Markets Daily Crypto Roundup: The Comeback of Bitcoin Programmability Like 'Renaissance': Portal VC Founder

Release Date: November 21, 2024

In this engaging episode of CoinDesk's "Markets Daily Crypto Roundup," host Jen Senassi sits down with Evan Fisher, founder and general partner of Portal Ventures. The discussion delves into the evolving landscape of cryptocurrency markets, the resurgence of Bitcoin programmability, and the strategic direction of Portal Ventures amidst a dynamic financial environment.

1. Navigating the Crypto Market Cycle

Jen Senassi opens the conversation by acknowledging the tumultuous end to the year and inquires about Evan Fisher's observations as 2024 draws to a close.

Evan Fisher responds by highlighting the cyclical nature of the crypto markets, noting, “[00:02:04]... we're on the four-year cycle timing and it's interesting that we're here again because the only way that happens is when people think that the four-year cycle is not going to repeat again.” He emphasizes the importance of Bitcoin inflows in creating a wealth effect within the crypto space, which subsequently influences investments in longer-tail assets. Fisher points out that understanding the profile of these new buyers—often those who have significantly profited from Bitcoin's rise—is crucial for predicting future market movements.

He further elaborates on the role of institutional investors, questioning whether their entry will lead to more fundamental, value-driven investments or if the market will remain narrative-driven. Fisher anticipates that Bitcoin’s continued ascent and other blue-chip cryptocurrencies breaking their all-time highs will signal the next phase of the cycle.

2. Portal Ventures’ Investment Thesis

When probed about his investment thesis, Fisher shares, “[00:03:22]... crypto over some period of the next decade will turn more fundamentally driven.” He discusses the dual nature of cryptocurrencies, some behaving like equities and others resembling commodities. Using BNB as an example, he explains that while traditional valuation methods like discounted cash flows (DCF) might apply, the actual price drivers are utility-based, such as access to discounts within the ecosystem.

Fisher underscores the importance of adaptability in investment strategies, stating, “[00:03:19]... we position ourselves by saying we just want to win regardless of what happens. And we can do that with how we invest, where we invest, how we construct a portfolio.” This approach allows Portal Ventures to stay resilient across varying market conditions.

3. Raising a $75 Million Pre-Seed Crypto Fund

Jen Senassi congratulates Fisher on successfully raising an oversubscribed pre-seed crypto fund of $75 million. Fisher provides insights into the fundraising journey, noting, “[00:05:16]... we started raising in Q1 of this year. And so it was a fast raise in the grand scheme of things, but it was a very different time.” Despite Bitcoin being down by 45% from its all-time highs during the fundraising period, Portal Ventures attracted a diverse Limited Partner (LP) base comprising traditional finance stalwarts like Henry Kravis and crypto-native leaders such as Chris Dixon.

He highlights that about half of their LPs seek crypto exposure exclusively through Portal Ventures, while the other half view the fund as the initial entry point into crypto investments. This strategic positioning allows Portal Ventures to balance risk and return effectively while identifying and leveraging emerging trends in the crypto sector.

4. Investment Strategy and Portfolio Construction

Exploring the nuances of their investment strategy, Fisher explains, “[00:07:06]... almost everything we do is first check-in investing with a thesis-driven approach.” Portal Ventures focuses on ideation-stage investments, often before projects even have white papers or formal proposals. This early-stage involvement means they frequently engage with founders who are still shaping their business models and products.

He emphasizes the importance of backing founders who possess both technical expertise and commercial acumen—the ability to transform ideas into scalable businesses. By concentrating on specific categories where Portal Ventures has deep expertise, they act as thought partners for founders, providing not just capital but also strategic guidance to foster growth.

5. Key Narratives and Predictions for 2025

When asked to identify a pivotal narrative that could drive the upcoming bull market, Fisher passionately asserts, “[00:11:18]... bitcoin is actually going to come back.” He recounts early investments in Bitcoin programmability projects like Arch, highlighting the latent demand for programmable Bitcoin solutions. Fisher argues that despite skepticism, there remains substantial unmet demand for Bitcoin-based products that enhance capital efficiency and programmability.

He envisions a “Bitcoin renaissance,” where innovations on the Bitcoin layer-1 (L1) blockchain enable more scalable and meaningful applications, potentially surpassing platforms like Ethereum and Solana in utility and adoption.

6. The Future of Venture Capital in Crypto

Reflecting on the venture capital landscape, Fisher draws parallels between historical capital market behaviors and current crypto investment trends. “[00:13:06]... The markets just always work this way. In times of euphoria, everyone gets excited and in times of despair, everyone gets scared.” He emphasizes the importance of maintaining a level-headed investment approach, resisting the herd mentality during market extremes.

Portal Ventures aims to navigate this volatility by adhering to first principles and making investment decisions based on rational analysis rather than market sentiment. Fisher recounts their strategic investments in 2023 contrasted with the cautious stance in 2022, demonstrating a deliberate approach to capital allocation that prioritizes long-term value over short-term gains.

Conclusion

Jen Senassi wraps up the episode by congratulating Evan Fisher on raising the new fund and expressing enthusiasm for the future projects Portal Ventures will support. Fisher reciprocates the sentiment, emphasizing the collaborative spirit essential for thriving in the evolving crypto ecosystem.

This episode provides a comprehensive look into the strategic thinking of a leading crypto venture capitalist, offering listeners valuable insights into market cycles, investment strategies, and the future trajectory of Bitcoin and the broader cryptocurrency landscape.

Notable Quotes:

• Evan Fisher: “[00:12:42] Bitcoin programmability, Bitcoin program like capital efficiency and really just like this bitcoin renaissance will come back in a very meaningful and scalable way this cycle.”

• Jen Senassi: “[00:10:16] Now you're writing checks before a white paper at the ideation phase. It sounds to me like you really are writing these checks based on the founder and their ability to bring this idea to life in collaboration with your team.”

• Evan Fisher: “[00:14:33]... by being just really at home doing the work, not being super public, we've found that we can avoid a lot of that.”

For those interested in the intricate dynamics of crypto markets and venture capital strategies, this episode offers a wealth of knowledge and foresight from one of the industry's key players.