2:00

We can compare it against BIDO and some other

2:02

things, but those are like single fund launches. Because

2:04

if you look at this, one,

2:06

GBTC was already a super liquid product. It traded

2:08

hundreds of millions a day. Right now, it's almost

2:10

$2 billion alone. But you can't really use that

2:13

as a launch, because it was already a successful

2:15

product. And honestly, we'll get into what we think

2:17

is happening. That's probably a lot of outflows. That's

2:19

a weak question. Yeah. So

2:21

there's no way to know. I think a lot of

2:24

the money, there's going to be significant inflows into these

2:26

other ETFs. I bet you a lot of that money

2:28

is literally reshuffling from Canadian ETFs, from GBTC,

2:30

from BIDO, which is the Bitcoin futures ETF here.

2:32

So there's going to be a lot of money

2:35

shuffling. So I don't know how much of this

2:37

is net buying. But also, you got to remember,

2:39

you're unlocking GBTC, which owns how much Bitcoin, $330,000

2:41

Bitcoin, I think? Yeah, $25 billion

2:43

or something dollars worth. $27 billion worth of Bitcoin. Some of

2:45

that's going to

2:48

be selling. It's just how much of that

2:50

selling is going into another ETF. Right. Okay.

2:53

So okay. There's no in-kind redemption,

2:56

right? So any outflow requires the

2:58

sale of Bitcoin. Correct. But to

3:01

James's point, if then they're just like, well,

3:03

I actually want to just get out of this thing, go into, you

3:06

know, BPCO or IBIT or FBTC or

3:08

whatever these other ones are. Well, that

3:10

is a create that requires buying. So

3:13

not really. Actually, I think we

3:15

I would characterize the price action today is like pretty flat

3:17

in the scheme of things. I mean, obviously, at $930,000, we

3:19

hit $49,000 basically in the

3:21

morning. And then we basically went

3:23

back to the 46 area where we've been for,

3:27

you know, like if you drew a line from before

3:29

the fake SEC tweet to like now, it would basically

3:31

be flat. Well, in fairness, like

3:33

if the ETF news have been a surprise,

3:36

we would have seen some kind of God

3:38

candle. But it's been so discussed. And kind

3:40

of even a few weeks ago, we were

3:42

like, probably like, when did you hit 90%?

3:44

We hit 90% on October 12th, initially. So

3:46

was that when they didn't

3:51

appeal or they didn't

3:53

have the reason we went to 90% it

3:55

was right around when the SEC we knew

3:58

they weren't going to appeal the day

6:00

one but I would say it's definitely not a

6:02

sell the news event clearly. Can you help me

6:04

understand the mechanics of this because this is what

6:06

I don't fully understand. If

6:08

I go to pick

6:11

one at random. Can't

6:13

go to Vanguard. BTCO. BTCO. Invesco,

6:15

yeah. Go to Invesco. An awesome random. Yeah. Pick

6:19

one at random. I think the partner with Who Galaxy?

6:21

I think so, yeah. I'm going to go with Brr

6:24

because it's my favorite ticker. But just

6:26

say I buy a share of that. Say I share it's $50. Yeah.

6:29

And I say I don't know about 100 shares. At

6:31

the point I click buy, do I

6:33

own that? Yeah,

6:36

basically. I do. Yeah. So at the point I

6:38

click buy, are they instantly buying the Bitcoin? Well,

6:40

it depends. I mean, you're buying the shares on

6:42

the market, right? So they have a net create

6:45

redeem requirement, right? They have to have

6:47

the certain amount. And

6:49

I think really they settle up at the

6:51

end of the day. BTCO. Yeah. So it's

6:54

the market makers that are doing this, right? So you

6:56

might be buying a share from the market maker and

6:58

he's offering that to you at a certain price. And

7:00

he's hedging that before he gives it, he hands it

7:02

over it. And then at the end of the day

7:04

with that trading, they're going to net it out. Or

7:06

it might just happen that the demand is so crazy

7:08

during the day that they're doing creations. The APs are

7:10

making you shares that day. But all you need to

7:12

know is there is a time to settle that share

7:15

that you bought. But functionally speaking, when you click buy,

7:17

you now own a share of that fund. And de

7:19

facto, you have rights to the underlying assets

7:21

in that fund, in this case, about Bitcoin.

7:23

So you, when you buy this ETF, you're

7:25

buying underlying spot Bitcoin. How long is it

7:28

before that's actually spot Bitcoin and ETF? It

7:30

doesn't, for most people, it doesn't really

7:32

matter. There's mechanics that I'm honestly not

7:34

probably the best person to talk about. This is

7:36

literally like premium discount to nab the stuff, right?

7:38

So this is the tracking error

7:40

or quality of a fund, right? It's

7:43

how quickly and how often

7:45

and do they need to create and actually redeem

7:47

new shares to make sure that AUM is tracked

7:49

by the price, right? So they may not need

7:51

to, they may say, Oh, well, yeah, Pete bought

7:54

one, but actually James sold one. So like, nothing

7:56

changed. Like, and they manage that. That's, that's one

7:58

of the reasons why they're other things that

8:00

differentiates these products from each other. But if

8:03

they've got to fulfill the obligation of

8:05

acquiring the Bitcoin, and the Bitcoin price itself

8:07

is changing, yet if you look

8:09

at some of them trading with 25 basis points,

8:12

there's not much room for error, right? There's not

8:14

much room for slippage. So how do they ensure

8:17

they always have enough of the underlying asset?

8:20

Well, the issuers themselves have every day, they

8:22

have to make sure they have the amount,

8:24

otherwise they trade at a premium or discount

8:26

and they're a bad product, right? But to

8:28

get it is something that you

8:31

have to do fast. It's why the world's biggest market

8:33

makers are the ones creating and redeeming these things, right?

8:35

And also, to James's point, they can hedge. So they

8:37

can hedge some of that, you know, if you click

8:39

buy, and now they need more Bitcoin, and it takes

8:42

some 10, 20, 30 seconds to

8:44

get that Bitcoin, right? They can have hedges on

8:46

to protect from volatility. Yeah. So the

8:48

way I think about it is like, you're buying, that

8:50

means they're selling, they're net short. So they need to

8:52

offset that somehow. So they're going to use another hedge,

8:54

so they might go along one of those other ETFs

8:57

or futures market or something like that. It's usually, it's

8:59

not a much bigger scale that this is happening,

9:01

but they're there and they want to be delta

9:03

neutral in this. And then the way that these

9:05

market makers make money is like they're selling to

9:08

you for a dollar and they're

9:10

selling to you for a dollar and one cent, and

9:12

they're buying it for $99 and nine, nine, nine,

9:15

Jesus Christ, they're selling to you for a

9:17

dollar and one cents, they're buying

9:19

it for 99 cents. So

9:22

that two cents spread between there is where they make

9:24

money. And they're trying to stay neutral to the exposure

9:26

of Bitcoin the entire time. Just forgive

9:28

James for his starter. We did drink a lot of. Okay.

9:31

Okay. But

9:33

is this all like kind of automated? There's all systems

9:35

for this. No one worries. I

9:37

wouldn't say automated, but the firms doing

9:39

this are the best firms in the world at

9:41

doing this. Like there's a

9:43

reason that Ken Griffin is a mega billionaire at

9:46

Citadel. There's a reason Jane Street and Vertu are

9:48

known as the best traders in the world. Like

9:50

they're not going to, they're not entering this space

9:52

with like blindfolds and they don't know

9:54

what's going on. They're going to make efficient markets like

9:56

that. This is literally what they do day in and

9:58

day out. So I would. basically

10:00

my only advice would be trust the ETF wrapper. Essentially,

10:02

you can look at what's gone on in Europe. You

10:06

can look at the ones that have traded

10:08

in Canada. They've all traded very tight with

10:10

very minimal premiums and discounts. Now today and

10:12

in the first few days, there might be

10:14

like minor premiums and discounts because as things

10:16

are getting settled with all the volatility creation

10:18

of shares, redemption of shares, but for the

10:20

most part over the long term, it is

10:22

going to be an order of magnitude better

10:24

than using something like GBTC's old version or

10:27

using even BIDO. BIDO

10:29

underperformed, if you look at from the entire

10:32

year of 2023, BIDO, the Bitcoin futures ETF,

10:34

underperformed spot by 16%. So

10:36

if I told you that there was an expense ratio to all this

10:38

fund that gives you a shortage of Bitcoin, but the cost is going

10:40

to cost you 16% a year, no

10:43

one would buy it. That's why this is more

10:45

efficient because yes, you might have issues where you're

10:47

not tracking 100%, but even the ones that have

10:49

a hard time tracking and don't do as well

10:51

as others are going to do better than everything

10:53

else that's been available to people looking to buy

10:55

Bitcoin and the traditional financial rails. All right, well

10:57

look, market's been open four hours. Like

10:59

what have you seen? What's your read so far? A

11:02

lot of volume. I mean, I'm a top line number. I

11:04

think we were just talking about this at maybe like three

11:06

and a half billion about halfway through the trading day. What

11:09

volume is buy sell, right? Correct, yeah. So not

11:12

inflows. We don't know necessarily what the AUM of

11:14

these products will be. I don't think we find

11:16

that out maybe till market close or even tomorrow.

11:18

After market close, we'll find out. So we basically

11:20

the way that the, so I used to work

11:22

on the team that took care of taking in

11:24

those files and updating the terminal. And basically what

11:26

it is is these files say like, here's the

11:29

change in shares outstanding. This is how flows are calculated, right?

11:31

So if the shares went from a hundred to 110, they're

11:33

going to say, all right, 10 shares came in today.

11:35

The nav or the value of the fund per share

11:37

is $1. That means $10 came into

11:40

the fund. That's how it's simple. That's just

11:42

how flows are calculated. So we're going

11:44

to get that file 6 p.m. today and

11:46

then Bloomberg's going to calculate and try to look at the flows. The

11:49

one caveat here is that like some of these

11:51

funds, like the way that they're structured and the

11:53

accounting works in the backend, we might not necessarily

11:55

even see the flows for today until tomorrow's close.

11:57

So I don't know when it's getting released, but

11:59

this is. Thursday. So like we might not see

12:01

what happened on Thursday for some of these funds

12:03

until the close of trading on Friday. So

12:06

there's a lot of nuance here to try and figure

12:08

out. But we have a good idea of probably what's

12:10

happening based on the numbers. You can it's more of

12:13

an art than a science. But you can kind of

12:15

guess. And the price of

12:17

the share itself. OK. How much is

12:20

that moved? How

12:22

much does that tell you?

12:26

That's a good question. I don't know. And then

12:28

I was going to ask about how I was

12:30

asking James a similar question, which is like, is

12:32

there any logic to this? You know, I see

12:34

like the shares trade at a

12:36

lower unit price than, say, the BTCO

12:38

shares. So it's obviously just the amount

12:40

of shares to piece of Bitcoin like

12:42

the, you know, like, right. They're not

12:44

like tracking the same thing. So it's

12:47

just a matter of like they some

12:49

of them said that one share equals

12:51

point zero zero one Bitcoin. Others said

12:53

one share equals point zero zero two

12:55

Bitcoin. Just the way they're. But you shouldn't really profit

12:59

any different amount from any of your

13:01

returns are based on price percent. Right. Like some people

13:03

it looks some people basically went and we're just going

13:06

to do one one thousandth of the Bitcoin, roughly speaking.

13:08

So like if you look at it and it's trading

13:10

at forty seven thousand, it should be these will be

13:12

trading around forty seven dollars. Something like that. Right. So

13:14

that's what some of them did. Some of them, the

13:17

standard one is people usually launch at twenty five dollars.

13:19

And what looks like what I bet did. Yeah.

13:22

So like for the most part, it

13:24

doesn't matter. That's we call that the handle what it's trading

13:26

at. Some people like a

13:28

lot of stocks will like lower their handle and

13:30

specific trading vehicles, trading ETFs that are leverage ETFs.

13:32

They'll keep their handle low because like retail traders

13:34

like seeing like you buying a hundred. Yeah, there's

13:36

a unit bias. So for the most part at

13:38

the end of the day, it doesn't really matter

13:40

unless you like can't buy one share. But I

13:42

mean, everything here is trading under the prices are

13:44

under fifty dollars. Well, this is one of the

13:47

things I heard that's great thing about the ETFs

13:49

is you're not selling something to somebody that's forty

13:51

six thousand dollars. Yeah. You're selling something that's

13:53

like twenty five dollars. Broadly, all of them

13:55

are are cheap, quote unquote. Right. And it

13:57

should solve the unit bias problem to a large.

14:00

degree. I mean, you're not like, oh, no,

14:02

like you want to buy, let's see, buy a major, like

14:04

a major tech stock, right? It's like you want it

14:06

to feel cheap enough, right? You don't want it to

14:08

be like, it doesn't matter. You already know you're getting

14:10

some amount of the company based on the dollars you

14:12

put in. So what do you care about the

14:15

price of the share is based on the

14:18

price of Bitcoin. This every single share should

14:20

be relative, like within a percentage

14:22

basis. It should be about the same.

14:24

Yeah, like BTCO and I bet it should

14:26

go up and down the exact same amount

14:28

on a percentage basis every day if they're

14:30

both properly tracking. But can there be reasons why they

14:32

don't? There can be. So

14:35

that goes back, you know, one,

14:37

the fee, there's a higher fee, basically

14:40

the way the fee works, right? If you

14:43

can think, I like to describe it as a termite. And

14:45

if you think like you put all these assets in and that's

14:47

your like block of wood, and the termite

14:49

takes a little bite, the bigger the termite, the bigger

14:52

the bite, and the more you're losing out over time.

14:54

So like the fee really does drag on your turns,

14:56

which is why people focus fixed state on fees, because

14:58

everyone talks about leave your money in the market, it

15:01

compounds, yada, yada, yada. But so do fees, fees also

15:03

compounds. So if you can get a really low

15:05

fee and stay in there, it's going to help you

15:07

out over the longer term. But essentially the fee comes

15:09

out a little bit every day. So the issuer is

15:11

taking a tiny little bit of the Bitcoin out of

15:14

the out of the fund to do

15:16

operations, essentially. So that's

15:18

how that process works. But so the fee is

15:20

actually going to, if you're tracking perfectly theoretically, you

15:23

should have the same exact return of Bitcoin over

15:25

a given time period, minus your fee. So it's

15:27

over a year, it should be minus the expense

15:29

ratio of the fund. And that's perfect tracking. So

15:31

is the issuer therefore selling a little piece of

15:33

Bitcoin every day to cover the fee? Yes, that's

15:36

like what grayscale does. Grayscale was operating GPC for

15:38

a long time. And they were, that's how they

15:40

did it. They funded, but they didn't do it

15:42

every day. I think they did it weekly or

15:44

monthly or something. But now they're going to do

15:46

the ETS for the most part do it, they did they do

15:49

it daily, just because of the way they operate and inflows and

15:51

outflows. Do they have to sell the Bitcoin or can they take

15:53

the Bitcoin out of the field? I don't

15:55

think they have to sell. I don't know. They're

15:57

taking the Bitcoin However, they're doing it. I Don't know.

16:00

I haven't paid that close attention to that aspect

16:02

of the documents. I'm sure I can borderline guarantee

16:04

you it says in the documents exactly what they're

16:06

going to do and in Gb T, C they

16:08

publicist see it were born on offices and they

16:10

were what two percent but it was essentially for

16:12

the said when the. Gap was

16:15

or I'm negative. Cr.

16:17

I'm the haven't pool that lot they lowered.

16:19

I think they've said that they will lower

16:21

marks. Bomb! It seems pretty clear the game

16:23

for them should be to try to keep

16:25

it as high as possible until the can

16:27

for item in. that's the rather make all

16:29

a lot of money Cameo. So I mean

16:31

obviously if they did, you know half the

16:33

fun flows out there. You can assume middle

16:35

of the lower. it's pretty quickly. Yeah the

16:37

the I'm so I haven't talked to them

16:39

specifically but I can. Guess what?

16:41

their their calculations are right, we have

16:43

seven or eight each yes ah that

16:45

are offering see waivers Most of them.

16:47

Both of those seven or eight are

16:49

down and zero percent for something which

16:51

six months. They

16:55

don't want to be with that. It's a race

16:57

to the bottom, which is what he did, which

16:59

is what I said. like the beasley tape drive

17:01

down costs like that's what Gts The Oaks. It's

17:03

cause depression. The ended: Besser wins in those situations.

17:05

But if you're grayscale, you're used to getting two

17:07

percent of how many hundred million dollars a year

17:09

on. It's. Like do I'd take

17:11

the ninety percent cotton go down to twenty

17:13

basis points even to be competitive with the

17:16

lowest end? Or do I just dropped twenty

17:18

five percent indo to one and a half

17:20

and then hope that less than like the

17:22

corresponding amount of outflows that would take like,

17:25

basically, they wouldn't. They just need

17:27

the number did not be ninety percent so I'd

17:29

say probably calculated and did some research. I'm so

17:31

I can guarantee you that did research trying to

17:33

figure out how many people are going to keep

17:35

their Rgb. She says shares versus who's going to

17:37

sell them and they probably calculated. We know we're

17:39

going to see a bunch of outflows. It doesn't

17:42

matter, we have the we have the liquid. it

17:44

were liquidity king. here. we have a ton of

17:46

assets, we can afford to lose assets and it's

17:48

more profitable and more better for their. It's better

17:50

for their revenue to just cut to one and

17:52

a half and take the outflows That guy all

17:54

the way down to twenty basis points or compete.

17:56

on a zero fi level than than than

17:59

the that assets or easier to steal

18:01

from. You can siphon assets by being

18:03

a lower cost provider, by outperforming in

18:05

some way, doing some unique situation. Stealing

18:07

liquidity from an embedded ETF is extremely,

18:10

extremely difficult. What we see other ETFs

18:12

do in this space, we've seen BlackRock

18:14

do this, State Street and others, they'll

18:16

leave their liquid ETF despite everyone coming

18:19

in with ETFs to charge, do

18:21

roughly the same thing, but charge a quarter or

18:23

even less. Then instead of lowering

18:25

the fee of their liquid one, they'll launch a

18:27

new one that competes with the other ones. If

18:30

you're a trader or somebody that wants to get in and

18:32

out, because the spreads are so tight on those super liquid

18:34

ones, it's cheaper to trade in and out if you're going

18:36

to do a short term trade because the fee only matters

18:39

over the long term for the most part. Who cares if

18:41

it's 50 BIPs or 10 BIPs when you're going to

18:43

be in there for a week and they're only taking like 1, 365th out of it

18:45

every time that

18:48

you're there. That's the

18:50

calculus. My theory, I've said this

18:53

in other places, I think grayscale one, I

18:55

think they might lower the fee still, which I'll extend to

18:58

that. I also think they might launch

19:00

another ETF. They own the ticker BTC.

19:02

They could theoretically launch a

19:04

cheaper comparable ETF. You

19:07

can leave these ones in there, leave the BTC

19:10

alone. See, I was surprised even converted to an

19:12

ETF. There's

19:14

a solid argument why

19:17

you wouldn't because essentially they had a

19:19

savings part pension fund that they were

19:21

going to be able to take what

19:23

was it, 750 million at the current

19:26

market rate and perpetuity and the Bitcoin

19:28

price continues to go up. Essentially,

19:30

they just milk everyone till the end. Morally

19:33

wrong, but. Yeah,

19:35

morally wrong. Jack Bogle

19:39

created Vanguard. He's the one part of the reason

19:41

that ETFs are driving fees down that Vanguard is

19:43

driving a lot of this process. He

19:45

used to say, this is the same dilemma

19:47

that active managers have in the equity and

19:49

fixed income space because ETFs and index investing came

19:51

around and are driving fees down left and

19:53

right. A lot of these managers basically either need

19:55

to decide, are they going to try to

19:57

compete here, which BlackRock and many others have done,

20:00

or are they just gonna sit on this

20:02

melting ice cube that's printing money for them, and

20:05

that's kind of what Grayscale need to decide. But the

20:07

problem is, at that point, you're not a growing business.

20:09

If you don't convert, no one's gonna trust you again,

20:11

no one's gonna buy more of your stuff. They're

20:13

basically de facto giving up on the business of Grayscale,

20:16

and I never thought they were gonna do that. So

20:18

I debated people constantly about, they were like, they're never

20:20

gonna convert. They're gonna do everything they can not to

20:22

convert, and here we are, they converted. Obviously,

20:25

and you've had sun and shine on

20:27

here. In this room here. It

20:30

was a great episode, by far one of my favorites you've

20:32

ever done. And he's

20:34

not wrong, though. They've been calling to convert for years,

20:36

right? Like I think they wanna be a serious asset

20:38

manager, so they had to. You

20:40

know, if you're listening, Michael, I stand by the

20:42

interview, but congratulations on the... I

20:45

think it's fair to say the industry owes Grayscale a

20:47

lot on this fight. In the

20:49

end, it was absolutely their lawsuit that forced

20:52

this, right? Many other people also worked hard

20:54

here, you know, inside the issuers,

20:56

outside, in the regulators, wherever, but that

20:59

victory in the DC circuit is the

21:01

main reason that today happened. This

21:03

show is brought to you by Unchained. All right,

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can be a time which sees prices rise as

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can end up costing you missed

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opportunities. Bitcoin's interest rates are up

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23:34

think this is one are situations where like

23:36

multiple things can be tricks srs math affected

23:38

d c d in genesis fucked a bunch

23:40

of people are and grace go when i'm

23:43

on a very boring also yep that's the

23:45

type of thing know like detected know if

23:47

they yeah grayscale dylan's pretty arrogant he sings

23:49

across the lines like it without that lawsuit

23:51

without them winning their ah i don't think

23:53

we'd get a he saw it in the

23:56

letters there is letters than all these commissioners

23:58

put out including gary gensler And

24:01

his letter was a very whiny bitchy

24:05

Kind of I just didn't understand it politics

24:10

Political treasury six three, right? Yeah, it's all

24:13

it's all political But you got it was

24:15

a three to decision the vote and

24:17

Gary was the deciding factor You can thank Gary Gensler

24:20

that we have a Bitcoin ETF. He

24:22

is the reason okay, but for multiple reasons

24:24

actually He could talk to me through that

24:28

The whole thought the whole yeah, yeah why

24:31

he voted it through if you like because

24:33

obviously he's conflicted because the suspicion

24:35

is that he would like to Stay

24:38

very close to Elizabeth Warren and eventually get

24:40

the Treasury Secretary job. That's the It's

24:43

an open secret at this point Yeah, he could have voted

24:45

against it and what he would be another

24:48

lawsuit It would have been that would have

24:50

been a nuclear option that the courts basically

24:52

backed them and they were basically him ignoring

24:54

the DC Circuit Court of Appeals. Yeah, which

24:56

is a federal court That said I also

24:58

think my theory is that look Gensler has

25:00

his political aspirations I think he knew what

25:03

he was doing. He gave a

25:05

speech on August 3rd of 2021 That

25:08

basically told every issuer what to do to

25:10

get a Bitcoin futures ETF through the SEC

25:12

without that speech We probably wouldn't have gotten

25:14

the Bitcoin futures ETFs that we got and

25:16

that was the first domino in the linchpin

25:19

that led to Us getting spot Bitcoin ETFs

25:21

So he's literally the one that opened the

25:23

door for Bitcoin ETFs to happen and he

25:25

just closed the door after it after it

25:27

happened With that Commission vote So he literally

25:29

started it and ended it to

25:32

get us to spot Bitcoin ETF which love him or hate

25:34

him Like he is the reason we got it Yeah,

25:36

I think both and frankly, I think the two

25:38

commissioners voting against it is also just purely

25:41

political They if it looks like

25:43

it's not gonna the Commission is that was that serious

25:46

in serious jeopardy legally speaking? Crenshaw

25:48

and yeah the other two Democrats. Yeah, I

25:51

don't remember the other person's name It's Crenshaw,

25:53

but the two the two Republican commissioners are

25:56

Hester person and you ate a you ate a yeah

25:58

and fairness to have to push she's being been very

26:00

consistent for years now. More than

26:02

in fairness. She's absolutely excellent. She

26:05

also appears to understand markets broadly

26:07

a lot better than many other

26:09

people that work in markets. I

26:11

think she seems to understand American

26:13

values better

26:15

than most people. I mean, look, I think her statement,

26:17

and it came out with Berlin, I think every time

26:19

she's dissented, I think I've read every

26:21

dissent. And they've also been absolutely brilliant.

26:23

She's also a great writer too, which is, you

26:25

don't see that often in the finance world, no

26:27

offense to anyone in finance. I guess you got

26:29

Jill Weisenthal and Matt Levine over at Bloomberg that

26:32

are great writers in my opinion. I

26:34

interviewed her at the SEC one. Did you? Yeah. She's

26:36

great. But I think again, it's

26:39

existential for this. I mean, the SEC is going

26:41

to get absolutely wrecked in court if they didn't

26:43

do something here. And I bet you,

26:45

I mean, there could have even been

26:47

tussling. One of them's got to vote for

26:49

it because it has to go through or the SEC's in

26:52

serious legal jeopardy. Like, truly, I mean, they're

26:54

going to get absolutely smoked in the federal

26:56

court if they don't. So

26:58

it's a matter of like, kind of like who's going to do

27:00

it? And like, and of course, all three of them put out,

27:03

I mean, Cher Gensler's statement, he started off saying that it was

27:05

the SEC is neutral on assets. But by the way, I

27:08

hate Bitcoin. Right. I mean, he said a bunch

27:10

of stuff about it. So, you know, it's this

27:12

conundrum. They also the people who are professionally anti

27:14

Bitcoin, you know, there's a fair amount of these

27:17

people, right? They have this

27:19

conundrum where they constantly talk about all the bad

27:21

things you can do with Bitcoin, but they

27:23

simultaneously say it has no use cases. You

27:25

know, it makes no sense at all. Right.

27:28

It's completely useless. It's only for speculation, except everyone we

27:30

don't like around the world uses it. And that makes

27:32

it bad. What do you like? What do you where

27:34

do you think Gensler goes next? Like, does

27:37

it all come down to the next

27:40

election? I don't know

27:42

what happens with the SEC. If it once, you know,

27:44

the election is done for whatever you say, the Republicans

27:46

win say, as a

27:48

Republican president, does that immediately rotate

27:50

out the chair of all

27:53

these free letter agencies? Typically,

27:55

that's how it works. Yeah, they would resign or be pushed.

27:57

If If

28:00

a Republican wins, I'm fairly

28:03

confident that Hesterpurse would be the chairwoman.

28:06

And it's been deserved. Yeah. Actually,

28:08

we're reforming the SEC in the way it needs to be reformed, I

28:10

guess. Yeah. That would be my base case. Yeah.

28:13

This is getting out of my wheelhouse. I'm happy to talk

28:15

about it, but I'm definitely not the expert. I'm not the

28:17

expertise to be talking about this, but that is what I

28:19

would expect to happen. Yeah. But

28:21

you do have to remember, like, Gensler, if

28:24

Hillary Clinton had won the election, Gensler likely would

28:26

have been Treasury Secretary. He

28:28

was her campaign finance director or whatever.

28:30

Yeah. He was lined up to

28:33

be the Treasury Secretary. So that loss is, yeah,

28:35

why we're here where we are. Because he's

28:37

politic. Yeah. He has

28:39

higher aspirations. Well,

28:42

he didn't have a great week. Apparently,

28:45

Mike Novogratz, his boss

28:47

was Gary Gensler at one point during his Goldman career.

28:49

I've heard this. Yeah. In Asia or something

28:51

when they were in... Yeah. So... And

28:54

I had the ignominious distinction of having worked with Chair Gensler a

28:56

decent amount when he was at MIT's digital currency. And

28:59

I was head of blockchain research at Fidelity because Fidelity was

29:01

a big donor to the DCI. This is why I don't

29:03

think Gensler hates Bitcoin. You're

29:06

welcome. I think he understands Bitcoin. He likes Bitcoin,

29:08

but he likes his own career more. I'm

29:11

with you 100% on that. Yeah. I think

29:13

it's all been career-based. But he did have a good week.

29:16

Can we just take a moment to laugh about

29:18

everything that happened this week? I just can't believe

29:20

it. Fucking hilarious. The SEC tweet thing was just...

29:22

I mean, I don't think I've... Has

29:24

anyone ever seen a financial markets regulator account

29:26

act like de-hacked in tweet market manipulation in

29:28

any country? She's not even ever seen that.

29:31

In Crenshaw's letter, she acted like that was a

29:34

reason. She wrote basically that was a reason to

29:36

deny the Bitcoin ETF because of the community that

29:38

did it. No one knows who did

29:40

it, Arlen. Let's find out who did it first, Commissioner

29:42

Crenshaw. The FBI's on it, apparently. The FBI's doing it.

29:44

Good. I mean, we need to find out.

29:46

I mean, I just... You do have to laugh because

29:49

I'm pretty sure... Some people have said, I think I've heard you

29:51

say maybe even that, like, you know, you probably make more money tweeting

29:53

and rejecting. And then shorting, if you're the accurate. A

29:55

lot of people said that was wrong and I didn't understand

29:57

how markets work. But in my mind... We may not be

29:59

wrong. would have had more impact probably. Yeah, I

30:01

mean, it was, but it might. My

30:04

point is, I think the hacker is all if it's an

30:06

external hacker, they're also just pro Bitcoin. They didn't, well, maybe

30:08

they could have, but they did certainly didn't want a tweet

30:10

of rejection. Yeah, right. 100% confirmed it was a hacker.

30:14

No, it's I think it's confirmed from

30:16

from x that the account

30:18

was compromised by a new user, right? Yeah,

30:20

someone that hadn't previously accepted. There's no, there

30:22

was no, we really know. There was some

30:24

other weird stuff too, because like they tweeted

30:26

stuff, deleted it, and then they were liking

30:28

weird. That's why it was

30:31

not like, oops, the social media manager at

30:33

SEC accidentally hit publish on a tweet. I'm

30:35

certain that you also did not see them tweet

30:37

like when they really did it. You wouldn't expect

30:39

the SEC's formal handle to tweet that anyway. But

30:42

I do think it was, we'll

30:44

say unintentional. It was a compromise, like somebody whether

30:46

it's in insider threat or outsider threat. I'm just

30:48

saying like, you know, you do know, it's like,

30:50

I'm saying the most famous hacker group of the

30:53

last decade was called LulzSec. Okay, the hackers in

30:55

general like to do things for the Lulz. Okay,

30:57

because you could have tweeted something like, you know,

30:59

we're opening a formal investigation against like, you know,

31:02

the largest company in the world. I mean, there's

31:04

a lot of other market manipulation you could have

31:06

done that was better than that. Yeah, wanted to

31:08

wasn't it wasn't it was probably the funniest thing

31:11

you could have done though. Which I do think

31:13

I think a lot more funny thing.

31:15

Yeah, maybe. Yeah, I think you could do a lot. You

31:18

can do some things are way more manipulative.

31:20

Yeah, you could have the problem. It just

31:22

looks like the tweet you would expect and

31:24

look like I'm tweet it was pretty good.

31:26

The memes that come out the back. Did

31:28

you see the thing that was a was

31:30

it who was it was f2 pool? What

31:33

do they have? They had a good one

31:35

scribed in one of the blocks. Oh, yeah,

31:37

against her on brink of second approve ETF

31:39

approval. I saw that literally killed amazing. Yeah.

31:41

And I think sailor tweeted out we're gonna

31:43

be six confirmations for you. Literally died.

31:45

That's good. But it was like a

31:48

catalog of fuck ups. Well, yeah, then

31:50

you got to the actual approval. And

31:52

so when you were the website went

31:54

down or something? Well, no, it wasn't

31:56

even just that. So I think

31:58

whoever the SEC didn't realize. that these

32:00

accounts on Twitter were getting

32:02

the documents before they were posting on the

32:04

public-facing site. So like typically you go to the

32:06

site, the SEC, SRO, whatever, and you can

32:08

see a list of everything. But there's a

32:10

bunch of accounts that have sniffers that are like

32:13

looking on the backend for any new URL

32:15

created in the SEC domain and tagging it and

32:17

pulling it immediately. So somebody probably thought, all right,

32:19

we're gonna load this and get ready to

32:21

drop it after one. 30 minutes, we'll post it.

32:24

Exactly, and then it went everywhere. And it

32:26

wasn't that the site went down. They literally took

32:28

the document down from that link. And then put

32:30

it back up 30 minutes later, basically. And then it

32:33

went back up. So they definitely took it down. So

32:35

they didn't want it to go out when it did.

32:37

So Bloomberg was like, are you sure this is real?

32:39

I'm like, I'm looking at the document. If somebody faked

32:41

this document, they need a... It's like one of the

32:43

top securities lawyers in the world if they faked this

32:45

document. It was an approval document. So I had to

32:47

like argue with people in Bloomberg. I was like, no,

32:50

this is it. This is the approval, I promise. Not

32:52

a head fake. Did you read the document? Because somebody

32:54

said to me, I was paid 22 pages, I'm not

32:56

reading this shit. It's my job. So I did, I

32:58

read some of it and I skimmed a decent amount.

33:00

I read and skimmed as well. And one thing that's really

33:02

interesting that they did is that they had, and again, because

33:05

of the grayscale case, by the way, I think Fidelity had

33:07

also made this case in 21 in

33:09

filings for their ETF. Again, the question

33:11

about whether futures prices are

33:13

mathematically comparable, similar to spot prices, is

33:15

one of the main things that DC

33:17

Circuit Court said was that first of

33:19

all, you don't need a surveillance sharing

33:21

agreement with a spot market of regulated,

33:24

of sufficient size, which was one of the things they've

33:26

been denying for. Futures are enough.

33:28

You can surveil the futures markets, which by the way

33:31

is what all commodity ETFs do. There's

33:33

no centralized market for corn guys

33:35

or gold. Where do you

33:37

think the trading floor for gold is? It's literally all

33:39

over the world at all the time. Oil, same thing,

33:41

right? So you surveil the futures. And in

33:45

the in the 1984 approval that

33:47

they posted yesterday, they go actually in depth

33:49

and say like, we previously rejected it for

33:51

this reason, but actually the court vacated that.

33:53

And when we look at the other reason,

33:55

they did their own math and they said

33:57

it actually is true that surveilling the future.

34:00

futures is sufficient to catch manipulation. And so they

34:02

have a whole analysis there. They did their own math

34:04

too. They looked at everyone else's math and were like,

34:06

okay, we agree. We'll put this math in here. But

34:09

in the oral arguments, they were arguing like you,

34:11

they were basically trying to confirm

34:13

a negative that you couldn't truly confirm, but

34:15

like everything pointed to like, yeah, you

34:18

can surveil using the futures markets. So then

34:20

iShares comes in with that surveillance sharing of

34:22

Coinbase and they come out and they basically

34:24

say, we requested this, but the

34:27

surveillance, whatever, blah, blah, what Alex said, and then was

34:29

like, and Coinbase is not a market of significant size.

34:31

So that was one thing that I learned. Coinbase, as

34:33

far as the SDG concerned, it's not a market. Right.

34:36

But they said, oh, it's okay because that whole argument was

34:38

negated anyway. And we'll go back to using the futures anyway.

34:40

Which is what that was what I was arguing anyway. The

34:43

grayscale court case basically

34:45

made it so that the Coinbase surveillance

34:47

sharing agreement did not matter. Yeah. I

34:50

mean, look, how long have you been covering ETFs now? Ten

34:53

years. You're the ETF guy, right? Yeah.

34:56

Maybe you should be your... It'll be ten years in

34:58

June. Like I said to you through this whole thing,

35:00

you've been the signal for me. Like lots of people

35:02

discussing ETFs. I'm like, I always go to James. I'm

35:04

like, go to James' account. What's James said? All

35:06

right. To me, that was truth in a world.

35:08

It's a bit like during the block size wars,

35:11

Adam back. What's Adam's back to be honest? That's

35:13

my truth. You are my truth in

35:15

this. But like, has there been anything like this in

35:17

the history of ETFs or is this completely unique? This

35:19

is a one of one. Nothing like this

35:22

ever. I mean, it's not even just in

35:24

the ETF world. You had politics involved.

35:26

You had like literally the

35:28

highest rung of government like involved, like Elizabeth

35:30

Warren's involved. We know for a fact like

35:32

the Biden admin knew kind of what was going on with this thing. Then

35:37

you have BlackRock and Fidelity and

35:39

Invesco and massive asset

35:41

managers, billions of dollars at

35:43

stake. You had retail investors, unarguably

35:45

being hurt by the SEC not doing this

35:47

and the fact that they had to use

35:49

GBTC, which was trading at such a broken

35:51

discount or premium before that. I

35:54

mean, the products like that rolled futures contracts,

35:56

like it just looked so bad from all

35:58

levels and the SEC like. I

36:01

think I said this last time I was on the show,

36:03

they completely lost the force for the trees. If they're protecting

36:05

investors, just do this. Trust the ETF

36:07

wrapper, trust these market makers we were talking about

36:09

to get this done. But no, there has never

36:11

been a frenzy like this. It's

36:15

been fun to be kind of at the center of it a little bit.

36:17

Oh, James, you've been the center for sure.

36:20

Leading into it in particular, right? I was saying last

36:22

night when we were in a big... This is the

36:25

account to follow on Twitter. James, you peek now. What's

36:27

now? Even now, Tunis, I could have said this guy

36:29

has to tweet stuff about other ETFs still sometimes.

36:31

And I'm like, dude, what is this? I have you

36:33

on alert, Eric. It's not about Bitcoin. I might have

36:35

to take you off alert. You wait until you have

36:37

to cover the ripple ETF when that comes. Oh, yeah,

36:40

that. Yeah, you had fun now, you're going to have

36:42

hate. Just the fact that you were tweeting about it,

36:44

if I do your job, they'll still hate you. Oh,

36:46

believe me, I say one or two things about it

36:48

and I get bombarded by the XRP

36:50

army. It happens. I'm

36:53

well aware. But yeah, no, it's been I've been lucky

36:55

enough to be right on like most of the things

36:57

I said, I got some stuff wrong here and there.

36:59

But for the most part, we've been we've

37:01

been lucky enough to be right on all of our calls.

37:03

So somebody was saying, remember the days when we were auto

37:05

refreshing on the DC Circuit Court? Those

37:08

were good days. I was doing that. Then after that, I had

37:10

a good moment there. I found it first. I think I think

37:12

I found it first. I think if you go back and look

37:14

at the tweets. But then

37:16

I was like, I can't play this game. James and

37:18

Eric have it like this can't go any further on

37:20

this one. I'm like an auto refresher on my chrome

37:22

looking at a core website that I can do. Beyond

37:24

that, I got to let Eric. Yeah, we have we

37:26

have we have web crawlers set up on there, too.

37:28

So we have like all these crawlers set up and

37:30

everything. I'm not smart enough to do that. But we have

37:32

people at Bloomberg that like specialize in that stuff. So but

37:35

yeah, I remember when people were telling

37:37

me that I was insane for saying Grayscale

37:39

had a shot at winning. Like we were

37:41

you in January put in a note that

37:43

said Grayscale had a 40 percent chance at

37:45

victory. And I got eviscerated by people telling

37:47

me that Grayscale was filing a frivolous lawsuit.

37:49

You guys have the great guy, Elliot Stein,

37:51

a great legal analyst in the finance world,

37:53

too. And he same thing. People

37:56

thought it was no chance. And then it

37:58

came out as like cascading avalanche victory. Yeah,

38:00

yeah, yeah. It wasn't

38:03

only a chance, they absolutely annihilated the FEC in

38:05

that case. Yeah, I was arguing with a lot

38:07

of people that were trying to do the redeem

38:09

GBTC stuff. I was like, I think they're going

38:11

to win this case. I wasn't against

38:13

the whole redeem GBTC movement, but I was like, I don't think

38:15

it's going to matter. Like it's going to become an ETF, like

38:17

they're going to win this lawsuit and they're going to get to

38:19

become an ETF. And then the argument became like, they're going to

38:21

act like they want to convert it, but they don't want to.

38:23

Like the thing you were talking about before, why not just sit

38:26

on this basic annuity that's just going to keep printing money that

38:28

right now is closed to new investors. But at the end of

38:30

the day, they would have lost other lawsuits to the likes

38:32

of Fertry. The guy who was in charge of that

38:35

lawsuit was at Pubkey last night, by the way. Really?

38:37

Yeah, they got it from Fertry. So do you think

38:39

this helps them with their other lawsuits? The

38:42

lawsuits are, for the most part, they don't matter

38:45

anymore. It's an ETF. They've done right by their investors.

38:47

And anyone who is trying to sue them and get

38:49

their money back at par, can get their money back.

38:51

There you go. Today, you got your money back at

38:53

par for the most part. I think it was trading

38:55

at a little bit of a discount, tiny bit. But

38:58

for the most part, you're even. You've got your money.

39:00

I'm going to wait a day or two more and

39:03

the market makers will sort it out. Yeah. I mean,

39:05

look, we all exist in multiple Twitter. I have Bitcoin,

39:07

Twitter, and non-league football Twitter. It's just the reality of

39:09

my world. I've got

39:11

my scarf and my backpack. My man. Is

39:13

there an ETF Twitter? Yeah,

39:16

there is. We call it FinTwit. Okay.

39:18

Well, okay. So FinTwit, that's like world that doesn't

39:20

know about Bitcoin. What do they make of? Are

39:22

they all right? What the fuck is this? No,

39:25

the people. So there's

39:28

FinTwit and there's a subset that focuses predominantly on ETFs. But

39:30

for the most part, everyone in FinTwit knows what ETFs are.

39:32

It's a lot of advisors and people like that. Particularly

39:35

the Bitcoin ETF. They know it. Yeah,

39:37

it's been 10 years. They've been following

39:39

it too. But

39:42

the funny part is I sit between these

39:44

two worlds. So I see

39:46

a lot of horrible takes about

39:48

finance or traditional finance from crypto

39:50

and Bitcoin specific people. And

39:53

then I also see awful, horrible takes, even more so

39:55

from TradVive that just don't

39:57

understand how Bitcoin works or what Bitcoin is.

42:00

Steam ahead, XRP Army 589. Is it

42:02

589? I mean,

42:04

they have that ruling that currently is, I

42:06

don't know, I would say like 65% supportive

42:08

of Ripple. So

42:11

Ethereum, the first deadlines are

42:13

for Van Eken arc, they're due May 23rd,

42:15

May 24th, which is equivalent to

42:17

what we just saw with arc and 21 shares who

42:19

were due on Jan 10. So those are the first

42:21

deadlines. No guarantee it happens then. I think it happens

42:23

in 2024. ETH is probably going to

42:27

happen. We're at like 70% odds. We

42:29

haven't published it yet, but we're probably, we're over

42:32

50% is what I can confidently say. More likely

42:34

than not. Yeah, more likely than not. So you

42:36

say, you know, it's just like all my Bitcoin

42:38

into ETH. No comment. I'm

42:41

gonna say don't do that. Yeah, maybe not. I

42:43

never do. What if I said yes, would you

42:45

have done it? No. Yeah. Well, it doesn't matter.

42:47

Well, you'll be happy to hear my next take,

42:49

which is I don't think anything else is happening

42:51

any time remotely soon. Oh, you don't think the

42:53

Ripple one happens? I think the Ripple one, it

42:56

could potentially be the third, but I don't think it's

42:58

happening anytime. We need all the stuff in the Ripple

43:00

court case to be done. There's no way the SEC,

43:02

they're going to have grounds to not allow this. The

43:04

other part is even if they do win, and if

43:07

it's de facto agreed to be not a security, let's

43:09

assume that I don't think that's necessarily going to be

43:11

the case. They still probably

43:13

can't get an ETF because there's no regulated

43:15

futures market. So like the current process to

43:17

get an ETF in the US, a spot

43:19

ETF based on taking the, the,

43:22

the steps from the Bitcoin ETF is

43:24

you get a futures market,

43:26

CME Bitcoin futures, then

43:28

there's a few other things that happen on CME

43:30

micro futures options, what have you. Then

43:33

you get a futures ETF, and

43:35

then you can get a spot product. So

43:38

if we follow that same theory, ETH is up next.

43:40

They also kind of go through nothing else. It's

43:43

like CME futures, then and

43:46

the other CME products around it, then it's

43:48

a Canadian spot ETF. Canada is

43:50

always a US cash settled futures ETF.

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47:08

SEC needs to see a surveillable market for them

47:10

to feel comfortable with this, and the way they

47:12

fell back on approving the spot Bitcoin ETFs is

47:14

they felt comfortable that the CME surveillance sharing agreement

47:16

with New York Stock Exchange, NASDAQ, the SEC, what

47:18

have you, is enough for them to surveil the

47:20

market. So without any sort of market that the

47:22

SEC can surveil, there's no ETFs that are going

47:24

to be happening. So there's been a lot of

47:26

takes like, oh, this is next, this is next.

47:28

The only thing possibly next is ETH, and then

47:30

you don't have to worry about any other shit

47:32

coins getting an ETF in the US

47:35

anytime soon. And I mean, Bitcoin, Ether,

47:37

and XRP are all meaningfully different, right?

47:39

I mean, the SEC hasn't been looking at, even ETH, I

47:42

think that to me this is one of the reasons why

47:44

it may not happen, although I think, again, following the path,

47:46

the path is laid out for Ether to have

47:49

an ETF. But it's meaningfully different,

47:51

a whole different type of consensus now, right? They

47:53

haven't been spending 10 years learning about ETH, right?

47:55

I mean, they know about it. They're not, they

47:57

know plenty about it, but I just mean, it just is different.

48:00

If not the same thing, custody

48:02

works differently. For example, there's no multi-sig native to

48:04

ETH, right? You have to use a smart contract.

48:06

Are they gonna have to, what is the disclosure

48:09

section of the ETH as one's

48:11

gonna say about the NoSYS save contract, which is

48:13

what everyone uses for, it just literally just is

48:15

different. Yeah, the SEC got really in the weeds

48:17

here, right? Like everyone likes to say the SEC

48:19

doesn't understand anything. The people working there understand the

48:21

stuff way better than you think they do if

48:23

you think they don't know what they're talking about.

48:26

That's the one thing I'll say. The other part is, I

48:29

laid out that there's another path to potential

48:31

other ETFs and it's like a little act

48:33

of Congress. Like if Congress gets this shit

48:35

together and figures out to like lay out

48:37

what all of this means, there's

48:40

a chance we get a stable coin bill, but like

48:42

anything else coming through, it doesn't seem like it's happening

48:44

anytime soon. And then change of administration, maybe

48:46

a Republican comes in after the new election, that

48:48

could do speed things along. But for the most

48:51

part, still, it's Ethereum and then nothing else. And

48:53

then if we do get Ethereum, like Alex was

48:55

talking about, people are like asking about staking. There's

48:58

almost no shot. If the SEC allows this

49:01

this year, I would be absolutely

49:03

stunned if they allow any sort of staking or

49:05

yield farming within the ETF. Which would make it

49:07

strictly worse than holding spot. Exactly. I

49:09

feel like we've said the word of theorem a little bit too much for

49:11

the What Bitcoin Did show, but this is

49:14

the ETF man you've got here. Listen, we

49:17

will cover these things if it's relevant and if there's

49:19

a chunk to get up and pop. Okay,

49:21

one more reason why it is relevant. And

49:23

one thing I've been saying about what the

49:25

Bitcoin ETFs will do, I think long-term volatility

49:27

in Bitcoin spot will dampen because of the

49:29

ETF, because a huge amount of it's gonna

49:31

sit in advisor accounts. They don't trade every

49:33

day, right? In fact, if anybody has a

49:36

financial advisor, they probably only trade once

49:38

or twice a year and rebalance and slight

49:40

shifts of strategy. So

49:42

Bitcoin, more Bitcoin will

49:45

sit effectively in stronger hands, right,

49:47

by definition. But also, there's

49:50

this many cycle Story

49:53

of Bitcoin leading the way to a new all-time

49:55

high than sort of going flat or sideways or

49:57

even down, than Ether having a new all-time high.

50:00

I'm hiding I flatter sideways or down send

50:02

all season as the des Gens call up

50:04

happening where Obama just like sick or in

50:06

scope moons graveyard space and repeatedly and for

50:09

don't even have an assault spritely once after

50:11

the first like real jubilant on the bitcoin

50:13

it's yep story happen in late October spend

50:15

bitcoin kind of went sideways many saw him

50:17

and we it even culminated with like dog

50:20

Money on everything I want or Mona a

50:22

sprite every different every button it's own like

50:24

dog money that that rifts so that that

50:26

many cycle but this eat yes is likely

50:29

to also dampened that. Inter Crypto cyclicality Because

50:31

again, the big point is not sitting on

50:33

a crypto. Extremes ready to be quickly sold

50:35

for eve were sold for those coin, right?

50:37

So it's because it's sitting in the one

50:39

thing that could make it persists a little

50:42

bit as if there's ether he tf to

50:44

than it might just be like of the

50:46

Coin East story. For that cyclicality and everything

50:48

else is systemic. You can imagine both Bitcoin

50:50

is going to be. It's already the most

50:53

liquid of the crypto generally. It's

50:55

gonna be more of magnitude more liquid and if

50:57

he gets their to than it's just the entire

51:00

market is gonna be a bitcoin heath market but

51:02

but if from a daughter has via. Deaths.

51:04

The other The other thing I'd say that

51:07

echoes where he says i think Cts are

51:09

going to dampen the volatility of bitcoins is

51:11

most I have muscle. We will react. Yeah

51:13

because most people that are going to be

51:15

buying these things advisors or institutions or if

51:17

they put them in model portfolios, the amount

51:19

of portfolio is like you're an advisor. If

51:21

you're you're you don't wanna be actually manage

51:24

money. Many vices don't do much with managing

51:26

money. They're on the golf course, they're salesmen,

51:28

their boost their boozing with their clients, What

51:30

they'll outsourced the actual managing a money. Some

51:32

the and oftentimes will do like financial planning.

51:34

like help you like how to plan things out

51:36

and they outsource it to a model portfolio in

51:38

the model portfolios like what is the risk tolerance

51:40

what is their risk appetite his mom all these

51:42

other things and they build a portfolio of equity

51:44

the bonds what have you have said they just

51:46

use about cts for that's it'll be like ten

51:49

gps and different proportions so it's possible at some

51:51

point down the line and with this i can

51:53

be initially black rock is one of the large

51:55

largest model portfolio providers out there they put their

51:57

a d f in there there's plenty of other

51:59

model for right out there that have relationships with

52:01

different people. So you could see something like Invesco's go in

52:03

there, you name it. But the main

52:05

point here is even if it's not the model portfolio, even

52:07

if it's just an advisor, what they do

52:09

is they have target allocations. So they're going to put I'm

52:11

going to put 2% in or 5%. And

52:14

the math behind what that does to a

52:16

portfolio, it actually decreases volatility portfolio, increases returns.

52:18

So you get like an increase in what's

52:20

called the risk adjusted return ratio. So it's

52:22

really good. But what that means is they're

52:24

going to have a target allocation number, right?

52:26

2% or 5%. So Bitcoin goes up 80%.

52:28

They're selling it as it goes

52:32

up, right? So they're providing the other side of

52:34

that trade. And if it tanks 80%, they're going

52:37

to be buying it to get it back to

52:39

whatever their allocation is. So they're going to try

52:41

to keep that allocation at 5%. And they rebalance

52:43

quarterly, semi-annually, whatever it is. So they're going to

52:45

be like the other side of this, they're going

52:48

to dampen the momentum potentially, because they're not DJ

52:50

and crypto traders, or only buying what have you.

52:52

So this will make Bitcoin more useful and usable.

52:54

Yeah, less volatile, more liquidity

52:56

in general, improves Bitcoin. It's a bit like,

52:59

so what am I, I don't have a

53:01

pension anymore. Well, I have a Bitcoin pension.

53:03

But when I did have a pension, pre-divorce,

53:06

they asked me this question is like, there

53:08

was like three major questions. What type of investment

53:10

are you interested in? Do you want more higher

53:12

risk? That kind of

53:14

thing. So if you're more like high risk, what

53:16

percentage of the portfolio might they attribute

53:19

to this? Like what's the high end?

53:21

So like the way I think about portfolios now

53:23

is like we call it core satellite, or we

53:25

say like a core and hot sauce. So like

53:27

core is like you're going to do 6040 type

53:29

portfolio, or maybe 8020, depending on how young you

53:31

are, maybe even more. And that's just equities and

53:33

bonds, and you're going to might just hold the

53:35

S&P 500 for the most part. And then but

53:37

like a lot of people like to have this

53:39

satellite approach, or we call it hot sauce. That's

53:41

where we I consider Bitcoin to be. It's like

53:43

an alternative. It's also like fun to play with

53:45

and trade around if that's what you want to

53:47

do. And a lot of people will use that

53:49

to invest in like thematic ETFs, like based

53:51

on like artificial intelligence or solar

53:55

energy or anything like that. And those

53:57

are that's one area where ETFs can

53:59

shine, because rather than buying a single stock

54:01

or something, you're getting a more diversified exposure, and

54:03

you're still able to bet on something happening. But

54:05

that's not in the core part of your portfolio.

54:09

These ETFs, if they do go into, if advisors

54:11

are putting them in, they're going to be in

54:13

that 2% to 5% range. Honestly, Alex can talk

54:16

about it more. His report trying to figure out

54:18

how many billions are going to go into ETFs

54:20

was pretty damn good from a bottoms up perspective.

54:22

And he looked at like where they're going to

54:24

do. And I think that 2%, 3% range is

54:28

where it will average out because no one's going to do just 1% that

54:30

we still be able to do way more. What

54:32

was your conservative number again? 13 billion, 14 billion

54:35

inflows in year one. Yeah. Net new assets brought

54:37

into Bitcoin. I don't know if it's conservative or

54:39

I really still haven't decided. We have to wait

54:41

until today, tomorrow, the first week, the first month

54:43

to get an idea if we're on track or

54:46

we could be, I mean, standard chartered supposedly put

54:48

out, I didn't see the note, but I

54:50

saw the screenshot on Twitter, supposedly 50 to 100

54:52

billion in inflows is what they were calling for,

54:55

for year one. That seems very high to me.

54:58

Absurd to me. Yeah. The

55:01

other point to build on what James was saying

55:03

too, is about the hot sauce. I like this. I haven't heard

55:05

this. I'm gonna start using this because this is actually how I've

55:07

thought about it. I got a core portfolio and then I like

55:09

to, I love commodities, right? Because I

55:12

studied geopolitics. And so I sort of feel like I

55:14

have a tiny, not an edge. I'm certainly not an

55:16

edge over the pro traders in it,

55:18

but it's something I actually know, whereas I'm, you know,

55:20

I was never an equity analyst. So like me picking

55:23

individual stocks is not something I'm into, but I like

55:25

trading commodities. And so I have some stuff in that,

55:27

in that bucket. And I think about this as a

55:29

way that financial advisors also now increasingly

55:31

differentiate because if everyone's basically

55:34

buying the same versions

55:36

of the same portfolios and they really are,

55:38

I mean, it's absolutely a giant portion of

55:40

the market, fidelity, you can even

55:42

do this automated now, all the, all the robo

55:44

advisors, which now people aren't even really using

55:47

anymore, but like they, they were doing this

55:49

exact thing, like automatically for

55:51

you without even a person. Betterment is adding

55:53

crypto investments on their platform. They're a big

55:55

robo advisor. Yeah, this is a nice way.

55:57

If you, if, if you're a financial advisor

55:59

for ever regular people. I mean I'm saying not

56:01

at a hedge fund on endowment or whatever with specific

56:04

things you have to do. If you're managing

56:06

people's retirement and their family of personal wealth

56:09

if everybody's basically in basically about the same stuff. Well

56:11

one thing you can do is say well actually we have

56:14

a guy here who was 20 years

56:16

in the real estate business. So we actually are really

56:18

good at like throwing in a little bit of some

56:20

real estate investing or or we're really

56:22

good at tech or we're really good. Right. And they do

56:24

a little bit there. And I think the Bitcoin ETFs will

56:26

be something that fits and helps differentiate

56:29

because they first of all they get to go

56:31

out with this like new story. Right. And you

56:33

don't get a new story very often in investing.

56:35

You've got new things to sell. Exactly. But also

56:37

you get to differentiate yourself. Like you mean look

56:40

at you see Vanguard supposedly today saying they're never

56:42

going to have them. Right. And

56:44

I've talked about this too. There are wealth platforms

56:46

that you know B.D. that are with broker

56:48

dealers that for example don't let you buy

56:50

cannabis stocks. I don't know why they just

56:53

don't like them. But it wasn't just them.

56:55

Wasn't it Merrill as well. That's

56:57

a different black. And that's a different

56:59

problem. Vanguard is basically saying supposedly there's a

57:02

quote right. They're actually saying they won't add

57:04

them. The others merely happened yet out of

57:06

them. OK. Do you think Vanguard will eventually

57:08

flip on that. So I won.

57:10

I do not. OK. But you've got to realize

57:12

Vanguard is a little bit different than some of

57:14

the platforms that that I saw people throwing out

57:16

there. Yeah. There's like wire houses. So like Vanguard

57:19

is a self directed brokerage account that you can't

57:21

buy these things on which is that it's against

57:23

their DNA to allow you to trade crypto. They

57:25

don't even like you. You can't do really gold.

57:27

They allow gold ETFs though. But for now they're

57:29

not allowing Bitcoin ETFs. We'll see what happens. They

57:32

didn't allow they stopped allowing you to buy GBTC not

57:34

that long ago. I think you

57:37

could only sell. Yeah. You could only sell because they

57:39

bet they said it was based because they didn't want

57:41

OTC trading things but it was it probably had to

57:43

do with GBTC. But these

57:45

other platforms it's where we those advisors we

57:47

were talking about brokers. They have

57:49

like these lists of like these are the green light.

57:52

You can buy this whenever you want for your clients.

57:54

And then there's usually a separate list or maybe multiple

57:56

things in the middle with different levels of hurdles before

57:58

you can buy it. So like. You need

58:00

to write up and explain to compliance or these due

58:02

diligence people why you want to buy this product for

58:04

your end clients. And then there's some that are like

58:06

in the red zone, we're like, no, no one can

58:08

buy this, not until we do our due

58:10

diligence. And that process could take

58:12

months to years before those big platforms

58:14

allow these advisors and brokers to buy

58:16

it. I know for a fact,

58:18

some of these issuers are out there trying to talk to

58:21

these platforms about why they should allow the Bitcoin ETF to

58:23

be sold, but it's going to take time. So that's why

58:25

I think like everyone's focused on like how much money is

58:27

going to come in on day one or day two. Let's

58:30

say that marathon, right? I'm way more interested in

58:32

what happens 18 months from now, because if you

58:34

get this on this platform, the Raymond James of

58:36

the world, the Meryl's, the big, where the big

58:38

money is, that's where it will be important to

58:40

see like if they start buying ETFs. So we're

58:42

very early on this. This is our entire point

58:44

in our report, which we did an episode on,

58:46

so I won't do the whole thing, but it

58:48

was that like, do we all can buy Bitcoin

58:50

right now, right? I personally, I throw it out

58:52

there. I know we're all friends. I like buying

58:54

Bitcoin on river. It's very easy. Buy it on

58:56

Cash App, buy it on any of the crypto

58:58

exchanges. You can buy it in your Fidelity brokerage

59:00

account already or adjacent to it. So

59:03

not hard for retail to buy Bitcoin. No issues

59:06

with it at all. In fact, we've all been

59:08

buying it for years, for the most part, if

59:10

you're lucky, or if you were early, you've been

59:12

buying it plenty of places, Coinbase. I'm not going

59:14

to hate on Coinbase. They've been selling Bitcoin to

59:16

retail Americans for over a decade, basically. Is this

59:18

all about portfolio construction? Yeah, well, it's just that

59:21

the group that can't easily buy it are these

59:23

wealth managers on these platforms, and primarily on the

59:25

platforms, but also even independent ones didn't have a

59:27

great way to do it. That's

59:30

who these are for. Look, this

59:32

would be for everyone. This is

59:34

what's interesting about the gold comparison for the

59:37

gold ETF, because you really couldn't buy investment

59:39

grade gold easily, right? Some

59:42

of the brokerages will let you have a metals desk.

59:44

You might be able to buy it like at Fidelity

59:46

or at GS or something like that. It's possible, but

59:48

not easy. Definitely not like everyone can download an app

59:50

from the app store and buy gold. There was no

59:52

way to buy gold. Yeah, you were going to the

59:54

coins. You're going to go buy. Yeah, eagles. You get

59:56

some American eagles and literally you have to go to

59:58

the store to buy gold. put in your backyard.

1:00:01

So that was an ETF. It was a

1:00:03

retail explosion because now everyone could buy gold.

1:00:05

But everyone can already buy Bitcoin except for

1:00:07

this large but like specific cohort

1:00:09

that has a lot of trouble. And

1:00:12

that's that and they don't turn on on day one. That's

1:00:14

what I'm saying. Even whatever this volume day comes out to

1:00:16

be on day one, it looks like it's going to be

1:00:18

pretty gang busters. We're nearing four billion.

1:00:20

I saw we're not quite there, but two more hours left

1:00:22

to trade. Would this be some kind of record? What

1:00:25

is the record? James, Eric was tweeted about it

1:00:27

or something. I mean,

1:00:29

this is meaningfully high. Yeah, the problem is it's hard.

1:00:31

Like I was saying in the beginning, it's kind of hard

1:00:33

because you're used to looking at

1:00:35

just one ETF. So I'm going to look at everything

1:00:38

down and try to figure out where each one of

1:00:40

these fall. But like, I, GBTC is at 1.8

1:00:43

billion today, which is a huge day. But GBTC

1:00:45

was a very liquid $30 billion

1:00:47

product. And I think

1:00:49

most of that volume is outflow. So

1:00:51

a lot of money is coming out

1:00:53

of GBTC, likely pouring into these ETFs.

1:00:55

Based on the price performance, it might

1:00:57

be net outflows to Bitcoin in general,

1:01:00

but who actually knows? But

1:01:02

it's hard to figure all this out. Well, then

1:01:04

you have some like, I don't want to name

1:01:06

any specific issuers, but like, let's say some that

1:01:08

run active ETFs and they now have their own

1:01:10

Bitcoin ETF, right? They may also just be rotating,

1:01:13

like where they're getting their exposure from. Like, this

1:01:15

is what this is like, where I'm not even remotely

1:01:17

close to knowing how to even really where to start

1:01:20

here. But you guys call it

1:01:22

BYOA flows, right? Like, yeah, bring your own assets. Like

1:01:24

that's the other thing is also figuring out who, right,

1:01:26

we heard rumors of like different issuers, like getting lining

1:01:28

up a bunch of money to come in early. Like,

1:01:30

first of all, I don't think we've seen that. So

1:01:32

I think that was not true. Or at

1:01:35

least the specific rumor, I don't want to mention, but because

1:01:37

I didn't think it was true then anyway. But does

1:01:41

that count? Is it organic? Or is it,

1:01:43

is it like some kind of structural thing?

1:01:45

So we, we often hard to know. Yeah,

1:01:47

we often discount, like, BYOA

1:01:50

flows for these types of record breaking. That's why

1:01:52

it was hesitant because like you can look at

1:01:54

some of these and there are ESG ETFs that

1:01:56

focus on like carbon and like carbon neutral stuff

1:01:58

and Paris along the way. equity

1:02:01

investing, and then a

1:02:03

finished pension fund puts $2.1 billion into

1:02:05

it in day one. That's

1:02:08

currently the record right now, but that's

1:02:10

not really organic demand. So we're going

1:02:12

to try tonight and tomorrow, we're going to

1:02:14

try to suss out what the organic demand looks

1:02:16

like. And it's more

1:02:19

an art than a science. Like I said, I'm

1:02:21

guessing GBC, we're going to see a lot of

1:02:23

outflows, we're probably going to see significant inflows. The

1:02:25

inflows that I heard about happening on day one,

1:02:27

I don't think they're there. I

1:02:29

think a lot of the flows, it'll be curious to

1:02:31

see the net flows. But also, it's

1:02:33

day one, like a lot of this money, even if

1:02:35

they had money lined up, maybe it's not happening on

1:02:37

day one, it could happen day two or next

1:02:40

week. Right. And that's what I mean,

1:02:42

these things are really designed for the

1:02:44

advisors. I mean, look, ETFs are for everybody, we've

1:02:46

talked about this, but given the weird nature of

1:02:48

Bitcoin and the Bitcoin markets, like, and they're just

1:02:50

going to take it even the ones who are

1:02:52

supportive, like they're in compliance review, and you want

1:02:54

to add something to that list that the advisors

1:02:56

can use, a bunch of people

1:02:58

have to sign off on it. Even if

1:03:00

they like it, some of the advisor platforms,

1:03:02

they already offer private Bitcoin vehicles. We know

1:03:04

this, right? And Galaxy is one of the

1:03:06

providers of those vehicles. And we were on

1:03:08

some platforms, we assume that those turn on

1:03:10

the ETF, but they haven't yet. It's not

1:03:12

going to happen to like day one. Yeah. That's

1:03:15

why for this, I think strangely, it's really not

1:03:18

about day one flows. It's some longer timeframe in

1:03:20

the end. It's in some ways day two more

1:03:22

important than day one. Day

1:03:24

one, day one's a shakeout. I

1:03:26

would say like more, I'm more interested in

1:03:28

seeing what happens in the coming weeks. Like

1:03:31

little, literally really long-term, like months even,

1:03:34

because some of these guys are,

1:03:36

some of these funds are probably going to have to close,

1:03:38

but we talked about a lot of these guys, from what

1:03:41

I understand, have a lot of BYOA ready on the sidelines

1:03:43

that will come in over the next week or two. So

1:03:46

we'll see exactly how that shakes out. There's been

1:03:49

a lot of rumors about billions of dollars flowing

1:03:51

in. I don't see any single ETF trading with

1:03:53

more than a billion dollars yet today. We

1:03:56

still have a couple, just under a couple hours left

1:03:58

of trading. So. there's no way

1:04:00

that that many billions of dollars float in today,

1:04:02

I don't think. So the

1:04:05

only one trading over a billion dollars is

1:04:07

GBTC. And they're probably going to hit two today. Right.

1:04:10

Okay. Longer term, what else are you looking

1:04:12

at? Is there anything else we should be keeping in mind? We love that.

1:04:15

No, I'm just laughing because

1:04:17

like, it's a big thing

1:04:19

to watch. You got to watch more than just this.

1:04:21

Yeah. What, you know, this probably

1:04:23

more for you as a Bitcoin addict. Well, yeah, let

1:04:25

me tell you, because I wanted to talk to you.

1:04:27

This is shifting gears a little bit, but I think

1:04:29

James raised the politics around Bitcoin, which also make it

1:04:31

a really also add both to

1:04:33

the humor and the seriousness of the ETF whole

1:04:35

thing. I mean, gosh, it's not all the

1:04:37

stuff that you said, all the facts and forths and the different

1:04:40

characters and then the hacks and the it's

1:04:43

also the fact that the underlying is

1:04:45

a revolutionary thing. Right. Well,

1:04:47

that was going to be my question. And it's a dangerous and revolutionary

1:04:49

thing. I mean that in a positive way. Right. I

1:04:52

mean, change is dangerous to there's no such thing

1:04:54

as a revolution where someone doesn't change

1:04:57

negatively. Right. And of course, Bitcoin

1:05:00

is designed to at a

1:05:02

minimum protect your wealth from deflation, I

1:05:04

think, which is at the core right

1:05:07

of second bailout for banks, but also

1:05:09

potentially changes how money works in general,

1:05:11

like unstoppable payments is a real thing.

1:05:15

So it's it's highly political and the theme of

1:05:17

thing. And I mean, like, you know, I don't

1:05:19

know, either the lowercase political, I don't mean like

1:05:21

Republicans and Democrats. I mean, like it

1:05:23

dramatically impacts power in the world. And

1:05:25

in many ways, it's empowering for individuals

1:05:27

in a way that hasn't previously existed.

1:05:30

So there's a lot of people who don't

1:05:32

like it. One of them is Senator Elizabeth

1:05:34

Warren. And there's this bill that I've been

1:05:37

harping on, I think, was we were going

1:05:39

to talk about this a little bit. I'll

1:05:41

just give the quick pitch called the Digital

1:05:43

Asset Anti-Money Laundering Act. D-A-A-M-L is

1:05:46

what it's called. And it's co-sponsored with

1:05:48

a Republican. And they've

1:05:50

she has been out here. We've been stacking sat. She's

1:05:53

been stacking votes, basically. And they've got a lot of

1:05:55

support in the Senate for this. Now, luckily, not not

1:05:58

enough support yet. ETFs help us?

1:06:01

That's a really good question. I'm not sure.

1:06:03

I think probably yes. Probably

1:06:05

yes. If the ETF issuers tell the story,

1:06:07

well, there's another thing I want to call

1:06:10

for on all issuers is to, and we've

1:06:12

seen some great stuff from VanEck, from Invesco

1:06:14

Galaxy, I thought from, not yet from BlackRock,

1:06:16

but I hope they put out some,

1:06:18

but Larry Fink has been quite positive. I think

1:06:20

his commentary on Bitcoin has been spot on in

1:06:22

the scheme of things. We

1:06:24

want to see the issuers, of course, promote

1:06:27

the underlying true value of Bitcoin, which is

1:06:29

not that it sits in a brokerage account.

1:06:32

It's much bigger than that. For

1:06:35

example, the issuers need to be opposed

1:06:37

to Damel. Now, Damel would make it

1:06:39

basically effectively illegal to operate a Bitcoin

1:06:41

node or a Bitcoin mining machine or

1:06:43

publish software that allows people to store

1:06:45

their own keys. You might

1:06:47

say cynically that issuers should directly be

1:06:49

fine with that. Great. Let's

1:06:51

kill self-custody and give us all the coins.

1:06:54

That theoretically is their incentive. Of course, if

1:06:56

that happens, the value of Bitcoin in dollar

1:06:58

terms and usability will go to zero or

1:07:00

very low. If you can't run Bitcoin, you

1:07:02

can't self-custody keys, then why even bother having

1:07:04

Bitcoin? Why don't we just give Invesco and

1:07:06

BlackRock a spreadsheet and let them tell us

1:07:09

how many coins there are? It's

1:07:11

existential and this bill is particularly bad. It

1:07:13

says that it wants to stop terrorists

1:07:16

from using Bitcoin, but actually the people

1:07:18

that it stops are regular Americans. Listen,

1:07:22

it's hyperbolic, but

1:07:24

it's really hyperbolic, what

1:07:26

I'm going to say now. It feels like it's

1:07:29

taken us on this journey that's going to

1:07:33

rebuild traditional American values of

1:07:35

what the republic was built

1:07:37

on because it's

1:07:39

been lost to the greedy power

1:07:41

brokers, to this political

1:07:44

class, where it's become

1:07:46

so apparent that

1:07:49

the elites within DC are getting

1:07:53

rich and massively

1:07:55

increasing surveillance and really have drifted

1:07:57

so far from the original American

1:08:00

dream and the promise

1:08:02

of the Republic. Like, it was so far

1:08:04

from that now. And

1:08:07

Elizabeth Warren wants to continue that. I

1:08:09

mean, she is... This could reduce power. Yeah.

1:08:12

I mean, I think... Well, we know, by the way I

1:08:14

should have added here, the banks wrote that bill for them,

1:08:17

right? Yeah. Yeah. know.

1:08:22

Did you see that clip? Yes. Amazing.

1:08:26

I believe it's actually called the American Bankers Association, but...

1:08:28

So he doesn't even know who wrote it. Exactly.

1:08:31

I put the blame much more on the

1:08:33

Bank Policy Institute, which is a much more

1:08:35

elite cabal of the banks, right? It's actually

1:08:37

chaired by Jamie Dimon as the

1:08:39

chair of the Bank Policy Institute, right? And

1:08:42

by the way, JPM has other

1:08:44

business before the Senate Banking Committee,

1:08:46

specifically around Basel and net capital

1:08:48

requirement rules, which are changing. So

1:08:51

perhaps there's a reason why. And of course

1:08:53

we know that maybe not anytime

1:08:55

soon, maybe it never will. But

1:08:57

I mean, again, Chancellor on brink of second

1:08:59

bailout for banks, like, why don't we

1:09:02

say like, be your own bank? Like, well, wait a

1:09:04

second. JPM is the world's largest bank. Like they probably

1:09:06

don't want everyone to be their own bank. They prefer

1:09:08

if you banked with them. So it's

1:09:10

obviously directly competitive with them. So it just

1:09:12

kind of starts to... Now, not every bank,

1:09:14

by the way, I don't want to hate

1:09:16

on the banks. There are plenty of banks

1:09:18

that like Bitcoin a lot. BNY Mellon, the

1:09:20

oldest bank in America, founded by Alexander Hamilton

1:09:22

himself, they love Bitcoin. Did he? Yeah. I

1:09:25

never knew that. BNY is the one they're doing. They're doing the

1:09:27

most fighting on SAB 121 that doesn't let them pay. Because

1:09:30

they want to hold Bitcoin. They want to custody Bitcoin.

1:09:33

Yeah. Anyway, I just I want

1:09:35

to I am I'm issuing that clarion call. Now, look, it

1:09:37

seems like right now the very immediate thing this bill is

1:09:39

not like going to move today. I was worried it would

1:09:41

be attached to the must pass spending stuff that's happening right

1:09:43

now in Congress. It seems like they've come up with a

1:09:46

what we call a mini bus, like stop got funding bill

1:09:48

that's going to basically kick the

1:09:50

can again for like another number of months. Maybe

1:09:53

nothing gets hung on that because that's truly must

1:09:56

pass. But this will rear its head again. And

1:09:58

it can't just be Bitcoiners like me and. James

1:10:00

calling for this or Pete and Danny. It

1:10:02

needs to now we need you. You want

1:10:04

to think. Yeah, we need Larry. We need

1:10:06

Abby. We need Invesco. Like this is your

1:10:08

you're in the game now. Like this. This

1:10:11

thing isn't valuable if it's not able to be

1:10:13

used self in a self-custody manner. If this is

1:10:15

the innovation, that's the core innovation. If this is

1:10:18

something in the poor photo of every boomer and

1:10:20

every pension fund, like Tom saying, we, we, we,

1:10:22

and the issue is we got to take the

1:10:24

story of Bitcoin's true value out. That's how they're

1:10:27

going to do it. It's how they're marketing it.

1:10:29

It's not just portfolio returns, although that's a part of it.

1:10:32

We got to tell that story widely. I really hope

1:10:34

and believe and we're working at Galaxy to make sure

1:10:37

that any discussion we do about

1:10:39

Bitcoin is geared to these new net

1:10:41

new groups and includes the actual truth

1:10:43

about what makes Bitcoin valuable. Isn't it

1:10:45

wild though, when you really think about

1:10:48

it in 15 years, that

1:10:50

it's gone just from a white paper,

1:10:52

white paper, like

1:10:56

an idea some anonymous guy had

1:10:58

for a former digital money and

1:11:01

then like, then how it helps in my mind,

1:11:03

like it spreads and like, even when you first

1:11:05

get into it, I spent most of my time

1:11:07

in Bitcoin saying, well, at some point

1:11:09

they're going to ban this. It's some boy like you watch

1:11:12

the video where there's a video that's been going around a

1:11:14

guy filmed himself watching Bitcoin break $100. Did

1:11:16

you see that recently? Yeah. And it's like, dude,

1:11:19

that it was like random, even

1:11:21

for the internet niche people, that

1:11:24

thing that's $100 is now being marketed by the

1:11:26

world's biggest. Yeah. It actually worked. No, it

1:11:28

doesn't. Like through your head. I can't believe

1:11:30

it actually worked. I mean, I can't believe

1:11:32

it. That's why I guess the question is

1:11:34

how early did everyone figure out how early

1:11:37

you realize that it would work is how

1:11:39

wealthy you are today basically, right? In

1:11:41

Bitcoin terms. So, but I just can't believe

1:11:43

I'm still shocked. I'm just it's going

1:11:45

to, it's going to get bigger. Yeah, it's going to get

1:11:47

a lot bigger. But now, so the interesting

1:11:50

is now, now I do think it's

1:11:52

kind of unstoppable. Like it was always

1:11:54

unstoppable as a blockchain or someone could

1:11:56

mine another block, whatever. Right. But like,

1:11:58

I always felt like. They

1:12:00

would stop it or they would regulate the fuck

1:12:02

out of it. Now I'm looking to Europe and thinking, it's

1:12:05

very hard to buy Bitcoin in the UK. Most

1:12:08

banks won't let you do it. We've

1:12:10

got now accredited investor rules. I saw

1:12:12

this. They didn't just go like a

1:12:14

test. Yeah, it wasn't just

1:12:16

what is your net worth. They were asking you

1:12:18

specific questions about Bitcoin and crypto assets. Like if

1:12:20

you answer the wrong, then they don't let you

1:12:22

buy. No, then you're done. Then you're out, right?

1:12:24

They've made it so difficult. All

1:12:26

you're doing is making us less

1:12:29

and less competitive than the US. It's like, come

1:12:32

on, you've got to flip this at some point. It

1:12:34

felt like we were being left behind by Europe

1:12:37

because Europe has had Bitcoin ETFs since 2015. They

1:12:40

had ETNs trading in Sweden. There's something weird though. They're not

1:12:42

nearly as good. European ETFs

1:12:44

aren't like a bankruptcy remote or something. There's

1:12:46

one aspect to it. They've

1:12:48

never been as big as American ETFs. They're

1:12:50

also kind of harder to get because they're

1:12:52

not usage compliant, which makes them harder to buy. Similar to

1:12:54

what you were talking about. The other thing I did want

1:12:56

to point out, you're talking about JP Morgan and bankers. They're

1:12:59

an authorized participant on a bunch of these

1:13:02

ETFs, including yours, which is

1:13:04

hilarious. I have to

1:13:06

assume whoever's running that desk, they are one of

1:13:08

the biggest authorized participants, which are the people that

1:13:10

like facilitate the actual creation and redemption of shares.

1:13:13

They have to be like, okay, we know the top of the

1:13:15

house doesn't like it, but this is our business. Also,

1:13:18

there's hundreds of people that are working on Onyx, which is

1:13:20

their blockchain thing. I've always

1:13:22

been friends with Christine Moy, who used to run

1:13:24

that. She's at Apollo now. She's great. There's

1:13:26

plenty of people there. I think JPM is a

1:13:29

huge investor in consensus, actually. There's tons of overlap.

1:13:31

It's absurd. It's just absurd that he's at

1:13:33

the top and telling them that you killed

1:13:35

it. It's not a

1:13:37

credible policy statement. It's theater when he says

1:13:40

that. If I was president, what did he

1:13:42

say? I would kill it? Yeah, he'd kill

1:13:44

it. That's not something he... It was for

1:13:46

her. No one's asking. I'm sorry. No

1:13:49

one's asking. Every time Elizabeth Warren

1:13:51

asks a question in those situations, it looks

1:13:53

right. It's not a... It's

1:13:55

theater. When you look at Rampo in one of

1:13:57

those hearings and you'll correct me on that. what

1:14:00

kind of hearings these are. Senate testimony hearings, are

1:14:02

they? Yeah, Senate banking committee typically. You

1:14:04

see around Paul, and you see him question

1:14:07

people, and it's authentic, and he wants answers

1:14:09

out of them. He wants answers that are

1:14:11

important to the American people. When Elizabeth Warren

1:14:13

does it, she looks rehearsed. She's

1:14:15

gaslighting us with the way she structures the

1:14:17

questions is to get what she wants. Well,

1:14:19

remember, she is historic. She's a lawyer. In

1:14:21

fact, I shouldn't even say that. Of course,

1:14:23

she is a lawyer. Almost all members of

1:14:25

Congress are lawyers, but she's

1:14:27

a talented lawyer in that sense, and

1:14:30

that's what lawyers do in court.

1:14:32

The law is also basically the

1:14:34

practice of litigation. The people

1:14:36

that actually go in and try cases, not the

1:14:38

other hundreds of lawyers behind that one person who

1:14:41

do all the paperwork and stuff, but that's theatrical.

1:14:47

Certainly, Senator Warren's not the only person that uses hearings

1:14:49

as theater. In fact, all the hearings are theater by

1:14:52

definition. Yeah, I can't stand watching them at times. I've

1:14:54

watched them because they show them on Bloomberg, and we

1:14:56

have a function on it. There's another one. You know

1:14:58

who that, when that wing of the Democratic Party places

1:15:00

a witness at the Senate Bank Committee, you know who

1:15:02

they always get? Better markets. Always

1:15:05

bring them. It's not just on crypto. They are always

1:15:07

there talking about, I've got to reform this part of

1:15:10

the hedge fund, and it's always better markets if Elizabeth

1:15:12

Warren's wing of the Democratic Party has

1:15:14

a say in the guest, and they

1:15:17

usually do. Go back and

1:15:19

look at all the times better markets. You'll

1:15:21

find that it's very aligned. To be clear,

1:15:23

that's fine. Better markets is

1:15:25

a political advocacy group. There's tons of them.

1:15:27

It represents a specific political faction. All

1:15:30

right. Well, listen, look, I think we've done enough.

1:15:32

We've covered enough. Amazing, weird.

1:15:34

It's been a weird week, weird 24 hours.

1:15:37

Go Pirates. Yeah. You guys here

1:15:39

tonight? Yeah, you're here tonight. Yeah, I'll be back

1:15:41

tonight. Yeah. Well, I guess this is in the

1:15:43

past. Everyone who's listening to this, whenever this comes

1:15:45

out, know that James did an awesome job at

1:15:47

Pubkey on

1:15:50

Thursday night. James Crush. He crushed. He

1:15:52

truly did. Am I up there with you? I

1:15:55

think so. All right. Yeah. Oh, Pete and James,

1:15:57

they crushed. We crushed. Thank

1:16:00

you, Alex. Thank you. We didn't get a wrap, but here's what

1:16:03

it is. Thanks, James. Next time. Thanks, guys.

1:16:06

This was fun. All right. All

1:16:08

right. What do you make of that? I

1:16:11

really want your feedback on these ETS. Please do email in.

1:16:13

Please do let me know what you think. Do you think

1:16:15

they're positive? Do you think they're negative? I've kind of got

1:16:17

this evolving view of them. I kind of see both worlds.

1:16:20

We discussed this a lot internally, but I definitely want your feedback.

1:16:22

Let me know what you think. I do want to say a

1:16:24

big thanks to James and Alex for coming on the show. James,

1:16:27

especially, just a big shout out to you

1:16:29

for everything you've been doing over the last

1:16:31

few months on Twitter. You've become the signal

1:16:33

for everyone, telling us all that's

1:16:35

actually going on, giving us the right information with these

1:16:37

ETFs. So thanks for doing all that, James. Right.

1:16:40

We're off to Nashville in the morning. A couple more

1:16:42

shows to do here in New York. One more night

1:16:44

here at Pubkey. But yes, we're off to the mining

1:16:46

summit in Nashville. I'm going to be there for a

1:16:48

week. Then I'm heading out to Canada. I'm going to

1:16:51

be making another film and then back to the UK.

1:16:53

And we'll be prepping for our conference, Cheat Code, which

1:16:55

is going to be happening in Bedford in April. If

1:16:57

you want to check that out, please do head over

1:17:00

to cheatcode.co.uk. If you have any questions about the show

1:17:02

or anything else, please do get in touch. It's hello

1:17:04

or what Bitcoin did. Bye.