Greg Carson of XBTO Humla Ventures, Venture Capital/Digital Asset fund manager at the marcus evans Private Wealth Management Summit 2022, and the Elite Summit 2022, discusses the financial markets transformation, and what investment opportunities investors must consider.

1. Why Investors Need to Enter the
Decentralized Finance Space
Interview with: Greg Carson, Manag-
ing Partner, XBTO Humla Ventures
“It is difficult for traditional venture
capitalists and investors to embrace that
the digital assets sector is real, and
growing so fast. Venture has moved from
a regional venture opportunity to a global
one, and from late stage to early. Wealth
managers and family offices can get
stuck in the cycles of the past, but there
is a new cycle coming along. The
opportunities today are in the financial
ecosystem markets transformation -
driven by this new asset class,” says
Greg Carson, Managing Partner, XBTO
Humla Ventures.
XBTO Humla Ventures is a Venture
Capital/Digital Asset fund manager
attending the marcus evans Private
Wealth Management Summit 2022
and the Elite Summit 2022.
Why do you consider this the best
moment in venture capital history?
We had about 25 years of opportunities
as the consumer markets and b2b
transformed. Amazon changed the way
we buy goods, payment solutions moved
online, media moved online, and adver-
tising moved to social media and search.
That was a USD 2 trillion market that
changed, and investors who were in
venture capital in the early days had a lot
to take advantage of.
How can today be better? We believe the
consumer transformation was the first
step, and with Bitcoin, blockchain and
web 3.0, it creates what we call the
“internet of money”. The ecosystem is
moving into a financial markets transfor-
mation, where thousands of new compa-
nies and innovations will need to exist to
support this new thriving business
segment. The picks, the shovels and rails
are in of themselves the real opportunity.
Some governments are using Bitcoin as
legal tender, S&P 500 companies are
holding it on their balance sheet, and we
have thousands of new protocols and
decentralized systems. All of these
systems, cryptocurrencies and infrastruc-
ture need accounting, lending, prime,
options, communications, audit, identity,
transactions and markets in order to
exist, and these are all decentralized new
venture opportunities that will replace
the systems that are in Wall Street
today. If we add these to banking,
banking access, asset management,
contracts and trade payments, it
amounts to at least a USD 27 trillion of
opportunity. These are new business
models, fee-based and yield-based
businesses with much lower marginal
costs than the consumer and b2b
transformations of the last three dec-
ades. Amazon and Facebook lost money
for ten years with negative EBITDA until
they broke even, then became super
profitable. These new companies will be
more global, have more customers and
be profitable much sooner. There is a
new transformation taking place.
Why are niched VC firms better
positioned for investing in this
space?
There are only a handful of us, venture
capitalists, who have experience in this
space. We have a very broad network,
and liquidity and trading capabilities,
which means we have very large balance
sheets, our affiliates can trade digital
assets and provide strategic value to the
start-ups and the companies they
interact with. Third, we have a portfolio
of companies. It is important for compa-
nies to have access to other companies
from the same sector so they can work
together. That is how Silicon Valley
works. The traditional firms have not
adapted their mindset yet.
Is there anything unique for inves-
tors to consider in this sector regard-
ing early vs later stage investing?
When family offices go into venture
capital and private equity, they have
traditionally gone for late-stage venture
capital and buyouts (or hedge funds).
Digital asset ecosystem companies are
now reaching profitability sooner, so the
valuations and exit opportunities are
happening sooner in the corporate
lifecycle. This means if you do not invest
in the pre-seed, seed and Series A
rounds/funds, you miss a lot more of the
appreciation of the investment. You may
end up participating in the secondary or
liquidation rounds. This is significantly
different from venture capital of 20 years
ago.
At XBTO Humla Ventures we think long-
term - but with distributions in sight,
looking at companies that will come to
fruition in the next five to seven years, if
not sooner. Some of these companies
may not be fully digital asset native, but
we see them as having a strategic
position in the industry, where when they
do introduce digital assets they will be
able to work with the other companies in
our portfolio, and be able to magnify or
dramatically increase the value both for
their customers and as an investment.
How should a family portfolio be
positioned for the next five years, to
maximize return and limit risk?
Family offices need to consider the
potential of runaway inflation, asset
allocation changes, and the potential of
massive transformation of technology. A
position in early stage venture and/or in
Bitcoin/Ethereum are two areas that may
warrant more attention, in this new
world. If a family already crossed that
bridge, then a more detailed digital
asset, DeFi, Crypto strategy can become
interesting. The financial markets and
their ecosystem are transforming. Family
offices need to have even a small
position as a beach head to learn about
digital assets, and participate in the
emerging technology economy, which is
early stage investing with a company like
ours. That will position them well as the
later stage opportunities come around.
They do not want to miss out on any big
opportunities. Imagine those investors in
the late 1990s who did not take the
internet seriously enough. That was the
mentality of some investors. The oppor-
tunities today are in the digital asset
markets transformation. It does not need
to be a large allocation, but they must do
it with a firm that has a good track
record, the right controls and systems in
place, and the will to share knowledge.
What risks should they be aware of?
There is volatility risk and operational
security risk. Short term thinking will not
serve families. They need a diversifica-
tion mindset. There are different forms of
custody and asset holding. Venture
capital is not a different risk, it is just a
different category of investment. Venture
capital, DeFi, and Crypto/digital assets
offer three different types of risk.
A family office considering the decentral-
ized finance space needs to get started
sooner than it is usually comfortable
with, but expertise is needed.
There is a new
transformation
taking place

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About XBTO Humla Ventures
Humla Ventures:XBTO is an investment firm focused on financial markets transformation. We invest in early stage (pre-seed to
series A) companies building the rails of the financial markets transformation, with an emphasis on fintech and digital asset
projects.
Headquartered in Miami, the firm is raising the ‘financial markets transformation fund II’; investing globally for this theme that is
both impact oriented and trend based.
Our cornerstone investor and platform, XBTO, was the first liquidity provider for Bitcoin and the largest digital assets financial
markets and exchanges since 2014. The platform and our veteran status grants us access to value added network, deal access,
and outsized strategic contribution to our entrepreneurs and increase the chance and size of our companies success.
In addition to offering unparalleled access to the digital asset ecosystem via our vehicle that invests purely in equity, we also offer
co-investments for our LPs.
www.xbtohumla.vc
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