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  • Hany Rashwan and Ophelia Snyder are the founders of Cathie Wood-backed crypto firm Amun Holdings.
  • They told Insider how they came to set up the world’s first physically backed crypto ETP firm.
  • They also break down why they are bullish on the Ethereum network and DeFi aside from bitcoin.

There are 807 cryptocurrency startups in Crunchbase’s database, but only one has caught Ark Invest CEO Cathie Wood’s attention.

Amun Holdings this week said Wood has joined as an independent board member after personally investing in the firm. Wood was “thrilled” to support the company, Bloomberg reported. Also taking part in Amun’s latest funding round is crypto investor Anthony Pompliano as well as Collaborative Ventures and Quiet Ventures.

Founded in 2018, the Zurich- and New York-based company has enjoyed explosive growth in a spectacular year for major cryptocurrencies. The firm’s assets, which grew from $27 million in March to $200 million in December last year, have skyrocketed 900% in the past six months to reach $2 billion. It is also already profitable, earning between $40 million to $50 million in annual revenue from retail and institutional investors.

But none of those eye-popping figures were what first drew Wood to the almost three-year-old startup.

Hany Rashwan and Ophelia Snyder, co-founders of Amun, said it was accessible and transparent research that really bonded them with the star stock-picker. Wood’s Ark Invest is well-known for putting its research, trades, and valuation models in public domains such as its email newsletters and GitHub.

"I sat down next to Cathie at a lunch at an ETF conference in 2019 and we started talking about crypto and ETFs," Snyder, president of the firm, told Insider. "And one of the things we spent a lot of time talking about was this philosophy around research infrastructure and accessibility."

Like Ark Invest, Amun publishes free independent research on crypto assets including Ethereum, Polkadot (DOT), Cardano (ADA), and Stellar Lumens (XLM) in five languages.

"We will never charge anything for it because we want everyone to read institutional-grade research that typically is sold for thousands of dollars per report, and we will give it away for free," chief executive Rashwan told Insider.

An international perspective on crypto

Both Rashwan and Snyder discovered bitcoin in 2011 on Stanford's campus where Snyder was attending college. Rashwan, a serial entrepreneur, was there in the midst of running a fintech startup backed by venture capitalist Tim Draper - who has become one of the biggest bitcoin bulls.

"At some point, I got a flash drive with some bitcoins on it. There were three of them or $50 worth of bitcoin, so it was about $15 per coin," he recalled. "I played around with it. It was very difficult to use and wasn't super interesting, so I threw it away."

It wasn't until he witnessed people in Egypt buying bitcoin to protect their net worths and hedge against inflation and geopolitical risks that Rashwan, a native of Cairo, Egypt, started to realize the cryptocurrency's potential. "Egypt is not an insignificant economy," he said. "When I saw that it was being utilized in Egypt, I thought this is actually a much bigger deal and could concern more people than what I had thought previously."

Snyder, who grew up between the US and Italy, charted a similar path to crypto. "If you grow up in a world where you're moving around a lot," she said, "you sort of pick up on the idea that having a hedge against inflation that's not political but global and unifying in a way has an enormous amount of value."

Because of the co-founders' international perspective, they recognized early on that some countries will take longer than others to embrace crypto. In 2018, they set up 21Shares, which is not only the world's first physically-backed cryptocurrency exchange-traded product provider but also offers the only ETPs tracking Binance, Bitcoin Cash, Tezos, Stellar, Cardano, and Polkadot.

So far, Amun, which consists of 21Shares and digital asset token trading platform Amun Tokens, primarily targets the European market. It plans to launch its first non-European ETP in the coming months and issue an additional 30 products this year.

Bullish on Ethereum and DeFi

Rashwan jokes that as a crypto CEO, he is nevertheless oblivious to the price of bitcoin most of the time. He said he usually has a price range in mind but the day-to-day volatility does not concern him.

"I have no personal plans on selling any of my bitcoin or any of my family's bitcoin for a decade," he said. "I think about it like a venture capital investment where it's going to take seven to 10 years to fully play out."

Snyder takes a similar approach. "We are not super into trading volatility, so it's not really how we think about our investments and it's also not how we build products," she said. "Typically our products are long-term, passive, and they're meant to do something very specific."

Aside from bitcoin, both of them are personally bullish on Ethereum and decentralized finance.

Rashwan thinks that while bitcoin has become an institutional asset, ether, the cryptocurrency of the Ethereum network, is increasingly becoming more accepted by institutional investors too.

"If you liken this to the internet which was created in 1983, we're just now starting to see the real compounding effect of how large it can get after two boom-and-bust cycles," he said, "I think that crypto, led by bitcoin and Ethereum, are going to have a generational type of return where over the next 20 to 25 years, this is going to touch and change everything."

Snyder is bullish on DeFi because it enables egalitarian access to financial products, which she believes can not only allow more people to access the global financial infrastructure but also unlock a lot of capital.

She adds that while Ethereum still needs a lot of technical improvements such as the Ethereum Improvement Proposal-1559 (EIP-1559) and the transition from proof-of-work to proof-of-stake, it will be hard to challenge the kind of network effects that have been created on the Ethereum network.

"I think you will see quite a lot of technical improvement," she said, "but the network effects, the thesis around broadening financial access and broadening accessibility to banking services is really appealing."

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