Ava Labs President on Crypto Outlook 2022
Listen, i think this asset class, the surprising thing about this asset class, is that itll be one of the few asset classes that can withstand the macro headwinds, whether its a hawkish fed or anything else that happens geopolitically speaking and the answer. The reason why its very simple i mean where i sit, i have a backstage pass, so to speak as an operator and the amount of inflow of talent, capital and basic users is just astonishing and that has not stopped. That has continued even with the short term sell off well, and on that note, youve got a lot of investors invested this time with more capital than theyve ever had before. Yes, theres been corrections before, but investors mainstream investors havent. Had this much invested, give us the mood of the investors out there and how theyre feeling yeah, i think the public investors have. Obviously they will like be part of the broader market when they see growth stocks that are down 50 60. They have the same visceral feeling um when they see the crypto markets down that much, but the venture investors and they raised about 100 billion plus last year, theyre still allocating more and more of that 100 billion towards crypto projects and those vcs theyre. Actually investing. No longer just in the enablers like the coinbases, the on ramps, the infrastructure they are looking at, the core of crypto theyre, looking at the layer, ones, theyre looking at specific d5 dabs, so the asset class can grow even if bitcoin loses market share.
Bitcoin, in fact, is only 40 of crypto. It was about 65 70, just about a year year and a half ago now, everyones talking about the fed and raids, we heard jay powells testimony at his confirmation hearing today. What will be the influence you think of fed policy on crypto this year? So i do think in the short term, it will affect the uh public market participants and the retail investors, but ultimately and ive seen this in every single tech cycle. Smart money will follow the innovation and the innovation is happening on web three. That is where the talent is going. That is where the applications being developed is going thats where the developers are going and thats where theres a crazy amount of growing usage there. So the vcs and the longer term money they will follow the innovation and then they will be a nice buffer for the asset class, especially for the tokens and the companies that are creating utility. All right lets talk about regulation, jesse powell, the ceo kraken, on the show at the end of last year, had this to say about regulation to come. Take a quick, listen were not against regulation at all, were you know, were licensed all over the world very happy to work with regulators um its about clarity, though, for us you know, theres a theres, a lot of people sitting on the sidelines, just because theyre not Sure about it – and it has the uncertainty – has a chilling effect on on banking and across the board.
What kind of regulation john? Are you preparing for this year, so we are always fully compliant just like jesses company kraken, we are in the u.s, so we do everything by the book so to speak, the regulation will come and its actually a good thing. Just like jesse said: no, one here is against regulation. They just want um clarity, as he said. If there is certainty – and you can play by a clear set of rules, you will keep a lot of innovation and you will keep a lot of the volume of trading in the us. I mean part of the reason why the tech markets are so good in the us is because its the deepest capital markets and its allow its an environment that allows for innovation. We want to keep that development here and we want to create deep capital markets. Clarity rules will allow that to happen. Meantime, jp morgan recently released a report talking about ethereums, merge, im curious what youre, seeing there so far, and what ava is bracing for preparing for, as that merge happens. So i think that report, if im reading the same report that you talked about, they said a couple of things. You know um one is that ethereums losing some market share to other layer, ones like uh, like avalanche or other layer ones. Its also talked about bridging correct, so i think the report had some um good ideas in it, and i mean, if you think, of all of these layer ones all these blockchains, its kind of like theyre all different cities, with their specific characteristics of you know, based On the technology and the community thats there, and each of these blockchains are starting to develop for different purposes and the communities showing up are there for different purposes and for web 3 to really flourish, one has to get from one blockchain to another easily, so the Avalanche bridge, for instance, from ethereum to avalanche 32 billion dollars already traveled back and forth on that bridge, a net six estate in avalanche.
You are not going to get the best of crypto 3.0 unless all of these blockchains in a multi chain, world will be able to connect to each other, and users can move around and play with different um tools and different applications. Given that you just launched avalanche bridge im curious, you know this is what allows you to transfer assets to and from ethereum. How is blockchain interoperab interoperab interoperability going and what are you learning, i think, its just taking off frankly um and what were learning is. There are different reasons for each blockchain to flourish in certain areas and theyre trading off technology for other technology, and then certain community goes there. Others go to a different one, but they all want to try different things at different times. Its no different from the williamsburg bridge connecting manhattan to to brooklyn people want to try different food, try different things. What were learning is there is a real appetite to move back and forth, and the bridge that i just cited from avalanche again in six months. Weve seen 32 billion dollars of assets move back and forth. That is an astonishing number um, given that you know think about a d5 asset class is only 100 to 150 billion by the way back to your earlier question, ed saying a golden cross is the opposite of a death cross when the the bullish indicator, uh is What lies ahead curious? What your thoughts are on trends that well see in 22, whether it is in crypto, nfts, vcs, the crossover of crypto and gaming.
What are you most excited about? Golden cross excited so a couple of trends within crypto, and i think the asset class will have a golden cross by the way but uh within the asset class. One of the things that were really exciting you talked about regulation is an institutional d5 product. So, as in the jp morgan, uh report cited the embracing of d5 from various institutions. I think tokenization of financial assets and then also uh, creating a a playground. So to speak, where d5 is done in a very compliant way, youre going to see a d5 for institutional product out there im very excited about that also very excited to see whats going to happen in gaming, and the reason why gaming is so important is because Its kind of like the gateway for adoption, nfts was a great gateway for adoption in 2021, d5 was accruing value. The the individual adoption was happening more rapidly in nft in 2022. Thats going to happen on gaming. Gaming is really the intersection all the good things about. Nfts gameplay, as well as d5, some of the games that were seeing the creativity, thats happening and creating the gamification of playing and earning and using your own unique nft its going to take things closer to you know.