Here's how crypto's crowded venture market could lead to a resurgence in liquid investing
May 13, 2024
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Founder and CIO of Split Capital, Zaheer Ebtikar, discusses the challenges and opportunities of liquid crypto investment strategies, market inefficiencies, impact of ETFs, and shifting fundamentals in the crypto market. He explores the evolution of crypto venture, nuances of liquid funds, and market opportunities for capital allocators.
Understanding the significance of crypto venture markets amidst regulatory scrutiny and challenges of token launches.
Importance of evaluating downside risk and effectively managing drawdowns in liquid investments.
Deep dives
Understanding the Importance of Crypto Venture Market and Liquid Side
The podcast discusses the importance of the crypto venture market versus the liquid side. It emphasizes the significance of understanding why venture markets in crypto are crucial due to regulatory scrutiny and the challenges of launching tokens. It highlights the shift towards longer stays in private markets due to legal complexities, leading to the rise of venture investing. The conversation explores the limitations of inflows into crypto venture funds and the need for a balance between liquid and venture investments.
Challenges and Potential in Liquid Investments
The episode delves into the challenges and potential of liquid investments in the current crypto landscape. It reflects on the drawbacks of liquid investments, such as handling drawdowns and market volatility. It points out the adverse selection in good liquid fund managers opting to trade with their own capital. The podcast underscores the necessity of evaluating downside risk and the complexities of running a liquid fund effectively.
Adapting Investment Strategies to Market Dynamics
The discussion revolves around adapting investment strategies to market dynamics in the crypto space. It underlines the need to be early in identifying opportunities and capitalizing on market inefficiencies. The episode emphasizes navigating through irrational market moves and leveraging fundamental analysis to make informed investment decisions. It stresses the value of being agile and strategic to navigate the evolving crypto landscape.
The Transition Towards Mainstream Adoption and Market Realities
The podcast touches upon the transition towards mainstream adoption in the crypto market and the evolving market realities. It discusses the challenges of managing market expectations and the implications for capital allocation. The conversation highlights the importance of tempering expectations and focusing on sustainable growth in a volatile market environment. It also explores the impact of retail and institutional participation in shaping market dynamics and investment outcomes.
Zaheer Ebtikar is the founder and CIO of Split Capital.
In this episode, Ebtikar discusses the opportunity of liquid crypto investment strategies and the challenges faced by crypto venture firms, including crowded markets and longer lock-up periods.
OUTLINE
00:00 Introduction
05:14 Evolution of Crypto Venture
08:12 Nuances of Liquid Crypto Funds
10:58 Liquid Fund Capital Allocators
13:59 Crypto Market Inefficiencies
17:38 Shifting Fundamentals
20:38 Impact of ETFs
22:49 Market Opportunities
37:02 Closing Thoughts
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