WEBVTT - Ether ETFs Are Looking for a Bitcoin Style Love 0:00:03.120 --> 0:00:12.039 Bloomberg Audio Studios, podcasts, radio News. 0:00:16.520 --> 0:00:17.200 Welcome to Trains. 0:00:17.200 --> 0:00:19.000 I'm Joel Webber and I'm Eric Belchiernis. 0:00:22.239 --> 0:00:27.480 There's been this wildly successful launch of Bitcoin ETFs this year. 0:00:27.640 --> 0:00:31.240 Eric and the industry just couldn't get enough. They're back 0:00:31.280 --> 0:00:34.559 for more, never enough with this. What's going on? What's 0:00:34.600 --> 0:00:34.919 going on? 0:00:35.159 --> 0:00:39.800 So they filed for Ethereum ETFs after filing for Bitcoin ETFs. 0:00:40.280 --> 0:00:43.440 Fast forward, after the Bitcoin ETFs launched, there was sort 0:00:43.440 --> 0:00:46.000 of a surprise approval from the SEC that the E 0:00:46.040 --> 0:00:48.880 three ETFs will be approved and they just launched about 0:00:48.880 --> 0:00:52.519 a week ago, and it's sort of, in my opinion, 0:00:52.560 --> 0:00:55.600 like the opening band following the headliner. So it was 0:00:55.640 --> 0:01:00.480 definitely interesting, but not quite the impact and import I 0:01:00.480 --> 0:01:04.039 think of Bitcoin, which is just way bigger across the board. 0:01:04.080 --> 0:01:08.000 But again, as an analyst who've been studying this stuff 0:01:08.000 --> 0:01:10.840 for twenty years, I really enjoy the horse race. It 0:01:10.880 --> 0:01:12.360 was another horse race where you had all of them 0:01:12.360 --> 0:01:14.600 lined up at once, you could like really get some 0:01:14.640 --> 0:01:17.800 interesting data compared to Bitcoin, compared to a regular launch, 0:01:17.959 --> 0:01:20.920 compared to each other. Also, Ether is different than Bitcoin, 0:01:21.240 --> 0:01:23.240 so there's definitely a lot to unpack. But you know, 0:01:23.319 --> 0:01:25.880 a little less intense than the Bitcoin launch. 0:01:25.959 --> 0:01:27.360 You know what I can't wait to talk about is 0:01:27.680 --> 0:01:29.119 you didn't think this was going to happen. 0:01:29.319 --> 0:01:32.120 I didn't. There's an ongoing debate on why it happened. 0:01:32.520 --> 0:01:35.440 Some people thought Gary Ginsler all along thought he would 0:01:35.440 --> 0:01:37.560 approve this, but didn't want to give any signals to 0:01:37.640 --> 0:01:41.080 the issuers because he didn't want to have a circus 0:01:41.120 --> 0:01:44.560 like the bitcoin, you know, approval process. On the flip side, 0:01:44.600 --> 0:01:48.480 some people thought that the politics had shifted, and Biden 0:01:48.800 --> 0:01:51.720 told Gensler, hey, let's lighten up on crypto a little. 0:01:51.880 --> 0:01:54.000 Let these out so we don't appeal appear to be 0:01:54.160 --> 0:01:56.880 that anti crypto. I don't know which is true. They 0:01:56.960 --> 0:02:00.400 both have decent evidence behind them, but we don't actually know. 0:02:00.440 --> 0:02:02.360 All we know is about a week before we had 0:02:02.400 --> 0:02:04.000 heard they're going to approve them, and they did. 0:02:04.800 --> 0:02:08.560 I'm also really excited to bring on Stacy Marie Ishmael, 0:02:08.919 --> 0:02:12.240 who's at an executive editor at Bloomberg News overseeing crypto, 0:02:12.480 --> 0:02:16.440 digital payments and cross assets. That also means she oldersees 0:02:16.520 --> 0:02:20.720 ETF coverage Peptinberg News. She's a longtime collaborator of mine 0:02:20.919 --> 0:02:23.480 in the newsroom. Looking forward to having her on her 0:02:23.520 --> 0:02:28.120 first episode of Trillions, this time on Trillions Ether ETFs 0:02:29.280 --> 0:02:31.239 Stace Marie Wecome on Trillians. 0:02:31.280 --> 0:02:32.040 Great to be here. 0:02:32.320 --> 0:02:35.240 Okay, so what is Ether? 0:02:37.160 --> 0:02:39.079 Just starting with the softball questions. 0:02:39.000 --> 0:02:42.400 Yeah, exactly what is Ether? How is it different than Bitcoin? 0:02:43.240 --> 0:02:47.680 I would say the distinguishing factor of Ether, which Ether 0:02:47.760 --> 0:02:51.440 fans may not like, is that it's significantly smaller than Bitcoin. 0:02:51.560 --> 0:02:53.320 I heard Eric called it small potatoes. 0:02:53.680 --> 0:02:56.000 I am not going to say that Ether are small potatoes. 0:02:56.040 --> 0:02:57.720 I am going to say that on the merits it 0:02:57.840 --> 0:03:00.799 is the second largest cryptocurrency after Bitcoin, and the gap 0:03:00.880 --> 0:03:04.440 between the largest and the second largest is very large. 0:03:04.520 --> 0:03:08.120 Right where the way that folks think about Ether is 0:03:08.360 --> 0:03:10.880 not necessarily that it's a Bitcoin replacement, but that it 0:03:10.919 --> 0:03:12.320 does very different things. 0:03:12.400 --> 0:03:15.760 And that's like, actually, how it's built and how it operates, 0:03:15.919 --> 0:03:18.960 everything about it is actually pretty distinct and different, pretty 0:03:18.960 --> 0:03:21.440 distinct then bitcoin? Can you can you explain some of that? 0:03:21.880 --> 0:03:25.280 I'd say, if you care about these distinctions, one of 0:03:25.320 --> 0:03:27.239 the very first ones that you'll point to is the 0:03:27.280 --> 0:03:30.640 way that bitcoin is created is something called proof of work. 0:03:30.960 --> 0:03:34.200 So a bunch of you know, energy intensive data centers 0:03:34.400 --> 0:03:37.240 switched on all day solving mathematical problems. You've heard the 0:03:37.280 --> 0:03:42.320 Shpiel Ether is maintained and kept in existence by a 0:03:42.360 --> 0:03:47.760 totally different methodology called proof of steak, which is still maths, 0:03:47.920 --> 0:03:50.480 still complex, but not something we necessarily need to go into. 0:03:50.560 --> 0:03:52.640 But the main thing that ether fans will point to 0:03:52.760 --> 0:03:55.960 is that the energy consumption of maintaining the Ether network 0:03:56.000 --> 0:03:57.760 is significantly less than that of bitcoin. 0:03:57.920 --> 0:03:59.360 If you want to go down a rabbit hole, you 0:03:59.360 --> 0:04:01.680 can go read a lot more about all of this. 0:04:01.760 --> 0:04:04.040 And let me jump in here too, because I'm a 0:04:04.040 --> 0:04:11.160 tourist of the planet crypto. I'm an ETF guy who basically, yeah, yeah, 0:04:11.200 --> 0:04:14.520 I've got an English to Crypto conversion dictionary that I've 0:04:14.600 --> 0:04:16.880 used a lot. It's worn out, basically, but I've read 0:04:16.920 --> 0:04:18.640 a couple of books, and one thing that struck me 0:04:18.680 --> 0:04:21.040 and I started to understand this whole thing a little more. 0:04:21.120 --> 0:04:24.520 Is bitcoins sort of a reaction to the dollar devaluing. 0:04:24.600 --> 0:04:24.680 Right. 0:04:24.760 --> 0:04:27.920 It's like, hey, if you want to store value in 0:04:28.000 --> 0:04:32.640 something because the dollar loses valuation, and hey, government's print money. 0:04:32.839 --> 0:04:35.600 It's just it's very politically expedient to print money if 0:04:35.600 --> 0:04:37.920 you have a problem, and so hey, there's this thing 0:04:37.960 --> 0:04:41.240 that can help protect you from that. Ether is not 0:04:41.320 --> 0:04:45.200 about security or currency. It's like, let's do another Internet 0:04:45.240 --> 0:04:48.520 that is completely decentralized and like a couple tech companies 0:04:48.560 --> 0:04:51.120 can't control. So I do think some of the ethos 0:04:51.160 --> 0:04:54.040 is the same, that sort of populous like, hey, things 0:04:54.040 --> 0:04:57.479 are too centralized government, big tech. I do find that's 0:04:57.520 --> 0:05:00.960 one common thread between the two. They're very different, and 0:05:01.000 --> 0:05:03.200 the way they're pitched this different, and I think even 0:05:03.240 --> 0:05:05.480 the way they operate is very different. 0:05:05.800 --> 0:05:08.920 So why does the world need an ether ETF let 0:05:08.960 --> 0:05:11.000 alone mini ether ETF. 0:05:11.680 --> 0:05:15.480 Look, if you want to invest in all this action 0:05:15.839 --> 0:05:21.920 and creativity that's happening in this decentralized platform, ether is 0:05:21.960 --> 0:05:24.680 sort of the gasoline that runs it. So some people 0:05:24.720 --> 0:05:27.840 call digital oil. So again, if you want access that 0:05:28.040 --> 0:05:31.800 is frictiony to go do that yourself. ETFs kill all 0:05:31.839 --> 0:05:35.279 the friction. So that's why the world needs ETFs in general, 0:05:35.360 --> 0:05:38.560 is they're friction killers. That said, do you need ether? 0:05:38.720 --> 0:05:41.800 And that's the question people have to ask themselves personally. 0:05:42.200 --> 0:05:44.960 I think a lot of normal investors sixty forty they 0:05:45.040 --> 0:05:46.960 might buy the bitcoin ETF and be like, I'm good, 0:05:47.240 --> 0:05:49.560 sort of like you buy gold, you don't buy silver too. 0:05:49.640 --> 0:05:50.400 I think that's. 0:05:50.200 --> 0:05:52.039 Probably what's going to happen, and then there will be 0:05:52.080 --> 0:05:53.760 some people who are sold in the ether story, but 0:05:53.800 --> 0:05:55.880 I think that's going to be a minority of the 0:05:55.920 --> 0:05:58.400 sort of bigger crypto PI station. Y. 0:05:58.560 --> 0:06:00.599 What's the vibe inin like this year? Because it feels 0:06:00.640 --> 0:06:03.920 like this thing that was really the wild West has 0:06:03.960 --> 0:06:05.000 started to get tamed. 0:06:05.279 --> 0:06:08.360 I can tell you that no regulator would say that 0:06:08.720 --> 0:06:12.120 they think that crypto has been tamed and that everyone 0:06:12.160 --> 0:06:13.800 is now following all the rules that they would like 0:06:13.839 --> 0:06:18.120 them to follow. But certainly as it relates to the 0:06:18.120 --> 0:06:22.240 ETF portion of the crypto market, which is still relatively small. Right, 0:06:22.240 --> 0:06:24.840 Like the overall market capitalization, market value, whatever you want 0:06:24.880 --> 0:06:28.200 to use of the entire crypto market globally is about 0:06:28.200 --> 0:06:30.919 one point five trillion dollars, and we are not quite 0:06:30.960 --> 0:06:36.120 there in terms of the direct comparison with crypto based ETFs. 0:06:36.400 --> 0:06:39.800 But you do have this feeling that now, if you 0:06:39.920 --> 0:06:44.960 are a pension fund or some other highly regulated institutional investor, 0:06:45.360 --> 0:06:48.120 you can get access either to as Eric put it, 0:06:48.320 --> 0:06:51.640 like you know the bitcoin element of crypto, or you 0:06:51.640 --> 0:06:53.920 can say, well, I'm actually interested in this idea of 0:06:53.960 --> 0:06:59.400 a separate Internet, this computational underpilling, this programmable theory. I'll 0:06:59.400 --> 0:07:01.480 invest in ether or you just want to diversify away 0:07:01.480 --> 0:07:02.520 from bitcoin. 0:07:02.400 --> 0:07:04.720 When we think about investing through an ETF in this 0:07:04.800 --> 0:07:07.880 and you're now the Ether people, they're all in. That's 0:07:07.920 --> 0:07:09.800 why when I did refer to a small potatoes, I 0:07:09.840 --> 0:07:11.440 got attacked for like three weeks straight on Twitter. I 0:07:11.440 --> 0:07:14.360 still still remind me that was a little dismissive. I 0:07:14.400 --> 0:07:16.560 do think opening act a headliner is a little fair. 0:07:16.640 --> 0:07:20.080 But the idea of where do you put this in 0:07:20.160 --> 0:07:23.720 a portfolio outside of hardcore ether people who are all in, 0:07:24.360 --> 0:07:26.120 most people are going to like one percent and we're 0:07:26.160 --> 0:07:28.800 talking like and I think Bitcoin and Ether to me 0:07:29.360 --> 0:07:33.480 are part of a larger category formally known as hot sauce. 0:07:34.000 --> 0:07:37.680 So you know, thematic investing, single stock investing. This is 0:07:37.720 --> 0:07:40.440 stuff to just have a little fun with. Yeah, just 0:07:40.560 --> 0:07:43.120 in case stroll these people are right and this stuff 0:07:43.160 --> 0:07:44.680 goes to a million. I don't want to kick myself. 0:07:45.120 --> 0:07:47.560 I think that thought alone is going to power a 0:07:47.600 --> 0:07:50.160 lot of flows, even if they don't even totally understand it. 0:07:50.600 --> 0:07:54.600 People are looking to cure future fomo now and they 0:07:54.640 --> 0:07:57.640 have as portion of the portfolio that they set aside 0:07:57.640 --> 0:07:59.280 for that kind of stuff. But it's not I don't 0:07:59.440 --> 0:08:01.600 see like this taking over anybody's core. 0:08:01.720 --> 0:08:03.440 And you used to have to use a digital wallet 0:08:03.440 --> 0:08:06.320 and now you just use your insert whatever platform you want. 0:08:06.400 --> 0:08:09.120 But this is interesting because the hardcore people are like, 0:08:09.240 --> 0:08:11.840 you know, not your keys, not your coins, and they're like, 0:08:11.880 --> 0:08:14.920 do we really want Larry Fink to have all the bitcoin? 0:08:15.480 --> 0:08:17.480 And he doesn't really own it? But I see what 0:08:17.520 --> 0:08:20.240 they're saying because like, let's say the government wanted to 0:08:20.240 --> 0:08:23.960 confiscate all the bitcoin, Obviously Blackbrock's probably going to comply 0:08:24.080 --> 0:08:27.120 with that, and that does kind of kill the whole ethos. 0:08:27.560 --> 0:08:30.880 So the hardcore people have mixed feelings on this. Yes, 0:08:31.040 --> 0:08:33.640 number go up, but on the flip side, a lot 0:08:33.679 --> 0:08:36.720 more cryptos moving into the traditional finance hands. 0:08:37.679 --> 0:08:40.240 Yeah, And I think to that point about fomo, you know, 0:08:40.240 --> 0:08:42.880 when you're now having a conversation with your financial advisor, 0:08:42.920 --> 0:08:45.640 who maybe a year or two years ago might have 0:08:46.040 --> 0:08:48.160 just stared at you blankly if you said, how do 0:08:48.200 --> 0:08:50.920 I get exposure to crypto? There's more people who have 0:08:50.960 --> 0:08:53.880 a way in. Whether those folks ever end up owning 0:08:53.920 --> 0:08:56.480 a Coinbase wallet is a totally different question. 0:08:56.720 --> 0:08:58.360 And a lot of the crypto people they want the 0:08:58.360 --> 0:09:00.240 ETF to be like a gateway drug. And then they 0:09:00.240 --> 0:09:02.520 go set up a coinbase account. Then they go and 0:09:02.800 --> 0:09:05.080 get a hard wallet, cold cold wallet, and then they 0:09:05.120 --> 0:09:07.200 won restore in the backyard and like bury it. And 0:09:07.240 --> 0:09:10.160 these are the steps to becoming like the full the 0:09:10.200 --> 0:09:12.400 full crypto, ye person. 0:09:12.160 --> 0:09:14.239 But full crypto when you got it in the backyard. 0:09:14.400 --> 0:09:17.600 But one thing on advisors and people having conversation with advisors, 0:09:17.640 --> 0:09:20.360 I do think seeing Larry Fink right, he's the head 0:09:20.360 --> 0:09:22.880 of the largest asset manager, a lot of these advisors 0:09:22.960 --> 0:09:26.440 use other I shares products, Fidelity, They've been around since 0:09:26.480 --> 0:09:30.440 the eighties. I mean, these are massive trusted brands. I 0:09:30.440 --> 0:09:34.080 think that gives advisors some cover. Now it's almost like, well, 0:09:34.120 --> 0:09:36.760 it's now, it's mainstream, the SEC approved it, Larry Fink 0:09:36.800 --> 0:09:39.360 says it's okay. Before they didn't have any of that, 0:09:39.520 --> 0:09:41.560 let alone the friction of trying to get it, so 0:09:41.800 --> 0:09:44.360 that I think is underrated. Point is having that cover 0:09:44.440 --> 0:09:47.040 of like it's now in an I shares brand. You 0:09:47.080 --> 0:09:48.880 can't really get upset with me. I just put you 0:09:48.960 --> 0:09:51.080 in an I Shar's ETF. It's not like I went 0:09:51.120 --> 0:09:54.080 out and got this crazy thing. We found that advisors 0:09:54.120 --> 0:09:58.160 really gravitate towards big brand ETFs, I shares, Vanguard, State Street. 0:09:58.400 --> 0:10:01.160 They feel comfortable like you can't really fire them for that. 0:10:01.800 --> 0:10:04.280 It's like buying IBM in the eighties. So I just 0:10:04.320 --> 0:10:06.440 think a lot of cover has been given here for 0:10:06.600 --> 0:10:20.840 those wealth managers. 0:10:15.520 --> 0:10:18.600 Stays Marie. What was this horse race to get ETF 0:10:18.640 --> 0:10:23.200 approval like for Ether? I mean, we spent a lot 0:10:23.240 --> 0:10:25.840 of time talking about the Bitcoin one. There's all kinds 0:10:25.880 --> 0:10:28.400 of back and forth with the SEC. What was it 0:10:28.480 --> 0:10:30.760 like this time and who were the players that you 0:10:30.800 --> 0:10:31.520 all were watching? 0:10:32.600 --> 0:10:35.800 Well, I think to Eric's point, the main thing that 0:10:35.800 --> 0:10:38.000 we were keeping an eye on is if the roughly 0:10:38.120 --> 0:10:42.560 same universe of people who got into issuing these you know, 0:10:42.600 --> 0:10:45.439 Bitcoin ETFs would do so for Ether, and you know 0:10:45.480 --> 0:10:47.319 the filings landed and we're like, yep, pretty much the 0:10:47.320 --> 0:10:50.439 same people, right, because they already had the infrastructure, they 0:10:50.440 --> 0:10:52.120 had already gone through all of the hoops with the 0:10:52.160 --> 0:10:54.280 approval process the SEC. The first time they knew the 0:10:54.280 --> 0:10:55.640 forms they had to fill in, they knew that they 0:10:55.640 --> 0:10:57.400 would have to fill in those forms fifty more times 0:10:57.400 --> 0:10:59.760 and make revisions. Hey the lawyers again, pay the lawyers again, 0:11:00.000 --> 0:11:02.400 out to lawyers, always making money on every financial product. 0:11:02.880 --> 0:11:06.040 And I think that they also figured that they would 0:11:06.080 --> 0:11:08.920 probably have a customer base that had been primed by 0:11:08.960 --> 0:11:11.640 the existence of these Bitcoin ETFs to say, hey, if 0:11:11.679 --> 0:11:13.720 you're interested in that, you might be also interested in 0:11:13.760 --> 0:11:17.240 this thing. To me, though, the only real surprise has 0:11:17.320 --> 0:11:22.400 been the absence of an immediate flurry of people trying 0:11:22.400 --> 0:11:26.640 to launch other types of token based ETFs, because you know, 0:11:26.760 --> 0:11:29.680 the infinite optimism of crypto is such that you see 0:11:29.679 --> 0:11:31.320 this other thing happen and you're like, Okay, we're going 0:11:31.360 --> 0:11:33.120 to do this. And really we've seen a couple of 0:11:33.160 --> 0:11:36.720 attempts at Solana, which is, you know, not even the 0:11:36.760 --> 0:11:39.640 third rank token but also but still a very popular one. 0:11:40.040 --> 0:11:43.000 But the prospects for that are much lower than they 0:11:43.040 --> 0:11:44.360 were for either Bitcoin or ether. 0:11:44.880 --> 0:11:47.440 Yeah, we wrote about the Solana ETF. We feel like 0:11:47.440 --> 0:11:51.920 it's just basically like a call option in case Trump 0:11:52.000 --> 0:11:54.760 wins White House, because let's say he pointed like a 0:11:54.760 --> 0:11:57.080 libertarian commissioner like hester Purse. 0:11:58.240 --> 0:12:02.360 Anything could happen if Harris wins or at that point 0:12:02.440 --> 0:12:03.320 we wrote it was bid him. 0:12:03.360 --> 0:12:08.160 But if the current administration kind of continues, and even 0:12:08.160 --> 0:12:10.839 if it's not Gensler and it's somebody Gensler two point zero, 0:12:11.360 --> 0:12:12.199 it's not going to happen. 0:12:12.440 --> 0:12:13.959 And a big thing that they've kind. 0:12:13.760 --> 0:12:16.679 Of like used legally is that there's no futures contracts 0:12:17.080 --> 0:12:20.280 currently and the only two coins they've approved have futures trading. 0:12:20.760 --> 0:12:22.719 It's a long story, but that was really behind the 0:12:22.720 --> 0:12:25.400 Greyscale lawsuit which sparked all this to begin with. So 0:12:25.520 --> 0:12:29.520 no future is no coin, but that's just the SEC's interpretation. 0:12:29.640 --> 0:12:32.680 Now you get a new SEC in there, anything's possible. 0:12:32.840 --> 0:12:35.040 I'm not saying it'll prove it, but certainly now it's 0:12:35.080 --> 0:12:36.760 more of a I would say, the odds go up. 0:12:37.000 --> 0:12:40.720 Why did you originally think that this ether ETF moment 0:12:40.760 --> 0:12:41.520 wasn't going to happen? 0:12:41.880 --> 0:12:45.600 Because Genzler had come out and indirectly just thought it 0:12:45.640 --> 0:12:47.080 was a security And this is trying to get through 0:12:47.120 --> 0:12:50.600 a nineteen thirty three Act, which was for commodities. So 0:12:50.679 --> 0:12:53.040 if you approve this, you're sort of ipso facto saying 0:12:53.120 --> 0:12:55.920 it's a commodity. And I don't think I still don't 0:12:55.920 --> 0:12:59.040 think he thinks that he wasn't really clear that's one thing. 0:12:59.720 --> 0:13:01.719 The other was there was no grey scale lawsuit here. 0:13:02.520 --> 0:13:05.240 The gray scale lawsuit was only on bitcoin. Now you 0:13:05.280 --> 0:13:07.320 could say that the threat of a lawsuit would happen 0:13:07.320 --> 0:13:11.840 if they denied it, but there wasn't an actual lawsuit. 0:13:11.880 --> 0:13:15.000 So we just thought Gensler. And when the bitcointf got approved, 0:13:15.280 --> 0:13:18.240 Gensler's letter was pretty pretty much like I hate that 0:13:18.280 --> 0:13:18.920 I had to do this. 0:13:19.080 --> 0:13:21.720 Don't look for any other ones. He was pretty upset. 0:13:22.000 --> 0:13:24.200 You could tell he was feisty, and he felt he 0:13:24.240 --> 0:13:27.040 had to do it almost by like gunpoint, and I 0:13:27.120 --> 0:13:29.000 was like, all right, I just don't think it's gonna happen. 0:13:29.320 --> 0:13:31.280 So there was a variety of reasons that we were 0:13:31.280 --> 0:13:32.280 like pretty bearish on him. 0:13:32.360 --> 0:13:34.680 And what was the moment that you realized it was 0:13:34.720 --> 0:13:35.080 game on? 0:13:35.440 --> 0:13:37.880 Well, there was chatter ped the issuers and their lawyers 0:13:37.880 --> 0:13:40.000 starts saying, hey, we just got notified from the SEC. 0:13:40.360 --> 0:13:43.080 And this is like a week before in the bitcoin process, 0:13:43.679 --> 0:13:46.160 people were hearing back from the SEC on like hey, 0:13:46.360 --> 0:13:48.000 tweak this or answer this question. 0:13:48.120 --> 0:13:51.200 This is called comments. Ninety five days before approval. 0:13:51.720 --> 0:13:54.400 We were in day ten to like we were ten 0:13:54.480 --> 0:13:57.000 days left and I hadn't heard anything, So we're like, 0:13:57.040 --> 0:13:59.560 there's just no way anyway. With a week left, it 0:13:59.600 --> 0:14:02.520 was like what oh, So it was a shocker. And 0:14:02.520 --> 0:14:05.200 that's where the political side comes in because if you 0:14:05.240 --> 0:14:09.199 trace it, but a week before that, that's when Trump 0:14:09.200 --> 0:14:11.280 said I'm the crypto guy. If you want crypto, vote 0:14:11.280 --> 0:14:13.480 for me. And then there was a couple other little 0:14:13.480 --> 0:14:15.960 political things. Mark Cuban came out and said, hey, Democrats, 0:14:16.000 --> 0:14:18.160 you're you're gonna this issue is going to really hurt 0:14:18.200 --> 0:14:21.280 you more than you think. So even moderate Democrats were like, hey, 0:14:21.720 --> 0:14:25.160 please don't let them have this issue. And I can't 0:14:25.200 --> 0:14:27.800 say that those things contribute to I don't know, but 0:14:27.840 --> 0:14:31.440 certainly the circumstantial evidence does point to maybe a little 0:14:31.440 --> 0:14:35.080 bit of a political inspiration to change their tune on. 0:14:35.040 --> 0:14:36.120 This stays me. 0:14:36.320 --> 0:14:38.520 Where about a weekend at trading? What have we learned 0:14:38.520 --> 0:14:38.840 so far? 0:14:39.800 --> 0:14:45.120 People don't like fees is the main takeaway. If you 0:14:45.200 --> 0:14:49.080 look at what happened with the bitcoin ETFs, there was 0:14:49.120 --> 0:14:51.920 a higher priced premium offering in the markets, and then 0:14:51.920 --> 0:14:54.160 everybody else was like, what about zero percent? Do you 0:14:54.200 --> 0:14:56.480 like zero percent? And that very much has been the 0:14:56.520 --> 0:14:58.040 case with the ether ets and. 0:14:58.040 --> 0:15:00.600 The bitcoin ones. It's just like even before launched, they 0:15:00.600 --> 0:15:02.640 were in a price war. Yeah, all right, so what's 0:15:02.720 --> 0:15:04.360 that look like on the ether side? 0:15:05.080 --> 0:15:07.520 Very similar. We have, you know, folks saying it'll be 0:15:07.680 --> 0:15:09.880 zero percent for six months or until we get this 0:15:09.920 --> 0:15:12.880 amount of inflows. We have people saying, well, we're not 0:15:12.880 --> 0:15:14.560 necessarily going to cut our fees to zero, but we 0:15:14.560 --> 0:15:17.680 will launch a smaller version, a mini that has a 0:15:17.880 --> 0:15:21.080 more attractive fee structure. You know, you get kind of 0:15:21.160 --> 0:15:25.080 like this bargain basement feel to it, where people are like, well, 0:15:25.120 --> 0:15:27.640 how is this thing different from that thing? Mostly I 0:15:27.720 --> 0:15:30.840 trust these three big names. Mostly they're kind of around 0:15:30.920 --> 0:15:32.920 the same pricing. So I'm just gonna go with wherever 0:15:32.960 --> 0:15:34.760 I have an account as long as that's the cheapest 0:15:34.760 --> 0:15:35.320 option for me. 0:15:36.000 --> 0:15:38.560 This fee war is really intense. If you look around 0:15:38.560 --> 0:15:41.080 the world, an ether or bitcoinspot etf is one to 0:15:41.160 --> 0:15:43.560 two percent. So for these guys to come out and 0:15:43.560 --> 0:15:46.800 be like the base fee, forget the waiver, We'll go 0:15:46.800 --> 0:15:49.680 over that mint. The base fee is between fifteen and 0:15:49.720 --> 0:15:52.640 twenty five basis points, so we're talking five six times 0:15:52.680 --> 0:15:55.120 cheaper than the rest of the world or a hedge fund. 0:15:55.360 --> 0:15:57.280 This is why the US market sucks all the money 0:15:57.280 --> 0:16:00.200 and jol it's very powerful. Plus you add liquidity and 0:16:00.240 --> 0:16:03.720 this is irresistible stuff. And then the waivers, so all 0:16:03.760 --> 0:16:06.560 of them, but like two have a waiver. I'm waiting 0:16:06.640 --> 0:16:09.440 for free steak knives. Actually I'm holding out for a 0:16:09.520 --> 0:16:11.800 time X watch or something, and then I'm going to 0:16:11.840 --> 0:16:13.920 buy that one for a year, six months? 0:16:14.000 --> 0:16:17.080 Does it come like, do you get an ether steak 0:16:17.120 --> 0:16:18.640 knife and a bitcoin steak knife? 0:16:19.800 --> 0:16:21.320 Combine them? Yeah? Buy both? 0:16:21.480 --> 0:16:23.920 Yeah, yeah, and you get maybe or I don't know, 0:16:23.960 --> 0:16:25.600 a monthly subscription to a magazine. 0:16:25.640 --> 0:16:27.760 But walk through the way that these waivers work. We 0:16:27.800 --> 0:16:29.720 don't usually see this, but we did see them. 0:16:30.120 --> 0:16:32.480 With the bitcoin, you'd be like a waiver for six 0:16:32.560 --> 0:16:35.880 months or if the ETF hits two billion, whatever of 0:16:35.920 --> 0:16:38.360 those two things happen first. So they're just trying to 0:16:38.360 --> 0:16:40.400 get fish tho. Yeah, they're trying to get people. 0:16:40.440 --> 0:16:41.000 And here's why. 0:16:41.320 --> 0:16:45.000 When you're in a race against ten or nine other issuers, 0:16:45.360 --> 0:16:47.840 the first couple of weeks are crucial. We report on 0:16:47.880 --> 0:16:51.240 who's winning and losing. Everybody is and if you don't 0:16:51.280 --> 0:16:53.640 have any assets or volume to begin with, you start 0:16:53.640 --> 0:16:56.200 to have a stank on you, and advisors tend to 0:16:56.240 --> 0:16:58.400 gravitate towards around the ones that are liquid. It's like 0:16:58.440 --> 0:17:00.280 a party you want to go where people are not 0:17:00.320 --> 0:17:02.400 to the one no one's at right, so they know 0:17:02.440 --> 0:17:04.320 how important the first couple of weeks are to getting 0:17:04.359 --> 0:17:08.000 that like winning mojo going. And that's why I think 0:17:08.000 --> 0:17:09.760 they all did it because the. 0:17:09.800 --> 0:17:11.200 Coin based custodian fee. 0:17:11.240 --> 0:17:13.360 They all use coinbased except for like one or two 0:17:14.040 --> 0:17:16.919 is I heard between like nine and twelve basis points 0:17:17.080 --> 0:17:20.040 something like that, So they're only making like six to 0:17:20.160 --> 0:17:23.960 seven that is razor thin, and that's before any fee. 0:17:23.960 --> 0:17:27.639 This is starting gate stuff, so it is intense. I 0:17:27.720 --> 0:17:30.639 was a little shocked. I thought we'd be forty to 0:17:30.680 --> 0:17:33.080 sixty to start and then we'd you know, have fee 0:17:33.080 --> 0:17:34.359 wars over the next couple of years. 0:17:34.359 --> 0:17:36.959 But where I thought we'd be at after like two 0:17:37.080 --> 0:17:39.639 or three years and we're in one week? 0:17:40.040 --> 0:17:42.680 Yeah, yeah, Well I guess that speaks to the power 0:17:42.720 --> 0:17:44.840 of what the ETF can do though, right, Like if 0:17:44.880 --> 0:17:46.600 you put this thing in a wrapper, it's going to 0:17:46.680 --> 0:17:48.679 drive down the price and everything's going to be you know, 0:17:48.800 --> 0:17:49.919 basically transparent. 0:17:50.160 --> 0:17:52.560 Well, the whole thing's very ironic because, in my opinion, 0:17:52.840 --> 0:17:56.960 especially black Rock and fidelity. They're both looking for Vanguard 0:17:57.040 --> 0:17:59.640 free zones in which to operate so they can make 0:17:59.640 --> 0:18:01.840 more money because they both have to continue to make money, 0:18:01.920 --> 0:18:04.720 especially Blackrock that it's a publicly traded stock, so they're 0:18:04.760 --> 0:18:07.240 like almost like an oil driller looking for new forms 0:18:07.240 --> 0:18:10.280 of oil. And they were like, Wow, this is something. 0:18:10.000 --> 0:18:10.399 We can do. 0:18:10.840 --> 0:18:13.159 But to go to those fees, it's almost as if 0:18:13.240 --> 0:18:17.639 Vanguard Vanguard's spirit was there even though they weren't. And 0:18:17.680 --> 0:18:20.159 so ironically there's not a ton of revenue here. But 0:18:20.240 --> 0:18:22.640 I think what they're thinking of is long term, let's 0:18:22.680 --> 0:18:25.359 get customers in. We'll bring them in here and then 0:18:25.400 --> 0:18:27.560 maybe something down the road we can charge more on. 0:18:28.359 --> 0:18:31.560 Let's just get the people, and this is something we 0:18:31.560 --> 0:18:32.960 can do that Vanguard clearly. 0:18:32.760 --> 0:18:35.360 Wants no part of a gale in other words, scale. 0:18:35.080 --> 0:18:45.000 Yeah, let's walk through who the players are and maybe 0:18:45.080 --> 0:18:50.000 even what distinguishes their offerings. If it's clear yet Blackrock 0:18:50.119 --> 0:18:52.840 ran away with the bitcoin game, how are they looking 0:18:52.840 --> 0:18:53.200 so far? 0:18:53.800 --> 0:18:54.600 So they're leading. 0:18:54.680 --> 0:18:56.960 If we're doing a horse ray so flows after about 0:18:57.000 --> 0:19:00.480 a week Blackrock four hundred and forty million. It's about 0:19:00.520 --> 0:19:03.120 double number two, which is about a tie between bitwise 0:19:03.119 --> 0:19:07.000 and Fidelity bit wise punching above their weight. They're indie, 0:19:07.000 --> 0:19:09.800 but they're real into crypto. They're like hardcore crypto people. 0:19:10.280 --> 0:19:11.959 So for them to compete with Fidelity up right off 0:19:11.960 --> 0:19:14.600 the bat's pretty good. Gray scales minim as a one 0:19:14.720 --> 0:19:18.280