Considering we’re in a bear market at the moment, how’s the Web3 part of the fund going?
Obviously, it’s down, and this is why the allocation is small. But we’re thinking about things on a five to seven-year timeframe, and while this current downdraft provides some headwinds to the portfolio, for me, it’s actually quite good in terms of cleaning out a lot of the bad stuff in the space.
Bitcoin and other cryptocurrencies have had a difficult six months.Credit:AP
And what the regulators are trying to put in place, in terms of clear frameworks and legislation, is to avoid this. What’s happening today is a rerun of what’s happened in traditional financial services for years.
That’s particularly evident when you look at some of the leverage in the Web3 space. It doesn’t cease to surprise me that people were taking so much leverage on a space that’s already growing very quickly. Why would you do that?
Yeah, when you see things like the Celsius withdrawal pause and the interest rates they were offering, I mean, did people really think that could just keep going on forever?
Exactly. And people don’t realise the regulatory burden on funds like ours, we’re constantly running liquidity tests with our funds – it is a very thorough process. So, as soon as you see these very high-yield products, you have to ask how sustainable they are? How are they being generated? What’s the economic proposition?
Holon’s Heath Behncke welcomes further regulation in the crypto…
