Crypto Unchained

From The Year Ahead in Crypto by Franklin Bi (General Partner, Pantera Capital):

Last July I wrote to you about how Donald Trump was gradually being molded into “The Bitcoin President” by the technology billionaires who eventually became his most vocal and financially generous supporters. This happened. And why wouldn’t it have.

Donald Trump most likely doesn’t have much of a technological interest in how any of this blockchain stuff works. He’s probably not interested in any of the ideology behind it either. But he does understand self-promotion and pulling money from his supporters out of thin air. He can definitely appreciate the utility of an asset that defies stringent ways of valuing it, like real estate or the cost of a construction loan. Crypto can be worth whatever someone says it’s worth - just like a Donald Trump property he’s trying to get insurance for or take out a loan against. It also enables a regulation-free funding mechanism for whatever you want to sell to whomever you want to sell it. And the people involved have gazillions of dollars at their disposal to donate, influence and lobby at will. The love affair between Trumpworld and the crypto movement was always destined to be a match made in heaven once they’d found each other.

Which led to the appointment of technology industry mover and shaker David Sacks becoming our nation’s first ever “Crypto Czar” followed by the Executive Order issued by the White House within hours of the Inauguration.

You can read the whole thing here. 

I wanted to learn more about how crypto-native investors are thinking about the opportunity for mainstream crypto projects now that they have all the momentum of the new administration, the cabinet and the various financial oversight agencies on their side (for the first time ever).

So below you can watch Franklin and I discuss his 2025 crypto market predictions.

This conversation is also available as a podcast if you’d prefer to listen. Go here to get it on Apple or Spotify or check out The Compound and Friends on your favorite podcast app.

How Investors Should React to DeepSeek’s Breakthrough

Last Friday morning I wrote about why you were going to be hearing of DeepSeek given the remarkable technological feat the company was claiming to have pulled off. The Chinese startup - a side-project of a prominent hedge fund manager - claimed to have built something with the functionality of ChatGPT 4o and Claude Sonnet 3.5 with a budget for chips and compute of just under $6 million. They made this claim in a research paper that first made the rounds among Silicon Valley people which then exploded into the stock market media ecosystem sometime over the weekend. I was early to this but I never could have imagined the magnitude of the reaction.

Nvidia’s drop on Monday - $589 billion - was the largest dollar-figure market cap loss of all time, for any company, on any stock market around the world. Nvidia now holds eight of the top ten of these records.

To put this number in perspective, this comes from Chart Kid Matt at Ritholtz Wealth Management:

Before Tuesday’s rebound, Nvidia had lost more than the market cap of Mastercard or Exxon because of the DeepSeek news. All kinds of stocks got destroyed this week beyond just Nvidia as traders raced to reprice the new disruption risk and everyone had to rethink their bets on data center buildouts. We’re lucky Anthropic and OpenAI, two pure-plays on expensive Large Language Models (LLMs), aren’t public companies yet, because that would have been a double-feature slaughterhouse for the ages.

On an all new edition of What Are Your Thoughts, Michael and I invited our friend Alex Kantrowitz (Big Technology) to help us make sense of the explosion that took place over the weekend and into the stock market’s open on Monday. What’s real, what’s fake, what’s lasting, what’s fleeting, why it matters and why it doesn’t - Alex delivered for us big time.

Watch it below:

That’s it from me, talk to you later this week - JB