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Speaker 1: Welcome to Trillions. I'm Joe Webert and I'm Erica Eric.

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Speaker 1: The past week has been an eventful week for ETFs,

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Speaker 1: specifically bitcoin ETFs, which we've been talking about. I went

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Speaker 1: back and looked we first had we talked about e

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Speaker 1: t F bitcoin ETFs on Trillions. Do you know when

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Speaker 1: it was, uh, well August nine, oh, with Matt Hogan. Sure,

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Speaker 1: and that was six. That was three minus five eight

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Speaker 1: minus three is five years before after it was first file. Yeah, yeah, exactly,

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Speaker 1: So here we are. It happened. We are. Yeah, this

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Speaker 1: past week felt like a decade, to be honest, I

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Speaker 1: guess because we've been waiting a decade and a lot

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Speaker 1: was crammed in. Honestly, I I kind of felt like

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Speaker 1: I was, I don't know, like covering the last week

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Speaker 1: of a campaign or something. Like every little thing was

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Speaker 1: was coming out and and it was really fascinating. And

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Speaker 1: some people were saying they were sick of are tweeting

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Speaker 1: and writing about this, but I told them, listen, E

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Speaker 1: t S only kicked down the doors of an asset

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Speaker 1: class once every decade, equities, bonds, gold, and now we've

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Speaker 1: got crypto. This is a big deal and I'm happy

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Speaker 1: we covered it well and it was really exciting, and

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Speaker 1: the whole thing is just been a whirlwind and there's

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Speaker 1: so much to discuss about it. So I'm no good

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Speaker 1: group to do that too with today, that's right. So

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Speaker 1: we're gonna break down what just happened, what else might happen,

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Speaker 1: and then maybe get into a few of the more

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Speaker 1: technical aspects of it all. So joining us Jeremy Sindo Wicks,

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Speaker 1: who's a shareholder at Better Price where he's an attorney,

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Speaker 1: are calling Katie Greifield in Bloomberg News, and also James

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Speaker 1: C for et F analyst and Bloomberg Intelligence, this time

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Speaker 1: on True Alliance. The Bitcoin E t F race is

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Speaker 1: over in the beginning at the same time, Katie, James, Jeremy,

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Speaker 1: welcome to trillions having Thank you very much. It's a

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Speaker 1: big honor. Katie. I want to start with you because

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Speaker 1: you had a news article that sort of um it

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Speaker 1: preceded the official UH filings go and and sort of

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Speaker 1: the the E t F s becoming live investments, and

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Speaker 1: I wanted to ask you, did you move the price

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Speaker 1: of bitcoin? Yeah, we moved the price of bitcoin. It

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Speaker 1: was wild I had I was waiting for that artistic

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Speaker 1: article to go. I think it. It went live at

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Speaker 1: PM on a Thursday and had my g I P

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Speaker 1: screen up, and I mean you saw the price shoot

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Speaker 1: straight up I think two right after that. And this

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Speaker 1: scoop in question that was with vill Donna Hirich and

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Speaker 1: Ben Bane also Bloomberg News, was that the SEC wouldn't

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Speaker 1: stand in front of these launches. They wouldn't delay or

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Speaker 1: stop them. It's the language was a little tricky because

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Speaker 1: it's not like they were they don't approve it necessarily,

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Speaker 1: but basically, if you boil it down, the story that

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Speaker 1: they would let these e t F launch and that's

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Speaker 1: what happened, okay, and what's transpired since BITTO ticker b

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Speaker 1: I t O uh finally started treading well, we saw

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Speaker 1: the second most heavily traded debut ever according to uh

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Speaker 1: b i's own data, and I mean just the assets

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Speaker 1: pouring into this fund. It was clear there was so

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Speaker 1: much pent up demand for bitcoin and e t F rapper,

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Speaker 1: more so than I was expecting. I mean, I've been

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Speaker 1: talking to people for weeks, analysts and investors who weren't

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Speaker 1: expecting as much demand as we saw, given that these

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Speaker 1: are futures products. It's not the real deal that many

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Speaker 1: in the crypto and et F community really have been

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Speaker 1: waiting for. That's kind of the holy grail. But even still,

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Speaker 1: I mean the Bitto e t F it already as

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Speaker 1: well over not well over, about one point two billion

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Speaker 1: in assets at the time that we're recording this UM,

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Speaker 1: and it really feels like they stole the show because

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Speaker 1: we've had Valkyrie launched since then and still very heaty debut,

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Speaker 1: but not to the same scale and the Valcori ticker

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Speaker 1: b t F. So when Biddle launch, I'm gonna agree

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Speaker 1: with Katie that it was beyond my expectations. We had

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Speaker 1: a group call with my research team, our team, and

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Speaker 1: I basically had everybody pick how much do you think

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Speaker 1: the volume would be on day one? And I think

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Speaker 1: the highest pick was three million. I think we averaged

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Speaker 1: about two hundred millions, so it traded one billion. But

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Speaker 1: here's the thing with bidd oh that was impressive, is

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Speaker 1: it traded more the second day and the only other

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Speaker 1: e t F to do that in history were like

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Speaker 1: g L d accused, like really ones that are studs today,

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Speaker 1: So that was a good sign. It has trickled off since,

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Speaker 1: although I will say, um to that stat The number

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Speaker 1: one most voluminous e t F on day one was

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Speaker 1: this preceded carbon blackrock e t F, which I can

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Speaker 1: account because that was one institution. Um So, if you

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Speaker 1: take away the b y o A preceding launches, Biddo

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Speaker 1: was two times over the most you know, the biggest

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Speaker 1: launch ever by grassroots volume. So again, major major deal

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Speaker 1: and something that I think none of us expected to

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Speaker 1: be so big. Okay, and James, I want to bring

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Speaker 1: you in here because we've we said it a couple

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Speaker 1: of times. We talked about it a couple of episodes ago.

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Speaker 1: This all of this was the futures based e t F. Right,

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Speaker 1: and walk us through why that got approved instead of

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Speaker 1: um uh, you know something that was actually commodity backed.

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Speaker 1: Eric and I and pretty much everyone in the e

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Speaker 1: t F ecosystems in agreement that the futures based product

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Speaker 1: was not the right product for most people out there

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Speaker 1: trying to buy a bitcoin etf UM And the sole reason,

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Speaker 1: there's really only one reason as far as I'm concerned

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Speaker 1: that the future is BASTF got to prove, and that

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Speaker 1: one reason is Gary Gindler. He gave a speech on

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Speaker 1: August three basically outlined this is what you need to do,

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Speaker 1: and he he gave a few different things, but the

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Speaker 1: two main things where he wanted it under the and

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Speaker 1: he wanted it to be holding bitcoin futures and pro shares.

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Speaker 1: I don't I would love to talk to somebody inside

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Speaker 1: of pro Shares to tell me how they did this,

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Speaker 1: because they got their filing out the next day. So

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Speaker 1: either there was a group, or they had this thing

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Speaker 1: tabled already ready to go or was on the shelf,

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Speaker 1: or they had somebody working twenties four hours straight to

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Speaker 1: get this filing. I don't know, UM, but I do

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Speaker 1: want to hear the story because that's the reason they

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Speaker 1: were first they got this thing out. Gary Genzler gave

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Speaker 1: this peach on August three, and to us, we talked

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Speaker 1: about him, You're like this, this is it. There's gonna

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Speaker 1: be an e t F and our team was kind

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Speaker 1: of in favor, like yes, that they're gonna prove a

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Speaker 1: Bitcoin futures et F. Ginzer wouldn't say this, um. And

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Speaker 1: then he reiterated that statement on September twenty nine, UM,

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Speaker 1: so we were pretty adamant. And then once he readed

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Speaker 1: that statement on twenty nine. We were very bullish that

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Speaker 1: there was going to be an approval um. But yeah,

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Speaker 1: it just goes back to Gary Gensler and his his

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Speaker 1: adamant see that it became the whole bitcoin futures and

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Speaker 1: be under the I just want to jump in. So

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Speaker 1: pro Shares they were like right there, ready to go,

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Speaker 1: probably working twenty four hours. So was Investco. I mean

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Speaker 1: Vestco also filed on that day. And a fascinating story

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Speaker 1: yet to be uncovered is Investco dropped their pursuit of

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Speaker 1: their Bitcoin E T F futures filing. I mean they didn't.

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Speaker 1: They haven't withdrawn it. It's still you know, it's sort

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Speaker 1: of on just hanging out in purgatory. But they theoretically

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Speaker 1: could have launched in the past weekend chose not to. Yeah,

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Speaker 1: they were exactly one day after pro Shares they're filing

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Speaker 1: hit the egg or filing the next day, so they

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Speaker 1: were just one day late. The idea that pro Shares

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Speaker 1: would win this rate, so James and myself and R

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Speaker 1: T was pretty aggressive and saying the SEC would approve

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Speaker 1: a bitcoin etf aggress more aggressive than most. We got

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Speaker 1: a lot of pushback and we had pro Shares as

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Speaker 1: the favorite so those did turn out to be true,

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Speaker 1: but rewind two years, nobody would have picked pro Shaares

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Speaker 1: to win this race. And the thing that I keep

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Speaker 1: thinking of the scene in Silence of the Lambs, when

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Speaker 1: you know Jodie Foster walks into see Hannibal Lector and

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Speaker 1: he tells her all everything you need is in the

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Speaker 1: case file. Uh that just it's all was all in

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Speaker 1: Genzer speeches and pro Shares. Not only were they quick

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Speaker 1: to do it on the e t F side, but

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Speaker 1: three months before that, Genzer talked about a mutual fund

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Speaker 1: and they file that right away and launched that right away.

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Speaker 1: And the fact that the SEC allowed that mutual fund

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Speaker 1: out gave us confidence to say, okay, well the mutual

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Speaker 1: phone was out seventy seven days. Uh, let's just go

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Speaker 1: ahead and be very confident the e t F will

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Speaker 1: also be approved. And it did. But it just goes

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Speaker 1: to show you, like following instructions. Those tests back in school,

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Speaker 1: those are good tests. I think, those ones that like

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Speaker 1: three kids get because everybody else does the one thing

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Speaker 1: and only three of them actually listened to the teacher.

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Speaker 1: Go ahead, go ahead and pop your callar Eric, good job, James,

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Speaker 1: can you tell me the difference between Bitter and BTF

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Speaker 1: the Valkyrie offering, Like, you've got two of these future

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Speaker 1: ones out there, what's what's the difference? I mean, honestly,

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Speaker 1: from a high level perspective, pretty much nothing but right now,

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Speaker 1: just because of when Biddo launched or however you want

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Speaker 1: to us be I t o UM. Basically they had

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Speaker 1: to roll because so much money poured in so quickly.

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Speaker 1: As Katie talked about that, they had to basically leave

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Speaker 1: that front month's contract, which was October at the time,

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Speaker 1: and start investing in the second month contract, which was November.

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Speaker 1: So their exposures are a little different right now. So theoretically,

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Speaker 1: if there's something big happens in the market, UM, it's

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Speaker 1: possible that BTF would move more in line or aggressively

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Speaker 1: than than BTF. But other than that, they're pretty much,

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Speaker 1: as far as I know, uh, almost the exact same product, um, James.

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Speaker 1: This whole role issue is clearly why at the beginning

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Speaker 1: we said most people did not want a future z ETF.

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Speaker 1: They thought of spot physically back to would be better

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Speaker 1: for investors. I still feel that way, UM, But let's

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Speaker 1: go into why Gezer did this, because it is baffling

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Speaker 1: to most people, and it really comes down to the

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Speaker 1: difference between the nine Act and nine Team forty Act,

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Speaker 1: and Jeremy is the perfect person to explain this. UM.

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Speaker 1: Jeremy walks through why Gary Gensler was so okay with

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Speaker 1: futures under the forty Act and the differences, and why

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Speaker 1: he was not okay with the e t s that

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Speaker 1: were followed the thirty three Act, which clearly would track better.

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Speaker 1: I think the best way probably to understand Gensler's position

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Speaker 1: is that UM regulator is that his his his conclusions

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Speaker 1: were driven by UM regulatory concentration rather than UM rather

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Speaker 1: than what is the most efficient exposure to bitcoin. And

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Speaker 1: from his perspective and from the SEC's institutional perspective, it

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Speaker 1: makes sense that the combination of a futures based product

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Speaker 1: that is regulated under the forty Act would provide the

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Speaker 1: maximum regulatory supervision UH maximum regulatory coverage. Then a e

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Speaker 1: t F that is registered that is only offered under

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Speaker 1: the thirty three Act. So let's go over that. So

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Speaker 1: a Bitcoin, a bitcoin e t F can't be under

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Speaker 1: the forty UM well generally because bitcoin itself is not

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Speaker 1: a security in order to be offered under the forty Act,

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Speaker 1: a fund must it must be investing in securities. Um.

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Speaker 1: What's interesting about a futures based e t F is

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Speaker 1: that it can go either way because because when you're

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Speaker 1: holding up, when you're having a futures based e t F, UH,

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Speaker 1: your your portfolio makes is made up of the futures

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Speaker 1: and some cash equivalent, usually treasuries um for margin purposes.

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Speaker 1: And the treasuries have a unique position under the forty

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Speaker 1: Act by virtue of various both statutory provisions and sec

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Speaker 1: interpretations over the years, and that treasuries can count as

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Speaker 1: securities if you want them to for purpose is of

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Speaker 1: registering under the forty Act, or they cannot count to

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Speaker 1: securities if you don't want to. And so you can

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Speaker 1: have a future of futures based product and choose whether

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Speaker 1: or not you want to register it under the forty

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Speaker 1: Act or under the thirty three Act. And in fact,

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Speaker 1: there is a futures based there is a bitcoin futures

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Speaker 1: based e t F that's currently on file that's not

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Speaker 1: forty Act um and full disclosure, my firm represents that

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Speaker 1: represents to uh to curi um um that registrurant. But

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Speaker 1: real quick, just it walk us through what does the

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Speaker 1: forty Act have it's quote protections Because again there has

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Speaker 1: been interviewed a couple of times about this very question,

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Speaker 1: and he keeps saying the word investor protections over and over.

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Speaker 1: What is what do you get under the forty Act

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Speaker 1: that you don't under the UM You get a whole

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Speaker 1: host of both portfolio requirements and governance requirements like, for example,

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Speaker 1: and a forty Act funds must have a board UM

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Speaker 1: that largely made up of independent board members. UM. It's

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Speaker 1: required to have an audit committee UM. It's required UM.

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Speaker 1: There are substantive limitations on what the fund can do

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Speaker 1: withouts portfolio UM, such as limited limitations on leverage, limitations

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Speaker 1: on transactions with affiliates UM, which is a huge governance,

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Speaker 1: huge governance third rail for the forty Act UM. So

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Speaker 1: it's though, so that entire structure is something that the

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Speaker 1: SEC views as being fundamentally for the benefit of investors UM.

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Speaker 1: So Gensler is clearly expressing this view that all other

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Speaker 1: things being equal, it is preferable for this type of

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Speaker 1: novel product to come out first under the forty Act

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Speaker 1: that essentially requires the product to be futures based rather

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Speaker 1: than physical physically UM, and there are other reasons as

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Speaker 1: to why UM a physical bitcoin e t F A

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Speaker 1: t F as a practical matter couldn't really be under

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Speaker 1: the Forty Act even if it wanted to, primarily relating

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Speaker 1: to custody requirements under the Forty Act, which there aren't.

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Speaker 1: There aren't really viable solutions for a Forty Act fund

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Speaker 1: to comply with right now. Clearly the Forty Act has

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Speaker 1: more protections. Again, sort likes it, and we're just gonna

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Speaker 1: live with the Forty Act for a while. So Katie,

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Speaker 1: let me turn to you, and you wrote another article

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Speaker 1: about the next in line. You know, Betto has a

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Speaker 1: great head start, and we know it's tough talk about

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Speaker 1: what's who's in line and what we might see launched

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Speaker 1: in the next couple of months. Well, Valkuru was able

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Speaker 1: to make it out of the gates the same week. UM.

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Speaker 1: We're waiting on van x, so they were expected to

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Speaker 1: launch this week. They haven't yet, So it's gonna be

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Speaker 1: interesting to see what goes on there, especially because I mean,

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Speaker 1: the pro shares the Valkyrie funds, their expense ratio is

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Speaker 1: about basis points. The van Neck Fund is sixty five

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Speaker 1: basis points, so nominally lower, and I mean it is

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Speaker 1: filed as a C corporation, so that gets into some

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Speaker 1: interesting tax implications which could dent performance, but not onally

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Speaker 1: if you're just looking at expense ratios and management fees,

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Speaker 1: that's a cheaper product. So it's gonna be interesting to

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Speaker 1: see if that's a way that they're able to differentiate themselves. Um.

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Speaker 1: But going back to differentiation, I think it was James

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Speaker 1: that brought up the fact that you know, pro Shares

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Speaker 1: has already had to roll out into out beyond the

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Speaker 1: front month contract. And I'm curious, you know, given that

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Speaker 1: we are approaching the role, um, given the pro Shares

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Speaker 1: has rolled out already into other months, I mean, will

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Speaker 1: there roll out of the front month be less painful

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Speaker 1: than it is for Valkyrie in terms of you know,

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Speaker 1: how much that cost is. I don't think it will

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Speaker 1: hurt them more. Um, it's possible, I mean we could,

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Speaker 1: this thing could go wonky with the bitcoin futures market

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Speaker 1: at this point. But honestly, I mean, we're just gonna

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Speaker 1: have to wait and see. Anyone who's saying they know

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Speaker 1: exactly what's gonna happen, Uh, it's probably lying or lying

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Speaker 1: to themselves at least. Um. This one crucial thing about

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Speaker 1: these e t f s that probably is different than

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Speaker 1: what people remember with U S O or V x

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Speaker 1: X or x I V. Those were all like basically

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Speaker 1: rules based. These are active, so they can sort of

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Speaker 1: really time the role and when there's good opportunity to

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Speaker 1: roll without much friction. Um. But I will say, just

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Speaker 1: if you have half of your portfolio in November already,

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Speaker 1: I would argue you're probably going to see less effect

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Speaker 1: on the role than one who has all of it in.

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Speaker 1: But we did have we have a sample set of

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Speaker 1: this BTCFX, which is the mutual fund that was launched

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Speaker 1: three months ago, that's been that's rolled a couple of times,

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Speaker 1: and it's not bad. It looks like ninety bits to

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Speaker 1: a hundred basis points of frictional cost over what it

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Speaker 1: was it three months. That would translate to about seven

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Speaker 1: percent annualized, which is precisely where Mike mcglond and others

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Speaker 1: have put the sort of annual role costs. But that

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Speaker 1: seven is not nothing, and if you were to put

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Speaker 1: that as the expense ratio, that would seem very expensive. Right.

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Speaker 1: So this is the real issue with this uh easy

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Speaker 1: t s being used long term, I would also say

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Speaker 1: it could be way worse. So like from from July

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Speaker 1: when those things launched until until now, the role cost

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Speaker 1: is Eric has said has been very low. But if

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Speaker 1: you go back a full year, if those things had

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Speaker 1: launched last September, it'd be would be trailing bitcoin by

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Speaker 1: right now. So we basically when bitcoin goes parabolic and

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Speaker 1: goes in these huge bullish runs, um, what happens is

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Speaker 1: the contango can increase. And I don't want to get

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Speaker 1: too wonky, but essentially it just means the next month

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Speaker 1: is way more expensive than the current month. And what

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Speaker 1: happens is you have to sell the current month at

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Speaker 1: a lower price and then buy at the higher price.

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Speaker 1: And that's why you want to perform. So like if

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Speaker 1: if bitcoin goes parabolic, depending on what happens with the

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Speaker 1: futures market, you could seriously lag. Now the opposite can

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Speaker 1: happen when it goes in the scops direction and a

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Speaker 1: huge downturn to so and I will say though that

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Speaker 1: a lot of people, like we talked to McLoone, he'll say,

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Speaker 1: well that when you're looking in the past, or wasn't

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Speaker 1: nearly as much liquidity. He thinks that a lot of

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Speaker 1: this bring liquidity, which brings arbitrage. That said, we had

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Speaker 1: pro shares on two or three months ago about the

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Speaker 1: mutual fund, and they brought up the point, which is

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Speaker 1: a fair one, although they're like, look if bitcoins on

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Speaker 1: fire and you're in, you're in. You're up a hundred

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Speaker 1: and fifty instead of a hundred and seventy. I mean,

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Speaker 1: you know you're not going to be that bummed out.

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Speaker 1: It's not like the way USO would trail spot oil

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Speaker 1: and you would have had the call right oils up,

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Speaker 1: but you're only up like five. That's the I don't

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Speaker 1: think you'll see that. But look, this is part of

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Speaker 1: the ish, part of the imperfection of this product, and

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Speaker 1: you'll have to compare it against other products. I will

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Speaker 1: say with these ETFs, there was the rolling gets is

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Speaker 1: a fair point, but the trading costs and these are

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Speaker 1: going to be one basis point and that is going

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Speaker 1: to pretty much I asked cheaper than any other exchange.

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Speaker 1: So I think that the trading crowd will probably use

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Speaker 1: these more than the buine hold. Katie, I want to

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Speaker 1: bring this back to you because if I'm interested investing

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Speaker 1: in bitcoin, sure an E T f sounds great, but

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Speaker 1: this all sounds really complicated. When I'm I'm just gonna

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Speaker 1: go buy some bitcoin with my robin Hood account, why

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Speaker 1: do I need to buy an E t F futures

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Speaker 1: based product? So who's actually going to be using this thing? Yeah,

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Speaker 1: that's a great question. I think from like the retail

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Speaker 1: investor perspective and individual investor probably doesn't make sense. I

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Speaker 1: don't know why you wouldn't just go to coin base

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Speaker 1: or robin Hood or PayPal or any other of these

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Speaker 1: platforms that offer crypto and buy it there. Um. I

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Speaker 1: mean too Eric and James's point that this is more

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Speaker 1: a product for traders, I think it would also be

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Speaker 1: a product for professional money managers who have mandates that

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Speaker 1: they can't trade, uh, you know, crypto derivatives, but they

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Speaker 1: don't want to be buying physical bitcoin or maybe they're

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Speaker 1: not able to in some way. So I think there

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Speaker 1: is an audience for them. And I mean just looking

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Speaker 1: at how much demand, how much money has been absorbed

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Speaker 1: by these funds already, clearly you know there has been

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Speaker 1: an audience that's materialized. Who it actually is, whether it

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Speaker 1: is retail traders that are going to get burned by

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Speaker 1: these rule costs and other things that remains to be seen.

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Speaker 1: And I would jump in and say that if you're

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Speaker 1: looking at these traditional like crypto things like uh coin

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Speaker 1: base or f t x or these other things, that

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Speaker 1: their transaction costs are higher, but there's no like custodian costs,

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Speaker 1: So that's a huge thing. There's no long term, ongo

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Speaker 1: on term, long term ongoing costs. On the other side

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Speaker 1: is things like robin Hood and PayPal and Square. You

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Speaker 1: technically can't actually take the crypto off of those exchanges

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Speaker 1: like they have to stay within those ecosystems, so that's

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Speaker 1: a detriment. And the other thing aside you've mentioned professional

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Speaker 1: portfolio managers, people that are managing ETFs I want to

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Speaker 1: invest in bitcoin and mutual funds. The other side, as advisors,

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Speaker 1: until recently, there was really no easy way to get

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Speaker 1: access to bitcoin, and advisors managed twenty plus trillion dollars

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Speaker 1: in any um. If you're an advisor, you want to

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Speaker 1: put one percent of your clients money, five percent, maybe

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Speaker 1: a little bit, you're not. There's there's some options out there,

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Speaker 1: there's new there's new technology. Companies on Ramp is one

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Speaker 1: that's trying to build an ecosystem where people can do

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Speaker 1: invest directly in crypto. But if you're only investing one

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Speaker 1: percent of some of your clients money, like the easiest

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Speaker 1: way to do that is through assist through an e

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Speaker 1: t F. Basically, this is this is gonna be the

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Speaker 1: way you're gonna do it if you're if you're willing

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Speaker 1: to invest in the futures et F. So even one

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Speaker 1: percent of twenty plus trillion or point oh one percent

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Speaker 1: of twenty plus trillion is a big deal. This is

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Speaker 1: going to be a debate for the next year. Probably

395
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Speaker 1: should advisors by this and it will be going on

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Speaker 1: and on, and I think for traders it's a much

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Speaker 1: more clear value proposition. We wrote a note basically saying

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Speaker 1: that this is just one step, and probably if you

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Speaker 1: fast forward to five years, there's probably gonna be something

400
00:21:53,800 --> 00:21:57,000
Speaker 1: like a total crypto market et F that's physically backed

401
00:21:57,520 --> 00:21:59,320
Speaker 1: U the fee or will have it down to twenty

402
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Speaker 1: basis points. It will trade it a penny spread, and

403
00:22:02,359 --> 00:22:05,320
Speaker 1: it will be fifty billion dollars. You know, it'll be

404
00:22:05,480 --> 00:22:07,399
Speaker 1: messy getting there, And I think biddo is just the

405
00:22:07,480 --> 00:22:10,040
Speaker 1: first step on this long road. That's what e t

406
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Speaker 1: s do. If you look at any other as a class.

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Speaker 1: They're dirt, cheap and highly liquid, and that's wh why

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Speaker 1: why people like them. We haven't gotten there yet here

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Speaker 1: And I think that leaves me one more question for Jeremy,

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Speaker 1: which is, this is the question we're getting all the time.

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Speaker 1: I love to get your take on it. Is in

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Speaker 1: order to get to that sort of E t F utopia,

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00:22:26,760 --> 00:22:29,200
Speaker 1: the SEC does have to approve spot E t F S.

414
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Speaker 1: What do you think is a decent timeline for Gainser

415
00:22:33,160 --> 00:22:35,560
Speaker 1: to come around a little bit and accept the thirty

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Speaker 1: three Act. Well, that's tough to say, just because based

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Speaker 1: on his recent UM, based on his recent comments, including

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Speaker 1: an interview he gave to Yahoo yesterday, UM, it doesn't

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Speaker 1: seem that there's any indication that he's there. But as

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Speaker 1: we've seen, um, as we saw over the summer, um

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Speaker 1: by when he essentially gave the green light to the

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Speaker 1: futures forty Act E t f S and they were

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Speaker 1: in the market shortly thereafter. UM, um once he's capable

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Speaker 1: of changing his mind, um fairly quickly. UM. And if

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Speaker 1: that happens then UM, it would still take a while

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Speaker 1: for the gears of the SEC to grind the products

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Speaker 1: through because of the statutory timelines around the ninety before

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Speaker 1: rule changes that are required. But um, you know, but

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Speaker 1: but if he but but I think at this point, UM,

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Speaker 1: it's really dependent on when he feels that the spot

431
00:23:42,080 --> 00:23:46,800
Speaker 1: market is developed enough and safe enough for UM to

432
00:23:47,040 --> 00:23:49,520
Speaker 1: support an e TF that holds it directly rather than

433
00:23:49,640 --> 00:23:53,760
Speaker 1: through the futures UM intermedia understood. Yeah, I'm ball parking

434
00:23:53,800 --> 00:23:55,920
Speaker 1: at it, like two years at this point probably, but

435
00:23:56,000 --> 00:23:58,480
Speaker 1: we'll see. But one quickie, Uh, moving back to the

436
00:23:58,560 --> 00:24:00,160
Speaker 1: forty Act, there has been a couple of filing that's

437
00:24:00,160 --> 00:24:02,679
Speaker 1: been a little more exotic. Uh. There's a slightly levered

438
00:24:02,920 --> 00:24:06,080
Speaker 1: one and there's a negative one x or inverse bitcoin

439
00:24:06,200 --> 00:24:08,600
Speaker 1: future strategy. I mean, is there any reason to think

440
00:24:08,640 --> 00:24:11,600
Speaker 1: these won't get approved given their forty Act and track futures.

441
00:24:11,640 --> 00:24:15,199
Speaker 1: I mean, I'm expecting they probably get through, right. Well, Um,

442
00:24:15,960 --> 00:24:17,960
Speaker 1: I don't know that we I don't know that we

443
00:24:18,040 --> 00:24:21,520
Speaker 1: can say yet, just because you're right that in that

444
00:24:22,200 --> 00:24:25,840
Speaker 1: both they're the use of leverage and inverse UM the

445
00:24:26,200 --> 00:24:30,200
Speaker 1: exposure is within the bounds of what's permitted under the

446
00:24:30,600 --> 00:24:35,880
Speaker 1: recently adopted Derivatives Rule UM that essentially finally allows other

447
00:24:35,960 --> 00:24:39,320
Speaker 1: sponsors to offer um leverage and inverse e t s

448
00:24:39,400 --> 00:24:43,320
Speaker 1: without specific exempt of really from the SEC. UM and

449
00:24:43,560 --> 00:24:48,280
Speaker 1: obviously they're they're using the forty Act futures UM then UM,

450
00:24:48,560 --> 00:24:52,560
Speaker 1: that is, that's the means which the SEC has already blessed.

451
00:24:52,720 --> 00:24:56,520
Speaker 1: But it's impossible to know at this point whether the

452
00:24:56,720 --> 00:25:00,920
Speaker 1: SEC is going to allow them to proceed. Um. I

453
00:25:01,040 --> 00:25:05,800
Speaker 1: think we'll will know probably pretty quickly. Um, just because

454
00:25:05,880 --> 00:25:09,280
Speaker 1: we saw with the ether futures products that were filed

455
00:25:09,480 --> 00:25:12,159
Speaker 1: and then withdrawn within a couple of days that the

456
00:25:12,280 --> 00:25:14,760
Speaker 1: SEC staff has ways of making it known when they're

457
00:25:15,359 --> 00:25:18,159
Speaker 1: when they're displeased with something. Yeah, yeah, yeah, why did

458
00:25:18,200 --> 00:25:20,679
Speaker 1: that happen? Because we are starting to get people wondering

459
00:25:20,720 --> 00:25:23,399
Speaker 1: if there will be an ether futures et F like

460
00:25:23,520 --> 00:25:25,480
Speaker 1: why did why did the SEC push of it? Just

461
00:25:25,520 --> 00:25:29,000
Speaker 1: because they were like, hey, baby steps? Probably I don't

462
00:25:29,040 --> 00:25:34,760
Speaker 1: have any any specific UM transparency into that into that conversation,

463
00:25:35,320 --> 00:25:39,119
Speaker 1: but it makes sense that it took them several years

464
00:25:39,200 --> 00:25:42,560
Speaker 1: to get comfortable with bitcoin futures and the ether futures

465
00:25:42,560 --> 00:25:46,639
Speaker 1: are newer, so so I think the history of e

466
00:25:46,760 --> 00:25:49,960
Speaker 1: t s has been a progression in a series of

467
00:25:50,080 --> 00:25:53,760
Speaker 1: baby steps. So it's not that shocking that UM the

468
00:25:53,960 --> 00:25:57,560
Speaker 1: SEC would at this point not be comfortable with the

469
00:25:57,680 --> 00:26:02,680
Speaker 1: ether futures. And it's also possible that UM. It's also

470
00:26:02,760 --> 00:26:06,360
Speaker 1: possible that at some as that market develops, they would

471
00:26:06,440 --> 00:26:08,800
Speaker 1: change their minds on a dime like Genzler did over

472
00:26:08,840 --> 00:26:11,399
Speaker 1: the summer. All right, Jeremy, I'm gonna give you the

473
00:26:11,520 --> 00:26:14,720
Speaker 1: last word with the question we ask all new guests

474
00:26:14,760 --> 00:26:18,399
Speaker 1: on Trillians, what's your favorite et F ticker. I have

475
00:26:18,560 --> 00:26:24,160
Speaker 1: a soft spot for cut Um, the old Google buyer

476
00:26:24,280 --> 00:26:28,200
Speaker 1: claims as Guggenheim timber t f Um. I did work

477
00:26:28,320 --> 00:26:32,119
Speaker 1: on that one way back when, and I'm no longer

478
00:26:32,280 --> 00:26:34,520
Speaker 1: working with that product after it was sold to after

479
00:26:34,640 --> 00:26:36,320
Speaker 1: the t F business was sold to invest Go a

480
00:26:36,359 --> 00:26:39,680
Speaker 1: couple of years ago. But I just thought it was,

481
00:26:39,960 --> 00:26:42,520
Speaker 1: you know, elegant and got the message across pretty well

482
00:26:43,080 --> 00:26:45,880
Speaker 1: at all. Isn't you like would right? That's the competing one.

483
00:26:46,160 --> 00:26:49,000
Speaker 1: I like wood. But you know, as we've talked about before,

484
00:26:49,160 --> 00:26:51,440
Speaker 1: the thing that is else of the verb is pretty

485
00:26:51,480 --> 00:26:55,560
Speaker 1: good verb down everything. You know, that's a that's a

486
00:26:55,760 --> 00:26:59,159
Speaker 1: that's a solid one. So we're gonna leave it on that, Jeremy, James,

487
00:26:59,320 --> 00:27:02,399
Speaker 1: Katie think so much for joining us on Trillions. Thank you,

488
00:27:02,600 --> 00:27:10,240
Speaker 1: thank you, thank you so much. Thanks for listening to

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00:27:10,359 --> 00:27:12,280
Speaker 1: Trillions until next time. You can find us on the

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00:27:12,320 --> 00:27:17,359
Speaker 1: Bloomberg terminals, Bloomberg dot com, Apple Podcast, Spotify, and wherever

491
00:27:17,440 --> 00:27:19,280
Speaker 1: else you like to listen. We'd love to hear from you.

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00:27:19,359 --> 00:27:22,600
Speaker 1: We're on Twitter. I'm at Joel web Show. He's at

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00:27:22,800 --> 00:27:26,840
Speaker 1: Eric Faltunas. This episode of Trillions was produced by Magnus Hendrickson.

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00:27:27,359 --> 00:27:30,760
Speaker 1: Francesca Levi is the head of Bloomberg Podcast. Bye.