Decoding Digital Assets: Navigating Crypto, Blockchain, and the Future of Finance with David Doss

Speaker A: Thanks for joining us for season four of the Scale by Numbers podcast. My name is James Van Russel and I'm the CEO and founder of Van Russel Ventures. Last season we focused on inflection points and scaling and I spoke with incredible guests From Threshold Ventures, BridgeBank, Dovetail Impact, full Focus and Jasmine Social Investments, just to name a few. This season I'll be speaking with innovative thinkers who are introducing new ideas and getting creative in business. So without further ado, let's dive in. Well, welcome everybody to another episode of Scale by Numbers. And I'm thrilled to have David Duss, uh, with us today. He is the founder and managing director of ckc management. Uh, he has over 14 years of experience leading teams and optimizing some massive programs across industries like software, media, financial services and cryptocurrency. David's background is as diverse as it is impressive. He has a BA from UC Berkeley, an MBA focused on strategy and entrepreneurship, and he's a Fulbright scholar as well who's worked with organizations like Cissy and Saks Fifth Avenue. And he's been at the forefront of driving fintech innovation, particularly in blockchain and cryptocurrency. He has uh, a track record of delivering seven figure returns in the crypto space since 2017. And David is here to share his unique perspective on the evolving fintech landscape and the future of blockchain in the global financial system. So welcome David. Uh, I'm very excited to have this discussion.

Speaker B: Uh, thank you for having me on the show, James.

Speaker A: Okay, awesome. Well, maybe, maybe to kick it off you could uh, just explain to people exactly what you do and who you do it for.

Speaker B: Yeah. So we are uh, at ckc, we are a asset management and program management firm focused on the digital asset and blockchain space. So on the asset management side we uh, we manage digital uh, asset funds as well as build out customized uh, solutions for separately uh, managed accounts for and with uh, high net worth individuals, uh, family offices, uh, as well as uh, institutions who are looking to tap into digital uh, assets as a way to um, drive uh, revenue and market cap for themselves. And then on the program management side we consult and advise on uh, more the technological, uh, product and service implementation of these technologies, uh, into corporations and nonprofits, uh, in such a way that can be additive to their, their overall business models.

Speaker A: Great, um, thanks for that. Um, I, I uh, we've discussed a lot of questions, um, and I want to dive straight in and uh, the, the, I think the first area that's, that's interesting is just on the organization side. So I work with, with organizations that um, you know, sometimes have uh, crypto companies as their clients and they get paid uh, in crypto. Could be part cash, part crypto, uh etc. Um and it could be for profit and it could be nonprofit as well. Um, what, what um, what recommendations do you have around this? Because I usually you know the CEO usually just says you know, they want to pay us in crypto. What do we do? Um, what you know, what, what would be your answer?

Speaker B: Yeah, well there's a lot of kind of factors to consider there. Uh um, firstly would be basically um, more crypto as a stable asset versus as a volatile appreciating or depreciating asset. So um, I think it's important to bear in mind that it's possible to send payments through um stablecoins or similar types of assets where uh, you know, popular ones are USDC or usdt. These are basically dollar backed collateralized uh, uh so you know, if you're sending a payment of let's call it uh, you know, $20,000 uh as, as a stable coin. The idea is for it to still be $20,000 the next day which you know has uh, its pros and cons. Right. So um, the other part would be getting paid in, in an, in a um. More of a, a volatile uh crypto asset such as uh, you know, Bitcoin or Ethereum or what have you. And this, this is something that organizations are increasingly uh seeing as a strategy where for example uh Microsystems has become very uh, sort of notorious uh uh uh for, for this strategy of basically uh acquiring positions in, in cryptocurrencies digital assets, uh where this is essentially something that is growing the market cap of this publicly traded company. Um you know as a basically a, a uh increase uh in their overall value that's separate from any uh, any revenue streams that they may have uh coming in. Related, relatedly would be basically what to be doing with those assets. So um, you know we'll see for example let's say uh an E Commerce uh platform, uh you know we've, we've had these sorts of uh discussions and, and and helps uh individuals where basically you know if they're getting, let's call it um, for sake of argument, 80% of their revenue, uh as, as dollars, you know, sort of the old fashioned way. And then maybe they're getting you know, 20% of payments in Bitcoin. What they might choose to do is use the 80% in dollars to you know pay uh pay rent, make payroll, all these important things. But then they might choose to keep uh, hold onto the um, the crypto, the digital assets. And then that's something where you know we, we can help to, to implement those, uh pay with Bitcoin type of uh, of. Of structures as well as build out awareness around it, uh and educate you know the, the consumer or the, or the, the clients around that. But then we could also help to manage that portfolio of digital assets uh for the business in a way, you know, to make sure that that risk is properly mitigated, uh that there's um, also basically minimize the uh, downside and maximize the upside. So those are I think relevant areas to bear in mind. And then on the nonprofit side, similarly we're uh, seeing a growing number of nonprofits being very interested in a donate with crypto type uh of approach. Uh and especially if we're talking about more of these uh, appreciating assets such as Bitcoin or Ethereum. That's something that can be a win win for uh, both the donor and the nonprofit, uh, of the donor being able uh to contribute a appreciated asset, uh with some tax benefits uh in many cases for the donor and then the nonprofit being able to hold on to an appreciating asset and essentially have uh, you know, more, more bang for their buck so to speak, be able to, to uh, essentially deploy more um, more value uh into the cause that uh, that the donors are supporting. Uh and that's something where you know, similarly uh we, we could be able to help with the, the actual you know, structuring uh, of something like that ranging from input to uh, day to day, uh strategy and management.

Speaker A: Yeah, that's really interesting I think uh, especially and you work with high net worth individuals and family offices and I'm sure that the idea of donating appreciated assets is high on their list every year. Um so having a strategy around that uh, is really important. Um, I think about you know, 20 years ago or so, you know, when I looked at the um, you know, the audit reports of organizations and you'd see how their cash was invested. It would usually be you know, a lot of, a lot of corporate bonds, money markets, you know, some equities, mutual funds. And then about you know, 10 years ago, all of a sudden they would talk you, you'd see alternative investment show up. You know, they started investing in PE firms and VCs and um, which was, which was I guess pretty radical 10 years before that to do because of the risk curve. I m. Haven't seen anything yet of we're investing in, you know, the Bitcoin ETF or a um, um, you know, a diversified fund for, for crypto or digital assets. Is that on, on the horizon?

Speaker B: So in terms of um. I guess in terms of who, who investing into those.

Speaker A: Yeah, you know, I, I, you know, uh, are. If I'm the CEO of an organization, should I be thinking about, you know, should I have my, you know, war chest of cash, you know, just sitting in debt and equity or should it be. Or should I be thinking of, you know, crypto as well? Because crypto is liquid as opposed to VCNP investments that are, that are not. So it has to. Uh.

Speaker B: Yeah, uh, well, there are a couple of, couple of relevant things to consider there. Firstly, just the growth of the alternative asset, uh, and alternative investment space. I think this is you know, certainly over the last couple decades very significant and I think also really catalyzed by Covid where people were seeing, you know, uh, some really uh, substantial uh, returns in more the alt space in the midst of some sort of downward trending volatility in the stock market and other kind of more mainstream uh, asset classes. Uh so I think that the value of having these uh, basically reducing correlation, having some uh, basically allocations to uh, these other asset classes is becoming increasingly, you know, something that's, that's part of more of a kind of mainstream mindset and consciousness. Um, you know, relatively. I mean it, it um, can really fulfill a kind of small but mighty type of role in a portfolio where you know, most people, it's not going to make sense to uh, you know, sell, you know, sell the house and sell uh, the business and put it all into crypto or whatnot. Although you know, you do hear some of those, some of those stories in the media from time to time. Some of them work out well, some of them don't. Right. Uh, but for many people it can make sense to put a minority percentage uh, of their overall of that individual or organization's portfolio into the uh, digital asset space. I think this depends on the risk reward profile. Um, I've heard uh, folks say at BlackRock recommending to their kind of, you know, uh, large institutional clients with multibillion dollar portfolios. They you know, they can sometimes recommend something like a half a percent to one and a half percent allocation into, into crypto. Whereas you know, maybe uh, more some of these, um, some of these firms that are, are supporting um, you know, maybe more family offices with a bit more of a, a higher risk uh, profile risk reward type of ratio there might be recommending anywhere between 5 and 20% of assets going into crypto. And again that's, you know, these are generalities, but the point being, you know, whether it's, whether it's 0.2% or 20%, it's something where um, an emerging asset class like this can show asymmetric upside opportunity where um, you know, if, if it's a minority position in the overall portfolio, there's a very, very clear limit to how much downside there is. But in, in an environment where we see a lot of Digital assets appreciating 2x5x10x, uh over you know, fairly short up periods of time and uh, you know, a couple of years, five years, ten years, uh, this is something that, that could yield a whole lot of benefit uh, to, to the person or the institution and their portfolio. And uh, another related area in terms of uh, in terms of liquidity profiles is also more the, the blockchain side of the fence that you know, some of these less liquid assets you're mentioning, such as private credit, private equity, um, are increasingly uh, getting tokenized on the blockchain. So that's also a movement we're seeing in terms of not just cryptocurrency itself, but how blockchain and digital assets in the broader sense of it are helping to evolve uh, the alternative investment landscape.

Speaker A: Great. Um, it's kind of an intro into, you know, where do we think we're going to be in the next few years or by 2030? How do you think the investment landscape is going to change with the, you know, with the tokenization? Um, and we don't have to go into AI yet, but maybe that's the follow on question after that.

Speaker B: Yeah, um, the AI question we'll all probably look back on in five years and laugh at how wrong we were or how right we were, depending on how that goes. Right. But uh, yeah, in terms of uh, 2030, um, there are a lot of very uh, sort of well known analysts, you know, including um, say teams at Citi at the World Economic Forum have been predicting multi trillion dollar market capitalization for the broader digital asset space. Um, many projections heading to that 10 to 20 trillion dollars range uh, by 2030. And when I say digital assets, that includes more uh, sort of straight ahead cryptocurrencies such as Bitcoin, Ethereum, et cetera, of which there are about 25,000, uh, at this point different cryptocurrencies, but also includes the tokenized assets we were talking about of you know, tokenized real estate, private credit and such. And so that's overall a growth in the, in the market cap, uh, a growth in the mainstream adoption, um, also an increasing adoption of central bank digital currencies. So basically, uh, government currencies that are on the blockchain which uh, you know, will have its own, uh, sort of interplay with, with more of the private, uh, private markets, um, with. With some, Some pros and cons potentially to be considering. But uh, aside from that, also, um, the, the overall, um. Overall space is very likely to consolidate as well. So um, does. Does the world need cryptocurrencies? I would argue absolutely. Does the world need 25,000 cryptocurrencies? I would say probably not. So um, you know, much like, you know, let's say there were probably you know, dozens if not hundreds of folks trying to, to do what you know, say of a Microsoft or, or an Apple were doing. Um, you know, eventually there were, there were consolidated kind of consolidated players in that space. Um, somewhat similarly. Similarly though different cryptocurrencies provide different, uh, utility different, uh, different. They solve different problems. So just like there we don't have just one, you know, one winner from the uh, from the tech boom that you know, started in the, in. In the late 90s, early 2000s and has, you know, continued through today. Uh, similarly, you know, we're. We're extremely likely to see, you know, more than one, uh, leading asset in the cryptocurrency space. Um, you know, you have currencies, stores of value, you uh, have smart, uh, contract platforms, decentralized, uh, file storage facilitation, um, digital assets focused on the basically interfacing with AI. There are multiple, multiple different use cases, much like you would have, you know, say Facebook as the sort of General Social Network, LinkedIn as the business one. Microsoft as you know, everything from uh, you know, phone and, and uh, and computer operating systems to games, uh, uh, et cetera, they're you know, solving for different problems.

Speaker A: And then with, with uh, you know, with AI, how does that, how does that play into this space?

Speaker B: Yeah, so there are, there are a lot of, A lot of considerations there. Uh, one of them is that um, that there's strong potential people are seeing for AI, um to benefit from blockchain technology. Um, for example in areas such as uh, detecting deep fakes, um, or counterfeits. So in a situation where you have say authorized AI usage of say a celebrity or a political figure, what have you versus unauthorized usage, uh, blockchain could potentially there are many, uh, uh, uh Exciting projects that are developing blockchain systems to help uh, essentially provide transparency around AI. Um, so uh, I guess simply put, if you know if AI is kind of this train to progress, blockchain can potentially sort of help provide some rails. That would be you know one, one example of that. Um, the other is uh, there's also larger um. There's also, I would say interplays to be considering more from a picks and shovels perspective as well that a lot of the types of hardware used for uh, for AI and 3D rendering and such also are being used for, for cryptocurrency mining. And so uh, in that sense the, the kind of uh, the chip wars and such is kind of a larger uh. There'll be a larger kind of development around allocation of uh, hardware and software resources. From more of a kind of an ideological perspective. I think a lot of AI technologies are a bit more top down where it's kind of these uh, ultra large corporations that are going to really provide the underpinnings for a lot of AI, uh technology. Uh whereas blockchain uh, is a bit more uh, bottom up, decentralized, got a lot of kind of small players driving a lot of innovation. Um, and uh, just thinking through that from a larger context, uh, I mean while I might say have more personal interest in kind of the decentralized aspects of technology, I think that those centralizing and decentralizing forces can really kind of help ah, balance each other out. Uh, you know, uh, the. You do need kind of opposing uh, opposing forces to, to drive, drive uh, progress in a balanced way. Um so and with that also, I mean there are, there are a variety of uh, AI tools being developed for uh, say you know, trading of assets, including equities, cryptocurrencies, uh, et cetera. Um, and then there are also assets specifically tied towards um, the uh, developments around AI, uh the uh, fetch, uh protocol, among others. So there are um, ways uh to be basically investing into the cryptocurrency space while capitalizing on AI. And there are also ways to be investing into the AI space in such a way that capitalizes on blockchain and crypto.

Speaker A: Great, thanks for that. Um, with, with the elections coming up, what are you seeing there and what, what, what's your recommendation kind of your strategy for your clients?

Speaker B: Yeah, so I think the, the overall picture there is is to think through having you know, having a plan, having a backup plan regardless of what's going on. And you know, at the end of the day, uh, when we're, we're thinking about investing, you know we're, we're looking to think not just what's happening this week, this month, but what's you know basically what's the five year plan, the ten year plan, uh etc. So to that point you know, uh, I guess you know uh, Presidents come and go, uh you know, parties change, change policies. But uh, you know over a 10, 10 year time horizon, 20 year time horizon, uh how can we help to mitigate risks and maximize upsides? So I mean for one thing regardless of political outcome, uh the market volatility uh aspect of uh. Basically helping people uh and institutions to mitigate risks from inflation which has been uh a consistent concern, um regardless of who's in the seat as president, interest rate decreases uh, or increases and how that affects kind uh of ripples across the broader uh global economy in terms of inflation deflation in other markets like Japan or China or what have you. Um and how that can in turn affect the stock market, the real estate market. Uh these are things where potentially getting um. Risk managed and properly researched uh exposure uh into the digital asset space can help to smooth out ah some of uh. Those considerations, um relatedly global instability uh is something that uh. Is you know of ongoing concern to a lot of investors uh you know regardless of, of who's kind of in the. In the pilot seat politically. Uh in terms of US Specific economic challenges as well as uh, you know, geopolitical disruptions. Having an asset class that is very global, potentially having that in. In a structure uh that is. Is offshore in a way that's uh, you know that's, that's transparent, compliant and above board can also mitigate uh some of those general risks and uh, beyond that also currency fluctuations, uh you know whether or not there's inflation, uh making sure to uh. To have something that's, that's not uh. As dependent on the US Dollar to ensure more, more stable portfolio growth and more stable returns. That being said, you know if, let's say if, if the Democrats win you know this particular round, I think a lot of uh investors and businesses have expressed some concerns around uh essentially regulation uh in being potentially uh less uh less uh let's say encouraging of certain business and investing activities. Um so potentially uh, you know moving away from say US Stocks or US Real estate for for certain people might, might be within their goals, uh moving towards more digital assets, perhaps offshore structures. Um others being concerned say with, with potential um uh environmental impact regulations, uh uh, how that could affect things like uh, like cryptocurrency or how that could affect other businesses. These are things that, that we want to, to minimize through portfolio allocations. Let's say if uh, if the Republicans win, uh, you know, others are, are concerned about potential trade, uh wars, uh escalating and what that might mean for the dollar or for the stock market. Uh, others being concerned about say potential uh, uh, policy instability of moving from a Democratic uh, a Democrat uh government, uh Democrat led government to a Republican led government. I mean uh, the, the shift, whether it's for, for the better or the worse over the long run shifts generally cause instability and I think you know many investors and businesses are, are looking to basically uh, minimize the risk that they have, uh, that they're exposed to uh, in terms of that short term instability that often inevitably will happen.

Speaker A: No, thank you. Um, to stay up to date on all this information and everything. What do you read, what do you look at, um, to stay ahead of the curve. That's not always uh. There's lots of retail crypto information out there and that pumping this crypto over that for a much more comprehensive um. Ah, yeah, I don't know, I don't want to say intelligent but you know, more responsible investment, uh, mindset. Where do you go?

Speaker B: Yeah. So I mean there's, it is, it is uh, I'd say there's. There are multiple challenges. One is, is the uh, I guess concerns around the quality and veracity of information. Um you know, certainly especially you know, uh, kind of more social media sentiment oriented information. It's hard to tell you know what's uh, what, what to uh, kind of take seriously there. Um but the other part is just the drinking through a fire hose that there is just so many, so many factors at play that can influence uh, you know any market but especially kind of a 247 global market like, like digital assets that also you know, have relationship with different business models and use cases and such. So I mean we, what we do is we conduct um, you know, comprehensive fundamental and technical analysis. So we're you know looking at anything ranging from white papers, um, of specific uh projects to more kind of uh, you know, uh, let's say price and volume indicators, uh, of you know, on, on exchanges and stuff like this. Also looking at where the money is flowing more thematically, you know, is it flowing out of say um, you know, defi protocols, uh out of one defi protocol into another? Is it flowing you know, away from uh, let's say Internet of Things type, uh plays into more AI um crypto plays for example, uh, at any given Point. So um, that being said, we, we do uh, we do seek to kind of consolidate a lot of this research and these insights for people as well. So we put out a monthly market commentary which is um, something that we have Both on our LinkedIn, uh, on our company's LinkedIn page as well as on a email uh, newsletter that we put out monthly. And then we also um, uh, as something as a, As a way that we learn as well as help, you know, help our, our clients and partners to learn is we. We participate in a variety of uh, of events. We also help to organize events uh, around the world. Um, you know, these range from uh, from events in Beverly Hills during the milk in that we've. We've helped to uh, uh, organize and facilitate as well as events. We participated in Davos during the um, in Dubai, London. Uh, this is something where you know, we find it very relevant to be talking with other people, um, sharing information. That's something that's helpful for us as well as for uh, for our partners and clients to really kind of have their finger on the pulse of what's going on.

Speaker A: Do you have any last thoughts, uh, for the listeners?

Speaker B: Last thoughts? Well, I would say that the overall space has, has huge potential. But also you know, to your point about kind of taking a disciplined approach, I think that that has been an issue uh, with the space that uh, as with other emerging uh, technologies and assets is that when people see something that's you know, volatile, uh, but. But upward trending with explosive growth potential, it tends to elicit gambling behavior. Whereas you know, what uh, uh, what we look to, to help with and what we encourage people to consider is basically you know, taking tried uh, and true frameworks and applying them to, To a new space. Um, sort of the point being that you know, whether it's. It's real estate or, or equities or. Or treasuries or. Or digital assets, you know these, these things all have very different uh, behavior patterns and, and uh, you know, different terminologies and such. But uh, if it's, you know, they. They may be apples and oranges and bananas, but they're all still fruit and, and there's uh, there's some, some common sense, some frameworks that, that still need to apply.

Speaker A: No. Okay, great. Thank you very much. Um, this was.

Speaker B: Appreciate you having me on the show.

Speaker A: Yeah, very interesting. Enlightening for me as well. Um, and uh, you know, we'll have uh, you know, all your information and uh, a link to the newsletter as well in the show. Notes uh, that you mentioned, um, so people can, can reach out to you or start reading, uh, some of your research as well.

Speaker B: Thank you, everyone.

Speaker A: Okay, great. Thanks, David. If you enjoy Scale by Numbers, leave us a review wherever you stream your podcast. This will help others find this more easily so that they, too, can benefit from the topics and advice here.