Ali Hamed - Novel Asset Investing (Capital Allocators, EP.40)

Crypto Funds

Institutional crypto funds are evolving to resemble traditional investment funds, with a focus on security and experienced management. Ali Hamed explains that these funds prioritize high levels of security and use top-tier vendors, while management teams are cautious and experienced in capital management 1. He notes that unlike venture capital, where proprietary networks are key, crypto fund managers can easily connect with all significant players in the space. This approach ensures that the funds are methodical and not overly reliant on risky investments.

It'll be people who probably err on the side of caution, like bitcoin probably has enough upside, or the more mature crypto assets probably have enough upside that you probably don't have to go too far down the risk curve to get real alpha in your portfolio.

--- Ali Hamed

Additionally, Hamed discusses the strategy of cap-weighting in crypto asset portfolios, emphasizing the importance of holding larger crypto assets for security and liquidity 2.

   

ICOs

Initial Coin Offerings (ICOs) present a complex landscape for both entrepreneurs and investors. Ali Hamed argues that many ICOs are primarily beneficial for entrepreneurs, allowing them to raise capital without diluting equity, but often lack clear benefits for investors 3. He suggests that ICOs could evolve to support growth equity for established companies, enhancing network effects and barriers to entry.

I think one day we're going to have icos that won't be companies that are just white papers that are pre product. It'll only be for growth equity.

--- Ali Hamed

Hamed also explores the potential for utility tokens to reinvent business models, citing examples like Yelp, where tokens could incentivize content creation and benefit both the platform and its users 4.