CRYPTO 101 Podcast Summary Episode 652: Understanding Crypto: Misconceptions and Realities of Today's Volatile Markets
Release Date: April 29, 2025
Hosts: Bryce Paul & Brendan Viehman
Guest: Les Borsai, CEO & Co-founder of Wave Digital Assets

1. Guest Introduction and Background

The episode features Les Borsai, the CEO and Co-founder of Wave Digital Assets. Les shares his transition from the music industry to the cryptocurrency sector, highlighting his early investments in Ripple (2013) and Ethereum (2015). His background in innovation and technology from the music business provided a unique perspective as he ventured into the crypto world.

Les Borsai [02:07]: "I was curious and, you know, I had heard about Bitcoin and not soon enough. I think at the time it was trading at about 600 bucks. And I said, well, I'm not going to spend that kind of money on something I don't understand, but I am going to find the next one."

2. Genesis and Evolution of Wave Digital Assets

Les discusses the founding of Wave Digital Assets with his partner, Dave Seymour, who brought expertise from finance and venture capital. The company initially focused on seed-stage investing in crypto companies, treasury management, and innovative financial products like Bitcoin yield products and tokenized funds.

Les Borsai [07:31]: "We took what [Dave] knew and that was seed stage investing in companies and built funds around that. But the other two things that we really excelled at were treasury management and looking at protocols... managing those using DEFI and other capabilities in a regulatory fashion."

3. Navigating the 2021 Bear Market

The 2021 market downturn was a pivotal moment for Wave Digital Assets. Unlike many peers who panicked, Les and his team saw opportunities in acquiring distressed token inventories from bankruptcies like FTX, Voyager, and Celsius. Their strategic acquisitions at discounted prices allowed them to gain valuable insights into asset liquidity and management.

Les Borsai [10:26]: "In 21, everything started imploding... everyone was running for cover, we're like, yeah, let's go buy this stuff."

4. Addressing Misconceptions About Crypto

Les emphasizes that misconceptions about cryptocurrency often stem from a lack of understanding and fear. He cites the FTX fraud as an example where greed overshadowed common sense. Les advocates for education, sharing a story about explaining crypto to an elderly taxi medallion owner to demystify digital assets.

Les Borsai [13:06]: "...a lot of misinformation out there based on narrative that just isn't accurate... people somehow cease to look at this just like another asset class."

5. Collaboration with Government Agencies

Les elaborates on Wave Digital Assets' collaboration with government bodies, specifically the U.S. Marshals Service, to manage and account for seized digital currencies. He highlights the complexity of governmental crypto holdings and the potential for innovative management solutions through public-private partnerships.

Les Borsai [19:16]: "We created a curriculum and I hired a bunch of government people just to give it away because I knew if there wasn't a baseline understanding in government of what these assets were."

6. Potential Disruption of the Music Industry with Blockchain

Drawing from his music industry experience, Les expresses skepticism about blockchain's ability to disrupt traditional music infrastructure. He argues that record labels resist transparency and changes that could empower artists, citing past challenges in integrating technology with the music business.

Les Borsai [35:39]: "I don't believe there's a business there because the gatekeepers don't allow for it. And that's just heartbreaking to me because artists deserve it, ultimately."

7. Insights on Blockchain Voting

Les discusses the feasibility of implementing blockchain in voting systems, concluding that while partial adoption might occur at the state level, nationwide implementation faces significant barriers due to the decentralized and varied nature of U.S. states.

Les Borsai [40:23]: "We will have it in parts and parcels... without a centralized federal mandate, it's going to be difficult."

8. Bitcoin's Future and Portfolio Inclusion

Addressing Bitcoin's role amidst market volatility, Les advises investors to consider their individual risk tolerance and understanding of the asset. He views Bitcoin's fixed supply and transparent economic model favorably, suggesting its continued relevance in diversified portfolios.

Les Borsai [43:27]: "Bitcoin, we know exactly what's going to happen with it... if they don't understand it, they should avoid investing."

9. The Intersection of DEFI and Traditional Finance

Les is optimistic about the integration of Decentralized Finance (DEFI) with traditional financial products. He envisions hybrid financial instruments that leverage DEFI's innovation alongside the stability of traditional markets, fostering broader adoption and creative financial solutions.

Les Borsai [46:07]: "When you start to create these hybrid financial products is when we're really going to see adoption. Because this is truly a global currency."

10. Conclusion and Future Outlook

Bryce and Brendan express their appreciation for Les's insights, emphasizing the unique perspectives he brings from intertwining crypto with government and traditional sectors. They acknowledge the accelerating pace of technology and AI as significant drivers for crypto's future growth.

Brendan Viehman [46:07]: "And you're right. I mean, people get themselves into trouble with this. So as we're looking at, maybe the rest of this year... How do you kind of see the crypto market coming out of this?"

Key Takeaways

• Early Adoption Pays Off: Wave Digital Assets benefitted from strategic acquisitions during market downturns, showcasing the importance of foresight in crypto investments.
• Education is Crucial: Misconceptions about crypto can be mitigated through education and transparent communication.
• Government Collaboration: Effective management of digital assets requires robust public-private partnerships and innovative solutions tailored to regulatory frameworks.
• Skepticism in Traditional Industries: While blockchain holds potential, entrenched gatekeepers in industries like music may resist disruptive changes that empower end-users or creators.
• Bitcoin's Stability: Despite market volatility, Bitcoin's inherent characteristics make it a viable component of diversified investment portfolios for those who understand its fundamentals.
• Future of DEFI and TradFi Integration: The blending of decentralized and traditional finance could lead to innovative financial products and broader crypto adoption.

Connect with Les Borsai:
Les maintains a minimal online presence with an active Twitter/X page, Facebook, and LinkedIn profile. He is responsive to inquiries through these platforms.

This summary encapsulates the in-depth discussion between the hosts and Les Borsai, providing valuable insights into the current state and future prospects of the cryptocurrency market.