Understanding the Crypto Fund Ecosystem...Source: Autonomous NEXT, Various for ICO, Pitchbook for VC, EOS Scan 179 209 437 345 66 364 245 646 54714 417 26 8 225 115 6,050 3,486 794

Understanding the Crypto Fund Ecosystem

Suitable only for professional investors

@autonofintech

https://next.autonomous.com

2

General Disclaimer Please note that the information and data presented herein is based on reliable sources and, or opinion of Autonomous Research LLP (herein

referred to as “Autonomous”). The material within this document has been prepared for information purposes only. This material does not give a

Research Recommendation and/or Price Target and thus applicable regulatory Research Recommendation disclosures relating to the same are

not included herein. This communication is not a product of the Research department of Autonomous although there may be links or references

to Research reports and products.

This communication has been issued and approved for distribution in the U.K. by Autonomous Research LLP only to, and directed at, a) persons

who have professional experience in matters relating to investments falling within Article 19(1) of the Financial Services and Markets Act 2000

(Financial Promotion) Order 2005 (the “Order”) or b) by high net worth entities and other person to whom it may otherwise lawfully be

communicated, falling within 49(1) of the Order – together Relevant Persons. This material is intended only for investors who are "eligible

counterparties" or "professional clients", and must not be redistributed to retail investors. This communication is not intended to be acted on or

relied upon by retail investors.

Retail investors who through whatever means or media receive this material should note that the services of Autonomous are not available to

them and should not rely on the contents to make any investment decision. Autonomous shall not be liable for any loss, including any

consequential loss which may result from reliance on the information or incurred in respect of any action taken. You are advised to seek your

own legal, tax or financial advice accordingly.

Autonomous makes every effort to use reliable comprehensive information, but makes no representation that is accurate or complete.

Autonomous assumes no responsibility to update any of the contents or opinions contained and therefore accepts no responsibility for any

actions taken on receipt of this communication. The information contained herein and any opinion expressed does not constitute an offer or an

invitation to make an offer to buy or sell any securities or financial instrument or derivative relating thereto. The information is not intended to

provide personal recommendation or investment advice and it does not take into account the specific investment objectives, financial situation or

particular needs of any specific person. Note that income from securities and other financial instruments as well as their value may fall as well as

rise and investors may lose their investments. Past performance is not a guarantee for future performance.

In Europe: Autonomous Research LLP is authorised and regulated by the Financial Conduct Authority in the United Kingdom (500498).

Registered in England & Wales No OC343985.

This information is provided for your sole use. For the protection of persons (other than a client) who are not authorised to receive this

communication, it may not be reproduced in whole or in part by any means except for the personal reference of the intended recipient. No part of

this material may be reproduced, distributed or transmitted or otherwise made available without prior consent of Autonomous. Any unauthorised

disclosure is strictly prohibited. Copyright Autonomous Research LLP. All rights reserved. The use of external logos are not authorized by,

sponsored by, or associated with the trademark owner. Any trademarks and service marks contained herein are the property of their respective

owners.

@autonofintech


4

Who is Lex Sokolin?

Fintech Director,

Autonomous

Research

Entrepreneur,

NestEgg,

AdvisorEngine

Lehman

Brothers PTSD

New media

visual artist

@autonofintech


5

What is Autonomous Research?

• Global Equity Research firm

founded in 2009

• Focused only on Financial Services

• Banks

• Insurance

• Investment Management

• Payments

• Exclusive to world’s

leading financial institutions

• Entirely independent and partner-

owned

@autonofintech


Autonomous NEXT brings together a fundamental cash-

flow view with an innovation growth lens

6

Here’s What Matters

@autonofintech


10 Years of Production Software, 3 Core Themes

Global Macro Trade Consortia cost cutting Smart Digital Assets

2008+

$7 Trillion

Low Probability

2014+

$500 Billion – 1 Trillion

High Probability

2015+

All Economic Activity

Starting Now

8

Bitcoin Cryptocurrency Born

Blockchain Distributed Ledgers Focus

Decentralized

Apps

Source: Autonomous Research

@autonofintech


What’s so special anyway?

Source: Pexels

Reality

• Physical & Scarce

• Economic Activity

• Pay for product

DotCom

• Digital & not Scarce

• MC = 0

• Free (pirated) or Pay

for Convenience not

IP (stream)

Crypto

• Digital & Scarce

• Economic Activity

• Pay for Product

@autonofintech


Digital Asset scarcity enables everything from digital cats to

digital equities, derivatives, currencies or other tokens

10

• Ownership of token on blockchain

• Smart contract performs programmed functions

• Network validates and plays various roles

• Mistake to dismiss as today

• These projects were less

than 6 months apart,

what’s next?

Source: Crypto Kitties, Polymath network

Macro View on Asset Class

@autonofintech


179 437 209 345

646 547 14 66 364 245

417 115 26 8

225

6,050

3,486

0.2B 0.5B 0.6B

0.8B

7.1B

4.1B

2013 2014 2015 2016 2017 2018 YTD

Other Early Stage Investors

Corporate Venture

ICO

March to Date has seen $3.5 Billion in ICO funds, vs $6.B

for last year, showing moderate slowing

12

Investment in Crypto-Economy ($mm)

Source: Autonomous NEXT, Various for ICO, Pitchbook for VC

@autonofintech


... if you ignore Telegram and EOS.

13

Investment in Crypto-Economy ($mm)

Source: Autonomous NEXT, Various for ICO, Pitchbook for VC, EOS Scan

179 437 209 345 646 547 14 66 364

245

417 115 26 8 225

6,050

3,486

794

1,643

1,700

0.2B 0.5B 0.6B

0.8B

7.9B 7.5B

2013 2014 2015 2016 2017 2018 YTD

Other Early Stage Investors

Corporate Venture

ICO

Rolling EOS

Telegram

@autonofintech


2

2 275 182

19

23

1,310

457

7

1

9

373

92

2

876

416

166 371

314

5

6

809

367

1,217

945

6

320 447

12 499 267

2014 2015 2016 2017 Up to 03/18

Media & Social

Gaming & Gambling

Internet of Things & People

Finance: Markets

Finance: Investments

Finance: Banking & Payments

Cloud

Core Tech

Cryptocurrency

26M 8M 225M 6.1B 3.5B

Increasing importance of apps and vertical use cases, not

just fat protocols

14

• All Initial Coin Offerings by Industry (USD Equivalent, $1M+ raises)

Source: Autonmous NEXT

@autonofintech


10%

100%

1,000%

10,000%

100,000%

1,000,000%

05/97 05/99 05/01 05/03 05/05 05/07 05/09 05/11 05/13 05/15 05/17

Amazon Marketcap Indexed to IPO

Netf lix Marketcap Indexed to IPO

NASDAQ Composite

898

128

595

175

IPOs between 1997 and 2000

Reduction by 2005

Reduction by 2010

2010 YE

The Dotcom bubble teaches a valuable lesson – most new

ventures die, but survivors become winners that take all

15

Tech Company Initial Public

Offerings (‘97-2000)

Source: Autonomous NEXT, Bloomberg data, McKinsey

Performance of Dotcom Survivors

(logarithmic, indexed to IPO date)

Marketcap grew from $429MM

to $475B, over 1,000x

Marketcap grew from

$320MM to $70B, over 225x

Macro View on Investors

@autonofintech


5 3

128

20

175

26

Prior 2013 2014 2015 2016 2017 2018

Credit

Fund of Funds

Index

Token Basket

AI / Quant

Trading

Liquid Venture

Institutional investors with broad strategies

Crypto Funds by Inception Year and

Strategy (April 2018)

Source: Autonomous NEXT

Fund of

Funds

Legal wrapper

Fat fees

Index Passive beta

Small, mid, large

Token Basket Token of tokens

Manager selection

Quant Arbitrage

Machine learning

Trading Technical charts

Market movement

Venture MV=PQ

Team + Narrative

@autonofintech


Decentralized but not equally distributed

18

0%

20%

40%

60%

80%

100%

120%

15110115120125198

52%

73

20%

21

15%25

4%23 4%

9 5%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Number % of Funds

Fund of Funds

Token Basket

AI / Quant

Index

Trading

Liquid Venture

249 AUM %

Crypto Fund by Strategy (April 2018) AUM Distribution (April 2018)

• Top 50 funds hold 77% of known AUM

• Top 10 hold 37%

• 75% of funds are lurkers

$3-5 Billion

in Total

@autonofintech


Crypto funds are tiny compared to asset class opportunity

19 Source: FT, CBOE, Coinbase

Exchanges

Custody

Products

@autonofintech


$36 trillion of Wealth in US ($70 trillion Globally), $400B

Revenue Pool

20

US Wealth Management Industry

Source: Autonomous Research, Investment Company Institute 2016, State Street 2015, World Wealth Report 2016

88.4

$5.6 $70.0

13.8

$2.6 $29.9

15.9

$8.5 $89.3

6.3

$16.9 $160.6

0.2 $3.2 $27.2

Households Investable Assets ($T)

Revenue ($B)

10mm+

$1mm-10mm

$250k-1mm

$100k-250k

Documents

Understanding the Crypto Fund Ecosystem...Source: Autonomous NEXT, Various for ICO, Pitchbook for VC, EOS Scan 179 209 437 345 66 364 245 646 54714 417 26 8 225 115 6,050 3,486 794