YouSaid · the spoken record

Pranav Kanade

lines on the record: 83
first: 2024-04-30
most recent: 2024-04-30
sittings or episodes: 1
sources: podcast

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“So, unfortunately, cannot market the fund on a podcast. So it's a QP-only fund, so I can't talk about it. But you can find my substack at killerapps.substack.com. Haven't written in a while, but I should probably go back and write.”
2024-04-30 · Forward Guidance · The Crypto Endgame in 2024 | Fireside Chat with Pranav Kanade, portfolio manager of the VanEck Digital Assets Alpha Fund · IDENTIFIED FROM THE TRANSCRIPT
“Think at its core, it makes sense, but no one's ever made a great product. So it's still like TBD, whether it will happen. So if in my experience, they're oftentimes great ideas. It's just a matter of time when they can come to market and someone builds them and it works. So that second one of getting paid for reinforcement learning, it's probably one of those things that's a great idea, but it's probably like years and years out.”
2024-04-30 · Forward Guidance · The Crypto Endgame in 2024 | Fireside Chat with Pranav Kanade, portfolio manager of the VanEck Digital Assets Alpha Fund · IDENTIFIED FROM THE TRANSCRIPT
“Still, are a believer in the promise of Web3 of people being able to own their own data and being able to profit from and enjoy in the fruits of their data having value, what was called Web3, definitely an overused term, but you still think that that is a serious use case that crypto can help with.”
2024-04-30 · Forward Guidance · The Crypto Endgame in 2024 | Fireside Chat with Pranav Kanade, portfolio manager of the VanEck Digital Assets Alpha Fund · IDENTIFIED FROM THE TRANSCRIPT
“Biggest reasons for that is the user experience of being on chain is not great. You know, you have to download a MetaMask wallet, a some wallet, write down some private keys, and then still click buttons to do things. So I think having a language-based interface to do things on chain will potentially succeed. I need AI agents for that. So that's one area. The other area is around sort of this reinforcement learning thing, which is when you or I go and do things on chat GPT or Claude or one of these large language models, we're helping that thing learn. And we should be getting paid for doing that, right? Like, you know, these systems don't pay us for doing that. So if someone can pay users for reinforcement learning through sort of small micro payments on the tokens, that's pretty interesting. I'm intrigued by that category.”
2024-04-30 · Forward Guidance · The Crypto Endgame in 2024 | Fireside Chat with Pranav Kanade, portfolio manager of the VanEck Digital Assets Alpha Fund · IDENTIFIED FROM THE TRANSCRIPT
“At this moment, I think most things in crypto and AI is pretty nonsense. I think most of it doesn't really make any business sense. I think the area that is interesting is maybe there's two kind of areas that are interesting to us. Number one is making the user experience for crypto users better. So simplistically, people want to communicate in natural language. So Jack, when you want to buy some NFT, you want to just be able to type, hey, take my ETH and buy me this NFT that might sit on Bitcoin or Solana wherever. And you need, it's better if some AI agents just do that for you rather than you sort of click a bunch of buttons and figure out how to do that yourself, right? So you just want to communicate to it in natural language and it does all these things on the back end. And there are some projects that are sort of doing that. We think that's an interesting area because we think, again, going back to one of the fundamental problems, 350 million people own crypto and some exchange, very few on-chain users, winning one of the”
2024-04-30 · Forward Guidance · The Crypto Endgame in 2024 | Fireside Chat with Pranav Kanade, portfolio manager of the VanEck Digital Assets Alpha Fund · IDENTIFIED FROM THE TRANSCRIPT
“What do you think about crypto projects and protocols that attempt to do stuff in the artificial intelligence AI space or at least market themselves? And which projects, how do you try and tell which, if any, any projects are legit versus, oh, AI is the hot new thing. I'll just start a new token called AI coin.”
2024-04-30 · Forward Guidance · The Crypto Endgame in 2024 | Fireside Chat with Pranav Kanade, portfolio manager of the VanEck Digital Assets Alpha Fund · IDENTIFIED FROM THE TRANSCRIPT
“Lot of hype. Would love to see what the use cases are. So it's clear that you can build up a massive amount of supply of staked Ethereum for restaking purposes and provide that restaked need for security. I would love to see what the use cases are to justify the hype. So who is going to use that restaked ETH? What are they willing to pay for that security? And how big is that market? And I think those are the big unknowns.”
2024-04-30 · Forward Guidance · The Crypto Endgame in 2024 | Fireside Chat with Pranav Kanade, portfolio manager of the VanEck Digital Assets Alpha Fund · IDENTIFIED FROM THE TRANSCRIPT
“Sort of becomes this focal point for the theorem ecosystem. So the game is not won, right? I'm not saying the game has been won. It's just I'm saying there's one ecosystem that cares about user experience at this moment more than the other.”
2024-04-30 · Forward Guidance · The Crypto Endgame in 2024 | Fireside Chat with Pranav Kanade, portfolio manager of the VanEck Digital Assets Alpha Fund · IDENTIFIED FROM THE TRANSCRIPT
“People who own crypto assets on an exchange and very few users on chain. And that has to be the key problem people have to solve. Solana has been hyper focused on that, which is user experience. Like, how do we make this easy for end users? So when Solana runs up into a problem, their ideological solution is let's try to reduce complexity while solving this problem. While the Ethereum's sort of solutions so far has been increasing complexity to solve scalability problems. So now I'm not saying like there's an absolute sort of outcome here because there are sort of these parallelized AVMs coming out. Monad is a big one everyone's talking about.”
2024-04-30 · Forward Guidance · The Crypto Endgame in 2024 | Fireside Chat with Pranav Kanade, portfolio manager of the VanEck Digital Assets Alpha Fund · IDENTIFIED FROM THE TRANSCRIPT
“Think the user fragmentation thing is a real problem or user experience fragmentation thing is a real problem in a variety of different ways. One is I have to be a sophisticated user at this moment to be able to bridge assets all over the place. But if also I'm a developer looking to build a project, I have too much choice at this moment when looking at Ethereum ecosystem. Do I build on optimism? Do I build an arbitrum? Do I build on StarkNet? There's so many L2s I can build on. And on top of that, these L2s are also making different choices, right? Some are using Ethereum for data availability. Some are using Celestia. Some are using EigenDA. So there's all these different choices like the developer has to make and the user has to make. And ultimately, that means you're kind of breaking composability and you're breaking this and you're creating this highly fragmented user experience. So my critique against the theorem ecosystem is they're less focused on the end user, which is all they should be focused on because crypto is biggest problem is you have too many”
2024-04-30 · Forward Guidance · The Crypto Endgame in 2024 | Fireside Chat with Pranav Kanade, portfolio manager of the VanEck Digital Assets Alpha Fund · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, so I came into the space using applications on Ethereum, right? Like ETH mainnet. Eventually, obviously all these LTUs started to come and I moved to these L2s and I tried different things on L2s personally.”
2024-04-30 · Forward Guidance · The Crypto Endgame in 2024 | Fireside Chat with Pranav Kanade, portfolio manager of the VanEck Digital Assets Alpha Fund · IDENTIFIED FROM THE TRANSCRIPT
“Potentially, yes. I mean, I'm kind of talking my book there, right? I mean, that's kind of the reason I run a Liquid token strategy, because I think the token market is north of $2 trillion. Again, a decent chunk of that is Bitcoin. So if you take out Bitcoin and ETH and stablecoins, the altcoin market is kind of in the 600 billion plus range. And my guess is the amount of directional institutional capital in that space is around 10 billion or so. So a vast majority of participants in this market were retail. unfortunately less sophisticated and they focus on a very specific category, as we said earlier, which is sort of these meme coins and narrative coins. So I think there's a lot of opportunity in white space in what I do. And there's a lot of sort of, you have kind of this opposite dynamic in the VC space, which you have a ton of managers, potentially with a decent amount of capital and a lack of quality in terms of founders and projects that are coming into space.”
2024-04-30 · Forward Guidance · The Crypto Endgame in 2024 | Fireside Chat with Pranav Kanade, portfolio manager of the VanEck Digital Assets Alpha Fund · IDENTIFIED FROM THE TRANSCRIPT
“Yeah. And you kind of ask them what's your thesis on the XYZ project? The thesis is not typically well articulated other than there'll be a token at some point and we're in a bull market and I'll be able to exit the token, which to me is not a good investment case because that requires you to take for certainty that there is some bull market liquidity for you. And that's what you see a lot of VCs doing these days. And these are sort of the marginal guys that came in that last cycle that didn't get to really deploy. So that's kind of like the weird VC market structure I see.”
2024-04-30 · Forward Guidance · The Crypto Endgame in 2024 | Fireside Chat with Pranav Kanade, portfolio manager of the VanEck Digital Assets Alpha Fund · IDENTIFIED FROM THE TRANSCRIPT
“People that they should go start a VC fund and raise tens of millions of dollars. We were sort of in this zerp world and like anyone could have raised a VC fund at the time. And those guys raised these small funds. There are a handful there that are also actually excellent and they could be great fund managers, but there are a lot of them there that deployed capital, a little bit of it in 2021, 2022, but had dry powder and then didn't do anything in the bear market because there was not much any quality projects there, but are now feeling the pressure to just aggressively deploy because they can't go raise another fund if they're not fully deployed. So they're deploying, in my opinion, to a lot of bad projects just so they can go raise another fund.”
2024-04-30 · Forward Guidance · The Crypto Endgame in 2024 | Fireside Chat with Pranav Kanade, portfolio manager of the VanEck Digital Assets Alpha Fund · IDENTIFIED FROM THE TRANSCRIPT
“Think it's a big mix. I think there's some great high quality VCs in the space that have been around for several cycles who continue to get some of the best deal flow because founders have seen them help other projects be successful and they want to work with these VCs. The general problem with those older generation of VCs is size. They've gotten just potentially too big. So while their success might have been a function of them first being a $40 million fund and writing small checks into early stage projects and giving outsized returns, that's now led them to have much larger funds. And as a result, they might not be able to really continue writing those small checks or sort of having the bandwidth to write those small checks. So that's kind of problem number one. Problem number two is in 2020, 2021, you had this sort of new cohort of VCs that came into the space. You know, anyone that had done something in crypto went and convinced.”
2024-04-30 · Forward Guidance · The Crypto Endgame in 2024 | Fireside Chat with Pranav Kanade, portfolio manager of the VanEck Digital Assets Alpha Fund · IDENTIFIED FROM THE TRANSCRIPT
“Most common one seems to be people love to buy high, sell low. As in, I don't think they fully understand or underwrite their view on the asset class. So when crypto goes to a bear market, they just full-on dismiss it. When prices go up, they conflate price appreciation with adoption and they ultimately feel FOMO and they come in. So I think what I tell everyone that I talk to who's interested really understand what you're betting on with this asset class. which to me is hundreds of millions of people using applications on public blockchains and understand what the path of that looks like and have ways of measuring is your thesis playing out or is it not playing out and have that dictate how you invest in the space rather than price as an indicator if anything”
2024-04-30 · Forward Guidance · The Crypto Endgame in 2024 | Fireside Chat with Pranav Kanade, portfolio manager of the VanEck Digital Assets Alpha Fund · IDENTIFIED FROM THE TRANSCRIPT
“I'm just making them an example. But the point is, like, every business is unique and making their sort of capital instrument a programmable asset has benefits for their underlying business.”
2024-04-30 · Forward Guidance · The Crypto Endgame in 2024 | Fireside Chat with Pranav Kanade, portfolio manager of the VanEck Digital Assets Alpha Fund · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, I think just very simply taking assets, financial assets that are essentially dumb assets and making them program. Has many properties or many features that could benefit the underlying business. So in Tesla's case, it could be as simple as like enabling more self-driving, enabling more loyalty or just kind of blending the lines between user and owner. But for other companies, totally different, right? For McDonald's, they could try to encourage folks that own McDonald's stock to come and try different products. I can't imagine people that own McDonald's stock are also like big McDonald's consumers. So trying to increase.”
2024-04-30 · Forward Guidance · The Crypto Endgame in 2024 | Fireside Chat with Pranav Kanade, portfolio manager of the VanEck Digital Assets Alpha Fund · IDENTIFIED FROM THE TRANSCRIPT
“On, I think it was like, I can't remember the exact dates, but basically if you own a certain number of shares of Tesla before 2021 and you continue to own it until now, aka demonstrating you're a long-term investor, you have to send them brokerage statements. And that would ultimately dictate whether you would get the product, right? If Tesla was an on-chain asset, they didn't have to do any of these brokers, send me a brokerage statement stuff. They could just check people's wallets and say, this wallet has held these shares for this much time. That's a loyal investor, and I should reward them also as a consumer.”
2024-04-30 · Forward Guidance · The Crypto Endgame in 2024 | Fireside Chat with Pranav Kanade, portfolio manager of the VanEck Digital Assets Alpha Fund · IDENTIFIED FROM THE TRANSCRIPT
“But I think a potential problem for Tesla is folks don't want to turn on the self driving their car because like they're like, why bother? I like to kind of drive and what's, you know, I don't want to take the risk that something bad happens. So I might as well continue driving. Like my parents owned two Teslas. I always tell them, can you turn on self-driving? And they're like, no, the car might crash, right? So my thought was, well, if people got a financial incentive, which is some airdrop of Tesla stock, every time they turned on self-driving, then they might be more inclined to experiment with it. And the only way you can really do that is if Tesla was a tokenized asset on some public ledger, making the asset programmable. I mean, another kind of use case, I didn't even think of this, but it came up recently because I don't know if you saw, but I'm a reservation holder for a cybertruck. I've been waiting for like years and years. And I believe a few weeks ago, Tesla came out and said they're going to prioritize deliveries to cybertruck for people who own the stock, right? So they basically said if you owned 500 shares of Tesla,”
2024-04-30 · Forward Guidance · The Crypto Endgame in 2024 | Fireside Chat with Pranav Kanade, portfolio manager of the VanEck Digital Assets Alpha Fund · IDENTIFIED FROM THE TRANSCRIPT
“So I actually had this funny, I have this sub stack where I wrote about why Tesla should tokenize their equity and what the benefits would be. And that was primarily centered around self-driving, which is Tesla's future isn't self-driving. I'm sure you've seen all the news, right? So like all the latest news with Elon saying the future of the company is in self-driving. I think a big problem for them is solving that sort of 1% edge case problem where like, you know, the car might, the self-driving thing might work 99% of the time, but like that 1% of time is cruise up. That's a problem from a regulatory standpoint. And the only way you fix that is with more data. And the most valuable data for Tesla is when someone turns on self-driving and then decides to disengage because that's when the system learns a lot, which is why did the human kind of come in and intervene? What did I, what was a mistake that I made? And that learning is very valuable.”
2024-04-30 · Forward Guidance · The Crypto Endgame in 2024 | Fireside Chat with Pranav Kanade, portfolio manager of the VanEck Digital Assets Alpha Fund · IDENTIFIED FROM THE TRANSCRIPT
“Could you get independent data centers to cluster together their GPUs to offer a similar product and using a token incentive to aggregate that supply for the end user who's building some AI application? And for them, the benefit is that compute is way cheaper.”
2024-04-30 · Forward Guidance · The Crypto Endgame in 2024 | Fireside Chat with Pranav Kanade, portfolio manager of the VanEck Digital Assets Alpha Fund · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, it's simply taking infrastructure or things that exist in the physical world that are currently run by a handful of centralized companies and saying, can I recreate that service by crowdsourcing that supply? And as a result, the product itself is better, faster, cheaper to the end user. So helium, as I mentioned earlier, was like a perfect example for it. Mobile services are now essentially controlled by four big telcos in the US, right? AT&T mobile horizon and probably like a handful of MNOs that aggregate to number four. Can you create, can you propagate data packets by crowdsourcing that function? And as a result, having a cell phone plan that's cheaper for the end user? That's like the simplest example of it. There are people trying to do this in the GPU space, which is you want to run some inference jobs. Well, you have to go to Amazon, Google, Microsoft, and to get some NVIDIA H100 GPUs.”
2024-04-30 · Forward Guidance · The Crypto Endgame in 2024 | Fireside Chat with Pranav Kanade, portfolio manager of the VanEck Digital Assets Alpha Fund · IDENTIFIED FROM THE TRANSCRIPT
“You want to sort of bet on something, but there's no market for it. So permissionless markets where anyone can go create a market on one of these DeFi platforms and then someone else can provide liquidity and earn the fees from providing liquidity for that market. I think as an idea, we'll take off there's several projects we're focused on that are doing that. But I think there's some product market fit there. So those are the four kind of buckets we think.”
2024-04-30 · Forward Guidance · The Crypto Endgame in 2024 | Fireside Chat with Pranav Kanade, portfolio manager of the VanEck Digital Assets Alpha Fund · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, obviously, it's not enabled for equities right now because it's a crypto based project. They have this feature called frames, which anyone can embed a frame in there, which will allow you to do things within the app. So it's kind of really blending in social and what finance really is supposed to be. I'm sorry, I was going to say the two other categories was deepen. Deepin was one. And then the last category, Deepin was things like helium that I've talked about. And then the last category would be something in sort of the permissionless market space. So it could be a combination of DEXs, but also perks markets on chain. You know, one of the things I was always intrigued about in 2017 was prediction markets. You know, at the time, I wanted to buy some real estate. I believe in like Mexico. My only way of doing that was finding some ETF to buy it or actually going to the city in Mexico and actually buying a physical piece of real estate. I wish there was a prediction market where I could just get that financial exposure. And there's so many of these situations where.”
2024-04-30 · Forward Guidance · The Crypto Endgame in 2024 | Fireside Chat with Pranav Kanade, portfolio manager of the VanEck Digital Assets Alpha Fund · IDENTIFIED FROM THE TRANSCRIPT
“Earlier, I think it's interesting for people to go download the front end, which I believe is called Warpcast, and test it out. The interesting thing there is it allows me to do all the things I wish I could do on Twitter, which I cannot. If I see someone talking about a stock on Twitter, I want to be able to just trade that stock in that UX. I don't want to have to go to my Robinhood app and then go trade that stock. Oh”
2024-04-30 · Forward Guidance · The Crypto Endgame in 2024 | Fireside Chat with Pranav Kanade, portfolio manager of the VanEck Digital Assets Alpha Fund · IDENTIFIED FROM THE TRANSCRIPT
“This again is a domino. You need one use case to bring people on shade and then other things will also get adopted. So there are a couple of possibilities as I would think about it. Payments is a big one. Stable coin-based payments are just easier and better. It's actually funny. We were supposed to wire money to a project a month ago and the project was not US-based. Like it was just like difficult to send a wire out from our bank to like that international bank and you know because our wire kept getting rejected. And if I sent that payment on Ethereum using USDC, that would have been done in probably 35, 40 seconds. So I think that is someone's going to make this stuff a lot easier for people to use. You're seeing traditional Web2 businesses just kind of leveraging those things. So payments could be one. It seems obvious. Social, I think, is one. Again, I talk about.”
2024-04-30 · Forward Guidance · The Crypto Endgame in 2024 | Fireside Chat with Pranav Kanade, portfolio manager of the VanEck Digital Assets Alpha Fund · IDENTIFIED FROM THE TRANSCRIPT
“As a category, I think meme coins will continue to exist and they will continue to garner more attention, especially because I think meme coins are the new Vegas. My generation and generation after me does not want to go to Vegas with a bunch of their friends and go stand at a craps table. They would rather chat with each other on iMessage and speculate on the next meme, right? That's the version of gambling. So I think the TAM for meme coins is somewhat a mix of the C. Power law distribution where a handful of me points actually just kind of survive and keep living and keep driving sort of these mini hype cycles.”
2024-04-30 · Forward Guidance · The Crypto Endgame in 2024 | Fireside Chat with Pranav Kanade, portfolio manager of the VanEck Digital Assets Alpha Fund · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, basically, right? But also, again, this goes back to the question of retail versus institutional capital in the crypto space, but crypto is still very retail heavy. And if you're a fund manager, what you might say is, you know, if I have $100 a risk, maybe I'll de-risk $50 of it and maybe take $5 of it and go at the risk curve. So I'm still looking at it from a beta perspective. But a lot of times what happens is retail looks at it differently and says, you know, I made a thousand dollars. I'm going to take that margin that and go speculate on something with it on margin”
2024-04-30 · Forward Guidance · The Crypto Endgame in 2024 | Fireside Chat with Pranav Kanade, portfolio manager of the VanEck Digital Assets Alpha Fund · IDENTIFIED FROM THE TRANSCRIPT
“It that makes sense. Yeah, I think the wealth effect in crypto is much bigger than it is in traditional finance. Like if Apple goes up, yes, some people sell their Apple and buy Microsoft, but in crypto, it is it fair to say it's much bigger. And in particular, for individual protocols, like if you own a lot of Solana and that Solana goes up theoretically 20 times, which is, you know, it did, then you have all the Solana people have a bunch of money to plow into Solana-based projects.”
2024-04-30 · Forward Guidance · The Crypto Endgame in 2024 | Fireside Chat with Pranav Kanade, portfolio manager of the VanEck Digital Assets Alpha Fund · IDENTIFIED FROM THE TRANSCRIPT
“I think the short answer is Bitcoin ETF, right? So You have this dynamic where still a vast majority of Bitcoin is held by crypto hands, folks that bought Bitcoin last year, the year before, the last cycle, right? So if you have 19 something million Bitcoin out there, a decent chunk of that is held by people who are native to the crypto ecosystem. And when they experience a wealth effect as a result of these ETFs, they then take that wealth and they want to speculate, right? So, you know, I have created a thousand dollars of wealth for myself in Bitcoin. Maybe I'll take 50 or $100 of that and go speculate on different things. And that sort of has this natural lift up.”
2024-04-30 · Forward Guidance · The Crypto Endgame in 2024 | Fireside Chat with Pranav Kanade, portfolio manager of the VanEck Digital Assets Alpha Fund · IDENTIFIED FROM THE TRANSCRIPT
“A faster pace to do things on these chains. And existing users and those new users spending increasing amounts of dollars on a daily basis to do these things. That kind of shows us generally engagement. As you're seeing a lot of these assets appreciating price, we're asking if the velocity of those factors are also increasing or decreasing or staying about the same.”
2024-04-30 · Forward Guidance · The Crypto Endgame in 2024 | Fireside Chat with Pranav Kanade, portfolio manager of the VanEck Digital Assets Alpha Fund · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, so again, for each project, we have sort of a set of metrics that we think will define a bull case, right? And so if you're talking about a layer one protocol, very simply, it's the number of users on that blockchain using applications, paying gas fees to use them. And is the number of users growing? Are those people spending increasing amounts on fees to do things on-chain? Are they paying are they spending decreasing amounts? And then on the other side of it are the number of unique applications coming onto those blockchains growing or decreasing. And then the keyword there is unique because there's a lot of like people coming in and doing small variations of already exist on those chains. You want sort of new different things. These things are petri dishes. We track all those things. Ultimately, we want to see increasing velocity. So more developers building more new and interesting things, more users coming in at”
2024-04-30 · Forward Guidance · The Crypto Endgame in 2024 | Fireside Chat with Pranav Kanade, portfolio manager of the VanEck Digital Assets Alpha Fund · IDENTIFIED FROM THE TRANSCRIPT
“You track daily transactions, number of wallets, and developer growth within the protocols. And I know you have some statistics about compared to last cycle, the wallets are three times higher, but the developers are less. Tell us about what exactly those numbers and what you glean from those numbers.”
2024-04-30 · Forward Guidance · The Crypto Endgame in 2024 | Fireside Chat with Pranav Kanade, portfolio manager of the VanEck Digital Assets Alpha Fund · IDENTIFIED FROM THE TRANSCRIPT
“Just new and different. We can get into what and why, but I'm just highlighting that. And then again, deep in, you know, if you look at sort of helium mobile subscribers, every month they're adding 10,000 subscribers. So there's things that are gaining traction, but they're not like a hockey stick. So we're monitoring those. We like those things that are just sort of slowly gaining adoption because of real intrinsic reasons. But beyond those things, we haven't seen anything that net new that was similar to DeFi and NFTs last year or last cycle. And so our view here is like time to be patient and see as these things evolve and as something net new comes about that is that will likely get people excited for another bull market we will be focused on that.”
2024-04-30 · Forward Guidance · The Crypto Endgame in 2024 | Fireside Chat with Pranav Kanade, portfolio manager of the VanEck Digital Assets Alpha Fund · IDENTIFIED FROM THE TRANSCRIPT
“So, I can't fully get into specifics of what we're doing or thinking. But again, it goes back to our earlier view, which is so far we haven't seen anything terribly net new with a lot of substance that I think will get tons of people excited to come into the space. Now there are pockets, right? To touch on a few pockets, there are some great things happening around payments. You saw PayPal a couple weeks ago with PYUSD say they're looking to do, I think, gasless transfers, right? So PayPal has got the widest distribution. I think that's an interesting area. Payments in general, stable coin-based payments in general is going to be sort of this snowball that is going to accelerate over the course of this year and next year. The second category has been in social. So I've become I've personally become a user on Farcaster. I've seen a lot of other crypto communities move over there. There's just unique things enabled by Farcaster that can't be enabled by Web2. So people are coming to use it for those use cases that are”
2024-04-30 · Forward Guidance · The Crypto Endgame in 2024 | Fireside Chat with Pranav Kanade, portfolio manager of the VanEck Digital Assets Alpha Fund · IDENTIFIED FROM THE TRANSCRIPT
“Negative. And from time to time, when people's risk appetite is maxed out, like there's not that many good things that can happen in the world that can increase that risk appetite is only one way to go, which is worse than that risk appetite. That's when we sort of think it's probably a good template defense.”
2024-04-30 · Forward Guidance · The Crypto Endgame in 2024 | Fireside Chat with Pranav Kanade, portfolio manager of the VanEck Digital Assets Alpha Fund · IDENTIFIED FROM THE TRANSCRIPT
“I personally believe that Bitcoin is viewed as a risk asset, especially by the folks that are coming into the space the last several months. I know this is kind of a big debate on whether people buying the ETFs are viewing this as a store value or a risk asset. And I would say people might tell themselves they're buying a store of value, but they're really feeling risk on when they're buying Bitcoin, right? If they're feeling like risk off, they're probably buying T-bills. So yeah, I view Bitcoin as a risk asset. I view everything in crypto as like a bigger risk asset. It's venture risk with liquidity. While I don't make decisions in our strategy based around what's happening macro, you know, I pay attention to what's happening macro. It's really around sort of how frothy are conditions in the market. So it's an indication of people's risk appetite. And can that risk appetite change?”
2024-04-30 · Forward Guidance · The Crypto Endgame in 2024 | Fireside Chat with Pranav Kanade, portfolio manager of the VanEck Digital Assets Alpha Fund · IDENTIFIED FROM THE TRANSCRIPT
“Everyone's really bullish. And all of a sudden, people are now borrowing against other assets to be levered long this asset and they're paying 30, 40, 50% annualized funding to own that asset. What they're basically saying is they're expecting that much of price appreciation above that funding rate to make a profit on that trade. Said differently, the token didn't appreciate by that much in price, then the person is net losing money. So after price have gone up a ton, folks are borrowing on these exchanges to be levered long something and paying that funding, you need a continuous appreciation of that price. Otherwise, you'll have a deleveraging event. So something bad happens macro that gets people scared, then that could trigger a pretty big deleveraging event, which is kind of what we saw the last couple of weeks with a combination of the war situation in the Middle East, but also the hot CPI print and sort of the Fed having to potentially get a little more.”
2024-04-30 · Forward Guidance · The Crypto Endgame in 2024 | Fireside Chat with Pranav Kanade, portfolio manager of the VanEck Digital Assets Alpha Fund · IDENTIFIED FROM THE TRANSCRIPT
“The way to think about in crypto markets in general is a predominant amount of leverage comes from these perpetual futures markets, whether on centralized exchanges or really decentralized purps markets. But most of it is like Binance, OKX, and by the biggest perps markets that drive leverage. And the way those typically work is folks bringing stablecoins or some other large assets. They use that as collateral. They borrow against that collateral and they buy something on leverage, right? Simplistically, someone might come and bring in $1,000 USDC of collateral and buy $10,000 worth of Bitcoin. And when they margin or borrow that amount, they're paying a funding rate to the people who are essentially taking the other side of that trade or is providing liquidity for that margin. And so when funding rates get to levels, let's just say I'm making it up. An altcoin has gone up by 10x.”
2024-04-30 · Forward Guidance · The Crypto Endgame in 2024 | Fireside Chat with Pranav Kanade, portfolio manager of the VanEck Digital Assets Alpha Fund · IDENTIFIED FROM THE TRANSCRIPT
“Alts in general at this point. And so, yeah, we de-risked our book in Q1. And the way we de-risk is we don't short crypto assets, we don't use leverage. It's purely going to stable coins.”
2024-04-30 · Forward Guidance · The Crypto Endgame in 2024 | Fireside Chat with Pranav Kanade, portfolio manager of the VanEck Digital Assets Alpha Fund · IDENTIFIED FROM THE TRANSCRIPT
“That getting into too much specifics, you know, as I said Many token projects have appreciated meaningfully in price, but we don't think that's been justified by an equivalent adoption in the fundamental metrics and also the probability that these things hit mass adoption. So we just generally thought in Q1 of this year crypto assets in general were mispriced. And we didn't know what the macro risks were that could repric these assets. But we saw a ton of leverage in the market. As you looked across various altcoins, funding rates were enormously high. The valuations didn't make sense from a probability adjusted perspective. So again, if we think 50-50 odds, something gains traction, but it's gone up in price by TEDx, then it's that much less attractive, unattractive, or that much less attractive. Sorry. So anyways, so we looked at a set of factors and we said it's just not asymmetric to be long crypto.”
2024-04-30 · Forward Guidance · The Crypto Endgame in 2024 | Fireside Chat with Pranav Kanade, portfolio manager of the VanEck Digital Assets Alpha Fund · IDENTIFIED FROM THE TRANSCRIPT
“No, yeah, I think it's just one of the components of the analysis, which is Most projects we look at, we kind of have a fair value relative on a relative basis to other projects and also on an absolute basis. In a market like now fair values are way below the absolute price of many things, right? Hence, we are being conservative at this moment. But we also look at these things on a relative basis. VCs, vesting, teams vesting, and how much dollars of wealth is being created as those vesting events are happening is a big input on whether we invest in something, but also if we do how we size that investment.”
2024-04-30 · Forward Guidance · The Crypto Endgame in 2024 | Fireside Chat with Pranav Kanade, portfolio manager of the VanEck Digital Assets Alpha Fund · IDENTIFIED FROM THE TRANSCRIPT
“It's a fair launch, right? You have to do some work to then get some tokens and it slowly inflates. So you can manage sort of this dynamic of supply and demand somewhat reasonably.”
2024-04-30 · Forward Guidance · The Crypto Endgame in 2024 | Fireside Chat with Pranav Kanade, portfolio manager of the VanEck Digital Assets Alpha Fund · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, so I wouldn't completely say it's full cell pressure, right? Because we have no idea what people will do. Like, you know, as folks vest, they might not sell. They might hold on. But here's what generally happens, which I think is unfortunate for crypto. People have to figure this out, is when you launch a project with a low float and you do this huge sort of marketing play around that, which is like, you know, every founder, when they're launching a token, they go on some podcasts. There's like sort of a lot of media content, there's a lot of hype. low float then leads to people interested in your project at any price and then you create this massive ftv right um and and so as folks vest the magnitude of dollars of wealth creation on paper is so big that they will likely sell i think one of crypto's biggest problem is how token launches are done which is low float high hype which is across the board a thing that you know i think hurts the space”
2024-04-30 · Forward Guidance · The Crypto Endgame in 2024 | Fireside Chat with Pranav Kanade, portfolio manager of the VanEck Digital Assets Alpha Fund · IDENTIFIED FROM THE TRANSCRIPT
“I think this is compared to other topics in crypto easier for traditional finance folks to wrap their head around. Like, yes, you have stock grants and there is a selling pressure, but it is quite extreme. I mean, you've got a table of these token launches and their supply schedule. The most extreme one is Worldcoin, which is backed by Sam Altman, where literally less than 2% of the entire fully diluted market cap is publicly trading. So 98% of all world coins will be sold by VCs or owned by institutional players that will help selling pressure. Is that correct?”
2024-04-30 · Forward Guidance · The Crypto Endgame in 2024 | Fireside Chat with Pranav Kanade, portfolio manager of the VanEck Digital Assets Alpha Fund · IDENTIFIED FROM THE TRANSCRIPT
“So if you are technically holding something in your wallet and you could trade it, like as in there's no contractual obligation preventing you from trading it, that would counter its market cap. Simplest ways you can track this is you just go on the block explorer of the project and you see what the circulating market cap is relative to the total supply. And then you can go into their white paper and basically read what's the vesting schedule typically looking like, who's vesting how much, right? So most of these things launch as token projects, as let's say as an airdrop and vesting begins. So the airdrop tokens are immediately vested. People can go trade it. But for original investors and team, which ends up being 30, 40% of the overall supply, total supply for most of these projects, vesting will probably begin in six months. And oftentimes it's not a cliff vest because cliff vests are scary for people. So it's usually like a linear.”
2024-04-30 · Forward Guidance · The Crypto Endgame in 2024 | Fireside Chat with Pranav Kanade, portfolio manager of the VanEck Digital Assets Alpha Fund · IDENTIFIED FROM THE TRANSCRIPT
“That cell pressure just comes from FTV fully diluted value. Basically, there's so many tokens exist, but they haven't been sold yet. They're not on the markets yet. And, you know, you had that traditional finance where a company goes public. They sell $10 million worth of stock, but 200 million is still held by one family founder. Things can go up, move up and down. You have that in crypto, but time's a lot. I've got a question. Because there is no exchange, how do you calculate what is liquid and trading versus like if I held something and I literally never traded it, but I'm not an institutional holder, would that count as market cap or fully diluted?”
2024-04-30 · Forward Guidance · The Crypto Endgame in 2024 | Fireside Chat with Pranav Kanade, portfolio manager of the VanEck Digital Assets Alpha Fund · IDENTIFIED FROM THE TRANSCRIPT
“Apple is flat. Correct. Exactly. And that's more of a technical dynamic that people are becoming aware of, right? Which is that quote unquote smart projects have this sort of cell pressure from vesting tokens from the investors of the last cycle from the 2021 cycle. And as you think about the retail money coming in, they're trying to hit 100x, right? They're trying to like sort of have these gambling-like outcomes. And it's hard to do that in a coin that has cell pressure from VCs. So you've had this weird bifurcation in the markets.”
2024-04-30 · Forward Guidance · The Crypto Endgame in 2024 | Fireside Chat with Pranav Kanade, portfolio manager of the VanEck Digital Assets Alpha Fund · IDENTIFIED FROM THE TRANSCRIPT
“Money flows are playing out. Where is it ending up? And what kind of characteristics will create, what I would say, successful investable opportunities in token space?”
2024-04-30 · Forward Guidance · The Crypto Endgame in 2024 | Fireside Chat with Pranav Kanade, portfolio manager of the VanEck Digital Assets Alpha Fund · IDENTIFIED FROM THE TRANSCRIPT