E259: The Institutional Way to Invest in Crypto w/Rennick Palley

Dec 10, 2025

In this engaging discussion, Rennick Palley, the founder of Stratos and a former research associate at Sanders Capital, shares insights on building top-decile crypto funds. He dives into the shift from momentum to fundamental investing in crypto and emphasizes the importance of fund size and position sizing to avoid portfolio disasters. Rennick also explores Bitcoin’s role as digital gold, the implications of gold outpacing Bitcoin, and the necessity of decisive action in investing. His expertise combines mathematical rigor with practical insights for navigating the volatile crypto landscape.

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INSIGHT

Chain As A Source Of Truth

Bitcoin is ‘digital gold’ because its immutable ledger stores scarce monetary information.
The same on-chain truth layer can extend to many forms of information and provenance.

ANECDOTE

Gold Confiscation Parable

Rennick recounts the 1930s US gold confiscation and how the government reflated the economy.
He draws parallels to crypto as an alternative money that could challenge fiat over decades.

INSIGHT

Supply Removal Can Raise Bitcoin Value

Seizure or government interference could remove supply and ultimately push Bitcoin's long-term price higher.
Self-custody and lost keys create effective permanent supply removal.

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What does it take to build four top-decile crypto funds in one of the most volatile asset classes on earth? In this episode, I talk with Rennick Palley, Founder of Stratos, about how he approaches crypto investing with a disciplined, mathematically grounded framework. We break down how Stratos constructs top-performing venture and liquid portfolios, why crypto is shifting from momentum-driven trends to fundamentals, how to size positions without blowing up, and why Bitcoin and gold are behaving the way they are in today’s macro environment. Rennick also shares his philosophy on decisiveness, conviction, and avoiding the costly mistakes investors make when they hesitate.

Highlights:

How Stratos generated four top-decile crypto venture funds
Why fund size matters more than most crypto investors admit
Crypto’s evolution from momentum to fundamentals-driven investing
How to size early-stage positions and avoid portfolio blowups
Why the smartest investors focus on: “Just don’t screw this up”
The future of Bitcoin as digital gold
Why gold is outperforming Bitcoin this year — and why that may change
What on-chain data reveals about global truth systems
Why most crypto VC funds underperform the benchmark (just like traditional VC vs. Nasdaq)
How institutions should think about crypto allocation and volatility
The behavioral cost of hesitation and the danger of inaction
Why crypto provides “free leverage” — and why that makes risk management essential
Thoughts on government seizure scenarios, custody, and ETF risk
Meme coins, debasement psychology, and the role of speculation
How investors can compound returns across cycles without blowing up

Guest Bio:

Rennick Palley is the Founder of Stratos, an investment firm he launched in 2016 after entering the crypto markets. Under his leadership, Stratos has built multiple top-decile venture funds and a liquid strategy designed to compound capital across highly volatile cycles. Before founding Stratos, Rennick worked as a Research Associate at Sanders Capital, a $75 billion global equity manager known for its fundamental, value-driven approach. He holds dual Bachelor’s degrees in Applied Mathematics and Mechanical Engineering from Southern Methodist University and a Master’s in Quantitative Finance from the Massachusetts Institute of Technology. Rennick blends value-investing discipline, quantitative rigor, and crypto-native insight, making him one of the most analytical and thoughtful investors in digital assets today.

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X/Twitter: https://x.com/RennickPalley Stratos: https://www.stratos.xyz/

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Disclaimer:

This podcast is for informational purposes only and does not constitute investment, financial, legal, or tax advice. Nothing in this episode should be interpreted as an offer to buy or sell any securities or to participate in any investment strategy. All opinions expressed by the host and guests are their own and do not represent the views of Weisburd Capital. Participants may hold positions or have financial interests in the companies, funds, or investments discussed. Any references to specific investments are for illustrative purposes only. Investing involves risk, including the potential loss of capital. Past performance is not indicative of future results, and any forward-looking statements are subject to risks and uncertainties. Any third-party data or opinions have not been independently verified. Listeners should conduct their own research and consult their own advisors before making any investment decisions.

(0:00) Introduction (2:00) Key principles in crypto venture investing (4:18) Analyzing large outcome clustering in crypto (5:12) Momentum vs. value in evaluating crypto wins (8:14) The future of information and crypto as a hedge (12:22) Historical parallels and Bitcoin's potential challenges (17:45) Strategies for a potential Bitcoin confiscation scenario (21:01) Debating Bitcoin's future valuation and effects of forced sales (27:10) Insights from Rennick Palley and liquid crypto strategies (31:34) Comparing crypto to traditional endowment strategies (33:06) Sector importance and risk management in crypto (39:47) Systematic decision-making and the role of an engineering background (43:43) Portfolio construction and institutional crypto allocation (45:52) Transitioning from venture to liquid crypto investments (49:08) The benefits of illiquidity in alternative investments (50:31) Fund liquidity and managing investor relationships (53:10) Determining the optimal portfolio size for Bitcoin (54:13) Utilizing leverage in crypto investing (57:12) Guidance for newcomers to crypto investing (59:45) Closing remarks