#491 Jeremy Boynton on Digital Asset Active Management

Jeremy Boynton is the Founder of Laureate Wealth Management, a comprehensive wealth management firm for affluent investors generally ranging from $5 million to $25 million in total net worth. In this conversation, we discuss value accrual, institutional adoption, active management, private market investing, and digital asset fund of funds. ======================= Exodus is an absolute game changer in the crypto wallet space, and we’ve teamed up to offer an exclusive discount for you, as listeners of the podcast. Sign up for Exodus today using my promo code Exodus.io/. This is a no brainer for both newcomers and crypto heavyweights - go sign up today. ======================= Diginex is the first company with a cryptocurrency exchange to be listed in the US. Their ticker is Nasdaq: EQOS, and they are the first crypto company that you can buy stock in. They also have a crypto exchange called EQUOS, which has been built to institutional standards, but is available to everyone. You can trade Bitcoin and Ethereum spot, as well as Bitcoin perpetuals, and get a 5% discount on all fees, by signing up using http://www.equos.com/pomp ======================= Money On Chain brings Bitcoin to mass adoption with solutions to meet the needs of different types of users: a fully bitcoin-collateralized stablecoin (DoC), a bitcoin on steroids (BPro), and a dizzying bitcoiner option for lovers of leveraged trading (BTCx). All this, without requiring the delivery of private keys. Money On Chain - Bringing bitcoin into the mainstream. Visit moneyonchain.com/pomp to learn more

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:02Anthony Pompliano?

  What's up everyone? This is Anthony Pompliano. Most of you know me as Pomp. You're listening to the Pomp Podcast, simply the best podcast out there. Let's kick this thing off. Jeremy Boynton is the founder of Laureate Wealth Management, a comprehensive wealth management firm for affluent investors generally ranging from $5 million to $25 million in total net worth. In this conversation, we discuss value accrual, institutional adoption, active management, private market investing, and digital asset fund to funds. I really enjoyed this conversation with Jeremy, and I think you will as well. Before we get into this episode, though, I want to quickly talk about our sponsors. First up is Exodus. Exodus.io is one of the most popular cryptocurrency wallets and has been around since 2015.

• 0:44Anthony Pompliano?

  It's supported on both desktop and mobile, allowing you to sync your wallet across multiple devices so you can have access to your funds anywhere. You can instantly exchange around 100 different cryptocurrencies. Interactive Charts lets you view the price history of a specific asset or your portfolio's performance over time. And maybe the best part? Exodus is integrated with Treasure Hardware Wallet, making advanced security easy for everyone. You can visit Exodus.io for your free download, or search Exodus on the App Store or Play Store. Again, Exodus, E-X-O-D-U-S.io for the free download, or you can search EXODUS on the App Store or the Play Store. Exodus, one of the most popular cryptocurrency wallets that's been around since 2015. Go check them out.

• 1:26Anthony Pompliano?

  Next up is Digenex. They're the first company with a cryptocurrency exchange to be listed in the United States. Their ticker on NASDAQ is EQOS. EQOS. And they are the first crypto company that you can buy stock in. They also have a crypto exchange called EQOS. EQUOS. EQUOS is the name of the crypto exchange. And that has been built to institutional standards, but it's available to everyone. You can trade Bitcoin and Ethereum spot, as well as Bitcoin perpetuals, and get a 5% discount on all fees by signing up using equos.com/Pomp. Again, EQUOS.com/Pomp. Go check them out. Digenex, the first company with a crypto exchange to be listed in the United States under the ticker symbol on NASDAQ.

• 2:10Anthony Pompliano?

  EQOS, EQOS. Lastly, Money on Chain. Money on Chain is bringing Bitcoin to mass adoption with solutions to meet the needs of different types of users. A fully Bitcoin collateralized stablecoin, DOC, a Bitcoin on steroids, B Pro, and a dizzying Bitcoiner option for lovers of leveraged trading, BTCX. All this without requiring the delivery of private keys. Money on Chain, bringing Bitcoin into the mainstream. You can visit moneyonchain.com/pomp. Again, moneyonchain.com/pomp. They've built an entire suite of decentralized financial products that

• 2:49Anthony Pompliano?

  do not require the delivery of your private keys. Go check out moneyonchain.com/pomp. My voice just cracked, so you definitely have to go to moneyonchain.com/pomp. DeFi is definitely for Bitcoiners. Go to moneyonchain.com/pomp. All right, let's get into this episode with Jeremy. I hope you guys enjoy this one.

• 3:08Speaker 01

  Anthony Pompliano is a partner at Morgan Creek Digital. All opinions expressed by Pomp or his guests on this podcast are solely their opinions and do not reflect the opinions of Morgan Creek Digital or Morgan Creek Capital Management. You should not treat any opinion expressed by Pomp as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his opinion. This podcast is for informational purposes only.

• 3:39Anthony Pompliano?

  All right, guys. Bang, bang. I've got a very special guest for you today. I've got Jeremy here with me. Thank you so much for doing this, sir.

• 3:45Speaker 02

  Thank you. It's great to be back.

• 3:47Anthony Pompliano?

  Absolutely. For those who didn't listen to the first episode, maybe just give us a quick two minutes on your background and kind of what you're doing today.

• 3:54Speaker 02

  Sure. So we launched, first of all, I'm an investment advisor. I run investments for really kind of the five to $25 million net worth family office who's not quite big enough to create their own family office, but big enough to play in that space. So I'm, you can think of me as an outsourced family office solution. I've got 19 families around the country that I do that for. And, you know, In middle of 2017, that led me down a rabbit trail to investigate crypto, completely became enamored with it, launched a hedge fund of funds, pure crypto in January 28, I'm sorry, January 2018, which of course, as we all know, in hindsight was impeccable.

• 4:39Speaker 02

  But yeah, so I've got a three year track record on that fund now. We're launching pure crypto two, or we just did, January of this year. And so we're here discussing sort of what we've learned and what we're excited about and what may have shifted and changed over the course of the three plus years.

• 4:57Anthony Pompliano?

  So let's just start with what's changed, which is a lot, but go back from 2018 to today, forget everything in between, but just like the sentiment in January 2018 to sentiment in January of 2021, what are the biggest changes or differences that you see?

• 5:14Speaker 02

  Yeah, clearly, from a sentiment standpoint, you know, the kind of maybe the obvious biggest issue is just the institutional adoption, the my my industry as a whole in fourth quarter 2017 and certainly even first quarter 2018 kind of had that I told you so this is a fraud, this is horrible, it'll never work kind of, you know, vibe and and and all of those naysayers for the most part have actually reversed course and it's pretty interesting to see how that has been articulated. That's one. But I think the more interesting one and the one I loved it sort of I'm passionate about talking about is when you look under the hood and you you actually look at the inner workings of how crypto has matured

• 5:56Speaker 02

  as an asset class. And by the way, it's got a long way to go and and we're still we feel early in the game. You know, in in the fourth quarter of 2017, venture capital investments in cryptocurrency were really, you know, three week to three month kinds of investments, right? These people, it was like the go-go days of the internet. You get an interesting team of individuals, they they, you know, they write a white paper or create a marketing deck and they go out and they raise capital without having to create any technology. At all. And of course, when the bubble popped, that went away immediately and you couldn't go get money for free to come build an idea before you'd done anything of that with that idea.

• 6:39Speaker 02

  Today, it's more like traditional venture capital. You gotta go, you gotta go raise a seed round, you gotta spend that money judiciously, you gotta make some progress on your technology, you gotta keep feeding it. You know, A round, B round, C round, and it takes a while to get to your ICO, initial coin offering, probably three years in most cases. And that one shift alone dramatically shifts where value is created in the ecosystem for cryptocurrencies and digital assets as a whole.

• 7:07Anthony Pompliano?

  Got it. And so when you think through this, you've got a whole bunch of things that you could offer to clients, right? You could do fund to funds, you could do indexing, you could do active management, you could go start your own company, you could start your own project, whatever it is. Walk through kind of your evaluation as to where you play in the market and why.

• 7:26Speaker 02

  Yeah. So, I mean, I'll, I'll sort of do that even historically. I, you know, when I, when I sort of stumbled

• 7:33Speaker 02

  you know, in kind of mid, middle of 2017, I thought this is cool. I'm going to go raise a hedge fund and start picking coins. And then I realized, well, I've never programmed a line of open source code in my life. I don't know how to do that. Nor do I have an NSA level of, of cryptography. I don't understand that, right? So at that time, all of the projects that were interesting were really kind of, you needed those sciences. You needed people on your team that really understood those in a very, very good way. I didn't. So immediately I thought, well, if I'm going to have value add in this space, it's not going to be on that end of the spectrum. So we naturally shifted to fund to funds. In my role as an advisor to wealthy clients, I'm always looking at deals.

• 8:14Speaker 02

  My, you know, my ability to vet and source deals and ask questions and trying to find talent, that's kind of what I do for a living. So we just took those skills and tried to apply them to this cryptocurrency world. And my most passionate point in making that fund structure work was

• 8:29Speaker 02

  A belief that the asset class was so nascent that you did not want to pigeonhole yourself with really strong boxes. You didn't want, you know, like in in traditional finance, you've got Morningstar style, you know, Morningstar box styling, you know, small cat growth, large cat value, all that kind of stuff. This ecosystem doesn't have that yet, and you don't want that. I think it's way too early even still. You want to go find the smartest guys in the room and give them the widest mandate you possibly can. Because the the landscape shifts so dramatically, so quickly, you can't box them in. And and it'll be years before we get to a place in this industry where you want to actually start boxing people in, but that will come eventually.

• 9:08Anthony Pompliano?

  Yeah. Talk a little bit about active management and kind of why that's so important.

• 9:13Speaker 02

  Well, uh, I'm maybe the first thread on that is go back to the idea of the venture capital. If you're in a, if you're in an index, uh, in the, in the early days, uh, you know, most of the value creation in, in, I'm going to say in the year 2017, might have been, uh, found in tickers that were already trading publicly. Not anymore, right? We have a position in our portfolio through one of our managers called The Graph. The first trade post ICO in The Graph printed at 13 cents. I believe it's trading somewhere around 55 cents today. Our cost basis is one tenth of a penny, and we were only able to achieve that because we hired really smart people that were super excited about that project before it went ICO.

• 9:56Speaker 02

  And so as an active manager, you've got to understand how the ecosystem works, where value accrual is happening and be able to move funds, uh, towards, uh, towards the part of the market that is accruing value in the most compelling way.

• 10:13Anthony Pompliano?

  Yeah, and it's really fascinating to me, I guess, that, um, as you think through, uh, kind of that active management, not only is it going and finding some of the stuff in the private market, but it's also then knowing when to get out of the positions as well.

• 10:29Speaker 02

  Yeah, for sure. Absolutely, you know, the, and again, because I don't program open source code, nor do I have any chops in cryptography, we actually don't make those calls. I mean, we are a, we are a traditional hedge fund of funds. We've got five managers in our portfolio. We're in constant communication with them. They don't ask us our opinion on when to sell. But our, our bet is that we're with the smartest herd and that there really is a small herd. And, and I think that's actually an important point. You know, in 2017, I believe there were less, and don't, not 100% sure of the exact number,

• 11:10Speaker 02

  but I'm, I'm pretty sure that there were less than five managers in crypto that, that ran liquid cryptocurrency books greater than $50 million in value. There was a really, really, there's hundreds of funds, but most of them had really, really small portfolios of capital under management. And I'm not including the venture capital guys. I'm just saying actual liquid crypto guys, right? Today, I bet you could count less than a dozen hedge funds managing liquid crypto books of, of greater than $100 million each. That's a really, really small universe. I mean, I can get on an airplane and go see those guys in three or four weeks, all of them, and be, and be really close to, to the biggest. Maybe, maybe the biggest aren't always the smartest,

• 11:55Speaker 02

  but their ability to attract capital probably has some sense of, of linear direction as to whether they've got chops in the space. And so I just think it's such a small space. There's so much misinformation. There's so much price discovery that isn't really accurate in, in the spreads in the market. And, and it's absolutely an active manager world.

• 12:17Anthony Pompliano?

  Yeah, talk a little bit about how your clients are thinking about sizing this in their kind of larger portfolios. And that'll kind of help people understand like why that feeds into the fact that some of these funds, you know, only have 10 million, 50 million, 100 million dollars to them.

• 12:32Speaker 02

  Yeah, for sure. So, you know, when we came out with the fund in 18, we said, you know, write a check that can go to zero. Like literally, I want you to write a check. You are not, you're not going to lose sleep. You're not gonna, it's not going to change your life. It's not going to really impact your financial at all. We think that's probably a 2% to 3%. If we're wrong and crypto goes to zero, it doesn't change the portfolio, it shouldn't change your life. If we're right and it goes 10x over the next five or 10 years, whatever, 20x, it can turn into real money. That conversation has shifted. We think today the floor is much higher. I mean, we've survived yet another 80% drawdown in the short life of Bitcoin's history.

• 13:16Speaker 02

  And you can't kill it. And the institutional adoption, it's upon us and we think the technology is here today. So we think double that allocation is reasonable for most investors. Although I have to say, if you listen to this podcast, this is not investment advice. I don't know you. I don't know your portfolio situation.

• 13:39Speaker 02

  Just in terms of general broad stroke, understanding of this space, we think of it.

• 13:47Anthony Pompliano?

  So when you think through how the space is evolving, one of the things that you've talked about in the past is this like value accrual, right? So we talked a little bit about kind of asymmetry and some of these investments. If you're the average person sitting at home, how do you think about this? Like, can you and should you go look for the active managers? Is this something where people should spend a bunch of time to get educated and then go try to trade? Or kind of pick, you know, stocks would pick these like coins? Like, how do you just think about that from a wealth management standpoint?

• 14:22Speaker 02

  Yeah, you know, I'm gonna, obviously you teed me up really well. Thank you for that. I'm gonna talk my own book here, but I'm gonna talk my own book because it's really what I believe. It's how I believe this space should be attacked. But, you know, there are, in my opinion, and I think in most people, it's gonna be a little bit of a longer answer. I hang with it as I explain this. There's probably seven hedge funds managing liquid crypto books. That pretty much most people think those are, those are the seven best in this country. I'm not talking about Europe or Asia, but I'm just saying US domicile crypto, global asset.

• 15:00Speaker 02

  Uh, we have, we have, uh, allocations to five of those seven and the two that we didn't allocate to, it was by choice. Two of those managers in our book are closed, cannot get, cannot get new money into them. The third manager has a really high minimum, a million dollars, they'll be closed. A fourth manager has high minimums, they, they might be closed in like three to six months, somewhere in the range. So there's actually arguably, in my opinion, only one manager in our deck that has some significant room for, for, uh, taking on new capital. And it's because that manager is really looking at a value sector of the market that's got way more runway, uh, to it. But the, all the traditional crypto guys are getting full of capital, there's so much interest.

• 15:44Speaker 02

  And so, uh, from a capacity standpoint, your ability to get diversification and get access to the smartest projects that are out there, really, really difficult, even if you spend the time and go do the work and learn, you know, learn how to understand the code or the crypt, uh, the cryptography and figure out how to get in the right doors. It's just a super high mountain to climb as an individual.

• 16:11Anthony Pompliano?

  Yeah. And so when you start to think through, uh, where's Bitcoin fit into all this, right? Is it still the king and people should have exposure to it? Are you of the belief that people shouldn't have Bitcoin? Kind of, how do you just think about it, given, uh, some of the asymmetry and value accrual you're talking about in other parts of the market?

• 16:29Speaker 02

  Yeah, I would say, uh, uh, I, I don't think that way. I think absolutely people should have allocation of Bitcoin. I think it's a very good core holding. I think Ethereum is the same way. And I think that, uh, uh, those are exposures that don't need, uh, frankly, a hedge fund with a carried interest. Uh, I, I just don't think the market, uh, I think the market has matured to a point where we just don't need to pay somebody that much to, to, gain those exposures. So I'm absolutely in favor of an allocation to Bitcoin and Ethereum direct, um, uh, alongside an actively managed portfolio.

• 17:06Anthony Pompliano?

  Yeah. And then when you think about some of the interesting things that you've seen, um, are these, uh, decentralized protocols? Are there specific like subsectors in crypto that you're saying, hey, look, this is really where I want to spend a lot of time?

• 17:21Speaker 02

  Well, for sure. Again, with the caveat that we don't make these calls, we just listen to all the smart guys in the room and we get excited when they get excited, but we don't, we're not actually directing them, you know, so it's, it's really, uh, they're, they're explaining those narratives to us, but absolutely DeFi is, is, uh, DeFi is the first killer app, if you will, in my mind. Like it is, it is real world, has real cash flows. It's the first place in the ecosystem where you can take your financial accounting 101 and actually apply real business metrics to a, to a token. Like, like, you know, like we, we, we can talk about Uniswap, right? Decentralized exchange, 30 basis points of transactional volume on a daily basis accrues to that token.

• 18:07Anthony Pompliano?

  Uh, so, so hold on, before we get into the token component of Uniswap, just explain Uniswap at a kind of a high level first for those that don't know.

• 18:13Speaker 02

  It's decentralized exchange. It's NASDAQ without the middleman.

• 18:18Anthony Pompliano?

  Okay. And that basically means that there's a pool of tokens. If you own some of those tokens, then you essentially have, uh, ownership, right? A couple of that in air quotes of the cash flow for that decentralized exchange?

• 18:31Speaker 02

  That's correct. You have, you have, ownership is right in air quotes, uh, because that, the, the cash flow, uh, uh, accrues to the token holders voting rights. Right? So token holders could vote them theoretically, uh, to their neighbor, uh, but, uh, but, but there is, and the token holders get to vote where that, where that cash flow goes.

• 18:55Anthony Pompliano?

  Okay. And so walk through just like, if you were to look at it as like a company valuation, kind of that, uh, that evaluation.

• 19:02Speaker 02

  Yeah. So 30 bps, uh, 0.3% of the transactional volume on that exchange accrues, uh, as cash flow to the token. Uh, which, uh, on seven, on an average of roughly $700 million of transactional volume a day, which by the way, has been growing like crazy. I mean, I don't even know the number, but it was a fraction of that just a year ago, right? So, uh, that's a $2.1 million daily. Cash flow hall, which is about a $766 million annual number. And I think if I I haven't looked at it this morning, I've been on calls all morning, but I I'm pretty sure the valuation of Uniswap is somewhere around four and a half billion, which puts this at, you know, maybe about a five X that cash flow.

• 19:48Speaker 02

  I hesitate to I hesitate to call it earnings because that's like this capital thing, but you can kind of make that. And that's a value company like like that, that, that, those are whether whether you call it exactly earnings or not, you know. Two years ago, we were sitting around a table saying, well, you know, how do you value a digital asset? It's not real. I can't touch it. And it's just a series of numbers and codes, and it doesn't really spit off any income. And what is it? And we're past that. There's a whole section of crypto that actually has real world cash flows. Another example in a different world would be Spencer Dinwiddie's NBA contract. Probably half or more of your readership or listeners know this, but there's an NBA basketball player out there who created his own token

• 20:29Speaker 02

  to brilliantly so to pull forward his $15 million or so NBA contract in cash flows. You know, he basically took his 15 million and sold it for 14 and a half or whatever to create an implied yield for the token holder. And basically asset back to that token with real world rights to pro rata ownership, the cash flows of an NBA contract. There's more and more of that happening in crypto or what I would more appropriately say digital assets.

• 20:57Anthony Pompliano?

  And so when you think about like, go back to the Uniswap example, is that just a thing where investors are undervaluing that? Like, it sounds like at five times cash flow, that sounds pretty low of multiple, especially given what's going on in the public markets. Is that the right way to think about it? Is maybe that's actually the right valuation? Like, how do you wrap your head around valuation versus kind of the analysis of the actual cash flow?

• 21:19Speaker 02

  Yeah, that's that's so great. I I I mean, this is where it's. I'm I'm passionate about it, but my opinion is just that it's very open handed opinion. But my opinion on that is it's just that people don't know. I mean, everybody, you know, 30 years ago, not very many people had money in the stock market. Today, it's ubiquitous, like lots, lower, lower, lower and lower levels of net worth, more and more percentage population of the country. They they they have money in the markets in one form or another through their 401ks or their IRAs or whatever. Crypto is is nascent, you know, just because it's true doesn't mean people know it yet. That's the entire reason why there can be that price dislocation because because it's

• 22:03Speaker 02

  just a novelty. People people have people are still trying to get their head wrapped around how to own Bitcoin, much less this funky token called Uniswap they've never heard of.

• 22:12Anthony Pompliano?

  Absolutely. And so when you think through kind of where the world's going, do we think that all of the capital is going to flow out of the stock market and into this kind of digital world? And there will be this digital decentralized financial system? Is there coexistence? Like, just how does this evolve over time?

• 22:28Speaker 02

  Yeah, I love that. Like, we, you know, it kind of goes back to, you know, we've been saying institutional capital is coming, it's coming. We've been saying that for three years, right? And and it showed up, but it showed up first on the balance sheet of MicroStrategy's treasury management. Nobody thought that. It's like, we thought that Warren Buffett would come out and say, oh, this is good stuff, or, you know, Ray Dalio, sort of institutional adoption. And it came from a really strange corner. And I say that because I think I think whatever we think is going to happen, it's going to come out as from a strange corner. So I don't mean to make that a cop out, but it wouldn't surprise me one bit if out of defending

• 23:10Speaker 02

  their own territory. I mean, there's lots of entrenched players that that have a lot of motivation to try to keep their turf, right? So it wouldn't surprise me one bit if ultimately the stock market morphed. I mean, you know, I think I think we're seeing central banks do that, right? If you can't beat them, join them. Figure out how to don't kill it, but figure out how to co-opt it, right? Power is important, and people love power, and people that have it aren't wanting to let it go. So I don't exactly know how that all collides, but I think there's there's there's a move towards this technology, no matter how it actually gets adopted, either by the winners or the losers.

• 23:46Anthony Pompliano?

  Yeah. Talk a little bit about the institutional adoption, right? So you talk about MicroStrategy. We now see all kinds of players coming out of the woodwork, right? Whether it's, you know, people who were in the venture capital, the kind of technology forward space, you got people who kind of are very well known publicly, like an Anthony Scaramucci. You've got big institutions like Fidelity and others who are starting to participate or have been for a couple of years now. Just what do you think about the institutional adoption and kind of the impact on the market?

• 24:17Speaker 02

  Yeah, my favorite thing to talk about on this is actually, I feel like we're in the second wave of institutional adoption now. We're entering it. The first one was, you know, those those those those kind of trailblazers, the people that were willing to be the first to take career risk and and and really sort of blaze a trail for the others, right? And there's been a number of those. Those are well documented players. The second wave is starting to figure out how to change the narrative. Like, I think one of the most perfect examples is Guggenheim is fairly famous, or maybe you could say infamous, the CIO of Guggenheim for coming

• 24:57Speaker 02

  out and calling a $400,000 price target on Bitcoin, right? That was December 16th. January 21st, he he comes back and says, well, it's it's actually going to go to 20,000 before it goes to 400,000, right? I mean, if that's not the most blatant example of talking your book, right? He he kind of, he kind of realized he couldn't talk it up until he gets his entire position in play, right? You know, BlackRock filed very, very quietly to have two of their funds be allowed to own Bitcoin. Never sent a press release out, nothing was said anywhere. So you've got this stealth institutional movement now. And that's that's the real meaningful one. That's the one where if they believe it strongly enough to not

• 25:40Speaker 02

  talk about it, but do it, it's a compelling investment.

• 25:45Anthony Pompliano?

  For sure. Talk a little bit about kind of the, what's the best way to talk about this? As these institutions move into the space, you will get the Guggenheims, you will get the BlackRocks, you will get kind of all of these players. But they're starting out buying Bitcoin. They're not going and looking at Uniswap or kind of the long tail of things. And so is it just there's an evolution and they start out with Bitcoin and then they go looking Ethereum and they kind of move down the path? Or just how exactly do you think that plays out over time with the institutional adoption across the asset class?

• 26:21Speaker 02

  I love this question. I absolutely think it's that for a couple of reasons. I think it's that because it's career risk. The institutional world, they've got safe jobs. It's it's like, don't screw it up, right? And so if if all of my neighbors are buying Bitcoin, I can buy Bitcoin, right? But but what that does is it creates It creates a kind of a bifurcated market. I mean, the people that are buying Bitcoin and Ethereum and maybe a couple of other coins are really a different set of investors than everything else. And that allows this quote unquote, everything else, uh, part of the market to be extremely inefficient.

• 27:01Speaker 02

  And, and, uh, if there's one thing, uh, that's important in having, uh, alpha and active management, it's finding inefficient markets, which there are very few of today.

• 27:13Anthony Pompliano?

  Absolutely. Uh, what is the best thing you've heard, uh, in the last year? So you talked to a lot of managers. Like, what's the thing that, uh, you're most excited about in, uh, the entire industry? Uh, whether it's kind of a corner of DeFi, it's something that, uh, maybe you've heard investors say, like, just like, what's the thing that sticks out and you're like, man, this is really, really exciting and nobody knows about it?

• 27:35Speaker 02

  Well, um, so we've got a manager that, uh, and this is hot off the press as of yesterday. Uh, you, you know, uh, we got a manager who's setting up an SPV to specifically target,

• 27:50Speaker 02

  um, small cap DeFi and, and pretty much as, as broadly as possible across the DeFi spectrum. And, uh, they, they can't put it in their larger fund because they're so thinly traded. They're small cap and the liquidity profiler constraints, uh, doesn't really fit. But it's, it's the most interesting space in terms of value accrual, uh, in terms of growth of, of transactional volume. Um, that, that's going to change, but for right now, we think that that is, uh, probably in my mind, that that's the thing that comes to the top of mind fastest is this, this small cap DeFi, which there's, you know, there's pretty much no way I'm going to say that you could probably replicate

• 28:34Speaker 02

  what, what we're investing in, in that sleeve, uh, unless you're one of these smart guys in the room. I mean, this is not a do it yourself or homemade portfolio.

• 28:43Anthony Pompliano?

  Yeah, I love it. Um, what is the thing that you think is most overhyped? In terms of people are talking about what you think actually, uh, is, is probably not going to be sustainable or valuable?

• 28:55Speaker 02

  Oh, that's a good question. I'm not really sure that there's much that's overhyped. Um,

• 29:02Speaker 02

  You get a lot of disparate opinions on, you know, what Bitcoin's ultimate price target is. If there is something like that, it's gotta be in the Bitcoin world. But I don't know. I don't think people know where it's gonna go. I'm not sure I've got a good answer for that question.

• 29:19Anthony Pompliano?

  That's fine. You've got plenty of good answers, so not having one for one question is perfectly fine. When you think through the allocation, before we kind of get into the rapid fire questions to wrap up, you started out with the hedge or the fund of funds. How do you think your clients are thinking about it today? Is it one allocation to one strategy? Is it multi-strategy? And will that also evolve over time? Like, will it start to look like that multi-strategy approach that they deploy in the traditional world?

• 29:54Speaker 02

  Sure, yeah, it will. It will morph over time. Right now, we've got really wide mandates and we know the DNA, or we think we know the DNA over managers. You know, one of them's kind of got a trading mentality. You know, coming out of Goldman and Cessna, you know, a couple of the others really are just, you know, coding tech geeks, like deep science guys trying to solve the big problems of the world. That's a huge allocation chunk. And then we got this value guy. And so broadly speaking, we're explaining that DNA, really 10,000-foot view to our investor base and telling them, you know, we don't want to restrict them, we don't want to put handcuffs on them.

• 30:37Speaker 02

  But as the asset class matures, we will. There will be a time when enough capital is in that to differentiate and find alpha, it's gonna get more crowded. It's just not crowded yet.

• 30:50Anthony Pompliano?

  Yeah, and it feels to me almost like that's the natural market cycle, right? It's just everyone doesn't think something's a thing. There's a couple of people who are early adopters, they get a bunch of alpha. Over time, the returns get commoditized down. And then when kind of the, you know, mainstream or middle market of the investor base shows up, you kind of just get a little bit higher than you got in the traditional world. And then by the time the last folks get in, you get kind of heavily commoditized returns that look exactly like the last market did.

• 31:20Speaker 02

  I think that's the narrative for most asset classes in history, right? You can think about the quote-unquote hedge fund, the market neutral strategies, or the long-short credit strategies, or any niche in the hedge fund world that sort of was born in the late 90s, had some really interesting return profiles with really good alpha capture early on, but by the time you got to the 08 recession, it was ubiquitous. There were so many people and so much capital trying to find that arbitrage, it got arbitrage away. And I think this asset class will do that, too. I don't know where or how long, but it feels a number of years

• 32:02Speaker 02

  away, in my opinion, but it'll happen.

• 32:07Anthony Pompliano?

  Yeah, it's pretty crazy. Where can we send people to find you on the internet, or find out more about the work you're doing?

• 32:16Speaker 02

  Pure-crypto.com would be the website that discloses the regulatorally allowable information about the hedge fund. And Laureate-wealth.com is my advisory practice.

• 32:36Anthony Pompliano?

  I don't think I ever asked you, where did Laureate Wealth and Pure Crypto, where the names come from?

• 32:42Speaker 02

  That's funny. Laureate was just, we were kicking around, China, we formed the company in 2009, and, you know, we just kept looking around, looking around, and it's a Laureate is a Nobel Laureate, like it's a wreath, it's what the Greek Olympians were given when they won. And so it's a term of distinction, it's a place of honor.

• 33:04Anthony Pompliano?

  It's amazing.

• 33:05Speaker 02

  Pure Crypto is just simply, you know, we wanted something that smacked of hedge fund that had nothing but cryptocurrency allocations in it. So it's kind of simple.

• 33:17Anthony Pompliano?

  That's a pretty self-explanatory name there.

• 33:21Speaker 02

  Not very creative, but it's what we got.

• 33:25Anthony Pompliano?

  All right. So I'm going to ask you two questions. I've already asked you my normal questions, but I'm going to ask you two new questions before we go to wrap up and you get to ask me one question. First is a is a very fun one, which is what is the craziest thing one of your clients has said to you about Bitcoin or crypto in the last three years?

• 33:46Speaker 02

  Oh, the craziest thing.

• 33:53Speaker 02

  Oh, it's probably fairly boring. I probably have had half of my clients at least become morally offended by my identification with, you know, Silk Road transaction, basically. That's a pretty strong mantra. It's a false narrative. I mean, of course, you know, lots, lots of interesting tech starts in nefarious places. I mean, that's kind of a thing. But that doesn't mean that, that doesn't mean they carry that DNA forward.

• 34:26Anthony Pompliano?

  Absolutely. I couldn't agree more. Second question is more personal. This comes from our friends at Eight Sleep. They've got this thermo-regulated bed that basically makes it super cold. I use it every night. It's amazing. Absolutely love it. Are you a five or six hour sleeper? Are you a nine or 10 hour sleeper? What's kind of the sleep routine and how much sleep do you get?

• 34:46Speaker 02

  Well, I'm embarrassed to say, I will say, I try to hide this from my clients, so maybe they won't watch or listen, but I am a dude, I'm an old man. Like, I'll be 50 in June. If I don't get eight and a half hours of sleep, I am just no good to anybody. My wife, my kids, my business. I'm just like, I gotta have, I gotta, I gotta get my sleep and I gotta work out and I gotta eat right.

• 35:09Anthony Pompliano?

  Yeah, that's a, that's a good thing. I think it used to be that people were like, you know, I'll sleep when I'm dead, right? But now I think the tide's turned. People realize, hey, sleep's pretty damn important. We probably should make sure that we're doing that.

• 35:20Speaker 02

  Yeah, I am. Yeah, I'm definitely an eight and a half, nine if I can get it. Go ahead.

• 35:26Anthony Pompliano?

  I love it. What, what one question you have for me to finish up?

• 35:30Speaker 02

  I'm just be curious, other than crypto, what's the most interesting investment that you're super excited about right now?

• 35:40Anthony Pompliano?

  Early-stage venture capital. I'm just a big believer that innovation drives returns and early-stage venture capital is by far kind of the best place to go find that. You're looking for the asymmetry. In some ways, you know, some of the markets that you're talking about with venture are frankly, you know, or in crypto are basically venture-type investments, right? Kind of zeros or heroes. It's just that they're not equity, they're this token-based thing. And so I think that that's probably it within that. I don't know if I could pick like an individual sector that I'm like, oh, this is, you know, going to be amazing over everything else. Cause I just think that across the board, early-stage venture is just driven on innovation. And that's where you're going to get kind of outsized returns.

• 36:24Anthony Pompliano?

  And so that's what I'd pick.

• 36:26Speaker 02

  Yeah, no, good word. And really, that's, that's the way we coach our investor base to think about crypto. Even though it's liquid, it's venture, it's venture capital, even post ICO. It's, there's nothing in, there's nothing in the digital asset space that's not venture capital today.

• 36:45Anthony Pompliano?

  I couldn't agree with you more there, my friend. So listen, thank you so much for doing this again. We will have to do, continue to do it as, as we check in on basically what the sentiment among your wealthy clients are, but also kind of how the funds doing and what you're seeing from all the different managers.

• 37:03Speaker 02

  Very cool. Thanks for having me. I really enjoyed it.