Why We Invested in Bitcoin Before It Was Cool | Raoul Pal and Micky Malka

Micky Malka describes how his venture firm Rivet became early Bitcoin investors by solving their own custody and purchasing challenges, eventually recognizing the broader potential of blockchain as a foundational financial infrastructure.

• Early Bitcoin investment stemmed from solving internal team's payment and custody problems.

• Investment thesis centered on addressing personal pain points in the emerging crypto market.

• Blockchain's potential as a unifying financial infrastructure was recognized over time through direct engagement with pioneers.

Micky Malka's journey into Bitcoin investing began in 2010 when developers requested payments in Bitcoin, prompting deep research into the then-nascent technology. His firm, Rivet, adopted a unique investment thesis focused on solving problems they encountered themselves, which led them to build a custody business and back companies addressing pain points in buying and holding Bitcoin. Initially perceiving Bitcoin as 'travel checks,' Malka and his team later recognized the broader implications of blockchain as an open ledger system, predicting the convergence of crypto and fintech into unified financial infrastructure by 2018-2019.

Early Bitcoin Investment

• 00:00:00 The firm's foray into Bitcoin began around 2010 when Micky Malka's startup developers requested payments in Bitcoin, initiating a deep dive into the technology. As early adopters, Rivet faced challenges storing their Bitcoin, leading them to build their own custody business, Sapo. This problem-solving approach shaped their investment strategy, funding companies that alleviated the difficulties they encountered in buying and holding digital assets, such as creating bridges to fiat money.

Evolving Blockchain Understanding

• 00:02:00 Initially, Bitcoin was seen by Malka as digital 'travel checks' due to its hash code and serial number, without immediate recognition of its underlying ledger system. It took several years, and interactions with early pioneers like Coinbase founders and Vitalik Buterin, to fully grasp blockchain's potential as a general ledger system capable of far more than just token transactions. By 2018 or 2019, Malka predicted to his LPs that crypto and fintech would converge, becoming indistinguishable parts of a unified financial infrastructure.