How much institutional money will flow into crypto in 2025?

Transcript

GM good morning welcome to the milk Road show The Daily crypto show that's crunchier than your favorite ASMR snack videos today we're joined by Joshua Frank co-founder and CEO of the tii which is a leading information services provider for digital Assets in today's episode we're going to get an Insider look for Josh's mind because he sees behind the scenes he sees how institutional money is reshaping the crypto landscape he sees where the new inflows are coming into crypto from institutions and we can talk about what it means for your portfolio for the rest of 24 24 and then into 2025 we're also going to talk at the end a bit about

data and what data Josh uses at the tie when institutions are looking to invest in crypto and what data you should be looking at as a retail investor when it comes to analyzing your portfolio before we jump in guys we've got our next Pro AMA coming up on on Wednesday that is tomorrow at 12:00 p.m. Eastern in our Discord now you have to be a pro member in order to get access to this AMA so if you want to go pro you can do so hit the QR code or the link in the show notes in this AMA there's usually about a 100 people that show up and our Pro researchers that's Kyle and Martin lead a conversation answering all your questions about investing so if you have any questions that you're not sure what

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first two times short or two times long ETF designed specifically for micro strategy stock position yourself with precision with T-Rex you gain access to powerful tools for sophisticated [Music] investors Josh welcome to the milk Road Show thanks for having me on yeah really excited to have you okay let's start you have an interesting perspective a perspective that um not everybody that we have on the show has most of the people we have on the show are retail investors and focus more on the retail side but you work at the tie with institutions so I want to get an idea of what you see from your seat at the tie

that can tell us about how institutions are thinking about crypto right now what their interests where their interests are which particular tokens they might be interested in any insights you have into the mind of Institutions and their portfolio and the way they're investing in crypto yeah so thanks for having me on first of all and so when you when you think about institutions that is a really big work so when we talk about institutions what do we mean by institutions in crypto for a very long time when we met institutions we we kind of have met and this is how interpret is anybody who has money means institutions right anyone who has has money historically it means allocators and Pension funds and endowments and others and so there's really a spectrum of

Institutions operating within the digital asset space you have your Crypt native institutions which are your Crypt native hedge funds and DCS you have your traditional institutions uh like your traditional funds like your traditional hedge funds your asset managers your VC funds and then you have your allocators folks that are actually funneling money into the funds which are going into the space and so when you think about what is needed in the crypto space everything starts from an allocator perspective in order for VCS and hedge funds to buy your favorite shitcoin they need to uh have Capital first and in order to get Capital they need to go out to Sovereign wealth funds they need to go to family offices they need to go into endowments uh and they need to go to these real

sources of institutional Capital because ultimately that's what's going to funnel down to buy you know alt right and so you kind of have two sides you have Bitcoin and eth which now people can get direct exposure through the ETF and products like that but then you also have your alt and your VC assets and things like that so you know historically a lot of the capital that's flown into the space has come of the space via High net worth and family offices right so family office would be an office of a very wealthy person they're investing in crypto funds whether it be VCS or hedge funds which are you know either doing Venture checks or or or trading tokens um going into 2021 that really started to

institutionalize a lot where you had um you know it's and it's it's you know I don't want to talk about specific names but like The Sovereign wealth funds of different countries in Asia or the Middle East or you have uh big endowments I think it's it's pretty public that Texas teachers and uh you know Ontario teachers and you know uh uh the city of Fairfax and a few other people have come in and written checks into VC funds and hedge funds in the space and so you saw in 2021 these massive fundraisers like Han Ventures raised a billion and a half dollars to invest in crypto funds you had you know $650 million raises here $500 million raises there then all of a sudden in

2022 FTX collapses and a lot of these uh allocators some of them had actually made direct investments into FTX and all of a sudden they had to justify their job to their employer in many cases some of them got fired but in other cases you know some that we know had to take pay cuts they got in big trouble what's really cool is starting about six to 12 months ago even before the ETF or like as the ETFs were approved even before it was clear that Trump was going to win the presidency you know that sentiment started to shift a bit where a lot of these allocators that were out of the market for the last two years have started to come back into the market again they've started to look at Crypt Venture funds and hedge funds and considered investing in them uh and I

was actually at a gplp conference so GP meaning the general Partners the people that actually own the funds LP meaning limited partners the people that invest in funds conference last week and there's definitely a massive sentiment shift I've talked to a lot of GPS or founders of funds uh and many of them are now either raising similar amounts of money to what they raised in 2022 so if they're a large fund like one of one of our clients that raised uh you know one of these multi million funds just closed $300 million a few weeks ago it's not announced yet they're planning on closing another similar amount of money later have heard similar stories from others so I think a lot of the larger crypto funds are actually going you're going to see similar raise numbers to what you saw last time for the best

performing funds and then some of the smaller funds are actually raising larger funds now so if they raise 40 in their fund two maybe they're raising 70 and fund three so I think you're actually going to see a huge inflow of uh Capital into crypto funds the question is are you going to see that on the liquid side or the Venture side so historically most of that funding has come into crypto Venture because if you look at historical returns like you know multi-coin fund one did 88x they returned 88 times investor capital and that obviously that's not every single fund that's you know multi-coin fund one as an example but a lot of these vent funds have historically done really well but what you've been seeing and I'm sure

a lot of you guys see this a lot of these newly launched projects are launching and then they're going straight down right and they're kind of this downward spiral because what happened all the money flew flooded into Venture funds it didn't go into liquid funds that are actually you know hedge funds that are buying tokens and Retail is not really here to buy the bags which they were in 2017 and 2021 so I think this cycle you might see more funds actually flow into liquid funds into hedge funds which for your favorite altcoin um is is a good thing so that's one side of the spectrum I could pause but I want to talk about the actual real institutional capital on bitcoin and eth as well I don't know if you have any questions there though because I know that was a uh you did sort of answer

answer my question before I even could ask it which was going to be where where is this Capital going to go where is it going to flow to and it's interesting to hear you say that you think that this time around it could go more towards the liquid tokens versus think about it if you think about it right like on the liquid side you can now get into projects that are trading at lower valuations than their last Venture round it's true and the token is liquid you can trade it you don't have a lock up right and so um I think there's a few interesting Dynamics and things that are happening right now the first is it's clear with this new Administration where I don't want to say it's clear it's looking like additional ETFs are going

to get approved right and so now all of a sudden there might be a Sal ETF there have been filings for xrp ETFs hadera ETFs I mean all sorts of different things right and so that's the first thing but also I don't know if you saw a few weeks ago coinbase announced this coinbase 50 index and if you look at how people invest in equity markets like I'm sure you own or a lot of your listeners own the S&B 500 ETF right the Spy ETF or another S&B 500 equivalent and so I think you will have this potentially interesting situation in which at some point we get an ETF of the top 25 or the top 50 assets by market cap and what that what's that going to mean when an asset enters the S&P 500 all of a sudden everyone who own like you know like the

that all of you know all of that like total Equity needs to go and buy that asset to have an equal waiting within the portfolio and so all of a sudden you could have a situation in which as more people buy into an ETF all of a sudden these altcoins need to get purchased and need to get bought so I think positioning yourself on the liquid side is really interesting because you can get Venture likee returns in liquid crypto um you'll get this benefit potentially of these multi-asset ETFs that then list in the future um and you can get in and out of positions uh you know relatively quickly and so I think you're you're you're seeing and we're hearing a lot more of this talk about liquid Venture which is not it's not it's not like a hedge fund you're not really focused on

hedging your bets and stuff like that it's more hey I want to raise hundred million I'm gonna buy 20 different tokens and I'm gonna put you know one to 15 million split between each of these tokens kind of thing so I think you'll see a lot of that and I think honestly I think it's it's it's you know Venture obviously continues to be very attractive I would say Venture in crypto is really attractive at the earliest stage it's not super attractive later stage anymore because of how tokens are launching it's also more attractive on the token side than the equity side because if you look at Equity deals Bridge was just bought by uh stripe for a billion dollars but outside of that you know coinbase went public there have been very few Equity Acquisitions so you know historically there has been money

raised for like growth equity in crypto later stage Equity deals I think until we see Equity this is somebody by the way who runs a later stage Equity business in crypto like I'm not doing myself any favors here but I do think like on the Venture side I think you'll see more uh money flowing into earlier stage Venture funds funding projects at you know like on the pre CED precede series a stage and then on the liquid side as well yeah super interesting so this leads to a couple of question and keeping in mind that our listeners and our viewers are want to talk about the ETF as well but we can go after okay okay yeah we'll come back to that for

sure I'll make a note of that uh is what's what's your what's your takeaway if you sit here and you look at this because you know we've had Joe mccan on the show or Kyle Sani from multicoin on the show and talked about their views and it's very interesting when you talk to these those fund managers they're really focused on the liquid token side right like they see and they're not afraid and they're crypto native funds right so they're not afraid to invest in in mem coins they love meme coins they get it right um whereas these more traditional institutions my guess is that they're they're a little bit they're probably more they're looking at eth they're looking at Bitcoin or do you

think they're looking at memec coins and looking at the full crypto Market you think about traditional institutions versus crypto natives so when you think about you know there's funds and then there's prop trading firms prop trading firms means the capital is proprietary it's your own money and so for example some that have been very public historically in crypto or guys like jump and Cumberland drw where that's their own money they have the ability to and I'm not saying exactly what they're doing but they can take risk the problem is on the traditional side when you think about large traditional hedge funds um they have LPs they have investors in their funds and those LPS have signed up for particular mandates right they're like okay you're a credit fund or you're doing this or you're

doing that they're not necessarily comfortable with the risks of crypto so historically when you think about how funds have taken an approach to crypto you have hedge funds and you have EC funds on the hedge fund side historically they've been trading the GP Capital which means they're trading the partners money they're not trading investors money right so if you look at like and there's there's there's lots of examples of this I don't know how much is public or not public but a lot of these a lot of these funds are just trading their own Partners Capital uh they're not really trading outside capital I think the ones that are trading outside Capital today are primarily trading the ETF and CME they're not necessarily trading spot crypto because the problem is if you have a fund and you have $50 billion you

might have one investor who is this Sovereign wealth fund of whatever country who's got five billion dollars in your fund and they say no and if they say no it doesn't matter what everyone else says they said no and they have $5 billion at you so the answer is no and the problem is historically these assets are less liquid there's not a lot of volume you can't do size so if you're a $50 billion fund and you're like if you're like I I know if I put a h hundred million to work I could triple it versus the $50 billion fund it's just it's inconsequential it doesn't matter it's not worth pisting off your investors and so what we've seen historically is the partners Capital being traded in crypto and by the way sometimes the partners at a $50 billion fund might have4 billion do themselves

keep that in mind like we're not talking they're trading 20 bucks they have real size um and so you know we're seeing again a lot of the GP the partners at these funds uh trading crypto some of them are trading spot they can definitely go down further down the risk curve because it's there anytime it's your own Capital you can afford to take more risks um and and and and they are doing so um in some cases they're investing in crypto funds so a lot of them are like hey I don't have the experience I'm going to invest in a fund some cases them they're doing it themselves directly I would say it tends to be a smaller even for them a smaller range of assets that they can trade um probably like top 50 top 100 by market cap just because you have so much money

you can't really like what's the point of trading a $50 million coin like what are you gonna do put a million dollars in it like it just doesn't move the needle for you um and so that's kind of what we're seeing on the traditional hedge fund side where where it's the GP is trading uh and also by the way kind of tying into ETFs a lot of these guys are trading ETFs so if you guys don't know there's something called 13f filings and what a 13f filing basically is is it basically you as a as a as a as a fund have to report your positions and you can actually go see who holds black Rock's ibit ETF or Fidelity's ETF or anything else the thing that's important to note there is just because they're holding the ETF doesn't mean they're long so a lot of the time these guys are

making trades where they're not really taking a long position in the ETF they're doing something like the the basis trade where they're you know where they're also trading CME Futures because the basis trade is is is generating 15% or 20% whatever it is today historically it's about 12 right and so like I I speak to a lot of the ETF issuers I spoke to one this morning which is the top three or four uh ETF issuer they think about 15% of the ETF is the basis trade I spoke to others that think it's as high as 30% for their ETF which is also in that number so a lot of this where you see a fund has a $3 billion position the ETF don't assume that means the fund is necessarily long the fund might be taking taking advantage of

inefficiencies that exist in the market as well as as as they should right it makes a ton of sense if you're one of these large funds it's such a it's important to understand the difference in perspective as you mentioned you are beholden to un unless you're trading your own Capital as you mentioned the case of these GPS but often you're beholden to your investors and the people who are investing in your fund and they have a lot of say and you you can't just go invest in anything and so you keep it simpler and a if you can consistently show that you can get a 10 to 15% return on something then that actually could be worth it when you're trading at the size that you're trading at and that's not an some of these some

of these funds that are like I just it's funny I see like people share on Twitter like you know XF fund bought $3 billion of the ETF like they're not long $3 billion on the ETF like that's not the trade that they're making they're not long at all right and so it's just funny you you get these like very misleading things on Twitter oftentimes um from from uh uh you know people which look I get it like you don't necessarily talk to these people you don't necessarily know you're not having these conversations but yeah I mean to your point yeah I mean look it's it's um with that said though I mean like a lot of folks that were trading GP capital in 21 and 22 stopped because they're cons they were really concerned about counterparty risk like once ft X blew up like like a lot

of people that had their money on binance were like get my money off binance like I don't know what's going on here um especially some of these like large hedge fund managers where they're not even the ones trading it it's like their employees are trading it and they're like I don't know what's going on here but like we've seen a Reawakening um if of these firms um and lots of guys that were like stopped trading GP are now trading again uh and look I mean the market is get once the market gets bigger when there's more volume that that you know it's it's like it's it's it's volume gets volume right the more volume you have the more volume that's going to drive the more liquid these assets are and so I think you're certainly going to see and by the way a lot of these asset managers now uh that

in addition to ETFs also have funds that they've launched too to invest in like Franklin Templeton I think is pretty public about their Venture fund right and so a lot of these a lot of these asset managers also have funds that they're either launching or have launched vanac uh has a hedge fund and a venture fund that they've launched as well and so a lot of these asset managers are also going out and launching funds and bringing external capital and these funds are meant for crypto like these are crypto specific funds and when they raise them they're able to invest specifically in crypto and a lot of them are going down the risk curve and are maybe they're not buying memec coins but some of them are and I've also by the way I've heard I have a couple of my clients that are Crypton native funds actually raised

dedicated memec coin funds where they're just investing in mem coins we're basically the investors in those funds know the risk profile it's basically like we're 100 Xing or zero and that's okay like I know what I'm putting my money into fascinating I think the the two questions that come up for me uh and we can take them in whichever order you you choose is first is everybody always wants to know when's it going to be different right when are we going to hit that Tipping Point when is crypto G to make that next leap up and every Point okay so you could say that um well every point in the especially at this point we're not quite

there yet but in the next in 2025 in early 2025 you're going to start to hear a lot of super cycle a lot of comments around oh this cycle is different we even did an episode last week looking at is this cycle different than past cycle like truly going to be different obviously I don't have a crystal ball I don't know but the one thing that really stands out to me is institutions are the ones that can really make a cycle different they have the the the wealth and the the is this cycle is driven by institutions not retail already all of this movement is driven by ins a lot of this movement is driven by Michael seller Levering up and just buying more and more and more and more more Bitcoin right so this you know this is uh but but yeah I mean this

cycle is not I mean we we track like uh you know we track a lot of data at the tie including you know which we track a lot of Twitter activity data and on a relative basis I mean we're like 50% the number of conversations we've been at at you know 2021 and stuff like that so this is really not I mean I can look really quickly I can just so we're still we're only at 50% W I can I can look really quick hold up I can tell you yeah I mean like you know in terms of Pico top even yeah I mean like 21 you know we we hit like a Pico top of like 130,000 tweets about Bitcoin a day we're at about 75 right now so that was like the Pico top in terms of and that's from

like real accounts non Bots like it's not the exact number but that's like a pretty good uh estimate but like we're directionally moving there but we're there were times in January 22 February 22 where we had more people talking about crypto than we do uh today so we're not from a retail perspective it's not it's not there yet obviously people look at all sorts of different data like coinbase app downloads and web traffic and whatever but I think broadly speaking like it's still this rally is is is primarily being driven by institutional Capital right and there are institutional buyers of the ETF for sure there are directional institutional buyers the ETF I said the Bas is probably 15 to 30% of volume so it's not it's a lot there's a lot of people there

that are that are not that um so yeah I mean I think I think this rally is very institutionally driven you asked like you know I think how this is going to be different than than previous Cycles is it's very institutionally driven which means I think it's G to have um it's also very policy driven by the US like historically we have not had a a government that is pro crypto and pro cry Innovation I mean we have a incoming president who launched a useless token which is crazy um like that's just this insane idea like he can't really attack crypto because he launched his own dumb thing which is I think by the way our best protection ever is the fact that the guy launched his own token like no one's talking about that but that's the best thing that he could have done um

and so yeah I mean I think it's it's it's gonna be I think policy driven um you know I think we haven't even seen the new capital flowing into the space yet from from like a funds raising Capital perspective because most of the capital being deployed right now is 21 22 vintage raised Capital so now we're going to see this new inflow of capital into funds which is going to start getting deployed and it's it's it's slightly there but it's not it's not really what what would you say is the likely timing of that is that early 2025 late 2025 I mean most investors were waiting for the election outcome like think about it this way if you're like I'm thinking about putting 50 million into crypto are you going to do it before on on November 2nd or November 4th right

and so I think a lot of investors were waiting to see the election outcome um and there's also by the way there's like cycles in which this capital is deployed by allocators so it's not just like a Ste stream deployment and so I think yeah q125 is when you see a lot of these checks start getting written you see a lot of these announcements of raises from VCS and hedge funds and others um but I do think there's a lot a lot to go I mean the question is is this going to look like previous Cycles what are people going to be buying what are people going to be investing in I'm not sure but nothing surprises me in crypto I mean like you know like a bunch of what I thought were dead altcoins popped 150% last week um which is which is crazy because it's it's you know a lot

of times retail that's coming back into the space and I think that was retail they remember the 2018 2017 cycle tokens and that's what they kind of go it's branding right they just it's what they're familiar with it's what they bought bought last cycle they bought polka dot they bought uh xrp they bought all these all these old l1s that have not really changed in terms of their adoption and in terms of what's going on in their ecosystem and like I'm not I'm not hating on these guys I'm just speaking to reality that there's just there's not a ton of l1s that have the adoption that warrants the type of value that their market cap would show right now uh yes uh that is the under statement of the century yeah if any of

these were Equity businesses and not tokens it would be a completely different ball game exactly exactly uh okay so what what's really you bring up this this Twitter stat that you clearly pulled up from the tie for us um which I I love to nobody who's listening to this is going to be able to afford to pay for your products this is our one chance to talk a little bit of the data that you guys have what are the different types of data that your your clients and institutions are looking at uh and how can that help our listeners think about data differently in terms of when they make decisions what data they might use when they're inv yeah I mean I think I think we we have so much data at the tie right and and I'm not trying to pitch us or our offering but we do everything

from Market data to derivatives data to sentiment data to blockchain data to news to research to private company data and everything in between and so you know the reality is every single one of our clients look at something totally different which is which is funny but there's no there's no broadly agreed upon fundamentals that exist in crypto yet there's no you know there's no PE ratio there's no evida like you know people like to create proxies for this type of data and stuff like that but it doesn't really kind of broadly exist I mean at the end of the day I mean I think you know as we've seen the last few weeks you know one of the biggest fundamentals for crypto is just Community right it's how many people are working on this project you can look at how many people are developing on these

blockchains and it also by the way it depends on what your investment uh cycle is right like Horizon is like there is our clients that trade day in and day out and are making sex decisions every five minutes are looking at materially different data than liquid Venture funds that are investing for the next 12 or 18 or 24 months so it really depends and I'm happy to I'm happy to get into every single one of those data sets or going into them broadly I mean I think at a high level the things that I I really want people to be thinking about are fully diluted valuation right look at like you know you can go like you can go on coin market cap or you can go coin Decko or whatever you don't need to pay for anything and you can see the market cap of assets but if you click in you

can also see what's called the fully diluted valuation and that basically means when all of the investors receive their assets when all of the tokens are distributed to the community how much is that project worth and in many cases you have situations in which only 10 or 20% of the token is liquid or tradable so the market cap maybe says 1 billion but the FTV says 10 billion and often times I think there's there's a few things one is like as we've seen with salana sana's price is at an all-time high again but it's pretty much at the same price point it was at in the top of the 21 cycle but its market cap has doubled because you have double as many tokens that are available in the supply and if you look even today already at the point that we're in at the cycle now there are some

ftvs which make absolutely zero sense and I know people like to think that like crypto can keep going up and you know like and look and like at some point in the bull market you're just like you know you're just like it just never stops it just keeps going up in what what's stupid stupider and stupider but like at the end of the day you have to look at these things because once the market corrects itself because it will it's not going to go up forever as much as I would like it to go up forever I have massive exposure to cryptos I'm sure a lot of you guys do and when it goes up forever you know fundamentals do start to matter like are there developers are there users is there traction are people talking about this how big is a community all of those

things do matter and FTV like once once the market cools and more and more Supply starts hitting the market if there's no buyer at the end of the tunnel that thing is going to sell off right and so I think it is important now like as you're thinking about investing like there's two l1s that I think are you know materially similar similar to one another I know one is trading at four times the FTV of another one doesn't have more users it doesn't have more traction the market cap is actually similar but if you look at the FTV they're really not similar at all and so I think that's one thing I think the other thing too that people when they invest they don't think about the question that you should ask yourself every time you're investing is if I had

this money in cash would I put it in the project and a lot of times people in a bull market are just like if it doubles again if it doubles again if it doubles again but like okay you put ,000 in a token and now it's $25,000 if you had 25 grand in cash would you put it in the project if the answer is no take it out like people don't think that way and you should think about all your money as being in cash every single day and if it was Cash where would you obviously there's tax implications and stuff like that too which obviously that's a personal decision but I think people oftentimes just you need to frame the perspective of if this is Cash what would I do and also not be too greedy so yeah I don't know but I mean in terms of

like the data that people should look at I mean I think it's fundamentals right I think it's you know how big is a developer community and you can see we obviously have a lot of developer data there's also some free developer data that's out there Electric Capital does a developer report that you can look at which is totally free uh you should look at user attraction and growth data um keeping in mind a lot of times people don't understand what metrics mean so for example one metric that I kind of hate is a metric called active addresses so for example a lot of people will tell me like oh Unis swap has 50,000 active addresses do you know what that means do you know what an active address is it's it's it's a it's one single wallet do it mean it's one person it's somebody who

sends a Tok token so you could be a Unis swap active address without using Unis swap what it means is you sent Unis swap tokens to an exchange versus a user is somebody who actually interact with a smart contract on unof and those are two very different ideas and so oftentimes when people are looking at metrics on different websites they don't know what the metric that they're looking at actually means is and so it's really important to get a sense of like okay how many real human beings are using this thing and also looking at a lot of times in crypto usage is BS because it's incentivized usage it's like hey you're getting paid to use this and so a lot of times it's really worth looking at like and you know this takes some deep research right it's not

that simple but it's worth looking at like okay once incentives dry up if people are no longer paying you to use something is that application retaining users like if you weren't getting paid to use it would you still use it right and so like I think an example of something that that's that that that's not the case for is gun on Avalanche like Godzilla is a video game on Avalanche it's got about half a million to 700,000 daily users that actually play the game because they think the game is cool like um like that's the kind of thing you should be looking at like to me that's like a like fundamentally they've built something that people actually like and people care about and people are using versus a lot of times you see traction on these chains is very incentivized like very incentive driven and oftentimes by the

way it's the same wallet address that's interacting across all these chains or 50 or 500 or 5,000 wallet addresses are controlled by a single person and so what what you really want to focus on is like is anyone you know using it have you tried using it does it actually work can you use the thing does it have does it you know like does it have developers that are excited about it does it have a community because at the end of the day those are the projects in the long run that are going to succeed and in a bare Market it you know like salana has come out of this you know the last bare Market it was down to what like $7 or something like that now it's at $9 I think eight or n whatever the number is whatever it now it's at 250 and why is

that the because there was a huge development community and Community people that love the that continue to build on it and continue to grow it and by the way salana is not giving out a ton of incentives anymore like they're not paying for this growth like people are and obviously you have your pump fund nonsense which I really don't like and and things like that but you have real developers that are building real projects and have real traction right and you see that across a number of different chains but I think it's something that's important to note and then on an application basis like honestly just like play around with some of these things and like do they actually work because if they don't work or if you're just getting incentivized to use it it could be a great trade you could make a lot of money trading it but

does that mean it's a good long-term investment maybe not fantastic advice fantastic advice all around uh I mean one of the the simplest things you said which is so true is just use the tokens that you want to invest in in some way use their chain play their game depending upon what app or what project or whatever they're building try to use it because if you use it and you like it then you're going to have a lot more conviction for your investment one of the most important things in invest in investing is conviction you have to have strong conviction for your Investments yes you need to listen to people like us and read newsletters and all that but you need to build your own conviction because that's what you need especially when we get into 2025 when everyone is

saying oh you got to buy this token over here or you got to invest in this thing over here you're missing out you need conviction otherwise you're going to fomo into things and you're going to make mistakes and you're going to play Follow the Leader and that's when you end up getting wrecked and that's what happens to too many people in crypto too many people it's all time frame right like you can fomo into something as a trade but just keep in mind the time Horizon that you're investing like look there's going to be a lot of stupidity and things that don't deserve to 50x or 10x will 50x or 10x but at the end of the day at some point especially as a space institutionalized right especially as my client come into the market especially as a lot of these Trad funds that we talked about come into the

market they're going to be looking at like okay what actually has users what actually has traction at some point fundamentals really will matter a lot more um and so it's important just to keep that in the back of your head as you think about where you're positioning your capital for the next few years yeah well and and it fits it fits really well into this will be my final question before we wrap here it fits well into uh one of our thesises which is a strong belief in a lot of the leading defi tokens for two reasons one a lot of the leading defi tokens let's say maker or a have very strong fundamentals so that we really believe in you can look at their fundamentals you can see their users that is all well baked and they've been

around for long enough that you can tell it's not a flash in the pan it's not a one- time and it's not incentivized growth of this and it's not incentivized anymore for most of these maybe it was in the beginning but definitely not in this cycle and not anymore and then the other big thing is there's as you said with regards to your clients there's all this trafi money that's coming in and our belief is what is trafi gonna be familiar with what are they going to want to invest in they're G to understand defi better than they're going to understand a memec coin or some or even an L1 blockchain they might not understand blockchains they might not understand that but they can certainly understand yeah I I would say though I would say though like these teams if a

big hedge fund wants to come into this space they're going to go find the smartest person in crypto and hire them and bring them in they have the budget to do so um and and and these people are no dummies like they they they know their so they're G to come in and a lot of them are going to be a lot smarter than the crypto funds as well so I wouldn't necessarily say that I I do I I do get your point that like from a fundamental perspective they're gonna be more aligned and understand defi I do agree with that 100% um you know I think it's also a question of like what are they gonna what are they GNA buy from a token perspective but also what are they going to use I think them using defi is very far off like if they can't even get

comfortable with interacting with coinbase at this point or binance like they're nowhere near interacting with defi so I don't think any of the trafi firms are going to use defi however a lot of liquid funds might raise money and then the liquid crypto native funds might use defi which can push the the the market up and to your point it's one of the only applications that actually has traction and actually has users in crypto so I do think I do think they are going to understand the l1s and l2s because they've seen how much salana has risen I think they're going to be like what's the next salana right and I think they're gonna that's going to kind of peak in in ethereum and others um and the l1s are what are what has size and scale and what they can you know from a

capital perspective get themselves involved with but I do think they'll understand defi a lot more than they'll understand gamey right or the metaverse or nfts or mem coins or anything else yeah or social F or something like that Josh this has been a fantastic conversation a fabulous episode everyone listening in I want to know if you guys have any questions about the way institutions are allocating Capital uh we're always trying to get experts like Josh on the show to talk about institutions View and so let us know what do you guys want to know from an Institutional point of view is there certain questions that you would ask to institutions throw them in the comments and we'll make sure we ask those to Josh or whoever the next guest is that we have on Josh thank you so much for joining the show today thanks for having

me on awesome thanks for listening in everybody have a wicked awesome day as always if you liked today's episode please hit subscribe and make sure you follow us so you don't miss out on the next one there's also a link in the description to our free five minute daily newsletter where we simplify crypto for you while making you laugh and if you're willing to step up your crypto investing game we're going to also leave a link for milk Road Pro you get access to our portfolio where you can see exactly what we are buying this is your number one resource to help you invest successfully in crypto one final note this show is for educational purposes only and nothing we say is financial advice investing in crypto or

any asset is risky and you should never invest more than you can afford to lose thanks so much for listening in my friends have a wicked awesome day