WEBVTT - Blackrock's Bitcoin Believer 0:00:05.400 --> 0:00:06.120 Bokn or chillions. 0:00:06.120 --> 0:00:08.440 I'm Joel Webber and I'm Eric Belchunas. 0:00:10.520 --> 0:00:12.600 Eric, we got a vip here today, we do. 0:00:13.000 --> 0:00:14.080 I'm excited about this one. 0:00:14.160 --> 0:00:14.680 Who is it? 0:00:14.720 --> 0:00:18.480 We got Blackrocks head of Digital Assets, Robbie Mitchnick, and 0:00:19.520 --> 0:00:21.760 I have been told and we've seen him as like 0:00:21.880 --> 0:00:25.759 the guy internally who has really turned Blackrock into this 0:00:25.800 --> 0:00:29.840 sort of bitcoin force. And not only has he done that, 0:00:29.880 --> 0:00:34.159 but since the bitcoin ETFs have launched, especially ibit, I bit, 0:00:34.320 --> 0:00:37.960 Blackrocks offering, Yeah, that's their bitcoin ETF. And as an analyst, 0:00:38.000 --> 0:00:39.960 I've never seen anything like this. This has to be 0:00:40.000 --> 0:00:42.560 like a golf analyst tracking Tiger Woods in the late nineties. 0:00:42.600 --> 0:00:42.960 What is this? 0:00:43.000 --> 0:00:44.560 What is going on here? Let me give you some 0:00:44.680 --> 0:00:49.040 number stroll. So before I Bit, the fastest ETF to 0:00:49.040 --> 0:00:52.560 get to ten billion dollars in assets was jp e Q, 0:00:52.960 --> 0:00:56.560 which did it in six hundred and forty seven days. Okay, 0:00:56.560 --> 0:00:59.400 it's like three years. I Bit did it in forty 0:00:59.480 --> 0:01:03.360 nine days, and Fidelity no slouch, did it in seventy seven. 0:01:03.440 --> 0:01:07.160 So think about that. Just let that absorb. That is insane, right. 0:01:07.840 --> 0:01:11.240 Another one, if you look at Blackrocks ETFs globally they 0:01:11.240 --> 0:01:14.120 have over one thousand, like one thousand and forty four 0:01:14.200 --> 0:01:17.760 something like that. IBID is taken in more money than 0:01:17.800 --> 0:01:20.520 any of them. IBID is taken in eighteen percent of 0:01:20.600 --> 0:01:24.160 all of black Rocks global flows this year, unreal for 0:01:24.280 --> 0:01:26.800 a new launch or unreal for any ETF. Even IVV 0:01:26.880 --> 0:01:29.680 doesn't pull off those numbers. And then when we look 0:01:29.720 --> 0:01:32.440 at the ETFs in the US, you're to date flows, 0:01:32.800 --> 0:01:35.720 IBID is number two overall. Only VU, the stud of 0:01:35.840 --> 0:01:39.520 all studs, VU is above IBIT this year, so it's 0:01:39.560 --> 0:01:42.160 top one percent in volume. Again, this is after four 0:01:42.160 --> 0:01:44.920 months on the market, and we see thirteen f's come in, 0:01:44.920 --> 0:01:47.960 which is reported holders. There's already two hundred and sixty 0:01:48.040 --> 0:01:50.720 reported holders of this. Normally a new ETF and their 0:01:50.760 --> 0:01:53.440 first thirteen F season will see anywhere from zero till 0:01:53.480 --> 0:01:57.560 five if they're lucky. So again, this is like breaking 0:01:57.640 --> 0:02:00.680 records by quantum leap style. 0:02:01.360 --> 0:02:04.600 And here we are with the guy who came to 0:02:04.640 --> 0:02:07.400 Blackrock and said, let's do something a little different. Okay, 0:02:07.440 --> 0:02:10.200 So joining us on this episode of Trillions Robbie Mitchnick, 0:02:10.360 --> 0:02:13.840 head of Digital Assets at Blackrock, and also James Safert, 0:02:14.080 --> 0:02:19.760 an ETF analyst with Bloomberg Intelligence, this time on Trillions. 0:02:20.480 --> 0:02:27.960 Blackrocks Bitcoin believer Robbie James, Welcome to Trillions. 0:02:28.360 --> 0:02:30.400 Thanks for having me, Thanks so much for having me on, 0:02:30.520 --> 0:02:32.799 and I appreciate the intro. I actually feel like I'm 0:02:32.840 --> 0:02:36.080 the one with celebrities here because we've all been watching 0:02:36.280 --> 0:02:37.360 Eric and James. 0:02:37.360 --> 0:02:41.520 Your guys, their head don't do it. 0:02:42.960 --> 0:02:46.880 So James is a somewhat of a regular on the podcast. 0:02:47.040 --> 0:02:49.800 Robbie obviously so thrilled to have you here. Have you 0:02:49.880 --> 0:02:54.280 asked Larry Fink for a raise yet? No? No, okay, 0:02:54.440 --> 0:02:56.200 all right, so maybe it's like in the course somebody 0:02:56.280 --> 0:02:57.239 just gave Yeah. 0:02:57.280 --> 0:02:59.840 By the way, I saw Larry Fink on Fox Business. 0:03:00.560 --> 0:03:02.799 I never see him mention tickers. I mean, because he's 0:03:02.800 --> 0:03:04.280 got a thousand of them, but it's like having a 0:03:04.320 --> 0:03:06.360 thousand kids you don't really bring up. He talks Macro 0:03:06.720 --> 0:03:09.600 a lot, but he was beaming. He's the biggest launch 0:03:09.639 --> 0:03:12.960 ever I been. But it's rare again seeing him talk 0:03:12.960 --> 0:03:14.480 about the ticker. I'm like, that must be a big 0:03:14.520 --> 0:03:17.000 deal internally if the big man's talking about it. 0:03:18.040 --> 0:03:18.239 Yeah. 0:03:18.320 --> 0:03:20.399 I think he's brought a lot of insight and thought 0:03:20.480 --> 0:03:24.080 leadership to this right, you think about we talk at 0:03:24.120 --> 0:03:27.240 Blackrock a lot about being a student of the markets, 0:03:27.280 --> 0:03:29.560 being a student of technology, and Larry's kind of the 0:03:29.720 --> 0:03:33.400 ultimate embodiment of that. So you see that in his 0:03:33.480 --> 0:03:36.080 journey on this, and obviously he brings a ton of 0:03:36.360 --> 0:03:39.240 geopolitical and historical context to it. 0:03:39.800 --> 0:03:42.360 So Eric ran through some stats about the launch in 0:03:42.440 --> 0:03:44.840 the intro there. But let's rewind the clock a little bit. 0:03:44.880 --> 0:03:47.440 When did you first spot the opportunity and go, Okay, 0:03:47.440 --> 0:03:50.360 we got bitcoin and we got Blackrock. How do I 0:03:50.360 --> 0:03:51.480 bring those two things together? 0:03:52.480 --> 0:03:55.200 Well, I joined actually in the summer of twenty eighteen, 0:03:55.800 --> 0:03:58.400 so coming up on six years now, and I had 0:03:58.440 --> 0:04:03.160 been at business. I totally fluked into this internship at 0:04:03.200 --> 0:04:05.400 a company I hadn't heard of and nobody had heard 0:04:05.400 --> 0:04:08.560 of at the time called Ripple, And that was twenty seventeen, 0:04:08.840 --> 0:04:13.080 and I interviewed for that internship in April of seventeen. 0:04:13.880 --> 0:04:15.080 XRP was a two cents. 0:04:15.200 --> 0:04:18.040 Their crypto tooken when I started eight weeks later in June, 0:04:18.040 --> 0:04:20.760 it was a twenty eight cents, and three months after 0:04:20.800 --> 0:04:24.599 I left in January to go back to finish my MBA, 0:04:24.880 --> 0:04:27.880 it was at three dollars, and so that explosive journey 0:04:28.240 --> 0:04:32.680 obviously incredible fortuitous fun timing, and I knew at that 0:04:32.760 --> 0:04:34.760 point I had to do something in this space. The 0:04:34.800 --> 0:04:39.200 opportunity was just too great and too exciting, and it 0:04:39.240 --> 0:04:42.400 was apparent to me that Blackrock had a lot of 0:04:42.480 --> 0:04:46.000 potential to be a transformative force in the space. And 0:04:46.600 --> 0:04:50.039 so August twenty eighteen, I started as full time employee 0:04:50.160 --> 0:04:52.480 number one in the digital assets realm. 0:04:52.520 --> 0:04:54.440 And it's been a fun couple of years. 0:04:54.600 --> 0:04:55.320 Who hired you? 0:04:55.880 --> 0:04:59.640 It was really Rob Goldstein in effect, that's who I 0:04:59.720 --> 0:05:03.280 first met with it at Blackrock, and we had a 0:05:03.320 --> 0:05:06.200 good conversation. I think some of my ideas were probably 0:05:06.440 --> 0:05:09.000 a little premature, let's say, at that time. 0:05:09.040 --> 0:05:13.000 But what were they Well, you know, you might guess, 0:05:13.720 --> 0:05:16.200 but you know, if you think about twenty eighteen, or 0:05:16.320 --> 0:05:19.040 at that time was twenty seventeen, the idea that we 0:05:19.080 --> 0:05:22.560 would do a bitcoin ETF would have been totally premature, right, 0:05:22.640 --> 0:05:26.560 You did not have the institutional infrastructure, you did not 0:05:26.720 --> 0:05:29.000 have the regulatory clarity, You frankly didn't. 0:05:28.800 --> 0:05:31.520 Have a lot of interest from our clients in this 0:05:31.839 --> 0:05:35.200 at that time. So as you track through time our 0:05:35.279 --> 0:05:38.320 journey there was a confluence of factors over the years 0:05:38.320 --> 0:05:40.560 that evolved to get us to where we are today. 0:05:40.800 --> 0:05:44.559 You were pitching an ETF, a bitcoin ETF even before 0:05:44.600 --> 0:05:45.159 you were hired. 0:05:45.800 --> 0:05:48.640 I don't think I was as reckless as outright pitching it, 0:05:48.680 --> 0:05:50.719 because I know how that probably would have gone at 0:05:50.720 --> 0:05:53.880 that time. It really wasn't the time, right, But I 0:05:53.920 --> 0:05:55.599 would be lying if I didn't think that at some 0:05:55.640 --> 0:05:58.080 point this was the thing that could happen at What 0:05:58.160 --> 0:05:59.920 better place for her to do that than black Rock? 0:06:00.160 --> 0:06:03.800 If you could have taken the internal temperature with one 0:06:03.800 --> 0:06:07.280 of those internal thermometers at Blackrock for what the temperature 0:06:07.320 --> 0:06:11.039 for crypto or digital assets in general was at that 0:06:11.120 --> 0:06:12.680 time you were starting, what do you think it was? 0:06:12.720 --> 0:06:16.000 What was the I think it was pretty similar to 0:06:16.040 --> 0:06:20.520 just about every large traditional financial institution at that time, right, 0:06:20.600 --> 0:06:24.960 We had so predating me. The firm had begun exploring 0:06:25.480 --> 0:06:29.960 blockchain in twenty sixteen, and I think correctly at the 0:06:30.000 --> 0:06:33.119 time came to the view that this technology and certainly 0:06:33.160 --> 0:06:35.640 the asset class was nowhere near ready for prime time 0:06:35.839 --> 0:06:39.640 and for our clients. And that was accurate, right, And 0:06:39.960 --> 0:06:42.159 there's been a bunch externally. 0:06:42.880 --> 0:06:44.159 Very importantly that's. 0:06:44.000 --> 0:06:47.240 Evolved over the years that brought that temperature up to 0:06:47.839 --> 0:06:50.479 obviously a much warmer level. 0:06:50.720 --> 0:06:53.440 So it was not ice cold, because it was just 0:06:53.720 --> 0:06:56.000 warm enough that they could hire you. So like cold. 0:06:55.880 --> 0:06:56.800 Certainly not ice cold. 0:06:57.000 --> 0:06:59.679 There was a recognition that this could be a thing, right, 0:07:00.080 --> 0:07:01.400 that it's time hadn't come. 0:07:01.600 --> 0:07:05.640 So what's interesting to me is Larry Fink is a 0:07:05.680 --> 0:07:08.520 major name, just like Jamie Diamond, and a lot of 0:07:08.560 --> 0:07:12.000 his peers generally were not into bitcoin. And there is 0:07:12.920 --> 0:07:15.160 an interview with Anthony Scaramucci on I Think It Was 0:07:15.200 --> 0:07:18.040 The Wolf of All Streets podcast and he says that 0:07:18.080 --> 0:07:20.559 he had a private meeting with Larry in late twenty 0:07:20.600 --> 0:07:24.880 twenty one where Larry says bitcoin sucks and Scamochie says, 0:07:24.880 --> 0:07:27.240 I think you're wrong. You should do some research, and 0:07:27.280 --> 0:07:31.320 then Scamucci says it was a young kid named Robbie 0:07:31.360 --> 0:07:34.000 who came into Blackrock with the idea of creating a 0:07:34.040 --> 0:07:36.600 bitcoin et have he orange pill Larry, And I'm going 0:07:36.640 --> 0:07:38.200 to give Larry a lot of credit because he actually 0:07:38.200 --> 0:07:40.320 did the homework. It takes a smart leader to pridefully 0:07:40.360 --> 0:07:43.040 say bitcoin sucks and then twenty four months later say 0:07:43.080 --> 0:07:45.600 you know what, I've got this wrong. Blackrock needs to 0:07:45.680 --> 0:07:48.040 be part of this? Is that mostly true? 0:07:48.240 --> 0:07:51.440 Was the pill actually orange or was it a different code? 0:07:52.160 --> 0:07:55.520 I think there's probably a little bit of hyperbole in that, 0:07:55.960 --> 0:07:59.040 But like I said, we talk all the time about 0:07:59.120 --> 0:08:01.760 being students of them mark markets and students of technology, 0:08:02.120 --> 0:08:06.360 and Larry's the ultimate embodiment of that and his journey 0:08:06.360 --> 0:08:08.240 in this space and the work he did in the 0:08:08.280 --> 0:08:14.280 study through various sources. It shows up in how insightful 0:08:14.280 --> 0:08:16.520 he is now when he speaks on the topic. 0:08:17.240 --> 0:08:19.400 When you're talking about joining and you're interviewing, they're looking 0:08:19.440 --> 0:08:22.240 up blockchain. That's around the time that Larry Fink's famous 0:08:22.360 --> 0:08:25.200 quote about an index of money laundering came out. Could 0:08:25.200 --> 0:08:26.920 you just walk us through before we move on to 0:08:26.920 --> 0:08:29.840 talk about the actual ETF What was the actual process 0:08:29.840 --> 0:08:31.800 of going from that view in twenty eighteen to twenty 0:08:31.880 --> 0:08:34.240 twenty one, still saying it sucks to like all right, 0:08:34.280 --> 0:08:37.280 actually I'm changing my mind, Like what were the milestones 0:08:37.320 --> 0:08:39.720 along the way? What did you see internally or even 0:08:39.720 --> 0:08:43.240 with Larry specifically that led us to getting Blackrock filing? 0:08:43.360 --> 0:08:44.280 Yeah, and then also. 0:08:44.200 --> 0:08:46.200 FTX was part of this. I had to think that 0:08:46.240 --> 0:08:48.320 almost would take you down a few pegs or set 0:08:48.360 --> 0:08:48.720 you back. 0:08:50.559 --> 0:08:55.840 So first, I think the approach here has always been 0:08:56.280 --> 0:08:59.640 very client focused and very long term right. So, certainly 0:08:59.720 --> 0:09:03.240 FtF was a bad event for the industry, but our 0:09:03.280 --> 0:09:07.480 focus was much longer term in nature than anyone company 0:09:07.679 --> 0:09:11.960 or market cycle. Where it started in twenty eighteen after 0:09:12.160 --> 0:09:14.680 I mentioned that initial work that happened in twenty sixteen, 0:09:14.720 --> 0:09:18.120 So twenty eighteen where we really spent our time and 0:09:18.200 --> 0:09:22.640 energy was applications of blockchain technology, and that was consistent 0:09:22.679 --> 0:09:25.920 with most of the banks and another large traditional finance firms. 0:09:25.960 --> 0:09:28.840 So exploring a dozen or fifteen different use cases of 0:09:28.840 --> 0:09:33.319 how you can use blockchain and the data synchronicity benefits 0:09:33.880 --> 0:09:37.360 across our business and for our clients, and by and large, 0:09:37.400 --> 0:09:39.920 most of those use cases across the industry did not work. 0:09:40.720 --> 0:09:43.400 We actually hit on a couple that were pretty interesting 0:09:43.760 --> 0:09:46.200 and delivered some value, but you didn't see the sort 0:09:46.200 --> 0:09:50.000 of broad based adoption of blockchain of everything right that 0:09:50.080 --> 0:09:53.720 some people thought would happen. That was an important period though, 0:09:54.040 --> 0:09:58.559 for learning, for building comfort, for understanding the technology, and 0:09:58.840 --> 0:10:03.120 as factors of evolved. Starting with I would say twenty twenty, 0:10:03.520 --> 0:10:06.840 you really started to see an uptick in client interest, 0:10:07.679 --> 0:10:10.040 you know, kind of in the post COVID aftermath, and 0:10:10.600 --> 0:10:15.040 there's widespread money printing. Obviously bitcoin went up thirteen x. 0:10:15.800 --> 0:10:20.520 You also had a huge amount of venture capital coming 0:10:20.520 --> 0:10:22.439 too the space, right if at almost one hundred billion 0:10:22.480 --> 0:10:26.480 dollars in venture financing the last four years. And that's 0:10:26.480 --> 0:10:28.840 also brought with it a lot of credible human capital 0:10:28.840 --> 0:10:32.520 too from big tech, from financial services backgrounds. And so 0:10:32.640 --> 0:10:37.360 you saw this institutionalization of the infrastructure of the degree 0:10:37.559 --> 0:10:43.160 that would enable us to potentially build solutions for clients 0:10:43.200 --> 0:10:45.960 that we could be confident in and have conviction that 0:10:45.960 --> 0:10:47.920 we could build to a black Rock and I Shares 0:10:47.960 --> 0:10:50.840 quality standard. And the last piece is the regulatory environment 0:10:51.160 --> 0:10:55.600 slowly but surely did moderate over time, right. And so 0:10:55.640 --> 0:10:58.920 when you put those together and then lay that against 0:10:59.120 --> 0:11:02.720 what we were doing at the time, first in crypto, 0:11:02.760 --> 0:11:05.480 so we think about this space across three buckets in 0:11:05.520 --> 0:11:08.600 digital assets, three pillars crypto. 0:11:08.320 --> 0:11:09.720 Stable coins, and tokenization. 0:11:10.080 --> 0:11:14.480 So in crypto foundationally, we built a partnership with coinbas 0:11:14.559 --> 0:11:16.960 Prime starting in twenty twenty one. That was a technology 0:11:16.960 --> 0:11:22.079 focused partnership building their trading and custody capabilities and workflows 0:11:22.120 --> 0:11:26.440 into our Aladdin Investment system, so that Black Croc or 0:11:26.440 --> 0:11:31.280 any of Aladdin's other clients who wanted to get exposure 0:11:31.320 --> 0:11:33.439 to crypto as part of the whole portfolio could do that. 0:11:34.160 --> 0:11:38.520 We also concurrently developed this private Bitcoin trust, which was 0:11:38.559 --> 0:11:42.040 really a starting point for us being an asset manager 0:11:42.440 --> 0:11:44.960 in the space, and that was focused on large US 0:11:45.040 --> 0:11:48.480 institutional clients, but it was a key solution that we 0:11:48.520 --> 0:11:51.320 felt was solving part of the problem that our clients 0:11:51.320 --> 0:11:52.439 were experiencing. 0:11:53.200 --> 0:11:54.360 Think about stable coins. 0:11:54.400 --> 0:11:57.400 We started managing the USDC Reserve or a part of 0:11:57.440 --> 0:12:01.240 it in twenty twenty one. That relationship grew significantly in 0:12:01.280 --> 0:12:04.440 twenty twenty two where we became the primary non bank 0:12:04.480 --> 0:12:08.800 manager of that three billion ish reserve today and invested 0:12:08.800 --> 0:12:11.920 in Circle and started to become a technology collaborator with 0:12:11.960 --> 0:12:13.920 them as well because of the potential we see for 0:12:13.960 --> 0:12:14.720 stable coins. 0:12:15.000 --> 0:12:16.160 And then finally tokenization. 0:12:16.280 --> 0:12:19.080 We did some private tokenization work with JP Morgan on 0:12:19.120 --> 0:12:22.640 their Onyx platform in twenty twenty one that laid the 0:12:22.640 --> 0:12:26.400 foundation for us to ultimately do our first public blockchain 0:12:26.440 --> 0:12:29.280 tokenization earlier this year. So those are all the key 0:12:29.320 --> 0:12:31.760 pieces that ultimately paved the way. 0:12:31.640 --> 0:12:34.400 For Understood But and this reminds you of what's going 0:12:34.440 --> 0:12:37.440 on in JP Morgan, but again, all that's happening. While 0:12:37.760 --> 0:12:40.520 the CEO does say some things that seem to be contradictory, 0:12:40.640 --> 0:12:44.079 but clearly he's also has to service clients, and he's well, 0:12:44.080 --> 0:12:46.920 this is fine, we're serving clients. But personally I don't 0:12:46.960 --> 0:12:49.920 get it because we do see JP Morgan. Jamie Diamond 0:12:49.960 --> 0:12:53.000 is basically slams it like every other week, and yet 0:12:53.120 --> 0:12:55.240 JP Morgan is one of the big aps for ibit 0:12:55.559 --> 0:12:58.040 and some people are like that hypocritical, but yeah, it's 0:12:58.040 --> 0:12:59.760 pretty much par for the course for a lot of 0:12:59.760 --> 0:13:03.400 firm this is the whatever business they're in, Like, they 0:13:03.440 --> 0:13:07.000 can't ignore clients, right, So you could actually be in 0:13:07.040 --> 0:13:08.920 the business without your CEO being all in. 0:13:11.720 --> 0:13:15.920 Yes, although thankfully Larry's been super supportive of this, right. 0:13:15.960 --> 0:13:20.120 I think he recognizes the level of interest from clients, 0:13:20.160 --> 0:13:23.640 and I think importantly the level of frustration that we 0:13:23.720 --> 0:13:26.480 felt from a lot of our clients, which was if 0:13:26.559 --> 0:13:30.360 you want to access crypto or bitcoin directly, that's been 0:13:30.480 --> 0:13:33.439 very hard for most of our clients. With the institutional 0:13:33.679 --> 0:13:37.240 or wealth advisory, right, it's different for retail. Retail has 0:13:37.280 --> 0:13:41.320 their own challenges too, but for financial advisors and for institutions, 0:13:41.440 --> 0:13:45.600 almost impossible practically to hold bitcoin directly. So what they 0:13:45.600 --> 0:13:49.840 do They went to alternative exposure vehicles, and a lot 0:13:49.840 --> 0:13:53.120 of those didn't go well right. They were often high fee, 0:13:53.280 --> 0:13:56.439 high risk, underperform the price of bitcoin in some cases 0:13:56.480 --> 0:13:59.640 all three right, and so there was this frustration. There 0:13:59.640 --> 0:14:03.040 are other clients who missed the opportunity entirely. Bitcoin turned 0:14:03.040 --> 0:14:04.960 out to be the best performing asset in the world 0:14:05.000 --> 0:14:07.120 the last ten years, so that was also a bad outcome. 0:14:07.559 --> 0:14:09.400 So I think that recognition that we were in a 0:14:09.440 --> 0:14:14.880 position to solve a real frustration for our clients definitely 0:14:14.960 --> 0:14:23.800 motivated the firm. 0:14:24.040 --> 0:14:25.960 I'm going to go to twenty twenty three now is 0:14:25.960 --> 0:14:29.640 that okay, Okay, I'm on vacation in Kpe. May I'm 0:14:29.640 --> 0:14:31.760 doing my thing. I try to stay off the internet, 0:14:31.960 --> 0:14:34.320 and I try to stay off work email, and I 0:14:34.360 --> 0:14:39.400 see my Twitter's blowing up because coin Desk puts out 0:14:39.400 --> 0:14:41.120 a story saying black Rock's about to follow for a 0:14:41.120 --> 0:14:44.200 bitcoin etf. I remember quot shooting. I said, this can't 0:14:44.200 --> 0:14:46.880 be real, ken it. I didn't want to totally shut 0:14:46.920 --> 0:14:49.240 it down because coin desk is pretty good. They've had 0:14:49.240 --> 0:14:52.520 some scoops about four hours later at four in the afternoon. 0:14:52.560 --> 0:14:55.440 Bang there it is. So my vacation, thank you, was 0:14:55.600 --> 0:14:57.760 messed up for the next couple of days. But it 0:14:57.880 --> 0:15:01.480 was exciting. I was like, what why would they file? 0:15:01.520 --> 0:15:03.720 Like I always thought Blackrock would come out after there's 0:15:03.720 --> 0:15:05.680 a couple filings and they get launched, and you come 0:15:05.680 --> 0:15:07.120 out a year later because you don't need to be 0:15:07.160 --> 0:15:10.280 early you're Blackrock. But you were like leading the way 0:15:10.360 --> 0:15:12.440 and there was no real I mean, as far as 0:15:12.480 --> 0:15:15.200 I was concerned, our odds were one percent that SEC 0:15:15.200 --> 0:15:18.280 would approve one and that day, on that day, on 0:15:18.360 --> 0:15:22.360 that day, and they immediately went to fifty because blackrocks Blackrock. 0:15:22.440 --> 0:15:24.720 And so the whole thing was what does Blackrock know? 0:15:24.840 --> 0:15:27.560 And then there was these conspiracy theories that like Larry 0:15:27.640 --> 0:15:30.400 was talking to like Gary and the head of the SEC. 0:15:30.240 --> 0:15:31.400 Or a lot of conspiracy things. 0:15:31.480 --> 0:15:32.960 Yeah, there was a lot. It was like, well, remember, 0:15:33.040 --> 0:15:36.480 Blackrock is a big time company. You helped bail out 0:15:37.240 --> 0:15:40.160 the whole economy basically with buying bonds with the FED 0:15:40.560 --> 0:15:44.880 in twenty twenty. So Blackrock is like just a monster company, 0:15:44.880 --> 0:15:47.440 different than any other company. In my opinion, this wouldn't 0:15:47.440 --> 0:15:50.040 have been as big as Fidelity or even Vanguard filed it. 0:15:50.440 --> 0:15:53.320 So anyway, everybody went crazy. The internet blew up. I mean, 0:15:53.360 --> 0:15:55.720 you broke the internet that day. I wasn't sure. I 0:15:55.760 --> 0:15:58.000 didn't know. I was like, maybe they saw Greyscale lawsuit 0:15:58.360 --> 0:16:00.480 and you saw that, Hey, maybe the SEC's going to lose. 0:16:00.560 --> 0:16:03.280 We should file now. So my question to you is 0:16:03.480 --> 0:16:08.480 what drove the filing that day at that time versus say, 0:16:08.560 --> 0:16:11.560 just waiting a while until the SEC comes around and 0:16:11.560 --> 0:16:13.200 then you can come in a little later and do 0:16:13.280 --> 0:16:13.640 your thing. 0:16:15.520 --> 0:16:15.720 Yeah. 0:16:15.760 --> 0:16:17.840 Well, I think that we were ready and our clients 0:16:17.840 --> 0:16:20.320 were ready, right, that was the big thing. We had 0:16:20.400 --> 0:16:24.160 laid out all those foundational pieces from the technology side 0:16:24.240 --> 0:16:27.560 with Coinbase in Aladdin, from the Bitcoin private trust side, 0:16:28.160 --> 0:16:32.760 and had conviction that we could deliver an ey shares 0:16:33.040 --> 0:16:36.720 quality product in this space, and it was increasingly clear 0:16:37.440 --> 0:16:41.160 that our clients hungered for that. Right that, at the 0:16:41.240 --> 0:16:42.120 end of the day is what it was. 0:16:42.720 --> 0:16:46.000 You knew that you could decrease friction and cost, which 0:16:46.040 --> 0:16:48.000 is sort of what Larry did say on Fox Business 0:16:48.000 --> 0:16:50.960 when he went on and I agree, I mean, ETFs 0:16:50.960 --> 0:16:53.080 are so good at that. I get it again. It 0:16:53.120 --> 0:16:54.840 was just a little bit of a shock. We figured 0:16:54.920 --> 0:16:56.760 usually the first one to throw in their hat is 0:16:56.800 --> 0:17:00.320 like a van Eck or a grayscale. It was like 0:17:00.400 --> 0:17:02.480 Blackrock playoffs. 0:17:04.040 --> 0:17:07.399 So I will say, you know, I maybe downplayed what 0:17:07.960 --> 0:17:11.679 Scaramouchi said your question earlier, but to his credit he 0:17:11.800 --> 0:17:15.959 did in the summer of twenty two when we launched 0:17:16.000 --> 0:17:18.720 the private Bitcoin Trust, he connected the dots and said, 0:17:19.119 --> 0:17:21.680 I think this is a precursor to them doing an ETF, 0:17:21.720 --> 0:17:22.720 which was a pretty good call. 0:17:23.560 --> 0:17:23.840 Yeah. 0:17:23.880 --> 0:17:26.040 I mean, like you said, our expectation was like people 0:17:26.160 --> 0:17:28.480 like Vanguard and Blackrock are nextually, Like Vanguard's never going 0:17:28.560 --> 0:17:31.400 to happen, but Blackrock we think that will probably happen. 0:17:31.440 --> 0:17:33.119 But we didn't think he'd be first or in with 0:17:33.240 --> 0:17:35.720 the first guys. So you talk about clients wanting this, 0:17:35.880 --> 0:17:38.480 I guess what are the client questions you're fielding or 0:17:38.480 --> 0:17:41.919 what were the questions like six months ago versus what 0:17:41.920 --> 0:17:44.159 are the questions now? What type of conversations are you 0:17:44.200 --> 0:17:46.399 happening with those clients that wanted you to do this? 0:17:47.520 --> 0:17:51.960 A lot pretty steadily through you know, we're four months 0:17:52.080 --> 0:17:58.080 in now, We've had hundreds of conversations across our client base, right, 0:17:58.119 --> 0:18:01.880 You could think of kind of our main distribution channels 0:18:02.160 --> 0:18:05.280 and investor direct which right out of the gate they 0:18:05.280 --> 0:18:09.040 were buying. There no hurdles to them getting access. That's 0:18:09.080 --> 0:18:12.560 been I think the largest source of flows for sure, 0:18:13.240 --> 0:18:18.680 second being wealth advisory channel and third being institutional, and 0:18:19.880 --> 0:18:23.720 those latter two really operate on a longer timescale. Right, 0:18:23.800 --> 0:18:27.760 There's a much longer, as you guys know, education, research, 0:18:27.840 --> 0:18:33.200 diligence journey that underpins their process. So it's a lot 0:18:33.240 --> 0:18:37.400 of conversations with our wealth advisory partners with home offices 0:18:37.480 --> 0:18:42.160 who are considering the approval process for this because many 0:18:42.160 --> 0:18:46.280 of those platforms it's available unsolicited today. Right, you guys 0:18:46.320 --> 0:18:49.199 have covered this in the past, but not on a 0:18:49.280 --> 0:18:52.440 solicited basis. So that's the process that they're going through. 0:18:52.480 --> 0:18:56.960 And then institutional, when this happened, it restarted in many 0:18:56.960 --> 0:19:00.840 cases those conversations of crypto or bitcoin, should we be 0:19:00.880 --> 0:19:01.560 invested in this? 0:19:02.000 --> 0:19:03.560 Right that in some cases. 0:19:03.160 --> 0:19:05.359 That firm has been having those conversations in twenty one 0:19:05.400 --> 0:19:07.520 and twenty say, for some of they hadn't had it yet, 0:19:07.680 --> 0:19:09.119 but this was a moment where they said, okay, we 0:19:09.240 --> 0:19:11.560 better figure out what this thing is and how it 0:19:11.560 --> 0:19:13.840 fits the portfolio. And that's kind of the education that 0:19:13.880 --> 0:19:14.480 we've been doing. 0:19:15.040 --> 0:19:17.880 Let's go to advisors for a second. When we saw 0:19:17.920 --> 0:19:21.199 the first inflows and the trade sizes for IBIT, it 0:19:21.280 --> 0:19:23.919 looks small. It looked like a bunch of minos biting 0:19:24.000 --> 0:19:27.679 right occasionally a big bite, right, big trade. The thirteen 0:19:27.760 --> 0:19:30.120 f's showing that there are advisors buying a couple hedge funds. 0:19:30.280 --> 0:19:33.400 No major institutions yet. But when you look at all ETFs, 0:19:33.440 --> 0:19:36.240 I think advisors are like seventy percent of the assets. 0:19:36.280 --> 0:19:39.600 Like they're the biggest users of ETFs generally. And there's 0:19:39.600 --> 0:19:41.760 been this sort of debate on Twitter lately about whether 0:19:41.840 --> 0:19:44.480 the boomer advisors are really coming. And let's bring up 0:19:44.520 --> 0:19:47.800 this part about solicited versus unsoliciteds So what you're saying 0:19:47.800 --> 0:19:50.359 now is that only if a client goes to the 0:19:50.400 --> 0:19:53.280 advisor says I need this, can they buy it. But 0:19:53.359 --> 0:19:55.720 over time the advisor will be able to solicit it 0:19:55.760 --> 0:19:58.840 to their clients. And where are we what inning are 0:19:58.880 --> 0:20:01.200 we on the solicit sure? 0:20:01.560 --> 0:20:01.760 Sure? 0:20:02.280 --> 0:20:05.959 So the standard process for new ETFs right is typically 0:20:06.040 --> 0:20:09.600 a multi year journey from launch to actually being approved 0:20:09.800 --> 0:20:14.440 for solicitation, right, And so I think what's happened here. 0:20:14.480 --> 0:20:19.879 Given some of the historic demand that we've seen around 0:20:19.880 --> 0:20:23.719 this that you talked about, Eric, there's been an acceleration 0:20:23.840 --> 0:20:27.000 of that process for a lot of these home office 0:20:27.240 --> 0:20:30.760 platforms at the Wealth Advisor. So that's a long journey. 0:20:30.800 --> 0:20:33.800 There's a very intensive diligence process that goes into that. 0:20:34.000 --> 0:20:37.200 There's also an education process, and so we're going through 0:20:37.240 --> 0:20:39.800 that with them. Some will be faster than others, that's 0:20:39.840 --> 0:20:42.560 just the nature of it, but certainly over the coming 0:20:42.600 --> 0:20:45.520 months we would expect to see some of those approvals 0:20:45.560 --> 0:20:48.840 come online. The institutional piece is interesting. You mentioned that, 0:20:49.320 --> 0:20:51.600 remember on the thirteen apps that says of March thirty first, 0:20:52.200 --> 0:20:55.399