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Speaker 1: Welcome a Strillians. I'm Joel Webber and I'm Eric bel Tunis.

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Speaker 1: So we had a plan and then as usual, you

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Speaker 1: were like, wait, I got a better plan. What's your

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Speaker 1: better plan for this episode? The better plan is, um, look,

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Speaker 1: crypto it just I can't escape it. Right. You had

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Speaker 1: Elon Musk on Satday Live does Coin. You've had Gary

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Speaker 1: Gamser of the SEC come out and talk about crypto exchanges.

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Speaker 1: That's kind of maybe put a little cold water on

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Speaker 1: our you know, outlook of when a bitcoin e t

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Speaker 1: F might here be approved here. Then you also see

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Speaker 1: up in Canada the E three e t f s

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Speaker 1: and the bitcoin ETFs are relentless. Normally a new launch

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Speaker 1: like comes out hard and then like trickles, these things

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Speaker 1: are are right there where they were. And so you

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Speaker 1: can tell there's this breadth and depth and the issue

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Speaker 1: is just really taken over. And so I thought we

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Speaker 1: would go over this with somebody who I consider to

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Speaker 1: be like three years into the future. It's almost like

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Speaker 1: we are going to get to see what the US

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Speaker 1: might look like in about you know, twenty four to

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Speaker 1: thirty six months. And this is Ophelia Snyder, who's co

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Speaker 1: founder of twenty one shares um over in Europe, you

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Speaker 1: can launch whatever you want. It's like free for all

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Speaker 1: over there. And so she has a lineup of get this,

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Speaker 1: fourteen different crypto et f s. I haven't even heard

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Speaker 1: of three or four of them, So that's how far

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Speaker 1: ahead of the curve she is. So I just would

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Speaker 1: really like to get her take on how she did it,

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Speaker 1: how it works, the market making, the exchanges, and just

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Speaker 1: what it's like to basically manage this full line of

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Speaker 1: crypto et f s, which is probably what we're going

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Speaker 1: to see from big issues like Fidelity and van X

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Speaker 1: some day. We're also joined by James Safered again of

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Speaker 1: Bloomberg Intelligence, this time on Trillions going full crypto with

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Speaker 1: Ophelia Snyder. Ophelia, James, welkn Trillions for having me. James.

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Speaker 1: We're not really here for you, We're here for Ophelia,

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Speaker 1: but I want to start with you. Can you set

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Speaker 1: the table a little bit about what's going on in

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Speaker 1: crypto right now? Eric, Eric laid a good a good

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Speaker 1: groundwork here. As you talked about Elon going on SNL

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Speaker 1: or all this doge coin rallying like crazy. Crypto just

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Speaker 1: seems to be just part of the ecosystem. Whether you're

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Speaker 1: on Twitter or in finance, no matter what you do,

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Speaker 1: there's some sort of crypto being spoken about. In my area.

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Speaker 1: I'm always covering anyone filing new e t F to

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Speaker 1: launch bitcoin or any crypto ETF. There's now four different

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Speaker 1: issuers who have filed what's called a nineteen be four

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Speaker 1: and you don't need to get into the specifics, but

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Speaker 1: essentially it's people filing with an exchange for a rule

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Speaker 1: change to allow a bitcoin et F on US exchanges. Um.

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Speaker 1: So that's what we're watching heavily in the U S. Okay,

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Speaker 1: so Aphilia, welcome to trillions and and look like you're

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Speaker 1: talking to a lot of Americans who who you know,

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Speaker 1: don't have access to your products. And you know here

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Speaker 1: you are from the future, so so talk to us

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Speaker 1: from the future. And what are we missing out on?

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Speaker 1: So I think when when I think about Europe and

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Speaker 1: crypto ATPs and a t S, um, we've been incredibly lucky. Uh.

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Speaker 1: The all of our products are based about this was

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Speaker 1: market and the Swiss took a completely different approach to

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Speaker 1: crypto regulation, which was right out of the gate. Let's

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Speaker 1: get it defined, let's get a structure in place, let's

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Speaker 1: tell people what they can and can't do. It's a

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Speaker 1: very well defined box. If you're willing to plan it,

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Speaker 1: you can get a lot of fleeway within that box.

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Speaker 1: And I think we've spent a lot of time talking

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Speaker 1: to both our unregulators and other regulators trying to get

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Speaker 1: them comfortable with this. And it took a very long

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Speaker 1: time to get this product structure right. Um. We did

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Speaker 1: it at a point in time when there was no

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Speaker 1: infrastructure really, so you had regulatory clarity but no infrastructure,

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Speaker 1: which is a completely different landscape that I think a

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Speaker 1: lot of these US applicants rendering where there is infrastructure,

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Speaker 1: they just don't have clarity on the regulatory side. Um.

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Speaker 1: So for us, it became an exercise in figuring out

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Speaker 1: understanding what that sandbox we could play in would look like,

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Speaker 1: figuring out how to fit into it really well, and

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Speaker 1: then figuring out how to actually launch a thing that

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Speaker 1: no one had done before that all of the traditional

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Speaker 1: like et F players, no one would help you. This

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Speaker 1: was no one was willing to actually help you operationalize product,

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Speaker 1: and so we ended up getting a really interesting crash

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Speaker 1: course in like the plumbing of what it takes to

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Speaker 1: make an E t F function. Uh, and that ended

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Speaker 1: up being where we spent most of our time and

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Speaker 1: product developments, the complete opposite of the U S landscape.

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Speaker 1: Could we break this down a little bit so explain,

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Speaker 1: because I think people are interested. If you're starting an

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Speaker 1: E t F, what do you need? What is the

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Speaker 1: plumbing and just how did you accomplish it? If you

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Speaker 1: break down a need t up to what it actually is, right,

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Speaker 1: it's a box that you put stuff in that has

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Speaker 1: to trade at the same value as the components of

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Speaker 1: what's inside the box. It's really all it is, right,

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Speaker 1: And the closer you get these two things to work together.

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Speaker 1: The way in which you actually make that happen is

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Speaker 1: a combination of some pretty intense data distribution, some pretty

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Speaker 1: intense like calculations that come around that, and an ability

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Speaker 1: to interact with marketing makers efficiently and then actually get

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Speaker 1: them securities into their hands. Right. Ultimately, that's what you're doing.

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Speaker 1: We take in crypto, we give you a security. We

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Speaker 1: need to do that in such a way that the

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Speaker 1: contents of the box and the box with its contents

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Speaker 1: in it trade roughly at the same tis. But normally

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Speaker 1: you would go to a stage tree to b N

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Speaker 1: Y and say hey, I would like to set up

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Speaker 1: this box, and they will manage the funds in, the

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Speaker 1: funds out, the data distribution, the fund accounting calculations, all

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Speaker 1: the administration of your fund, all of the legal structuring.

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Speaker 1: There are companies that do that. There are underwriters, there's

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Speaker 1: a ton of people who do package things to make

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Speaker 1: these products work, and it becomes like the role of

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Speaker 1: NESSEA manager becomes quite different, and that you really come

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Speaker 1: in not to operationalize a product, but to run a strategy.

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Speaker 1: The difference in in crypto is that, so roll back

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Speaker 1: the clock, no one had the technical infrastructure to do

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Speaker 1: this because you basically have two separate systems. You have

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Speaker 1: securities that need to do stuff and you have crypto

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Speaker 1: that needs to do a different set of things. They're

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Speaker 1: not really well connected in any way, so you actually

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Speaker 1: had to we had to build infrastructure to bridge that.

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Speaker 1: We ended up creating a platform that actually manages all

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Speaker 1: of your subscriptions and redemptions, the ins and outs of

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Speaker 1: the product. Our relationships with market makers are fund accounting

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Speaker 1: all the way through the custody reconciliations, and it basically

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Speaker 1: plugs into our own platform, and we had to develop

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Speaker 1: a house because at the time no one could serves it. Okay,

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Speaker 1: So I guess it's it's good to jump in, and

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Speaker 1: I guess one thing we start with is just talking

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Speaker 1: about the reasons the SEC has denied all these bitcoin

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Speaker 1: et f or crypto ETFs in the past. Asket and

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Speaker 1: get your views on them first is one of the

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Speaker 1: They're concerned about NAV calculation and being the market is

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Speaker 1: so segmented on many different exchanges. Um there's no like

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Speaker 1: central authority and just getting an accurate NAV, which from

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Speaker 1: my point of view, we've seen plenty of issues where

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Speaker 1: navs are inaccurate, especially in the fixed income market. Even

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Speaker 1: in the US we saw it during the pandemic. I

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Speaker 1: don't see it as an issue, but it's evident in

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Speaker 1: the SEC's replies that they're concerned about it. So I

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Speaker 1: guess first, I guess would be about a question about

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Speaker 1: arbitrage and market makers and how your products are working

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Speaker 1: and how you think it will work in the US.

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Speaker 1: So we don't really see any substantial premiumser discains from

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Speaker 1: a market making infrastructure perspective, it's quite straightforward at this point,

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Speaker 1: like we've been running these products for three years. They

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Speaker 1: almost three years they are They trade quite easily, cryptos

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Speaker 1: very liquid. It has uniqueness in its settlement structure. UM

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Speaker 1: that has certain considerations. Let's just do some really coal

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Speaker 1: stuff that has its own drawbacks, and I think ultimately

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Speaker 1: you don't see a ton of issues in terms of

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Speaker 1: market making and accuracy and in trading and those types

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Speaker 1: of things. The way we've structured our products, we don't

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Speaker 1: do cash curations at all, so we don't really trade. Now.

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Speaker 1: Now it becomes a rough No one really uses it

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Speaker 1: for anything, either for trading the products actively although we

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Speaker 1: publish I nows and things like that, or for creations reductions,

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Speaker 1: which is not something we do. We actually price everything

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Speaker 1: in Kryptic makes it much more transparent. You look at

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Speaker 1: an entitlement model out of gold people love to talk

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Speaker 1: about big point is, you know the expiration of gold.

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Speaker 1: Treat it like that, price it that way. It makes

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Speaker 1: a ton of sense UM in the same way you

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Speaker 1: would have like an ounce per you know, ounces per

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Speaker 1: share and a gold ETF like j l D structure

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Speaker 1: that works really well. It's really transparent, and then you

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Speaker 1: sort of get away from some of these pricing issues.

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Speaker 1: UM from having them actually be impactful to the product itself.

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Speaker 1: I think the broader question you're asking is about crypto

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Speaker 1: pricing now, right, it seemed as though the SEC was

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Speaker 1: really prime to approve it this year. My over under

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Speaker 1: his septem Dave Nadig, who knows a lot, His is

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Speaker 1: in August, because that's exactly six months after Canada, which

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Speaker 1: is we always follow Canada. Reggie Brown, who is more

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Speaker 1: plugged in than either of us, says January anyway, regardless

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Speaker 1: of two Sorry, um, time's flying. Uh. Here's what Gamser

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Speaker 1: said though about bitcoin exchanges. We need greater investor protection

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Speaker 1: here there. We don't have a federal regime overseeing the

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Speaker 1: crypto exchanges. There's a gap in our system. Now again,

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Speaker 1: it almost seems like if he wants to make all

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Speaker 1: of the crypto exchanges perfect or or as good as

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Speaker 1: say the stock market, it could be a long time.

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Speaker 1: Others say, well, he's just saying that to buy space

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Speaker 1: and time. It's like, all right, look, give me a

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Speaker 1: couple of months here. I'm gonna say that just to

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Speaker 1: pour more cold water than I need. But here's my point.

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Speaker 1: Aren't these the same exp changes that all the issuers

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Speaker 1: are using and it seems to be working fine. Oh

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Speaker 1: so I have a controversial opinion. I guess um, I

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Speaker 1: am not anti regulation. I'm actually I think it's great ideas.

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Speaker 1: I think as long as we have regulatory clarity, the

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Speaker 1: rest is fine. I don't think crypto as a industry

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Speaker 1: has any problem with meaning. Whatever standard it is people

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Speaker 1: want to have that. I think the problem is no

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Speaker 1: one's ever said the standard. It's a different issue. I

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Speaker 1: see it in Switzerland right that. The reason our business

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Speaker 1: is able to grow the way it is is because

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Speaker 1: we have a very defined set of roles. We follow them.

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Speaker 1: As long as we follow them, everything is great and

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Speaker 1: there's no risk associated with that. I guess my question

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Speaker 1: is do you feel, as somebody who operates with the

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Speaker 1: exchanges and your market makers have to use them, do

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Speaker 1: you think they need more investor protection or are they okay?

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Speaker 1: You can have an e t F operating and have

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Speaker 1: them in the ecosystem of the e t F. I

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Speaker 1: think a practical perspective to fine. I don't think you're

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Speaker 1: gonna each exchange is slightly different. They'll have slightly different

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Speaker 1: ways of doing things. I don't think there's anything that's

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Speaker 1: that materially problematically different, I think. But to go back,

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Speaker 1: I think the point, the bigger point is even if

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Speaker 1: there's nothing that needs to be changed, it would be

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Speaker 1: great if there was a bar that everybody could just meet.

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Speaker 1: And you've met the bar, and I get this almost

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Speaker 1: like a chicken in the egg situation. The U S E.

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Speaker 1: T F and US exchange volume, Like, we are the

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Speaker 1: liquidity capital of the world, and we have the best

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Speaker 1: market makers in the world. Um, there's so much capital

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Speaker 1: going in here. And if these market makers that are

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Speaker 1: in the US and a U S E. T F

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Speaker 1: comes to market, I almost feel like allowing that to

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Speaker 1: happen would clean up anything that's going on. I mean,

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Speaker 1: these market makers are not going to be besting around

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Speaker 1: or getting pushed around. Uh So it's it's a little

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Speaker 1: bit like I said, it's a little bit of a

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Speaker 1: chick in the egg situation. If you bring these people

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Speaker 1: in here, it's going to clean up the Market's going

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Speaker 1: to tighten up the market, you would say. Where I

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Speaker 1: was saying that a couple of years ago. Now the

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Speaker 1: market is a completely different world. It's way more mature

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Speaker 1: than it was even in so we we actually just

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Speaker 1: in some analysis on this the market is pretty tight cocontested.

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Speaker 1: Like you actually look at statistically what's happening across a

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Speaker 1: variety of different crypto markets, they all moved together. It's

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Speaker 1: really tightly grouped. There's nothing odd happening in that. And

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Speaker 1: I think part of the thing that has changed in

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Speaker 1: the past several years in the crypto markets is a

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Speaker 1: lot of those market makers that you're talking about are

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Speaker 1: playing in this pool, either directly as corporates, but you

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Speaker 1: also have a lot of ex traders that came from

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Speaker 1: those shops who have entered with the crypto market, partially

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Speaker 1: because there was money to be made in that arbitrree trade.

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Speaker 1: And so you now have both quite literally those firms

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Speaker 1: as well as the people who used to run that

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Speaker 1: trading and have that experience entering the space, and you

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Speaker 1: ended up with a much tighter market. I think to

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Speaker 1: some degree, we're there, right. You have these big players

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Speaker 1: playing in the pool, and it's helped tremendously in terms

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Speaker 1: of the maturity of market. Like I run across it

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Speaker 1: a lot, like people I knew in previous lives who

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Speaker 1: are not hopping up in crypto, I think probably true

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Speaker 1: for all of us. Is not that common anymore. The

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Speaker 1: other big story that's happening this week is the Colonial

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Speaker 1: pipeline ransomware hack. And again I totally understand that the

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Speaker 1: vast majority of people who own bitcoin aren't um criminals.

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Speaker 1: And yet you know, here's the downside of of bitcoin,

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Speaker 1: which is that it can still be used and it's anonymous,

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Speaker 1: or it can be used anonymously, and there's this underworld

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Speaker 1: that will attract regulatory ire when it's used as as

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Speaker 1: ransom And so is there how big of a fear

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Speaker 1: do you have about regulatories? Got Tory bodies in America

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Speaker 1: actually just never wanting to make let this thing go

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Speaker 1: mainstream as long as it's anonymous. But you know, maybe

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Speaker 1: you take away the anonymity and it might change things.

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Speaker 1: I think anonymity and crypto is sort of a red herring.

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Speaker 1: Nothing about crypto is that anonymous unless you're trading privacy

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Speaker 1: points that there are coins that are designed to do that,

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Speaker 1: and that's a different market. But you're talking about bitcoin

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Speaker 1: and whether or not bitcoin is anonymous. You can run

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Speaker 1: analytics on chain to figure out where every piece of

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Speaker 1: crypto that you're receiving in a transaction from what it

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Speaker 1: was mine through today you're never gonna be able to

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Speaker 1: do that with the US dollar. I think part of

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Speaker 1: it is just a lack of understanding of how we

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Speaker 1: could use that structure. And I think if to go

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Speaker 1: back to the question of regulation, I think if you

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Speaker 1: have infrastructure around that, you're not going to actually have

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Speaker 1: a real real issue there because being pseudonymous persons being

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Speaker 1: actually anonymous or right different, and bitcoin especially is pseudonyms, right,

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Speaker 1: you get a string that is used. But ultimately, if

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Speaker 1: you're going to bring those assets into a like any

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Speaker 1: kind of sat on ramp, and you're trying to get

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Speaker 1: that out of this system and into something else, you're

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Speaker 1: inevitably going to have to clear some form of ky

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Speaker 1: C a m L, and they're going to run what

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Speaker 1: amounts to a background check on your specific piece of

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Speaker 1: curtough from the day it was born until the day

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Speaker 1: it's hitting that account. And you can't really do that

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Speaker 1: in the same way with the U S doll. So

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Speaker 1: we talked about everyone has their over unders. The Van

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Speaker 1: Neck filing, as I mentioned, is the first one, and

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Speaker 1: we have the The deadline will be November tenth about

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Speaker 1: where the SEC either has to fully approve or fully

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Speaker 1: deny that filing UM. I mentioned there's three others that

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Speaker 1: are going through that process right now. There's like twelve

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Speaker 1: different issuers that are in this in this uh in

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Speaker 1: this race to potentially launch a bitcoin etf UM. So

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Speaker 1: what what if you had to pick a date. I'm

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Speaker 1: sure you talk to these people. I'm sure they've reached

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Speaker 1: out to you for questions about different things. UM what

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Speaker 1: what over under would you put it out? Do you

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Speaker 1: think we're gonna see one? Or do you think we're

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Speaker 1: gonna see one? I agree with the range broadly. I

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Speaker 1: think I'm slightly to the latter end of that. I

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Speaker 1: think late late Q four is probably more realistic than

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Speaker 1: early Q four, so I don't sometimes November December is

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Speaker 1: probably where I would put it, very very late. I

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Speaker 1: do think a lot has changed, including Canada's. Canada is

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Speaker 1: a lot close for US than Europe, and I think

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Speaker 1: that physicality actually matters. They have a history of launching

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Speaker 1: e t f s ahead of US in groundbreaking asset

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Speaker 1: classes and they've been doing fine. I mean, they're their

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Speaker 1: premiums are tight, They've seen a lot of action both

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Speaker 1: up and down UM, and now they've got into ether.

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Speaker 1: There's a multiple ethere e t f S. I also

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Speaker 1: think you now have more context around trading behavior in

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Speaker 1: much more robust markets around like you, corporate actions in

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Speaker 1: crypto like things like forks are ultimately just corporate actions, right.

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Speaker 1: There's not a material different between that and the stock

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Speaker 1: split or that and any kind of spin off. The

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Speaker 1: pretty similar to other stuff that we have that exists

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Speaker 1: in normal and financial infrastructure. I also think you've finally

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Speaker 1: seen those happening in a more robust trading environment. One

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Speaker 1: of the big questions is within like trading behavior around

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Speaker 1: these things network stability. I think a lot of those

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Speaker 1: questions have been answered as well. So purely like technical stuff,

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Speaker 1: we've actually seen a much more robust cycle. Like we've

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Speaker 1: gone through forks in our products, We've gone through all

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Speaker 1: sorts of different things, and it's never cause an issue.

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Speaker 1: And you can actually watch the impact of those actions

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Speaker 1: across networks and you're not seeing, you know, substantial issues

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Speaker 1: with network performance. I think that's also quite hopeful. So

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Speaker 1: it's a question that comes up a lot. So um

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Speaker 1: it was it might have been February of March. I

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Speaker 1: was just tooling around on E t F GO, which

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Speaker 1: is like I just I call it the leaderboard, and

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Speaker 1: I sworked by flows, I sworked by performance, and I

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Speaker 1: did your to date return and did everything. A lot

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Speaker 1: of times i'll screen out other countries or leverage, but

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Speaker 1: I did the whole Enchilada. This is nine thousand and

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Speaker 1: ninety two E t f S. Number one, by far

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Speaker 1: in your date return is one shares Finance b n

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Speaker 1: B E t P. Number two by far is twenty

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Speaker 1: one shares Ripple x r P E t P. And

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Speaker 1: then you've got number five, You've got number seven, you've

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Speaker 1: got number ten. You're basically like you're all over the leaderboard.

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Speaker 1: And this is out of nine thousand E t f S.

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Speaker 1: So I guess let's just start with your product line

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Speaker 1: and starting I think people get bitcoin and ethereum at

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Speaker 1: this point. You know what is binance? How did that

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Speaker 1: launch come about? B and B is a coin native

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Speaker 1: to the finance system, and great long winded way of

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Speaker 1: saying it basically is sort of like a rewards park

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Speaker 1: inside of one of the largest currency So finance is

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Speaker 1: like the eight underpound guerrilla in terms of trading volumes.

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Speaker 1: They are massive global. If you trade crypto, chances are

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Speaker 1: you either touch you touch finance and some They are

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Speaker 1: kind of everywhere and offer massive range of crypto services.

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Speaker 1: And one of the things that happened is basically they

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Speaker 1: came out with this token that would allow you to

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Speaker 1: do a number of things within their ecosystem, and they

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Speaker 1: may also built a centralized applications on top of that,

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Speaker 1: and it lets you do a lot of things within

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Speaker 1: the finance network UM that are quite unique. On the

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Speaker 1: back of the coin based IPO, there was a lot

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Speaker 1: of excitement around the exchange business and I think for

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Speaker 1: the first time people having a real understanding of what

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Speaker 1: the crypto exchange business actually looks like from a monetary

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Speaker 1: perspective UM and Finance is substantially larger UM, and so

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Speaker 1: you ended up with a a structure where this specific token,

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Speaker 1: even though it is absolutely not Finance ectually, it does

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Speaker 1: represent a participation in their ecosystem, and that was really exciting,

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Speaker 1: and it was substantially undervalued apparently, and so you had

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Speaker 1: a really fascinating just jumped here between these two markets

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Speaker 1: and people got very excited about it. If you couple

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Speaker 1: that with the fact that Finance has rolled out in

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Speaker 1: the past several months a couple of really interesting new

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Speaker 1: projects that expand its reach into things like defied um

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Speaker 1: it's been doing incredibly well. Uh. That product came about

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Speaker 1: because we have a pretty unique, I think, approach to

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Speaker 1: crypto products, which is that we really wanted to make

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Speaker 1: sure that people have real access two interesting underlying assets

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Speaker 1: we launched. We have a the largest products we in

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Speaker 1: the world for these types of products and do it

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Speaker 1: because ultimately we wanted to bring them into mainstream and

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Speaker 1: give people access to them in an easy way. Because

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Speaker 1: while I think for people in crypto, binance is pretty

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Speaker 1: common infrastructure, for people who maybe aren't in crypto, signing

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Speaker 1: up the binance maybe quite a reach, and we wanted

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Speaker 1: to find a way to bridge that and allow people to,

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Speaker 1: you know, still get access to the sector. UM. I

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Speaker 1: guess the binance tokens like one simple example to lay

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Speaker 1: it out for somebody who's not familiar, you, everyone has

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Speaker 1: to pay fees when you're trading on an exchange, right,

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Speaker 1: there's exchange fees. That's how coin base makes all the money.

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Speaker 1: If you use the binance token to pay your fees,

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Speaker 1: the dollar amount or the actual amount you're paying is

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Speaker 1: a little less. It's like an incentive to use the

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Speaker 1: binance coin. That's how it's like one of the things

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Speaker 1: that started out as UM. So just throw that in there,

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Speaker 1: and then I guess my next question is you guys,

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Speaker 1: we we've talked about it. There's a whole bunch will

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Speaker 1: probably get into some of these other products, but it

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Speaker 1: goes back to the regulatory framework. Like in the US

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Speaker 1: and Canada and many other places, they're allowing bitcoin, they're

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Speaker 1: allowing etheroryum, but like no one else is going further

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Speaker 1: than that at this point in most other markets. UM

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Speaker 1: there's some index based products, But how did the can

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Speaker 1: you talk you keep mentioning the regulatory friendlick from the

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Speaker 1: Swiss Swiss point of view, but how did it go

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Speaker 1: when you guys were launching all these things other than

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Speaker 1: the if you're going to call them widely accepted bitcoin

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Speaker 1: and etheroryum. Do you have things like a crypto basket,

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Speaker 1: you have UM tesos, you have all these different bitcoin

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Speaker 1: forks like bitcoin, cash, Cardiano, UM, Stellar x RP polk again,

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Speaker 1: Polka dot um, all of them. Can you just explain

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Speaker 1: how like that conversation went with regulators if at all? Sure, UM,

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Speaker 1: we've been doing this for i mean, relative to tript

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Speaker 1: a long time. The first product we came out with

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Speaker 1: was actually an index, and at the time it was

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Speaker 1: the only one in the world. Actually, I think I

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Speaker 1: don't know they're there are a couple now in other industries,

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Speaker 1: but none in in this format um. The conversation with

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Speaker 1: regular nes ends up boiling down to a couple of things,

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Speaker 1: which is there's a bunch of stuff on. There are

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Speaker 1: no fly list, which has to do with it's not

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Speaker 1: a security it's not you know, you're not doing bactor

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Speaker 1: I keo. You know, they have this list of criteria. Basically,

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Speaker 1: if you're able to meet all of those criteria and

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Speaker 1: show them that there is you know, sufficient liquidity, real

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Speaker 1: trading pairs against fiat um and some stability in the network,

431
00:23:26,160 --> 00:23:29,000
Speaker 1: they are able to get comfortable with it. The interesting

432
00:23:29,000 --> 00:23:31,520
Speaker 1: stuff comes in when we get away from like a

433
00:23:31,560 --> 00:23:35,720
Speaker 1: planet vanilla tractor. So we have products that have yield

434
00:23:35,800 --> 00:23:39,360
Speaker 1: in them. For example test as being a good example

435
00:23:39,400 --> 00:23:41,960
Speaker 1: of that, where you can actually have a yield generating component,

436
00:23:42,000 --> 00:23:45,040
Speaker 1: and that's where we end up having more nuanced conversations

437
00:23:45,040 --> 00:23:48,160
Speaker 1: when we're trying to introduce new features like that. Otherwise

438
00:23:48,160 --> 00:23:52,960
Speaker 1: it comes down to network stability, some seasoning metrics, some

439
00:23:53,119 --> 00:23:57,080
Speaker 1: volume metrics, and some technical ones related to how the

440
00:23:57,160 --> 00:23:59,960
Speaker 1: specific crypto asset is structured, is that its own chain,

441
00:24:00,200 --> 00:24:02,600
Speaker 1: is it based on another one? How has it actually

442
00:24:02,600 --> 00:24:06,320
Speaker 1: been built? Ends up being a large part of the conversation. Okay,

443
00:24:06,320 --> 00:24:10,080
Speaker 1: so you sorry you lost me at tasos and that's

444
00:24:10,400 --> 00:24:13,440
Speaker 1: part of my question here. You've got ethereum and bitcoin

445
00:24:13,520 --> 00:24:16,200
Speaker 1: and ripple. I get all those, but like days of

446
00:24:16,840 --> 00:24:20,639
Speaker 1: Cardono polka dot, what what are those? And how do

447
00:24:20,680 --> 00:24:24,400
Speaker 1: you decide what you're going to do and what you're

448
00:24:24,480 --> 00:24:28,640
Speaker 1: not going to do the way we think about product

449
00:24:29,119 --> 00:24:32,240
Speaker 1: is there are products that we need to have because

450
00:24:32,560 --> 00:24:35,400
Speaker 1: we as a company have an enormoutheumatic conviction around them,

451
00:24:35,560 --> 00:24:38,040
Speaker 1: and we'll launch them mos back like even if we've

452
00:24:38,080 --> 00:24:40,919
Speaker 1: never had institutional client aspects for it. We either are

453
00:24:40,920 --> 00:24:43,640
Speaker 1: some products we're like, okay, there's a real thesis here.

454
00:24:43,840 --> 00:24:45,760
Speaker 1: We believe in this. We will bring something like this

455
00:24:45,920 --> 00:24:49,800
Speaker 1: market because we think it should exist. Um, there are

456
00:24:49,800 --> 00:24:52,760
Speaker 1: products that we will we feel maybe less strongly about,

457
00:24:52,760 --> 00:24:55,359
Speaker 1: but we're willing to launch anyway if there's sufficient demand

458
00:24:55,400 --> 00:24:58,320
Speaker 1: for them, if people are really interested, Um, we're willing

459
00:24:58,359 --> 00:24:59,960
Speaker 1: to do that. And we have a really brought produ

460
00:25:00,160 --> 00:25:03,240
Speaker 1: drane as a result of that, because we do try

461
00:25:03,280 --> 00:25:06,480
Speaker 1: to be unbiased in that approach. We try to make

462
00:25:06,520 --> 00:25:08,840
Speaker 1: sure that you know, anything that we think meets the

463
00:25:08,920 --> 00:25:12,399
Speaker 1: criteria or a product selection perspective, we're going to do that,

464
00:25:12,520 --> 00:25:15,160
Speaker 1: especially if we have clients who want it. How are

465
00:25:15,200 --> 00:25:18,600
Speaker 1: people using your products, how are they putting them in portfolio?

466
00:25:18,840 --> 00:25:21,680
Speaker 1: Either from a retail perspective or or an institutional one,

467
00:25:23,200 --> 00:25:26,919
Speaker 1: so we get both, um, a pretty good mix between

468
00:25:26,920 --> 00:25:30,240
Speaker 1: the two. Actually, for fully, construction is interesting. So it

469
00:25:30,400 --> 00:25:32,680
Speaker 1: used to be a real challenge to get people to

470
00:25:32,720 --> 00:25:35,760
Speaker 1: allocate you know, a few basis points here and there too,

471
00:25:35,840 --> 00:25:38,920
Speaker 1: because it has really nice impacts a statistical perspective on

472
00:25:39,000 --> 00:25:40,800
Speaker 1: your portfolio. And it was a lot of that kind

473
00:25:40,800 --> 00:25:44,200
Speaker 1: of selling and a lot of you know, vision alignment

474
00:25:44,280 --> 00:25:46,560
Speaker 1: and trying to explain to people what they might actually did.

475
00:25:46,680 --> 00:25:50,000
Speaker 1: The markets changed a lot. Now you actually see people clients,

476
00:25:50,040 --> 00:25:54,200
Speaker 1: some arts who are building portfolios of our products, which

477
00:25:54,280 --> 00:25:57,520
Speaker 1: was the original intent, like run your own index, here's

478
00:25:57,560 --> 00:25:59,560
Speaker 1: the components and make it what you wanted to do.

479
00:26:00,040 --> 00:26:02,560
Speaker 1: Will package them for you because we have ideas on

480
00:26:02,880 --> 00:26:05,040
Speaker 1: things that are interesting that we think will return well.

481
00:26:05,080 --> 00:26:08,240
Speaker 1: But also you know, paintment of all the colors of

482
00:26:08,240 --> 00:26:10,720
Speaker 1: the wind here, there's a ton you can do with

483
00:26:10,840 --> 00:26:14,000
Speaker 1: the components, and that's how we've envisioned our products, and

484
00:26:14,000 --> 00:26:16,160
Speaker 1: we actually see clients doing that for the first time,

485
00:26:17,119 --> 00:26:20,000
Speaker 1: actual institutions saying, Okay, we're going to allocate you know,

486
00:26:20,080 --> 00:26:23,560
Speaker 1: some to x raps and bitcoin. We're gonna hold some

487
00:26:23,880 --> 00:26:27,320
Speaker 1: polka dot, but we're definitely not going to hold you know,

488
00:26:27,680 --> 00:26:32,199
Speaker 1: this Cardano making this up obviously because they actually have

489
00:26:32,280 --> 00:26:34,080
Speaker 1: a thesis around us and we're seeing people do that

490
00:26:34,119 --> 00:26:37,600
Speaker 1: for the first time. So one thing we're talking about here,

491
00:26:37,600 --> 00:26:40,760
Speaker 1: as I mentioned, there's potentially twelve issuers maybe more that

492
00:26:40,800 --> 00:26:42,680
Speaker 1: want to launch a bitcoin or crypto et F in

493
00:26:42,720 --> 00:26:44,880
Speaker 1: the US. And I mean, if you're all launching one

494
00:26:44,880 --> 00:26:47,720
Speaker 1: bitcoin ETF, I mean there's gonna be a have to

495
00:26:47,760 --> 00:26:50,119
Speaker 1: be waste to differentiate. So I guess one, how do

496
00:26:50,160 --> 00:26:55,080
Speaker 1: you see people differentiating? Obviously it's gonna be fees, maybe branding.

497
00:26:55,400 --> 00:26:57,800
Speaker 1: Do you think that this this new the whole DeFi

498
00:26:57,920 --> 00:27:01,640
Speaker 1: regular framework has come about a lot of yield farming

499
00:27:01,720 --> 00:27:03,840
Speaker 1: coming in in crypto is basically where you can earn

500
00:27:03,960 --> 00:27:06,840
Speaker 1: yield on your cryptocurrencies. How do you see any of

501
00:27:06,880 --> 00:27:09,840
Speaker 1: this playing into how different issues are going to differentiate.

502
00:27:09,880 --> 00:27:11,960
Speaker 1: Do you have any Obviously you're not going to give

503
00:27:11,960 --> 00:27:13,960
Speaker 1: away your secret sauce or what you're thinking about it,

504
00:27:13,960 --> 00:27:16,240
Speaker 1: But I guess I'm just curious about how you're how

505
00:27:16,280 --> 00:27:18,760
Speaker 1: you're framing this when you guys are having conversations about it.

506
00:27:19,240 --> 00:27:24,160
Speaker 1: So what I've seen in Europe, interestingly, this is not

507
00:27:24,640 --> 00:27:28,119
Speaker 1: the same kind of market at all as what you

508
00:27:28,160 --> 00:27:31,359
Speaker 1: would expect in it traditionally. Yeah, this isn't the cheapest

509
00:27:31,400 --> 00:27:33,800
Speaker 1: product is going to steal all of the assets like

510
00:27:33,880 --> 00:27:37,000
Speaker 1: it doesn't. It ends up coming down to expertise, is

511
00:27:37,000 --> 00:27:42,080
Speaker 1: what I've seen. Um Our clients rely on us to

512
00:27:42,160 --> 00:27:44,399
Speaker 1: know what we're doing. These are highly technical products at

513
00:27:44,400 --> 00:27:46,040
Speaker 1: the end of the day, and in a way that

514
00:27:46,080 --> 00:27:48,119
Speaker 1: has nothing to do with the TS right. How you

515
00:27:48,160 --> 00:27:53,120
Speaker 1: store crypto really matter, How you transact in crypto really matters.

516
00:27:53,240 --> 00:27:55,120
Speaker 1: How you think about that, and it's not just how

517
00:27:55,160 --> 00:27:57,600
Speaker 1: you set it up the first go around, it's how

518
00:27:57,640 --> 00:28:00,400
Speaker 1: you maintain it over time. How how are you really

519
00:28:00,440 --> 00:28:04,520
Speaker 1: going to handle your first poor without it causing massive disruptions?

520
00:28:05,280 --> 00:28:07,720
Speaker 1: What does that mean for your products? How are you

521
00:28:07,760 --> 00:28:09,320
Speaker 1: going to give it in that out to people are

522
00:28:09,440 --> 00:28:12,320
Speaker 1: not How do you think about this, UM and it

523
00:28:12,440 --> 00:28:14,760
Speaker 1: ends up coming down to, from what I've seen in

524
00:28:14,760 --> 00:28:17,800
Speaker 1: the market so far, a lot of emphasis on knowing

525
00:28:17,840 --> 00:28:21,280
Speaker 1: what you're doing UM and being able to make clients

526
00:28:21,320 --> 00:28:23,080
Speaker 1: comfortable with the fact that you do know what you're

527
00:28:23,119 --> 00:28:26,560
Speaker 1: doing in space that ends up being a major differentiator.

528
00:28:34,359 --> 00:28:38,200
Speaker 1: Just real quick pivoting to the news about your firm

529
00:28:38,280 --> 00:28:41,080
Speaker 1: that UM I saw two days ago about Cathy Wood,

530
00:28:41,360 --> 00:28:44,040
Speaker 1: who we've had on the show a couple of times, UM,

531
00:28:44,120 --> 00:28:46,920
Speaker 1: and she comes up a lot. She's always in the

532
00:28:47,040 --> 00:28:50,400
Speaker 1: in the spotlight UM, and I think it's interesting. Kathy

533
00:28:50,440 --> 00:28:52,400
Speaker 1: Wood is a big fan of crypto. It's not a

534
00:28:52,400 --> 00:28:57,560
Speaker 1: shocker she joined your board. But how did that come about? UM?

535
00:28:57,600 --> 00:29:03,040
Speaker 1: I meant Kathy a long time ago UM at an

536
00:29:03,040 --> 00:29:08,520
Speaker 1: ETF conference. Uh. She and I got talking about about crypto,

537
00:29:08,600 --> 00:29:10,320
Speaker 1: about a lot of things you've actually been talking about

538
00:29:10,360 --> 00:29:15,560
Speaker 1: on this podcast, around what does the space look like,

539
00:29:15,600 --> 00:29:17,239
Speaker 1: what does the plumbing look like, how do you think

540
00:29:17,280 --> 00:29:19,520
Speaker 1: about making these products work, how do you think about

541
00:29:19,720 --> 00:29:23,080
Speaker 1: the impacts of crypto on the future of what financial

542
00:29:23,080 --> 00:29:25,800
Speaker 1: infrastructure looks like? All things that I love And she

543
00:29:25,880 --> 00:29:27,520
Speaker 1: did as well, and we kept in touch and she

544
00:29:27,600 --> 00:29:32,240
Speaker 1: became an informal advisor to the company when we were

545
00:29:32,400 --> 00:29:35,080
Speaker 1: really early and trying to figure out but frankly with

546
00:29:35,160 --> 00:29:37,920
Speaker 1: product market fit and how to really enter the ETS space.

547
00:29:39,040 --> 00:29:41,080
Speaker 1: And so it was a really natural fit. There was

548
00:29:41,120 --> 00:29:45,400
Speaker 1: a lot of a lot of vision alignment, longstanding relationship

549
00:29:45,520 --> 00:29:50,400
Speaker 1: even prior to this UM and she, you know, became

550
00:29:50,440 --> 00:29:53,720
Speaker 1: a became a shareholder this week and that's how we

551
00:29:53,800 --> 00:29:57,280
Speaker 1: ended up with the announcement UM and how she ended

552
00:29:57,360 --> 00:30:02,200
Speaker 1: up being part of the fabric of this company. Yeah,

553
00:30:02,400 --> 00:30:05,000
Speaker 1: I'm gonna go on the record right now. She will

554
00:30:05,080 --> 00:30:07,600
Speaker 1: launch a crypto et F in some shape or form

555
00:30:07,680 --> 00:30:09,400
Speaker 1: down the road. I think it will be some kind

556
00:30:09,440 --> 00:30:14,320
Speaker 1: of a crypto, you know, like active management crypto picker.

557
00:30:14,720 --> 00:30:16,800
Speaker 1: I think there needs to be some underlying crypto ETS

558
00:30:16,880 --> 00:30:21,720
Speaker 1: first for her to use. But thoughts active crypto is

559
00:30:21,960 --> 00:30:28,200
Speaker 1: really interesting, UM active crypto, I mean clearly there's there

560
00:30:28,200 --> 00:30:29,800
Speaker 1: you can get alpha. I mean if you if you're

561
00:30:29,840 --> 00:30:32,800
Speaker 1: good at it, you could really win. Oh. I think

562
00:30:33,120 --> 00:30:37,280
Speaker 1: returns perspective active cryptose amazing. People who know what they're

563
00:30:37,320 --> 00:30:40,280
Speaker 1: doing in crypto. It's unreal the kind of return to

564
00:30:40,280 --> 00:30:43,120
Speaker 1: you can make, especially, I mean it's still a pretty

565
00:30:43,680 --> 00:30:46,040
Speaker 1: there's a lot of volatility here you can do a lot,

566
00:30:46,120 --> 00:30:48,600
Speaker 1: especially if you're actively training, if you're if you're doing things,

567
00:30:48,600 --> 00:30:52,800
Speaker 1: if your thesis driven assets most certainly outperformed, you would

568
00:30:52,880 --> 00:30:57,680
Speaker 1: need a pretty wide roster. Though, like I think with

569
00:30:57,760 --> 00:30:59,200
Speaker 1: our products in Europe you might be able to do

570
00:30:59,280 --> 00:31:01,960
Speaker 1: something like that. You would need you need a deep bench,

571
00:31:02,000 --> 00:31:04,000
Speaker 1: therepy need to really be able to capture, and you

572
00:31:04,040 --> 00:31:10,080
Speaker 1: would need essentially it amounts to regulatory okay, for certainly

573
00:31:10,120 --> 00:31:13,920
Speaker 1: more than the big point of needs. Uh, And I

574
00:31:13,960 --> 00:31:17,560
Speaker 1: think it could do very well. Okay, So what about

575
00:31:17,760 --> 00:31:23,040
Speaker 1: um ultimate active manager and you know Ellen driving the

576
00:31:23,480 --> 00:31:26,680
Speaker 1: doge coin to the moon? Does that does does that

577
00:31:26,720 --> 00:31:32,840
Speaker 1: do crypto more harm than good? I think those generally

578
00:31:33,000 --> 00:31:37,880
Speaker 1: actually is helpful, which is interesting. I think one of

579
00:31:37,920 --> 00:31:41,240
Speaker 1: the big problems with crypto's approachability, and we worked really hard,

580
00:31:41,960 --> 00:31:44,640
Speaker 1: how do you make somebody feel confident investing in space

581
00:31:44,840 --> 00:31:48,959
Speaker 1: and a combination of you know, the fifty eight thousand

582
00:31:49,000 --> 00:31:53,120
Speaker 1: dollars sticker price on bitcoin and sort of inherent technical

583
00:31:53,240 --> 00:31:57,720
Speaker 1: jargon that comes around it is really not friendly. What's

584
00:31:57,760 --> 00:32:02,120
Speaker 1: happening right now? We've Ellen with those with a lower

585
00:32:02,160 --> 00:32:04,920
Speaker 1: price point, with all of the pieces that come with

586
00:32:04,920 --> 00:32:10,680
Speaker 1: that is, it's providing a lower barrier to entry for people,

587
00:32:11,080 --> 00:32:13,240
Speaker 1: and I love that. I think that's ultimately a good thing,

588
00:32:13,600 --> 00:32:15,880
Speaker 1: whether it as an investment product as well or not,

589
00:32:15,960 --> 00:32:18,520
Speaker 1: or whether it sticks around, is you know the network

590
00:32:18,600 --> 00:32:21,160
Speaker 1: and what that ends up looking like in the long term,

591
00:32:21,200 --> 00:32:23,280
Speaker 1: I am like, yeah, but I think in terms of,

592
00:32:23,360 --> 00:32:26,440
Speaker 1: you know, the branding around it, the mascot, the language

593
00:32:26,440 --> 00:32:28,200
Speaker 1: that people are using to describe it, I think it

594
00:32:28,280 --> 00:32:30,560
Speaker 1: really does make Krypto more approachable, and I think on

595
00:32:30,640 --> 00:32:34,200
Speaker 1: the net that will end up being possible. Yeah, I'll

596
00:32:34,200 --> 00:32:36,720
Speaker 1: share a quick I'll share a quick anecdote. I was

597
00:32:36,760 --> 00:32:41,000
Speaker 1: actually on a flight uh on on on Saturday, and

598
00:32:41,040 --> 00:32:43,480
Speaker 1: the two women I sat next to when they came

599
00:32:43,480 --> 00:32:45,479
Speaker 1: in and sat down and immediately started talking about how

600
00:32:45,480 --> 00:32:47,640
Speaker 1: they were buying dose coin and which they were buying.

601
00:32:47,680 --> 00:32:50,800
Speaker 1: More so like I was like, I can't, I can't.

602
00:32:51,120 --> 00:32:56,360
Speaker 1: This was like what four hours before SNL aired. Yeah, yeah,

603
00:32:56,400 --> 00:32:59,600
Speaker 1: it was like the worst trade ever that they should

604
00:32:59,600 --> 00:33:03,120
Speaker 1: not punch the active crypto etf those two. But just

605
00:33:03,280 --> 00:33:05,200
Speaker 1: well that to that in though, it like takes me

606
00:33:05,240 --> 00:33:11,600
Speaker 1: back to like nineteen twenties pre Black Monday crash of

607
00:33:11,680 --> 00:33:15,560
Speaker 1: like who yeah, exactly if you if you know nothing

608
00:33:15,640 --> 00:33:18,360
Speaker 1: about this and you're hearing stuff like that, it's like shoeshine, Like,

609
00:33:18,520 --> 00:33:22,680
Speaker 1: I'm out. What do you think of that, Ophelia. I

610
00:33:22,920 --> 00:33:29,640
Speaker 1: think there's a fine line between really hype droven investment

611
00:33:30,000 --> 00:33:32,760
Speaker 1: that you're talking about and made to bring adoption, and

612
00:33:32,800 --> 00:33:36,840
Speaker 1: I think, unlike what we saw in seventeen, this time around,

613
00:33:36,880 --> 00:33:39,800
Speaker 1: it feels like people actually understand what they're doing. So, yeah,

614
00:33:40,160 --> 00:33:44,200
Speaker 1: it's very retail as market, but it's in a much

615
00:33:44,280 --> 00:33:48,160
Speaker 1: more stable way with a nice institutional backbone, which I

616
00:33:48,200 --> 00:33:50,840
Speaker 1: feel much more comfortable with as a market construction. I

617
00:33:50,840 --> 00:33:55,120
Speaker 1: think the stuff around us and l is what it is. Okay,

618
00:33:55,160 --> 00:33:59,160
Speaker 1: last question, um favorite E T F ticker that is

619
00:33:59,200 --> 00:34:07,560
Speaker 1: not your own? Oh um, that is so hard because

620
00:34:07,560 --> 00:34:10,560
Speaker 1: I totally don't come from traditionally to get background, I

621
00:34:10,600 --> 00:34:12,799
Speaker 1: will say, I almost feel like this is the one

622
00:34:12,800 --> 00:34:14,640
Speaker 1: guest where we should let her pick her own because

623
00:34:15,040 --> 00:34:18,279
Speaker 1: she's got H O, D L, she's got Abba, she's

624
00:34:18,320 --> 00:34:21,120
Speaker 1: got moon. I mean, you've got like an embarrassment of

625
00:34:21,239 --> 00:34:23,920
Speaker 1: riches in your ticker lineup. Do it for one, we

626
00:34:23,960 --> 00:34:26,879
Speaker 1: have to do it for all. Yeah, so listen, pick

627
00:34:26,920 --> 00:34:30,000
Speaker 1: your favorite of your own and then you're non something

628
00:34:30,040 --> 00:34:35,960
Speaker 1: out of your family. Okay, Um, some of the stuff

629
00:34:36,000 --> 00:34:39,400
Speaker 1: around like hack I really like, which is sort of

630
00:34:39,680 --> 00:34:44,320
Speaker 1: that's a good one. Top five, right, that's a top five.

631
00:34:46,320 --> 00:34:48,920
Speaker 1: And I think your person is always your favorite, so

632
00:34:51,400 --> 00:34:55,840
Speaker 1: totally is an epic one that is up. There's always

633
00:34:55,840 --> 00:34:58,800
Speaker 1: your favorite, right, ABBA's mine? I think I like Abba better.

634
00:34:58,960 --> 00:35:01,400
Speaker 1: I just want I just get dancing queen stuck on

635
00:35:01,480 --> 00:35:03,520
Speaker 1: ahead and it's it's that's fine, that's a good day.

636
00:35:04,000 --> 00:35:05,920
Speaker 1: You got you got keys and moon too, which are

637
00:35:05,920 --> 00:35:11,440
Speaker 1: also fantastic. Uh we kid, But I'm telling you if

638
00:35:11,480 --> 00:35:14,480
Speaker 1: these tickers, you could sell these tickers for over a

639
00:35:14,480 --> 00:35:19,320
Speaker 1: million dollars in the US someday. Honestly, it's when you're early,

640
00:35:19,480 --> 00:35:21,600
Speaker 1: you get to do a lot of cool stuff. It's

641
00:35:21,640 --> 00:35:23,360
Speaker 1: one of the things that I look at with this market,

642
00:35:23,400 --> 00:35:28,560
Speaker 1: like we launch your bitcoin product in January, and when

643
00:35:28,600 --> 00:35:31,840
Speaker 1: you do stuff early, there's some disproportionate advantages to that.

644
00:35:33,080 --> 00:35:35,400
Speaker 1: So Philias neither thanks so much for joining us on Trillions.

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Speaker 1: Thank you for having it's really fun. Thanks for listening

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Speaker 1: to Trillions. Until next time. You can find us on

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Speaker 1: the Bloomberg Terminal, Bloomberg dot com, Apple Podcast Spotify or

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Speaker 1: where where else you'd like to listen. We'd love to

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Speaker 1: hear from you. We're on Twitter, I'm at Joel Webber Show,

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Speaker 1: He's at Eric Pultunas. You can find James at j

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Speaker 1: S E y f F and you can find Aphelia's

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Speaker 1: twenty one shares at twenty one Shares Underscore. This episode

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Speaker 1: of Trillions was produced by Magnus Hendrickson. Francesca Levy is

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Speaker 1: the head of Bloomberg podcast by