Arianna Simpson, the managing director at digital asset hedge fund Autonomous Partners, told Quartz that her career in cryptocurrency began in 2013, when she visited several underdeveloped African countries including Zimbabwe. Most of these nations have suffered greatly due to hyperinflation and bitcoin (BTC) “made a lot of sense” in helping to resolve these issues, Simpson noted.
The American School of Milan graduate explained that observing economic hardship in third-world countries led her to start thinking “about monetary policy and what might be possible in a country where a government or central bank wasn’t regulating currency.”
When questioned about she thinks of the recent growth of the crypto industry, Simpson said:
I’ve watched the space develop from this niche, weird corner of the internet into something that commands mainstream attention.
She added that despite the extended bear market, there have been quite a few positive developments and “a lot more financial players” have entered the crypto industry. According to Simpson, this is “not something we saw a few years ago.”
Crypto "Mania" Attracted A Lot Of "Smart People"
Expressing views that are similar to Ethereum co-founder Joseph Lubin, Simpson noted that she has been “struck by the amount of talent that’s moving in[to]” the blockchain ecosystem. Going on to comment on the crypto “financial mania” in 2017, the former BitGo employee said “cycles like that attract a lot of interest from smart people.”
However, it takes time for the contributions from newcomers to the crypto space “to produce some real value,” Simpson noted. She added that there’s typically up to a three year “lag” before we actually see the results from the work being done.
Interestingly, this has also been pointed out by crypto treasury management professional, Meltem Demirors, who said that paradigm changing technologies like those developed by Microsoft, Intel, and Amazon take many years to mature and gain mainstream adoption.
Concerns About "Capital Drying Up"
In response to what her role is in the crypto industry, Simpson said she’s focused on “bringing aboard investors” at Autonomous Partners who “can add value beyond their capital.” She explained that crypto-related technology is still in its “early stages” of development, so having a select few knowledgeable partners with “experience in various realms” is a sensible strategy.
Notably, hedge fund billionaire Steven Cohen has invested in Arianna’s Autonomous Partners’ initiative, which focuses on privacy-oriented digital currencies and crypto firms working to resolve scalability issues that plague the blockchains of today.
Other prominent investors in Simpson’s crypto hedge fund include New York-based VC firm Union Square Ventures, which has over $1 billion of assets under management. Commenting on whether she’s concerned about “capital drying up” due to the current bear market, Simpson remarked:
It’s easy for everyone to look like a genius in a bull market, but a lot of people aren’t willing to sit through the years of a bear market that you might have to in order to see those gains.
She further noted that she has “structured” her investments in a manner that will allow her firm to absorb the “shocks” and still make progress, even while cryptocurrency prices continue to plummet.
"Overlap" Between Traditional Markets And Crypto
Simpson went on to mention:
It’s not great for the ecosystem longterm when inexperienced investors or people without convictions in their theses are starting new funds. I think [the bear market] clears it out for those who plan to stay in the industry for a long time.
She also advised investors to not get “emotional and sell at the bottom” while noting that the financial advice shared by traditional market veterans such as billionaire Warren Buffett has revealed “how much overlap there is between what they write about and what’s happening in crypto.”
However, Simpson said she does not ”give much weight to” negative comments made by traditional market analysts about bitcoin and other cryptocurrencies as they’ve been “notoriously bad tech investors."