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- [00:00]
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- [00:32]
Cosmo Jiang
Business successful the reason why Jeff Bezos is this Jeff Bezos ism about what do consumers want? They went faster, cheaper, more convenient and that's what Solana delivers. It's faster, cheaper, more convenient. And that's why it's, you know, done a fantastic job basically taking almost 100% of incremental new users and activity last year. In crypto.
- [00:57]
Jen Sanasi
We all want to believe in something.
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Cosmo Jiang
In Chinese, belief also means trust.
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Jen Sanasi
We want to trust our systems and.
- [01:04]
Cosmo Jiang
Each other so we can build a future beyond what we know.
- [01:08]
Jen Sanasi
Join us at Consensus Hong Kong, where belief becomes real. Hello and welcome to Markets Daily, hosted by me, Jen Sanasi. On this show, we navigate the currents shaping the crypto markets, providing insights against the broader financial landscape. So whether you're actively trading or simply simply fascinated by the volatility that is the crypto markets, this show is your compass to understanding what's happened, where we are and where we're going. On today's show, we're joined by general partner at Pantera Capital, Cosmo Jiang.
- [01:34]
Cosmo Jiang
Hi, Jen, how are you?
- [01:36]
Jen Sanasi
I am doing fantastic. We watch the markets here on this show and this week has been a good one. We've seen a few small ups and downs, but I'd love to start the show off by asking this question. What are you watching today? What's standing out to you?
- [01:52]
Cosmo Jiang
Yeah, I mean, look, I think all eyes are clearly on Trump and the election and the pace of regulatory action that could come out of, that could come out of the new administration. You know, it's been a little slower out of the gate. I think a lot of people were worried about, about not much happening. And so, you know, it makes sense that it's not top of priority for him. But certainly some stuff like setting up the crypto council, sorry, the crypto, like a crypto effort on in the SEC and then and putting in place, really, really supportive. You know, acting chairman of the SEC and CFTC have been really helpful. So we're seeing good action. Good, good, good, good movement and then in the market, you know, things are, things are looking better because of this optimism. There was this wall of worry around the sell the news Inauguration Day, but that's, that's passed and we can start focusing on the things that have great fundamentals and great stories.
- [02:46]
Jen Sanasi
You mentioned the crypto task force there. You mentioned, you know, Donald Trump taking office, having all these promises to the crypto industry. And it really seems like he's coming true to those promises this week. You know, we recently saw that Russ Ross Albret was pardoned. And my, my question to you is, you know, in this industry, we have been waiting a long time for many of the things that have happened in the last year to happen, and they have finally happened. And so where do we go from here and how do you expect the markets to act from here now that many of these major events we've been waiting for are coming to fruition?
- [03:29]
Cosmo Jiang
Yeah, I mean, look, I do think it's really hard to understate the importance of this like political and regulatory inflection. It really is a paradigm shift for the blockchain industry. And I know you said, I think you said some of the things have happened, but actually not that many things have happened yet. So there's a lot still to come, which we're really excited about. Right. The short term price action in the market has certainly been nice, but the longer term implications of the election are very profound. You know, from a, from a, from an allocator perspective like one, when you think about the reasons why prospective investors say no to the industry or have said no to the industry in the past, the first thing is often lack of regulatory clarity and the regulatory pushback. Well, that number one bear case is now gone. Right. We have a very supportive administration, we have a very supportive climate for digital asset growth, which is extremely exciting. And then in terms of the things that could actually happen, I think it does start with some of the regulation things that might happen, whether that's, you know, the, any, the talks around the Bitcoin strategic reserve, potential ETF filings, which I think we could see as early as this week or next, you know, eat staking Solana and the dropping of just unhelpful regulatory actions like SAB121 or Wells notices and eventually longer term, you know, stablecoin and digital arts digital asset market structure regulation, all those still yet to come, I think those will be just so transformative for capital flows in the industry and for entrepreneurial interest and innovation in the industry.
- [05:02]
Jen Sanasi
A few things you said I want to Touch on there. But the first is, you know, looking at the markets today, how would you be looking to allocate a portfolio?
- [05:10]
Cosmo Jiang
Yeah, I mean, look, I think it's. I think I sort of think of the blockchain industry in two major buckets, one being just like bitcoin and then there's blockchain and technology, which is everything else. And I think bitcoin is very obviously found product, market fit. I think the story on bitcoin is very clear to most people in the world now, which is it is digital gold. And increasingly more and more people believe that frankly the election, while very good for bitcoin, was really, really didn't change anything about the bitcoin story. Right. And so, and so nothing for bitcoin has changed other than maybe more recognition. It's really for everything else outside of bitcoin or blockchain technology as we define it, which is, you know, Solanas, Ethereums, Your DeFi, your AI, your deepin of the space. That's where the real change actually happens, where actually the election changed everything for them. Now these tokens can actually form, have a function and have a real use case. And so that's really exciting. So as I think about allocating today, it's like, certainly there's a reason for people to have bitcoin in the portfolio and I think it will continue to do well. It's probably closer to mid innings than late than early innings. But for blockchain technology, which is everything else, which is, you know, your longer tail tokens, their alts, it's still super early innings and that's where we're spending all our time and really excited.
- [06:28]
Jen Sanasi
You mentioned. Okay, a few things I want to, I want to touch on. I don't want to trade too far away from the ETFs. You mentioned the Ether Staking ETF and the Soul ETF. How soon do you think we could see those trading in the United States?
- [06:40]
Cosmo Jiang
Well, well, look, the Solana ETFs, there are a few that are currently in, that are currently in the hopper, which the SEC actually needs to respond to by this week. I think as soon as tomorrow and Thursday. And so we should start to see some movement on Solana. I think very likely they need to get their ducks in a row and they don't have a full commission or a full chairman yet. So likely it's a delay until the next deadline would be mid March for a response. But the Salon ETFs, like that is absolutely coming up and it's something that in a crazy case could get decided on this week, but very much more likely delayed and then talked about in March, which is very soon. And then eat staking ETFs. There's a lot of rumblings about a lot of issuers have these on file ready to get filed. And I bet there's just a little bit more of a my expectation is now with the new SEC or with the new administration and the acting SEC chairman, there's more of a constructive dialogue. And so these things won't be in order to not like put the SEC under perhaps, you know, the eight ball. There's probably instead of filing for the etf, probably there are discussions in the background and they'll file when things are actually like fully fleshed and ready, which could be very soon.
- [07:52]
Jen Sanasi
Let's talk a little bit more about the Solana ecosystem. Just before we started recording this, Solana was the only Token on the CoinDesk homepage ticker that was in the green. And it really has been seeing renewed interest after this meme coin frenzy. I believe I mentioned it earlier around the inauguration, obviously we saw Donald Trump and Melania launch their meme coins on Solana. Talk to me about how the Solana story unfolds for you over 2025.
- [08:21]
Cosmo Jiang
Yeah, I mean look, as, as you probably you and your listeners may or may not know, we're one of the largest investors in Solana and we're, we're extremely, we've, we've been. And Solana is our largest investments. It's something that we're very excited about and bullish on. I think in order to talk about the outlook, you kind of need to step back and think about why it's gotten to where it is. And I always hearken back to the history of blockchains are that bitcoin was the first blockchain that gained large traction and it did something very simple which is transferred value back and forth. People thought, hey, this is really great, but what if we could do a little bit more than that. And thus was born something like Ethereum, which is more generalized smart contract architecture. Fast forward a few years, 2019, 2020, like Ethereum started to show real signs of certain strain because there was a lot of congestion because people really wanted to use this. And thus was born the next generation of layer ones like Solana with the ethos of hey, why don't we do what Ethereum did, but let's do it just like faster and cheaper. And lo and behold, in the classic and the reason why Amazon's been Successful. The reason why Jeff Bezos is this Jeff Bezos ism about what do consumers want? They went faster, cheaper, more convenient. And that's what Solana delivers. It's faster, cheaper, more convenient. And that's why it's done a fantastic job basically taking almost 100% of incremental new users and activity last year in crypto. Fast forward to 2025. That's why we are where we are, which is that Solana is the fastest growing blockchain of scale. It actually does more total economic value than Ethereum. So it does more cash flow, more fee generation than Ethereum. It's where most of the growth is. And by the way, it's still trading at one quarter of the valuation of something like Ethereum. And so in a lot of ways you can understand why Solana continues to have the investor interest and the traction it has because delivers a better product experience, first of all. And then it's actually. And it's growing fast and has the momentum.
- [10:16]
Jen Sanasi
Cosmo, I gotta ask you for people who are looking at Solana and seeing the outages that Solana just like can't seem to get in their rear view mirror. What, what would you tell investors that look at these outages. I was looking at X over the weekend. Folks were talking about not only the outage, but the delay in transactions on exchanges like Coinbase. What would you tell them?
- [10:40]
Cosmo Jiang
Yeah, well, number one is that there's a little bit of a misunderstanding around, around these outages or this recent outage, which wasn't an outage. Although I think the, the point is maybe lost because the reality is the user experience was not great. But Solana, the blockchain actually worked perfectly fine and nothing went wrong. The issues were with the front ends that users interact with to go on Solana. The issues were with users of Jito who had to end up using something else other than Jito. And so it's all the tools and infrastructure that are built on Solana that really strained under Solana's growth. But Solana itself ran totally fine. But again, for a user using the blockchain, it feels the same way because you're using something to access Solana and the thing that you were using to access Solana failed you. But it's sort of an important nuance because Solana blockchain actually was totally fine. If you go back a few years though, over the last couple years Solana has had a couple outages and the reality is like traditional financial systems also go offline. Like that's not something that's nothing has 100% uptime like you strive for that, but nothing does. And that's okay. It just means you're, you're, you're hitting the limits of what you're trying to build. It means you're scaling really quick. And it's okay as long as you can iterate fast enough to overcome that. And we've seen time and time and again that Solana has it ready fast enough to overcome that. And this is even before the massive Fire Dancer client release that's going to be a major upgrade to the system later this year. And so I think it's like I wouldn't be too worried in the grand scheme of things.
- [12:06]
Jen Sanasi
Okay, I think that's a fair point. Now you brought up a major update for Solana coming later this year. There's a story on Coindesk today talking about an options block trade that was executed on Monday showing expectations for a sole price rally to $400. I know that you're one of the biggest investors in Seoul, but, but talk to me a little bit about how you expect price performance over the year as it gets this new renewed interest as it has major updates.
- [12:32]
Cosmo Jiang
Yeah, I'd expect amongst the large cap assets for Salon to be one of the strongest performers over the course of the year or has the potential to be one of the strongest performers over the course of the year. And ultimately it just comes down to can they continue to grow users, can they continue to grow applications that people want to use, but if it does, there's no reason why it couldn't. And some of the main catalysts that people want to think about are certainly the launch of the Solana etf, which I think will have enormous appetite, potentially probably more appetite than the Ethereum ETF had. And that's, I think certainly we'll get news flow about that in the first quarter and potentially a launch this year. I think the other is, you know, a lot of people are very worried about this March unlock from the FTX estate. I just say, I mean Solana trades, trades, trades so much relative to that unlock amount. That also something that doesn't worry me too much, especially because a lot of the buyers were, you know, people who want to be long term investors, not, not short term arbitragers. And so it feels like, you know, as long as fundamentals continue to hum, as long as the crypto market continues to hold, it can be a pretty strong performer for the rest of the year.
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Jen Sanasi
Cosmo, I gotta ask you, what's going on with Ethereum I bring this up time and time again. We had a guest on the show once, probably a few months back now, that said Ethereum could be the BlackBerry of the crypto industry. I don't know if I, if I follow that line of thought, but, you know, it really has not been something that is so top of mind when I have these conversations now. It's kind of fallen to the back burner. Talk to me about your outlook for Ethereum. Do you think it's going to pick up momentum in 2025 or do you think that some of the other chains like Solana are going to give it a run for its money?
- [14:13]
Cosmo Jiang
Yeah, I mean, look, I do want to start with we are as one of the first institute, well, as the first institutional fund in crypto. We have a long history in this space and so we love all our children. And Ethereum has absolutely proven out its value and its contributions to the space over time. That's undeniable. It has the most TVL of any chain, as the most stable stablecoin volume of any chain, and certainly the most developers and serious academics building on the chain. That said, like, you know, on a relative basis, it's not hard to see why Ethereum has struggled recently. And you know, we're, and it's, it's clearly, it's, you know, got a large valuation for something for what it is that it needs to continue to grow into. Not to say that it can't keep going up, but does need to grow, grow, grow into that. I think the, on a relative basis, certainly a lot of the, the, the media attention and the excitement and the new developers have gone to Solana. Right. You see that in the Electric Capital developer report. You see that in just the, the tenor of conversations. And so there is some, you know, introspection that the Ethereum is going through, which I think is extremely healthy and due to bear a lot of good fruit. But it, it does need to go through this growing pain in this introspection period and hopefully that sets the stage for stronger, more durable growth after that.
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Jen Sanasi
Okay, and Cosmo, just before we wrap up, I got to ask you, what is the one thing that you think folks who watch the crypto markets like you and I should be watching, I.
- [15:43]
Cosmo Jiang
Think one of the fastest growing and most exciting categories within crypto is at the intersection of crypto and AI. I know that's not like one specific investment, but I would say we've made a lot of investments in this space in both the private and liquid markets. I think there are a lot of compelling reasons why blockchain uniquely enables AI and why an AI will accelerate blockchain adoption. One of the areas that we've seen the most excitement recently is certainly this AI of AI agents which live on blockchain. It's not just a crypto thing, it's a whole world thing. Jensen Huang, the CEO of Nvidia, Sam Altman, CEO of OpenAI, have all been talking about how AI Agents is the thing to watch this year and a lot of the cutting innovation happens to be happening on blockchain. I also think it's really important to think about why AI and crypto is so important is it's really important to call it the creation of the White House AI and crypto czar. Let me just say that again, it's the White House AI and cryptos are this appointment elevates crypto into a side by side place with AI, which to me makes sense, right? I believe crypto and AI each are the two fastest, most exciting growth sectors in the world in the coming years. And the creation of AI and cryptos are placing AI and crypto level is really an explicit acknowledgment by the leaders of our government that they also believe that to be true.
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Jen Sanasi
Cosmo, it's been such a pleasure having you on Markets Daily today. Thank you so much.
- [17:01]
Cosmo Jiang
Thank you Jen.
- [17:02]
Jen Sanasi
And thank you to our audience for watching. Cosmo's colleague, managing partner at Pantera Capital, Paul Veratikaket, will be joining us as a speaker at Consensus Hong Kong. Get your tickets at consensus hong kong2025coindesk.com if you enjoy listening to Markets Daily, also subscribe to the Coindesk Podcast network that is available on all podcast platforms. If you prefer to watch, we are on YouTube, hit subscribe, give us a thumbs up and we'll see you tomorrow.