Kyle Samani: Why Bitcoin is Not a Hedge Against Inflation | 20VC #909
Kyle Samani (guest), Harry Stebbings (host)
In this episode of The Twenty Minute VC, featuring Kyle Samani and Harry Stebbings, Kyle Samani: Why Bitcoin is Not a Hedge Against Inflation | 20VC #909 explores kyle Samani Explains Tokens, Network Effects, And Crypto Investing Discipline Kyle Samani, co-founder of Multicoin Capital, discusses how he entered crypto, why Multicoin abandoned trading to focus on long-term, thesis-driven token investing, and how they structure their firm around deep written analysis and brutal internal debate.
Kyle Samani Explains Tokens, Network Effects, And Crypto Investing Discipline
Kyle Samani, co-founder of Multicoin Capital, discusses how he entered crypto, why Multicoin abandoned trading to focus on long-term, thesis-driven token investing, and how they structure their firm around deep written analysis and brutal internal debate.
He explains what tokens are, why they should rarely accrue value alongside equity, and when tokens are actually useful—namely, to incentivize permissionless, public coordination and bootstrap network effects, as in the Helium network.
Samani argues that tokens both enable new forms of capital formation and wealth distribution, while also making it easier to launch competing networks, thus weakening traditional network moats.
He contrasts crypto and traditional venture on topics like liquidity, portfolio construction, market prediction, network effects, and why he believes Bitcoin is a poor inflation hedge and Solana has a superior scaling path versus Ethereum.
Key Takeaways
Treat tokens as primary assets, not sidecars to equity.
Samani stresses that in almost all cases tokens and equity should not both capture value; trying to do so creates conflicts, so Multicoin typically underwrites tokens as the core asset and assumes the equity may be worthless.
Get the full analysis with uListen AI
Only use tokens when you need permissionless public coordination.
A token makes sense if you must incentivize large numbers of unaffiliated participants to take risk and do real work (e. ...
Get the full analysis with uListen AI
Design token incentives to reward early, higher‑risk contributors more.
Helium’s model—fixed token issuance over time, with early hotspots earning more—shows how to align risk and reward so early adopters who take the most uncertainty capture outsized upside while helping the network reach critical mass.
Get the full analysis with uListen AI
Expect token-based systems to erode, not entrench, network advantages.
Because tokens make it easier to finance and bootstrap new networks, they also lower the barrier for competitors, meaning incumbents’ network effects can be more easily attacked by new tokenized challengers.
Get the full analysis with uListen AI
Build an investment culture around writing and adversarial debate.
Multicoin’s IC process centers on detailed memos, silent comment battles, and explicit calling out of bad assumptions; Samani believes painful, rigorous disagreement is required to approach the truth and size positions correctly.
Get the full analysis with uListen AI
Anchor on markets and returns to scale, not just founders or products.
Multicoin spends the vast majority of its time on market structure, network effects (sublinear vs superlinear), and potential returns to scale, arguing you can often forecast market evolution more rigorously than VCs typically attempt.
Get the full analysis with uListen AI
Use liquidity to manage downside while still investing with a ‘forever’ mindset.
Although tokens offer early liquidity, Multicoin only invests when they’d be happy to hold indefinitely; liquidity is used mainly to exit when theses prove wrong or to reduce loss rates, not to trade short‑term price swings.
Get the full analysis with uListen AI
Notable Quotes
“Tokens only make sense if you need to incentivize behavior in a permissionless fashion among the public at large.”
— Kyle Samani
“If you believe in the vision of the Helium network... you actually want to incentivize those people to have more financial upside for taking on more financial risk.”
— Kyle Samani
“We will only make an investment if our intended hold horizon at the time of investment is forever.”
— Kyle Samani
“Prices don’t matter if you don’t look at them.”
— Kyle Samani
“Bitcoin is nonsense... people do not want to own unproductive assets.”
— Kyle Samani
Questions Answered in This Episode
In practice, how should a founder decide whether their project truly needs a token rather than using traditional equity and pricing models?
Kyle Samani, co-founder of Multicoin Capital, discusses how he entered crypto, why Multicoin abandoned trading to focus on long-term, thesis-driven token investing, and how they structure their firm around deep written analysis and brutal internal debate.
Get the full analysis with uListen AI
What specific metrics or patterns does Multicoin look for to conclude that a token network has achieved, or will achieve, superlinear network effects?
He explains what tokens are, why they should rarely accrue value alongside equity, and when tokens are actually useful—namely, to incentivize permissionless, public coordination and bootstrap network effects, as in the Helium network.
Get the full analysis with uListen AI
How can teams structure token and equity economics to avoid the conflicts Samani describes, while still satisfying both crypto‑native and traditional investors?
Samani argues that tokens both enable new forms of capital formation and wealth distribution, while also making it easier to launch competing networks, thus weakening traditional network moats.
Get the full analysis with uListen AI
To what extent does easy capital formation via tokens risk creating unsustainable or speculative projects, and how can serious builders differentiate themselves?
He contrasts crypto and traditional venture on topics like liquidity, portfolio construction, market prediction, network effects, and why he believes Bitcoin is a poor inflation hedge and Solana has a superior scaling path versus Ethereum.
Get the full analysis with uListen AI
If Bitcoin is not a good inflation hedge, what basket of ‘productive’ assets or crypto protocols would Samani recommend as a superior alternative?
Get the full analysis with uListen AI
Transcript Preview
(reversing beeps) Three, two, one, zero. You have now arrived at your destination.
Kyle, this is such a joy to do. I'm so excited for this episode and education that it will be for me. So thank you so much for joining me today.
Hey, pleasure to be on the show. Thank you for having me.
Listen, the pleasure's all mine. But I want to start with a little bit on you before we dive into the nitty-gritty. How did you make your way into the world of crypto and investing, and how did Multicoin come to be? Let's start there.
Sure. So I did my last startup, uh, in 2013. It was called Pristine. We built software for Google Glass for surgeons. I know Glass was kind of a silly consumer product, but it was a very interesting tool for surgeons because they work with their hands and are sterile and gloved up. Um, did that raised venture, grew to a few million in revenue, got to, hmm, 25, maybe 30 employees, and then Google killed Google Glass, uh, which was a problem for the business, as you would imagine.
(laughs)
Uh, so after that happened, I pivoted the company and, and the company was ultimately acquired for kind of scraps, so no one really made any money. Um, in 2016, I had to kind of find something new to do with myself. Um, I was pretty jaded with healthcare at this point. Um, and, uh, you know, tried to find something new. I discovered Ethereum in March or so of 2016, n- um, and, uh, started fiddling around with it. And, uh, it struck me f- fairly quickly that this is what permissionless finance is. Um, I had played around with Stripe's APIs maybe a week or two prior, and, uh, I was quite frankly not terribly impressed. I was like, "You can take a credit card payment? Like, why is this the most hyped up company in the world?" Um, but with Ethereum, I started fiddling around with it and I was like, "Oh, I can do stocks, bonds, equities. You know, I can m- make things trade." And once I kind of understood the flexibility, um, of, of all the things you could do with it, y- in one fairly simple language, that's when my eyes kind of opened to what, um, the power of smart contracts could be. Uh, over the course of 2016, kind of spent an increasing percentage of my time reading and learning about the space, falling down the proverbi- f- proverbial rabbit hole. Um, by the spring of 2017, I had, uh, basically at this point I was 40 hours a week, internet hobby, crypto. Um, and, you know, I called up Tushar in May of 2017 and I said, "Hey, man, we should, we should do a fund. Like, we can... I think this is... timing is right." Uh, actually, the, the Gnosis ICO was the, was the day that I was like, "Okay, we gotta go." And, uh, Tushar, uh, was working on his prior startup a- also in the healthcare space, and, uh, he was like, he was getting pretty excited about crypto as well. We'd been kind of going down the rabbit hole together. Um, and so in May of '17, we agreed to launch Multicoin. Uh, s- we had no idea how to launch a fund. Took us a few months to figure that out, um, but got our, got our liquid fund up, up and off the ground on October 1st of 2017. Uh, we added our first venture fund in July of '18, and, uh, yeah, we're now on our third venture fund an- and off to the races.
Install uListen to search the full transcript and get AI-powered insights
Get Full TranscriptGet more from every podcast
AI summaries, searchable transcripts, and fact-checking. Free forever.
Add to Chrome