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Joe McCann: Modern Day Crypto Investing

By Superteam

Published on 2022-04-28

Dive into the world of crypto investing with Joe McCann as he discusses his new fund Asymmetric, risk management strategies, and the future of Web3 and DeFi.

The notes below are AI generated and may not be 100% accurate. Watch the video to be sure!

Joe McCann: Pioneering the Future of Crypto Investing

In a captivating conversation with the Superteam podcast, Joe McCann, a seasoned crypto investor and advisor, shared his insights on the evolving landscape of cryptocurrency investments, risk management, and the future of Web3. As the founder of Asymmetric, a newly launched fund styled as a technology company, McCann brings a wealth of experience and a unique perspective to the crypto space.

Asymmetric: A New Approach to Crypto Investing

Joe McCann's latest venture, Asymmetric, is not your typical investment fund. Described as a "liquid crypto venture fund," Asymmetric represents a novel approach to investing in the Web3 ecosystem. McCann explains:

"It's actually a technology company with a fund mandate. If you look at the past 10-12 years in enterprise sales, you've seen this pitch of digital transformation. One of the things that I saw with the venture world is that most of them have not become really digitally enabled or technology companies like the rest of the world."

This innovative approach sets Asymmetric apart from traditional venture capital firms. The fund aims to provide more than just financial support to founders, offering technological expertise and infrastructure support to help projects succeed in the rapidly evolving crypto landscape.

The Asymmetric Advantage: Adding Value Beyond Capital

McCann emphasizes that Asymmetric's unique selling point is its ability to provide tangible, technological support to the projects it invests in. He illustrates this with an example:

"Imagine we had Zcash on Solana. Well, on the one hand, I could just invest in the private round or the strategic round like all traditional VCs do, but what I would prefer to do is support the founder by running relay or nodes."

This hands-on approach demonstrates Asymmetric's commitment to adding value beyond mere financial investment. By running infrastructure for the protocols they invest in, Asymmetric aligns its incentives with those of the founders, creating a symbiotic relationship that goes beyond the traditional investor-investee dynamic.

The Changing Landscape of Crypto Investments

McCann's insights reveal a shifting paradigm in the world of crypto investments. He notes that while raising money is not particularly difficult for founders in the current market, the real challenge lies in finding investors who can add strategic value. This is where Asymmetric aims to differentiate itself:

"What I am kind of offering up, what we do differently at Asymmetric versus say a traditional investment fund, is... we feel comfortable doing it but more importantly, this is literal proof that we're adding value to you as an investor."

This approach not only benefits the projects Asymmetric invests in but also positions the fund to capitalize on opportunities that may be overlooked by more traditional investors.

The Philosophy Behind Asymmetric

McCann's approach to investing is deeply rooted in his background in philosophy and his experience as a trader. He cites influences such as Friedrich Nietzsche and Nicholas Nassim Taleb, particularly Taleb's concepts of "skin in the game" and seeking asymmetric upside with limited downside.

"Risk taking is the purest form of virtue," McCann states, explaining the quote in his Twitter bio. This philosophy underpins his approach to investing and risk management, emphasizing the importance of aligning incentives and taking calculated risks.

The Future of Trust and Truth in the Digital Age

One of the most intriguing aspects of McCann's vision is his perspective on the future of trust and truth in the digital age. He discusses the potential for blockchain technology to serve as a source of truth in an era of increasing uncertainty:

"My kind of hypothesis was well, we can't really rely on institutions or we can't really rely on politicians or we can't really rely on the media because they don't have skin in the game... What if there was a way that you know say bitcoin's blockchain could be optimized for a single source of truth because you have economically incentivized machines to verify and validate truth?"

This concept of using blockchain technology to establish verifiable truths could have far-reaching implications beyond just financial transactions, potentially revolutionizing how we approach information and trust in the digital age.

NFTs: A Gateway to Crypto Adoption

McCann shares his thoughts on the NFT market, viewing it as a powerful tool for introducing people to the broader crypto ecosystem. He emphasizes the cultural significance of NFTs:

"When culture bridges over to a new technology, it makes it normal... That is what NFTs have unlocked for culture where they're basically saying like yeah that like crypto defi weird thing I went to curve finance that website's terrible like I don't want any like they're not going that's not going to get normal people in a crypto what will get normal people in the crypto culture sports entertainment are like whatever the thing may be."

While acknowledging the speculative nature of many NFT investments, McCann sees the broader impact of NFTs as a gateway for mainstream adoption of crypto technologies.

The Formulaic Nature of Crypto Markets

One of the most intriguing insights McCann shares is his view on the predictability of crypto markets. Drawing from his experience in traditional finance, he describes the crypto market as "the most formulaic market I've ever seen."

"Crypto is formulaic in the sense that the patterns that exist run charts... Technical analysis or the formulaic nature of these charts, it's just a probability of an outcome, it is not a guarantee."

This observation suggests that there are opportunities for traders who can recognize and capitalize on these patterns, although McCann is quick to caution that past performance does not guarantee future results.

The Window of Opportunity for Retail Investors

McCann believes that there is still a window of opportunity for retail investors in the crypto space, although he predicts this window may close within the next four years as institutional players become more dominant. He advises retail traders to focus on "crypto native strategies" that don't exist in traditional finance:

"If you're going to be doing sort of automated strategies or systematic strategies or quantitative strategies or these are these crypto native pieces and so if you're a retail trader today going forward over the course of like the next four years what will likely happen is the uh there are these things called like basis trades where you can basically short the future and long like the spot asset."

This insight provides valuable guidance for individual investors looking to navigate the evolving crypto landscape.

The Convergence of Web3 Technologies

Looking to the future, McCann sees a convergence of various Web3 technologies, creating new investment opportunities:

"We went from like bitcoin to ethereum to like tokens to defi and now we've got like NFTs and video games and metaverse and DAOs and infrastructure and payments right like Solana Pay recently like it's it's just getting huge."

He emphasizes the importance of identifying where these different aspects of Web3 intersect and overlap, as these convergence points are likely to be where the most innovative and valuable projects emerge.

The Importance of Open Source in Web3

McCann highlights the significance of open source development in the Web3 ecosystem, drawing from his experience building open source businesses:

"The types of businesses that are thinking through like okay I like I met with this uh I'm actually today I met with the founder where he was like we're going to build a protocol first anybody can use it it's open source there'll be a token but we're going to build the UI like the vertical integration on top of it that's the business right."

This approach of building open protocols with proprietary applications on top represents a new model for creating value in the Web3 space, one that McCann believes will be crucial for long-term success.

The Role of India in the Crypto Ecosystem

McCann expresses strong enthusiasm for the potential of India in the crypto space:

"I am extremely interested in India. I have made it extremely publicly clear that I actually think genuine and I mean this genuinely I think India has the potential to be a monster powerhouse of engineering talent and prowess and also capital flowing into the Web3 and crypto ecosystem."

This bullish outlook on India's role in the future of crypto highlights the global nature of the Web3 revolution and the opportunities it presents for talent and capital from around the world.

Risk Management in Crypto Investing

A key theme throughout the conversation is the importance of risk management in crypto investing. McCann emphasizes the need to avoid becoming a "forced seller" and recommends strategies such as lending and staking to build up one's portfolio over time:

"Never become a forced seller. Hold tokens that you actually think are are going to be valuable genuinely you know intermediate to longer term and then find ways of lending and staking those things."

This approach allows investors to weather the volatility of crypto markets while potentially benefiting from long-term growth and passive income streams.

The Future of Financial Markets on the Blockchain

McCann makes a bold prediction about the future of financial markets:

"My fundamental view is that every financial every financial contract will move on chain period. We are like and a fraction of the types of contracts that exist on chain today those will all be moving on chain and then as those move on chain the institutional flow follows it."

This vision of a future where all financial contracts exist on blockchain networks represents a massive opportunity for growth in the crypto space, potentially expanding the total crypto market cap far beyond its current levels.

Hiring in the Web3 Space

The conversation also touches on the hiring landscape in the Web3 space, with McCann highlighting several companies in his portfolio that are actively seeking talent. He emphasizes the importance of remote work and the global nature of talent in the crypto ecosystem:

"I think every company I just mentioned is like remote like because you kind of have to be at this point right."

This focus on remote work and global talent acquisition reflects the decentralized nature of the Web3 ecosystem and the opportunities it presents for skilled individuals around the world.

The Evolution of Venture Capital in Crypto

McCann's approach with Asymmetric represents a new evolution in venture capital for the crypto space. By combining technological expertise with financial investment, Asymmetric aims to provide more comprehensive support to the projects it backs:

"The question really that I see from a lot of founders is you know how do I find investors that add this big kind of air quote strategic value right. Where do I get the value add investor?"

This model could set a new standard for venture capital in the crypto space, pushing other firms to adapt and provide more tangible value to their portfolio companies.

The Importance of Skin in the Game

Throughout the conversation, McCann returns to the concept of "skin in the game" as a crucial factor in both investing and broader societal structures:

"Skin in the game is is is a form of risk taking and and uh moreover um he even mentions and I largely agree with this that like you know candidly entrepreneurs are probably some of the most virtuous people out there because the reason all these people have jobs is because they took a risk right."

This philosophy informs McCann's approach to investing and his view on the importance of aligning incentives between investors, founders, and users in the Web3 ecosystem.

The Potential for Crypto to Reshape Global Finance

McCann discusses the potential for crypto to reshape global finance, particularly in light of recent geopolitical events:

"We're seeing a major acceleration in the movement away from the U.S. dollar... The swift sanctions have made people realize like wow my fiat currency could be weaponized maybe I should start using crypto as a means to protect myself as a citizen not necessarily as like an oligarch but literally as a citizen right."

This perspective highlights the broader implications of crypto adoption beyond just investment opportunities, positioning cryptocurrencies as potential tools for financial sovereignty and protection against geopolitical risks.

The Role of Bounties in Hiring for Web3

An interesting point raised during the conversation is the use of bounties as a method for identifying and hiring talent in the Web3 space:

"Bounties I think are the cleanest uh signal versus say things like resume's and cv's and things like this and right and so we the top of the funnel is bounties for us and then that filters in a set of awesome candidates and then we help connect them with the projects in the Solana ecosystem."

This innovative approach to hiring aligns well with the decentralized and meritocratic ethos of the Web3 movement, potentially offering a more effective way to identify skilled individuals in a rapidly evolving technological landscape.

The Long-Term Vision for Crypto and Web3

Despite the current market conditions, McCann remains bullish on the long-term prospects for crypto and Web3:

"This is potentially a new iteration of the internet and you have the potential to invest in that and be a network participant that's not that's like a generational opportunity so any pullback in these markets I'm buying them with size because like this is in my view going so much higher."

This optimistic outlook is tempered with a realistic assessment of the challenges and risks involved, but ultimately paints a picture of a transformative technology with the potential to reshape numerous aspects of our digital lives.

Conclusion

Joe McCann's insights offer a comprehensive view of the current state and future potential of the crypto and Web3 ecosystem. From his innovative approach to venture capital with Asymmetric, to his philosophical underpinnings of risk and value creation, McCann provides a unique perspective on navigating the complex and rapidly evolving world of cryptocurrency investments.

As the space continues to mature and evolve, the convergence of various Web3 technologies, the increasing involvement of institutional players, and the ongoing innovation in areas such as DeFi, NFTs, and blockchain-based gaming all point to a future rich with opportunities for those able to navigate its complexities.

While challenges remain, including regulatory uncertainties and market volatility, the overall trajectory appears to be one of growth and increasing mainstream adoption. As McCann's insights suggest, those who can combine technological expertise with sound investment strategies and a long-term vision may be well-positioned to capitalize on the transformative potential of Web3 and cryptocurrency technologies.

Facts + Figures

  • Joe McCann has launched a new fund called Asymmetric, described as a "liquid crypto venture fund"
  • Asymmetric is positioned as a technology company with a fund mandate, aiming to provide technological support beyond just financial investment
  • McCann predicts that every financial contract will eventually move on-chain
  • The total crypto market cap is currently around 1.8-2 trillion dollars, compared to gold's market cap of 20 trillion dollars
  • McCann believes there is a 4-year window of opportunity for retail investors in crypto before institutional dominance increases
  • Asymmetric's risk management system is custom-built in-house, with the project codename "God"
  • McCann minted 33 Solana Monkey Business NFTs when SOL was around $30
  • McCann's Telegram group, Joe's Crypt, has over 6,100 members
  • McCann predicts that the total crypto market cap could potentially 5x in the next 5-10 years
  • McCann sees India as a potential "monster powerhouse" of engineering talent and capital in the Web3 ecosystem
  • McCann believes that all financial contracts, representing a market of potentially 900 trillion dollars, could move on-chain in the future

Questions Answered

What is Asymmetric and how does it differ from traditional venture capital funds?

Asymmetric is a liquid crypto venture fund that positions itself as a technology company with a fund mandate. Unlike traditional VCs, Asymmetric aims to provide technological support to its portfolio companies by running infrastructure like relayers or nodes. This approach allows Asymmetric to add tangible value beyond just financial investment, aligning its incentives more closely with the founders it supports.

How does Joe McCann view risk in crypto investing?

Joe McCann sees risk-taking as a virtuous act, but emphasizes the importance of avoiding the "risk of ruin." He advocates for a balanced approach to risk management, advising investors to hold tokens they believe in for the intermediate to long term, while also exploring ways to generate passive income through lending and staking. McCann stresses the importance of not becoming a "forced seller" and maintaining a long-term perspective in the volatile crypto markets.

What opportunities does McCann see for retail investors in the crypto space?

McCann believes there is still a window of opportunity for retail investors in crypto, potentially lasting for the next four years. He advises retail traders to focus on "crypto native strategies" that don't exist in traditional finance. These strategies could include things like basis trades or other approaches that take advantage of the unique characteristics of crypto markets. However, he warns that this window may close as institutional players become more dominant in the space.

How does McCann view the future of NFTs and their role in crypto adoption?

McCann sees NFTs as a powerful tool for introducing people to the broader crypto ecosystem. He believes that NFTs have "unlocked" culture for crypto, making it more accessible and relatable to mainstream audiences. While acknowledging the speculative nature of many NFT investments, McCann views the cultural impact of NFTs as a significant driver for broader crypto adoption, particularly in areas like sports, entertainment, and art.

What is McCann's perspective on the role of open source in Web3?

McCann emphasizes the importance of open source development in the Web3 ecosystem. Drawing from his experience building open source businesses, he sees a model emerging where companies build open protocols that anyone can use, but then create proprietary user interfaces or applications on top of these protocols. This approach allows for the benefits of open source collaboration while still providing avenues for businesses to create value and generate revenue.

How does McCann see the crypto market evolving in terms of institutional involvement?

McCann predicts increasing institutional involvement in crypto markets over the next few years. He believes that as more financial contracts move on-chain, institutional capital will follow. This could lead to a significant expansion of the total crypto market cap, potentially far beyond its current levels. However, he also notes that this shift may reduce some of the advantages currently enjoyed by retail traders and investors.

What is McCann's view on the potential of India in the crypto and Web3 space?

McCann is extremely bullish on India's potential in the crypto and Web3 space. He believes India has the potential to become a "monster powerhouse" of engineering talent and capital in the ecosystem. He cites examples of young developers in India creating impressive projects on platforms like Solana, and expresses a strong interest in building relationships with individuals and projects in the Indian crypto community.

How does McCann approach hiring and talent acquisition in the Web3 space?

McCann is a strong advocate for remote work and global talent acquisition in the Web3 space. He believes that the best talent exists everywhere, not just in traditional tech hubs. McCann also supports the use of bounties as a method for identifying and hiring talent, seeing it as a cleaner signal of ability compared to traditional resumes or CVs. This approach aligns with the decentralized and meritocratic ethos of the Web3 movement.

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