为什么管理300亿美元资产的 Franklin Templeton 正大举押注加密货币

I was in Lehman’s headquarters the day they went under, meeting with the management. The analyst who brought me in was like, “I don’t know if I’m going to have a job tomorrow. I don’t know if this is still going to exist tomorrow.”

1. 18 Years At Jennison, Then Crypto

We are here at the Out East conference with a great new show of 1000x. We've got somebody very special here.

Seth Ginns, who is a TradFi legend, has been in the world for a very long time. He started in healthcare banking at Credit Suisse and then spent 18 years at Jennison in a public-equities long-only vehicle. Now he has taken over crypto because his firm just got bought by Franklin Templeton.

Seth, you’ve been in this world—the world of investing—for a really long time. Specifically, tell me a little bit about your journey.

Thanks for having me, Avi. I started doing healthcare equities back in 2002, and it was a wild ride. Healthcare had a really nice inflection back then. Then I did industrials. Those were a hot area for a while because China was developing, and you had Dubai developing, Abu Dhabi, all of that.

2. Seed Investing In Coinbase In 2012

Then you had the GFC. The GFC was a roller-coaster ride. It’s really interesting because the GFC is how I got into crypto. With the GFC, I was like, “Look, I’m exposed to macro in my day job, so I want to find early-stage startups that are secular growth, that are going to grow no matter what’s happening in macro. Find me the end markets that are growing nonstop, that have a ton of momentum, so I don’t have to bet on Bernanke at the time doing QE.”

He was doing these bursts of QE that were $250 billion. You would get a boost to the market, and then he would pull it back and the market would come down. It was actually that view—to look at early-stage startups—that led to Y Combinator, which led to seeing Coinbase, and that was what led to my first investment in crypto.

So Coinbase is how you got into crypto.

I was a seed investor in Coinbase. That was how I got invested.

Yeah, yeah, yeah. That was back in 2012. How did that happen? They went through Y Combinator, right?

They went through YC, and it was great. I read a New Yorker article about Bitcoin in 2011, and I was like, “This is cool, but I have to buy the Bitcoin on Mt. Gox.” Mt. Gox seemed a little shady. It turns out it was a little shady, so I didn’t do anything.

Then, when I got this YC deal flow, it was through a business called FundersClub, which was—and still is—an accredited-investor crowdfunding platform. They went through YC themselves, and they started listing all their batchmates. Their batchmates were Coinbase, Instacart, and a bunch of startups that ended up doing really well.

I saw Coinbase on FundersClub and I was like, “This is exactly what I was looking for,” and I invested in the seed round.

Did you hold that all the way to the IPO?

Oh, yeah.

Oh, yeah. Yeah, yeah, yeah. So why aren’t you on your yacht? What are you doing talking to me?

Too much fun, man. Too much fun.

Because you love the game. You can’t be trading and investing for as long as you have without loving the game. But that leads me to one question: Has the game changed, Seth? Think about where you first started and where we are today.

For sure. Let’s fast-forward to when I launched the crypto fund. My view was, “This is interesting.” It was a small part of my angel portfolio—about 15% of my broader angel portfolio—but I was like, “Look, if this ever becomes an institutional asset class, I want to launch a fund.”

What did I mean by that? I meant institutional custody. I remember Ari, back in the day at BlockTower, talking about how you guys had a form of custody. You had a laptop, you would put duct tape on it, you’d splash nail polish on it, take a picture, and that’s how you would know if it was tampered with—not institutional custody.

My view was that if we started seeing institutional custody come together, it would be time to launch a fund. Obviously, we were seeing futures and other aspects of institutional infrastructure come together.

If we fast-forward to Franklin, that same period—2017, 2018, 2019—was when Franklin started to get involved in crypto as well. I saw that infrastructure coming together, and by 2019 I was like, “Now’s the right time to launch a fund.” I joined CoinFund at the beginning of 2020, launched the liquid fund, brought in all of the infrastructure to build an RIA, and got a lot of momentum. CoinFund grew to over $1 billion in AUM over time.

Obviously, we had the market downturn. As we were coming into the end of last year and the beginning of this year, we felt like it was a really good time to think about spinning out the liquid fund and bulking up our resources. Why? Because we were seeing traditional finance start to pay more attention to the space.

3. 2026: The Year Crypto And TradFi Converge

It became clear to my partner, Chris Perkins, and me that we were approaching a period when traditional finance was ready to engage with crypto. Our view was that 2026 was going to be the year that crypto and traditional finance started to converge, and we needed a lot of resources to compete effectively in that world.

That makes sense. But, Seth, you were in the world of public equities for a long time, and then in 2019 you decided to get into crypto. Crypto is a completely different game from public equities, right? You have crypto assets that don’t generate revenue. People say you’re investing in vaporware.

How did you go from navigating the world of public equities, where you have earnings and cash flows, to investing in crypto, where you kind of have none of that?

It’s funny because when you look at the diversity of investments in the public-equities world, it’s not that different from crypto. When I launched the fund in 2020, there weren’t that many fundamentally driven names. The exchange tokens were the only names that had a direct line from generating revenue to a buyback, right?

There was still a lot of opacity in there. Some of them did it off revenue, and some of them did it off earnings. If they did it off earnings, you didn’t know how much they were growing headcount or how much they were paying people. You didn’t have that certainty of value capture.

But it’s really interesting. The view that we took in 2020 was that this was moving in the direction of equities, where you were going to have direct value capture. I think today we’re getting there, where there’s an immense amount of pressure.

You look at Hyperliquid. Hyperliquid is winning because they have strong revenue growth and a great business, but they also have direct value capture in the token. Crypto is great at having protocols borrow from other protocols that have things that are working. You’re seeing more and more protocols say, “Hey, we see what’s working with Hyperliquid. It’s having a strong business and having the token accrue value.”

We’re starting to have questions around, “Hey, what do you think we should do with value capture? How should we think about ascribing value capture to the token?” I think we’re getting there from a movement perspective.

But if we flip it to the other side and say equities have value capture, that’s actually a little bit of a misconception, I think, because you have legal value capture in the equity, but a lot of times you have equities that do really well but are unprofitable. A lot of times you have equities that do really well but don’t have any revenue right now. They’re almost like a narrative or a memecoin in their sector, whether it is nuclear, quantum, or AI. Those are real sectors, but any given name right now doesn’t have revenue, for the most part.

4. Tesla, Amazon & Why Value Capture Is A Myth

I remember back in 2012, we were investors in Tesla at its genesis. When we invested, they hadn’t started shipping the Model S, so they were on the precipice of potentially going bankrupt if there was a problem with the Model S. That was a decision tree that ended up taking the path that led to a highly profitable business. But if they hadn’t gotten the Model S out, that would have been a very different story.

Amazon was the same thing. I remember in that same time period, 2011 or 2012, talking to a friend who was a consumer investor, and he said, “The retail business—I just can’t get it to profitability.”

Mhm.

He was like, “I don’t understand how institutional investors, serious investors, can own this because I can’t get it to profitability.”

Our analysts at Jennison who covered Amazon were taking Amazon’s revenue, putting Walmart’s net margin on it, and then putting a higher multiple on it because they were saying Amazon was growing faster. They ended up being totally wrong. It wasn’t about the retail business getting to profitability. It was about AWS, the whole cloud infrastructure, being massively profitable, and it was about the ad platform driving profit growth.

The key is, whether you’re talking about crypto or equities, it’s about having amazing, visionary founders. It’s about having product-market fit. It’s about seeing the opportunity for revenue down the road and seeing the path toward value capture down the road, either for the equity or the token. It’s not necessarily about having that in the moment today.

That makes a lot of sense. I mean, one thing about what you used to do, obviously, is if you're going to pitch an investment at a large public fund, you're going to need to back it up with something. Yeah, right. And so, was that the same framework that you were using back then to invest? Is this something that you've carried with you through your career, or is this something that you've learned over time? And maybe talk to me a bit: How did the Tesla investment materialize in the fund?

Yeah, I mean, again, it's funny: whether you're looking at the earliest-of-early-stage startup investments, a liquid token, or a mature business, you're really betting on management, right? Management is a big part of what you're betting on within the growth world, right? You can do value investments where you're betting on the engine of the business, but I would actually say that with AI and the cadence of innovation that you see in AI, you can't bet on cash-flow businesses—just cash cows that generate good, consistent earnings but without a lot of growth year in and year out—continuing indefinitely with all of the change that's happening.

5. You Can't Bet On Cash Cows Anymore

So betting on the leader, whether it's a founder or a great CEO, betting on them navigating a changing world, and betting on them figuring out how to monetize that business over time—that's the algorithm. That's the same whether you're doing early-stage startup investing, public equities, or crypto tokens.

So if betting on management is the most important part of investing in future technology, what's your process for actually vetting management?

Spending a lot of time with them.

Yeah.

That's the—there are a lot of tangible elements of betting on management. There are a lot of intangible elements, right? So it's spending a lot of time with them, understanding how they think about the world, understanding how well-read and curious they are. It doesn't have to be about everything, right? But are they a student of their end market? Are they a student of their competition? Are they a student of business in general—what's worked and what hasn't worked?

Are they a risk-taker, right? Because the risk-takers in our space don't just live on the investing side. If you're launching a business, you're making a very concentrated bet, right? You're putting a lot of your net worth and a lot of your future wealth in one name. So it's about how seriously they're taking that commitment, how seriously they're making that bet, and how much they're putting on the line with that.

You know, that's one thing that I really loved about crypto that was present, that wasn't and still isn't present in public equities: access to founders. You could just send a message to most crypto founders, and they would respond to you in the early days.

Obviously, as things got a little bit bigger, that got harder, but they're still far easier to get access to the brains and the operations and what's behind the scenes when it comes to crypto companies than it is in the public markets, I think, outside of earnings calls. But what's kind of interesting to me now is where you're focusing your time.

Yeah.

So you are now in crypto, investing in liquid assets, but under the umbrella of a large traditional asset manager. Franklin Templeton bought you guys out. What was their thesis? Why did a multibillion-dollar traditional fund buy a crypto fund?

So it's really funny. As I noted earlier, Franklin started getting involved with crypto at the end of last decade.

At the end of last decade?

At the end of last decade—so, 2017, 2018.

You're saying that they've been in crypto for almost a decade?

Almost a decade.

Almost a decade.

That's right.

Okay.

6. Why Franklin Templeton Bought A Crypto Fund

That's right. And so they've built out fantastic tokenization technology and an asset-management arm. Actually, our acquisition brought over 8 people, but Franklin already had another 15-plus people doing crypto asset management. So we're actually—this is not a pure acquisition of a new business line. This is a merger of a fantastic existing business with the liquid business that we spun out of CoinFund.

This is just a doubling down. What do you do if you have high conviction in an investment? You have high conviction in the TAM, in the team, and you're in a cyclical downturn—you double down, right? That's what Franklin is doing here. We're doubling down on fundamental crypto investing, and we're doing that as we're seeing—I mean, look, there's a little bit of an unfair advantage in the sense that we're talking to all of our peers.

We're talking to the sell side. We're seeing the momentum that's building. So when I say that 2026 is the year where traditional finance and crypto converge, that's not just pulling together nice phrases about momentum and how we're seeing this come together in real time. We're having the conversations, and that momentum—which is a really big disconnect between the fundamental momentum of this convergence, the fundamental interest across the sell side right now in getting engaged with crypto, and where prices are—that disconnect is something that Franklin felt was really attractive and felt was something that their clients were going to be asking about over the next few years.

So building this business now, making sure that we're ready to help clients come into crypto in a variety of ways that meet the way that they want to invest in the space—which is probably not up 400%, down 80%—but managing it in an institutional manner, I think, is very attractive at this moment. That was why Franklin doubled down.

But again, this wasn't a new investment. This was adding to an investment that's been building up all the way from Jenny Johnson to Sandy Kaul since the end of last decade.

People often say, "We're having conversations," and I often say, "What are the specifics?" Maybe give people 1 or 2 concrete things to sink their teeth into. What's actually happening?

7. The Clarity Act Doesn't Need To Pass

I'll give you a great example. If you think about the CLARITY Act, there's a lot of talk: Is CLARITY going to pass? It would be this awesome catalyst if CLARITY passed. We had a really interesting discussion a few days ago about how it doesn't really matter if CLARITY passes. What matters is that the vote happens, because right now everyone understands that the administration is very forward-thinking with regard to crypto, and the administration is not going to go after you if you're a big bank that wants to start leaning into crypto.

In fact, you're helping their agenda to get tokenized equities and more stablecoin adoption. By the way, stablecoins use Treasuries as collateral, and that creates a bid for US Treasuries. So there's an understanding that it will be okay even if CLARITY doesn't pass.

But people want to see that vote happen because if they start to take the path that doesn't need CLARITY, you don't get federal preemption. So you end up getting a New York BitLicense and taking that path—state-by-state regulation. You undermine the case. You undermine the momentum for getting CLARITY passed.

The fact that it hasn't come to a vote is actually creating a little holding pattern. But we're having conversations with desks that are saying, "We're ready to build out our capital-markets activities in crypto." These are all of the traditional primes, but they want CLARITY to come to a vote.

If it passes, great. Federal preemption goes superfast. We know exactly what that looks like. If it doesn't pass, okay, we're still going to move forward. It's just going to be a little slower. But until it comes to a vote, we're kind of waiting. We can't move forward aggressively.

If it doesn't pass, though, I would assume that the Democrats, if they came back into power, might take issue with some of these operations.

Potentially post-2028.

Okay. And the way you mitigate that is commercial adoption, right? You look at what we're seeing from a market-structure perspective. There is activity on market infrastructure, with tokenized equities—NYSE and Nasdaq both announcing partnerships this year. You look at what we're seeing on the stablecoin and payment side: USD1, a very big change in market structure around stables.

Would you be able to make an argument that if it doesn't pass, it incentivizes people to move even faster to get things in before the Democrats? Would that play into it?

I think there's definitely an interesting angle. I think, practically speaking, the way that you implement crypto capital markets if you're a big traditional player is going to take longer if it doesn't pass. So you might move faster because you're like, "Well, gosh, we need commercial adoption as quickly as possible now, because this is our main de-risking vector."

It's not just going to be legislation; it's going to be commercial adoption. But I think, practically speaking, you can move a lot faster. The path is a lot clearer if CLARITY passes.

That makes sense. Seth, I want to round out by asking: If you had 1 piece of advice for people who are starting out in their investing careers today, based on your extensive experience investing, what would that advice be?

Take measured risks. Learn as much as you can. Meet as many people as you can. Get as much advice as you can, but take shots on goal. You miss 100% of the shots on goal that you don't take, right? So take shots on goal, learn what you're good at, learn where you have an edge, and then just lean into that.

8. Lehman, COVID & The Craziest Days In Markets

At some point, I need to sit down with you and figure out more of the stories that you went through, because I'm sure there have to be so many.

Oh, yeah. Yeah.

Well, I just want to hear about the GFC.

It's funny: The GFC was wild at the time, but then, tied to crypto, it's really nothing.

You think the GFC was nothing compared to crypto?

No, because we're talking about personal experience, right? You're sitting in a seat and watching a 6% down move in the overall market—the Flash Crash, 7%.

Right. Or you're watching futures open on a Sunday night and everything is limit down.

Mhm.

And it's mind-boggling at the time. But then you look at what happened on 10/10.

Right. Everything that we saw on a day-to-day basis with the GFC was nothing compared to the type of move that you saw on 10/10, or the type of move that you saw when Bitcoin crashed around COVID—50% in a day.

Yeah.

Just wild moves compared to what you saw in the GFC.

That was one of the most insane moments of all time. I remember the night before was Thursday. I was trading on the desk at the time, and we'd sold all of our Bitcoin at 7,700. We had set alerts for 7,000. That's a 10% drop overnight, so we thought, "Okay, that's probably not going to hit. We'll probably be able to come back in the morning."

At 6 a.m., all my alarms were going off, and Bitcoin was at 6,300. It had just taken a 1-hour candle straight down.

I was living in New York at the time, and I remember walking out. It smelled like death in the streets to me. That was my own brain playing tricks on me. I was walking into the office thinking, "This is going to be a hell of a day." Do you remember that?

Oh, yeah. Oh, yeah. I was driving up to Connecticut, and we pulled over. I had to pull over and do some trading on my laptop at one of the rest stops.

Yeah.

Yeah, no, it was craziness.

When the GFC was going on, what was the craziest day for you specifically? Was it Lehman going down? Were you just sitting there, because you're long-only, thinking, "I'm not touching anything"? Or how were you handling it?

No, I mean, there was a human element. I was in Lehman's headquarters the day they went under, meeting with management, and the analyst who brought me in was like, "I don't know if I'm going to have a job tomorrow. I don't know if this is still going to exist tomorrow."

There was a very human element. On the one hand, things were just functioning like they always do—we were meeting with management—but on the other hand, you were looking at what stocks were doing, and it was absolutely crazy. I remember being in Rock Center talking to the GE CEO as they were weathering the crisis, because GE Capital had a lot of exposure.

There was the human side of it, and then there was the market side of it. There was really an element of shock and disbelief on the human side that only caught up to where prices were weeks or months afterward. But again, you think about the volatility of crypto versus the volatility of equities, even in that most volatile time for equities, and it's just night and day. They're totally different. Crypto is way more volatile.

So maybe that's why crypto traders are doing so well in the equity markets now.

Yeah.

It's because they're able to weather this volatility. Lord knows that the equity markets are absurdly volatile now relative to these single-name stocks. You have Google whipping around 8% to 10% sometimes on earnings. Things are going up 15% or 20%.

No, I mean, and it's huge market-cap swings.

Huge market-cap swings. It's completely different from—I mean, actually, I wasn't around. Would you say it's completely different from the way equities used to trade?

It's certainly different from the way equities traded during more stable times, but not that different from the '90s. I wasn't in a seat in the '90s, but you would have gigantic moves up and gigantic moves down. Around the GFC, you had more gigantic moves down.

There were always brief periods of time with a lot of volatility, and we're in one of those now in the equities world. Maybe there are some structural things, like everyone's shifting to 0DTE options and stuff like that, that are driving even more volatility. But I think part of the volatility is tied to the fact that we have a hyperlevered global economy and massively disruptive technology right now.

Do you think the hyperlevered global economy is a problem that we should keep an eye on, or do you think we're okay? Is it okay to be this levered?

I think it's a problem to keep an eye on, but I also think it's totally going to be okay.

Okay.

The reason why is because we have a technology that's driving massive productivity gains that's going to be massively disinflationary over time. I think it's going to drive huge nominal GDP growth, and I think the path to growing our way out of our over-indebtedness is clearer today than it's ever been.

I think 5 years ago it wasn't as clear how we were going to get out of over-indebtedness without just printing a lot of money. It was purely going to be a debasement trade. Now you could ask: If we have real GDP growth and debasement combined, does that dilute the case for crypto, for Bitcoin?

I'm not sure that it does, because I think the pace of penetration of these new technologies is going to drive such fast productivity gains and such volatility in the way the economy is structured that we're probably going to have to print.

There was a podcast with Elon a few months ago where he was like, "Look, if you speed-run all this big deflationary pressure, what do you do to offset that? You have to print." So you end up with really good real GDP growth, but deflationary pressure offsetting that, which means you need to print in order to keep nominal GDP accelerating nicely.

It kind of makes me feel like this is a simulation because we nailed it perfectly, right? Right as we're coming up on this big issue, right as inflation's kicking off, we're getting this massive deflationary shock, AI is actually expanding its use cases, and real GDP is coming back.

Or you just think about it in a different framing, a different way: If you have an economy that's constantly focused on levering up to invest in higher-ROI opportunities, sometimes we get it wrong, like the overinvestment in the dot-com boom and a few other areas over time. A lot of times, that overinvestment involves the government pushing investment in one direction or another.

But you could argue that, structurally and algorithmically, the U.S. system drives excess leverage. It drives excess leverage in just enough of an intelligent, thoughtful way to drive an acceleration in technological innovation and get us to that point where we hit—whether it's the singularity, where you're getting recursive AI self-improvement, or the convergence of all the different technological paths, like health care and industrial tech, hard technology as well as software and AI.

The momentum that we're seeing across all of those areas is driven by enough rational, thoughtful capital allocation, and all of that is with leverage to keep the system moving in the right direction. Another way of thinking about it is: Why did multiple people come up with calculus at the same time?

Why have there been a number of inventions and discoveries where multiple people in different parts of the world, who weren't directly communicating, came up with the same discovery at roughly the same time? The general explanation is that you had enough of the precursors to that. I think the U.S.—our capitalist system—is really good at finding those precursors and somewhat intelligently allocating capital, again, sometimes in an overlevered way, in order to move us to that next technological progression.

That's all. I think that's a beautiful place to wrap, then. Thank you, Seth. I appreciate you coming on the show.

Thank you for having me. This is awesome.

Awesome, dude.

Nothing said on the ThousandX podcast is a recommendation to buy or sell any investments or products. This podcast is for informational purposes only, and the views expressed by anyone on the show are solely their opinions, not financial advice or necessarily the views of 1KX Media. Our hosts, guests, and the 1KX team may hold positions in the companies, funds, or projects discussed.