E175: Dan Tapiero: This Crypto Strategy is Boring, But It Will Make You Rich

Dan Tapiero rebranded his firm from 10T Funds to 50T Funds because the total digital asset ecosystem grew from roughly 300 billion dollars in mid-2019 to approximately 4.5 to 5 trillion dollars, making a 10 trillion target no longer ambitious enough. His 10-year framework allocates roughly 20 trillion dollars to Bitcoin, implying a price of one million dollars by 2035, another 10 trillion to ETH, Solana, and other protocols combined, and 20 trillion to blockchain and crypto equities, for a combined 50 trillion total he describes as intentionally conservative.

The fund holds 22 private investments, targets companies at roughly 40 to 50 million dollars in revenue, buys at five to ten times revenue, and models a 5 to 8x return over a ten-year fund life. Tapiero's preferred entry point is a valuation of 500 million to 1.5 billion dollars. Portfolio companies include Circle, Figure, eToro, Gemini, and Cypher owned by Bitfury. Deribit was acquired by Coinbase after Tapiero invested at just over a 1 billion dollar valuation when the company was generating 200 million dollars in net profit, implying a purchase price of five to six times net profit. Deribit held roughly 80 percent of global Bitcoin and ETH options volume but had prior KYC and AML issues and was domiciled in Panama, which deterred larger investors and created the uncertainty Tapiero was willing to accept.

The fund invests exclusively in operating businesses at the growth stage, not in venture, tokens, or cryptocurrency directly. Tapiero chose equity over tokens because revenue accrual to token value still carries too much interpretive uncertainty and lacks roughly 100 years of case law that clarifies equity investor rights, citing ongoing Uniswap and Aave governance debates as evidence. Kraken was an early investment made at a 2.8 billion dollar valuation, but the fund has since been diluted by aggressive acquisitions by the CEO, illustrating that minority equity holders have no control over dilution or capital allocation. Strategic investors like PayPal and Binance are keeping valuations elevated because they prioritize synergy over price discipline, which compresses the opportunity for pure financial investors.

Fund four closed in November 2024, is up 300 percent gross within a year, and has already returned 30 percent of committed capital with eight and a half years remaining. Funds one and two have returned 40 percent of committed capital. Fund three lagged because it was raised at the peak and one third was allocated to blockchain gaming, metaverse, and NFT exposure that has not recovered. Fund four was composed mostly of secondary stock purchased at very low valuations during the bear phase. Tapiero acknowledged that two portfolio companies went to zero, which he called unacceptable, and that raising capital during a bear market is practically impossible even with an established track record. His fund-level strategy involved raising capital during the bull phase and deliberately holding it uninvested to deploy during the bear phase.

Tapiero's core macro thesis is the digitization of all money and finance, and he argues that blockchain is the native money layer for autonomous AI agents because AIs will use programmable smart-contract money rather than traditional banking infrastructure. On-chain AI agent transactions grew from zero 18 months ago to tens of billions already, and he projects autonomous AI agents will generate thousands of trillions of transactions within five to ten years, though per-transaction value remains unclear. Stablecoins traded 33 trillion dollars in volume last year, up from zero five years ago, yet the entire annual figure equals only four days of legacy foreign exchange activity at 7 trillion dollars per day, framing the scale of displacement still ahead.

On Bitcoin, Tapiero holds it in cold storage, does not stake, lend, or actively trade, and argues that simply buying and holding for ten years will outperform active trading. He described the current phase as distribution, where early retail holders who bought below 1,000 dollars are selling 100x gains to institutions willing to accept a 10x return. Mike Novogratz sold 9 billion dollars worth of Bitcoin for a client at 115,000 dollars and was surprised it did not move the market more. Total global assets including real estate, stocks, and bonds are approximately 1,000 trillion dollars, gold is roughly 40 trillion, and Bitcoin reaching 1 million dollars would represent a 20 trillion dollar market cap equal to about 2 percent of total global assets, which Tapiero frames as a reasonable long-term destination. He views Coinbase as a generational company with a potential 1 trillion dollar valuation and notes only about 10 significant public blockchain and crypto companies exist today versus the 50 to 100 he expects in the future.