Transcription
Our space. It's the easiest space in the world to make money, but it is the most difficult space in the world to hold on to it because anybody can get lucky for a year or two, but to have a defined process, to be able to withstand the volatility, to believe with deep conviction in what you're doing, it's hard.
You don't tweet a lot, but when you tweet, you're always super bullish and optimistic. Why? It's very funny. I'm a Bitcoin maximalist.
And Dan Tapiro, the founder of 50T Funds, a digital asset fund manager built on a $50 trillion crypto thesis, a macro investor backing Bitcoin infrastructure and AI blockchain innovation. All value and money will be onchain. There's no way that's not happening. And I think this RWAs and tokenization, these are big themes for me. I need to be able to say this is our view in the future and they build revenue the way we expect that revenue will accrue to the value of the equity.
Markets have a tendency to do the unexpected. Gold never does what you expect it will do when you expect it to do it. Traditionally, it's been a very difficult asset to just hold as a result. There has to be uncertainty. It has to be something that you don't quite expect for it to work. So, when you go into an investment and you have full conviction, you know it's a home run, it's probably wrong.
Last year, we branded your company 10 trillion fund to 50 trillion fund. What makes you so confident that the crypto industry is going to 50 trillion?
Blockchain is the money of the autonomous AI agent. AIs will not be calling up JP Morgan and doing a wire. We think that within the next 5 to 10 years.
Hi everyone. This is the little bit that I know none of you like that can help us make a huge difference for this show and we want to take it next. 71% of the people who regularly watch When Shift Happens have not subscribed. And so all I'd ask you if you want to make a huge difference is the following. If you've seen this show before and you like it, help me, help my team. Hit the subscribe button and we'll continue to build this show for you. Thank you.
Cast is a sponsor. Yes, we we we kind of like Cast. We're looking at this is a Cast gold card. Yeah, we we like we kind of like Cast. Uh, I wanted to I wanted to say actually like uh, it's an amazing business. Fast growing. You should. I don't know enough about it to talk about it now. We just started looking at it. I know. But you should. I know. They're sponsor. I know. I get it. So is Bitwise. So is Bitwise.
Okay. Let me know when you want to go. We're going. We're ready. Are we going now? Yeah. Okay. We like Cast. That's the beginning. They're going to be happy about it. No, they know us. They know us. We like them.
How are you doing? Good. Good. It's been very busy. You said we like Cast. So I have to ask you why and and and explain with the Cast example what framework you put when you look at businesses that you are interested to invest in terms of. Yeah. But I also told you that I didn't have enough. We just started looking at it. I said we like them. Um, but I don't have enough uh, you know, in-depth. I look I have it on my phone. I have our little analysis. I could look and I could tell you, but the reality is is that we are the, as far as I know, really the only growth stage investor in the world exclusively focused on crypto, blockchain, web 3, digital assets. We don't do VC, right? We don't invest in cryptocurrency. It's very straightforward. Made 20 uh, we have 22 investments. We had six realizations last year. We own companies, you know, like Circle and we had Darabit that got bought by Coinbase and Figure. Um, you know, eToro, uh, Cipher that is owned by Bitfury. So, you know, unfortunately, we also have Gemini, which hasn't had a good, uh, run in the IPO market, but I think it this price is extremely cheap. But we look at companies, you know, roughly with 40 to 50 million in revenue, uh, and we want to buy them for about, you know, five to 10 times revenue. Now, Cast is a little small. Uh, you know, you see the card, the very nice card you have there. Uh, the growth of the business has been tremendous in the last two years. It's a little small for us. It's not quite yet there. So, it's on our radar. We think it's one of the higher quality businesses in doing what they do.
But it wouldn't quite yet. I mean, maybe next year if they do, you know, we focus more on I would say VC around. Um, so they're on the cusp and that's why I don't have a full answer. They're not in our, let's say, our direct pipeline.
Um, I have two deals that I think just went live today, which is incredible about going to these conferences. You know, everyone, the in-person thing, you know, we have a decentralized firm. The in-person thing is incredible. You know, you're going back and forth with a guy for weeks or months about a deal. All of a sudden, you see him, you say to him, "Look, this is it. This is what we're doing. Yes or no by tomorrow." And that in-person thing really uh, you know, I think changes the dynamic. So anyway, that's why we're here in person.
Absolutely right. That's why that's why last time you said no, I want to do the podcast in person. Yeah. It it's a big difference. The Zoom thing is okay, but it doesn't, you know, it doesn't capture the essence of the conversation.
Absolutely. Yeah. The empathy.
Was that okay for uh, the Cast? Beautiful. Okay. One thing very interesting is if we look at we talked the first time a bit more than a year ago, which was kind of like people didn't know it, but kind of like shortly after the the previous stop of like the previous kind of bull bull run. We talked the previous. So when? It was in March last year, I think, or I don't remember, something like that. And you have this approach of saying we do equity only, right? And most people. And you've always had this approach for many years. And most people in crypto would probably, this kind of more crypto-native crowd would be like, this is a boomer. Why would we not buy these tokens? These tokens have so much more upside. All that stuff. He's boring.
Yes. And what happened? Well, what happened is that all these shitcoins went to zero. And you had, you just said before, we had six realizations last year. Yeah. Which proves your thesis. Yeah. Yeah. And we have more coming. We have more coming. Kraken just announced and uh, Ledger will probably be next year. Um, but should I let you finish your question or should I keep going?
Well, for me it's. It's. Where did you learn and how do you learn to like. Say, let's do it the infrastructure kind of more boring way, but this is going to work.
Let's put that to the side for a second. I like I look for clarity and I, it's not that we're against tokens. That's not that's not right. Like I think that um, what I call there are some growth stage protocols. So there are businesses in our space, real businesses producing real revenue where there is no equity. There's only a token. So, you know, a Jupiter, these are these are real uh, real things. These are not pump and dump. They they're important to the space. Um, you know, hype is real. Hype is fantastic. Um, but the reality is, there's still a bit of confusion as to where revenue occurs. So, you know, you saw that with Uniswap, you saw the last six months with a back and forth on governance and so again, I'm from the old business. I was in the old world business in the macro hedge fund business for 20 years and, you know, my background and all of that business. Um, and so we do a huge amount of diligence and that's very deep in a very specific way. And we try to model all of our investments for a five to 8x return over a 10-year life. Okay? So I'm looking out 10 years. We have a 10-year life fund. I need to buy at a price that will give me the belief that we can make a five to eight times.
Okay? So if I buy a token, just as an example, and I'm looking out 10 years, do I have certainty that the revenue that I expect to accrue to it will accrue to the value of the token? Now, in some cases, yes, but there's still too much uncertainty and there's still too much, um, like room for interpretation. And so what I always believed, um, was that equity was never going away. That maybe there would be a transition where all value eventually ends up accruing to tokens, everything. Now I believe and I've said this from the very beginning, all value in money will be on chain. It's moving on chain. There's no way that's not happening. And I think this RWAs and tokenization, these are big themes at this conference. Um, you know, I think Larry Fink was very important changing people's minds in the summer of '23. We had the ETFs in '24. You have the corporate balance sheet stuff in '25. And Sailor, I'm not really a big DeFi believer, but, you know, Sailor, I think, is sort of a special uh, uh, guy and he's doing something fantastic in a way. Um, we're not involved in that space. We don't invest in DeFi. We we invest in operating businesses and I think that's really our, you know, it's an equity wrapper around a cryptocurrency, which is fantastic. It pushes forward adoption. I love it. I wish them all success. I I hope they all get, you know, super uh, wealthy and build great businesses, but that's just not what we do, right? So for me, I need to be able to with my team, you know, I need to be able to say this is our view in the future. If this view happens, uh, and they build revenue the way we expect that that revenue will accrue to the value of the equity.
Um, and I think in the crypto space people change the rules on you. Look, it happens in equity too. There, you know, um, we made an initial investment years ago into Kraken at a $2.8 billion valuation, but five years later, we've gotten diluted. Right? Arjun's been very aggressive out there, the CEO of Kraken. He's been doing a wonderful job, you know, buying businesses, you know, but again, we get diluted. So my entry price has changed. I don't have any control. We're a minority owner. I'm hoping that the uh businesses that he's bought have been accretive. We think they have been, um, but the reality is that even as an equity owner, you don't have that kind of control. So again, um, the legal precedence, the legal infrastructure and architecture around token ownership is just not there.
And around equity, you have a hundred years of, you know, case law and, you know, there's, it's very clear, you know, what your rights are as an equity owner, or sometimes not so clear, but it's a lot clearer. And so when it becomes clear in the token space, um, yeah, they're, they're, they're still, you know, they're projects or, you know, growth stage protocols. I know your businesses, I don't know how you'd call them, um, that we'd be very interested in. You know, I mentioned Jupiter. A Stani, I think, is doing a great job there. These are core things that aren't going away, but we can't really invest in them yet.
Absolutely. No, it makes a lot of sense actually. But it's not the boomer thing. I am sensitive. I'm not a boomer. I'm younger than a boomer. I miss the boomer. But I I hear you on the boomer uh on the boomer thing. Um.
Well, you you're being proven right. What you've done. Well, you know, but that's for now. That's true. But I, you know, like I'm not uh, knock, I'm, you know, there's still plenty of time. We have 22 investments that are still private. So, there's still plenty of time to be uh, you know, tested again, right?
Quick one. I want to thank our partners who help us make this show possible. Thank you, Trezor, my favorite cold wallet to store my Bitcoin and crypto and make sure I sleep well at night. If you want to sleep well at night, too, you can order your Trezor Wallet with my promo code WH10 and get a 10% discount. Check out my Trezor link in the description down below. Big thanks to my good friends at Bitwise Asset Management for backing today's conversation. Bitwise is a global crypto asset manager with 11 billion dollars in client assets and more than 70 crypto solutions. That includes ETFs, index funds, SMAs, custom option strategies, staking vaults, and more. However you want to invest in crypto, the experts at Bitwise have you covered.
You don't tweet a lot, but when you tweet, you're always super bullish and optimistic. Why? Well, I would tweet more. The reality is is that I really like tweeting. I used to try to tweet three times a week, two, three times a week. Um, and it would always be about, you know, macro or trading or crypto or Bitcoin or whatever it is. And I started really only on Twitter in 2019 after I did this interview with Raul Pal that had hundreds of thousands of views. It was the first time that I spoke about why I was bullish on on Bitcoin. And they basically said to me, you know, you have to have a a Twitter account because there are all these people who want to reach out to you. And I was like, what is this? Why, you know, how does this world work? I had no idea. And I find Twitter very interesting. I think at the moment it's a little toxic, which I don't like. Um, you know, a lot of the young guys probably have gotten hurt in things and they're upset. It's very painful. Investing, making money is an extremely difficult process, you know, and I always say, look, I didn't feel comfortable, completely comfortable in my skin as a portfolio manager for 15 years. Um, it took me until I was 38, really. Um, and I started immediately after college, you know, um, you know, I was at Tiger Management, of course, very early in my career in '92 and '93. And it wasn't really until, you know, I was 24, then it took me about 15 years to really feel that I was in complete command, uh, of what I was doing. And even then, like you still make a huge number of mistakes. You have to live with them. It's extremely painful from an emotional perspective. You have to learn how to manage that. Managing a portfolio, executing an idea towards a conclusion is not, you know, it's just not the space. Our space hasn't even been around 15 years. So, I think the young guys who are YOLOing into memecoins and pump this and that and this and that. Um, you know, I I've said this, I probably even said this the last time I was on your podcast. I think our space, it's the easiest space, uh, in the world to make money. Um, but it is the most difficult space in the world to hold on to it.
And um, because anybody can get lucky for a year or two or this or that. But to have a defined process, to be able to withstand the volatility, to believe with deep conviction in what you're doing, um, is hard. The reality is, I think, if you just own Bitcoin and you hold for, you know, 10 years, I've said this, you know, in 2019 and 2021, you ask why am I bullish? Because I do believe that Bitcoin is the core asset. I am. It's very funny, I'm a Bitcoin maximalist. And I also believe in a multi-chain future. And people think that that doesn't, uh, that's not consistent. It's very consistent. I think that Bitcoin, you know, and the code, uh, is the core asset. Everything else sits underneath Bitcoin. Every belief system, everything. Ethereum solved for programmability. Solana for speed. And we'll have other cryptocurrencies that solve for different specific niche things. But Bitcoin is the gold, is the core. You don't spend it. You know, you have it on your ledger in a safe and you don't look at it. I don't stake it. You don't blend it. You don't anything. It's just. And again, I come a little bit from the physical gold space. I have my physical gold company, GBI, that I started in '08, '09. And so, I come from that gold world of of really believing that having your bar with your name on it in a vault, um, that type of security and ownership is very important. And so for me, I'm not active. Like my all my guys are very active in DeFi, you know, all of them, but I'm not. I have, you know, my Bitcoin and ETH are away. I don't think about it. I don't look at it. I have my view. Um, and I think that's very hard. I think it's very, it's very hard to have the patience and distance from the success of of Bitcoin and and Ethereum. And I call them together because they're the sort of two core assets. And Solana now, I think, is approaching approaching that. It's very hard for people to believe that, oh, all I have to do is just buy this thing and come back in 10 years and I'll have made money and I won't have to do anything.
I'll have made much more than if I do all the [ __ ] I. Correct. Correct. And and it's a very hard thing for a human to believe. But hold on a second, that you absolutely do nothing because our mentality is you work hard, you make money. And the reality is you are getting paid for something. You are being rewarded for having a vision about the future that will be right. And so why you say, "Oh, I'm always bullish." Um, when I post, I've been posting less now because I've been inundated and I just have too much going on. Whereas, you know, four or five years ago, I had I was able, we weren't invested in so many companies. I have eight board seats. I already mentioned to you. We have all these companies. And we've just launched our fifth fund. We had our first close. We have more money coming in. I have more investments to make. I told you today we closed, I think, on two deals for our fifth fund. Not closed, but we've, you know, it's lined up. So, I have less time to sit back and think about, you know, h saying something interesting. Like I I like to point something out that's interesting. But the reality is that people have to be reminded that they they they are getting paid to sit. You know, you're getting paid to have patience. You're being rewarded for having vision. And it's like this from this great book, Reminiscences of a Stock Operator, u which is Paul Tudor Jones's favorite book on trading. Many traders from the old world, macro traders, this is their favorite book. Um, and one of the things that he says in the book is that he says all of the money is made in the sitting.
You know, and this book was written, you know, 70, 80 years ago or whenever it was written. It was post the '20s. And so every portfolio manager, you know, trader, of course, has read Reminiscences of a Stock Operator, is what it's called. Um, and it's about a very famous, you know, speculator in the '20s, but there's some nuggets of wisdom in there like that. You know, all the money is made in the sitting, right?
You you said before it, I needed 15 years to feel in command as a portfolio manager. Yeah. This podcast is called When Shift Happens. What's the shift in mindset that's needed in a university or career to become or to feel more in command and actually start to understand, I know I finally know what the hell I'm doing here.
Yeah. Well, look, I was very fortunate to work with some of the greatest uh money managers of all time. And so, and you know, Steve Cohen, Julian Robertson, Stan Druckenmiller in the old world, these are some of the greatest, you know, investment money-making people of all time. And so I was able to learn from them and see how they operated and also understand how I, my natural style was very different. You know, Steve is much more uh trading-oriented than I am. He's very much on the go. I don't move as much. I'm looking for bigger structural changes. You know, Julian Robertson, the risk appetite of of that individual was greater than I've ever seen of any person ever. The the comfort that he had with risk, giant risk, was unbelievable. I witnessed it. I lived it firsthand. Okay. And, you know, Dan Miller, do.
You have an example of. I'll give you an example to you in terms of. I'll give you an example. In 1993, when I was there, we had uh a $3 billion AUM hedge fund. Tiger was the second largest in the world after Soros. Okay. And we built a swapion portfolio. So that's options, long-dated options, one and two-year options on swaps. Those are interest rate swaps in Europe. We believed there was a big recession in Europe. Interest rates needed to come down. And, you know, Germany was in its weakest position since the war. Um, economically, it was a very clear bet. And there was also the erm, uh, compression of yields. And so Julian, um, Julian had a very high degree of conviction. The AUM was three billion. We put on $50 billion of notional exposure. Okay. We put $1 billion of the three billion into option premium. Okay. $1 billion of one-year and two-year options on two and three-year interest rates in Germany, France, Italy, Spain. Okay. And I was responsible at the time, extremely young, for actually executing many of those trades and getting the size on. And, you know, of course, Julian and the two guys who I worked for in the macro area, it was just a small little group of us, three of us. Um, uh, and I used to come in at 3:00 in the morning to buy these swapions in Europe. Okay. And there were days where we were up or down three, $400 million. So the fund itself would swing three to $400 million in a day. This is in 1993.
So that's like a more than 10% swing. Yeah. For the whole fund. Yeah. But the dollars. Okay. $300, $400 million dollars. This is 30 years ago, right? Yeah. And Julian, you know, he wasn't thrilled about it, but he didn't win. I mean, you don't never see anything like that. Um, Steve Cohen, you know, has built a massive business, massively successful, guys worth over $30 billion. The fund is probably 50 billion or whatever it is. He doesn't have that risk appetite. He would tell you that. Um, you know, Stan Druckenmiller had enormous uh risk appetite and also, you know, arguably the greatest macro portfolio manager, you know, of all time, you know, with Soros, but probably on his own. And, you know, to witness the way those people looked at markets. Um, it was Julian, and then Steve, and then and then Duck. And, you know, I learned a lot of different things from Duck. Um, but it was seeing that his global macro analytical framework was very similar to mine gave me a huge amount of confidence. And it didn't mean we didn't lose money. It didn't mean that I, you know, didn't make mistakes. But after that experience, and I did well there and had some unique ideas, executed them, turned them into money. Um, and Stan also showed me how you how you could use a macro idea to start a business. And so he and I started a company together called Acoa, which eventually became the largest private holdings of farmland in the United States. And we sold that in 2013, seven years later, to the uh Canadian pension fund system. And then, you know, three years ago, Bill Gates uh bought all those farms. It made him the the largest landowner in the United States. But the fact that you could have a macro idea. And this is time at the time we're very focused on agriculture and corn, soy, and wheat. And he loved that idea. Um, but he wanted to express it in a different way. And I came up with this idea that farmland prices, uh, in certain locations producing certain crops could double in the coming five to seven years. And we were right about that. And we expressed it in a different way through a business. And I think that's very, very powerful. Um, you know, to start something from zero. It was an idea in my head. And truck, thankfully, got behind it. And we were partners in that thing for seven years. Um, and that's sort of what we do with the funds now. Like I had this big macro idea about the digital asset ecosystem being a thing, right? Not just Bitcoin, not just ETH, but the digitization of all money and finance. Um, and RWAs, tokenization, stables. I thought all this was, you know, potentially going to happen. And we, you know, express it by taking, you know, 10-year investments in businesses, um, you know, that we think are capturing that, you know, that macro, you know, how that capture the macro wind at the back.
You know, and all, but then it's more complicated. You have to have good CEOs. And, you know, it's it's it's not that it's not just a macro bet on the space. We do a huge amount of, you know, bottom-up diligence. So, um, to answer, I think I answered the the the question. Um, I would say a lot of failure. You have to have a lot of failure to get to a place where you have a lot of confidence. And even when you have a lot of confidence, you know, we had we had two companies that went to zero. I never thought I would ever have a zero in my whole life, uh, because in macro, you don't have a zero. No, in macro, you know, you bet on interest rates or currencies or commodities. Gold is never going to zero, right? But we had two companies that went to zero. And you know, I I will that's not acceptable. And the people involved with those of my team were removed. And I'm very clear about that. We should never have any zeros. Um, it's my responsibility at the end of the day, but, um, and that's also largely why I can't really do venture because I'm not comfortable having something go to zero.
Um, and that style of investment can be very successful. You know, you have 100 investments, I always say, you know, 99 go to zero and one is Google and you've made a 20x or whatever on the fund. But that style is very different from what my natural style is.
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You said something some time ago. Markets have a tendency to do the unex the unexpected. Why? Well, I didn't exactly say that. I I think what I said was that um uh I, you know, it was about gold, you know, because still very involved in gold, of course. And I always say gold never does what you expect it will do when you expect it to do it. It's a very traditionally has been a very difficult asset to just hold as a result. Um, surprise. And it has to be that all markets that are strong, all bull markets, all, there has to be uncertainty. M. It has to be, it has to be something that you don't quite expect for it to work. So when you go into an investment, whatever it is, and you have full conviction, massive, you are so comfortable, you know, it's a home run, it's probably wrong.
Which is a weird thing because you have to have massive conviction to put a big bet on, but you have to also know and believe that there are areas where there's risk, where you could be wrong. And it's that risk that keeps people out of it. It's an example. Darabit, which we invested in in 2021, a little bit over a billion dollar valuation, you know, was just bought by Coinbase. Of course, at the time, monopoly on Bitcoin and ETH options trading. They still probably have about 80% of total world volume, but in '21, they were based in Panama. And they had left Holland. The there's an excellent team. The CEO is excellent. The founders are excellent. Um, they were doing $200 million in net profit, very rare at the time in the space. We could buy it for, you know, five to six times net profit. And I was looking to myself, well, this seems like a home run to me. This is the why isn't anyone else doing this bet? And, you know, they had had some in 2019, I think, they had some KYC AML issues, so people were like, there's some hair on it. They then cleansed the whole, um, uh, their client list. It was a lot cleaner. It was more institutionally focused. Um, they became a lot better. And people were also like focusing on all the the problems or issues that may have arisen. And then the fact that it was based in Panama would scare any large investor. Anyway, we had them moved to Dubai. They moved to Dubai. They became very successful. Now the founders, you know, have sold their stake to Coinbase and, you know, become billionaires. It's been a wonderful bet for them. But I had massive conviction, but I also knew what other people thought was a problem and what the uncertainty was. If there's no uncertainty, you're not making any money. So there has to be this un you have to be have to be comfortable living with uncertainty. And the reality is that human beings are not comfortable naturally living with uncertainty. They're just not. But that's why you get paid. You get paid because you're doing something that's difficult for other humans to do.
Let's dive a bit deeper in this uncertainty side. But in Bitcoin today, 2026, moving forward, what what makes you so let's use the same framework. What makes you so convinced that Bitcoin is going to 200, 500K, a million dollar? Yeah. >> That you say this is a no-brainer, but hey, there is there must be people who are uncertain enough to invest in this thing for it to go up.
Yeah. Well, it's not a it's not a no-brainer, per se. Um, however, um, you know, it's it's not a no-brainer. And I said before, the price has been unchanged for five years. Um, a corollary to something I've said, you know, is that the market, I put this on Twitter quite a bit, the market does the most amount, uh, does its it's it's hardest to to create the most amount of pain for the greatest number of people, right?
Why why is that? Because how is that? There's an explanation and it happens every time, right? Yes. Every time. Because it can't be that everyone gets it. You know, it's like, um, Michael Steinhardt, who I worked for briefly, uh, after working for Julian Robertson, used to say, "Dan, if it were easy, everyone would be rich."
Of course. And so he used to say that to me, you know, three times a week, you know, anyway. Um, and so that's part of it. It has to be difficult. Has to be difficult emotionally. You have to do your diligence. There are landmines everywhere. Human beings are not straightforward. They're volatile. They're emotional. They make bad decisions. They make good decisions. Um, there's a bell curve of everything. There's a bell, there's a distribution, right? You have 5% who are winning, 5% who are uh, going bankrupt, and then everyone is basically broadly in the middle, right? So, we're now in this middle phase with Bitcoin where everyone got a little bit of a taste up at $120,000. You know, we were at $70 at the previous peak, $65,000. So, then some people had a double. And I've said from the beginning, Bitcoin was going to go to $100,000 and then it was going to stop. And it was going to stay there for a while. And people would say, weeks, months, years, I have no idea. No idea. But everybody who is involved sub $1,000, right, will take profit at 100x. Because because at $100,000, it's not realistic to think that Bitcoin will do another 100x. I mean, I don't think it it can. Now, there are guys out there who maybe think it can, and maybe over the next 50 years or something. I I don't know. But just think about it yourself, right? You're in at a thousand. And there are a lot of people in below a thousand. You're in at 2,000. You're in at 3,000. You're in at 5,000. You have a 20x.
Okay? It's too tempting. It's too tempting for humans not to take profit. So at $100,000, it's called the big round number thesis of markets. So us old-time macro guys, we have all sorts of different voodoo that we look at. We look at things that, you know, we don't talk about and things that don't make sense. You could never tell your investor, oh, I sold my whole position because we hit a big round number. But the reality is, there is a big round number thesis in trading and investing. $100,000 always was going to stop the market cold. Always. Mike Novogratz said in one of the interviews or something he sold $9 billion for somebody at $115,000 and he was shocked that he didn't move the market more, right? And Mike's a great trader and has a great feel for markets and, um, you know, there's a lot of buying also. And this this handoff from the in the the the early retail OG super OG guys to now the more institutional larger asset owners. People believe reasonably Bitcoin can be a million dollars. It can be a $20 trillion asset. That's still only half the value of gold. Gold is about $40 trillion today. And total global assets are a thousand trillion now. 1,000. So if you look at all of the assets, real estate, stock, bonds, everything, okay, today is around a thousand trillion. So to think that Bitcoin could be 2%, right? The most brilliant invention, the invention of decentralized money, okay, the the code that supports all of these stablecoins that all the DeFi guys are crazy about, all the RWAs, all of that, right? That's not a very aggressive bet. 2% like that's kind of small, but that's a million dollars on Bitcoin. $20 trillion dollar bit, uh, value on Bitcoin, that's a million dollars. So I think we have, you know, what, 12x from today? Now, for me, for you, maybe for a a pension fund, for a a 10x over a 10-year period is about as great an investment as you could possibly make.
Okay. So at this $100,000 price, what's happening is the early individuals who saw it early, they're taking their 100x returns and saying, "Thank you very much." Okay? And the institutions are saying, or the larger investors, we believe that it can be a 10x. And for us, that's just fine.
So this is called distribution. And that's what's going on now. And it's very painful because it goes nowhere. And imagine you got into the space in 2021 and then you went all the way down and you held, it went all the way up and you had it double, and now it's all the way back to where you bought it, and you have focused on it for five years and it hasn't moved. And it's pain. And NASDAQ has doubled and this and Nvidia and all this, and you're sitting yourself and you want to shoot yourself because what did I do? All the intellectual energy, my capability. Now, hold on. All all of this. So, at the moment when there is the greatest amount of desperation, when someone on Twitter comes out and says, you know, I give up, like important people, I'm out. I'm Bitcoin. I'm, you know, or the toxicity level has really risen. It's got to get more intense, higher. The D the bullish consensus is was 4 or 5% bulls. I think it's possible that Bitcoin hit a low at 60. It's possible. I'm not 100% on that. We go down to 50 and then down at 50, everyone gives up. And then we go to 250, 300. Like I could see a scenario where because if we go up to 100 again, everyone is going to be like, we're going to 200. But then something happens and we go down to 50. And then literally everyone gives up. Everyone hates it. It's gotten it's it's terrible. And then we go to 250, 300. And people can't buy it. And that's that's just how markets work. Now, I'm not saying that's my view. Okay. I I actually don't have a particularly strong view because for me, there isn't much of a difference between Bitcoin at 60, 70, 80, 90, 100 for what we do. For how I invest, it doesn't matter. Like we have a 10-year holding period. It doesn't matter. I don't think Bitcoin is going below 50. And so it was at 60, it was at 70. You know, that to me is is not a big deal. But I know if it goes down to 50 again, it'll be like there was a nuclear bomb dropped, you know, and it will feel so bad that I guarantee you that that's the that would be the bottom.
Yeah. But anyway, let's It may not do that. And I hope for Bitcoiner's sake that they don't have to go through uh that kind of pain. Um, you know, and and I hope we're we're straight up from here, but, uh, you know, markets don't always give you that. Yeah.
How do you go and raise more money as a fund manager during a bare market when everyone is depressed? So theoretically, it's the best moment to go and raise money. Practically is the moment where no one wants to invest because they want to see, ah, let's wait a bit. How do you do that? So then you have the funds at the right time.
Yeah. Well, you basically don't. I mean, that's in the bare phase. In '23, '24, we're raising our fund four. And I was telling all our investors in our first three funds, listen, I can buy everything down, you know, these stocks that we really love, these businesses down 80%. They're distressed sellers, you know. Um, and fund four, which is our best returning fund because I closed it in November of '24, is the smallest fund. Because it was impossible, even for me. I had already, uh, you know, over a billion dollars in AUM in my first three funds. And, um, I have an investment track record, you know, going back to, you know, 16 years in the old world. I'd already had these funds, um, 300 investors, people who've known me for 25 years, and they're like, you know, so we closed November of '24, is very small. And within a year, it was up 300%. The fund four of 300% gross. And in the first 16 months, we've already returned 30% of the committed capital. There's eight and a half years left in fund four. And I decided, I'm just going to return the capital. So in terms of DPI, which is committed capital returned, it's DPI. Um, all four funds are in the top 5% of all PE funds globally across all mandates. So our funds one and two have returned 40% of committed capital. That's from '21 vintage. '22 vintage has returned 20%. That one was raised at the peak. And unfortunately has one-third of that fund. Three was in blockchain gaming, metaverse, NFT bucket, which has not come back at all. So that's lagged. Um, and then fund four is a fund mostly of secondary stock that we bought during the bare phase at ridiculous, you know, we just set our prices. And, you know, we're buying things, um, at very low valuations. Um, fund five, we had our first close in December. Um, and a lot of that money came in during the bull phase, but I've already passed on 40 deals. So the valuations in the growth space, so VC and later, these companies generally, I would say with valuations over $500 million. My sweet spot is like $500 million to I would say a billion five. Um, that th those prices haven't come in as much as certainly as the alts, but not as much as Bitcoin. And it's because some of the strategic investors, not the investors like myself, like, um, the PayPals or Binance, or they're coming in and they don't tether. They don't care as much about valuation. I like to buy something at between five to 10 times revenue. There was something I was going to buy a few weeks ago at a billion dollar valuation company, you know, and then they they come back to me a week later and say, "Oh, um, we have a a strategic that's going to do it at two billion." And I'm like, "Well, that's crazy. I mean, it's a crazy multiple, but for the strategic, they don't care. They see some synergy. They value the company differently than we do." And so, like the strategics are keeping some of the prices in some of the growth stock higher now. But we've been fortunate because we had a nice first close. It was relatively big, but I didn't invest any of it. So now the markets come down and I'm just waiting. And I have two now that I think we're going to do. I said we had two that we think are are going to happen right now that we're very excited about. Um, but the reality is, it's nearly impossible to raise during the bare phase. What you need to do is you raise during the bull phase and then if you're selective about how you invest, you don't overpay, then you have capital during the bare phase still, but it's been raised during the bull. But now I think, look, we've we've proven ourselves. We don't really pay those high multiples like some of the other growth investors did in '21. And so we've, I think, already proven to our investor base that it doesn't matter whether it's a bull or bare phase. We will invest, you know, we have our process. We'll invest at the multiples, you know, that we believe in. And, you know, over 10 times revenue, I think is already, you know, very generous. There's some, you know, cases where, you know, you have some wiggle room, but, you know, we I think staying disciplined and and working as a partner, uh, is a much better approach for us.
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Last year rebranded your company from 10T to 50T. 10 trillion fund to 50 trillion fund. Yeah. What makes you so confident that the crypto industry is going to 50 trillion?
Yeah. Um, it's funny because I just did a short little 10-minute interview with Coindesk and they asked me the same thing. And the guy basically said, you know, isn't 50 trillion a little too conservative? My next question is this. Why 50 trillion and not 100 or 200 trillion? Or whatever. So, whatever. Yeah. Right. Well, so the reality is this is that in in in 2019, the value of the digital asset ecosystem as we measured it. So the value of Bitcoin, the value of ETH and the alts and the value of all the equity that existed in the blockchain crypto world in the middle of 2019 was 300 billion. Okay? And I've told this story many.
times. I probably told it to you last time I was on. And I said, "Okay, what do I really think? What am I playing for? What is the TAM, the total addressable market of this DAE? It's 300 billion." And I thought, well, I think it can go up 30x, 10 trillion. So that's where the name one second, 10T, 10 trillion. And I thought if I don't, you no one will believe me that that was my view because it's an outlandish view. I've never had a call and said something was going to go up 30 times. You know, currency doesn't go up 30 times. I never called gold going up 30 times. So I said, I'm going to put my view into the name of my fund, which I think no one has ever done. I don't think anyone has ever done that. I mean, I thought it was crazy, but I'm like, I'm going to do it. And 10T.
Uh, about a year ago, we got to 5T. So that was Bitcoin up near the highs, ETH, the alts, the equity, it all added up to around four and a half to 5 trillion. So I thought to myself, okay, well, we're launching fund five. I can't call it 10T. That doesn't make any sense. What is that? Like we're that's a double from where we are. We're at 5T today. So I stepped back and I thought, okay, 10 years from now, this is 2025, 2035, what does the DAE, the digital asset ecosystem look like?
>> And I've already talked about Bitcoin going to a million in 10 years. That's 20 trillion.
>> I think ETH and the other alts could be 10 trillion. So that's 30 trillion.
>> And people say, well, that's too low, too. I'm like, well, okay. And then I think all the equity in the space. So any business that touches blockchain or crypto, web 3 in some form can add up to about 20 trillion. Now, that might be way too conservative. Coinbase is a $50 billion company today. I think Coinbase can be a trillion-dollar company in the future. I think Coinbase is a generational once, you know, it's like a Microsoft type of company. I think Kraken also has that ability, but that's something separate. I So I think 20 trillion for the equity and the businesses that use blockchain, you know, the circles of the future. Right now, we only have, you know, 10 significant public blockchain crypto companies. I think they're going to be 50 to 100. So 20 for Bitcoin, 10 for ETH and the alts, 20 for the equity adds up to 50 trillion. And so I thought conservatively, we can go from 5T to 50T. And, you know, people said the same thing when I was talking about 10T. Well, Dan, it's going to blow past 10T. But the point is not to be have some pie in the sky view. The point is to be right about your view. So I make it, you know, it's a little conservative. And why would you say it's conservative? Well, look, stable coins, we invested in Circle in very early days. Sta, there were zero stable coins 5 years ago when I first launched the fund. There were no, didn't exist. And today, and last year, as you know, $33 trillion of stable coins traded. 33 trillion. So, I have never seen anything, nor do I think anything has ever existed that has gone from zero to 33 trillion in 5 years. And what's remarkable about this is that stable coins, those are only dollar-based. 99% of stables are dollar. Okay, we're going to have euro stable. We're going to have yen stable. We're going to have all the currencies. Now, total old world currency volume is 7 trillion a day. So, we have 33 trillion in a year. That's four days of old world currency volume.
>> Okay. So that 33 trillion is going to 300 to whatever 3,000 trillion, whatever the number is, right? That is going to eat the old world currency. Now, another thing that also makes 50T, I think likely conservative is, of course, authentic finance. We think that uh, the number of trans, no blockchain, let's be clear, blockchain is the money of the uh, autonomous AI agent, okay? AIs will not be calling up JP Morgan and, you know, doing a wire. I've said this, they they'll be using programmable money, smart contracts embedded in blockchains. So AI agent money is blockchain. Okay, we think that within the next 5 to 10 years, uh, that they're going to be not tens or hundreds of trillions, there will be thousands of trillions of transactions done by autonomous agents. Thousands of trillions. So, is the value of those, what is the value of those transactions? Will they be 1/100th of a penny? Will they be a penny? Will they be a dollar? I think it's unclear. I think the volume that we've seen in the last six months is unbelievable. There's been tens of billions of transactions from zero 18 months ago. Tens of billions already. So you look, I have said this before, this investment thesis about the digital asset ecosystem to me is the greatest macro investment, macro trade of all time. Right? The internet was the digitization of ideas and information in the 90s. Bitcoin and blockchain is the digitization of value and money.
>> And de facto has to be worth more because it's about money.
>> Right? Ideas and information are nice. They're great. That's great. But that's not money and value. There's some money and value there. Of course, we have the internet. But the internet of money and value has got to be a bigger financial enterprise than the internet of ideas and words.
>> So that sort of underpins everything I'm doing.
>> Let's wrap up with some actual numbers. You said, um, because you said before, these last five years for a lot of people feel like a kind of last lost half decade, right? The price going nowhere, going up, down, back. So people are kind of depressed, but you have this thesis, which is this, this space is going to $50 trillion, and this might be conservative. Therefore, at $50 trillion, you say 20 trillion is about Bitcoin, right? Which would be Bitcoin at $1 million.
>> Correct.
>> Uh, which means it's going higher from here. Even if it's painful since five years.
>> Where does that put an ETH or in Soul?
>> More or less.
>> Again, because ETH is max pain for people since five years. Soul has been amazing, but it's also gone down a lot and it's very volatile. Yeah, I think I think look, um, that's a 10x on on Bitcoin and I I sort of just could, you know, it's reasonable for me to think that ETH could do a, you know, a 5 to 10x. I mean, I it's it's I I I can't remember what level of ETH equals, you know, 5T. Let's see. We could I could figure it out now, you know. Um, but that's just a broad estimate. ETH could be up 20x. It could be up 10. Um, I look at ETH and Bitcoin, ETH and Solana core assets now, but, you know, I think 10 trillion for ETH, Solana and all the other potential protocols and blockchains that include hype in that, which could be maybe hype becomes more massive than everything, right? Um, you know, maybe there are businesses that switch from having equity to just having tokens. That could add another huge chunk in sort of that alt universe. So I don't specifically think about where Ether, Soul can go. Can they go over the next 10 years? Could Solana be at a thousand? Sure.
>> Sure. But I think about it more broadly because I think that's a little bit more the realm of the venture, the venture capitalist, the guy who, you know, is investing in a seed, uh, investment because he sees a great future in something and, um, you know, at a very small valuation. And I can't quite, you know, you see the numbers I'm talking about, right? I'm talking about the tokenization of assets, right? Like all real world assets, that hasn't even started. Like that's the first inning of that. So I'm not so much, I and I know your audience is probably like, well, where can that go? I think, um, you know, easily, you know, 5, 10, 15x over the next 10 years, but it will be painful. ETH has been a killer, but the reality is, let me tell you, ETH at 2000 is an enormous price. In 2019, ETH was at $100.
>> Mhm.
>> It was at $100. I know. I mean, I I I I I have firsthand experience. It was $183 ETH and it was below there for a long time.
>> So 20,000 is a big number.
>> Even in 2020 went below 100 in 2020, which is just six years ago.
>> Correct. Like 20x like, oh my gosh. Like, and people are complaining.
>> Um, no. I I it's just that it's the young people and there's a lot of insting to get instant gratification. But when you look at the financial markets in the old world, again, commodities, currencies, stocks, bonds, you get a 20x in something.
>> I mean, it's very, very rare.
>> And what we have in our space is people sitting on a 20x complaining.
>> Right. Good perspective.
>> Thank you so much for doing this.
>> My pleasure. Great to be here.
>> Awesome.
>> As usual.
>> I look forward to the next time already.
>> Absolutely.
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