Markets Daily Crypto Roundup: What VanEck Is Looking at in Public Equities

Podcast Information:

• Title: Markets Daily Crypto Roundup
• Host/Author: CoinDesk
• Description: Tune in as CoinDesk runs down daily action in crypto markets and some of the most important recent industry developments.
• Episode: What VanEck Is Looking at in Public Equities
• Release Date: May 23, 2025

Introduction

In this special edition of Markets Daily Crypto Roundup, CoinDesk hosts a discussion with Pranav Kanade, Portfolio Manager at VanEck, during the Avalanche Summit in London. The conversation delves into VanEck's strategic focus on public equities alongside digital assets, exploring unique investment opportunities in the evolving financial landscape.

VanEck’s Dual Focus: Digital Assets and Public Equities

Host: "You lead VanEck's digital asset Alpha Fund, right?"

Pranav Kanade [01:26]: "Correct."

VanEck occupies a distinctive position by managing both tokens and public equities within their Alpha Fund. This dual approach allows them to tap into opportunities that are often overlooked by traditional financial participants and the crypto community alike.

Key Insights:

• Unexplored Opportunities: VanEck identifies a niche where public equity players can leverage stablecoins to optimize cost structures, particularly focusing on reducing interchange and banking fees.
• Strategic Portfolio Tilt: The firm has recently adjusted its portfolio to capitalize on these less explored areas, observing that many altcoins may underperform in the current market climate.

Strategic Investment in Public Companies

Host: "Can you tell us some of the equities that you're looking at?"

Pranav Kanade [02:31]: "Unfortunately, I cannot come out on a call like this or event like this and talk about some of our holdings. But I think the way we approached it, if I were to sort of share the approach, is we kind of mapped out all the players and then generally kind of started with the belief that much of the adoption from these public companies will come from founder-led businesses..."

Approach to Equity Selection:

• Founder-Led Businesses: Focus on companies where founders or CEOs are making decisive moves to integrate stablecoins and optimize business operations.
• Global Perspective: Emphasis on U.S.-based and international companies engaged in cross-border payments, catering to audiences seeking affordable dollar access.
• Long-Term Winners: Identifying companies poised for significant long-term growth as they adopt stablecoin technologies and benefit from improved margins.

Public Market Trends and Institutional Horizons

Host: "Are you looking at sort of small to midsize or you're looking at large companies?"

Pranav Kanade [03:37]: "Yeah, yeah, we're looking at some of the larger players because you know, I think that's where like the less explored opportunity is. If I think about what's happening in the public equity markets, much of that market has gone to passive, you know, ETFs and index type products..."

Key Points:

• Focus on Large Companies: Targeting larger public firms where opportunities to integrate stablecoins and enhance business models are more pronounced.
• Extended Time Horizon: Unlike large hedge funds that concentrate on short-term outcomes (three to six months), VanEck adopts a multi-year perspective, allowing them to harness transformative changes in business operations due to stablecoin adoption.

The Future of Stablecoins in Traditional Finance

Host: "You know, you said altcoins are probably not going to do as well as they did before. If we bring it back to a more crypto focus. What are you looking at there? Where do you see the upside when we look at what's going on specifically in crypto?"

Pranav Kanade [04:26]: "Yeah. So, you know, one of the things we say in our team is stablecoins are clearly the product with some PMF here that's going to continue to work the next Thing likely that's going to come on the backs of that is tokenizing tradfi assets, bringing them on chain."

Insights on Stablecoins:

• Product-Market Fit (PMF): Stablecoins have established a solid PMF and are expected to remain integral in bridging traditional finance (TradFi) with blockchain technology.
• Tokenization of TradFi Assets: Anticipates a surge in bringing traditional financial instruments like T-bills and U.S. equities onto the blockchain, facilitating broader access and efficiency.
• Exporting U.S. Capital Markets: Envisions expanding U.S. capital market access globally through stablecoin utilization, especially benefiting regions with limited banking infrastructure.

Challenges and Structural Issues with Altcoins

Pranav Kanade [05:00]: "We think part of the reason the altcoin market is structurally kind of in a bad place is there's not that many pipes into the space. There's not an easy way for pools of capital to access this."

Key Challenges:

• Limited Access for Institutional Capital: Current infrastructure does not sufficiently support the seamless flow of institutional capital into the altcoin market.
• Regulatory Hurdles: The potential introduction of multi-token ETFs with stringent rules could streamline access but may exclude less compliant or speculative tokens.
• Future ETF Integration: Predicts the emergence of regulated, rule-based multi-token ETFs that could aggregate select tokens, enhancing credibility and investment inflows.

Opportunities and Implications for Retail Investors

Host: "So in the future we're buying an index fund that has bonk in it or has dog with hat or whatever because it's fit a rule set that makes sense."

Pranav Kanade [06:17]: "Maybe not those tokens. Right. Because those things are good."

Implications for Retail Participants:

• Enhanced Access: Retail investors may gain easier and more regulated access to a diversified basket of tokens through ETFs, simplifying investment decisions.
• Focus on Quality Tokens: Emphasis will likely be on tokens that meet specific criteria for inclusion in regulated investment products, favoring fundamentally strong projects over meme coins.
• Alignment with DEFI Ethos: While DEFI promotes open access, the regulated approach may provide a balance between accessibility and investment quality, benefiting both retail and institutional investors.

Deep Dive into the Stablecoin Opportunity

Host: "What do you think that the average viewer at Home isn't understanding about the opportunity in stables... two years, five years, 10 years down the line."

Pranav Kanade [06:43]: "Yeah. So the biggest one, especially in the United States, really is explaining to people what are the benefits of stablecoins?... If you just think of those two components, which is chargeback and fraud risk as well as points programs, that's a very opaque landscape. Right. The banks make all their margin in that opacity."

Comprehensive Analysis:

• Cost Efficiency: Stablecoins can significantly reduce transaction costs by eliminating high fees associated with traditional banking and credit card systems, which currently take up around 3% of every transaction in the U.S.
• Transparency and Savings: By operating on-chain, stablecoins offer greater transparency, reducing chargeback and fraud risks, and potentially lowering costs for both consumers and businesses.
• Disruption of Traditional Banking: The adoption of stablecoins threatens the profitability of banks, especially in credit card operations, by offering a more efficient and transparent alternative.
• Global Impact: Particularly beneficial for the unbanked populations outside the U.S., where stablecoins can provide access to financial services that were previously inaccessible or too costly.

Future Outlook and Conclusion

Host: "I want to come back to the altcoin point... What do you think that means for the retail investor or the smaller market participant?"

Pranav Kanade [08:33]: "I don't necessarily think it means anything negative. I think, you know, folks are going to be able to access these protocols and use them. I think it's all a function of regulatory. So that's more of a regulator question..."

Final Thoughts:

• Regulatory Landscape: The future accessibility and integration of altcoins into mainstream investment products will largely depend on regulatory frameworks.
• Encouragement for Founders: Pranav encourages crypto project founders to maintain focus on building robust, fee-generating businesses, as institutional capital may increasingly recognize and reward sound fundamentals.
• Optimistic Future: Despite current challenges, the long-term outlook remains positive with expectations of increased institutional involvement and the maturation of the crypto investment ecosystem.

Host: "Pranav thanks for joining us. We hope you enjoy the rest of the event."

Pranav Kanade [09:27]: "Cool. Thank you."

Conclusion

In this episode of Markets Daily Crypto Roundup, Pranav Kanade of VanEck provides insightful perspectives on the intersection of public equities and digital assets. By focusing on stablecoins and their capacity to transform traditional financial systems, VanEck positions itself to capitalize on long-term opportunities that extend beyond the volatile altcoin market. The discussion underscores the importance of regulatory developments and the potential for institutional capital to drive the future of crypto investments, offering a roadmap for both investors and industry participants navigating the evolving landscape.