The Fundamentals of Venture Capital Across the Liquidity Spectrum: Digital Assets - Session 3 of a Series

November 30, 2021

In this presentation, Keith Black discussed the digital asset and cryptocurrency markets and the innovative solution to build a global, decentralized, and secure network that facilitates payments and other transactions. Keith explored how proof-of-work, such as Bitcoin mining, and proof-of-stake protocols, such as Cardano, are used to secure networks and complete transactions. Behind many of these currencies are real businesses, such as projects built on top of Ethereum smart contracts that facilitate borrowing and lending as well as options and futures trading. Stable coins pegged to USD or EUR can earn yields of up to 7% with minimal volatility. Returns and volatility data were presented, as well as evidence on how digital assets can add return to a diversified portfolio without adding to portfolio volatility. Risks of digital assets were also discussed, including regulatory risks, technology risk, and valuation risk. Keith’s presentation was followed with a discussion with Josh Kernan, who provided an update on digital assets and the current market environment.