WEBVTT - Institutions' Slow-Motion Crypto Embrace 0:00:13.720 --> 0:00:17.079 Hello, and welcome to What Goes Up, a weekly markets podcast. 0:00:17.160 --> 0:00:19.119 My name is Mike Reagan. I'm a senior editor at 0:00:19.160 --> 0:00:22.720 Bloomberg and humbled Donna Higher across asset reporter with Bloomberg. 0:00:23.320 --> 0:00:27.160 This week on the show, Well, cryptocurrencies have been mired 0:00:27.200 --> 0:00:30.120 in a so called winter as the Federal Reserve raises 0:00:30.160 --> 0:00:35.120 interest rates. Bitcoins down more than sevent from its highs. Yeah, 0:00:35.120 --> 0:00:37.360 could there be signs of green shoots emerging in this 0:00:37.440 --> 0:00:40.720 crypto winter? After all, bitcoins low for the year was 0:00:40.800 --> 0:00:43.400 way back in June and it's held above that low. 0:00:43.479 --> 0:00:46.680 Since we'll go hunting for green shoots with the CEO 0:00:46.760 --> 0:00:50.120 of a digital asset fund manager. But first, fil Donna, 0:00:50.640 --> 0:00:53.760 I have to ask Buffalo does not have a baseball team. No, 0:00:53.760 --> 0:00:58.000 no baseball team. No baseball team, Go Bills? Fine, whatever, 0:00:58.080 --> 0:01:02.200 how about the Fills? As a juror see native South 0:01:02.280 --> 0:01:05.440 Jersey native, I really hope you're rooting for the Philly 0:01:05.640 --> 0:01:08.679 I definitely am. You know why because I have a 0:01:08.720 --> 0:01:12.520 teacher friend who lives in Philadelphia and if they win 0:01:12.600 --> 0:01:14.640 and there's a city parade and then she gets the 0:01:14.680 --> 0:01:21.720 day off. When the Eagles won the Super Bowl two, Yeah, 0:01:21.280 --> 0:01:29.640 I knows seventeen. Uh, yeah, they all got the day 0:01:29.640 --> 0:01:33.920 off and everybody went out into the streets. Yeah, exactly, 0:01:33.920 --> 0:01:36.320 burnt cars. Just maybe Bloomberg will give us a day 0:01:36.319 --> 0:01:39.200 off if it's possible. Can you put in a second 0:01:39.240 --> 0:01:41.040 for that ask ye, I'll put in a picctre on 0:01:41.080 --> 0:01:43.920 the show. I am worried about how how good the 0:01:43.959 --> 0:01:49.640 Eagles are. They're incredibly good there. I'm really worried about them. Yeah. Yeah, 0:01:50.240 --> 0:01:51.880 we have a guess waiting for us. By the way, 0:01:53.200 --> 0:01:55.280 we could talk about this forever though, but I want 0:01:55.320 --> 0:01:57.520 to bring in Leah Wald. She's the CEO of Digital 0:01:57.560 --> 0:02:00.840 Asset fund manager of Walkere Investments. I can Buildna. Thank 0:02:00.840 --> 0:02:03.240 you so much for having me. I'm so excited to 0:02:03.240 --> 0:02:05.960 have you on the Padia and I've been talking for years, 0:02:06.000 --> 0:02:07.960 I think now, and I think one of the first 0:02:07.960 --> 0:02:11.079 times we spoke. Actually had been looking for an expert 0:02:11.120 --> 0:02:16.960 who was very knowledgeable about world events. And you actually 0:02:16.960 --> 0:02:19.680 have a background. You you had worked at the World Bank. 0:02:19.840 --> 0:02:22.079 So maybe just tell us a little bit about your background, 0:02:22.080 --> 0:02:27.560 how you got into crypto having had this World Bank experience. Yes, 0:02:27.639 --> 0:02:30.280 I did. I started my career working at the World 0:02:30.360 --> 0:02:32.880 Bank in the sub Saharan Africa region for the former 0:02:33.040 --> 0:02:37.360 vp O bia Zek Wesley, an incredible woman who then 0:02:37.440 --> 0:02:42.760 became Minister of Education in Nigeria and Resources among many 0:02:42.880 --> 0:02:46.320 other things, as well as founding Transparency International. So the 0:02:46.360 --> 0:02:50.560 segues are actually quite similar. At the time, it was 0:02:50.639 --> 0:02:54.840 interesting the pilot programs for Empeza were launching in Kenya, 0:02:55.360 --> 0:02:59.120 UM and and Pezza is a microfinance micro loan based 0:02:59.160 --> 0:03:02.760 on SMS UH system. So when I learned about bitcoint 0:03:02.760 --> 0:03:05.440 a few years later, to be honest, the value proposition 0:03:05.480 --> 0:03:09.280 made complete sense to me. Of a permission list value 0:03:10.040 --> 0:03:16.760 transfer transfer that's also UH denominated in UH fractional shares 0:03:16.800 --> 0:03:20.360 that that can be shared over, you know, instantaneous. Now, 0:03:20.560 --> 0:03:23.400 I don't think that bitcoin has taken off in the 0:03:23.440 --> 0:03:27.160 way that I've hoped quite yet in the developing world 0:03:27.280 --> 0:03:30.120 with some of those use cases, but it definitely was 0:03:30.360 --> 0:03:33.639 starting at the World Bank and seeing those pilot programs 0:03:33.720 --> 0:03:37.000 be so successful that got me excited about the use 0:03:37.040 --> 0:03:40.160 cases and kind of the pillars and principles of crypto 0:03:40.160 --> 0:03:43.200 and digital assets. What do you think is a sort 0:03:43.200 --> 0:03:46.120 of holding back that development of those use cases in 0:03:46.360 --> 0:03:49.920 UH developing economies? UM, you know, that's always been the 0:03:49.960 --> 0:03:53.160 great promise, right is is uh, you know, under bank 0:03:53.280 --> 0:03:58.120 communities being able to use crypto to sort of you know, 0:03:58.400 --> 0:04:01.320 participated in some sort of fine actual system, if not 0:04:01.360 --> 0:04:03.760 the traditional one. What do you think is holding it back? 0:04:05.400 --> 0:04:08.000 I think that's a great question, something I asked myself 0:04:08.040 --> 0:04:11.800 a lot. I think that it has evolved in certain ways, 0:04:12.040 --> 0:04:17.840 given UH the more trend towards believing bitcoin to be 0:04:17.880 --> 0:04:21.640 a store of value. I think that the recent advances 0:04:21.680 --> 0:04:25.719 in countries like El Salvador that we've been following utilizing 0:04:25.760 --> 0:04:29.680 bitcoin as legal tender alongside the United States dollar has 0:04:29.720 --> 0:04:34.919 shown that there's definitely promise UH to sovereign nations for 0:04:35.200 --> 0:04:39.560 using cryptocurrencies. But to your point, is it solving issues 0:04:39.600 --> 0:04:44.360 with the remittances corridor other issues with unbanked I'm not 0:04:44.400 --> 0:04:46.839 sure why it hasn't taken off quite yet. I think 0:04:46.880 --> 0:04:50.880 that structurally we haven't been focused as much on those 0:04:50.920 --> 0:04:54.279 types of use cases. I think the speculative elements of 0:04:54.400 --> 0:04:57.960 cryptocurrencies have definitely had the limelight, which is maybe why 0:04:58.000 --> 0:05:01.599 we're on this podcast today. UH. I think that money 0:05:01.640 --> 0:05:06.840 has followed Wall Street UH and cryptocurrencies used again in 0:05:07.520 --> 0:05:12.560 UH speculative elements and traditional finance joining rather than as 0:05:12.600 --> 0:05:16.719 of right now solving some of those development economics issues. 0:05:16.760 --> 0:05:20.719 But I think that as more development banks around the 0:05:20.720 --> 0:05:24.920 world start getting more comfortable with crypto assets, which they 0:05:24.920 --> 0:05:27.960 have not been, I think that we'll start to hopefully 0:05:27.960 --> 0:05:30.599 see a little bit more progress on that front. With 0:05:30.720 --> 0:05:35.480 that said, there have been fantastic technological developments that can 0:05:35.560 --> 0:05:38.760 ease this, such as the amount of nodes on the 0:05:38.839 --> 0:05:42.159 Lightning network being over seventy seven thousand, uh and a 0:05:42.160 --> 0:05:46.039 lot of other advances that I think could facilitate, um 0:05:46.080 --> 0:05:50.200 what is needed in developing countries for remittances or for 0:05:50.279 --> 0:05:55.440 again microfinance, micro loan systems uh and whatever platform needs 0:05:55.480 --> 0:05:59.159 to be used to make those successful, um you know, 0:05:59.240 --> 0:06:02.880 and hopefully we'll it on the sooner end. I'm going 0:06:02.960 --> 0:06:06.120 to ask you a somewhat controversial question, which is that 0:06:06.360 --> 0:06:09.040 and you and I have spoken about El Salvador adopting 0:06:09.040 --> 0:06:12.560 bitcoin as legal tender, and I think there's a couple 0:06:12.560 --> 0:06:15.000 of other countries around the world that have done so, 0:06:15.360 --> 0:06:20.479 but they're not places where there's you know, robust usage 0:06:20.480 --> 0:06:23.640 of bitcoin or even you know, we had in El Salvador, 0:06:23.680 --> 0:06:27.520 the failure of the of the crypto wallets, so they 0:06:27.520 --> 0:06:30.000 hadn't been working when it first rolled out, etcetera, etcetera. 0:06:30.200 --> 0:06:34.400 I'm just wondering how great of examples these might be, 0:06:35.279 --> 0:06:38.400 uh to to be using when talking about greater adoption 0:06:38.440 --> 0:06:42.920 of of bitcoin and other cryptocurrencies. Yeah. I think that's 0:06:42.960 --> 0:06:46.520 the right question, and a controversial answer is that I 0:06:46.560 --> 0:06:51.360 think what's been interesting from a GDP perspective is the 0:06:51.400 --> 0:06:54.839 onus we've now placed on El Salvador and the tourism 0:06:54.880 --> 0:06:58.440 that then has some to the country and generally the 0:06:58.440 --> 0:07:01.880 community and enthusiast as um of bitcointerers around the world 0:07:01.960 --> 0:07:05.200 to support El Salvadore due to the initiatives. So in 0:07:05.240 --> 0:07:08.479 some ways, you're absolutely right. I don't think that the 0:07:08.560 --> 0:07:12.800 actual usage of bitcoin as a means of payment on 0:07:12.960 --> 0:07:16.280 the every day for buying a you know, big mac 0:07:17.280 --> 0:07:20.080 is really taking off, although I think that again we're 0:07:20.200 --> 0:07:24.280 very early stages for that to be comfortable. And generally speaking, 0:07:24.360 --> 0:07:27.640 the divide, as you well know, uh, in the bitcoint world, 0:07:27.880 --> 0:07:29.520 is is it a store of value, is it a 0:07:29.560 --> 0:07:31.480 means of payment? Is it this? Is it that? And 0:07:31.520 --> 0:07:33.920 I think that's still being figured out, and until that's 0:07:33.920 --> 0:07:36.720 figured out, I think it's hard to try to pinpoint 0:07:36.960 --> 0:07:40.679 bitpoint being a means of payment as its success metric, 0:07:41.360 --> 0:07:45.800 therefore showing the validity of that argument. But on the 0:07:45.840 --> 0:07:50.520 other side, just generally from El Salvadore gaining attention in 0:07:50.560 --> 0:07:53.840 a positive way, that's something that the country hasn't you know, 0:07:53.920 --> 0:07:56.760 had that opportunity for in in a very long time. 0:07:56.880 --> 0:08:00.720 So I think that in that front it's been quite successful. 0:08:01.280 --> 0:08:04.640 A lot of tourists are coming again, a lot of support, uh, 0:08:04.680 --> 0:08:08.600 and a lot of infrastructure builds, whether it's you know, 0:08:08.640 --> 0:08:14.200 wallet's specifically designed for the country, it's definitely taken. I'd say, 0:08:14.480 --> 0:08:19.080 you know, the limelight of the fact that bitcoin as 0:08:19.120 --> 0:08:21.960 a means of payment cannot take off unless the rails 0:08:22.040 --> 0:08:24.960 are in place, So there has been a lot of 0:08:25.560 --> 0:08:29.400 technology developed specifically for All Salvador as well. And again, 0:08:29.800 --> 0:08:32.920 you know, it wasn't particularly a country that's been very 0:08:32.960 --> 0:08:36.920 focused on by the mass public, But now we love 0:08:36.960 --> 0:08:39.520 talking about All Salvador. I just mentioned it and you 0:08:39.600 --> 0:08:42.400 called me out on it, which is fantastic, uh, And 0:08:42.440 --> 0:08:45.880 I think that that's important as well. You know, Leah 0:08:46.160 --> 0:08:49.240 Pildona and I recently wrote a piece talking about sort 0:08:49.280 --> 0:08:53.440 of the transition from a very much a retail sort 0:08:53.480 --> 0:08:57.319 of day trader mentality to crypto towards crypto to more 0:08:57.320 --> 0:09:01.520 of an institutional approach. It seems like the influence of institutions, Uh, 0:09:01.559 --> 0:09:05.240 the participation of institutions is much greater. You shared some 0:09:05.640 --> 0:09:09.080 findings from some bullet points from a Fidelity survey. Just 0:09:09.160 --> 0:09:11.160 read off a couple of the highlights. Adoption of digital 0:09:11.240 --> 0:09:16.719 assets among those surveyed institutional investors increased to in the 0:09:16.840 --> 0:09:22.000 US sixty seven percent in Europe globally, of all institutional 0:09:22.040 --> 0:09:25.640 investors believe digital assets should be part of a portfolio. 0:09:26.040 --> 0:09:30.120 So it definitely seems like institutions are jumping in with 0:09:30.160 --> 0:09:33.520 both feet this year especially, I would think that would 0:09:33.520 --> 0:09:36.920 be bullish for prices, and yet here we are, you know, 0:09:37.360 --> 0:09:40.719 with prices down severely this year. I mean, did they 0:09:41.000 --> 0:09:44.080 cushion the blow of this crypto winner or you know, 0:09:44.360 --> 0:09:46.800 how are you thinking about sort of the interest of 0:09:46.800 --> 0:09:50.960 institutions and the effect on levels for for bitcoin, ethereum 0:09:50.960 --> 0:09:56.440 and everything else. Yeah, absolutely so those statistics are definitely exciting, 0:09:56.679 --> 0:10:01.240 definitely bullish long term and as we vary well known finance, 0:10:01.320 --> 0:10:04.200 it absolutely depends on your time horizon and institutions have 0:10:04.280 --> 0:10:08.559 a longer time horizon. They also as a producery, I 0:10:08.720 --> 0:10:13.960 cannot just jump in with a strategy. Might might I digress. 0:10:14.080 --> 0:10:16.160 My former partner used to tell me hope is not 0:10:16.200 --> 0:10:19.520 a good investment strategy. So as much as we you know, 0:10:19.640 --> 0:10:22.440 may like bitcoin and we're interested in bitcoin, if it's 0:10:22.440 --> 0:10:24.400 a bear market, it's a bear market, we're not buying 0:10:24.840 --> 0:10:27.600 right and that's the way that it should be. So 0:10:27.720 --> 0:10:32.320 I do think again, I'm very excited about institutions interest 0:10:32.559 --> 0:10:37.840 family offices as well across the spectrum a desire to 0:10:37.920 --> 0:10:41.160 have a crypto strategy for when the timing is right 0:10:41.280 --> 0:10:44.240 to actually buy it. We also know that there is 0:10:44.280 --> 0:10:46.679 a lot of different committees that need to sign off, 0:10:46.760 --> 0:10:49.520 and there's a lot of other rdles that institutions have, 0:10:50.040 --> 0:10:54.040 whether it's risk parameters among others, and also just generally 0:10:54.080 --> 0:10:56.440 the vehicle that they need in order to buy it. 0:10:56.840 --> 0:10:59.720 So I think that those statistics from the Fidelity in 0:10:59.760 --> 0:11:03.520 all so, a recent KPMG survey and many others have 0:11:03.600 --> 0:11:09.280 been absolutely showing very exciting bullish metrics, but it's not 0:11:09.320 --> 0:11:11.040 showing up in the market right now. And I think 0:11:11.080 --> 0:11:13.880 that's also because we have a coupling in correlation to 0:11:13.960 --> 0:11:17.160 the traditional market, and all of us are very concerned 0:11:17.200 --> 0:11:19.880 for the most part about what the macra outlook is. 0:11:20.320 --> 0:11:23.760 So I don't see any institutions investing in such a 0:11:23.840 --> 0:11:27.720 risk asset at the moment. So I do see a 0:11:27.720 --> 0:11:30.959 lot and we hear a lot of institutions that we're 0:11:30.960 --> 0:11:34.400 speaking to on the sidelines and preparing. So I do 0:11:34.520 --> 0:11:39.079 think if we consider a longer time horizon, that's exciting. Indeed. Yeah, 0:11:39.120 --> 0:11:41.320 so they're they're just maybe not in the type of 0:11:41.320 --> 0:11:45.240 size that would really bolster prices. I guess that's right. 0:11:46.679 --> 0:11:49.240 So Leah, can you actually talk more about this because 0:11:49.880 --> 0:11:53.280 we've sort of had bitcoin, largely Bitcoin and some other 0:11:53.320 --> 0:11:57.000 cryptocurrencies mired in a very tight trading range. So Bitcoin 0:11:57.040 --> 0:12:00.400 has been hovering around twenty thousand for weeks now, and 0:12:00.440 --> 0:12:03.079 a lot of people are saying or asking is bitcoin 0:12:03.440 --> 0:12:05.720 boring at the moment? Stuck a little bit more about 0:12:05.720 --> 0:12:08.680 the macro landscape, because a couple of months ago, we, 0:12:09.160 --> 0:12:12.080 you know, speaking of institutional interest, we had the Black 0:12:12.080 --> 0:12:14.920 Crock announcement that they were partnering with coin base, and 0:12:15.000 --> 0:12:18.200 I remember even back then, it really didn't do anything 0:12:18.280 --> 0:12:21.240 in terms of being a catalyst upward for prices, So 0:12:21.600 --> 0:12:25.360 what exactly is going on that's keeping prices very muted recently? 0:12:27.040 --> 0:12:30.560 Right the million dollar or multimillion dollar question, I think 0:12:30.559 --> 0:12:33.320 you brought up a couple of interesting points. Number one, 0:12:33.360 --> 0:12:36.280 that bitcoin is boring, and how funny that is because 0:12:36.280 --> 0:12:39.440 in the same survey that you just mentioned, Mike, the 0:12:39.480 --> 0:12:45.120 main obstacle to adoption over said was volatility, right, and 0:12:45.160 --> 0:12:47.800 that's always been for the most part. What are as 0:12:47.920 --> 0:12:50.360 that we speak to and other money managers have had 0:12:50.559 --> 0:12:54.880 as their highest concern is volatility and uh an inability 0:12:54.920 --> 0:12:59.720 to accurately allocate given that volatility. So now we have 0:13:00.240 --> 0:13:02.760 Bitcoin being the boring asset in the market, and I 0:13:02.800 --> 0:13:05.320 think that there's some humor to that as well, but 0:13:05.480 --> 0:13:11.719 also some important elements to consider as this asset develops. 0:13:12.120 --> 0:13:14.440 And to your second point, Bill Donna, I think that 0:13:14.520 --> 0:13:18.000 the black Rock point based news was extremely important. You're 0:13:18.080 --> 0:13:21.000 right that it didn't move the markets yet, but the 0:13:21.080 --> 0:13:24.480 integration with the Laddin can't be overstated, and I think 0:13:24.480 --> 0:13:29.320 anyone in traditional finance understands the power of Aladdin and 0:13:29.559 --> 0:13:32.800 obviously the power of black Rock. What we've been hearing 0:13:33.120 --> 0:13:38.040 is that allocators still want to work with UH sophisticated 0:13:38.160 --> 0:13:43.000 crypto active managers to manage that product rather than allocate 0:13:43.080 --> 0:13:48.040 themselves due to again those concerns around volatility, lack of 0:13:48.640 --> 0:13:53.240 understanding around fundamentals, lack of regulatory clarity, and just general 0:13:53.800 --> 0:13:58.720 UH discomfort in their own understanding of how to allocate 0:13:58.760 --> 0:14:01.880 to this asset class. So I believe that number one, 0:14:02.320 --> 0:14:05.880 as institutions get more comfortable with the asset class, they 0:14:05.920 --> 0:14:10.840 will likely feel more comfortable allocating themselves through that integration 0:14:11.360 --> 0:14:15.440 and in the introim that integrates directly to coin based 0:14:15.440 --> 0:14:19.360 So you can't work with a active manager who is 0:14:19.480 --> 0:14:23.280 fluent in allocating to these assets, especially in an active 0:14:23.320 --> 0:14:25.760 and risk managed way. So I think that there is 0:14:25.760 --> 0:14:29.520 still a hurdle where it went straight to the finish 0:14:29.640 --> 0:14:33.280 line when maybe we're not quite there yet. Really, I'd 0:14:33.320 --> 0:14:36.320 like to talk a little bit about the bitcoin mining space, UH. 0:14:36.480 --> 0:14:39.280 I know one of your firms offerings is a miners 0:14:39.320 --> 0:14:42.800 et f W g M. I UH actually really taking 0:14:42.800 --> 0:14:46.240 it on the chin this year unfortunately, UH down seventy two. 0:14:46.600 --> 0:14:49.520 I think since since February when it was launched, what 0:14:49.720 --> 0:14:53.000 is the sort of the landscape for miners right now? 0:14:53.040 --> 0:14:56.760 I mean clearly, when bitcoin prices are low, it's not 0:14:56.840 --> 0:14:58.400 the best of times for them. But how do you 0:14:58.440 --> 0:15:02.600 see sort of the the environment for miners progressing from here. 0:15:02.760 --> 0:15:05.760 That's a really great ticker, by the way, w g 0:15:06.240 --> 0:15:08.240 M I yeah, I think I know. What do you 0:15:08.240 --> 0:15:12.480 think it stands for? It? We're going to make it? Yeah, yeah, 0:15:13.040 --> 0:15:17.760 Leah's pumping our fast. You've got to do the inverse 0:15:17.880 --> 0:15:21.360 version of it. IM not going to make it. I 0:15:21.400 --> 0:15:23.400 love seeing not going to make it. You didn't think 0:15:23.440 --> 0:15:26.600 I knew the hip crypto. I didn't know. I didn't 0:15:26.840 --> 0:15:31.680 plus one hundred points for you today. That's amazing. I 0:15:31.720 --> 0:15:34.080 didn't know, Mike, that you were such a bitcoiner. But 0:15:34.400 --> 0:15:39.680 this is this. Yeah, I mean, as you guys know, 0:15:39.800 --> 0:15:42.160 sometimes you've got to get creative with the tickers. You know, 0:15:42.400 --> 0:15:44.560 that's a really good one. You have to be a 0:15:44.560 --> 0:15:50.120 little playful, especially in this industry. And that's a tough question. 0:15:50.440 --> 0:15:53.520 I am bullish, but there's also a lot of concerning elements, 0:15:53.720 --> 0:15:57.800 especially with prices at this level. For Scientific recently warned 0:15:57.840 --> 0:16:01.920 that it's on the verge of bankruptcy. That's no small deal. Um. 0:16:02.000 --> 0:16:05.800 They're obviously publicly listed. Argo also just came out with 0:16:05.920 --> 0:16:08.960 news that they failed to raise the twenty seven million 0:16:08.960 --> 0:16:12.120 dollar strategic ground that they were in the midst of doing, 0:16:12.160 --> 0:16:15.720 and that there's concerns around what that means. But on 0:16:15.760 --> 0:16:19.000 the plus side, as we know, bear markets are for builders, 0:16:19.480 --> 0:16:21.400 so and there's a lot of money still on this base, 0:16:21.520 --> 0:16:25.560 especially from overseas money that's all, you know, relocating here 0:16:25.560 --> 0:16:28.400 in the United States. So there's a lot of upside 0:16:28.440 --> 0:16:33.080 to consolidation, perhaps not from the dessentialized ethos of bitcoin, 0:16:33.240 --> 0:16:36.880 but from a business and capitalist standpoint, and and hopefully 0:16:36.960 --> 0:16:39.600 price appreciation of the sector. You know, M and A 0:16:39.920 --> 0:16:44.520 could reduce redundancies and costs, and stronger firms could most 0:16:44.600 --> 0:16:48.880 definitely bolster their position. Weaker firms could return at least 0:16:48.880 --> 0:16:52.440 some value to shareholders, which is very meaningful in this environment. 0:16:53.080 --> 0:16:57.640 And again, you know, all industries go through this during downturns, 0:16:57.680 --> 0:17:01.240 and mining is no different. So hopefully we continue to 0:17:01.240 --> 0:17:04.440 see these activities, and we are now, especially in the 0:17:04.480 --> 0:17:06.440 private equity realm, so I don't think it's going to 0:17:06.520 --> 0:17:10.040 be seen just yet, but I do think that these 0:17:10.080 --> 0:17:14.159 are bullish catalysts for long term and typically miners do 0:17:14.359 --> 0:17:18.600 overperform bitcoin in a bull market. Right now. It's it's 0:17:18.640 --> 0:17:21.600 quite difficult since it's sometimes in so there's like a 0:17:21.640 --> 0:17:24.640 beta to them as a investment. I guess to whatever 0:17:24.640 --> 0:17:34.160 the coins. I'm gonna blow your guys minds with this 0:17:34.240 --> 0:17:37.480 next one because I'm ready. You know, the the Ethereum merge. 0:17:37.520 --> 0:17:40.280 I've actually heard of that. I think I understand what 0:17:40.320 --> 0:17:44.800 it was. But obviously that was the big, big event 0:17:44.920 --> 0:17:48.800 this year where Ethereum switched from proof of work Lee, 0:17:48.880 --> 0:17:52.520 I'm curious if that plays a role in troubles for 0:17:52.520 --> 0:17:54.840 for miners. You know, I assume many of these companies 0:17:54.960 --> 0:17:59.720 are mining bitcoin but also have rigs working as a 0:17:59.800 --> 0:18:05.040 theory arium validators. UM. How does the switch to proof 0:18:05.080 --> 0:18:09.080 of stake affect a sort of minor validator company? Um? 0:18:09.160 --> 0:18:13.080 Is it less profitable for them? Uh? More profitable? You know? 0:18:13.240 --> 0:18:16.320 Is there is there much difference for for these companies 0:18:16.320 --> 0:18:22.080 involved in that space. Yeah. For miners that we're mining ethereum, 0:18:22.119 --> 0:18:26.199 obviously they needed to switch and there has been you know, 0:18:26.320 --> 0:18:29.080 luckily for the merge, we have known about it for 0:18:29.119 --> 0:18:32.120 a very long time, so a lot of mining companies 0:18:32.359 --> 0:18:35.840 prepared for this for you know, even the years now. 0:18:35.960 --> 0:18:39.600 Miners are often agnostic as to which coin they're mining 0:18:39.680 --> 0:18:43.080 if they're able to UH, simply due to market environments 0:18:43.080 --> 0:18:45.479 and where they can find the most alpha. For the 0:18:45.480 --> 0:18:48.760 most part, though, I do think that the market reacted 0:18:48.800 --> 0:18:51.600 to this news previously and that it was priced in, 0:18:51.760 --> 0:18:55.720 and that miners across the industry had again prepared for 0:18:55.760 --> 0:18:59.199 it accordingly, since it didn't happen overnight, the merge was 0:18:59.560 --> 0:19:02.680 very much a countdown for you know, a couple of years. 0:19:03.160 --> 0:19:05.280 But I do think that that's a good question and 0:19:05.320 --> 0:19:09.000 also something maybe that we don't know quite yet, especially 0:19:09.000 --> 0:19:13.359 hard to potentially decouple the market environment if we're just 0:19:13.440 --> 0:19:16.720 looking at the price of UH and Bitcoin and maybe 0:19:16.760 --> 0:19:20.040 some of the other proof of work coins UH. And 0:19:20.080 --> 0:19:22.320 so maybe we'll see that more in the future, and 0:19:22.359 --> 0:19:25.920 also as earnings continue to come out for these publicly 0:19:25.920 --> 0:19:29.560 traded miners and and other companies that will be sharing 0:19:29.600 --> 0:19:32.520 their financials soon, I think that that's when we're really 0:19:32.520 --> 0:19:34.080 going to be able to see how that hit their 0:19:34.080 --> 0:19:36.560 pan now. But right now, I think, given the merge 0:19:37.200 --> 0:19:40.360 so recently happened, we probably don't know the full effects 0:19:40.400 --> 0:19:43.159 quite yet. So besides the minor e t F, you 0:19:43.160 --> 0:19:45.119 guys actually have a bunch of e T F s 0:19:45.160 --> 0:19:47.200 and I have some E t F some more E 0:19:47.320 --> 0:19:50.280 t F questions for you. So, for one, can you 0:19:50.359 --> 0:19:55.400 talk about your Bitcoin Futures fund which launched last year 0:19:56.000 --> 0:19:58.320 And I remember at the time writing about this because 0:19:58.359 --> 0:20:01.239 it was huge news in the crypto space. There had 0:20:01.240 --> 0:20:03.879 been a ton of concern about some of the costs 0:20:03.920 --> 0:20:08.600 associated with rolling the futures contract and how potentially that 0:20:08.640 --> 0:20:12.360 was maybe going to eat away at some of the returns, etcetera, etcetera. Obviously, 0:20:12.480 --> 0:20:16.840 also worries about volatility. So can you maybe reflect back 0:20:16.920 --> 0:20:20.520 now that it's been a year about how well the 0:20:20.600 --> 0:20:24.680 structure the fund itself and others like it have actually 0:20:24.680 --> 0:20:27.720 held up and whether or not some of those worries 0:20:27.800 --> 0:20:31.240 that we had back then sort of have have have 0:20:31.359 --> 0:20:36.480 proved to be unfounded. Yeah. Absolutely, and it obviously varies 0:20:36.640 --> 0:20:40.080 across US issuers. I think that there was probably a 0:20:40.119 --> 0:20:43.800 real silver lining and being smaller and second in that 0:20:44.240 --> 0:20:48.240 we've only held front month futures, so that makes the 0:20:48.320 --> 0:20:51.080 role periods more fluid. You know. Again, if you if 0:20:51.080 --> 0:20:55.280 you look at how our bitcoint Future z ETF has performed, 0:20:55.359 --> 0:20:59.960 it's had very minimal contaging contango effect. Again that's really 0:21:00.040 --> 0:21:02.760 due to the front month futures, and there's been actually 0:21:02.800 --> 0:21:06.960 a lot of healthy volume um with momentum and new 0:21:07.000 --> 0:21:10.080 creates over the past month. And you know, other metrics 0:21:10.119 --> 0:21:12.639 again of the premium discount spread for e t f 0:21:12.720 --> 0:21:16.040 s is kind of negligible based on the other trust 0:21:16.080 --> 0:21:18.520 products in the market. So again, if we try to 0:21:18.560 --> 0:21:21.600 consider that the bitcoin futures, the e t f S 0:21:21.720 --> 0:21:25.199 as an alternative to g BTC as an example, or 0:21:25.240 --> 0:21:29.040 O b t C, UH, there's just a huge discrepancy 0:21:29.080 --> 0:21:33.080 on the poth positives of the structure of the coin 0:21:33.119 --> 0:21:36.719 futures E t F UM. So I would say that, uh, 0:21:36.800 --> 0:21:39.639 Now a little over a year later, I agree with 0:21:39.680 --> 0:21:43.160 you that um that launch day I was definitely hammered 0:21:43.160 --> 0:21:46.119 on questions of role and how that would affect And 0:21:46.119 --> 0:21:49.800 I think that uh time has shown that, especially if 0:21:49.800 --> 0:21:52.199 you're holding in front month futures, that hasn't been as 0:21:52.280 --> 0:21:56.359 scary as the market thought. And then I want to 0:21:56.359 --> 0:21:58.560 ask you about a spot the coin e t F 0:21:58.560 --> 0:22:01.080 and what the prospects are for that, because you know, 0:22:01.280 --> 0:22:04.280 periodically we just tend to hear about this whenever we 0:22:04.359 --> 0:22:07.440 hear from Gary Gensler, for instance, and I know there's 0:22:07.480 --> 0:22:10.280 a huge contingent of believers who say, you know, it's 0:22:10.320 --> 0:22:12.399 around the corner, it's going to get approved. So what 0:22:12.520 --> 0:22:17.879 are actually the prospects predict Not in my lifetime, maybe 0:22:17.960 --> 0:22:21.600 year two year, two lifetimes. But I have no comment, 0:22:24.400 --> 0:22:28.000 no comments. Yeah, I give you the softball. I don't 0:22:28.000 --> 0:22:32.320 want to you. I don't want to ate you. So Mike, 0:22:32.359 --> 0:22:35.240 I shouldn't hold my breath because that's that's not gonna work. 0:22:35.240 --> 0:22:38.560 Then well, and I wanted to throw a huge kudos 0:22:38.720 --> 0:22:44.440 to Chairman Gendler, who appropriately tweeted recently about Bitcoin's birthday. 0:22:44.520 --> 0:22:46.880 And I thought it was a very sweet tweet, actually 0:22:47.080 --> 0:22:51.240 acknowledging that Halloween was actually the release of the white papers, 0:22:51.280 --> 0:22:54.480 So that was very sweet to see. But Mike, Mike 0:22:54.520 --> 0:22:57.160 threw a party for Bitcoin's birthday. I wasn't invited, though 0:22:58.680 --> 0:23:02.600 It's true, you don't hear many kudos sent Ginstler's way 0:23:02.600 --> 0:23:07.399 from hopefully he listens. And uh, and here's that one. 0:23:08.320 --> 0:23:10.760 I mean, anyone could be Satoshi, So I don't know 0:23:10.800 --> 0:23:14.520 if you know that was your costume and just you 0:23:14.640 --> 0:23:17.159 presented yourself. I mean, Mike, it could be you and 0:23:17.200 --> 0:23:20.879 we don't know about it. Um, but you know, Halloween 0:23:20.920 --> 0:23:24.400 is amazing, It's my favorite holiday. As for the Bitcoin 0:23:24.440 --> 0:23:26.680 Spot e t F, I mean, that's that's always been 0:23:26.720 --> 0:23:30.919 the question, UM and I we definitely can't predict what 0:23:31.000 --> 0:23:33.879 the SEC is going to do and when they approve it, um, 0:23:33.960 --> 0:23:37.040 But as an issue tour, we're doing our best to 0:23:37.080 --> 0:23:39.440 try to keep a finger on the polls. We most 0:23:39.480 --> 0:23:44.040 definitely still are in the race to uh see that 0:23:44.160 --> 0:23:47.480 holy grail, the Bitcoin Spot et F get approved. And 0:23:47.640 --> 0:23:53.160 obviously we do agree that it's a more efficient vehicle, UM, 0:23:53.240 --> 0:23:55.840 that it's the right vehicle, and I definitely think that 0:23:56.040 --> 0:23:58.800 it will be UM a huge benefit to the market. 0:23:58.880 --> 0:24:02.520 We've seen in other markets abroad, the Bitcoin future is 0:24:02.560 --> 0:24:07.240 ets performed very well, very comfortably, UM, and you know 0:24:07.320 --> 0:24:10.280 across from Canada to Brazilian as well as the other 0:24:10.400 --> 0:24:13.280 e t n s in Europe. So you know, I 0:24:13.320 --> 0:24:16.520 look forward to the day where we see that approved 0:24:16.520 --> 0:24:19.040 here in the US. But I think that you're right, Mike, 0:24:19.119 --> 0:24:23.680 maybe not that long, but I won't be holding you know, Leah. 0:24:23.720 --> 0:24:26.520 One thing you sent some notes over to us before 0:24:26.520 --> 0:24:29.480 the show. One thing really caught my eye is you 0:24:29.520 --> 0:24:31.880 have a bullet point here that nearly one billion dollars 0:24:31.880 --> 0:24:35.880 worth of bitcoin was recently moved to cold storage. Now 0:24:36.840 --> 0:24:39.520