BTC where is the hype, you have been going down for the past 19 days, why in the heck
are you cooling off!?
Well, let me cool your nerves a bit, because we think this bull run is just getting started.
Let me tell why, in about 10 minutes, because it’s time for Chico Crypto!
The bearish roars have been echoing throughout the crypto halls today, and the beginning
of this story takes us into the depths of an actual confirmed bear market.
The Summer of 2018.
What happened this summer?
Well 2018 was absolutely brutal to BTC, bearish throughout the entire year, and getting to
the low of 3k by the end of that summer and into the fall.
But something also happened that summer, the creation of a crypto fund that goes deeper
than anyone would imagine, unless they had Chico Crypto to tell them.
In the summer of 2018, Elites got together, elites from all walks of life and they created
the paradigm fund.
So who were the initial faces of paradigm back in 2018.
Well 3 persons, Matt Huang, Fred Erhsam, and Charlie Noyes.
And each has a more than interesting past.
Let’s begin with Matt.
Who’s father Quifu Wang tells a more than powerful and interesting story.
Quifu grew power in American academia.
Beginning by graduating with a PHD from Stanford business school in 1983.
Then he taught as a professor at MIT, Stanford, and the University of Pennsylvania and gained
Tenure at MIT, in the mid 90s, he left academia and became head of fixed income derivatives
at Goldman Sachs.
After Sachs, he went to become the main partner at Long Term Capital Management company, who
considered themselves the financial technology company.
Here he was engaged with hedge funds in the Asia Pacific region, and at one time during
their most prosperous years, Quifu managed assets at Long Term equivalent to China’s
entire GDP.
A Powerful individual, whose opinion were heard by any central bank in the Asia pacific
region.
So what happened to LTCM?
Well it fell off a cliff in 1998, is the topic of bailout seminars, and business insider
sums it up nicely with this 2014 article “The Epic Story Of How A 'Genius' Hedge Fund Almost
Caused A Global Financial Meltdown”...yes today, the collapse of LTCM is regarded as
a critical financial event in history, along the lines of black monday, the persian gulf
war, and the 2008 financial crisis.
LTCM, they funked up and they funked up big time during the dot com bust...according to
the balance, if it would have fallen, it would have set off a financial crisis in 1998, but
it was saved, as we can see by a 3.5 billion dollar bailout.
So what happened?
Well the balance says “Almost $100 billion worth of derivative positions could have unraveled.
Large banks throughout the world would have lost billions, forcing them to cut back on
loans to save money to write down those losses.
Small banks would have gone bankrupt.
The Fed stepped in to soften the blow”
Matt’s dad, involved with American financial turmoil, beyond what anyone can comprehend.
I wonder what Matt did?
Well he has followed his Dad’s path...Matt studied at MIT, worked at Goldman Sachs for
some time.
But then he created a company, Hotspots, social media data analytics, which was acquired by
Twitter.
He worked for Twitter for a year and a half, before being brought on back to Dad’s Path
in February of 2014, as a partner of a financial technology company, an investment VC firm,
Sequoia Capital.
A powerhouse VC, with tech investments from every corner of every industry?
But Matt is the one who brought them to blockchain.
In the 4 years with Sequoia, from 2014 to 2018 he led investments for them in blockchain
focused startups, Polychain Capital, Metastable and Filecoin.
2018, he left though, and a new Paradigm was started with Fred and Charlie.
So who are they!?
Well Fred we know, he is co-founder, and current board member of Coinbase.
Fred is also Goldman Sachs tied, before Coinbase he was a foreign exchange trader there, where
he traded and managed Goldman's electronic market making platform.
How about Charlie?
Well he was the investment director for Pantera Capital.
Pentera Capital was established in 2003 by Dan Moorehead, the former Chief Financial
Officer and Macro Trading Director of Tiger Fund aka Tiger Managment...what happened to
them in the mid 90s?
Collapsed too...USA today covered the 3 biggest hedge fund failures ever in 2014, and #1 was
LTCM and #2 was Tiger Fund.
In March 2014, Pantera announced an investment center shift to Bitcoin and other digital
currency related investments.
Of which Charlie lead for some time, 4 years...but of course he left in mid 2018 for Paradigm.
Now, I hope you see the 3 headed beast created here at Paradigm after this history.
3 Powerful Tech VCs, Sequoia, Coinbase, and Pantera and their partners or directors came
together during the depths of the bear market to get gungho on blockchain.The Big question
is why!?
Well it all comes down to even bigger financial funds.
Like from some of the highest regarded educational institutions in America.
It started with the Yale Endowment Fund.
Which as we can see, as of 2019, had 18 percent of it’s asset allocation in Venture capital,
including Paradigm and it’s investments.
So what happened?
October of 2018 Yale put in no measly amount, Coindesk covered it...400 million buckaroos
towards Paradigm capital.
How about since October of 2018?
Well Forbes covered Matt, Fred and Paradigm thoroughly just in October of 2020, and their
article states “All the more fuel for Paradigm, a new-look investment firm that has quickly
emerged as a leader in the crypto category but has grander ambitions than outsized financial
returns.
Combining mainstream pedigrees and pioneering crypto cred, Ehrsam and Huang convinced top
institutional investors like Harvard and Stanford to give them $750 million to invest in a market
they were too blue-blooded to touch directly”
So chunks of America’s top educational investment funds are being run by Paradigm.
Paradigm bet big on blockchain…
From the Forbes article, with the 400 million from Yale in 2018, they immediately put it
into Bitcoin and Ethereum .….But since 2018 it goes even deeper than that.
They are betting Big on DeFi too…
Paradigm’s investments include Uniswap, Argent Wallet, Cosmos Tendermint, Keep Network,
Starkware, Sia, Facebook Diem, yield protocol and more.
ANd if you sift through each of their investments, there will be ties right back to where Matt,
Fred, and Charlie came from.
Coinbase, Sequoia, and Pantera…
Now this all happened in 2018, these endowments have bet big on this, and they are in deep.
Why do you think just yesterday, Coindesk, the largest media outlet...put out this article
“Harvard, Yale, Brown Endowments Have Been Buying Bitcoin for at Least a Year”
And the subheading is “University endowments that backed blockchain VCs in 2018 have started
buying crypto directly from Coinbase”
Ya they are buying crypto directly from Coinbase now...of which many are already invested in.
No not crypto...but Coinbase itself.
As you can see Paradigm, which manages some of their endowments, is an investor in Coinbase
and Fred, is a board member, co-founder, and one of the largest shareholders.
I’m telling ya right now, there is a lot of money riding on the success of this.
And what I think it comes down to is the Coinbase IPO.
Will they tokenize it?
Will they bend the knee to wall street and do the IPO!?
Or will it be a blend of the two??
Well let me give you the reason we think it may be a blend.
Well over the surprise live stream I showed it...Fred Erhsam, who would know a lot about
this, said this over the summer, during the heat of the IPO news, in an interview with
Jeff Roberts, senior reporter at fortune.
Let’s listen in….
So Jeff, he spoke with Fred, on camera and off.
Jeff was interviewed by the Unchained Podcast a month later, and they asked about the Coinbase
IPO...and this is
what
Jeff said….
That is the most interesting part of the story to me too.
Jeff & I agree Fred that would be pretty boring going the traditional route.
So what are they going to do?
Well no one really knows...yet.
But the block released this, just last week “Coinbase to offer secondary market for
private shares ahead of public stock listing” The article states “Coinbase alerted shareholders
that the firm would launch a secondary market for its private stock on Nasdaq Private Market.
The move comes ahead of the firm's much-anticipated public market debut.
Coinbase, which filed a confidential S-1 in mid-December, said that it would provide further
details to shareholders on Monday about the secondary market launch…
Well Monday has passed, and we haven’t heard anything regarding this secondary market….But
you wanna know what the Nasdaq secondary Market is?
Well going to wikipedia, for Nasdaq private markets, its a software as a service suite,
and it was founded by none other than Barry Silbert, of Digital Currency Group.
And then in June of last year, the heat of the IPO news, Nasdaq unveiled the next iteration
of this, Nasdaq marketplace services...from this article we can see who in collaboration
with.
They partnered with Microsoft, they are involvelved with Digital Asset, r3 & symbiot to deliver
the technology.
Hmmm aint that a quinkidinkie, Nasdaq led a 20 million dollar funding round in symbiont
with a focus on security tokens.
Coinbase tokenizing itself?
Chico thinks through the private market, for accredited investors, but the public, the
retail?
We aint smart enough, we get the plain out old, paper shares.
We didn’t attend Yale, Harvard or Stanford, laying us a path to accreditation.
And in Chico’s opinion, those schools can lick retails hairy b-sack.
Cheers I’ll see you next time!