Hi, I'm Vince Molinari, and welcome to FinTech TV.
We're broadcasting from the iconic New York Stock Exchange, and I'd like to welcome Diago Monica, who is a general partner at Han Ventures.
Diago is the co-founder of Anchorage Digital, where he served as the president prior to joining Han Ventures and where he currently serves as executive chairman.
Anchorage Digital is the first federally chartered crypto native bank in the United States, and so good to welcome you back, Diego.
It's been a while since we have a conversation.
And here we are at the epicenter of historic capital markets, the New York Stock Exchange, and we're going to have this great conversation as always that we do, but very timely today.
Bullish IPO just getting underway here today.
Well done, sir.
Hey, so.
We haven't spoken since you've been at Han Ventures and launch there.
Tell me a little bit about Han, what you're doing there, the vision.
That's right.
So Hahn Ventures, I'm a general partner there.
It was a fund that was created by Kitty Hahn.
Kitty Hahn is extremely famous in our in our world.
There's not many ex-re federal prosecutors.
They go into the crypto world, as you know, she was the first.
Been a board member of Coinbase.
She co-ran Fund 12, and 3 vendories in Horowitz's crypto, and she started her own fund about 4 years ago, and I just joined up about a year and a half ago, and there's 2 GPs.
It's actually keeping great company.
Yes, Katie's amazing.
We've known each other for 8 years.
The fund is one of the largest funds in crypto.
The platform is extremely interesting. $500 million early stage funds, a billion dollars.
Growth stage funds.
There's not a lot of growth stage vehicles and acceleration vehicles in crypto, so it's a really fun thing to have.
Smallest check being 3 million, largest check being 100 million.
You really can play the game like you got a lot of, a lot of breath to play with, yeah, and for me it was extremely exciting to be able to actually spend my time.
I don't know if you, we talked about this last time, but I actually I have over 150 angel investments myself.
Well, no, you didn't.
And so the way that I feel about spending more of my time deploying capital is Changing my mini golf to golf.
It was the same mechanics.
There was a club and a ball and a hole, but a very different sport.
And so that's how I feel about venture investing and competing in the big leagues.
I love that analogy.
I may have to use that a bit later, but I'm kind of a bit more on the playschool set.
I hadn't even gotten to to the mini golf yet.
So, so talk to me a little bit about this transition, you know, as, as, as an entrepreneur.
Entrepreneurial world is always hard, no less startup entrepreneurship layer in, no pun intended an entire new industry.
What you pioneered with Anchorage Digital and that and truly congratulations.
Well done to you and the team.
You know, now kind of spending more time as a as an investor, a professional investor, how do you balance that?
What do you like dislike about both?
So it was a transition that I wanted to do for a long time and candidly, I think I'm the luckiest man ever to have a partner in Nathan McCauley that stays on as CEO and is such an incredible entrepreneur and such an incredible CEO.
And so I had the opportunity to actually spend more of my time deploying when it is a normal situation.
You may not be lucky enough to find a company and now some.
So amazing that is actually going to going to take the man until they do such a great job by he's doing.
So that one is like luck number one.
And number 2, while you're an entrepreneur and you're executing, it's, you have these blinders on.
It is your business.
Every time away from the business is something that you should be spending on a business instead.
And so I've always felt a little bit guilty every time I wrote an angel check those $25,000 or $100,000 and I really wanted to do the fourth thing in crypto that I hadn't done, which was the.
If you think about my background, I have literally a PhD in distributed assistance and Security, which is blockchain.
So I've done the academic thing.
I've done the operator thing.
I was early at Square, early at Docker, building distributed systems.
I've done the entrepreneur thing and the CEO thing, right, of like being president of a company and executing.
The last thing, the last thing that I, the insight into this space that I didn't have was how to actually play in the big leagues, tier one venture capital and crypto.
So that for me was always something that was extremely interesting.
And the final thing that I'll say is that I genuinely believe that beer is a young man's game, and I'm not getting any younger and so I need it to start now if I ever want to be any good.
Well, I think you're being very humble, and I think perhaps you're, you're playing in the Masters and you're going to have your green jacket soon, so I hope so.
Well, well done.
Listen, I want to talk about stablecoins.
We're seeing this massive growth.
Give me a little bit of a lens.
What are you seeing?
What are you thinking about the entire space?
So unfortunately right now we can't talk about sy coins talking about circles IPO.
Well, and that's a testimony to the space itself right now.
It really is, and I think more than that for me, learning and for the whole space, I don't think anybody underwrote circles equity at the prices that we're seeing trading at just under $40 billion market cap in the private sector.
And so there was a major mispricing.
It was not just that there was an IPO pop and you know, Bill Gurley is right that there's a massive mispricing on these things, but is that the private sector in crypto, the experts were not valuing stablecoins. way that the public markets are, so the excitement is immense, and the things that have happening that have been happening, it really started with Stripe's acquisition of Bridge, which is a company we were on a portfolio of, so we were an investor.
I was also an investor, so it was really fun and that was really the starting gun.
From that moment on we've had this year alone in crypto where there had been no over a billion dollar M&A, we've had more than 4, and we continue seeing M&A happening over and over again.
So there's a lot of excitement and the reason is another clear sign of property market fit.
Stablecoins are working.
They're growing.
They have a use case.
It's something that traditional financial instruments haven't been able to do for a long time, and they're just a unique building block.
They take away a lot of the weird things that we've coalesced around a SWIFT system or even in traditional card payments with chargebacks and rewards, etc. and there's just a simpler building block and entrepreneurs love new building blocks to And so as you'd expect, all these entrepreneurs are building the extremely interesting companies that are growing extremely fast, which was something that we didn't really have in the prior versions of crypto where it was primarily token focus.
Now we're definitely seeing the pendulum swing to equity and deservedly so, because these companies are making tens of millions of dollars out of the gate, 9 months into it, 18 months into it, large amounts of coming in as a real revenue, real underwriting as an equity company, which makes crypto extremely exciting for all of these more traditional players that really what they loved about crypto was the FinTech angle, not necessarily the defy angle.
Well, I think we have 3 or 4 episodes just in that in that question that we could do.
I want to just pull on one of those threads for a second because as you as you were talking, I was thinking about it.
So well beyond mis pricing, right, this delta between the IPO price were traded aftermarket and ongoing and has stayed at that pricing.
So congratulations to Jeremy and team and and so forth.
But when we look at that, what's the, what's the messaging, right?
We're so off in market perception and public market valuation.
Is it, is it private sector investors that have missed it?
Is it the crypto investors?
Is it our trad by market system?
Because we're all learning as we're going, right, as we're intersecting here.
Any further thoughts on that?
So I have to say that I'm part of the pack that mispriced this aggressively from the private sector, and I think many of us, many of us, and I think the way to introspect this is it is pretty clear that A specific crypto fund has been the right way to invest in crypto over all of the cycles that we've seen over the past 15 years of crypto.
That has been the right way to play this, and in many of those cycles, the winner has absolutely been the underlying tokens.
Obviously Bitcoin, good performance, Ethereum showing great performance.
We have seen that actually playing the token games, so to speak, it's actually been extremely profitable and a great strategy overall, and I think throughout time in crypto funds lands and private crypto venture.
We have discounted the value of equity.
And we have done so so consistently that we were in the situation where the first company that was about to be coming public in a while was this extremely great narrative that in crypto we've been shouted from the rooftops, such as stablecoins at foreign market fed.
They are a new innovation.
There are new money rails.
They're faster, better, cheaper, and somehow we discounted as an industry, the actual equity value because we were so focused on the tokens, and I think this is a learning for all of us.
Well, you know, it's an amazing point when we think about.
Bridge trad 5 to Defi, right, there's stablecoin or crypto value.
All of a sudden there's this equity value that's almost a twofer that you're getting within enterprises, which is just incredible, and it's really a wave because the M&A is the other side of this.
The M&A is not an IPO and a public listing, but it is the private market recognizing that these companies have equity but have a lot of value in for over a billion dollar Min acquisitions in a space, as I mentioned in crypto where we had none until last year.
Well, hopefully that wave of momentum really continues, you know, we, we talked a bit about uh off camera earlier market structure for stablecoin.
Um, I'd love if you talk a little bit about it because it's so fascinating when you talk about.
Where's the money being made?
And maybe if you can share some of your thoughts, what the end state and where where we're going with stable porn.
So right now it's pretty clear that Val capture is a pyramid where at the bottom layer we have Circle and we have tether, which is even larger and makes even more money, and they are the ones generating the most, most revenue out of stablecoins.
They're the issuers, the bottommost layer of the pyramid.
On top of that we have this. that I'll call the money routers companies like Bre, companies like Bridge, which was acquired by by Stripe that are effectively integrating with these money issuers in the blockchains directly and making it easy for you to go from fiats to stablecoins, stablecoins back to fiat, getting your money to destination, pay-ins, payouts, remittances, dealing with effects problems, and then on top of that you have what I call the money apps which are global Vinmo.
One of the very interesting things about stablecoins, which I think are absolutely fascinating and still underappreciated, is that we have never had a truly global fintech before.
If you think about it, Revolut is only really your Square Cash doesn't really operate outside of the United States.
Why is that?
Well, it turns out that every time a company like Square or PayPal wants to go to a different country, they have to find partnerships on site, local markets, local markets.
They have to actually do all reconciliation, get access to the rails.
They have to do a lot of effort from a compliance perspective to actually ramp every one of the 150 markets that they're going to.
But now at stablecoins, the onus of integration has inverted.
So now what you need to do is you have one selling point, which is this USDT or USDC as the mechanism by which you settle.
And now from day one you can issue a truly global fintech.
The only thing you need is these rails, and every single one of these countries already has an on-ramp for you ready to give you what you want, which is the trade too stable, and that is fascinating.
So as a venture investor, extremely excited about the marketing gap of something that can be truly global, the first truly global fintech, and I think that's really exciting.
Massive point.
Hey, you know.
Virtually out of time already, Diago, as always, as you and I get to talk, but you know, give me some insight as we close out if you can.
What's at the stable point where as a venture investor, as an angel investor, what are you looking at next?
What's the next play?
The next play is absolute tokenization in this particular form.
If you think about it, stablecoins are tokenized dollars.
The same infrastructure we're building for stablecoins and the same grow up infrastructure that we're creating maturation is actually going to come for equities.
So absolutely the same way that dollars are being tokenized, extremely successfully we call them stablecoins.
We're going to have tokenized stocks, tokenized private market funds, tokenized yield.
All of these things are happening already, but they're really the next step of this evolution of the market.
Love it.
Well, we're gonna have to do a separate segment on that.
Diego, congratulations.
So good to have you back in house and we look forward to chatting again.
