Recently, John Hoffman joined Grayscale as our new Managing Director and Head of Distribution and Strategic Partnerships at Grayscale. In this capacity, John will be working alongside our existing ETF and Sales teams to lead our efforts to help investors access our products wherever their needs require. We chatted with John to learn about his career history and motivations, and gather some of his insights, learnings, and ways of thinking about the world.
If his insights inspire you, explore open positions at this link.
1. John, thanks so much for making time to talk to us during your busy first few days at Grayscale. We like to start with a (hopefully) simple question: what started your career in finance?
I have always been intrigued by markets and the complex interplay of human emotions and investing. I began investing in stocks in high school. After graduating college with a finance degree, I joined a consulting firm and got great exposure and experience doing strategy work at Fortune 100 companies. Around the same time, I started investing in ETFs. I already knew I wanted to be closer to markets and ETFs seemed like an exciting, disruptive way to get to the heart of the industry. I switched to an asset manager in 2006 and haven’t looked back.
2. Why did you decide to join the Grayscale team?
I believe that Grayscale is the asset manager of the future, and is building this company by embracing the platform of the future. The company and its leadership have built a culture of respectfully challenging convention – while embracing US financial rules and regulations – to pioneer better outcomes for investors. From the outside, during the interview process, and in my first few days at Grayscale, I have seen how this culture cultivates and inspires intellectual curiosity, and real, constructive collaboration. I’m excited to be a part of the team, and to aid in the company’s next phase of growth.
3. Are you interested in crypto? If so, what piqued that interest?
I would actually answer this question by first talking about ETFs. In many ways, they digitized the delivery of investment return – making it simple, easy, and convenient to access markets. The transformative potential of the technology was not well understood when I joined the market in 2006, despite being 13 years after the first ETF launched in the US. The market was relatively small at that time (it was about $250Bn AUM, and is now over $7T), and ETF use cases were narrow, as the product constructs were simple. But, even early on, I felt ETFs had the massive potential to modernize the way people invest, and I found that incredibly energizing.
Then, in 2011-2012, I first started reading about Bitcoin. I was intrigued by its promise. I downloaded the Bitcoin protocol, but could not figure out what to do next. At the time, Mt. Gox was the largest exchange, and I explored this venue and discovered that you could meet people in-person and exchange private keys for fiat. Both of these options seemed cumbersome and risky, and I did not have the technical chops to acquire otherwise. Coinbase was just getting started and was squarely focused on solving the problem of making it easy to buy digital assets. I found Coinbase to be a strong solution to a common problem for non-technical adopters, like myself: making it easy to buy Bitcoin. So, in short, I have been invested in BTC since 2013, but I have been emotionally invested in its innovation for much longer.
4. So, pulling on this thread a bit: What can we learn from the history of ETFs? Are there commonalities relevant to crypto assets?
Definitely. Over the decade following my initial Bitcoin investment, I fell deeper and deeper into the rabbit hole of learning about digital assets, and always saw obvious parallels to the ETF world. From a value standpoint, there are parallel network effects, whereby as adoption grows, the network becomes stronger, and the value and utility of the network increase. ETFs have created a flywheel of added utility over time. With thousands of listings and over $10T in global AUM, we have seen the ETF user base and implementation strategies expand significantly. I expect crypto to continue to evolve in a similar trajectory.
There are also parallels in the public discourse about each of these asset classes. New, transformative technologies can be perceived as confusing or scary, and much like the early days of ETFs, where there was a lot of doubt, concern, and skepticism, many of those same conversations are playing out in crypto today.
It’s still very early. On a time series, we are 15 years past the innovation trigger of blockchain, but when you think about the adoption and impact, we may only be 1% into an exponential trend, and just like how ETFs grew from $250Bn to over $10T globally over the course of 17 years, I expect digital assets to transform the way we live, work and play over the course of the next decade. I think we are now entering what I call “the slope of enlightenment,” where the early promises of blockchain are increasingly operationalizing and demonstrating real-world utility. All said, I expect the next decade to be incredibly fun.
5. What lessons have you carried with you through your career?
Businesses can be large and complex but at the end of the day, they are comprised of individual people and people have diverse perspectives formed by differing life experiences. As such, it is critical to be a study of people and to seek to understand different perspectives in order to be most effective. Culture is not just a fluffy topic for human resources and people teams to think about. Culture is the lifeblood of the organization and it is constantly evolving and changing. Culture is the most important aspect of a business and a strong culture enables individuals and teams to achieve incredible outcomes.