00:38whether it's the regulatory environment completely changing just in the last 6 to 12 months,
00:43or if it's the rapid adoption of stablecoins all over the world,
00:46like every single metric you care about in crypto is going up and to the right.
00:49So I don't think there's any sense from this market that, hey, we're over and done and dusted.
00:54I think everybody expects that the market opportunity for crypto is only getting bigger.
00:57And, of course, when it comes to the Genius Act, they say that that's been front and center
01:02and that's driving optimism because we have regulations that's pretty much in line with the sector.
01:08That's right. That's right.
01:09I mean, this is the most, well, first of all, it's the only legislation that has ever passed in the U.S.
01:14in the 15 years since Bitcoin was created.
01:17It's the first bill ever.
01:18And, of course, it enshrines stablecoins into the law, which now, I mean,
01:22most people realize that the U.S. is very much a leader on regulation.
01:25A lot of other countries that have been kind of waiting and seeing on what they want to do about stablecoins,
01:29seeing the U.S. embracing it tells them, oh, hey, we should also adopt our own stablecoin legislation.
01:34So I was in Japan just a few weeks ago.
01:36I was in Korea last week.
01:37All of them have bills in Congress right now about stablecoins that they also expect they're going to get passed,
01:43given what's happened with Genius.
01:44So this is all happening all around the world simultaneously.
01:47And the growth rate in stablecoins themselves has been astronomical.
01:50So we started beginning of last year.
01:52There was $140 billion in stablecoins.
01:54We're about to hit $300 billion.
01:56Right.
01:56And Secretary Besson has said he expects stablecoins to hit $2.7 trillion by the end of the decade.
02:03If that's true, that's a 70 percent year-over-year growth rate from now until the next four years.
02:09That basically means that the stablecoins will be gobbling up treasuries.
02:14But, you know, it remains to be seen whether that happens or not.
02:17All this optimism, I'm just wondering, is it trekking down in terms of, you know, the funding environment?
02:23What are you seeing?
02:24Absolutely it is.
02:25So you can see very clearly, especially on the stablecoin side, there's a massive build-out happening right now.
02:30There's over 15 of the Fortune 100 companies have live RFPs for people to help them with treasury management through stablecoins.
02:38Right.
02:38We're now seeing crazy growth rates on the ground.
02:41We recently made an investment to a company called Rain, which is a stablecoin card company.
02:45They allow you to pay in traditional, you know, if you go to a mall and you want to buy something with stablecoins, most places in the world that's difficult today.
02:52Merchants don't yet take stablecoins.
02:53But if you can go through the card networks, if you can go through Visa or MasterCard, but have stablecoins be settling on the back end, you can have lower fees, real-time settlement, and anybody with stablecoins can suddenly pay for anything all around the world.
03:05These companies, so Rain, for example, is growing 20%, 25% month over month, okay?
03:10It's an insane growth rate.
03:12You're seeing the build-out happening right now for stablecoins because everybody is seeing down the road all of these banks, all of these companies are now figuring out their stablecoin strategies because they know this is coming.
03:24It's not a future story.
03:25It's a right-now story.
03:26It's a right-now story, and what's happening right now, too, is this craze of the DATs, digital asset treasuries.
03:33It is a craze, isn't it?
03:34It's going to stop somehow.
03:35There's consolidation happening already.
03:37That's right.
03:38It's already stabilizing, right?
03:40So actually, just this morning, we announced that we invested into a company called the Avalanche Treasury Company, which is accumulating AVAX, which is one of our portfolio company investments.
03:48We also invested in another DAT for Athena, which is another one of our portfolio companies, which is a decentralized stablecoin.
03:54Now, more and more of these are launching, but we're seeing consolidation on a per-asset basis.
03:59Now, what do I mean by that?
04:00Right now, if you look at MicroStrategy and Bitmine, which is the big Ethereum one, those comprise already 88% of the trading volume of all of the DATs, right?
04:11Just those two, which tells you there's consolidation, and there's not going to be room for multiple ones for a particular asset.
04:17It's going to be the winner gets all the gains, and you can have one for each asset as an access play to allow investors who don't necessarily want to go and buy spot of the underlying on Coinbase or Binance or whatever,
04:29they can buy directly through the stock market in this interim solution before you have an ETF for the underlying asset.
04:34So I think these DATs make sense as an overall asset, and they can do things that an ETF can't do.
04:39They can do staking, they can do capital accumulation, as well as go get involved directly into the ecosystem to do value accruing plays.
04:47And it's not going to be in-trip, right? At some point, it's all going to stop.
04:50Well, no, it's not that it's all going to stop.
04:51I think what's going to happen is that the NAVs, the MNAVs, the multiples to NAV, they're going to go to 1 or 1.1, something very stable.
04:58And it's not going to be, oh, these things are trading at 2x, 3x NAVs.
05:01I think people have already seen that happen, right?
05:03So microstrategy premium was at like 2x, you know, just six, nine months ago.
05:08Now it's come down to like 1.4, 1.5.
05:11Everything else is basically at 1.
05:12And I think that's normal.
05:13That's what you should expect in a stable market is that, yeah, there's not a crazy premium arbitrage.
05:17The story is more around how can they create value that's going to be accruing to the underlying,
05:22not at like a 50% premium, but more closer to like within, call it 10, 15%.
05:27So consolidation is happening.
05:28Do you expect further consolidation?
05:30And who might the winners be?
05:31Is it a case of the big boys will win for sure?
05:34I think that's true on a per-asset basis.
05:36Definitely it's going to be the case that you see MNA happen.
05:38So right now there's way too many of these vehicles.
05:41And if some of them are trading at discounts to NAV, then the economically rational outcome
05:45is that the big guy who's trading at a premium to NAV or trading a par goes and acquires the vehicles that are trading at discounts.
05:52And by coagulating them into a single big vehicle, all of a sudden those discounts can get erased, right?
05:57So we're definitely going to see that.
05:58It doesn't really make sense to have like 10 teams, and all of them have their own management team,
06:02their own filings and regulatory obligations.
06:06It should be that there's consolidation in the market.
06:08It's too early to see that yet, but I suspect over the next 6 to 12 months, we will see that.
06:12Where are you deploying capital right now?
06:15So a lot of our money goes into early stage investments.
06:17So like Seed, Series A, we're investing a lot in the stablecoin space.
06:21We also invest a lot into infrastructure.
06:23DeFi continues to be a big part of our investment thesis.
06:25And you're seeing a lot of growth in DeFi this year.
06:28Big story around Hyperliquid, which is a large perpetual swap exchange.
06:31It's purely on-chain.
06:32And we've seen a bevy of new products that are going live playing for this decentralized marketplace.
06:37Now DeFi, you've seen go to something like 15% of the centralized exchange's volumes is now purely in DeFi.
06:44That's a really big story.
06:45Before, it was close to like 1% to 2%.
06:46So I expect that number to continue to grow.
06:49And that's another area we spend a lot of time on.
06:51Are you excited about what's being offered here in Asia?
06:54Asia's a big part of the story.
06:55So Hyperliquid themselves, their team is here in Asia.
06:57So same thing with Aster, which is right now the number one DeFi exchange by trading volume.
07:03Asia's always been a big part of the story in crypto, not just in terms of builders, but especially in terms of adoption.
07:08The go-to-market, and of course the biggest change in the world, they're all here in Asia.
07:11So Asia's a big part of the story.
07:13That's why we spend a lot of our time on the ground here in Asia as well.
07:15So I'd like to tell you a lot of time on this topic.
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