1/ Spent the day at the Coinbase State of Crypto summit.
10/10 event.
Many pensions, endowments, brokerages, asset managers, banks, etc in attendance. Leaving very optimistic.
Scribbled notes during some talks, sharing here:
10/10 event.
Many pensions, endowments, brokerages, asset managers, banks, etc in attendance. Leaving very optimistic.
Scribbled notes during some talks, sharing here:
2/ Brett Tejpaul (head of institutional) opened up the event.
- there's a huge generation of wealth ($70 trillion) going from old to young. 90% of this young generation is disillusioned with the financial system
- 1/3 of the top 100 hedge funds in the world are already onboarded with Coinbase
- there's a huge generation of wealth ($70 trillion) going from old to young. 90% of this young generation is disillusioned with the financial system
- 1/3 of the top 100 hedge funds in the world are already onboarded with Coinbase
3/ First panel with Alesia Haas (coinbase CFO) and b (CIO of ETF/Index investments at blackrock)
Baller panel, maybe my favorite. Lot of notes.
Samara:
- Got pitched 5 years ago on doing Bitcoin ETFs. Said no need. Now institutional demand for Bitcoin forced them to do it
- Today 80% of their Bitcoin ETF is bought by self-directed investors buying through their own brokerage... still huge wave of institutional capital coming
- Financial advisors still wary but that’s their job to be wary
- Can’t comment on eth etf bc have active filing
- Also excited about tokenization... demand for tokenized funds (tokenized short duration treasury fund) coming from crypto native firms doing treasury management
- We saw digitization of every asset. Now we’re going to see tokenization of every asset, feels obvious
- Tokenized treasuries shouldn't compete with stablecoins. Stablecoins are for payments. Money market funds are a liquid investment strategy
- Few years ago we thought private permissioned blockchains would lead. We now realize public blockchains are better so we don’t fragment liquidity
- Crypto has a branding problem. This term RWA means something totally different in banking world. Also implies crypto isn’t real world assets. Need to stop using "RWA"
Alesia:
- 40% of institutional clients adopt 3+ products in their first quarter
- Net inflows of $12b in 3 months fastest growing in history
- Both coinbase and blackrock have many clients sitting on sidelines waiting for regulatory clarity
- Does coinbase support trump? We’re here to support 52m americans who hold crypto and they can vote however they want to vote
Baller panel, maybe my favorite. Lot of notes.
Samara:
- Got pitched 5 years ago on doing Bitcoin ETFs. Said no need. Now institutional demand for Bitcoin forced them to do it
- Today 80% of their Bitcoin ETF is bought by self-directed investors buying through their own brokerage... still huge wave of institutional capital coming
- Financial advisors still wary but that’s their job to be wary
- Can’t comment on eth etf bc have active filing
- Also excited about tokenization... demand for tokenized funds (tokenized short duration treasury fund) coming from crypto native firms doing treasury management
- We saw digitization of every asset. Now we’re going to see tokenization of every asset, feels obvious
- Tokenized treasuries shouldn't compete with stablecoins. Stablecoins are for payments. Money market funds are a liquid investment strategy
- Few years ago we thought private permissioned blockchains would lead. We now realize public blockchains are better so we don’t fragment liquidity
- Crypto has a branding problem. This term RWA means something totally different in banking world. Also implies crypto isn’t real world assets. Need to stop using "RWA"
Alesia:
- 40% of institutional clients adopt 3+ products in their first quarter
- Net inflows of $12b in 3 months fastest growing in history
- Both coinbase and blackrock have many clients sitting on sidelines waiting for regulatory clarity
- Does coinbase support trump? We’re here to support 52m americans who hold crypto and they can vote however they want to vote
4/ Regulatory panel
@iampaulgrewal
- Lot of activity for coinbase has been through litigation, finally seeing progress in congress today
Simon O’Brien, ADGM
- Abu Dhabi. 2018/2019 we leaned in. We thought if we get this wrong then our investor community will get mad. We publish the rules then haven’t changed much since. Important for regulators not to change rules all the time but always be improving
- there’s a risk for regulators who publish them then change rules every 12 months.
- only way to create good regulation is to engage with the industry
- mistake regulators make is regulatory rules then not having good ops team and not enough capital
@joshualipsky
- 4b people gong into election season
- crypto is high on agenda and will stay high
- there's a new realization that crypto will be part of the global economy
Lisa Cameron
- crypto helps people who have been left behind by the financial system, now crypto is important for politicians more than ever
@iampaulgrewal
- Lot of activity for coinbase has been through litigation, finally seeing progress in congress today
Simon O’Brien, ADGM
- Abu Dhabi. 2018/2019 we leaned in. We thought if we get this wrong then our investor community will get mad. We publish the rules then haven’t changed much since. Important for regulators not to change rules all the time but always be improving
- there’s a risk for regulators who publish them then change rules every 12 months.
- only way to create good regulation is to engage with the industry
- mistake regulators make is regulatory rules then not having good ops team and not enough capital
@joshualipsky
- 4b people gong into election season
- crypto is high on agenda and will stay high
- there's a new realization that crypto will be part of the global economy
Lisa Cameron
- crypto helps people who have been left behind by the financial system, now crypto is important for politicians more than ever
5/ Good chat with @brian_armstrong and @CathieDWood
- This is the biggest economic revolution of my life. This is just as big as AI, there will probably be a convergence of crypto and AI
- Economic freedom underpins all global progress. We want to increase economic freedom globally
- Our biggest obstacle is regulatory clarity
- Brian just back from DC: Senate is excited to move crypto legislation forward
- Turf war between cftc and sec, we think investment contracts are securities and tokens are commodities. At this point need congress to step in and act
- Retail led this industry but now institutions here
- 56% of fortune 500s working on something onchain
- Regulatory clarity will push institutions from 1-2% to 5-10%
- Cathie says flows are mostly retail for ETF bc platforms haven’t approved (interesting, same as blackrock)
- We haven’t seen the real demand for ETFs bc Morgan Stanley UBS etc haven’t started pushing
- Brian says most exciting thing at company is Base
- Also exciting: derivatives and our smart wallet (makes onboarding much easier)
- Crypto started as asset class, now moving to real world utility
- Centralized exchanges will be great for a bit but they're a moment in time. It will all be peer to peer with no intermediaries and onchain
- Coinbase moving our products onchain
- Payments are like water they flow to path of least resistance
- We want adjusted ebitda to be positive in any market. Means moving from trading fees to subscriptions and services which is more predictable
- Been able to reduce costs a lot while investing in innovation
- Last piece of big puzzle is international expansion. 17% of revenue today. We’ve picked 10 markets. “Go deep markets”
- International grew faster than US in Q1
- Then with self custody wallets we have our “go broad” strategy
- Whole group of people growing up today who will never have bank account, their phone is their wallet
- Coinbase as a company won’t disrupt big incumbents like visa. But protocols that we build and contribute to could do that
- This is the biggest economic revolution of my life. This is just as big as AI, there will probably be a convergence of crypto and AI
- Economic freedom underpins all global progress. We want to increase economic freedom globally
- Our biggest obstacle is regulatory clarity
- Brian just back from DC: Senate is excited to move crypto legislation forward
- Turf war between cftc and sec, we think investment contracts are securities and tokens are commodities. At this point need congress to step in and act
- Retail led this industry but now institutions here
- 56% of fortune 500s working on something onchain
- Regulatory clarity will push institutions from 1-2% to 5-10%
- Cathie says flows are mostly retail for ETF bc platforms haven’t approved (interesting, same as blackrock)
- We haven’t seen the real demand for ETFs bc Morgan Stanley UBS etc haven’t started pushing
- Brian says most exciting thing at company is Base
- Also exciting: derivatives and our smart wallet (makes onboarding much easier)
- Crypto started as asset class, now moving to real world utility
- Centralized exchanges will be great for a bit but they're a moment in time. It will all be peer to peer with no intermediaries and onchain
- Coinbase moving our products onchain
- Payments are like water they flow to path of least resistance
- We want adjusted ebitda to be positive in any market. Means moving from trading fees to subscriptions and services which is more predictable
- Been able to reduce costs a lot while investing in innovation
- Last piece of big puzzle is international expansion. 17% of revenue today. We’ve picked 10 markets. “Go deep markets”
- International grew faster than US in Q1
- Then with self custody wallets we have our “go broad” strategy
- Whole group of people growing up today who will never have bank account, their phone is their wallet
- Coinbase as a company won’t disrupt big incumbents like visa. But protocols that we build and contribute to could do that
6/ Payments panel with St Jude, PayPal, EY, Google, and OpenAI
Didn't take notes sorry
But did have lunch with @RichJWidmann and damn, google is taking very crypto seriously, think everyone is sleeping on this
Didn't take notes sorry
But did have lunch with @RichJWidmann and damn, google is taking very crypto seriously, think everyone is sleeping on this
7/ CIO perspectives
The other contender for best panel
Sebastian (coinbase asset management)
- Coinbase: this is the first real institutional cycle
- As an industry we've already put $50b into venture… next to come are hedge funds
- Still no standard to value things and that’s bc lack of regulatory standards. Still a very inefficient market so conversations about valuations are tough
- RWA is a terrible term
- Eventually you’ll have 100% exposure to crypto assets bc crypto rails will sit underneath all assets
- Every pension had a DAWG (dig assets working group). Didn’t go well. This is second chance. Haven’t got green light for second chance yet but close. 2024 people not doing. 2025 everyone will
Matt Halstead (teacher retirement system of texas)
- Crypto is so much. It’s just a format and a standard for how things move around
- Crypto is the merger of communications networks and financial networks
- It’s not controversial to allocate to emerging tech but people struggle with crypto bc brand problem
- Conversation about going to zero not right question. It’s if this happens how much liquidity is there and how fast will it happen. I have 10x upside, I can bet that in size, and my downside is 25-50%. No opportunity like this exists in the world. Institutions will wake up to this. This is a trade that comes across infrequently in a career
- Tokens conflated with cryptocurrencies which is conflated with Bitcoin and people don’t like that bc branding around industry is so bad
- Biggest challenge is that institutions work with buckets bc of outdated consultants and portfolio constructions from years ago
- Talk about people using crypto misses the point. This will all be AI agents. We’re building for a future world none of can predict
- 5 years 5% adoption. Long term 100% adoption
Blue Macellari (t rowe price)
- Bitcoin is the one people start with but it’s hardest to get mind around. We start with hardest first
- ETFs have brought conversation to mainstream
- If you’re not buying crypto you’re short the market
- Conversation has moved from why would we do this to how do we do this
- Does 1% allocation make sense? Not really. That’s an arbitrary number. It should be greater than 1. Maybe 3 maybe more. There’s a psychological thing for people to ease it, it’s a bit of a paradigm shift
- If someone says blockchains are great but tokens are scams, that’s cognitive dissonance
- We still have people internally who say it’s just a ponzi or just used for illicit activities. Then have people who say it’s interesting but no cash flow so can’t put into traditional framework
- When soros shorted the pound and the pound crashed did we sit around say this is the end of the pound. Duh no
@Matt_Hougan
- Institutions over allocated to VC now focus moving to liquid
- Institutions are essentially short crypto bc the ability to buy is there and they’re not pushing the buttons
- On how to value Bitcoin: Bitcoin provides a service. Service of storing wealth without relying on a government or an existing institution. No different than any company. It’s a service. More people who want the service higher value goes up
- We take 20k meetings/year. Crypto not blockchain slide used to be our most used slide, now it hasn't been used in years. That's progress
- Used to talk about 1% allocation. Now we talk about 3-5%
- Many started with venture bc career risk or bc they didn’t know how to diligence tokens. Illiquid and liquid returns will start to diverge
The other contender for best panel
Sebastian (coinbase asset management)
- Coinbase: this is the first real institutional cycle
- As an industry we've already put $50b into venture… next to come are hedge funds
- Still no standard to value things and that’s bc lack of regulatory standards. Still a very inefficient market so conversations about valuations are tough
- RWA is a terrible term
- Eventually you’ll have 100% exposure to crypto assets bc crypto rails will sit underneath all assets
- Every pension had a DAWG (dig assets working group). Didn’t go well. This is second chance. Haven’t got green light for second chance yet but close. 2024 people not doing. 2025 everyone will
Matt Halstead (teacher retirement system of texas)
- Crypto is so much. It’s just a format and a standard for how things move around
- Crypto is the merger of communications networks and financial networks
- It’s not controversial to allocate to emerging tech but people struggle with crypto bc brand problem
- Conversation about going to zero not right question. It’s if this happens how much liquidity is there and how fast will it happen. I have 10x upside, I can bet that in size, and my downside is 25-50%. No opportunity like this exists in the world. Institutions will wake up to this. This is a trade that comes across infrequently in a career
- Tokens conflated with cryptocurrencies which is conflated with Bitcoin and people don’t like that bc branding around industry is so bad
- Biggest challenge is that institutions work with buckets bc of outdated consultants and portfolio constructions from years ago
- Talk about people using crypto misses the point. This will all be AI agents. We’re building for a future world none of can predict
- 5 years 5% adoption. Long term 100% adoption
Blue Macellari (t rowe price)
- Bitcoin is the one people start with but it’s hardest to get mind around. We start with hardest first
- ETFs have brought conversation to mainstream
- If you’re not buying crypto you’re short the market
- Conversation has moved from why would we do this to how do we do this
- Does 1% allocation make sense? Not really. That’s an arbitrary number. It should be greater than 1. Maybe 3 maybe more. There’s a psychological thing for people to ease it, it’s a bit of a paradigm shift
- If someone says blockchains are great but tokens are scams, that’s cognitive dissonance
- We still have people internally who say it’s just a ponzi or just used for illicit activities. Then have people who say it’s interesting but no cash flow so can’t put into traditional framework
- When soros shorted the pound and the pound crashed did we sit around say this is the end of the pound. Duh no
@Matt_Hougan
- Institutions over allocated to VC now focus moving to liquid
- Institutions are essentially short crypto bc the ability to buy is there and they’re not pushing the buttons
- On how to value Bitcoin: Bitcoin provides a service. Service of storing wealth without relying on a government or an existing institution. No different than any company. It’s a service. More people who want the service higher value goes up
- We take 20k meetings/year. Crypto not blockchain slide used to be our most used slide, now it hasn't been used in years. That's progress
- Used to talk about 1% allocation. Now we talk about 3-5%
- Many started with venture bc career risk or bc they didn’t know how to diligence tokens. Illiquid and liquid returns will start to diverge
8/ Consumer panel
@benleventhal + @sid_coelho + @js_horne + @lay2000lbs
Didn't take notes on this because was too fired up about pleasr's album launch but panel was great
@benleventhal + @sid_coelho + @js_horne + @lay2000lbs
Didn't take notes on this because was too fired up about pleasr's album launch but panel was great
10/ Last panel of the day with @WileyNickel and @faryarshirzad
Only caught the end so no notes.
Only caught the end so no notes.
11/ Timeline feels bearish. Sentiment feels low.
But I'm telling you, if you were at this event, you'd realize it's back up the dump truck time.
Stage 3 on the horizon.
Big thanks to @CoinbaseInsto for hosting, great event. Hopefully I didn't botch these notes too much :)
But I'm telling you, if you were at this event, you'd realize it's back up the dump truck time.
Stage 3 on the horizon.
Big thanks to @CoinbaseInsto for hosting, great event. Hopefully I didn't botch these notes too much :)
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