It takes time for innovations to penetrate their target markets. The rate of adoption is best characterized by the s-curve, a mathematical graph that plots growth against time.
At the outset, growth is slow in relation to the time that passes. With time, however, growth accelerates rapidly as the majority adopt the innovation.
According to Clayton Gardner, the co-founder and co-CEO at Titan, an investment firm, crypto innovations are at the steepest part of their adoption curve.
“Many institutions are jumping straight into Ethereum ETH/USD and other Layer 1 protocols,” he said.
“You actually see Ethereum, Solana SOL/USD, and Avalanche AVAX/USD, as a percentage of the total market cap of crypto, far exceed Bitcoin BTC/USD, now.”
To learn how Titan is positioning users to best capitalize on disruptive innovation in emerging markets like crypto and DeFi, check out the conversation below.
Context: Founded by Gardner, Joe Percoco, and Max Bernardy, Titan, at its core, solves money management problems.
“I spent six years, after graduating Wharton, at hedge funds and private equity firms,” Gardner, who even helped launch a fund backed by Blackstone Inc BX, said.
“My co-founder Joe was a user of a lot of these [competing] products, and he didn’t really have an expert money manager. That’s kind of the role I filled for him.”
The challenge faced by Percoco, and many other market participants, inspired the genesis of Titan; the firm provides its users an expert-managed investment experience in their pocket.
“I handpicked and hired our investment team,” Gardner added. “We have folks on the investment side from hedge funds, sell-side firms, as well as research, and analytics firms.”
Core Product: A "Buffett-like" long strategy that invests clients directly into a hedged basket of 20 or so market-leading U.S.-based companies with over $10 billion in market capitalization. “These are companies that we believe are established compounders and have strong competitive advantages,” Gardner said.
In 2020, the firm expanded into small- and mid-cap equities typically below $10 billion in market capitalization, as well as offshore opportunities in China, Latin America, and Europe.
Crypto: Launched in April 2021, Titan Crypto is an actively managed portfolio of five to ten crypto assets believed to be positioned for long-term returns with minimal correlation to equities and attractive hedging qualities. “We launched from zero-to-public in about sixty days,” Gardner said. “That’s record timing.”
Titan's interests aren’t just assets like Bitcoin and Ethereum. It’s the lesser-known Layer 1 and 2 projects that ought to outperform passive crypto indexes over the next three to five years. “We have an investment analyst, internally, following and tracking on-chain analytics, and other factors to try to beat the index.”
The product is on track to managing hundreds of millions within almost a year of launch.
Corona Growth: Up to and through the pandemic, Titan was a beneficiary of the investing public’s increasing interest in markets.
Investors stuck at home fueled engagement that has yet to subside. The reason being is that Titan is mostly hands-off; you invest and let the product do the work for you.
“Seven out of ten users still check the app every week,” Gardner said in reference to Titan’s education and research functionalities, like “Ask Titan Anything,” providing participants more ways to engage with the market during heightened volatility.
“You’re going to see us continue to do a lot more on making Titan a place where there are others interacting and learning from each other, as opposed to just one-on-one relationships.”
Crypto Boost: “TradeFi institutions are at the risk of facing a significant slowdown in growth at the expense of DeFi projects if they don’t have at least a view or strategy in the space.”
In providing an example of how Titan is helping investors ride the curve of adoption, Gardner said that the firm’s flagship strategy owns Coinbase Global Inc COIN, an on-ramp for a lot of companies willing to get involved in the crypto space.
For the purpose of diversification, Titan, also owns a mix of projects as it’s difficult to know how the space will unfold.
“We have Bitcoin as our store of value holding. We have several [tokens] that we view more as sort of smart contract platforms, and then, a few that we view as more novel, and able to implement use cases like NFTs, DeFi, and DAOs.”
Future Plans: Despite clear signs of speculation, as well as concern over new regulations, Titan has never been more excited about crypto.
“The first move for us was primarily to understand adoption and demand for this fiat on-ramp into crypto,” the co-founder said. “Now we’re asking our users, which is our ethos for a lot of product development, what they want.”
On the roadmap is the potential addition of features like staking, so long as they are compliant with prevailing regulatory requirements.
"We’re going to do it the right way. We’re going to be thoughtful about it. And, of course, we’re going to continue to listen to our users as that is our primary M.O.," Gardner said.
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