1 00:00:13,480 --> 00:00:17,280 Speaker 1: Hello, and welcome to What Goes Up, a weekly markets podcast. 2 00:00:17,440 --> 00:00:19,720 Speaker 1: My name is Mike Reagan. I'm a senior editor at 3 00:00:19,760 --> 00:00:23,639 Speaker 1: Bloomberg Tumble Down the Park across asset reporter at Bloomberg. 4 00:00:24,560 --> 00:00:28,000 Speaker 1: This week on the show, Well it finally happened. Bitcoin 5 00:00:28,080 --> 00:00:30,960 Speaker 1: exchange traded fun hit the market this week, and the 6 00:00:31,040 --> 00:00:33,839 Speaker 1: excitement was enough to push the biggest cryptocurrency to a 7 00:00:33,880 --> 00:00:37,240 Speaker 1: new record high, also causing vill Donna to wear her 8 00:00:37,280 --> 00:00:39,800 Speaker 1: fingertips off with all the writing shod to do about it. 9 00:00:40,280 --> 00:00:43,680 Speaker 1: But anyway, what does this milestone mean for crypto and 10 00:00:44,200 --> 00:00:46,720 Speaker 1: what should we expect next? We'll get into it with 11 00:00:46,760 --> 00:00:49,640 Speaker 1: the head of business development at a major digital asset 12 00:00:49,720 --> 00:00:52,680 Speaker 1: exchange who previously spent about two decades in the et 13 00:00:52,840 --> 00:00:56,160 Speaker 1: F industry. But first, Bill Donna, I need to catch 14 00:00:56,240 --> 00:00:59,560 Speaker 1: up on your vacation last week. Uh, listeners will be 15 00:00:59,640 --> 00:01:02,320 Speaker 1: very interest didn't this because Dona spent the week in 16 00:01:02,400 --> 00:01:06,039 Speaker 1: Boca Raton, Florida, and I believe visited our old pal 17 00:01:06,240 --> 00:01:10,800 Speaker 1: Sarah Ponzac, the former co host of the show, Danna. 18 00:01:11,000 --> 00:01:15,000 Speaker 1: I've heard a rumor that Sarah is cruising around Boca 19 00:01:15,280 --> 00:01:19,120 Speaker 1: in like a white Lexus with cold seats. Now we 20 00:01:19,200 --> 00:01:21,560 Speaker 1: in the Northeast. We have heated seats to keep our 21 00:01:21,600 --> 00:01:25,280 Speaker 1: butts warm. Apparently Sarah needs cold seats in Florida. I've 22 00:01:25,319 --> 00:01:28,200 Speaker 1: never heard of such a thing. Is that Is that true? Yeah, 23 00:01:28,240 --> 00:01:30,679 Speaker 1: it's true. I have no idea where that you've got 24 00:01:30,760 --> 00:01:35,039 Speaker 1: this rumor from. I mean, but it's true, and I 25 00:01:35,080 --> 00:01:38,039 Speaker 1: had never heard of it before. Everybody in Florida basically, 26 00:01:38,080 --> 00:01:41,880 Speaker 1: like of Floridians have white cars because of the heat. 27 00:01:42,400 --> 00:01:46,319 Speaker 1: And I guess cooling seats are the next, you know, 28 00:01:46,440 --> 00:01:49,160 Speaker 1: top feature, and Sarah has it. Did you get to 29 00:01:49,160 --> 00:01:52,640 Speaker 1: try out the cooling seat that Sheila is samp I didn't. Actually, 30 00:01:52,680 --> 00:01:54,320 Speaker 1: this is fun. I sat in her back seat with 31 00:01:54,360 --> 00:01:58,680 Speaker 1: her doggie. So yeah, she has a cute little pup. 32 00:01:59,000 --> 00:02:03,720 Speaker 1: She has an adorable Sarah. Anyway, Uh, how to tell 33 00:02:03,760 --> 00:02:05,600 Speaker 1: us about this guest this week. I'm very excited for 34 00:02:05,640 --> 00:02:07,920 Speaker 1: this guest. I think we got a lot to talk about. 35 00:02:08,480 --> 00:02:10,680 Speaker 1: He's the most perfect guest for this week. I'm so 36 00:02:10,680 --> 00:02:13,120 Speaker 1: happy he can join us. It's Dave Abner. He's the 37 00:02:13,160 --> 00:02:16,880 Speaker 1: global head of business development at crypto Exchange Gemini and 38 00:02:16,960 --> 00:02:20,520 Speaker 1: welcome to the podcast. Hi, thanks for having me filled 39 00:02:20,520 --> 00:02:23,119 Speaker 1: out and might great to meet you, well, I want 40 00:02:23,120 --> 00:02:25,200 Speaker 1: to start off with just a little bit about you 41 00:02:25,280 --> 00:02:27,720 Speaker 1: and your career. I know you and I have chatted before, 42 00:02:27,760 --> 00:02:31,200 Speaker 1: but just to give our audience a view of you know, 43 00:02:31,560 --> 00:02:33,720 Speaker 1: your career and what you've done in your life, because 44 00:02:33,720 --> 00:02:37,120 Speaker 1: you do straddle this et F and crypto world very 45 00:02:37,200 --> 00:02:38,520 Speaker 1: very well, so if you can just give us a 46 00:02:38,560 --> 00:02:41,720 Speaker 1: sense of some of the work you've done. I actually 47 00:02:41,800 --> 00:02:46,600 Speaker 1: spent two decades in the e t F world before 48 00:02:46,600 --> 00:02:49,640 Speaker 1: I came to the crypto world. And what's funny is 49 00:02:49,639 --> 00:02:51,679 Speaker 1: that I actually got into e t f s from 50 00:02:51,720 --> 00:02:54,960 Speaker 1: closed end funds. So I was a closed end fund 51 00:02:55,080 --> 00:02:58,040 Speaker 1: trader and I ran the closed end fund trading business 52 00:02:58,040 --> 00:03:01,320 Speaker 1: at bear Stearns in the nineties. And when e t 53 00:03:01,520 --> 00:03:03,880 Speaker 1: f s came onto the scene in the late nineties, 54 00:03:04,360 --> 00:03:07,480 Speaker 1: they were funds, they traded on exchange. People didn't really 55 00:03:07,480 --> 00:03:09,480 Speaker 1: know what else to do with them, so they naturally 56 00:03:09,520 --> 00:03:12,240 Speaker 1: called the close down fund trader. First. That was me, 57 00:03:12,680 --> 00:03:17,560 Speaker 1: and that instantly became pretty you know, maybe not instantly, 58 00:03:17,600 --> 00:03:21,680 Speaker 1: but slowly became my next venture. Right. I realized the 59 00:03:21,680 --> 00:03:26,200 Speaker 1: difference early between trying to arbitrage closed down funds and 60 00:03:26,400 --> 00:03:29,959 Speaker 1: saw how readily available that was in the e t 61 00:03:30,120 --> 00:03:32,839 Speaker 1: F world. ETF world was growing, although it was very 62 00:03:32,880 --> 00:03:37,280 Speaker 1: small back then, and I progressed into that and I 63 00:03:37,280 --> 00:03:39,840 Speaker 1: I was a trader and I ran bear Stearns Global 64 00:03:40,080 --> 00:03:44,240 Speaker 1: e t F business for about eight years. Then I 65 00:03:44,280 --> 00:03:47,120 Speaker 1: went to BMP Paraba to build an et F trading business, 66 00:03:47,720 --> 00:03:51,720 Speaker 1: and then I had an opportunity to switch sides and 67 00:03:51,760 --> 00:03:54,840 Speaker 1: I did. I switched. I joined wizdarm Triasset Management in 68 00:03:54,880 --> 00:03:58,240 Speaker 1: two thousand eight April first, two thousand eight and auspicious 69 00:03:58,280 --> 00:04:00,880 Speaker 1: state to join any firm because it was like the 70 00:04:00,880 --> 00:04:04,560 Speaker 1: beginning of the end really um and I spent ten 71 00:04:04,640 --> 00:04:08,520 Speaker 1: years or eleven years building up Wisdom Trees et F 72 00:04:08,720 --> 00:04:12,800 Speaker 1: business and then at the end of that the last 73 00:04:12,840 --> 00:04:17,640 Speaker 1: two years we were getting into crypto as a firm 74 00:04:17,680 --> 00:04:19,839 Speaker 1: and I was getting deeper into it. We ended up 75 00:04:19,920 --> 00:04:22,840 Speaker 1: launching the first bitcoin e E t P in Sweden 76 00:04:23,360 --> 00:04:28,320 Speaker 1: in and then that was my my entry into the space. 77 00:04:28,920 --> 00:04:32,080 Speaker 1: And then when I wanted to go really full full bore, 78 00:04:32,240 --> 00:04:35,320 Speaker 1: I joined Gemini about a year ago. So I see 79 00:04:35,360 --> 00:04:36,839 Speaker 1: a lot and we'll talk about this. I see a 80 00:04:36,839 --> 00:04:39,760 Speaker 1: lot of parallels between the growth of the ETF industry 81 00:04:39,960 --> 00:04:42,080 Speaker 1: and where we are with crypto today. So I'm excited 82 00:04:42,160 --> 00:04:45,240 Speaker 1: to talk about it. That's when you went full laser eye. 83 00:04:45,320 --> 00:04:49,080 Speaker 1: I guess right, yeah, I haven't. I haven't adjusted my 84 00:04:49,160 --> 00:04:52,040 Speaker 1: Twitter feed to be laser eyed. I'm still on my 85 00:04:52,040 --> 00:04:55,360 Speaker 1: my My pandemic puppy is my is my picture there. 86 00:04:55,880 --> 00:04:59,240 Speaker 1: I haven't modified it yet. But you know what that 87 00:04:59,360 --> 00:05:03,159 Speaker 1: I'm curious about, giving all your experience in the business 88 00:05:03,200 --> 00:05:07,520 Speaker 1: and wisdom Tree obviously specializing in some sort of innovative 89 00:05:07,960 --> 00:05:10,320 Speaker 1: e t f s, you know, the hedged European equities, 90 00:05:10,320 --> 00:05:12,120 Speaker 1: that sort of thing, you know, kind of pushing the 91 00:05:12,200 --> 00:05:14,960 Speaker 1: envelope there in some of the strategies. To me, the 92 00:05:15,000 --> 00:05:17,920 Speaker 1: big question is, all right, when the I guess it 93 00:05:18,000 --> 00:05:20,680 Speaker 1: was the Winklevoss twins who originally sort of floated the 94 00:05:20,720 --> 00:05:23,400 Speaker 1: idea of a bitcoin e t F. However many years ago, 95 00:05:23,920 --> 00:05:26,960 Speaker 1: you know, and back then, um, it made a lot 96 00:05:26,960 --> 00:05:28,720 Speaker 1: of sense to want to put it into an et 97 00:05:28,800 --> 00:05:33,640 Speaker 1: F because buying and sort of providing the custody of 98 00:05:33,760 --> 00:05:36,159 Speaker 1: bitcoin was a lot trickier back then. You know, the 99 00:05:36,200 --> 00:05:39,960 Speaker 1: famous amount Cox hack, you know, and and bitcoin while 100 00:05:40,000 --> 00:05:43,240 Speaker 1: it's we're being compromised left and right. Now we've gotten 101 00:05:43,240 --> 00:05:46,000 Speaker 1: to the phase where you know, your firm, Gemini, coin Base, 102 00:05:46,440 --> 00:05:51,240 Speaker 1: all the other exchanges are available to purchase bitcoin. You 103 00:05:51,440 --> 00:05:54,480 Speaker 1: can even buy it on Venmo and PayPal. You can 104 00:05:54,480 --> 00:05:57,040 Speaker 1: buy it at the coin star machines at the supermar market. 105 00:05:57,480 --> 00:05:59,840 Speaker 1: So at my point, bit it's just very easy and 106 00:06:00,760 --> 00:06:04,120 Speaker 1: presumably a lot more secure to buy and hold bitcoin 107 00:06:04,160 --> 00:06:07,000 Speaker 1: than it was years ago. And so I wonder how 108 00:06:07,160 --> 00:06:14,000 Speaker 1: much demand is uncorked by uh bitcoin et s. I mean, 109 00:06:14,040 --> 00:06:16,159 Speaker 1: obviously this one is just the futures et F, but 110 00:06:16,440 --> 00:06:19,160 Speaker 1: presumably if we get a spot you know et F 111 00:06:19,279 --> 00:06:23,440 Speaker 1: as well. Um, how much demand uh sort of uncorked 112 00:06:23,600 --> 00:06:26,279 Speaker 1: by being able to buy it as an ETF now? 113 00:06:26,800 --> 00:06:30,239 Speaker 1: Or is it you know, going to cannibalize the demand 114 00:06:30,279 --> 00:06:33,359 Speaker 1: that's already in place in the traditional places to buy it. 115 00:06:33,440 --> 00:06:35,600 Speaker 1: And the reason I ask is, I'm wondering, No, we've 116 00:06:35,640 --> 00:06:38,200 Speaker 1: obviously seen this, this pop in the price of bitcoin 117 00:06:38,720 --> 00:06:41,680 Speaker 1: coinciding with with the launch of the CTF, and I'm wondering, 118 00:06:41,680 --> 00:06:45,080 Speaker 1: how you know sustainable that is to sort of be 119 00:06:45,160 --> 00:06:49,760 Speaker 1: this this new spiggot of demand for bitcoin or whether 120 00:06:49,800 --> 00:06:52,640 Speaker 1: we sort of cannibalize demand that's already there. That's a 121 00:06:52,800 --> 00:06:59,960 Speaker 1: that's a new record for you for length of question Mike, Yeah, 122 00:06:59,520 --> 00:07:03,680 Speaker 1: that's my thing. Okay, so I'll just talk for the 123 00:07:03,720 --> 00:07:06,720 Speaker 1: rest of the podcast. Right, try to pull that all 124 00:07:06,720 --> 00:07:12,640 Speaker 1: apart and answer. Let's go back to the beginning from me, right, 125 00:07:13,000 --> 00:07:17,440 Speaker 1: the um. We really have to give the Wigglebox Twins 126 00:07:17,440 --> 00:07:19,440 Speaker 1: a lot of credit here. They were so far ahead 127 00:07:19,440 --> 00:07:23,120 Speaker 1: of the curve with their filing in and I think 128 00:07:23,120 --> 00:07:27,640 Speaker 1: it was when their first filed for bitcoin e t 129 00:07:27,800 --> 00:07:33,440 Speaker 1: F that like nobody even really thought that would Like 130 00:07:33,560 --> 00:07:35,360 Speaker 1: they were like, what what you know? Most of the 131 00:07:35,360 --> 00:07:38,880 Speaker 1: e t F industry, all of the investment community was like, 132 00:07:38,920 --> 00:07:41,640 Speaker 1: what what's the bitcoin e tf Nobody knew anything that 133 00:07:41,640 --> 00:07:44,000 Speaker 1: they what they were even talking about? Right, they were 134 00:07:44,080 --> 00:07:50,840 Speaker 1: denied time and time again, uh from the SEC, right, 135 00:07:50,920 --> 00:07:54,320 Speaker 1: like four or five times they were denied. Now, let's 136 00:07:54,320 --> 00:07:56,480 Speaker 1: think about that. What were they trying to do, right, 137 00:07:56,560 --> 00:08:01,680 Speaker 1: They were trying to make bitcoin investable for people. They 138 00:08:01,800 --> 00:08:04,760 Speaker 1: kept getting denied with their e t F and so 139 00:08:04,800 --> 00:08:06,800 Speaker 1: they actually what they do. They turned around and they 140 00:08:06,800 --> 00:08:09,640 Speaker 1: went out and built Gemini. Gemini didn't exist when they 141 00:08:09,640 --> 00:08:13,640 Speaker 1: first filed. So they said, Okay, we think this is 142 00:08:13,640 --> 00:08:17,280 Speaker 1: going to be a valuable thing for the American public, 143 00:08:17,320 --> 00:08:20,000 Speaker 1: for the global public. We think this is the future 144 00:08:20,000 --> 00:08:25,080 Speaker 1: of financial products, and we think this should be accessible. 145 00:08:25,320 --> 00:08:28,000 Speaker 1: So they went out and they built Gemini, which is like, 146 00:08:28,160 --> 00:08:31,320 Speaker 1: you know, the most highly regulated, probably the most secure 147 00:08:31,440 --> 00:08:36,080 Speaker 1: storage facility for bitcoin and other cryptocurrencies on the planet today. 148 00:08:36,640 --> 00:08:39,720 Speaker 1: And it's actually easy to use via the exchange and 149 00:08:39,840 --> 00:08:43,319 Speaker 1: via the app, and it's it's expanding as a global 150 00:08:43,320 --> 00:08:49,120 Speaker 1: crypto platform. Right. Um, you're you're so the if I 151 00:08:49,160 --> 00:08:51,600 Speaker 1: take all of your sort of questions and I boil 152 00:08:51,720 --> 00:08:55,000 Speaker 1: them down to do we really need an e t 153 00:08:55,240 --> 00:09:01,440 Speaker 1: F today, the answer is, in general, for most investors, no, 154 00:09:01,679 --> 00:09:05,040 Speaker 1: it's really easy to open a Gemini account and get 155 00:09:05,080 --> 00:09:08,080 Speaker 1: access to cryptocurrencies or to open it, you know, like 156 00:09:08,120 --> 00:09:10,880 Speaker 1: you said, use other any of these other venues to 157 00:09:10,960 --> 00:09:13,960 Speaker 1: get through. But there are and what I've learned in 158 00:09:14,000 --> 00:09:19,199 Speaker 1: the industry, there are two things. Um, money moves really 159 00:09:19,320 --> 00:09:25,240 Speaker 1: slowly in this industry. People don't change investment products, you know, readily. Right, 160 00:09:25,320 --> 00:09:27,719 Speaker 1: So if you think about like we talked about the 161 00:09:27,800 --> 00:09:31,040 Speaker 1: growth of the TF industry, it's it's twenty years later 162 00:09:31,120 --> 00:09:35,320 Speaker 1: and they're at ten trillion dollars. The last sort of 163 00:09:35,400 --> 00:09:38,640 Speaker 1: fur to six trillion, or you know, the real money 164 00:09:38,679 --> 00:09:41,840 Speaker 1: moved in the last five to seven years. It took 165 00:09:41,920 --> 00:09:46,240 Speaker 1: fifteen years for people to even think about putting ETFs 166 00:09:46,240 --> 00:09:52,240 Speaker 1: in their portfolios right and using new products, launching going 167 00:09:52,240 --> 00:09:56,280 Speaker 1: into new platforms to access cryptocurrencies is hard for a 168 00:09:56,280 --> 00:10:01,360 Speaker 1: lot of people. So accessing bitcoin via and e t 169 00:10:01,559 --> 00:10:05,800 Speaker 1: F is a great sort of gateway for people to 170 00:10:05,800 --> 00:10:09,440 Speaker 1: get their feet wet and start investing in the cryptocurrency arena. 171 00:10:10,000 --> 00:10:13,320 Speaker 1: Now there's a big problem with that actually, because it 172 00:10:13,480 --> 00:10:17,440 Speaker 1: took you know, we're talking about eight years for the 173 00:10:17,559 --> 00:10:21,600 Speaker 1: SEC to approve a Bitcoin futures et F. And that's 174 00:10:21,679 --> 00:10:27,040 Speaker 1: basically like you've got this castle full of cryptocurrencies. They 175 00:10:27,080 --> 00:10:29,360 Speaker 1: just open the gate, but they actually won't even let 176 00:10:29,400 --> 00:10:31,800 Speaker 1: you into the rest. You can you can stand at 177 00:10:31,800 --> 00:10:34,640 Speaker 1: the gate, which is what bitcoin is. It's the gateway, 178 00:10:34,840 --> 00:10:37,400 Speaker 1: and but you can't go anywhere else. And and it's 179 00:10:37,520 --> 00:10:40,640 Speaker 1: unclear how long it's going to take to see other products. 180 00:10:40,960 --> 00:10:43,040 Speaker 1: So what I really think is when you talk about 181 00:10:43,600 --> 00:10:46,199 Speaker 1: is there going to be a news figat of demand, yes, 182 00:10:46,480 --> 00:10:49,000 Speaker 1: I think, uh, the doors open for a whole new 183 00:10:49,040 --> 00:10:51,240 Speaker 1: swath of investors who might not want to go directly 184 00:10:51,280 --> 00:10:54,199 Speaker 1: to a platform, who want to use bitcoin in a 185 00:10:54,480 --> 00:10:59,600 Speaker 1: specific account or alongside of portfolio et F s UM. 186 00:10:59,679 --> 00:11:02,719 Speaker 1: So there is new demand coming, but it's going to 187 00:11:02,760 --> 00:11:05,600 Speaker 1: be limited because what they're gonna do, what they're gonna 188 00:11:05,600 --> 00:11:09,400 Speaker 1: want is broader exposure. So they're gonna probably use the 189 00:11:09,440 --> 00:11:11,440 Speaker 1: e t F and then say oh I want more, 190 00:11:12,080 --> 00:11:15,280 Speaker 1: and then pursue other ways to get access to the 191 00:11:15,320 --> 00:11:18,000 Speaker 1: wider cook the landscape. That's where I think about it. 192 00:11:19,040 --> 00:11:20,920 Speaker 1: I'm going to pull a mic and ask a two 193 00:11:20,920 --> 00:11:24,120 Speaker 1: part question, and I get the right to do that 194 00:11:24,160 --> 00:11:27,600 Speaker 1: because I never do that, Mike, But to two parts 195 00:11:27,640 --> 00:11:35,440 Speaker 1: that is amateurs your part, Yeah, all right, Yeah, that 196 00:11:35,520 --> 00:11:38,600 Speaker 1: was great, But I wanted to ask you. A lot 197 00:11:38,600 --> 00:11:43,520 Speaker 1: of people have called the launch of the Futures Back 198 00:11:43,600 --> 00:11:46,200 Speaker 1: TTF fund a watershed moment, and then I also have 199 00:11:46,280 --> 00:11:49,240 Speaker 1: people who call me and say it's not a watershed moment, 200 00:11:49,440 --> 00:11:52,000 Speaker 1: don't call it that. So I'm wondering where you would 201 00:11:52,000 --> 00:11:55,200 Speaker 1: fall in in that description. And then the second part 202 00:11:55,280 --> 00:11:58,040 Speaker 1: is you you were talking about you know, this opens 203 00:11:58,360 --> 00:12:01,200 Speaker 1: it up to a whole new base of investors, So 204 00:12:01,240 --> 00:12:04,560 Speaker 1: I'm wondering who who that basis? Is it for the 205 00:12:04,760 --> 00:12:07,960 Speaker 1: retail crowd? Our retail investors do anticipate will they be 206 00:12:08,000 --> 00:12:13,160 Speaker 1: buying the e t F. Okay, Uh, great questions, two 207 00:12:13,200 --> 00:12:15,800 Speaker 1: parts I can manage. I'll actually probably remember both. So 208 00:12:15,880 --> 00:12:23,240 Speaker 1: let's start with watershed moment um. It is a watershed moment. Uh, 209 00:12:23,400 --> 00:12:29,840 Speaker 1: this is unique, right, This is US regulators acknowledging bitcoin 210 00:12:30,080 --> 00:12:34,960 Speaker 1: and saying this is an investable asset. We will approve 211 00:12:35,000 --> 00:12:37,040 Speaker 1: a product to make it available for you. Right, Like 212 00:12:37,120 --> 00:12:39,880 Speaker 1: you know, there have been funds available, they've been they've 213 00:12:39,920 --> 00:12:43,400 Speaker 1: been unregulated, they haven't worked like an e t F. 214 00:12:43,520 --> 00:12:46,200 Speaker 1: This is a fund that looks like a lot of 215 00:12:46,240 --> 00:12:50,360 Speaker 1: what investors are using in their portfolios today, and that's 216 00:12:50,400 --> 00:12:54,080 Speaker 1: helpful for them. So I think it's a watershed moment 217 00:12:54,080 --> 00:12:56,959 Speaker 1: in that sense. Right. I think this is that that 218 00:12:57,080 --> 00:13:00,520 Speaker 1: acceptance is important because I think it will lead to 219 00:13:01,400 --> 00:13:05,319 Speaker 1: greater regulation on the industry going forward. It is, and 220 00:13:05,480 --> 00:13:07,600 Speaker 1: like I said before, it's sort of this is the 221 00:13:07,640 --> 00:13:12,560 Speaker 1: beginning of an entirely new segment of investable assets and 222 00:13:12,840 --> 00:13:17,800 Speaker 1: the new investors. There is absolutely a crop of investors. 223 00:13:18,280 --> 00:13:20,599 Speaker 1: I don't call them retail I actually don't like the 224 00:13:20,679 --> 00:13:23,719 Speaker 1: name retail right. Direct investors are one thing, it's we 225 00:13:23,720 --> 00:13:26,400 Speaker 1: should get away from using the term retail. Right. Direct 226 00:13:26,440 --> 00:13:30,800 Speaker 1: investors are already buying bitcoin in the robin Hood accounts, 227 00:13:30,840 --> 00:13:34,040 Speaker 1: They're buying it in PayPal, they're buying it on Gemini 228 00:13:34,120 --> 00:13:37,360 Speaker 1: in coin based direct investors are not going to be 229 00:13:37,400 --> 00:13:40,920 Speaker 1: the new investors to bitcoin because they actually realize they 230 00:13:40,920 --> 00:13:44,840 Speaker 1: don't need to pay basis points or two hundred basis 231 00:13:44,840 --> 00:13:48,320 Speaker 1: points to on bitcoin directly. They can do it um. 232 00:13:48,360 --> 00:13:52,240 Speaker 1: The new set of investors, though, is the huge swath 233 00:13:52,360 --> 00:13:58,520 Speaker 1: of money in advised accounts in the US. Advisors control 234 00:13:59,200 --> 00:14:02,520 Speaker 1: really most of the money in this country, and they 235 00:14:02,640 --> 00:14:06,880 Speaker 1: run generally now that ten jillion dollars is et F 236 00:14:07,040 --> 00:14:12,360 Speaker 1: portfolios that they are building for investors, and those investors 237 00:14:12,400 --> 00:14:14,720 Speaker 1: are not going out and selecting their own ets. They're 238 00:14:14,760 --> 00:14:20,080 Speaker 1: generally advisor lead and advisors who were building those portfolios 239 00:14:20,320 --> 00:14:24,560 Speaker 1: are now going to incorporate bitcoin. Many of them are 240 00:14:24,640 --> 00:14:27,920 Speaker 1: using s m A s and have built procedures already 241 00:14:28,000 --> 00:14:30,760 Speaker 1: to get to bitcoint But for a huge swath of 242 00:14:30,800 --> 00:14:34,040 Speaker 1: them who really couldn't be bothered or didn't have the time, 243 00:14:34,640 --> 00:14:38,560 Speaker 1: or we're waiting for the regulatory approval, this will be 244 00:14:39,080 --> 00:14:42,040 Speaker 1: a new path for them to say five percent of 245 00:14:42,080 --> 00:14:44,800 Speaker 1: our portfolio should be in crypto assets. It's the best 246 00:14:44,800 --> 00:14:47,720 Speaker 1: performing asset over the last you know, one, three, five, 247 00:14:47,960 --> 00:14:51,080 Speaker 1: and ten year periods, we need to incorporate a piece 248 00:14:51,080 --> 00:14:53,400 Speaker 1: of them. So I think there is this new swap 249 00:14:53,440 --> 00:15:06,800 Speaker 1: of investors that will commit you know, Dave with UH 250 00:15:07,040 --> 00:15:10,760 Speaker 1: ETFs that hold futures. There's always this issue of the 251 00:15:10,920 --> 00:15:13,160 Speaker 1: role you know, and the cost of rolling in the 252 00:15:14,000 --> 00:15:17,440 Speaker 1: futures further out the curve um. Especially when you look 253 00:15:17,480 --> 00:15:22,040 Speaker 1: at the bitcoin futures curve, it's in contango upper least sloping, 254 00:15:22,120 --> 00:15:25,360 Speaker 1: meaning the prices in the further out months or or 255 00:15:25,440 --> 00:15:29,680 Speaker 1: higher than the much higher than the UH near months um. 256 00:15:29,920 --> 00:15:33,520 Speaker 1: And it even looks like the CTF is gonna sort 257 00:15:33,520 --> 00:15:36,360 Speaker 1: of bump up against its limits on how many futures 258 00:15:36,360 --> 00:15:39,480 Speaker 1: that can hold at the you know, the CFTC rules. 259 00:15:40,600 --> 00:15:42,800 Speaker 1: All this is kind of leading people to worry that 260 00:15:42,800 --> 00:15:45,520 Speaker 1: that this thing is not going to track UH at 261 00:15:45,600 --> 00:15:48,560 Speaker 1: least spot the price of spot bitcoin as closely as 262 00:15:48,680 --> 00:15:52,040 Speaker 1: as maybe uh, you know, it would be hoped what 263 00:15:52,200 --> 00:15:54,960 Speaker 1: what you're thinking on that as far as the sort 264 00:15:54,960 --> 00:15:58,080 Speaker 1: of the perils of a futures based et FU when 265 00:15:58,080 --> 00:16:03,960 Speaker 1: it comes to tracking the spot asset price closely. You 266 00:16:03,960 --> 00:16:08,440 Speaker 1: you you you you lead the question with the answer 267 00:16:08,480 --> 00:16:12,160 Speaker 1: I think really right, like those are you know, future 268 00:16:12,200 --> 00:16:14,400 Speaker 1: space ttfs are not new. There are a lot of 269 00:16:14,400 --> 00:16:16,720 Speaker 1: them trading in the market. We know exactly how they trade. 270 00:16:16,760 --> 00:16:19,480 Speaker 1: We know how futures work. They do trade at contango, 271 00:16:19,520 --> 00:16:24,480 Speaker 1: they trade in sometimes intergradation. There are limits to how many, 272 00:16:24,600 --> 00:16:28,320 Speaker 1: so quick growth can be can be detrimental potentially to 273 00:16:28,360 --> 00:16:33,080 Speaker 1: the funds. These are all things that UM come into 274 00:16:33,080 --> 00:16:37,360 Speaker 1: play when you are trading a future spaceed TTF. So 275 00:16:38,000 --> 00:16:39,720 Speaker 1: if I go, if I put my e t F 276 00:16:40,200 --> 00:16:42,200 Speaker 1: had on. When we were at the et F Fisher room, 277 00:16:42,240 --> 00:16:44,400 Speaker 1: we were explaining to people, you know what you should 278 00:16:44,400 --> 00:16:46,160 Speaker 1: be thinking about when you're buying e t F s. 279 00:16:46,480 --> 00:16:50,160 Speaker 1: Structure mattered right. For years, Black Rock and all the 280 00:16:50,200 --> 00:16:54,280 Speaker 1: other issuers were spent, you know, millions of dollars in 281 00:16:54,360 --> 00:16:58,280 Speaker 1: marketing explaining to investors how structure matters a lot. This 282 00:16:58,360 --> 00:17:00,440 Speaker 1: is what you need to be aware of, aware of 283 00:17:00,560 --> 00:17:03,120 Speaker 1: if it's a future space TTF, if it's a physical 284 00:17:03,120 --> 00:17:08,720 Speaker 1: et F. These things are incredibly important in understanding what 285 00:17:08,880 --> 00:17:13,080 Speaker 1: your future potential returns will be. And this is all 286 00:17:13,119 --> 00:17:17,399 Speaker 1: about UM. You know, it's funny right the SEC is 287 00:17:17,440 --> 00:17:22,000 Speaker 1: talking about they went this path focused on investor protections, 288 00:17:22,359 --> 00:17:25,520 Speaker 1: but what do investors really want. They really want an 289 00:17:25,520 --> 00:17:29,119 Speaker 1: experience where they can read the label of an e 290 00:17:29,200 --> 00:17:31,879 Speaker 1: t F and and I don't mean the small print 291 00:17:31,920 --> 00:17:33,639 Speaker 1: on the label because they're never going to read that. 292 00:17:33,680 --> 00:17:36,879 Speaker 1: They want to read the title and understand what they're buying. 293 00:17:37,600 --> 00:17:40,919 Speaker 1: And they want to get returns that look like the 294 00:17:41,000 --> 00:17:43,840 Speaker 1: underlying asset that they're trying to get. So when you 295 00:17:43,880 --> 00:17:46,480 Speaker 1: buy bitcoin, if you look at your e t F 296 00:17:46,560 --> 00:17:49,480 Speaker 1: returns on a Bitcoin futures et F, they could be 297 00:17:49,840 --> 00:17:52,240 Speaker 1: potentially very different. And I look at the gray scale 298 00:17:52,240 --> 00:17:54,200 Speaker 1: funds is a good example of this. Right, the only 299 00:17:54,240 --> 00:17:59,320 Speaker 1: way to access bitcoin in a fund before the futures 300 00:17:59,440 --> 00:18:01,960 Speaker 1: et F and US has been the gray scale fund. 301 00:18:02,280 --> 00:18:05,040 Speaker 1: The returns of bitcoin and the gray scale bitcoint fund 302 00:18:05,280 --> 00:18:11,439 Speaker 1: are extremely different, like hundreds of percent different, right, you know, 303 00:18:11,600 --> 00:18:15,879 Speaker 1: hundreds of basis points different. Excuse me, Right, So I 304 00:18:15,920 --> 00:18:19,479 Speaker 1: don't think the returns between a future space ETF and 305 00:18:19,480 --> 00:18:23,720 Speaker 1: bitcoin will be as dramatically different, but there is the 306 00:18:23,760 --> 00:18:28,000 Speaker 1: potential for those two things to diverge. And that means 307 00:18:28,320 --> 00:18:30,920 Speaker 1: there is the potential one day for an investor to 308 00:18:32,000 --> 00:18:34,760 Speaker 1: look at think they bought a bitcoin at et F, 309 00:18:34,840 --> 00:18:37,760 Speaker 1: look at the price of bitcoining and it's change and performance, 310 00:18:38,119 --> 00:18:40,159 Speaker 1: and look at their e t F and see two 311 00:18:40,200 --> 00:18:43,760 Speaker 1: different numbers in the performance. That's the problem, right, that's 312 00:18:43,760 --> 00:18:46,000 Speaker 1: the whole risk with this, and that's what we try 313 00:18:46,040 --> 00:18:49,960 Speaker 1: and avoid in building good investment products. And look, sometimes 314 00:18:50,000 --> 00:18:52,560 Speaker 1: you're just subject to the regulatory environment. And this is 315 00:18:52,800 --> 00:18:55,320 Speaker 1: the best that an investor can get today based on 316 00:18:55,359 --> 00:18:58,119 Speaker 1: the regulations. But you know, they could have gone a 317 00:18:58,160 --> 00:19:02,000 Speaker 1: lot further. In my month, argument for a physically backed 318 00:19:02,040 --> 00:19:04,720 Speaker 1: bitcoin e t F and if we were to see one, 319 00:19:04,880 --> 00:19:08,480 Speaker 1: what are the propects when potentially might we see one 320 00:19:08,720 --> 00:19:14,360 Speaker 1: approved by the SEC? The best argument is um that 321 00:19:15,720 --> 00:19:21,440 Speaker 1: the like all of the all of the underlining mechanics, 322 00:19:21,560 --> 00:19:30,600 Speaker 1: underlying mechanics of custodying bitcoin safely, providing you know, security 323 00:19:30,800 --> 00:19:37,480 Speaker 1: and um execution and clearing those trades, everything already works 324 00:19:37,880 --> 00:19:40,479 Speaker 1: and has been proven to work for a bitcoin e TF. 325 00:19:40,840 --> 00:19:44,480 Speaker 1: Gemini is actually the largest provider of infrastructure to bitcoin 326 00:19:44,600 --> 00:19:47,840 Speaker 1: e t F providers on a global basis. If you 327 00:19:47,880 --> 00:19:52,320 Speaker 1: look at our nearest neighbor, Canada, we are the infrastructure 328 00:19:52,400 --> 00:19:55,440 Speaker 1: of all of the Canadian bitcoin and the theory ets. 329 00:19:55,920 --> 00:19:58,440 Speaker 1: So there are you know, there's a bunch of products 330 00:19:58,480 --> 00:20:02,120 Speaker 1: up there. They're doing really well, and they've already proven 331 00:20:02,160 --> 00:20:05,960 Speaker 1: the model that a physical bitcoin et F works. So 332 00:20:06,440 --> 00:20:09,879 Speaker 1: it's very clear to me that I think that's the 333 00:20:09,920 --> 00:20:12,280 Speaker 1: next step. And you asked about like when might we 334 00:20:12,400 --> 00:20:16,040 Speaker 1: see that. I saw that gray scale file to convert 335 00:20:16,119 --> 00:20:19,639 Speaker 1: to an e t F. I mean, no brainer, that 336 00:20:19,680 --> 00:20:23,680 Speaker 1: should happen immediately. There's no reason why the SEC shouldn't 337 00:20:23,720 --> 00:20:27,480 Speaker 1: follow up disapproval with a physical bitcoin e t F 338 00:20:27,560 --> 00:20:31,199 Speaker 1: approval in the very near future. UM. So you know, 339 00:20:31,520 --> 00:20:33,800 Speaker 1: I would hope you might see something by the end 340 00:20:33,840 --> 00:20:37,000 Speaker 1: of this year, even we have two months left. UM. 341 00:20:37,040 --> 00:20:39,639 Speaker 1: But if I were being more conservative, I would say 342 00:20:39,840 --> 00:20:44,400 Speaker 1: the first quarter, excuse me, next year, we would see 343 00:20:44,400 --> 00:20:47,520 Speaker 1: some approval. Beyond that, I mean, it's just getting ridiculous. 344 00:20:47,520 --> 00:20:50,080 Speaker 1: There's no reason to not approve this at this point. 345 00:20:50,800 --> 00:20:55,160 Speaker 1: I think one of the more fascinating innovations of crypto 346 00:20:55,720 --> 00:20:58,399 Speaker 1: in recent years has been the notion of earning some 347 00:20:58,480 --> 00:21:00,960 Speaker 1: kind of yield on your holding, you know, whether through 348 00:21:02,000 --> 00:21:06,960 Speaker 1: lending products or staking that sort of thing. Obviously, quin 349 00:21:07,040 --> 00:21:10,080 Speaker 1: Base made a lot of headlines with the Wells notice 350 00:21:10,119 --> 00:21:13,480 Speaker 1: they got from the SEC basically warning that they're they're 351 00:21:13,560 --> 00:21:18,560 Speaker 1: lending product. Um. Essentially could violate securities laws. Um. Also, 352 00:21:18,760 --> 00:21:20,679 Speaker 1: I did a piece looking at just the notion of 353 00:21:20,760 --> 00:21:24,840 Speaker 1: staking and even in the risk factors that at coin base. Um. 354 00:21:24,880 --> 00:21:27,960 Speaker 1: You know, there's not a lot of clarity according to 355 00:21:28,040 --> 00:21:32,320 Speaker 1: them about um how staking fits into the securities laws 356 00:21:32,359 --> 00:21:35,879 Speaker 1: as well. I know, you know, Gemini offers chances to 357 00:21:35,920 --> 00:21:40,480 Speaker 1: earn on your holdings through lending and staking. You know, 358 00:21:40,840 --> 00:21:43,080 Speaker 1: is this a risk to Gemini doing that too? You 359 00:21:43,080 --> 00:21:46,600 Speaker 1: know is obviously coin bases a public company, so they're 360 00:21:46,760 --> 00:21:49,640 Speaker 1: bound to get more scrutiny from the sec But has 361 00:21:50,040 --> 00:21:52,960 Speaker 1: the thinking that Gemini changed it all about these products 362 00:21:52,960 --> 00:21:57,879 Speaker 1: given the coin based wells. Notice, so the think he 363 00:21:58,000 --> 00:22:00,359 Speaker 1: hasn't changed because we have a different approach to the 364 00:22:00,400 --> 00:22:04,440 Speaker 1: business in general. Right, Gemini takes a very very conservative 365 00:22:04,480 --> 00:22:08,320 Speaker 1: stance with regards to regulation and everything we do. We 366 00:22:08,400 --> 00:22:13,680 Speaker 1: do from a ask first before we move forward, right, 367 00:22:13,760 --> 00:22:16,760 Speaker 1: we don't. We don't do first and then ask for forgiveness, 368 00:22:16,920 --> 00:22:20,720 Speaker 1: and we don't sort of you know, come off with 369 00:22:21,080 --> 00:22:23,439 Speaker 1: you know, we we are trying to be and we 370 00:22:23,480 --> 00:22:27,359 Speaker 1: already are this sort of you know, collaborators with the 371 00:22:27,400 --> 00:22:30,520 Speaker 1: regulators to bring something to market that works within their eyes. Right, 372 00:22:30,560 --> 00:22:32,920 Speaker 1: So we are you know, we're a New York trust 373 00:22:32,920 --> 00:22:36,720 Speaker 1: company regulated by the New York Apartment Financial Services, qualified custodian. 374 00:22:37,040 --> 00:22:40,720 Speaker 1: All of these things are We are already incredibly highly 375 00:22:40,720 --> 00:22:45,160 Speaker 1: regulated and we're very confident that our product has been 376 00:22:45,640 --> 00:22:51,200 Speaker 1: vetted deeply by our regulators. We um and on that note, right, 377 00:22:51,240 --> 00:22:52,520 Speaker 1: like if you if you get back to it, we're 378 00:22:52,680 --> 00:22:55,520 Speaker 1: we've got more than four billion dollars in our earned product. 379 00:22:55,880 --> 00:22:59,879 Speaker 1: People are coming to us every day looking for higher return, 380 00:23:00,040 --> 00:23:04,040 Speaker 1: not just on their bitcoin, but also on their stable coins. Right. 381 00:23:04,080 --> 00:23:07,000 Speaker 1: So Gemini dollar is a stable coin that tracks, that 382 00:23:07,080 --> 00:23:12,159 Speaker 1: replicates the US dollar basically. And what's important is you 383 00:23:12,200 --> 00:23:14,720 Speaker 1: asked if you mentioned the risk right, the risk factors, 384 00:23:14,760 --> 00:23:19,320 Speaker 1: and there's not a lot of clarity. It gets back 385 00:23:19,359 --> 00:23:22,840 Speaker 1: to just understanding in general what's happening in the financial markets. 386 00:23:22,920 --> 00:23:27,280 Speaker 1: Right in the crypto asset arena and the cryptocurrency world, 387 00:23:28,119 --> 00:23:32,560 Speaker 1: it's hard to actually get banking partners right, So there's 388 00:23:32,560 --> 00:23:36,760 Speaker 1: a there's a limited funnel on access to dollars and 389 00:23:36,840 --> 00:23:42,600 Speaker 1: back again to facilitate lending and borrowing. So there's demand. 390 00:23:42,359 --> 00:23:46,360 Speaker 1: And on top of that, we have what's called pre 391 00:23:46,480 --> 00:23:50,720 Speaker 1: funded trading across all of the exchanges. So if you 392 00:23:50,760 --> 00:23:52,720 Speaker 1: want to trade on Gemini, you need to pre fund, 393 00:23:52,760 --> 00:23:54,720 Speaker 1: You need to have money on the exchange to trade. 394 00:23:55,160 --> 00:23:57,199 Speaker 1: Same thing for every other exchange out there. So if 395 00:23:57,200 --> 00:24:00,199 Speaker 1: you're a trading firm and you're pursuing trading on a 396 00:24:00,200 --> 00:24:05,479 Speaker 1: bunch of different exchanges, you need to borrow assets and 397 00:24:05,560 --> 00:24:08,359 Speaker 1: set them on the exchanges so that you can have them. 398 00:24:08,359 --> 00:24:12,359 Speaker 1: This has created incredible yields for both dollars and for 399 00:24:12,440 --> 00:24:16,600 Speaker 1: cryptocurrencies because there's demand to borrow, because the trading firms 400 00:24:16,800 --> 00:24:19,359 Speaker 1: will use those assets and generate even more money for 401 00:24:19,400 --> 00:24:22,720 Speaker 1: themselves and then pay back those borrows. I actually think 402 00:24:23,440 --> 00:24:26,280 Speaker 1: as long as you're on the major venues, we see 403 00:24:26,280 --> 00:24:29,000 Speaker 1: the risks of doing this as very low. It's a 404 00:24:29,119 --> 00:24:34,399 Speaker 1: very it's a standard business that looks exactly like traditional finance, right. 405 00:24:34,600 --> 00:24:38,919 Speaker 1: I think stock loan in traditional financial services. This looks 406 00:24:38,960 --> 00:24:43,160 Speaker 1: exactly like that, right. So it's a it's a it's 407 00:24:43,160 --> 00:24:48,440 Speaker 1: not something that is completely new. It's it's similar, different words, right, 408 00:24:48,520 --> 00:24:51,439 Speaker 1: staking versus stock loan, but a lot of this is 409 00:24:51,560 --> 00:24:54,119 Speaker 1: very similar, and I think it's uh, it's gonna be 410 00:24:54,240 --> 00:24:56,120 Speaker 1: very It's going to continue to grow in that sense, 411 00:24:56,119 --> 00:24:57,920 Speaker 1: because if you think about we're talking about bit woin 412 00:24:58,000 --> 00:25:00,920 Speaker 1: et F Storry, Mike, but the you know, you were 413 00:25:00,920 --> 00:25:03,120 Speaker 1: asking like what's the best way to hold bitcoin, sort 414 00:25:03,160 --> 00:25:04,320 Speaker 1: of like do you want to hold the e t 415 00:25:04,480 --> 00:25:06,760 Speaker 1: F or do you want to hold bitcoin directly? Well, 416 00:25:06,760 --> 00:25:08,480 Speaker 1: if you hold bitcoin directly and you put it in 417 00:25:08,560 --> 00:25:11,240 Speaker 1: gemin iron, you can earn one and a half percent 418 00:25:11,560 --> 00:25:14,640 Speaker 1: on your bitcoin holdings with no fee on the holding. 419 00:25:15,080 --> 00:25:17,560 Speaker 1: Versus if you hold bitcoin in the futures e t F, 420 00:25:17,920 --> 00:25:22,080 Speaker 1: you're paying points and you're getting no yield on the surface. 421 00:25:22,480 --> 00:25:25,120 Speaker 1: So it's you know, you need to think carefully about structure. 422 00:25:42,440 --> 00:25:44,199 Speaker 1: So Dave, just to wrap it all up, I know 423 00:25:44,240 --> 00:25:46,119 Speaker 1: at the start of the conversation you were saying you 424 00:25:46,160 --> 00:25:48,919 Speaker 1: see a lot of similarities between the e t F 425 00:25:48,960 --> 00:25:51,520 Speaker 1: world and the crypto world, and so I'm hoping you 426 00:25:51,560 --> 00:25:54,479 Speaker 1: can tell us about those similarities and whether or not 427 00:25:55,640 --> 00:25:57,480 Speaker 1: it can tell us the growth of the e t 428 00:25:57,640 --> 00:26:00,399 Speaker 1: F industry, can tell us anything about the potential growth 429 00:26:00,440 --> 00:26:06,000 Speaker 1: of the industry. Yeah, so great question. It's probably one 430 00:26:06,040 --> 00:26:10,000 Speaker 1: of my favorite questions because I feel like I'm sort 431 00:26:10,040 --> 00:26:12,280 Speaker 1: of like back to the future. You know, ten years 432 00:26:12,280 --> 00:26:17,639 Speaker 1: ago we were educating institutions how to implement e t 433 00:26:17,800 --> 00:26:22,560 Speaker 1: F s into their portfolios. Right. And today we're doing 434 00:26:22,600 --> 00:26:24,639 Speaker 1: the same thing. I'm going out and speaking to the 435 00:26:24,720 --> 00:26:27,879 Speaker 1: largest institutions on the planet and my team, and we 436 00:26:27,960 --> 00:26:32,960 Speaker 1: are educating them on how they can start to implement 437 00:26:33,000 --> 00:26:37,040 Speaker 1: cryptocurrencies into their portfolios. Right, And it's uh. You know, 438 00:26:37,119 --> 00:26:39,840 Speaker 1: so I wrote the UH in two thousand nine, I 439 00:26:39,880 --> 00:26:42,120 Speaker 1: wrote the t the first edition of the et F Handbook, 440 00:26:42,440 --> 00:26:47,520 Speaker 1: which was designed to take the details that are happening 441 00:26:47,520 --> 00:26:50,840 Speaker 1: in the market and presented in a way that institutional 442 00:26:50,880 --> 00:26:55,080 Speaker 1: managers can understand the markets enough so that they can 443 00:26:55,080 --> 00:26:57,920 Speaker 1: start to implement ets into their portfolios. And I think 444 00:26:57,960 --> 00:27:00,960 Speaker 1: it was you know, it's widely used around the industry 445 00:27:01,040 --> 00:27:04,600 Speaker 1: and by institutional investors when they're building et F portfolios, 446 00:27:04,680 --> 00:27:07,320 Speaker 1: like how the mechanics of these products work. We were 447 00:27:07,359 --> 00:27:09,440 Speaker 1: at the same sort of that was two thousand nine 448 00:27:09,480 --> 00:27:12,320 Speaker 1: when I when I sort of published that, we're at 449 00:27:12,320 --> 00:27:16,959 Speaker 1: the same stage as I think in cryptocurrency land, like 450 00:27:17,440 --> 00:27:20,480 Speaker 1: institutions are. You know. I like to say that Gemini, 451 00:27:20,600 --> 00:27:23,600 Speaker 1: actually we don't need keypads on our phones. Our phones 452 00:27:23,640 --> 00:27:27,120 Speaker 1: are so busy that we we actually make no outgoing 453 00:27:27,160 --> 00:27:31,000 Speaker 1: phone calls. Right, People institutions are calling us on a 454 00:27:31,080 --> 00:27:36,680 Speaker 1: daily basis asking for you know, they're not even ready 455 00:27:36,720 --> 00:27:41,040 Speaker 1: to implement yet. They're still at the education stage for 456 00:27:41,080 --> 00:27:44,359 Speaker 1: a lot of this, right, so they understand bitpoint very well. 457 00:27:44,400 --> 00:27:47,320 Speaker 1: But this is a there's a very broad spectrum of 458 00:27:47,320 --> 00:27:51,440 Speaker 1: of cryptocurrencies and there's a lot to learn and they 459 00:27:51,600 --> 00:27:53,359 Speaker 1: need to get up the curve. And we're spending a 460 00:27:53,359 --> 00:27:58,760 Speaker 1: ton of resources that educating institutions around this business. Well, 461 00:27:59,320 --> 00:28:01,840 Speaker 1: speaking of that acating vill Donna, I think it's time 462 00:28:02,119 --> 00:28:05,359 Speaker 1: to educate the listeners on some crazy things. But first 463 00:28:05,400 --> 00:28:08,280 Speaker 1: I got Dave, I have to get one thing out 464 00:28:08,280 --> 00:28:11,480 Speaker 1: of you before we switched to crazy things. We'll not 465 00:28:11,600 --> 00:28:14,520 Speaker 1: to notice you're wearing a University of Pennsylvania shirt. I 466 00:28:14,560 --> 00:28:18,680 Speaker 1: believe your daughter goes to pen that's right, sophomore. So 467 00:28:19,359 --> 00:28:21,159 Speaker 1: there's a requirement on this show that if you have 468 00:28:21,160 --> 00:28:22,800 Speaker 1: any sort of filled out the connection, you have to 469 00:28:22,800 --> 00:28:25,600 Speaker 1: give us your favorite cheese steak pick in the city, 470 00:28:25,680 --> 00:28:28,080 Speaker 1: brother Lee Love, So where do you go for your 471 00:28:28,119 --> 00:28:32,200 Speaker 1: cheese steaks? There's no question, Abner's Cheese Steaks. It's right 472 00:28:32,240 --> 00:28:36,160 Speaker 1: by the campus. It's the best, No, no no relation. 473 00:28:36,280 --> 00:28:40,280 Speaker 1: I take it all right, all right, he's not talking 474 00:28:40,360 --> 00:28:44,680 Speaker 1: his book. That's the same. That's the second Abner's recommendation 475 00:28:44,680 --> 00:28:47,880 Speaker 1: we've gotten. That's interesting. You know, I confess I've never 476 00:28:47,880 --> 00:28:50,360 Speaker 1: tried them. I'm not in that part of the Philly much. 477 00:28:50,360 --> 00:28:53,200 Speaker 1: But next time I'm definitely gonna hit Abners. Let's take 478 00:28:53,200 --> 00:28:55,680 Speaker 1: a road trip. Let me know, all right for sure 479 00:28:57,000 --> 00:28:59,880 Speaker 1: stand clearer of the craziest things we saw in mark 480 00:29:00,040 --> 00:29:03,440 Speaker 1: gets this week. Now let's hit those crazy things. I'm 481 00:29:03,440 --> 00:29:06,360 Speaker 1: gonna break with tradition. I'm gonna go first because I 482 00:29:06,440 --> 00:29:08,840 Speaker 1: really want to hear Dave's take on my crazy thing. 483 00:29:08,880 --> 00:29:13,480 Speaker 1: And that was Get ready, Dave, take some notes. Now 484 00:29:13,480 --> 00:29:16,960 Speaker 1: this will be an easy question, at least an easy 485 00:29:17,200 --> 00:29:20,680 Speaker 1: number of questions packed into this. But on Thursday, UH 486 00:29:21,080 --> 00:29:25,000 Speaker 1: real eye popping move in the price of bitcoin on 487 00:29:25,160 --> 00:29:31,239 Speaker 1: finances US Exchange UH fellas low Is likes something like 488 00:29:31,240 --> 00:29:35,160 Speaker 1: an eight seven percent plunge. Only on that one. Exchange 489 00:29:35,360 --> 00:29:38,000 Speaker 1: and Finance eventually came out with a statement and said, well, 490 00:29:38,000 --> 00:29:41,400 Speaker 1: one of our institutional traders had a bug in one 491 00:29:41,440 --> 00:29:45,520 Speaker 1: of their algorithms, UM, and that's what caused it. Dave, 492 00:29:46,520 --> 00:29:49,840 Speaker 1: what I wondered of you is UM. Obviously that's a 493 00:29:49,880 --> 00:29:53,240 Speaker 1: crazy thing to happen. And you know, there's certain sort 494 00:29:53,280 --> 00:29:56,160 Speaker 1: of guardrails built into the stock market over years too 495 00:29:57,320 --> 00:30:01,040 Speaker 1: allow them to bust trades that are obvious, the erroneous 496 00:30:01,080 --> 00:30:04,000 Speaker 1: or circuit breakers to prevent that that sort of dramatic 497 00:30:04,040 --> 00:30:08,160 Speaker 1: plunge out of nowhere. And at the same time, we 498 00:30:08,200 --> 00:30:10,200 Speaker 1: have seen coin bays come out with sort of their 499 00:30:10,280 --> 00:30:14,680 Speaker 1: proposals to regulate the industry, including what that they wanna 500 00:30:15,040 --> 00:30:18,280 Speaker 1: self regulatory and s R s r OH organization created 501 00:30:18,560 --> 00:30:21,560 Speaker 1: similar to the stock market, where the sort of the 502 00:30:21,600 --> 00:30:25,200 Speaker 1: industry polices itself. But I'm wondering how you see the 503 00:30:25,240 --> 00:30:28,080 Speaker 1: market structure and where it needs to go. You know, 504 00:30:28,240 --> 00:30:32,400 Speaker 1: is is this a feature or a bug that someone 505 00:30:32,440 --> 00:30:36,680 Speaker 1: can pick off bitcoin for because of a bad altgo 506 00:30:36,760 --> 00:30:39,560 Speaker 1: on an exchange? Where do you think something needs to 507 00:30:39,600 --> 00:30:42,120 Speaker 1: happen sort of a consolidated tape like we have in 508 00:30:42,120 --> 00:30:45,080 Speaker 1: the stock market, um, where everyone knows the sort of 509 00:30:45,760 --> 00:30:48,280 Speaker 1: the real price of bitcoin. Where do you see that 510 00:30:48,320 --> 00:30:55,080 Speaker 1: sort of market structure issue going, if if anywhere? Great question. 511 00:30:55,960 --> 00:30:58,280 Speaker 1: I think it is a it is a highlight of 512 00:30:58,280 --> 00:31:01,400 Speaker 1: a crazy thing this week, um, but it's also something 513 00:31:01,400 --> 00:31:03,440 Speaker 1: that happens in the US markets quite a bit actually. 514 00:31:03,520 --> 00:31:06,800 Speaker 1: So remember the biggest one that we ever talked about 515 00:31:06,880 --> 00:31:10,480 Speaker 1: was the flash crash, right two, and that really brought 516 00:31:10,520 --> 00:31:14,360 Speaker 1: attention to what happens here in a world with i'll 517 00:31:14,440 --> 00:31:17,280 Speaker 1: go trading and no stop losses and things like that. 518 00:31:17,600 --> 00:31:20,480 Speaker 1: And after the two, after the two thousand ten flash crash, 519 00:31:20,520 --> 00:31:22,520 Speaker 1: there was a big backlash and people, a lot of 520 00:31:22,520 --> 00:31:24,760 Speaker 1: people came out and said, e t f s are 521 00:31:24,880 --> 00:31:30,080 Speaker 1: ruining the market, They're causing these market anomalies. And in 522 00:31:30,160 --> 00:31:33,360 Speaker 1: the end it was decided, no, that wasn't that wasn't 523 00:31:33,360 --> 00:31:35,720 Speaker 1: the case. It was a systems issue that caused the 524 00:31:35,760 --> 00:31:38,600 Speaker 1: market anomaly, and they worked on fixing the system. There 525 00:31:38,640 --> 00:31:42,120 Speaker 1: wasn't any real regulation brought into place after that. We've 526 00:31:42,160 --> 00:31:45,040 Speaker 1: tightened up a few things in terms of trade away 527 00:31:45,120 --> 00:31:47,880 Speaker 1: rules and things like that, but nothing nothing really sort 528 00:31:47,920 --> 00:31:51,560 Speaker 1: of no dramatic fixed to the market structure. But things 529 00:31:51,800 --> 00:31:57,560 Speaker 1: systems got better, and also we education of investors got better. 530 00:31:57,840 --> 00:32:00,240 Speaker 1: So one of the things that was highlighted and then 531 00:32:00,240 --> 00:32:04,640 Speaker 1: the flash crash was that advisors were using stop losses 532 00:32:05,280 --> 00:32:08,280 Speaker 1: and stop losses and they would not stop limits stop 533 00:32:08,320 --> 00:32:11,640 Speaker 1: loss limits, so they were stop loss markets. So they 534 00:32:11,680 --> 00:32:16,680 Speaker 1: got triggered and then everything sort of uh, waterfalled down 535 00:32:17,280 --> 00:32:19,400 Speaker 1: and we moved to a we moved to world where 536 00:32:19,400 --> 00:32:21,600 Speaker 1: advisors don't do that anywhere that you stop lost limits 537 00:32:21,680 --> 00:32:24,720 Speaker 1: often right to protect themselves against that. This is the 538 00:32:24,760 --> 00:32:27,320 Speaker 1: same thing like we've this is this is sort of 539 00:32:28,160 --> 00:32:31,240 Speaker 1: you know, the Binance thing was a fat finger basically, 540 00:32:31,560 --> 00:32:33,760 Speaker 1: you know, except there was no finger anymore. It's computer 541 00:32:33,840 --> 00:32:37,960 Speaker 1: system that did it. The ALGA was bad. Um I 542 00:32:38,320 --> 00:32:41,760 Speaker 1: I sort of agree we um. I think getting to 543 00:32:41,880 --> 00:32:46,280 Speaker 1: a self regulated place for the industry that nobody wants 544 00:32:46,320 --> 00:32:49,040 Speaker 1: this to happen. They still will always continue to happen, 545 00:32:49,440 --> 00:32:51,239 Speaker 1: but I think our market structure is going to look 546 00:32:51,280 --> 00:32:55,040 Speaker 1: a lot more like traditional market structure over time, and 547 00:32:55,400 --> 00:32:58,640 Speaker 1: the biggest firms and especially forms like Gemini, we have 548 00:32:58,720 --> 00:33:02,560 Speaker 1: protections in place to protect against this, so that you know, 549 00:33:02,640 --> 00:33:05,040 Speaker 1: these these types of things don't happen. But in the 550 00:33:05,080 --> 00:33:07,480 Speaker 1: crypto space and now in the world right like it's 551 00:33:07,480 --> 00:33:10,440 Speaker 1: so easy to build an exchange that these things it's 552 00:33:10,560 --> 00:33:14,320 Speaker 1: it's it's still very early. What I find fascinating that 553 00:33:14,480 --> 00:33:17,840 Speaker 1: you talk about market structure right think about where we're going. 554 00:33:17,960 --> 00:33:22,360 Speaker 1: The crypto exchanges, they trade twenty four hours every day, 555 00:33:22,440 --> 00:33:24,920 Speaker 1: seven days a week when they do. If you think 556 00:33:24,920 --> 00:33:30,960 Speaker 1: about even upgrading, Um, like when we do systems upgrades, 557 00:33:31,480 --> 00:33:33,840 Speaker 1: when the New York Stock Exchanges, the systems upgrade, but 558 00:33:33,880 --> 00:33:36,480 Speaker 1: it's great. They closed at five o'clock on Friday, They've 559 00:33:36,520 --> 00:33:39,400 Speaker 1: got forty eight hours to fix it before they open again. 560 00:33:39,640 --> 00:33:41,920 Speaker 1: We do upgrades on the fly on our system, right, 561 00:33:41,960 --> 00:33:44,680 Speaker 1: so we've had to develop mechanics to be able to 562 00:33:44,800 --> 00:33:53,080 Speaker 1: upgrade the system just exactly as we're running. Right. Um, 563 00:33:53,120 --> 00:33:54,920 Speaker 1: So that's the thing to think about in terms of 564 00:33:54,960 --> 00:33:57,440 Speaker 1: market structure, Right, we have to build towards a world 565 00:33:58,120 --> 00:34:02,240 Speaker 1: where we're going to be running markets seven all the time, 566 00:34:02,800 --> 00:34:05,680 Speaker 1: and we're gonna have to think about low liquidity periods 567 00:34:06,120 --> 00:34:08,919 Speaker 1: depending on you know, where the volume is happening, whether 568 00:34:08,920 --> 00:34:11,040 Speaker 1: it's in Asia or whether it's in the US. These 569 00:34:11,040 --> 00:34:12,600 Speaker 1: are a lot of things that are coming that we're 570 00:34:12,600 --> 00:34:15,200 Speaker 1: gonna have to think about as we go. Sorry, long answer, 571 00:34:15,200 --> 00:34:19,120 Speaker 1: short question maybe, But well that's fascinating because, as you say, 572 00:34:19,160 --> 00:34:21,800 Speaker 1: those upgrades, even though they do have time to implement 573 00:34:21,840 --> 00:34:24,719 Speaker 1: them when they are turned on there there, or they 574 00:34:24,800 --> 00:34:28,239 Speaker 1: used to be anyway, so often the source of anomalies 575 00:34:28,280 --> 00:34:30,560 Speaker 1: and and uh, you know, sort of wild moves in 576 00:34:30,600 --> 00:34:33,879 Speaker 1: the market, so uh wait to do it on the fly. 577 00:34:34,200 --> 00:34:38,040 Speaker 1: It really makes you, you know, makes you worry about that, 578 00:34:38,080 --> 00:34:39,520 Speaker 1: at least makes me. I worry a lot to you, 579 00:34:39,640 --> 00:34:42,400 Speaker 1: I don't know. No, well, look I should, I should, 580 00:34:42,680 --> 00:34:45,200 Speaker 1: I should just um look, doing on the fly. It's 581 00:34:45,239 --> 00:34:47,160 Speaker 1: just the way everything is done right now, Right, Amazon 582 00:34:47,200 --> 00:34:51,240 Speaker 1: doesn't shut down, uh to fix systems, right, nobody, nobody's 583 00:34:51,280 --> 00:34:54,040 Speaker 1: gonna be willing to accept that in today's world. And 584 00:34:54,080 --> 00:34:55,719 Speaker 1: I should talk about just a little bit more about 585 00:34:55,719 --> 00:34:58,040 Speaker 1: the regulation of the market. Right. We worked very closely 586 00:34:58,080 --> 00:35:00,719 Speaker 1: with the regulators on this. We want our market to 587 00:35:00,880 --> 00:35:05,120 Speaker 1: look and feel two investors like they are as safe 588 00:35:05,320 --> 00:35:09,120 Speaker 1: and protected as the markets that they are used to 589 00:35:09,400 --> 00:35:12,520 Speaker 1: dealing in. Right, that's our goal. That's that's Gemini is 590 00:35:12,560 --> 00:35:15,520 Speaker 1: sort of that's our blood, right, Like, that's what we do. 591 00:35:15,600 --> 00:35:19,319 Speaker 1: So that's our that's our plan there. Like I can't 592 00:35:19,320 --> 00:35:21,880 Speaker 1: believe you take away from that answer wasn't but that 593 00:35:22,000 --> 00:35:26,120 Speaker 1: Dave said that we're going to have markets. Yeah, Dona 594 00:35:26,160 --> 00:35:29,840 Speaker 1: can't wait for this is my scariest thing. Why is 595 00:35:29,880 --> 00:35:35,080 Speaker 1: that scary? That's amazing? Dona think about it. Right, You're 596 00:35:36,480 --> 00:35:40,879 Speaker 1: you're a reporter, You're that you're busy reporting all day long, 597 00:35:40,960 --> 00:35:43,640 Speaker 1: you don't have time to trade your portfolio. You should 598 00:35:43,680 --> 00:35:46,200 Speaker 1: be but you should be able to go home and 599 00:35:46,239 --> 00:35:49,760 Speaker 1: buy and sell stocks in your portfolio. But the problem 600 00:35:49,840 --> 00:35:51,880 Speaker 1: is every time you get home from work, everything is closed, 601 00:35:52,160 --> 00:35:54,799 Speaker 1: so you're putting in like orders to buy for the 602 00:35:54,880 --> 00:35:57,000 Speaker 1: next day or something like that. You should be able 603 00:35:57,000 --> 00:35:59,880 Speaker 1: to go home on the weekends and update your portfolio 604 00:36:00,040 --> 00:36:03,319 Speaker 1: with things that are trading in real time. Reason, we'll 605 00:36:03,320 --> 00:36:06,279 Speaker 1: make it. We'll make her cover the market on the weekends, right, 606 00:36:06,480 --> 00:36:09,160 Speaker 1: that's the That's the reason. It's scary for me because 607 00:36:09,320 --> 00:36:13,480 Speaker 1: I would never get to go home. But that was 608 00:36:13,520 --> 00:36:15,879 Speaker 1: one of my craziest things a couple of weeks ago. 609 00:36:16,400 --> 00:36:19,600 Speaker 1: If listeners remember where there is a company that is 610 00:36:19,640 --> 00:36:23,239 Speaker 1: trying to do this, Um my craziest thing does not 611 00:36:23,840 --> 00:36:27,560 Speaker 1: ask you to answer a question, Dave uh. And I'm 612 00:36:27,600 --> 00:36:31,000 Speaker 1: actually going out into space with with mine kind of 613 00:36:31,960 --> 00:36:35,080 Speaker 1: which which I've done before because it's interesting to me. 614 00:36:35,200 --> 00:36:39,000 Speaker 1: But there was a great Bloomberg article about Elon Musk 615 00:36:39,080 --> 00:36:43,600 Speaker 1: potentially becoming the very first trillionaire, and a lot of it, 616 00:36:43,920 --> 00:36:47,200 Speaker 1: a lot of that new amassing of money is supposed 617 00:36:47,239 --> 00:36:49,759 Speaker 1: to be on the back of SpaceX and some of 618 00:36:49,800 --> 00:36:53,799 Speaker 1: the space deep space exploration and and other things that 619 00:36:54,239 --> 00:36:59,080 Speaker 1: SpaceX likely could be doing in the future. A trillionaire 620 00:37:00,040 --> 00:37:02,880 Speaker 1: our lifetime. Who would have ever thought he's an amazing, 621 00:37:03,080 --> 00:37:05,400 Speaker 1: amazing guy. I listened to a podcast with him the 622 00:37:05,440 --> 00:37:10,040 Speaker 1: other day about how he's planning on really thinking. I mean, 623 00:37:10,360 --> 00:37:14,040 Speaker 1: I think he's thinking clearly about colonizing Mars, and I 624 00:37:14,080 --> 00:37:17,040 Speaker 1: love it, like it's so exciting for our children and 625 00:37:17,040 --> 00:37:20,359 Speaker 1: our grandchildren. That's gonna be amazing. That's why I love 626 00:37:20,400 --> 00:37:25,520 Speaker 1: the space stories. That's good one. Vell Data, that's a 627 00:37:25,520 --> 00:37:27,440 Speaker 1: good one. How about you, Dave, what's the craziest thing 628 00:37:27,440 --> 00:37:30,760 Speaker 1: you've seen this week? Look, I think it's the topic 629 00:37:30,800 --> 00:37:34,200 Speaker 1: of the day. Right, A major record was broken this week, right, 630 00:37:34,280 --> 00:37:37,040 Speaker 1: the fastest et F launched to get your billion dollars. 631 00:37:37,760 --> 00:37:41,279 Speaker 1: This herald is the beginning of the crypto era for 632 00:37:41,320 --> 00:37:44,160 Speaker 1: e t f s. But even more than that, the 633 00:37:44,200 --> 00:37:48,640 Speaker 1: ability for investors to really delve into the crypto markets 634 00:37:49,400 --> 00:37:53,439 Speaker 1: in in sort of ever new expanding ways. I think 635 00:37:53,440 --> 00:37:58,000 Speaker 1: it's exciting, really exciting. Yeah, well that I know it's 636 00:37:58,040 --> 00:38:01,160 Speaker 1: exciting for our own Eric Calcuna here at Bloomberg he 637 00:38:01,160 --> 00:38:03,759 Speaker 1: got to know big Twitter war with someone about how 638 00:38:03,840 --> 00:38:07,800 Speaker 1: much how many inflows he expected into the bitcoin ETFs. 639 00:38:08,040 --> 00:38:10,000 Speaker 1: It's looking like I forgot what his number was, but 640 00:38:10,040 --> 00:38:12,200 Speaker 1: it's look everyone took the under and it's looking like 641 00:38:12,600 --> 00:38:15,520 Speaker 1: he's gonna win. He bet a dinner at the restaurant 642 00:38:15,520 --> 00:38:18,040 Speaker 1: of choice, which Dave, I think Eric would probably go 643 00:38:18,040 --> 00:38:21,880 Speaker 1: for Abner's cheesesteaks. That's he's a filly guy too. I 644 00:38:21,920 --> 00:38:23,560 Speaker 1: know we've talked about it. I love Eric. He's a 645 00:38:23,600 --> 00:38:25,960 Speaker 1: good friend of mine, UM, and I think he likes 646 00:38:25,960 --> 00:38:29,040 Speaker 1: Avner's actually, so he's spoken favorably and he's on point 647 00:38:29,160 --> 00:38:31,359 Speaker 1: with his predictions on the temp market. I don't think 648 00:38:31,400 --> 00:38:34,160 Speaker 1: there's there's not too many people that that rival Eric 649 00:38:34,200 --> 00:38:36,759 Speaker 1: in his knowledge of this market today. He's awesome. His 650 00:38:37,320 --> 00:38:41,759 Speaker 1: predictions are really good. Yeah, it's cool with that. I 651 00:38:41,800 --> 00:38:44,200 Speaker 1: think that's all of our time for the week. Dave, 652 00:38:44,320 --> 00:38:48,480 Speaker 1: really appreciate you joining us this week. UM historic week. 653 00:38:48,520 --> 00:38:51,640 Speaker 1: I guess you could say, uh in the the wacky 654 00:38:51,760 --> 00:38:53,799 Speaker 1: history of bitcoint, and hopefully we can have you back 655 00:38:53,840 --> 00:38:57,200 Speaker 1: again to UH talk all things crypto. Awesome. Thank you 656 00:38:57,239 --> 00:39:10,960 Speaker 1: so much for having me. It's been great. What goes up? 657 00:39:10,960 --> 00:39:13,080 Speaker 1: We'll be back next week. Until then, you can find 658 00:39:13,160 --> 00:39:16,400 Speaker 1: us on the Bloomberg Terminal, website and app, or wherever 659 00:39:16,440 --> 00:39:18,799 Speaker 1: you get your podcasts. We'd love it if you took 660 00:39:18,800 --> 00:39:20,760 Speaker 1: the time to rate and review the show on Apple 661 00:39:20,800 --> 00:39:23,799 Speaker 1: podcast so more listeners can find us. And you can 662 00:39:23,800 --> 00:39:27,440 Speaker 1: find us on Twitter, follow me at Rea Anonymous, Bildonna 663 00:39:27,680 --> 00:39:30,640 Speaker 1: is at Bildonna hi Rich. You can also follow Bloomberg 664 00:39:30,680 --> 00:39:34,320 Speaker 1: Podcasts at podcasts and thank you to Charlie Pelletto. Bloomberg 665 00:39:34,440 --> 00:39:37,480 Speaker 1: Radio What Goes Up is produced by topur Foreheads. The 666 00:39:37,520 --> 00:39:41,120 Speaker 1: head of Bloomberg Podcast is Francesco Levy. Thanks for listening, 667 00:39:41,239 --> 00:39:42,000 Speaker 1: See you next time.