The Wolf Of All Streets - What Is Crypto’s Superpower & Why 2022 Will Be A Year Of Ethereum | Seth Ginns, CoinFund

Episode Date: March 17, 2022

Crypto is here to stay and understanding its superpower will give you a competitive advantage. Our guest Seth Ginns (@sethginns) has been deeply involved with the crypto world since 2012. Now a Managing Partner at CoinFund, Seth specializes in liquid investment strategies and the convergence of crypto and equity markets. On this episode, Seth joins host Scott Melker to help us understand the recent infrastructure legislation and its effects on crypto, the upcoming election and what to expect in the stock market, why he believed in crypto early on, and why he continues to be a believer. ••• FIND US ON SOCIAL ••• Scott Melker: https://twitter.com/scottmelker Seth Ginns: https://twitter.com/sethginns Production & Marketing Team: https://penname.co/ ••• JOIN THE WOLF DEN NEWSLETTER ••• 📩 https://www.getrevue.co/profile/TheWolfDen/members ••• THANK YOU TO OUR SPONSOR ••• Secure your assets, secure your future, with Arculus. Arculus is the crypto cold storage wallet that combines the world’s strongest security protocols with an easy-to-manage app. Store, swap, and send your crypto all with a simple tap of your Arculus Key™ card.

This podcast is sponsored by Arculist. Stay tuned for more information on them later in the episode. What's up, everybody? I'm Scott Melker, and this is the Wolf of Wall Street's podcast, where twice every single week I talk to your favorite personalities from the worlds of Bitcoin, finance, music, trading, art, sports, politics, basically anyone with a good story to tell. Now, most of us are passive investors. We dollar cost average. We look at our portfolios very rarely, right? We don't obsess over them every single day. We would never do that. But there are obviously

people out there who are much more active investors and funds that take a very active interest in their investments. Seth Ginty, today's guest, he's a managing partner at CoinFund, and that is their MO. They are active investors. They bring added value to the projects that they invest in. So I want to talk to him about how they approach the market and also, of course, what kind of projects they're looking for, what they think of the macro environment and everything that's happening right now in the crypto space. Seth Ginn, thank you so much for joining and taking the time. Scott, thanks for having me. I thought you were going to say you bring on anyone with a pulse and that's why I'm here today. You know, we needed a fill in. And so now I'm just kidding. That's not the case at all. You

made the cut of your own volition. I was told that my first question to you today has to be, who did you vote for in your senior high school presidential election? Dude, got to be Jeremy. Got to be Jeremy. Right. So Seth and I found out right before this recording with no connection here that we share a very, very close mutual friend. And then also we went to the University of Pennsylvania together only one year apart. So there's some kismet here. I'm not going to get in trouble with that question. I hope I don't get you into trouble with that question. So let's dive right in.

Can you talk about exactly what CoinFund is and what you do? Yeah, no, thanks. So CoinFund is one of the largest crypto investment managers where we're investing across the liquid markets. We actually started in early equities world, the fundamental kind of large, long only investing world. And a lot of what we're doing at CoinFund, either on the venture side or the liquid side rhymes with what I was doing for 18 years on the public equities buy side. So what's the difference between how the venture side operates and how the liquid side operates for people who might not understand? Yeah. I mean, the venture side, we're investing in typically earlier stage opportunities. They are opportunities where if it's our early stage funds, the team might just be coming together full time

for the first time now when we're looking at the opportunity. If it's a mid or later stage, it's still private. Oftentimes, mid or later stage, it's still private as an equity investment. And we're evaluating the addressable market, the product market fit, and really talking to the team, their customers, their competitors. If it's something that's readily modelable, building a model for where we think that the business can go. If it's an opportunity that we think is likely to have a public or liquid token over time, then we'll think about how the liquid markets value those types of businesses, just like you would if you were investing in an early stage private equity opportunity, and you were looking at how the public equity markets would value those types of businesses. And you primarily work on the liquid side? That's right. That's right. So I

lead our liquid efforts. That's really, really interesting. So when you guys invest in a company, how do you actually add value, right? I mean, I know that there's all kinds of different venture capital and different approaches and everybody sort of comes specifically with that certain something that they're gonna bring to the project. Because frankly, I think we all know at this point

that actually finding money for a project is not that hard, right? It's determining which money to take, which is a very interesting sort of situation to be in. Totally, totally. And like you said, capital is readily available right now, particularly for crypto. There's a new fund announcement just about every week. So we're adding value really with the experience that we have of investing in over 100 companies in the space that first pulling together teams that would be really good matches. That's also working broader business development for investment. So a lot of times a portfolio

company is looking for a connection to a public company and I have a connection from my equities days. Or they're looking for a connection to another investor who we're close to because that investor has a portfolio company that would be helpful for them. So it's really figuring out how we can help accelerate the business with our network. And then the crypto native things that we're involved with, I'd say CoinFund, and this was before my time,

but one of the pioneers in what we call active network participation. So that would be running nodes for projects, being actively engaged. And that's an area that has become really, I'd say, part of the course for investors over the last two years. It was an area that my partners, Jake and Alex, really pioneered going back three, four years ago. And you came, as you said, from sort of the legacy market side, which seems to be a path we're seeing quite a bit more often now, but maybe wasn't that common before.

What drove you to crypto? And did everyone tell you you were crazy? Yes, on the second part. No, it's funny. Everyone, meaning like everyone that would listen to me talk about crypto was hearing about crypto forever from me. So it wasn't that big of a surprise. But I got involved in crypto back in 2012, read about Bitcoin in 2011, ended up investing in some angel investments, actually Coinbase when they graduated from Y Combinator back in 2012. So that was kind of my starting crypto. And then it was really a question for me of if and when this space became a large institutional asset class, I'd want to be ready to launch a fund. And for the first five years, it was really an if. Did

a bunch of additional investments in the space early in Ethereum and did a bunch of equity investments as well. But they were all part of a broader angel portfolio. And my view was, I think this is really interesting technology. It was meeting some of the smartest people I was coming across in the tech world, but it wasn't clear that this was actually going to be one of those breakout areas where you are kind of pushing the envelope on the regulatory side, but you're actually going to be able to reshape the regulatory environment. And I think this is an area that's really, really interesting because there's some dynamics that came to play where for the first, call it like five to seven years of crypto, it was just too small to be on regulators' radars.

And I remember the first time that Bitcoin was mentioned in an SEC filing, at least one of the ones that we saw was when PayPal spun out of eBay. And it was like this monumental moment. And it was just like the monumental moment when the president mentioned Bitcoin for the first time. And we had like all of these kind of like monumental moments along the way. And it's kind of wild. It's a little bit like the frog that's being like boiled slowly, where you go from being this like niche area where you're like, wow, the government could really shut this down if they wanted to. And that's always the risk that like traditional finance people would always bring up. It was like, look, if this gets too big, the government's going to shut it down. And then you just like you wake up one day and you're at a point where

the engagement and the excitement and the technology that's being built and the global way that this is really driving development and the cadence of innovation. It's all like at a critical mass where it's unstoppable. And that happened, I think, after I joined full time. But you could kind of start seeing that coming together. I really think the core inflection point for all that was last summer with the infrastructure bill. But back to your question, I'd say the reaction was like, you know, whenever I could talk to someone about Bitcoin, and then about ETH, and about going to DevCon or EdCon and what I was investing in, what I was learning about,

I would talk people's ears off. And it wasn't that much of a surprise that as we started to emerge from the last bear market, it was something that I wanted to pursue full time. And the amazing thing was I started to find traditional allocators showing up at the events that I was going to. And they were ready to start coming up the learning curve and ramping and investing in the space. And that was back in the day. They've made it up the learning curve now. When you see Bain coming in with a half a billion dollar fund and sort of these big names that you thought would never touch us. It really is

astounding and something that I wouldn't necessarily have expected to happen so fast, right? Slowly and then all at once has definitely been the case. And you touched on it. I mean, I started in 2016. And back then, even if a random Forbes article had the word Bitcoin, price would move 10 percent. Right. Just a mere mention of it anywhere in the mainstream media. And now the tickers on CNBC next to Apple and Amazon. And I think you talked about something that I want to dive into a little more. The infrastructure bill last year, because it was a complete accident that sent Bitcoin onto the international stage, right? We didn't have a PAC or lobbyists.

And this one line that basically triggered the crypto community froze this bill for five days. That was the biggest bill of the Biden presidency, right? And like you said, at that point, the crypto community stepped up and became this force to be reckoned with. It could not be ignored anymore. But it was a complete accident in my mind. What's wild is it was a complete accident, but in actuality, I mean, it was Treasury trying to slip that language in. It was Treasury trying to push their policy agenda, which is totally fair.

But the way that the industry was catalyzed, the way that the set of lobbyists in D.C. who had been down there and who had been doing fantastic work, but kind of behind the scenes, the way that they just like came out front and got multiple amendments to be brought up and the language ended up staying in. was having at the end of that period, bipartisan senior senators saying, crypto is about technology innovation. It's here to stay. We need to keep it on shore. And then there was another really cool dynamic, which was when they tweeted this, they got 1,000, 2,000, 5,000 likes. And it was from the younger generation

that they haven't been able to engage with as much. And that just got a lot of attention. And we internally were talking about how this felt like such a pivotal moment for the industry. And it ended up just snowballing through the fall, where you had Senator Toomey, when the PBOC banned crypto, tweeting that crypto and Bitcoin are about, I think the exact language was economic freedom and liberty. And it had like 40,000 likes within a week. So this engagement, and you started to see different parts of government, local, state, national, realizing that this is a real next wave of technology innovation. It means jobs growth for their constituents. It means economic growth. And by the way, when Bitcoin goes up,

when the dollar falls versus Bitcoin, when the dollar falls versus ETH, that's actually an economic tailwind, which is pretty powerful. And all of this, like you said, it goes from nothing to really a big deal very quickly. All of this happened from that infrastructure bill. The kindling was kind of laid, but that spark was the infrastructure bill, I think, last summer. And it's really taken off. And kind of the culmination of that is the executive order from this week. Which, I mean, I wouldn't have had on my early 2022 bingo card, President Biden having to sign an executive order on crypto, if you'd asked me in 2019. So really, like the velocity is just incredible. Something you just talked about, it's a very positive take and talking about

the tweets and the engagement and then realizing the importance of Bitcoin, because my take would have been, wow, voters, right? And so like, you know, maybe I'm a bit of a pessimist about politics, but of course, I don't think anything moves the needle for them beyond, I want to get reelected and do my constituents care enough that I have to formulate an opinion on this? And what should that opinion be? But I think it's very interesting to see the pushback against those who have taken a negative opinion. Well, I'll tell you, I think one of crypto's superpowers is engagement. And there was a great quote, and I haven't seen their more recent data, but the CEO of PayPal back in December of 20, right when they enabled crypto functionality, was talking about how their daily active users for people that had crypto enabled was just off the charts. And that's kind of like what we saw around the infrastructure bill was the exact same

dynamic. Like you engage people on crypto and your engagement, the amount of attention that they pay for you and for politicians, this is like, it's so important, right? Like you said, voters, that's what this is about. And what they saw was voters care about this, by the way, get out and vote, vote for pro-crypto candidates. It's so important. And then I think Constitution DAO was yet another example of how quickly crypto can mobilize. And you look at what's happening with Russia and Ukraine and seeing how quickly the crypto community was able to mobilize and donate to the Ukrainians. Like there's a really, really big engagement angle here that politicians are very much taking note of. And it's so powerful. Talk about seeing the velocity of the donations to Ukraine, how quickly they're

actually being put to use, how much more of an efficient manner of actually sending those donations and receiving them it is. You've been here since 2012, you said. Effectively, I feel like Bitcoin has had these endless positive narratives that have just evolved, right? I mean, 2008, it's peer-to-peer cash. We don't even barely talk about peer-to-peer cash anymore, right? That's what the white paper was. Then digital gold, store of value, censorship proof.

And now it's the greatest use cases donating to countries and war-torn countries. It feels like the narratives just never end. And they're almost always positive. And they dispel the negative ones so rapidly. It's interesting. I mean, we talk about how crypto is about, and when I say crypto, I'm really talking open source blockchain. And it's about open source, open competition and global. When you mix the three of those together, you end up having a cadence of innovation that is extraordinary. And that innovation is around people's pain points, but it's not like a bunch of people in the valley who are saying, what are our pain points? It's global pain points. And it's organizing people

around the world to solve those global pain points. And it's kind of like this organic beast that's like finding its way to where it needs to be. Another framing that I like to talk about is the way that those dynamics come together, crypto advances really quickly as an industry, right? So you see innovation that's unbelievable, but it's incredibly difficult as an individual business, because as an individual business, the moats to your business are actually a lot lower than in the traditional business world. So there's this dynamic where it's really easy for people to take the best parts of your business.

If you have an open source protocol, it's easy for them to take parts of that that are really exciting and incorporate it into their protocols. And the way that you keep your competitive advantage, it really boils down to community, right? So to driving engagement, engagement of users, engagement of developers, getting people around the ethos of what you're building. But it's really tough. So you have this dynamic where you have a lot of turnover in the projects that are the winners, but all of that ends up moving crypto forward at a really fast pace. Yeah. I mean, it's like the old joke that six months in the real world is like 60 years. And well, I should say that six months in crypto is like 60 years in the real world.

I had the pace of innovation, but you identified it pretty early, right? I mean, it's funny. You probably have people who in 2022 are like, you were so lucky, you know, to be there and to invest in Coinbase in 2012, as if they would have invested in Coinbase naturally. What was it about Brian Armstrong, the Coinbase team earlier that made you think, hmm, I'm going to invest in a crypto exchange when crypto was not even remotely a thing. And by the way, one of my best friends was in Y Combinator with them and passed on a $10,000 investment in Coinbase for something else that

went to zero. It could have been one of the first investors alongside Gary Tan. Love it. Yeah, no. So it's interesting. I mean, I think a lot of it is, I'm a big believer in luck favors the prepared mind. And I had read about Bitcoin in 2011. There was a great article in the New Yorker, actually, that was talking about the security researcher who was trying to break Bitcoin, was looking for vulnerabilities. And whenever he would come up with a vulnerability, he would go into the code base and there would be a message saying, nope, sorry, close that. It was like one after another. I was like, this is really cool. I want to, I love the ethos of it. I think it's really interesting. And I was thinking about buying

it. The problem was you had to wire money to Mt. Gox to buy it at the time. It seemed too shady in the seat that I was sitting in. So I didn't do it then. So when I came across Coinbase as kind of a much more like onshore regulated way of doing that, sitting at an investment from that, that made a lot of sense to me. Did the investment actually through Funders Club, which was one of the batch mates of Coinbase and a credit investor, crowdfunding platform, a bunch of pen guys, Boris and Alex there too. And then I got an email from Brian and Brian said, hey, I'd love to hop on. I saw you said on AngelList that you're an investor, would love to get you to invest more. And I was like, let's do it. He was

like, let's Skype, right? This is back in 2012. So we get on Skype and I had a great call. I thought Brian was awesome. And he was like, so do you want to invest more? And I was like, no, no, I'm all good. Thanks. Isn't that how every investor call? That's like 99 out of a hundred had the greatest feeling from that guy he said no no but but i mean i had like you know i i put in what i felt was the appropriate amount for for that point it was a call option on a call option and then when they did the series a i i came back and re-upped and actually was able to give some of my pro rata to uh one of my mentors who did angel investing with me at the time. And that was really awesome. Yeah, that's really cool. It's interesting to hear you describe that early

process of wanting to buy Bitcoin, but you had to wire to Mt. Gox. So that didn't feel safe enough for you. So you bought Coinbase stock, or you invest in Coinbase early as a proxy for buying Bitcoin. Even 10 years later, people buy Coinbase stock now, which is publicly traded as a proxy for buying Bitcoin. Even 10 years later, people buy Coinbase stock now, which is publicly traded as a proxy for buying Bitcoin. Some of them who can't access Bitcoin for various rules. Amazing that that hasn't changed in 10 years. It's pretty wild. I mean, I ended up buying Bitcoin on Coinbase right after that. It was so funny. I love when I was at DevCon in Cancun back in 17, I had all these people saying, well, hold on a sec. Like you would have been better just buying Bitcoin. And of course, yeah, it was all right. It was all right. But yeah, no, it is wild. And also the fact that, I mean, when you look at the equity associated ways of buying Bitcoin today, they still either traded a discount or have a role, which obviously contango role you're going to lose. So, you know, I really,

I think the regulators are doing a great job of getting up to speed on the space. They're at this point, incredibly knowledgeable. And the hope is that we see a broadening out of investment opportunities for sure. We all believe and know that cryptocurrencies are the future, but it's still very scary to be your own bank and have to secure your assets. Most of the traditional hardware wallets are hard to use. They're clunky and people lose their private keys. It's not really that efficient.

And that's where the Arculus key card comes in. I absolutely love this thing. I've transitioned largely to using it for most of my assets. It's literally just a card that you tap right on your mobile device. You can send, receive, swap, buy and sell crypto with that simple action. It's literally amazing. There's no cords. There's no charging. There's no Bluetooth. The only person that has access to your crypto is you. You guys have got to try it. And guess what? You can buy it right on Amazon.

Go buy your Arculus on Amazon now. Did the executive order give you hope that that is the direction that they're going to head in? I think there was a lot of optimism after it was actually released, although I think it was exactly what they expected. Optimism being that it wasn't bad, right? Almost was the feeling because after the Russian invasion, there was obviously some fear that it would be sort of skinned as a threat to national security or the evading sanctions narrative, which we all know is nonsense. So do you think that that's going to light a fire under regulators to get this done? Oh, I think they have to know. I think the executive order was pretty clear that regulators all should do a full evaluation of crypto. What

I loved about the executive order was the way that it was balanced and the way that treasury actually came out and highlighted that it was balanced. And it really ties into, I mean, you look at how the narrative could have gone with sanctions, as you were noting, and crypto. And a year ago, two years ago, that might have been where the narrative went. But over the last nine months, we've had this very steep learning curve, lots of engagement. And again, I think many, many people in government, in the regulators are coming up to speed, very sharp, and they want to see innovation prosper here in the state. So I think the way that views have started to change over the last nine months, and the way that the executive order was very balanced, that's all a recognition of the fact

that people are open-minded, regulators are open-minded, people in government are open-minded. They see the national security benefits of keeping this technology onshore, keeping the innovation onshore, attracting innovators within crypto to be onshore. And I thought the executive order was very, very thoughtful and balanced. Yeah, we need to protect consumers, but also protect innovators. I mean, and they were pretty clear about it. And it made a lot of sense. And you're so absolutely right. If this executive order had been written a year ago today, or even 10 months ago in May, it probably would have been about China, energy, right? All of the recycled sort of FUD stories that we've seen in the past that were arguably the reason for last summer's correction. But now we have another correction.

So right, what's the reason for this one, right? We've talked about all these great things we have going for us. Biden executive order regulators are getting it together. It's the reason for this one? We've talked about all these great things we have going for us. Biden executive order regulators are getting it together. It's being used for donations to Ukraine. We have incredible tailwinds, I would say, but price is not reflecting it right now. Well, it's interesting. I mean, I think as the technology narrative picks up, that necessarily leads crypto toward being a risk on asset. Luke Gromen, Jr.: And anyone that's looked at, you don't have to run a correlation analysis,

you just look at the daily movement with the NASDAQ and it's been quite tight over the last few months. It's broken down a little bit more recently. So I start off by saying crypto is trading like a risk on asset, which by the way, generally speaking, trading as a growth risk on asset is a really good thing, right? So that's number one. Number two, though, I think when you think about how risk on assets have been trading, in the back half of December and into January, I think there was really concern that the Fed was going to make a policy mistake. There was a concern that Omicron was slowing the economy and the Fed was tightening into that. That's like the analog of 4Q of 18, when the same thing was happening. The Fed was tightening. People were saying, well, the economy is slowing. Powell was saying, no, I'm going to keep tightening. And then right when you got to the end of the year, you started to see the market bottom.

Beginning of January, Powell said, we're going to remain data dependent. And 2019 was a great year for the market. And by the way, you look at what happened in 17 and the first three quarters of 18, and you hit a new high in the market right at the beginning of 4Q of 18, guess what? The Fed was raising rates. It was just raising rates into a strong economy. And that was fine. And the market was able to still reach new highs. So I think it all really came down to the question of whether the Fed was going to be data dependent. There were questions around that in the back half of December and into January. When we started to see data for January coming in saying that the economy hadn't slowed as much as expected,

you look at payroll for January, blew out expectations. That's when the market realized, you know what? The Fed is remaining data dependent here. The economy is just stronger than we realized. And it's really interesting when Powell came out, I think it was last week and said 25 bps for the March meeting, he also reiterated that the Fed is staying data dependent. So in the background, we have this dynamic of, is the Fed going to be data dependent? And the answer is the Fed is going to be data dependent. Now you have to layer in the market, got a relief rally on that. But now you have to layer in Russia, Ukrainekraine. And Russia-Ukraine is a geopolitical curveball, which I think we're going to need to see that de-risk a little bit, simmer down a little bit. Now, we've already had

the VIX come off of its highs. So I think we're seeing some of the tentative steps toward de-escalation, but there's still a lot more to go there. Right. In the previous cycle, though, talking about 2017, 18, 19, they hadn't just printed 40% of the money that's ever existed, right? I mean, I would just say, argue that at this point, the Fed is in a much tighter spot, I think, than they were then. I mean, this is going to be a very tough needle to thread already before Russia, Ukraine, right? I mean, we were already, everybody was already concerned about what the Fed was going to do. And then of course, we have a midterm election in November. I can't imagine them

tightening too much before everybody needs to get reelected. There's a lot going on. I mean, my view had been that the Fed was going to try to tighten aggressively while the economy was strong and early two queue, and then stay non-political going into the midterm election. And I think now we are likely set up for just a very consistent 25 basis points a month. Now, I might be changing my view on that in a week, two weeks, in a month, but right now it looks like a nice consistent 25 basis points a month, not changing, or a meeting, not changing course going into the election. I think that's palatable. And the reality is like, as we deescalate with Ukraine, We'll see energy prices come off. The inflation on the food side is locked and loaded, though, probably, because you're going to have fertilizer not get applied. You're

going to have yields come down. So that's going to be a persistent problem out into 23. But I think we do have, with that deescalation, when it happens, we have enough of a data-dependent Fed to get this market rallying in a nice way. Yeah, we're going to go from extremely effective negative rates to slightly less extremely effective negative rates. We'll have big negative real rates, right? We'll still have big negative real rates, which is what should be a nice tailwind for the economy. And don't forget, I mean, look, we have longer term questions of like, can the Fed raise rates beyond 200 to 300 basis points without interest costs becoming too much of the budget. We kind of want to see inflation run a little hot, but you don't want it to run hot into the election because it becomes very politicized. But in fact, like why not de-lever the economy with a little bit more inflation, particularly if you have a wage price spiral where you're getting wage increases that are quite strong. So I think there's the economic balance,

the political balance, and the key is just keeping it from kind of running amok, but having it run a little hot for a little while, particularly as we get commodities starting to come off their highs, maybe wouldn't be the worst thing for the economy. Do you think that Bitcoin has acted as an inflation hedge? I love Mark Yusko. Yeah, I think so too. And people make the argument that it hasn't. And I like to remind them on when this money printing started that Bitcoin was under $6,000. Just because we're not at 69 doesn't mean it hasn't gone up a lot. No. I mean, you look at when Paul Jones said that Bitcoin was the fastest horse as a hedge for inflation, it was like May of 20. Right. And look at any other potential inflation hedge.

Although I shouldn't say it with that much certainty because I haven't looked at nickel over that time period now. So nickel might be a better squeeze. Technical short squeeze. Technical short squeeze is different than a fundamental hedge, right? Nickel has been the greatest inflation hedge for the last week and all of time. Exactly. But you can't look at this stuff on a short-term basis. And honestly, when you look at the 10-year yield, the 10-year yield is a nice combination of growth and inflation expectations. And you obviously, now we're seeing the yield go up again, but you've had these periods of pullback

where people are concerned about global economic growth. And so the short run isn't the relevant time period, I think, for an inflation hedge. Bitcoin has been the best inflation hedge out of liquid assets since we started bailing out after the COVID crisis. Well, gold certainly hadn't been particularly exciting during that period. No, and even with the current move, it's not catching up. Yeah. Mark Yusko, who I love, came on at one point and said something that I just loved. And he said,

we were talking about whether Bitcoin was a hedge and what it was a hedge against, because, you know, we have the evolving narrative. And he said, simply, Bitcoin is schmuck insurance. He's like, forget if you're hedging against inflation, whatever, you're just hedging against these schmucks who are going to make bad decisions inevitably. And so just buy some, right?

And I think that that's really kind of sums it up because as we talk about this, if you step back, you hear about how we're talking about the Fed and inflation and how they manage it, it's a dog and pony show, right? I mean, 50 bibs, 25 bibs, seven raises are priced in. Let's do four. Let's say six, right? It's like listening to an auctioneer. And it's all a game to me. It's all a, what we hope is a delicate balance of keeping the economy within kind of these guardrails and keeping businesses investing and people feeling good about where they are

and their ability to advance, their ability to save, all of that. So it's a balance. And I think what we've shown is a level of stability that has attracted a lot of capital to the country, and that's been really positive. Yeah. Speaking of a lot of capital being attractive, not to the country, but certainly to crypto. And you said it earlier, you made the same joke I do, which is like every day, it's like $500 million here, 750, a billion, 1.5, a lot of money pouring in to crypto. But interestingly, alongside that, there's sort of been this anti-VC sentiment that I'm sure you've been feeling.

What do you make of that? I mean, somebody has to invest. They have accreditation laws, whether fortunately or unfortunately, it's only certain people are going to have access. But why all the negativity towards VCs? Because they're pouring a lot of money into crypto. You know, I think the core crypto ethos is open access. That's really important. You think about do your own research. All of the things that we use for research are out there available for everyone it's an ethos of information is available, it's democratized, and everyone can invest in, let's say, the liquid token side. And when you then go to the equity side,

which might not have as broad a set of access, I think that's where that pushback comes in. And I think over time, it would be great to see more of a harmonization or a convergence of the way that those two worlds operate. It's certainly a topic that has gotten a lot of attention. Really, like, you know, we talked about AngelList and Funders Club. I mean, that was back at one of the first openings of early stage investing, but it didn't go far enough. And I think what we're seeing is there's a desire for people to be able to invest in the businesses that they're supporting, the businesses that

they're helping to grow. So I think that's like, it's kind of getting the engagement and the excitement and being able to really help grow the businesses over on the liquid crypto side and then being locked out if you're not accredited from some of the other opportunities, which really creates that dynamic. What I can tell you is there's also a ton of value that VCs bring to these companies. And it's interesting. I mean, like you stated earlier, there's tons of capital out there. So there's lots of competition to show startups that you're going to be able to

make the connections that they need, that you're going to be able to help accelerate the business. Otherwise, you don't end up on the cap table. So I completely understand where that view is coming from. I think there's going to be more normalization over time between the way liquid crypto operates and the way that early stage traditional venture equity operates. And I think as long as we have the right guardrail protections in place and people are doing their own research, that's fantastic. I agree. Is there anything left seeing how many obstacles the crypto space has overcome since you've been

in it? Is there still some black swan thing that could destroy it all, right? We love to say now, you know, the Bitcoin's going to zero narrative is dead. Even the executive order says it's here to stay. We want to protect it. We accept it. We want the innovation. But is there anything left that can stop it? Oh, I would never say never. So I love the fact that Bitcoin was super resilient as hash rate migrated out of China. I love the fact that we've gotten to a point as a community where we're large enough to garner real political attention, thoughtful political attention. And we seem to be moving in the right direction there. But you have elections and new politicians coming into office. And I think they're actually the election looks like it could potentially be favorable for crypto, but

never say never. I think- Favorable in that the incumbent party may not do too well. Well, but by the way, I think we're seeing bipartisan support in Congress. I agree. So I really hate the narrative that this has become a partisan issue because that's once again polarizing an issue. It's not the case. Maybe the far right is clearly in support and the very far left is clearly against. But I think almost everyone

who lives anywhere near the center understands that this could be a good thing. I'm seeing, that's what I'm seeing, right? I'd say the far left is actually coming around to crypto as well. They were definitely one of the holdouts, but the inclusivity of crypto, the banking, the unbanked dynamic, whether that's domestic and like, it is, it's real. It should be progressive. I mean, it should be something that progressives

champion if they call themselves progressive, right? If you're for the people, you should be for crypto. And I think we're starting to see that, which is amazing. So they're always going to be unknown unknowns. So I would not rest on our laurels that we're out of the woods, but we continue to see the space be de-risked, which I think is really valuable. If I had to say something that would be a big deal, it would either be regulatory or it would be some sort of hack. I think you could imagine something. Yeah. If something happened to Bitcoin, to the sanctity of the Bitcoin code, I think we could probably manage a Satoshi movement now like but but if we had something that um that that was like a real vulnerability within uh the the bitcoin code base that for whatever reason even like you know people talk about quantum compute like i'm i'm very confident that

um the the crypto community will adjust to that um in a more uh in a more responsive way than everything within the traditional world that's also dependent on encryption that could be broken by quantum computers. So I think it's really either. Yeah. In one of my conversations with Michael Saylor, I think it was the first time I had him on the podcast. He kind of laughed off quantum computing. He was like, if they can hack Bitcoin and make that not work, shouldn't we be worried about, I don't know, them firing off nuclear weapons

and ending the entire planet before they attack Bitcoin, right? There's no incentive. The funny thing is there's really like, that's the beauty of Bitcoin, right? There's no incentive to attack it because if you hack it, it goes down in value.

It's worth nothing and you got nothing out of it, right? There's no incentive to attack it because if you hack it, it's worth nothing and you got nothing out of it, right? That's right. It's the worst thing to attack because even if you're successful, you have nothing left to show for it. That's right. Yeah. That's the beauty of it. Yeah, it really is. So what are you really, really interested in investing in right now? Web3 has sort of been the big narrative, obviously. But is it Metaverse, NFTs, DeFi, Layer 1s? There's so many narratives that we have right now in crypto. What's the most exciting to you?

So first of all, I'll put in a plug for Metaversal, one of our portfolio companies that invests in NFTs, NFT infrastructure, and has an advisory business for traditional asset owners that are looking to come into the metaverse and the NFT space. Really excited about what they're doing. Really excited about how they're attacking that opportunity. Yossi and Dan are the founders there. But look, we were, Dan Shver, we're very open-minded about places where innovation emerges.

I think we're just starting to scratch the surface of the verticals of the traditional economy that are going to be impacted by crypto. So right now, we have a lot of challenger base layer exposure, but we're starting to think about how cross-chain solutions might end up impacting those platforms. We're always keeping a very close eye on DeFi, DeFi 1.0, DeFi 2.0. But these are areas where they don't have to be in our coin fund portfolios. We want to be in the projects that we think are the long-term winners that really have what we think are prospects that kind of transcend whatever changes in the way that the base layer ecosystem looks or other dynamics that play could play out as. so, I mean, we're really, um,

open-minded in, uh, verticals in, uh, base layer ecosystems in parts of the technology stack and, um, very, um, very, very hands-on. I'm just laughing at how many pen guys there are out there because you mentioned Metaversal, Dan Schmarin, who is a fraternity brother of mine and his older brother is a very close friend of mine, also in college when we were at college together at Penn. At Rain Steinberg, at ARCA, there's just Penn guys absolutely everywhere. Oh, totally, totally.

Lots of Penn guys around and it's awesome. And Penn Blockchain Acceler accelerator, Sarah Hammer, absolutely killing it. So lots of exciting stuff coming out of pen. Glad to see so many so many made it out of the swamp. Made it over to the made it over to the light side from the dark side. It's good, right? Because the forced path out of Penn is obviously Wall Street, right? Totally. I like to joke that when I was graduating, you just showed up and it was like Halloween. They just threw you jobs, like throwing candy in your bag. In 1999 at Penn, I mean... Oh, it was crazy. It was crazy. Absolutely nuts. I think this could be a very exciting year for ETH and obviously Ethereum virtual machine getting a lot of traction cross-chain. So that's one where I feel like it kind of gets lost in this like, well, that's too easy. That's like saying invest in Bitcoin.

But I think there's been a focus redirection away from ETH. And I think we could see some really, really exciting developments within the ETH ecosystem over the next year. I agree 100%. I'm a huge ETH bull. So I hope that you're right. Certainly. I hope that you're right. I agree. So where can everybody keep up with you and check out CoinFund after this conversation? Yeah, I'm Seth Gins, S-C-T-H-G-I-N-N-S on Twitter. We're at coinfund.io for our website. Yeah, please reach out. Absolutely. Well, thank you so much for taking the time to record this. I can't believe we didn't know each other before because it feels like we have so many connections now.

And now I'm going to go, I'm going to reach out to Dan Schmarin and see if we can get him to come on here and talk. Dude, get Dan on. That would be awesome. Got to go full circle here. Thank you once again. It was really a pleasure. And we'll revisit this maybe like six months, a year down the road, record a second one and see how it's going. That would be awesome. Scott, great meeting. Take care.