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In a recent Cantina TV interview, Cantina’s co-founder and CEO Hari Mulackal spoke with Gabe Rabello from VanEck to understand how traditional asset managers approach crypto investments, what they look for in blockchain technologies, and how they navigate risk in the digital asset space.
Understanding VanEck's Approach to Crypto
VanEck, a traditional asset manager with over $100 billion in assets under management (AUM), has positioned itself as an early institutional adopter in the crypto space. While most of their AUM remains in traditional finance products, they've allocated several billion to digital assets through various investment vehicles — including passive ETFs in the US, exchange-traded products in Europe, and three private funds, one of which is a liquid token hedge fund.
What sets VanEck apart from many traditional institutions is their willingness to experiment and take a contrarian view. As a family-owned asset manager, they can be more nimble and maintain a longer-term outlook without the pressure of answering to public shareholders seeking immediate returns.
The Three Buckets of Crypto
According to Gabe, the crypto market can be divided into three distinct categories:
- Bitcoin: Well-established as "digital gold" and already widely accepted by many institutions
- Tech Crypto: The innovative blockchain technology with the potential to revolutionize financial markets
- Casino Crypto: The speculative side focused on meme coins and short-term gains
For institutions, the second category — tech crypto — presents the most exciting long-term opportunity. They see tremendous value in how blockchain technology can fundamentally transform financial markets by bringing settlement cycles closer to real-time.
The Settlement Cycle Revolution
One of the most compelling value propositions of blockchain technology is its potential to dramatically compress settlement cycles for securities trading. The traditional financial system has been slowly improving these cycles over decades:
- 1990s: T+5 (five business days for settlement)
- 2017: T+3 reduced to T+2
- 2024: T+2 reduced to T+1
Blockchain technology could enable near-instantaneous settlement (effectively T+0), removing friction from financial markets and creating enormous efficiency gains. As Gabe notes, "If you can do that and realistically bring that settlement cycle down for any kind of asset to T+0, in my view, there's no reason why all of the world's financial markets shouldn't be on chain."
What VanEck Looks For in Blockchains
When evaluating blockchains for both investment and building purposes, VanEck takes a pragmatic approach:
For Investments:
- Long-term vision and trajectory
- Strength of the development team
- Total addressable market
- Actual user activity (not just vaporware)
For Building:
- Current users and capital on the chain
- Whether people will engage with their product
- Developer ecosystem and tooling
Interestingly, while decentralization matters, it's not viewed along a spectrum but rather as a threshold requirement. They ask: "Is it decentralized enough that your money won't disappear overnight?". Once a blockchain passes this hurdle, other factors like user activity and developer ecosystem become more important.
Stablecoins: The Next Killer Unlock
There’s a lot of excitement around stablecoins. Their ability to facilitate instant, low-cost cross-border transfers offers tremendous value for businesses and individuals alike.
The impact of stablecoins is already being felt across industries far beyond crypto-native companies. Even companies like DraftKings, which spends 6-8% of their revenue on payment processing fees, are being asked by equity analysts about their plans to integrate stablecoins to reduce costs.
For institutions like VanEck, the key to unlocking institutional adoption of stablecoins is clear regulatory frameworks. Regulatory clarity would allow institutions to understand their obligations and risks, making them more comfortable engaging with these digital assets.
Navigating Risk in Crypto
Institutions experience different stages in their crypto journey, each with distinct risk considerations:
- Stage One: Viewing crypto as a single "flaming ball of risk" and hesitating to engage
- Stage Two: Recognizing crypto's value proposition but concerned about custody solutions
- Stage Three: Actively engaging with or building crypto products while managing expanded risk factors
For institutions in the final stage, risks expand dramatically beyond those found in traditional finance. Smart contract risk, compliance concerns, and a host of other factors must be carefully assessed and mitigated.
While traditional finance has developed robust risk management frameworks over decades, institutions entering crypto must adapt these frameworks for an entirely new environment with unique challenges. They need to leverage emerging tools and protocols that help address issues like OFAC sanctions compliance while operating in a decentralized ecosystem.
Privacy: A Critical Consideration for Institutions
For institutions holding assets on-chain, privacy remains a significant concern. Unlike traditional finance, where transactions remain private until deliberately disclosed, crypto defaults to full transparency — allowing on-chain analysts to potentially track an institution's every move.
Current workarounds often involve using centralized exchanges as privacy shields, but this is far from ideal. For institutions, there’s enormous potential in privacy-preserving blockchain solutions that can simultaneously maintain compliance with regulations. As Gabe notes, a "privacy-preserving blockchain that still has mechanisms to prove you're not interacting with sanctioned entities" would represent the "holy grail" for institutional adoption.
What Does the Future Hold?
Despite market fluctuations and regulatory uncertainties, institutions should be optimistic about crypto's future. Specifically, VanEck’s contrarian approach — which previously led them to recognize opportunities in gold, and later Bitcoin, before the mainstream — continues to guide their strategy in digital assets.
As regulatory frameworks continue to develop, particularly around stablecoins and market structure, we can expect increased institutional participation. The real challenge and opportunity lie in creating products that maintain compliance while delivering the transformative benefits of blockchain technology.
For builders in the space, the message is clear: focus on addressing real user needs, maintain open communication with institutions to understand their requirements, and develop solutions that balance innovation with compliance.
Secure your protocol today
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This blog post is based on an interview with Gabe from VanEck. The views expressed are those of the interviewee and do not necessarily reflect the official position of Cantina or VanEck.