Nic Carter on CoreWeave's origin story, the crypto strategic reserve, and why stablecoins are eating finance

Summary

Nic Carter's first angel investment was CoreWeave — made before he was accredited, partly funded by a loan from his father. He connected with founders Brian Venturo and Brandon Arvanaghi through a shared hostility to Ethereum's proof-of-stake transition; they were ETH miners, he was a proof-of-work advocate. The original pitch had nothing to do with AI. The plan was to repurpose idle Nvidia GPUs for CGI rendering, targeting blender conferences and movie studios.

The fund Carter brought it to passed. The thesis was seen as outside scope after earlier crypto mining investments had soured. He describes it as the worst miss of his career: fund one alone would have returned 50x on that single check.

The pivot came around 2019, when Ethereum's move to proof-of-stake wiped out the proof-of-work GPU market almost simultaneously with early transformer-based LLMs gaining traction. GPT-2 era apps like AI Dungeon drove hockey-stick compute demand, and CoreWeave was positioned — almost accidentally — to serve it. Carter credits the team's early decision to build high-performance synchronous HPC clusters around Nvidia hardware as genuinely differentiated; no hyperscaler was doing that at the time. Long-duration contracts and creative financing, including a significant partnership with Magnetar Capital, followed.

Crypto strategic reserve

Carter is flatly against the proposed strategic crypto reserve, and that position hasn't softened. His core argument is that strategic reserves exist for commodities with genuine industrial liability — petroleum, tungsten, uranium, medical supplies. There is no industrial use case that requires the US government to hold Bitcoin, let alone Ripple or Cardano. The idea of selling seized Bitcoin to rebalance into other assets he calls incoherent.

He also doubts Congress would authorize taxpayer funds for crypto purchases, which means the reserve likely stalls as a stockpile of already-seized Bitcoin rather than an active accumulation program. Markets appear to agree — price action has not responded as a genuine government buying program would suggest.

On David Sacks, Carter's read is that the reserve and the broader crypto-maximalist posture coming from the White House isn't Sacks' agenda. Carter says if it were purely up to Sacks, Trump would have fired Gary Gensler, installed Paul Atkins, and never mentioned crypto again. Instead, Trump has launched roughly four crypto projects since October 2024 — World Liberty Finance, the Trump memecoin, the Melania coin, and two NFT series across two editions — with the reserve on top. Carter suspects the influence is coming from elsewhere in Trump's orbit, not from Sacks, and he'd like it to stop.

On the 4D chess theory — that Cardano's inclusion in the reserve is an opening bid designed to be negotiated down to Bitcoin-only — Carter is skeptical on principle. He makes deals for a living, and a counterparty who opens at an obviously absurd number with a known history of doing exactly that doesn't read as a skilled negotiator. It reads as untrustworthy.

Stablecoins

This is where Carter is actively deploying. His portfolio sits at 19 stablecoin-related investments with two more wires going out the same week. His framework for the stack: issuers at the top, B2B infrastructure and payment service providers in the middle, consumer forex apps at the bottom.

Issuance he views as largely closed — Tether and Circle dominate, banks and consortia are moving in, and Ethena is the only new entrant he credits with genuine traction. B2B stablecoin PSPs are heavily commoditized, with roughly 100 new bridge projects competing on thin margins. He's instead looking at how stablecoins integrate into core banking infrastructure and at regional forex businesses with a stablecoin angle, where regulatory or local network-effect moats are possible.

On traditional finance adoption, he draws a distinction by segment. Major non-bank fintechs are active acquirers. Remittance players are either being disrupted or building their own rails. Visa and Mastercard are engaged. Foreign banks — Societe Generale and Standard Chartered are his examples — are already doing substantial stablecoin work. US domestic banks are the laggard, still carrying PTSD from Operation Choke Point and afraid the Fed will move against them if they step into stablecoin issuance.

The regulatory question he flags as a genuine gray swan — his term for a Known Unknown the industry underweights — is KYC and surveillance obligations for stablecoin transactions. How that gets resolved will shape which business models survive.

Tether and Coinbase as gray swans

Tether is Carter's top gray swan. The accounting irregularities and the $850 million hack of affiliated exchange Bitfinex are documented. His more nuanced point is that much of Tether's historical opacity — undisclosed banking relationships, co-mingled balance sheets — was a function of being shut out of US banking rather than pure bad intent. Forced to use marginal intermediaries, they got scammed and had to obscure the damage. He believes the reserves are cleaner now, with Cantor Fitzgerald holding Treasuries on their behalf, but the structural risk hasn't fully disappeared.

His second gray swan is Coinbase's custody operation. Coinbase holds hundreds of billions in crypto assets and is the primary custodian for the Bitcoin ETFs. A successful hack would be catastrophic for the industry. He doesn't expect it, but the concentration risk is real and underappreciated.

The infrastructure argument

On crypto's broader security problem — illustrated by the Bybit hack of roughly $1.4 billion — Carter's investment thesis is that the industry needs to move away from real-time gross settlement and bearer-asset architecture toward something that looks more like traditional finance: deferred settlement, pull payments alongside push, and a messaging layer sitting above the settlement layer the way SWIFT sits above wire transfers. He acknowledges this invites the criticism that crypto is just rebuilding traditional finance from scratch. His answer is yes, but on a better substrate and without the legacy file-transfer protocols. The recourse and scalability that come with deferred settlement are worth it.