WEBVTT - Ether ETFs Finally Wake Up 0:00:06.000 --> 0:00:07.640 Welcome Atralian's. I'm Joel Webber and. 0:00:07.600 --> 0:00:11.039 I'm Eric Belchunas. 0:00:11.680 --> 0:00:16.400 Eric, we talked about crypto a lot, and a lot 0:00:16.400 --> 0:00:19.680 of that is about Bitcoin, but one that we haven't 0:00:19.680 --> 0:00:24.079 come back to basically since the ETFs launched is Ether 0:00:24.760 --> 0:00:28.280 and Ether If you have been paying attention, or maybe 0:00:28.320 --> 0:00:30.640 if you haven't, Ether is having a heck of a year. 0:00:30.720 --> 0:00:31.320 What's going on? 0:00:32.560 --> 0:00:36.200 Yeah, Well, when Ether launched one year ago, it launched 0:00:36.240 --> 0:00:38.800 right into a downturn. And that's not it's hard to 0:00:38.840 --> 0:00:41.879 get assets if you if your performance is awfulver off 0:00:41.880 --> 0:00:44.960 the bat ask any issue or that. So not only 0:00:44.960 --> 0:00:46.720 did it have to follow Bitcoin, which is. 0:00:46.680 --> 0:00:49.839 Tough, like most successful ETF launch ever. 0:00:50.159 --> 0:00:52.720 Yeah, it really, I mean the shoes that it was 0:00:52.760 --> 0:00:55.920 trying to fill were just too big. It felt very disappointing, 0:00:56.000 --> 0:00:58.920 and then it had a rally. There's a couple narrative 0:00:58.960 --> 0:01:00.920 things that will go over the help get it going. 0:01:00.960 --> 0:01:02.840 Sover in the past three months, it's doubled, it's up 0:01:02.840 --> 0:01:06.440 one hundred percent the coin. So once that got started, 0:01:06.480 --> 0:01:10.200 people started buying the ETF and amazingly, these e three 0:01:10.240 --> 0:01:13.600 ETFs basically double their assets in July alone, just one 0:01:13.640 --> 0:01:17.640 month double. They've got about twenty billion now. And a 0:01:17.680 --> 0:01:21.600 great fun fact is that if you remove the bitcoin 0:01:21.640 --> 0:01:25.000 ETFs and pretend they didn't exist, Black Rocks E three 0:01:25.040 --> 0:01:27.960 ETF would be the fastest ETF to ten billion in 0:01:28.000 --> 0:01:31.800 the history of ETFs. Wow, it's just I equated to 0:01:32.000 --> 0:01:34.679 having to play with Michael Jordan in the eighties and nineties, 0:01:34.720 --> 0:01:38.479 like Reggie Miller, great player, another era. He probably gets 0:01:38.520 --> 0:01:41.280 a couple of rings, but he happened to play with Jordan. 0:01:41.840 --> 0:01:44.479 And even with all that, there's still only thirteen percent 0:01:44.480 --> 0:01:47.240 of the assets the bitcoin ETFs have, so at least 0:01:47.280 --> 0:01:49.640 they're doing something though, you know, we think they should 0:01:49.680 --> 0:01:51.920 probably get around twenty percent, so they're on their way 0:01:51.960 --> 0:01:54.960 to earning that market share. That's sort of like silver 0:01:55.560 --> 0:01:58.200 to gold. It's like they're the silver to bitcoins. 0:01:57.680 --> 0:01:59.960 Gold, the Regie Miller to the Michael Jordan. 0:02:00.080 --> 0:02:00.400 They are. 0:02:00.520 --> 0:02:02.840 And you're going to get so much comment on that. 0:02:03.240 --> 0:02:05.040 On sociable, I can't wait. 0:02:05.960 --> 0:02:08.840 And you know, Ether is interesting to me because the 0:02:09.040 --> 0:02:12.639 pitch for it is totally different than Bitcoin. It's more 0:02:12.680 --> 0:02:14.799 like we had a note we referred to it as 0:02:15.520 --> 0:02:18.560 feeling like a nineties tech stock, like the very early 0:02:18.680 --> 0:02:23.760 days of this new possible thing that could really change 0:02:24.000 --> 0:02:28.040 tech and the Internet basically, and we'll see how it 0:02:28.080 --> 0:02:29.639 pans out. And there's a lot of things to talk 0:02:29.639 --> 0:02:32.840 about here, but yeah, definitely interesting area of the market 0:02:32.880 --> 0:02:34.520 having a moment. And the reason we covered so much 0:02:34.560 --> 0:02:37.160 is those numbers are ridiculous. So I know people are like, 0:02:37.520 --> 0:02:39.079 you know, if you're not into it, you're probably like, 0:02:39.120 --> 0:02:40.280 why do you cover it so much? But I'm like, 0:02:41.000 --> 0:02:42.919 these numbers are crazy? All right? 0:02:42.960 --> 0:02:45.080 To join us on this episode, we've got Matt Hogan, 0:02:45.360 --> 0:02:49.120 who's the chief investment officer of bit Wise Asset Management. 0:02:49.200 --> 0:02:51.399 Before he went full crypto, he was an ETF guy, 0:02:51.800 --> 0:02:57.760 as well as Isabelle Lee Cross outset reporter with bloogrig News. 0:02:57.600 --> 0:03:03.720 This time on trillions Ether. Matt, Isabelle, welcome back to Trillions. 0:03:04.280 --> 0:03:05.519 We're very excited to be here. 0:03:06.000 --> 0:03:07.560 Yeah, one hundred percent excited to join. 0:03:07.680 --> 0:03:07.880 Matt. 0:03:07.919 --> 0:03:11.079 It's been a while since we had you on and 0:03:11.600 --> 0:03:16.600 you're you know that full crypto transformation happened, and I'm 0:03:16.720 --> 0:03:19.040 curious a lot has gone up in the crypto world. 0:03:19.120 --> 0:03:20.919 Why have you not retired already? 0:03:24.120 --> 0:03:27.720 Wow? Straight at it. You know, Look, I think it's 0:03:27.720 --> 0:03:29.799 I think it's still inning too in crypto land. I 0:03:29.840 --> 0:03:32.519 think we're just getting started. I think if you're listening 0:03:32.600 --> 0:03:36.360 to the SEC, they're telegraphing that the crypto boom is 0:03:36.400 --> 0:03:38.680 ahead of us, not behind us. So I'm going to 0:03:38.800 --> 0:03:40.560 keep building. We'll retire eventually. 0:03:40.640 --> 0:03:44.840 Okay, So a lot has happened in the Trump administration 0:03:45.000 --> 0:03:50.120 two point zero at the SEC. We've had bitcoin ETF's approved. 0:03:50.280 --> 0:03:53.480 We've had these Ethereum ETFs approved, which we talked a 0:03:53.480 --> 0:03:57.640 little bit about here. What what do you see on 0:03:57.720 --> 0:04:00.720 the ground. How do you distinguish between what's happened with 0:04:00.720 --> 0:04:03.280 Bitcoin and what's happened with Ether? 0:04:04.200 --> 0:04:07.840 And it's yeah, so Bitcoin, you know, remember the first 0:04:07.880 --> 0:04:11.520 Bitcoin ETF was filed in twenty thirteen, so we had 0:04:11.720 --> 0:04:14.480 ten plus years of pent up demand for an asset 0:04:14.520 --> 0:04:17.440 that was easy to understand. It was digital gold. And 0:04:17.520 --> 0:04:19.880 so it came to the market and it crushed all records. 0:04:19.920 --> 0:04:21.839 As you guys talked about. It pulled in thirty six 0:04:21.880 --> 0:04:25.080 trillion dollars in its first year. It was six times 0:04:25.120 --> 0:04:28.320 as large as the second fastest growing ETF of all time. 0:04:28.800 --> 0:04:32.920 It was massive. Ethereum launched, I would say too soon, right, 0:04:33.000 --> 0:04:35.880 It launched five or six months after the Bitcoin ETF, 0:04:35.880 --> 0:04:40.800 people were still digesting bitcoin. As as mentioned, it launched 0:04:40.839 --> 0:04:44.960 into a difficult market for Ether. The underlying asset wasn't 0:04:44.960 --> 0:04:47.880 performing well, the community was in somewhat disarray, it didn't 0:04:47.920 --> 0:04:52.480 have an obvious growth youth case. But it's now has 0:04:52.600 --> 0:04:55.000 all of those things and as a result, we saw 0:04:55.080 --> 0:04:57.800 five point four billion dollars in flows in July. To 0:04:57.839 --> 0:05:00.880 put that number in context, remember that Ether is one 0:05:01.000 --> 0:05:03.880 fifth the size of bitcoin, so that's akin to saying 0:05:04.040 --> 0:05:07.080 twenty seven billion dollars in flows in the Bitcoin ETF. 0:05:07.120 --> 0:05:11.080 From a relative size perspective, it's absolutely massive, and I 0:05:11.120 --> 0:05:14.440 actually think it's going to accelerate or continue throughout the 0:05:14.480 --> 0:05:14.960 end of the year. 0:05:15.200 --> 0:05:17.440 Where are those flows coming from. 0:05:17.520 --> 0:05:20.320 I think they're coming from people who bought the Bitcoin ETF. 0:05:21.240 --> 0:05:24.240 I think a lot of it's coming from financial advisors 0:05:24.240 --> 0:05:27.200 and family offices who bought the Bitcoin ETF. And this 0:05:27.240 --> 0:05:29.039 is not a new story. If you talk to any 0:05:29.080 --> 0:05:33.359 crypto investor pre ETF, probably the first asset they bought 0:05:33.400 --> 0:05:37.200 was bitcoin, and then twenty percent of them became Bitcoin 0:05:37.279 --> 0:05:39.599 maxis and that's all they wanted to do, and the 0:05:39.680 --> 0:05:43.480 other eighty percent eventually moved down to buy ethereum maybe 0:05:43.680 --> 0:05:46.680 nine to twelve months later. It's actually a story as 0:05:46.720 --> 0:05:50.400 old as Satoshi. It's been happening in crypto for years, 0:05:50.400 --> 0:05:52.360 and I think that's what's happening here. So people who 0:05:52.360 --> 0:05:55.880 bought the Bitcoin ETF now want to diversify. There are 0:05:56.000 --> 0:05:58.960 only other choices in Ethereum ETF. It has a good 0:05:59.040 --> 0:06:02.680 narrative with stable coins and regulation. Why not add that 0:06:02.720 --> 0:06:04.560 to the portfolio. I think that's what we see a 0:06:04.640 --> 0:06:07.960 bit wise, and I assume that's what other ETF issuers 0:06:07.960 --> 0:06:08.680 are seeing as well. 0:06:09.160 --> 0:06:10.520 Isabelle. I know you've been covering this a lot for 0:06:10.600 --> 0:06:12.520 Bloomberg News. What else has jumped out to you? 0:06:13.000 --> 0:06:15.520 I think what Matt said is really good food for thought, 0:06:15.600 --> 0:06:20.200 because when Ether ETF's launch in July, we were almost like, 0:06:21.279 --> 0:06:22.880 I don't want to say we were making fun of 0:06:23.040 --> 0:06:26.640 how they're not getting inflows, but that's what we were thinking, like, man, 0:06:26.720 --> 0:06:30.000 this is really so paltry compared to the just monster 0:06:30.040 --> 0:06:34.320 flows we've seen in bitcoin ETFs. But then almost yeah, almost, 0:06:34.360 --> 0:06:35.960 and then at one point I think we even saw 0:06:36.000 --> 0:06:37.880 outlows when you look at them in aggregate because of 0:06:37.920 --> 0:06:41.160 the black rock Ether fun and then now it's really 0:06:41.160 --> 0:06:44.320 interesting how you saw really this influx of cash in 0:06:44.400 --> 0:06:48.760 July and to everyone's earlier point, Like, for instance, as 0:06:48.839 --> 0:06:52.800 soon as February to July second, we were seeing outflows 0:06:52.800 --> 0:06:55.440 when it comes to black rocks Ether the biggest Ether 0:06:55.520 --> 0:06:59.000 ETFs out of among the twenty related ETFs. But then 0:06:59.400 --> 0:07:01.479 after that, for the whole month of July, we've just 0:07:01.520 --> 0:07:03.760 been seeing inflows after inflows. So really, I think it's 0:07:03.760 --> 0:07:07.840 this perfect storm of regulatory clarity momentum and just really 0:07:07.920 --> 0:07:10.840 corporate companies piling into it. You see a lot of 0:07:10.880 --> 0:07:13.240 eater treasury companies popping up. 0:07:13.880 --> 0:07:17.200 By the way, one more metaphor. When I would be 0:07:17.280 --> 0:07:19.840 on these podcasts of these crypto people, I would be like, 0:07:20.480 --> 0:07:21.960 they'd be like, oh, do you think Ether will be 0:07:21.960 --> 0:07:25.280 a hit, And I'm like, it's tough. It's like, you know, 0:07:25.320 --> 0:07:28.080 Bitcoin is the headliner. It's like having to follow the headliner. 0:07:28.080 --> 0:07:31.240 It's like Sister Hazel having to follow Nirvana, which is 0:07:31.280 --> 0:07:33.960 a if you know nineties rock you know that would 0:07:33.960 --> 0:07:35.960 be no one would be left on in the crowd. 0:07:36.440 --> 0:07:39.200 And so now when Ether takes and flows, all these 0:07:39.320 --> 0:07:42.680 ethereum people tag me and they're like, sister Hazel. Is 0:07:42.720 --> 0:07:47.640 it still, sister, Hazel, It's a whole thing. They're very proud. Anyway, 0:07:47.920 --> 0:07:49.080 that's side go ahead. 0:07:49.400 --> 0:07:51.760 That's true because when you explain it to people have 0:07:51.800 --> 0:07:55.239 no idea what cryptocurrencies are. Like my parents, Bitcoin is easy, 0:07:55.240 --> 0:07:58.200 it's digital gold. But what is the elevator pitch of ether? 0:08:00.120 --> 0:08:02.720 The elevator pitch now it's the rails for stable coins 0:08:02.720 --> 0:08:06.440 and tokenization. But actually that is that's the big thing. 0:08:06.520 --> 0:08:09.040 I mean, we do. I think it's fifteen thousand meetings 0:08:09.040 --> 0:08:12.280 a year with financial advisors about crypto. After the Bitcoin 0:08:12.320 --> 0:08:15.000 ETF launched, it was easy to come in and say 0:08:15.280 --> 0:08:18.480 Bitcoin is like digital gold. The US has thirty six 0:08:18.520 --> 0:08:21.040 trillion dollars in debt. Don't you want to buy this? 0:08:21.640 --> 0:08:24.320 If you had to get into let me explain how 0:08:24.400 --> 0:08:28.760 the bitcoin blockchain and the Ethereum blockchain are fundamentally different, 0:08:28.840 --> 0:08:31.640 and how value accruis in the ethereum. You just forget it. 0:08:31.640 --> 0:08:34.280 It's impossible. Part of it is it now has that 0:08:34.320 --> 0:08:38.080 easy story. Ethereum is the rails for stable coin and tokenization. 0:08:38.480 --> 0:08:41.040 If you're bullish on that, you're bullish on eth and 0:08:41.160 --> 0:08:43.080 people buy it based on that premise. 0:08:42.800 --> 0:08:47.120 How do you feel about Eric's metaphors for sister Hazel 0:08:47.160 --> 0:08:53.240 and Reggie. Are you going to use those with potential clients? 0:08:53.280 --> 0:08:53.319 This? 0:08:53.760 --> 0:08:57.520 Is it the second best or is there no second best? 0:08:58.800 --> 0:09:01.280 I love it. I think I think it's a different sport. 0:09:01.400 --> 0:09:04.080 I think that would be the more accurate metaphor, would 0:09:04.120 --> 0:09:10.960 be a a Michael Jordan Messi metaphor. I say, okay, Emailer, 0:09:11.640 --> 0:09:13.599 but you know, I'm also courting the eth vote on 0:09:13.640 --> 0:09:15.720 crypto Twitter, so I need I need. 0:09:15.520 --> 0:09:18.960 That you might be doing a more diplomatic version than Eric. 0:09:20.200 --> 0:09:21.520 Yeah. Yeah. 0:09:21.559 --> 0:09:25.240 And also I also once I referred to Ether as 0:09:25.280 --> 0:09:28.120 small potatoes and that I get that a lot too. 0:09:28.160 --> 0:09:32.600 They're there anyway. Listen, I was reading up on Ether. 0:09:32.760 --> 0:09:36.520 You know what's interesting to me is Bitcoin came out, 0:09:37.280 --> 0:09:40.400 and it makes sense. Bitcoin is really for security. It's 0:09:40.440 --> 0:09:42.640 like built like a tank, right, it's like just for 0:09:43.559 --> 0:09:47.640 uh indestructible money. And there's a scarce amount twenty one 0:09:47.640 --> 0:09:51.240 million only. But the blockchain people thought we could do 0:09:51.320 --> 0:09:54.080 something some other things on this maybe have speed and 0:09:54.120 --> 0:09:57.120 in this case make it so anybody can like program 0:09:57.160 --> 0:10:01.120 their own smart contracts so they to bitcoin for everything. 0:10:01.240 --> 0:10:04.200 So when you think about it being the rails for 0:10:04.280 --> 0:10:08.760 tokenization and stable coins. Can you explain how that works? 0:10:08.920 --> 0:10:12.400 Try to use a visual if you can, because they 0:10:12.440 --> 0:10:16.320 call it DeFi Web three. So it really is a 0:10:16.400 --> 0:10:19.520 new version of the Internet. So is my nineties tech stock? 0:10:20.240 --> 0:10:22.200 Is it kind of like that should be looked at 0:10:22.559 --> 0:10:24.760 because then you have these other blockchains like Salana that 0:10:24.800 --> 0:10:28.760 are competing with ether and so it feels very much 0:10:28.840 --> 0:10:31.840 like the race for land in the nineties for the 0:10:31.880 --> 0:10:35.440 Internet to me, except crypto versions. And is that a 0:10:35.440 --> 0:10:36.400 good way to look at it? 0:10:36.920 --> 0:10:38.719 Yeah, I think that's a good way to look at it. Right. 0:10:38.720 --> 0:10:41.120 Bitcoin is a tank, it's a way to store wealth. 0:10:41.400 --> 0:10:44.800 Ethereum is a platform that lets you move wealth. An 0:10:44.840 --> 0:10:47.200 analogy that I think helps people. You think of the 0:10:47.200 --> 0:10:50.040 New York Stock Exchange. If you're a company, you list 0:10:50.160 --> 0:10:53.240 shares on the New York Stock Exchange, and to a degree, 0:10:53.280 --> 0:10:58.240 it benefits every time someone transacts in those shares. If 0:10:58.320 --> 0:11:00.720 you want to issue a stable coin, you have to 0:11:00.920 --> 0:11:05.320 issue it on a blockchain. Ethereum is the blockchain on 0:11:05.360 --> 0:11:08.360 which the majority of or the largest share of stable 0:11:08.400 --> 0:11:11.040 coins are issued, and then every time it moves on 0:11:11.080 --> 0:11:14.600 that blockchain, Ethereum accrues a little bit of revenue. So 0:11:14.640 --> 0:11:20.199 it's sort of like New York Stock Exchange for stable 0:11:20.200 --> 0:11:23.640 coins and for tokenization. It's a new financial switching infrastructure. 0:11:24.080 --> 0:11:28.120 So real quick, how does it monetize this? Because one 0:11:28.160 --> 0:11:30.320 of the things that I have sort of been seeing 0:11:30.400 --> 0:11:33.000 is that they don't want to People don't want to 0:11:33.040 --> 0:11:35.480 pay a lot, Like, how does is it going to 0:11:35.480 --> 0:11:38.240 sell advertising? I mean, how does it actually make money? 0:11:38.679 --> 0:11:42.000 So I get that it's a popular public ledger, but 0:11:42.080 --> 0:11:44.200 how does it turn that into cash? And is that 0:11:44.320 --> 0:11:48.240 something that the ether token will be riffing off of 0:11:48.400 --> 0:11:50.800 or do you even need cash flow for this to work? 0:11:51.280 --> 0:11:53.560 Yeah? Absolutely, it's a cash flow drive an asset. So 0:11:53.840 --> 0:11:56.520 right now, Eric, there's about one hundred and twenty million 0:11:56.600 --> 0:12:01.200 ethereum in existence. That's it, and each year about one 0:12:01.320 --> 0:12:04.199 percent new eth is issued, so let's call it one 0:12:04.240 --> 0:12:08.079 point two million new eth. Every time you issue a 0:12:08.120 --> 0:12:12.120 stable coin or conduct a transaction on ethereum, you have 0:12:12.200 --> 0:12:16.079 to pay a fee that's denominated in eth, and that 0:12:16.360 --> 0:12:20.000 fee is destroyed. It's removed forever, so that reduces supply. 0:12:20.559 --> 0:12:22.120 You can think of it a little bit like a 0:12:22.200 --> 0:12:26.079 share buyback. But the more activity there is, the more 0:12:26.160 --> 0:12:31.120 that supply demand dynamic tilts in favor of less supply 0:12:31.760 --> 0:12:36.120 and more demand. The idea is that if over time 0:12:36.559 --> 0:12:40.120 the majority of the world's stocks and bonds and cash 0:12:40.600 --> 0:12:44.959 move over ethereum, there'll be so many transactions, so much activity, 0:12:45.200 --> 0:12:47.800 that there'll be a huge amount of value in this ecosystem. 0:12:48.040 --> 0:12:52.360 There'll be consistent supply pressure and strong demand, and that 0:12:52.400 --> 0:12:53.480 will push the price up. 0:12:54.800 --> 0:12:58.440 I feel like that's exactly what people should stop doing, 0:12:58.440 --> 0:13:00.920 maybe or start doing. Not trying to think of ether 0:13:01.000 --> 0:13:03.960 in terms of bitcoin, but something completely different. I'm looking 0:13:03.960 --> 0:13:06.320 at it in terms of ether treasury because so many 0:13:06.360 --> 0:13:08.520 people are asking us, Okay, why is it different? Why 0:13:08.520 --> 0:13:11.480 make an ether treasury? But I think for ether treasury, 0:13:11.480 --> 0:13:14.800 what makes it attractive is that it has yield and 0:13:14.880 --> 0:13:17.440 it's more similar to a money market fund rather than 0:13:17.480 --> 0:13:19.480 like you. And again the digital goal of the scarcity, 0:13:19.480 --> 0:13:22.560 because Ether obviously is in scars, it's not finite, you 0:13:22.559 --> 0:13:24.080 can keep the making. In fact, we know who the 0:13:24.120 --> 0:13:26.480 founders are as opposed to do bitcoin, so I feel 0:13:26.480 --> 0:13:28.640 like it's just completely different. At least that's how I 0:13:28.679 --> 0:13:32.360 try to explain it very simplistically to sources. 0:13:32.920 --> 0:13:35.520 I think that's exactly right. It is completely different. You 0:13:35.559 --> 0:13:38.520 could even argue that it belongs in different asset classes. 0:13:38.559 --> 0:13:41.120 People debate whether crypto is an asset class. I could 0:13:41.280 --> 0:13:44.200 argue that bitcoin should belong in the commodity space and 0:13:44.320 --> 0:13:48.719 ether is actually a technology service. It's driven primarily by revenue. 0:13:49.040 --> 0:13:52.280 That's not perfect, but it may be closer than assuming 0:13:52.320 --> 0:13:55.760 that there's the same thing. Just because they're both crypto assets, 0:13:55.840 --> 0:13:57.600 they're used for very different purposes. 0:13:57.640 --> 0:14:09.760 Today, let's go over stable coins, because when people out 0:14:09.800 --> 0:14:14.640 there think about crypto sometimes, especially in like New York City, 0:14:15.120 --> 0:14:17.439 they kind of a it's like, oh, it's a Trump thing, 0:14:17.440 --> 0:14:20.720 I'm not into it. But stable coins to me, are 0:14:20.760 --> 0:14:23.960 the most progressive technology I've seen in a long time. 0:14:24.520 --> 0:14:27.240 If you're living in an emerging market under one of 0:14:27.280 --> 0:14:31.400 these autocratic dictators, they just crap on the currency all 0:14:31.480 --> 0:14:34.680 day long, and the currency has twenty five percent inflation 0:14:34.760 --> 0:14:38.040 a year or worse. They used to go into dark 0:14:38.080 --> 0:14:41.080 alleys to try to get dollars because they make they 0:14:41.080 --> 0:14:42.520 go to work, make money, they don't want to keep 0:14:42.560 --> 0:14:45.960 it in their own currency, so they want dollars or bitcoin. 0:14:46.400 --> 0:14:49.400 Stable coins are just literally dollars on the blockchain that 0:14:49.560 --> 0:14:52.640 all you need is an Internet connection, right, So I 0:14:52.680 --> 0:14:57.720 had heard that it's possible stable coins supersede bitcoin completely 0:14:58.480 --> 0:15:01.280 and the dollar keeps running around the world as the 0:15:01.320 --> 0:15:06.760 reserve currency, versus bitcoin taking that path and challenging all 0:15:06.800 --> 0:15:09.120 of the currencies for dominance. What's your take on that. 0:15:09.960 --> 0:15:13.400 I think both will happen. Actually, so, I do think 0:15:13.520 --> 0:15:17.480 the existence of stable coins will extend the dollar's role 0:15:17.640 --> 0:15:20.080 as a reserve currency in the world, because you're going 0:15:20.120 --> 0:15:24.840 to crypto dollarize to borrow Nick Carter's term, huge parts 0:15:24.840 --> 0:15:26.840 of the world, because if you're somebody in one of 0:15:26.880 --> 0:15:30.320 those countries, you'd rather hold dollars than your local currency. 0:15:30.320 --> 0:15:31.840 And if you can get it from your cell phone, 0:15:32.200 --> 0:15:34.680 you absolutely will, particularly if it's in a way that 0:15:34.760 --> 0:15:37.400 the government can't seize it. And it's more than that, 0:15:37.480 --> 0:15:42.600 if you're conducting business between two countries with imperfect financial architecture, 0:15:43.080 --> 0:15:48.600 you can use US quality financial rails with instantaneous settlement 0:15:48.920 --> 0:15:52.400 at low fees, using stable coins instead of routing through 0:15:52.440 --> 0:15:56.200 local banks. It is hugely progressive and hugely valuable for 0:15:56.280 --> 0:16:00.560 the world. So yeah, I think that's the direction of travel. Ultimately, 0:16:00.640 --> 0:16:04.720 I think bitcoin gets a seat at the world's reserve currency. 0:16:04.760 --> 0:16:07.720 Table in the same way that gold has a small 0:16:07.760 --> 0:16:10.400 seat at that table as well. I think bitcoin is 0:16:10.400 --> 0:16:12.720 a better version of gold and it fills that role. 0:16:13.040 --> 0:16:16.720 But I do think stable coins extend the dollars position 0:16:17.120 --> 0:16:19.640 as the world's reserve currency. It's one of the ironies 0:16:19.920 --> 0:16:22.680 of crypto that's going to end up helping the dollar 0:16:23.080 --> 0:16:25.920 maintain its position for longer than it would have otherwise. 0:16:26.680 --> 0:16:28.600 I do think so, because I don't. I think it's 0:16:28.600 --> 0:16:31.120 apples and orange like stable coins are meant to represent 0:16:31.160 --> 0:16:34.720 a digital fee at currency, and your faith is on 0:16:34.840 --> 0:16:37.040 the company backing it, like Visa, for instance, has been 0:16:37.080 --> 0:16:41.160 slowly integrating stable coins into their systems, and I feel 0:16:41.160 --> 0:16:43.040 like we'll be hearing more and more blue chip companies 0:16:43.080 --> 0:16:45.640 say that whereas bitcoin is, it's on. 0:16:45.560 --> 0:16:47.359 The blockchain, a different asset. 0:16:47.520 --> 0:16:49.440 A different to Matt's point. 0:16:49.680 --> 0:16:53.360 Yeah, So, Matt, how do you think about what that 0:16:53.440 --> 0:16:55.960 stable coin race is going to look like? Is it a. 0:16:55.880 --> 0:17:00.000 Different version of rails or is it something else entirely? 0:17:00.720 --> 0:17:03.440 And we're starting to live in, you know, a multi 0:17:03.520 --> 0:17:04.439 dimensional world. 0:17:05.359 --> 0:17:07.879 Yeah, I mean there are probably two races worth talking about. 0:17:07.920 --> 0:17:10.359 One is what is the infrastructure on which it moves? 0:17:10.400 --> 0:17:13.520 Because you can issue stable coins on eth on, Solana, 0:17:13.560 --> 0:17:17.879 on Tron, on XRP, on many different blockchains, So what 0:17:18.040 --> 0:17:22.840 is the one that people gravitate to and does that 0:17:22.960 --> 0:17:25.679 share change over time? I think what we see in 0:17:25.720 --> 0:17:28.440 the world today is the two leaders are actually Ethereum 0:17:28.480 --> 0:17:32.159 in Tron, and it's geographically determined, with Tron dominating in 0:17:32.280 --> 0:17:36.320 Asia and Ethereum in Western markets. It wouldn't surprise me 0:17:36.359 --> 0:17:39.679 if that's the case going forward, but they'll certainly be competition, 0:17:39.760 --> 0:17:42.760 and I wouldn't count Solana out. The other one is 0:17:42.840 --> 0:17:44.840 who will win is the issuer of these stable coins. 0:17:44.920 --> 0:17:48.760 Remember this is an enormously profitable business because stable coins 0:17:48.840 --> 0:17:52.600 don't pay interest. So a company like Tether, which is 0:17:52.640 --> 0:17:55.159 behind the largest stable coin in the world, usd T 0:17:55.920 --> 0:17:58.840 I think, made four point five billion dollars last quarter, 0:17:58.920 --> 0:18:02.640 which was, you know, more than Goldman Sachs. I mean, 0:18:03.400 --> 0:18:06.119 I may have that precise number wrong, but it's in 0:18:06.200 --> 0:18:09.120 that order of magnitude. I think you're gonna see all 0:18:09.160 --> 0:18:13.199 the major financial institutions issue stable coins and compete with 0:18:13.240 --> 0:18:16.840 cryptonative companies like Circle and Coinbase and Tether, and it 0:18:16.880 --> 0:18:18.720 will be interesting to see. I have my views on 0:18:18.760 --> 0:18:21.600 who will win but we'll find out in the next 0:18:21.600 --> 0:18:22.119 few years. 0:18:22.600 --> 0:18:24.720 Is that for the benefit of the world though that 0:18:24.760 --> 0:18:27.480 there are so many stable coins issued by a lot 0:18:27.520 --> 0:18:29.679 of different companies, and like the US dollar, there's just 0:18:29.720 --> 0:18:31.800 one and that's at a full face of the US government. 0:18:32.680 --> 0:18:36.600 Yeah, these are all private lookthrough vehicles to that. As 0:18:36.640 --> 0:18:39.920 long as there's an extremely liquid interchange market, I think 0:18:39.920 --> 0:18:41.679 it's for the benefit of the world. If you just 0:18:41.760 --> 0:18:45.760 had one issuer, they'd be likely to abuse their position 0:18:45.880 --> 0:18:49.280 in a way that competition wouldn't allow. So I like 0:18:49.359 --> 0:18:51.520 that there will be multiple I think it'll probably be 0:18:51.560 --> 0:18:56.399 an oligopoly with a few big providers. But look, I'm 0:18:56.480 --> 0:19:00.439 pro competition. I'm anti CBDC, which is the sort of 0:19:00.480 --> 0:19:04.040 government issued version of a stable coin, and I think 0:19:04.160 --> 0:19:06.640 I think the market will sort itself out well. 0:19:06.680 --> 0:19:09.240 And just to be clear, you buy the stable coin, 0:19:09.840 --> 0:19:12.960 right the dollar you buy, just like an ETF, gets 0:19:13.000 --> 0:19:16.440 put into a some kind of a collateral basket or 0:19:16.520 --> 0:19:19.840 reserve that is one for one to the stable coin. 0:19:19.880 --> 0:19:25.080 Because there was the big blow up right with terror Luna, 0:19:25.560 --> 0:19:29.920 where they look these tokens that these intermediaries put out 0:19:29.920 --> 0:19:33.200 screw that man. They use the token as collateral it's like, Oh, 0:19:33.200 --> 0:19:34.960 I made this magic token, I'm gonna use a collateral. 0:19:35.680 --> 0:19:37.720 Please tell me. They won't do that. Here, they're going 0:19:37.800 --> 0:19:39.919 to actually use dollars or treasuries. 0:19:40.600 --> 0:19:43.560 They'll use treasuries. Yeah, thank you. The Genius Act stable 0:19:43.600 --> 0:19:46.439 coin bill that just got signed into law requires it 0:19:46.480 --> 0:19:49.000 to be short term treasuries. So back to one for one. 0:19:49.080 --> 0:19:52.800 The lunar thing was a crazy experiment. You know, we 0:19:52.920 --> 0:19:56.359 never owned it a bit wise, and obviously it was 0:19:56.400 --> 0:20:00.000 going to fail. It was self referentially going to fail. 0:20:00.560 --> 0:20:03.360 So the new stable coins under the Genius Act will 0:20:03.400 --> 0:20:06.280 be one for one back by short term treasuries. I 0:20:06.320 --> 0:20:09.720 would argue that they'll be safer than traditional bank accounts. 0:20:10.480 --> 0:20:13.560 Imagine that though, oh here you want a dollar. Here, 0:20:13.640 --> 0:20:16.160 here's your digital dollar. I'll take my dollar, do something 0:20:16.200 --> 0:20:19.360 with it. Maybe I'll buy a nice car, and then 0:20:19.359 --> 0:20:24.160 I'll again make the error coin. That is that's that's 0:20:24.200 --> 0:20:25.520 now what your dollars based on. 0:20:26.760 --> 0:20:28.640 You would call it the you'd call it the Reggie coin. 0:20:28.720 --> 0:20:32.920 By the way, this whole idea of these intermediaries, who 0:20:32.960 --> 0:20:36.560 are usually under the age of thirty, I have this 0:20:36.680 --> 0:20:41.600 overall theme that the adults have arrived, whether it's the ETFs, 0:20:42.040 --> 0:20:46.439 people like you, the government SEC. It just feels like, 0:20:47.280 --> 0:20:51.200 are we maybe beyond this sort of massive scam part 0:20:51.280 --> 0:20:54.320 of the crypto era, because I just don't see any 0:20:54.359 --> 0:20:58.680 of this happening anymore. But man, it happened pretty regularly before. Honestly, 0:20:58.720 --> 0:21:02.640 the black rock eto all ETFs, it kind of we've seen. 0:21:02.720 --> 0:21:05.040 There's like a turning point, I think, and then a 0:21:05.040 --> 0:21:08.320 bunch of other things happened. Does that give you more 0:21:08.359 --> 0:21:12.400 confidence that it's now a mainstream, mature and safer. 0:21:12.960 --> 0:21:16.040 Huge, huge amount of more confidence. Right when you refuse 0:21:16.119 --> 0:21:18.560 to regulate something, which was essentially what we did in 0:21:18.600 --> 0:21:22.120 the past, you create the space for these scams and frauds. 0:21:22.200 --> 0:21:24.879 You get the space for something like Luna, or you 0:21:24.920 --> 0:21:27.840 create the space for something like FTX. I do think 0:21:27.880 --> 0:21:30.960 the market is more safe. I think there'll be fewer 0:21:31.000 --> 0:21:33.960 blow ups. And actually you can see that in the numbers. 0:21:34.040 --> 0:21:37.760 If you look at bitcoins volatility. Since the ETF launched, 0:21:38.040 --> 0:21:41.480 it's actually been below about half of the mag seven stocks. 0:21:41.520 --> 0:21:45.200 It's been the lowest it's ever been. Volatility has been squashed, 0:21:45.520 --> 0:21:49.080