Tips For Surviving A Crypto Bear Market, With Jeff Sekinger

The current bear market for crypto has presented many investors and traders with challenges. On this episode, we explore strategies to navigate what looks to be another “crypto winter.”

Jeff Sekinger, Chief Investment Officer for the Boron Digital Large Cap Cryptocurrency Investment fund, joins the show to cover the market landscape and offer insights.

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Episode Highlights

Institutional Grade Solution For Digital Assets: “Invest into an actively managed index focused in Cryptocurrency and Blockchain Technology.” (Boron Capital)

Bitcoin, altcoins sell-off on record-high inflation, but traders still expect BTC to consolidate: “Global financial markets once again find themselves trending lower on June 10 after the Consumer Price Index (CPI) came in at a blistering 8.6% year-over-year increase, the highest print since 1981. The hotter-than-expected CPI print resulted in a collapse of the $30,000 support and Bitcoin (BTC) price sold off to a daily low of $28,852 before dip buyers managed to bid the price back above $29,000.” (CoinTelegraph)

Featured: Boron Capital

About The Show

Cryptogic is the show for crypto investors who are focused on long term results. Follow host Scott Hawksworth as he explores the investable world of blockchain technologies, Bitcoin, Ethereum, and other cryptocurrencies.

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Transcript

Scott: Hello, welcome to Cryptogic. I’m your host, Scott Hawksworth. And today we’re going to be taking a look at the cryptocurrency investment landscape, what’s going on currently, maybe some insights for investors. And joining me to offer his insights is Jeff Sekinger, who is the chief investment officer for the Boron Digital Large Cap Cryptocurrency Investment Fund.

So when we’re talking about cryptocurrency investing, couldn’t think of a better guest to have. Jeff, welcome to the show.

Jeff: Thank you so much, Scott. Excited to be here.

Scott: Well, thank you for being here. Let’s just kick it off with what’s been going on. You know, as of this recording, we are truly in a crypto bear market and there’s a lot of uncertainty, and maybe folks saying, “Ooh, what’s this whole crypto thing? Do I need to pull out?” What are some of the keys or strategies for investors in crypto to navigating this bear market?

Jeff: Yeah. I think the first most important thing is having some context. This is honestly not a surprise for anyone that has done research into cycles of cryptocurrency. There’s three years of a bull market, one year of a bear market. The last bear market was 2018.

So honestly, we’re right on track with everything that’s happened…

Scott: On schedule. Exactly.

Jeff: …since inception. Yeah. So it’s not a surprise. And you also got to realize what the drawdown is. On Bitcoin, it’s typically, you know, the mid-80 percentile, and with all coins, we’ve only really seen one cycle back in ’17 when they, like, were just coming out. But all coins are likely to, you know, also have drawdowns over 90%. And some of them are already there, which is, you know, pretty crazy.

It blows people’s minds when they don’t have context and understanding that. So once you have that context, I think it’s good to kind of look at, on a technical basis, where has, you know, Bitcoin been drawn down to, and also anytime that you’re getting… It’s very similar to investing into, you know, even like, you know, stocks.

Obviously, they’re evaluated way different, asset class is way different. Crypto is way more speculative. But it’s going back to the fundamentals is what I’m saying. So it’s really important to invest in the things that aren’t so speculative that do have some data behind them. And that’s why specifically we like to invest into something called smart contract platforms, which have their own blockchain.

So we invest in the coin behind the blockchain that has a lot of activity and data. And we also like to stick with coins that have a larger market cap, because to be honest, a lot of cryptocurrency is likely to be wiped out, because it really has no utility. So we just go back to focusing on the utility, the fundamentals, and we think most importantly, the people behind the actual projects.

Because they’re the ones ultimately that have to continue to develop and innovate. And, you know, obviously, the communities are really, really important as well. So I think it’s important to understand, hey, there are really big drawdowns. Let’s look at where historically Bitcoin is drawn-down to. And then let’s make a decision on where we want to start deploying over time. So I don’t really ever think it’s something where it’s like, “Oh yeah, when Bitcoin hits 16 grand, then I’m going all in at 16.”

Right? It’s really good to start layering on the way down, which is just the form of dollar-cost averaging. So you’re putting in money, you know, at certain price points. That’s what we do, we set by limit orders as the market’s coming down to the targets that we set based on what historically has happened.

Scott: Right. Right. And one thing I would highlight there, you know, you were talking about, you know, investing in sort of the underlying technologies and the teams, and really that is your investment thesis. And I think a lot of folks when you’re just kind of coming at it from a speculative standpoint, when you do have these drawdowns, when you do have this sort of bear market, that’s where…

Well, if you didn’t have a solid thesis before that you really believed in, that’s where you panic and you’re saying, “Oh, no.” Right?

Jeff: Exactly. I always say that you have to do your own research. If you don’t, you probably need to invest with someone that is doing their own research. Because if you don’t have conviction in what you’re buying, that emotion comes out when you have these big drawdowns. And then you end up selling the bottoms and buying the top. So 100%, if you do not know why you’re buying what you’re buying, it’s a big, big issue because, again, you’re going to get emotional and then make a really bad decision.

Scott: Absolutely. Kind of shifting gears to maybe a little more macro, but I think it does…it is impacting crypto, and I’m curious to your perspective on how that impact is really being felt, The CPI in April, and I’ve got the number right here, was 8.3%, which was higher than expected. How is inflation from what you’ve seen impacting cryptocurrency investing, and how are investors who, you know, you have those conversations with really treating this inflationary landscape that we’re in relating to crypto?

Jeff: I would say short-term, it’s bad for it. Long-term, it’s good for it. And the reason is because when there’s high inflation, the number one objective of the fed is to start bringing that number down right to their target, which is usually 2% to 3%. And how do they do that? They increase rates. Well, when money becomes more expensive from them increasing rates, guess what happens? People borrow less money, which means they spend less money, which means the stock market sells off.

And recently over the past, especially six months, Bitcoin and cryptocurrency has been highly, highly correlated to the stock market. I haven’t seen correlation to, you know, the NASDAQ 100 and S&P 500 like this before, even since I’ve been in crypto.

Scott: I mean, it’s behaving like tech stocks.

Jeff: Yeah, exactly. It’s almost tick for tick with the QQQ. If you watch the NASDAQ 100, it’s pretty insane. So short-term is what I’m saying is it’s bad because when the fed is, you know, hawkish and they’re raising rates and they’re potentially decreasing their balance sheet, that causes other markets to sell-off. And what we got to remember is crypto is still a teenager, specifically Bitcoin. And actually most of crypto’s less than a teenager, right?

Because a lot of it’s only, you know, two, three, four, five years old. Bitcoin’s 13 years old. So that behaves as a really volatile asset because there is…it has a smaller market cap and it doesn’t have long-term institutional capital into it yet. So it’s treated as very, very speculative, which means it’ll sell-off when the rest of the markets are starting to potentially jump into a bear market and potentially a recession.

So short-term, I think it’s, you know, bad, but honestly, it depends. I always say prices going up and down are neither good or bad, it’s just a matter of fact. So it really depends on your overall strategy. If you’re a long-term investor, this is amazing right now. We purposely prepared for times like this by raising more money, also having a higher cash position in order to be able to layer our buys and decrease our average purchase price.

So it really depends. And also if you’re, you know, a fan of leverage or options, you can make a lot of money right now because, you know, volatility is just opportunity. But I would say, you know, long-term, I don’t think… Unfortunately, I think it’s really sad that that inflation is a…that that’s just something we have to live with now.

And I don’t see it getting much better. So, I think long-term, that is good for cryptocurrency because, you know, things like Bitcoin specifically are disinflationary and they have a cap supply, and there’s already 19 million released, only 21 million is ever going to be released. And when I say disinflationary, that supply gets cut in half every year, about four years.

So it is actually like…you know, investors will look for assets like that, assets like real estate to start protecting their money because they understand that, okay, well, if inflation… You know, they’re saying 8% or whatever, right? Actually, like here in Miami, Florida rents went up 40% in one year. So I think depends where you’re living and it depends on what you’re looking at. The basket, the goods, and the CPI, that includes funerals and milk and museum tickets.

Like, it includes a lot of stuff that people don’t really ever buy anymore. At least I don’t. But I think it’s a little bit of a bad way to account for and try to measure actual, real inflation. So I think it’s muchly like higher than what they’re saying.

And the problem with that is if your investments are not outpacing inflation, you’re actually losing value. And historically, Bitcoin has done like a…even with this drawdown, I think it’s still 130% compounded annual growth rate since inception, which is obviously insane, but it’s an asset that’s definitely outpacing inflation.

Scott: Absolutely. Okay. I’ve got to ask about stablecoins. You know, it’s still fresh on people’s minds, the collapse of UST. I think that caused a number of investors to maybe even question stablecoin themselves. So what’s your take on stablecoins from an investment perspective, and what happened with UST and, you know, losing its peg to the dollar and all of the disaster we saw there?

Jeff: Yeah. I guess we’ll start with that point. So UST was a very interesting project on the Terra blockchain that was directly correlated with Luna. So as UST market cap grew, they would actually burn Luna. So every $1 that got issued a UST, they’d burn $1 of Luna. So as UST was growing and it was getting put onto more and more exchanges, more people were using it, so they were creating more UST, decreasing the supply of Luna, which brought the price of Luna up.

Meanwhile, they were also offering 20% APY to get more adoption into the project. So specifically on a protocol called Anchor, you could go by UST, and most people were going to the Anchor protocol, they would deposit their Luna and then they would take a loan against the Luna, and then they would get the UST. And then some of them would even go buy more Luna, take a loan against that Luna, get UST, and then buy more Luna and take it.

So it was, like, multiple levels of leverage. And then they would…at some point, they would put the UST into the treasury and then they would start to yield right around 20% APY. So that was a big problem that a lot of people didn’t realize. We’re talking billions and billions of dollars that were levered up.

Scott: Right. You can just see that house of cards just…

Jeff: Yeah. Yep. It’s just getting ready to tumble. The unfortunate part is I really do believe it was an attack because there were billions of dollars that were put into Anchor. So there was billions of dollars in a loan that was taken against Bitcoin out of the Luna Foundation treasury.

So they, like, bought more Bitcoin. And then this entity that bought it, took a loan against it. They bought UST, put it into Anchor, and then they pulled all of the money out at one time. And then what people believe is there was a massive short sell on Luna at the same time. So it caused just this ripple effect, because then once all the money got drawn out of the Anchor protocol and everyone started to get liquidated, then the market cap is going way down, UST loses its peg, and then it starts to infinitely mint new Luna.

It just collapsed the whole thing. So there’s a lot of speculation on, like, what institution or person did it. I don’t think we’ll ever know. It’s a part of the game. It’s not illegal to do. So, you know, that’s just part of markets. When there’s fundamental issues to a project, like, the market is going to correct it and that’s just part of the game.

But it is unfortunate, I know, you know, quite a lot of people lost money in that… It was a super unique, interesting project. And I was going to say earlier, the unfortunate part is they were actually gearing up to have the mint burn feature stability fixed in the next two weeks. Like, that was a planned schedule of them actually fixing that one flaw that they had, and unfortunately…

Scott: They were aware of it and planning on addressing it?

Jeff: Exactly. In literally the next 14 days. So I do think it was a very timely move by, you know, whoever…

Scott: Whoever it was.

Jeff: …to take advantage of it. Yeah.

Scott: So then, so that’s kind of the… And I think there’s still more autopsies to be done and we will learn so much from this as time goes on. I think it is going to be one of those moments where, you know, people will refer back to in the years to come like, “Oh, yeah, remember that.” But kind of extrapolating stablecoins themselves. Jeff, I’m curious, does this shake maybe some of the investment thesis on stablecoins, some of the confidence in stablecoins?

I’m just curious to your perspective there.

Jeff: Yeah. I mean, 100%. Most people don’t understand what I just explained. So when they hear the collapse of one, they think the collapse of all. But, you know, there are a lot of other algorithmic stablecoin that I would definitely stay away from. And to be honest, the only thing that we will hold right now is USDC. And the reason is because it is actually they’ve passed all of the compliance steps of actually verifying that they have $1 that’s backing one USDC.

Scott: Right. The collateralized aspect is key.

Jeff: Yeah. Yeah, that’s another thing is like, UST was collateralizing it with Bitcoin and other all coins. And that too was kind of a new thing that happened like a few months before this whole collapse. So it wasn’t originally like that, and they started to change it, and I started to think like, “Okay, what is going on here? I don’t know. It doesn’t make sense to back stability with instability.”

So I think it’s just really important to actually do your research into, like, what stablecoin is actually backed by a dollar. If you’re going to peg it against a dollar, it probably makes sense to have a dollar behind it. I would think so.

Scott: I’d like to keep that peg if things get funky.

Jeff: Yeah, exactly. And then, you know, you look at other institutions and investors, what they’re actually using. Like, for example, I know… Probably everyone will know this person, but Kevin O’Leary. His new business called WonderFi, it’s really kind of like a…almost like a Defi play for retail, you know, people to put money into banks and get a yield.

And they’re using the USDC stablecoin as a significant part of that venture. You should look for signs like that on, like, actual respected investors and institutions using things like that. Because a lot of the times, obviously, they’re doing research to do it and they’re saying yes to it for a reason.

I do think regulation behind stablecoin is going to come now, especially because of what just happened, but I think it is a very important piece of crypto. And I honestly don’t know how… I think in five years, we’re going to kind of look back and a lot of these new CBDCs, these Central Bank Digital Currencies I think are going to be on exchanges and just used that way.

Scott: Absolutely. Kind of speaking of regulation, I agree that that regulation is coming on some level. I think that, you know, Janet Yellen has singled that they’re looking at it. And I think that’s just clear. And especially when events like this happen, that really does, you know, put it all under the magnifying glass, so to speak, and then the media gets their articles going and all of that.

So I’m curious to your perspective on, you know, will it come and how might that impact the investment landscape when we’re talking about cryptocurrencies?

Jeff: Yeah. I think it’s definitely going to come. I mean, the SEC just came out and doubled their employment like about a month ago. And they specifically gave certain sectors within crypto they’re going to be looking into. One of them is stablecoins. So definitely it is coming and I think rightfully so. I think a lot of people get worried about that and they think it’s all a negative thing.

Like nothing in crypto should ever be regulated because that’s the point of it is to…you know. But it’s like, okay, well, you are probably in crypto because you want a large appreciation in your investments. Like, that’s probably why you’re in it. Maybe if you’re more, you know, accredited or you’re an institution, you’ve got, you know, another hedging strategy or whatever it is, right?

But most people in retail, they hate regulation and they really want crypto to go up and up only. And the way that it’s going to go up to get above a 2, 3, 4 up to a 10 trillion market cap is by having regulatory clarity so that more public companies, institutions, sovereign wealth funds, endowments, you know, large swaths of capital can actually come into it.

So it’s highly necessary. I think there’s a few sectors that are likely to be somewhat in trouble. I think a decent amount of stuff in Defi will be pretty regulated. I think stablecoins is going to be regulated. I think privacy coins are not going to do very well through this because, you know, a lot of them it’s a very easy way for investors and people to hide what they are doing with their money, which is not what the IRS wants.

Scott: Yeah, SEC is not going to like that.

Jeff: No. Not at all. I mean, how does that sound like a good idea? I think a decent amount of those are going to get delisted from exchanges and just banned, to be honest, because that’s a way to evade taxes, and money laundering, and all the stuff they’re trying to avoid. Like, that’s what they literally talk about all the time. So I think staying away from privacy coins is probably a good idea, but yeah, I think it’s coming over the next year to two years.

And I also think that… I don’t think it’s right for them to paint everything into securities laws because, you know, we’re talking about 80-year-old laws that they’re trying to paint into, you know, a brand new asset class that we’ve never seen anything like this before. So I really do think they’re going to have to come out with digital asset laws and have specific laws in order to actually regulate them fairly.

Because if not, it’s just going to be like, “Oh, okay, well, you know, Bitcoin and this one and that one passed, but yeah, the other 20,000 cryptocurrencies are securities.” So now they all get de-listed and I think… like, that’s what their stance is right now. They’ve said openly, “Bitcoin is a non-security. Ethereum is kind of on the teeter-totter, but you should expect everything else to be a security.”

Like, literally, they have said that. So I think they are going to have to come up with new laws and I am expecting it to come. But overall, I think it’s a really positive thing. And this is just the importance of diversification and doing your own research and understanding kind of what they’re looking at and just keeping your finger on the pulse.

Scott: Absolutely. And Jeff, that, you know, to me, that connects to what we were just talking about. You mentioned Kevin O’Leary. I know there’s a lot of retail investors that get grumpy when, you know, VC investment flows into projects. And you have, you know, some of these traditional financial institutions coming in there. And to me, I always say that’s a good sign. That’s a good sign if folks are wanting to put capital into crypto projects.

And again, I know there’s this, “Oh, no, it should be for everybody. It should be for the people. You know, not regulated, etc, etc.” But I’m like, “Hey, if a whale’s coming in, that can be good.”

Jeff: Yeah. I mean, it’s definitely good. I mean, yeah. I don’t know why people would hate on it. I mean, this is… I talked about this yesterday, I really think this is maybe one of the few opportunities that we ever see where retail can front-run institutions. Like, that’s what’s happening right now, which is pretty amazing.

Because typically, institutions, they get all of the access first, and then retail gets, you know, the droplets of what’s left over. It’s actually the inverse right now. Since there’s no regulatory clarity, retail actually has an opportunity to get in before institutions.

Scott: Absolutely. When investors are looking at altcoins, what are some of the things, signals, what have you, they should be considering when they are looking at an altcoin that isn’t Bitcoin, isn’t Ethereum? I know for your fund, you focus on, you know, the large-cap, you look at the market cap and many other factors, I’m sure.

But I’m just curious sort of your perspective there when we’re talking about all coins?

Jeff: Yeah. We primarily invest into the smart contracts that I’ve mentioned for a reason. So that we can actually do the data and research behind the actual chain. Because, unfortunately, there’s not a lot of other great data behind these other altcoins. And the majority of them are kind of used as like a governance coin.

Which means that people that hold onto the coin can just vote on upgrades to the project, which, like, we don’t have much interest in because there’s not a use case there. So what we look for are people that have… the founders have previous tech experience, they have previous finance experience, they have previous blockchain and cryptocurrency experience.

We look to make sure that the founders don’t have a significant amount of the coin. You can also do your own research into coins through different block explorers, which is something we absolutely do to mitigate risk. Like, to give you an example, Dogecoin, the reason why we don’t buy Dogecoin is not only because it’s a meme coin, but also because the top 5 wallets have over 40% of all Dogecoin.

So there’s literally 5 wallets, out of millions of wallets, that have 40% of all the Dogecoin. So if one of those wallets wants to say, “Oh, I actually want to go buy an island. I’m selling all my Dogecoin.” Well, guess what happens to what you’re holding.

Scott: Yeah, that’s… I mean, that’s just tremendous amounts of risk there.

Jeff: Yeah, exactly. So those are the things we look at or like, you know, who are the wallet holders? Is there a few wallets that have a significant portion of the supply? Does the coin actually have utility? Do the metrics make sense? When I’m talking about metrics, like, another value add of looking into smart contracts is what it is, is like it’s a coin behind a blockchain.

And the blockchain is essentially like AWS, right? Where developers can come, build on top of the blockchain. So the more projects that come on top of the blockchain, the larger that ecosystem grows. And we look at a metric called total value locked, which is the amount of total value within, inside of a blockchain ecosystem. And the more value… We want to see that number consistently growing. And as it consistently grows, it just shows more and more conviction behind the developers and the users.

And those are the things that we look for, a mass adoption like that. And then like number of new wallets and specifically, number of active wallets. Sometimes the new wallets can kind of be propped up a little bit. So we look at actually active wallets, we look at transaction volume or transactions, you know, growing or decreasing. We want to see more transactions because that gives the coin more utility because it’s used as a gas fee. Right?

So every transaction on the blockchain, that coin is being used as a fee. Maybe you guys have heard of, you know, all the Ethereum transactions causing high gas fees.

Scott: Oh my gosh, yes.

Jeff: It’s because Ethereum does 12 transactions per second, but there’s millions of users. And the problem now is that it’s getting congested. So there’s a lot of… The fees on that chain are now way higher, 70, 80. It was even over, like, 200, 300, 400 bucks depending on when you were transacting on it. So we’re starting to see…

I mean, Ethereum’s already making the upgrades. There’s other chains that are 0.0001 cents for transactions now because the technology has gotten better. But those are the things we look at is like actual adoption, you know, actual money coming into that ecosystem, number of new wallets, all that type of stuff. And like I said, you know, I think the majority of crypto, unfortunately, is pretty non…it’s just nonsense.

And it’s difficult to evaluate. Very difficult. I mean, smart contracts are even somewhat difficult, but when you look at these other coins where you do not have that blockchain data and there’s not a lot of utility behind the project, it becomes very, very difficult to put some type of thesis together on why you’re making, you know, X, Y, Z investment.

Scott: Absolutely. You were talking about, you know, there’s that risk aspect, and that’s any investment. And then we look at crypto itself, you know, a lot of traditional investors just see it and they’re still saying, “Ooh, that is so risky. I can’t do it.”

Is crypto as risky as some say?

Jeff: I think it would depend who some is, but yeah, I think it’s definitely risky. I think what’s important is… I want to reiterate what I mentioned earlier and explain a little bit more about how I said Bitcoin is a teenager and how alt coins are… you know, they’re five-year-olds. And it’s the truth because they just came out.

So having some context, understanding like it’s… We’re playing with an infant child right now. And what do infant childs do when they come out of the womb? Guess what? They’re super happy one moment, they’re crying and screaming the next moment. The same thing with cryptocurrency because the market cap is low, people don’t really understand what’s going on yet. They don’t know how to put these, you know, valuation theses behind certain projects.

So the space is just highly, highly volatile. So if you don’t have conviction, absolutely, that’s very, very high risk. But if you have conviction and you understand what to look for and you’ve got the ability to make non-emotional decisions when there’s a lot of volatility, I think there’s huge, huge upside to have.

And I know this just through experience because I’ve been through…this is my third cycle that I’ve been through in cryptocurrency now. So I’ve seen, you know… I first started to get in in 2013, sold in ’14, got back in ’17. And I’ve been watching it very closely every day since 2017. So I expect these big drawdowns and it’s not a big issue for me because I have conviction in what I’m holding.

And I think that’s the important thing to realize that volatility is not necessarily risk. You have to understand and have conviction behind what you’re buying in order to not make that emotional decision. So absolutely, I think there’s more risk than buying stocks and bonds and some classes of real estate, but I also think there’s a higher risk to not being exposed to the asset class because of all the problems that’s happening with inflation and the way where economies are being globalized and how, you know, even the World Economic Forum said that $669 trillion worth of assets is likely to be tokenized.

And they’re including, you know, derivatives. And that was like, I think in the last six months they came together and said that it’s likely to be tokenized on a blockchain. So like mass adoption is coming. It’s very, very obvious. And I think it’s really important to decide, you know, what level of risk you want to take and allocate your portfolio as you see fit.

Like I said, I think it’s really important to realize that I think it’s actually more risk to not have exposure than to have exposure. And there’s studies that show, even from JP Morgan, if just in a regular 60/40 portfolio, 60% equities, 40% bonds, if you put 5% in Bitcoin over the past 9 years, you actually would’ve doubled the return of the portfolio and had a decrease in volatility.

So you got to look at the overall picture of your investment portfolio and then decide, you know, what percentage you want to allocate towards it.

Scott: Absolutely. All right. We’ve covered a lot of ground here. Jeff, are there any other maybe trends that you’ve noticed in this current landscape that investors should pay particular attention to that we haven’t already mentioned?

Jeff: Yeah. I think that a few things are really important. I think like, you know, we’re starting to invest in kind of infrastructure of the space as well. And that’s kind of… You know, the whole purpose of decentralization is to allow people and investors all around the world to run nodes and to run mining equipment.

Because that’s how the transactions run through the blockchain. So like even Elon Musk is partnering with a company called Blockstream to launch their own solar-powered Bitcoin mining facility. So there’s, like, some big institutions getting into it. We also run, like, validator nodes, which is on proof-of-stake blockchains. Like, we’re starting our own mining facility.

Already have just over 100 running right now, just a proof of concept, and plan on considerably scaling that. So I think it’s important to like, let’s get some exposure, definitely through some valuable coins, right, that have good token metrics. But then let’s also understand that probably having a piece in infrastructure is probably important to decrease volatility and understand that that’s where pretty much everything is running on, are these, you know, validator nodes and on the proof-of-work blockchains through mining equipment.

So I think it’s important to have, you know, some infrastructure. And then I think it’s important to look at certain sectors. So I always kind of run in my head, “Okay, what do I believe is going to have really big adoption in this time period, in this time period, in this time period?” To understand where it’s likely a good entry point to get into that sector in crypto. So like, you know, smart contracts can kind of be considered as an infrastructure play, but it’s kind of indirect because you’re using the coin behind the blockchain as opposed to investing pretty much right into the infrastructure of the blockchain.

But then I look at, okay, that’s great. We’ve got good exposure there. Let’s look at the next sector. I think Defi, there’s a lot of opportunity there. There’s already proof of concept almost, you know, even on Uniswap, they almost have a trillion dollars of volume that have run through that, which is insane.

Scott: Right. I mean, that’s incredible.

Jeff: Yeah. It is really incredible. I mean, that’s in the past like two years. So it’s pretty, pretty ridiculous how much growth Defi has seen. And it’s obvious that, you know, finance needs a revolution. It’s just run on, you know, dinosaur railways that are built… Why can’t we not send…why can’t I send 100 grand this weekend to someone?

It doesn’t make any sense.

Scott: Right. Exactly.

Jeff: Do you know what I’m saying?

Scott: It’s my money, I should be able to send it.

Jeff: Yeah. I mean, crypto just makes everything more efficient, and there’s also a lot of peer-to-peer lending going on, you know. Instead of having a bank, right, that has to pay for their building, they pay for their fax machines, their employees, all the fixed costs and overhead that they have. That all gets removed and replaced with protocol such as Uniswap where it’s community-owned, where we can actually go up and provide the liquidity to the short-term loans.

And we’re actually generating all the fees that the users pay for those loans. So instead of Bank of America taking the fees, the community, and, you know, millions of peers around the world that are doing the lending through the protocol are actually participating in those fees. So I think that’s a really, really big industry that’s likely to see a lot of growth over the next two years.

And I think, you know, this whole metaverse thing is nothing to look past. You know, to see companies like Facebook changing their entire name and brand around it, I think this is the real deal. I think this is where, you know, a lot of time and attention and money is going to be spent over the next 5, 10 years. And I think that that space is super, super early, but if you can find a prudent way to invest into some type of metaverse project and infrastructure in companies, I think that’s probably a decent idea as well.

But again, that’s kind of a longer-term, in my opinion, timeframe until we see, you know, a lot of user growth in different metaverse platforms.

Scott: So to sum it all up, lots of different trends for investors to keep an eye on and a lot of exciting things happening across the blockchain world, the crypto world and beyond. Jeff, thank you so much for joining me on the show today, offering your insights. And if folks want to connect with you, maybe find out more about your fund and the things going on there, where can they do that?

Where should they go?

Jeff: Yeah. So we work with just accredited investors in our funds. We also have like an education platform where people that are not accredited, or even people that are accredited, they want to learn more about the space, they can actually learn, look at like an actively managed portfolio and understand what this whole asset class is and potentially how to, you know, allocate it in a confusing exponentially growing asset class.

So if you have any interest in learning on the education side, or even about our funds, if you’re an accredited investor, you can text the number 877-771-0615. And all you need to do is text the word “crypto” to that number. So I’m sure we’ll drop that below.

And if you also want to just follow me, I’m on Instagram, Twitter, YouTube @JeffSekinger. So just my name on all those platforms.

Scott: Fantastic. Thanks again, Jeff.

Jeff: Yep. Thank you so much, Scott. I appreciate it. It’s been fun.

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Scott Hawksworth

Hailing from Evanston, Illinois, Scott is co-founder of Cryptogic as well as host of the several popular crypto podcasts. Scott believes that cryptocurrencies and NFTs represent a once-in-a-generation opportunity for investors of all types to participate in the future of decentralized networks.