Tokenizing alternative assets: crypto's $22 trillion opportunity

Transcript

GM, good morning. Welcome to the Milk Road Show, the daily crypto show that sticks around longer than that subscription you swore you'd cancel last month. I'm your host, Jay Hamilton. It's Monday, April the 28th. And Kathy Wood's firm Ark projects 1.2 million Bitcoin by 2030. This is making everyone ask the question this morning, are they underexposed to Bitcoin? Today we're going to look at funding trends, where institutional money is flowing on chain. Is it going to Bitcoin? What's going on with crypto venture? Are we seeing a reignite of crypto venture since its dips over the bare market? Is it coming back?

RWAS continue to grow at a rapid rate. What is happening with the growth of RWAs? And what do we see as the future of tokenization as more and more real world assets come on chain today? Hey, to break it all down, we are joined by Michael Steinberg, founder and managing partner at Reciprocal Ventures. He's previously a leading portfolio manager, spent about two decades over on Wall Street where he led his hedge funds, tech investments. He also had 15 years consecutive of positive returns, which is basically unheard of on Wall Street.

And his old firm is based on the show Billions. So, Michael's been around the Brock. Now, Reciprocal Adventures, where he is founded and where he is now, is an early stage crypto VC, one of the first to invest in Salana and many other leading projects. Before we jump in, if you guys could just do me a quick favor, give me a like, a subscribe, or review wherever you're listening. It really helps the show. Also, I've got to let you guys know quickly that we have a sale right now on Milkro Pro. you can get 20% off. And we have so much conviction in the market right now that we are going to make a bet with you, which is that Bitcoin will be at new all-time highs by October 31st, 2025. If it's not, and you're so subscribed, then

we will give you a full refund. Today's episode is brought to you by Letin Get Cash without selling your Bitcoin. It's also brought to you by Coin Shift, powering top crypto treasuries with their yield bearing stable coin, CSUSDL. Without further ado, Michael, welcome to the Milk Road Show. Big fan of the show. Great to be here. Super happy to have you, my man. Okay, let's start with uh let's rewind the clock a second here. You you spent two decades on Wall Street working at a hedge fund, building a lot of noncrypto projects, non-crypto businesses. Uh what made you make the shift back in 2016 from Tradfi to crypto? Yeah. So, so my journey goes

back to kind of the beginning of the web one build uh where I was an internet analyst um Steve Cohen's first and um I you were Steve Cohen's first internet analyst. Yeah. Yeah. Technically, but pretty much you know TMT and I ran a TMT book for him for 15 years. So, uh across a bunch of different market cycles, product product cycles too, right? If you think about it, um, internet itself, uh, cloud, mobile, um, and, um, I got really interested in in the private investment business along the way. uh learned some really expensive lessons on my personal balance sheet which I think everyone has to go through before I kind of got through the knack of it and then

built the skeleton of of 72's uh venture business made their first investment and sort of had enough success with that that I was compelled to sort of switch from public investing full-time to private investing full-time and in 2016 made the full pivot left the firm and started uh Reciprocal Ventures. give us your macro view. You you've invested in tech for so long, you know, dating back to web one. Obviously, a lot has changed since then. How does crypto fit into the evolution of tech? Yeah.

So, I think it takes quite a bit of research to really understand what crypto is. I like to tell newbies that you need to spend six months down the rabbit hole to really understand it. Obviously, you can trade it and speculate and make make tons of money with it. But if you really want to understand it, contextualize it. It takes time. I'd say around 2020, we became convinced that blockchains are the next great technology platform shift. And that tokens, the original product of crypto, really enable a better allocation of resources. Um, uh, they help align, they help coordinate.

It's sort of a coordination optimization tool. And so our view is that they're so potentially powerful that they're going to transform entire industries. And you can you could start to see that in 2020 with the financial services sector and DeFi and DeFi summer was sort of just awakening at the time. But you know, we think that crypto will continue to expand beyond financial services. We've already seen some early shoots with mixed results in sort of gaming and and other sectors. Um but we think it's only a matter of time and um one area that like we're focused on is the actual upgrade of the internet itself and we think that some of the uh technologies

behind these decentralized networks can actually power a better internet experience. But I mean I do think that it takes um a lot of perspective to understand where crypto is at any given point in time. And so we've all seen those Gartner hype cycle charts and the graph of the psychology of market cycles, how it kind of goes up and down in despair and euphoria. And I mean, I've lived through those so many times I know them backwards. Um, but I think they've given me a pretty good perspective on where crypto sits today. And you know, I like this quote that John Door once gave. He's the legendary VC to use a word from the draft this weekend. Um and you know he used to say great investors need both a telescope

and a microscope. The telescope to see the big picture and the microscope to see the details. And I think nothing could be more true in the crypto business. Um you know remember hodal from the 2014 cycle I mean that was telescope only. And if you think about cryptonellism, nihilism, that was 100% microscope. And so I think a lot of people get glued to the microscope. The influencer tweets, the viral ideas, the memes, even support levels. But you know, crypto Twitter, it's really fun, but it's a bit of an echo chamber. And um it's pretty easy to get lost in there. And so we use a microscope at our firm to sort of after we develop a

thesis and we want to zoom in and then we want to understand se sentiment, mimetic value, where exposures lie, and where onchain data suggests traction is or is going. I don't think enough investors use onchain data, by the way. I think that's really valuable tools, but that's another topic. Just to stop on that for a sec, when you say not enough investors, I think a lot of our listeners would use onchain data because we're cryptonatives. We understand how to use onchain data. So, but I'm going to I agree with what you're saying. I think a lot of institutional investors don't use onchain data because they don't understand it. They don't know how to use onchain data. Yeah, it's

fascinating to me how um nent the institutional investing community is with regard to tokens. I mean, most people don't really understand how tokens work. You know, like we write pieces about token utility because that's what our investors need to understand. And so, um, getting into onchain data, they're not even really, they haven't wrapped their head around the concept of a gas token. You know, they think everything's a meme or everything is a currency. And so, there's a huge amount of education that's required to bridge the gap from your audience to, let's say, my audience.

I mean, it makes me think of we had uh Matt Hogan, CIO over at Bitwise on the show a few weeks ago and he was saying that people mispronounce Salana when he started just to give you like, you know, let alone know how to pull onchain data. They can't even say the the name of one of the most popular blockchains in our space. So, there is certainly Yeah. Yeah. Certainly a gap there. Sorry, I I cut you off though. Getting back to what you were saying, one of the things that's really hard in right now in the market is this telescope versus microscope concept that you're bringing up because I think right now all of our listeners feel pretty good about their telescope. You look out a few years,

five years, 10 years, everyone feels really good. Which tokens you feel good about? Okay, sure. That depends. There's certainly a shift happening right now from more of the mimetic and speculative assets in the space to more of the fundamentals because quite frankly we have more fundamental assets in the space. Not a lot, not a lot. We still are fairly low on the fundamental assets. You know, we've got millions of speculative assets but less fundamentals. But there is that shift is is happening. The the challenge is right now when you look through the microscope, there's so much noise in your microscope that you don't know what to look at because not only do you have the the onchain noise and the crypto

noise, you have all this macro noise as a result of tariffs and Trump and then what's happening in the geopolitical side and China. That stuff is very distracting to investors and can often pull you away from your mandate and from your thesis. Uh just just while we're on that topic, how are you guys navigating this current macro environment? Yeah. Well, you know, it's not really what we do. We're not focused on the liquid markets. We're early stage VC investors. We're, you know, founder focused, obsessive about company buildings and network buildings. Obviously, we do pay close attention to the macroeconomic climate. You know, I like this concept of actual versus perceived risks. And so

one thing that I think investors need to learn is that when risks are abundant and evident and discussed constantly in the papers, they are absolutely perceived risks and they're things we need to think about. But are they actual risks? Because when things get so heavily perceived, they become discounted. And then it's often sell the rumor, buy the news or buy the rumor, sell the news as it's more traditionally said. Um, and so that's why you'll often see things like the day the tariffs come out, the market doesn't actually go down because it's fully discounted. And and so I wonder how much of this news is at this point fully discounted. Um, I

personally believe that the market has bottomed, but that's not really relevant to what we do and it's also not investment advice. These are all my personal opinions. Selling your Bitcoin should be a last resort when you need cash. That's why there's Lein, the trusted platform for Bitcoin back loans. You can unlock cash in as little as 18 hours with no monthly interest payments and no prepayment penalties. They've issued over 9 billion in loans and never lost a single satoshi of client funds, even during the chaos of 2022. If you're a long-term hodler, this is the move.

Get liquidity without selling at milkroad.com/letin spelled ln. I would tend to agree. I think I think we've bottomed. Uh and but I also think we have volatility to go from here. So, you know, even though we've bottomed doesn't mean there isn't some more pullbacks ahead. And I mean, look, the headline risk is just so extreme right now. Like anybody's guess when you're dealing with this much headline risk like how much of it can be priced in depends upon I don't know how crazy everybody feels Trump feels when he wakes up in the morning and he goes to Twitter to tell us what's up for the day. I don't even think that those are the biggest risks in the market though to be honest with you. Like I think if

you kind of ignored the macro sure you might miss 10 or 15% moves. I guess theoretically they could be a little bit larger, but the larger risks is is really not not knowing the issuers. Um not understanding who's behind the tokens, not understanding the road map of the development that's ahead. And we've just seen so many tokens launch at absurd valuations that make absolutely no sense with teams that aren't really committed or particularly engaged. Um, and yet markets get taken up with the meme or the idea without doing the work to understand if this is really um going to be a successful project in the long run and if they're not overpaying. And I

think there's just so many assets that cut get cut in half um that have nothing to do with the macro. Yeah, it's it's it's a really really great take and I I want to touch more on that and which which areas you see that you think have the best potential and we're going to talk about RWAs and tokenizations of assets. Um but I want to before we get there, we're talking about as we prep for this show this spread that that has happened over the past year, year and a bit between the Bitcoin ETF and crypto venture funding. And obviously we need crypto venture funding early. We need this early stage funding so that we can go grow great crypto companies. Uh but there hasn't been as much activity there

recently. Uh let me share this chart here. Let me bring it up and uh let's just Michael, can you talk us through this spread and what you're seeing here? Yeah, absolutely. Yeah, we find that this this slide or chart gets a lot of attention in conversations that we that we have and you know what it depicts is the uh price of Bitcoin in the squiggly black line against the amount of capital that has been raised by venture capital firms in crypto in the blue bars on the bottom. And so if you look at it, it was historically correlated pretty tightly.

In other words, they moved together. There was sometimes one exceeded the other for a little bit of time, but it usually, you know, reverted to the mean and and and caught up. But starting in, you know, I guess late 2023, we we had a real separation and Bitcoin price surged while venture funding did not it didn't come back. It didn't even go up. Um and uh that long those th that data is now confirmed. Um venture funding did not grow for v last year uh in a meaningful way. As a matter of fact um total VC raised was under $2 billion in 2024. Bitcoin ETFs took in 35 billion.

They almost 20xed us on on marketing. And you know look that's why the guys at Black Rockcket paid the big bucks. Um, but the reality is it's a historic wide as they call that and if you believe in reversion to the mean, it's only a matter of time before more money comes into crypto venture or Bitcoin price falls. And I'm personally a believer in the former and and not the latter. Um, and I think there are a lot of reasons to believe that. I mean, uh, or to to understand why this happened. It's not just marketing, right? people were underexposed to Bitcoin. PE institutions finally got a product that they could

buy comfortably and not worry about custody and all the SEC barriers to that. And then in crypto venture, think about the narratives of last year. It was it was memecoins. That's not really a a VC funded business sector. Never will be. Um, if you think about gaming or metaverse, metaverse disappeared after 2021, probably with good reason or at least temporarily. Um, and gaming has been fits and starts, you know, it it hasn't really found any killer games that have ex, you know, captured um, enough eyeballs. And even DeFi, I mean, DeFi didn't have any sort of spectacular stuff last year. I'd say hype uh, Hyperliquid was was the first example of

it. But the the various VC categories didn't have sort of explosive new product growth. And so that's another reason. But I think we all know that uh we all know what Bitcoin does and what it doesn't. And there's a just this huge tale of innovation that exists in alts. And I think we all know that it's just a matter of of when not if we get new killer apps that are actually in categories that require venture capitalists to help grow, build, and invest. So what would you expect to see from here moving forward? Would you expect to see as you said you don't think Bitcoin price is going to regress towards crypto venture? You think crypto venture

increases to meet meet Bitcoin or just to decrease the spread. Does that lead to new projects coming out quickly or do we have to is there a delay here and a lag because we have to wait for crypto venture to increase in order to get enough money or is it that there's just going to be more DeFi projects built because they're they're building in a different they're fundraising in a different way. I think it really comes down to institutional capital flows. And so this is a bit of a nuance of the venture, but if you think broadly about venture capital, institutional money invests in funds. The funds make investments. they're supposed to sell those investments and return that capital to those investors that they have and then that cycle repeats through time. Well, most venture categories um

software uh food non-crypto categories have not had any exits exits or liquidity and so the institutional capital has gotten clogged. there's no constant flow of that loop and so um things have slowed and the interesting thing is crypto has a fully liquid v fully liquid market as you know and so there's much more liquidity from crypto venture funds it's actually a better mousetrap for the venture community um and so we think that that can help contribute to sort of unclogging the capital log jam that exists at institutional LPS today um but I think it's more than that right because Um the institutions are making a lot of money

in Bitcoin today, right? It's not just Black Rockck, but it's Van and it's so many fund families. Um and then custodians, Coinbase, Fidelity, uh and the rules are changing. And so finally, the institutions are actually incentivized to build and push into this community. And so I believe that this market is extremely attractive for those institutions. And that's the number one most important driver and theme for 2025. Meet CSUSDL, the stable coin built for institutions and Dows. Don't just hold basic stable coins. Earn yield. All without compromising security. Backed by regulated real world assets and secured

with institutional grade risk management by our friends at Stakehouse Financial. Put your treasury cash to work, earning native yield and protocol rewards. Built by the team behind Coin Shift, which is trusted to manage over 1 billion in business treasuries on chain, including a gitcoin, and hundreds of leading institutions, cycusl is gaining traction at milkroad.com/coinshift. And where are they looking to allocate? Because one trend that really seems the bit, as you said, Bitcoin has captured all the mind share, all the the marketing, right? Uh, and the Bitcoin economy is really growing. What's interesting to me is the

Bitcoin economy is all being it's all funded by traditional funding, venture, traditional funding means. You're not seeing the Bitcoin economy being developed the way in any decentralized way really like it's mostly centralized. Whereas you're still seeing the DeFi and new L1s and new uh what I would you know non Bitcoin part of the crypto ecosystem which is really the the biggest part of crypto that we're all so excited about and waiting waiting for it to take off.

Where's the venture money flowing right now? Well, I think there are some parts of DeFi that are really compelling and it's the next home for institutional capital. So, when we talk about institutions making money on Bitcoin, if you look at what Larry Frink's been saying, the head of Black Rockck and we just follow the money, right? They're the biggest asset manager in the world. They have something like uh 10x the entire crypto market cap in AUM. But, um, look, they're talking about tokenization. They want to tokenize everything at Black Rockck, funds, stocks, and bonds. And um you know why?

I think it's actually really interesting to think about why they want to tokenize these things. The answer I think is twofold. One, it saves them a lot of cost to tokenize a fund. I don't know if you've ever looked into this um or talked to any of these folks, but like Franklin Templeton has famously said that they're saving 90% of the administration costs on their funds by being onchain. So it's a very significant cost savings. And if you think about any new technology across time, it either has to give you new capabilities, new forms of compliance or cost savings. It's the three C's. And so it hits on the cost savings point. But then you think about the crypto market and it actually gives you new capabilities too. It gives you new distribution because you know at a high

level crypto is really internet commerce, right? It's sort of an international business where citizens of any country almost any country can buy or use products from almost any other country um without tax or tariffs. There's no economic toll taking. There's no friction. It's a global market and it's growing. So crypto had 425 million users in 2022. Today they have 650 million users or we have 650 million about 50% growth in ownership in this cycle alone over two or three years. And then you look where the growth is coming from. Well, crypto is growing everywhere and all at once. But the fastest growth is actually in some really large

important emerging economies. Nigeria, Indonesia, Vietnam. And these are populous countries. I mean Nigeria and Indonesia have over 500 million people between them. Jakarta is the third biggest city in the world. Logos is top 20. Um, and so crypto delivers this embedded bricks trade, right? Brazil, Brazil, India, China, and whatever the R was, Russia. That was a big trade in like the 2000s. Everyone wanted bricks. So, we have this like embedded exposure to these emerging economies. The customer segment's really, really large and it's not it's not wealthy today, but it's only a matter of time. But then you think about the customer itself and well the customer balances are visible

because wallets are online so they're pseudonymous but they can be messaged and so there's these huge visible houses of money on the internet that are holding piles of liquid assets. That's a pretty attractive customer. And so um we think that for years we heard the institutions are coming the institutions are coming. I think that changed last year. I think the institutions are here. Um, and so what are they going after? They're going after stable coins and tokenization and those are really large opportunities and a lot of venture money is is is is migrating into those categories. Let's chat through the the tokenization opportunity a little bit more. Uh I I pulled up a slide that you

shared with us where you you talk about the potential of unlocking $22 trillion in alternative assets if we were to tokenize these assets. Can you help us wrap around 22 trillion is a you know a a massive that would be a huge increase of the total crypto market cap uh compared to where we are today. Can you help us understand how could we bring these $22 trillion onchain? Okay. So, alternative assets refer to everything other than stocks, bonds, and hard assets like cash or cars. And so, if you look at uh I believe it's it's global exposure to alternative assets, not stocks, bonds, or hearts, there's $22

trillion in those products. And those products are things like hedge funds uh or or just other kinds of mutual funds that aren't fully liquid. And the reason we call this out is because if any of you have ever gone for an a loan, maybe a mortgage loan for your home, they ask you what your net worth is and you have to fill out this detailed sheet and kind of swear that it's all true. And I encourage you to always be true with that because the banks don't mess around. But um when you fill that out, you can put all the hedge funds you want and all these exotic funds you want.

They don't care. They don't register as part of your liquid net worth. And so you can't borrow against them. They're essentially blocked out on your balance sheet. So what if we can liqufy them? What if we can create secondary markets for them where you can get instant liquidity or more importantly borrow against them onchain from DeFi pools? All of a sudden, we're going to allow American consumers to access leverage on their alts. And that's the power of some of these tokenization platforms. It's kind of a big idea. The devil's in the details. We're still early in the process, but that is the core idea behind some of these tokenization platforms. That is not obvious.

And and obviously we are seeing a massive this is already happening. This tokenization of this $22 trillion is happening. I mean, let me just scroll quickly to your next slide just to give an idea of the scale of this right now. Walk us through how much of this tokenization is happening already. Yeah. So, this isn't our data, but um we think it's it's directionally accurate. And it says there's 17 billion dollars worth of assets in RWAs today, real world assets that have been tokenized. And it's across a couple of different categories.

Most of it seems to be treasuries. Um $17 billion is a good number. It's obviously not quite all the way there to it's not 22 trillion. Right. But I think the way to think about it is when you think about assets that can be tokenized, right? We're thinking equities, we're thinking bonds, we're thinking funds, and we're thinking real estate. Now, there are other categories, you know, wine or or maybe art, but those are smaller buckets. But if you look at the market size of real estate, equities, credit, and funds together, it's almost $900 trillion. It's a crazy number, but that's what it is, right? Global real estate, it makes sense. It's 385 trillion dollars of global real estate

value. So theoretically, all of that can be tokenized. I'm not saying it will, but it can be. And so versus our goal, we're 2% of the way there. We have 2% penetration of the largest categories of assets moving on chain. Uh, you know, markets often develop 8020. So let's say we get to 20%. there's still 10x growth in this chart and 10x growth in all the platforms that are helping bring them onchain uh or service those assets while onchain. There's obviously a lot of asset categories within the potential of tokenization. It's almost overwhelming to think about them all at once or try to wrap your head around where where do

you see tokenization happening within which asset categories do you see it happening now or happening next? Yeah. Again, it's not rocket science. Kind of follow the money. Listen to what the CEO of Apollo says, you know, and read the Black Rockck letter. I mean that that's that's pretty simple research that our our team does and um it's very clearly that it's funds first and and that's why these treasury funds have been collecting assets on chain. I think build which is Black Rockck's product has over two billion in assets now and then I think we'll see equity and credit next commodities are actually you can already trade a lot of commodities on chain I just don't think they have full scale yet uh and then

eventually we'll get into some of the more difficult categories like real estate. Um, but you know, we've invested in a platform um that really is the market leader in this called Plume. And it's it's sort of like a digital broker dealer in that they're bringing assets on chain with a best-in-class text tech stack. Um, and they essentially tokenize the funds or they help the issuers distribute their tokenized funds across the Plume ecosystem. Um and then they create a secondary trading of those assets uh which helps unlock all of the 22 trillion eventually. Um, and they have real traction with these web two issuers. Like they they've announced

public partnerships and actually provide access to funds by Apollo, Black Rockck, and and some crypto native folks like Superstate, who you know is probably a familiar name to this audience. And um and and so you know, they have a live live token that it's already out there. They're launching on mainet. And and we think as more of these traditional financial services bring their funds on chain and more consumers buy into those products, it'll benefit, you know, Plume and all of its competitors. What do you think is the the impact of the regulation and the legislation that's being worked on in the US right now? I mean, it's very clearly meaningful and real. We definitely keep our ear to Washington and um you know

Trump has appointed or supported pro- crypto can uh uh leaders at every important organization and what's key about that is you know government is a very collaborative enterprise. So the SEC you see that they say something but they only do that after checking with the other organizations to make sure everyone's cool with it and that they're not stepping on anyone's toes. And so it's really compelling because you have pro- crypto folks at the head of all of the agencies working together on subcommittees helping to knock down barriers and and we think right good legislation that you know could pass under Trump. Um legislation takes time, you know, and there's this this saying

that you can't you can't regulate without regulating some of the the upside. That's something that we we all need to think about. But if you look at the way regulation's trending, it's it's in the right direction. And I don't think it's sort of eliminating the upside. I actually think that the crypto legislation and the crypto regulation that's underway is like borrowing our ideas. Like for example, uh the SEC approved an exchange to trade uh extra hours recently. NASDAQ's thinking about extending the trading day for their assets. That's clearly a hint from, you know, where that's coming from. They're also last week, I think the CFTC asked for comments about PERPS. They they're

thinking about using PERPS now. And, you know, PERPS are just a better futures product. I think everyone would admit that, but it does change and disenfranchise some folks. But anyway, my point is we're seeing really good progress. I don't think it necessarily hurts anybody, and I think it's going to expand our market. Yeah. It's uh what's so great about this conversation today, Michael, is it's so easy in these current market conditions to lose hope and to go through you, you talked about the market sentiment at the beginning and to go through those phases of despair. Uh and I keep telling people right now, I'm like, don't quit, don't leave, stick with it. uh because during

periods like this you can really start and you've been through multiple cycles both in crypto and even uh you know before you came into crypto you've seen that things go through cycles and things especially tech especially this type of tech that is takes time to achieve its evolution and to get to product market fit. The one thing that um I would love to get your take on before we wrap up here is where is the opportunity now for whether you consider that from from your lens from the venture lens or whether I mean from for our listeners it's going to be from the retail lens they obviously don't get access to the same things that you're going to get to get on the venture side but the thing that feels very obvious to me is the L1 trade

the blockchain trade has been such a popular trade throughout the evolution of crypto. And it seems like we might be at a point now where we have a lot of block space. We might actually have too much block space. We have a lot of these L1s that are really just competing for marketing and for attention as opposed to competing for fundamental onchain real usage yet because we just don't have I mean you said yourself 650 million people in crypto a very small portion of those are actually active on chain on a regular daily monthly basis most of them are just buying and holding

right so where where do you see the opportunity next? Well, again, I'll start big picture and I know you want money-making opportunities, but just just to think about it big picture today. Um, crypto penetration is at 8% of global population, right? So, 650 sounds like a lot, but it's only 8%. So, if we compare that to other asset classes and technologies, I think it provides some perspective. So, about 15 or 20% of the world own public stocks. Um, another another 10% own ETFs. Um, uh, I think the bond bond market is hard to track, but estimates are 5 to 10% people own bonds. Um, so as a percentage

of penetration as a financial asset, crypto is actually pretty high. It's still growing and it will grow in the short term as ETFs proliferate our market. But as a technology platform, blockchain penetration at 8% is extremely low. 70% of the world today uses the internet. In the US, it's like 95 plus, obviously. Um, but in emerging markets, it's more like 40. The internet had 8% penetration back in 2001. Mobile phones, today penetration is actually over 100% because some people have multiple prescript subscriptions. But um mobile phones started selling in 85 and by 2016 they were at 100% penetration.

They were at 8% in 1997. And so I I I like mobile phone example because things changed in 198 1997. I actually remember it's a little embarrassing but I was investing in stocks back then and Motorola came out with a new product and it was the tipping point for growth. It was one product. was called a flip phone, Motorola StarTech, and it became it was just a smaller, lighter form factor. Kind of a better application if you think about it. Um, and the market exploded from there and never looked back. So, I think from a technology perspective, we're very early. From an asset perspective, we're later along, but um there's still quite a bit on our

on our in our future. And then specifically, you know, there's a lot of money-making opportunities in crypto today. I've heard you talk about this, and it's more about protecting your downside and not making mistakes, not having style drift, doing what you're good at. I think, you know, a proper trader with all the tools that are out there today can consistently produce really good returns. I also think private investing is a wonderful opportunity. Um, but yeah, there's a lot of niches. You just got to stick to your netting when you think about, you know, where this all goes. So from a technology and I love that the the comparison to the internet comparison to the mobile phone feel uh feel very appropriate because I think we would agree and the rest of the world might

not know this yet or might not understand this but it feels like blockchain is one of those technologies that will permeate the entire tech stack and will be widely adopted um I mean for sure at a minimum by finance but feels like it'll go well beyond that. What the timeline is for that and how that looks very difficult to predict. U but the but that adoption feels inevitable. So if we're sitting at such low adoption right now and we're going to we're one day going to get to that 70% maybe even 100% adoption of the whole world using crypto again not necessarily I think when everybody hears that it's not the way you think it's not how you think they're going to use it. It's more them using

crypto the way they use the internet where they don't even know that they're using crypto. they're just playing a game or they're using their cell phone and the back the rails on which it is built on is built on blockchain built on crypto rails. Where where do you think that all happens? I know I keep coming back to the same question, Michael, so forgive me if you don't want to answer it, but I'm going to keep directly asking you. You know, is this all going to happen on Salana? Is this all going to happen on one chain? Is it going to happen on hundreds or thousands of chains? How do you see it playing out? Yeah. Um, I don't know the answer to this. Um, I think it's an interesting question. We think about it a lot. It's why we use data, right? It's why we

think about our style as quantal. We look for trends. We try to fund trends. Then we use data to support and validate. And it's really all we have. So if you take a look at why technology platforms win over time, you know, the answers are surprising and I can't remember all of it, but like backward compatibility is one of the leading indicators of success. You wouldn't think that, right? You think maybe it's um something else. What is what is backward compatibility? Like the ability for one technology system to plug in easily to the older technology system.

Interesting. you know, um, crypto does not have that so far. There's not a lot of that. But not a lot of that. Probably not that hard to build. And I'm sure my I'll be yelled at for for not coming up with the three different firms that are already building that. But listen, I think what we can do is we can follow the data and produ think of trajectories of where things are going. I think it's pretty obvious that Salana has the most momentum in this ecosystem. I mean, it's doing, you know, more transactions than all other chains combined, more fees than all of ETH combined, uh, more active addresses than the entire ETH ecosystem. Um, I I also keep in mind

that most of tokenization and stable coins are on ETH today and so that could be a second chapter or third chapter in their story. My guess is though there will be a couple of chains that control the bulk of the activity and um I think it'll be some of the chains we have today. Um and so I think the base layer trade goes on for years. I think you can cap you know the returns will probably compress over time in these large assets. It's hard to go from 80 billion to 240 billion, right? Um, but I think they'll if though if that's true, if you believe soul triples from here, there's a lot of smaller assets on the Salana

ecosystem that should follow suit and actually have a more alpha, more VA, and better returns. Yeah, there's so much room in the entire adoption of the space that we could see opportunities at the base layer. We could see opportunities at the DeFi layer. We could see opportunities at some new apps that are coming out that we don't even know about yet. The difficult thing is we're so we're so early I think and this is why I talk so much about like protect your downside because um yes there is massive opportunity when you're so early in a new technology like this but there's also massive downside. Before we wrap up

with you Michael is there any lessons learned from your your your career in investing of how to navigate new technologies and how to protect your downside? uh millions of them and I won't be able to capture them all today. Sell when you can, not when you have to is one idea, right? Just make sure that you're you're always um your balance sheet is all well positioned and you're not forced out of positions. Um you know, life is a marathon and not a race. So 50x leverage is is probably not the wisest choice for every trade. Um I don't know. There's I there's a million of these. We could talk about him

another time. Yeah. Great. Michael, really appreciate your time today. Thanks so much for joining us and guiding us through all this. Yeah, I enjoyed it. Have a great day. Thanks for listening in everybody. Have a wicked awesome day. We'll see you back again tomorrow. Thanks for listening to today's show. Y'all, before I let you go, I get asked a lot what card I use for my crypto and my onchain spending. And I use the Crypto.com card. I don't recommend you check it out as well. I use it for a few reasons. Uh, one, you get cash back in crypto. So, rather than paying cash back in fiat, you get cash back onchain. You can build your crypto, build your onchain dollars, which I love. Great way to on-ramp and to build more onchain. Also, great perks. Netflix subscription, Spotify subscription. And

depending upon the level of card you have, you get lounge access. If you're a traveler like me, you're going to conferences. I'm going to a bunch coming up this year. So, it's great to get that lounge access. Check it out. cards free, no points, no no cost to get started. Hit the link in the show notes, you won't be upset. Thanks again, y'all. Have yourselves a great 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 5minute 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