Raghu Yarlagadda, co-founder of FalconX, on why he feels India can build a truly global crypto system
“Is crypto a bubble? And is this bubble about to burst?” When you are talking to an aggressive and enterprising crypto entrepreneur whose maiden venture is valued at $8 billion and has scaled considerably over four years, it’s interesting to start the conversation with the subject of a bubble. Is there a bubble? Raghu Yarlagadda, co-founder and CEO of FalconX, a cryptocurrency brokerage and digital asset trading platform for institutional investors, takes the bull by the horns.
“The future is already here. It's just not evenly distributed,” he says, alluding to a quote attributed to influential American speculative fiction writer William Gibson. Crypto, too, has a similar story, reckons Yarlagadda, whose San Francisco- based venture recently scooped up $150 million in Series D round and more than doubled its valuation to $8 billion in just 10 months.
As a lot of wealth is migrating from Baby Boomers to Millennials, and they think about money differently. They not only want a yield in an economy that's inflating, but are also looking for entertainment from finance. “The Gamestop Saga is an indication that there is activism and entertainment with finance, which is a completely new concept,” he underlines, adding the traditional financial system is not cut out to meet the needs of the millennials.
While conceding there are some aspects of crypto which are frothy, Yarlagadda maintains it would get corrected in the future. “Any innovation in the early days is messy. Some froth will be corrected as it becomes more mainstream,” he says in an exclusive interview with Forbes India. Edited excerpts:
Since the beginning of history, three ingredients are extremely important: Sound business fundamentals, unit economics, growth paired with profits. Ultimately, when a market gets into a risk-off mode or a value-hunt mode, the companies generating good revenues and profits will actually leapfrog in becoming bigger and better. The market will consolidate, and the winners will become bigger and better.
Yeah, I agree that a rising tide lifted all boats, and there are some boats which are not built robustly and will inevitably go through a period of correction. But I do think that this number is smaller than what people are expecting in the so-called ‘winter’ primarily because there are massive megatrends of how millennials are thinking about interacting with financial services, how the technology is making things online, and the delivery ecosystem.
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