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    Empire

    Larry Fink Just Ignited BTC's Institutional Adoption Narrative | Roundup

    Fri Jul 07 2023
    NFT communityCrypto educationSocial graphLarry FinkBlackRockCrypto assetsMarket trendsInstitutional involvementNFT market dynamicsDeFi innovationLiquid stakingConferencesBook recommendations

    Description

    The episode covers various topics including the NFT community, crypto education, the value of owning your social graph, Larry Fink's views on crypto assets, market trends, institutional involvement, NFT market dynamics, DeFi innovation, liquid staking, conferences, and book recommendations.

    Insights

    Crypto education and critical thinking

    Investing in crypto provides a unique education due to market cycles and strategies. Critical thinking and the ability to think for oneself are increasingly important.

    The value of owning your social graph

    Owning your social graph has value in relation to crypto. Different value propositions exist between Twitter and threads. Practical implications of transferring your social graph and the potential impact on crypto-first applications are discussed.

    Larry Fink's influence and BlackRock's involvement in crypto

    Larry Fink's positive view on Bitcoin and cryptocurrency, along with BlackRock's approval rating for ETFs, indicate institutional demand for crypto assets. BlackRock's investment into Circle and involvement with real-world assets validate the asset class.

    Market trends and institutional endorsement

    Incumbent legacy firms are expected to dominate the crypto market. Blackrock's filing for an ETF has sparked a response from other companies. Coinbase's rally in stock price and Baupost group's exposure to Coinbase converts indicate market trends.

    NFT market dynamics and speculation

    Blur's influence on the NFT market and the role of speculators are discussed. The inefficiency of NFT markets is attributed to factors like hype and celebrity endorsements. NFTs seem to follow a similar pattern as DeFi with bear markets followed by innovation and recovery.

    DeFi innovation and risk management

    DeFi innovation is thriving, and speculators play a crucial role in providing liquidity and driving innovation. Investors should consider their exit strategy and not become too attached to their investments. Liquid staking and its benefits and risks are explored.

    Conferences, book recommendations, and podcast support

    Upcoming conferences like ECC and Permissionless are mentioned. The importance of targeted conferences is highlighted. Tiger's pause in secondary portfolio sale and the possibility of founders recapitalizing or shutting down struggling companies are discussed. A book recommendation on knowing when to quit is given, along with support for the podcast through an Amazon link.

    Chapters

    1. The NFT Community and Crypto Education
    2. The Value of Owning Your Social Graph
    3. Larry Fink, BlackRock, and Crypto Assets
    4. Crypto Market Trends and Institutional Involvement
    5. NFT Market, Social Graph, and Crypto Speculation
    6. DeFi Innovation and Liquid Staking
    7. Liquid Staking, Conferences, and Book Recommendations
    8. Book Recommendation and Podcast Support
    Summary
    Transcript

    The NFT Community and Crypto Education

    00:04 - 06:36

    • The NFT community is going through its first true cycle.
    • Staying calm during panic is a valuable skill in crypto.
    • Investing in crypto provides a unique education due to the market cycles and various strategies.
    • Critical thinking and the ability to think for oneself will become increasingly important.
    • BlackRock's Larry Fink went on Fox, causing discussion about Blur's role in the NFT bear market.
    • Coinbase and OG DeFi tokens are performing well.
    • Lido moved their treasury from ETH into steth.
    • Facebook announced threads, their Twitter competitor, which has seen rapid growth in downloads.
    • Facebook owns four of the top ten social media apps globally.
    • The value of owning your social graph is highlighted by threads versus Twitter.

    The Value of Owning Your Social Graph

    06:17 - 13:23

    • The value of owning your social graph in relation to crypto
    • Different value propositions between Twitter and threads
    • Instagram's commitment to building support for activity into threads
    • The importance of being able to transfer your social graph
    • The potential impact on crypto-first applications like Lands and Farcaster
    • The distribution advantage of platforms like Facebook and Twitter
    • Activation energy and the challenges faced by new apps like Lens
    • Most people don't know what a social graph is or care about it
    • Practical implications of taking your social graph to another platform
    • The concept of a social protocol and automatic following/unfollowing
    • The lack of incentive for platforms like Twitter to allow portability

    Larry Fink, BlackRock, and Crypto Assets

    12:54 - 19:47

    • The speaker discusses the issue of auto-following on Twitter and compares it to the problem of airline points.
    • There is no incentive for Twitter to allow portability of social graph data.
    • People care more about fame, money, and dopamine on social media than their social graph.
    • Larry Fink, CEO of BlackRock, expressed a positive view on Bitcoin and cryptocurrency in an interview with Fox.
    • BlackRock's approval rating for ETFs is high, indicating institutional demand for crypto assets.
    • Larry Fink's change in stance on crypto may be driven by institutional demand and opportunities seen by BlackRock.
    • The speaker provides background information on Larry Fink and highlights his influence and power in the capital markets.
    • BlackRock is the largest asset manager in the world with $9-10 trillion AUM.
    • BlackRock has significant political connections and has been involved in various important financial operations such as buying corporate bonds during the pandemic.
    • BlackRock's investment into Circle and its involvement with real-world assets validate the asset class and can change the narrative around cryptocurrencies.

    Crypto Market Trends and Institutional Involvement

    19:20 - 26:14

    • Incumbent legacy firms are expected to dominate the crypto market.
    • Blackrock filing for an ETF has sparked a response from other companies.
    • The discount on grayscale products has been fluctuating, potentially impacting court rulings and liquidity.
    • Coinbase has experienced a rally in its stock price.
    • Baupost group announced exposure to Coinbase converts, indicating a mispriced instrument.
    • $75 Coinbase stock may be undervalued in the bull market.
    • Blackrock's endorsement of Coinbase is significant despite ongoing lawsuits against the company.
    • M&A activity involving traditional companies and crypto is unlikely due to high valuations and market conditions.
    • Average open interest for Bitcoin futures on CME is at its highest since December 2021.

    NFT Market, Social Graph, and Crypto Speculation

    26:00 - 33:29

    • Big mutual fund groups like BlackRock, Fidelity, and Charles Schwab may be forced into the crypto market by their customers' demand.
    • Blur is being blamed for causing a crash in the NFT market due to its influence on floor prices and trading activity.
    • Blur introduced more efficiency and liquidity to the NFT market, leading to better price transparency.
    • The inefficiency of NFT markets should be blamed on factors like hype, celebrity endorsements, and undisclosed gifting of NFTs.
    • Efficient markets are desirable for better price discovery.
    • Manipulating the stock of a public company is difficult, but manipulating crypto assets is easier due to low liquidity.
    • The NFT marketplace is going through a capitulation phase with declining prices.
    • A small percentage of NFT buyers are purely speculating, while others are closer to art collectors.
    • NFTs seem to be following a similar pattern as DeFi did one year ago with bear markets followed by innovation and recovery.

    DeFi Innovation and Liquid Staking

    33:02 - 40:09

    • DeFi innovation is currently thriving, with high prices and new developments.
    • Many NFT collectors are actually speculators who blame platforms when prices go down.
    • Investors should consider their exit strategy and not become too attached to their investments.
    • Speculators play a crucial role in providing liquidity and driving innovation in various industries.
    • There is nothing wrong with making money, as it fuels progress and new movements.
    • LIDO executed proposal 161, staking a significant portion of their treasury into steth and LIDO tokens.
    • Around one-third to 40% of the speaker's ETH is stake-dETH for risk management purposes.
    • The speaker plans to listen to a podcast season on liquid staking before deciding on adjusting their exposure.

    Liquid Staking, Conferences, and Book Recommendations

    39:40 - 46:40

    • A new season of the podcast will focus on staking, liquid staking tokens, and eigenlayer.
    • The hosts plan to assess their exposure to liquid staking after listening to the season.
    • They discuss the benefits and risks of liquid staking.
    • The hosts mention an upcoming conference called ECC and express their preference for targeted conferences over general ones.
    • Permissionless is a conference they are excited about due to its diverse crowd.
    • They mention other conferences they have attended or plan to attend.
    • The hosts talk about Tiger pausing their secondary portfolio sale due to low valuations of individual companies.
    • They discuss the possibility of founders recapitalizing or shutting down struggling companies.
    • The importance of knowing when to quit is mentioned, along with a book recommendation on the topic.
    • The hosts briefly talk about books they have read and recommend.

    Book Recommendation and Podcast Support

    46:16 - 47:09

    • The speaker was initially reluctant to buy the book 'Dacker Keltener' because it seemed like a self-help book.
    • However, they decided to purchase it after seeing it recommended by a behavioral scientist.
    • The speaker is impressed with the book and finds it awe-inspiring.
    • The podcast hosts mention that they should include an Amazon link for the book to support their podcast.
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