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Capital is opening up amid “challenging” times
Bitcoin has finally recovered after months of macro-driven sell-offs, but it’s an open question whether the bear market is behind us, especially with so many market indicators pointing in different directions.
That’s why I thought it was a good idea to do a man-on-the-street interview during Cafecitos at Consensus: Talking Tokens Live, an event StrataMedia co-hosted with GSR and Alpaca on the sidelines of Coindesk’s Consensus Miami conference last week.
We sought out six executives and two division heads to get their take on the state of the crypto market. What did we learn? Overall, the sentiment is mixed, and operators aren’t disregarding the fact that the market is volatile right now. Still, one can hear notes of optimism around growing regulatory clarity as well as the opportunity in exploring avenues that have opened up over the past two years.
“Having been in this space for 13 years, it’s both exciting and muted,” Asheesh Birla, CEO at Evernorth, an upcoming XRP-focused digital asset treasury company, said. Fireblocks’ Head of Strategy and BD, Neil Chopra, echoed that sentiment, saying the crypto market right now is “interesting,” and “uncertain.”
Not everyone minced their words: “This is in some ways the worst bear market I’ve been in,”, Phil Fogel, CEO and co-founder of tokenized risk infra startup Cork Protocol, said, comparing the current climate to the last decade of his career in crypto.
David Reising, the founder and CEO of Lotus Protocol put it simply, saying, “It’s challenging.”
It would be premature to assume, however, that the industry is mired in pessimism. Indeed everyone we spoke to made it a point to highlight upcoming opportunities.
Scott Dykstra, co-founder and CTO of Space and Time, feels we’re at a turning point, saying, “it really feels like things are turning around. The ships are turning, the pain is ending, and people are really excited about crypto again, which is great.”
That optimism may be driving some of Dykstra’s new initiatives, too. Space and Time recently launched Virtual Vaults, which provides institutional lenders and borrowers onchain vault infrastructure. “These virtual vaults are a way to bring institutional lenders onchain, get their money onchain and show them data about borrowers,” he explained.
From Chopra’s perspective at Fireblocks, enterprises and traditional infrastructure players are starting to step in and really understand how digital assets are going to impact their businesses. But two big questions remain: What is the utility? How will these assets be used in a productive way going forward?
“It’s very conflicting,” said Tom Murphy, head of communications at tokenization firm Securitize, pointing to the disparity of operating in a bear market while tokenization booms. “Things for us are as good as they’ve ever been. But the larger market is not necessarily on that same level, so it’s important to be cognizant of that tilt.”
For Jakob Palmstierna, president of GSR, the market right now is going through growing pains. He described it as “evolutionary,” though he was careful to point out that this is a different climate than the bull and bear markets of the past decade.
“We’re going to see more and more tokenized assets,” he said. “It’s full circle, [many of us] were in TradFi. We came into crypto. Now many of those assets in TradFi are coming onchain again, which is really exciting.”
Still, we noticed that operators are stepping with care, mindful of the fact that the industry as a whole has much to work on.
“There's more opportunity now than I've ever seen before,” Cork Protocol’s Fogel said. “Institutions are coming; they want to use DeFi. They want to use blockchain protocols to actually improve efficiency, create better capital markets. But in order for that to actually happen, there's a bunch of things that need to come first.”
The market is on the edge of a “paradigm shift,” according to Yoshi Yokokawa, the co-founder and CEO of Alpaca. “I think regulations are catching up, but it's still not there yet. But it's the right direction in terms of the product-market fit. What's happening right now? I think it's still a lot of volatility.”
But when will things continue to improve on the ground? No one can say for sure, but the signs are skewing somewhat positive.
There's a lot of uncertainty, Chopra said. “But I do think we're going to start to see capital open up a bit more.”
Birla shared a similar sentiment, pointing to the record growth in tokenization and real world assets (RWAs) moving onchain. “It’s up four-fold over the last six months. But unfortunately, there’s a lot of macro effects out there in the crypto markets that are sort of in this prolonged winter,” Birla added.
Going forward, Murphy is hopeful that this will be the tipping point for the industry as large allocators enter the space and the $30-billion tokenized RWA market continues to grow. “On the flip side, that is only the tiniest percentage of the larger markets as a whole,” he said.
“It’s such a cliche, but we are so early.”
Check out the next section for more details and the full episode.
The latest Talking Tokens podcast 🎙️
For today’s episode, I interviewed eight crypto leaders in rapid-mini fire segments at Cafecitos at Consensus: Talking Tokens Live, an event StrataMedia co-hosted with GSR and Alpaca on the sidelines of Coindesk’s Consensus Miami conference last week. Each guest is asked a similar set of questions: what their company is working on, how they describe the state of the crypto market, whether bearish sentiment is overhyped, what they would tokenize if they could tokenize anything, and what else they're paying attention to that listeners should be watching too.
Guests include Asheesh Birla (CEO, Evernorth), Phil Fogel (CEO and co-founder, Cork Protocol), Neil Chopra (head of strategy and BD, Fireblocks), Scott Dykstra (co-founder and CTO, Space and Time), David Reising (founder and CEO, Lotus Protocol), Yoshi Yokokawa (co-founder and CEO, Alpaca), Tom Murphy (head of communications, Securitize), and Jakob Palmstierna (president, GSR). Answers range from wanting to tokenize chickens and avocados to entire balance sheets, and the through line is clear: institutions are here, the infrastructure is maturing, and the people still building through a tough market are the ones who will define what comes next.
TIMESTAMPS
00:00 – Intro
00:32 – Asheesh Birla, CEO of Evernorth, on active XRP treasury management and tokenizing compute
05:48 – Phil Fogel, CEO and co-founder of Cork Protocol, on risk infrastructure DeFi is still missing
12:08 – Neil Chopra, head of strategy and BD at Fireblocks, on convergence of crypto native and traditional markets
18:10 – Scott Dykstra, co-founder and CTO of Space and Time, on its new institutional Virtual Vvaults and decentralization after exploits
21:56 – David Reising, founder and CEO of Lotus Protocol, on tranched lending and DeFi insurance
24:36 – Yoshi Yokokawa, co-founder and CEO of Alpaca, on tokenization infrastructure and the paradigm shift ahead
28:11 – Tom Murphy, head of communications at Securitize, on its new Jump and Jupiter partnership, Computershare announcement, and tokenized stocks
34:38 – Jakob Palmstierna, president of GSR, on market structure evolution and tokenized equities trading 24/7
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Please note this content is for informational and educational purposes only. Any views shared should not be considered financial advice, nor should it be used to make investment decisions. Cryptocurrencies are high risk and you should consult a financial professional before making any financial decisions. Make sure you do your own research. We may have a direct or indirect financial interest in content mentioned in this newsletter.