Transcript
Introduction
Patrick
In episode one of Hash Power, we explored blockchains as a technology, how they work, why tokens, also known as cryptocurrencies, are an integral part of any blockchain, and how these new networks might change the world. In episode two, we spend time with the leading investors in the field. Like any frenzied asset class, there are countless cryptocurrency hedge funds popping up everywhere. But founders from three of the original firms, Polychain, MetaStable, and BlockTower Capital, are our primary guides this week.
As I speak, the total market cap of all cryptocurrencies is $136 billion. There are hundreds of tokens currently available, but Bitcoin and Ethereum still represent 75% of the total market. $136 billion sounds like a big number, but it's tiny relative to any other asset class. And I use that term with hesitation. To put it in perspective, that's exactly the same size as the market cap of IBM. But IBM has more than $10 billion of earnings. Tokens have none. As you will hear, valuing tokens is a very hard exercise. I said it emphatically during the introduction to episode one, but given that this is the investing episode, let me say it with even more emphasis. None of what you are about to hear is investment advice of any kind. Just as you shouldn't buy Apple stock because you love their products and hope to outperform the broad market, you shouldn't buy any cryptocurrencies without deep, personal research and consideration. A big part of my goal with this episode is to introduce you to the players who are shaping the investment ecosystem and how the investing ecosystem, with exchanges, trading, and weird custody problems, works in action. Collectively, our guests run hundreds of millions of dollars, likely now approaching a billion dollars, in pure-play cryptocurrency investment strategies. While we do explore examples of how to think about individual tokens, these are not investment recommendations. Rather, this is an introduction to the various stages of cryptocurrency investing, from early-stage white papers to full-fledged liquid tokens, and the strategies and skillsets being deployed by the pure-play investors.