E158: Avichal Garg, Electrical Capital CoFounder: Why Bitcoin Hitting $10 Million Is Less Crazy Than You Think

29:07You can send, receive and spend Zcash without middleman or surveillance using Zashi, the wallet that was built by the team that launched Zcash in 2016. what's the because you mentioned these different companies you invested 10 of them that became 10 billion plus company right what's the common thread between i would say more the founders than the company themselves yeah yeah i think it's this i think they're just authentic there's they have a belief system they believe something about the world and they have the agency and the will to sort of make that happen um now that doesn't mean that just because you have that you're going to be successful like a lot of the times you could um you could believe you could believe something and the market's not ready for it or or you know the market doesn't care um you know some some like the meta right now i think in crypto for example is around privacy and so we've invested in a lot of privacy stuff over the years because we we believe in that um it's one of the things that brought us into the space originally um and um and it looks like it's maybe finally starting to hit right like z cash has kind of taken off not investment advice you probably shouldn't buy it But, you know, signal looks like it's working.

30:17And if you look at the demographics, the people that are most interested in privacy are actually younger people. And so it's almost like you can see a generational thing happening, which is a lot of people sort of figured out, wait a second, I don't have privacy on the Internet. Right. Because this is the age, like the Gen Zers that are growing up now sort of grew up in the shadow of, wait, Facebook has all my data. Google has all my data. Bitcoin's transparent on the ledger. Like they sort of like grew up understanding that and they grew up understanding the consequences of that. So you put stuff on social media and then do you get canceled.

30:44You know, you put stuff on social media, does the college rescind your application? You put stuff on social media, does like the job offer get pulled? And so there's like a very acute understanding of the consequences of transparent systems such that you're actually seeing younger people actually be more drawn to privacy tech, which is kind of interesting. That's like not what you would have expected 10 years ago, I think, or 15 years ago. So, you know, there are a lot of people who believed in privacy for a long time and have been working in those things for 10, 20, 30 years. They were just never good businesses.

31:10Now the market might be ready for it. so it's not sufficient to say look I have a world view I'm going to express it into the world the market also has to be ready for it you need both but that sort of I have something to say I have something that I believe I need to say it's almost a compulsive thing it's like I can't not say it I have to do this and that's kind of what you're looking for and a lot of people are just compulsive about it like if you look at somebody like Ivan at Notion he was working on creator tools at Apple he worked at this company called Inkling which is an education tech company that a really smart guy, Matt McGinnis, Matt started that company.

31:45He's COO at Rippling now. Phenomenally smart guy. And they're building textbooks on iPads. And so if you look at Ivan's history, he's just compulsive. He's so obsessed with creator tools. He's like, tools are how humans make progress. That's how we share information. He's just obsessed with this idea. So he spent his entire career trying to build tools for other people to create content and be able to express themselves. And so once you sort of like understand him a little bit, even like it's, you know, you can figure that out in 30 or 45 minutes in a conversation. You're like, oh, this guy is just, this is what he was born to do.

32:18Like maybe it'll work, maybe it won't work, but he has a point of view. He has a very, you know, clear way he wants to express himself and he's just compulsive about it. It's like, there's, there's nothing that's going to stop this guy from building this and he's going to do it again and again and again until he cracks it. And that, that sort of is like the raw material you're looking for. how much of your decision is based on that your decision to invest a lot is it like an 80 percent then you say maybe the market is not there yeah or but whatever this guy's gonna figure it out or this girl is gonna figure out because they just have the thing yeah i it depends on what stage you're talking about if you're talking pre-seed where there's it's one or two people on an idea um and and they're just trying to figure it out it's it's 80 that now you still have to assess like hey look do they have an intuition for what market they're going after who the customers are and who the users are and how you go about, you know, pricing.

33:07And there's a bunch of other skills that you need. And you can assess those, but it's overwhelmingly that. Once you're starting to get into like a Series A and you're going to go raise$10 million, it's a little different. You know, you need to have some of the other stuff dialed in. You still have to have the other one. But basically the earlier you're talking, the more it is this sort of, you know, you're betting on somebody to figure it all out. And so, you know, the kinds of questions you ask are totally different. Like when we're doing pre-seed stuff, I spend a lot of time with people asking about where were you born?

33:36What do your parents do? Like, where'd you go to school? Like, why'd you study that? Like, it's, it, it doesn't feel like a, um, we'll talk about the product. We'll talk about the business. We'll talk about all this stuff. But like, I think it's very hard to make a decision without like deeply understanding somebody's perspective and where they come from and like, why, what, what makes them unique? Because that uniqueness is what needs to come out in the product and the business. And so you got, you have to like really understand the person behind the thing. We have a very similar job. Yeah. And me.

34:01Yeah. No, it's a hundred. I really agree. It's very similar. Actually, I was thinking maybe two years ago with the co-founder of SwissBorg, which is one of the largest exchanges in Europe. Yeah. And he was saying, Kevin, I used to be an analyst in the city in London. Yeah. And this floor, and there was like three or four managing directors and they're bringing us a bunch of ideas or deals and we had to work on them, right? Do analysis. But their job was basically your job, Kevin, was they were just going and talking to CEOs and founders all day long. And, and there was no camera, but that's what they were doing basically.

34:40And then you, then it gives you insights on like, what should I invest in? What's interesting? Who has the thing, who is built different? And, uh, ask this question. I mean, let's get, let's get into it right now. Usually I ask them in the beginning of the, the, the conversation, but yeah. who are you?

35:02And I want to get in, I want to get not only who you are, but you said before, at some point I realized that, I mean, I built this company, I sold it to Facebook, but actually I might be better to find who these people are, right? And this is completely linked to your childhood and your skin color. So that's where I really want to get because I think it's super interesting. Yeah. um well the answer the answer i'm just i'm just some guy who you know happens to be good at math and good at reading people and um and here we are i'm very very fortunate um you know i think uh the the the backstory i think you're you're referring to is um you know i was born in india but i grew up mostly in um in kentucky and southern ohio and um at a at a time where there weren't a lot of Indian people around in some of these communities.

35:57And so a lot of my early childhood experiences were basically being the outsider. You know, I would go into these situations and like, you know, in Kentucky in the 90s, it's like you're either white or you're not white, right? So it's like white people and black people, not a lot of brown people in most of these places. And so you kind of don't fit in with the white kids. You kind of don't fit in with the black kids. um and uh and so you know you're kind of out on your own and so you you have to build certain skills beyond the academic stuff um just sort of as a survival mechanism right because um unfortunately it's it's obviously much better now but you know um you know 30 years ago uh you know in the 90s there's still a lot of like physical racism like you could you could get like physically beaten up for for looking a certain way or doing a certain thing um and so you know know you have to learn to read the room pretty quick um you have to learn to be like entertaining you have to learn to be funny you have to learn to diffuse situations you have to like figure out is like somebody lying to you are they are they a threat um you have to you you know some of some of my earliest um memories and experiences are also like very quickly like you know as a as a six or seven year old figuring out that like actually like the teacher may not be on my side which is like a weird realization for for like a six or seven year old to have because because you're sort of taught like hey if you need something you talk to the teacher you talk to principle or whatever but you know just because somebody has structural authority doesn't mean that they're actually a morally good person um is this big but again is this because skin color or just because they like kids more than others no i mean some of it some of it was like pretty explicit um you know some of it was was yeah very very explicit um and that's just you know that's just reality it's not you know you don't like wallow in it it's just i kind of think if you go through situations like that where um you're an outsider and you're gonna get bullied or you're gonna get physically assaulted for for things you can't change it's just like i can't change my skin color so it just sort of is what it is you kind of have two paths where you can either sort of wallow in it and let it sort of really grate on you and or you just deal with it you're like all right this is my life i gotta i gotta do something about it so what do i do it you know what do i do about it um and uh and so you learn to navigate it um and so you know it's it's um just unfortunately you know as a kid i think about it i think about it now as an adult I'm like, man, that's, that's tough.

38:17Um, you know, I would not want other little kids to have to deal with that, but at the same time, it's sort of, you know, I had to spend a lot of time alone, just like nobody would want to play with me. And so that actually turned out to be great. Like I got, I was like sit with like books and just like read and read and read. And I got like really, you know, deep on a bunch of stuff and I got smart on a bunch of things or, you know, like, it's funny like I grew up you know in that sort of environment that one safe space is like such a loaded word but like one safe environment actually was the church right and so you could go to like a bible study and they didn't care what your skin color was and so you could be in an environment of people that wanted to understand who you were and were you a good person and so like I had very early experiences with like churches both white churches and black churches, which are culturally very different, which are, I think, very formative.

39:16And, you know, going to Bible studies and stuff when I was a young kid, I'm not I'm not a religious person per se, but it's it's sort of, you know, I look back and I'm like, oh, like I have I have an understanding of where where the sort of middle America comes from, because just sort of through a set of like funny coincidences, like I had to go to Bible study. right so um so you know you look back on some of these things and you're like oh i couldn't have control for any of those things but like they ended up giving me a bunch of skills that that downstream turned out to be superpowers right it's just sort of like that that um that stress is formative in in sort of other ways um which i'm you know and retrospect i'm grateful for because i think so many of those things ultimately gave me the skills that that make me outside successful.

40:04Let's talk about crypto a bit. Sure. It's supposed to be a crypto podcast, but we talk about so many other things in general. But I think this actually ties, right? Because so, you know, Curtis, my co-founder, we had this great career. We could have you know, I worked on large-scale machine learning systems. This is what I studied in school. I worked on Google search, newsfeed ranking. We worked on these large-scale systems. So we're sitting right next to the AI stuff. And so we had, Curtis and I had these long conversations in 2016. And we were thinking about crypto and we were thinking about AI.

40:40And the thing that we thought about a lot and talked about a lot was to us, it always felt like the AI stuff was going to benefit the incumbents. Like it was so CapEx heavy. It was already obvious that the people who had the data were the ones who were going to win. And the crypto stuff to us felt like the little guy had a shot. not just from like a startup perspective, but like if you think about cryptography at its core, you know, when you have a super, we all have supercomputers in our pockets now, right? And we have these GPUs at scale, which allow us to hire tens of thousands of people. So now you can run a business and not have any employees.

41:19And so it's like asymmetric power projection through AI and computers, which is pretty remarkable. What really struck us about cryptography was it was kind of like the opposite of that. It was that it was a massively leveling force. It was a massively egalitarian force, which is like you and I get the same cryptography that the NSA has, that the US government has, that the Chinese government has. And it serves as essentially, if you think about GPUs or AI agents as like sort of power projection and sort of like an offensive tool in a sense, cryptography is a defensive tool. It's an asymmetric defensive technology where we all get the same protection, regardless of whether you're a billionaire or you're a little person.

42:02And structurally inside crypto, if you go back to sort of cypherpunk, if you go back to what the space started as and hopefully continues as, there is this healthy skepticism of authority, right? The whole idea is that the system has failed in very fundamental ways. This is if you go back to the white paper with Satoshi, the system failed. And we have an opportunity now with cryptography and smart contracts and technology to reimagine these systems. We can not only reimagine banks, but we could reimagine voting systems. We can reimagine capital allocation. We can reimagine money flows. We can reimagine healthcare data.

42:37We can imagine who owns the data. There's all of these fundamental things that we can now reimagine. And we don't have to trust these large-scale systems that we previously had to trust because we didn't have the technology to do it in any other way. So to tie it back to what we were just talking about, I think part of the thing that drew me in was I had these very early experiences where just because you have structural authority doesn't make you good. It doesn't necessarily mean that you should trust the structural authority just because that's how it's always been done. And so I think that healthy skepticism allowed me to see this thing.

43:10And then, you know, in 16, 17, 18, when we were making a lot of these early investments into protocols and companies, you know, like Bitwise, it was a pretty contrarian thing to do. Like if you did that, you were in Silicon Valley, you were like not serious. you're like a scammer you're like hanging out with the drug dealers and the porn stars like you know there's a stigma around it there's still a little bit of a stigma i want you to ask now in let's say 2026 yeah how does the silicon valley look at crypto and crypto investors because it seems to be mostly an ai story yeah i think it's still a little bit on the fringe which is great i think that's that's good um i would prefer it that way um and and not just because i'm more comfortable with that but i think that's that's where like real returns get generated absolutely Like if you're in the mix too much, then you get massive return compression.

43:57Absolutely. So, you know, I think a lot of the electric story and a lot of Curtis and I being successful as investors, I think, is due to us being very comfortable being outsiders. It doesn't bother me. I'm actually more comfortable as an outsider. And so when we go into the bull markets, for example, I get really uncomfortable. You know, I'm just like, oh, no. Like the journalists are coming in. Like the press is writing about this. Celebrities want to talk to us. Like it's just I get very uncomfortable. And that's the signal that we have like a qualitative signal for, I don't know, we're in the bull market.

44:28And so I think that's really like for this, it turns out like my personal story of seeing, you know, having lived through some stuff, gave me a particular perspective, which sort of put me on this path of being able to see this thing that a lot of Silicon Valley didn't see, which is then why we have the business that we do today.

44:48Week one. I want to thank our partners who help us make this show possible. Thank you, Treasurer. My favorite cold wallet to store my crypto and make sure I sleep well at night. If you want to order a treasure wallet and sleep well at night too, you can use my promo code WSH10 to get a 10 % discount. Thank you to our friends at SWE for supporting this show. SWE is a scalable layer one blockchain that's fast, secure, and affordable, built by previous Facebook developers, and that delivers the benefits of Web3 with the ease of Web2. Big thank you to Bitwise Asset Management for backing today's conversation.

45:21Bitwise is a crypto specialist asset manager with more than$15 billion in client assets across 30 plus crypto solutions, including ETFs, index funds, alpha strategies, staking, and more. However you like to invest in crypto, Bitwise has something for you.

45:42regarding uh kind of feeling comfortable when people i mean the crowd is agreeing with you or not i'm i'm i'm think i'm kind of shocked but also i feel good because there is a lot of people in our industry in crypto yeah i still don't believe in this freaking industry like literally you're they're like hey bitcoin is gonna get rugged at some point maybe they bring it to a million dollar but then the government's gonna rug it blah blah blah and you're like what are you doing here man like what but at the same time i'm like if these people who are in this industry they don't believe in it well that's actually good the day everyone is a mega believer uh well in my experience those people also get washed out it's like it's um well one way to to sort of frame of what you're talking about is sort of missionaries versus mercenaries and the mercenaries who see prices going up or want to do pvp trading or whatever um they usually get burned out it's hard to it's hard to do that for 10 years um missionaries you know going back to like the privacy thing for example missionaries believe in a thing even though it may not be the economically viable thing to do they're going to do it because it's the right thing to do um and missionaries tend to have staying power and in any in any industry that is highly volatile but is generally up and to the right, the name of the game is surviving.

47:01Like if you're last man standing, you win. And if it is a truly up and to the right sort of industry, then if you survive long enough, often the outcomes are actually quite significant. And so you really want to surround yourself with missionaries and you want to invest in missionaries because they'll go through the ups and the downs and they'll power through and they'll survive. And then a lot of times just by surviving for long enough, they'll actually be quite successful. Which sounds less exciting than the kind of dream, right? It's, I mean, if you look at, for example, crypto is a good example or tech or whatever, Amazon.

47:39Well, you just have to buy and hold or build and hold, right? Turns out it's hard. It's fucking hard. It's really hard. Because we cannot, and maybe like that's a key topic, like as an investor. Yeah. The human brain is not built to think exponentially. We think just linearly, right? Correct. So we just see this crazy volatility. It doesn't move. Oh, the Sol is only at 150 or 250 or 300. It hasn't really moved since a couple of months, a couple of years. Bitcoin is just, it's just doing nothing. It's so frustrating. Oh my God, oh my God, oh my God. Well, if you close your eyes, I mean, some people call that the comma strategy, right?

48:23If you get into a comma for next five or 10 years and you wake up, well. you're probably going to do pretty well. Yeah. There was actually, I think, I want to say it was either Schwab or Fidelity. Somebody did a study at some point and they looked at the accounts that had performed the best and it was basically people that like forgot their passwords or died. Died, yeah, yeah. Absolutely, dead people. Yeah, they just performed the best. So yeah, there's truth to that. You know, the cognitive bias thing you're talking about, we talk about this internally a lot too. I think there's actually three cognitive biases at play here.

48:52So the exponential growth is certainly one of them. Like the human brain as primates were not wired for exponential growth. why why does it feel because if we look we can just look at the charts right this thing is yeah because i think we're we're extensions of our biological form and as primates as macro biological beings we don't experience that you know like you don't go to sleep one day and then there's just like a tree outside your window that didn't exist yesterday on a microbiology scale it does happen with bacteria right so we saw this with covid but because that's not our lived experience as like macro beings in biology with sort of like our primate DNA, we don't have an intuition for it because we don't really experience that at scale.

49:35So it's an intellectual thing. It's not a physical thing. We tend to have like very good intuitions for things that, you know, that we have like our biological sensors have sort of adapted for. You know, like think about something like how complex it is when somebody throws you a ball for your like eye to see it, for you to like stick your hand out, like predict the trajectory of where the thing is going, be able to catch it, send the electrical impulses. It's like a very complex set of operations, not only because that, but like if you actually run the math on the delay in your visual processing system from like where the atoms actually are to when the light hits you to how long it takes your brain to process it, you're actually anticipating moving your hand to where the ball will be, even in physical space with this like built-in, you know, millisecond delay, which is like remarkable.

50:19We have an intuition for that, right? If you try to model that through physics, because it's like actually quite complex. Meanwhile, something so simple as like look at a price chart and it's going up and it's like our brains aren't, we don't have an intuition for it. So even though it's like very easy to model, the intuition is not biological. And so I think it's not in there, but that's only one of, one of the biases at play here. I think another bias is we don't really understand large numbers. And so, because, you know, like you can see this is five, right? You can see this is 10. If there's like a pile of bananas here, you don't know if it's like 23 or 64.

50:50You just kind of know it's a lot, right? You can just sort of see it. And it's because we never have to think in large numbers. So, you know, this is why like those jelly bean games are so interesting and everybody's just totally wrong. Where you have a jar full of jelly beans and it's like how many are in there? You can't, you don't know, right? It's just your brain doesn't have an intuition for it. So we don't have an intuition for like a million or 10 million or a billion. We don't, like our brains are not wired for those numbers intuitively. and so we can't intuitively reason about what does it mean when hundreds of millions of people or a billion people or five billion people will be using this stuff like it's just there's no intuition for it you really have to put it on a chart and like graph it and say wait a second and what's interesting about that actually if you take those two things together is if you go back at every time in in technological history for the last let's say 40 or 50 years especially with software because that's the world i know the best if you were to stand at that moment in time and look backwards in time, you would see an exponential growth.

51:46And then if you were to sort of turn around and you look forward in time, you should project exponentially. But if you do that, you get to really outlandish numbers. You get to numbers like Facebook's going to be worth a trillion dollars. NVIDIA is going to be worth$5 trillion. There's going to be 5 billion mobile devices. Actually, there's going to be more mobile devices than there are people. You get to like very strange conclusions. And if you assert these conclusions based on exponential growth, you sound like a crazy person, right? Like in 2010, if you'd said there's going to be more mobile devices than people and, you know, Tesla is going to be a trillion dollar company and NVIDIA is going to be a five trillion, you would sound like an insane person, right?

52:21It's like, no way, like that doesn't, but actually it turns out that's the right thing to do. So, so like that social thing works against you. And then I think in general, when you're dealing with the world of startups, which, you know, I think people have a misunderstanding about, about crypto in general is you're really investing in early stage companies, even though they're protocols or tokens or whatever. these are very low probability events right so the likelihood of bitcoin succeeding was actually quite small the likelihood of ethereum succeeding was quite small so these are tail events and we also have a really bad intuition for low probability events um right because we have loss aversion of these other things happening in our brain and so you know people are worried about dying in a plane crash and they're not worried about dying in a car and you know but if you just look at the numbers this is like totally wrong um and so there are like emotional factors at play and so our intuition is about small probability events and tail events also wrong so if you think about like crypto or you think about early stage investing, it's actually the intersection of all three of these things.

53:14It's an exponential growth with low probability events with extremely large numbers if they work. And so it's like the intersection of three terrible cognitive biases. So it makes it basically impossible to intuitively reason about. So what you're saying about the last one, low probability event is you're saying most people think that for some reason it's understood in the startup world, right? I invest in a startup, it's probably going to zero. But in crypto, they think, that is probably probably going to be worth a lot there's this bias where everything goes up forever and we're all going to get rich yeah or are they yeah that's part of it and so they don't understand most things don't work and the likelihood of success success is an anti-pattern most things fail most things that people try will fail and the things that work are the anti-pattern there's an intuition for that and then you intersect that with well when it works it's actually 100x bigger than you think it's going to be um right and so like that's a really hard thing for most people to intuitively reason about, which is why I think being a missionary in any field beats being a mercenary.

54:16Because when you're a missionary, you're not doing it because of the number. You're doing it because you believe in the thing, which then allows you to persist for an extra five years and capture the back end of the exponential growth. And so the outcome ends up being much, much bigger, not because you thought the outcome was going to be much, much bigger, but because you believed and because you believed you were willing to grind for an extra five years. And that extra five years is where all the compounding is, right? It's not It's not years zero through five that you have significant compounding in a business or you have significant compounding in your assets or in the investments that you've made.

54:44It's really in years five through ten, or actually ten through fifteen. You can look at the NVIDIA price chart when they went public versus when the compounding really kicked in. And a lot of these businesses, Microsoft, Facebook, Google, the real compounding is not in the first five or ten years. The real compounding is in the back ten years. Let's apply this to crypto. Sure. Because some people are talking about the Bitcoin IPO moment. Yeah. Right? like early early believers kind of selling their coins and the institution yeah buying yeah can we apply maybe let's take bitcoin eth and sol solana or whatever you want let's start with bitcoin i want to understand with all these kind of biases that we just can't get right how high can this thing go yeah based on what we just talked about yeah so um obviously not financial advice please don't ever listen to anything I say about where you should or shouldn't put your money.

55:39But here's how we explain it to people when they ask us, like our RLPs and our funds. And they say, okay, how should we think about this? And what we say is, look, there's a, at a hundred thousand foot view, you have to understand what's happening at the backdrop. And the backdrop that we have right now is we have a fiscal situation in most Western countries that is creating a lot of spending and it's unsustainable. We're spending more money than, than we're bringing in to, to very, very large percentages now, like 7%, you know, debt loads. And this is remarkable. There are only a couple of ways forward.

56:10If you assume that this is like one of the big drivers in the world. One is you could try to cut spending, entitlement spending, not going to happen. Like nobody wants to pick winners and losers. You can't get reelected as a politician if you cut, you know, health benefits for old people or poor people or young. There's no winners here. Nobody's going to do that. There's no political will to do that. Option two is to raise taxes. Nobody's going to do that. Extremely unpopular. Practically speaking, in most places, very hard to pull off. People are mobile. They'll pick up and leave with their wealth.

56:37We've seen this in the UK. We've seen this in the EU. In the US, taxes are unpopular. Again, not getting reelected if you raise a bunch of taxes. Not going to happen. Option three, which is the path that we've been on, is currency debasement. What you're going to do is inflate your way out of it in some form, ideally hidden, so most people don't realize it. You know, and you call that money printing. And that's the path that we're on because it's politically viable. Like nobody has to make a hard call. Nobody has to say like, I did that thing. It sort of secretly happens behind the scenes and you get reelected as a politician.

57:06And option four is we grow our way out of it. If you can actually fundamentally boost GDP through productivity gains, then we can actually afford all the things that we want to give people in society because we can grow our way there. So one and two are not going to happen. And option three, you really want to be in fixed supply assets, things that the government cannot create more of. So you want to be in California coastline. You want to be in gold. you want to be in you know copper you want to be in bitcoin and once you start you want to be in fine art like there's no more da vincis right you just go buy da vinci um so when you look at it through that lens you realize actually that that stores of value that are that are seizure resistant that are resistant to government creation are extremely valuable because the backdrop of the world has changed and most people are just starting to realize that the world has changed that we're in this new regime and so most of the world hasn't even figured out this is what's happening yet, right?

57:57So we're very early in this. As people figure it out, the question is, where will they put their assets? And our assertion is that when you look at the properties of a good store of value, whether, you know, you want it to be fungible, easy to transfer, easy to subdivide, highly liquid market, extremely protected against seizure from, especially from a government, you know, extremely protected from the government just being able to get more of it, yada, yada. I think the digital stores of value, like a Bitcoin or an ETH, are far superior to many of these other options. Again, most of the world has not realized this yet, so they will.

58:28So then you say, okay, well, how will these things get valued? And I think the easiest way to reason about it, ADIQ way to reason about it is relative to comps. And so you say, take something like Bitcoin, it's digital gold. That's a meme. People get it. Wall Street now gets that. The pension funds and the sovereign wealth are starting to get that. The central banks have not gotten it yet. And if you just do a one-to-one, you say, look, if Bitcoin can be as big as gold, because everybody in the world that has gold wants some Bitcoin. And there's a rotation happening. You do the math. We used to do this math in like 2017, 2018.

59:00And you just do this sort of market cap of gold divided by 21 million Bitcoin. And back then you would have gotten to like 400K. These days you get to like 1.2 million because the market cap of gold has gone up so much in part because of the currency debasement. And so a really, really simple back of the envelope is like Bitcoin's worth at least a million dollars if it gets to the same market cap as gold. And back to this idea of exponential growth in underestimating markets and so on and so on, you know, in these markets, generally when you put things on a phone, you get TAM expansion. The total addressable market goes up.

59:29So I go back to something like Uber. The criticism against Uber, like the Series A was, well, the entire taxi industry is worth$10 billion. How could you possibly be worth more than$10 billion? And here we are when Uber is worth$100 billion, right? And not only do we have Uber, we have DoorDash and we have Instacart and we have Didi and we have Grab. And that whole market is hundreds of billions of dollars. it ended up being 50x bigger um and so i think there's a very reasonable assertion that when you put digital gold on a phone and now all of a sudden three billion people can have it instead of 300 million people that have gold um you actually get massive expansion and so you know our house view is that it's it's very likely that gold um is too small a comp that actually bitcoin is much much bigger because it's so much easier for people like there are a lot of people in the world that would like to have gold they can't get it um and now they can um and so they will um and so actually i think i don't think like a you know five to ten million dollar um in the fullness of times is at all crazy just because you get tam expansion and that's the history of every every piece of software for the last 30 years would tell you that once you put it on a phone once you put it in front of a billion people once you put it in front of five billion people the market size actually goes up by five to ten x and but that's that you sound like a crazy person when you say that, right?

1:00:44Like in 2017, we used to say Bitcoin's going to a million and we sound like crazy people. And now you say Bitcoin's going to like five or 10 million. You sound like a crazy person. But it's not that crazy once you reason through it because the denominator is also... It's not 21. It's like Satoshi's coins are locked. Like a bunch of people have lost their Bitcoin. Dollar's getting denominated. You start reasoning through this and you're like, man, you can get to some pretty large numbers without sounding... If you reason through it, it's not that crazy. If you use the gold comparison, you make the assumption that gold just has to go up and Bitcoin to stay the kind of same percentage for Bitcoin to go up, that's one, right?

1:01:17Then if Bitcoin gets market shares from gold, it's going up also. And then if it becomes much bigger because it's on a phone, well, then you don't sound crazy anymore. Yeah, I agree. I mean, and what is not that crazy is, I mean, you look at, you pull out your phone right now and look at all the apps on your phone. How many of those applications have more than a billion users? A lot of them, actually. A billion users on a mobile device is not what it used to be. I probably have 20 apps on my phone that have a billion users, right? And so like, I think we're just very early in this. There's a big question here about how long it takes.

1:01:52I'm not saying it's gonna happen in two years. But again, you know, when you're thinking about compounding and investing, it's often like the back 10 years. Like we're 15 years into Bitcoin, we're 10 years into ETH. A lot of times the real compounding is like, not the first 10 years or the first 15 years. It's like you have something durable that continues to compound, right? It's Amazon, it's Google, it's NVIDIA. It's like actually those back 10 or 15 years is where like the real compounding is. Let's maybe finish today with applying this concept to an ETH or a SOL. I mean, maybe a SOL is too early.

1:02:25I don't know. How do you think about these things? Yeah. Yeah, ETH we tend to think of also as some sort of store value. I think it's going to be interesting to see how that gets carved up. Even if you say, look, if you're a BTC Maxxie, you might say, look, ETH is not as good as gold. origin story, yada, yada. Okay. Is ETH better than silver? I think it is. Would I rather have like a hundred kilograms of silver and try to figure out what the hell to do with it? Or would I rather just have some ETH on my phone that I can turn into stables and I can like, you know, get some yield and way rather have ETH.

1:02:55And so silver is worth something like, you know, two, two and a half trillion. That's like a five X right there from where, you know, from where ETH is today. And I think a lot of people will actually say, you know what, I don't want to have 100 % BTC. There's a lot of reasons to not be 100 % BTC, just from technical risk and fork risks. And maybe I should take some percentage of this and be allocating it to ETH. I think a lot of rational investors will take that sort of an approach. They're not going to be BTC maxis. And so I think there's a natural sort of reallocation that will happen. So not only will Bitcoin eat up gold market share, but I think ETH starts to eat up gold market share.

1:03:30Because people say, well, should I just have one digital store value? Shouldn't I just hedge a little bit? and so they'll reallocate between the two so i think i think we're still very early in sort of that i mean to zero index it right um eth just turned 10 in july 2025 right it started in um 2015 bitcoin turned 10 in january 2019 and all of the institutional understanding about what bitcoin is like if you go back to 2018 2019 larry fink doesn't understand it wall street doesn't understand it's it's a it's a real you know outside outside thing 2019 to 2023 is when wall street got their head around it that's when everybody who was an institutional investor said oh i get it now that's that's exactly where eth is now in our opinion right it's just like the wall street folks are just starting to get their heads around it um and so is it so crazy that that eth does what bitcoin did between 2019 and 2024 like that five-year windows when all the institutional investors got their heads around it doesn't seem crazy to us that over the next five years Same thing happens for ETH.

1:04:29We're also very bullish on Sol. As a store of value, completely different theses. How do you categorize this? Today, I mean, it could evolve. There's no reason it couldn't evolve. And I think ETH involved, for example. So maybe Sol could get there one day. Today, we tend to think of it more like a computational layer, which still has a huge amount of upside. You know, I think what would it be worth to have an AWS? Like if you look at Amazon's market cap, most of it is probably AWS. Like they have a huge brand, but like the grocery business or the retail business doesn't make that much money. It's a huge moat, but it's really AWS that makes all the money.

1:05:05And so what is it worth to have an AWS where global retail is participating in financial transactions, right? Or we tend to think Solana as the architecture is actually really good for things like social applications. Like if you look at like the social, the intersection of sort of entertainment in financial applications, the Solana ecosystem is really excelling there. There are a lot of really interesting experiments that happen there in part because of the way the architecture works. And so it's easy for devs to get in there and write code and ship stuff. And so what is a thing that's like AWS for financial transactions for everybody who's a retail person in the world worth?

1:05:47If AWS is worth a trillion, is it so crazy that Seoul could be in that same tier? That doesn't seem crazy to us. And so that's kind of how we think about it today. It could evolve. But I think what Solana is like uniquely good at relative to Bitcoin or relative to ETH is actually a lot of that kind of stuff. We just like on the ground, when we look at the devs and what they're doing, there's like that, that's like where we see a lot of creativity and interest for these sort of like end consumer experiences. I think that the developers in that ecosystem really excel. Is there any other blockchain or kind of crypto asset that you think has kind of reached this escape velocity moment now in 2026?

1:06:23You know, not yes, but, you know, our definitions of escape velocity are a little bit different because we're such early investors, right? So we were like in the seed rounds of things like SWE and NIR. And we think there's an entire new generation of things coming that are going to be even 100x, you know, faster. You know, but it's always very risky to reason by analogy, but it is interesting and illustrative to think about what the analogy might teach you. There's something underneath the analogy that's useful. So, you know, even if we look at the internet and you look at later in the internet's history, you know, we got Snowflake and we got Databricks, right?

1:07:01You got like database companies and data management companies that, you know, 20, 25 years into the history of the internet. and so I think you're going to continue to see L1s I think you're going to continue to see blockchains that are 100x faster and things like Unto where you take all the learnings from all these other ecosystems and say well actually I can make it 100x faster and what happens when I make it 100x faster? Maybe you get an entirely new class of applications that just weren't possible before so if there's something that comes out that's 100x cheaper then maybe it's really great for machine-to-machine communication for example and now all the sensors of the world can talk to each other and build distributed networks in a new way so I don't think we're anywhere close to the end of like oh there's gonna be three three L1s three blockchains or something I think it's actually much more likely that we have many many hundreds um that are that are interesting and successful quick one to finish tell me your SWE SWE is a partner oh my chief haven't passed apart tell me your uh what's your thesis on SWE yeah it's um well you know we we um i've known evan uh for a long time it's a bunch of ex facebook people right so we knew we knew a bunch of those folks um for a long time really really talented technically um just very gifted technically um and and sort of the same idea you know i think um purpose-driven um uh blockchain environment uh programming language uh with move like a new vm and really thinking about all these things from the ground up after having tried it with Libra and said, okay, well, we learned a bunch of things and we made a bunch of mistakes.

1:08:33And so now we know how to do it right. And that's, that's often a good signal. I mean, we were talking about missionaries, um, and some of these stories. And I think one thing that people may not appreciate is there's often many, many, many years of pain before the thing works. And it's often not just that one company. Often there's a multi-company journey or a multi-entity journey. And so the fact that, that Evan and Sam and co, you know, have been building these kinds of systems like you know take something like evan he's he worked on llvm like he's he's been working on like compilers and programming languages for for 15 20 years right like his his whole career um and so this doesn't come out of nowhere it's not like this person just shows up and then 12 months later it's like oh i got this great thing that's working it's like no there's there's like 15 years of training and pain and diligence and insight that goes into this and so when you looked at the team at the seed stage it was like oh this is a killer team to go figure out how to create an entirely new programming language and and a vm and a chain that can be 100x faster and so on um and so for us it was a lot of bet on that um and then you know i think these things once once you have something that does have some some infrastructure novelty and some ecosystem novelty um then you get things like walrus that get built on top of it and you're like oh that's interesting like i wouldn't you know if you asked me four years ago what i have thought that they would have sort of produced something like walrus as a distributed file system um file storage system and and make it performant and competitive on cost and it actually works is like i don't think i could have predicted that four years ago um but it makes sense given where they are now right and so you know our job we we our job is um we're just so early it's it's we it's different you know it's not i you know i can't i couldn't have told you all the things they're going to do today and the ecosystems that might pick up and the use cases that might pick up but i definitely could have told you that like evan and sam were really special guys and they were they were going to figure something out thank you so much avishan for doing this that was very fun and uh super informative and what i really like about these people i interview here especially in silicon valley and san francisco is this super long-term view that is uh i mean our mission at when shift happened is to separate the signal from the noise and there's so much noise in the industry and if we can just sit down and listen to people who are long-term driven and saying hey guys like this is this is still early this is a massive opportunity don't fuck this up as Raul Pal always says be patient understand that you have a lot of biases that are not working in your favor and then resist the temptation to do all the shit that you should not do then yeah it's 100 % correct amazing thank you so much thank you good to see you as you probably know by now I host some of the biggest names in Bitcoin and crypto on my podcast but a lot of the best stuff never makes it on air the shift newsletter is where I share that raw behind the scene alpha, the insights, stories, and lessons straight from my guests that you won't hear anywhere else.

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