E70: Spartan Co-Founder: How I predict Crypto Market Cycles

28:29What's your advice to a 22-year-old dude who went to a good uni that his parents paid for and whose next logical step is a safe job in tech, consulting, or banking, but who feels that is destinalized into doing something less consensus, such as building a company? I would say that, first of all, you're 22 and you've got, in that generation, at least 78 more years to live, right? So there's no rush, right? I started Spartan when I was 43. I started companies before that, but there's nothing wrong with spending the first two, three, four, five years out of school, just getting solid training in an organization, learning how to navigate, you know, politics, people, learning how to eat dirt.

29:25You know, it's not necessarily a bad thing, but it's a very, it's a very personal thing for some people. It's, it's something like for me, it's always been something I wanted to do at some point. I felt like when I came out of school I didn't have to do it right away and also I didn't have like an idea that I just had to do this I knew it would come someday something some opportunity but I just didn't have it then and so I think it's and then there's there there is also now now I'm on the other side of that trade right where I'm about to send my eldest off to college next year so in four or five years I could be in a very similar situation right where I've I've forked out a lot of private school and college tuition over about 20 years, right?

30:08And then they want to go and do something which maybe from my perspective is not what I expected of them and is certainly not very remunerative. And I don't even see how they could pay their rent with it. And, you know, I think it's going to be disrupted by AI or whatever, right? But I think you need to let people go on that journey. I mean, sometimes there's financial extenuating circumstances, there's medical bills there's whatever then you just got to do what you got to do but in in a situation where you're flexible then I don't I don't think there's a rush to do these things I actually think you know each person has their time that's very interesting that's very interesting because it's kind of a double-edged sword right for me I started at 23 right after uni I started my first company and I never had an employer from that but And the reason why I started that.

31:01You're unemployable. Well, I think Naval says the taste of freedom makes you unemployable, right? Naval Ravikant. But that's in theory, right? Now the truth about doing that. Why did I do that? Because I did my bachelor in Switzerland and I did a gap year in Hong Kong and Singapore. Right. I was an intern for a large luxury company for two times three months. I was in these cubicles every day and I was like, it's going to be hard for me to continue like that. But that's where I developed my first business idea by building, by basically solving some issues. The reason I started a company though was because the amazing thing in Hong Kong and Singapore is it's very easy to meet people like you, basically.

31:46Like I'm 21, 22. You know, you're kind of naive. You have big mouth. You're going out there pitching yourself. Yay. My pitch was... And at that point, my pitch was, I'm going to do the GMAT. I'm going to do a top MBA or master's in Europe. And then I'll go for McKinsey. And so I was basically meeting people, ex-McKinsey or ex-Goldman, who had done the whole thing. And then they were 42, 43 and basically starting a business or running a business since two or three years. And they were telling me, man, my only regret is not having started when I was your age. in my mind I was like what that's weird like the people who've been through the career path that I aim because that's kind of what the society and school tells you and the brands that you see in the universities and everything big four McKinsey Boston Consulting etc they're telling me I should not do that and I should start now right so that's how my mind switched basically and then I started the first company but honestly it was fucking horrible because I was 22, 23 no one gives a shit about you right like and it's you don't have a very big network there's zero network you don't even know it exists you don't understand the corporate politics and you're there like man like I'm gonna die I mean the business is gonna die before I even have a chance to show anything to anyone because no one gives a crap and no one believes in me I'm just a kid right and so the double-edged sword is on one hand And for many years, I was still pushing and building the first company, but I was thinking, had I spent the first three, four, five years in a consulting company building my network and my skills, probably would have been much easier to start the business itself.

33:35But would I have been able to leave a job that pays me well and gives me a comfortable life and take the leap? I don't know, right? That's where a lot of people get stuck. But I think those people who are 42, 43, which is the same age I was when I started Spartan and also had similar experience, right? I think that's easier said than done because they now have the benefit of almost 15, 20 years, call it, of work experience and network and also some level of savings, right, to fall back on when they're starting their business. that is very different although it's also scary and it's big leap it's very different from being in in one way when you're younger you have nothing to lose nothing you have nothing so nothing to lose but on the other hand you also have no base no buffer right so in a way you're you know you're jumping on a plane without a parachute right so i think that's easier said than done is very hard to be successful when you're that young to start a company um and then And yeah, in terms of getting this experience in a big company, I think it's good.

34:49I think you can also have small companies like I would say more like that, right? Where you can get very solid learning and experience and use that as a base. You don't necessarily have to jump straight into entrepreneurship. but of course you have much more time to try and fail if you start when you're 22. You can do a new startup every two years. There's this, because I was like that. I was thinking, I'm taking the leap but then I have my friends, you know, they're starting a career, McKinsey, I don't know, in Switzerland you make 10K a month directly out of school. They're building their career and I'm like, I knew inside of me is the right thing because I was thinking there's no ceiling to what I'm doing but at the same time I was like if it doesn't work maybe I'm just like you know you compare yourself to others especially when you're young yeah so like maybe I'm doing a massive mistake here and I'm going to be five years behind the others yeah who just took this easier I mean it's not easier but different path and maybe what I'm doing here doesn't make sense because i'm not sure and i think that's still i think this is the truth i don't think big companies value entrepreneurial experiences yeah like if you go apply to a big company and say hey look i've tried this and blah blah and i failed i'm like you have no experience no yeah right yeah so so the the the the safe salary maybe more but not still not not not the same right yeah yeah yeah yeah so so what's your message to because you left Goldman right when you were 43 actually no you did a bunch of other things yeah the first time I left Goldman was right after I made executive director which is like again for me it was the right time because I reached a new level I'd unlocked the level that I wanted and then now it's time to try something others looking both colleagues within Goldman and friends were like what are you doing you're crazy like you finally made it to this level and now you're leaving now is when you're going to It's hard getting paid for real, et cetera, et cetera.

36:55And you've got this recognition. And for me, it's just like something I had to do. At the time, you're living in Hong Kong. It's super expensive. We had a two and a half year old. It was a big decision, but it was just something I had to do and something that I wanted to do. Do you think they really thought you were crazy? Or do you think they were almost, I don't want to say jealous, but like how does he have the guts to do that when I also want to do something else? I think it's a combination. Most people, almost everyone says they want to do something else and they're going to leave next year.

37:31Just one more bonus, right? Some are just literally kidding themselves and they should really just accept the fact that they really like what they're doing and that's totally fine, right? Not everybody has to start a company. Others actually really want to do it and then just don't do it. And again, I'm carving out people who have whatever personal circumstances doesn't mean that they just have to keep the cash flow coming and have bills. But yeah, it's not, especially in Hong Kong and Singapore, it's not the most usual thing to do. Also with, you know, when you're describing your 22, 23, like if you're going around doing that in somewhere like San Francisco, you know, you might get a lot more traction and there's a track record of people doing that, Stanford grads, Stanford dropouts, whatever, and people will listen to you and take you seriously.

38:14But in many, especially financial capitals, there's not a huge startup scene. And anyone taking startup level risk is basically seen as a bit crazy. Also because, and this is also why ultimately we moved to Beijing, because the cash flow in Hong Kong, the cash disappears very, very quickly once you don't have an income. It's just really hard. And your savings just get carved out really quickly. still even today right Singapore Hong Kong it's a tough place to be as a as a founder absolutely which is why that's I mean I think more and more people especially from younger generations understand the notion of geographical arbitrage when you start a company but you always have again is a kind of double-edged sword like I was in Phuket for a couple of days now and there's a bunch of crypto teams there spent a few days with the founder of Entangle we just launched they're layer one and they're based there but yes it's cheaper but singapore is amazing because the people you meet so it's always yeah either you take the cheaper routes which maybe you're forced to because you have to either you're like oh man kind of same as what you were saying in the beginning i i need to stay in singapore i need to stay there but if i'm here i need to make it worth it staying here.

39:34Therefore, I need to destroy myself. Like, I have that, you know, like... The sense of urgency. Yeah. Which probably makes you better because you have the sense of urgency. There's also more of a network here, especially if you need capital. There is just, although there's still not a lot of capital compared to, like, New York or San Francisco, but there's still a lot more capital in a place like Singapore versus Phuket. So you made a lot of decisions in your life, you know, moving, changing jobs, starting companies. stopping companies that didn't work, investing in founders. That's a hard decision to stop a company that doesn't work.

40:11Let's go with this one first. Yeah. Yeah. I mean, when I left Goldman the first time when I just made BP, right, that I launched a big data company. We raised money for it. We ran it for about three and a half years before we decided that, you know, we just weren't finding product market fit. We weren't getting enough traction. We had to go raise more capital. Was this really, you know, prime time of our lives, right? Like early, mid-30s, the founders, was this really what, did we want to double down on this? Or was this a time to say, look, we killed ourselves and we literally did like 100-hour weeks for, you know, three, three and a half years.

40:51And we decided to say, no, this is the time to stop. That's a very difficult decision. How long did you take to make this decision? And how long do you think you should have taken? yeah people always say it's the same when you when you fire someone right yeah should have been much faster yeah when you break up should have been as fast i think we probably from when we gut feel knew it was the case till we actually decided probably took a year um and and then yeah it probably took about a year which you know overall i would have liked to fail quicker so to speak but we were all first-time founders.

41:30So I think that that's one factor. We also had, you know, angel money. And it's a little bit more personal when it's friends and family money versus, I mean, you always have to respect investors' money, but the fact that someone's hard-earned savings, which in fact also is in a fund, but it's just abstracted away through multiple layers, but that makes it hard. And then because when you build, especially a very early stage startup, like a lot of people are relying on you, trusting you, getting options and your team going back to them and saying, sorry, like we're, you know, we're, we're shutting down and you're all fired basically with, with, you know, whatever one month notice is, is really difficult.

42:13I remember firing my first person. I mean, first employee, actually had to fire first co-founder. Yeah. I remember crying, crying, crying. And then I remember also like the first employee that we had to fire it was not even his fault that we had lost a big client because of an internal politic reason the guy who hired us we were doing consulting implementation of data analytics solutions actually and the guy who hired us got fired for some reason i don't know why and therefore like we i knew this project is fucked maybe not directly they're telling us it's fine we'll continue but i was like yeah i don't think so You lost your sponsor.

42:51So then you're like, oh, man, this guy has a family and everything, and I'm going to have to fire. I remember two nights in a row not being able to sleep, being completely destroyed and being like, okay, we'll have to fire you, but I'll buy you some plane tickets to go wherever you are because I felt so horrible, right? One of the hardest things for me was at that point I'd spent over three years and worked Monday to Friday and then also every Saturday, full day, and then often part of Sunday. and my first child was between two and a half and five and a half at that time. So I'd sacrificed a lot of time with her, away from her, working in the office on this thing that ultimately turned out to worth zero financially, right?

43:36So I had a huge amount of guilt over that too. That was almost harder. It was up there with everything, all the other considerations too. Obviously, I gained a lot in terms of personal development and learnings and things that later on in life I've built upon to be able to provide you know what I'd say was a good life but at that time it just felt like it's very hard to yeah yeah cool I learned all that stuff blah blah blah but you know the day what do I have to show yeah nothing right yeah yeah it's it's tough it's very I mean you told me the other day so basically this didn't go well right you told me once you roll the dice once If it doesn't work, keep rolling them.

44:20Yeah. Yeah. Yeah. I mean, and what I mean by that is if you have it in you to take the kind of risk to jump, you know, to do a transition, if that first transition doesn't work, like don't keep like just jumping, like be thoughtful about it. But you've shown that you're willing to take some level of risk to try to shake things up, develop yourself, do something, create wealth, whatever reason you do it, then do it again. Because I've tried a few companies, didn't work out. I've obviously invested in some angel investments, didn't work out. But I think you have to keep trying. You need to make sure that you, in terms of mental health and financially, have enough to kind of stay alive, so to speak, to keep trying until you figure what works for you.

45:10If you just try it once and then go back to that stable corporate job, like almost certainly at some point you're going to get the itch again. And then you should, my view is you should go for it again. do you think it's if you keep doing that obviously you know thoughtful fashion right do you think that success is not inevitable basically it's not it's not inevitable unfortunately no it's not so no so if because i'm i mean maybe it's because i'm too optimistic but i'm just thinking if you have if you're the kind of person obviously you're not doing random thing in a random fashion but you are you have this power of saying i'll jump take the leap i'll try and you have this it's a mindset but basically it's kind of like a or lifestyle yeah at some point you'll find that thing that works out it's kind of mathematical it's the first time probably no work second time and i i see all the people i i interview on this podcast for example i mean for example joan from winter mute mega company super successful but he's the first he's also saying right i built three other companies before that that kind of worked but not really uh yeah i mean you said life life in life in general i built that i'm 39 or 40 now i had to build three companies the fourth one to be really successful i had to go through a 10-year marriage that didn't work out and have two kids to find the wife you know like basically the more you try, the more it's likely to work.

46:48Yeah. And it's probably not going to work directly, which were being sold at least, I'd say maybe less now, but when I was at school, let's say, master's, I bashed our master between 2010 and 2015. Instagram, Facebook, all these mega companies, kind of overnight success, right? I mean, overnight, 10-year overnight success. But like in the newspaper, it's not that. It's like, oh, look, I mean, Instagram, one or two years. So you're being kind of told that... you're gonna you should first you should be an entrepreneur it's second it's cool third you're gonna build a multi-billion company in a year yeah and then you're trying i'm like yeah it's just like it's not cool no it's fucking hard no one gives a fuck and where is the money yeah yeah yeah yeah basically no but so just to say that people just in my maybe very optimistic mind it's the The more you try, the more you're likely to find something that works.

47:45Maybe same in dating, right? The more you date, the more you start to understand what works, what doesn't work, who is good for you or not, and then find the right person. Instead of being like, I put yourself so much pressure that I should, the first person I date, marry them. Or the first company I build should be a multi-billion dollar company. Yeah. But what I think, I think I'd come back to the fact that it's important to just kind of be able to stay alive from the perspective. So example of what I did, not that this is the recipe, but that worked for me is I, it wasn't Goldman. I left, tried something, didn't go out, didn't work out for three and a half years.

48:26goldman asked me to come back i came back i replenished the coffers two and a half years try something again that kind of worked out not really then i you know did something else but what was the second thing that you tried um now when i left goldman i went in-house with a client um to do an ipo we did the ipo but then the parent company went bust and went to chapter 11 and kind of the whole financial play around it fell apart. And I ended up feeling a bit of a fool having walked away from Goldman for the second time and probably not able to go back again, right, to replenish the coffers. But ultimately made it work out.

49:07And then in some ways, the path led me to where I am now. So I'm thankful for it. But these kind of rolling the dice and trying things, there's also a bit of a bias around it where you can look at, okay, where am I now? And man, if I hadn't done that, I wouldn't be where I am now. So the right model is to do what I did. But not necessarily because if I'd done all these things and then not had ultimately success and luck with what I did, you'd look at it and say like, yeah, of course, because you just kept jumping to so many different things. You should have just focused on one thing because look at this guy over here.

49:43He focused on one thing and he's very successful. so this second thing chapter 11 right that was the thing how so it's the second thing that you try right and it's kind of working because IPO so I guess you had stock options and all that stuff but then it doesn't work with chapter 11 how do you deal with

50:07maybe you are more mature so it's maybe easier you were in your 30s right the biggest problem in failure is how we think we're going to look stupid towards others. Probably the thing that makes people not start things initially, right? You're thinking, if I fail, everybody's going to be looking at me and ha, ha, ha, I told you so, right? Or come with their best advices, I told you so, or kind of like laugh about you. So how do you deal? You're like, oh, I tried, almost got there, but maybe God or destiny really doesn't want me to be super mega successful. Because there is always something else.

50:45Or is it just part of life? Like to make it big, you probably have to make it try, fail. But also maybe sometimes you make it big and then you kind of lose a lot. Yeah. And then continue instead of abandoning at that key moment, right, where it's so tempting to just say, okay, enough tries. Now I'm just going to go back to the safe spot. Yeah, I mean, I know a lot of successful people, right? Many of them have been on your podcast and friends in other industries, right? And there's not a single one of them that hasn't been through very difficult times, both in their past as well as in their current company.

51:22It hasn't been like a straight line to success. There's been many instances where they felt like it was near death or at least very, very critical. So I think that's, you have to kind of persevere through that and keep your belief. It's never like a, never a straight line. And even when you from the outside see people that are very successful, there's still constantly things that come up where, you know, you got it. You have to keep running. You have to keep pushing always in a company, even if it's successful.

51:55Maybe we can talk about that. What happens if you don't? What happens? And this is a big thing in crypto. When everything goes so well, it's so easy to fall into complacency. Yeah. What happens if you become complacent? I think it, of course, depends a lot on what kind of company you have. But, for example, in our situation, if we become complacent, what we risk is that we no longer get access to the best founders, be it building with them, investing with them, advising them, which is what we do. Because we just, you know, a bit chill and there's no sense of urgency. There's no intensity. We're just kind of comfortable.

52:37then we go into that more comfortable mode and nothing wrong with that but you just have to recognize that you're no longer kind of top of the game and you're not on top of your own game because you it's like you know it's just like if you're an athlete if you stop the training because you just kind of broke the world record or did really well you can't expect to show up at the next race and do what you did before and if you expect that you're going to be very disappointed so I think at some point everybody has their own point in time where you kind of say okay now is the time I'm going to step back and you know I'm not going to train for the gold medal anymore but as long as you're kind of if you're in the game you're running a business you just have to you have to keep pushing otherwise it also you'll lose your your passion because if you're used to kind of doing well in whatever area you're focused on and all of a sudden you feel you'll feel that you're not it it's very difficult to to accept and then yeah and then you'll get back to what we're seeing in the beginning which is happiness right yeah you you're gonna lose that yeah it's a bit either or it's a bit either or like just like i know people who are top tennis players and when they stop they literally just stop because they can't accept just playing a bit for fun and then you know losing like maybe later they come a bit back to the game but it's very hard to just kind of take it down 30 % and say, you know, I'm going to go down to 40 hours a week and then still keep doing the same thing.

54:04It just doesn't work that way. That's a super interesting point.

54:09Because there is this utopia where, I'd say in life in general, but again, very applicable to crypto. I made it. I can chill now. Yeah. But there's no such thing, right? I think it's hard because of the personality types too. Like, yeah, sure, if you went into Bitcoin 2011, put$100 ,000 worth, I don't know,$100 million now, and you haven't really actually built anything, you just kind of sat on that pile, then maybe that's one thing. But if you've built up a company, you've built up a fund, whatever it is, just to this point earlier about sitting still, it's very hard to just say, well, I kind of have enough.

54:53Because at some point, I think initially you do it for the money and because you want to generate wealth. And there's absolutely nothing wrong with that. That's how great businesses are built. But then you kind of reach a point where when you started, you had this goal of I want to reach here. And once I'm here, that's financially all I need for me, my kids, and then I'm going to retire. And, you know, in some cases, the bear market comes and you dip way below that again and realize that, oh, oops, okay, I'm not quite there yet. But even for people that reach that point, part of the issue is that Target keeps moving because you keep like, oh, actually, but I kind of need this too.

55:32And like, no, but like two houses is not enough. Like I have to get here. or whatever it is, depending on personal habits, consumption. But for most people, they reach a point where they realize that, you know, it's not just about that. They really actually enjoy what they're doing. They're building something. They want to keep building it. Probably one of the good, you know, first cycle, first crypto cycle, if you play it not too bad, you print a lot of money, at least on paper, and then you start to become like very, you might become entitled to your king or the queen of the world. And then you probably get wrecked.

56:08And the moment you get wrecked, it's really painful, but it's also the moment that probably your mindset is going to shift towards, why am I here anyway? Yeah. What's going to make me happy in life? What's the definition for happiness, right? What do I need to be happy? And it's probably being struggling and improving and feeling progress every day rather than a number. Yeah. And as long as I have enough to have a great life, I probably don't need as much as I think to have a great life anyway. But if I'm doing something that I'm struggling at every day and I feel that I'm really giving my best, the fact I'm giving my best is going to provide me happiness.

56:45And that's why no matter if I reach that financial goal, I'll continue afterwards, which a lot of people probably who are new to crypto might not understand. Like, why don't you stop when you're at that number? Non-crypto people, they might say, ah, they have a million. I'm going to change my life. Why are you going to do this? Or they have 10 million, right? but if you, I always tell them, if the day you have that number, you're going to change your life. Probably you want to change your life now because you're not going to be happy to get to that number anyway because the source of your happiness is not a number.

57:18That's right. It's what you're doing. Yeah. But you probably need to get maybe to that number or higher and then lose it to realize what changed. Ah, nothing. Ah, maybe that's not the source of happiness. Ah, maybe I should focus on the right things. I think being a crypto founder is a very, very, it's a very difficult sector to be a founder in because for most crypto founders, some have pure equity businesses, but like many are associated with a token or portfolio or a fund, right? And you can almost, you can track your personal wealth and people can kind of roughly track your wealth. Whereas if you're more traditional Web2 founder, like you do your series A, do your series B, C, D, and yeah, maybe after the series D on paper, as a founder, you're worth 100 million on paper, but it's not violently moving up and down every day.

58:08You might have some trouble in the company sometimes. And people always know that this is equity. It's illiquid. It's subject to an IPO or selling the company. Whereas in crypto, a lot of the wealth fairly quickly becomes liquid. So technically, we could have all just cashed out near the peak and literally just had that in cash or stable coins, right? It's not like it's paper value, but a lot of it is very real, like you could actually realize it, right? So the psychological impact of seeing that evaporate versus if you're a Series D and have to do a down round, and it's actually much tougher in crypto, I would say.

58:49A lot of people, You need a pretty strong personal gut. It can be big gut-wrenching so that your founder group, the people around you is very important around that. But also, as you say, your perspective in terms of you can reach a point in the peak bull market where you feel like you just – at least on paper, you reach a point where you're like, wow, this is just absolutely crazy. and then very quickly you become humbled again and be reminded that if it was in some way easy come, it can also very easily be easy go. The important thing is to build something like a franchise, a business, something, a foundation of value that you can just over time keep increasing so you get higher highs and higher lows over time.

59:42But it's just going to be very volatile. But it's, yeah, it can be pretty jarring. So you're busy a crypto founder. You founded Spartan Group. What is Spartan Group and what's the story? Yes, I founded it with Melody and Kelvin, my two co-founders, in 2017. We all have a background from Goldman Sachs in different parts of the organization. but we really started by just investing in crypto as angel investors. We've been tech angel investors for 10 years, and we saw a lot of use cases we liked, especially remittance, cross-border, disruption of the banking sector, et cetera, et cetera, new social networks via monetary value.

1:00:31So we decided to, we looked at, we like investing, we want to do this full-time. Melody and I are good at working with companies as advisors like we're investment bankers so we immediately kind of had a lot of referrals of people who wanted us to work with them and funds I want us to work with portfolio companies so the business kind of just started itself it was almost like hit us in the back of the head where it's like wow so many people are asking if we could work with them there's a real business here let's do it right it just made sense while you were still employees we were all trans kind of semi trend in something and semi transitioning we were all in doing something where we're kind of launching our own thing participating in something where it wasn't too hard for us to jump out like sure we had to jump out of something and you know focus on sport in full time but it was a good period for the three of us to do it and we decided to launch an advisory business and then an asset management business.

1:01:32So that's kind of what we launched in 2017. So that's still our two core businesses, advisory, where we do token launches, token raises, equity raises, M &A, all in crypto. And we have an investment side, three funds, a liquid token hedge fund, a DeFi venture fund, and a gaming and metaverse venture fund. And then we also added a third arm about a year and a half ago, which is Spartan Labs, where we, it's a venture builder where we co-build, you know, mainly crypto consumer facing products with founders. this is the first business that really worked out well for you. yeah and you started it when you were 43 yeah with a wife yeah three kids yeah where does the conviction come from to take such a risk in your 40s yeah it's a good question again probably one of those times when people thought we were not only I was crazy but the whole family was going crazy because we you know we both kind of stopped what we're doing so we and obviously as founders we're pretty much not paying ourselves the first few years, right?

1:02:41So we, like, income, zero. And then we put all our eggs in one basket and that we started the company together. And that we also then took most of our savings and put them into the liquid token hedge fund, the Spartan fund that we started. So we were pretty much all in, you could say. The conviction, I think, came because, you know, I'd worked in banking a long time. I'd been a tech founder. Melody had worked in banking and venture, had been a tech founder herself. Kelvin had a long career in banking and also been a tech investor for a long time. I think we, at that point, had enough experience that what we saw, especially this was, of course, Bitcoin as the macro play, but with Ethereum and all the apps being built on top and, you know, sure, it was slow and all that.

1:03:33But we kind of saw that potential of this whole new technology. We all felt like, you know, like in the dot-com bubble or boom and then bust, right? We were actually all old enough to have participated in that. We were kind of, you know, 20, 24, we could have participated, but we were all doing like corporate-y type things and kind of missed it. And we felt like this is a whole new paradigm that's being set up. It's like it's deconstructing existing business and putting it back together. And now we are actually at that time, although we felt we were late in 17, because there's a lot of like serious OGs at that time, like early Bitcoiners, right, including my former co-founder.

1:04:22At least on the building, on the Ethereum, in terms of on the growth of the sector, we were quite early. and we felt that we were early enough to really establish ourselves before much bigger names and more people came in. So we just had a super high conviction about the technology and this intersect of technology and finance where we found ourselves. So you launched it in 2017, but when? Early, mid, late? Because it makes a big difference, right? And the reason I'm asking that is you might have the right conviction, the right timing go all in there's this meme maybe it represents the question better there's this meme that's these days on twitter it's something like oh you've been in bitcoin since 2020 or 17 or whatever you must be rich and then the guy is like because it's so easy to be early yeah but lose everything especially the first cycle right so now image i mean i guess it didn't happened to you.

1:05:29Obviously, that's why you're still here. But maybe let's say it's early 2017, you go all in, you can print a lot of money on paper, but if you don't manage your risk well, you can probably lose most of it. And then the entire story is different. Yeah, that's right. What did you do right to be at least able to survive the 2018 and 2019 bear market? What I did right, and I put this down to a combination of skill, luck, and whatever. But we started investing in early 2017. So we were starting in Q2 2017. We started investing in the ICOs. And back then, there was no concept of token lockup or anything like that.

1:06:15Everything's liquid right away. And there weren't that many tokens. So the exchange just lists Binance, all these like listed them right away, right? CoB, OKX, Bidrex at the time. So you could quickly turn them over. You invest in one, it goes up, you liquidate, you invest in the next, and you could kind of build some, accumulate wealth quite quickly, like compounding wealth there. and what I think was important from me and Melody's perspective is pretty much sold everything at the peak at the end of 17 like I remember sitting in um yeah we had a we had a small ski place in in China and we were up skiing and I remember sitting in the evenings after coming back from the slopes and just selling everything in late December um why just just I guess because I wasn't completely orange-pilled yet right at that time like we jumped into it but I was still it's just like it was even though it was like only from whatever 3k to 17k which feels really low nowadays it was just the hype back then even late 17 it was super frothy and it was very there's a lot of very scammy projects coming out and it's just it's just a frenzy and it just felt like too much and i just wasn't you know getting given the risk we were running to in terms of um you know our just the fact that we're all in i just wasn't very comfortable with it so i kind of just decided let us let us get out of the market and then wait and see what what happens here and like if i give up another like turn if it goes from 17 to 30 and i miss out so be it i I was wrong, but at least I can kind of have that base.

1:08:02And then after that, it all went down. And then kind of was able to start buying back into the market about half a year later. But then we rolled most of that into our fund. So if I hadn't done that, we wouldn't have much to put into our fund, to be honest. That's probably where the previous two or three failures actually helped, right? Yeah. Maybe you're thinking, oh, man, I don't want to feel like it's going really well, but like end up losing it all again, right? Yeah. Because we felt like on the advisory side, we really felt we were adding value to these projects. And there was a business there.

1:08:41Like maybe it would be a difficult time and we would be able to run a profitable business because we could do all the work ourselves, just the two of us, if we had to, me and Melody on the advisory side. We had a small team, but we could do it. And there's a real business there. and it's sustainable. So I was kind of comfortable with that from a cashflow perspective that we could just about eke it out. And then on the capital side, partially I knew that we'd have to make a sizable contribution into our own fund kind of mid-year. So I needed to have that ready. And then partially it also felt a bit too frothy.

1:09:15So I can't, I mean, there's been other times since then where I wish I had the same clarity and sold, right? But I didn't. So it's not like, you know, sell when I sell, buy when I buy. Sometimes you should do the opposite. But that particular point in time, I think was the most critical because if I hadn't done that and we watched it, wrote it all the way down, you know, it could have been more critical in terms of, hey, should one of us go take a job, right? So then there is this bear market. You still keep complete conviction. I remember it was a bad one because I was also involved. Yeah. then there is a covid march crash i mean you told me that you basically went back in six months after late 2017 so that's like mid 2018 so mid 20 august 1st 2018 was the first close on our first fund so that's where we rolled pretty much all of our crypto in i mean we turned into cash and then we we rolled it in um so at that point a lot of it was all of it pretty much was in our fund and then um you know our co-founder kelvin then was deploying that fund but deployed very slowly so even like half a year after launching the fund which was the bottom half a year after launching like early 19 late 18 yes half a year after we were still like only 30 percent employed just sitting 70 cash then we started to ramp up in q2 19 which turned out to be really good timing so that that worked out well like i'm happy i gave you know kelvin the the money to manage too like i don't know whether i had done better or worse but i'm very happy with that that strategy and of course early on we it was mostly our money so we talked a lot about it now we have a lot of external lps and it's you know it's more of a you know it's it's a very professional process but um that that i think was was critical um and but yeah it was a difficult time but we we also survived by keeping costs really low both on the personal front i mean right now we have a not luxurious but we have a nice lifestyle but like our lifestyle and like our kids have seen it right we've our rent where we live how we travel when we travel how much we travel do we eat organic apples or regular ones like that varies a lot depending especially the early years of the company based on how we're doing right so um there's definitely like a period in like 1819 where we're kind of like wow can we afford to live in Singapore anymore between you know rent health care international schools for three kids wanting to travel to the family there's definitely like some a time there where it was like you you show you like in hindsight you maintain conviction but there's you know you you can't not question yourself um it's impossible not to question yourself at some point in time like what the hell am i doing did you question yourself in March 2020 when COVID crash happened there's a lot of fun that blew up right even if it didn't blow up it's kind of a catastrophic moment for crypto I mean obviously you entered gradually during the bear market so maybe you're not that much down or maybe you're still positive but still it's a really bad moment where you That's where your conviction is being tested, right?

1:12:42Because Bitcoin is supposed to be a store of value, but it gets completely wrecked. The rest gets wrecked even more. We had Arthur A's on the podcast talking about the infamous moment where we got DDoSed, attacked, you know? Like, we'll never know what happened, but like, it's a really bad moment. Like, what goes on through your mind at that moment? Yeah, that's one of the moments where I at least, you know, I felt like what was happening in the crypto side was not specific just to crypto. It was like a total macro meltdown in general and a risk off. So I didn't feel like in 1819, people were questioning, you know, is crypto here to stay?

1:13:26It's just going to be Bitcoin. and it's just even an industry, like what's going on. You know, regulation was really, you know, difficult. In 20, it already felt more like an industry, it's here to stay, and it was a crash and it was really bad, but I didn't feel like there was kind of fundamental, foundational concerns about, like, what did I do, and is this an industry that continued. But it was super painful in terms of just, you know, mark to market on, you know, on a portfolio basis. It's definitely super painful. And at that time, I also, I sold some holdings, which in hindsight, I wish on the personal front, I wish I hadn't sold.

1:14:09Right. But I felt that I needed to de-risk. Right. But it was also just, I also invest outside of crypto. And it was just, it was painful across the board, really. That's when I wish I had had, you know, dry powder in the balls to kind of go all in. Right. But I was kind of fairly fully invested at the time. So I think it picked up pretty quickly after that, right? Like we had some really good mandates. There's also the Bitcoin halving shortly after. So if you believe in that, it was kind of like a good thing to fall back on and say, it's bad, but the halving is coming anyway. Maybe it's a better entry if you really have conviction.

1:14:47It was hard around the 2020 halving because the previous halving before that was 2016. and crypto wasn't an industry back then, right? It was a collection of very early adopters. And sure, you had Coinbase and you had a few others, but very early adopters, it was largely Bitcoin and a few other things, but it wasn't like a real industry and it wasn't as massive a market cap and financial assets. So it was hard, like I feel much more comfortable making judgments and predictions now based on the 24 and 28 having. I just feel like in 20, the data points was like, you know. One or two, yeah, basically 2013, 2016.

1:15:28Yeah, exactly. So you're like, can I even rely on that? Yeah, not much of a graph, right? So in terms of like A to B. So I think 20 was, and then with everything else going on around COVID, it was really hard to have conviction about anything at that time versus like this time where I think we're much more comfortable around it. so it's a bad moment but then for the people who stuck around which is what happens every time crypto if you stick around the bad times you probably rip the rewards pretty like pretty handsome rewards right and so 2020 21 was crazy yeah crazy good after the crazy bad yeah crazy good.

1:16:12How do you still stay level-headed when you were right? Your thesis is playing out and you're printing like an insane amount of paper wealth. And for me, the most important point here is, I don't remember who I was talking to about that. Another guest, we were saying about the paper wealth is very addictive and it's kind of unhealthy right yeah and makes me feel like you're a king but there's something else that's a bigger drug than that being right being right early and telling people i was right right yeah i got this and that's why a lot of people get wrecked because instead of saying oh now it's enough they rather like keep bragging about the fact that they were right and become cocky, which is what happened to a lot of people in 2021, then they got wrecked.

1:17:09So how do you stay level headed and stay alive and maximize the kind of amount of cash you have for the next complete wreckage? Right? Yeah. Yeah. I think that we, I think we stayed relatively level headed, like, I mean, in one way was, you know, just on the personal expenditure side, like, yeah, you can, you can tweak your lifestyle a little bit. But, you know, if, if you change it completely based on your newfound wealth that then evaporates six months later, it can be quite jarring, right? So, and that's something that I I think because we all came from investment banking, where it's also fairly volatile and you can get a very nice bonus one year and the next year it's not very nice.

1:18:01So you cannot base your lifestyle based on paper bonus or potential bonus or wealth. You have to look at, have a base level, and that's what you use. I think we followed the same philosophy. So we tried to keep, we stepped things up a little bit, but we didn't increase our burn. Same thing in the company. we tried to really maintain cost discipline, even in 2021. We give, I would say, generous variable bonuses at the end of the year if we performed well. But throughout the year, we try to really focus on maintaining cash flow and cost discipline. So that helped buffer some of the crash because we weren't forced to, because of financial reasons, let anyone go.

1:18:47Ultimately, we reduced the size of the business, but it wasn't because of financial pressures because of that. I think another is we believe on the advisory side, we work with founders on getting funding for the business, selling their business. So it's always a grind working with these founders. And there's always challenges, even in a bull market, you're constantly trying to achieve something better because like maybe the year before you should have sold it for 50. And but this year selling it for 100 is not acceptable because you could sell it for 125. So there's constantly even though the market is up, there's constantly this this pressure to perform.

1:19:30So I think that that kind of helped us keep us level headed. But no, we were definitely we were expecting a blow off top in the market and kind of waiting for that. And that just didn't come. And then, you know, we were we were caught out of it on on that. Then obviously this time around, if there's a blow off top and you sell before, you're going to be like, oh man. But you also have to just sometimes say like, look, okay, I'm okay to miss out on the last 30%, right? It's been a good ride. But that is just so much easier said than done because you get caught up in the euphoria. And yeah, you do sometimes lose a little bit of perspective in terms of like, you know, I've been calling it.

1:20:11You forget the last bear market. You're like, I've been calling it right the last year, year and a half. I just need to stay fully invested. and then you kind of get caught out. It's really difficult for that. Even like you look at some of the best traditional fund managers, most of them at some point in their career have also been caught out despite phenomenal track records. Do you have rules that you follow to manage your risk? For example, for me what's really interesting is, I mean, obviously every cycle is kind of similar, but it's actually different, right? hey, we are expecting a blow off top.

1:20:48It's not coming. Hey, we're going to, there's the Bitcoin halving and after six months after the Bitcoin halving, we reached previous all-time high. We reached previous all-time high before the Bitcoin halving. How do you navigate that in terms of de-risking? Like do you have a framework that is more around prices than around time? Or do you have both a price and time factor that you put together-ish to say that's the moment I'm going to start de-risking my liquid positions. And maybe that's the moment I'm going to stop investing in venture fund, even if I think that the venture that I might invest into now is good, but it's too late in the cycle.

1:21:40How do you navigate the whole thing? I think in this sector, it's hard to have such a rigid framework unless you're running more of a quant type strategy. When you're running a fundamental strategy like us, both in the liquid token hedge fund where it's based on like, yeah, sure, there's when the market is slow and in the start of a bull market, you're more heavy Bitcoin and ETH. But as the market heats up, you transition out of Bitcoin and ETH and more into the altcoins. And on the altcoin side, it's really a, there's a view developed, a thesis developed on each one in terms of what needs to play out.

1:22:19And then you look at price on an absolute basis, but also on a relative basis versus peers and comps. And I think it's more about like primarily focus on that. But then, of course, we also take a step back and we look at factors impacting the overall market. Every week, we look at not just crypto factors, but all the macro factors and inflation and FX and shipping rates and all the different oil price, commodity prices, gold, like all the different factors to try to figure out like, OK, from a high level perspective, where are we in the market? it. But what you risk, I think, as a crypto fund manager is, at the end of the day, people are paying you to invest in the sector.

1:23:02There are many times, for example, in 21, ahead of November 21, when it peaked, where you could all look at all these factors. And you could say, like, in April 21, like, man, everything is running into the red. And now's the time to jump out. But you would have missed like another, you know, one, two X on that return and even going to the top and then losing 30, 40%, you're still way above where if you've gone out in April, right? So it's really difficult to judge and be too formulaic about it. But we, of course, there's, there's factors like a dashboard that we have, we keep track. And if we feel like it's starting to get really overheated at some point we start trimming the positions across the board and de-risking.

1:23:50Maybe even start shorting the market more. But you have to be really quite, you know, you have to be very agile, I think, in crypto more than in traditional public markets. So the halving is in 20 days? Something like that? 22 days? Bitcoin is basically broke all-time high, previous all-time high. Where do you think we're at in this cycle? Do you think everything just happened earlier because of these ETFs? Or do you think the cycle is going to look similar to what it looked like before? Or do you think it ends up earlier? This is kind of a consensus now. December this year, it's kind of over.

1:24:40Yeah, I mean, I wouldn't... Again, it's how do you play? I mean, obviously you have to be agile and you're going to have to look at things, how they evolve. But like right now, what's your, is a mix of feeling and data, right? Yeah. I mean, if you ask me in like some years ago, okay, so at the next having, where are we ahead of that having? I would have said that we'll probably at near or slightly above the all-time high. That's kind of what I would be expecting. To me, breaching the all-time high is the start of the bull cycle, not the end of it. Like I have lots of friends contacting me saying, hey, like we broke all-time high, should I sell my Bitcoin?

1:25:23I'm like, no, that's just the start. And I'm glad that the market kind of has cooled off a bit recently because one of the concerns I had was I do think that the halving was the price ran up quicker because of the Bitcoin ETF approval, because it is such a massive factor. And I think we're just starting to see the effect of it. I don't even think we've seen the real effect of it yet. But people always want overnight results. So even now the volume, even though it's like the fastest inflows ever in an ETF, people are already like poo-pooing it and saying like, oh, now there's outflows today and it's all over and people aren't interested.

1:26:00I don't think that's the case at all. But I do think it ran up quicker ahead of having than it normally would have. It would have been a gradual increase and bounced a bit around and then maybe up towards the having it goes from whatever 50 and up towards the all-time high but now we're kind of settling into a bit of a range right where it's bouncing around the all-time high and I think that's fairly healthy ahead of having I wouldn't be surprised if you know having happens and a lot of people expect fireworks and it's just like you wake up the next say it's business as usual, miners are just getting half as much, right?

1:26:36So I wouldn't be surprised if there's some volatility or a bit of a dip after halving. But in general, you know, halving has preceded 18-20 month bull market. And that's still my base case. I don't think it ends the end of this year. I think it goes deep into 2025 and will probably towards the end of it. But there's many other factors in just crypto. There's also - Interest rates. Interest rates. Elections. Wars, elections. But right now, I think the political outlook is quite positive also for it, just based on where U.S. elections will probably fall out, how that will impact interest rates, how that will impact politicians and the SEC's view on the crypto sector.

1:27:22So I think right now, I'm not usually overly optimistic. I'm very cautious optimistic but I'm feeling fairly optimistic actually also because there's a lot of interesting things new products, financial products, games etc. being built in crypto there's actually like people have used the bear markets well usually there is a kind of consensus-ish that you look at previous all-time high for Bitcoin and you do maybe a 2 or 3x so maybe, oh look previous all-time high 2x maybe start to de-risk, be careful, et cetera. Do you think in your mind, the ETF changed this in how high it can go and also in how much we can crash afterwards?

1:28:07So there's two separate questions. The first one is maybe not like a concrete price prediction, but like, can we go higher than what people think? You know, 120, 50, 80. For example, Johan, he thinks 250. I don't know really how. so that's maybe the first question is how what's a moment where you're like okay we captured enough of the we could go that high but we captured enough gains to like start to be like de-risking because you said your friends asking previous all time high now should I de-risk? No it's the start when do you de-risk? Obviously there is factors but price is one of them and the other question is do you think there is still despite the ETF and all these forces another crash afterwards, 70, 80 % Bitcoin, 97, 99 % on the altcoins.

1:28:59Yeah, I think it's not just about the ETF. It's also about the derivatives market. I mean, derivatives markets play an important role in trying to, for price discovery also. And we've seen derivatives markets like, you know, when, you know, there's expiry dates or when, you know, there's a short squeeze or people get stopped out, that impacts the price quite a lot. I do think the fact that there is a growing derivatives market around crypto, especially around the large cap coins, and it's been there for a while, but there's more and more value coming in and more and more institutional and sophisticated volume.

1:29:33I think that that will help to an extent will naturally reduce the upside, but it could also reduce the volatility. so yeah i think something like a two to three x for bitcoin on all-time highs is not unreasonable like i'm probably also more in the two handle camp like we go to somewhere two to 250 but that's again it's who knows but that just gut feel feels reasonable to me i think where a lot more value will be captured in this cycle is in the altcoins both in the the layer ones layer twos all the other layers, as well as the apps built on top. There we could see, I think Bitcoin dominance will go down significantly.

1:30:21And then maybe in the next bear market, it comes back up again. But I do think there'll be a lot of value created and maybe eventually destroyed also in that area. But I just think that we're at a totally different place in 2020. If you look at all the infrastructure available now to build on. UIUX is still a challenge for many apps, but I do think it has improved. And there's a lot more users, a lot more openness to it. And then the ETF just brings in this whole different category of money and funds that hasn't been able to access it before, right? It's like the whole, you know, the number of people are throwing around is the baby boomers in the US sit on about$80 trillion worth of wealth, right?

1:31:09and they are going to pass, they're all 70, 80, and there's going to be inherent intent and so forth going into the hands of people who are probably more open to an understanding of digital assets, so all things being equal, that is a net positive. That is a lot of wealth on the sideline when you think about the market cap of Bitcoin as well, let's round up, say it's 1.5 trillion, right? That's another, it's not all going to go to Bitcoin, But gold's, you know, Bitcoin's 1.5, gold's 15, right? 80 trillion is a lot to flow in. And sure, there's global markets, but the U.S. is such a large capital market.

1:31:47And access to these products is substantial. And people haven't even started really selling the Bitcoin product yet. There's reactions to inbound to people wanting it. But I don't even think we've seen the start of this really being distributed properly yet. Yeah, talking about one perfect trillion for Bitcoin. Alex, when we did the podcast, he actually, maybe two months back, three months back, he was saying that he was very bearish real estate. And he was explaining why. And I found it really interesting because not a lot of people talk about that. And then I saw a thread from your co-founder, Calvin, talking about real estate.

1:32:30Why bearish? Andrew Kang, why bearish? and looking about Miami real estate, 1.5 trillion, trillions of dollars from boomers being passed down to millennials and Gen Z, who even if you don't think it's only going to crypto, it's going to divert from real estate, but probably a lot of it's going to go to crypto because our, I mean, crypto assets, which there is a lot of difference, right? Yeah. Because that's how our generation kind of thinks. We just think completely differently. Yeah. Yeah. Also, they're less tied down. It's a pain in the ass to own stuff, to be honest. Do you think the same? Yeah.

1:33:14I mean, I still would like, I still own, like, I have like a family house back in Denmark, and we're there, we create memories. I'd much rather do that than bounce around different hotels. But it's not like from a value perspective, it's very small. It's a very, it's a nice little house, but it's nothing like amazing. And I don't plan to change that. It's just more to have a spot. But it's not like, if you look at previous generations, like the percentage of their wealth they would have put into real estate when they achieve it is way lower, I think. I mean, Alex doesn't own real estate anymore.

1:33:51He sold everything. Johan doesn't own real estate anymore. He sold everything. And they're kind of what, mid 30s, 40. our generation you know mid-2530 we're just like we want to be free of hassle yeah we're just thinking I'd rather own if I don't know I'd rather own an S &P 500 that is liquid yeah or I'd rather own just Bitcoin yeah like put my put your money in Bitcoin and it's just it's gonna be easy and you're not gonna have to deal with all this maintenance and all this crap that comes with it yeah because we're building businesses we have something else to do right yeah and the return is better yeah Actually.

1:34:29So you said lots of value created and ultimately destroyed in the layer one, layer two apps on the top. So basically you're in the camp. I mean, obviously I'm in the camp too. That we're going to have these mega crashes again, right? Especially in the alcohol market. I mean, it depends on the, I think over time, all things being equal because of things like the ETFs, because of derivatives, because of there being just more real use cases and products that you will have booms and busts, just like you do in the traditional financial markets too. They've been around for hundreds of years, but I do think they'll be less extreme.

1:35:08But there are certain things that just can get hyped up and run up way ahead of themselves. And of course, they're also bound to come down quickly. the the tech bubble which you kind of looked at but didn't participate in is kind of an example i was thinking i might be wrong on numbers but i was because i was thinking people are asking oh but the etf is changing everything right but then you're thinking what's the kind of target previous all-time high for crypto was maybe three trillion the target for some people for this cycle maybe 10 trillion which sounds like a lot but anyway let's say 10 trillion then i was looking at what was the total market cap of the Nasdaq in 2021 when it crashed?

1:35:49And I think there were some ETFs back then, right? I think around$10 trillion too. And it crashed a lot, right? So it's possible with ETFs and the big mania that goes to$10 trillion that it still crashes a lot and people get wrecked, especially on the altcoin side, obviously. Yeah. It also depends on the amount of leverage in the system too. And there is a lot of exchanges, a lot of leverage available. but I also think that's being taken down a bit over time. You think, yes, during the bear market, but during bull market, there is, especially in crypto, people are very innovative to invent new type of leverage.

1:36:30And it's what kind of, what every bubble is, is that at the end of the day. The way I see it, at least in a very simplistic fashion, is a bull market is a leveraging event, a bear market is a deleveraging event, and in crypto when things start to go crazy, people mortgage their house and all that stuff. And that's one of the reasons why I'm so bullish in that I think we haven't even, we've started a bull market, but we're in the first quartile because if you look at, when I talk to people right now, they're struggling to get leverage. I mean, the market makers, they want to borrow money, they want more leverage.

1:37:05You know, you look at the yield that you get on, you have to pay to take out loans and stable coins, like 20, 25%. I talked to founders who have different types of companies in crypto, be it payments companies, lending companies, market making. They're all growing less quickly than they could because the lack of access to leverage. So and I think there's a lot of money sitting on the sidelines that will come in later on and provide that capital, that leverage. And that's when we'll see prices really move. So I think now it's almost like, sure, there's leverage in the system, but the price moves so far have largely been, you call it unlevered.

1:37:44So that's why I'm just not seeing that. I'm not seeing us running even close to the red on the dial yet.

1:37:55We talked about Bitcoin, ETH, layer one, layer two, applications on the top. There's another one that's been pretty crazy, the meme coins. yeah what's your take on what's your big brain take on meme coins I don't have a big brain take but I have a take you know they're they're interesting they're social phenomenons right where I mean Dogecoin of course is the king of the meme coins and it is top 10 market cap and it just perseveres and it has this kind of you know GameStop-ish type, you know, diamond hands ecosystem around it. And similar to, you know, some NFTs also have this, you know, they're not meme coins, but they're in a way meme NFTs because it creates a community.

1:38:53It creates an asset that people like and they believe in it. I think it's incredibly easy to launch a token and it's incredibly easy to launch a meme coin. So I do think the vast majority of them will will come and go very quickly some of them have meteoric rise and then meteoric crashes but i do think there'll be a group of them that stay around and some of them will just be for the sake of it but others will also actually be true communities and start building more more things around it but um i think it's just it's a it's a freedom of expression in a way right like just like you could put up a website you put anything in the internet you can also just launch a meme coin it's just technically not complicated at all you can just kind of throw it out there there's also been all kinds of you know you probably call it more toxic meme coins launched recently but that's very similar to like the internet where ultimately you create a new channel new forum you create twitter there's going to be people putting toxic stuff up there too you're from traditional finance initially so you understand how traditional finance people think right yeah and they will come to crypto with a certain way to value assets

1:40:18how would you explain them crypto let's start with meme coin because it's like the most extreme thing, right? Like, they're probably going to be like, what the fuck is this bullshit? Right? But even then, they might look at some really interesting crypto projects, Lido, for example, Uniswap. Great revenue, great businesses, not performing well. Memecoin. Let's not take the far right kind of like shit of memecoins. But, you know, you have you have dodge but you have you have dodge but then you have whiff you have pepe so these ones are kind of like the for me there is i mean maybe simplistic but there is three categories of the of of meme coins first one is dodge shiba or you know like multi-cycle but huge market cap probably going to do well but like limited then you have the flavor of the day yeah toxic all that stuff right it's fun complete casino then you have the one in between which are like the one that maybe are now they were like couple of hundred million now there are maybe 2-3 billion with Pepe probably gonna do really well in the cycle just because if Bitcoin 2x Solana 5-6x whatever with Solana on leverage but the same kind is like the new meme coin but it's not too new to still have enough liquidity.

1:41:51Like this kind of like, and look at Dodge Market Cap or SHIB last cycle. Probably can reach that. Yeah. Performing amazingly well versus some great protocols that make so much revenue but don't perform well. How do you explain that to a traditional finance person when yourself, you were a traditional finance person before? I mean, I would go back to basics and say, if you're traditional finance, at the end of the day, you're a capitalist and you believe in free markets. Free markets are about supply and demand and you believe in the efficiency of capital markets, which ultimately means that the market prices assets and sets that price.

1:42:33Like why does Amazon trade at this? Why does Google trade at that? Why does a Rolex cost this? Why does a Louis Vuitton cost this? Why does a Birkenberg cost that it's not due to the input, the raw materials, there's many other factors. Ultimately, it's priced at what people think it's worth, right? And to me, these coins are the same. They're the ultimate expression of capitalism where people are willing to pay$1.50 for that coin and that in itself is the value of it because someone's willing to pay for it. Same as Bitcoin. Yeah, does it need to have – it's just like why is a dollar worth a dollar?

1:43:16It's a piece of paper, right, backed by the full credit of the U.S. government and the military. But at the end of the day, why is it worth a dollar? Why is anything worth anything? I think they just – a lot of people, because they don't – there's not necessarily a rational explanation. They can't immediately – they can't accept it. But the reality is just it's a liquid traded market. And you look at the volumes, they're traded. There's big volumes. It's not like a low volume. It's a real market price out there. So I think it's kind of as simple as that. And then, yeah, at some point, if the market loses interest in it, then the price evaporates.

1:44:01But that's because it loses its social capital, loses interest. Something else comes along that's new and shiny. but you know the people will lose some they'll win some but end of the day it's it's capital allocation and you could also say that it's you know maybe it's due to the failing of traditional finance to one give people access to the system and to put products out there that are interesting enough for people to invest in instead of with right i mean there's a reason why people are investing in these things people you know traditional financial system it's for people in many markets. So how do you get an interactive broker's account?

1:44:35How do you even get a bank account? How do you get any US dollar asset? People in developed markets, they maybe have lost faith in a lot of these large companies. They don't like what they stand for. They feel like, despite the fact that there's accounts, there's just such a lack of transparency in there. They don't like what they're doing. They don't want to invest their money in them. So it's like traditional finance in kind of it's these guys are the capital in these coins are taking market share from traditional finance which is why they don't like it right they make money off of capital flowing and now it's flowing in the sector but it's just because they're losing market share and so at the end of the day they're also you know upset about that and that's just their own failing are you just looking at that and thinking it's interesting or are you participating in that in terms of personal investment?

1:45:28Like, hey, I'm having some fun in dabbling in whatever, WIF or Pepe or Dodge, or maybe even in the Liquid Fund, because you think there is a thesis around that that maybe was less explainable last year or two years ago, but now has become more consensus. I mean, it's hard for us to punt on individual meme coins because it's just, you know, it moves so fast. And the way that we invest is we develop a thesis, a catalyst, and it's a little bit of a crossover of venture and liquid investment. So it's hard to do that in the meme coins, and it's hard to do it quick enough to even participate and get that upside.

1:46:09But what we do, for example, we invested in meme land. We invest in the platforms, like the enablers, like some of the infrastructure around it. So maybe not bet on one coin. Just like in our gaming fund, yeah, we have individual games, but we have a lot more invested in the gaming infrastructure that enables all this. So we don't know which one the winner will be, but we believe in the overall theme. We believe that what's happening here is real and it's valuable, but we maybe can't pick the one out of the two out of the 50 that will really do well. That's more like that is a lot of luck and maybe some intuition, but that's kind of how we think about it.

1:46:46On the personal front, I don't really have much time to invest personally, to be honest. And I feel like... So you give everything to the liquid fund? I have a little bit myself, but it's kind of deployed in a fairly boring manner, I would say. And I have a specific... For that one you asked earlier, I'm much more regimented in terms of my targets. Sell 10 % of this, sell another 10 % of this. because I have a use for that. I have something in mind that I want to do for it, do with it, right? But, you know, I don't have to answer to anybody else. Even if I leave 100%, the top 100 off, it's okay.

1:47:27I'm happy with it. It's not maximizing the return is, hey, how do I translate that into something useful in my life, right? Yeah, it's more like, hey, we have this now. It's the start of the bull market. Let's try to 3X it. If we get to 3X, we could use it for this that we think we'll, you know, we could use for something that would make us very happy and set it aside. And that's okay. Could it go to 6X? Maybe, but that's okay. We have so much exposure other places, so it's okay. Meme coins. We talked about meme coins. Before, we talked about NFTs that are kind of meme coins with a picture, but non-frangible, right?

1:48:11You own your piece of the community or your access key to the community.

1:48:21I think it was yesterday evening. I was in a dinner and there was a husband of a friend of mine. And he was saying, oh, you're in crypto. Crypto, yeah, cool. But like not too excited, right? He's kind of like dabbling, but kind of more what we call a normie, right? So he's like, oh, yeah, crypto, cool. I mean, not doing bad, right? But I lost 200K a few years ago. So I'm waiting for it to go back up. But NFT is dead, right? Yeah. For me, it's very bullish. When I hear that, I'm like, oh, yes. Like meme coins last year, dead or crypto last year overall, right? Are NFTs dead? Absolutely not. I mean, NFTs are one of the things that, for me, should be intuitive for everyone.

1:49:15Like, yeah, meme coins you can discuss and Bitcoin as a macro play. But NFT is like a digital collectible that is unique. You know, it is traceable. It's yours. And, you know, if it's a good one, it has a community around it, right? To me, that is just like a total no-brainer as a concept. Now, you can debate value. Should it be worth 10 ETH, 5 ETH, 1 ETH? Maybe some of them are not right now, but over time get overpriced and need to come back down. But as a concept, I don't even think there's any good argument against why there shouldn't be NFTs. And they can take many forms. NFTs can also be, ultimately, when we start seeing more traditional financial assets on blockchain, a lot of them will be NFTs because it's a specific debt contract to someone that's an NFT or it's a title for a property and that's an NFT.

1:50:07But NFTs in the more PFPE social type way, I think in the last bull cycle, people just launching all these random collections. So that's why I referred those to me are more like meme coins because people don't have a personal connection to them. right they just kind of trade them as if they're mean coins even though they're nfts whereas now with what's happened there's been a few collections i mean i mean pudgy penguin just see the obvious one i know you've had luca on and you've had you know um you've had lots of people talk on talking about it and you know you had alex han and alex is the one that ultimately got me me into it but um i felt i was late but again now looking back at it i was early enough right but But to me, there's a real community around there, right?

1:50:51There's a meetup last week. I missed it. But there's a real community. People have an emotional attachment to it. You know, it's my Twitter profile pic is my penguin, one of them, right? Why? Because I want to signal, one, I like it. And I like it better than having my own mugshot up there. And I think it's cute. and i think it um it's

1:51:24i i like the community like if i stop liking the community even if it 10x is from here if i stop liking the penguins community for any way in any way then you know i'd remove it there i wouldn't like because i wouldn't feel like like i would sell it if i stopped feeling some sort of cultural or personal alignment with the community and what Luca and the team stands for, what they're doing and all that, right? More so than it's like the problem with these PSPs is once they go up in value, right? And Penguin now is about 50K, give or take, right? It could be seen as being a bit like flashy signaling.

1:52:06Hey, look at me. I just, I got an NFT for 50K. You know, I'm super wealthy. I can just buy these like JPEGs. But in reality, I feel like a lot of people that have had their profiles, they've had those picks up there since it was like one, two, three, four ETH. And ETH was 1 ,200. And this was like still not a cheap thing, but nothing like luxurious. So it's much more about that. And that's why I think some of these NFTs, the ones that have the, it really is a community. And that's why it's powerful. And of course, some of them just stay that way and that's fine. And others build massive businesses around it like Pudgy's is doing.

1:52:46But there'll be other NFT collections that are legit. Maybe don't have like CryptoPunks are also super cool, but they're not like CryptoPunks dolls and the movie and all this out there. You guys invested in the Pudgy Penguin equity, right? I did personally. You did personally? Yeah. Why? to me it was the simple i mean i've been investing in founders for 25 no sorry 20-ish years right and sometimes you just meet a founder that you don't need to be in a call with them for very long before you realize they're a beast and you just have to invest in this person and luke that was luca to me like it was a total no-brainer like i is like i i just looked at his experience I looked at his drive.

1:53:38And I think that had been another collection like, I don't know, Squiggles, like Squiggles are toys, Squiggles are movie, doesn't really work. Like it was almost like a non-crypto play in many ways. If you look at the, you know, over time, it'll be a combination between, you know, the world, the game, you know, linking the physical kind of doll to a, you know, a profile. And, you know, but it won't be just a pure, it's not a pure plot. It's not a purest Web3. It's a realistic business model of combining online, offline, Web2, Web3. And that takes a special, a unique kind of founder to execute on that.

1:54:24One that has experience in sales, marketing, distribution, because it's very hard when it's physical, real stuff. It's so much harder. I have investments in those, like pollution mask companies, shoe companies, other stuff. And there's so many things that can go wrong versus just a digital business. But then at the same time, in addition to that expertise, you have to understand the Web3 community, respect the community, respect the importance of that ecosystem of the 8 ,888 penguin holders, right? And to combine those two is not easy. And I think Luca had that, which is, that's kind of what convinced me to invest in it and also buy more penguins.

1:55:04So you are an equity shareholder, you own a bunch of penguins. Where do you think it's going? Because we had Alex. I don't even have to ask them where do you think it's going? Alex is like... 10 ,000 bucks per ETH, 100 ETH per Penguin, I scored mathematics. So basically a million per Penguin. I mean, 100 ETH. James Wu, 100 ETH. Luke Belmar, he's also a, I mean, he bought it with Luca. Yeah, I watched the podcast with him. So it's like 100 ETH. Yeah, I don't disagree. I think it's very, if you look at where BASYs went to last time around, I think did peak at a 150 or something. But of course, the ETH price was lower.

1:55:55But the top ones, of course, go for more. But if you look at the floor, the average, I mean, there's only 8 ,888 penguins, which on a global scale is very little. I absolutely don't see why they couldn't reach that level. The question, of course, is how long do they maintain that? Where do they go from there? Um, and also, you know, it can also, it is a bit of a double-edged sword because, you know, if these NFTs become so unsustainable that you can, in reality, only buy one or hold on to one if you have a reasonable amount of wealth. Otherwise, it's just the only asset you have. It's worth a million.

1:56:34You're just clinging on to it. Then you're a different level of ballsy, right? But that's what. So I just don't want it to become too elitist either, if you know what I mean. But that's also always a risk of the price going up. Of NFTs, absolutely. That's why there is little pudgies. Yeah. And then there is the rods. And like, but.

1:57:00the one of the strength is actually the community because it's a lot of builders and the good thing if If you think in investment terms, right? If you have a lot of big builders in the crypto space owning Pudgy, there are people who are probably wealthy already and don't have to sell them, right? So they're here for another reason than pure gain, which is probably, I mean, yeah, probably a positive factor. Yeah. To not say more. You're so super bullish on Bitcoin layer two. And I mean, applications on the top of Bitcoin. Yeah. And you've been actually involved already since five years when it was not a hot narrative.

1:57:39That's right. Now it's the hot narrative. But five years ago, probably a lot of people were actually thinking it was completely dumb, right? Or didn't make any sense, especially the hardcore Bitcoiners. Yeah, I mean, we've been tracking and working with Blackstacks since they were founded, right? They're now called Stacks. They're the original Bitcoin layer two and the only operational one right now. They're going to have a big upgrade in about three weeks. And there's about 10 to 20 other Bitcoin L2s that are going to be launching over the course of this year. So in combination, they're going to make, and they all have different flavors, but in combination, they're going to make building on top of Bitcoin much easier, more approachable.

1:58:25And the reason why we've always liked this sector is we feel that, I mean, again, it's not like we're not in maxis. Like we still think everything that's been built on Ethereum, Solana, and the other L1s are super interesting. And it's not, we don't feel like they're necessarily competing. They're just collectively growing the pie. And I think Bitcoin especially is growing the pie because as an asset, especially now with the ETF, it is by far the most accepted asset kind of broadly. It is the only one that's really completely out of the woods in terms of it's clear it's not a security. you know so and it's just the market cap is so big it's been around for so long building financial products that ultimately are secured against the bitcoin blockchain and where bitcoin is a native currency building block in those is just something to me that makes a lot of sense so much sense so being involved in that both on the the defi on bitcoin finance on Bitcoin as well as the NFT or ordinals on Bitcoin just makes a lot of sense to me.

1:59:31It's not like shifting all the attention, all the capital to that, but something that's really worth being involved in. And so that's why we've gotten quite, you know, fairly deeply involved in that. So you have a few focus because you can be everywhere, right? Yeah. So let's start with Stacks. What's so special? I mean, it was the first one, right? Yeah. What's so special about the project and the team? Why do you like them so much? And why maybe you haven't kind of jumped ship and went to fully support someone else? Yeah. I mean, there's also, keep in mind, we have an advisory business and an investment business.

2:00:07The investment business job is to generate returns. So that one will invest more broader in the ecosystem and might not invest in 10 or 20 L2s, but might invest in three of them to see which one works out. And they all have slightly different focuses. And, you know, the capital we invest doesn't move the needle ultimately for any of them, but we have kind of our bets spread out. But on the advisory side, the reason why we've been working with Stacks for so long and have known them for over five years is it starts with the team, right? So the original founders of Blackstack, you know, that Muneeb and JP are both, you know, obviously incredibly smart people from cryptographers from Princeton, PhDs.

2:00:54So they know like technically very strong. And then also they've just been very pure about their mission throughout. So even throughout the last hype cycle and so forth, they couldn't have done a lot of things that were more short term to monetize, to hype it up, to push things out there. But they just really focused on building and they focused on building it the right way. So now this new upgrade that's coming, it's really long overdue because they've learned so much now from building for so long that the first version that's out there right now is just a little bit difficult to work with, a little bit slow to build on.

2:01:36But these upgrades are kind of not the end game, but it's a very important step in just making it a lot easier for developers to build on top of it. And so for me, it's just that they've had this conviction and perseverance when nobody else was talking about building on Bitcoin and everybody else was like, why aren't you doing, look at the Solana ecosystem, look at the Ethereum ecosystem, look at all these ecosystems coming up, right? So that conviction and that perseverance and the fact that they now have so many years of experience. And now there's also new interesting things being built on top of Stacks.

2:02:13and the things being built on top of stacks are being built in a way where they will be fungible across the whole Bitcoin ecosystem, including other L2s too. So there will be like a Bitcoin L2 war, just like there's an Ethereum L2 war of trying to win market share. That's a good thing, right? May the best chain or L2 win. And there's not going to be one winner takes all, but we'll see how it all plays out. There's a lot of really good teams, really smart people building in that space. So which one will ultimately win? Hard to say, but as a theme, as a group, I'm very optimistic about it. You said NFTs are a no-brainer, and you say that building on the top of Bitcoin is a no-brainer.

2:02:58There is an NFT project on the top of Bitcoin that you're super bullish on. It's called Unchain Monkeys. Yeah. Why? Again, it's maybe a bit purist. So the founder of that or one of the founders is Danny Yang, who was my co-founder in the big data startup I did 15 years ago. So I've known him for a fair amount of time and know what he stands for. And he is also a bit of a purist in what he does. So, you know, Unchainmonkeys, the way, I won't go into the technical details, but the way they generated that collection first on Ethereum and then they ported it over to Bitcoin is a lot of firsts in the use of the Ordinals protocol and in the use of doing NFTs on Bitcoin.

2:03:46So I think over time, it will be recognized as a CryptoPunks type of collection on Bitcoin, like a Genesis collection that just has so many firsts. And I don't, we'll see what they do with that over time. They're launching other things, but I just think it'll be CryptoPunk-like because it's, again, the team is not hypey. It's just very genuine builders that like the technical aspects of what they've done with this collection. What's the current floor price for this one? Sorry? What's the current floor price for this one? Just for me, because I'm going to have a look tonight. 1.2 ETH. Okay. Okay.

2:04:31So it's still valued in ETH, despite being on top of Bitcoin. Well, they have, yeah, they trade in, like, I look at the pricing in ETH, so it's all comparable. But yeah, they trade in, they exist still both because they haven't all been ported. So it exists, part of the collection exists on ETH and part of it exists on Bitcoin. And then they have other Bitcoin native derivatives or collections they've launched since on direct on Bitcoin, including Ocean Monkey OCM Dimensions, which also has a lot of interesting firsts about it. Okay. You recently led a 10 million round for a project called Alex, which does DeFi on Bitcoin.

2:05:13Yeah. I think the announcement was just a few days ago, right? Yeah. What compelled you into not only investing in this team, but also leading the round? So that was an introduction from the Stacks team. where they're like, there's this crazy group of founders that has been building on us for a couple of years now, despite the fact that they're really waiting for the V2 upgrade, but just really believe in our mission and believe in the infrastructure. So I was like, okay, we got to meet these founders. And they're all very accomplished in their own right, mathematicians, PhDs, and they have background.

2:05:50They've all pretty much been at, you know, they've been at J.P. Morgan, Goldman, Morgan Stanley as quant derivatives, structures, so very complicated financial products. So they understand complexity and how to pick it apart, how to put it back together. And that's really what Alex is, because it's not, building DeFi on top of Bitcoin is not super straightforward when you're the first one doing it. So you require quite a bit of experience to do it. And they're building multiple things on top of the Stacks layer and then ultimately on all the other Bitcoin layers, including a protocol that can allow all the Bitcoin.

2:06:37Because one of the things on Ethereum that's a challenge with the L2s is the fragmentation of liquidity, right? There's all liquidity sitting in all these different L2s. They're building a link basically for share liquidity across the whole Bitcoin L2 ecosystem. That's one of the things they're building. They also build a launch platform. They're going to do a stable, a BTC-based stablecoin. They're doing a lot of things that because they've spent a number of years building up all this infrastructure, it sounds like they're launching a lot. But they've actually been building the foundation in order to do all these things and all these primitives that exist in other ecosystems but not on Bitcoin.

2:07:15And all of that is effectively spinning out of this one protocol and accruing value back to it also. That's why we like the team. That's why we're working with them. That's also why we invested in them. You told me just like Magnus Grimland, who is one of your best friends and was here on the podcast. Actually, you both told me that you never really struggled with mental health before. Maybe it's the European Nordic side. But you definitely had some low moments where you felt betrayed. Yeah. Can you give me some examples of hard moments you overcame in your life and how you picked yourself up?

2:08:02Yeah. And I've noted a few things. The first startup, the big industry players in 2022, and the chapter 11. So you said you were in chapter 11 for one year. Maybe you can go through that. And then I'd like to link that to chapter 11 that we've seen in crypto because there's some really shady shit happening. I mean, for people who understand chapter 11, probably it's not that shady or you understand how the game is. But for the customers of those exchanges, it's disgusting. Yeah. Yeah, so Magnus and I started, he started Antler. At the same time, I started Spartan with Melody and Kelvin. And we also actually shared an office the first three, four months to save costs.

2:08:52We shared a WeWork office. So we kind of saw each other grow. And I think one of the reasons why what him and I share in common is we both have military backgrounds, right? He was a Navy SEAL in Norway. I was in a not a special forces program, but a fairly demanding program in Denmark also. So I think we were both broken and rebuilt, like as they do in those kind of programs. So I think that probably provided some level of like steel that meant that later on, even if you faced really tough situations, like it didn't like mentally like affect you in the same way. but um so that that's you know one reason why i think some of these situations where um you're able to to navigate and survive those tough situations but it still doesn't mean that you don't get disappointed right and to me that's also like i build we're all about founders so relationships are all quite you know personal um so you know when you see people build something up And then when they disappoint you, that's very emotionally difficult versus just like you invest in something, you get it wrong, you lose money.

2:10:11It's not like there's not a personal connection there. So, yeah, I think, you know, just, you know, taking them in chronological order, going through the Chapter 11 process. the reason why that was difficult that it wasn't my own company it was a the parent company that went went broke um but obviously knew the executives there and you know for anyone who goes through a chapter 11 process there's obviously a lot of restructuring um a lot of people lose their jobs a lot of people have equity financial upside that's quite substantial that all of a sudden is either worth something when things are sold or worth nothing and it can be very meaningful.

2:10:59So the knives literally come out and becomes incredibly political. And it becomes, you know, like, you really just have to look out for yourself at that point. And, you know, I, being a fairly trusting guy, relied on certain people during that time, and many of them disappointed me. So that was difficult to deal with. And I think just kind of got over that through time, really, and then moving on to something else. in terms of in crypto i think the one thing that really disappointed me was when when ftx blew up because we um we did a few deals with with ftx where we were on the other side of all the deals so we were the you know working with founders to sell their assets to them so we never represented them, but we interacted with Sam early on.

2:11:56And I would say before things went off the rails, obviously it's hard to say internally what they did, how early on did that start, but at least in terms of mental clarity and focus and ability, the times we interacted at that point in time in 1920, things were still, I would say, running relatively well there, at least professionally. And obviously, it was a key piece of infrastructure in the sector. And I think there's generally nothing wrong with businesses failing. It's kind of part of, you know, it's a natural course of things that you run a business, sometimes you don't run it well, goes bust but when there's you know fraud involved and you feel like yourself and many people you know have been defrauded then you get you get really really disappointed right and especially when I personally had a lot of funds on FTX so getting that I didn't feel it was stuck at the time I felt it was lost because it was just clear that this was such a complete and utter shit show wasn't even sure where the money was there it had all been embezzled where it was at the time nobody knew it now seems like there might be a full recovery but at the time you just had to zoom it to zero right and then you feel really stupid you feel disappointed in kind of trusting the people behind this and also in yourself in that you you know still you know not your keys not your money right but you kept that a centralized exchange despite being having been in the sector for a while maybe linking the ftx you say full recovery but what does that mean because from what I read, it's full recovery, but at...

2:13:39Yeah, like if you had crypto on there, it'd be at the valuation at the time. If you had 300K on there, you're going to get 300K back. But if you just kept that Bitcoin, of course, it'd be worth a lot more today. So that's a difficult question. That's what I want to get because of Chapter 11, right? Yeah. And okay, some of the things I'm saying might be wrong, but like I've seen some campaigns online. I tried to verify, but I'm not sure. But for me, it's really this bitter, because you spent one year in Chapter 11 in traditional finance, and you said you saw how people are in there. And obviously, Chapter 11, we had Celsius, FTX, Voyager.

2:14:24I mean, a lot of these, right? And you start to see how it takes much longer than it should because the lawyers make a lot of money. the advisors make a lot of money even the people internally like CEO whoever is appointed the longer it lasts the more money they make

2:14:43and then the customers get fucked multiple times because first they lose maybe everything or maybe something probably the worst is not knowing right I don't know it's horrible like at least it's lost okay right off but I don't know and then you're in this situation we're like market pickup like celsius bankruptcy period kind of what june 2022 kind of bottom yeah i mean for for eth at least ftx bottom for bitcoin and then there's the let's take an example ftx and solana so the people who got their solana stuck in ftx get 16 dollars per solana per coin the customer Solana today is let's say 200 maybe a bit less so it's already fucked up except if you say oh but they sold at 16 dollars at least you would have the excuse to say oh they sold at 16 dollars so that's the only money they have but obviously it's not true so they make a lot of money on these coins where does it go and second because you understand chapter 11.

2:15:58So where does the difference between$200 and$16 go? Because probably not everything goes to the lawyers or the bankers, whoever is involved. But then there is Pantera coming in and saying, hey, I'm raising$250 million to get this Solana at$60. So Pantera, who is probably doing a lot of good for the industry, right? But for some reason is allowed to come in there raise money get the Solana at$60 where they make a 3x like that okay it's vested whatever I mean I feel the customer are fucked three times they get$16 per sold which is now worth$200 so there is a big amount of money in between that should go to them or at least some part of it and then there's another third party that comes there and say because I'm Pantera or maybe I'm Spartan or I'm, you know, I'm allowed to just come there and just buy this stuff, right?

2:17:01What the fuck? So I think, you know, the chapter 11 process is something that's enshrined in law, right? In terms of how the process has to be run and how it functions. So, you know, if Solana had gone to zero, you know the flip side of this is if a Solana got to zero very few people those who had that Naftex account they would have said like no no no I needed a$16 because I would have sold that and that's what it was worth when you took my money so give it to me at$16. They wouldn't say like yeah I went to zero you're right I shouldn't get anything because it's my Solana right so that's that's one perspective on it and that's that's where in and I'm not an expert in U.S.

2:17:50bankruptcy law, not the details of it. And I think this might still be litigated. And I think some people are litigating it. It's the same thing with Mt. Gox, right? Where it's like, do they get the Bitcoin? Do they get the money? It varies also by jurisdiction, what the rules are. But it's kind of meant to be a snapshot in time of what is the value at the time where you hit the stop button of what people are owed. So for example, if it's a more traditional bankruptcy, it's a furniture company and you're based in Singapore and you prepaid a thousand US dollars for your sofa. And now it's just stuck, right?

2:18:33Because furniture company went bankrupt. In the meantime, that thousand US dollars, when you paid it, it was worth 1 ,400 Singh. Now it's only worth 1 ,200 Singh because of the exchange rate movement in the meantime. Should you get 12 or 1 ,400? or should you get your$1 ,000? But these kind of questions are a bit tricky, right? Because it all depends on the situation. Now, crypto is so extreme that the law, I don't think, nobody when they wrote the law thought that you'd have an asset there which then 15X is in the year and a half, right? So it feels like super unfair. And to me, it feels a bit like, luckily, I had USD, right?

2:19:16If I had Solana there, I'd be out there banging the table myself saying, no, no, I want the current market value or at least something more for this. Or you guys should have sold it when it ran to$120 or when it ran to$80 or whatever. You shouldn't just sat on it because you should have sold it and I should have gotten the proceeds from my Solana that you sold for me. Either that or give me my Solana back, but don't give me like$16. But this then comes back to actual bankruptcy law. And so it's not – the lawyers and accountants, they get more of a – mainly a retainer-based and time-based payments.

2:19:50There is sometimes something for the liquidator in terms of how much they recover, and they get percentage off of that. But anything incremental here that is left over after all the account holders have their funds, that accrues to the equity or debt holders. But I think in this case, account holders also are seen as kind of debt holders. So that basically means that anybody who's invested would get a small equity payout because there'd be some stub left for them. It wouldn't go to the lawyers and accountants themselves. So I think they are just trying to follow the process that they have. I think if someone then litigated it and won and said, no, you have to get Solana back, from their perspective, it's like, OK, we think we follow what it was.

2:20:42But if the judge says this, then okay, we'll do that. But I understand, like, so I'm not into the details of it. I can see both sides of it, but I understand why people are pissed off about it. It feels like really unfair. Like, first of all, you freeze my money. Don't know if I have it. Now the market's come roaring back. You guys are still sitting on it and you're not giving it to me, right? I'll give you a personal example of unfairness. But like at some point you just look into what's ahead and you do something better. I had 7 million of dollar worth of Luna that turned into 5 dollars in 2 days and I was doing arbitrage on a Terra station Luna be Luna you could like to 1.5 to 2 % every 21 days so that was like 50-60k every 21 days just pressing a button so it's on Terra station right fine but then I'm going to Bali for 10 days invite 20 people let's go together have something so I'm like I'm not going to leave all this money on Terra Station because it's not safe there I'm not there I'm not at my laptop I put it on Celsius I go to Bali the crash happens I lose all the money

2:22:00then for two weeks I mean obviously I'm destroyed but like for two weeks I'm like they talk about this Luna 2.0 thing I'm like oh maybe out of this 7 million I'm going to have 200k back which during a bull market maybe goes to a million whatever it's going to be something right but the snapshot for Luna 2.0 happens at the moment where the crash happened just before right and that moment my Luna is on Celsius just for 10 days but then Celsius goes bankrupt and Luna 2.0 is a has vesting is a future payment especially for the big Luna holders so it doesn't enter into Celsius liquidation estate because it's not Luna 1.

2:22:41So basically it's in no man's land and probably Machinsky or whoever can just go and get the freaking coins because he's not in the estate, right? Yeah. These are all these technicalities, right? And then it even comes down to like what your right is and Celsius versus FTX might also not be the same depending on what were the, you know, the terms and conditions of the account, what kind of account is it held in? Is it segregated? Is it not? What jurisdiction is it in? So all these, you get into a lot of very specific legal machinations around it that from the outside, very difficult to figure out.

2:23:28Even when I was in that Chapter 11, which is like a traditional industry, like a renewable energy company, there are definitely some decisions made in terms of divestitures and some assets that I really was left scratching my head at. But even though I was there, without seeing the full picture, it's really hard to figure out what's going on, why these decisions are made. Which maybe the sum up of this kind of situation is, especially as very optimists that we are, right, and looking forward and building businesses. There's two ways. either you go down the legal proceeds route for usc there was also a lot of legal actions i mean maybe you have a more balanced view on that than me but for me i'm like you know what fuck all this shit what's gonna be my power even if i do a lawsuit even if i win it's gonna take me years it's gonna cost a lot it's gonna wreck my mental health yeah i'd rather focus on like I learned my lesson.

2:24:26It's a write-off. No, same for me. And you just move on and that's it. The reason why, I mean, because originally I have a law degree, right? I have a bachelor and master's of law. And bankruptcy law was one of the areas I quite liked when I was studying. So I can also see things from a legal perspective. So I understand to some degree the complexities of bankruptcy law. But I also understand the complexities of litigation. and yeah my general view is litigation is like there's no winners in general in litigation and i've i have friends i've had family who've been through litigation and whether they lose or win it kind of leaves them emotionally scarred and and sometimes it is enough capital that you just really don't have a choice like you have to pursue it but if it's something that you can live with.

2:25:19Yeah. I mean, just it's life is too short, like really to go to put yourself through that.

2:25:27What would you tell your 18 year old self if you met him today?

2:25:36I would say trust your gut. Don't be afraid to take risk. Do you think you started taking risks too late? no i don't think so um it also depends on how you define risk right when i was drafted into the military when i was 18 um i could have just gone the standard route of you know get doing whatever four six nine months like being a private getting out of the way and moved on I specifically applied for a more advanced program right that didn't know what I was going into and which was much longer that's already like probably an example of taking risk right that's that's not something I had to do like it was it was basically I could have gotten kicked back out I could have gotten injured I could have like mentally impacted me um and and likewise when you know I ultimately decided to go into banking, despite having studied law for five, six years, that was also really risky because I kind of stepped away from a very comfortable situation.

2:26:46So I think there's different risks, different types of taking risks, not necessarily just jumping out and starting your own company. So I don't, I think, no, I think I was taking risks fairly early on, but it's also a very personal thing, right? Like people are, some people just are take risks, right? You can see some kids, like, you're just like, oh my God, this kid's going to, they're going to kill themselves. They're just like constantly taking risks, constantly pushing the limits and others never get there and others do it when they're, when they're older. But like what I would say, I generally tend to not take uncalculated risks.

2:27:26I tend to at least try to understand And the risk reward before I take a risk, I don't just run headless into something.

2:27:36Did you learn that from a big failure where you actually took too much risk or you always are wearable to do these calculated risks? For example, from the Luna thing, I learned. Yeah. It's not the first time I got really wrecked. I also got wrecked in March crash 2020. I was levered 3x on ETH with all my crypto portfolio. Yeah. which was 80 % of my net worth. Everything went to zero. But then I had so much conviction. I bought, you know, with the 20 % that was left in equity, gold, whatever, I bought ETH and then, I mean, anyway. So I learned from that, don't use leverage. Yeah. And greed is going to kill you every time.

2:28:18Yeah. What I didn't understand was that the entire 2021 bull run was basically fueled by leverage, lending companies. If you put your coins there and you earn 5 % or whatever, you have UST. Everything is a leverage, right? So basically, even without using leverage, you're involved in the leverage system. I only... I actually did learn a lesson early on that I think saved me a lot of money later on, which was in March 2020, which was like peak nasdaq literally um i had put myself in denmark you don't pay for university but you you still have expenses and so forth i've worked throughout university i'd never taken out any student loan but i had the right to take out all those student loans through my you know four or five years of college and you can kind of accumulate it so i hadn't taken any and then like march 2020 when i I was a year away from graduating.

2:29:24I took the max loan, like my whole period. I put it all into NASDAQ, like a NASDAQ ETF, based on advice from my banker. Because, you know, tech stocks were hot and like crazy. So that's basically the only time I ever took any debt. I just levered up. And I took the entire student loan. I just immediately put it into that equity. And then literally like a week later, like it got wiped out by like 80 % or so. like just gone and all of a sudden i was just there with all this debt and really nothing to show for it right then one year later when i got my first few paychecks at goldman i just i paid that all off and got rid of the debt but since then i've never traded with leverage um and in crypto i've never traded with leverage and even our funds don't really use leverage so that of course sometimes means leaving money in the table because you know if you get it right you can enhance your returns substantially by using leverage but i i'm happy not to use leverage and it also means that even if the shit really hits the fan if i believe in it longer term i can just i can ride it out just sit on it what's your biggest prediction for next 12 months

2:30:44oh um

2:30:49biggest prediction um well obviously i'm as i mentioned i'm very optimistic um about the market overall i i think i think we see a you know broad crypto bull market and across the board in the with bitcoin the bitcoin ecosystem the ethereum ecosystem the Solana ecosystem, NFTs, and in gaming also. I think we see a lot of really good games come out that maybe are not totally Web3 native, but incorporate parts of it and get people on board with Web3 gaming. I think we see a lot of good products coming out, just a broad-based bull market, driven not just by finance and macro factors, but by really good products coming out.

2:31:36I think we see a Republican presidency in the US. And I think that means that the regulatory environment, the financial environment, the macro environment is good, but also the general attitudes towards crypto, if not positive, at least is neutral and not outright hostile. I think that really helps because the US drives a lot of this. And then in many other countries around the world where crypto regulation either is in place or is being put into place, I see that coming into place. So just also just globally see a much more, much broader adoption and acceptance of the crypto space. What do you think marks the end of this bull run?

2:32:18What could be something that people really don't think about that could mark the end? I don't know if it'll be anything unusual that marks the end of this. I think it'll be too much credit in the system, too much leverage that then crashes it. What's the maybe one or two factors that people can look at to gorge, man, there is too much credit now in this system? It is definitely the derivatives, just in terms of like the open interest out there and just, you know, when, yeah, just the, you can see in the derivative space, like how much leverage is in there. I think that is, that's a key indicator.

2:33:05um and then i think also in the yeah there's there's different factors in terms of like you know the fear fear greed factors i just look at at these these trends i think those are quite telling too like i'm not a huge fan of technical analysis but i do think like looking at some of these charts you know you'll but by you'll reach a point where by any metric on any one of those charts, no matter what analysis you use and golden crosses or moving averages and the logarithmic charts. And you reach a point where pretty much every single metric, it just looks really, really expensive and really just crazy, unsustainable.

2:33:48That to me, I think is like, because there'll always be charts that point in different directions, but you reach a point where it's just clear that it's just not sustainable. But I still think leverage is going to be the key factor. There could be other macro factors. There could be, you know, but again, we'll get the U.S. presidential election over with this year. That'll be another four years out. And I think there's not many elections globally that matter. Of course, there's like geopolitical things like, you know, what Putin does, what Xi does. like these, probably those two people are the ones, other than the US president, between the three of them are the ones that can move geopolitics, move forces, wars.

2:34:29And if anything extreme happens there, then kind of all bets could be off across the board, not just crypto. But I'm not too concerned about that. I think it'll sort itself out in a, I mean, not necessarily untragic way, but not in a way where we move into something, some larger, broader range in conflict. Amazing. Thank you so much for your time, Kasper. No, I've really enjoyed it. That was a great conversation. A great two hours and 36 minute conversation. Oh, wow.