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Speaker 1: Bloomberg Audio Studios, podcasts, radio news. Bitcoin coming off a

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Speaker 1: little bit recently, retreating investors try and digest what this

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Speaker 1: recent rally means. You're also seeing, obviously, the the workthrough

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Speaker 1: of how we have moved from kind of the non

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Speaker 1: ETF environment into the ETF environment, which takes us to

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Speaker 1: our next guest. We have seen one of the big

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Speaker 1: themes post the ETF launches is a big outflow from

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Speaker 1: the Gray Scale fund and what we've now got is

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Speaker 1: potentially Gray Scale launching a kind of mini fund which

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Speaker 1: will have lower fees. We understand, we need to get

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Speaker 1: some details on what is happening here. The perfect person

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Speaker 1: to ask around all of this is course is Michael

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Speaker 1: sonshein Grey Sales CEO.

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Speaker 2: Michael.

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Speaker 1: Great to see you see great see you in person,

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Speaker 1: which is fantastic. I think you and I have met

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Speaker 1: many times down the line, but nice to see you

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Speaker 1: here in London. Look, let me let's we'll deal with

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Speaker 1: the with the with the ETF in just a moment.

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Speaker 1: First of all, talk me through your view of the

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Speaker 1: recent price section. What is going on here? We're seeing

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Speaker 1: a little bit of a roll off. Is that FED related?

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Speaker 1: Is just that because we've come too far related what

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Speaker 1: is going on?

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Speaker 2: Well, I think we have to just examine where we've

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Speaker 2: been over the last couple of months. It wasn't long

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Speaker 2: ago that we were in a crypto winter, and as

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Speaker 2: crypto winter melted, prices started to accelerate. Around the time

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Speaker 2: spot bitcoinytfs got approved in the US, many called it

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Speaker 2: a kind of sell the news event, and on the

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Speaker 2: back of that, we've seen unprecedented demand for spot bitcoinytfs

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Speaker 2: in the US, which has been a real driver of

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Speaker 2: bitcoin prices. We broke through that all time high just

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Speaker 2: a couple of days ago, all the way up to

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Speaker 2: about seventy three thousand dollars US dollars for the bitcoin price,

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Speaker 2: and now we're seeing that, you know, come down a

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Speaker 2: little bit, which is healthy. Bitcoin does this from time

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Speaker 2: to time. Investors understand that these pullbacks are normal, healthy, expected,

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Speaker 2: and we're still up over fifty percent year to date.

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Speaker 1: When all the ets launched and when we saw GBTC converts,

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Speaker 1: I spent a lot of time with Kadie I Felt,

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Speaker 1: who was very obsessed with fees, as you well know,

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Speaker 1: surrounding all the various ets and trying to track the

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Speaker 1: impact that those fees potentially had in terms of outflows.

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Speaker 1: We've continue to see outflows coming out so GBTC, and

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Speaker 1: I'd be interesting to get your take on this. Going

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Speaker 1: into other ets, you are now launching a different version

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Speaker 1: of that fund with lower fees, and the question therefore

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Speaker 1: that everybody scratching the head about is why don't you

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Speaker 1: simply just lower fees on the original fund and potentially

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Speaker 1: stem some of the outflows.

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Speaker 2: Sure, well, this is a really important question, and this

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Speaker 2: is on a lot of investors' mind, So I want

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Speaker 2: to attack this head on. When GBTC uplisted to the

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Speaker 2: New York Stock Exchange, it did so in an unprecedented way.

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Speaker 2: It had twenty eight billion dollars of assets under management,

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Speaker 2: a ten year track record, and a very diversified shareholder base.

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Speaker 2: And when we look at that in the context of

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Speaker 2: the ETF rapper, anytime you've seen a new exposure, a

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Speaker 2: new offering type, fees tend to be high, and over

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Speaker 2: time fees come down as those markets tend to mature. Now, again,

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Speaker 2: it's only been about eight or nine weeks, right, which

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Speaker 2: you know in crypto is kind of like two years.

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Speaker 2: But in the real world, it's only about eight or

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Speaker 2: nine weeks, and so this market has matured and has

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Speaker 2: come in faster and more furiously than any of us

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Speaker 2: could have anticipated. So it has always been our intention

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Speaker 2: to lower fees on GBTC over time as that market

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Speaker 2: has matured. And you know, as you said, we also

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Speaker 2: did recently file for the gray Scale Bitcoin Mini Trust,

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Speaker 2: which will come to market given regulatory approvals, with a

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Speaker 2: lower fee and really give investors the opportunity to have

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Speaker 2: greater access to this ecosystem, allow for greyscale to have

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Speaker 2: both kind of its flagship GBTC offering as well as

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Speaker 2: that many kind of core allocation offering through taker BTC

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Speaker 2: again if we get regulatory approvals for the product.

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Speaker 3: So lower fees over time, which to be fair, is

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Speaker 3: a mark and shift in thinking. And what you've said previously,

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Speaker 3: what's the catalyst for the though, What do you need

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Speaker 3: to see to say all right now we have to

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Speaker 3: make that move.

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Speaker 2: Well, you know, I wouldn't say it's a shift in thinking.

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Speaker 2: More so something that's kind of always been on our roadmap.

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Speaker 2: You know, when we look at again historical you know,

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Speaker 2: prices in the way that markets have matured, it's usually

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Speaker 2: taken quite a bit of time for those new products

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Speaker 2: to come to market get saturated, and I think for us,

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Speaker 2: when we zoom out, given it's only been eight or

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Speaker 2: nine weeks, we're just at the end of that first

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Speaker 2: inning of satisfying that initial demand before that next wave

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Speaker 2: of growth will happen. Where we're talking about platforms, financial advisors,

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Speaker 2: registered investment advisors, private banks first getting comfortable and onboarding

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Speaker 2: some of these products to their platforms, and we think

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Speaker 2: that could be the driver of this next wave of

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Speaker 2: adoption of Spotpit TWENTYTFS.

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Speaker 4: Good morning, Michael. So is the answer then that you

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Speaker 4: you just you think you can be a price setter

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Speaker 4: and you don't have to be a price taker in

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Speaker 4: this market.

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Speaker 2: Well, again, prices certainly will come down over time. I

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Speaker 2: think a lot of the new issuers were trying to

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Speaker 2: lure new investors into their products starting from scratch, no

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Speaker 2: track record, no assets, you know, no no aum and

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Speaker 2: we will you know, see those products continue to emerge

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Speaker 2: as time goes on, but you are seeing a little

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Speaker 2: bit of a cohort amongst the Greyscale product, the Fidelity product,

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Speaker 2: and the black rock product really taking kind of liquidity

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Speaker 2: position within the market that may ask.

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Speaker 4: You a sort of setback question around the way that

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Speaker 4: crypto blockchain fits into some of the other big tech

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Speaker 4: trends that we've been talking about. Clearly, there's so much

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Speaker 4: excitement around AI right now, and perhaps that detracts a

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Speaker 4: little bit from some of the faster money that might

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Speaker 4: have gone into crypto, and maybe it's tracing it some

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Speaker 4: of the stocks that do well out of AI instead.

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Speaker 4: But I wonder if you link the two. Some people

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Speaker 4: talking to me about how blockchain could have an opportunity

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Speaker 4: with the AI era around validation and verification, and that's

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Speaker 4: an interesting area to watch. Hows that sound to you

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Speaker 4: at greyscale.

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Speaker 2: It's actually an area that we're very focused on and

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Speaker 2: very excited about. We feel that A and crypto have

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Speaker 2: been really two technologies that have been growing independently of

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Speaker 2: one another, and now that AI has become a little

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Speaker 2: bit more mainstream, we're starting to see adoption and usage.

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Speaker 2: But we're also starting to see some issues with AI,

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Speaker 2: things like bias and deep fakes, and when we think

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Speaker 2: about the technology that underpins many crypto assets, blockchain, it

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Speaker 2: can actually serve to ameliorate some of those issues that

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Speaker 2: we're seeing in AI, and so as we move into

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Speaker 2: this next era of adoption, we actually could see how

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Speaker 2: these two technologies could actually symbiotically grow together rather than

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Speaker 2: continuing to mature as independent technologies.

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Speaker 3: So you talked a little bit about how the demand

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Speaker 3: for the ETFs is driving the price higher. Let's talk

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Speaker 3: about it in reverse. There is a having coming up.

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Speaker 1: Are you concerned.

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Speaker 3: About the rate through into ETFs at a time when

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Speaker 3: products like yours are seeing.

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Speaker 1: So much momentum.

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Speaker 2: Well, my team has always led with investor education, and

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Speaker 2: given that the introduction of spot bitcoin ETFs have really

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Speaker 2: been almost Bitcoin's mainstreaming moment, We're going to use this

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Speaker 2: upcoming having, which I think is only about thirty days away,

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Speaker 2: as a reminder for us for the investment community to

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Speaker 2: really dive back into the fundamentals of bitcoin. That this

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Speaker 2: having is baked into the bitcoin protocol. This is an

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Speaker 2: important part of helping investors understand the verified supply, the

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Speaker 2: constrained supply that underpins bitcoin, and I think a lot

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Speaker 2: of investors are going now they focus on that over

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Speaker 2: the next thirty days, but also see how it is

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Speaker 2: a catalyst for prices in the months that follow Like

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Speaker 2: it historically.

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Speaker 1: Has Michael in theory the whole cryptos place should be

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Speaker 1: an uncorrelated asset. Doesn't feel like that right now, does it.

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Speaker 1: I've got a FED met coming up a little bit

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Speaker 1: later on today. As you look at the relationship between

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Speaker 1: FED and Bitcoin, the FED decision of Bitcoin, how does

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Speaker 1: it change the reason for me putting it in my portfolio?

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Speaker 1: Is this an uncorrelated asset? What role does it play

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Speaker 1: in my portfolio? If it is still correlated with the

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Speaker 1: big macro events that we're watching.

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Speaker 2: Well, there's no question that if you look across asset classes,

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Speaker 2: there's certainly been a convergence around correlations. And so what

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Speaker 2: we're hearing from investors is that if they want to

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Speaker 2: beat their benchmarks, they're going to have to start diversifying

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Speaker 2: as assets get increasingly correlated, and that means diversifying into

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Speaker 2: new asset classes like crypto. I certainly think in the

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Speaker 2: Greyscale research team has really done the analysis to believe

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Speaker 2: that for many investors, an allocation of maybe up to

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Speaker 2: five percent of their holdings their investable assets in crypto

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Speaker 2: may make sense for investors with the right risk tolerance. However,

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Speaker 2: in the context of the FED meeting, we do believe

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Speaker 2: that if those rate cuts are actually going to happen

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Speaker 2: later this year, that could actually be quite bullish for

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Speaker 2: bitcoin prices.

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Speaker 4: Okay, Michael, really nice to see you. Thanks very much

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Speaker 4: for coming to see us when we pass through London.

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Speaker 4: Thank you, Michael Sansheine The Greyscale see