1 00:00:05,440 --> 00:00:06,160 Speaker 1: Welko Onchrillions. 2 00:00:06,160 --> 00:00:10,480 Speaker 2: I'm Joel Webber and I'm Eric Belchunas. 3 00:00:11,160 --> 00:00:15,400 Speaker 1: Eric, you've been busy lately, Yeah, Joel a little bit. Yeah, 4 00:00:15,400 --> 00:00:15,960 Speaker 1: what happened? 5 00:00:16,360 --> 00:00:17,280 Speaker 2: The word is obsessed. 6 00:00:17,360 --> 00:00:17,919 Speaker 1: What happened? 7 00:00:18,040 --> 00:00:22,880 Speaker 2: Yeah, So spot Bitcoin ETFs were approved after ten and 8 00:00:22,960 --> 00:00:25,759 Speaker 2: a half long years, and it was really intense the 9 00:00:25,840 --> 00:00:29,240 Speaker 2: past month, you know, and James and myself were all over, 10 00:00:29,240 --> 00:00:30,720 Speaker 2: the rest of the team did other things, but James 11 00:00:30,760 --> 00:00:35,240 Speaker 2: and I dove in, you know, headfirst, basically and deep, 12 00:00:35,479 --> 00:00:38,519 Speaker 2: and if anything, we almost need some time to like 13 00:00:39,680 --> 00:00:42,960 Speaker 2: like wash it off. But I'm still in it because 14 00:00:42,960 --> 00:00:45,240 Speaker 2: they just launched and now it's like the first couple 15 00:00:45,320 --> 00:00:47,280 Speaker 2: weeks of the race are pretty intense. At some point 16 00:00:47,560 --> 00:00:49,159 Speaker 2: we will move on to other things. But this is 17 00:00:49,560 --> 00:00:51,240 Speaker 2: all we can talk about right now. 18 00:00:51,320 --> 00:00:56,040 Speaker 1: What's been the most exciting part since the SEC's x 19 00:00:56,120 --> 00:01:00,279 Speaker 1: account got hacked, which happened like the day before, or 20 00:01:01,040 --> 00:01:04,960 Speaker 1: they actually authorized everything to start treating. 21 00:01:04,880 --> 00:01:08,200 Speaker 2: From that fake tweet to the approval was twenty four hours. 22 00:01:08,480 --> 00:01:10,959 Speaker 2: A lot of people came in with Gary's now going 23 00:01:11,040 --> 00:01:13,160 Speaker 2: to disapprove or he actually planned it all just so 24 00:01:13,200 --> 00:01:15,280 Speaker 2: we can say he can disapprove because bitcoin fell and 25 00:01:15,280 --> 00:01:17,520 Speaker 2: it's like, oh see, it's it's so easy to manipulate 26 00:01:17,560 --> 00:01:20,319 Speaker 2: I did it. Like there was all kinds of conspiracy theories, 27 00:01:20,840 --> 00:01:23,000 Speaker 2: and James and I had a quick call where like, 28 00:01:23,080 --> 00:01:25,760 Speaker 2: let's just hold the line. We're still ninety five percent 29 00:01:25,760 --> 00:01:28,240 Speaker 2: approval odds. And even at the last minute, there was 30 00:01:28,240 --> 00:01:31,160 Speaker 2: some filing that said withdrawal and it turned out to 31 00:01:31,160 --> 00:01:34,200 Speaker 2: be a complete technical issue, but people saw the word withdrawal, 32 00:01:34,480 --> 00:01:37,240 Speaker 2: thought arc with withdrawing. So that whole twenty four hours 33 00:01:37,319 --> 00:01:39,840 Speaker 2: was very wild and emotional because there was always that 34 00:01:39,880 --> 00:01:42,120 Speaker 2: little chance that yeah, they could not approve them, and 35 00:01:42,560 --> 00:01:44,680 Speaker 2: we put a lot of career risk on the line, 36 00:01:44,760 --> 00:01:47,680 Speaker 2: James and myself, and we ended up vindicated. So but 37 00:01:47,720 --> 00:01:51,800 Speaker 2: the last day was really intense. I mean little sleep 38 00:01:51,880 --> 00:01:55,480 Speaker 2: that week. Once they were approved, though, the only thing 39 00:01:55,520 --> 00:01:56,800 Speaker 2: I could think of. I don't know if it's because 40 00:01:56,800 --> 00:01:59,280 Speaker 2: I'm watching a World War two documentary, but I just 41 00:02:00,160 --> 00:02:02,520 Speaker 2: I just thought, war is over. So I went and 42 00:02:02,560 --> 00:02:05,440 Speaker 2: posted a picture of the Pittsburgh Gazette from like nineteen 43 00:02:05,520 --> 00:02:10,560 Speaker 2: forty four or whatever, war is over. And then no 44 00:02:10,600 --> 00:02:13,160 Speaker 2: matter what he says or Elizabeth Warren says, it's over, 45 00:02:13,440 --> 00:02:13,960 Speaker 2: they're out. 46 00:02:14,440 --> 00:02:15,000 Speaker 1: It's done. 47 00:02:15,040 --> 00:02:16,560 Speaker 2: And that felt so good. 48 00:02:16,639 --> 00:02:19,280 Speaker 1: So here we are. They're out of the bag. 49 00:02:19,440 --> 00:02:19,920 Speaker 2: They're out. 50 00:02:20,240 --> 00:02:23,680 Speaker 1: We've we've we've many questions that people on X and 51 00:02:23,800 --> 00:02:28,080 Speaker 1: elsewhere have been asking you and James Safer, the Bloomberg 52 00:02:28,080 --> 00:02:30,560 Speaker 1: intelligence analyst who's going to be joining us on this episode. 53 00:02:30,919 --> 00:02:32,679 Speaker 1: So we're going to do an episode that we haven't 54 00:02:32,720 --> 00:02:36,200 Speaker 1: done for a very long time. Mail bag, lots of 55 00:02:36,400 --> 00:02:40,239 Speaker 1: questions and we have maybe a few answers who asked 56 00:02:40,280 --> 00:02:41,040 Speaker 1: the most questions. 57 00:02:41,680 --> 00:02:43,520 Speaker 2: We got a lot of questions about like three hundred 58 00:02:43,560 --> 00:02:46,799 Speaker 2: respondents to my tweet. A lot of them are are overlaps, 59 00:02:47,160 --> 00:02:48,880 Speaker 2: really about like how does it work? 60 00:02:49,000 --> 00:02:49,160 Speaker 1: You know? 61 00:02:49,200 --> 00:02:51,320 Speaker 2: And we'll get into that. There's also a guy two 62 00:02:51,360 --> 00:02:53,200 Speaker 2: people want to give a shout out to Fred Krueger. 63 00:02:54,000 --> 00:02:56,919 Speaker 2: I mean, I assume that's his real name, but it 64 00:02:56,960 --> 00:02:59,320 Speaker 2: is the same name as the you know nine news 65 00:02:59,720 --> 00:03:01,080 Speaker 2: it is, so you never know. 66 00:03:01,440 --> 00:03:01,840 Speaker 1: I don't know. 67 00:03:01,880 --> 00:03:04,160 Speaker 2: But anyway, he did a Q and A and it 68 00:03:04,200 --> 00:03:06,280 Speaker 2: was beautiful and that was part of where we got 69 00:03:06,280 --> 00:03:08,200 Speaker 2: the idea. But we've been my inbox has been flooded 70 00:03:08,200 --> 00:03:11,480 Speaker 2: with questions, but we pulled some from his cues. We 71 00:03:11,560 --> 00:03:14,800 Speaker 2: also nature Acy did a Q and A with Matt Hogan. 72 00:03:15,120 --> 00:03:17,840 Speaker 2: There's some overlap with that, but generally speaking, a lot 73 00:03:17,840 --> 00:03:20,240 Speaker 2: of them came from people who hit our DA. My 74 00:03:20,320 --> 00:03:22,240 Speaker 2: dms are open, so I get all kinds of questions 75 00:03:22,440 --> 00:03:24,960 Speaker 2: and in the replies and so I've never had this 76 00:03:25,040 --> 00:03:28,200 Speaker 2: many questions ever, so I thought we would address a 77 00:03:28,200 --> 00:03:29,720 Speaker 2: lot of them right now and just be done with it. 78 00:03:29,800 --> 00:03:39,760 Speaker 1: Okay, here we go, this time on Trillions Bitcoin ETF mailbag. James, 79 00:03:39,760 --> 00:03:40,760 Speaker 1: welcome back to trillions. 80 00:03:41,600 --> 00:03:43,400 Speaker 3: Yeah, thanks for having me. I'm happy to be back. 81 00:03:43,600 --> 00:03:47,120 Speaker 1: Okay, so have you gone full bitcoin yet or are 82 00:03:47,160 --> 00:03:50,800 Speaker 1: you like cyborg half bitcoin half ETF. 83 00:03:54,160 --> 00:03:56,440 Speaker 3: Definitely the cyborg around. Eric can tell you I've built. 84 00:03:56,440 --> 00:03:58,280 Speaker 4: I've been building a tool that I'm very, very proud 85 00:03:58,320 --> 00:03:59,920 Speaker 4: of and excited to show off the clients that is 86 00:04:00,600 --> 00:04:03,520 Speaker 4: pretty much completely unrelated to anything happening with bitcoin ets 87 00:04:03,520 --> 00:04:05,600 Speaker 4: but largely a huge chunk of my time over the 88 00:04:05,680 --> 00:04:08,040 Speaker 4: last month or two has been spent and focused on 89 00:04:08,120 --> 00:04:11,320 Speaker 4: nothing but talking about these ETFs and also tired of 90 00:04:11,320 --> 00:04:11,800 Speaker 4: it a little bit. 91 00:04:11,840 --> 00:04:15,200 Speaker 2: Honestly, just props to James. If we're going on crypto 92 00:04:15,280 --> 00:04:18,720 Speaker 2: knowledge or fluency, he's better than me for sure. I mean, 93 00:04:18,760 --> 00:04:21,800 Speaker 2: he was interested in this a long time ago. I'm 94 00:04:21,880 --> 00:04:24,200 Speaker 2: much more focused on the ETF and the positioning in 95 00:04:24,240 --> 00:04:27,080 Speaker 2: the marketplace. But he really knows this industry, I think 96 00:04:27,440 --> 00:04:29,000 Speaker 2: better than anyone on our team for sure. 97 00:04:30,120 --> 00:04:33,760 Speaker 1: Okay, James, I'm gonna start these questions off going to you. 98 00:04:35,480 --> 00:04:38,400 Speaker 1: Some of them have I'm gonna call it like a 99 00:04:38,520 --> 00:04:40,720 Speaker 1: like a little bit of a tinfoil vibe. So we're 100 00:04:40,760 --> 00:04:43,919 Speaker 1: gonna maybe unpack that as we go there, as we go. 101 00:04:44,000 --> 00:04:49,400 Speaker 1: Here are the ETFs backed by actual bitcoin or are 102 00:04:49,440 --> 00:04:54,040 Speaker 1: they paper bitcoin? That was question number one? 103 00:04:54,080 --> 00:04:58,160 Speaker 4: Ja, Yeah, so I actually, I mean the answer is yes, 104 00:04:58,200 --> 00:05:01,880 Speaker 4: they're backed by actual bitcoin. Theoretically, you could argue that 105 00:05:02,000 --> 00:05:05,080 Speaker 4: it's not that dissimilar from people who are used in 106 00:05:05,120 --> 00:05:08,159 Speaker 4: the crypto markets to trading bitcoin on in exchange like 107 00:05:08,200 --> 00:05:10,160 Speaker 4: coinbas or Gemini, in the sense they're sitting. 108 00:05:10,000 --> 00:05:10,880 Speaker 3: On a wallet. 109 00:05:11,800 --> 00:05:14,240 Speaker 4: But all of these shares are going to be backed 110 00:05:14,240 --> 00:05:17,080 Speaker 4: proportionately by some number of bitcoin. So yes, they are 111 00:05:17,120 --> 00:05:20,760 Speaker 4: physically backed. And that's all you really need to know. 112 00:05:20,800 --> 00:05:22,719 Speaker 4: If you're buying a share of this ETF, you should 113 00:05:22,720 --> 00:05:24,159 Speaker 4: know that you're going to be backed by bitcoin. 114 00:05:24,560 --> 00:05:26,760 Speaker 2: And this came up with gold back in the day, Jrol, 115 00:05:26,839 --> 00:05:29,400 Speaker 2: This is a repetitive question. They said paper gold, So 116 00:05:29,400 --> 00:05:32,080 Speaker 2: they actually took people into the gold vault, took pictures 117 00:05:32,080 --> 00:05:35,600 Speaker 2: in there in London and showed them the bars. These 118 00:05:35,640 --> 00:05:39,799 Speaker 2: issuers do not want the risk of being short bitcoin. Okay, 119 00:05:39,880 --> 00:05:42,039 Speaker 2: they want to do a one for one. The way 120 00:05:42,040 --> 00:05:44,800 Speaker 2: they make their money is the small vig or the 121 00:05:44,839 --> 00:05:47,359 Speaker 2: fee they get for this service. They're not into the 122 00:05:47,360 --> 00:05:49,960 Speaker 2: trading business. So I would say yes. The only reason 123 00:05:49,960 --> 00:05:52,280 Speaker 2: the answer is not yes is if you're a hardcore 124 00:05:52,320 --> 00:05:55,720 Speaker 2: crypto person and you believe bitcoin is literally a currency 125 00:05:56,040 --> 00:05:59,320 Speaker 2: that is there for when the system collapses. No, this 126 00:05:59,480 --> 00:06:01,799 Speaker 2: is not the same as direct ownership, and you should 127 00:06:01,839 --> 00:06:04,200 Speaker 2: buy it direct, get your own wallet, God bless you. 128 00:06:04,760 --> 00:06:09,520 Speaker 2: This is more indirect ownership, but it's still ownership. ETF 129 00:06:09,560 --> 00:06:12,480 Speaker 2: shares are receipts. That's what the word spider stands for, 130 00:06:12,600 --> 00:06:15,320 Speaker 2: SMP depository receipts. So think of the shares as a 131 00:06:15,320 --> 00:06:18,240 Speaker 2: receipt too, the bitcoin storre with the custodian. 132 00:06:19,000 --> 00:06:21,159 Speaker 4: Yeah, if we're putting tinfoil hats on, I'll say, like, 133 00:06:21,400 --> 00:06:24,080 Speaker 4: there's a lot of takes out there about why ETFs 134 00:06:24,080 --> 00:06:26,120 Speaker 4: aren't great or bad, and like the one take that 135 00:06:26,160 --> 00:06:27,480 Speaker 4: I was out there that I was like, yeah, that's 136 00:06:27,520 --> 00:06:31,080 Speaker 4: actually value like fair. It was like, this is centralizing. 137 00:06:31,120 --> 00:06:33,360 Speaker 4: So if the government wants to confiscate your bitcoin, they 138 00:06:33,360 --> 00:06:36,159 Speaker 4: can do it. And it's like, well, honestly, if we 139 00:06:36,200 --> 00:06:38,479 Speaker 4: get to that point, you're you're probably correct. The government 140 00:06:38,480 --> 00:06:40,920 Speaker 4: could confiscate your bitcoin if it's in this ETF. 141 00:06:40,960 --> 00:06:44,479 Speaker 1: Okay, question number two, Can I get the bitcoin back 142 00:06:44,680 --> 00:06:49,479 Speaker 1: when I sell the ETF? James No. 143 00:06:49,839 --> 00:06:52,600 Speaker 4: So part of the reason, part of the reason, part 144 00:06:52,640 --> 00:06:55,200 Speaker 4: of the way that the SEC approved these ETFs is 145 00:06:55,240 --> 00:06:58,320 Speaker 4: they did not allow the standard in kind creation redemption. 146 00:06:58,480 --> 00:07:01,960 Speaker 4: So in a normal ETF, the way you create shares 147 00:07:02,000 --> 00:07:04,040 Speaker 4: you hand over the underlying asset or securities and in 148 00:07:04,040 --> 00:07:06,560 Speaker 4: return you get the shares of the ETF. In this case, 149 00:07:06,600 --> 00:07:09,760 Speaker 4: the SEC said they were uncomfortable within kind, so they 150 00:07:09,760 --> 00:07:12,320 Speaker 4: force them to only be cash create. So that means 151 00:07:12,360 --> 00:07:14,200 Speaker 4: the only way that money can go in or out 152 00:07:14,240 --> 00:07:17,240 Speaker 4: of these funds for now, until there's further regulatory approval 153 00:07:17,320 --> 00:07:21,640 Speaker 4: or changes for now is cash in, cash out. So no, 154 00:07:21,800 --> 00:07:24,080 Speaker 4: there is no real way right now to get the 155 00:07:24,080 --> 00:07:28,360 Speaker 4: bitcoin that you have de facto ownership of the ETF itself. 156 00:07:28,400 --> 00:07:31,240 Speaker 4: Will have to sell the bitcoin to generate cash if 157 00:07:31,280 --> 00:07:32,480 Speaker 4: you are redeeming. 158 00:07:32,280 --> 00:07:36,600 Speaker 2: Now, fund investors like, there's how many thirty trillion dollars 159 00:07:36,600 --> 00:07:41,520 Speaker 2: in funds and ETFs and equity stock everything? Right, Nobody 160 00:07:41,560 --> 00:07:45,720 Speaker 2: wants the stuff back. That's the whole point of outsourcing. 161 00:07:45,880 --> 00:07:47,760 Speaker 2: This is the whole thing to explain to crypto people. 162 00:07:48,320 --> 00:07:51,720 Speaker 2: Fund investors want no part of this. They want USD back. 163 00:07:51,800 --> 00:07:53,960 Speaker 2: That's a feature, not a bug. So part of that 164 00:07:54,080 --> 00:07:57,760 Speaker 2: question is, as a true coiner person, most people happy 165 00:07:57,760 --> 00:07:59,960 Speaker 2: to get USD. Let Blackrock deal with it. I'm just 166 00:08:00,040 --> 00:08:01,360 Speaker 2: here to get a little piece of the action. 167 00:08:01,840 --> 00:08:08,320 Speaker 1: Okay. Is it possible Eric that if I, you know, 168 00:08:08,560 --> 00:08:12,040 Speaker 1: buy this ETF, that the money that I'm giving to 169 00:08:12,160 --> 00:08:17,000 Speaker 1: one of these issuers uses the money that I was 170 00:08:17,040 --> 00:08:19,360 Speaker 1: going to give to them for something other than bitcoin. 171 00:08:19,560 --> 00:08:19,640 Speaker 4: No. 172 00:08:20,360 --> 00:08:22,760 Speaker 2: Here's one thing though. If you sell a bitcoin ETF 173 00:08:22,800 --> 00:08:24,920 Speaker 2: on the market, or buy one, let's say you buy one, 174 00:08:25,240 --> 00:08:27,520 Speaker 2: you may be buying it from somebody else on the 175 00:08:27,520 --> 00:08:29,800 Speaker 2: stock is change. That's called a natural there's no reason 176 00:08:29,840 --> 00:08:33,319 Speaker 2: to do flows. But if there's way more people buying 177 00:08:33,360 --> 00:08:35,520 Speaker 2: than selling, it creates a premium in the price that 178 00:08:35,600 --> 00:08:38,160 Speaker 2: triggers an ap to do a creation. That's where the 179 00:08:38,160 --> 00:08:41,480 Speaker 2: flows come from. And again these issuers don't want to 180 00:08:41,559 --> 00:08:43,960 Speaker 2: in the market makers and aps. Nobody wants to be 181 00:08:44,040 --> 00:08:46,719 Speaker 2: long or short the underlying thing, whether it's S and 182 00:08:46,760 --> 00:08:49,480 Speaker 2: P stocks or bitcoin, they want to be flat. They're 183 00:08:49,520 --> 00:08:52,320 Speaker 2: not in the trading business. And so no, the answer 184 00:08:52,400 --> 00:08:54,960 Speaker 2: is or yes, the answer is your flows would go 185 00:08:55,040 --> 00:08:58,280 Speaker 2: directly towards that. They wouldn't go SBF and buy like 186 00:08:58,320 --> 00:09:00,680 Speaker 2: a bunch of apartments in Bahamas and give the money 187 00:09:00,720 --> 00:09:03,360 Speaker 2: to all kinds of celebrities and politicians. They wouldn't do that. 188 00:09:11,360 --> 00:09:16,719 Speaker 1: Eric next question was this launch, let's call it. I 189 00:09:16,720 --> 00:09:19,600 Speaker 1: guess it's a series of launches really successful. 190 00:09:21,760 --> 00:09:26,760 Speaker 2: So yes, by any measure we're talking, I'll give the numbers. 191 00:09:26,920 --> 00:09:29,120 Speaker 2: If you talk about organic, there's a couple of tfs 192 00:09:29,120 --> 00:09:31,520 Speaker 2: that were launched where someone just stuffed two billion in 193 00:09:31,760 --> 00:09:34,120 Speaker 2: and no one traded it after that. I would call 194 00:09:34,200 --> 00:09:36,760 Speaker 2: that like total like sea capital, and that's it and 195 00:09:36,880 --> 00:09:40,440 Speaker 2: remove those Easily the most successful launch organically of all time, 196 00:09:40,840 --> 00:09:42,920 Speaker 2: ten billion dollars of trading in the first couple of days. 197 00:09:43,480 --> 00:09:46,880 Speaker 2: The flows are already up to about two billion. Now 198 00:09:47,040 --> 00:09:49,600 Speaker 2: you have to subtract GBTC. Okay, so that's what makes 199 00:09:49,600 --> 00:09:49,960 Speaker 2: it weird. 200 00:09:50,120 --> 00:09:54,960 Speaker 1: James, I was saving this one for you because of GPTC, 201 00:09:55,080 --> 00:09:58,520 Speaker 1: and you can unpack that one. There were outflows there, 202 00:09:58,720 --> 00:10:02,720 Speaker 1: So does that make this these launches a failure? So 203 00:10:02,760 --> 00:10:08,920 Speaker 1: talk to a saisho between GBTC and also these newer entrants. 204 00:10:10,000 --> 00:10:12,199 Speaker 3: Yeah, I'll add a little nuanced to what Eric was saying. 205 00:10:13,080 --> 00:10:15,360 Speaker 4: I'm with Eric one hundred percent, like this was a 206 00:10:15,400 --> 00:10:18,280 Speaker 4: successful launch for these ETF fissuers, for ETFs in general. 207 00:10:18,920 --> 00:10:20,880 Speaker 4: I think some people are saying it's a failure because 208 00:10:20,880 --> 00:10:23,160 Speaker 4: it didn't send them bitcoin price skyrocketing. 209 00:10:23,559 --> 00:10:25,600 Speaker 3: That said, I do think some of the volume numbers 210 00:10:25,600 --> 00:10:25,920 Speaker 3: were seeing. 211 00:10:26,000 --> 00:10:28,480 Speaker 4: There was almost about ten billion that traded in these 212 00:10:28,480 --> 00:10:31,520 Speaker 4: things and the first three days of trading, which is insane. 213 00:10:31,880 --> 00:10:33,199 Speaker 4: But I think part of that is you got to 214 00:10:33,200 --> 00:10:35,800 Speaker 4: look at GBDC is over fifty percent of that volume. 215 00:10:36,040 --> 00:10:38,160 Speaker 4: I think a lot of this is pair trading from 216 00:10:38,200 --> 00:10:40,360 Speaker 4: these market makers. And you also got to look at 217 00:10:40,360 --> 00:10:43,000 Speaker 4: what was happening with the premiums and discounts. So a 218 00:10:43,040 --> 00:10:45,160 Speaker 4: lot of these new ets were trading at premiums while 219 00:10:45,160 --> 00:10:47,120 Speaker 4: GBDC was trading at a discounts. So there's a lot 220 00:10:47,120 --> 00:10:50,480 Speaker 4: of r being happening between these things. So it's like 221 00:10:50,559 --> 00:10:54,120 Speaker 4: basically facilitating more trading. That said, trading is a very 222 00:10:54,160 --> 00:10:56,480 Speaker 4: good thing for a new product. Whether it's whether it's 223 00:10:56,520 --> 00:10:59,360 Speaker 4: partially because of the underlying structure of the market or not, 224 00:10:59,440 --> 00:11:03,720 Speaker 4: it doesn't matter. But yeah, GBDC, we expect it outflows. 225 00:11:03,840 --> 00:11:05,839 Speaker 4: I've written notes where I was saying I'm expecting billions 226 00:11:05,880 --> 00:11:08,040 Speaker 4: of dollars to flow out of GBTC, and I think 227 00:11:08,080 --> 00:11:10,120 Speaker 4: a lot of that money, who knows how much, at 228 00:11:10,200 --> 00:11:12,040 Speaker 4: least the third maybe half, is going to flow into 229 00:11:12,120 --> 00:11:12,880 Speaker 4: probably other. 230 00:11:12,840 --> 00:11:14,000 Speaker 3: Spot, bitcoin ETFs. 231 00:11:15,080 --> 00:11:17,640 Speaker 4: But people are also fixated so much on like the 232 00:11:17,679 --> 00:11:20,240 Speaker 4: near term, day to day, what's going on with these flows. 233 00:11:20,679 --> 00:11:22,280 Speaker 4: Just take a step back, give us a little bit 234 00:11:22,320 --> 00:11:23,960 Speaker 4: so we can see what's going on with these flows 235 00:11:24,000 --> 00:11:24,560 Speaker 4: over a week. 236 00:11:24,880 --> 00:11:26,800 Speaker 2: Yeah, and let me add this. I get a lot 237 00:11:26,800 --> 00:11:29,079 Speaker 2: of people replying because the price of bitcoin has been 238 00:11:29,120 --> 00:11:32,720 Speaker 2: like flat, went down a couple of days. These guys 239 00:11:32,720 --> 00:11:35,520 Speaker 2: are like when moon, which is like when am I 240 00:11:35,559 --> 00:11:38,040 Speaker 2: going to the moon? I'm like, dude, you just went there. 241 00:11:38,080 --> 00:11:40,679 Speaker 2: It went up eighty percent in anticipation of this event. 242 00:11:40,880 --> 00:11:42,920 Speaker 2: Of course, there's going to be some profit taking and 243 00:11:42,960 --> 00:11:44,560 Speaker 2: some selling of the news. That's just the way it works. 244 00:11:44,559 --> 00:11:45,880 Speaker 1: With anything. How about the FED. 245 00:11:45,880 --> 00:11:48,440 Speaker 2: The FED gets front run right, FED announcements. This is 246 00:11:48,520 --> 00:11:52,360 Speaker 2: normal stuff. Some of these people expect like one hundred 247 00:11:52,360 --> 00:11:54,480 Speaker 2: percent return every day when they wake up in the morning, 248 00:11:54,559 --> 00:11:56,400 Speaker 2: and if they don't get it, they're like cry babies. 249 00:11:56,840 --> 00:12:00,000 Speaker 2: I'm a sixty forty person, I expect six seven percent 250 00:12:00,240 --> 00:12:04,160 Speaker 2: a year. Joal, that's how low my expectations are. So 251 00:12:04,920 --> 00:12:08,319 Speaker 2: everybody's people are going to get more miserable the higher 252 00:12:08,320 --> 00:12:10,800 Speaker 2: their expectations are, and so there's misery out there somehow, 253 00:12:11,160 --> 00:12:14,480 Speaker 2: even though this was successful. Other thing, the ETFs traded. 254 00:12:14,520 --> 00:12:17,120 Speaker 2: There was seven hundred thousand individual trades in the first day, 255 00:12:17,520 --> 00:12:20,640 Speaker 2: so the number of trades is gigantic. That is a lot. 256 00:12:20,679 --> 00:12:22,840 Speaker 2: That's more than the q's trades every day. And the 257 00:12:22,840 --> 00:12:24,720 Speaker 2: other thing is if you take the volume, the average 258 00:12:24,760 --> 00:12:28,480 Speaker 2: volume of the newborn nine, let's take GBTC outboard nine. 259 00:12:28,559 --> 00:12:31,319 Speaker 1: Yes, is everything except GBTC, which is, by the way, 260 00:12:31,440 --> 00:12:34,400 Speaker 1: Greyscale Bitcoin Trust. If you're not familiar with what we're 261 00:12:34,400 --> 00:12:37,840 Speaker 1: talking about with GBTC, go back to previous episodes of 262 00:12:37,840 --> 00:12:39,280 Speaker 1: Trillions and you'll learn all about it. 263 00:12:39,520 --> 00:12:42,360 Speaker 2: Right, So GBTC separated because it came over with volume 264 00:12:42,360 --> 00:12:45,080 Speaker 2: and assets like a fully grown adult. The newborn nine 265 00:12:45,120 --> 00:12:47,040 Speaker 2: is newborn, and that's why I use it, use it. 266 00:12:47,520 --> 00:12:50,360 Speaker 2: Launching a fresh ETF is hard, So those are on 267 00:12:50,440 --> 00:12:53,560 Speaker 2: a different standard. Those nine, right, if you take their 268 00:12:53,600 --> 00:12:58,400 Speaker 2: average volume just totally obliterates a normal situation. So consider 269 00:12:58,440 --> 00:13:02,559 Speaker 2: this last year, there was five hundreds launched on Tuesday, 270 00:13:02,960 --> 00:13:06,520 Speaker 2: they traded four hundred and fifty million total. The spot 271 00:13:06,559 --> 00:13:10,880 Speaker 2: bitcoin ETFs traded two to threefold that on day three, right, 272 00:13:10,920 --> 00:13:14,480 Speaker 2: and that's five hundred combined. I bit alone traded more 273 00:13:14,520 --> 00:13:18,840 Speaker 2: than the five hundred. Yeah, so yes, there will be 274 00:13:18,880 --> 00:13:21,760 Speaker 2: some tapering off of the volume. But the other thing is, 275 00:13:21,760 --> 00:13:24,240 Speaker 2: remember who's in this. This isn't like some random I 276 00:13:24,280 --> 00:13:26,199 Speaker 2: don't know, like global x fund that had had a 277 00:13:26,200 --> 00:13:30,120 Speaker 2: good day and is being used as an our blackrock fidelity. 278 00:13:30,360 --> 00:13:30,560 Speaker 1: Right. 279 00:13:30,760 --> 00:13:35,400 Speaker 2: These are investco These are gigantic companies with huge marketing 280 00:13:35,400 --> 00:13:38,680 Speaker 2: divisions and sales sales forces. So I think the short 281 00:13:38,760 --> 00:13:42,840 Speaker 2: termism is annoying, and I think I just tell people 282 00:13:42,840 --> 00:13:46,040 Speaker 2: out there, if this is bringing you down, they get 283 00:13:46,080 --> 00:13:48,240 Speaker 2: despite all these numbers, just because it didn't go up 284 00:13:48,240 --> 00:13:51,080 Speaker 2: another fifty percent on top of eighty. You have to 285 00:13:51,080 --> 00:13:54,160 Speaker 2: get outside. You have to read a book, you have 286 00:13:54,240 --> 00:13:57,680 Speaker 2: to find a girlfriend, you have to do something, because 287 00:13:57,720 --> 00:13:59,640 Speaker 2: your expectations will never be met. 288 00:13:59,760 --> 00:14:04,000 Speaker 1: Not it's not twenty twenty James. Question number five, If 289 00:14:04,040 --> 00:14:07,920 Speaker 1: I buy a bitcoin ETF, does it cause an immediate 290 00:14:08,080 --> 00:14:12,079 Speaker 1: buy of bitcoin? And how does the settlement cycle work? 291 00:14:13,559 --> 00:14:17,240 Speaker 4: Yeah, so it's it's sent from your perspective, the answer 292 00:14:17,280 --> 00:14:19,360 Speaker 4: is yes. Right at the end of the day, that 293 00:14:19,480 --> 00:14:22,120 Speaker 4: share is going to have exposure to bitcoin. But there's 294 00:14:22,160 --> 00:14:25,160 Speaker 4: a creation process that has to happen. There's a there's 295 00:14:25,240 --> 00:14:27,760 Speaker 4: what we call a creation cutoff times. So different ETFs 296 00:14:27,760 --> 00:14:31,560 Speaker 4: have different cutoff times. So to create new shares, there 297 00:14:31,600 --> 00:14:34,600 Speaker 4: needs to be essentially in order from the aps to 298 00:14:35,040 --> 00:14:38,040 Speaker 4: to these fun saying we're going to create this many shares. 299 00:14:37,840 --> 00:14:38,720 Speaker 3: And wire the money over. 300 00:14:39,120 --> 00:14:41,000 Speaker 4: But you've got to realize once that money is wired 301 00:14:41,000 --> 00:14:43,240 Speaker 4: over and those shares are created, which what only only 302 00:14:43,240 --> 00:14:46,160 Speaker 4: happens with net new demand and the ETF once that 303 00:14:46,200 --> 00:14:48,640 Speaker 4: money is wired over, all these issuers, as Eric was 304 00:14:48,720 --> 00:14:51,440 Speaker 4: hinting at before, they are not They're they're trading trying 305 00:14:51,440 --> 00:14:56,440 Speaker 4: to get good execution, but they make their money by making. 306 00:14:56,200 --> 00:14:58,800 Speaker 3: Sure they're exposed one to one with bitcoin. The last 307 00:14:58,800 --> 00:14:59,800 Speaker 3: thing they want. 308 00:15:00,080 --> 00:15:02,200 Speaker 4: Is to have cash drag in their portfolio where their 309 00:15:02,240 --> 00:15:05,880 Speaker 4: portfolio is significantly exposed to cash and then bitcoin goes 310 00:15:05,920 --> 00:15:07,680 Speaker 4: on a run and all of a sudden they're underperforming. 311 00:15:07,720 --> 00:15:10,320 Speaker 4: That is borderline worst case scenarios of the ETF fissure. 312 00:15:10,440 --> 00:15:12,560 Speaker 4: So at the end of the day, the plumbing can 313 00:15:12,560 --> 00:15:15,840 Speaker 4: get confusing because there's a lot of offsetting trades in 314 00:15:15,840 --> 00:15:17,200 Speaker 4: the back end. People are trying to look at what's 315 00:15:17,240 --> 00:15:19,480 Speaker 4: going on with the on chain metrics. Well, do you 316 00:15:19,520 --> 00:15:22,320 Speaker 4: look at coinbase and GBTC or grey scales on coinbas 317 00:15:22,320 --> 00:15:25,040 Speaker 4: sortm in these other ETFs. There's money coming into the 318 00:15:25,040 --> 00:15:27,920 Speaker 4: other ets and money coming out of GBTC, and it's 319 00:15:27,920 --> 00:15:30,000 Speaker 4: hard to know exactly what's going on in the back 320 00:15:30,080 --> 00:15:33,200 Speaker 4: end because there's offsetting positions that don't necessarily show up 321 00:15:33,200 --> 00:15:35,120 Speaker 4: on chain that we are seeing. 322 00:15:34,800 --> 00:15:35,720 Speaker 3: In flow data. 323 00:15:35,880 --> 00:15:38,240 Speaker 4: So I'm just going to go back to the beginning 324 00:15:38,240 --> 00:15:41,120 Speaker 4: and say, yes, eventually you will have exposure to bitcoin. 325 00:15:41,160 --> 00:15:43,560 Speaker 3: If there is a share outstanding, you have exposure to bitcoin. 326 00:15:44,480 --> 00:15:50,040 Speaker 1: But yeah, okay, you mentioned coinbase. What role do they 327 00:15:50,040 --> 00:15:54,040 Speaker 1: play in this and how safe is the bitcoin that 328 00:15:54,120 --> 00:15:57,440 Speaker 1: they're holding, and what happens if they lose it? You know, 329 00:15:58,160 --> 00:16:00,240 Speaker 1: if you followed crypto at all, you know that, you 330 00:16:00,240 --> 00:16:02,480 Speaker 1: know the cryptos bass in general is sort of then 331 00:16:02,600 --> 00:16:05,480 Speaker 1: rife with thefts at times. 332 00:16:06,440 --> 00:16:07,280 Speaker 3: Yeah, So there's two. 333 00:16:07,440 --> 00:16:09,920 Speaker 4: The primary way that most people think of Coinbase playing 334 00:16:09,920 --> 00:16:12,160 Speaker 4: here is they're the custodian. They're the ones that are 335 00:16:12,200 --> 00:16:15,280 Speaker 4: storing these assets in cold storage. Right, they're on these 336 00:16:15,320 --> 00:16:18,560 Speaker 4: hardware wallets or multi sig wallets, whatever they're using. They 337 00:16:18,600 --> 00:16:21,800 Speaker 4: don't exactly tell you exactly how they're doing it. The 338 00:16:21,880 --> 00:16:23,800 Speaker 4: other part of what coinbase is doing is they're also 339 00:16:23,840 --> 00:16:26,000 Speaker 4: execution agents for a lot of these As I said, 340 00:16:26,560 --> 00:16:29,040 Speaker 4: cash comes in and then the issuers need to execute 341 00:16:29,080 --> 00:16:32,240 Speaker 4: and get exposure to the big bitcoin. So they're working 342 00:16:32,280 --> 00:16:34,360 Speaker 4: with the coinbase over the counter desks and the execution 343 00:16:34,480 --> 00:16:37,000 Speaker 4: desk to make sure they're getting exposure to bitcoin. As 344 00:16:37,000 --> 00:16:38,560 Speaker 4: far as your question about what if they lose it 345 00:16:38,640 --> 00:16:43,040 Speaker 4: or it gets hacked, the coinbase does have like an 346 00:16:43,120 --> 00:16:44,320 Speaker 4: insurance policy for one. 347 00:16:44,320 --> 00:16:45,120 Speaker 3: Hundred and something million. 348 00:16:45,160 --> 00:16:46,760 Speaker 4: I should have looked it up before again this podcast, 349 00:16:46,840 --> 00:16:49,040 Speaker 4: but coinbase has an insurance policy in the event that 350 00:16:49,080 --> 00:16:52,360 Speaker 4: they do get hacked. Obviously that would be a bad situation. 351 00:16:53,280 --> 00:16:54,920 Speaker 4: But one thing I will plug here is I think 352 00:16:54,960 --> 00:16:58,240 Speaker 4: we'll see some of these ETF fissuers likely sign up 353 00:16:58,240 --> 00:17:00,360 Speaker 4: to have multiple custodians, which is in something and we 354 00:17:00,400 --> 00:17:02,080 Speaker 4: have in the US. So I think we'll see Gemini 355 00:17:02,120 --> 00:17:04,840 Speaker 4: and Bicco as custodians of some of these ones that 356 00:17:04,920 --> 00:17:06,320 Speaker 4: have only goin base listed now. 357 00:17:06,320 --> 00:17:08,320 Speaker 3: But time will tell if I'm right on that front. 358 00:17:08,440 --> 00:17:11,400 Speaker 1: Okay, Eric, I'm gonna kick this one to you. When 359 00:17:11,440 --> 00:17:16,240 Speaker 1: will the SEC approve an ether ETF now that Bitcoin's 360 00:17:16,280 --> 00:17:16,760 Speaker 1: been approved? 361 00:17:17,040 --> 00:17:19,480 Speaker 2: Yeah, this is a tricky one. James and I haven't 362 00:17:19,520 --> 00:17:21,840 Speaker 2: fully dove into this and given odds like we thought, 363 00:17:21,880 --> 00:17:24,080 Speaker 2: but we're kind of in agreement that maybe a two 364 00:17:24,160 --> 00:17:27,560 Speaker 2: thirds chance sixty five percent is by may and our 365 00:17:27,680 --> 00:17:31,280 Speaker 2: rationale the pros are that they've already approved ether futures 366 00:17:32,000 --> 00:17:36,160 Speaker 2: and if they approve bitcoin futures, didn't approve spot, got 367 00:17:36,200 --> 00:17:38,919 Speaker 2: sued how to do spot, and they approved ether futures, 368 00:17:39,240 --> 00:17:41,919 Speaker 2: remember the SAT questions, Well, then they got to approve 369 00:17:41,920 --> 00:17:44,520 Speaker 2: ether spot where they gonna get sued. That's the general 370 00:17:45,240 --> 00:17:49,720 Speaker 2: like sort of you know Bell curve meme, like even 371 00:17:49,760 --> 00:17:52,440 Speaker 2: the like the not so smart person and the super 372 00:17:52,440 --> 00:17:55,600 Speaker 2: smart person come to the same conclusion there. But Gary 373 00:17:55,640 --> 00:17:58,359 Speaker 2: did kind of say some things that were like he 374 00:17:58,520 --> 00:18:01,560 Speaker 2: was really lashing out in his you know, after the approval, 375 00:18:01,560 --> 00:18:04,200 Speaker 2: he was saying like he didn't like it. All the 376 00:18:04,280 --> 00:18:06,520 Speaker 2: risks and he didn't he said, don't expect anything soon. 377 00:18:07,280 --> 00:18:09,600 Speaker 2: But I would blow that off. I just think that 378 00:18:09,680 --> 00:18:12,680 Speaker 2: you've got Blackrock with a filing too, and remember Blackrocks 379 00:18:12,720 --> 00:18:15,600 Speaker 2: Blackrock Gray Scale who sued them. So you have those 380 00:18:15,600 --> 00:18:18,560 Speaker 2: two main companies with filings for spot. I think they 381 00:18:18,560 --> 00:18:20,960 Speaker 2: probably do it. But you know, we were ninety percent 382 00:18:20,960 --> 00:18:23,560 Speaker 2: on this, we're only sixty five percent. So take with 383 00:18:23,600 --> 00:18:24,879 Speaker 2: that which you will. I'm not sure if James has 384 00:18:24,920 --> 00:18:25,480 Speaker 2: anything to add. 385 00:18:26,480 --> 00:18:29,399 Speaker 4: Yeah, I'll just I agree with one hundred percent of 386 00:18:29,400 --> 00:18:31,680 Speaker 4: what Eric said. I will just add the other side 387 00:18:31,720 --> 00:18:34,240 Speaker 4: what the other thirty five percent is. And that's basically 388 00:18:34,320 --> 00:18:38,320 Speaker 4: that Gendler might know everything that Eric just said. All 389 00:18:38,320 --> 00:18:40,360 Speaker 4: the facts are pointing to that they should be approving 390 00:18:40,359 --> 00:18:43,880 Speaker 4: these things. But he could say I don't care, I'm 391 00:18:43,880 --> 00:18:47,479 Speaker 4: denying them because of XYZ reason and then waits till 392 00:18:47,520 --> 00:18:49,720 Speaker 4: a court forces him to approve them again. That's my 393 00:18:49,880 --> 00:18:52,360 Speaker 4: most of my other thirty five percent that basically he says, fine, 394 00:18:52,359 --> 00:18:54,800 Speaker 4: we'll go back to court over this one and maybe 395 00:18:54,840 --> 00:18:57,520 Speaker 4: he learned a thing or two from what they did 396 00:18:57,520 --> 00:18:59,480 Speaker 4: wrong on bitcoin futures, if he indeed did not want 397 00:18:59,560 --> 00:19:02,680 Speaker 4: bitcoin futures and spoty bitcoin ets, and he'll use that 398 00:19:02,720 --> 00:19:05,280 Speaker 4: in the theorem. The other thing is the other part 399 00:19:05,320 --> 00:19:07,600 Speaker 4: of that is etheroem is different from bitcoin, right, it's 400 00:19:07,640 --> 00:19:10,000 Speaker 4: proof of steak, not proof of work, which means there's 401 00:19:10,040 --> 00:19:13,240 Speaker 4: yields and other things, and there's some very mind, there's 402 00:19:13,240 --> 00:19:14,800 Speaker 4: a lot of minutia and the differences here that the 403 00:19:14,920 --> 00:19:16,119 Speaker 4: sec is gonna have to get comfortable. 404 00:19:16,160 --> 00:19:17,520 Speaker 1: I'm gonna go out on a limb here and say 405 00:19:17,520 --> 00:19:20,680 Speaker 1: that he's gonna he's gonna uh punt on that he'll 406 00:19:20,680 --> 00:19:24,040 Speaker 1: find a way not to do it. Okay, Uh, James 407 00:19:24,280 --> 00:19:29,640 Speaker 1: doesn't spot bitcoin ETFs defeat the purpose of bitcoin as 408 00:19:29,640 --> 00:19:35,000 Speaker 1: a currency quote outside the system end quote by Tinfoil Cap. 409 00:19:37,480 --> 00:19:37,880 Speaker 3: Yeah. 410 00:19:37,960 --> 00:19:41,400 Speaker 4: I mean it is arguably against the ethos of bitcoin, 411 00:19:41,440 --> 00:19:43,520 Speaker 4: but it is in the ethos of bitcoin that bitcoin 412 00:19:43,640 --> 00:19:45,920 Speaker 4: is all for free markets and libertarian ideals for the 413 00:19:45,960 --> 00:19:49,720 Speaker 4: most part. And basically, these ETFs are not changing anything 414 00:19:49,760 --> 00:19:52,560 Speaker 4: about bitcoin itself, aside from maybe storing some of the 415 00:19:52,600 --> 00:19:55,120 Speaker 4: bitcoin in cold stores where no one's gonna fucking play 416 00:19:55,119 --> 00:19:55,840 Speaker 4: method to get. 417 00:19:55,680 --> 00:19:56,800 Speaker 3: Exposure to that. 418 00:19:56,800 --> 00:19:59,639 Speaker 4: That said, obviously, as we talked about, this is not 419 00:19:59,680 --> 00:20:02,320 Speaker 4: gonna help you if if society collapses, you're don't you 420 00:20:02,320 --> 00:20:04,639 Speaker 4: don't actually own your bitcoin, not your keys, not your coins. 421 00:20:04,640 --> 00:20:06,880 Speaker 4: But if you want exposure to the asset, in my opinion, 422 00:20:06,920 --> 00:20:08,520 Speaker 4: this is the best way to get exposure to it 423 00:20:08,560 --> 00:20:10,359 Speaker 4: in the traditional financial rails. 424 00:20:10,840 --> 00:20:13,800 Speaker 1: James, one more for you, kind of related does the 425 00:20:14,160 --> 00:20:17,280 Speaker 1: does the bitcoin held by these ETFs count as on 426 00:20:17,440 --> 00:20:19,720 Speaker 1: exchange or off exchange? 427 00:20:22,040 --> 00:20:23,880 Speaker 4: Yeah, I mean I guess, I guess it depends how 428 00:20:23,920 --> 00:20:26,080 Speaker 4: you're going to define that, right, So for the most part, 429 00:20:26,160 --> 00:20:28,760 Speaker 4: I would say it's it's not on exchange in the 430 00:20:28,800 --> 00:20:33,040 Speaker 4: sense that the any bitcoin that's held by these ETFs. 431 00:20:33,040 --> 00:20:34,560 Speaker 3: Needs to be in cold storage. 432 00:20:34,760 --> 00:20:39,600 Speaker 4: That said, in the same way that bitcoin is on exchange. 433 00:20:39,600 --> 00:20:42,600 Speaker 4: Bitcoin it can be moved at any point just because 434 00:20:42,600 --> 00:20:45,480 Speaker 4: of flows in or out of ANYTF. Right, So it's 435 00:20:45,560 --> 00:20:48,440 Speaker 4: not it's more cold storage than anything. 436 00:20:49,400 --> 00:20:54,600 Speaker 1: Eric, you mentioned the gold etf uh, and there were 437 00:20:54,600 --> 00:20:58,520 Speaker 1: conspiracy theories when those products launched that the gold wasn't 438 00:20:58,560 --> 00:21:01,239 Speaker 1: actually in the vaults. So this next one's for you, 439 00:21:01,280 --> 00:21:03,600 Speaker 1: which is, are any of these issuers going to show 440 00:21:03,680 --> 00:21:07,280 Speaker 1: us the wallet addresses for the bitcoin. 441 00:21:08,359 --> 00:21:11,560 Speaker 2: I think so I do. I just don't think of. 442 00:21:11,600 --> 00:21:14,520 Speaker 1: The similar thing because the gold bars they eventually showed 443 00:21:14,520 --> 00:21:16,520 Speaker 1: the serial numbers or whatever. Yeah, some of them. 444 00:21:16,640 --> 00:21:18,199 Speaker 2: James is going to go a little deeper on this 445 00:21:18,880 --> 00:21:20,800 Speaker 2: than I am, because I also I think this should 446 00:21:20,800 --> 00:21:24,000 Speaker 2: be pivoted to how does a bitcoin actually get stored 447 00:21:24,040 --> 00:21:25,879 Speaker 2: at coinbase? Like, how does that work? Where do they 448 00:21:25,920 --> 00:21:27,639 Speaker 2: source it? That's what I want to hear him answer. 449 00:21:28,160 --> 00:21:30,840 Speaker 2: But I will say one thing, Nobody who would buy 450 00:21:30,840 --> 00:21:33,800 Speaker 2: an ETF care stroll. The only people who cared about 451 00:21:33,800 --> 00:21:37,400 Speaker 2: the gold were a couple like quacky Gold people who 452 00:21:37,440 --> 00:21:41,840 Speaker 2: were like really really paranoid. Even goldbugs don't care they 453 00:21:41,840 --> 00:21:44,560 Speaker 2: traded it. They were like, it's fine. Remember these are 454 00:21:44,560 --> 00:21:48,439 Speaker 2: also big companies. Do you think blackrock after like forty 455 00:21:48,520 --> 00:21:51,280 Speaker 2: years on the market once it's reputation damage because it 456 00:21:51,920 --> 00:21:54,119 Speaker 2: blew the money on something else or didn't. It's just 457 00:21:54,800 --> 00:21:58,520 Speaker 2: this is serious business. These people are not are going 458 00:21:58,560 --> 00:22:01,440 Speaker 2: to mess around for a one billion, two billion dollar 459 00:22:01,560 --> 00:22:02,919 Speaker 2: kind on behalf. 460 00:22:02,560 --> 00:22:07,240 Speaker 1: Of the tinfoil crowd? James, are they going to show 461 00:22:07,280 --> 00:22:08,399 Speaker 1: us the wallet addresses? 462 00:22:09,760 --> 00:22:11,480 Speaker 4: So I think some of them will. I think some 463 00:22:11,520 --> 00:22:13,280 Speaker 4: of them are going to share their addresses. But the 464 00:22:13,320 --> 00:22:15,280 Speaker 4: problem is, if you're using coinbase and some of these 465 00:22:15,320 --> 00:22:17,080 Speaker 4: other ones, they might not want to show you exactly 466 00:22:17,160 --> 00:22:20,520 Speaker 4: what the addresses are for operational security purposes. That said, 467 00:22:20,560 --> 00:22:22,760 Speaker 4: I think some of these smaller shops might say, all right, 468 00:22:23,119 --> 00:22:26,480 Speaker 4: these huge funds might not want to release their addresses 469 00:22:26,520 --> 00:22:27,439 Speaker 4: and show where the money is. 470 00:22:28,080 --> 00:22:29,400 Speaker 3: But if you're a. 471 00:22:29,320 --> 00:22:32,080 Speaker 4: Smaller shop, you might feel a lot more comfortable and 472 00:22:32,200 --> 00:22:33,680 Speaker 4: use it as a marketing ploy to be like, if 473 00:22:33,680 --> 00:22:35,600 Speaker 4: you're questioning it, you can use our ets. But like 474 00:22:35,720 --> 00:22:37,800 Speaker 4: Eric said, for the most part, the people that will 475 00:22:37,800 --> 00:22:39,840 Speaker 4: be using this and really care about that are going 476 00:22:39,920 --> 00:22:42,879 Speaker 4: to be more cryptonative type people, and they might be 477 00:22:42,960 --> 00:22:45,280 Speaker 4: just using this in like an IRA or something like 478 00:22:45,320 --> 00:22:48,040 Speaker 4: that they have a money in some sort of account 479 00:22:48,040 --> 00:22:51,439 Speaker 4: that they can't actually buy physical or spot bitcoin itself 480 00:22:51,480 --> 00:22:51,720 Speaker 4: with it. 481 00:22:51,800 --> 00:22:52,000 Speaker 1: Yeah. 482 00:22:52,080 --> 00:22:54,720 Speaker 2: Remember there's there is a gold ETF that stores the 483 00:22:54,760 --> 00:22:58,359 Speaker 2: gold in Switzerland, and there's another one that promises to 484 00:22:58,359 --> 00:23:01,040 Speaker 2: give you send you goal coins your front door, even 485 00:23:01,080 --> 00:23:05,720 Speaker 2: as a retail redemption. And those two have maybe one 486 00:23:05,760 --> 00:23:08,480 Speaker 2: percent of all the assets in gold ETF. So I 487 00:23:08,520 --> 00:23:10,679 Speaker 2: think we'll see something similar. Someone will come out with 488 00:23:10,760 --> 00:23:12,960 Speaker 2: a we're literally going to make sure it stored a 489 00:23:13,000 --> 00:23:15,560 Speaker 2: company that's in Europe, and we'll show you the address 490 00:23:15,600 --> 00:23:17,320 Speaker 2: and we'll figure out a way to sort of get 491 00:23:17,320 --> 00:23:20,200 Speaker 2: you bitcoin. I could see that kind of thing coming out, 492 00:23:20,400 --> 00:23:21,880 Speaker 2: but don't look for that to be a big hit 493 00:23:21,960 --> 00:23:24,679 Speaker 2: or anything. This is a very fringe sort of concern. 494 00:23:24,840 --> 00:23:28,320 Speaker 1: Okay, I think this is question eleven, James. I love 495 00:23:28,359 --> 00:23:32,080 Speaker 1: this one. Actually, how come the ETFs have different prices 496 00:23:32,240 --> 00:23:35,040 Speaker 1: and different discounts. That makes no sense to me. It's 497 00:23:35,080 --> 00:23:37,000 Speaker 1: all they're all holding the same underlying. 498 00:23:38,720 --> 00:23:40,000 Speaker 3: Yeah, that's actually a good question. 499 00:23:40,040 --> 00:23:41,639 Speaker 4: So some of them went with the idea of, like 500 00:23:41,640 --> 00:23:43,640 Speaker 4: we're going to do one one thousands of a bitcoin, 501 00:23:43,760 --> 00:23:46,280 Speaker 4: so if bitcoin's trading at forty thousand or fifty thousand, 502 00:23:46,280 --> 00:23:47,480 Speaker 4: will trade at forty dollars. 503 00:23:47,359 --> 00:23:48,119 Speaker 3: Or fifty dollars. 504 00:23:48,680 --> 00:23:50,560 Speaker 4: But for the most part, most CTFs just launch around 505 00:23:50,560 --> 00:23:52,600 Speaker 4: twenty five dollars, which it looks like what a bunch 506 00:23:52,600 --> 00:23:55,040 Speaker 4: of these guys did as far as the premium and 507 00:23:55,119 --> 00:23:58,399 Speaker 4: discount go. That's just a part of like fine tuning 508 00:23:58,400 --> 00:24:00,960 Speaker 4: this process. I've put out charts in a note that 509 00:24:01,040 --> 00:24:03,760 Speaker 4: shows like all those nine ETFs, the newborn nine, which 510 00:24:03,760 --> 00:24:04,760 Speaker 4: I've never heard Eric. 511 00:24:04,640 --> 00:24:07,119 Speaker 3: Say before this, and I love that phrase. It's so good. 512 00:24:07,680 --> 00:24:09,679 Speaker 2: I say it on Twitter all the time. You do 513 00:24:09,720 --> 00:24:10,399 Speaker 2: you not follow me? 514 00:24:11,160 --> 00:24:13,600 Speaker 3: I guess I don't follow you well enough. I never, 515 00:24:13,760 --> 00:24:17,000 Speaker 3: I never. The alliteration didn't click until I heard it aloud. 516 00:24:17,040 --> 00:24:21,880 Speaker 3: I guess they were trading at big premiums. 517 00:24:21,880 --> 00:24:23,480 Speaker 4: But what you've got to realize is, I think that's 518 00:24:23,480 --> 00:24:24,960 Speaker 4: also part of the reason why the volume is up, 519 00:24:24,960 --> 00:24:27,160 Speaker 4: because people are basically trying to r of those premiums 520 00:24:27,160 --> 00:24:29,280 Speaker 4: in the Newborn nine and the discount and GBTC. 521 00:24:30,400 --> 00:24:32,440 Speaker 3: But it's it's just a it's gonna take time. 522 00:24:32,520 --> 00:24:35,800 Speaker 4: Like these authorized participants, these market makers, they're going to 523 00:24:35,880 --> 00:24:37,960 Speaker 4: get more and more efficient as time goes on and 524 00:24:38,040 --> 00:24:39,600 Speaker 4: making these things, and we're not going to see these 525 00:24:39,640 --> 00:24:43,960 Speaker 4: same differences in premiums and discounts and prices. But while 526 00:24:43,960 --> 00:24:45,560 Speaker 4: we will see the difference in prices but not in 527 00:24:45,600 --> 00:24:46,960 Speaker 4: premiums and discounts over time. 528 00:24:53,880 --> 00:24:56,280 Speaker 1: James, I'm gonna ask this one of you because I 529 00:24:56,320 --> 00:24:59,760 Speaker 1: think it's a little technical. How do these ETFs match 530 00:25:00,119 --> 00:25:03,680 Speaker 1: up with the biggest holders of bitcoin to the best 531 00:25:03,680 --> 00:25:04,280 Speaker 1: of our knowledge? 532 00:25:06,320 --> 00:25:09,000 Speaker 4: Yeah, So the problem with this question is, like it's 533 00:25:09,040 --> 00:25:11,720 Speaker 4: what a lot of regulators get don't understand about bitcoin, 534 00:25:12,680 --> 00:25:15,720 Speaker 4: Like if you use an exchange wallet, that wallet is 535 00:25:15,760 --> 00:25:18,000 Speaker 4: not a wallet for one person, that's for an exchange 536 00:25:18,040 --> 00:25:20,160 Speaker 4: that's representative a whole bunch of people, which goes back 537 00:25:20,160 --> 00:25:22,879 Speaker 4: to like tradfy looking at ETFs and who owns the 538 00:25:23,000 --> 00:25:24,960 Speaker 4: who actually owns the ETFs. It's not black rockets the 539 00:25:25,040 --> 00:25:27,520 Speaker 4: end investors in those funds. And that's the same way 540 00:25:27,520 --> 00:25:29,720 Speaker 4: to look at some of these bitcoin addresses. And the 541 00:25:29,760 --> 00:25:32,440 Speaker 4: other part of it is is the exact opposite. I 542 00:25:33,640 --> 00:25:36,360 Speaker 4: could have ten different bitcoin addresses and you would never 543 00:25:36,440 --> 00:25:40,159 Speaker 4: know that. Said GBTC is like the largest known holder 544 00:25:40,400 --> 00:25:43,000 Speaker 4: of bitcoin in the world as far as i'mwhere, aside 545 00:25:43,000 --> 00:25:45,080 Speaker 4: from something like Satoshi and some of these other people. 546 00:25:45,080 --> 00:25:48,359 Speaker 4: But we don't exactly know how many of those wallets 547 00:25:48,480 --> 00:25:51,960 Speaker 4: or actually Satoshi and things like that. So the real answer, 548 00:25:51,960 --> 00:25:55,240 Speaker 4: the easy answer, is Satoshi Nakamoto, the inventor of bitcoin. 549 00:25:55,320 --> 00:25:58,199 Speaker 4: But those coins haven't moved since basically the invention of bitcoin. 550 00:25:58,800 --> 00:26:01,800 Speaker 4: But yeah, GBTE is the largest holder. When it came over, 551 00:26:01,840 --> 00:26:04,600 Speaker 4: it had over six hundred thousand bitcoin. A lot of 552 00:26:04,600 --> 00:26:07,320 Speaker 4: that's leaving and coming to other ETFs likely, but it's 553 00:26:07,440 --> 00:26:09,280 Speaker 4: it's basically the largest holder right now. 554 00:26:09,440 --> 00:26:13,480 Speaker 2: And how much this Michael Sailor or micro Strategy hold again, James. 555 00:26:15,040 --> 00:26:16,440 Speaker 3: In dollars? 556 00:26:17,359 --> 00:26:17,959 Speaker 2: Eight billion? 557 00:26:18,480 --> 00:26:19,680 Speaker 3: Yeah, it's eight billion dollars. 558 00:26:19,720 --> 00:26:22,440 Speaker 4: It's one hundred and thirty nine thousand bitcoin. 559 00:26:22,600 --> 00:26:25,320 Speaker 2: What to watch in the next twelve months? I BIT 560 00:26:26,040 --> 00:26:29,000 Speaker 2: passing micro Strategy at eight billion. I'm not sure i 561 00:26:29,040 --> 00:26:30,280 Speaker 2: BIT will go that fast. We'll call it one to 562 00:26:30,280 --> 00:26:34,000 Speaker 2: two years, but I'm calling it now. I guarantee that 563 00:26:34,000 --> 00:26:34,400 Speaker 2: will happen. 564 00:26:34,480 --> 00:26:34,680 Speaker 4: Trol. 565 00:26:35,119 --> 00:26:37,399 Speaker 2: I don't the timeframe will see. It depends on the 566 00:26:37,400 --> 00:26:40,520 Speaker 2: price and stuff. But that's something that you could probably 567 00:26:40,600 --> 00:26:43,919 Speaker 2: take to the bank. Not all of them will pass him. 568 00:26:44,240 --> 00:26:46,880 Speaker 2: That said, owning that much as a stock is one 569 00:26:46,920 --> 00:26:49,080 Speaker 2: person interested a lot, But I could see that happening. 570 00:26:49,119 --> 00:26:53,800 Speaker 1: Okay, okay, James, I'm curious about this one. What percent 571 00:26:53,960 --> 00:26:58,000 Speaker 1: of bitcoin is already owned by the ETFs and how 572 00:26:58,080 --> 00:27:01,199 Speaker 1: high could it get. I'm picturing a conversation in a 573 00:27:01,200 --> 00:27:03,520 Speaker 1: couple of years. Maybe it could be more than a 574 00:27:03,560 --> 00:27:06,280 Speaker 1: couple of years where suddenly it's like you look at 575 00:27:06,680 --> 00:27:09,639 Speaker 1: who owns what and it's like black Rock and Vanguard 576 00:27:10,040 --> 00:27:14,640 Speaker 1: own ten percent of all public trade in companies or something. Right, 577 00:27:15,080 --> 00:27:18,280 Speaker 1: we're gonna get to a world where ETF's own vast 578 00:27:18,320 --> 00:27:20,720 Speaker 1: quantities of the bitcoin available. 579 00:27:21,800 --> 00:27:25,120 Speaker 4: Yeah, they already if you include all international ETFs and gBGC, 580 00:27:25,200 --> 00:27:27,600 Speaker 4: I mean it's somewhere around flourish percent. I think it's 581 00:27:27,680 --> 00:27:30,119 Speaker 4: under five percent, but it's a pretty healthy chunk of 582 00:27:30,440 --> 00:27:33,119 Speaker 4: the out standing bitcoin. And that's out of like the 583 00:27:33,359 --> 00:27:35,680 Speaker 4: outstanding bitcoin. It doesn't take into account the fact that 584 00:27:36,000 --> 00:27:38,080 Speaker 4: a lot of this bitcoin is just hasn't moved in 585 00:27:38,119 --> 00:27:38,639 Speaker 4: as untouched. 586 00:27:38,640 --> 00:27:40,240 Speaker 3: It might be in a hard drives that were lost. 587 00:27:40,280 --> 00:27:43,840 Speaker 4: So the number as far as like actual float, if 588 00:27:43,880 --> 00:27:45,280 Speaker 4: you want to think about it that way, might even 589 00:27:45,320 --> 00:27:47,680 Speaker 4: be higher. I'd have to go back and crunch the 590 00:27:47,720 --> 00:27:50,480 Speaker 4: exact numbers. But things are changing very quickly, pretty much 591 00:27:50,480 --> 00:27:51,120 Speaker 4: every single day. 592 00:27:51,640 --> 00:27:53,919 Speaker 1: How does that compare with like equities and fixed income 593 00:27:54,000 --> 00:27:54,680 Speaker 1: or this. 594 00:27:54,600 --> 00:27:56,640 Speaker 2: Is another thing I hear people kind of I wouldn't 595 00:27:56,640 --> 00:27:59,880 Speaker 2: say moaning about, but like fear mongering over which is, hey, 596 00:28:00,320 --> 00:28:04,199 Speaker 2: there's only a limited supply, how how could this work? Scarcity? 597 00:28:04,280 --> 00:28:06,280 Speaker 2: And I'm like, well, there's only a limited supply of 598 00:28:06,640 --> 00:28:09,439 Speaker 2: float for a stock shares too, that this is normal. 599 00:28:09,480 --> 00:28:10,960 Speaker 2: It just means the price would go up if there's 600 00:28:11,080 --> 00:28:14,040 Speaker 2: if there's a limited supply and more demand, the price 601 00:28:14,040 --> 00:28:16,359 Speaker 2: would go up. So I'm not too worried about it. 602 00:28:16,520 --> 00:28:18,399 Speaker 2: I do think, you know, maybe we'll settle in it 603 00:28:18,520 --> 00:28:21,040 Speaker 2: like fifteen percent, that's where I could see this going 604 00:28:21,080 --> 00:28:24,520 Speaker 2: from four. But remember ETFs are headed for fifteen percent 605 00:28:24,520 --> 00:28:28,760 Speaker 2: of the stock market too, so I think ETFs overall 606 00:28:28,600 --> 00:28:31,399 Speaker 2: will end up, you know, under twenty percent of just 607 00:28:31,440 --> 00:28:33,719 Speaker 2: about everything. Every now and then they own a lot 608 00:28:33,760 --> 00:28:35,359 Speaker 2: of us like a mid cap, but that's like a 609 00:28:35,440 --> 00:28:38,280 Speaker 2: quirky situation. They usually rebounce out of it, so I 610 00:28:38,320 --> 00:28:40,440 Speaker 2: would see that. I wouldn't see them owning like, you know, 611 00:28:40,520 --> 00:28:43,960 Speaker 2: eighty percent or anything. But it's certainly the more they own, 612 00:28:44,120 --> 00:28:47,000 Speaker 2: or the less limited supply there is, the more volatility 613 00:28:47,040 --> 00:28:50,640 Speaker 2: there should be, which, by the way, is in my 614 00:28:50,800 --> 00:28:53,200 Speaker 2: in my theory, the volatility this is a feature, not 615 00:28:53,320 --> 00:28:55,800 Speaker 2: a bug. I think there's gonna be leverage. ETFs is 616 00:28:55,800 --> 00:28:59,320 Speaker 2: gonna be fun for traders and what I call hot sauce. 617 00:28:59,360 --> 00:29:00,800 Speaker 2: So I see it's sort of fitting in as a 618 00:29:01,320 --> 00:29:04,040 Speaker 2: hot sauce. So that volatility, I think would be desired, 619 00:29:04,080 --> 00:29:05,920 Speaker 2: and the scarcity, if you own some, you're gonna feel 620 00:29:05,920 --> 00:29:06,520 Speaker 2: good about. 621 00:29:06,280 --> 00:29:10,920 Speaker 1: That, okay, James if I sell GBTC that's gray scale 622 00:29:11,080 --> 00:29:15,040 Speaker 1: at a loss. Can I buy another bitcoin ETF or 623 00:29:15,040 --> 00:29:18,320 Speaker 1: do I have to wait thirty one days to avoid 624 00:29:18,320 --> 00:29:19,800 Speaker 1: the wash sale rule. 625 00:29:22,800 --> 00:29:23,040 Speaker 3: Yeah. 626 00:29:23,160 --> 00:29:26,760 Speaker 4: So first before I answer this question, I'll say, seek 627 00:29:26,880 --> 00:29:28,520 Speaker 4: tax advice from a tax professional. 628 00:29:29,160 --> 00:29:31,440 Speaker 3: As far as I'm aware, maybe we just leave it there. 629 00:29:33,680 --> 00:29:36,280 Speaker 4: I can answer from what I understand because I went 630 00:29:36,280 --> 00:29:37,719 Speaker 4: in the weeds on this a little bit last night 631 00:29:37,760 --> 00:29:38,280 Speaker 4: and this morning. 632 00:29:40,160 --> 00:29:40,720 Speaker 3: Right now. 633 00:29:40,760 --> 00:29:43,600 Speaker 4: Technically so for gold ETFs, for precious metals ETFs, there 634 00:29:43,600 --> 00:29:45,280 Speaker 4: is no washeale trading rule, which is what you were 635 00:29:45,280 --> 00:29:48,200 Speaker 4: asking about. You can basically sell and buy immediately because 636 00:29:48,200 --> 00:29:51,480 Speaker 4: they're not securities. A lot of the bills that have 637 00:29:51,560 --> 00:29:54,040 Speaker 4: come in front of Congress, specifically one from Lumus Gillibrand 638 00:29:54,080 --> 00:29:56,400 Speaker 4: trying to do a market structure bill around crypto and 639 00:29:56,440 --> 00:29:59,680 Speaker 4: digital assets, if those ever get passed, it will make 640 00:29:59,800 --> 00:30:02,720 Speaker 4: why sale. It will bring the wash sale rule into 641 00:30:02,760 --> 00:30:05,840 Speaker 4: effect for cryptos. That said, as far as I'm aware 642 00:30:05,920 --> 00:30:07,719 Speaker 4: right now, it is not in effect, so it's not 643 00:30:07,760 --> 00:30:10,520 Speaker 4: going to be impacting flows. That said, even flows wouldn't 644 00:30:10,520 --> 00:30:12,880 Speaker 4: matter because for the most part, anyone who's in these 645 00:30:12,920 --> 00:30:15,720 Speaker 4: things right now is probably up unless they bought like 646 00:30:16,000 --> 00:30:17,760 Speaker 4: at the very worst time a couple of years ago. 647 00:30:17,800 --> 00:30:20,520 Speaker 4: There's there's likely not really a situation where people are 648 00:30:20,520 --> 00:30:24,680 Speaker 4: going to be tax loss harvesting right now in these things. 649 00:30:24,920 --> 00:30:27,680 Speaker 4: So yes, I don't think they're subject to the washsale rule, 650 00:30:28,120 --> 00:30:30,120 Speaker 4: but no, I don't think it's impacting anything right now. 651 00:30:30,200 --> 00:30:36,640 Speaker 1: Okay, James, We're we're getting to the final questions here. 652 00:30:37,040 --> 00:30:41,360 Speaker 1: How does an advisor in good faith recommend a bitcoin 653 00:30:41,400 --> 00:30:46,120 Speaker 1: ETF when the SEC chairman who taught blockchain at MIT 654 00:30:46,800 --> 00:30:50,640 Speaker 1: has said it's pretty much a scam in his approval statement. 655 00:30:52,160 --> 00:30:54,560 Speaker 4: Yeah, I mean a lot of what Gary said there 656 00:30:54,680 --> 00:30:56,680 Speaker 4: is political in nature, is the first. 657 00:30:56,480 --> 00:30:57,120 Speaker 3: Thing I would say. 658 00:30:57,120 --> 00:30:59,920 Speaker 4: And second of all, you can just look at the 659 00:31:00,200 --> 00:31:03,000 Speaker 4: hard data around what a small allocation in bitcoin does 660 00:31:03,040 --> 00:31:05,120 Speaker 4: to a portfolio. It wouldn't be hard to make the 661 00:31:05,240 --> 00:31:07,680 Speaker 4: argument of why it would make sense in a giving 662 00:31:07,720 --> 00:31:10,880 Speaker 4: client's portfolio, obviously assuming they have the risk appetite and 663 00:31:10,920 --> 00:31:13,320 Speaker 4: the ability to take the risk to add a volatile 664 00:31:13,360 --> 00:31:15,600 Speaker 4: asset to a portfolio. But for the most part, I 665 00:31:15,640 --> 00:31:17,840 Speaker 4: think it'd be a pretty easy argument, especially if you 666 00:31:17,920 --> 00:31:19,840 Speaker 4: have your end client coming to you asking you to 667 00:31:19,840 --> 00:31:20,320 Speaker 4: buy this thing. 668 00:31:21,680 --> 00:31:25,240 Speaker 1: Eric, if you're having that conversation with the financial advisor. 669 00:31:25,360 --> 00:31:28,120 Speaker 1: The next obvious question is, if you're the advisor, this 670 00:31:28,160 --> 00:31:30,480 Speaker 1: is what you're gonna hear from someone. When do I 671 00:31:30,480 --> 00:31:32,800 Speaker 1: get to put this stuff in a retirement account? 672 00:31:33,640 --> 00:31:36,200 Speaker 2: That's a good one at some point. A lot of 673 00:31:36,240 --> 00:31:37,360 Speaker 2: them have a broker I mean a lot of them 674 00:31:37,360 --> 00:31:39,720 Speaker 2: do a brokerage window. You can get through there, assuming 675 00:31:40,240 --> 00:31:43,200 Speaker 2: they provide it. I know Schwab has access to it. 676 00:31:43,240 --> 00:31:46,520 Speaker 2: But here's the bigger question. A lot of it may 677 00:31:46,560 --> 00:31:50,480 Speaker 2: be difficult for now. Again, over time, black Rock, Fidelity, 678 00:31:50,720 --> 00:31:53,160 Speaker 2: these are actually sponsors of some retirement accounts, so it 679 00:31:53,240 --> 00:31:56,320 Speaker 2: depends for now. I think over time it'll be normal 680 00:31:56,880 --> 00:32:01,160 Speaker 2: through a brokerage window. That said, the platforms out there 681 00:32:01,160 --> 00:32:06,880 Speaker 2: like these, these brokerage platforms and advisory platforms, Wells Fargo, Merrill, JP, Morgan, 682 00:32:07,400 --> 00:32:08,920 Speaker 2: A lot of them don't have them yet, so these 683 00:32:08,920 --> 00:32:11,280 Speaker 2: flows and assets are even without that kind of distribution. 684 00:32:11,760 --> 00:32:14,480 Speaker 2: Those will probably also happen over time. That could take 685 00:32:14,560 --> 00:32:18,240 Speaker 2: like a eight months to two years. Though Vanguard doesn't 686 00:32:18,280 --> 00:32:21,640 Speaker 2: have them. That's more for philosophy. They just don't believe 687 00:32:21,680 --> 00:32:25,480 Speaker 2: in this philosophically as an investment. They might come around eventually, 688 00:32:25,520 --> 00:32:27,760 Speaker 2: but for now, it's actually not available a lot of places. 689 00:32:27,760 --> 00:32:30,080 Speaker 2: I think over time, given the size of the asset 690 00:32:30,160 --> 00:32:32,840 Speaker 2: managers that are into them, they will pop up on 691 00:32:32,880 --> 00:32:36,400 Speaker 2: these places again typically, you know, Joel, you know I 692 00:32:36,440 --> 00:32:37,040 Speaker 2: love MTV. 693 00:32:37,480 --> 00:32:38,480 Speaker 3: I read the book MTV. 694 00:32:38,960 --> 00:32:41,680 Speaker 2: Cable companies did not want to carry it. Remember the 695 00:32:41,720 --> 00:32:44,960 Speaker 2: campaign I Want my MTV. That's how they got That's 696 00:32:44,960 --> 00:32:48,840 Speaker 2: how MTV became MTV. They were told people call your 697 00:32:49,240 --> 00:32:51,880 Speaker 2: cable person that you're you know, in Illinois or whatever, 698 00:32:52,120 --> 00:32:54,560 Speaker 2: and tell them I want my MTV. That's how MTV 699 00:32:54,720 --> 00:32:57,640 Speaker 2: got on widely distributed on cable. The same thing here. 700 00:32:57,680 --> 00:33:00,320 Speaker 2: If there's enough grassroots demand, it'll be everywhere us me. 701 00:33:01,640 --> 00:33:04,360 Speaker 2: If not, it might not be everywhere all right. 702 00:33:04,680 --> 00:33:12,400 Speaker 1: Final question. Unsurprisingly outflows dominating the conversation so far. So 703 00:33:12,440 --> 00:33:17,760 Speaker 1: what's next. What are some other key ETF data points 704 00:33:17,880 --> 00:33:21,480 Speaker 1: or features worth keeping an eye on to gauge success 705 00:33:21,480 --> 00:33:24,280 Speaker 1: in competition in the coming weeks or months. 706 00:33:24,800 --> 00:33:28,840 Speaker 4: James, Yeah, So I'm watching those discounts and premiums I 707 00:33:28,880 --> 00:33:32,720 Speaker 4: was talking about. I'm watching spreads, GBDC. Is they tight? 708 00:33:33,880 --> 00:33:36,200 Speaker 4: It is trading of all these products, which makes sense. 709 00:33:36,200 --> 00:33:38,000 Speaker 4: As Eric talked about, it came over as a full 710 00:33:38,040 --> 00:33:41,800 Speaker 4: grown adult with immense liquidity, but their spreads are extremely low. 711 00:33:41,800 --> 00:33:44,640 Speaker 4: But ibitspreads are already compressing pretty heavily just on the 712 00:33:44,640 --> 00:33:46,240 Speaker 4: third day of trading, and so are many others. They're 713 00:33:46,280 --> 00:33:49,040 Speaker 4: all trading pretty tightly, so be watching that and we'll 714 00:33:49,080 --> 00:33:50,280 Speaker 4: continue watching flows. 715 00:33:50,360 --> 00:33:52,040 Speaker 3: Obviously volume will be important. 716 00:33:52,040 --> 00:33:54,120 Speaker 4: We'll see I would expect volume to fall off a 717 00:33:54,160 --> 00:33:58,360 Speaker 4: little bit after the hype train has subsided, But as 718 00:33:58,440 --> 00:34:00,840 Speaker 4: Eric hinted with his last answer, I'm more interested to 719 00:34:00,840 --> 00:34:02,960 Speaker 4: see what happens with these assets and flows over the 720 00:34:03,000 --> 00:34:06,000 Speaker 4: next eight to eighteen months, more so than I'm really 721 00:34:06,000 --> 00:34:09,680 Speaker 4: focused on what's going on. Yes, now matters getting more assets, 722 00:34:09,719 --> 00:34:12,080 Speaker 4: getting more volume immediately out the gate can help you 723 00:34:12,200 --> 00:34:14,440 Speaker 4: longer term, but it doesn't guarantee anything. 724 00:34:14,840 --> 00:34:15,399 Speaker 3: Longer term. 725 00:34:15,440 --> 00:34:18,000 Speaker 4: Stuff will be very interesting to see as these ETFs 726 00:34:18,040 --> 00:34:21,880 Speaker 4: potentially get added to those big wirehouses and advisor platforms. 727 00:34:22,000 --> 00:34:24,399 Speaker 3: So flows is still going to be the number one 728 00:34:24,400 --> 00:34:26,160 Speaker 3: thing I'm watching as far as I'm concerned over the 729 00:34:26,160 --> 00:34:26,560 Speaker 3: long term. 730 00:34:26,560 --> 00:34:28,120 Speaker 4: And then some of those other facts, like is somebody 731 00:34:28,120 --> 00:34:31,480 Speaker 4: going to release their wallet addresses? Will people figure out 732 00:34:31,520 --> 00:34:34,440 Speaker 4: ways to deliver smaller values of bitcoin directly to end clients? 733 00:34:35,440 --> 00:34:38,440 Speaker 4: And will we get to in kind creation redemption with 734 00:34:38,480 --> 00:34:40,799 Speaker 4: the SEC is not comfortable with He. 735 00:34:41,160 --> 00:34:43,000 Speaker 2: Went over almost everything I had. I would add in 736 00:34:43,040 --> 00:34:45,840 Speaker 2: their options. Options should be listed on these in about 737 00:34:45,840 --> 00:34:48,840 Speaker 2: two months ish. They have to get some more approval 738 00:34:48,840 --> 00:34:51,640 Speaker 2: from the SEC. But assuming they do, options will help 739 00:34:51,680 --> 00:34:54,440 Speaker 2: because anything volatile and you have options on it, you're 740 00:34:54,440 --> 00:34:56,560 Speaker 2: going to attract the trading crowd. They love that you 741 00:34:56,640 --> 00:34:59,320 Speaker 2: get leverage. ETFs have been filed already two x bitcoin. 742 00:34:59,680 --> 00:35:01,359 Speaker 2: That will also drive in, so there'll be a lot 743 00:35:01,360 --> 00:35:04,080 Speaker 2: of these amplifiers or these things that sort of bring 744 00:35:04,120 --> 00:35:06,279 Speaker 2: more ecosystem into it. We're going to watch that, and 745 00:35:06,280 --> 00:35:09,640 Speaker 2: then the fees. The fees are already low between twenty 746 00:35:09,640 --> 00:35:12,280 Speaker 2: and thirty, we're probably going to see somebody break through 747 00:35:12,800 --> 00:35:15,160 Speaker 2: and set a low, so the fee war will probably 748 00:35:15,400 --> 00:35:18,200 Speaker 2: carry on as well. I'm watching that, and then I 749 00:35:18,239 --> 00:35:20,759 Speaker 2: would just but just to go back to James, as 750 00:35:20,800 --> 00:35:24,440 Speaker 2: I think, you know flows are truth. You just you know, 751 00:35:24,560 --> 00:35:27,239 Speaker 2: assets can move with the price of bitcoin, like you 752 00:35:27,239 --> 00:35:28,960 Speaker 2: can have assets go up just because the bitcoin went 753 00:35:29,040 --> 00:35:32,960 Speaker 2: up in your fund. But flows are really truth, and 754 00:35:33,040 --> 00:35:36,080 Speaker 2: so flows are probably the most important number. But I 755 00:35:36,120 --> 00:35:38,560 Speaker 2: will say this to anybody listening who's from the crypto world. 756 00:35:38,960 --> 00:35:41,359 Speaker 2: You need two things for an eat, for a new 757 00:35:41,400 --> 00:35:44,040 Speaker 2: category to have a good shot at growth volume and 758 00:35:44,080 --> 00:35:47,680 Speaker 2: low fees, and these have that in spades. And what 759 00:35:47,719 --> 00:35:49,560 Speaker 2: I also like, what I'm seeing so far is that 760 00:35:49,840 --> 00:35:52,399 Speaker 2: if you look at the nine, the newborn nine, their 761 00:35:52,640 --> 00:35:56,319 Speaker 2: flows and their volumes are proportional to their size, and 762 00:35:56,400 --> 00:35:59,600 Speaker 2: everybody's getting some love. That tells me it's not one 763 00:35:59,640 --> 00:36:02,759 Speaker 2: giant investor or something. It's everybody putting their whole might 764 00:36:02,880 --> 00:36:05,600 Speaker 2: behind it and it ends up proportional to their weight, 765 00:36:06,000 --> 00:36:08,640 Speaker 2: and that's good. That means a middle class is growing already, 766 00:36:09,040 --> 00:36:11,239 Speaker 2: and that should help long term as well. 767 00:36:12,200 --> 00:36:14,880 Speaker 1: We've been waiting for this race to begin for ages. 768 00:36:15,280 --> 00:36:17,680 Speaker 1: Now it actually began. When are we gonna know who 769 00:36:17,800 --> 00:36:21,720 Speaker 1: wins the race to be the top spot bitcoin ETF. 770 00:36:23,880 --> 00:36:26,359 Speaker 4: I'll jump in real quick. I would argue that it's 771 00:36:26,360 --> 00:36:29,360 Speaker 4: almost kind of over right now because of gbtc's immense 772 00:36:29,440 --> 00:36:31,000 Speaker 4: lead and assets and liquidity. 773 00:36:31,560 --> 00:36:33,200 Speaker 3: That said, I would never count Blackrock out. 774 00:36:33,200 --> 00:36:36,040 Speaker 2: Wait, who whoa whoa whoa whoa that I thought you 775 00:36:36,080 --> 00:36:38,400 Speaker 2: were going to say Blackrock, There's no way you can 776 00:36:38,440 --> 00:36:43,600 Speaker 2: count GBTC that. This is where it's complicated rol GBTC. 777 00:36:44,800 --> 00:36:47,800 Speaker 2: It's like it's like, Okay, there's a race and the 778 00:36:47,800 --> 00:36:51,520 Speaker 2: the it's adults and like nine newborn babies, and the 779 00:36:51,640 --> 00:36:59,160 Speaker 2: race goes on for fifty years. Obviously, that's I'm getting 780 00:36:59,160 --> 00:36:59,839 Speaker 2: into a weird place. 781 00:37:01,080 --> 00:37:04,040 Speaker 1: I was gonna say, listen, listen, listen. Let me just 782 00:37:04,040 --> 00:37:06,200 Speaker 1: say this did take some longevity meds there. 783 00:37:06,280 --> 00:37:10,080 Speaker 2: Here's what's gonna happen over time. GBTC is going to bleed. 784 00:37:11,239 --> 00:37:13,960 Speaker 2: It's going to like a melting ice cube. It will stabilize. 785 00:37:14,560 --> 00:37:19,360 Speaker 2: But honestly, from what I'm seeing early James, I wouldn't 786 00:37:19,360 --> 00:37:22,560 Speaker 2: be surprised if bit of an ibit is already trading 787 00:37:22,600 --> 00:37:26,799 Speaker 2: more day to day than GBTC within the month, And 788 00:37:26,920 --> 00:37:29,160 Speaker 2: once that happens, it's only a matter of time before 789 00:37:29,160 --> 00:37:32,319 Speaker 2: the assets gets past sort of like img EM. So 790 00:37:32,400 --> 00:37:34,400 Speaker 2: I would look at a couple of years down the 791 00:37:34,480 --> 00:37:37,640 Speaker 2: road the assets get passed. But the real important one 792 00:37:37,680 --> 00:37:39,680 Speaker 2: is volume, and I think I BIT could have more 793 00:37:39,719 --> 00:37:41,440 Speaker 2: volume by the end of the month. You disagree. 794 00:37:43,320 --> 00:37:45,440 Speaker 3: End of the month seems new to me. 795 00:37:45,480 --> 00:37:47,400 Speaker 4: But again, I think a lot of the reason that 796 00:37:47,480 --> 00:37:49,960 Speaker 4: GBTC has has made up fifty two percent of this 797 00:37:50,120 --> 00:37:52,840 Speaker 4: entire volume. Pie is because it was being used as 798 00:37:52,880 --> 00:37:54,760 Speaker 4: the other side of the trade on these market makers. 799 00:37:54,840 --> 00:37:57,560 Speaker 4: So when they're when they're offering shares to new people 800 00:37:57,560 --> 00:38:00,600 Speaker 4: that are buying them on these new Boar nine, they're 801 00:38:00,640 --> 00:38:03,320 Speaker 4: probably going out because then they're net short those ETFs. 802 00:38:03,320 --> 00:38:05,640 Speaker 4: They have to go long Bitcoin in some way on 803 00:38:05,680 --> 00:38:07,200 Speaker 4: the other side, and I think a lot of people 804 00:38:07,239 --> 00:38:09,560 Speaker 4: were using GBTC. That's why we saw minimal outflows in 805 00:38:09,600 --> 00:38:12,239 Speaker 4: the first day despite the massive trading volume. So I mean, 806 00:38:12,320 --> 00:38:14,799 Speaker 4: maybe you're right, maybe that once these flows start to 807 00:38:14,800 --> 00:38:17,040 Speaker 4: settle in and the discounts and premiums come down a 808 00:38:17,080 --> 00:38:20,640 Speaker 4: little bit, maybe GBDC starts to lose some of its shine. 809 00:38:20,640 --> 00:38:22,840 Speaker 4: But right now, from what I'm seeing on a trading perspective, 810 00:38:23,360 --> 00:38:26,759 Speaker 4: GBDC spreads are are immensely tight and tighter than everyone else. 811 00:38:26,800 --> 00:38:28,680 Speaker 4: But IBE it's gaining on them really quickly. So maybe 812 00:38:28,719 --> 00:38:30,600 Speaker 4: you're right. I'll take the l of the wrong I won't. 813 00:38:30,600 --> 00:38:32,400 Speaker 4: I won't bet a Susie Lunch on this one. 814 00:38:32,600 --> 00:38:35,760 Speaker 2: But again is whoever has the average thirty day volume 815 00:38:36,719 --> 00:38:38,879 Speaker 2: that's higher that will take a couple months to play out, 816 00:38:39,160 --> 00:38:42,360 Speaker 2: that to me would be the winner. But again, GBTC 817 00:38:42,480 --> 00:38:45,560 Speaker 2: makes this such an intriguing race. It's it is interesting, 818 00:38:45,920 --> 00:38:48,120 Speaker 2: but it's a again. It's that's why I say the 819 00:38:48,160 --> 00:38:48,799 Speaker 2: newborn nine. 820 00:38:48,840 --> 00:38:54,240 Speaker 1: Do you think we'll talk about any of this again? Probably? James. 821 00:38:54,360 --> 00:38:55,640 Speaker 1: Thanks for joining us on Trillions. 822 00:38:56,520 --> 00:38:58,040 Speaker 3: Thanks for having me guys, this was fun. 823 00:39:04,440 --> 00:39:07,360 Speaker 5: Thanks for listening to Trillions until next time. You can 824 00:39:07,400 --> 00:39:12,279 Speaker 5: find us on the Bloomberg Terminal, Bloomberg dot com, Apple Podcasts, Spotify, 825 00:39:12,920 --> 00:39:15,360 Speaker 5: or wherever else you'd like to listen. We'd love to 826 00:39:15,360 --> 00:39:18,680 Speaker 5: hear from you. We're on Twitter, I'm at Joel Webber Show. 827 00:39:19,120 --> 00:39:23,760 Speaker 5: He's at air Caultunas. This episode of Trillions was produced 828 00:39:23,760 --> 00:39:26,520 Speaker 5: by Magnus Hendrickson. Bye