Kyle McDonald: Excellent. Fantastic. So, as you can see, today’s panel has a breadth of individuals who really understand the space well from both sides. Perhaps I’ll kick off with a very simple question. And ultimately, how would you define a digital asset? So, I might sort of pass this one over to Amila if you don’t mind. What should family offices think of when they think of what a digital asset is? 

Amila Dissanayake: I thought this question might come to me, so I actually have a definition up in front of me from the Financial Action Task Force. They are a global standard-setting group focused on generally preventing money laundering and financial crime. So they define virtual assets, sometimes called crypto assets, sometimes called digital assets. They’re largely used interchangeably, but they’re defined by FATF as any digital representation of value that can be digitally traded, transferred or used for payments. And so there we’re encompassing a range of things from cryptocurrencies to stablecoins. We might think about central bank digital currencies or CBDC; you might have heard that term as well. And then, in the wider ecosystem, we’ve also got smart contracts that might execute financial activities. So we’re thinking about the decentralised finance space. 

So, this question seems very simple, but it actually has a huge range of different types of assets that do different types of things. Some do more. Some do less. Thinking about Bitcoin when it first started, it’s just a simple idea of peer-to-peer value transfer through to what we see in decentralised finance, where we’ve got bits of code living on the blockchain, executing quite complicated bits of math for us. The definition that I always go back to is the FATF one because that’s quite simple and encompasses a lot. But I’m sure other panellists would have a slightly different way of putting it. 

Kyle McDonald: Excellent. I love the comprehensive preparation for this as well. Very impressed. Ten points to you, perhaps. Over to you, Ben. What would you do? If we’re thinking about this from a family office perspective and we’re trying to eliminate distractions, what of what aren’t traditional assets? Sort of. Sorry, what aren’t digital assets? So, you know, we’ve heard a definition of what it is, but what are they not? How can we sort of cut out the noise from what we’re hearing in the papers? 

Ben Wiener: Yeah, it’s interesting. You know, I’m not; I don’t come from the coding world; I don’t speak Python or anything like that. So, you know, when I think of what digital assets are, you know, if you look at NFTs, they are the digital representation of ownership. So the opposite of that would be just your regular deed, maybe to a home or the actual physical piece of art if you’re looking at it from the commodity space. You know, Bitcoin is a digital commodity. You know, the physical commodities that we’re familiar with are gold and et cetera. And then you have some digital assets that have this sort of blend of securities component and commodities combined, which makes the SEC’s role pretty challenging, maybe. 

And so the opposite of that would just be, I think, perhaps traditional equities, however, those can certainly be digitised as well. 

Kyle McDonald: Excellent. That makes sense. I guess if we think of sitting in the driver’s seat and you’re a family office, perhaps watching this today, why would it be important for them to have a strong understanding of this space and perhaps. I’ll pass this one over to you, Adrian. 

Adrian Larsen: Yeah, I see digital assets not as a new asset class but as the belief that all assets, in some sort of way, will have a digital representation in the future. And if that is true, then everything will have a representation of some sort of blockchain technology. So I guess what family offices really need to understand is if this is true, that this is a new technology, it’s not an asset class per se. It is an enabler for us to digitise the financial world. And if that’s true, then we need to really understand the rails and the structure behind the technology as well, which I’m sure that some of the other panellists can talk about in a lot deeper depths than I can. 

But it is really important for me at least that we define this as not a new asset class, but a way for us to efficientise how the financial rails really works.

Kyle McDonald: Brilliant. And Jameson, if we’re thinking a little bit about, you know, following on from that, so this is something we’re beginning to become more familiar with. It’s changing the way we ultimately think about engaging with assets. How will digital assets actually change the playing field for family offices? 

Jameson Lopp: Well, it’s interesting because I think I’ll actually disagree with Adrian slightly now. 

Ben Wiener: We love it. 

Jameson Lopp: The way that I look at it. Yeah. So the way that I look at it and the reason I believe that you may, in fact, be able to claim that it’s a different asset class is that I look at this fundamentally from an aspect of authority is what is the ultimate arbiter of truth and ownership of the assets in these systems. And so with, you know, most of your traditional financial, that means there’s going to be some sort of authority, whether it’s ultimately like a government or a government-approved entity that is keeping track of who owns what within their own databases, their own ledgers. The revolution within this system is that we’ve created a new global ledger that, in most cases, has a lot of grey areas, and it gets really complicated. 

But in cases like Bitcoin, Ethereum, or whatever, the authority is comprised of just a large voluntary opt-in group of people who are all running the same set of rules and software. That provides some very interesting attributes, and I think that’s why we’re all here today: because we want to convey the power of these attributes and functionality that the digital bearer asset class can give to people. So what does that mean? Well, it means that you can empower yourself greatly because now you have the ability to take ownership, prove ownership, and transfer ownership of these things, which are generally cryptographic tokens that may represent something else of value. And you can do that without asking permission from a third party. You can do that without having to operate within some set of arbitrary constraints like business hours. 

You can do it without having to worry about things like jurisdictional rules or hop around across different borders. So it’s an amazing level of friction, I believe, that has been removed from dealing with financial assets. But of course, the flip side of that and the reason why I’ve worked in security for so long, is that it also makes it a very ripe space for attackers. And because you’re taking on a lot more responsibility, there are a lot more things that can go wrong. 

Kyle McDonald: All right, that makes sense. So, as we hear, it’s an exciting and emergent space. But if we begin to get quite practical in terms of thinking today as a family office, who might be less familiar with how to get started? How would you begin to think about recommending a family office begin engaging or understanding a bit more about digital assets today besides obviously logging into a session like this? Ben, perhaps a question over to you. 

Ben Wiener: Yeah, thank you. I think, you know, having a general understanding of what are the motivations, you know, are the motivations yield generation? There’s plenty of opportunities for that. Are they philanthropic? That’s one of the opportunities here. We view it primarily, maybe in the US, as an investment. But in other countries, it’s, you know, substantially different than that. So, you know, I think that’s where you start, and then from there, you know, I think it’s important to have a really solid understanding of where you’re going and what sort of entity is going to hold it. 

If it’s a trust, you know, checking with the division of banking or, you know, the regulatory authority is, you know, necessary and takes a little bit away from, you know, what Jameson was saying as part of the advantage. But that’s sort of the reality of the situation that we live in now. So, there are just a number of things that you need to consider, just like you’re getting into any other space. Why are we doing it? Who’s advising us? You know, what’s the best approach to take? And let’s make sure that we have a really sound plan that we’re able to execute before we get started. 

Kyle McDonald: All right, those are great principles, I guess. I’m sort of piggybacking on those principles a little bit if we begin to think about how to really set up a strong foundation and ensure that this is a scalable capital allocation that can really last and drive lasting value for families. Amila, what would you recommend for a family office? Think about engaging with digital assets when setting up a foundation. And I don’t mean a foundation from a foundation perspective, a base, shall we say. 

Amila Dissanayake: So my perspective is always going to come from the risk management side of things. So I think, picking up on what Ben was saying, we need to do due diligence. We need a holistic approach to making sure that the people and the services that we’re relying upon are competent, trustworthy, liquid, and so on and so forth. And here, you know, when we look at the risks that are, you know, commonly associated with digital assets, there’s this perception, which I hope is now becoming pretty outdated, that, you know, just cryptocurrency is only used by criminals, and it’s, you know, it’s all just dirty money. Hopefully, we can leave that behind in the dust. The stats really don’t play that out, but there are, you know, specific concerns that are associated with different types of activity and also different types of assets. 

So, when we look at the macro level, we see that stablecoins are becoming much more popular in the ecosystem, and they have a much bigger market cap now than Bitcoin or ether. And so here, yes, they’re popular. It also means that they’re being used more for illicit activity. What type of illicit activities are they associated with that might be of concern to a family office? While they’re being used a lot for sanctions, we definitely don’t want any connection with sanctioned entities or jurisdictions. They’re also being used, particularly if I check my notes here, in scams. So, this is another thing I think we would want to be mindful of from an investment perspective. So, are we investing in the right type of opportunities? 

Are we investing in a new project, a new token that we think is going to gather value very quickly? Also, if there are recommendations coming from elsewhere, are these people being taken advantage of and exploited? We see new innovative uses of crypto coming into the market. And one last example here: I think I mentioned decentralised finance earlier. This is such an exciting space. It’s really the frontier of innovation within crypto. It is also the place where we’re seeing, you know, a lot of use of stablecoins, but we’re also seeing a lot of, you know, different types of risks coming out to play. Historically, you know, the last couple of years, we’ve seen a lot of issues with the code that’s being used in the smart contracts with decentralised finance protocols. 

That risk is now diversifying, and we’re seeing a mix of on-chain and off-chain issues. So we’re seeing the return of classic techniques, you know, social engineering, insider attacks and all of that kind of stuff. So, I think the overall message here is to be holistic, right? Not to assume that there’s one type of risk that you need to manage. We need to look at it from several different angles and use them. Actually, the transparency of the blockchain helps us do that due diligence because there is a lot more data available to make that assessment, which is a positive note that I would like to end on. 

Kyle McDonald: Brilliant. Yeah, I guess sort of taking a data-living-led approach is something that we’re seeing quite effectively across family offices at the moment. Something we’ve had a webinar on before. I guess, Adrian if we think a little bit about where there are opportunities for family offices to cut their teeth in this space. If you think back to potentially, you know when you were thinking about engaging in this space for the first time without obviously providing financial advice, where are there opportunities to sort of build the muscle? 

Adrian Larsen: I think it’s very different 2020 to where we are now because there are a lot more ways to play it now with also the ETFs coming out, but I think going a little bit off and Mila’s point about being holistic here, if we’re looking towards allocating within the space from a holistic and maybe within a portfolio context, I think that it’s prudent to be mindful of how you can diversify within blockchain because to me, at least, it’s still an emerging technology and we still don’t know really where it’s going to go from here. We obviously have a clear path that we think where it’s going, and it’s going to impact financial institutions for sure. But I think a diversified approach that’s both playing the passive markets, ongoing direct within cryptocurrencies and self-custody. 

It’s also maybe attacking some of the alpha there is around trading going into a hedge fund like Ben has. But it also might be able to play it from an equity point of view, a traditional private equity standpoint where you’re able to go into different kinds of sectors. You were able to invest in Chainalysis a long time ago. It was a very favourable evaluation, at least now, and they’ve become a very interesting company within the space. Right. So, there are many different ways of getting exposure to the emergence of blockchain technology. And I think you need to be diversified, at least if you want a holistic approach. 

Kyle McDonald: Right. That makes a lot of sense, I guess. You know, Jameson, if you’re thinking about a family office sitting in a world in which they’ve decided to actually begin engaging in the solution, what are some sort of strategies to get the most out of the digital allocation? 

Jameson Lopp: Yeah, so kind of piggybacking off of the last question. The first thing I’d point out is that anyone out there who regularly makes international wire transfers should definitely try out stablecoins. I would say they are a 10x, if not a 100x, improvement on the user experience in terms of just time and trouble to go through that process. Like I tell everyone that I’m dealing with these days, I’d rather receive stablecoins or send stablecoins than bother with wire transfers. Now, on the sort of dipping your toes into the ecosystem, obviously, I’m a tech guy. I look at all of this stuff from a protocol and a game theory perspective, and there are a few different ways to approach it. 

I first generally break it down between whether this token or project is a sort of open, collaborative project that a bunch of different diverse people are working on or if it looks more like a company and a small startup. And I would say the vast majority of projects in the space are more like small startups, and they should be approached from more of angel investment or venture capital type of approach of like you need to be doing a lot of due diligence on the people behind the project, not just the technical claims of what they are saying they’re going to do because, you know, it’s easy to come up with ideas, it’s hard to execute. Also, I think it’s very important to recognise what people are actually doing when they are creating new tokens and projects in the space. 

They are literally creating new games. They are codifying the rules of a new system. This is where it can get very difficult to evaluate. The risk is that if you aren’t very technical or you don’t have very technical advisors, then you may only see the rules of the game that are being marketed to you. This is why so many scams in this space can be so popular: because a lot of people don’t look under the hood to see what the actual rules of the game are. So that’s the main thing that I would encourage people to be very wary about. 

Kyle McDonald: Brilliant. Good. Good watch-outs. Was that Ben? Sorry, yeah. 

Ben Wiener: Can I, can I chime in on that just for a second? 

Jameson Lopp: Yeah. 

Ben Wiener: I think that there’s, you know, there’s a perception out there that, you know, the way that you invest in this space is to buy a token and, or asset and sit on it and wait and then sell it in the future for more yield. But I think for money managers and wealth managers, there needs to be a realisation that there are so many different strategies in this space that mirror traditional strategies. You can have a correlated strategy, an inversely correlated strategy, a non-correlated, so, you know, picking up or, you know, assuming a strategy that can get, you know, if we’re trying to get somewhere between that, you know, 10 and 12% yield with low risk, I mean, there’s certainly ways to do that. 

And I think, you know, one of the things people don’t realise is that there’s probably more yield with less risk in this space than in the traditional space, likely because it’s emerging and not everybody’s playing in it. 

Kyle McDonald: Right. And I guess that quite nicely leads on to the next section. So if we think about a family office, you know, they are as different as you might expect them to be and broad and diverse, but ultimately, they traditionally come from a background where they’re asset managers or, you know, they’ve built the wealth themselves. But they’re sitting in a position now where there’s a whole new world, an ecosystem that’s coming to the fore. What that means is they need to tap into some expertise and service providers to understand how to navigate the space correctly. So I guess maybe I’ll start with you, Amila. If we’re thinking about a family office trying to actually engage in this new frontier, we know sometimes it can be a bit wild out there. 

What should they do when they think about doing their due diligence to ensure that they’re set up for success? 

Amila Dissanayake: So I think this comes back to what we were talking about previously in terms of data. So, the big difference for me when I compare working in the fiat space to working in crypto is the availability of data. The blockchains, by and large, with some exceptions, but by and large are transparent. Right? And that gives us access to a lot more data than we have available in the fiat world. Now, this is not the be-all and end-all. I wouldn’t suggest that anyone solely relies on blockchain data when doing their due diligence and choosing providers or experts, but getting hold of that data, and if you need someone to help you to pass that data, to interpret it, then so be it. 

But getting hold of that data is going to be a really important component that perhaps isn’t so much the case in the fiat world. And for those of you who are perhaps not as familiar with what that means in terms of data, what am I talking about? Is this just like a black box of magic there? When we’re thinking about blockchain activity, we’re able to see transactions. So we’re basically able to see a version of a ledger where movements of funds are being recorded for everybody to see. Now, that may sound amazing to some of you, and it may strike fear in the hearts of others. 

I know there is generally a pretty mixed reception to this idea, but that data, on the positive side of things, allows us to do better due diligence, and it also allows us to compare what a service provider might be telling us with what we can see on chains. Do those two things match up? Where are their funds coming from and going to? Does that match with what they say in terms of the types of suppliers that they use, the types of customers that they have, the types of services that they provide, and the types of assets they support? All of these things can actually be checked independently without going through some sort of invasive process. It’s out there, publicly available information that we can check. 

And then further, if we think about what the type of blockchain analytics companies do, like Chainalysis, for example, we are in the business of analysing that data to provide further insights. So, can we figure out, for example, that on many blockchains, we’re not able to see who exactly is conducting a transaction? We call it pseudonymous. It’s not quite anonymous. There are some identifiers there on the blockchain, but it doesn’t say, you know, Amila sent these funds to Kyle. So, we are sometimes able to identify large services that interact in this space. So, we’re able to provide even more insight based on that publicly available data. So, that information is a big differentiator. As I mentioned, a couple of examples are used in combination with other things that you’re getting hold of and the conversations that you’re having. 

I think that the big piece when it comes to due diligence is using that publicly available data. 

Kyle McDonald: Brilliant. So we’ve got some interesting questions in the chat, which I might begin to just sort of cycle through. And that was a fantastic sort of steer to some of these. So I guess we have one from. Let’s look at Richard first. So we’ve got one from Richard Lewin. So, how can a family office articulate its commitment to crypto when engaging and developing or updating a meaningful vision? So how should they begin to think a little bit about this, you know, tying their vision to the crypto side of things? And perhaps this is something I’ll throw this towards. Let’s start with you, Adrian. 

Adrian Larsen: Yeah, I think it really depends on how you look at it. Do you look at it from a principal standpoint, or do you look at it from the wealth owner behind the family office? Because those might be two very different things. And I can only answer from managing the money and not being a wealth owner myself. But from our perspective, if we’re trying to be a family office that is at the forefront and is trying to preserve wealth in the long run, we need to be able to look at new technologies as well. And if we’re preserving wealth for the long term, we need to invest in the new technologies as well. And blockchain and digital assets are certainly that. 

So, you might think that the rest of your portfolio might be impacted by not having exposure to this as well because it could potentially disrupt some of the other companies or other allocations that you have in your portfolio. So, looking at it as a holistic diversification, it’s the way we articulate it internally anyhow. 

Kyle McDonald: Excellent, great answer. And I guess another question. So LinkedIn user here sort of hidden their name, but I think the question is quite interesting. So, you know, how should family offices begin to think about sizing their positions when they think about digital assets? So perhaps this goes back a little bit more to you, Ben, dipping your toe into the ecosystem. How do you begin to kind of think about beginning to size out how much you’re sort of exposing yourself to this asset class? 

Ben Wiener: Yeah, I mean, I guess it definitely depends on, you know, what the strategy is. If you’ve got right now, you know, a 70, 30 blend of, you know, like equities to fixed. Right. Well, there are different strategies within that fixed component that you can have in the digital space and in the crypto space. So, you know, you could say, for example, if you’re looking at, you know, a fixed income or a high yield at potentially taking some of that and diversifying it. If it were just a single asset, I think all of us here would love Bitcoin and would say all of it. No, I, you know, I don’t think that you’re going to put any more than, you know, a few per cent in any one, you know, particular basket. 

But I would challenge them to look at their correlated, non-correlated, and inversely correlated strategies and visit with somebody to say, you know, can we do this same thing in the digital space and potentially have less risk and get more yield so that, you know, it really takes your diversification exposure up from 1 to 10%, potentially much higher than that? 

Kyle McDonald: Right. It makes complete sense. So perhaps sort of jumping back to the service provider piece, you know, I think if we think of the sort of typical service providers that a family office should begin to think about having on speed dial for, you know, this type of asset class, who would you typically want to reach out to first? Do you know what’s the sort of profile of an expert or an advisor in this space? Perhaps I’ll start with you, Jameson. 

Jameson Lopp: Well, from a security perspective, you’re going to need to find a custodian. You’ll also need to determine whether or not you want a custodian who will handle everything for you. And in that case, they’re probably going to charge for institutional custody at about 10 to 20bps. You’re taking a slice of those assets, or if you look at one of the self-custody options, you know that will end up being a lot cheaper for you. But of course, you’re going to be taking on more responsibility and having to manage keys yourself. Interesting trade-offs there, of course, and I’m very biased on the self-custody perspective because I think that, you know, you’re also empowering yourself to be able to deal with these assets without having to ask permission from some third party. 

But it’s also tricky if you’re looking for a sort of technical analysis, digging into newer protocols and tokens, and understanding all of the risks and rewards. I think most custodians are not going to provide that level of strategy. So that’s where it gets trickier, and you have to sort of reach out into the space and find, really, I would call it more of a longevity thing. The people and the services that have been around for less than a full market cycle, you should be much more suspicious about. That’s the only sort of broad way I can describe how to be more sure that you’re going to be talking to a reputable person or provider. The people who survive a full market cycle, like a four-year cycle in this space, are less likely to be scammers and less likely to be doing malicious things. 

And that’s generally because you end up blowing up if you’re not on the up and up. 

Kyle McDonald: Right. So this, there’s a question from Jason Pinkham, which I guess is similar to this as well. So if we imagine, you know, he’s curious about how the process of a single-family office decides to officially invest in, say, digital assets once this decision is actually made, you know, what’s the approach to this implementation, and I guess who do they need and how do they begin to actually kick off this process? What type of service providers are they looking at? What type of experts might they need to tap into? And I’ll sort of direct this one towards you, Adrian, again. 

Adrian Larsen: Yeah, I guess if we’re just talking about investing in digital assets, let’s just define that as Bitcoin or some of the other top tokens that are out there. You need to decide if you want to have self-custody, which, ethically, I agree with Jameson; it’s probably better to have self-custody from a practical standpoint. I guess with the success of the ETFs, it’s another question. But so you need to first think about do you want to custody it yourself or do you want to find a custody provider going off-chain analysis and all that they’re doing. You need to have some kind of data and some kind of solutions around data. You can go to the token terminal, which is similar to Bloomberg or find stuff there. 

And then lastly, I would say if we’re just focusing on the trading aspect, either you need a trading partner that can handle the trades for you, or if you just want to do it passively, you need to also think about how you can actually implement this and just sit with it. From our standpoint, there’s a lot of alpha within the space. If you’re able to do what Bendis is also doing with their hedge funds, a passive allocation to this can be very beneficial. But you are also able to create some kind of alpha. At least, that’s what we’ve seen in previous cycles. 

Kyle McDonald: Right, brilliant. And I think Amilia, perhaps, has a question for you as well. So I guess those first degrees of service providers, so we think about the asset allocation itself, but then I guess there are the infrastructure partners behind that, much like chain analysis. It would be interesting to hear a little bit more about who you should have in your ecosystem if you’re thinking about getting into this space. 

Amila Dissanayake: Yeah, I think just I don’t want to repeat what the other panellists have said because I agree fully. I would also like to put my hand up for the self-custody training. I think that is the principle of the thing that we’re getting involved in. But I think it is, you know, also about making sure that you have access to the type of analytics that you want so that you can think about what tools you need to review your portfolio. Sorry if I can get my words out and how that’s acting for you, particularly if you are directly investing in a number of specific assets. 

Obviously, we talked earlier about how there are different ways that you can get exposure to the crypto ecosystem, and some of these are going to be more passive, so more traditional tools might be sufficient. But from a kind of direct investment point of view, I think having access to that data, whether it’s blockchain analytics, publicly available data, and making sure you know how to use that because it’s all very well saying, oh, I have this data stream, or I can go here to get access to this information, but how are you actually going to use it? How are you embedding it into your processes and your policies to make sure that it is being utilised and used to manage risk? 

Kyle McDonald: Brilliant. So I guess I might sort of throw this one over to you, Ben. If we’re thinking a little bit about family offices having to think about, you know, managing the cost of this thing, what type of typical costs come into beyond just capital allocation, you know, having the asset, all of that sort of thing, what unexpected costs might there be? Great question. 

Ben Wiener: You know, there’s a number of different ones. You know, I’m going to start by saying, you know, I love what Jameson is doing. I think everybody will agree with self-custody. That’s not always possible, you know, especially if you get into, you know, some of the trustees and their comfort level with handling things and you know, the other thing that I would say so, I mean, you potentially have, you know, the cost of custodian there, you know, another cost that we talk about all the time is that if you’re not in the space or you haven’t been in the space, I think all of us on the panel can agree that we’ve all paid tuition. It’s just kind of the way it is. 

And if you haven’t, you’re probably not trying, you know, we’re, you know, in any emerging market, you know, you’re going to get burned from time to time. And, and I’m sure we all have here. And so if you’re going to take it on yourself, I think what you should try to do is reduce the tuition that you have to pay. Right. And sometimes that’ll come at the cost of, you know, performance fee of a hedge fund or, you know, an advisor. I think those are, you know, probably the biggest ones that we would focus on. 

Kyle McDonald: Great. Brilliant. So, I’ve had another question come through in the chat from Christina Varga. When looking for service providers, specialists, advisors, etc., in this space, do you look locally? For example, do you know they cover the Canadian family office space? Or can they look a little bit more international, perhaps? That’s a question I’ll sort of hand over to Adrian. What are your thoughts on this? Do you need to, you know, you obviously serve the Danish market? Do you want to look only at providers in your sector and space, or are you looking globally? 

Adrian Larsen: We’re certainly looking globally. I think this is a global space. If you’re not trying to go with the best service providers around the globe, then you have a higher chance of risk and also not executing the strategy. So, I would certainly go towards the biggest players within the space, or at least the established ones. I think Jameson made a good point. If they haven’t been around for a full market cycle, I think it’s a bit concerning at this point, and there are certainly a lot of different service providers who have been around for one or more market cycles.

Kyle McDonald: Brilliant. So, I guess. Yeah, go ahead. 

Amila Dissanayake: I totally agree with that. I think there’s one exception, which is thinking about your compliance requirements. So, these vary wildly from jurisdiction to jurisdiction. So that’s the only one where I feel like a local expert might be more useful because there’s just so much variety depending on where you are in the world. 

Kyle McDonald: And I guess regulation actually moves quite quickly in this space compared to a sort of traditional regulation. So, I have a question here as well. Moving on to, you know, where this market is today. So, say someone’s woken up from a slumber post-Covid, and they’ve stumbled into this webinar. How mature would you say the market is? That’s obviously a philosophical question, and perhaps I’ll kick that one off with Ben here at Grid. 

Ben Wiener: You know, fairly immature. As fascinating and amazing as the technology is, you know, I think we’re just getting started. You know, we talk about the S curve in technology and the amount of time that it takes to go from, you know, 0 to 10% adoption, you get the same, takes the same amount of time to go from 10 to 90, roughly. You know, I think we’re just turning the corner in that. And I think the reason that I would say that is we still haven’t seen, you know, from a decentralised application standpoint, much of what I anticipate will be built. So, are we in the late 90s or 2000s of the Internet? I think it’s probably close to that. 

Kyle McDonald: Great. Perhaps I can flow it over to you then. Jameson, where do you think we are in the current cycle? 

Jameson Lopp: Yeah, it’s early from a variety of perspectives. And this becomes trickier and trickier for me to fully understand because I’ve been in the space so long. It feels like 100 years. You know, things move so quickly. It’s very easy to sort of compress the history of everything that has happened in your head. But you know, when you go out on the street and talk to the average person, they’re probably not going to be able to tell you very much about any aspects of the crypto ecosystem. So, there’s definitely still a lot of opportunity for people to get in early and start experimenting. The flip side of that, of course, you know, is great risk as well, and that’s why there still is a lot of opportunity: you have to be able to navigate this space and not get blown up. 

And so, you know, there is still a lot of work that needs to be done, including security, scalability, and privacy. None of these systems are really ready for mainstream adoption, I believe, from a technical perspective. Perspective. And so what we’re going to continue seeing is, I believe, these market cycles where we get a new wave of adoption and then things start to break, and people get disillusioned and leave the space, and then the builders like myself keep building. And that cycle, I think, is going to continue repeating for the short to medium term. 

The main thing that I would caution against in terms of risk if you’re getting into this space, I think that it is a lot safer to be more passive and look at sort of long-term holding perspective of tokens because the more active you get in the space, the more frequently you are interacting with these protocols and using private keys and making trades and doing defi stuff. The more risk you expose yourself to because you’re getting more exposure to new code, new rules, new smart contracts, and basically the places where all the dragons still are. So obviously, there’s more risk there or reward there, but also a much higher potential to lose everything when you’re dealing with much more new and emergent behaviour. 

Ben Wiener: Yeah, piggyback off of that, Jason or Jameson, I think, you know, what’s kind of interesting is in these cycles, you do have, you know, the developers that are building in the space have a tendency to, you know, some of them have a tendency to, you know, take the path of least resistance to wealth, which is, you know, I mean, tough to blame them. But often, that’s, you know, a useless utility token or, you know, something that really isn’t going to, you know, expand the space at all. And so that’s the challenge. And then you have these winters, right, these crashes and corrections that last for a period of time, and the developers like Jameson, who is still kind of head down through that, it’s really exciting to see what comes out of those winters and what blooms and blossoms. 

And it can be challenging in a decentralised arena to have any sort of, you know, opportunity for incentive like there is in a centralised ecosystem. And sometimes that’s why, you know, it takes a little bit longer than the Internet did. 

Amila Dissanayake: Yeah. And you have to remember, I mean, we’re only in the first 15 years since Bitcoin was created, which was the start of all of this. So, yeah, we are definitely still very much in the beginning. 

Kyle McDonald: Exactly. I guess thinking a little bit about sort of family offices and how they begin to, you know, manage this and keep an eye on the future. What type of indicators should they be thinking about in this current climate? Perhaps a question for you, Adrian. 

Adrian Larsen: Yeah, I guess we can just look to the newly issued ETFs around this space. I think that has been a massive success, at least from a flow standpoint. I think the BlackRock ETF just crossed 8 billion within the first three weeks or something like that the other day, which is one of the biggest successful launches within ETFs ever. So I think there is definitely institutional demand for these types of products, and that is just going to fiddle into other projects within the crypto ecosystem and also within the blockchain community. So, I’m super excited for this cycle. And we have Bitcoin above 60,000 again today, so. So it feels like we’re moving towards spring and a little bit happier days within the space. 

Kyle McDonald: Brilliant. I guess I’ll ask everyone this question individually and sort of go around, but what sort of excites you the most about this space today and why? So maybe starting with you, Jameson. 

Jameson Lopp: It’s been the same reason for me for the past decade, which is that we are building open collaborative systems. The reason that I got interested in Bitcoin was because I felt like money is an abstract concept that should not belong to anyone in particular. It should not be controlled by a smaller group of people. It really is something where we’re all agreeing upon what the authoritative ledger of ownership is of who owes who what. It makes sense to me to be an open, collaborative project which anyone who wants to can contribute to. And so that concept, this merging of the open source ethos into finance, is what has spawned this multi-trillion dollar ecosystem. I believe that this fundamental concept is going to be applied to more and more things. 

And that’s what we’ve been seeing over the past five, six, seven years. So it’s very exciting because I think that the potential for disruption is tremendous. But, of course, it’s going to be a very bumpy and volatile road along the way. And you know, that’s also why it’s a very exciting space to be a part of. 

Kyle McDonald: Great. Perhaps over to you, Amila. What excites you about this space? 

Amila Dissanayake: I mean, similar to Jameson, I think it’s unpredictability for me. The potential is huge, and so is the ability to create new things that no one has thought of before and do with cryptocurrency, digital assets, and smart contracts. You know, there’s so much possibility there, and someone’s going to come along, or a bunch of people are going to come along and do something that no one’s ever thought of before, and the world could change because of that. And that’s pretty cool, right? If you want to get philosophical about it, that’s what excites me most. The possibility and not being able to predict that from where we’re sitting right now is pretty exciting. 

Kyle McDonald: Great. Perhaps over to you, Ben. 

Ben Wiener: You know, I think I’ll take a slightly different angle. You know, the freedom that these assets represent can really have a significant impact on humanitarian issues. And I think that’s an under-discussed part of the value of this technology. 

Kyle McDonald: Perfect. And you, Adrian, what excites you about this space? 

Adrian Larsen: Yeah, I think I have a lot of personal reasons, which I echo from all of the other panellists, and I totally agree with them as well. But I guess from an opportunity standpoint, or more of from my position as responsible for alternatives within our family office, I see the continued growth and adoption of blockchain technology across various sectors. Very exciting. But within tokenisation of real-world assets, I think it is super exciting. There are a lot of developments happening. We’re still at the very earliest beginnings of this, but I think it can provide access and inclusivity for a lot of people to gain access to certain assets or allocations that they just simply couldn’t before. We can go in this direction or not, but retail investors might actually be able to invest in startups that we’ve just never been to before because venture capital is so high. 

Both regulation demands looking at different jurisdictions and capital constraints. This technology truly brings inclusivity to investments within alternatives as well, and that excites me a lot. 

Kyle McDonald: Brilliant. Well, that wraps up our panel event today. That was just the tip of the iceberg of the types of conversations that many in our network have. Thank you so much for carving out the time. Jameson, Amila, Adrian and Ben, if anyone would like to reach out to any of you, I know that you’re open and welcome on LinkedIn. Except for Jameson, the best place to reach you is always Casa IO. So, if you want to find out a little bit more about what Jameson’s up to, head over to that. But yeah, there’s a lot of information out there with regard to digital assets and other themes related to family offices. And ultimately, you know, thank you to the simple team. Simple is here to help family offices explore, collect, and share relevant insights. 

So please feel free to reach out to any on the channel, email them, DM them and ultimately, if you’d like to know a little bit more about Simple, it’s a leading family office knowledge resource providing a suite of technology-driven solutions to empower the next generation of family offices. It’s a fantastic network to be a part of, so definitely check it out. Thank you so much, everyone, for your time today. It’s been an absolute pleasure. Stay well.