The Wolf Of All Streets - Ryan Selkis, CEO of Messari, is a walking encyclopedia for the crypto space and shared his thoughts on every important crypto trend for 2021.

Episode Date: January 21, 2021

Ryan Selkis is the co-founder and CEO of Messari which boasts the longest running crypto daily brief in the world, with over 40,000 readers. Their readers and platform customers include retail traders, investors, family offices, hedge funds, crypto institutions, governments and more. Placed at the heart of the operation, Ryan is inextricably tied to every important aspect of crypto and has a keen awareness of what's likely to unfold in the coming years. This conversation focuses on the potential explosion of interest in the crypto space in 2021.   Scott Melker and Ryan Selkis further discuss the 2020 Crypto Thesis, aggregating high signal information for investors, GBTC’s premium, alpha for whales, a crypto bubble that won't pop, the gold market as a proxy, the legitimacy of Tether, threats to Bitcoin, top DeFi blue chips, sending money at the speed of light, Ethereum as the backbone of DeFi, a Bitcoin ETF, Picasso’s Bull, NFTs and more.  ---- If you enjoyed this conversation, share it with your colleagues & friends, rate, review, and subscribe. This podcast is presented by Blockworks. For exclusive content and events that provide insights into the crypto and blockchain space, visit them at: https://www.blockworks.co

What is up, everybody? I'm Scott Melker, and this is the Wolf of All Streets podcast. Today's guest is an entrepreneur, investor, and writer helping to build the Bitcoin and digital cryptocurrency ecosystem. As a founder of Masari, a top research news, metrics, and live data provider for crypto, Ryan has been behind the longest running crypto daily brief read by over 35,000 people. Before Masari, Ryan was a managing director at Coindesk. So it's safe to say he knows a thing or two about what's going on in the crypto space. Like myself, Ryan is arguably a professional tweeter, engaging daily in the nonsense of crypto Twitter, interacting with farm animals, degenerate gamblers, and insanely wealthy,

spoiled teens. But in this episode, I look forward to getting Ryan's thoughts on crypto in 2021, specifically what we'll see from Bitcoin in the DeFi space throughout the year. Ryan Selkis, man, thanks so much for coming back on the show for a second time. No, it's been a while. The world has changed. Yeah, last time we spoke, I think was April. So you were in full lockdown in New York and everything was really just gearing up. Yeah, it might have even been sooner. I measure time periods last year in epics based on where I was living at the time. And I know where we spoke. It was in my second living location out of five last year. So I know,

I think it was actually in March. Yeah, early March. So any um, any case, good to be back. And, uh, and, and obviously crypto hasn't skipped a beat. It's been, uh, it's been weird, but long, strange trip has been. Uh, better than we would have expected in March. So once again, before we get into the questions, you're listening to the Wolf of Wall Street's podcast for twice a week. I talk to your favorite personalities from the worlds of Bitcoin, finance, trading, art, music, sports, and politics. Show is powered by Blockworks Group, a media company with over 20 podcasts in your network. You can check them out at blockworksgroup.io. And if you like the podcast, follow me on Twitter.

You can check out my website, join my newsletter. You can do both of those things at thewolfofallstreets.io. So first, Ryan, I'm still plowing through your treatise on 2020 in review, however many hundreds of pages it is, it's basically war and peace for crypto. Blows my mind that one man can compose such a thorough document. What was the thinking behind this massive undertaking? Well, I like to joke and throw in Sopranos references every once in a while. There's a scene in Sopranos after Tony gets shot in one of the mid seasons where he goes and he kind of looks around for the toughest guy in the Sopranos after Tony gets shot in one of the mid seasons where he goes and he kind of looks

around for the toughest guy in the room in his crew to pick a fight with because he's afraid that he he thinks that they might think he's weak when he's recovering from this gunshot wound and and so every once in a while when I write I try to I try to write and show that I basically to myself but also the team that I still I got it, especially given how prolific and excellent the analysis has been from our much newer and scrappier team. But really, it's just a good mental framing for the year ahead. I think it helps me think through strategy for the company. It's something that I think declutters a lot of the garbage that is going on

in the industry, what's actually interesting, what's not. And I think the biggest difference between this year's post and a few years ago when I started these, the original was a hell lot easier to put together. I think I wrote it in about a day because it was essentially 95 tweet length insights on the state of the market. And you could do it at that point because a lot of what was happening in late 2017 was just, you know, kind of garbage in garbage out. It was, it was white papers. It wasn't products. It was insane valuations versus where we are today. And, and, and, you know, there wasn't a whole lot of usage or actual economic models that really made sense. And, you know, back when we started Masari, we thought we would ultimately aggregate high signal information for professional investors and,

and, and infrastructure companies trying to, you know, kind of build the foundation for the future of the web and for finance. And that was not going to look anything like the 2017 crop of ICOs, but probably look more like the economic models that we've seen this year. And there was just a ton of actually interesting developments to cover this year from everything from kind of Web3 to DeFi to stable coins. The foundation's been built and things are real this time around. If still aggressively valued, they're at least real. So I'd say that's a good kind of foundational document for us as we think about the industry. And really, although it's long, it's almost like 12 sector reports stapled together

in some respects, or to go one step further, even 120 tear sheets based on the different sections and the different topics that are highlighted. So 120 newsletters stapled together in addition to what we come out with daily. Makes sense. You're flexing on your

employees, basically, showing them that you're still the boss. But it's interesting that you say, in the past, it would have been a very quick document, but now there's far more to cover and it's far more real. And that gave you a basis to look at 2021 and likely what we can expect, which makes you the perfect person to be a talk to that, to talk about. So 2021, here we are, it's January, Bitcoin has reached 42,000 and had a slight retracement as we speak. What is at this point, would you say the main story for Bitcoin? Well, you know, institutional money comes in kind of like a tsunami. And people have talked about this institutional wave of capital that was going to come in basically for as long as I've been in the industry. In the 2013 bubble, it was Wall Street's coming in 2014. In the 2017 bubble, it was Wall Street's coming in 2018. Um, and we're starting

to see it now, but the difference is, um, MMT, uh, negative interest rates, uh, perpetual lockdowns and just, you know, kind of unbridled enthusiasm for, for permanent transfer payments and stimulus. I think it's, it's created a perfect storm where people are actually paying attention to, um, new types of assets that they could protect against an inflationary shock in the years ahead. Like we've never had that as a backdrop. That's always been scoffed at because inflation has never been high, at least in living memory for many investors and professionals in the West. So I think that that narrative environment has changed. The fact that Bitcoin has been through a few of these catastrophic cycles and remains, I think has caught the attention from major investors. And it just comes down to a bit of a snowball effect. The other kind of major trend that I think is

different this time around is there is as close as you're going to get to a surefire trade if you're an institutional investor in playing the grayscale premium game. That trade last year really kind of hit its S curve. And what I mean by that is basically accredited and institutional investors being able to buy Bitcoin at fair value and then ultimately liquidating or transferring their positions in six to 12 months through the public markets. And this kind of weird, esoteric vehicle that, you know, has basically been created because the SEC refuses to actually approve a Bitcoin ETF. So, you know, there's kind of like a premium that you can earn. There's a ton of money that can be made just with the basis trade in the derivatives market. So cover to cover, you know, in a financial system that is, you know, ruthlessly competitive, there seems to be a little bit

of alpha for whales in Bitcoin markets right now. And that's obviously going to attract some deep pocket investors. So it's a virtuous cycle on that end. It's interesting. So you touch on, there's sort of two narratives for institutional adoption. It's not just the Michael Saylor micro strategy, inflation hedge, you know, buying Bitcoin with your cash reserves. There's also just this simple trade with grayscale that existed where it was basically printing money, right? Because it trades so high above NAV. And it's basically a crappy product that for the for the public that institutions can take advantage of. That is going to disappear, right? We're going

to see an ETF approved. I don't know if that's going to be this year in the future. There's going to be competitive trusts that probably do not have that premium. So assuming that disappears and we see an ETF, is the other side of it, the inflation hedge side enough for institutions to continue buying? Well, I think Bitcoin's got a lot of momentum right now. And public market investors typically ride waves of momentum. You don't really see them reverse course overnight too quickly. And growth at all costs has been prioritized, certainly in 2020, but even beyond that for the last several years. And that's just a function of where interest rates are and where the economy is generally. I don't know if this is, you know, some people have said, is this going to be like the last Bitcoin bubble, right? So is this the bubble that income producing properties as well. I wouldn't go that far, but I do think because you're talking about institutional investors, tsunamis don't like, it's not like a movie, like Deep Impact, where you just see,

like, the thousand-foot wave kind of, you know, engulfing the cities and the coastlines. The tide typically goes out, and it looks just like, you know, a small wave that's coming in, and then you realize that it's just a relentless flood of water. And in this case, I think that's what's going to happen with institutional capital. As many of these investors have a pretty significant lead time between when they first learn about Bitcoin, when they have conviction to buy Bitcoin, and when they actually can execute their first trades. We're just starting to see the very, very tip of that iceberg. Do you believe that the ETF is what would really open the floodgates because it would give them a way to gain that exposure in a manner that they're familiar with and obviously is safe and would not require the same kind of approvals and vetting? Honestly, I'm not sure. I don't know the answer to that. Maybe for some investors that need to hold title custody options, whether it's through

Fidelity, Anchorage, BitGo. There's options this time around that didn't exist last time. And so I think the custody challenge was probably the gating item more so than the, is this available as a publicly traded security? And I've even seen, I think JP Morgan came out with an analysis last week that a bunch of people laughed at. I actually think it might have some merit that an ETF approval could be a short-term dampener of demand because you basically kill the grayscale trade. It's hard to say one way or the other

how that impacts supply demand. And if the demand right now is more of a mirage or if it's real and you're just starting to see, again, the early part of the tide coming in. So if this is the tip of the iceberg and the few companies that we've heard about gaining exposure are just the first, what does it look like when

we start to see much larger corporations gain exposure to Bitcoin? Because we all know that right now, I mean, it's fun to talk about an Apple or a Facebook putting a percentage of their treasury, but the asset's way too small. Market cap is way too low for that to be meaningful for them. So what does it look like as it scales up? Well, I'm not sure that I agree that the market cap is too low to be meaningful. I mean, if you're talking about kind of daily liquidity and kind of accessibility of the trade, it's there. Saylor has been able to accumulate close to a billion dollars worth of Bitcoin in six months. MassMutual, 100 million, square 50 million. And I'm sure there are going to be other announcements in short order of similar directional trades.

I shouldn't say trades, like directional investments, long-term kind of treasury reallocations or portfolio reallocations now that this is really getting discussed more widely. So my general sense is that you're in the short term looking at the gold market as a proxy. So maybe the GLD equivalent size of the market and the securitized portion of the gold markets, maybe $2 trillion, three X from here that gets you close to 100,000 Bitcoin. But I actually think that the framing, and this happened in a discussion that Balaji Srinivasan and I had right before the holidays when we were talking about the theses. And he made the point that the aberration here is not Bitcoin's performance.

The aberration is that fiat currency has been accepted for 50, 60 years, when historically there's always been some type of hard money backing currencies. And if you look at the framing of Bitcoin as like the reserve currency for, you know, internet money and, you know, a true replacement to the fiat regime, then, you know, gold kind of goes out the window because no one cares about gold right now anyway, ever since we've gotten off the gold standard, is that many multiples higher than the gold market today because you're starting to see it stockpiled as an actual long-term reserve. So I'd actually look less at institutional investors and more at whether we see our first central bank purchases

this year as kind of the real catalyst for whether we get into the potential hundreds of thousands of dollars range for Bitcoin. We haven't necessarily seen central bank purchases, but we definitely know that in countries like North Korea, Iran, I mean, Iran is mining, Venezuela, places like that, where it's been, I guess, a necessity, whether that's to bypass sanctions or whatever, we are seeing nation states that are interested in some manner. So I guess when you say central banks, we're talking about a European central bank or the United States or something like that. Do you really think that

that could be on the horizon in 2021? Yeah, I mean, I certainly hope so. And I'd like to see some Western developed economies and their central banks start initiating positions. Unfortunately, I doubt that they'll be the first movers. But, you know, we've got 70% of mining capacity in China. Russia has replaced the US dollar with gold as its top reserve asset. I'm sure they're not far behind when it comes to Bitcoin purchases as well, to compliment that. Iran, Venezuela, Turkey, North Korea, there's a pattern here and it sucks from an optics standpoint. So if we get the Swiss bank or the Brits to start stockpiling this,

I think that'd be a welcome change from the gas of characters that we've seen so far. But having said that, it doesn't change the fundamentals behind the investment theses, and it doesn't change the Western institutional money that's coming in outside of the central banks. If you had to play devil's advocate, what are the threats to Bitcoin in 2021? Well, I think it's just that. I think it's regulatory optics and overreach on self-custody of assets, right? So, you know, since 20, basically since I got into the industry, 2020, even as far back

as 2012, going back to the Mike Hearn days and the concept of coin taint, people within the industry were talking about this two-tiered system of blacklisted and whitelisted addresses in Bitcoin. And I think the biggest risk is global regulatory overreach that basically makes it extremely difficult to go between the regulated on and off ramps and then any type of either self-hosted wallet or actual non-custodied peer-to-peer transfer or even interaction with smart contracts. I think that's a real risk. Um, I, I don't put, um, kind of majority probability on, on that actually kind of crippling us, but, um, in theory it, it, it could be a, you know, a massive headwind, um, if, uh, if government's coordinated on that, I tend to think that they have bigger fish to fry

with COVID though. I would imagine so, but you know, it's on the docket. We, we, we know that, and they did it over the winter holiday and didn't give people much time to, to discuss or react. So it is a bit disconcerting. That's, that's, that's, that's a Trump administration that's doing a lot of shady shit on the way out. So I, you know, we'll, we'll, we'll see what sticks. Yeah. Right. I, it's just, it's definitely worth noting that it's on the radar. It's certainly not theoretical anymore. We've always talked about, you know, you can never ban Bitcoin, but you can certainly make it really difficult to get your money in and out of it if you're trying to go to fiat. And that's sort of what we're talking about here to some degree. I really hope that

that doesn't happen. And speaking of regulators, I think Bitcoin is pretty much in the clear being deemed a security, Ethereum probably as well, but it's ripple time, right? I mean, they're obviously coming after them. That's very clear. What are the implications of that, do you think, moving into the coming year for XRP itself and anything else that might be thrown in that basket? You know, I think the, you have to look at, at Ripple and XRP separately from pretty much everything else. And, you know, I think Gensler has been pretty thoughtful about how he's looked at the industry historically. He's been, I think, critical and I wouldn't expect a departure asset that really seems to be within the SEC's crosshairs right now. Hypothetically, DeFi protocols could run into some trouble.

But I don't know whether you're going to see it as aggressive as it stands towards crypto from the SEC in particular, as you did, you know, the previous administration and under, you know, Clayton's watch. We already have at least one ally in the SEC ranks in, you know, Commissioner Peirce. So I do think there's an opportunity to get a couple of other swing votes

when it comes to the Bitcoin ETF. I got a lot of confidence that that's going to happen. And if we see a Bitcoin ETF, that probably means that we are going to see a friendlier SEC in general, which hopefully leaves the door open for more no action letters, faster Reg A approvals, faster clarifications and interpretive letters on things like DeFi so that the US companies don't get left behind. So you think that other companies that ICOed in 2017 might be not thrown in the same basket as XRP, maybe treated like kick, a fine or something like that. Um, but not, you know, we're not looking at a heavy, heavy hammer. Yeah, I think, um, uh, I, I, I, who knows, right. But Ripple is,

is so large in comparison to everything else, um, that came to market in 2017. And it's also based in the US. So it's kind of the, it really is a unique animal. The SEC has already made its thoughts known on Bitcoin and Ethereum. You know, a lot of the higher profile ICOs in 2017 were either international or they came to market really before it became obvious that the SEC was going to treat pretty much all these fundraisers as unregistered securities offerings. And then last but not least, a lot of the interesting projects today are, you know, DeFi assets. And they've got a much

stronger case as to how they're decentralized from the opening gun than the 2017 variety of these tokens that raised a ton of money basically just on white papers. So I think there are, you know, kind of sizable differences across the board. And, you know, hopefully that's reflected in a little bit more certainty and a little bit less aggression from the SEC. Right. Well, I mean, DeFi was the hot button topic of the back half of 2020, certainly. So let's talk about how that looks. I mean, we talked about what Bitcoin looks like in 2021. How about everything else, right? What's Ethereum's role? And then how about all these other protocols? You know, obviously they're on Ethereum or trying to compete. Sorry, all the other DeFi protocols or DeFi specifically? Yeah, DeFi specifically.

Well, you know, I I'm I'm pretty conservative with my portfolio. And and if you're more or less just stuck with currencies and then with currencies and then what I call the DeFi blue chips, which probably won't be a surprise for any of your listeners. synthetic asset market, in the lending market, in the decentralized exchange market, and in the asset management market. So right there, you've kind of got the easies, right? Aave, synthetic, Wi-Fi, just to name a few, and Uniswap and Sushi for the decentralized exchange base. So the reason I think all those are interesting, there's actually fees that pass through the network and the fees are at relatively large scale right now. So they're not just based on future expectations. Certainly a lot of the valuation is reflected in outsized future expectations, but that doesn't mean that the fundamentals

of any of these projects are broken per se. I would say maybe the one missing component of the DeFi stack right now is actually decentralized algorithmic stable coins. And there are a few experiments in this realm right now is actually decentralized algorithmic stablecoins. And there are a few experiments in this realm right now between like empty set dollar and frax and new protocol that I've invested in called Fade Protocol. But I think the long and short is you're absolutely going to see value accrual in DeFi. And I typically think about DeFi versus Ethereum as just putting a relative value hat on where people want to be positioned for 2021. And right now, DeFi at $13 billion versus Ethereum at $120, should DeFi be 10% market share or more of Ethereum given that ETH basically is a DeFi

settlement chain? I don't know the answer. It is now. 2017, it was an ICO platform and that certainly has changed now. Well, ICOs are still decentralized finance, right? I mean, that was decentralized capital formation. It's just a different flavor this year. And by the way, I think that's fine. That's great. If you're going to be the backbone of the global decentralized financial system, that's a pretty big fucking market. And I said as much on stage at the 2019 ethereal summit, right. I was on stage with, with all the ETH heads and, and you know, they were, they were very riled up that I said, ETH is DeFi and nothing more because you can only have,

you can only focus on so many things. And I mean, that's proven to be true because everything else gets pushed off chain if it's not high value enough. Aren't those gas fees, transaction fees you touched on, the large transaction fees, aren't those prohibitive to growth in the DeFi space? I mean, there's times of late where if you want to send 100 bucks, you pay $35 to do it. Yeah, I mean, that's temporary. You know, like Bitcoin had a miniaturized version of this in 2017, and then we had Segwit,

right? And then Lightning. And you say what you will about Lightning as a scaling solution and whatnot. The point is Bitcoin found a way to route around its capacity constraints after a short amount of high fees. Ethereum, same exact thing. I could argue that there's much more innovation around the Ethereum scaling ecosystem than there ever has been around Bitcoin. It's almost not even up for debate in terms of layer two versus alternative layer one chains that could route demand back and forth. And I think there's going to be a lot of interoperability between various chains as well. So one way or the other, congestion will come down. Either Ethereum will lose and someone else will take its place with something that's better, faster, cheaper, more secure, or more likely Ethereum will win, continue to win.

But certain either high volume periods or certain applications will route either on different layer one chains or layer two. Yeah, I agree. I mean, you said it's a big enough use case because, hey, we're trying to replace the entire global financial system, right? I mean, is that a meme or is that really the potential of DeFi in a perfect world? Well, I mean, in 10 years, the landscape is not going to look like it does today, for sure. But, you know, change doesn't happen overnight. And so my sense is whether it's

Ethereum or something else that scales incredibly quickly, you're going to see it coming. You know, it might happen fast, but, you know, fast in the, in through the lens of how quickly can we disrupt global finance, you know, that takes years to actually see some of those changes come to fruition. And I think if you look at like annual milestones, it's a good, looking backwards, it's a good indication of kind of the pace of macro change that you could expect for decentralized finance going forward, right? 2015, Ethereum launches. 2016, you have the initial applications. 2017, you have the ICO boom where a lot of the other layer one competitors got funded. 2018, you had Maker. 2019, you started to see a pickup in DeFi and decentralized exchange applications.

Last year was all about yield farming and actually making sure that the capital... Well, yield farming was important, right? I just laugh because I think of food coins. You had the liquidity in place to actually, you know, make these applications useful and tighten the spread so that they're competitive with, you know, centralized alternatives. And, you know, this year we've got a few different things that could happen. But I think the biggest theme for the year is going to be reducing gas fees and actually seeing real usage on platforms not named Ethereum for a variety of reasons, maybe the most important of which is just throughput optimization and the gas is too damn high. The rent is too damn high. Yeah. I mean, the speed and the reduction of fees are clearly the key there, I would imagine.

But what happens, we're already seeing it with actual banks starting to take interest. Obviously, banks we know now can custody assets. Crackin' is a bank, but can custody Bitcoin. And now we've obviously seen that likely stable coins will be used by the legacy banking system as a replacement for Swift and ACH. So what happens when the big boys come in and say, maybe not sushi. We know, we want to do this ourselves. Good luck. They're just, they are handcuffed. Banks are law firms with small business development teams and technology arms. They're, you know, they're an extension of of global government and they're almost definitionally never going to be able to use to move as fast as um as pure play technology

companies now it's not to say that um people building in defy should just flout all the regulations and and and you know ignore what's what's been uh dictated from on high. But the point is, a lot of teams can just do that and spin up projects anonymously. And once the plumbing works, it's there and it's consumable for anyone that's looking to interface with the system. So I don't think it matters. Like we had this thing in the industry

for a really long time of, you know, like being so eager that like, we're going to level up to the next grade. Right. It's almost like school, right? You get out of middle school and then you got to get into the AP class. So you get into the AP class, so you get into a good college, you get into a good college and go to a good grad program. And then at some point in your life, you realize like, like there is no next step. Like, like it's basically just on you to kind of develop your own career and, and, and make your own living in your own life. And I kind of feel like we're at that point with crypto where it was like, you know, for, for a very long time, it was, if we can only get past the crypto anarchists and the technologists, if we can only get past the crypto anarchists

and the technologists, if we can only get past the shit coin traders, and if we can only get past like hedge funds, and if we can only like get to the banks, like there's going to be this promised land. And I think what's going to happen is people are going to turn around and say, who gives a fuck about JP Morgan? Binance and Coinbase are as big or bigger, or at least they're on a steeper trajectory. And I think once that happens, and once we start to see the decentralized ecosystems get as large as major financial firms, in some cases they already are, it's going to start mattering less to people like what grade you're jumping and what milestone you've hit using traditional measures of success versus the sky is now the limit because this is a new frontier. It's so funny you talk about high school, college, and all the classes, and then you look back and think, I should have

probably just played video games when I was 15 and learned to code. Yeah, right. And that's sort of where this is at, which is interesting. But we envision this future where you completely opt out of the system altogether. You don't need a bank, you're gaining yield, even if it's on a Celsius or a BlockFi or a Voyager, and you're making your 9% and you can't get that in a bank. Is there a future where, I mean, certainly it's harder in America where you opt out completely of that system and you can just live your life, you know, in the DeFi ecosystem and go about your day? You know, first of all, I don't think so. And, and second of all, I don't know that we want that, right. You know, so the, the, the Citadel meme is, is extremely dystopian. You know, I, I, I tend to think that if, if crypto is, is going to succeed at scale, you're going to have to grapple with the same societal

challenges that we grapple with in the financial system. Just because North Korea can mine Bitcoin doesn't mean we want them having a lot of Bitcoin. Just because people can move money at the speed of light doesn't mean that we are excited that Hamas or Al-Qaeda or ISIS or any of these other up and coming terrorist groups are going to be able to circumvent global sanctions. So I think the same is true just when we talk about wealth distribution in general. So I don't think it's a problem if crypto is ultimately taxed efficiently and people that have made a lot of money in this new economy pay something to Caesar in terms of the gains that have accrued. There's nothing wrong with that. And I think it's probably healthy. You'd rather that and some semi-functional regulatory regime for how to make sure that this industry gets built out intelligently than just say, you know what, it's kind of a binary black or white decision. You can either be your own bank and basically live in the shadows because at scale, that is what's going to happen. You're going to need to file,

you already need to disclose on IRS forms that you, you know, if you've conducted any transactions, that will get extended one step further through, I think, FBAR reporting in the next couple of years, foreign bank account, something, you know, disclosures. And at that point, you basically have to make a decision about whether you're going to perjure yourself to the US government or whatever country you're living in and truly live outside the law or if it's required or, you know, you're, you're going to play by the rules and figure out, you know, how, how can we be smart about treating this technology just like any other, where it's going to have to fit in into society, or you're going to have to emigrate or be outlawed somewhere.

Yeah. I mean, it's right on the first page of the tax form now, like you said. I mean, you don't even have to dig far to find that disclosure. It's in the top third of the front page of your taxes. So yeah, clearly it's very much in the spotlight. So the other thing, I mean, we've seen a huge emergence obviously is in the power and usage of stable coins. To some degree, you could argue that they've sort of replaced Bitcoin

as the cash part of the peer-to-peer cash from the white paper. And now Bitcoin is sort of moved into the store of value half and away from the cash. Do you think that we will see an explosion now with banks and everything in the usage of stable coins and innovation in that space as well? Yeah, I mean, I think it's inevitable, you know, how interesting they are is a separate question, you know, like there's, will US dollars and euros and Swiss francs and yen, will they all be tokenized and tradable on blockchain protocols? Of course,

like that's already true. They already exist just, you know, in There's varying shades of regulations that those different protocols are operating under the framework of. is can we actually bootstrap a truly resilient decentralized stablecoin or stablecoins? And a global reserve similar experiments across the spectrum from partially collateralized, fully collateralized, algorithmic, fully regulated central bank digital currencies. The more regulated versions are less interesting, but they're going to continue to be massive. To me, I'm spending more of my time thinking about the decentralized alternatives, because I think that's a game changer if we can actually have a decentralized Bitcoin-like protocol that doesn't fluctuate as wildly as the current alternatives. Does Tether concern you at all?

No. Me either. I'm just curious. It's become such a small part of the market, actually, relative market. Well, Tether's reserve doesn't concern me. I think enough deep-pocketed traders do enough business with Tether and with Bitfinex and know the principles that it doesn't seem like that much of a near-term risk. Again, it's in that, could there be a coordinated global shutdown and crackdown and seizure? Yes, potentially. But that's already happened once at pretty significant scale just a couple of years ago with Bitifinex and the account seizures that they had and the alleged fraud and theft that they had in, I think, 2018. So I don't know that

it's going to be tough to shake people's faith in Tether that are using it at real scale. And that's in particular true for the global exchanges. So what else excites you about this year that we haven't touched on? What else do you think that's coming in the crypto space that we can look for? I think the multi-billion dollar question for a lot of developers on the smart contract side is on whether we will see many different layer ones emerge as viable and competitive. Like, will they actually build ecosystems that can rival Ethereum's. And my sense right now is that with ETH roadmap looking like it's going to stop at 1.5 plus rollups, the Ethereum community has already

kind of resigned themselves to the fact that a lot of what they want to do is going to be off the primary Ethereum chain and off the primary Ethereum 2 shards. So a lot of infrastructure is going to have to be built for cross-shard compatibility and then layer one versus layer two compatibility. As long as teams are working on that problem on the infrastructure side, kind of portability between different basically blockchains entirely, you should see more build around Cosmos and Polkadot and Solana and Near and avalanche and so on down the list. Um, I, I don't know which ones are going to fail and which ones are going to make some serious inroads, but that's going to be fascinating to watch over the course of the next year. Cause I think we're going to get an answer pretty, pretty quickly, um, as to which layer ones have staying power. I don't think this is something where, you know, a layer one project

that's been in development for three years launches doesn't hit scale, but then somehow has a magical resurgence in a few years. I think you'll probably see the winning handful of layer one protocols emerge this year and next year. And then, and there'll be, there'll be incredibly hard to displace after that. What are your thoughts on the NFT space? It was another thing that we saw start to really, really bubble in 2020. And honestly, it's kind of interesting. I haven't heard as much about it right now at the beginning of 2021, maybe just because Bitcoin has gone on such an aggressive bull run and all eyes are on the king. But do you think that we'll see more innovation and excitement around NFTs this year?

Yeah, I mean, I think that at scale is going to be an incredibly interesting market. I tend to look at the actual marketplaces as more interesting just in terms you know keeping a tab keeping tabs on things and and you know understanding where there might be opportunities an investor um i haven't done too many deep dives uh around the nft market one of our uh analysts mason uh has has been doing a phenomenal job of tracking everything from social tokens and community tokens, digital art markets, kind of the metaverse developments. But that to me feels like a market that's probably a couple of years away from having its euphoric rise similar to what we saw on DeFi this year. I feel, so I guess I said it another way, I feel about NFTs this year, the way I felt about DeFi maybe, you know, mid 2019. So we'll keep an eye on it, but I'd say, you know, it's hard for me to get really excited about NFTs right now um before uh you know there's there's actual development in kind of the vr space

because i think gaming will probably be one of the first markets uh that it's that it's interesting scale um but you know nfts are it's like saying erc20 right it's just a right because it's such a right i mean it's a vast it vast. But I think when most people talk about NFTs, they're talking about things like digital art and goods and tokenized data and things like that. And to me, like that genre of Web3 assets is probably still a little bit a ways away in the future. Yeah, I mean, I don't think that we'll be like,

you know, buying and selling cars with NFTs and our mortgages yet. But I do think that that is potentially the future, much bigger than the art side of it, honestly. But like you said, I think that that's sort of your knee jerk reaction when someone mentions NFT is to think about, you know, bidding on Picasso's bowl and art and such things like that. Going back to the high school college comparison, I think the same thing happened with security tokens. People were talking about security tokens, security tokens, security tokens. Who gives a shit? The interesting thing is to create synthetic assets on chain that have security like properties, like actual cashflow characteristics that you'd be able to value like a traditional security, but that are now native to crypto. And that's what we saw this year with DeFi assets.

So I think tokenization, again, it'll probably be insular and people will talk about tokenizing your mortgage and this and that and the other thing. That's probably the last thing that happens in my mind. It's probably all digital IP at this point. That makes total sense. So specific to Masari, what are you guys doing this year? Any big changes in your operations or is it, you know, just keep plowing through? Well, I mean, we've, we've, we've tripled revenue in the last year. So that doesn't sound like a lot by DeFi standards, but for, for information, but for, for, for, for, for, for, for, for subscription software businesses and the information space is pretty good. And that pace is accelerating because of a couple of new project, uh, products that we have. Um, so, uh, the, the first thing that people see is a lot of our, uh, our, our

tech and tools are available for the community at large. Uh, so our new homepage, uh, launched in early, uh, early December and, um, even, you know, accounting for the Bitcoin rally, we've seen just insane levels of spikes in all of our traffic metrics, in particular time on site. So that terminal-like feel, particularly for desktop, I think has become a go-to and a second screen for professionals. Once you kind of start with the free stuff, a lot of folks kind of go down the rabbit hole to our pro and enterprise tiers where, you know, we put out daily, you know, research insights, have best in class analyst coverage for assets, not named Bitcoin and Ether, right? So the long tail or top 200 that people care about, but just don't really have much reliable information on. And then we also cover about 150 assets through our new Intel product that's been enclosed beta, which is kind of like a corporate actions alerts and monitoring system for infrastructure companies, projects, investors, anyone that's, you know, covering multiple crypto assets that needs to keep tabs on things like governance changes, economic changes,

you know, third party listing decisions, stakeholder changes, or any type of technical or compliance issues that might arise with the tokens. So all three of those have, you know, been going gangbusters in terms of, you know of our metrics and growth, as you can imagine. lag the Bitcoin market because of the Bitcoin wealth effect and the fact that no one needs enterprise research if you're just focused on Bitcoin. You make the binary decision, you set the allocation, and then you figure out how to actually store it and then call it a day. But once you start going further down the rabbit hole and start thinking, okay, what should be in my five asset portfolio or which of these protocols should we start actually taking seriously from an infrastructure standpoint? That's where we've been pretty effective at picks and shovels to some of the real hardcore crypto professionals. So true. In the 90s, we would have said that Bitcoin was like weed,

was the gateway drug. And then you get into like math speed and crack over with DeFi and food coins and stuff. But that's interesting. So it seems like your business is a good window into probably the general global interest in the market as a whole, because you can see what kind of people are coming into it and what they're interested in specifically. So are you seeing

a large swath of retail, just average people who are coming into your entry level products and looking for information? Or are you talking more about family offices and hedge funds and sort of the bigger money, but the lower hanging institutional fruit. We have a, I mean, we have a pro product that's competitively priced for like the hobbyist that's just really getting deep into the weeds and, and, you know, trying to figure out, you know, what projects are interesting or, you know, just generally come up the learning curve, whether they're a day trader or just kind of new newcomer to the space. That's certainly a significant portion of our revenue, particularly on the pro side. But last year and particularly in the last quarter, we've seen a shift in revenue from just the individual professional into the enterprise and crypto enterprise, right? Not like the Wall Street banks, although we do have several large,

you know, institutional clients from the kind of, you know, the traditional realm. So I think, you know, we'll certainly see more of that. Again, the big difference between now and a few years ago, there are Web3 assets that matter. There are DeFi assets and ecosystems that matter that are at scale. There are other layer ones beyond Ethereum that people have to pay attention to. There are legitimately interesting marketplace models and all types of different stablecoin models that people need to wrap their heads around. So you could afford to ignore a lot of this shit last cycle.

Sure. Not true anymore, right? There's probably 100 bona fide interesting assets that any investment fund, any investor that's not a hardcore Bitcoin maximalist will say they should be keeping an eye on. And that kind of teases, I think, what will happen over the course of the next few years, where we'll go from 100, maybe last cycle, it was 10 actually interesting assets. Now it's 100. And four years from now, it'll be 1,000 and so on. So we're positioned for that 100 to 1, thousand. So to some degree, you just have to expand because the market is growing so fast and there's so many more assets to track and there's just so much more information and you have to be the hub for all of that. Yeah, but you can only

expand if you have revenue. So people are, you're, we're at a trillion dollars in market cap and there's no sell side research. Right. So like that, that's the, that's the one liner that I think people, you know, like grok immediately there there's, there's going to have to be a right sizing of the crypto information market in general. You know, we're going to have a slice of that. There's going to be other data providers that have a decent slice of that. You know, other, you know, subscription research, you know, platforms as well. So I don't think it's, you know, winner, winner take all, but we're, you know, we're certainly in position A right now, as long as, as long as I don't fuck it up. So do you become Bloomberg and start charging, you know, like, Oh God knows, what are they now? A 50 grand for a yearly for a terminal? Is that the future of Masari?

Well, look, I mean, there's, there's certainly a common elements to our new look and feel and, and what we're building technically. And, and we certainly have the research team to pull off some of this at scale. So we'll see. I think the industry moves in cycles. We've got another whole cycle before we're at Bloomberg type data needs. Going back to something that I referenced earlier, you know, 2013, it was the crypto anarchists, the libertarians and the early adopters. From 2013 to 2017, it was like the retail crowd. 2017 to now, I'd say it's the

professional crowd. So we've still got a whole other four-year cycle by that logic to get into the actual legacy enterprise beyond just the first. We're finally just making traction with Bitcoin and Ethereum. It's going to take another four years for the 100 assets that we think are interesting to get interesting to that next crop of firms. So ways to go. I'll be looking forward to your mayor run in New York City and then your presidential campaign when you get to Bloomberg status. Something like that. Yeah.

Yeah, totally. So where can everybody follow you, keep up with you? Check out Masari after this conversation. Yeah, head over to masari.io, that research report that you mentioned. Still front and center, so you can give that a read. And if you enjoy it, you can sign up for our newsletter pretty seamlessly from that download process. I write daily. Our analysts have been on fire in terms of their daily insights pieces as well.

And if you're too lazy to do all that, I'm at 2BitIdiot on Twitter for the shit posts. Still the greatest name on Twitter, especially for someone who's running a serious business. I absolutely love it. But if anyone wants to know why he's 2BitIdiot, you can revisit our first podcast conversation. Well, thank you so much for taking the time. I really appreciate it. And I'm excited for 2021. I don't know about you, but it feels like we really are on the precipice here. I think so. Hope so. Fingers crossed. We'll do this a third time soon. Sounds good.