Digital Assets Investing
January 05, 2023
In this episode of Engaging Alternatives Spotlight, Elana Margulies-Snyderman, Director, Publications, EisnerAmper, speaks with David Siemer, CEO of Wave Financial, an over $1 billion digital asset manager based in Santa Monica. During the podcast recorded on November 8th, 2022, a notable day in the crypto industry, David shares with us his outlook for digital assets including the greatest opportunities and challenges he faces. He also addresses how the firm integrates DEI.
Absolutely. So David, to kick off the conversation, tell us about your firm and how you got to where you are today.
DS:Sure. So Wave Financial is an SEC regulated asset manager. As you mentioned in the intro, manage a little over a billion in assets. We really have two halves of our business. One side we were originally launched as the first and largest crypto wealth management platform. So in that part of our business we manage assets for a lot of high net worth's, protocols, some minors, large, I refer to it as like crypto corporates. Other side of our business is a more traditional asset management arm. They'll focus just on crypto. We manage about 10 different fund products, several VC strategies, several yield strategies, and a couple of alpha seeking strategy funds.
EMS:Great. So to kick off the conversation in more detail, love to hear your thoughts on where some of the greatest opportunities lie today and why.
DS:Yeah, it's an interesting day today in crypto to say the least. Had heard all the rumors everyone else heard, I didn't exactly see this coming. Crypto is always full of opportunity. Right now it's a little different than it has been historically. I think from a buying crypto market assets at spot prices is probably a little less interesting at this exact moment. A lot of volatility today, but things have been pretty status quo for a while and I think that'll probably continue for a bit. For Wave itself, we're actually very interested in acquiring some of the assets that are out there for sale right now. So we've been spending a lot of hard time on M&A and looking at some of the other companies in this space that have found themselves rather challenged.
EMS:And that segues nicely into the next question I have for you, David, about the challenges that you face as a digital asset manager and how you're addressing them.
DS:Yeah, we're pretty unique in the space. So for our clients, and again, a lot of our clients are very crypto native, so very few of our clients come to us and say like, "Hey, can you get me Bitcoin?" There's a lot of other companies, the gray scales of the world specialize in that. Most of our clients already have large amounts of crypto assets and are very educated in the space. So then what they come to us for is the more challenging strategies in crypto. So for our clients we do all aspects of DeFi, everything from stablecoin yield farming, liquidity, provisioning in the DEXs, a lot of lending, collateralized loans. We do a lot of derivative strategies, so taking advantage of volatile markets like today and packaging that into, it becomes interesting yield strategies. Yeah, so there's a lot of things that can be done in this market. That's where we focus mostly.
EMS:David, to shift gears a little bit, it'd be a remiss if we failed to discuss DEI, which is obviously top of mind for the industry and wanted you to address how Wave is integrating it.
DS:Yeah, for our own team we're pretty diverse, but we also focus a lot of our efforts and our investment efforts on projects that are very focused on DEI. So one of our team members helped found Unicorn DAO, which is the first female lead, female empowerment NFT platform that also another one of our members launched, co-founded Ukraine DAO, obviously helping provide mostly winter clothing for the Ukraine war and a lot of other initiatives like that. The great thing about crypto is most things... It is always joked about being a bit of a boys club and it was, but I think that's actually changing pretty rapidly and we're always excited to help that.
EMS:Oh, absolutely and it's very important. David, we've covered a lot of ground today and I wanted to see what your future plans are or if you have any other final thoughts you'd like to share with us?
DS:Yeah, again, our general investment outlook is that this is a pretty challenged period and what happened today with FTX elicits that. Our own thoughts are, asset prices are probably going to be a little bit stagnant to where they are for, not for a super long time, but probably for the next six months at least. And so for us and ourselves and for our clients, we mostly focus on yield strategies. There are still a lot of opportunities in crypto to generate really high yield even if you're staying relatively crypto market neutral. And those are the strategies we focus on for our clients.
EMS:Well David, I want to thank you so much for sharing your perspective with our listeners, and thank you for listening to the EisnerAmper podcast series. Visit eisneramper.com for more information on this and a list of other topics. And join us for our next EisnerAmper podcast when we get down to business.
Transcribed by Rev.com