We are live from Definition by Accountable at Token 2049 in Singapore. Joining me straight from his panel is Marco Manoppo, General Partner at SharpByte Capital. Marco, welcome to Fintech TV.
Thanks for having me.
Tell us more about SharpByte Capital — what is your focus and what kind of companies do you back?
We are what I like to call a DeFi-native yield fund. Essentially we are a liquidity provider in the crypto and on-chain ecosystems. We do a lot of deals with early-stage stablecoin projects, early-stage real world asset projects, and so on. Our thesis is that in the next five years there is going to be a huge influx of more products coming on-chain. They are all going to compete for liquidity and TVL — and we are there to facilitate that.
You just came off the institutional infrastructure race panel. What was your main takeaway?
The main takeaway is that the institutional side of crypto finally feels that the wind is behind their back. Since 2017 we have been saying institutions are going to come, are going to come. But in the past 18 months we have seen exponential growth on that. And I think this event was the culmination of that.
Institutional capital now comes with a longer horizon and a higher bar. How has that changed what founders need to build?
Founders need to be a lot more rigorous. It is not the same as the 2017 or 2021 crypto cycle where you would see well-intentioned cypherpunks or founders who had not properly managed a business before. Now the level of rigour being asked — whether you are a venture capitalist or an institution deploying to crypto — is a lot higher. Overall it is just maturation.
Which categories feel more settled to you and which are still wide open?
The top three stablecoins and the top three centralised exchanges are pretty settled. Those are the kings of the industry. What is still wide open: crypto payments, vault infrastructure, and a lot of blockchains that launched in the past couple of years and have finally realised they need to do something or they will consolidate.
We are seeing a wave of M&A across the industry. What is driving it?
The relative lack of VC funding compared to the past cycle. VCs have had to be more careful about deployment and talking to their LPs. The result is you can no longer be a 19-year-old founder with no product raising at a $30 million valuation. All those teams that were no longer able to raise capital have been running down their runway for two, three, or four years. That is what is driving the M&A wave — and I think in the next one to two years we will still see a lot more of it.
What trends across Asia should people pay attention to?
The number one trend — and Asia is a very big market for this — is the dollarisation of offshore crypto dollars. Eurodollar, petrodollar, crypto dollar. USD in circulation outside the United States is increasingly in crypto form, and it is very big in Asia. That trend is only going to continue.
Looking two years ahead — what will the winners in this space have in common?
They will be able to strategically align their investors and their partners. Given how much more mature the space is, aligning yourself with the right stakeholders and knowing what moat you can create through those alignments is going to be the number one thing. If you just compete on pure capital, it is tough.
Marco, thank you very much for coming on Fintech TV.
Thank you
