Winter Is Leaving… Cryptoros
Borrowing a catchphrase from Game of Thrones is always popular for a blog post but is particularly helpful when writing about the crypto winter we have enjoyed for about a year. Our portfolio companies have used the adverse market conditions to opportunistically add technical talent in a highly competitive job market.
We continue to be believers in the power of alternative asset classes and stores of value. Crypto is an ideal example of both. It shares many characteristics with other tradable currencies, which is why crypto desks are populated with FX traders, except it is not issued by a government. It also digitizes value in a convenient and easily transferable way for investors. It matters because it is a truly decentralized way to transfer value to others and remove friction costs.
It is quite easy to imagine digitization and fractionalization of ownership of assets of all types. ETF’s removed incredible amounts of costs from mutual fund structures which has lead to their popularity. I believe the next phase is to rollout digital assets representing ownership in stocks, bonds and all asset types. While there is still a great deal to do in regulatory oversight and rule making, we will see this happen quickly once ETF’s of crypto assets are allowed.
This matters because of the same cost characteristics of digitization of a currency. It removes the need for cost related to trust verification by building the trust in the asset-blockchain. This cost savings accrues to the savers who now pay them as part of their investing process.
None of this will happen overnight but does represent the march to decentralization of assets and better outcomes to investors to put more of their investment money to work at lower costs. You can practically feel the frost of crypto winter melting!
—Mark Casady, General Partner