The Wolf Of All Streets - Make More Money With Better Data | The Bloomberg Of Crypto | Joshua Frank, The Tie

Episode Date: April 12, 2022

How can you make more money in the world of crypto? By knowing the market. And that starts with data. Our guest today is Joshua Frank (@Joshua_Frank_), Co-Founder and CEO of The TIE (@TheTIEIO). The TIE is a leading information services provider for digital assets. Joshua and his team are on a mission to help crypto-driven businesses make informed, data-driven decisions by monitoring everything from the news to investor relations. In this episode, we discuss whether or not crypto is really the Wild Wild West, the massive shift we’re seeing from traditional assets to cryptocurrencies, the importance of being first in on the newest trends, and the increasing need for information analytics. JOIN THE WOLF DEN NEWSLETTER 📩 https://www.getrevue.co/profile/TheWolfDen THANK YOU TO OUR SPONSORS ►► I couldn't be more excited to announce that Vuori is a sponsor for the show. I've been wearing their clothing for years and can't get enough of it. Countless episodes have been recorded in Vuori, and I tell everyone they need their incredibly versatile and comfortable clothing. You can do practically anything in it. For our listeners, they are offering 20% off your first purchase. Get yourself some of the most comfortable and versatile clothing on the planet at vuori.com/melker. Not only will you receive 20% off your first purchase, but enjoy free shipping on any U.S. orders over $75 and free returns. Get your outfit today at: https://vuori.com/melker ►► Vauld is a Smart Investing Crypto Platform which allows the user to invest without any stress! With Vauld, you can earn free passive income in crypto. Vauld lets you earn the highest interest rates in the crypto industry - 12.68% on stablecoins and 6.7% on BTC and ETH.. Sign up below and get a 40% kickback on trading fees, 5% commission on interest payouts and 5% commission on loan interest. Vauld’s ‘Buy the Dip’ function automatically purchases specific cryptocurrencies for you when the price dips below a pre-set level. It’s awesome! Sign up here: http://thewolfofallstreets.info/vauld EPISODE LINKS Joshua Frank: https://twitter.com/joshua_frank_ Production & Marketing Team: https://penname.co/ FOLLOW SCOTT MELKER • Twitter: https://twitter.com/scottmelker • Instagram: https://www.instagram.com/scottmelker • Facebook: https://www.facebook.com/wolfofallstreets • Web: https://www.thewolfofallstreets.io • Spotify: https://spoti.fi/30N5FDe • Apple Podcasts: https://apple.co/3FASB2c

This episode is sponsored by Vauld and Vori. Please stay tuned for more information on both of these amazing companies later in the episode. What's up, everybody? I'm Scott Melker, and this is the Wolf of Wall Street's podcast, where two times every week I talk to your favorite personalities from the worlds of Bitcoin, trading, finance, music, art, politics, sports, basically anyone with a good story to tell. Now, most people in the crypto market are probably just throwing darts and trying to figure out what to trade. That's certainly what the TradeFi and Wall Street world thinks of us. But there are people who are actually taking a qualitative, quantitative, data-driven approach to trading this market. And we have one of the

people leading the tie. He's the co-founder and the CEO of the tie, Josh Frank. That's exactly what they're doing it. And they are quietly doing it for the biggest firms in the world. I can't wait to discuss what's going on behind the scenes at the tie and how data is actually driving this market. Josh, thank you so much for joining. Thanks for having me on. So yeah, like I said, most people think that crypto is the Wild West, that we're all out here throwing a bunch of darts and having a big FOMO party. But is that really the reality of what's going on and how this market's being traded? Yeah, well, look, I mean, to be fair, that's certainly part of it. But one of the greatest things about speculation is that speculation

begets liquidity and you need liquidity for the largest institutions and players to come into the market. And so speculation is actually a good thing. And so certainly there is gambling and there is stuff like that going on, but I think there's definitely, and we've seen this, you know, from where we started to where we are now, a massive institutionalization of crypto. And we sit in a really cool, cool seat in that, you know, the best way to think about us is kind of, I don't like to say it, but like a Bloomberg for crypto or like a Bloomberg meets an OpenFin for crypto where we have a data terminal that brings together news. And by news, I mean SEC filings,

regulatory rulings, court cases, updates from tokens, on-chain data, derivatives data, market data, sentiment data, research both from us, but also third-party, like you can access Genesis Research and ARCA and a bunch of others on our platform. And so we sit in this really interesting seat in which what is the first thing that anybody needs? It's actually information. Before you can place a trade, before you can enter the market, you need to understand what is going on in the market. And, you know, I started this company, you know, early 2018, late 2017, basically by myself with no money. You know, we grew from me and a hundred grand to 50 full-time employees before we raised. And so, you know, we've seen, you know, we were here in the early days where there was no one in

this market, there was nothing going on. And the amount of institutional interest is absolutely obscene. Like for anyone who tells you that that's not true. And by institutions, I don't really mean pensions and endowments. I mean, more specifically hedge funds and OTC desks and market makers, you know, the interest, because that's kind of what we refer to as institutions in crypto, that that's not what is referred to in traditional capital markets as institutions. The interest there is insane. I mean, we went down the list of the top 50 hedge funds by assets. We've talked to way more than 60% or 70% of them, and they're all coming. And it may just be one or two people that are coming in, but you talk to some of these large firms, and they are very sophisticated. They know what's

going on. And the challenge for them is really just figuring out what vehicle to trade out of. Like, can it be with the existing fund? Do they need to set up a separate fund? You know, should they just be trading out of the GP, which means partner's capital versus bringing in, you know, new external investors or trading with, you know, existing LPs capital. But we're seeing this massive institutionalization of crypto. And it is way fast than anybody thinks it is. Yes, compliance teams suck. Yes, it takes forever for these guys to enter the market, but it is really here. It's not everyone. It's not like these firms have 500 people trading crypto. It's not like every pod at a place, and I'm not saying these guys are in

crypto or not, not commenting on specific people, but like places like Millennium operate in pod structures. It's not like every single pod at a place like that would necessarily be in crypto, but at similar types of places, it's one, it's two, it's three different pods that are slowly moving in the space. And it's not just trading Bitcoin. And that's what it was before. It's not just trading Bitcoin futures. These guys are trading shit coins, man. Like, and they're coming in fast. And, you know, sometimes it's like, okay, the GP, like, for example, X giant large hedge

fund is now going to just fund one of their guys to go off and start a new fund. And they'll be part of the GP. But this is happening. We are here. And it's not just Bitcoin. And that's something that I think is being missed in the dialogue that's public. These guys are trying to trade. I mean, in some cases we see them trading 20 tokens, but in other cases, I mean,

one of the largest funds in the entire world is doing MEV stuff on ETH. Like they're doing real stuff now. They're getting there. We're heading in that direction. And it's not everyone. And we're not there yet, but we're going that way. And I think being data, one of the really cool things is we see people starting to look at this information and we hear the questions that are being asked us before the market really moves in that direction. The questions that we were hearing a year ago, two years ago is, what's the difference between Bitcoin and Ethereum? What's the difference between Bitcoin and a cryptocurrency? That's what we heard. And now we hear like, okay, what do we think about these obscure layer ones? What do we think of these different layer

to scaling solutions? What are you seeing? And look, a lot of it is even gambling by these institutions where they're just trading on these things. But that's not a bad thing. Gambling is great because we need liquidity for everyone to come into the market because the more liquidity we have, the more that the endowments, the pensions can start to write $250 million checks into these hedge funds because that's the biggest constraint we have today isn't interest, it's liquidity. Yeah, I mean, a year and a half ago, not even, you know, all we were talking about was MicroStrategy buying Bitcoin and putting it on their balance sheet. And how could these

institutions gain exposure? And now to your point, it's literally like, how do we yield farm on Polygon? Yes. Right. How can we get 20% yield instead of 17% yield in DeFi? But that begs the question, why all of a sudden now? We've been here a while. What is it that's finally triggered this sort of gold rush? Is it a cash grab? Is it a legitimate interest in the infrastructure? Do they believe in it as a long-term asset? What's driving this? Yeah. I mean, I think, look, I think part of it is like they look at the returns of crypto funds and then they look at their returns. They're like, OK, like, you know, we returned six percent last year. The average crypto fund returned seven thousand percent or whatever the stupid number is.

It's not that much. But the point being is like, I think they're starting to see that. They're also I think this this industry every single year, every single year that we exist in Bitcoin doesn't die. And it's clear Bitcoin is not going to die. We're at that point now. I think everyone's over that. And I think that's part of it as well. Like this industry is clearly here to say, look, we both know that 95% of crypto is still garbage, right? Most of these things don't make any sense, right? Like, and we saw that, like we had DeFi summer, like, like in 2017, we had the, I mean, even go before that we had pure coin. We had name coin in 2015. Then we had the ICO boom, even go before that, we had PureCoin, we had NameCoin in 2015. Then we had the ICO boom, Dentacoin went to a $2 billion market cap. Then we had the 2020 DeFi

summer and we had sushi and kimchi and blah, blah, blah, whatever. Sushi is real, but most of the stuff is dead. Yams. But like, yams, exactly. We had, you know, and then we had kebab finance, then chicken kebab finance, then like lamb kebab finance, right? And then, you know, had, you know, and then we had kebab finance, then chicken kebab finance, then like lamb kebab finance, right? And then, you know, so, you know, over time, we still certainly have all of this nonsense that exists. But it's clear that like, you know, we now, you know, Bitcoin has clearly established

itself. Ethereum has. But I think a lot of these other large protocols have as well. I think we're starting to see usage on these things. It's not just like these ideas of like these layer ones that were launched four or five years ago that never got any traction. We're starting to see people build application. And look, a lot of it is speculative nonsense, but there is some real, you know, there's a lot of real things going on there and there's a lot more liquidity and the knowledge set is there as well. So I think it's a combination of things.

I'll also say like, you know, not trying to toot our own horn, but like us and other market infrastructure providers, the infrastructure that exists today is significantly better, like the data and information that we can provide to institutional clients, the level of depth that we can get in the experience that we can build, because the solutions that exist today in the market, the quote, unquote, prime brokerage solutions, but let's just call them smart order routing solutions or liquidity solutions that exist in the market. There's really great infrastructure. I think the infrastructure is actually going to get so good that crypto firms are going to start overtaking traditional firms and going to start

stepping on their toes because the amount of innovation that's coming out of crypto, the speed that this asset class is moving in is going to pose a real threat to non-crypto institutions as well. So I know a little bit of a sidetrack there, but I think the infrastructure is great. The infrastructure is improving. It's not there yet, but it's improving and it's improving fast. This market has established itself and the education is there and traditional yields suck. I think infrastructure is one of the biggest and most obvious answers, right? We always joked that institutions were here in the 2017 bull run. That was part of the narrative for why Bitcoin pushed 20,000. And you didn't even have custody solutions back then as if MicroStrategy was going to like buy a ledger and throw it in a safe and hope for the best, right? So it was nonsense. We didn't even have custody solutions back then as if MicroStrategy was going to like buy a ledger and throw it in a safe and hope for the best.

Right. So it was nonsense. We didn't maybe realize that at the time. And to your point, that infrastructure is now becoming superior to trade by and sort of legacy infrastructure. I mean, the best example is like in this is not this is actually a legacy one, but BNY Mellon. Yeah. BNY Mellon custody in the biggest custody in the biggest banks in the world now, right? And this is what they're excited about. Absolutely. So, I mean, doesn't that mean that the trajectory is tokenize everything and leave all these guys behind?

Yeah. Well, look, I don't know how much I subscribe to the everything needs to be a tokenized asset of you. For trading. For trading, yeah. For 24-7 trading. If I want to sell a stock on Sunday at 10 a.m., I should be able to do it. I agree with you broadly. The thing is, it needs to come from broker-dealers. The thing is, cryptocurrencies, yes, these things are

probably securities. A lot of them are probably securities. But today, they're not treated as securities. And so that allows them to be traded. But the problem is, and this is what we've seen with a lot of these security token exchanges and security token issuers, it's this kind of this two-sided problem. You're never going to have good security tokens unless you have liquidity. You're never going to have liquidity unless you have good security tokens. It's this kind of this chicken and the egg problem. And so yes, broadly, I agree with you that it would be great to be able to degenerately trade Apple stock at 2.30 in the morning after you have a great night out. But I don't know how soon we are to hit that point. But in the interim, it's fantastic for crypto because what are people doing at 2.30 in the

morning? They're trading crypto, which is awesome. Right. And so to that point, you have to assume that this generation is quite different than the boomers and our parents and the way that they invested in the way they traded. The assets that they're interested in are vastly different than our parents. Right. They're going to- I think a great example is like, how many people listen to you, right? And how many people watch what you're doing? I mean, it's unbelievable. And those are not institutional guys. I mean, yes, certainly there are some mixed in, but it's everyone on the spectrum,

which is amazing, which is awesome. And that definitely was not the case 10 years ago. I mean, when YouTube didn't come out, people were watching chocolate rain. They weren't watching technical analysis. Absolutely. And so that leads to the point of Bloomberg, right? You said you guys are effectively

sort of a Bloomberg meets whatever, you know, for crypto and other assets. Our parents care about Bloomberg. Our parents care about those assets. But isn't Bloomberg going to be, I love Bloomberg, but aren't they going to be Blockbuster or Xerox to companies like you that are coming in as Netflix? Well, I think the interesting thing is what no one talks about, the reason that Bloomberg is so fantastic has nothing to do with the data and everything to do with the network effect. You need a Bloomberg because of IB. You need a Bloomberg because of messaging, because all of your counterparties on the platform. And Bloomberg just has the ability to price that product at whatever they want because it's not a nice to have, it's a need to have. It's a need to have. But I think as it relates to digital assets,

I think there's this really big opportunity. And when I say people just need Bloomberg for messaging, obviously there's other things there as well. But you can't tell me that the pricing data on Bloomberg is so much better than the pricing data on FactSet, is better than the pricing data on Icon or anywhere else. It doesn't come down to the data. It comes down to the connectivity. But the thing about these traditional platforms is that they're all walled gardens. Bloomberg limits what you can bring into the platform to what you're buying from Bloomberg. We are going in the complete opposite direction, especially as we think about crypto. We are the biggest producer of data in crypto. We build so much data in-house. We're

also the single largest acquirer of data and crypto. So we buy data from others, but the really unique thing that we're doing, and I think this is going to transcend into traditional capital markets, is we allow our clients to bring in any data set that they want to have on our platform, even if we don't have support for it. And so imagine you could be a Bloomberg customer, but you could bring in faxed data onto Bloomberg. And so the really cool thing that that enables is we have so much data from company fundraising data to web traffic data to sentiment data. We have TikTok and YouTube data on crypto, like to on-chain data or whatever else. But the really cool thing is imagine you're a

fund and you have four teams. You have a quant team, you have a research arm, you have a trading arm, and you have a growth equity team. Every single one of those teams needs to see vastly, vastly, vastly different information. And what we enable our clients to do is to create dashboards with all the information that we provide, which is probably 80% to 90% of what they need off the bat, but also their own data. Imagine you're a large traditional hedge fund. You're building your own data sets. You're not necessarily just using what Bloomberg offers you. And we allow our clients in a secure environment to upload that data and access it and to build dashboards. And every single type of user needs to see different information. And so I think there's a big opportunity for disruption there because I think these traditional funds need more modular

approaches to access data. And as you think about crypto, if you've ever been on a Bloomberg, Bloomberg has pricing on 15 coins and some news on it as it relates to crypto. We have infinite more data. We charge like a seventh of what Bloomberg charges. We allow our clients to customize anything that they want to see. And we have a significantly larger crypto counterparty network. We have all the crypto funds on our platform. And we are, the next thing we're rolling out is secure messaging. We're about four weeks away from that across all of our counterparties, which means that like, if you are a, you know, we have a giant, you know, we have a lot of the biggest takers in crypto, but we also have a lot of the largest market makers in crypto, and we're going

to allow them to connect with one another. And we're moving at kind of the speed of light as it relates to onboarding these new institutions onto our platform. And so I think the really cool thing is like the next generation of platform, I think is going to be crypto native in that, like, just like FTX and Coinbase are going to go into equity markets, that doesn't stop us from doing that as well. Because if we can get past the compliance teams, if we can get people trading crypto on our platform, and those are at large traditional hedge funds, what's stopping them from trading other assets later if we have the same counterparty network and we charge a seventh of the price? Imagine you can go to UBS and say, hey, guys, we're going to cut $60 million out of your cost structure

that you're paying to these large traditional financial data platforms, which I think is quite interesting. But that's just an example of what we can do. But there's so many other crypto native companies like Fidelity offers equity trading to retail, and so does Charles Schwab and TD Ameritrade. But FTX and Coinbase have way more active users. And the thing to remember is the new generation of people that are coming onto the trading desk, they're crypto native. That's a crypto native generation. They're not excited about trading bonds. They're excited about trading shit coins, man. Like what is more fun than trading shit coins? And I think that's creating this awesome opportunity, you know, obviously for us and that's down the road, that's not where we are today. But for a lot of crypto native institutions, I think that's going

to be the next generation of fintech companies, I think are going to be guys that started crypto and kind of moved into more traditional assets. But it's interesting now, it seems like everybody who's in traditional assets is aggressively moving to crypto, right? You're seeing so many people leave the Goldman's and Morgan's and Stanley or JP, choose your Morgan, and rushing into crypto. And you're not seeing people go the other way. Exactly. There are a few exceptions, but the point is like, who's excited to go join, you know, one of these big financial institutions to build out their crypto arm when you have to go through 70,000 people worth of bureaucracy, compliance, this or that. And you have to sit there waiting for seven years with your, you know, your hands under your ass for, you know, for sign off from regulators to actually do anything. Right. And by the way, the stock is or, you know, Goldman stock is already worth $90 billion or whatever

the number is. For you to 10X your options, it's never going to happen. But you can join these really cool crypto companies. We just raised, we announced to raise it in $100 million valuation. There's a really big difference in $100 million and what Bloomberg would probably IPO out, which would be $100 billion. That's at 100x difference or whatever the number is in valuation or 1,000x difference, whatever the number is. I think it's 1,000x difference in valuation, right? And so it's pretty incredible the opportunities that people have coming into crypto. But I do think some of these traditional financial institutions will kick ass when it comes to crypto. A good example is like the Golden Tree Asset Management Team just hired Avi Fellman out of BlockTower.

They have a lot of other things that are going to come out and be announced, I'm sure, soon as well. So there will be a lot of guys that do well. But I think that's not to say that crypto is going to totally eat TradFi. That's not going to happen. But I think a percentage of crypto firms are going to be up there with all of the TradFi firms. And I think on the same token, there will be a few TradFi firms and some unexpected ones that end up doing very, very well. There are some guys that we're talking to that are tier two investment banks or maybe tier two hedge funds that are really smart on crypto. And they're looking at this as like a really unique opportunity. I mean, Cross River Bank is an example.

Cross River just raised at, I don't know, three, four billion dollars. They've kind of come out of nowhere. Silvergate as well by kind of having this crypto angle, which has allowed them to scale really fast. And I think that's the thing to keep an eye out as well is is I think some of the lean TradFi companies are going to be able to do very, very well. And some of the crypto native ones too. Hey man, Silvergate will throw you a $200 million loan with Bitcoin as collateral with you having the intention of buying more Bitcoin with the $200 million, right? They just did that with MicroStrategy. So there's clearly institutions that are ahead of the curve here and willing to sort of take that risk. Guys, I have a serious question for you.

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You talked about the fact though that you have all this data, right? I can even say anecdotally as a retail trader, there's only so much you can consume, right? Before you sort of experience paralysis by over-analysis. So with all of this data, how do you discern or how do your customers discern what's actually important? How do they cut through the noise and use it for actionable decision-making? Yeah. So I would say our biggest value add isn't actually alpha. We don't pitch our clients on alpha. We pitch our clients on streamlining workflow. So when we talk about our business, we talk about us being a workflow solution as opposed to a data vendor. And what I mean by that is think about all of the listeners. Think about how you analyze crypto. You spend 72 hours on Twitter every single week. You go to website A, website B, website C. You're in 42 million discords. You're in 300 billion Telegram channels. And so staying on top of the market is impossible. There's no one that's aggregating all that information for you. And a huge value add that we have is just aggregation. It's having everything available,

whether it's derivatives data, whether it's open interest data, whether it's things like we have company fundraising data. So I can show you every single fundraising round, who's invested in what headcount growth data, whether it's how many Twitter users are talking about a particular asset, whether it's we track every single real-time update from tokens or exchanges, like you name it, it's bringing everything together in a consolidated platform. But how we work with our clients is really focused on building the workflow that works for them. So our clients aren't going to use 100% of what we offer. They're going to use 4% or 5%, and that's totally fine. But we want to cover the 4% or 5% that they need to look at and work with

them to build that workflow. And so the way that we really work with our clients, we build a relationship with the portfolio manager, the CIO, or even the CTO. And we basically will build the custom dashboard that these clients need, bring in all of that data, the information that they want to see, and show it on one single screen. And that's the most important thing where we cut our clients, you know, we cut our clients from 37 tabs down to one. So I'm not going to say that we have one particular data point that's going to make you a trillionaire. That's not the pitch that we make to anyone. It's really a streamlining workflow, but as it relates to data, that's actually something in quality of data and, and cutting through signal and signal and noise. That's the thing we spend a lot of time on. We actually have a free blog research.thetide.io where we push, where we push a little bit of that out for free to the public. But we have a team of 10 plus data

scientists, multiple of which are PhDs in biological oceanography and geology and math and all these different things. And we're basically just like, take all of this data and find stuff. Just ingest all of this, build machine learning models, and try to figure out what data is predictive. And so we do a lot of the work trying to figure that out. For example, a lot of people love to trade on GitHub commits. We found zero statistical significance that that has anything to do with price movement, both short-term or long-term. And so a lot of what we do is we'll figure out where we tend to find alpha, but it also depends on the client type. Because if you're an investor and you're more of a VC, you may care about community size. Even if that's not going to

predict the price movement in the next hour, you may think about that as a long-term indicator. So I think it matters what is the time horizon of the investor? What are they trying to accomplish? Are they an investor? Are they a trader? Because certain things matter in different intervals of time. And what I'll note as well, certain metrics matter a lot more for certain coins than they matter for others. And that's not something that's talked about ever, right? The fact that Bitcoin really isn't that sentiment driven in the short term because of the amount of liquidity, but assets five through 50 are, and sentiment is a really good predictor of price. But for example, for coin 247, right, in terms of market cap,

it's a lot harder to predict the price of that coin because if somebody goes and market buys a million bucks worth of the coin, the thing's going to triple. And there's nothing you can do about that, right? And so every single coin, you coin, metrics matter differently for particular coins. When we work with a lot of the largest quant funds and we feed them APIs, we may work with them on building some sort of machine learning model that weights different metrics for different coins very, very, very differently. And certain coins are much more on-chain driven. And I think a lot of times we focus on the wrong thing. For example, we focus so much on TVL, but no one's focused on what's the difference between incentivized TVL and non-incentivized TVL, right? If somebody's just like, hey, come to my blockchain,

we're going to give you all these incentives to provide liquidity. How much does that matter in the long-term? And so like one of the cool things that we're working on is cross-chain wallet data and looking at, okay, for EVM compatible chains, a wallet on Avalanche is the same as a wallet on Ethereum is same as a wallet on, you know, any other, whatever, it doesn't matter, any other EVM compatible chain. And so looking at when there's some sort of incentive, like some TVL incentive on a particular chain, are we seeing flows into that chain and then flows back out to other chains. Again, it's the same wallet address. It's the same number. And so those are the types of things that we're trying to look at and we're trying to understand dynamics. And to your point, it's really hard. There's no magic formula out there. If anybody's telling you

one metric predicts the whole market, it's just not possible. It's really a combination of metrics and a combination of factors. And our goal is really just to put that information, the analytics in front of these institutions so they can get the best sense of what's going on in the market. And I think the last point, I know I've said a lot here, but one thing that's so, so, so important and we focus on more than anything is sector data. The way that crypto moves, just like there's sectors in traditional markets, right? You have technology sector, you have TMT, you have this, you have that, fashion, whatever, it doesn't make a difference. Crypto really, really is narrative driven and it moves in sectors, right? Like privacy coins will get hot. And then first you

have Zcash, then you have Zen, then you have this, then you have that, And you go down the list and like, you know, first the first few things will run. And then honestly, the best way to trade it is just buy the shit that hasn't moved yet because if everything else has moved, the other things are going to move after that. And so a huge part of what we focus on with our clients is sector data. subcategorization, ecosystem-related data, and just show trends like, okay, this random ass sector just got super hot on TikTok, which means retail is probably going to ape into it in the next couple of days. So that's just a short-term play. And so a lot of what we focus on is that as well, which isn't like, this is not going to help you make a trade over the next seven months, but it may help you make a better trade today. Right. It's such a good point. And we've seen it over and over and over again,

repeating in crypto, right? DeFi summer, you've touched on a million times. You have Yearn and then everything else follows, right? Or even NFTs, all of a sudden punks blow up and then you have a million things that pop. Literally right now, we're seeing a completely new genre as we're recording this exploding exercise coins, workout coins. Yeah, at this point, GMT, Stepin, it's pulling like launch it. Right, but then like the Dot Moves, which is like a soccer fitness app, followed it and is up hundreds of percent.

Now, anything that has like fitness or exercise in it has gone up hundreds of percents. It's just the way that this market moves. So to your point, like if you, I have a lot of friends who are not really crypto native, they saw Axie Infinity go up massively and then they invested in the Axie Infinity ecosystem. And I tried to say, well, that was the first mover. You want to look at everything else, right? You don't want to be in Axie after it's gone up a few hundred percent. You want to find the next, that's your harbinger of a trend in metaverse

or game play to earn or any of these things. And I think we'll continue to see that with trends in crypto. Yeah, look, and I think a lot of this stuff is garbage that doesn't have any sort of long-term utility or use case and nonsense. It's all just short-term. But it's kind of like this idea of like,

even if these things are Ponzi schemes, right? Being the first person to Ponzi scheme is fantastic. It's fantastic. You make a ton of money as long as you get out. You just don't want to be the last person left standing. And so you want to identify these trends early, move into them and move out. And you don't want to be afraid to take your losses. Because once these things die, they're done. Right. And a lot of every one of those things we described has died at some point. I'm not saying that like the quality won't rise from the ashes. That's sort of what this is. It's like we have these infinite number of late 90s, early 2000s internet bubbles, like in these small little

sectors, as you said, everyone rushes in, you have all these things explode, 90% of it disappears, and 10% of it become these massively important companies moving forward. Yes. Yeah. And look, and that's awesome because you can make a ton of money trading these things. Like you can crush it, but you just want to make sure there's a really big difference between trading and investing, right? And so, you know, and look, I mean, look, you know, but it's, it's no different than, than equity markets, 90% of, of startups fail. Right. And 99% of tokens are going to fail. It's no different. Right.

But like what we focus on with information is whether you're in a, like a hedge fund trying to trade something super fast. Like one of the really cool things we actually provide for VCs is we built a tool that tracks all the top VCs and hedge funds on Twitter and it shows you what they're following in real time. And so often we'll find like one of the big traditional VCs.

I don't want to call out anybody's name because I don't want them to stop following stuff on Twitter. But like we'll find X fund just followed this account and like four people at that fund. And this is a $10 billion crypto fund or whatever it is. And they have 122 accounts. And so we call it the ape fluencer because you see what the influencers are following and you ape into it. And so like the way that we kind of think about product and build things out is really like, we want it, we need to support all of those different client types, right? And throughout the entire gamut and just like a Bloomberg or a FactSet or an Icon or

an S&P or any of these other guys, our clients are going to use 3% or 4% of what we have. We don't expect anybody to use anything or anyone to stay on top of the market. I think you need to figure out what you want to focus on and really hone in and focus on that. But I think where all this information analytics really come in is when you want to dive in in depth, where you're like, okay, surface level, I see that this token is surging in terms of trading volume or Twitter volume or on-chain activity. Now let me dive in in depth and see, is there news that moved the market? We track news from 7,000 sources in real time. Is there something on-chain? One of the really cool things we're tracking on chain now, I think this is so important and no one is talking about it, is insider trading. No one talks about that in crypto,

but that's super important in traditional capital markets. Like we track all the developer addresses and early VC addresses in aggregate. And so I could show you over the last day, over the last seven days, over the last 30 days, are like the developers on Curve Finance selling out of their position? Because if they are, you probably want to run. But if they're adding to their position, you may want to come in. And so I think one of the other really cool things that we do that I think others are kind of not focused on, which is so important, is like, this is just another asset class. Like people forget that. Like when we talk about news, we talk about corporate actions. When we talk about on-chain activity, we talk about insider trading. We're not trying to reinvent the wheel here. We're taking things that big, large hedge funds

know and understand and fitting that into the crypto market. And obviously there are going to be things that are different, but like the on-chain activity is just a way more, you know, public way to look at insider trading. Like that's one of the coolest things. And like that's, you know,

those are the types of things that I think people should try to focus on because I think there's, there's a lot to it. If you were in, you know, trading stocks in the early hedge fund days, seventies, eighties, there were these massive inefficiencies in the market that if you had the best data, you could just consistently take advantage of, right? Arbitrage, whatever those things were. Crypto is still really nascent.

There's these huge gaps where a smart person with capital can go literally just move money around and make a ton just because it's so inefficient, right? Yeah, but I will say it is maturing a lot, which is why more of these institutions are coming in. We actually originally started trying to sell alternative data to quant funds in early 2018. We realized that was a big problem in early 2018 because one, there were no quant funds, but two, you could arb the kimchi premium for 30% every fucking day. Just rotate it. And just rotate it and send it out. So like in a market that's so inefficient, like the last thing you need is interesting data, but we're certainly starting to see more of these efficiencies, which is why like you hear a lot of the things that I'm talking about are like really niche and in-depth

because that's where we need to go to find alpha, right? Like we need to start going beyond, like the thing is everyone's a genius in a bull market, right? In a bull market, everyone's a genius. Everyone's making money. No one needs data and information, But as the market starts to correct or it flatlines, there becomes this really significant need for information analytics to make better and smarter decisions, which is why we're constantly trying to iterate and innovate,

not just us, other companies in the space as well, to find these things. But when we try to do it, we try to fit them into the constraints of traditional capital markets. In 2017, I vividly remember sitting at my nephew's middle school band concert, vividly remember, with Bittrex, Binance, and Coinbase on my phone, just rotating Litecoin for a 5% premium every time and literally just printing free money, right? That does not exist anymore. I think in 2017, if I'm correct, maybe it was Coinbase or it may have even been like, it was maybe an ItBit or something. The price of Bitcoin was at like $20,400. No one actually ever hit the $20,000 except for one or two exchanges. In aggregate, Bitcoin may have hit $20,000, but it was on like one or two exchanges where the thread was just so

ridiculously large. But I mean, we're not seeing that anymore. Like with Bitcoin, I mean, there's no opportunity to, I mean, yeah, maybe you could take pips across different exchanges, but like the arm opportunity doesn't exist. It's not even worth setting it up to be able to do it. So listen, you talked about the definition of institutions and crypto being a bit different, right? It's really traders, hedge funds, et cetera. And you sort of mentioned superficially pensions and endowments. We'll call that the big wall of institutional money that, you know, is in traditional markets. How do we get them? They're coming. They're coming. And

they're coming in through hedge funds. So they're investing in funds. I think one of the questions that I always have for fund managers that we work with is how scalable is your strategy? People don't talk about that. Like, okay, great. You made 20,000% with $5 million. How much can you make when the Ontario teachers or a municipal retirement system gives you $100 million check? Because for these guys to move, they have to put $50 million, $100 million, $200 million check into these firms. And so how scalable are some of these strategies? And so I think there's a few things that are needed for these places to come into the market. The first thing is, you know, they need to be okay with how these institutions are actually operating. So when I talked about us moving into messaging

and compliance, like institutions today are trading on Telegram. That's a huge problem, right? Like on Telegram, you can edit messages, you can delete messages, you can be impersonated. We're rolling out a fully compliant platform for institutions to communicate with one another, and that's needed. People need to be able to do funds. They need to understand who their service providers are, how they're operating, what they're doing. Is it kosher is the best way to put it, right? Is everything they're doing kosher? And so I think that's part of it. I think it's understanding, are these strategies scalable? I think it's understanding like, okay, we need it. Yes, some of these funds track records may look great, but is their track record great because they bought three things super early? Do they just get into Solana? Yeah, if you buy Solana at five bucks, you're looking pretty good. Right, exactly. And so like, you know, how good are these track records? But we're certainly seeing the interest there. And to the point where there is one of the largest

college endowments, top five best college in the US, the endowment is trading crypto directly, which is pretty cool. Not just buying, but actually trading crypto. And so I think they're going to come in through the funds. I think ETFs are certainly going to help. And I think it's just like, it's awesome. If you could spot buy $50 million worth of Bitcoin and custody it with BNY Mellon, like if you guys, listeners don't know how big BNY Mellon is, I think they custody like $30 trillion worth of assets. It's the single largest custodian in the entire world. Yeah. And now you could custody your Bitcoin with BNY Mellon if you're a giant mega institution.

And so I think all those things are going to help. And I mean, the coolest thing is like when money flows into just Bitcoin, it's not that exciting because if it's flowing in from these pensions and endowments, it's probably not going to roll into other assets. When it rolls into these hedge funds, these hedge funds are now benchmarking the performance of Bitcoin or they're benchmarking the overall crypto market, which means they have to outperform those assets, which means that's going to build out and help the long tail of crypto assets perform. In particular, we're seeing that with your Ethereum, your Avalanche, your

Solana, your Luna, all of the large assets are performing well. And I think that's a function of a lot of this traditional money. And we see it with crypto funds, moving into crypto. And when Andreessen is raising another crypto fund, that's not coming from just high net worth individuals. Obviously, that's coming from mega institutions and also sovereign wealth funds. I'm talking to one of the largest sovereign wealth funds in the entire world. Their goal for Q2 is to place one crypto buy spot on an exchange. That's their goal, just to prove that they could do it and they could get compliance teams behind it.

This is one of the biggest sovereign wealth funds in the entire world. They manage somewhere between, I'll just say a hundred billion to trillion dollars. They are about to go on the market and start buying crypto. I don't want to give away who it is. You can probably Google it.

But like they are going to buy crypto directly, not via a fund and not, yeah. Goldman executed their first OTC deal, right? They did it with Galaxy, but it sort of sounds like a similar thing. You need to prove that it's possible. Yes. I mean, Elon Musk, he even said,

I sold some Bitcoin, whether that was true or not. You know, he's like, Tesla sold a little bit of Bitcoin in the first quarter to prove that it was liquid and that we could get out of it. Yep, yep. So a similar phenomenon. Yeah, look, it's not going to be, when we say institutions are coming,

that doesn't mean 100% of their capital is coming into the space. But if 2% of it comes in. I'd say 1% or 5%. 1%, yeah, yeah, yeah. Talk about trillions of dollars. Yes, trillions. I mean, crypto is still worth,

I think it's worth less than Apple now or like close to Apple or whatever. Like it's, we're still, it's still just the beginning, right? And there's a lot of nonsense, which is going to get washed out as we've talked about before, but this is still the beginning. I mean, you know, look, you know, Bitcoin is a trillion dollar asset. Like, you know, you know, there's no reason it can't be a $10 trillion asset in the future, right? You know, if it fulfills this, like, you know, there's only ever going to be 21 million Bitcoin, but no one talks about the fact that they're really probably only ever going to be 15 million Bitcoin because the people that

have lost their private keys, Satoshi's funds haven't moved, right? And so like, you know, there's demand for these things are just increasing. And, you know, the things that are going to exist in the longterm are going to attract the most demand. There have been years where Bitcoin is 10x, right? So to think that we can't 10x in market cap from here is just nonsense. Listen, you're steering a much bigger ship to get to those larger market caps, but it's certainly possible. And I mean, to your point about Andreessen and these funds, it's like every day you turn around and someone's casually raising a billion dollars. Yes.

It's insane, right? I think we, I would guess, I haven't seen the metrics. You might have the data, but I would guess that even though 2021 was a banner year for VC and crypto, 20 billion, 10 billion, whatever it was, I would bet we've matched that already in the first quarter of 22 or come close. It's a big number. I don't know what it is. I will say at some point,

at some point, the market's going to catch up to us, especially because there's a difference between tokens and companies, right? So a lot of these guys are investing in equity and companies and public market valuations have gotten trashed. Do you think Coinbase would rather be private right now? Possibly. I don't think FTX would want to go public in today's market. Kraken's talking about it. Yeah. Yeah. I think private market valuations probably trail publics by a few months or a couple quarters. So I think that will catch up to itself a little bit. But yeah, I mean, the appetite is certainly still there. I mean, there are VC funds that no one really talks about in crypto that like have $2 billion worth of tokens or five. There's a couple of funds that

have $5 billion worth of tokens on their balance sheet. These are $50 to $100 billion traditional funds. No one's talking about them and they're holding $5 billion with the tokens on their balance sheet. It's insane. And it's not just Bitcoin. It's not just Bitcoin. I would say it's mostly not Bitcoin. You would hear about it, honestly, if it was primarily Bitcoin because that makes it into the news cycle. And it just completely sidebar the same sort of phenomenon, these unknown billions. That also applies to the people in this space, right? I laughed when Forbes did the article on CZ, right? And they were like the $96 billion man or whatever. He's worth $96 billion. And that doesn't count his crypto. And CZ has been previously quoted as saying 90% of my money's in crypto, right. By that math,

he's almost a trillionaire and by far the richest man in the world. Right. How many millennial multi-billionaires are there out there that aren't on any list? Well, that would mean, to be fair, that would mean CZ has half of the entire crypto market cap. So that's probably not saying that. Right. I'm not saying that that math is actually accurate. Yeah, but I get the point. My point being that there's, I mean, probably, you know, hundreds of billionaires out there that aren't on any Forbes list are completely unknown and huge question mark. Yeah. A hundred percent. A hundred percent. We would have never had that before crypto. Yeah. I mean like, you know, yeah, it's, it's, you know, we talked to like, we'll talk to like some family offices that are like the family offices of a founder of a crypto company. And they're casually just like, yeah,

we write like five to $50 million checks and just like a 28 year old crypto founders family office. It's like, okay, great. Yeah. I mean, I, I personally know dudes who are like, you know, it's always been my goal to get to a hundred thousand Bitcoin. I'm like halfway there, but, and they like live in a small apartment and drive a beat up car, right. Because of the holder mentality. But I think that there's a lot of those people out there, but anyways, coming into the rest of this year and moving forward, are there any things that you're especially excited about or looking at either that just personally as an investor or that you guys are building?

Yeah. I mean, look, we're building a lot of unreal cool workflow things for front office institutions. And so lots of cool things. I mean, if you follow us, you'll see it, or I'm sure a lot of our listeners or clients are ready. In terms of the market more broadly, I just can't wait to see the news start to come out about a lot of the people that we know are in the market that haven't announced they're in the market yet. It's going to be super cool. The institutionalization of Bitcoin and crypto, all of the infrastructure plays. But the most exciting thing, and it's probably something your listeners don't talk about a lot, is I'm really interested in roll-ups. And I'm really interested in M&A activity in crypto.

And the fact that there's... We talked about all the capital that's floating from a VC perspective, but what does that mean? That means that there's a tremendous number of companies in crypto, like companies that have raised capital, which are going to go out of business, right? Because they raised wage. And we saw that in 2018, like there were a lot of institutional providers that were just too early. And they built awesome product. There were some awesome products out there that unfortunately, were just the casualty of the market. And so I think there's going to be a ton of really interesting M&A that happens in this space, especially as some of these, as, look, VC is not going to be like this forever. It doesn't make sense. It's just not. And so the companies that have strong balance sheets that are crushing it are just going to buy a ton. And what I'm really excited about on the M&A front is I'm really excited to watch crypto firms go out by traditional firms because crypto firms may trade at 50 times or 80 times run rate,

whereas a traditional firm is trading at 10 times EBITDA. And if those firms can get rolled up, positioned as crypto companies, and then you can start like, I'm excited to see private equity come into crypto. Like imagine some of these large private equity companies that just come out and do buy these awesome leveraged buyouts, right? Where you're going to go 90% leverage and start just buying 20 of these things and rolling them up because it doesn't make sense that there's all these different companies out here in the space. I mean, from a data perspective, everyone and their grandma, there's 300 on-chain data companies and market data companies. There's a million people trying to do custody. There's a million people trying to do custody.

There's so many people trying to do prime brokerage. Everyone is market-making now. Every single person in the world is a market-maker apparently. It's like, everyone's like, yeah, we do VC and we trade and we market-make. There's going to be some really exciting opportunities for consolidation. And that's what I'm most excited about. And on the private side, but also on the token side as well, I'm really excited to watch token M&A because I think it will happen. I think DAOs will sell to each other. You know, I think tokens will sell to each other. I think there's a lot of really cool stuff that's going to happen in this space. And so, you know, one of the news feeds that I create for me on our own platform is I track every funding round, but every M&A round, I'm super excited to watch.

And hopefully we can participate in that in some way in the future as well. I mean, so basically everything that we've ever seen in traditional markets, that's huge and exciting will eventually make its way here, right? I mean- Exactly. Exactly. Why don't we have private equity in crypto? It makes no sense. We will. Oh, it's coming. Of course. It's coming. Yeah. So I mean, that's going to just change the market fundamentally, right?

But we might see some of these small projects, to your point, that built exceptionally good products and just kind of never made it, brought back to life. Yeah, I mean, I'm super cool. I'm excited to watch hostile takeovers of networks. So somebody just quietly goes in

and just buys enough, you know, buys enough votes. 55% of the tokens. Yeah, they need 55% because no one actually votes on any of these governance votes. You just need to buy enough because people ignore this. I mean, that's like, you know, you know, like some of these big funds have come in and just single handedly, like in a day, I'm not pointing fingers at anybody. You're not saying anything wrong with it, but they've just like changed, like voting happened for 60 days. Then one fund comes in and the entire vote goes in a different direction. Right. And so like, I think there'll be some cool hostile takeovers and things that happen in crypto. Like that kind of stuff is super,

super cool. And also just like, you know, buying distressed assets and leveraged buyouts, like there's going to be some cool stuff that happens in crypto. But I think a lot of the cool stuff, as I mentioned before, is going to be crypto going out and, you know, everyone jokes about when is SPF going to buy Goldman? Like, I don't think I should say that. Yeah. I don't know if I see that happening necessarily, but like I, at this point, why not? Like, I mean, they're buying there, they are buying other things, right? I mean, they're buying companies that will allow them to have the licensing to do derivative trading and things like that. So we're already seeing the very initial sort of hints that things like that could happen.

I would give almost anything to see SBF and FTX buy Goldman, though. That would be hysterical. That would be awesome. I mean, especially if they do it on April Fool's Day, like on April 1st, right? Just get that done. That would be absolutely incredible. So after this conversation, where can everybody follow you and the tie? Yeah. You can check out our website, thetie.io. That's T-H-E-T-I-E.io. You can follow us on Twitter at thetie.io. And on our website, we have our research blog. Um, I'm not that exciting. Don't follow me, follow the company. He's he's excited. You're not that

exciting. You're absolutely great guest, uh, with endless thoughts. You were on my live stream recently and it was so much fun. And I loved the banter cause you and I kind of like, I think openly, uh, love the trading and speculative aspect of maybe some other people. Oh, it's so much fun. It's so much fun. Yeah, absolutely. Well, thank you, man, so much for the insight and for sharing and definitely gave me a lot. I've literally never thought about the private equity and M&A side of the potential, but

it's so obvious now that you say it. Yeah, no, it's going to be fun. Crypto is going to be fun. Don't go anywhere and don't let prices deter you from having a great time and aping in. Up only. Not investment.

Thanks, man.