Speaker 1: Hello, and welcome to What Goes Up, a weekly markets podcast.
Speaker 1: My name is Mike Reagan. I'm a senior editor at
Speaker 1: Bloomberg and humbled Donna Higher across asset reporter with Bloomberg.
Speaker 1: This week on the show, Well, cryptocurrencies have been mired
Speaker 1: in a so called winter as the Federal Reserve raises
Speaker 1: interest rates. Bitcoins down more than sevent from its highs. Yeah,
Speaker 1: could there be signs of green shoots emerging in this
Speaker 1: crypto winter? After all, bitcoins low for the year was
Speaker 1: way back in June and it's held above that low.
Speaker 1: Since we'll go hunting for green shoots with the CEO
Speaker 1: of a digital asset fund manager. But first, fil Donna,
Speaker 1: I have to ask Buffalo does not have a baseball team. No,
Speaker 1: no baseball team. No baseball team, Go Bills? Fine, whatever,
Speaker 1: how about the Fills? As a juror see native South
Speaker 1: Jersey native, I really hope you're rooting for the Philly
Speaker 1: I definitely am. You know why because I have a
Speaker 1: teacher friend who lives in Philadelphia and if they win
Speaker 1: and there's a city parade and then she gets the
Speaker 1: day off. When the Eagles won the Super Bowl two, Yeah,
Speaker 1: I knows seventeen. Uh, yeah, they all got the day
Speaker 1: off and everybody went out into the streets. Yeah, exactly,
Speaker 1: burnt cars. Just maybe Bloomberg will give us a day
Speaker 1: off if it's possible. Can you put in a second
Speaker 1: for that ask ye, I'll put in a picctre on
Speaker 1: the show. I am worried about how how good the
Speaker 1: Eagles are. They're incredibly good there. I'm really worried about them. Yeah. Yeah,
Speaker 1: we have a guess waiting for us. By the way,
Speaker 1: we could talk about this forever though, but I want
Speaker 1: to bring in Leah Wald. She's the CEO of Digital
Speaker 1: Asset fund manager of Walkere Investments. I can Buildna. Thank
Speaker 1: you so much for having me. I'm so excited to
Speaker 1: have you on the Padia and I've been talking for years,
Speaker 1: I think now, and I think one of the first
Speaker 1: times we spoke. Actually had been looking for an expert
Speaker 1: who was very knowledgeable about world events. And you actually
Speaker 1: have a background. You you had worked at the World Bank.
Speaker 1: So maybe just tell us a little bit about your background,
Speaker 1: how you got into crypto having had this World Bank experience. Yes,
Speaker 1: I did. I started my career working at the World
Speaker 1: Bank in the sub Saharan Africa region for the former
Speaker 1: vp O bia Zek Wesley, an incredible woman who then
Speaker 1: became Minister of Education in Nigeria and Resources among many
Speaker 1: other things, as well as founding Transparency International. So the
Speaker 1: segues are actually quite similar. At the time, it was
Speaker 1: interesting the pilot programs for Empeza were launching in Kenya,
Speaker 1: UM and and Pezza is a microfinance micro loan based
Speaker 1: on SMS UH system. So when I learned about bitcoint
Speaker 1: a few years later, to be honest, the value proposition
Speaker 1: made complete sense to me. Of a permission list value
Speaker 1: transfer transfer that's also UH denominated in UH fractional shares
Speaker 1: that that can be shared over, you know, instantaneous. Now,
Speaker 1: I don't think that bitcoin has taken off in the
Speaker 1: way that I've hoped quite yet in the developing world
Speaker 1: with some of those use cases, but it definitely was
Speaker 1: starting at the World Bank and seeing those pilot programs
Speaker 1: be so successful that got me excited about the use
Speaker 1: cases and kind of the pillars and principles of crypto
Speaker 1: and digital assets. What do you think is a sort
Speaker 1: of holding back that development of those use cases in
Speaker 1: UH developing economies? UM, you know, that's always been the
Speaker 1: great promise, right is is uh, you know, under bank
Speaker 1: communities being able to use crypto to sort of you know,
Speaker 1: participated in some sort of fine actual system, if not
Speaker 1: the traditional one. What do you think is holding it back?
Speaker 1: I think that's a great question, something I asked myself
Speaker 1: a lot. I think that it has evolved in certain ways,
Speaker 1: given UH the more trend towards believing bitcoin to be
Speaker 1: a store of value. I think that the recent advances
Speaker 1: in countries like El Salvador that we've been following utilizing
Speaker 1: bitcoin as legal tender alongside the United States dollar has
Speaker 1: shown that there's definitely promise UH to sovereign nations for
Speaker 1: using cryptocurrencies. But to your point, is it solving issues
Speaker 1: with the remittances corridor other issues with unbanked I'm not
Speaker 1: sure why it hasn't taken off quite yet. I think
Speaker 1: that structurally we haven't been focused as much on those
Speaker 1: types of use cases. I think the speculative elements of
Speaker 1: cryptocurrencies have definitely had the limelight, which is maybe why
Speaker 1: we're on this podcast today. UH. I think that money
Speaker 1: has followed Wall Street UH and cryptocurrencies used again in
Speaker 1: UH speculative elements and traditional finance joining rather than as
Speaker 1: of right now solving some of those development economics issues.
Speaker 1: But I think that as more development banks around the
Speaker 1: world start getting more comfortable with crypto assets, which they
Speaker 1: have not been, I think that we'll start to hopefully
Speaker 1: see a little bit more progress on that front. With
Speaker 1: that said, there have been fantastic technological developments that can
Speaker 1: ease this, such as the amount of nodes on the
Speaker 1: Lightning network being over seventy seven thousand, uh and a
Speaker 1: lot of other advances that I think could facilitate, um
Speaker 1: what is needed in developing countries for remittances or for
Speaker 1: again microfinance, micro loan systems uh and whatever platform needs
Speaker 1: to be used to make those successful, um you know,
Speaker 1: and hopefully we'll it on the sooner end. I'm going
Speaker 1: to ask you a somewhat controversial question, which is that
Speaker 1: and you and I have spoken about El Salvador adopting
Speaker 1: bitcoin as legal tender, and I think there's a couple
Speaker 1: of other countries around the world that have done so,
Speaker 1: but they're not places where there's you know, robust usage
Speaker 1: of bitcoin or even you know, we had in El Salvador,
Speaker 1: the failure of the of the crypto wallets, so they
Speaker 1: hadn't been working when it first rolled out, etcetera, etcetera.
Speaker 1: I'm just wondering how great of examples these might be,
Speaker 1: uh to to be using when talking about greater adoption
Speaker 1: of of bitcoin and other cryptocurrencies. Yeah. I think that's
Speaker 1: the right question, and a controversial answer is that I
Speaker 1: think what's been interesting from a GDP perspective is the
Speaker 1: onus we've now placed on El Salvador and the tourism
Speaker 1: that then has some to the country and generally the
Speaker 1: community and enthusiast as um of bitcointerers around the world
Speaker 1: to support El Salvadore due to the initiatives. So in
Speaker 1: some ways, you're absolutely right. I don't think that the
Speaker 1: actual usage of bitcoin as a means of payment on
Speaker 1: the every day for buying a you know, big mac
Speaker 1: is really taking off, although I think that again we're
Speaker 1: very early stages for that to be comfortable. And generally speaking,
Speaker 1: the divide, as you well know, uh, in the bitcoint world,
Speaker 1: is is it a store of value, is it a
Speaker 1: means of payment? Is it this? Is it that? And
Speaker 1: I think that's still being figured out, and until that's
Speaker 1: figured out, I think it's hard to try to pinpoint
Speaker 1: bitpoint being a means of payment as its success metric,
Speaker 1: therefore showing the validity of that argument. But on the
Speaker 1: other side, just generally from El Salvadore gaining attention in
Speaker 1: a positive way, that's something that the country hasn't you know,
Speaker 1: had that opportunity for in in a very long time.
Speaker 1: So I think that in that front it's been quite successful.
Speaker 1: A lot of tourists are coming again, a lot of support, uh,
Speaker 1: and a lot of infrastructure builds, whether it's you know,
Speaker 1: wallet's specifically designed for the country, it's definitely taken. I'd say,
Speaker 1: you know, the limelight of the fact that bitcoin as
Speaker 1: a means of payment cannot take off unless the rails
Speaker 1: are in place, So there has been a lot of
Speaker 1: technology developed specifically for All Salvador as well. And again,
Speaker 1: you know, it wasn't particularly a country that's been very
Speaker 1: focused on by the mass public, But now we love
Speaker 1: talking about All Salvador. I just mentioned it and you
Speaker 1: called me out on it, which is fantastic, uh, And
Speaker 1: I think that that's important as well. You know, Leah
Speaker 1: Pildona and I recently wrote a piece talking about sort
Speaker 1: of the transition from a very much a retail sort
Speaker 1: of day trader mentality to crypto towards crypto to more
Speaker 1: of an institutional approach. It seems like the influence of institutions, Uh,
Speaker 1: the participation of institutions is much greater. You shared some
Speaker 1: findings from some bullet points from a Fidelity survey. Just
Speaker 1: read off a couple of the highlights. Adoption of digital
Speaker 1: assets among those surveyed institutional investors increased to in the
Speaker 1: US sixty seven percent in Europe globally, of all institutional
Speaker 1: investors believe digital assets should be part of a portfolio.
Speaker 1: So it definitely seems like institutions are jumping in with
Speaker 1: both feet this year especially, I would think that would
Speaker 1: be bullish for prices, and yet here we are, you know,
Speaker 1: with prices down severely this year. I mean, did they
Speaker 1: cushion the blow of this crypto winner or you know,
Speaker 1: how are you thinking about sort of the interest of
Speaker 1: institutions and the effect on levels for for bitcoin, ethereum
Speaker 1: and everything else. Yeah, absolutely so those statistics are definitely exciting,
Speaker 1: definitely bullish long term and as we vary well known finance,
Speaker 1: it absolutely depends on your time horizon and institutions have
Speaker 1: a longer time horizon. They also as a producery, I
Speaker 1: cannot just jump in with a strategy. Might might I digress.
Speaker 1: My former partner used to tell me hope is not
Speaker 1: a good investment strategy. So as much as we you know,
Speaker 1: may like bitcoin and we're interested in bitcoin, if it's
Speaker 1: a bear market, it's a bear market, we're not buying
Speaker 1: right and that's the way that it should be. So
Speaker 1: I do think again, I'm very excited about institutions interest
Speaker 1: family offices as well across the spectrum a desire to
Speaker 1: have a crypto strategy for when the timing is right
Speaker 1: to actually buy it. We also know that there is
Speaker 1: a lot of different committees that need to sign off,
Speaker 1: and there's a lot of other rdles that institutions have,
Speaker 1: whether it's risk parameters among others, and also just generally
Speaker 1: the vehicle that they need in order to buy it.
Speaker 1: So I think that those statistics from the Fidelity in
Speaker 1: all so, a recent KPMG survey and many others have
Speaker 1: been absolutely showing very exciting bullish metrics, but it's not
Speaker 1: showing up in the market right now. And I think
Speaker 1: that's also because we have a coupling in correlation to
Speaker 1: the traditional market, and all of us are very concerned
Speaker 1: for the most part about what the macra outlook is.
Speaker 1: So I don't see any institutions investing in such a
Speaker 1: risk asset at the moment. So I do see a
Speaker 1: lot and we hear a lot of institutions that we're
Speaker 1: speaking to on the sidelines and preparing. So I do
Speaker 1: think if we consider a longer time horizon, that's exciting. Indeed. Yeah,
Speaker 1: so they're they're just maybe not in the type of
Speaker 1: size that would really bolster prices. I guess that's right.
Speaker 1: So Leah, can you actually talk more about this because
Speaker 1: we've sort of had bitcoin, largely Bitcoin and some other
Speaker 1: cryptocurrencies mired in a very tight trading range. So Bitcoin
Speaker 1: has been hovering around twenty thousand for weeks now, and
Speaker 1: a lot of people are saying or asking is bitcoin
Speaker 1: boring at the moment? Stuck a little bit more about
Speaker 1: the macro landscape, because a couple of months ago, we,
Speaker 1: you know, speaking of institutional interest, we had the Black
Speaker 1: Crock announcement that they were partnering with coin base, and
Speaker 1: I remember even back then, it really didn't do anything
Speaker 1: in terms of being a catalyst upward for prices, So
Speaker 1: what exactly is going on that's keeping prices very muted recently?
Speaker 1: Right the million dollar or multimillion dollar question, I think
Speaker 1: you brought up a couple of interesting points. Number one,
Speaker 1: that bitcoin is boring, and how funny that is because
Speaker 1: in the same survey that you just mentioned, Mike, the
Speaker 1: main obstacle to adoption over said was volatility, right, and
Speaker 1: that's always been for the most part. What are as
Speaker 1: that we speak to and other money managers have had
Speaker 1: as their highest concern is volatility and uh an inability
Speaker 1: to accurately allocate given that volatility. So now we have
Speaker 1: Bitcoin being the boring asset in the market, and I
Speaker 1: think that there's some humor to that as well, but
Speaker 1: also some important elements to consider as this asset develops.
Speaker 1: And to your second point, Bill Donna, I think that
Speaker 1: the black Rock point based news was extremely important. You're
Speaker 1: right that it didn't move the markets yet, but the
Speaker 1: integration with the Laddin can't be overstated, and I think
Speaker 1: anyone in traditional finance understands the power of Aladdin and
Speaker 1: obviously the power of black Rock. What we've been hearing
Speaker 1: is that allocators still want to work with UH sophisticated
Speaker 1: crypto active managers to manage that product rather than allocate
Speaker 1: themselves due to again those concerns around volatility, lack of
Speaker 1: understanding around fundamentals, lack of regulatory clarity, and just general
Speaker 1: UH discomfort in their own understanding of how to allocate
Speaker 1: to this asset class. So I believe that number one,
Speaker 1: as institutions get more comfortable with the asset class, they
Speaker 1: will likely feel more comfortable allocating themselves through that integration
Speaker 1: and in the introim that integrates directly to coin based
Speaker 1: So you can't work with a active manager who is
Speaker 1: fluent in allocating to these assets, especially in an active
Speaker 1: and risk managed way. So I think that there is
Speaker 1: still a hurdle where it went straight to the finish
Speaker 1: line when maybe we're not quite there yet. Really, I'd
Speaker 1: like to talk a little bit about the bitcoin mining space, UH.
Speaker 1: I know one of your firms offerings is a miners
Speaker 1: et f W g M. I UH actually really taking
Speaker 1: it on the chin this year unfortunately, UH down seventy two.
Speaker 1: I think since since February when it was launched, what
Speaker 1: is the sort of the landscape for miners right now?
Speaker 1: I mean clearly, when bitcoin prices are low, it's not
Speaker 1: the best of times for them. But how do you
Speaker 1: see sort of the the environment for miners progressing from here.
Speaker 1: That's a really great ticker, by the way, w g
Speaker 1: M I yeah, I think I know. What do you
Speaker 1: think it stands for? It? We're going to make it? Yeah, yeah,
Speaker 1: Leah's pumping our fast. You've got to do the inverse
Speaker 1: version of it. IM not going to make it. I
Speaker 1: love seeing not going to make it. You didn't think
Speaker 1: I knew the hip crypto. I didn't know. I didn't
Speaker 1: plus one hundred points for you today. That's amazing. I
Speaker 1: didn't know, Mike, that you were such a bitcoiner. But
Speaker 1: this is this. Yeah, I mean, as you guys know,
Speaker 1: sometimes you've got to get creative with the tickers. You know,
Speaker 1: that's a really good one. You have to be a
Speaker 1: little playful, especially in this industry. And that's a tough question.
Speaker 1: I am bullish, but there's also a lot of concerning elements,
Speaker 1: especially with prices at this level. For Scientific recently warned
Speaker 1: that it's on the verge of bankruptcy. That's no small deal. Um.
Speaker 1: They're obviously publicly listed. Argo also just came out with
Speaker 1: news that they failed to raise the twenty seven million
Speaker 1: dollar strategic ground that they were in the midst of doing,
Speaker 1: and that there's concerns around what that means. But on
Speaker 1: the plus side, as we know, bear markets are for builders,
Speaker 1: so and there's a lot of money still on this base,
Speaker 1: especially from overseas money that's all, you know, relocating here
Speaker 1: in the United States. So there's a lot of upside
Speaker 1: to consolidation, perhaps not from the dessentialized ethos of bitcoin,
Speaker 1: but from a business and capitalist standpoint, and and hopefully
Speaker 1: price appreciation of the sector. You know, M and A
Speaker 1: could reduce redundancies and costs, and stronger firms could most
Speaker 1: definitely bolster their position. Weaker firms could return at least
Speaker 1: some value to shareholders, which is very meaningful in this environment.
Speaker 1: And again, you know, all industries go through this during downturns,
Speaker 1: and mining is no different. So hopefully we continue to
Speaker 1: see these activities, and we are now, especially in the
Speaker 1: private equity realm, so I don't think it's going to
Speaker 1: be seen just yet, but I do think that these
Speaker 1: are bullish catalysts for long term and typically miners do
Speaker 1: overperform bitcoin in a bull market. Right now. It's it's
Speaker 1: quite difficult since it's sometimes in so there's like a
Speaker 1: beta to them as a investment. I guess to whatever
Speaker 1: the coins. I'm gonna blow your guys minds with this
Speaker 1: next one because I'm ready. You know, the the Ethereum merge.
Speaker 1: I've actually heard of that. I think I understand what
Speaker 1: it was. But obviously that was the big, big event
Speaker 1: this year where Ethereum switched from proof of work Lee,
Speaker 1: I'm curious if that plays a role in troubles for
Speaker 1: for miners. You know, I assume many of these companies
Speaker 1: are mining bitcoin but also have rigs working as a
Speaker 1: theory arium validators. UM. How does the switch to proof
Speaker 1: of stake affect a sort of minor validator company? Um?
Speaker 1: Is it less profitable for them? Uh? More profitable? You know?
Speaker 1: Is there is there much difference for for these companies
Speaker 1: involved in that space. Yeah. For miners that we're mining ethereum,
Speaker 1: obviously they needed to switch and there has been you know,
Speaker 1: luckily for the merge, we have known about it for
Speaker 1: a very long time, so a lot of mining companies
Speaker 1: prepared for this for you know, even the years now.
Speaker 1: Miners are often agnostic as to which coin they're mining
Speaker 1: if they're able to UH, simply due to market environments
Speaker 1: and where they can find the most alpha. For the
Speaker 1: most part, though, I do think that the market reacted
Speaker 1: to this news previously and that it was priced in,
Speaker 1: and that miners across the industry had again prepared for
Speaker 1: it accordingly, since it didn't happen overnight, the merge was
Speaker 1: very much a countdown for you know, a couple of years.
Speaker 1: But I do think that that's a good question and
Speaker 1: also something maybe that we don't know quite yet, especially
Speaker 1: hard to potentially decouple the market environment if we're just
Speaker 1: looking at the price of UH and Bitcoin and maybe
Speaker 1: some of the other proof of work coins UH. And
Speaker 1: so maybe we'll see that more in the future, and
Speaker 1: also as earnings continue to come out for these publicly
Speaker 1: traded miners and and other companies that will be sharing
Speaker 1: their financials soon, I think that that's when we're really
Speaker 1: going to be able to see how that hit their
Speaker 1: pan now. But right now, I think, given the merge
Speaker 1: so recently happened, we probably don't know the full effects
Speaker 1: quite yet. So besides the minor e t F, you
Speaker 1: guys actually have a bunch of e T F s
Speaker 1: and I have some E t F some more E
Speaker 1: t F questions for you. So, for one, can you
Speaker 1: talk about your Bitcoin Futures fund which launched last year
Speaker 1: And I remember at the time writing about this because
Speaker 1: it was huge news in the crypto space. There had
Speaker 1: been a ton of concern about some of the costs
Speaker 1: associated with rolling the futures contract and how potentially that
Speaker 1: was maybe going to eat away at some of the returns, etcetera, etcetera. Obviously,
Speaker 1: also worries about volatility. So can you maybe reflect back
Speaker 1: now that it's been a year about how well the
Speaker 1: structure the fund itself and others like it have actually
Speaker 1: held up and whether or not some of those worries
Speaker 1: that we had back then sort of have have have
Speaker 1: proved to be unfounded. Yeah. Absolutely, and it obviously varies
Speaker 1: across US issuers. I think that there was probably a
Speaker 1: real silver lining and being smaller and second in that
Speaker 1: we've only held front month futures, so that makes the
Speaker 1: role periods more fluid. You know. Again, if you if
Speaker 1: you look at how our bitcoint Future z ETF has performed,
Speaker 1: it's had very minimal contaging contango effect. Again that's really
Speaker 1: due to the front month futures, and there's been actually
Speaker 1: a lot of healthy volume um with momentum and new
Speaker 1: creates over the past month. And you know, other metrics
Speaker 1: again of the premium discount spread for e t f
Speaker 1: s is kind of negligible based on the other trust
Speaker 1: products in the market. So again, if we try to
Speaker 1: consider that the bitcoin futures, the e t f S
Speaker 1: as an alternative to g BTC as an example, or
Speaker 1: O b t C, UH, there's just a huge discrepancy
Speaker 1: on the poth positives of the structure of the coin
Speaker 1: futures E t F UM. So I would say that, uh,
Speaker 1: Now a little over a year later, I agree with
Speaker 1: you that um that launch day I was definitely hammered
Speaker 1: on questions of role and how that would affect And
Speaker 1: I think that uh time has shown that, especially if
Speaker 1: you're holding in front month futures, that hasn't been as
Speaker 1: scary as the market thought. And then I want to
Speaker 1: ask you about a spot the coin e t F
Speaker 1: and what the prospects are for that, because you know,
Speaker 1: periodically we just tend to hear about this whenever we
Speaker 1: hear from Gary Gensler, for instance, and I know there's
Speaker 1: a huge contingent of believers who say, you know, it's
Speaker 1: around the corner, it's going to get approved. So what
Speaker 1: are actually the prospects predict Not in my lifetime, maybe
Speaker 1: year two year, two lifetimes. But I have no comment,
Speaker 1: no comments. Yeah, I give you the softball. I don't
Speaker 1: want to you. I don't want to ate you. So Mike,
Speaker 1: I shouldn't hold my breath because that's that's not gonna work.
Speaker 1: Then well, and I wanted to throw a huge kudos
Speaker 1: to Chairman Gendler, who appropriately tweeted recently about Bitcoin's birthday.
Speaker 1: And I thought it was a very sweet tweet, actually
Speaker 1: acknowledging that Halloween was actually the release of the white papers,
Speaker 1: So that was very sweet to see. But Mike, Mike
Speaker 1: threw a party for Bitcoin's birthday. I wasn't invited, though
Speaker 1: It's true, you don't hear many kudos sent Ginstler's way
Speaker 1: from hopefully he listens. And uh, and here's that one.
Speaker 1: I mean, anyone could be Satoshi, So I don't know
Speaker 1: if you know that was your costume and just you
Speaker 1: presented yourself. I mean, Mike, it could be you and
Speaker 1: we don't know about it. Um, but you know, Halloween
Speaker 1: is amazing, It's my favorite holiday. As for the Bitcoin
Speaker 1: Spot e t F, I mean, that's that's always been
Speaker 1: the question, UM and I we definitely can't predict what
Speaker 1: the SEC is going to do and when they approve it, um,
Speaker 1: But as an issue tour, we're doing our best to
Speaker 1: try to keep a finger on the polls. We most
Speaker 1: definitely still are in the race to uh see that
Speaker 1: holy grail, the Bitcoin Spot et F get approved. And
Speaker 1: obviously we do agree that it's a more efficient vehicle, UM,
Speaker 1: that it's the right vehicle, and I definitely think that
Speaker 1: it will be UM a huge benefit to the market.
Speaker 1: We've seen in other markets abroad, the Bitcoin future is
Speaker 1: ets performed very well, very comfortably, UM, and you know
Speaker 1: across from Canada to Brazilian as well as the other
Speaker 1: e t n s in Europe. So you know, I
Speaker 1: look forward to the day where we see that approved
Speaker 1: here in the US. But I think that you're right, Mike,
Speaker 1: maybe not that long, but I won't be holding you know, Leah.
Speaker 1: One thing you sent some notes over to us before
Speaker 1: the show. One thing really caught my eye is you
Speaker 1: have a bullet point here that nearly one billion dollars
Speaker 1: worth of bitcoin was recently moved to cold storage. Now
Speaker 1: cold storage for those who are unfamiliar and correct me
Speaker 1: if I mess this up. But it's basically, you take
Speaker 1: the bitcoin off the exchange and you put it on
Speaker 1: a hard drive, uh that you keep in a filing cabinet.
Speaker 1: Then you promptly forget the pass word to the hard
Speaker 1: drive where you throw it out and you have to
Speaker 1: go dig through a dump to find it and uh
Speaker 1: and spend billions trying to dig it out. Right right,
Speaker 1: I'm kidding of worse. But but what is it about
Speaker 1: the notion of moving bitcoin to cold stories that that
Speaker 1: you think is bullish? Is Is it as simple as
Speaker 1: that is that some of this is just gonna get
Speaker 1: lost and forgotten? Cheez well, I I certainly hope not
Speaker 1: with that type of amount. Um, I think that it's bullish.
Speaker 1: It's also just as a divergent note, I also think
Speaker 1: it's important to show the importance of bitcoin being able
Speaker 1: to move that type of money instantaneously. It's just an
Speaker 1: important element. If we talk about the bitcoin fundamentals, and
Speaker 1: we often talk about price, but it is fun to
Speaker 1: note the importance of the fundamentals on something like that,
Speaker 1: but bullish. And the reason that it's bullish is typically
Speaker 1: when crypto or especially bitcoin is moved into cold storage,
Speaker 1: that buyer, that holdler doesn't plan on selling. So if
Speaker 1: all of that was dumped on the market, I think
Speaker 1: that we would be in some trouble. Indeed, But again,
Speaker 1: when we see large movements, and that's called on chain analysis,
Speaker 1: looking actually on Chaine moving from cold storage onto exchanges,
Speaker 1: we get very nervous. It's certain that they are going
Speaker 1: to be selling, but moving from exchanges into cold storage
Speaker 1: means that it's going in the safe and hopefully they
Speaker 1: don't plan on selling it and they're they're holding it
Speaker 1: for the long term, which is something that we like
Speaker 1: to see in is helpful for keeping the health of
Speaker 1: the bit win market for longevity. What do you suppose
Speaker 1: inspires that movement to cold storage? And I can't help
Speaker 1: but wonder if some of these bankruptcies we've seen this
Speaker 1: year have people worried about, you know, where their their
Speaker 1: crypto is held. Is that part of it too? Do
Speaker 1: you think? Yes? Actually, I think that I think that
Speaker 1: that is the short note on the price and investment
Speaker 1: thesis there is is simply that potentially you know a
Speaker 1: lot of these holders believe that we're at the bottom
Speaker 1: um or near there too, especially if their horizon is
Speaker 1: much longer UM. So they're comfortable moving into storage now. Uh.
Speaker 1: And you know, holding it at this price and feeling
Speaker 1: very comfortable as to your very bit pointer comment. And
Speaker 1: I'm very impressed today we in the industry say not
Speaker 1: your key is not your points, and I think that's
Speaker 1: absolutely right. There's a h widespread analogy actually an adage
Speaker 1: there um that if you keep it on an exchange,
Speaker 1: it's vulnerable and it's not your bitcoin. And I think
Speaker 1: that there's nothing more pressing than actually and important than
Speaker 1: what you're saying here. Given the contagion that we've seen
Speaker 1: in the market that just devastated crypto this year across
Speaker 1: the lending platforms, especially um SO, I think that that's
Speaker 1: an important takeaway for anyone that does hold crypto, is
Speaker 1: that not only keeping it on a third party platform
Speaker 1: exposes you to the devastation of their policies and what
Speaker 1: they are doing behind the scenes. Uh. And therefore you
Speaker 1: can't always just get your bitcoin back, but again really
Speaker 1: taking control of your money and ensuring that you are
Speaker 1: holding in and therefore you know exactly where it is,
Speaker 1: so not your keys, meaning private keys in order to
Speaker 1: um hold your bitcoin, not your coins. So I think
Speaker 1: that that's very very important, especially again in light of
Speaker 1: everything that's just devastated the market from the contagion of
Speaker 1: the hedge funds, the learning platforms, and most of the
Speaker 1: funds that got blown up. Hm. And just to keep
Speaker 1: us going with the theme of you know, crypto specific
Speaker 1: terms or memes. Even one of my favorites is October,
Speaker 1: which is just people hoping that the month of October
Speaker 1: is a very good month for cryptal prices, and we
Speaker 1: had somewhat of an October over the over the past month.
Speaker 1: So can you maybe just talk about some of those
Speaker 1: other green shoots, like what else is out there that
Speaker 1: maybe is making you a bit more positive about things? Yeah,
Speaker 1: I think again bringing it back to the fidelity points
Speaker 1: that you spoke about earlier, Mike, I think that those
Speaker 1: are positive elements that we definitely need to take note of.
Speaker 1: There's other institutions that have been coming out with very
Speaker 1: powerful news Bank in New York announcing their bitcoin custody.
Speaker 1: Uh NASA did as well. Other very large players such
Speaker 1: as Apollo, Franklin Templeton with s m a s across
Speaker 1: the spectrum. So I do think again that a lot
Speaker 1: of very smart traders are seeing this as a relative bottom,
Speaker 1: but as a buy opportunity. And again I think that
Speaker 1: as much as institutions continue to come out with positive
Speaker 1: news release reports such as what you mentioned, which has
Speaker 1: news about already allocating to these digital assets, UH, the
Speaker 1: comment at hand that we were speaking about is you know,
Speaker 1: how much are they allocating uh, and is a decisable
Speaker 1: portion of the portfolio, But knowing that they are allocating
Speaker 1: already is important to note. And again we've been speaking
Speaker 1: more US centric, but globally it's it's really a different environment.
Speaker 1: I used to live in Singapore for a few years
Speaker 1: and in Singapore it's a different conversation to be speaking
Speaker 1: about bitcoin and crypto and your allocation strategies. And across
Speaker 1: Asia you just see different dynamics, uh, South Korea always
Speaker 1: being a hub, Japan being very regulatory forward um throughout
Speaker 1: the past few years. So again, it's not just a
Speaker 1: US phenomenon, and the rest of the world has been allocating.
Speaker 1: And I think that in keeping in mind that this
Speaker 1: is a global phenomenon and asset class that's traded worldwide,
Speaker 1: and those moved the markets as well. I think that
Speaker 1: there is bullish news to be had. I don't know
Speaker 1: if we can truly call it an up October I
Speaker 1: as having moved the markets, given where we're sitting again
Speaker 1: right now, but definitely there's there's been bullish news that
Speaker 1: has come out over the past month, right And obviously
Speaker 1: we talked about a lot of positives that you and
Speaker 1: others within the industry have been sort of pointing tour
Speaker 1: or looking at recently. But again we have to remember
Speaker 1: what actually is happening bigger picture with the crypto space,
Speaker 1: and some of the most heart wrenching headlines have been
Speaker 1: about a lot of the layoffs or reshufflings or you know,
Speaker 1: within just a huge number of crypto companies and bloomering.
Speaker 1: News just this week reported about Galaxy considering some layoffs,
Speaker 1: and there have just been so many I've been writing
Speaker 1: about Genesis and some of the moves that people have
Speaker 1: been making away from that company. So maybe you can
Speaker 1: you can talk about your view on what's going on
Speaker 1: in terms of seeing some of the CEOs, especially leaving,
Speaker 1: and then tell us about what's happening with Valkyrie specifically
Speaker 1: and how some of these changes and trends have been
Speaker 1: impacting you guys. Yeah, I think it's been a hard winter,
Speaker 1: and I think that a lot of US firms and
Speaker 1: especially crypto asset management understand that the winter could be
Speaker 1: here for much longer, maybe eighteen months even plus. Um So,
Speaker 1: from even just a dispassionate business decision. Um as awful
Speaker 1: is that sounds. Sometimes that's the decisions you need to
Speaker 1: make as the CEO in the end of the day
Speaker 1: in order to cut costs as much as needs be
Speaker 1: based on what your p m L is looking like.
Speaker 1: In this type of environment, there has been necessities for
Speaker 1: many firms across the industry to conduct layoffs and other
Speaker 1: metrics and measures such as strategic grounds. Again right now,
Speaker 1: you're seeing that across across the industry. Blockchain dot came
Speaker 1: out with news that they're also raising another strategic round.
Speaker 1: Um So, I think that, you know, uh yeah, a
Speaker 1: lot of the crypto asset managers all intensive purposes. I'd
Speaker 1: see a lot of us as startups. We are not
Speaker 1: black Rock as much as we hope to be one day,
Speaker 1: and the introm we are still trying our best to
Speaker 1: still have a seat at the table, But that does
Speaker 1: mean that we are more prone to these types of
Speaker 1: market volatility than a larger legacy firm in New York
Speaker 1: City would be in something like this. So I think
Speaker 1: the best that we can do and what we all
Speaker 1: need to be thinking about. Again, as mentioned previously, bear
Speaker 1: markets are for builders, so hunkering down on what's working
Speaker 1: and what your vision is for the future is what's important.
Speaker 1: So at Valkyrie, it's been very important to the firm
Speaker 1: to be building infrastructure tools and technology this year, and
Speaker 1: that's something that we're focusing on during this market as well,
Speaker 1: is ensuring that our funds are running to the highest
Speaker 1: quality possible, making it through the Bearer market, taking care
Speaker 1: of our investors and holding their hands when it gets
Speaker 1: a little scary, and building the infrastructure tools to make
Speaker 1: sure that as this market faws, we are in the
Speaker 1: most powerful position and digitally enhanced if you will, um
Speaker 1: to really take advantage of the uptick and and be
Speaker 1: there as a hopefully a powerhouse. But I would say
Speaker 1: that you know, this market definitely hits us more than
Speaker 1: the legacy players. Uh you know you mentioned bitcoins celebrating
Speaker 1: its birthday. I think throughout the entire lifespan of bitcoin. Uh.
Speaker 1: The notion of regulation has just been hanging over the
Speaker 1: whole space like this you know storm cloud. Uh, and
Speaker 1: it you know, it really seems like it's only been
Speaker 1: sprinkling the storm cloud. It hasn't really been a day
Speaker 1: lousee yet of you know, of regulations. Um. But obviously
Speaker 1: we have a mid term election coming up. So is
Speaker 1: there any risk there, either positive or negative risk in
Speaker 1: your mind is as far as how these mid terms
Speaker 1: shake up? Yeah, I think that that's a great question.
Speaker 1: I think that it does very much depend on what
Speaker 1: we see in the midterm elections and in regards to
Speaker 1: getting again, if we're looking at that bitcoin spot et
Speaker 1: F approval, I think that many firms across the board
Speaker 1: are looking for greater regulatory understanding and guidelines from all
Speaker 1: the regulators on how that affects them. I think that
Speaker 1: a lot of people were interested in what came out
Speaker 1: with Fasby recently and generally are just looking to Washington,
Speaker 1: d C. Two see how that affects their firm and
Speaker 1: if it makes them comfortable enough to be able to
Speaker 1: buy UM. So I think, as mentioned, we are likely
Speaker 1: a far ways off at least a couple of years
Speaker 1: from that spot bit we needs f um But yeah,
Speaker 1: we're watching the mid terms very closely. We think that
Speaker 1: if Democrats retained majority, we expect rules and regulations to come,
Speaker 1: hopefully within the next year, but we also expect that
Speaker 1: if Republicans take the majority in one or more houses
Speaker 1: of Congress, we expect that it may take longer. So
Speaker 1: we're definitely watching that very closely. Is it sort of
Speaker 1: better for the industry to just get those you know,
Speaker 1: rip the band aid off with those regulations and get
Speaker 1: them in place quicker? Absolutely? And actually, Bill Donna, I
Speaker 1: loved your peace about that recently, and I think that, uh,
Speaker 1: you know, I would love your thoughts a little bit
Speaker 1: more since I think that your piece recently really nailed
Speaker 1: that on the head that it seems as if the
Speaker 1: industry just celebrates, uh, having that type of clarity so
Speaker 1: that they'll have more comfort buying. Yeah, I think you're
Speaker 1: talking about the We we did a market's live survey
Speaker 1: saying that or asking people would you be more interested
Speaker 1: in crypto if there were more regulations in place, and
Speaker 1: the majority of respondents had said yes. I think so.
Speaker 1: There was this really great quote where somebody told me.
Speaker 1: The more they can get crypto out of the wild
Speaker 1: West and into traditional investing, the better off it's going
Speaker 1: to be. So I think a lot of people, at
Speaker 1: least they say that they'd be more interested in this
Speaker 1: space if there were greater regulations in place. Well, I
Speaker 1: think that's a good segue for us, yes to our
Speaker 1: own wild West of crazy things. But mine isn't even
Speaker 1: markets related, but it's numbers related. So I'm just going
Speaker 1: to cheat. I've been cheating a lot recently, but this
Speaker 1: is so hilarious I had to go with it. Okay,
Speaker 1: go ahead, I really hope you haven't seen this. A
Speaker 1: man in China one a thirty million dollar lottery jack
Speaker 1: pot dollar lottery. That's okay, that's it. I'm just kidding.
Speaker 1: And this is this is the kicker. He's keeping it
Speaker 1: a secret from his wife and child because he's worried
Speaker 1: that the winnings might make them lazy. So he went
Speaker 1: to the lottery office to claim his prize, obviously the
Speaker 1: big check, and he wore he wore this hilarious bright yellow,
Speaker 1: bright yellow costume had big like googly eyes, so his
Speaker 1: face and body were totally covered, so that his wife
Speaker 1: and child cannot recognize him. I'm sure that's the reason
Speaker 1: why he's hiding that thirty million from his wife. Sure why?
Speaker 1: I think there's other reasons to hide thirty million from
Speaker 1: your wife, you know, Like what, I don't know. If
Speaker 1: my wife listens to this podcast, I might be are
Speaker 1: you hiding thirty million dollars? Oh? Is this person you? Okay,
Speaker 1: so he said I didn't tell my wife and child
Speaker 1: for fear that they would be too complacent and would
Speaker 1: not work or work hard in the future. I just
Speaker 1: love that, all right, all right, I didn't know that
Speaker 1: was a possibility. We've done lottery stuff before. Yeah, good,
Speaker 1: good stuff. All right. How about Julia, you see anything
Speaker 1: crazy recently in markets? Okay? So this this was tough.
Speaker 1: But I has told this recently, and I thought that
Speaker 1: it was pretty interesting. It's actually quite sad. But you
Speaker 1: guys also talked about the Phillies I believe. So it's
Speaker 1: a Phillies factoy. So apparently if you look at the
Speaker 1: years when Philadelphia teams won the World Series, they were
Speaker 1: all in or near periods of economic or stock market weakness,
Speaker 1: and we are obviously in one now. So bad omens. Indeed,
Speaker 1: that was something new that I learned recently, so scared
Speaker 1: the athletics the predecessor I believe, Yes, well two thousand
Speaker 1: and eight, that was the last time. Look, it's a
Speaker 1: small price to pay, all right, A minor recession, financial crisis,
Speaker 1: you know, if that's what it takes for the Phillies
Speaker 1: to win, I'm okay with I saw this on Twitter
Speaker 1: and I close it out real fast. I really did.
Speaker 1: I was like, oh no, I think there are some
Speaker 1: who will claim that the A's won a few series
Speaker 1: that did not precipitate a financial crisis, so h But
Speaker 1: I mean I was gonna say this has track. It
Speaker 1: is what it is. If a global financial crisis is
Speaker 1: what it takes, I think most of Phili would be
Speaker 1: okay with that. I didn't say it. I think the
Speaker 1: A's actually did win as well. I know, I know
Speaker 1: it's not good. Oh we'll get a cheesesteak and call
Speaker 1: it a day. Cry into the Tuesday and a pretzel
Speaker 1: for me now, Leah. I know in your world, heavy
Speaker 1: crypto traders like to refer to themselves as d gens
Speaker 1: or degenerates, but as d gen as they get, they
Speaker 1: don't really compare to the original dgens of the gambling world.
Speaker 1: So so my crazy thing relates to the gambling markets.
Speaker 1: So did mine lottery? Right? Okay, fine, fine, all right?
Speaker 1: Have you heard of this guy, Mattress Mac in Houston
Speaker 1: and Texas. He's a furniture He owns this furniture chain
Speaker 1: of furniture stores, and he has placed a bet on
Speaker 1: the Houston Astros to win the World Series to beat
Speaker 1: my Philadelphia Philly. So clearly a degenerate right there. With that,
Speaker 1: with that pick those cheaters in Houston. Uh, I'm just kidding.
Speaker 1: Mattress Mac seems like a very nice guy, very fine.
Speaker 1: I was going to lean into this with you. I
Speaker 1: don't want Mattress Mac coming at from anyway he's placed.
Speaker 1: If he wins this bet, they said, it will be
Speaker 1: the biggest legal gambling winning of all time. So, Lee,
Speaker 1: I regret to inform you you are a concessant on
Speaker 1: our game show. The prices precise, and so is val Donna,
Speaker 1: who I think may have already read the story. This
Speaker 1: story is person by the way, you just know Mattress
Speaker 1: Mac from his mattress because he placed some bet like
Speaker 1: six months ago on something and he won big. He
Speaker 1: he places big bets. Yeah, left and right. I think
Speaker 1: he did a Super Bowl bet that explain his strategy.
Speaker 1: It's a brilliant strategy when when you find out. But
Speaker 1: what do you on a prisis precise? What do you
Speaker 1: think the biggest legal gambling win will be if this
Speaker 1: guy wins? Which is the payout Philly gonna win? Okay,
Speaker 1: I'm gonna go with one eight million, eight million? Okay, Leah,
Speaker 1: what do you think the payout will be on the
Speaker 1: world's biggest legal recorded sports gambling that I want to red?
Speaker 1: I want to go higher. I'm going to go with
Speaker 1: four point three million. Alright, I'm keeping a poker face here, Leah.
Speaker 1: What's what's your entry on the prices precise for the
Speaker 1: biggest ever legal gambling payout? I believe legal sportsman gambling payout.
Speaker 1: I want to go even higher. No, you get you
Speaker 1: already amended it once. I'm going over. So I'll go
Speaker 1: four point eight, I take I take above Vilgana. Yeah,
Speaker 1: you'll take four point nine, four point eight and one
Speaker 1: dollar's going to do it to five point five. But final,
Speaker 1: let's stick with whatever se million dollars. Yes, so I
Speaker 1: kind of win that when you played it smart, that's
Speaker 1: the way you play it. Yeahfals not to get it
Speaker 1: on the nose. It's just to beat Bildana. Yeah, he
Speaker 1: bet ten million on the Astros at average odds of
Speaker 1: seven and a half odds. But the guy's kind of
Speaker 1: a genius because here's his strategy. He told his customers,
Speaker 1: if you spend three thousand dollars or more on a mattress, which,
Speaker 1: first of all, I did not even know mattresses sold
Speaker 1: for three thousand dollars. Yes, I need to sleep in
Speaker 1: one of those mattresses. I don't think I'll ever wake up.
Speaker 1: If if the customers spends three thousand or more on
Speaker 1: a mattress and the Astros win, they get the mattress
Speaker 1: for free. Right, So what happens is all these people
Speaker 1: went and bought expensive mattresses, all these astros. He sold
Speaker 1: something like seventy three million worth the attresses, and then
Speaker 1: you have to shut it down because he placed a
Speaker 1: ten million dollar bet. So if the Astras win, he
Speaker 1: wins seventy five million, and his customers get seventy three
Speaker 1: million in free mattresses. Still makes money, that's lose. He
Speaker 1: has sold all these mattresses. Pretty brilliant strategy there, despite
Speaker 1: the fact that the astros are gonna lose. Hopefully they
Speaker 1: will lose by the time this podcast comes out on Friday,
Speaker 1: I hope. So it's a brilliant strategy, though, Leo, I
Speaker 1: gotta admit I you know it's kind of no outside. Yeah,
Speaker 1: very smart. Okay, Well, that's that's it for our show.
Speaker 1: Leo wald CEO, a digital asset fund manager of all
Speaker 1: Korean Investments. Thank you so much for joining us. It
Speaker 1: was so fun to have you on. Thank you so
Speaker 1: much for letting me join today. It was a lot
Speaker 1: of fun. Thanks, thank you, Leah. That's it for our show,
Speaker 1: and don't forget to tune into Bloomer Crypto, a daily
Speaker 1: Bloomer I heart podcast What Goes Up. We'll be back
Speaker 1: next week. Until then, you can find us on the
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