Speaker 1: Hello, and welcome to What Goes Up, a weekly markets podcast.
Speaker 1: My name is Mike Reagan. I'm a senior editor at Bloomberg,
Speaker 1: and I'm Baldonna Higher Across Asset reported Bloomberg, and this
Speaker 1: week on the show, well, cryptocurrencies have been under pressure
Speaker 1: this year as the Federal Reserve and other central banks
Speaker 1: get ready to withdraw stimulus, and as tensions escalate between
Speaker 1: Russia and Ukraine. And in fact, the situation has gotten
Speaker 1: much more serious since we recorded this episode on Wednesday,
Speaker 1: with Russia launching a massive invasion of Ukraine. What do
Speaker 1: all these developments mean for digital assets? We'll get into
Speaker 1: it with the chief strategy officer at a big digital
Speaker 1: asset investment firm. I want to welcome Melton the Mirrors.
Speaker 1: She's the chief strategy officer at coin Shares. Melton, thank
Speaker 1: you so much for joining us. I am so delighted
Speaker 1: to be here, Ldonna. We've and flirting online and offline
Speaker 1: for years now, years years, and I've always appreciated part
Speaker 1: of your coverage of the cryptos days to be here,
Speaker 1: need to no one flirts with me, either online or offline,
Speaker 1: maybe for a reason, but uh well, well, so let's
Speaker 1: get into it a little bit and tell our listeners
Speaker 1: about coin shares. I mean, I think you're probably most
Speaker 1: well known for exchange traded products tracking bitcoin and ether,
Speaker 1: but a lot more going on with the company. So
Speaker 1: what do you give a sort of a you know,
Speaker 1: quick rundown of what's going on at coin shares and
Speaker 1: sort of how you got into the space personally, into
Speaker 1: the crypto space. I'd love to, and maybe I'll actually
Speaker 1: start with my journey into crypto first, because it's really
Speaker 1: relevant to who we are coin shares and why we
Speaker 1: do what we do. So before I got into crypto
Speaker 1: is actually in the oil and gas industry, and I
Speaker 1: started on the trading side, then moved into the M
Speaker 1: and A side, and then into corporate treasury at Exnomobile.
Speaker 1: At a time, if you recall, many many years ago,
Speaker 1: an ex don Moobil was in fact the largest company
Speaker 1: in the world by market capitalization of four billion dollars,
Speaker 1: which today it feels very paltry when we have companies
Speaker 1: with market caps and several trillion dollars, but at that time,
Speaker 1: this was less than a decade ago. You know that
Speaker 1: that was a pretty big deal. As I went to
Speaker 1: graduate school, I was at I was like, I don't
Speaker 1: know about oil and gas. The world was changing a lot,
Speaker 1: everything was going digital. I've never heard of venture capital
Speaker 1: or startups. Winter God School and I t went down
Speaker 1: you know, the startup BC rabbit Hole, and had been
Speaker 1: personally interested and engaged with bitcoin, but started interacting with
Speaker 1: a lot of bitcoin startups. Um, if you recall, it
Speaker 1: wasn't really until when coin base received its first round
Speaker 1: of funding went through by Combinator that people were even
Speaker 1: investing in in bitcoin companies. At the time, it was
Speaker 1: really just bitcoin. None of these other cryptocurrencies existed. Web
Speaker 1: three didn't exist, Defied didn't exist. And then as I
Speaker 1: was leaving grad school, I met Barry Silver who starting
Speaker 1: Digital Currency Group, and when I met the coin Shares team. Um, really,
Speaker 1: what we bonded over is all of us come from
Speaker 1: the commodity space. So my business partners they had launched
Speaker 1: and ran a commodities hedge fund. And again, if we
Speaker 1: look at the narrative cycle around commodities, if you recall
Speaker 1: twenty years ago, commodities really weren't an investible asset class.
Speaker 1: A lot of commodities trading was done physically by firms
Speaker 1: who operated in the commodity space and the energy space
Speaker 1: who had a need to hedge, right, but um it
Speaker 1: really wasn't a space with a lot of financial instruments
Speaker 1: or really active electronic market. And so what they saw
Speaker 1: that I think was so interesting and really the genesis
Speaker 1: of point shares was trading and market infrastructure, building market infrastructure.
Speaker 1: And what they saw that I think was so compelling,
Speaker 1: and I think so many other people who were earlier
Speaker 1: Crucco also saw from commodity space was this nasive market.
Speaker 1: It was already inherently digital, right, there was nothing physical
Speaker 1: that needed to be dematerialized, but the market infrastructure on
Speaker 1: bitcoin didn't needs this at all. So most of what
Speaker 1: I did for the first five years in the industry
Speaker 1: is invest in market microstructure on and off rams and
Speaker 1: a lot of the basic elements of this market. And
Speaker 1: what's been really fascinating is over really until twenty the
Speaker 1: crypto market operated largely outside of the traditional system, so
Speaker 1: outside of existing brokers, outside of existing exchanges, um, it
Speaker 1: didn't really even have its own access to banking system,
Speaker 1: which is why we saw the proliferation of the stable coins, right.
Speaker 1: We needed a way to settle dollars on the same
Speaker 1: sort of rules that that crypto settled with. Our journey
Speaker 1: at point Shares really started with trading, thinking about market structure.
Speaker 1: We then got into the exchange trader products space. Most
Speaker 1: people know our legacy product line, XPT Provider, which was
Speaker 1: the first crypto et P in the world, started with bitcoin.
Speaker 1: Now we have ethereum Um and a bunch of others.
Speaker 1: The two biggest elements of our business today are asset
Speaker 1: management with three platforms, XPT Provider, Coinchers, Physical which is
Speaker 1: fully collateralized and uh sort of cold storage coins. And
Speaker 1: then we have a e t F that tracks crypto equities,
Speaker 1: which are also an exciting part of the market. Now
Speaker 1: it's no longer just the digital assets themselves, also equities.
Speaker 1: We're also publicly listed, so that's been a fun process
Speaker 1: and we can definitely talk about that what eas side
Speaker 1: of the crypto space. And then obviously it was underpinning
Speaker 1: all of that. We operate all of that infrastructure, We
Speaker 1: build all that infrastructure. That's what makes the products possible.
Speaker 1: And then what I get to do. I have the
Speaker 1: best job in the company. I think, I get to
Speaker 1: think about what the future looks like, so I invest
Speaker 1: in our behalf and focus on investing M and A
Speaker 1: and growth. And so it's been really interesting over the
Speaker 1: last few years, in particular to think about how asset management,
Speaker 1: how investments, how market microstructure fundamentally changing, and what the
Speaker 1: implications are for how we build and distribute financial products,
Speaker 1: particularly on chain financial products and non custodial financial products,
Speaker 1: which is a thing you know, you would never have
Speaker 1: conceptualized even as little as five years ago, but now
Speaker 1: it's very much becoming a reality with hundreds of billions
Speaker 1: of dollars locked in these protocols that are managing money
Speaker 1: programmatically for individuals and institutions alike. That's really the genesis
Speaker 1: of coin shares. You know, we're a publicly listed company.
Speaker 1: Um we just reported our full year results for last year,
Speaker 1: so people can go and check that out. We've atty
Speaker 1: big research team that publishes all sorts of great insight
Speaker 1: on markets, whether that's the exchangere to product market, whether
Speaker 1: that's the equities market, whether that's crypto market structure and
Speaker 1: new assets in the crypto space. But it's been a
Speaker 1: it's been a fun journey over the last four years
Speaker 1: building that business and really thinking about constantly how we're
Speaker 1: going to disrupt ourselves. Right. I'm glad actually that you
Speaker 1: mentioned that you guys just reported earnings because I wanted
Speaker 1: to ask you about that and what type of growth
Speaker 1: you're seeing or what you're seeing ahead for you guys. Yes,
Speaker 1: so so for us, obviously, exchange for your products continue
Speaker 1: to grow. Um. What's been really interesting is we see
Speaker 1: a lot more entrance into the ETP space, into the
Speaker 1: structure product space. I think one of the really cool
Speaker 1: things happened over the last two years. It used to
Speaker 1: be the only way people could really access crypto investing
Speaker 1: in the early days was through exchanges, right, and I
Speaker 1: recall my early days. You know, you'd send envelopes of cash,
Speaker 1: or you would try to wire money to bank in
Speaker 1: China or Japan and you'd hope that that would work
Speaker 1: out for you, or you'd use local bitcoins. Um. I
Speaker 1: remember when Circle came on this theme and I was
Speaker 1: in Boston, Circle as the Boston company. Leave ability to
Speaker 1: a c h or wire money into a platform by
Speaker 1: crypto was such a huge relief. But if we think
Speaker 1: about what's happened over the last two years, crypto is
Speaker 1: now accessible directly through dozens of both traditional fin tax
Speaker 1: as well as crypto native fin techs. We have coin based, Gemini,
Speaker 1: cracked in a lot of others, but we also have
Speaker 1: Square and robin Hood and so By and others to
Speaker 1: make it really, really easy for people to manage their
Speaker 1: crypto in the same way they're managing their equities exposure. Right, So,
Speaker 1: I think that's been a really amazing development and has
Speaker 1: certainly made consumer on ramp much simpler. An area I'm
Speaker 1: really excited about is putting crypto in iras and tax
Speaker 1: advantaged accounts. I think that's a huge opportunity for this
Speaker 1: growth asset. We're investors in a company called Choice that
Speaker 1: does that, but Alto i RA does that and others
Speaker 1: do that as well, and I think for us, the
Speaker 1: biggest area of growth is really continue think about how
Speaker 1: we can use our market infrastructure and all of the
Speaker 1: technic l you we feel the coin shares to reach
Speaker 1: our consumers in different ways, our clients in different ways. Maltim,
Speaker 1: I wanted to ask you about sort of the institutional
Speaker 1: investor end of things. You know, correct me if I
Speaker 1: if you disagree with this, but I kind of, you know,
Speaker 1: I get the sense that for a lot of sort
Speaker 1: of individual retail investors. As you pointed out, there's so
Speaker 1: many easy ways to to get yourself exposure to crypto.
Speaker 1: But I feel like the institutions are really such a
Speaker 1: big well of money there that potentially could come into
Speaker 1: the space. And my guess is they more likely uh
Speaker 1: be interested in a in an exchange traded product, um,
Speaker 1: something they're more comfortable with, and say storing crypto themselves
Speaker 1: or going through you know, direct exposure through a coin base.
Speaker 1: Where are institutions in your opinion as far as where
Speaker 1: on the curve are they as far as getting into crypto.
Speaker 1: It's it seems to me like we're just at the
Speaker 1: early days of them scratching the surface. What are the
Speaker 1: type of conversations institutions have about crypto as far as
Speaker 1: how much exposure they really want to get? Yeah, that's
Speaker 1: been the topic in the crypto industry for quite some time.
Speaker 1: So let's just start by talking about how institutions typically
Speaker 1: allocate the new asset classes. For most it starts with research, right,
Speaker 1: and it starts with actually an internal decision process around
Speaker 1: whether or not they want to engage with a specific
Speaker 1: asset class. Now for a bitcoin in particular, for the
Speaker 1: longest time. You know, when I first went out to
Speaker 1: the street and tried to raise money for a bitcoin business,
Speaker 1: people told me I was crazy. Does this DNI? Everyone
Speaker 1: wanted to do blockchain, but we weren't really clear with
Speaker 1: that that meant. But everyone was doing blockchain. And what
Speaker 1: was really interesting about what happened in particularly when individuals
Speaker 1: like Bill Miller, Um and you know, Stan Drucor Miller
Speaker 1: came out and said, I'm Paul to your Jones, right,
Speaker 1: came out and said I'm allocating a bitcoin. I have
Speaker 1: long term conviction in mis sasset. It made it acceptable
Speaker 1: institutions for chief investment officers, for investment committees, for risk
Speaker 1: review committees to start looking at the asset. Right. They've
Speaker 1: been doing a little bit of research, and I'll say
Speaker 1: there's some firms that were really you know, forward looking
Speaker 1: and started doing research as early. But it was really
Speaker 1: in when people started saying, Okay, this is an asset class,
Speaker 1: maybe we're willing to consider it, We're willing to talk
Speaker 1: about it Um And what I think is happening now
Speaker 1: is institutions definitely want to add crypto exposure. I mean,
Speaker 1: all you have to do is look at the margins
Speaker 1: in this business, thanks for in the business of making money.
Speaker 1: Financial firms are in the business of making money. There's
Speaker 1: an industry that is printing billions of dollars of revenues.
Speaker 1: Right they're going to get in that game. That's that's
Speaker 1: there it for them right now. The challenge is how
Speaker 1: do they mesh the way they're customed to interacting with
Speaker 1: assets with this new thing, a digitally native asset that
Speaker 1: settles with finality on a public network. Right, That's that's
Speaker 1: a little bit different. So the cme um cash settled
Speaker 1: futures product has been really popular with institutions because it
Speaker 1: fits within their existing infrastructure, doesn't require many new processes internally.
Speaker 1: The only risk they're really taking their right with the
Speaker 1: c music counterparty with this cash settled contract is the
Speaker 1: asset risk. And that's really what's been the biggest thing
Speaker 1: for us that coin shares is thinking about articulating those
Speaker 1: different risks and then qualifying, quantifying those different risks, and
Speaker 1: finding rappers and constructions, because the only risk they really
Speaker 1: want to have right is asset level risk. They don't
Speaker 1: want to have market risk, they don't want to have
Speaker 1: counterparty risk. They want to try to minimize that. They
Speaker 1: certainly don't want to have some contract risk, which is
Speaker 1: something you face these defied products. So I think a
Speaker 1: lot of institutions through the sort of risk review phase,
Speaker 1: and now the question is do we build buyer partner
Speaker 1: start to offer these capabilities. So we've partnered, for example,
Speaker 1: with invest Go on the TF side, and that's been
Speaker 1: a great partnership. Asset manager massive asset manager who really
Speaker 1: wants to get into the crypto space, partnering with the
Speaker 1: crypto native firm like US gives them an accelerated way
Speaker 1: to do that, and we've seen a lot of partnerships
Speaker 1: of that type. We're also seeing folks buying. We've seen
Speaker 1: a number of financial institutions acquiring companies in the crypto
Speaker 1: space or evaluating the opportunity to acquire, although evaluations are
Speaker 1: pretty high these days. And then um some are building, right,
Speaker 1: But the issue with building is it takes a lot
Speaker 1: of time. It's really difficult to find talent, and at
Speaker 1: the end of the day, not certain that the culture
Speaker 1: at institutions is necessarily built around keeping pace with an
Speaker 1: industry that's so dynamic and constantly evolving. But I think
Speaker 1: right now that's really where most institutions are at they
Speaker 1: have internal approval, the board is on board shareholders, you know,
Speaker 1: I find it compelling. We've certainly seen when companies around
Speaker 1: their announced shouldn't do something crypto, right, we see a
Speaker 1: share price pop. So it's certainly value creative. I think
Speaker 1: now the question is how do they actually deliver on
Speaker 1: that in a meaningful way, um, and what does that
Speaker 1: timeline look like the next two to three years, it's
Speaker 1: going to be table stakes for every asset manager, every
Speaker 1: financial institution to offer crypto related services. I don't think
Speaker 1: many of those will be on chain. I think they'll
Speaker 1: find ways to wrap those assets, to make them custodial
Speaker 1: and to minimize some of the that they perceive with
Speaker 1: engaging with crypto assets in a more way that has
Speaker 1: the price action we've seen over the last few months,
Speaker 1: UM sort of slowed that momentum at all. Uh, you know,
Speaker 1: thrown some cold water on it. Absolutely not what I
Speaker 1: think has been interesting. The argument we used to get,
Speaker 1: or the pushback we used to get when we speak
Speaker 1: to the institutions that allocating to bitcoin was around bitcoin's volatility,
Speaker 1: and as we've seen in the last two years, volatility
Speaker 1: is no longer limited to Bitcoin. I think we've seen
Speaker 1: volatility all across the f f AT landscape and all
Speaker 1: across the part polar landscape. So I think um as
Speaker 1: a sort of a mindset shift has happened over the
Speaker 1: last two years, where everything else has gotten much more volatile.
Speaker 1: I think institutions are much more comfortable with Bitcoin's inherent volatility,
Speaker 1: and in some ways that volatility actually can be an
Speaker 1: an asset, particularly on the fixed side, or or the
Speaker 1: trading side, or the prime brokerage side right, which are
Speaker 1: big profit centers for many financial institutions. You know volatilities
Speaker 1: when you make money. Vola vol is good for traders.
Speaker 1: So I think that that volatility has gone from criticism
Speaker 1: to now being sort of did reality and potentially an
Speaker 1: opportunity for firms. So the big news obviously this week
Speaker 1: is Russia Ukraine tensions, and I wanted to ask you
Speaker 1: what happens to bitcoin prices as things sort of escalate
Speaker 1: in the coming days, because the thought used to be
Speaker 1: at least a couple of years ago, I remember hearing
Speaker 1: a lot about for example, Venezuela like bitcoin, and whenever
Speaker 1: something was happening in an unstable country, people could potentially
Speaker 1: use bitcoin or start to use bitcoin a bit more so,
Speaker 1: how should we be thinking about what happens to bitcoin's
Speaker 1: price as these Russia Ukraine tensions as collect Yeah, Vil Donna,
Speaker 1: I think that's that's a huge question. Um. If I
Speaker 1: had a crystal ball, right, I would be trading this.
Speaker 1: I sadly don't have a crystal ball. What I think
Speaker 1: is interesting is you alluded to. I think one of
Speaker 1: the narratives around bitcoin historically has been bitcoin is an
Speaker 1: antidote to chaos and government incompetence, right, And I think
Speaker 1: in many ways historically gold was also viewed that way, right,
Speaker 1: And we're seeing right now gold is having a little moment,
Speaker 1: it's rallying. I think one of the big questions around
Speaker 1: bitcoin in particular in this environment is we don't know
Speaker 1: what's going to happen. Right. A matter of weeks is
Speaker 1: not really going to reveal what correlations might exist between
Speaker 1: bitcoin and other sort of macro trends, political trends, cultural trends, etcetera.
Speaker 1: I think it's a bit too early to say. Um.
Speaker 1: I think certainly bitcoin in an inflationary environment has been
Speaker 1: something we've been waiting for for a long time. Um,
Speaker 1: and we are going to look at the data like
Speaker 1: we do with coin Shares research team. We're gonna continue
Speaker 1: looking at correlations, decrrelations and where things shake out. But
Speaker 1: again I'm hesitant to make any sort of definitive conclusions.
Speaker 1: I think it gets things we don't have. Unfortunately, in
Speaker 1: the sasset class is a long time series of data
Speaker 1: to look at to allow us to make inferences. Things
Speaker 1: have changed so much fundamentally that it's very difficult to pinpoint,
Speaker 1: like what's happening in markets. I think everyone is a
Speaker 1: little bit perplexed and confused to be candid, and if
Speaker 1: you look at the way things are trading in markets
Speaker 1: like it, it's wild. So um, I don't have a
Speaker 1: clear answer to that. I think for us, we're going
Speaker 1: to continue watching, We're going to continue looking at the data.
Speaker 1: Is always they I love to bring receipts of CBS,
Speaker 1: susy baby. They are a long um so, so we
Speaker 1: want to get some more data. We want to look
Speaker 1: at this over a longer time scale. But certainly we're
Speaker 1: optimistic around this idea that people will continue to look
Speaker 1: at bitcoin as a portfolio diversisfire, an effective portfolio diversisfire
Speaker 1: in an environment of increased chaos and uncertainty, you know.
Speaker 1: To me, I think the one thing that skeptics of
Speaker 1: crypto sort of sees on is that the narrative bowl
Speaker 1: case for crypto tends to be kind of a moving target.
Speaker 1: You know, Um, as you say, you know, government chaos
Speaker 1: and and sort of geopolitical chaos. Was was one selling
Speaker 1: point obviously, monetary inflation being sort of one of the
Speaker 1: evergreen bowl cases for crypto. Is it just natural then
Speaker 1: to expect a correction like this when central banks start
Speaker 1: moving in the other direction and tightening policies? I mean,
Speaker 1: is that the main cattles you think? For what we've
Speaker 1: seen this drop in in crypto prices over the last
Speaker 1: few months. Um, is it as simple as that? Or
Speaker 1: is there more going on? Do you think? I think
Speaker 1: there's more going on. So if we look at how
Speaker 1: much bitcoin has dropped, Bitcoin is down around from its
Speaker 1: last high in November around set nine thousand, So it's
Speaker 1: down for you five percent. If we look at tech equities,
Speaker 1: tech equities are down and round thirty two in some
Speaker 1: cases like right, So we've seen drawdowns in in that
Speaker 1: asset class, which is technically considers a growth assets, we're
Speaker 1: using more traditional value stocks like pre um, core equities
Speaker 1: rallying a bit right UM. But I think across the
Speaker 1: board there is growing awareness and I think it's not
Speaker 1: the Ukraine Russia conflict that's highlighted this, but it's what's
Speaker 1: been happening in Canada with the Drucker protests and um
Speaker 1: the Canadian government cutting off financial access to more involved
Speaker 1: in in these protests. People in the in the West,
Speaker 1: right historically, and the majority of capital markets activities still
Speaker 1: by and large in the United States and in the
Speaker 1: Western hemisphere. If we look at what's happened in the West,
Speaker 1: people in the West have never really conceptualized situation like
Speaker 1: Venezuela or Greece or Turkey like it. Just I think
Speaker 1: as we watch what's unfolded over the last few weeks
Speaker 1: and months with new regulation being proposed around surveilling bank
Speaker 1: accounts with balances over six and some of the new
Speaker 1: rules and be increased oversight in the lack of financial
Speaker 1: privacy that's coming down the pike, I think people just
Speaker 1: globally are becoming more aware of the fact that moving
Speaker 1: into the digital age and our lives being so driven
Speaker 1: by technology. On a day to day basis, every facet
Speaker 1: of our lives also has some profound implications for our self,
Speaker 1: sovereignty and the level of freedom we enjoy. And so
Speaker 1: I actually think for many people it is catalyzed and
Speaker 1: renewed interest in how bitcoin other cryptocurrencies could potentially be
Speaker 1: part of their lives in the future. And you know
Speaker 1: what I always say is taking a small percentage of
Speaker 1: your portfoliolocating it to bitcoin. It's a form of insurance. Right.
Speaker 1: If we're wrong and everything else works out, great, you're covered.
Speaker 1: But if we're right, the fact that this is still
Speaker 1: such an asymmetrical risk reward asset makes it worthwhile making
Speaker 1: that small allocation. That's how I view it, and when
Speaker 1: I think to people that sort of how articulate it.
Speaker 1: And again, there are risks. I certainly don't think you
Speaker 1: know that there aren't risks here, and certainly it's important
Speaker 1: to convey those that I think around the world just
Speaker 1: people are becoming more aware of the potential impact technology,
Speaker 1: in particularly financial surveillance technology will have on their lives,
Speaker 1: and they're starting to think more critically about it. I mean,
Speaker 1: we've been locked in our houses for the last two years.
Speaker 1: Investing has become a form of entertainment. And I think
Speaker 1: generally people are looking around them and they're asking what
Speaker 1: do we do from from here? Especially for my generation,
Speaker 1: like we got screwed by the financial crisis. That's from college,
Speaker 1: no jobs set back, you know, four or five years.
Speaker 1: You're in your thirties, So so what are you gonna do?
Speaker 1: It's really, I think, good, an interesting shift that's happening.
Speaker 1: It is a generational shift, and I do think, um,
Speaker 1: what's interesting. There's amunt of amount of capital in the
Speaker 1: crypto space. You know, we talked about institutions for a
Speaker 1: long time, and we thought about institutions, we thought about things.
Speaker 1: Now when we think about institutions, we actually think about
Speaker 1: crypto native institutions with a tremendous amount of capital, a
Speaker 1: huge amount of capital. And so it's no longer just
Speaker 1: the traditional players. There is a new world. There's a
Speaker 1: new set of power players and they're spending a lot
Speaker 1: of money. They're moving fast, very aggressive in this land,
Speaker 1: grab for not just mind share, for attention and for
Speaker 1: share of wallet. And that shift is happening very rapidly.
Speaker 1: So multim you mentioned the Canadian trucker situation that's been unfolding.
Speaker 1: And I actually have a question about that from a
Speaker 1: from one of our new colleagues, one of our new
Speaker 1: crypto team members, Emily Nicole in London, and she said,
Speaker 1: you know, she's followed your work for a really long time,
Speaker 1: and you had said in the past that bitcoin was
Speaker 1: the only way to fight for America's core freedom values,
Speaker 1: and so she was wondering, actually, if you still think
Speaker 1: that considering everything that's been happening on the Canadian border
Speaker 1: with the intervention. Absolutely, Um, democracy dies in in darkness.
Speaker 1: And I think one of the you know, one of
Speaker 1: the core tenants that America was built around was the
Speaker 1: right to free speech and the right to personal freedoms.
Speaker 1: I think financial violence is actually the predominant form of
Speaker 1: violence in our world today if we look at the
Speaker 1: impact that sanctions have on people's live financial redlining, financial exclusion, etcetera. Um,
Speaker 1: we now with this new technology, see new tools being
Speaker 1: added to the state arsenal right around monitoring surveillance and
Speaker 1: not just on the crypto side, which is with digital
Speaker 1: finance more broadly, and with the elimination many societies, many
Speaker 1: countries of cash, and so what starts to become really
Speaker 1: interesting and concerning is we see governments and this is
Speaker 1: not just aalitarian governments, but governments in the West also
Speaker 1: right that have historically been more propromises. They're utilizing financial
Speaker 1: violence as a tool to suppress certain types of activity,
Speaker 1: as a tool to suppress certain view Um, we have people,
Speaker 1: the politicians, going on television and publicly stating if we
Speaker 1: don't like what you have to say on social media,
Speaker 1: we will remove you from social media and remove this
Speaker 1: you from this platform. But we'll also potentially, you know,
Speaker 1: impose other limitations and what you can or can't do.
Speaker 1: And I think that very rapidly starts to be condystopian.
Speaker 1: So I am, I am concerned, and I do think
Speaker 1: it's very important for us to continue educating, to continue advocating,
Speaker 1: and again, like a free society is not possible without
Speaker 1: free money because money is inherent in everything we do.
Speaker 1: From the moment we wake up to the moment we
Speaker 1: go to sleep, we're constantly transacting. If you don't have
Speaker 1: the ability to transact with digital money right within the
Speaker 1: sort of state oversighte banking system, you can't do anything.
Speaker 1: And if you hear some of the comments from people
Speaker 1: in Canada who have been involved in the protests. Even
Speaker 1: for example, coffee shop who's sold coffees right there in
Speaker 1: the business of selling coffee. People come in and buy coffee.
Speaker 1: There's a coffee shop that was literally cut off from
Speaker 1: the banking system, had all their accounts frozen because they
Speaker 1: starved coffee to people who are protesting. I mean, I
Speaker 1: think that's absolutely bonkers. Well, and let's shift to a
Speaker 1: to a slightly more happy topic, n f T s.
Speaker 1: I love to talk about n f T s and
Speaker 1: all Donna's notes to me, Uh say that you are
Speaker 1: an n f T investor yourself, Is that right? I
Speaker 1: am a jpeg connoisseur. Yes, all right. I want to
Speaker 1: hear about your collection. But I also want to hear
Speaker 1: after that about how do n f T s fit
Speaker 1: into the strategy for affirm like coin shares. I mean,
Speaker 1: I I have a hard time picturing like an n
Speaker 1: f T E T F we're sort of, you know,
Speaker 1: any sort of way for you to to put the
Speaker 1: you know, n f T s on the exchange, the
Speaker 1: regular securities exchange. But you know I was, am I
Speaker 1: wrong about that? Is there a way, you know, is
Speaker 1: there a strategy in place to to sort of bring
Speaker 1: n f t s into a security form or is
Speaker 1: there other ways for a company like coin shares to
Speaker 1: sort of you know, get involved in the business. Absolutely,
Speaker 1: and know we talked about n f t s a
Speaker 1: lot internally. UM we hosted an event in New York
Speaker 1: and we worked with one of the first n f
Speaker 1: T projects called ether Lambos to make a coin shares
Speaker 1: digital Lamborghini. Um. We made two hundred of them. UM
Speaker 1: only twenty were claimed at this event, and now they're
Speaker 1: trading and I think fourteen or fifteen dollars each. So
Speaker 1: has been pretty interesting, right, But but I think again,
Speaker 1: for us, if we take a step back, what our
Speaker 1: n f t s in the absence right of physical
Speaker 1: sort of communities that are gathering in people being able
Speaker 1: to denote their belonging to a certain group. Right, we
Speaker 1: don't really identify so much by like what nationality we are,
Speaker 1: what our occupation is, um, what our religious belief is.
Speaker 1: Today the way express who we are online is through
Speaker 1: the content we share, right and what we post on
Speaker 1: our profiles. And so I think n f t s
Speaker 1: are actually a really interesting articulation of that in an
Speaker 1: online fashion, and with capital embedded in it. It's similar
Speaker 1: to in some ways, you know, why do people buy
Speaker 1: Rolex is why do people buy expensive cars? They want
Speaker 1: to make statements about who they are and their taste
Speaker 1: and their views, and they want to denote that they
Speaker 1: have taste right, and that could be classy, it could
Speaker 1: be funny, it could be cross, it could be ghosh.
Speaker 1: Like whatever it is you prescribed to, there is an
Speaker 1: n f T out there for you, which I think
Speaker 1: is is quite funny. Um. And I think again, the
Speaker 1: way that becomes an expression in in an asset management
Speaker 1: firm is I think there are certain collections of n
Speaker 1: f T s that have reached sort of blue chip
Speaker 1: status as we like to call it, that have had
Speaker 1: value over time, that have retained value over time and
Speaker 1: grown in value over time. So I do think you'll
Speaker 1: start to see synthetics emerging around the n f T
Speaker 1: space where you don't actually have to only underlying n
Speaker 1: f T, but you can own a basket of synthetic
Speaker 1: exposure to specific n f T collections um, and so
Speaker 1: you can start to build sort of these these portfolios.
Speaker 1: And we've invested in a number of projects that are
Speaker 1: building synthetics around n f T s, which are pretty
Speaker 1: excited about. One of them is called Goose Effects is
Speaker 1: built on top of Salana. So if you own a
Speaker 1: valuable n f T, instead of selling it to get liquidity,
Speaker 1: can actually collateralize it and utilize it as a way
Speaker 1: to get liquidity. I think there's actually company working on
Speaker 1: letting you use blue chip n f T s to
Speaker 1: buy a house, right so to get a mortgage, which
Speaker 1: is also quite interesting. We're starting to c n f
Speaker 1: T lending products, so I do think the financialization of
Speaker 1: everything right One expression of that is certainly n f
Speaker 1: T s, and I think is we continue to push
Speaker 1: further into these more esoteric ways of of building communities
Speaker 1: and sort of expressing who we are through conspicuous spending,
Speaker 1: which certainly n f T s are. The second piece
Speaker 1: that I think is important to remember about n f
Speaker 1: T s is it's not just about the assets themselves,
Speaker 1: just like with crypto, about the assets themselves, there's also
Speaker 1: a ton of equities right there, companies who are creating
Speaker 1: tremendous amounts of value in the n f T ecosystem,
Speaker 1: building infrastructure to make all of this possible. So we
Speaker 1: are investing in those companies, We are actively collaborating with
Speaker 1: those companies as well, and I think we will see
Speaker 1: in the next three or five years companies that publicly
Speaker 1: list derive the majority of their revenues from participation in
Speaker 1: the n f T market. And if we look at
Speaker 1: n f T S as an asset class right today,
Speaker 1: crypto assets themselves are roughly to trillion dollar asset class.
Speaker 1: Crypto equities right including public lists and privately held companies
Speaker 1: are probably another one to two trillion dollars of value,
Speaker 1: and the n f T space right the assets plus
Speaker 1: the infrastructure that's been built around n f T s,
Speaker 1: it's close to a one trillion dollar asset class as well.
Speaker 1: So what's been interesting to observe is there are many
Speaker 1: different ways that you can express that investment thesis based
Speaker 1: on how you like to invest. And I certainly would
Speaker 1: not ignore with happening on the equities side, and it's
Speaker 1: not just crypto companies, they are also traditional companies. They're
Speaker 1: starting to move into the n f T space. You know,
Speaker 1: as we saw game Stop, Meme Stock, they're now going
Speaker 1: to be an n f T platform. So again, you know,
Speaker 1: I think um reinvention and and constant change, that's the
Speaker 1: only constant really in financial markets, and I think and
Speaker 1: if they are really interesting expression of that. And certainly
Speaker 1: we're seeing a lot of activity not just within the
Speaker 1: crypto ecosystem, but also inside the ecosystem and also the
Speaker 1: utilization of n f T s um in this this
Speaker 1: broader sort of Web three ecosystem as they call it,
Speaker 1: or this idea where instead of platforms owning our online
Speaker 1: experiences of monetizing them, users and creators alike can own
Speaker 1: pieces of the platform. If you haven't noticed, Mike asks
Speaker 1: multipart questions. So I'm going to pull a mic and
Speaker 1: ask you a multipart question, which is, I want to
Speaker 1: ask you about your collection and how big your collection is,
Speaker 1: what you're buying right now, and what you think is
Speaker 1: the most overhyped n f T collection right now? I
Speaker 1: love it. Vel donnas like give me the alpha lady
Speaker 1: opens the open right now. I'll agre you' about to
Speaker 1: buy some n f T s. Yeah, whatever you say,
Speaker 1: I'm just going to do it. Okay, Okay, always careful then,
Speaker 1: um n f T s I'm excited about. So I'll
Speaker 1: be very candid. I did not get n f T
Speaker 1: s for a long time, right, which is I'm perfectly
Speaker 1: happy to admit that I don't understand everything happening in
Speaker 1: crypto and that's fine. UM so n F T S.
Speaker 1: As I started to get into last year, UM, I
Speaker 1: came across something called ether Rocks. There's an n of
Speaker 1: two projects from It's a hundred pictures of the same rock,
Speaker 1: just in slightly different colors, not particularly attractive, no road
Speaker 1: map like it's it's a rock and about an ether
Speaker 1: rock for about nine eight at the time. And one
Speaker 1: of the cool things that happened is through participating in
Speaker 1: the ether rock community, we actually started to build a
Speaker 1: physical community around these ether rocks. Today, the owners of
Speaker 1: ether rocks comprise a really cool group of individuals from
Speaker 1: across the crypto space. Their startup founders in it. There
Speaker 1: are professional poker players, there are athletes and their celebrities
Speaker 1: in it. So we've built this really cool sort of
Speaker 1: online community that's also convened offline. And I think we
Speaker 1: see that with a lot of benefit communities that I
Speaker 1: personally love ether rocks and I own ether Rock number
Speaker 1: sixty nine, which is obviously I'm here for the culture,
Speaker 1: so I find that super funny. Um It's I think
Speaker 1: I personally don't own crypto punks or board ape yacht
Speaker 1: club apes, but those have been really popular, and I
Speaker 1: think I've had persistent value crypto covens, which are these
Speaker 1: like ten thousand witches that exist online. Um, They've built
Speaker 1: a really cool community, and that's really interesting because sort
Speaker 1: of a female focused, female lead project, and I've seen
Speaker 1: a lot of growth in that community and other projects.
Speaker 1: You know, I recently got involved in an n f
Speaker 1: T community called crypto dick butts, which is if I'm
Speaker 1: like a Reddit kid. I grew up on the Internet
Speaker 1: in the nineties, so you know, I was on like
Speaker 1: four Chan and something awful and like all these weird
Speaker 1: online communities, and dick butts have in an internet joke forever.
Speaker 1: So someone actually made these little picks lined dig butts,
Speaker 1: and that's been really funny. That community. It's just very irreverent,
Speaker 1: as you can tell. I gravitate towards n f T
Speaker 1: s that are like silly and and a little bit
Speaker 1: irreverent and a little bit cheeky. But I've also been
Speaker 1: collecting some really cool one of one pieces, some generative
Speaker 1: art as well, and I think there is this interesting
Speaker 1: intersection between physical art and digital art. Who have made
Speaker 1: physical paintings buying the n f T and then I
Speaker 1: can have the physical painting in my house look at it.
Speaker 1: But I can also have the digital representation sort of
Speaker 1: take it with me online. Um, but yeah, I'm not
Speaker 1: a you know, I buy funny n f T s
Speaker 1: at anytime a new n f T comes out. Okay,
Speaker 1: I'm going to mess around with this again. My job
Speaker 1: really is to learn and to understand, so I spend
Speaker 1: a lot of time doing it because it helps you
Speaker 1: understand and contextualize and figure out how it fits into
Speaker 1: our business. You know, the n f T space is
Speaker 1: super fun. They're really low cost n f T s
Speaker 1: two that you can buy a lot of these are
Speaker 1: like hundreds of thousands of dollars. The Grail n f
Speaker 1: T s or the blue chips are quite expensive. But
Speaker 1: in the Salona ecosystem, you know, there are a lot
Speaker 1: of n f T s that you can buy for
Speaker 1: less than one soul. So you can buy an n
Speaker 1: f T for and I do think because gas kes
Speaker 1: on Etherorum are quite expensive, we will see n f
Speaker 1: T s on other ecosystems that will get mass market involved.
Speaker 1: Cool stat I heard recently is coin based n f
Speaker 1: T has a wait list of three point seven million users,
Speaker 1: So when those come online, that will triple the current
Speaker 1: size of the n f T wallet by a number
Speaker 1: of the n f T market in terms of number
Speaker 1: of while it's participating. And again, they'll be able to
Speaker 1: reduce season and do things in a in a more
Speaker 1: retail friendly way. So I do think those on and
Speaker 1: off ramps for n f T s are really gonna
Speaker 1: start to matter as well. You know, Meltim, I don't
Speaker 1: know how many sort of old grumpy guys like me
Speaker 1: you've come across over the years who will say something like, oh,
Speaker 1: you know, crypto has no cash flow, I don't know
Speaker 1: how to value it, which fine, we could argue that
Speaker 1: debate that for for another time. But then you ask
Speaker 1: them to sort of value an n f T, and
Speaker 1: I think it makes people's head spin to try to
Speaker 1: sort of figure out if there is a way to
Speaker 1: fundamentally look at the potential value of an n Yeah.
Speaker 1: I'm curious how you because to me, it's all about, well,
Speaker 1: how high you know, how much hype is behind this,
Speaker 1: how much sort of of the community is going to
Speaker 1: be sort of backing this and and hyping it up
Speaker 1: on social media. I mean, is that is that a
Speaker 1: big part of it? Or Am I just sort of
Speaker 1: looking at it superficially. No, So I think, Uh, there's
Speaker 1: a really interesting company called upshot um and they actually
Speaker 1: specialize in valuing and pricing n f T s and
Speaker 1: one of the interesting things they look at and they
Speaker 1: have a great white paper on their site that you
Speaker 1: can read. Look in investing in anything, right, there's a
Speaker 1: certain element of fundamental analysis. There's also a certain component
Speaker 1: of luck. Right. It's very difficult to determine what n
Speaker 1: f T will be successful in what won't. Similar to
Speaker 1: what I do right when I'm investing in startups is
Speaker 1: there's an element of analysis that you can apply. But
Speaker 1: there's also a certain element of luck. Right. And one
Speaker 1: of the reasons that we create portfolios of assets right
Speaker 1: in similar sectors or the portfolios is to attempt to
Speaker 1: influence of luck on financial outcomes, right, so that the
Speaker 1: mean of the performance across the portfolio sort of will
Speaker 1: will perform l right, and we'll like eliminate or at
Speaker 1: least reduce the impact of luck in each individual investment
Speaker 1: decision you're making. Right. So I think, um, right, now,
Speaker 1: there's not a huge amount of data. Again, n f
Speaker 1: t s are two years old, but really there's a
Speaker 1: lot of these assets are very new. UM, but Ophots
Speaker 1: developed some pretty cool models. Um, they've launched a really
Speaker 1: cool API that you can utilize that we'll do actually
Speaker 1: price predictions, so you can start to figure out what
Speaker 1: n f t s are undervalued overvalued. And again I
Speaker 1: think as we look at portfolio construction, there are all
Speaker 1: these interesting analytical tools that are starting to be built
Speaker 1: that will allow you to evaluate not just utilizing price data,
Speaker 1: but contextual data, social graphic data. Again, all of this
Speaker 1: is on chain's public you can see what other assets
Speaker 1: people hold in their wallets. Um, all of this is
Speaker 1: starting to build. I think a much more robust data
Speaker 1: set around how we can analyze esoteric assets like n
Speaker 1: f t s contextualized valuation and start to determine what's overvalued,
Speaker 1: what's undervalued, what has long term sort of UM value proposition.
Speaker 1: But again, I think all quite new highly recommend upshot UM.
Speaker 1: I'm an investor in the company, full disclosure, but I
Speaker 1: think again this space around analyzing textualizing what's happening and
Speaker 1: who's buying what and what that means and how that
Speaker 1: infix pricing is a really rich space that a ton
Speaker 1: of companies are building in. They'll take a couple of years,
Speaker 1: I think, to really start to become more of a
Speaker 1: science right now, sort of student science. So many things
Speaker 1: are when I first start, but I think again, with time,
Speaker 1: more data, with better tooling and infrastructure, it's certainly can
Speaker 1: be a very interesting asset class that presents opportunities for
Speaker 1: people who are deploying different types of strategies, whether it's
Speaker 1: an arbitrage strategy with whether it's a value investing strategy,
Speaker 1: whether it's a growth investing strategy. Right, all of those
Speaker 1: things ultimately can be applied to these new types of
Speaker 1: markets as well. Is that the kind of startup that's
Speaker 1: sort of catching your eye as a venture investor? Is
Speaker 1: you know that that sort of analysis and type of thing. Yeah, so,
Speaker 1: so the way I think about it is, um so
Speaker 1: I think along to acts these uh, utopianism and grift right,
Speaker 1: so a lot of crypt I'm serious, uh, And I
Speaker 1: want to get a shout out to to Kevin Aglois
Speaker 1: Capital who came up with this framework which I've adopted
Speaker 1: and sort of permutated to fit my own needs. And
Speaker 1: those are not the two axes I saw coming that.
Speaker 1: That's pretty good utopianism and grif. Yeah. So so look
Speaker 1: there's some there's some projects that are low utopianism and
Speaker 1: low grift, and those out categorizes infrastructure rights, like building
Speaker 1: a crypto exchange. That's low utopianism, like we know and exchanges.
Speaker 1: You have an order book, you have bids and offers, right, Like,
Speaker 1: that's not how utopianism, it's not fundamentally revolutionary. It's also
Speaker 1: low grift. Right, the business model is very clear, you
Speaker 1: know exactly how that works. Then there are projects which
Speaker 1: are really how utopianism and low grift. And these are technical,
Speaker 1: typically very technical projects that are based on like one
Speaker 1: or two fundamental sort of technology breakthroughs. So categorize those there,
Speaker 1: and those are sort of like your moon shots. Then
Speaker 1: you have low youtubism grift projects, which are like ship
Speaker 1: coins and n f T money grabs, so I like
Speaker 1: to call them. It's really just about optimizing for getting
Speaker 1: as much money out of people as possible. And and
Speaker 1: a lot of those projects we've seen coming go over
Speaker 1: the years. I think it's very common in any new
Speaker 1: technology sector to see those types of projects startups, companies
Speaker 1: and then there's how utopianism high drift, and those are
Speaker 1: the ones I sort of worry about. Now things can
Speaker 1: migrate between sectors right as they become more real. But
Speaker 1: that's sort of an interesting like two by two matrix
Speaker 1: that you can sort of use to to contextualize. Again,
Speaker 1: it sounds probably crazy to a more traditional investor who's
Speaker 1: not accustomed to thinking about the world this way. I
Speaker 1: think it'll sound more familiar to start up investors and
Speaker 1: people who look at the venture and startup space. But look,
Speaker 1: at the end of the day, like you have to
Speaker 1: have a certain degree of optimism and a certain degree
Speaker 1: of belief in ratically different futures, like do you think
Speaker 1: the utopianism and sort of this belief that we can
Speaker 1: do radically different things really important. Um, and over time
Speaker 1: that will become normalized, right, But it's also important to
Speaker 1: be aware of the grift components. A lot of stuff
Speaker 1: in the crypto space that just when you stop to
Speaker 1: think about it, doesn't make sense that at all. So, um, yeah,
Speaker 1: that's that's sort of my framework. It's a it's I
Speaker 1: love it, so so you're okay with it being sort
Speaker 1: of out there on the on the utopian access but
Speaker 1: lower on the grift access but presumably or you want it,
Speaker 1: you want it sort of close to zero on both. Yeah.
Speaker 1: I think again, um, intention is really important, and it's
Speaker 1: very important to sort of understand like the economics of
Speaker 1: the project, the vesting of the project, particularly since there
Speaker 1: is um a much quicker pathway to liquidity in crypto
Speaker 1: through a orchanization or through issuing and n f T,
Speaker 1: and so you always want to have a clear understanding
Speaker 1: of what the economic incentives are with the time frame
Speaker 1: is and to ensure that those incentives are aligned around
Speaker 1: people building things that have actual utility. Vildana, we need
Speaker 1: to somehow make a chart, a utopian drift chart. Yeah,
Speaker 1: I was trying to picture it in my mind. I'm
Speaker 1: sure one exists. The Milton can share with us. It's
Speaker 1: sort of an interesting way to contain actualize things, but
Speaker 1: also to test my own thinking, it's very appealing. I
Speaker 1: think it's very seductive to many crypto investors sort of
Speaker 1: be like, oh we can we can make a lot
Speaker 1: of money very quickly. But again, I think that persistence
Speaker 1: is really important, Like you want to invest in things
Speaker 1: that are gonna be around for a long time and
Speaker 1: ultimately one of our fundamental beliefs is one of the
Speaker 1: beliefs I've always had been in this industry for eight years,
Speaker 1: which very long time. Reputation does matter, particularly in capital markets.
Speaker 1: Relationships do matter. Even that we're operating in this this
Speaker 1: digital space, it does matter, and so I do think
Speaker 1: it's important for people and for firms as they're investing
Speaker 1: in the space, as they're talking about things on Twitter,
Speaker 1: like you have to be cautious around what you're promoting,
Speaker 1: what type of behavior you're promoting, and so that's a
Speaker 1: line we sort of try it to be very mindful of.
Speaker 1: And again I do think we see other firms in
Speaker 1: the space absolutely fine, right to each their own. We're
Speaker 1: not judge, we're not Jerry, we're not executioner. But it's
Speaker 1: something to be mindful of. And again point shares. We've
Speaker 1: been around for eight years now, we plan to be
Speaker 1: around for decades more um, and so that's how we're
Speaker 1: going to build our business. Melton, I wanted to ask you.
Speaker 1: It's going to sound like a simple question, but actually
Speaker 1: I think the story behind it is really interesting and
Speaker 1: very fascinating to me. I want to ask you where
Speaker 1: you're talking to us from because you and I have
Speaker 1: talked about this idea about people building bitcoin communities, especially
Speaker 1: in New Hampshire and in other places, and you and
Speaker 1: I have talked about how potentially you could see in
Speaker 1: the future people running for office on these bitcoin community platforms.
Speaker 1: And so where are you calling us from and what
Speaker 1: does this bitcoin community development. I don't know if project
Speaker 1: is the right word, but what what does it look
Speaker 1: like and where is it happening? I love this topic, Danaus,
Speaker 1: but thank you for giving me an opportunity to shill
Speaker 1: New Hampshire. Um. Look, I think at the end of
Speaker 1: the day, you know, I used to be in New York.
Speaker 1: I was in New York for many years in New York,
Speaker 1: and my view stills in anyways that the capital of
Speaker 1: the financial world has been really sad to see his
Speaker 1: New York implement called the bit license that were hired
Speaker 1: firms operating in New York to obtain additional licenses specific
Speaker 1: to just dealing in cryptocurrencies. Now very few bit licenses
Speaker 1: have been issued. The average waytime from application to getting
Speaker 1: a bit licenses I think over two years at this point,
Speaker 1: and the wait list is quite long. They're not processing
Speaker 1: these things so what's been really sad to see certain
Speaker 1: states have effectively excluded them from this entire sector by
Speaker 1: having a very I think Dacronian approach or very inflexible
Speaker 1: verage decrypto if you will. UM. The other challenge you
Speaker 1: have operating in the US, and one of the reasons
Speaker 1: why coin Shares is a global firm with offices in
Speaker 1: multiple jurisdictions is the US in many places lacks regulatory clarity,
Speaker 1: and the approach the US has chosen to take is
Speaker 1: regulation by enforcement, which again I think is a really
Speaker 1: challenging approach. It's not that firms don't apply to the
Speaker 1: guidance isn't clear. People are trying to do innovative things.
Speaker 1: They're new I understand it's challenging for regulators to sort
Speaker 1: of figure out how to manage that. By regulating by
Speaker 1: enforcement and being kingmaker, right, which is what the SEC
Speaker 1: is doing by deciding who can and who cannot. Is
Speaker 1: not a fair market approach. That's not how regulations supposed
Speaker 1: to work. UM. I think other jurisdictions like Switzerland, Singapore
Speaker 1: and others that have that have taken a more proactive approach,
Speaker 1: that have established their guidance through regulation as opposed to enforcement.
Speaker 1: Have seen a lot of crypto firms, a lot of
Speaker 1: high paying jobs, a lot of capital moving into those jurisdictions.
Speaker 1: Um I think Abology Turn of Austin does a great
Speaker 1: job articulating this. He recently run an article in um
Speaker 1: UH Policy, sort of political science focused publication around sort
Speaker 1: of the rise of digital nation states or nation states
Speaker 1: that embrace new technology, that have regulation that's a creative
Speaker 1: to startups and and you know innovative entrepreneurs who want
Speaker 1: to build innovative types of businesses. And I think the
Speaker 1: physical infrastructure also matters. So what I really love about
Speaker 1: New Hampshire is um from a tax precative, it's quite
Speaker 1: amenable from a regulatory perspective. You know, it's the live
Speaker 1: freer dice states, so it's not overly prescriptive and how
Speaker 1: it regulates. And I think again, there's a huge opportunity
Speaker 1: here for jurisdictions to compete for all of these tech
Speaker 1: workers that have been living on the coast California, New
Speaker 1: York or to the most regulated states in this country.
Speaker 1: So people are flocking to jurisdictions like Wyoming in Texas,
Speaker 1: in New Hampshire and Florida where there is an embrace
Speaker 1: of these new industries where policies are not as restrictive
Speaker 1: and where there is an openness to engaging because these
Speaker 1: states the opportunities to bring high paying, high tech jobs
Speaker 1: to their economies, and obviously that influx of capital and
Speaker 1: that influx of people has a huge impact, not just
Speaker 1: some people working in that sector, but on those states overall.
Speaker 1: The live free or die. So it's more than just
Speaker 1: a license plate slogan. In New Hampshire, they're tiden up
Speaker 1: your straight jackets. It's time for the craziest things we
Speaker 1: saw in markets this week? All right, Malton, Well for
Speaker 1: this next next segment, I also have two axes in mind.
Speaker 1: This is called the craziest things we saw in markets
Speaker 1: this week. So when one access is crazy and on
Speaker 1: the other access is also crazy, it's it's it's crazy.
Speaker 1: Think when I think about chaos, right there's like bad chaotic,
Speaker 1: neutral chaotic, good chaotic. I think right now markets are
Speaker 1: like absolutely absolutely I'm hoping to get back to a
Speaker 1: good chaotic crypto in some ways like one and anyways,
Speaker 1: it's good chaotic because it's fun. Yeah, this is not
Speaker 1: too fun, but certainly plenty of plenty of things to
Speaker 1: talk about for the craziest things, Well, Donna, let's get
Speaker 1: started with you. What's the craziest thing you saw? And
Speaker 1: keeping the mind you were in Portagal for most of
Speaker 1: the week, so I don't know. I don't know if
Speaker 1: that factors into your selection this week. Yeah, but I
Speaker 1: have one that I specifically chose for you because I
Speaker 1: think you will really like it, and I really actually
Speaker 1: hope you haven't seen it yet. But Family Dollar, which
Speaker 1: is owned by Dollar Tree, it's actually closed like hundreds
Speaker 1: of stores and recalled a bunch of products because of
Speaker 1: a rodent infestation that they have. It's a nauseating story,
Speaker 1: but it's also kind of unbelievable. So I guess CNN
Speaker 1: had a report that showed, know, they were just like
Speaker 1: rats running around everywhere eating the food and they were
Speaker 1: rotting garbage and trash and all kinds of stuff. And
Speaker 1: the stock did drop so so they had to recall
Speaker 1: a bunch of stuff too. I don't know if the
Speaker 1: stock dropped, you know, in conjunction with everything else selling
Speaker 1: off this week, But it was fun, it was a
Speaker 1: fun read. I think it's safe to say that some
Speaker 1: market moves are hard to determine rat trappings. Closing your
Speaker 1: stores I think is definitely a catalyst that hundreds of stores. Yeah, well, Maltim,
Speaker 1: I don't know if you saw anything crazy, God was crazy.
Speaker 1: I saw a chart this week that trapped UM tech
Speaker 1: I p os over the last two years and the
Speaker 1: performance of those stocks that was crazy to see, just
Speaker 1: pretty bad. How far they are down, yeah, from their people. UM.
Speaker 1: The other crazy thing I guess that's really on my
Speaker 1: mind is um I have a lot more competition and
Speaker 1: early stage investing Tiger. Do you want a bunch of
Speaker 1: other later stage proth equity firms that would typically invest
Speaker 1: pre I p O have said they're not going to
Speaker 1: be investing pray Go so much anymore. They're going to
Speaker 1: be in liquid public markets looking for undervalued tech companies,
Speaker 1: or they're gonna move earlier stage to UH startups like
Speaker 1: startup startups. So so that's been interesting to see certainly
Speaker 1: change the venture landscape, and I think we'll continue to
Speaker 1: there's more capital than ever chasing opportunities, but where they're
Speaker 1: chasing those opportunities starting to shift. People generally are much
Speaker 1: more comfortable moving further out on the risk curve UM
Speaker 1: and also on the duration curve, which is been interesting
Speaker 1: to observe, and I think the impacts of that will
Speaker 1: be felt throughout, you know, the tech sector for a
Speaker 1: long time to come. There's over a thousand unicorns in
Speaker 1: the world today, no idea how those companies are gonna
Speaker 1: get liquidity. Um. I think what's happening around SPACs has
Speaker 1: also been fascinating to watch a lot of new rules
Speaker 1: coming out limiting um the ability to to raise bacts
Speaker 1: um and a ton of SPACs that have raised capital
Speaker 1: that I can't deploy it. So I think just generally, um,
Speaker 1: you know, the liquidity landscape for startups and company in
Speaker 1: the text space is starting to look very areas. Yeah,
Speaker 1: it just seems like there was just so much money
Speaker 1: in private capital just looking for private market investments. It's uh,
Speaker 1: it's amazing. All right, I'm gonna take you wild to
Speaker 1: do a market we have not discussed before. London real estate. Okay,
Speaker 1: this is a story by our own Lisa Flasher. A
Speaker 1: London flat is up for auction, very small flat, seventy
Speaker 1: five square feet so to picture that if that were
Speaker 1: a rectangle, that would be seven and a half feet
Speaker 1: by ten ft. It's a regular well yeah, you'd have
Speaker 1: to convert it to meters, but we did not convert
Speaker 1: it to meters. Seventy five ft square apartment. It has
Speaker 1: a bathroom, of course, you know when you shower, the
Speaker 1: water lands on the toilet and the sink and everything.
Speaker 1: It's this tiny little bathroom. So I want you to
Speaker 1: guess what the asking price is for this seventy five
Speaker 1: ft square foot flat. About the size of a prison cell,
Speaker 1: I would say, And I will point out that this
Speaker 1: is on the crazy access the price. Access is not
Speaker 1: necessarily what drew my attention to this. It's just the
Speaker 1: tiny nature of the apartment. Oh, I see, so the
Speaker 1: price might not be crazy crazy. I'm going to say
Speaker 1: three hundred thousand pounds. Three hundred thousand pounds. I'm gonna
Speaker 1: keep a poker face, Melton, what's your bid for a
Speaker 1: seventy five square foot London apartment. Let's go with five
Speaker 1: million pounds. Wow, I lived in New York, baby, I've
Speaker 1: seen at all. Oh my gosh. I think you guys
Speaker 1: will be hearing from some London realtors very soon, both
Speaker 1: asking you a bit on this apartment. They're set to
Speaker 1: auction for fifty thousand pounds, which I find is it's
Speaker 1: kind of reasonable for a little, you know, bunk bed
Speaker 1: apartment in London. You know, I don't know. Yeah, I
Speaker 1: thought for sure you were going to say like four
Speaker 1: or five said, it's not the price. It's the size
Speaker 1: of the apartment that's crazy, not the price. So we'll see.
Speaker 1: Maybe it we'll go for five million pounds. Melton is
Speaker 1: gonna go buy it for five million to prove us wrong.
Speaker 1: I think I'm not buying it. I read it. I
Speaker 1: read another article about a building in nice Bridge where
Speaker 1: apartments were styling for like two two fifty million pounds um.
Speaker 1: That was interesting. A lot of money floating around. Well, Melton,
Speaker 1: I think that's all the time. We have really appreciate
Speaker 1: your insights. Fascinating conversation. We didn't even get to the
Speaker 1: the whole bitcoin energy issue, which I hope we can
Speaker 1: have you on some time to talk about that. Actually
Speaker 1: crazy European Parliament just came out with the decree that
Speaker 1: they want to ban all proof of work based cryptocurrencies,
Speaker 1: which is going to be really interesting. We publish a
Speaker 1: lot of research at coin Shares around bitcoins energy consumption.
Speaker 1: It is over seventy renewables driven it's greener than most
Speaker 1: other industries in our world today. I think it is
Speaker 1: really a straw man for government's not liking bitcoins. So
Speaker 1: you know that's all right. Well she got it in there,
Speaker 1: vill Don, and we'll have to have her back on
Speaker 1: to unpack that a little bit because that is certainly
Speaker 1: such a huge, huge issue for for crypto. Melton, thank
Speaker 1: you so much for your time. Thanks and excited to
Speaker 1: be here and excited to see what your audience. Thank you, Malton,
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Speaker 1: The head of Bloomberg Podcasts is francesco Leavie. Thanks for listening,
Speaker 1: See you next time. Two