Speaker 1: This is Bloomberg Business Week with Carol Masser and Bloomberg
Speaker 1: Quick Takes Tim Stinovic from Bloomberg Radio. Well, Tim, we've
Speaker 1: been talking about crypto all weeks, so it's been a
Speaker 1: good week for me and I'm excited to keep that
Speaker 1: conversation going with Michael Sonenshein. He is the chief executive
Speaker 1: officer of digital asset manager Gray Scale. He joined us
Speaker 1: now on the phone from Los Angeles. Michael, great to
Speaker 1: have you on the show. And I mean, it's been
Speaker 1: a big week for bitcoin, but it's been an even
Speaker 1: bigger week for ethereum. Ether is up three point three
Speaker 1: percent this week, dusting Bitcoin, and I feel like we've
Speaker 1: been seeing this more that we see Ether outperform bitcoin.
Speaker 1: Are are we back in all season? Well, first of all,
Speaker 1: great to be with you both, and thank you so
Speaker 1: much for having me. You know, I think it's tough
Speaker 1: to say whether or not we're back in all season
Speaker 1: or not. I think what we're seeing now is more
Speaker 1: attention than ever is being paid to crypto as an
Speaker 1: asset class. There is certainly amongst the Gray Scale in
Speaker 1: investors a general appreciation that the asset class is here
Speaker 1: to stay and as a result of that, investors realize
Speaker 1: that there is a lot more than just bitcoin, and
Speaker 1: actually more than just bitcoin and ethereum, and so there
Speaker 1: continues to be ever more demand for them to diversify
Speaker 1: beyond just those top two digital currencies by market cap. Okay,
Speaker 1: where should where? El should they diversify? Well, I think
Speaker 1: what many investors are beginning to appreciate is that there
Speaker 1: are now growing ecosystems within the digital asset universe. And
Speaker 1: you know, we're seeing that in the world of gaming. Um.
Speaker 1: You know, there's been a lot of chatter recently about
Speaker 1: the metaverse. We've seen the convergence of file storage and
Speaker 1: digital assets. We've seen um, a lot of investors beginning
Speaker 1: to think about things like n f t s and
Speaker 1: really starting to unlock other use cases that maybe weren't
Speaker 1: part of this ecosystem when they first began thinking about
Speaker 1: making investment allocations. Okay, you really piqued my interest with
Speaker 1: n f T So there's so much to talk about.
Speaker 1: We fortunately have you for quite a bit, Michael, So
Speaker 1: we're gonna try to everything. Okay, but let's talk n
Speaker 1: f T s because I'm trying to understand what use
Speaker 1: cases are for n f t s beyond what we've
Speaker 1: seen them used for, which you know is collectibles. Sure, well,
Speaker 1: I think what it's highlighting and this is just one
Speaker 1: incarnation of the idea of a digitally unique item that
Speaker 1: the ownership of which is is you know verified, we
Speaker 1: recorded in a way that's completely decentralized. You are starting
Speaker 1: to see how that could certainly be a tailwind or
Speaker 1: a major improvements individuals and companies around the world. You know,
Speaker 1: we fight things like um, you know, fake goods, whether
Speaker 1: they're counterfeit or um you know, having to be able
Speaker 1: to track them and and they're whereabouts and track their ownership.
Speaker 1: And you know art is just you know, one vertical
Speaker 1: that it could be looked at. It could be luxury goods.
Speaker 1: This can extend, you know, really to almost any item um,
Speaker 1: physical or not, that could be tagged and added to
Speaker 1: a blockchain where it's ownership easily be recorded. And I
Speaker 1: think it's really starting for many people to really have
Speaker 1: them rethink the creator economy, the way that artists can
Speaker 1: pump out their content and actually sell it and engage
Speaker 1: directly with their bands and user bases. And that can
Speaker 1: be music, Um, it could be our The list is
Speaker 1: pretty endless, and so sticking with n f T s,
Speaker 1: I mean, Gray Skill has a really impressive lineup of funds.
Speaker 1: It feels like you guys cover every part of the
Speaker 1: cryptocurrency universe. I don't see any of your trusts UH
Speaker 1: specifically focused on getting exposure to n f T s.
Speaker 1: Is that something that you plan to offer at some point, Well,
Speaker 1: I would never rule anything out. UM. You know, we
Speaker 1: today operate fifteen different investment vehicles. Some of them are
Speaker 1: single asset vehicles and some of them are diversified, meaning
Speaker 1: that they have a basket of various assets that they hold.
Speaker 1: And so as we think about where investor preferences are,
Speaker 1: we certainly think that there is a meaningful opportunity to
Speaker 1: expand in both categories, such that we are providing investors
Speaker 1: with an on ramp to certain of these subsets of
Speaker 1: the current of the digital currency ecosystem. UM, and we've
Speaker 1: so far done that with large cab currencies. We've done
Speaker 1: that for Defy, and certainly are always trying to tow
Speaker 1: the line between identifying opportunities that we think are compelling
Speaker 1: and bringing them to investors and trying to reconcile that
Speaker 1: with where investors are telling us they want that exposure. Well,
Speaker 1: listen to that. I'm curious whether you think that n
Speaker 1: f t S could be a flash in the pan,
Speaker 1: whether this is just the bright, shiny object that crypto
Speaker 1: investors are focusing on right now, because there are stats
Speaker 1: out there that you know, obviously n f t S
Speaker 1: get a lot of buzz, but actually dilly average sales
Speaker 1: piece sometime in August and we have just about thirty seconds. Well,
Speaker 1: I don't know that it's necessarily a flash in the
Speaker 1: pan so much as again i'd read a rate. The
Speaker 1: success and the acceptance of n f T I think
Speaker 1: is really a way for everyone to understand the potential
Speaker 1: of what it could be like to have the assets
Speaker 1: whose ownership has trapped on a blockchain, and fcs are
Speaker 1: just one incarnation of them. Still with us is Michael Sonnenshein.
Speaker 1: He is the chief executive officer of Gray Scale. On
Speaker 1: the phone from Los Angeles and Michael, it's finally time
Speaker 1: to talk about the metaverse. And clearly there's a lot
Speaker 1: of corporations out there that are excited about it. Facebook
Speaker 1: rebranding as meta platforms, but there's also a lot of
Speaker 1: people excited on Twitter in my mentions about the metaverse.
Speaker 1: But for the normal person, how do you make money
Speaker 1: on the coming metaverse revolution? How do you even invest
Speaker 1: along that? All? Right, well, let's break it down for everybody.
Speaker 1: So simply put, Katie, the metaverse is where digital experiences
Speaker 1: can take place, right, And so how did we get here?
Speaker 1: When we think about the Internet, it really started with
Speaker 1: the Internet one point oh. Right, that meant that we
Speaker 1: had now a digital place where we could extract information.
Speaker 1: It was really read only. And over the last you know,
Speaker 1: two plus decades, we've seen the Internet evolved into the
Speaker 1: web two point oh where we now have this digital economy.
Speaker 1: Individuals and companies can read and engage with each other,
Speaker 1: but all of the data, all of the activity is
Speaker 1: owned by corporations. Right. We must buy online goods through
Speaker 1: certain sellers, we must interact with one another through certain
Speaker 1: social media platforms, etcetera. And now what we're seeing is
Speaker 1: the emergence of the web three point oh. Um, the
Speaker 1: metaverse being one of those incarnations where digital experiences are
Speaker 1: actually owned by the individuals that are participating. So the
Speaker 1: value no longer attribute to the company, but rather to
Speaker 1: the individuals that are participating. So one of the areas
Speaker 1: of the meta or so we've been excited about, is
Speaker 1: actually a project called a decentralized metaverse where users can
Speaker 1: interact with one another, build businesses, have experiences, and there's
Speaker 1: actually a native token called mana that's associated with the metaverse,
Speaker 1: the Central Land. We lost you for one second, just
Speaker 1: say explain one more like ten seconds ago. What it's called. Yeah,
Speaker 1: it's called decentral Land, and de central Land is one
Speaker 1: of these decentralized metaverse projects where users can interact with
Speaker 1: one another and participate in the economy there by building
Speaker 1: businesses offering experiences, and there's actually a native token associated
Speaker 1: with called mana. We don't have a ton of time,
Speaker 1: so I want to make sure we get all this
Speaker 1: in what is a What is an experience that somebody
Speaker 1: would have in the metaverse that they can't have in
Speaker 1: real life. You can go to a concert, for example,
Speaker 1: and you wouldn't need to leave your couch or your desk. Um.
Speaker 1: You know, if if you want to see a certain
Speaker 1: artist perform and they're not where you live locally, you
Speaker 1: might be able to attend that concert in the meta rios.
Speaker 1: And that's just beginning to unlock the types of experiences
Speaker 1: that are possible, and it's bringing together a bunch of
Speaker 1: technologies digital currencies, computing, gaming, and virtual reality UM and
Speaker 1: we're just just just at the earliest of earliest innings.
Speaker 1: And so a lot of their digital currencies stay like
Speaker 1: Mama and others are ways to Katie's point that investors
Speaker 1: can invest in the metaverse as this technology or as
Speaker 1: these experiences begin to take off. And Michael talk about
Speaker 1: the link between cryptocurrencies and the metaverse because it seems
Speaker 1: like there's a lot of spiritual similarities there. A lot
Speaker 1: of the people I talked to her are excited about
Speaker 1: crypto or excited about the metaverse. Is that because you know,
Speaker 1: in this new virtual reality that will be the medium
Speaker 1: of exchangers, it's something different. Well, I think it's because
Speaker 1: these are decentralized communities that the value UM that is
Speaker 1: typically ascribed back to the company's social media platforms, the
Speaker 1: commerce platforms that we use in the web two point oh,
Speaker 1: can actually be owned and used by the individuals participating
Speaker 1: in the metaverse. So many of these projects have their
Speaker 1: own native digital currencies UM that are you know, either
Speaker 1: offshoots of things like bitcoin or ethereum, or others that
Speaker 1: can actually be only used in those ecosystems. Michael, just
Speaker 1: in ten seconds. Well, I you know, I can't even
Speaker 1: ask you a question that the question that I had
Speaker 1: would require a longer answer. You're gonna have to come
Speaker 1: back and join us once again, Michael. I'm always happy
Speaker 1: to come back. Actually, that helps everybody understand the metaverse
Speaker 1: a little bit better. It absolutely helps we are well, Katie,
Speaker 1: are you still metaverse curious work? I still have some
Speaker 1: existential dread associated with the metaverse, but I'm moving past that.
Speaker 1: This conversation helps metaverse hesitant metaverse hesitant plenty of time
Speaker 1: Web three point out great definitions of that. By the way,
Speaker 1: that was really helpful. Michael Sonenshine, CEO of Gray Scale,
Speaker 1: joining us once again on the phone from Los Angeles.
Speaker 1: Thank you so much for taking a time, Michael,