is a little bit different than the sentiment in 2019 than 20. And like now in 2021, it feels like everyone is, you know, using hashtag Bitcoin on Twitter. They want to tell you about how they bought their first Bitcoin in 2018. And, you know, they're ready to rock and roll. So like, how have you guys seen that sentiment shift over time? Yeah, I mean, it's funny. There's people think about FOMO. A lot of people use that as like a dirty word, right? But it's kind of not right. And I know you've talked about this as well, that a lot of these guys, they had all the time and opportunity in the world to buy Bitcoin when

it was $3,000, $5,000, whatever it was, and they didn't. And there's a reflexive property in Bitcoin, where as the price goes up, the network actually ends up getting more secure. You've got more people participating. It's actually more valuable. And I think you're starting to see that take effect in a big way. And one of the other problems with Bitcoin overall is that it's always been kind of too small. Like scale has always been a huge problem for these guys where it's like, okay, you know, I'm a $10 billion asset manager. I want to put a hundred million dollars to work. The space was just straight up way too small. So I think right now, I mean, as we're talking right before this Bitcoin hit 40 K. So I think there definitely is some danger

of being kind of euphoric settlement. That's not making a comment on the price or where I think it might go. But I definitely think emotions are a little bit high in the space overall. So that probably has to end at some point. But I really do think some of the best info that you can get on this, the sentiment gauge, is actually not listening to people in crypto, but listening to the more macro people. And if you tune into some of the macro podcasts, so that's the Grant Williams show, that's Macro Voices, that's Masters in Business. Six months ago, Bitcoin was a dirty word. And every one of these podcasts, every one of these guys talking about it, and they're talking about it in sophisticated ways. They're using good arguments and they're

open-minded. And to me, that's a really powerful way to measure the sentiment of the overall space. And is it fair to say that we're now at a point where every single institutional investor is like, I got to have a Bitcoin strategy and they're actually going and allocating? yeah i mean i i can't speak to every single one but i think so it's a powerful tool right in the same way in the same social pressure that applied when bitcoin was at 3 000 is like what do you do in looking at this the social pressure is working the exact opposite way where hey it's 40 000 i need to be looking at this today but why weren't we already paying attention to this basically um and people also go ahead mike yeah yeah i was just gonna say people don't want to

be left out, right? So you got to keep up with performance. If you think that everyone is piling into Bitcoin, and that's going to drive huge returns, you can't be the odd duck left out. Pomp, we spoke with a portfolio manager at an endowment a few weeks ago. And basically, what he described is every single fund manager is looking at this right now. Doesn't mean they're buying. Every fund manager at least has to look at this. Most of them want to allocate a small amount, right? I don't know, a few basis points, maybe 1%. If they want to invest, what's happening is they want to invest. They have an investment mandate that says that they can't invest right now. So what they're doing is putting it on their personal, inside their personal portfolios.

So now you've got these hedge fund managers, endowment managers, RIAs, financial advisors, who manage most of the money in the world. They have a mandate that says that they can't invest through their fund. They still love Bitcoin. They invest personally. Now there's an incentive for them, right? The beauty of Bitcoin is as soon as you buy it, there's an incentive to make this thing go higher, just like any other asset. And so now you've got the portfolio managers of the largest asset managers in the world. They might not own it on their funds portfolio, but they own it inside their personal portfolio. Yeah. Well, and I think we're just at a point now where like everyone realizes is frankly what mostly Bitcoiners have been saying for a while.

This is a necessity. This isn't a privilege. This is a necessity. You have to have this in your portfolio. It is the single greatest protector of purchasing power. And it's the only asset in the world that can protect you against the chaos in the traditional world, yet still provides you asymmetric opportunities, similar to a venture style investments, literally like the apex predator of financial markets. And I think that that sounded nuts at $3,000. That sounded interesting at $20,000. Sounds pretty damn smart at $40,000, right? But it's the same comment. It's just literally the price almost opens people's eyes and changes their opinion. I'll tell you, though, I think price is amazing. So there's Bitcoin, the asset,

and Bitcoin, the network, right? And Bitcoin, the network, as a payment settlement network, is arguably more interesting than the asset. Bitcoin, the asset, will get bigger than gold, At some point, there'll be the flippening and it passes gold. And that's really interesting. Bitcoin, the settlement layer and the network will become magnitudes larger than the asset. And that's interesting because that really globalizes the world and actually really helps. The asset helps people protect against inflation, things like that. The settlement network and what guys like Jack Mallers, I think you might have invested

strike, what they're working on is just unbelievable. And that's arguably, for any investors who are looking at this, don't just look at Bitcoin, the asset, but look at Bitcoin in its whole as a settlement layer. Yeah. Absolutely. Go ahead, Mike. No, I was going to, the interesting thing about Bitcoin too, and honestly, if you look at something like stable coins, it's kind of just a good product. The product works. It's kind of a similar thing when people point at Elon Musk, who just became the richest guy in the world, surpassed Jeff Bezos. Meme lord. Meme lord Musk. Meme lord Musk, as we colloquial call him. But when people point at Tesla, it's kind of like at the end of the day,

the guy made an amazing product. And when you look at something like SpaceX, the guy pulled it off, right? And it's the same thing with Bitcoin. You can say all you want, this price seems funny and yada yada. But at the end of the day, the technology works better than the existing financial system. You can literally send money anywhere in the world and it'll settle instantaneously with no middleman. I actually recently had an experience trying to help someone open a Coinbase and then a brokerage account. The ease of opening a Coinbase is like, click, click, click, you're done. And a brokerage account takes 30 minutes to do and multiple approvals. It's a nightmare working with the, with the existing financial system. So

look, you can look at price, but at the end of the day, it is just kind of a better product than what exists out there. Yeah. I, uh, obviously I agree. Um, what are the things that you guys are looking forward to in 2021, uh, in terms of, obviously once you get this launched, uh, either milestones for the industry or milestones for, Blockworks? Yeah, I think, I mean, for Blockworks, what we're really just dead set focused on, we serve one audience, right? Which is the institutional audience. So I think we've done a great job building a brand so far in terms of the events and kind of the podcasts, and that's what we're known for. But really what we're doing this year, we're building that editorial kind of

brand, right? And onboarding a whole, like the mission statement of what we're doing is we're trying to talk to directly to this whole new group of people that are coming in. In terms of things that I think I'm looking forward to in the space over the coming year, just keeping on what's happening right now. As more and more people get into the space, not only is it exciting because obviously the price of Bitcoin and stuff like that, but you just get more diversity of thought and opinion, and you build out the infrastructure, and everything just feels more real. you know um so i think it just just watching as more and more people come into the space build good products build successful products figure out business models just advance the

overall space in general all that stuff is really really exciting i think there's about to be a huge hiring spree i mean the best part of blockworks is hiring people who don't own bitcoin and having them buy their first bitcoin right and is that a requirement uh now it certainly is now and uh But no, I think, Pomp, I think the four biggest things, I'm looking forward to four things, outside of BlockWorks, right? BlockWorks, looking forward to growing revenue, and the team's going to double in size again, and all of our metrics that we look at are going to grow. But I think there are four themes to look at in 2021. The four main Bitcoin themes are going to be, one, corporates are going to invest 1% of their cash into Bitcoin. Every corporate is going to be

looking at this. And just like a lot of funds, some of them might not do it, but everyone's at least looking to invest 1% of their cash into Bitcoin. The second thing is funds are going to invest 1% to 5% of their portfolios into Bitcoin. The third thing is financial advisors and RIAs are going to start recommending Bitcoin, I think. And the fourth thing is, I think the M&A space and acquisitions are going to really heat up now that traditional companies want Bitcoin customers. So you can sure as hell believe, I know you're a big investor in BlockFi. BlockFi is on an absolute tear right now. How many customers do they have?

I'm assuming BlockFi will end up going public at some point, but you can sure as hell guarantee JP Morgan wants access to those BlockFi customers. So yeah, corporates investing, funds investing, financial advisors, recommending Bitcoin to clients, and the M&A and acquisition space heating up. Those are the four big themes that I think will take place this year. And yeah, we'll be pretty damn excited to see it play out. Yeah, absolutely. I would even call a shot a little bit and say, because the other really interesting thing that just recently happened is that OCC announcement, which basically seriously

disrupted SWIFT, right? And there's a lot of incentive there for investment banks to get involved in crypto now. The other thing about banks is that they're just in the business of gathering assets, right? That's what they really do. They're in the asset gathering business and lending out at a high level. Crypto used to be not very exciting when it was $2 billion or $3 billion market cap asset. Now, it's a trillion-dollar asset. Who knows when it's going to stop? At some point, those banks are going to say, this is a whole new pool of assets that I want to have access to. Honestly, the best way that they're going to move in there is to buy existing companies that have successfully gathered those assets so far. The M&A space is, I agree with

Jason. It's a really interesting space to watch. Yeah. The thing, too, that seems to be really valuable is as these companies grow, they continue to hire more and more people from the legacy financial world or legacy media or legacy tech companies and bring them into the crypto space. It feels like that's just only going to accelerate and become faster, bigger and more important over time. Yeah. And with every single person that comes in, it's another person who owns Bitcoin. And once you own Bitcoin, you're incentivized to tell more people about it. It's an amazing system. I've got this goal going on right now. I just post on Twitter, get 100 friends to buy Bitcoin. Six days into the year, I'm at 12. And there are thousands of people like me who

are telling their friends about Bitcoin. And so every single 30-year-old JP Morgan employee who comes over, starts working at Coinbase, they're telling 20 of their old colleagues at JP Morgan about bitcoin so yeah there's a really great article by i think andreessen horowitz put this out um like a couple years ago now but basically it's the idea that kind of everything follows price and on these big uptrends in this is this has already started right because what ends up happening is the price ends up going up the media ends up covering it a bunch of eyeballs get on this space, and then a bunch of people end up moving into the space. So that's a really exciting thing that you don't necessarily see reflected, but just purely the amount of human capital that's

going to get dragged into this space after this recent run-up, that's something that's already in motion. I guarantee you that that's already starting. So one way to measure that is companies hiring right now, but that's kind of more staffing up in anticipation for a bull run. But over the next like two or three years the amount of human capitals that's going to flow into this space especially from the like legacy financial system is really really interesting yeah and it also just feels like as more people come into the space uh they're more experienced they've got a different skill set uh in some cases they're more intelligent right like you just kind of like almost professionalize some of what's going on uh but at the same time what's really important

is keeping the same ethos and the same edginess and the same kind of, you know, absolute fanatical obsession that has made Bitcoin what it is. So it's almost like you're going to end up having both sides of the coin where you've got kind of a professionalization and adoption by institutions at the same time, you know, jump on Twitter real quick and you'll get told, you know, have fun staying poor by somebody who's literally living anywhere in the world and wants to take on the government. Like, it's very rare that an asset can kind of walk the line between those two camps. But that feels like what Bitcoin is doing and will continue to do in the future. It's an entire industry that understands that the memes are the message, right?

How's that hire the chief meme officer coming along? I have somebody. I know you. I bet you do. I have many people. Many people are sitting there. They keep DMing me all this nonsense. but i got one guy who he's working on some other things for me too but uh he is uh fire with the memes amazing i may or may not have a 40k meme sitting in my uh in in my uh arsenal right now but i have not used it yet so i'll be recording this and dumped from 40 down to 37.5 you know just make sure everyone remembers that uh this is a wild beast that can't be uh can't be tamed

Nice little sell order up at 40. All right. Before I let you guys go, I have three questions. The first thing is, what is the craziest thing that either of you has seen in the crypto industry? Oh, man. Where do you even start with that? Craziest thing that we've ever seen in the crypto industry. on a micro level it's i mean this sounds kind of i don't want to promote scam stuff but there's

some pretty intelligent scammers out there like every day i get hit up in my direct messages on twitter uh that's some like you know my my son you know my son just died like can you send me some bitcoin i don't want to promote those though so i won't i won't use that i'll think of a better one um but those are i mean i i don't know if that exists in other industries um it's the modern day nigerian nigerian prince everyone wants to get their hands on some bitcoin you know um the craziest thing i've seen honestly is this isn't gonna feel that crazy now that bitcoin's ripping so much and it's becoming the norm but like just every time i hear about you know yale's investment manager. Bitcoin to me is still, I heard about this thing in 2015 when I was living

in freaking Budapest, Hungary, right? And so every time I hear about Yale's portfolio manager buying Bitcoin, I don't know if that'll ever cease to amaze me. I'll be honest with you. I've actually got one here for you. I actually think the craziest thing that happened in crypto happened in 2018 or 2019. And it was when those pensions invested in Morgan Creek and took that risk. That's the craziest thing. Because if you work at a pension, you're tasked with handling money for everyday people. And they're so conservative. And the incentives are not there to take the risk. So the fact that they went out on such a limb and invested, you guys are amazing and more guys apps but the fact that they went and did that is the most amazing thing that i've

seen in crypto it's the least risky thing they could do probably didn't feel like that at the time well said that that was my point was like hey y'all want to keep playing this uh this crazy game go ahead but uh there's another path so uh i guess i can say it uh their cost basis in the first fund is $5,500. Not too shabby. They're doing just fine. All right. The two questions I ask everybody, and then you guys get to ask me a question. What is the most important book you've each read? I think for me, actually, Jason introduced me. So you're about to get a twofer here, Jason. But I think The Ascent of Money was actually one of the most interesting ones. And I don't come from a background in finance at all. Like Jason, I was a classics

major in school, classic psychology, and learning about what money is and how it has evolved and how things like credit have evolved were really, really instructive and interesting to me. And I think getting that full history was really what gave me context, honestly, for my interest in crypto and Bitcoin. So I'd say The Ascent of Money is one of my favorites. For me, I got two answers. One is the one to make me sound sophisticated. It's the book I'm reading right now. Cause I'm a history nerd. It's a team of rivals about Lincoln, but that's the one to make me sound more sophisticated than I am. Honestly. I mean, it's, it's almost like a little embarrassing to say, but the one, the books that change, it's a series of books that

changed my life when I was 18. Um, it's four. Exactly. And that's a seven part series. I did love that one, but no, it's, it's, it, it's a book called think and grow rich. There's a book called rich dad, poor dad. It's a book called richest man in Babylon. And there's a book called, it's a Dale Carnegie book, How to Win Friends and Influence People. And I probably read all four of those books at least 10 times in college. And I mean, I was still a shithead in college, but I felt like I had a different mindset than people because of these four books. And that totally changed. Like reading Rich Dad, Poor Dad, I was like, I'm going to be an entrepreneur. I'm never working for the man. I'm not doing the nine to five game. And so yeah,

is the think and grow rich how to win friends and influence people rich dad poor dad and richest man in babylon as cheesy as those might sound those are the three books i read when i was 20 years old to change my life so that's good we could have been in a book club no i wasn't talking about it uh aliens how much do both of you believe nope 100 not not only do i believe in aliens, I think there's a really good chance that they are already here. I don't know if you guys saw this article that came out about this Israeli guy who was in the military for like 30 years. And he just came out and he was like, look, man, I've done my whole thing. I've built this respected career. I've worked in the government. I've worked in academics. I never said this before

because I was afraid of being called a crackpot, but now I'm old. Aliens exist. There's a galactic federation and there's it's straight up humanity is not and you know honestly i think everyone's allowed one conspiracy thing that they're allowed to believe in and this is mine and i i fully it's not a conspiracy it's science it's yeah i agree i'm right i'm right there with you jason nope what why not i was in the room the first time you asked this question you think i'm crazy enough to say no i just wanted to hear your response of course aliens exist i went i took a 10-day trip to cairo egypt two years ago by myself 10-day trip i saw those pyramids of egypt once you see those things aliens they're a lock they're they exist you think the aliens built the pyramids

absolutely i don't know about that absolutely i didn't sign up for that you haven't seen those things i didn't sign up to that those things are like geometrically down to the inch miles apart, and they're to the inch at a 90 degree angle. I mean, I'm Jewish. I know the Jews are good at building those things when they're slaves, but you don't know.

You don't know. If aliens were real, where do you think the most likely place that they are? Area 51? I got a wild theory. All right, let's hear your theory before we answer. In the ocean. Yeah, man. The depths of the ocean.

Who's going down there? Nobody's going down there. Yeah, except for those fish that have the 12-foot rods hanging out with the little light bulb. But they can't talk. Nobody's going down there. So how do we know that they're just not chilling in the ocean? That's fact. Can't verify.

Can't verify. Just saying. Paul, would you ask me? Oh, this is not my question. I'm not using my question on this one. All right. What were you going to ask? I was going to say, would you rather go to the bottom of the ocean or to the moon?

No, to the moon. Well, we're going to the moon altogether anyways, but... I was a lamb. I had to lay that out. All right. What questions you guys got for me? I got a question. If Bitcoin didn't exist in this whole space, you've always said, since the day I met you,

you're a tech investor and that Bitcoin is just some of the most interesting technology in the world. You're not a Bitcoin investor. You're a tech investor. If Bitcoin didn't exist, but you had to dedicate yourself to one space, whether it be biotech, tech psychedelics and uh you know mushrooms and things like that uh self-driving cars what what one space would you dedicate the next decade of your life to uh just really sage tech investing like yeah if you have to get more specific than that though yeah so i got i think that people

think of that as oh that's just like investing on cross i think of it as uh it's one very very specific skill, which is you're actually investing in people and it doesn't matter what they're worried about. It's more psychology, I think, than anything else. And so the way that I think about it is like finding the world's most interesting people who have a higher probability of success going after like a massive market. Right. And so like those markets, like by definition, there can't just be 20 people who all win one market. So it's actually like you have to like cut it a different way and it's just at the earliest stages there's a lot of people who are really good series b series c investors a lot of people who are good series a investors but like

i kind of think that it's a little bit uh different and even cheating to some degree to wait till it's a series b company and be like oh this one i think is gonna win like yeah it's working already and sure they can mess it up but like you have data you have all this stuff but it takes an absolute, you know, just a crazy person to sit down with somebody and they say, I'm going to go build a billion dollar business. And for you to say like, cool, I believe you here's, you know, a hundred thousand dollars, just $250,000. So let's go do it. And it also takes a crazy person to be the person who sits down saying like, you know, I'm going to go build a billion dollar company from scratch. And so like, I just genuinely enjoy meeting those people and having

those conversations. Um, and I've now invested in the seed round of four, I think four companies that are a billion dollars or more. Uh, and so like when you start to get a couple of those data points, you start to realize like the people are the exact same from a, like a structure standpoint, uh, and the way that they think they're going after different industries, they're all facing different challenges. But I think that like almost like the science of identifying those people and studying how to do that uh is fascinating to me and so like luckily i get to do bitcoin and that but if bitcoin didn't exist like that would be the obsession that i have can i get a follow-up question there which would be sure you said they all kind of look alike right four

companies what's what's one trait i'm sure there are a few different traits but what's one trait of the some of the founders of these companies um i think that there is uh a critical thinking and problem solving tree that usually goes undiscussed like everyone was talking about like oh they're smart or oh they're good at hiring or they're good storytellers like yeah duh you have to be able to do all that stuff but at the end of the day it's just this like a deep seated, um, kind of like fire of when I see a problem, I want to solve it. When I see another problem, I want to solve it. And I'm constantly on offense. When I see problems rather than defense, a lot of people, when a problem pops up, they go, Ooh, I don't want to

like, like they, they go away. There's a hard conversation. They don't want to have it. If there's an issue, they would hope that somebody else steps in and solves it before they have to the best founders that I know who've built the most successful companies. If something happens, they immediately attack and they just what's the problem what's the information that we have how do we make a good decision here who's responsible for owning this in the future like go and they do that over and over and over again all day long and when you're building a company from scratch into a multi-billion dollar business like it's just a series of solving problems and making sound decisions so you have to enjoy the problem solving just as much as you do making

sound decisions um and i think we always focus on like oh this person you know smart successful yada yada whatever but like the problem solving piece is like that's where you roll up your sleeves and really do the work and so the best founders like they really enjoy doing that stuff even though it might not be fun at all times because the problems suck or they're unexpected or it's on vacation or holiday or whatever um but just they just have this like obsession with getting the problem solved and keep marching forward that's good yeah all right palm i've got I've got one question for you. What is the best investment you've ever made? And I don't mean which one did you make the most money on? Uh, that's not what I'm asking. And wide ranging,

it could be a founder that you invested in. I know the answer. All right. Planet by far. Oh, that is great. I think it's just, um, when you think about, uh, investing And Flynn and I talked about this like very early on in our relationship. I said, look, there's like basically two paths that lead people to having a successful marriage and kind of partnership for like many years. One is you either meet somebody young and you essentially reinvent yourself and they reinvent themselves over and over and over again for literally, you know, let's say you meet if you're in a high school, for example, you meet when you're 16, 17, 18 years old. and then basically you've got to transition from like okay we were in high school it's now we're like in college together okay we survived that and throughout then we gotta go from college to like early professional life then we gotta get to like mid to late 20s then you gotta get to like okay now i want to have a family right then you get to like oh now we're like really doing well professionally then it's like okay like now our kids have gone off to college like there's so

many different almost acts to that maturation process and so the odds that you're going to meet somebody like really early in life and successfully make a lot of those transitions especially the earliest ones, it's just really small. Like the sample size you're pulling from is small. It's like, who did I go to high school with? Like, yeah, sure. Maybe. But like, that's a really, really difficult thing. Or the second thing is people basically go on their own paths. And then eventually they meet at some point, usually kind of late twenties, early thirties, maybe even into their forties. And when they meet, it's like, Hey, I've already had to get some sort of traction in my life in certain aspects, uh, without you. But now like all of

these future transitions like that's something that i think we can do together and so like i was in the camp of like i am never gonna get married like people say that i was like i'm never going to get married why would you ever get married that sounds like the dumbest thing in the world like what you mean that like now you have to make decisions and like somebody else can say like i don't want to do that and you might have to listen nah if i want to go party i'm gonna to go party. I want to eat McDonald's. I want to eat McDonald's. If I don't want to do anything today, I'm not going to do anything today. That was my approach to life. And when I met Polina, uh, it was like almost immediately we were just like, all right, I think that like,

maybe I'm not gonna just do whatever I want for the rest of my life. And so to me, it's just like that investment of like time and like really open-mindedness I think has been the best investment because what you begin to realize is like, it's hard to grow as an individual by yourself. Like you only have the perspective of the world that you have. And so like, whether it's playing on like looking over my shoulder, being like, eh, I wouldn't tweet that. Like that's, you're not like thinking about this other thing. Like you're going to be an idiot here all the way to like me coming up with, oh, hey, I have to make a really important decision professionally. Like let's sit down and talk about it. Like having somebody there that has

the same context that has the same uh kind of goals and aspirations that's like really really valuable and so i think that people just underestimate like that element of it uh and they always focus on like what company did i invest in or like you know where i chose to move to or whatever but to me like by far that's been the most impactful thing and like nothing's even close that's a great answer that's a great answer block five is a distant second she paid she paid me a lot of money to say episode sponsored by the profile the episode is not sponsored by the profile we have no free sponsors you don't get any advertising unless you pay so we will not be giving out the readtheprofile.com url in this episode because it's not a paid sponsorship we'll

only be giving out the url blockworks.co go hit it right now yeah all right i appreciate you guys coming on uh blockworks.co is uh the website you guys should go and well not youtube you guys are going to be there anyways but if you're listening or watching this you should go check it out i'm a huge fan of jason and mike uh and they've been super helpful to me as all this stuff has gotten built so go check it out blockworks.co you too i will uh talk to you soon we'll definitely do it again in the future and uh to end it i've gotta you know just throw a little jab in there uh mike your uh zoom name is maria ipolito so we'll talk to you that's the name of my we try to cut costs we try to not a jab at all