WEBVTT - Spot Bitcoin ETFs Are (Probably) Almost (Finally) Here 0:00:05.760 --> 0:00:07.320 Welcome. Achillian's I'm Chill Webber and. 0:00:07.280 --> 0:00:12.879 I'm Eric Belchernas. 0:00:13.880 --> 0:00:19.400 Eric. Everyone thought that crypto and bitcoin were going to 0:00:19.440 --> 0:00:23.119 go away, maybe well not everyone, but some people. And 0:00:23.160 --> 0:00:26.400 then all of a sudden, SBF went down and Bitcoin 0:00:26.520 --> 0:00:29.440 kept coming and kept coming and kept coming, and here 0:00:29.480 --> 0:00:32.600 we are at a high that we haven't seen for 0:00:32.640 --> 0:00:36.279 more than eighteen months, and a lot of that enthusiasm 0:00:36.520 --> 0:00:38.640 is about the prospect of an ETF. 0:00:39.240 --> 0:00:40.760 Yeah, no, this is huge. 0:00:40.800 --> 0:00:43.640 Ever since Blackrock I shares filed in I think it 0:00:43.680 --> 0:00:47.000 was June of twenty twenty three, there's been a lot 0:00:47.040 --> 0:00:51.479 of excitement about spot ETF approval, the SEC lawsuit with 0:00:51.520 --> 0:00:54.600 Greyscale that was another huge catalyst, and then we've seen 0:00:54.720 --> 0:00:58.600 very very good news in terms of these legal documents 0:00:58.640 --> 0:01:01.920 getting updated, which shows the SEC working with issuers. So 0:01:02.240 --> 0:01:04.880 we are basically, if this has been a ten year journey, 0:01:05.640 --> 0:01:08.279 let's call it a marathon, we're literally in. 0:01:08.240 --> 0:01:11.119 The last mile. We're a mile twenty six. So it's 0:01:11.160 --> 0:01:11.760 a big deal. 0:01:12.280 --> 0:01:16.160 This marriage has been, you know, something in the mix 0:01:16.200 --> 0:01:19.720 for again a decade, and when it finally happens, there's 0:01:19.720 --> 0:01:22.480 a lot of you know, it's like building a bridge 0:01:22.520 --> 0:01:26.319 to the Advisor World in particular. And so you know, 0:01:26.360 --> 0:01:29.520 we thought one of the main players is ARC and 0:01:29.560 --> 0:01:33.880 twenty one Shares. They were honestly filed before black Rock. 0:01:34.959 --> 0:01:38.319 They deserve credit for having probably the most vision of 0:01:38.360 --> 0:01:41.560 figuring out this is the cycle, and so their filing 0:01:41.640 --> 0:01:44.400 is actually the one that has the first deadline in January. 0:01:44.720 --> 0:01:47.560 So because of them, we're probably going to see an 0:01:47.560 --> 0:01:52.240 ETF on January tenth, or at least approval by then. 0:01:52.520 --> 0:01:56.400 And so yeah, it's great to have both sides of 0:01:56.440 --> 0:01:59.880 that prospectus, both ARC and twenty one Shares. 0:01:59.680 --> 0:02:00.720 On the cast today. 0:02:01.280 --> 0:02:05.520 So joining us, we've got Kathy Wood of ARC and 0:02:05.720 --> 0:02:13.399 Aphelia Snyder of twenty one Shares, this time on Trillions. 0:02:13.800 --> 0:02:17.200 Let's talk about a bit points and more. Kathy, Aphelia, 0:02:17.360 --> 0:02:19.000 welcome back to Trillions. 0:02:19.520 --> 0:02:21.400 Thank you, Joel, thank you Eric. 0:02:22.360 --> 0:02:23.160 It's good to be back. 0:02:23.919 --> 0:02:27.600 Okay. So Eric described this as a marathon. We're in 0:02:27.639 --> 0:02:31.240 a mile the miles sprint to the finish line. Are 0:02:31.240 --> 0:02:34.280 we going to get across that finish line? 0:02:35.040 --> 0:02:39.520 I think this is the perennial question, and I I 0:02:39.520 --> 0:02:41.560 think I've pretty consistently said the same thing on this, 0:02:41.639 --> 0:02:44.399 which is that if you would like a different outcome, 0:02:47.000 --> 0:02:48.800 A pattern break is a good thing. 0:02:49.840 --> 0:02:52.320 I have to give twenty one Shares a lot of 0:02:52.360 --> 0:02:55.639 credit on that, because you know, we were denied and 0:02:55.680 --> 0:02:59.920 denied and we just kept filing, and it was because 0:03:00.000 --> 0:03:04.120 twenty one shares, you know, the grip, the gumption, the determination, 0:03:04.200 --> 0:03:06.839 which which is very much in keeping with the way 0:03:06.880 --> 0:03:09.359 we work as well. So I think that's why we're 0:03:09.360 --> 0:03:10.240 first in line. 0:03:10.400 --> 0:03:13.760 Okay, so there's this January date that's going to happen 0:03:13.960 --> 0:03:19.200 the tenth. Eric says, what's going to happen on the tenth? 0:03:20.360 --> 0:03:23.040 Everyone is very focused on the tenth makes a ton 0:03:23.040 --> 0:03:28.079 of sense. Completely understand why it's not how this works actually, right, 0:03:29.400 --> 0:03:32.800 These windows aren't quite as clean as what people seem 0:03:32.840 --> 0:03:38.000 to say, right, So it's completely conceivable that it's before. 0:03:38.160 --> 0:03:41.280 It's completely conceivable. You know, we hear something day of. 0:03:41.400 --> 0:03:46.040 If you look at previous rejections and delays and approvals, 0:03:46.600 --> 0:03:49.200 the day of is not necessarily like the key window. 0:03:49.680 --> 0:03:53.440 But I think from the minute you here go, what's 0:03:53.440 --> 0:03:55.240 going to happen is it's going to boil down to 0:03:55.280 --> 0:03:58.800 who's actually ready to go, because and it's not just 0:03:58.840 --> 0:04:01.560 a question of like the regulatory or a documentation critical 0:04:01.800 --> 0:04:05.800 critical component, but has everybody actually operationally set up these 0:04:05.840 --> 0:04:09.560 products in the background, because the SEC says, go whether 0:04:09.640 --> 0:04:13.080 whatever that ends up being, you're going to have everyone 0:04:13.240 --> 0:04:15.760 jump at the same time, and it's going to fundamentally 0:04:15.800 --> 0:04:20.840 be a question of who's got aps on board? Are 0:04:20.880 --> 0:04:24.279 the custodians ready, are the accounts open? Have you actually 0:04:24.360 --> 0:04:27.160 completed the process it's the exchange ready to go? Like 0:04:27.560 --> 0:04:30.359 how much of this have you actually operationalized? And I 0:04:30.400 --> 0:04:34.120 think that's a much bigger deal at an infrastructure level 0:04:34.120 --> 0:04:35.760 than anybody thinks right now. 0:04:36.600 --> 0:04:40.839 It's been interesting as different firms. We've been doing due 0:04:40.839 --> 0:04:45.680 diligence with different firms, and you know, some of those 0:04:45.760 --> 0:04:51.360 who have filed really haven't haven't issued ETFs before, so 0:04:51.600 --> 0:04:54.760 you know they're they're trying to figure out, wait a minute, 0:04:55.640 --> 0:04:58.640 who do we choose among this field of perhaps twelve 0:04:59.200 --> 0:05:03.159 if they approve twelve at the same time, and they're 0:05:03.200 --> 0:05:05.240 really thinking about, okay, how do I'm only going to 0:05:05.279 --> 0:05:10.880 pick three? Maybe so, and they're beginning to delineate, Okay, 0:05:10.880 --> 0:05:13.400 this is what these are my checkboxes. 0:05:14.520 --> 0:05:17.120 And I think one of the things that's so undervalued 0:05:17.360 --> 0:05:22.200 is clients service and client support. So obviously there's actually 0:05:22.320 --> 0:05:27.640 a third piece here, which is resolut and in some 0:05:27.720 --> 0:05:30.359 of the distribution on that side, Like at the end 0:05:30.400 --> 0:05:32.279 of the day, this is going to come down to 0:05:33.760 --> 0:05:35.640 you're going to get a go are you ready to 0:05:35.680 --> 0:05:38.040 actually do it? Is the thing you're bringing to market 0:05:38.160 --> 0:05:40.640 high quality because one of the things that I think 0:05:41.279 --> 0:05:44.560 the world is sick of is crypto products that are 0:05:44.600 --> 0:05:47.920 both more expensive and less good than what you normally get. 0:05:48.200 --> 0:05:50.080 That that's not going to work anymore. So it's going 0:05:50.120 --> 0:05:52.080 to be a question of are you bringing something that's 0:05:52.160 --> 0:05:54.599 high quality, can you do it quickly? And are you 0:05:54.720 --> 0:05:59.599 going to be able to actually help clients. Client service 0:05:59.640 --> 0:06:02.800 is huge. You've got advisors who are looking at entirely 0:06:02.880 --> 0:06:05.960 new asset classes for the first time, like are you 0:06:06.080 --> 0:06:08.279 ready to answer those questions? Because they're going to have 0:06:08.360 --> 0:06:10.599 them and you need to actually have answers and have 0:06:10.640 --> 0:06:12.640 a way to support them through that process. So I 0:06:12.640 --> 0:06:15.440 think you're going to see a flurry of operational activity 0:06:15.480 --> 0:06:19.240 followed by a very steep educational curve for the client 0:06:19.279 --> 0:06:21.520 base as they try to get up to speed and 0:06:21.560 --> 0:06:23.279 try to figure out like what are we doing here? 0:06:23.520 --> 0:06:26.440 Most CIO's offices don't have a policy on crypto yet, 0:06:26.440 --> 0:06:29.080 and if they do, it's negative. So what's going to 0:06:29.120 --> 0:06:31.479 happen here in terms of their need to be responsive 0:06:31.520 --> 0:06:34.919 to their own customer bases. As they start to allow 0:06:35.000 --> 0:06:38.960 product on platforms, they start to get comfortable making allocations. 0:06:39.120 --> 0:06:44.560 It's going to be a very critical time for cryptos 0:06:44.560 --> 0:06:47.120 and industry in terms of welcoming a whole new cohort 0:06:47.200 --> 0:06:50.080 of players. And it actually goes back to it, and 0:06:50.120 --> 0:06:53.359 I mean, this is this is the whole core of 0:06:53.520 --> 0:06:58.400 ARC right. This is about research and education and providing 0:06:58.400 --> 0:07:00.679 people who are curious about this space for the gateway. 0:07:01.320 --> 0:07:05.080 Our first research piece on bitcoin was in two thoy 0:07:05.480 --> 0:07:08.719 fifteen when it was two hundred and fifty dollars and 0:07:09.080 --> 0:07:12.160 we asked the simple question that it was a white paper, 0:07:12.560 --> 0:07:16.960 can bitcoin serve the three rolls of Money? And we 0:07:17.040 --> 0:07:20.480 did that in collaboration with Art Laugher, and when he 0:07:20.680 --> 0:07:24.160 really understood what this was, he said, I've been waiting 0:07:24.200 --> 0:07:27.960 for this since they closed the gold window in nineteen 0:07:28.000 --> 0:07:31.520 seventy one, so twenty fifteen, and then the next year 0:07:31.560 --> 0:07:35.480 we wrote Ringing the Bell for a New asset class Bitcoin, 0:07:35.680 --> 0:07:38.120 Ringing the Bell for a New asset class. So we've 0:07:38.160 --> 0:07:40.880 been trying to educate the market. And I remember in 0:07:40.920 --> 0:07:44.960 the early days twenty fifteen especially, you know, many people 0:07:45.000 --> 0:07:48.920 dismissed us. That's a marketing gimmick. Bitcoin market nothing but 0:07:49.080 --> 0:07:51.360 a marketing gimmick. So we've come a long way. 0:07:51.600 --> 0:07:54.480 Oh yeah, absolutely. I was skeptical of myself. I remember 0:07:54.520 --> 0:07:57.880 the first one filed, the winklevoss etf in twenty thirteen, 0:07:58.040 --> 0:08:01.120 bitcoin was ninety nine dollars, so I knew about it, 0:08:01.200 --> 0:08:03.640 and I'm kicking myself for not buying any because it 0:08:03.680 --> 0:08:06.400 was I remember it was. I was doing a TV 0:08:06.520 --> 0:08:09.280 hit around then about the filing and Matt Miller was 0:08:09.320 --> 0:08:10.760 way more up to speed than I was. 0:08:10.840 --> 0:08:12.720 I could have acted then, but I was like, this 0:08:13.000 --> 0:08:13.760 seems so silly. 0:08:13.800 --> 0:08:15.680 I don't know, it just seemed like, I don't know, 0:08:15.840 --> 0:08:19.320 like almost like a little bit of a fun craze, 0:08:19.360 --> 0:08:22.040 like something that would just go away, like a fad. Anyway, 0:08:22.680 --> 0:08:25.000 I want to go and talk. I know, Kathy, you've 0:08:25.040 --> 0:08:27.680 been into You bought GBTC in the early days with 0:08:27.920 --> 0:08:31.040 ARKK and you made it was a huge trade. It 0:08:31.080 --> 0:08:33.000 was a powered a lot of your returns early on, 0:08:33.559 --> 0:08:36.359 so I know you were in it early. Now Ophelia 0:08:36.480 --> 0:08:38.600 twenty one shares is over in Europe. You're launching all 0:08:38.600 --> 0:08:42.520 these ETFs. At some point you guys met and like, 0:08:42.600 --> 0:08:46.480 I guess talk me through that and then the filing 0:08:46.520 --> 0:08:48.679 in April, I mean, and like, how you guys work 0:08:48.720 --> 0:08:49.360 together on this. 0:08:51.000 --> 0:08:54.760 It's actually a lovely story. Kathy and I have known 0:08:54.800 --> 0:08:56.880 each other for a while, like way way before this 0:08:56.960 --> 0:09:02.400 partnership was public. I was like a super green that 0:09:02.480 --> 0:09:09.080 had just started my company, going to my first like 0:09:09.320 --> 0:09:13.400 gathering of people who know stuff about ETFs, and I 0:09:13.440 --> 0:09:16.040 sat down next to Kathy at lunch and we started 0:09:16.080 --> 0:09:24.040 talking and there was such a wonderful alignment between our 0:09:24.080 --> 0:09:28.160 philosophies as firms or views on crypto. We come at 0:09:28.160 --> 0:09:30.920 this from a very different perspective. I'm a total like 0:09:31.080 --> 0:09:35.040 wonk for structuring and things and rags, and I think 0:09:36.440 --> 0:09:40.760 Kathy definitely comes with more of a visionary technology perspective. 0:09:41.360 --> 0:09:43.240 And we just got talking. It was such a good 0:09:43.679 --> 0:09:47.440 match that we we kept in touch, and I was 0:09:47.480 --> 0:09:50.600 building an ETF business for the first time and transparently 0:09:50.760 --> 0:09:53.200 had a long way to go and learning how to 0:09:53.240 --> 0:09:58.360 do that, and it turned into I think a very 0:09:59.240 --> 0:10:03.520 productive and very enjoyable, like friendship and relationship and that 0:10:03.760 --> 0:10:07.160 sort of it was the genesis of these products. 0:10:07.679 --> 0:10:09.800 So I can give you a little bit more inside 0:10:09.800 --> 0:10:15.520 scoop here. This was at the annual ETF comfab called Denostia, 0:10:16.200 --> 0:10:20.360 and I remember, yes being late to the lunch, sitting 0:10:20.960 --> 0:10:24.720 next to Ophelia, and then she started talking and I said, 0:10:24.960 --> 0:10:27.320 I know what school you went to, and I know 0:10:27.400 --> 0:10:30.160 what school within the school you went to. You went 0:10:30.200 --> 0:10:33.840 to Stanford, the Earth System School at Stanford. And she 0:10:34.040 --> 0:10:37.440 was shocked because nobody knows about that. But if you'll 0:10:37.480 --> 0:10:42.320 remember Chris Bernisky, he was our first crypto analyst, and 0:10:42.880 --> 0:10:46.600 I heard Ophelia talking and thinking in the way that 0:10:46.720 --> 0:10:50.440 he did, so that's what really got us going. 0:10:50.440 --> 0:10:54.400 And then I definitely understood early. 0:10:54.200 --> 0:10:59.960 On how much into the ops and infrastructure and plat 0:11:00.160 --> 0:11:04.880 form part of the business Aphelia was and it was 0:11:05.400 --> 0:11:08.160 not what I do. But I said, I want you 0:11:08.200 --> 0:11:12.080 to meet Tom Stout, who's our COO, because he loves 0:11:12.160 --> 0:11:15.440 the same things that Aphelia does, and we were looking 0:11:15.520 --> 0:11:19.400 for someone who could help us with the platform play, 0:11:19.440 --> 0:11:25.000 the infrastructure play associated with bitcoins. So you know, very 0:11:25.040 --> 0:11:28.920 quickly we p came fast friends professionally as well. 0:11:28.880 --> 0:11:32.240 So you got together, you're filing for this ETF. Like, 0:11:32.520 --> 0:11:35.400 do you guys talk every day now? Because we're sort 0:11:35.400 --> 0:11:38.040 of at the eleventh hour here, Like how often are 0:11:38.080 --> 0:11:40.200 you communicating? Or Kathy, do you just sort of like 0:11:40.240 --> 0:11:43.600 let Ophelia drive this because you've got the stocks to pick? 0:11:43.640 --> 0:11:44.560 I mean, how does this work? 0:11:44.880 --> 0:11:49.600 Like I guess today, I think Aphelia and Tom talk 0:11:49.840 --> 0:11:54.000 at least once a day if I'm no more, if 0:11:54.040 --> 0:11:59.960 not more, and we get together, you know, I'm update 0:12:00.200 --> 0:12:03.800 it all the time, but we get together regularly to 0:12:03.920 --> 0:12:07.080 compare notes and you know, just make sure that we're 0:12:07.120 --> 0:12:10.600 all on the same page. It's it's you know, we 0:12:10.679 --> 0:12:13.560 have to get everything right. This is really important. 0:12:14.200 --> 0:12:15.960 And one of the things to rize is we already 0:12:16.000 --> 0:12:19.360 have five funds out as part of this partnership, right, 0:12:19.400 --> 0:12:25.640 and we already have a suite of crypto ETFs. They 0:12:25.640 --> 0:12:28.320 came to market a couple of weeks ago. So it's 0:12:28.360 --> 0:12:30.200 not just a question of I think Kathy and I 0:12:30.400 --> 0:12:32.360 and not just a question of Tom and I. At 0:12:32.360 --> 0:12:35.240 this point, there are touch points across essentially every layer 0:12:35.280 --> 0:12:38.160 of our organization, and as there we're already in the 0:12:38.160 --> 0:12:39.760 trenches operating product together. 0:12:40.600 --> 0:12:44.120 Yeah, our marketing teams. Our marketing teams are working very 0:12:44.160 --> 0:12:47.560 closely together. Our research teams are working very closely together. 0:12:47.600 --> 0:12:49.559 So it's across the both organizations. 0:12:49.720 --> 0:12:52.199 Okay, And so these new funds you okay, So for. 0:12:52.160 --> 0:12:56.000 People who don't know, obviously the main headlining act is 0:12:56.040 --> 0:12:59.240 the spot bitwinn etf race, but there is this sort 0:12:59.280 --> 0:13:02.880 of under card with the futures. And obviously there was 0:13:02.920 --> 0:13:05.800 a Bitcoin Futures ETF put out, then Ether futures were approved. 0:13:06.160 --> 0:13:08.480 You guys have put a bunch like five or six 0:13:09.120 --> 0:13:12.600 products out. One of them is like an active Bitcoin 0:13:12.720 --> 0:13:18.920 future strategy, one's an ether, one looks like it's uh blocks, right, 0:13:18.960 --> 0:13:21.440 So these are all futures. I guess you know. Give 0:13:22.160 --> 0:13:24.440 given when I saw these, I'm like, I get it. 0:13:25.360 --> 0:13:29.559 But given that Spot is so close, you know, in 0:13:29.679 --> 0:13:33.680 the futures ETFs probably going to be a little outdated. 0:13:33.720 --> 0:13:37.199 Like you know, most advisors prefer Spot when given a choice, 0:13:37.200 --> 0:13:39.920 like we've seen that with gold. They don't really want 0:13:39.960 --> 0:13:42.680 to use the futures, like do you I guess give 0:13:42.679 --> 0:13:44.920 me the logic there, given that we're so close to 0:13:44.880 --> 0:13:48.120 the Spot, why put all these futures ETFs out. 0:13:49.200 --> 0:13:54.040 So a couple of things here. I the premise I 0:13:54.040 --> 0:13:56.560 agree with. I think Spot is a more accessible product 0:13:56.600 --> 0:13:59.200 for most people most of the time. I think Future 0:13:59.280 --> 0:14:01.080 is similar to gold. Futures are going to have a 0:14:01.080 --> 0:14:02.959 reason to exist and are going to be a critical 0:14:03.000 --> 0:14:09.120 part of certain profiles investments and how they choose to 0:14:09.200 --> 0:14:10.840 enter that market. And I do believe there will be 0:14:11.640 --> 0:14:13.440 a use case for them similar to what we've seen 0:14:13.440 --> 0:14:17.640 in other commodity markets. Beyond that, with this suite, we 0:14:17.679 --> 0:14:21.760 took an approach to bringing a series of highly differentiated 0:14:21.800 --> 0:14:25.200 products right that these are not really exactly the same 0:14:25.240 --> 0:14:28.720 as what was in the market before. At a strategy level, 0:14:28.720 --> 0:14:34.080 we're looking at a product that is strategic allocations of 0:14:34.160 --> 0:14:37.440 bitcoin versus ethereum, bitcoin versus cash, and a true multi 0:14:37.520 --> 0:14:41.440 asset product. These are designed to solve a very different 0:14:41.560 --> 0:14:47.720 set of problems for investors. Crypto is a massive, massive industry. 0:14:47.720 --> 0:14:49.360 This is not going to be one size fit solved. 0:14:49.360 --> 0:14:51.320 Different people are going to have different issues and this 0:14:51.440 --> 0:14:59.760 allows customers and advisors to take advantage of our expertise 0:15:00.080 --> 0:15:03.200 as a crypto firm. We've been doing this for five years. 0:15:03.840 --> 0:15:08.920 ARCS expertise inactive management, some really sophisticated on chain analytics, 0:15:08.960 --> 0:15:12.800 all of the benefit of our research and ARCS active 0:15:12.840 --> 0:15:16.040 management as well as our operational excellence, and it really 0:15:16.120 --> 0:15:21.840 packages these products. They're fundamentally quite different than something like 0:15:21.960 --> 0:15:24.880 just a pure play Bitcoin spot product, because that's not 0:15:24.880 --> 0:15:27.240 really what they're intended to do. These aren't. The vast 0:15:27.280 --> 0:15:29.920 majority of the suite is not intended to be a 0:15:30.000 --> 0:15:34.080 long only exposure, but rather more sophisticated exposures. Is to 0:15:34.080 --> 0:15:37.680 take advantage of that knowledge base from us as a firm, 0:15:38.480 --> 0:15:41.840 or actually as two firms. And so that's I think 0:15:41.880 --> 0:15:44.400 one of the key things with why we chose to 0:15:44.400 --> 0:15:46.080 do this. We don't believe that this is going to 0:15:46.080 --> 0:15:50.320 be one size fitsall. We intend to provide clients with 0:15:50.880 --> 0:15:54.080 solutions that fit their needs in this space that lets 0:15:54.120 --> 0:15:58.520 them take advantage as much as possible of our experience 0:15:58.520 --> 0:15:59.760 and expertise in the sector. 0:16:00.160 --> 0:16:02.600 And I would say we have been investing on the 0:16:02.640 --> 0:16:07.840 research side. In our team, we have three cryptoanalysts, one 0:16:07.880 --> 0:16:12.760 of whom does nothing but on chain analytics. And what's 0:16:12.880 --> 0:16:18.520 beautiful about this ecosystem, especially Bitcoin, but others as well 0:16:19.200 --> 0:16:25.760 ethereum the transparency of these ecosystems gives us a lot 0:16:25.800 --> 0:16:31.200 of information to manage actively, and so this is the 0:16:31.240 --> 0:16:34.440 first time, while we've been developing these tools for a 0:16:34.520 --> 0:16:36.480 number of years now, this is the first time we've 0:16:36.520 --> 0:16:40.920 been able to activate them in a productive way. So 0:16:41.440 --> 0:16:42.680 I'm pretty excited about that. 0:16:50.080 --> 0:16:54.480 Okay, So obviously you do are both big bulls and 0:16:54.760 --> 0:16:57.880 have you know a stake and where this product can go. 0:16:58.400 --> 0:17:02.160 There's still remains plenty of naysayers, even Jamie Diamond coming 0:17:02.160 --> 0:17:04.800 out and basically saying that if he were in the government, 0:17:04.880 --> 0:17:07.360 he would just shut Crypto shut till day. 0:17:07.840 --> 0:17:09.600 Yeah yeah, yeah, so crazy. 0:17:09.760 --> 0:17:15.600 So you're still having to wrestle with a version of haters, right, 0:17:15.720 --> 0:17:18.360 And I think the haters actually, for a while within 0:17:18.400 --> 0:17:21.120 the last year and change kind of gained a little 0:17:21.119 --> 0:17:24.320 bit of an upper hand with the carnage that came 0:17:24.359 --> 0:17:29.000 out of the SBF fallout. So how do you wrestle 0:17:29.040 --> 0:17:33.040 with that sentiment that still remains, which is like, there's 0:17:33.080 --> 0:17:35.480 no point to this, why should I even bother? 0:17:36.359 --> 0:17:40.720 So I'll start there. I had to defend what we 0:17:40.720 --> 0:17:45.879 were doing throughout last year. So Terra Luna Celsius three 0:17:46.040 --> 0:17:52.120 arrows FTX and when FTX blew up. I basically said, 0:17:52.280 --> 0:17:55.359 and I think it's now clear that wait a minute, 0:17:55.440 --> 0:18:04.200 this proves the value of bitcoin and other cryptocurrencies. Bitcoin 0:18:04.480 --> 0:18:16.840 completely transparent, decentralized, no counterparty risk, whereas FTX completely opaque, centralized, 0:18:17.080 --> 0:18:17.879 and fraudulent. 0:18:18.280 --> 0:18:19.480 So that was the first step. 0:18:19.520 --> 0:18:24.400 But even more provocative, I thought was during the regional 0:18:24.440 --> 0:18:28.679 bank crisis in March. As you pointed out earlier, Joel, 0:18:30.160 --> 0:18:33.919 bitcoin went up fifty percent as the KRE the regional 0:18:33.920 --> 0:18:37.639 Bank index was imploding, an SVP and signature went under, 0:18:38.400 --> 0:18:41.560 and we were able to say to our clients, wait 0:18:41.600 --> 0:18:46.240 a minute, Bitcoin is not just a risk on asset. 0:18:46.880 --> 0:18:50.040 It is now showing its stripes as a risk off 0:18:50.280 --> 0:18:55.440 asset when there's a financial crisis and counterparty risk becomes 0:18:55.480 --> 0:18:59.000 a question, because that was a question with the regional banks. 0:18:59.560 --> 0:19:02.160 I think that has gotten a lot of people's attention, 0:19:02.560 --> 0:19:07.840 as well as others in the industry who were negative. 0:19:08.720 --> 0:19:12.360 And you're right, it's so interesting to see Jamie Diamond 0:19:12.480 --> 0:19:16.639 and Elizabeth Warren on the same side of the agreeing 0:19:16.680 --> 0:19:21.320 with each other. Kind of what But someone like Larry 0:19:21.359 --> 0:19:27.840 Fink coming around after years of focusing on the environmental 0:19:27.880 --> 0:19:32.840 issues that he thought were a part of the bitcoin ecosystem. 0:19:32.880 --> 0:19:34.600 And you know, I think one of the most important 0:19:34.600 --> 0:19:38.119 things that happened actually happened five years ago when Cambridge 0:19:38.160 --> 0:19:42.960 Associates published its first report on crypto and focused on 0:19:43.040 --> 0:19:48.560 bitcoin in particular and basically said to its foundations and endowments, Look, 0:19:49.320 --> 0:19:53.840 you may not like this instrument, but you should get 0:19:53.880 --> 0:19:55.840 to know as much as you possibly can about it, 0:19:55.880 --> 0:19:59.600 because this seems like it's a new asset class with 0:20:00.359 --> 0:20:05.159 very low correlation of returns to other assets. And so 0:20:05.359 --> 0:20:10.399 I think, but one by one these points are I 0:20:10.440 --> 0:20:15.040 think are a are hitting home, hitting a responsive cord. 0:20:15.480 --> 0:20:19.879 And I do think the SEC coming around and blessing 0:20:20.400 --> 0:20:25.119 a bitcoin spot e TF is going to check the 0:20:25.160 --> 0:20:26.919 box for a lot of institutions. 0:20:27.000 --> 0:20:31.960 When when the SEC does whatever it does, and let's 0:20:32.080 --> 0:20:36.160 let's say that it approves, right, I'm curious what kind 0:20:36.160 --> 0:20:39.200 of modeling you've done. What happens to the price of 0:20:40.080 --> 0:20:44.240 bitcoin when that headline moves that SEC has approved a 0:20:44.359 --> 0:20:46.480 spot bitcoin product. 0:20:47.320 --> 0:20:49.680 Some of it's happening right now, right. 0:20:50.520 --> 0:20:55.200 And there's this anticity the room building for that moment, 0:20:55.240 --> 0:20:56.680 But what happens at that moment? 0:20:56.760 --> 0:20:59.600 Yeah, very often, very often you will get a sell 0:20:59.600 --> 0:21:01.920 on the news because and I don't know where it 0:21:01.960 --> 0:21:04.560 will go between now and then. And you could have 0:21:04.560 --> 0:21:07.000 a sell on the news and you know you'll get 0:21:07.200 --> 0:21:11.840 maybe some week holders in kicking and screaming, and they 0:21:11.880 --> 0:21:16.120 may sell. But when you think we're at roughly nineteen 0:21:16.160 --> 0:21:20.000 and a half million bitcoint outstanding and we're only going 0:21:20.040 --> 0:21:24.159 to twenty one million, and I really do believe that, 0:21:25.400 --> 0:21:28.240 knowing the core some of the core developers the way 0:21:28.280 --> 0:21:34.280 I do, then I think this institutional push in will 0:21:34.320 --> 0:21:39.119 be the biggest reason that our target, which the base 0:21:39.200 --> 0:21:42.200 case is six hundred and fifty thousand and the bowld 0:21:42.240 --> 0:21:46.160 case is one point five million. One of the reasons 0:21:46.560 --> 0:21:49.840 that we have a shot that those numbers are close 0:21:49.880 --> 0:21:54.119 to the mark is the institutional interest in a new 0:21:54.240 --> 0:21:55.160 asset class. 0:21:55.320 --> 0:21:58.840 Can I ask just about how, just because those numbers 0:21:58.840 --> 0:22:02.000 are what they are, when you do the research and 0:22:02.080 --> 0:22:05.320 the modeling to get to those prices, how does that 0:22:05.359 --> 0:22:07.000 math work, Kathy? 0:22:08.000 --> 0:22:10.960 And you'll see this in our Big Ideas twenty twenty three, 0:22:11.480 --> 0:22:16.440 we delineate what we are assuming for twenty thirty. Those 0:22:16.520 --> 0:22:22.320 numbers are twenty thirty numbers. When it comes to digital gold, 0:22:22.560 --> 0:22:28.240 that role the institutional push and the use of bitcoin 0:22:28.560 --> 0:22:35.080 in emerging markets, which have from a use case point 0:22:35.080 --> 0:22:41.840 of view, when economies are hyperflating their money and spending 0:22:42.080 --> 0:22:46.320 egregiously and are corrupt, there's all the reason in the 0:22:46.320 --> 0:22:50.080 world to look for an insurance policy like bitcoin. So 0:22:50.119 --> 0:22:52.520 those are the three biggest reasons we think it will 0:22:52.560 --> 0:22:56.520 go there. But just the institutional case alone, and we 0:22:56.560 --> 0:22:59.520 did write a piece on institutional I think it was last. 0:22:59.359 --> 0:23:00.440 Year or the year four. 0:23:00.920 --> 0:23:05.720 But if you do the analysis, if you and you're 0:23:05.720 --> 0:23:09.840 an institution saying this is a new asset class, if 0:23:09.880 --> 0:23:16.199 you want to minimize volatility, you will probably take it 0:23:16.240 --> 0:23:19.720 to two and a half percent in terms of an 0:23:19.760 --> 0:23:22.960 allocation to a new asset class, if you want to 0:23:23.119 --> 0:23:28.280 maximize your sharp ratio, so we're speaking their language, you'll 0:23:28.359 --> 0:23:30.960 look at something closer to six or six and a 0:23:31.040 --> 0:23:37.560 half percent. So those are the bull case is based 0:23:37.600 --> 0:23:40.280 on that six and a half percent. Now why are 0:23:40.320 --> 0:23:43.000 these numbers making sense to us? Well, if you look 0:23:43.040 --> 0:23:46.040 at new asset classes. So in the seventies and eighties 0:23:46.040 --> 0:23:49.320 it was real estate and pension funds. In the eighties 0:23:49.359 --> 0:23:53.640 and nineties it was emerging markets as a new asset class, 0:23:54.920 --> 0:23:58.760 institutions started tiptoed in with one percent than two percent, 0:23:58.800 --> 0:24:02.639 then end up a five percent or roughly thereabouts. So 0:24:03.680 --> 0:24:08.159 it's not crazy. These are not crazy numbers, and we 0:24:08.280 --> 0:24:13.520 used a Monte Carlo analysis to get to them. So that, 0:24:13.560 --> 0:24:18.320 I guess is the biggest the biggest source of the 0:24:19.560 --> 0:24:21.840 upward move in bitcoin from our point of view. 0:24:22.480 --> 0:24:25.200 And one of the things people don't realize. And I 0:24:25.240 --> 0:24:28.840 think there's been a lot of statements made by people 0:24:28.960 --> 0:24:31.119 about the sell then news concept and what that's going 0:24:31.200 --> 0:24:35.879 to look like, and I you know, sure, yes you 0:24:35.920 --> 0:24:37.719 may see that. I think what you're going to end 0:24:37.800 --> 0:24:43.600 up seeing that is a little bit unexpected. Is there's 0:24:43.840 --> 0:24:46.439 less of a question of what does it take to 0:24:46.440 --> 0:24:50.040 get people off of zero? Most ras, most managers, most 0:24:50.119 --> 0:24:54.240 advisors are currently at zero, and the reason for that 0:24:54.480 --> 0:24:55.920