WEBVTT - Get Ready for the Hottest Hot Sauce 0:00:05.840 --> 0:00:06.640 Welcome to trillions. 0:00:06.680 --> 0:00:17.400 I'm Joel Webber and I'm Eric Balchunas. 0:00:13.680 --> 0:00:16.079 Eric, lots of things happening in the world. You and 0:00:16.120 --> 0:00:19.119 I were talking about things that have happened this year 0:00:19.840 --> 0:00:22.560 that have been significant, though, and there's been, you know, 0:00:22.640 --> 0:00:26.319 for the most part, not that much volatility. But you 0:00:26.400 --> 0:00:28.600 want to one thing that has been really interesting since 0:00:28.600 --> 0:00:31.600 the beginning of the year, how bitcoin has just been 0:00:31.880 --> 0:00:34.199 on a tear. How much do you think ETFs have 0:00:34.240 --> 0:00:34.839 had to do with that? 0:00:36.320 --> 0:00:41.199 Certainly, Look, I've i get booed at on Twitter when 0:00:41.240 --> 0:00:44.880 I tell the bitcoin people that bitcoin would be trading 0:00:44.880 --> 0:00:47.720 at thirty thousand dollars if warn't for the ETFs. So 0:00:47.840 --> 0:00:50.920 right now bitcoin's around seventy thousand, and they don't like 0:00:51.000 --> 0:00:53.800 to hear that. But I'm telling you, when black Rock 0:00:53.920 --> 0:00:59.480 filed for the ETF last June, it was like basically 0:00:59.520 --> 0:01:02.120 a year ago. It went up eighty percent on the anticipation. 0:01:02.920 --> 0:01:05.720 Then when it launched there was a little pullback, but 0:01:05.840 --> 0:01:08.200 it ripped further. So I think it's up something like 0:01:08.280 --> 0:01:11.680 forty percent since then, so it's eighty plus forty. A 0:01:11.720 --> 0:01:13.640 lot of the forty percent was based on how the 0:01:13.680 --> 0:01:16.520 ets were taking in money, and this past couple of weeks, 0:01:16.520 --> 0:01:20.880 it's been crazy. Like this whole area is to quote 0:01:20.880 --> 0:01:24.160 the Paul Abdul song two steps forward, one steps back, 0:01:25.319 --> 0:01:27.120 which I don't know if you guy, it's a deep 0:01:27.240 --> 0:01:28.240 cut from like. 0:01:28.160 --> 0:01:32.000 The eighties right there. I know that I know the cut. 0:01:32.240 --> 0:01:39.160 What does it mean here? I'm gonna I want to 0:01:39.200 --> 0:01:40.399 hear you great question. 0:01:42.040 --> 0:01:44.199 Ye I forgot I went too far off the highway. 0:01:44.200 --> 0:01:46.160 I don't know where I am. 0:01:46.360 --> 0:01:47.080 Yeah. No, so. 0:01:50.320 --> 0:01:52.760 That is really funny. That's naturally funny. I get what 0:01:52.800 --> 0:01:54.960 you're saying. Hold on, okay, now I'm gonna answer that question. 0:01:55.520 --> 0:01:55.800 Yeah. 0:01:55.800 --> 0:01:58.560 So what I mean is like there's like two or 0:01:58.600 --> 0:02:01.400 three weeks of like intense flow, and then there's a 0:02:01.440 --> 0:02:03.720 little pullback. Then there's like a week or two where 0:02:03.720 --> 0:02:06.200 there's some outflows. Then there's like two or three weeks 0:02:06.280 --> 0:02:08.960 or a month of inflows, and so it's two steps forward, 0:02:09.000 --> 0:02:11.360 one step back this whole time. But you are netting 0:02:11.720 --> 0:02:14.360 twenty four billion in new net money, even beyond the 0:02:14.360 --> 0:02:17.440 GBTC outflows. So twenty four billion, just to put that 0:02:17.480 --> 0:02:21.560 into context. James and I safered on my team, we 0:02:21.919 --> 0:02:23.920 thought these would get ten to fifteen billion in their 0:02:23.919 --> 0:02:27.600 first year, so they're already nine billion beyond our upper band. 0:02:28.440 --> 0:02:32.280 So I think that what happened here was just that 0:02:32.919 --> 0:02:37.000 there was a lot of investors out there who were afraid, 0:02:37.440 --> 0:02:40.320 even if they were casually interested, they were afraid because 0:02:40.320 --> 0:02:43.200 of the FTX downfall. Who can you give your money 0:02:43.200 --> 0:02:46.040 to in order to get this exposure. Well, long comes 0:02:46.040 --> 0:02:48.640 black Rock and Fidelity, and it's like, oh, I know 0:02:48.680 --> 0:02:51.200 these I can use all their products. I completely trust them. 0:02:51.639 --> 0:02:55.519 So the ETFs brought trust and that was totally missing. 0:02:55.560 --> 0:02:57.600 Not only that you got low fees and high liquidity, 0:02:57.919 --> 0:03:00.360 So this is like major So it's not just that 0:03:00.400 --> 0:03:01.880 there was a little rally. I just think this is 0:03:01.919 --> 0:03:07.359 a a really powerful vehicle that a lot of people 0:03:07.480 --> 0:03:09.520 just trust and like to use for this exposure. So 0:03:10.320 --> 0:03:12.480 I'm not surprised as successful, but it's a little beyond 0:03:12.480 --> 0:03:14.960 what I thought. And so there's been all these interesting 0:03:15.080 --> 0:03:19.920 products now coming out that are ancillary. They aren't spot bitcoin, 0:03:19.960 --> 0:03:22.040 but they do something similar and those are hits too. 0:03:22.240 --> 0:03:24.200 So there's a bit of a feeding frenzy for anything 0:03:24.240 --> 0:03:27.120 that's sort of Bitcoin related, and that's. 0:03:26.960 --> 0:03:30.320 What we're going to talk about today because that ancillary 0:03:30.400 --> 0:03:35.040 products sure there's bitcoin, but there's also things like micro strategy, 0:03:35.680 --> 0:03:41.040 and there's been multiple entrants and you when the first 0:03:41.040 --> 0:03:44.640 one came out, you call it, Bloomberg Intelligence called it 0:03:45.080 --> 0:03:47.120 most Volatile ETF. 0:03:47.360 --> 0:03:49.440 How come and how does micro strategy fit into all 0:03:49.440 --> 0:03:49.640 of this? 0:03:50.640 --> 0:03:53.400 Yeah, you know, we've used the phrase hot sauce plenty 0:03:53.400 --> 0:03:56.600 of times on this show. This is like a ghost pepper. 0:03:58.080 --> 0:04:00.240 This is the ghost pepper of the hot sauce bucket. 0:04:00.280 --> 0:04:01.440 Okay, this is. 0:04:01.440 --> 0:04:04.280 Where you invest in it and you film yourself on 0:04:04.320 --> 0:04:08.280 YouTube seeing how you react to It's very VOLTAIGJOL. So 0:04:08.440 --> 0:04:11.160 to give you some numbers, we're talking like one hundred 0:04:11.200 --> 0:04:14.440 and seventy one hundred and eighty percent volatility. To put 0:04:14.440 --> 0:04:16.280 that into context, the S ANDP is like ten to 0:04:16.279 --> 0:04:19.840 eleven percent, so it's like sixteen times the volatility of 0:04:19.880 --> 0:04:25.520 the SMP. But there is definitely people who are hungry 0:04:25.560 --> 0:04:30.760 to trade, and so this pushes the envelope on volatility. 0:04:31.279 --> 0:04:34.200 But at the same time, it's not just some random stock. 0:04:34.320 --> 0:04:37.279 It's a stock that a lot of the crypto world 0:04:37.480 --> 0:04:40.280 really enjoys trading. And so if you think about it, 0:04:40.680 --> 0:04:43.280 this was actually a clever way to make a four 0:04:43.480 --> 0:04:47.640 x bitcoin ETF because MicroStrategy is two times the volatility 0:04:47.640 --> 0:04:51.760 a bitcoin and highly correlated, and these are two x MicroStrategy, 0:04:52.360 --> 0:04:54.599 so you're looking at a four x bitcoin ETF, which 0:04:54.640 --> 0:05:00.559 is again a powerful concept because there's not just people 0:05:00.640 --> 0:05:03.560 using this product. People like leverage bitcoin trading all over 0:05:03.600 --> 0:05:05.880 the world. It's very popular. There's all kinds of derivatives 0:05:05.880 --> 0:05:09.080 being used. So this again the ETF industry is famous 0:05:09.120 --> 0:05:12.680 for democratizing stuff that might be happening elsewhere. So here 0:05:12.720 --> 0:05:16.840 you have again a democratization of a very leverage trade 0:05:16.680 --> 0:05:20.279 on bitcoin, which is popular elsewhere. So I'm not totally 0:05:20.279 --> 0:05:24.000 shocked that's popular here. But these two products were instant 0:05:24.040 --> 0:05:27.159 hits to the point where they're both around the top 0:05:27.240 --> 0:05:31.480 one two percent in terms of all ETFs in volume. 0:05:32.080 --> 0:05:33.760 I mean, so in other words, they launch and they're 0:05:33.760 --> 0:05:36.600 instantly in the top one two percent most traded. That's crazy. 0:05:37.200 --> 0:05:40.160 All right, We're gonna speak with Sylvia Jablonski, who's the 0:05:40.200 --> 0:05:47.680 CEO and CIO at Defiance ETF's particular mst X, which 0:05:47.760 --> 0:05:54.040 launched in August this time on trillions. 0:05:54.240 --> 0:05:55.279 Do you want volatility? 0:05:55.839 --> 0:06:01.760 We got some volatility, Sylvia. Welcome back to trillions because 0:06:01.800 --> 0:06:04.520 you have. As you reminded us, you have been here before. 0:06:04.880 --> 0:06:06.520 I have, and thank you for having me again. 0:06:06.560 --> 0:06:09.920 Great to have you back and in a new capacity 0:06:09.920 --> 0:06:12.799 because I think last time you were not at Defince, 0:06:12.839 --> 0:06:14.919 you were at Directions, and that was a number of 0:06:14.960 --> 0:06:19.240 years ago. So welcome back to the podcast. Eric called 0:06:19.320 --> 0:06:22.200 your product ghost pepper. How do you feel about that? 0:06:23.040 --> 0:06:23.880 I feel good about that. 0:06:24.920 --> 0:06:26.880 I actually which may be surprising to some, but I 0:06:26.920 --> 0:06:30.000 actually think that that's an accurate description, right, and and 0:06:30.279 --> 0:06:33.159 it could be you know, the range of descriptions for 0:06:33.240 --> 0:06:35.560 Levered u versytfs in general, right, you have some that 0:06:35.600 --> 0:06:37.880 are that are kind of like mildly spicy, and then 0:06:37.880 --> 0:06:39.680 they go all the way off to ghost pepper. And 0:06:39.760 --> 0:06:42.039 I would say that we're on the ghost pepper side. 0:06:42.080 --> 0:06:44.680 So it's it is sort of the perfect recipe though 0:06:44.720 --> 0:06:47.359 for a LEVERTYTF product. You have this high level of volatility, 0:06:47.360 --> 0:06:50.560 as Eric mentioned, and you know a lot of a 0:06:50.560 --> 0:06:53.719 lot of interest due to the underlying sector being crypto related, 0:06:53.760 --> 0:06:56.280 and you know, low and behold it. It really did 0:06:56.320 --> 0:06:59.280 take off. The good thing though, is that it's kind 0:06:59.320 --> 0:07:00.680 of being used the way it's supposed to do. You 0:07:00.720 --> 0:07:03.040 kind of see that volume in that turnover being quick, 0:07:03.200 --> 0:07:05.080 you know, a day less than a day things like this, 0:07:05.279 --> 0:07:08.440 and so in that sense, it's kind of okay that 0:07:08.480 --> 0:07:09.400 it's ghost Pepper. 0:07:09.600 --> 0:07:12.600 Yeah, so when did you get the idea to be like, 0:07:12.680 --> 0:07:15.520 you know, what we need is to effectively do what 0:07:15.720 --> 0:07:18.680 Eric said, we need to go four x bitcoint Where 0:07:18.680 --> 0:07:21.400 did you first identify that that would be a thing 0:07:21.400 --> 0:07:22.320 that you would want to do. 0:07:22.600 --> 0:07:25.640 So this might be super interesting too, but the initial 0:07:25.760 --> 0:07:27.480 name of our company, like when you look at the 0:07:27.920 --> 0:07:32.040 founding documents, it was Crypto Beta LLC. And when we 0:07:32.040 --> 0:07:35.480 were at you know, Direction working with Levered n versus 0:07:35.520 --> 0:07:39.640 ETF products, the chairman and original founder Matt Belski was 0:07:39.960 --> 0:07:41.240 talking about, you know how he was going to go 0:07:41.360 --> 0:07:45.680 leave and start a crypto company basically, and it was 0:07:45.840 --> 0:07:48.520 you know, sort of just way too soon. That was 0:07:49.000 --> 0:07:50.600 that was a period of time where crypto was just 0:07:50.680 --> 0:07:53.040 you know, taking off, but there was no sense that 0:07:53.360 --> 0:07:55.120 you could put it in an ETF. You could put 0:07:55.120 --> 0:07:58.400 it in like a democratized ropper that you know, a 0:07:58.480 --> 0:08:00.680 black Rock was going to be launching a product on it. 0:08:00.840 --> 0:08:03.920 You just couldn't get it out basically, right. And so 0:08:04.320 --> 0:08:06.520 you know, for years we've tried to get into the 0:08:06.520 --> 0:08:09.960 crypto game, but it was oftentimes that you know, we 0:08:09.960 --> 0:08:12.440 were either too late or not the first mover when 0:08:12.480 --> 0:08:15.200 it came to a bitcoin ETF or a levered bitcoin ETF. 0:08:15.240 --> 0:08:17.000 And we knew that we couldn't compete with the likes 0:08:17.000 --> 0:08:19.440 of a massive institution like black Rock, and so we 0:08:19.480 --> 0:08:22.880 just started looking and thinking to ourselves, like, okay, what's 0:08:23.080 --> 0:08:27.080 so bitcoin did really well, they're levered inmverse ETFs, there 0:08:27.080 --> 0:08:28.240 are single stock ETFs. 0:08:28.280 --> 0:08:30.640 Where can we play? What else is crypto related? 0:08:31.320 --> 0:08:33.360 And we started looking at the performance of just the 0:08:33.400 --> 0:08:37.440 micro strategy stock as compared to bitcoin and bitcoin ETFs. 0:08:37.520 --> 0:08:40.000 And you know, throughout history we call it like four 0:08:40.200 --> 0:08:42.880 x leverage, right, but throughout history it's been like six 0:08:42.920 --> 0:08:45.920 times the performance of crypto in in trending markets or 0:08:45.920 --> 0:08:48.079 three times kind of depending on you know, when you 0:08:48.200 --> 0:08:51.240 run that comp and we saw the stock, we were like, okay, 0:08:51.280 --> 0:08:54.559 the stock is up three hundred percent, right, and it's 0:08:54.600 --> 0:08:58.280 it's a crypto company. It's it's democratized crypto built into 0:08:58.320 --> 0:09:01.240 an equity, and so we thought, get this to market 0:09:01.440 --> 0:09:03.640 levered up best crypto play. 0:09:03.640 --> 0:09:05.320 Ever, let's break that down just a little bit though, 0:09:05.520 --> 0:09:08.040 in case somebody's not familiar with micro Strategy or it's 0:09:08.080 --> 0:09:10.280 business model. I don't know if it has a business 0:09:10.280 --> 0:09:12.360 model so much as it is just a vehicle for 0:09:12.440 --> 0:09:14.080 bitcoin at this point, right, can you explain that? 0:09:14.280 --> 0:09:16.719 Yeah, so micro Strategy was kind of historically this this 0:09:16.960 --> 0:09:19.400 software company, right, and you can argue that they play 0:09:19.400 --> 0:09:21.320 an AI which I do think, you know, kind of 0:09:21.320 --> 0:09:22.040 helps they have that. 0:09:22.080 --> 0:09:23.640 Overall AI theme. 0:09:24.240 --> 0:09:27.040 But Michael Salor's goal was always to kind of scoop 0:09:27.120 --> 0:09:29.640 up as much bitcoins as humanly possible. And we just 0:09:29.640 --> 0:09:31.520 heard them announce that, you know, over the next three 0:09:31.600 --> 0:09:33.800 years you're going to be raising another forty two billion, 0:09:34.160 --> 0:09:35.920 which is, you know, I think more than they actually 0:09:35.920 --> 0:09:38.920 have in total right now of bitcoin. And so what 0:09:39.000 --> 0:09:42.480 they try to do is create this this access point 0:09:42.559 --> 0:09:45.680 for investors to buy their stock and have more crypto 0:09:45.720 --> 0:09:47.760 exposure than they could ever get on their own, right, Like, 0:09:47.760 --> 0:09:49.960 can you imagine having you know, forty two billion of 0:09:50.000 --> 0:09:52.680 exposure to bitcoin? You can't do that on your own, right. 0:09:53.760 --> 0:09:56.200 And and the fact that it's a stock, the fact 0:09:56.240 --> 0:09:59.360 that it's you know, traded in the marketplace, it has liquidity, 0:09:59.679 --> 0:10:01.920 it has transparency, you can get in and out of 0:10:01.960 --> 0:10:03.920 it whenever you want. You know, people started buying it 0:10:04.720 --> 0:10:09.080 to have exposure to bitcoin, and you know, then we 0:10:09.160 --> 0:10:11.680 also noticed that people started trading it in and out 0:10:11.760 --> 0:10:14.359 short term, and so we thought there would be appetite 0:10:14.360 --> 0:10:16.160 to put leverage on it. And that's you know, kind 0:10:16.160 --> 0:10:17.280 of how the ETF was born. 0:10:17.760 --> 0:10:20.120 Now, one thing interesting about this, and you know, we 0:10:20.640 --> 0:10:24.240 call it the hot sauce arms race because there is 0:10:24.320 --> 0:10:27.840 a lot of competition out there for this area. One 0:10:28.840 --> 0:10:31.360 well one reason is, you know, they charge a little 0:10:31.360 --> 0:10:34.200 more in the fees here and you just need one hit. 0:10:34.600 --> 0:10:36.840 You know, we had Will Rindon Joel you know his 0:10:36.920 --> 0:10:40.440 two X Navidia ETF. Guess how much money that makes 0:10:40.440 --> 0:10:44.439 a year. I'll tell you sixty million dollars. You can 0:10:44.480 --> 0:10:47.480 see the magnet to do this as opposed to like 0:10:47.600 --> 0:10:50.720 trying to go into the core and complete against compete 0:10:50.720 --> 0:10:53.440 against black Rock and Vanguard. So I totally get it. 0:10:53.480 --> 0:10:56.880 Like and there's a you know, definitely a market for this. 0:10:57.600 --> 0:10:59.880 So when you guys came out, you were one point 0:11:00.280 --> 0:11:03.839 five X and then tuttle and then you launched that 0:11:03.920 --> 0:11:06.559 one point seventy five X, which again is still pretty volatile, 0:11:06.559 --> 0:11:09.640 given how volatile micro strategy is. But then Tuttle filed 0:11:09.679 --> 0:11:13.640 for two X Matt Tuttle and t Rex and then 0:11:13.880 --> 0:11:16.960 you guys launched. You get all this money really quickly, 0:11:17.000 --> 0:11:20.800 all this volume. He launches, and I'm like, rarely, if 0:11:20.800 --> 0:11:23.720 you're like four weeks late on a hit product, it's over, 0:11:24.120 --> 0:11:27.520 Like you cannot it's the chip has failed. It's very difficult. 0:11:28.040 --> 0:11:30.400 But he launched and kind of tied you. You both 0:11:30.480 --> 0:11:33.559 got an equal amount of assets and volume, and then 0:11:33.960 --> 0:11:37.920 you filed and now you're two X. I guess what 0:11:38.120 --> 0:11:41.720 all took shape there? And is point two five x 0:11:42.480 --> 0:11:45.880 extra volatility really that much of a deal breaker? 0:11:46.720 --> 0:11:49.040 I mean, so there's a little more to this story. 0:11:49.080 --> 0:11:52.760 So actually we we had originally filed for two X, right, 0:11:52.800 --> 0:11:55.720 And there are different rules that you have to meet 0:11:55.760 --> 0:11:59.000 in order to launch an ETF at a specific leverage point. 0:11:59.080 --> 0:12:01.880 We call that basically called a var test, and it's 0:12:01.920 --> 0:12:04.520 kind of you know this this inside baseball stuff where 0:12:05.080 --> 0:12:07.280 you know, you have to kind of like prove what 0:12:07.360 --> 0:12:09.440 the value at risk is with the basket and the 0:12:09.480 --> 0:12:12.040 index that you're comparing yourself to is and things like this, 0:12:12.200 --> 0:12:14.640 and so there were you know, there are periods of 0:12:14.679 --> 0:12:18.480 time before we launched where we wouldn't have passed the 0:12:18.559 --> 0:12:21.600 bar test based on the index that we had been 0:12:21.679 --> 0:12:25.840 using to you know, submit for var and so we filed. 0:12:25.920 --> 0:12:27.840 We were approved at one point seventy five, but we 0:12:27.840 --> 0:12:31.480 were right there with two beta, right, and then we 0:12:31.559 --> 0:12:33.720 kind of thought to ourselves, like, let's get this product 0:12:33.720 --> 0:12:35.600 out because this is hot sauce and people are going 0:12:35.640 --> 0:12:38.560 to want this and trade this, and you know, and 0:12:38.679 --> 0:12:41.080 as soon as we got it out, our clients and 0:12:41.080 --> 0:12:43.440 traders started saying, you know, we want two X, we 0:12:43.480 --> 0:12:45.680 want two X. And at that point the rex filing 0:12:45.760 --> 0:12:47.520 was out there, right, we assumed that they were going 0:12:47.559 --> 0:12:51.720 to launch the ETF, And before they launched the ETF, 0:12:51.760 --> 0:12:54.480 we actually filed to update the leverage point to to beta. 0:12:54.840 --> 0:12:57.000 But you know that takes sixty days, right, so their 0:12:57.080 --> 0:13:01.800 launch came before our left change. And so I think 0:13:01.840 --> 0:13:03.719 it was this interesting race, right because we knew we 0:13:03.760 --> 0:13:06.200 had to get out because we also knew that the 0:13:06.200 --> 0:13:09.679 two X wouldn't come into effect, you know, before they launched. 0:13:09.679 --> 0:13:12.000 So we had the one point seven out, we gathered 0:13:12.040 --> 0:13:14.120 all the assets. They came out with two and basically 0:13:14.200 --> 0:13:16.480 everything our clients said was true that people prefer the 0:13:16.559 --> 0:13:20.800 higher leverage point, and then you saw our inflows slow 0:13:20.880 --> 0:13:23.160 down a little bit. You saw them kind of take over. 0:13:23.600 --> 0:13:25.520 And now we've changed to two X and over the 0:13:25.600 --> 0:13:27.600 last couple of days we're getting a little bit more 0:13:27.640 --> 0:13:30.360 in terms of inflows than they are. So, you know, 0:13:30.520 --> 0:13:33.240 long story short, I think the two beta mattered and 0:13:34.160 --> 0:13:36.480 we're like, you know, sometimes we get praised for it 0:13:36.520 --> 0:13:40.000 and sometimes we get criticized for it, but we're very 0:13:40.080 --> 0:13:42.679 nimble as an ETF provider, like we don't take our 0:13:42.960 --> 0:13:45.080 you know, we actually had the ticker I bit and 0:13:45.120 --> 0:13:47.200 it was a short block ETF and it was out 0:13:47.400 --> 0:13:51.000 around the time that you know FTX collapse, and you know, 0:13:51.120 --> 0:13:53.640 all of this stuff happened. That ETF was up thirty 0:13:53.640 --> 0:13:56.920 percent every other day and nobody traded it, right, and 0:13:57.320 --> 0:13:59.559 we kind of knew, like, Okay, the market doesn't market 0:13:59.559 --> 0:14:02.600 doesn't want this, and we moved on from it. You know, 0:14:02.760 --> 0:14:05.240 Blackrock has that to Kurnah went a little better for them. 0:14:05.280 --> 0:14:08.360 But you know what I would say is we knew that, 0:14:08.480 --> 0:14:10.520 like we had come up with this awesome product, but 0:14:11.120 --> 0:14:13.400 you know, the people wanted more, so we gave them more. 0:14:19.560 --> 0:14:22.800 How much has the Trump trade factored into what these enplosive. 0:14:22.400 --> 0:14:25.760 Books likes you think, you know, I think it's like 0:14:25.840 --> 0:14:26.440 anything else. 0:14:26.480 --> 0:14:29.160 I always find this conversation so interesting, you know, when 0:14:29.160 --> 0:14:32.160 it comes to like what's the what's the playbook for 0:14:32.200 --> 0:14:35.400 the election, because like usually nothing happens for for if 0:14:35.440 --> 0:14:36.960 you if you look like a six months to a 0:14:37.040 --> 0:14:38.920 year out in the stock market, it kind of like 0:14:39.360 --> 0:14:42.200 reverts to the mean after whatever reaction is there for 0:14:42.240 --> 0:14:44.200 a couple of days, and then maybe as policies start 0:14:44.280 --> 0:14:46.080 changing and things like that, you see, you know, you 0:14:46.120 --> 0:14:51.360 see things happen over years. But there's certainly this this 0:14:51.520 --> 0:14:55.600 thought that you know, Trump is obviously like Republican government 0:14:55.680 --> 0:14:58.480 will be you know, less focused on regulations and things 0:14:58.520 --> 0:15:01.040 like this. Maybe there's the there's more room for crypto 0:15:01.120 --> 0:15:04.040 to grow and there's more leniency to have crypto you know, 0:15:04.720 --> 0:15:07.640 invested upon different platforms and things like this. So and 0:15:07.680 --> 0:15:09.160 the fact that he went to the crypto conference and 0:15:09.200 --> 0:15:11.640 said I love crypto quinn, I think that's going to 0:15:11.680 --> 0:15:14.720 help micro strategy. I think that's going to help bitcoin. 0:15:14.680 --> 0:15:19.080 When you think about where the year began, or even 0:15:19.200 --> 0:15:22.600 let's go back even slightly longer. I mean, Eric mentioned 0:15:22.680 --> 0:15:25.320 Sam Bakeman freed and the FTX thing. Yes, to be 0:15:25.360 --> 0:15:28.400 where we are now and see the you know, the 0:15:28.400 --> 0:15:32.400 crypto rally be where it's at. When did you think 0:15:32.800 --> 0:15:35.440 you might, you know, looking ahead here there might be 0:15:35.520 --> 0:15:39.200 something more that the world needed that could be a 0:15:39.280 --> 0:15:41.520 micro strategy x ETF. 0:15:41.840 --> 0:15:44.040 I mean right then, you know, Eric said it like 0:15:44.080 --> 0:15:46.160 the minute that those ETFs came out, all of a sudden, 0:15:46.240 --> 0:15:48.720 there was there was this massive loss of just trust 0:15:48.840 --> 0:15:51.880 right in crypto from retail investors and then for sure 0:15:51.920 --> 0:15:55.120 institutional types of players that have you know, rigorous due 0:15:55.160 --> 0:15:57.960 diligence and they probably had to get they're probably told 0:15:58.000 --> 0:16:00.800 like get out of this now, right, But I think 0:16:00.920 --> 0:16:02.280 you know, he made the point like as soon as 0:16:02.280 --> 0:16:05.000 it became like democratized and it became launched by companies 0:16:05.000 --> 0:16:08.960 that people trust, Fidelity, black Rock, we just knew and 0:16:09.040 --> 0:16:12.000 right away we were like filing for things and trying 0:16:12.040 --> 0:16:14.480 to find ways to get exposure to crypto and this 0:16:14.640 --> 0:16:16.520 was you know a great idea that we landed on here. 0:16:16.560 --> 0:16:19.080 But does it matter that it's still not clear what 0:16:19.160 --> 0:16:19.840 it's really for? 0:16:20.840 --> 0:16:23.680 So you know, we get this question a lot, like 0:16:23.720 --> 0:16:25.800 sometimes we'll talk so much about the rise of crypto 0:16:25.840 --> 0:16:28.120 and then somebody will say, hey, what is it? 0:16:28.160 --> 0:16:28.880 What do we do with it? 0:16:28.920 --> 0:16:29.160 Again? 0:16:29.240 --> 0:16:32.600 You know, why why is it here? And I think 0:16:32.840 --> 0:16:36.440 it goes back to, you know, like there are two things. 0:16:36.520 --> 0:16:39.000 One you can be and you can be an investor 0:16:39.040 --> 0:16:41.040 because you believe in the utility of it. You believe 0:16:41.040 --> 0:16:43.000 that it will be used in some way, whether it's 0:16:43.040 --> 0:16:46.200 for trade, whether it's you know, digital gold, whether it's 0:16:46.200 --> 0:16:48.680 an inflation hedge, whether it's because it's good to have 0:16:48.720 --> 0:16:52.560 this decentralized asset away from central banks. And those are 0:16:52.640 --> 0:16:54.600 you know, kind of like good reasons that people buy 0:16:54.640 --> 0:16:58.240 into why they should hold trade by crypto. And then 0:16:58.240 --> 0:17:00.280 there are other people that will just, you know, kind 0:17:00.320 --> 0:17:02.600 of flat out tell us, I still have no idea 0:17:02.640 --> 0:17:05.000 if any of that will actually come to fruition, but 0:17:05.080 --> 0:17:07.760 I see that this is an asset class with a 0:17:07.840 --> 0:17:10.840 high level of momentum and volatility, and so I trade 0:17:10.880 --> 0:17:14.720 it for the technical reason. And you know, even like 0:17:14.800 --> 0:17:18.439 the largest institutional clients will tell us like, my five percent, 0:17:19.000 --> 0:17:20.879 you know, and you guys talk about this stuff a 0:17:20.880 --> 0:17:22.840 lot too, right, five percent of your portfolio is to 0:17:23.680 --> 0:17:25.800 have some fun talitate to an asset class that might 0:17:25.840 --> 0:17:30.200 not be along your map and take a gamble at it. 0:17:30.880 --> 0:17:34.399 Yeah, no, the bitcoin is what is it for? I 0:17:34.440 --> 0:17:36.119 went through a lot of this, you know, as a 0:17:36.160 --> 0:17:39.639 tourist in that world. But I think also one thing 0:17:39.640 --> 0:17:42.200 that opened my eyes was like in other countries, especially 0:17:42.240 --> 0:17:45.879 the emerging markets, like the governments have just annihilated their 0:17:45.880 --> 0:17:50.080 currencies like they're worth nothing. The US does that to 0:17:50.160 --> 0:17:53.240 a degree, but it's not as pressing of a need here. 0:17:53.280 --> 0:17:56.400 I just think over time, it's something that the government 0:17:56.480 --> 0:18:00.439 cannot mess with because it is truly decentralized, and people 0:18:00.480 --> 0:18:03.280 like to have a little of something that they can't 0:18:03.480 --> 0:18:07.000 you know, mess with, you know, because obviously printing money 0:18:07.040 --> 0:18:09.119 is a very easy way to solve problems, and so 0:18:09.320 --> 0:18:12.879 I get that. I also think that it's sixteen years old, right, 0:18:12.880 --> 0:18:16.280 The white paper was sixteen years ago, written by Satoshi, 0:18:16.359 --> 0:18:20.679 and so I do call crypt bitcoin gold as a teenager, 0:18:21.240 --> 0:18:22.879 you know, where they used to make those movies like 0:18:23.040 --> 0:18:26.159 Young Einstein and stuff like that. This is like young gold. 0:18:26.320 --> 0:18:28.520 So it's sixteen years old. You know, it's got attitude, 0:18:28.560 --> 0:18:31.720 it's stealing the car, it's very volatile. So I just 0:18:31.760 --> 0:18:35.280 think it's kind of the best of both worlds. You've 0:18:35.320 --> 0:18:38.720 got this store of value. But you've got something that's 0:18:38.760 --> 0:18:42.800 hot saucy in whereas gold is very boring. It can 0:18:42.880 --> 0:18:45.240 go up, but it does. It's not a volatile which 0:18:45.280 --> 0:18:47.280 is a plus for some people, but in this case, 0:18:47.320 --> 0:18:50.640 I just think the hot sauce volatility is a feature, 0:18:50.720 --> 0:18:54.040 not a bug in this case. Speaking of that, one 0:18:54.040 --> 0:18:57.720 thing you guys have on mst X and MSTU, which 0:18:57.760 --> 0:19:01.959 is tuttles is options. So think about this roll. You 0:19:02.000 --> 0:19:05.080 can't get options on spot bitcoin ETFs. We do think 0:19:05.119 --> 0:19:07.639 they'll be approved in the next couple of months, but 0:19:07.760 --> 0:19:09.680 right now you can't do it. But you can get 0:19:09.680 --> 0:19:13.439 options on what is effectively for x bitcoin, which just 0:19:13.600 --> 0:19:16.760 shows you how sometimes regulation isn't as logical as you'd 0:19:16.800 --> 0:19:18.399 like it to be. I mean, if you add the 0:19:18.480 --> 0:19:20.320 volume of you two together, you trade like as much 0:19:20.359 --> 0:19:23.080 as Netflix every day. I mean, this is clearly there 0:19:23.119 --> 0:19:26.679 is a market to trade in this stuff, and I 0:19:26.760 --> 0:19:29.359 wondered if you want to talk a little bit about how, 0:19:29.600 --> 0:19:33.520 like who uses the options, what that's for, and how 0:19:33.560 --> 0:19:34.760 that market has grown. 0:19:34.520 --> 0:19:38.120 Also, Yeah, sure, And another great point to just add 0:19:38.119 --> 0:19:39.800 to what you said about, you know, kind of like 0:19:39.840 --> 0:19:43.440 the teenager and gold, is that the two are also 0:19:44.560 --> 0:19:48.919 in scarcity, right, there's a limited quality, limited quantity in 0:19:48.960 --> 0:19:52.600 the world of both you know gold and crypto, which 0:19:52.640 --> 0:19:54.640 is you know, digital gold, and I think that's why 0:19:54.640 --> 0:19:57.639 they sometimes get married together. But so in terms of 0:19:57.680 --> 0:20:00.760 the options, I think, you know, we have investors using 0:20:00.800 --> 0:20:04.439 them for many many reasons, Like first it's to you know, 0:20:04.640 --> 0:20:08.680