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21.co focused on getting ‘the next billion people’ involved in crypto, co-founder says

Ophelia Snyder, 21Shares Co-Founder & President, joins Yahoo Finance Live to discuss the crypto firm's latest funding round, the crypto winter, decentralized finance projects, and more.

Video Transcript



AKIKO FUJITA: Weathering the crypto winter. Crypto ETP issuer 21.co just announced a $25 million fundraising round, making it Switzerland's largest crypto unicorn. This round values the company at $2 billion. Here to discuss its latest funding round is co-founder Ophelia Snyder. We've also got Yahoo Finance's David Hollerith joining in on the conversation. Ophelia, when you look at the number here, $25 million raised. I mean, that's certainly-- you could argue any money raised in this environment is good news. How do you plan to deploy the capital?

OPHELIA SNYDER: So the plan for this capital is really focused around new product development and continued geographic expansion. In the last year, you've seen us expand our product line into Australia and also into the Middle East. And you should expect to see a few new markets from us in the coming months.

DAVID HOLLERITH: Yeah, and, Ophelia, you know, you've sort of mentioned how your largest business line, which is issuing crypto-related ETPs, has grown a lot in the past year. I think you mentioned some revenue numbers too. But in general, can you just sort of explain what a crypto ETP is compared to something like a Bitcoin ETF, which has come up in a lot of conversation, in the US market at least?

OPHELIA SNYDER: Yeah, so they're quite similar, actually. In the European market, we use ETPs primarily for single asset products. But they have the same structure, really, the same creations and redemptions, the same secondary market trading. It's really designed to let you access crypto assets using your existing bank or brokerage in the same way you would use to buy shares of UBS or the S&P 500.

DAVID HOLLERITH: Yeah, and I understand you can also do sort of an indexing situation too. And I was curious, you know, given that cryptocurrencies have tended to correlate a lot with each other, I was curious, what are your clients' interests in sort of these indexed ETPs? Is that sort of showing success, or is it more of like a single product?

OPHELIA SNYDER: So both have shown quite a bit of success, obviously, given the growth of the company. But actually, this year, basket products and index products have been the more popular. And a lot of that comes down to we spend a lot of time working with our clients, helping them craft thesis-driven views on the sector. And so what you end up with is different cryptoassets, while they may be short-term correlated, have very different use cases and very different reasons for existing.

And one of the things we work with our clients and our customer base on and we do through our research arm, where we give research away for free in a bunch of different languages, is designed really to help foster that type of understanding. And so the index products that we bring to market have a tendency to be popular for those reasons.

DAVID HOLLERITH: Yeah, something that comes up a lot, I think, that is a little bit confusing to sort of a general-- someone who's not deep into crypto sort of, people have said, you know, given the crypto market's fallout over the last couple of months, decentralized finance has held up really well. And I know that's an area of business you guys have been heading into.

But obviously, there have been stablecoins, which I think fit as a part of decentralized finance, such as terra, which have collapsed and have cost investors money. So could you sort of explain maybe the complication there in terms of DeFi tending to hold up better, but then also some DeFi products turning out to be total messes?

OPHELIA SNYDER: So DeFi is like anything else at the end of the day. You have products that are going to be-- do really well and be really well structured, and you're going to have products that aren't going to work quite as well as they should have. I mean, you could argue VIX products in traditional finance would be an example of that. And DeFi and actually all of crypto is still painfully early in its development process.

And unlike other types of early tech, you typically don't have billions of dollars running through it. So I think one of the things that you're seeing is obviously this is very early days for this type of technology and very early days for this industry more broadly. DeFi itself has made enormous leaps in the last couple of years. And I think we will see a continuation of that as the market matures.

AKIKO FUJITA: Ophelia, when you think about the crypto space as a whole, we've heard so many companies have come out and said, look, this is the time to hunker down and innovate. And yet, you could argue, because of the pullback we've seen even further, the money hasn't necessarily followed. I mean, you've managed to raise money in this environment. But what's your expectation moving forward? I mean, how long-- if we want to call this a winter, how long do you expect this to last?

OPHELIA SNYDER: So I think there's the potential for this to last months. But I think the most important thing to realize about crypto is that we build in the winter. Most of the great innovations of the crypto asset space have come out of these types of markets because this is when companies buckle down and focus. And if you are in the sector and you're listening to what people are working on, I think we should expect over the coming months the work that's being done right now to be the next major leaps forward from a technological perspective. And I typically see price as a fairly heavy lagging indicator of what's actually happening under the hood in the industry.

DAVID HOLLERITH: Yeah, and you guys occupy a really interesting spot in that you're sort of trying to bridge crypto to more traditional investors. And I was just sort of curious, you know, that does in some-- to some degree of crypto's history, that kind of goes against some of the ethos. But clearly, you've had success. So I was just curious, could you explain a little bit more of that dichotomy and complication?

OPHELIA SNYDER: Yes. Well, I think the way to think about this is user experience in crypto has often lagged a little bit where the industry is from a technical development perspective. And there are a lot of people who want to be engaged in this space and might not be comfortable setting up brand new infrastructure just to do that, my mom being an awesome example of that. She was one of the first people to ever talk to me about crypto, but the infrastructure for her was-- made it inaccessible.

And that's really what we look to solve for people. If we want the next billion people to participate in the crypto market, we need to make that easy and seamless for them, not requiring them to have all of the specialized infrastructure. And that's really what we're aiming to do in creating these bridges.

AKIKO FUJITA: Well, Ophelia Snyder, good to have you on today. Really appreciate the time. Our thanks to Yahoo Finance's David Hollerith as well.