It’s Thursday, August 22nd. And this is Markets Daily hosted by me Jen Sani. As you know, on this show, we navigate the current shaping the crypto markets, providing insights against the broader financial landscape. So whether you are actively trading or simply just fascinated by the volatility of crypto markets. The show is your compass to understanding what’s happened where we are and where we’re going. Joining the show today is founder Ceo and Cio of one round table partners and 10 T holdings, Dan Tao Dan. Welcome to the show. All. Glad to be here. Happy to be here. Happy to have you here. Now, this show is all about the crypto markets. Talk to me about what you’re watching this morning, I guess, you know, look, I look at things from a lot of different perspectives. I mean, I always start with a big uh global macro, you know, what is the, what are the big central banks doing? Uh you know, what is liquidity look like? What are the broader markets doing? Um And I think, you know, right now, um my focus is the, the two year and the 10 year notes in the us have dropped down to new lows in yield. Uh, the 10 year, I think, uh in the three seventies now and the two year 390 this is a trend that I’d been anticipating for quite a while. Um, the drop in inflation that we’ve had over the last 18 months has been pretty severe and the FED has maintained a much tighter than expected policy at least by me. Um, to be fair. I did not expect them to raise from 0 to 5%. And as quickly as they did frankly, I thought it was a bit unwarranted. Um but growth stayed stronger than, you know, one might have expected. Um And now I think we’re seeing a pretty severe slowdown. And so, uh the unemployment numbers uh last time around were weaker than expected and, you know, every bit of data for the past 23 months uh has more or less slowed down. Except for me, the housing data which is just picked up a little bit in the US. Um In Europe, Europe has been weak. The Swedish central bank, in fact, just cut rates. The UK is a cutting. Um and most concerning, I guess is China, I mean, China’s economy has been very soft over the past year and uh rates there are back down to 2%. So I start with this picture of where is the macro economy going? Um I think we’re slowing, not a recession or a panic necessarily. But um and, and I think that’s going to be, and it has been, has been bullish for gold. Gold just made an all time high. Uh you know, last week. And I think people in the new world and the crypto digital world, the world that I’m in, uh they ignore, you know, some of these traditional market uh prices, but gold making an all time high is a sign of uh liquidity coming and also the dollar I think has begun its bear market. Uh the euro yesterday hit, you know, 111 that was the highest level in some time. And I think it’s gonna continue. And so over the next 234 months, as I look out, I’m very bullish on Bitcoin and Ethereum. Those to me are the core assets of the digital asset ecosystem broadly as I call it, the other cryptocurrencies to me are more venture projects. I think Solana probably is the one Cryptocurrency that’s maybe moving towards becoming a core asset. Um But I look at that uh broad uh background of the traditional macro and I think it’s very supportive uh for, you know, uh core crypto. But if you look beyond just the, the core assets, you see that the uh the um level of usage and interaction with blockchains has really exploded in the last six months. Part of that uh is attributable to, you know, the E and, and Bitcoin ETF S that have brought new people into the ecosystem. Uh Part of it is a, is a result of Coinbase L two base which is on boarded, a lot of people into DFI. Uh you have new things like D pen and RW A which are small but are taking off. And of course, the Stablecoin business has been extremely strong. So you look at, uh, um, I look at it as you see from 20,000 ft, you’re watching everything this morning. You know, I can’t avoid it. I don’t know, I, I, I’m an old guy in the space and I, I spent, you know, 25 years uh managing a portfolio and, and trading in the old macro markets uh and was a gold guy and still am. And I think crypto people look at me and like, how can you be a gold guy and a Bitcoin guy? Uh and then deeper down the companies we invest into are all ones that are very active within the broad digital asset ecosystem. And so through TT and one RT, uh I’ve invested into 24 different businesses in the space in the growth stage. Uh We’ve deployed uh the A um today I think is about 1.4 billion. Uh We have board representation on 12 of our 24 businesses. Uh So we really know what’s going on within what I call the growth stage. So that’s a lot, there’s, there’s a lot, there, there are some things I want to narrow in on, on what you just said. And one of them is you being a gold guy, like you said, gold recently hit its all time high while Bitcoin is in um kind of a holding pattern unable to break through its current levels. Talk to me about the similarities and differences you see between the two because as you know, many of the refer to Bitcoin as digital gold, but it seems like the two are performing um a little bit differently each other right now. Well, you know, I, I would really say that, I mean, they are, of course, because Bitcoin is massively outperformed gold over any uh time period, reasonable, long term time period. But uh I mean, look as uh our, our funds are 10 year life funds. I’m a long term investor. Uh The difference between Bitcoin at 16 70,000 is nothing like I, for me, essentially Bitcoin is at the all time high. Um whether it’s 10 or 15% lower or higher, it’s still um I think we’ll be, you know, over the next six months I think will be over 100,000 of Bitcoin and probably over around 5000 in each as well. I mean, I, I think this, there’s a big bull uh rush coming and look sometimes gold is maybe a little ahead, sometimes it’s behind. Um You know, I, I think because uh Bitcoin is broadly speaking, more of an emerging asset at least versus gold, which is 5000 years old, it tends to be um more uh you know, there’s more gamma there, it moves more quickly. And I think the upside, of course, in Bitcoin is, and it is much greater, but both are a reflection of global liquidity trends. And so when liquidity is plentiful, which I think the markets are beginning to sense that it’s going to become uh these liquidity assets. Uh move. Uh what I would say more importantly is that with or without or regardless as to whether, where, where the short interest rate is the federal reserve short interest rate. The activity uh in the unchained world uh has, I don’t know, is up at least 100/100 percent in the last six months. And that’s what the rates having stayed to the same place. And I keep saying to people look when the interest rate the uh was zero. Bitcoin was around 65,000. The peak in 21 rates went to 5% they’re still there. And Bitcoin is now at the same price when that short rate goes from five down to 2.5 or three, a Bitcoin should easily double just on that. Forget about all of the myriad wonderful developments going on on chain and in this space, all the innovation, forget about all of that. If you just look at that one measure, uh I think there’s cause for being super bullish right here. Well, on that note, we know that fed chair, Jerome Powell speaking at Jackson Hole today. What are you expecting to hear? You know, I don’t really listen to that too much. Um I think the market’s already, uh, moving towards pricing in, uh, you know, the right scenario. I, I think he sees the data. He’s been a little bit stubborn, I think easing because they were late to hike and uh and then they over hiked. And um you know, look at the two year note, as I said, is it a 3.9 yield? The fed funds rate is 55 and a quarter, it’s already massively inverted. So the market already has is pricing in uh multiple cuts coming from him in the next six months. My guess is he just confirms what the markets already have priced in. Let’s broaden it out a little bit outside of the US. You mentioned that you follow uh global economic trends when you are looking at your strategy, what should folks who are investing in crypto be looking at when it comes to economic data maybe outside of the US borders? Well, that’s a, that’s a good question. Normally folks investing in crypto just kind of YOLO, you know, into some like, you know, crazy. Uh you know, I don’t know, low uh market cap coin and hope it goes up 1000 eggs, right? Or they’re playing in Dozier or whatever it is. I don’t really do that. Um I mean, I, I think that this sector, um you know, is, I don’t wanna say it’s mature but people don’t often realize, look this 300 I’m sorry, there’s $3.5 trillion of value sitting in this digital asset ecosystem. So that’s 2.5 trillion is the value of all of the cryptocurrencies plus another trillion uh of value in the equity, the businesses in the space. And so the macro at this stage, and I think for this next stage is important. Um China is the second largest economy out there. I think you’ve got it, you’ve got to be in touch with what they’re doing over there and it’s not that difficult, you know, you don’t, I mean, I have a Bloomberg of course, as I have for 30 years and I know many people don’t, but, you know, you can find the economic data, you know, the money supply in China has been very weak. Uh the consumer has been soft, real estate prices have come in quite a lot and they’ve had, you know, a lot of difficulty with their stock market. The um the Hong Kong market earlier this year um was at a price that essentially was unchanged from over 20 years ago. Now, imagine, I think it’s improved a little bit. But imagine in the US, if the NASDAQ were at the same price that it was 20 years ago. I mean, the whole country would be in uh you know, a revolution. Um I guess what I’m saying is, is that things have been weak there and I think that’s exerted a deflationary pressure to the rest of the world and I think actually helped slow our, the US inflation uh picture a bit. So the, the world is completely interconnected. Um It’s just, you know, as you said, it’s a lot to keep track of and sometimes it doesn’t necessarily have an impact, like, you know, there are times when China can be weak and it may not mean much for the rest of the world. But right now, I think we have sort of a synchro global slowdown. It’s not diabolical, it’s not, you know, cataclysmic or anything, but it’s definitely a slowdown that’s gonna lead to lower short interest rates, a bear market in the dollar, which is not bad dollar going down 10 15%. And I think very supportive um for the main crypto assets as well. So it’s, it’s really China Europe doesn’t really move, you know, it doesn’t move that much. It grows 2% or it doesn’t and inflation pops up and comes down. So, um interestingly though, you know, we have a pretty significant position in Krak and the second largest exchange in the US, you know, after Coinbase, it’s a private company, of course, and they have 60% market share of the entire European market. And we were just updating our analysis there. And I didn’t realize that the European crypto market is actually in volume terms larger than the US. Um So, um this really is, uh and of course, Asia is, is quite big as well. And um you know, Brazil has, you know, shown quite a lot of growth. So this really is a global macro phenomena, the, you know, invention of Cryptocurrency, the advent of crypto. Um you know, every, I always say it’s the, it’s the, it’s the biggest global macro trade uh of all time. Um largely because you have people in each country around the world who actually up and down the socio-economic strata, no matter what your wealth is, no matter, you know, own Cryptocurrency. And so it’s very widespread, the uh the ownership. And so, um you know, and that’s because it’s decent wise to begin with. And I, you know, I think um this is something that we haven’t seen before uh global currencies, which I traded for many, many years, realistically, there are only like 15 currencies that are really tradable, you know, for, and, and now, well, not only do you have many different cryptocurrencies, but you have people all around the world able to transact in all sorts of things all the time. I mean, it’s uh a phenomenal innovation. I, I just don’t know why everyone else is taking so long to, to get it right in terms of global adoption being further along. I want to talk about specific much extra specific sector. Now, before we wrap up our conversation at the beginning of the show, we talked a little bit about one round table. You said that you invest in mid to late stage uh companies in the digital asset ecosystem. Talk to me about what companies you see saw a well, not what companies, what sector you saw a lot of growth in this year. And if you think that sector will continue to see growth or if the pension from an investor standpoint is shifting to another sector that we might see a spotlight on next year. Yeah, it’s a good it it’s too bad. I can’t share some of these charts with you here, but I mean, I have this great chart total active addresses across all blockchains. OK. In June hit 53 million. All right, six months ago, that number was 20 million. There aren’t that many things that grow 100 and 50% like that in six months. These are really, I would show you really uh you know, fantastic that it does really look up into the right. It’s up into the right. I mean, I look at mobile wallet users just reached an all time high total unchained transaction across all blockchains 7.4 billion. So Dan, I got to ask you though, what do you think is driving this? What do you think is driving this are new people coming to the space are the folks who are already operating in the space, putting more attention into it, opening more wallets. What’s driving this growth? I think, um, the people, the initial adopters, let’s just call it who maybe originally have only maybe purchased a little bit of Bitcoin in e um, are becoming more crypto native and maybe they’re using their ledger live off their ledger to get into, uh, defi people are more active staking. I think there’s a little bit of this, you know, hysteria around the mean coins again, you know, I there’s, there’s a reason for it. Um But uh iii I wouldn’t push that too, too much. Um Stablecoin. Um I, I think stablecoins, especially on, for instance, Tron have exploded, you know, when you look at the revenues of the top four blockchains, you know, you’ve got E Bitcoin, uh Solana Tron five, you know, 34 years ago, it was really just Ethereum. There was no building on top of Bitcoin, right? So on that did not exist, Tron essentially was not used as a, as a payments network. Um So I think, you know, there are many more um use cases that I think are developing that are crypto native. And so for the crypto native people, uh I think that digital asset world, that world, uh the on chain world has exploded. Also the base layer to the Coinbase layout makes it very easy for uh people coming into the space through Chi to then move immediately into D five. So I think that’s a big thing and we can’t forget the Bitcoin ETF. I don’t think it’s onboarding people so much into the unchain world immediately. But, you know, for every person that buys Bitcoin in their equity account through an ETF, which I don’t think is a great way to go about it, but it’s on boarded a huge number of people after sitting there with their Bitcoin a little bit, they start to do more research, they investigate what’s going on in the space. What’s going on with this guy micro strategy, you know, who’s talking about, you know, Bitcoin going to whatever 500,000, you know, Cathy, what, what are these people talking about? Why are they so excited? And then as people investigate and dig into the space, um they, then, you know, we’ll move into define maybe they start staking, uh you know, there’s all sorts of stuff. I think the one sector that’s lagging right now is the, is the NFT uh metaverse Blockchain gaming uh area which was very hot in 21. Uh That’s sort of behind what’s going on in these unchained uh ecosystems. Um I think that will change. Uh It’s just that it got very overhyped and I think it’s still struggling a little bit for, you know, to find uh its use case is how I, how I call it. Whereas something like stablecoins you know, last year settled about $10 trillion. If you think about, you know, dollars of stablecoins were settled, uh, 34 years ago, that number was zero, literally zero. So, look, iii I don’t, I don’t see that growth rate continuing for stables, but could we end up, you know, settling 30 $50 trillion you know, a a absolutely. Um, but, you know, I, I’m very focused on, um, the sort of innovative use cases but um focused on the equity of businesses that have figured out how to monetize um the, the business area that they’re in. So the venture guys are looking for great ideas and they’re making a, you know, 100 bets and hoping one of them ends up being Google or something like that. Um We, we are not, we’re investing in companies generally making, you know, 30 40 50 million in revenue already. Um you know, companies between $500 million in value uh and uh you know, a few billion and hoping to make a uh a 5 to 10 X return, whereas a lot of the venture guys with the me, you know, doing the uh the more speculative investment in coins directly, I think really are trying to make a 50 or 100 X. So we have more of a sort of an institutional type, larger investor, a focus on the space um rather than a specific uh you know, a specific sector focus. Dad. Thank you. So much for joining Markets Daily this morning. It was a pleasure and thank you for watching. That’s a wrap for Markets Daily. If you like to listen to us, subscribe to the Coin Desk podcast network that is available on all podcast platforms. And if you like to watch, subscribe to our youtube channel and give us a thumbs up. Thanks so much for watching today. We’ll see you on Monday.