Ava Labs announces a 12% job cut in a restructuring, reflecting the changing market and product analysis in the cryptocurrency sector.

Ava Labs Restructuring

Discussion on the recent surge in Bitcoin prices, the impact of macroeconomic factors, and the anticipation of a Bitcoin ETF.

Bitcoin Market and ETF Potential

Exploring how institutional investors are getting ahead of the ETF announcement by buying Bitcoin through centralized exchanges or proxy products like Grayscale.

Institutional Investment in Bitcoin

Examining Grayscale's marketing efforts, the link between risk appetite and demand, and the potential for continued positive inflows into the Bitcoin market.

Marketing Strategies and Outlook

Reflecting on the past challenges of the FTSE scenario, weeding out bad actors in the crypto space, and the evolving regulatory landscape.

Implosion of FTSE and Regulatory Challenges

Discussing the growing presence of professionals in the crypto industry, corporate partnerships, and the vision of Ava Labs in deploying real business use cases.

Professionalization of the Industry

# Crypto Market Update and Ava Labs Restructuring


So John, before we get to the crypto market and your calls, I do want to touch on the Ava Labs news that we got this week. Our own Bloomberg News team here reporting that Ava cut jobs by 12% this week in a restructuring. We should know it's just the latest layoffs to hit the cryptocurrency sector. What can you tell us about this restructuring?

- Ava Labs cut jobs by 12% in a recent restructuring
- Latest layoffs in the cryptocurrency sector

Well, that's right, Tim. And that day was probably the toughest day in my 4 years at Ava Labs. But in the last 4 plus years, we've gone from 10 people to 270 before this 12%. And the world has changed. Again, any fast-growing business, you have to assess where the market is, what kind of products you're building, and analyze it and then make the necessary changes. So it was very tough. I called some of those people my friends, but it was necessary. And the team is leaner and I've got 200 and almost 40 people still that I have to think about. So is this it for 4 cuts. Yes. So it was a 1 time thing. That's OK.

Yeah I guess 1 thing though if you could just pull back and talk a little bit about the market for Bitcoin so far this year. I mean there's just been this resurgence. What's that. Is that going to continue. Are we going to see a Bitcoin ETF.

- Bitcoin market resurgence
- Potential for a Bitcoin ETF

Oh, I mean that is obviously the rage. I mean so first the surge in the Bitcoin prices. Keep in mind I'm an operator but I used to be a fund manager so I keep a lot of perspectives in mind. It was really 2 things. Recently you've had the call it un-inverting of the yield curve from a macro perspective. You had also announced that there'll be less supply in Treasury auction sales. So that created a backdrop from a macro perspective that was very positive for risk assets and crypto included in that. But on a micro perspective you had I think you thought called it on your own show exuberance for these ETF potentials. I think we're getting closer to the reality of 1 of those. And reality is, I think a lot of these institutional managers are trying to get ahead in anticipation of that.

- Factors contributing to the surge in Bitcoin prices
- Institutional managers anticipating Bitcoin ETF

How are they doing that? Just by buying Bitcoin? Or I mean, how do you how do you get ahead of that?

- Institutional investors buying Bitcoin
- On-chain transactions vs centralized exchanges

Yeah, I mean, I think they are buying. Well, if you look at the volumes where they're coming from, if you are doing it on centralized exchanges like a Coinbase, or are you doing in a decentralized exchange, which is on chain? Typically the crossover investors, the institutional hedge fund types, they do it on chain. So you can do it either through Coinbase or you can do it through proxies. Those are basically Grayscale's product. Then you also have other proxy products out there, trusts like that. And you have certain stocks that you can buy it. So if you look at that, you would say that it was more crossover traditional people getting ahead of the ETF announcement.

How much do you think Grayscale is spending on marketing? Because you cannot go into an airport in the New York City area or the Washington, D.C. Area and not see an ad for GBTC.

- Grayscale's marketing efforts

Listen, when you have 30 billion in assets and you charge what they charge, you have decent, you know, marketing budget. And Do you think they're also doing marketing to get ahead of that to gin up interest ahead of a spot Bitcoin ETF. They've been very consistent in their marketing even before this. You know part of their job is also to proselytize asset managers and they've been very good at it. I know those guys. Well they've been doing it for more than 5 6 years.

1 thing just to go back to the you know the outlook here. I mean you mentioned this link between a risk on appetite and demand. What's the chance that that risk on appetite is going to continue into next year. I mean we've certainly got a lot of macro feedback that that's not that that's not going to be the case.

- Link between risk appetite and demand
- Uncertainty of risk appetite in the future

Yeah I mean that is everything is likely and it's a and it's a volatile asset class. So anything can happen in the short term. But if you look at it over the course of the year Bitcoin is actually a lot better than most tech stocks. It's up something like 2 to 300 somewhere between 2 and 300 percent literally 2 or 300 percent. You can't even tell you exactly unless you're really studying it day to day. So actually over the longer period of time it's still doing relatively well. Can it go backwards. Sure. And I wouldn't even be surprised. People have bought in anticipation the news and then sell it on the news so to speak of an ETF release. But just think about it. BlackRock has 10 trillion in assets. So you know if 1 percent of their distribution picks up on this that's you know 100 billion 100 billion. You know the Bitcoin ETF Bitcoin market cap I think is about 700 ish. So it's like 14 percent increase demand. And that's only 1 percent of just BlackRock. You have fidelity of other big players involved. So over time it'll still continue to have positive inflows.

- Bitcoin's performance compared to tech stocks
- Potential demand from institutional investors

And then just to continue on with the sort of sentiment around the market at this point. Can you explain a little bit about how the implosion of FTSE is landing in terms of getting new customers in people sticking with the asset class.

- Impact of FTSE implosion on customer sentiment

Well obviously when it happened the FTSE scenario was really about a year ago. Everything changed. The market structure of the asset class really deteriorated, a lot of players left the system. I think what's good right now, a year later after the trial, is that people are saying, okay, It's almost there where we can put this chapter behind us and move forward. So I think the fact that we can put this chapter or closer to putting this chapter behind us, we removed a lot of bad actors is all viewed positive going forward.

- Improvement in market sentiment after the FTSE implosion

I saw last week that I believe it was last week or the week before. Jennifer, correct me if I'm wrong, if you know this, that we saw another person accused of being a bad actor in the crypto space by the Southern District of New York. Like this was an actual, you know, complaint. Where are we in weeding everybody out?

- Ongoing efforts to remove bad actors from the crypto space

I think we're farther along than people realize. There are bad actors. I mean, this place has, I've been in this space for a while. The space has been a Petri dish of genius experimentation and frauds and scams, unfortunately. You know, regulatory rules are different in every part of the world, and they're frankly uncertain, so it allows the bad actors to come in and try to take advantage of things. But What is happening with this ETF potential, as well as, again, I'm an operator, Avalabs is actually a software services company helping people build on Avalanche. The partnerships and the business development relationships we're building with professionals tells me professionals are coming into the space. There's new leadership coming. And it's frankly nice to see a blend of great technologists working with domain experts whether that be traditional finance or the stuff we're working on in Asia with gaming companies or loyalty rewards programs.

- Professionalization of the crypto space
- Partnerships and business development in the industry

Yeah I mean that's my next question for you isn't it. It's the the the industry developing more professionals coming in. What sort of the vision in terms of pursuing that with corporate partnerships.

- Vision for industry development and corporate partnerships

So the vision for other labs again software service just like Red Hat was for Linux is to help people deploy things on top of avalanche create real business use cases for traditional companies as well as crypto native companies. So giving them product market fit getting them business use cases stable coins was a perfect example. I think that is the real first thing in block chain or Web 3 if you will that has established product market fit. Brevin Howard's research said there was over 11 trillion on-chain settlement in stable coins in last year. That's the same volume almost the same volume as Visa over the course of a year. So my prediction for next year 2024 is you're going to have the same volume as both Visa and Mastercard in terms of stablecoin settings.

- Vision for Avalanche Labs and product market fit
- Growth potential of stablecoins

Thank you for reading! Stay tuned for more updates.


Crypto Market Update and Ava Labs Restructuring

Decreased supply in Treasury auction sales

To create real business use cases on Avalanche

To establish product market fit for Web 3

- Ava Labs, a cryptocurrency company, has undergone a restructuring and cut jobs by 12%.
- The CEO states that it was a necessary change due to market conditions and product analysis.
- The CEO believes that the surge in Bitcoin prices is due to the un-inverting of the yield curve and anticipation of a Bitcoin ETF.
- Institutional investors are buying Bitcoin through centralized exchanges or proxies like Grayscale's products.
- Grayscale has a significant marketing budget and has been consistent in their marketing efforts.
- The CEO predicts that the risk-on appetite for Bitcoin will continue in the long term, despite potential short-term fluctuations.
- The implosion of FTSE, a previous cryptocurrency scandal, is viewed as a positive development for the industry.
- The CEO believes that professionals and new leadership are entering the cryptocurrency space, leading to partnerships and business development opportunities.
- Ava Labs aims to help companies deploy blockchain solutions and establish real business use cases, particularly in stablecoins.
- The CEO predicts that stablecoin settlements will reach the same volume as Visa and Mastercard in 2024.

Ava Labs president John Wu explains why he sees big advances ahead in the crypto market and related software services. He also discusses the recent staff cuts at his company and the benefit of having "bad actors" like Sam Bankman-Fried out of the picture. John speaks with Jennifer Ryan and Tim Stenovec on Bloomberg Radio.

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So John, before we get to the crypto market and your calls, I do want to touch on the Ava Labs news that we got this week.

Our own Bloomberg News team here reporting that Ava cut jobs by 12% this week in a restructuring.

We should know it's just the latest layoffs to hit the cryptocurrency sector.

What can you tell us about this restructuring?

And that day was probably the toughest day in my 4 years at Ava Labs.

But in the last 4 plus years, we've gone from 10 people to 270 before this 12%.

Again, any fast growing business, you have to assess where the market is, what kind of products you're building, and analyze it and then make the necessary changes.

I called some of those people my friends, but it was necessary.

And the team is leaner and I've got 200 and almost 40 people still that I have to think about.

Yeah I guess 1 thing though if you could just pull back and talk a little bit about the market for Bitcoin so far this year.

I mean there's just been this resurgence.

I mean so first the surge in the Bitcoin prices.

Keep in mind I'm an operator but I used to be a fund manager so I keep a lot of perspectives in mind.

Recently you've had the call it un-inverting of the yield curve from a macro perspective.

You had also announced that there'll be less supply in Treasury auction sales.

So that created a backdrop from a macro perspective that was very positive for risk assets and crypto included in that.

But on a micro perspective you had I think you thought called it on your own show exuberance for these ETF potentials.

I think we're getting closer to the reality of 1 of those.

And reality is, I think a lot of these institutional managers are trying to get ahead in anticipation of that.

Or I mean, how do you how do you get ahead of that?

Well, if you look at the volumes where they're coming from, if you are doing it on centralized exchanges like a Coinbase, or are you doing in a decentralized exchange, which is on chain?

Typically the crossover investors, the institutional hedge fund types, they do it on chain.

So you can do it either through Coinbase or you can do it through proxies.

Then you also have other proxy products out there, trusts like that.

And you have certain stocks that you can buy it.

So if you look at that, you would say that it was more crossover traditional people getting ahead of the ETF announcement.

How much do you think Grayscale is spending on marketing?

Because you cannot go into an airport in the New York City area or the Washington, D.C.

Listen, when you have 30 billion in assets and you charge what they charge, you have decent, you know, marketing budget.

And Do you think they're also doing marketing to get ahead of that to gin up interest ahead of a spot Bitcoin ETF.

They've been very consistent in their marketing even before this.

You know part of their job is also to proselytize asset managers and they've been very good at it.

Well they've been doing it for more than 5 6 years.

1 thing just to go back to the you know the outlook here.

I mean you mentioned this link between a risk on appetite and demand.

What's the chance that that risk on appetite is going to continue into next year.

I mean we've certainly got a lot of macro feedback that that's not that that's not going to be the case.

Yeah I mean that is everything is likely and it's a and it's a volatile asset class.

So anything can happen in the short term.

But if you look at it over the course of the year Bitcoin is actually a lot better than most tech stocks.

It's up something like 2 to 300 somewhere between 2 and 300 percent literally 2 or 300 percent.

You can't even tell you exactly unless you're really studying it day to day.

So actually over the longer period of time it's still doing relatively well.

People have bought in anticipation the news and then sell it on the news so to speak of an ETF release.

So you know if 1 percent of their distribution picks up on this that's you know 100 billion 100 billion.

You know the Bitcoin ETF Bitcoin market cap I think is about 700 ish.

And that's only 1 percent of just BlackRock.

You have fidelity of other big players involved.

So over time it'll still continue to have positive inflows.

And then just to continue on with the sort of sentiment around the market at this point.

Can you explain a little bit about how the implosion of FTSE is landing in terms of getting new customers in people sticking with the asset class.

Well obviously when it happened the FTSE scenario was really about a year ago.

The market structure of the asset class really deteriorated, a lot of players left the system.

I think what's good right now, a year later after the trial, is that people are saying, okay, It's almost there where we can put this chapter behind us and move forward.

So I think the fact that we can put this chapter or closer to putting this chapter behind us, we removed a lot of bad actors is all viewed positive going forward.

I saw last week that I believe it was last week or the week before.

Jennifer, correct me if I'm wrong, if you know this, that we saw another person accused of being a bad actor in the crypto space by the Southern District of New York.

Like this was an actual, you know, complaint.

I think we're farther along than people realize.

I mean, this place has, I've been in this space for a while.

The space has been a Petri dish of genius experimentation and frauds and scams, unfortunately.

You know, regulatory rules are different in every part of the world, and they're frankly uncertain, so it allows the bad actors to come in and try to take advantage of things.

But What is happening with this ETF potential, as well as, again, I'm an operator, Avalabs is actually a software services company helping people build on Avalanche.

The partnerships and the business development relationships we're building with professionals tells me professionals are coming into the space.

And it's frankly nice to see a blend of great technologists working with domain experts whether that be traditional finance or the stuff we're working on in Asia with gaming companies or loyalty rewards programs.

Yeah I mean that's my next question for you isn't it.

It's the the the industry developing more professionals coming in.

What sort of the vision in terms of pursuing that with corporate partnerships.

So the vision for other labs again software service just like Red Hat was for Linux is to help people deploy things on top of avalanche create real business use cases for traditional companies as well as crypto native companies.

So giving them product market fit getting them business use cases stable coins was a perfect example.

I think that is the real first thing in block chain or Web 3 if you will that has established product market fit.

Brevin Howard's research said there was over 11 trillion on-chain settlement in stable coins in last year.

That's the same volume almost the same volume as Visa over the course of a year.

So my prediction for next year 2024 is you're going to have the same volume as both Visa and Mastercard in terms of stablecoin settings.


Speaker 0: So John, before we get to the crypto market and your calls, I do want to touch on the Ava Labs news that we got this week. Our own Bloomberg News team here reporting that Ava cut jobs by 12% this week in a restructuring. We should know it's just the latest layoffs to hit the cryptocurrency sector. What can you tell us about this restructuring?

Speaker 1: Well, that's right, Tim. And that day was probably the toughest day in my 4 years at Ava Labs. But in the last 4 plus years, we've gone from 10 people to 270 before this 12%. And the world has changed. Again, any fast growing business, you have to assess where the market is, what kind of products you're building, and analyze it and then make the necessary changes.

So it was very tough. I called some of those people my friends, but it was necessary. And the team is leaner and I've got 200 and almost 40 people still that I have to think about.

Speaker 0: So is this it for 4 cuts. Yes.

Speaker 1: So it was a 1 time thing. That's OK.

Speaker 2: Yeah I guess 1 thing though if you could just pull back and talk a little bit about the market for Bitcoin so far this year. I mean there's just been this resurgence. What's that. Is that going to continue. Are we going to see a Bitcoin ETF.

Speaker 1: Oh I mean that is obviously the rage. I mean so first the surge in the Bitcoin prices. Keep in mind I'm an operator but I used to be a fund manager so I keep a lot of perspectives in mind. It was really 2 things. Recently you've had the call it un-inverting of the yield curve from a macro perspective.

You had also announced that there'll be less supply in Treasury auction sales. So that created a backdrop from a macro perspective that was very positive for risk assets and crypto included in that. But on a micro perspective you had I think you thought called it on your own show exuberance for these ETF potentials. I think we're getting closer to the reality of 1 of those. And reality is, I think a lot of these institutional managers are trying to get ahead in anticipation of that.

Speaker 0: How are they doing that? Just by buying Bitcoin? Or I mean, how do you how do you get ahead of that?

Speaker 1: Yeah, I mean, I think they are buying. Well, if you look at the volumes where they're coming from, if you are doing it on centralized exchanges like a Coinbase, or are you doing in a decentralized exchange, which is on chain? Typically the crossover investors, the institutional hedge fund types, they do it on chain. So you can do it either through Coinbase or you can do it through proxies. Those are basically Grayscale's product.

Then you also have other proxy products out there, trusts like that. And you have certain stocks that you can buy it. So if you look at that, you would say that it was more crossover traditional people getting ahead of the ETF announcement.

Speaker 0: How much do you think Grayscale is spending on marketing? Because you cannot go into an airport in the New York City area or the Washington, D.C. Area and not see an ad for GBTC.

Speaker 1: Listen, when you have 30 billion in assets and you charge what they charge, you have decent, you know, marketing budget.

Speaker 0: And Do you think they're also doing marketing to get ahead of that to gin up interest ahead of a spot Bitcoin ETF.

Speaker 1: They've been very consistent in their marketing even before this. You know part of their job is also to proselytize asset managers and they've been very good at it. I know those guys. Well they've been doing it for more than 5 6 years.

Speaker 2: 1 thing just to go back to the you know the outlook here. I mean you mentioned this link between a risk on appetite and demand. What's the chance that that risk on appetite is going to continue into next year. I mean we've certainly got a lot of macro feedback that that's not that that's not going to be the case.

Speaker 1: Yeah I mean that is everything is likely and it's a and it's a volatile asset class. So anything can happen in the short term. But if you look at it over the course of the year Bitcoin is actually a lot better than most tech stocks. It's up something like 2 to 300 somewhere between 2 and 300 percent literally 2 or 300 percent. You can't even tell you exactly unless you're really studying it day to day.

So actually over the longer period of time it's still doing relatively well. Can it go backwards. Sure. And I wouldn't even be surprised. People have bought in anticipation the news and then sell it on the news so to speak of an ETF release.

But just think about it. BlackRock has 10 trillion in assets. So you know if 1 percent of their distribution picks up on this that's you know 100 billion 100 billion. You know the Bitcoin ETF Bitcoin market cap I think is about 700 ish. So it's like 14 percent increase demand.

And that's only 1 percent of just BlackRock. You have fidelity of other big players involved. So over time it'll still continue to have positive inflows.

Speaker 2: And then just to continue on with the sort of sentiment around the market at this point. Can you explain a little bit about how the implosion of FTSE is landing in terms of getting new customers in people sticking with the asset class.

Speaker 1: Well obviously when it happened the FTSE scenario was really about a year ago. Everything changed. The market structure of the asset class really deteriorated, a lot of players left the system. I think what's good right now, a year later after the trial, is that people are saying, okay, It's almost there where we can put this chapter behind us and move forward. So I think the fact that we can put this chapter or closer to putting this chapter behind us, we removed a lot of bad actors is all viewed positive going forward.

Speaker 0: I saw last week that I believe it was last week or the week before. Jennifer, correct me if I'm wrong, if you know this, that we saw another person accused of being a bad actor in the crypto space by the Southern District of New York. Like this was an actual, you know, complaint. Where are we in weeding everybody out?

Speaker 1: I think we're farther along than people realize. There are bad actors. I mean, this place has, I've been in this space for a while. The space has been a Petri dish of genius experimentation and frauds and scams, unfortunately. You know, regulatory rules are different in every part of the world, and they're frankly uncertain, so it allows the bad actors to come in and try to take advantage of things.

But What is happening with this ETF potential, as well as, again, I'm an operator, Avalabs is actually a software services company helping people build on Avalanche. The partnerships and the business development relationships we're building with professionals tells me professionals are coming into the space. There's new leadership coming. And it's frankly nice to see a blend of great technologists working with domain experts whether that be traditional finance or the stuff we're working on in Asia with gaming companies or loyalty rewards programs.

Speaker 2: Yeah I mean that's my next question for you isn't it. It's the the the industry developing more professionals coming in. What sort of the vision in terms of pursuing that with corporate partnerships.

Speaker 1: So the vision for other labs again software service just like Red Hat was for Linux is to help people deploy things on top of avalanche create real business use cases for traditional companies as well as crypto native companies. So giving them product market fit getting them business use cases stable coins was a perfect example. I think that is the real first thing in block chain or Web 3 if you will that has established product market fit. Brevin Howard's research said there was over 11 trillion on-chain settlement in stable coins in last year. That's the same volume almost the same volume as Visa over the course of a year.

So my prediction for next year 2024 is you're going to have the same volume as both Visa and Mastercard in terms of stablecoin settings.

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Surge in Crypto Poised to Continue With Possible Bitcoin ETF: John Wu