"The Bull Market is Intact for the Next 10, 20 Years; We are in a Secular Shift" Arca's Jeff Dorman

In this week’s episode, I interview Jeff Dorman, chief investment officer at Arca, an investment management firm focusing on digital assets. Jeff has been valuing assets for the past 20 years, from investment-grade bonds, to high-yield debt and equities, and now he’s doing the same for crypto.

We talk about the recent selloff; he thinks the big crash is over but that doesn’t mean we’ve seen the market bottom. Still, Jeff says this is a buying opportunity and he gives insights into which sectors will outperform and underperform.

We also talk about valuing cryptocurrencies and blockchain protocols. Jeff says some DeFi companies have fundamentals and multiples that are hard to come by in traditional finance. As an example he names SushiSwap, which is generating 1 billion in revenue and paying dividends.

Jeff says he can apply tried and true methodologies from debt and equity, but he’s most excited about finding new valuing techniques as crypto has its own characteristics, for example, the fact that a token can combine utility with financial ownership. To him, learning to analyze a space like DeFi before most have even heard of it where the real alpha come from.

Jeff’s clients are hedge funds and traditional investors, and he says they’re getting increasingly interested in decentralized finance —they find DeFi protocols are a lot easier to grasp than cryptocurrencies because they're more similar to tangible companies. He says asset managers will probably very soon start getting involved in yield farming and staking.

Jeff believes we’re heading to a 10 to 20-year secular bull market in crypto, where there will be a decoupling of sectors and where DeFi continues to grow.

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