Bitcoin Investors Are BLIND To This Incoming Market Risk!

Dan Tapiero (0:00)

All things of value and money are going to move on chain. But at the end of the day, where's the revenue accruing? Who gets it in the end? We're looking to invest in the equity of the companies that are building out this new digital asset sort of infrastructure. And last year, we had five IPOs. We had Circle and Figure and Itoro. We just invested $40 million into MoonPay.

Ran Neuner (0:22)

What is it about MoonPay that you like?

Dan Tapiero (0:24)

Fiat to Crypto on Ramp. They have been pivoting to Agentic.

Ran Neuner (0:30)

I have a thesis around AI agents. By 2029, most transactions are going to be done by agents on the web. There's going to be over a billion agents. All day long, they're just going to be transacting.

Dan Tapiero (0:39)

There'll be trillions of agents. These things sort of take a little while to get to those kinds of numbers, but I think you're heading in the right direction.

Ran Neuner (0:48)

Are they going to settle on blockchain rails?

Dan Tapiero (0:50)

I think blockchain is the money for these AIs, because it's uniform, because it's code. The productivity boost from having these agents working for us is unbelievable, and that's part of the reason why I think the stock market is so strong.

Ran Neuner (1:04)

So you made us bullish, but I was around for the.com collapse. At the time, we all invested in the promise of what the internet could bring. But there was no revenue. No one was using the internet. But now there is revenue. Is there another.com collapse?

Dan Tapiero (1:16)

I think it's.

Ran Neuner (1:20)

Dan, a lot of our viewers don't really know you. I've known you for many years.

You've been one of the most prolific investors in the space, I must say. But you haven't been a loud VC investor. You know one of these guys that goes on Twitter and tweets about a VC investment that they made. Maybe just give us a little bit of insight as to what your investment style is.

Dan Tapiero (1:38)

Yeah. Yeah. All right. Well, good to see you, of course.

Yeah, we, 50T funds, those are my funds. We are, as far as I know, the only growth stage investor in crypto blockchain digital assets, as they're now being called. And we invest generally in the equity of the companies that are doing 50 to $100 million in revenue minimum. So we're not investing in tokens directly, even though I love some of the tokens, but not for the funds.

We don't invest in any venture projects. So no seed, pre-seed, even A is too early for us. We are waiting for the company to be more mature, to be developed, also know that it can survive the volatility that's in our space. Because as you know, every three, four years, everything vaporizes. And certainly some of these tokens have gone down 99%, but it's also some of the venture projects just disappear. So I manage the risk of our portfolio in a way that we don't have that kind of volatility. And so the companies that we own are companies that you know, like Kraken and Ledger and QuickNode and Ledin and Animoca. And last year, we had five IPOs. We had Circle and Figure and Itoro. And our company Bitfury owned Cypher Digital, which is another big hit. Unfortunately, we had Gemini as well, which I like as a company, but the IPO was not properly timed, but that's okay.

So those are the kinds of companies that were investing in larger, more developed.

Ran Neuner (3:27)

What's the thinking behind not investing in tokens? Is it a regulatory thing or is it a risk thing?

Dan Tapiero (3:31)

It used to be less so maybe today, but we have institutional investors in the funds, and you have entities like Texas Teachers, and we have the Michigan Pension Fund, MERS, that legally, I don't know now, but when they invested legally, we're not allowed to own tokens. Also, explaining tokens is much more difficult to a traditional crowd. The reason is that the value accrual mechanism is still a little unclear.

Whether a company or an entity can have equity, it can have token, it can have value, some accrue to the token, some accrue to the equity, or you can have an investment in the equity, and then they decide they wake up and they want to have a token, and the reverse. Projects that have tokens, and then they say, okay, now we want to have equity. So where does the revenue for whatever business it's involved with, where is the revenue accruing? Who gets it in the end?