On Tuesday, I had the pleasure of moderating the “Uncovering The Global Crypto & Blockchain Investment Landscape” panel for the LA Blockchain Summit that runs through Oct. 7.
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The panel included Tom Schmidt, partner at Dragonfly Capital Partners; Brooke Pollack, founder and managing partner, Hutt Capital; Curtis Spencer, co-founder and partner at Electric Capital; and Zachary Cefaratti, CEO of Dalma Capital.
Over the course of 30 minutes we discussed the global nature of cryptocurrency, investment funds dedicated to the space, which crypto/blockchain assets are investable, and the panelists’ predictions for the short-term and long-term of this space.
Below are highlights of the predictions they ended the panel with:
Cefaratti: “Within six months, we will see the first major corporate- and sovereign-related entities utilize DTL [distributed ledger technology] as a mechanism for issuing digital securities. We know of deals happening in the pipeline.
“In the next five years, we will see a large portion of the global securities market, particularly debt markets, utilizing–hopefully permissionless, but certainly permissioned–blockchains to issue, settle, trade, and as the backbone of what is currently an archaic structure.”
Curtis: “In the short-term, I have more of a rain cloud over my head in terms of regulation. The SEC has gone down their list and started on the things that were outright fraud in 2017. Now they are starting to go into credible projects, and I don’t know where that list ends. I know there will be some negative press headlines around some projects that we think are high quality, but are doing something the SEC was not happy with.
“In the longer term, we have Maslow’s hierarchy. We started with early on-ramps, and next up is scalability. We are running high on gas prices on Ethereum, so we expect to see some meaningful improvements in six months to a year. Privacy then becomes important, and we will see more research there. Scalability pulls against decentralization, and we should be pulling back because without that, the whole thing falls down.”
Pollack: “Six months from now, I will be curious to see who the new SEC chair is. Five years from now, I do think we will see more non-crypto companies look at tokens as a way to bootstrap network effects and bootstrap usage in unique ways. We will see more creative ways from companies trying to use new technology to grow. There will potentially be a large number of new tokens from non-crypto companies that want to see the inherent benefits.”
Schmidt: “We are currently seeing another wave of “Ethereum killers” crop up, and this time they are trying to be an L2 [layer 2] to Ethereum. I think those noticeably will not work when they come to market, because they will fail to get community and developer mindshare. As we see them launch over the next few months, it will be a similar result to what we saw in 2018 and 2019, especially given those have been the vintage of those assets.
“Zooming out, the macro tailwinds favor the rise of crypto assets like bitcoin. The path forward for Ethereum, and DeFi is very clear. They continue to scale, continue to become more mainstream and more user-friendly. Also, we are seeing people using these things for real business needs and for real use cases, as well as being used to integrate into global banking systems. I continue to be very bullish on this space.”
Illustration: Li-Anne Dias