Speaker 1: Essentially either the SEC refused to acknowledge them, told them
Speaker 1: to withdraw, basically said this isn't happening, which isn't all
Speaker 1: that surprising. I mean, if you look at some little
Speaker 1: lawsuits out there against coinbase, Kracken, you name it, they
Speaker 1: basically flat out calls allonta security and say they're not
Speaker 1: going to mess with that thing.
Speaker 2: This content is brought to you by bitco, which is
Speaker 2: one of the top crypto custodians in the crypto industry.
Speaker 2: Bitco works with many big companies and brands such as
Speaker 2: Pantera Capital, Bitstamp, and bitcoin Ira. Nike also selected Bitgo
Speaker 2: to power its wallets for its NFTs, and bitco has
Speaker 2: many great services such as hot wallets, custodial wallets, self
Speaker 2: managed cold wallets, and NFT wallets. Many institutions trust bitco
Speaker 2: with its top level security and incredible services such as
Speaker 2: being able to deploy your capital while it's in custody,
Speaker 2: which includes lending, borrowing, trading, staking, DeFi access and more.
Speaker 2: If you'd like to learn more about bitco, please visit
Speaker 2: bitgo dot com link in a description. Welcome to the
Speaker 2: Thinking Crypto Podcast. I'm your host, Tony Edward and with
Speaker 2: me is James Seyferd, who's an ETF research analyst at Bloomberg. James,
Speaker 2: great to see you.
Speaker 1: Yeah, happy to be back, Tony. It's been a while well.
Speaker 1: James has been good though.
Speaker 2: Yeah, the summer has been good, although I wish we
Speaker 2: were talking in better terms. As far as the market,
Speaker 2: it's kind of bloody right now. What are you seeing
Speaker 2: on your end? What are you hearing from people? Do
Speaker 2: you think this is just the normal seasonal uh, you
Speaker 2: know set up where they say September is usually not great,
Speaker 2: but in Q four starts to do well.
Speaker 1: Yeah, I mean it's we're just coming now out of
Speaker 1: the summer, right And I feel like if you look
Speaker 1: at trading volumes on anything it's been, it's pretty standard
Speaker 1: for them to go down in that time of year.
Speaker 1: There's less things happening, and I guess that's translated over
Speaker 1: into crypto. So yeah, I mean, I'm not surprised by
Speaker 1: any of this. I mean, if you if you look
Speaker 1: at anything, I mean it's it's Honestly, I said this
Speaker 1: on Twitter, which like some people jump down my throw
Speaker 1: for but it kind of reminds me of the way
Speaker 1: things were trading in twenty twenty before COVID and then
Speaker 1: even right after, like it just kept hitting like that,
Speaker 1: you know, right around that eleven twelve K mark down
Speaker 1: to seven and so on, and like that that happened
Speaker 1: for like eighteen months straight, it felt like, and that's
Speaker 1: what it feels like this to me kind of I
Speaker 1: know it hasn't been quite that long yet, but it
Speaker 1: just that same range kind of feel similar. It's like
Speaker 1: that fifty fifty five to like near seventy just keeps happening,
Speaker 1: and it's like we're just keep hitting sixty and fifty
Speaker 1: eight over and over and over again. And it just
Speaker 1: feels like how it felt to me when I kept hitting,
Speaker 1: like staying right around ten k. It just feels similar.
Speaker 1: And obviously, like when you're thinking about this, like I
Speaker 1: never like to look to the historical price action for
Speaker 1: what's actually going on. It's just the vibes feel very
Speaker 1: similar to me. People were very down and out on
Speaker 1: the prospects for the market in general, specifically bitcoin, and yeah,
Speaker 1: people were still building, so I guess we'll see what
Speaker 1: happens in the coming months, but yeah, I think we're
Speaker 1: just kind of in this sideways choppy market right now
Speaker 1: and time will tell what happens next.
Speaker 2: I know the FED rate cuts are around the corner,
Speaker 2: and that could be causing some anxiety as well, in
Speaker 2: addition to the summer lull. Right, every they say sell
Speaker 2: and may go and go away, right, and then people
Speaker 2: come back into the markets come late September. So do
Speaker 2: you think the FED ray cuts is kind of adding
Speaker 2: some volatility here waiting to see what the job numbers
Speaker 2: may look like, and then maybe markets will then have
Speaker 2: confidence to you know, keep going.
Speaker 1: Yeah, I mean that's my personal view, right, So I
Speaker 1: just think one, a lot of the economic data is softening,
Speaker 1: pointing towards cuts are likely to happen, right, So I
Speaker 1: think we're going to see fifty BIPs most likely in September.
Speaker 1: But I'm not a rage strategy or very trateg just
Speaker 1: says at least twenty five, possibly fifty, which is roughly
Speaker 1: what the market is pricing. Right. So we're priced now
Speaker 1: for one hundred basis points or one percent cut before
Speaker 1: the end of the year, and then another or one
Speaker 1: percent cut before the end of twenty twenty five. That's
Speaker 1: currently what markets are pricing. But you said sell a man,
Speaker 1: go away, and ironically that probably would have been pretty
Speaker 1: good for crypto, but not for socks socks off. It's
Speaker 1: done I done pretty well. So it's not all risk
Speaker 1: assets that are that are fitting that this year.
Speaker 2: Yeah, for sure. So let's talk about ETFs. How have
Speaker 2: the big one in ether ETFs have been reacting to
Speaker 2: this type of environment. We've seen some outflows, although some
Speaker 2: there was some inflows at certain points, so it's kind
Speaker 2: of been up and down a bit.
Speaker 1: Yeah. I mean, if you look at the Bitcoin ETFs,
Speaker 1: i'd say it's it's been pretty damn good. I mean,
Speaker 1: their net inflows since they launched is over seventeen billion.
Speaker 1: I mean, no matter how you slice it, that's with
Speaker 1: nineteen billion coming out of gray scales GBTC. Yeah, things
Speaker 1: have been somewhat slow recently, but it hasn't been that bad.
Speaker 1: There's kind of been this trickle that comes in and
Speaker 1: then there's spurts of outflows and then there's another level
Speaker 1: of inflows come in and they more than cover the
Speaker 1: outflows that we just saw. And that's typically the way
Speaker 1: that we see categories grow in the ETF world. Right
Speaker 1: like they're going to go up and down with prices
Speaker 1: and money will come in and out. But theoretically, a
Speaker 1: real healthy market, you're going to see those asset levels
Speaker 1: and those flows over the long term tend to go up,
Speaker 1: and that's what we're seeing. We're not seeing that with ethereum.
Speaker 1: So the Ethereum ETFs launched in July and they have
Speaker 1: had negative let me get you the exact number. They've
Speaker 1: had negative, like almost five hundred million dollars in olflows.
Speaker 1: Actually over five hundred million dollars in outflows. So with
Speaker 1: the bitcoin ETFs we had, we called them the newborn nine,
Speaker 1: these other spot ETFs besides GPTC that had enough demand
Speaker 1: to overwhelm the outflows from the unlocking of the GBTC shares,
Speaker 1: the gray scale GBTC shares. We are not seeing these
Speaker 1: other new eight ETFs or seven ETFs from the Ethereum
Speaker 1: side of things to overwhelm the unlock and selling of
Speaker 1: shares of ETH. So we've seen net alflow since launched.
Speaker 1: So we were relatively bare. So our our view was
Speaker 1: like fifteen twenty percent was what we thought was going
Speaker 1: to happen. Twenty percent was my number. Al chun Is,
Speaker 1: my boss, thought fifteen percent of the flows that bitcoin
Speaker 1: ETFs saw, we thought theorem metos would see over the
Speaker 1: first six to twelve months. I think I probably said
Speaker 1: that on here Man I was there are nowhere near that.
Speaker 1: So there's there's a few things we just talked about. Summerduldrums, right,
Speaker 1: sell them a go away. That's definitely been the case
Speaker 1: for Crypto. They launched into a very quiet, sideways shop
Speaker 1: b market. There's just not a lot of interest in them.
Speaker 1: But there's a lot of other things that go on here.
Speaker 1: Like Bitcoin is kind of like if you're an advisor,
Speaker 1: like bitcoin, digital store value, those things they just like
Speaker 1: they make sense. They're very easy to sell, and if
Speaker 1: you want to diversify it with like we call it
Speaker 1: hot sauce in your portfolio, if you're already putting like
Speaker 1: two percent of your client's money into bitcoin, do you
Speaker 1: need to diversify it with another digital asset. Maybe not.
Speaker 1: So it's basically bitcoin first and then these other things
Speaker 1: kind of need to fill out their own narrative. I've
Speaker 1: seen like these issuers and these trad five people that
Speaker 1: are trying to sell these ethereym metfs and ethereum in
Speaker 1: general are working on different things. But like so I
Speaker 1: could say Matt Hogan for bitwise for example, likes to say,
Speaker 1: like ethereum, you should be owning it and viewing it
Speaker 1: as like part of your tech exposure, like it almost
Speaker 1: should be part of the queues in a way. That
Speaker 1: that's the argument that they're pushing. I just think there's
Speaker 1: no one cohesive argument, so it's a little bit harder.
Speaker 1: And honestly, ethereum is a lot more complex than bitcoin, right,
Speaker 1: There's a lot more things you can do, so it's
Speaker 1: a little more complicated. So for all those reasons, I
Speaker 1: mean Bitcoin ETF's really done really well, maybe one sideways
Speaker 1: the last couple of months, but still holding up well.
Speaker 1: Everything is there's been no issues Ethereum. Honestly, still no
Speaker 1: issues over there. You look at everything besides ETH, they've
Speaker 1: taken in well over two billion dollars, so you know
Speaker 1: we're looking at outflows, yes, but that's because two point
Speaker 1: six billion came out of grey scales ETH, but two
Speaker 1: point one roughly came in to the other products. So
Speaker 1: they are doing well. They are pulling in money, it's
Speaker 1: just not enough to offset the ETH outflows.
Speaker 2: Yeah, and like you said, like maybe the timing wasn't
Speaker 2: great given you know, we had headed in to summer
Speaker 2: and then you know, I'm thinking from a RIA standpoint,
Speaker 2: wealth manager standpoint, what you said, how much are you
Speaker 2: going to throw at your clients?
Speaker 1: Right?
Speaker 2: You spend a lot of time pitching this new product Bitcoin.
Speaker 2: It has the branding, it has the mass penetration, and
Speaker 2: so forth. Etherom not so much. So if you go
Speaker 2: to someone say, hey, there's also this thing called etherorem,
Speaker 2: what's that? Why is it different?
Speaker 1: And big?
Speaker 2: You have to go through this whole explanation. So it's
Speaker 2: a harder sell.
Speaker 1: Yeah, no, it really is a harder sell. And it's like,
Speaker 1: as somebody who's like pretty well versed in this stuff,
Speaker 1: you can kind of get it. So I honestly think
Speaker 1: like it would have probably been easier if they had
Speaker 1: launched like later this year or early next year, because
Speaker 1: you're also not only is it those reasons you just
Speaker 1: talked about, you're also like they pick on ETFs just launched,
Speaker 1: like people are just getting comfortable with these things, and
Speaker 1: then you're throwing another one at them right away. So
Speaker 1: I think that all of that contributed to the lower
Speaker 1: demand we're seeing. That said, I also always expected that
Speaker 1: the etherey metfs were going to be a bit of
Speaker 1: a slower burn, if you will. Like I thought the
Speaker 1: type of level of demand that we could see maybe
Speaker 1: twenty five percent of the Bitcoin ETF flows, I thought
Speaker 1: it might take a while to get there. And I
Speaker 1: thought the theory metfs could potentially get up to like
Speaker 1: their market cap rat show, which is like, I don't know,
Speaker 1: thirty a third something like that over the longer term.
Speaker 1: But I think it's going to be a slower burn
Speaker 1: for all those things we just talked about. I'm kind
Speaker 1: of second guessing as so right now, I actually I've
Speaker 1: met with Steve mcclerk, who used to be one of
Speaker 1: the guys running the Valkyrie ETFs. He has the under
Speaker 1: on fifteen percent of the flows in six months versus
Speaker 1: Bitcoin for ethereum, and I have the over and right
Speaker 1: now I am I'm going to owe him some food
Speaker 1: at Pubkey in New York City a few months from now.
Speaker 2: Well, you know, James, look what we were talking about
Speaker 2: with the FED cut raycuts and maybe some additional liquidity
Speaker 2: injections from Janet Yellen and things like that. As we
Speaker 2: head into the elections, right we know these sitting incumbent
Speaker 2: wants to, you know, make things look good. The stock
Speaker 2: marketing look good, the economy to look as best as possible.
Speaker 2: So do you think we see some liquidity injections and
Speaker 2: we are in much favorable environment where the inflows will increase?
Speaker 2: Were both bigcoining ether coome Q four into twenty twenty five.
Speaker 1: Yeah, I mean, I mean, I do. I do think
Speaker 1: it will help. And but part of the problem here is, right, like,
Speaker 1: a lot of this is going to depend on the
Speaker 1: political nature here. I know a lot of people will
Speaker 1: say it shouldn't really matter that much, but I really
Speaker 1: do think the political nature of what happens in November
Speaker 1: will have an impact here. Obviously, ray cuts theoretically should
Speaker 1: be beneficial to this market. There's no guarantee that that's
Speaker 1: going to be the case, but theoretically that's what should happen.
Speaker 1: But also we don't know exactly where somebody like Harris
Speaker 1: is going to stand, if they're going to follow like
Speaker 1: the typical way that Biden has handled things. I tend
Speaker 1: to think not. I think it will be neutral at worst,
Speaker 1: like maybe slightly positive at best if the demsill win
Speaker 1: in November, and I think it could be a very
Speaker 1: positive catalyst if somebody like Trump wins.
Speaker 2: Yeah, agreed, and I know it's very heated right now
Speaker 2: from the political standpoint, and we'll see what happens. I
Speaker 2: did want to ask you about Solana. Is this Solana
Speaker 2: ETF dead? Is it officiated? We had some filers, but
Speaker 2: what do you think?
Speaker 1: Yeah, So essentially what happened here is so for I've
Speaker 1: definitely talked about this on your show before. So for
Speaker 1: an ETF to launch, you need to basically approval from
Speaker 1: two parts of the SEC, and you need two like
Speaker 1: things that happened at once. The first thing is the
Speaker 1: issuers have to file their prospectuses or s ones and
Speaker 1: they go through the Division of Corporate Finance eventually to
Speaker 1: get approved. So that's one division of the SEC. But
Speaker 1: typically before they would approve those to Corporate Finance, you
Speaker 1: also have to get these those nineteen befores which we've
Speaker 1: talked about a lot, right and CBOE filed nineteen before
Speaker 1: on behalf of ARC or sorry not on behalf of PARC,
Speaker 1: half of twenty one Chaares and on behalf of van K.
Speaker 1: Those filings went through, but they have since withdrawn them.
Speaker 1: Essentially either the SEC refused to acknowledge them told them
Speaker 1: to withdraw. Basically said this isn't happening, which isn't all
Speaker 1: that surprising. I mean, if you look at some of
Speaker 1: little lawsuits out there against Coinbase, Bracken, you name it,
Speaker 1: they basically flat out calls all hot A security and
Speaker 1: say they're not going to mess with that thing. So
Speaker 1: what we've seen is CBE has withdrawn. So for now
Speaker 1: it's dead in the order. Until we see another ninety
Speaker 1: before filing, nothing can happen. That said, twenty one chairs
Speaker 1: and van X still have those s ones out there,
Speaker 1: so they're still filed. They're still technically active. They just
Speaker 1: need to go through that nineteen before process before they
Speaker 1: can get approved by the corporate finance. So are they
Speaker 1: dead kind of? I think again this goes back to
Speaker 1: what I was just saying with the political process. I
Speaker 1: think if we see Trump in office, it's possible that
Speaker 1: actually I would say it's it's highly likely we would
Speaker 1: see another filing because the people would hope that somebody
Speaker 1: else would be running the SEC, so there could be
Speaker 1: a chain and the way the ADMIN is handling this stuff.
Speaker 1: So I think that could come down to the presidential election.
Speaker 1: But also you kind of need a bunch of other things, right,
Speaker 1: like right now you have the CFTC and the SEC
Speaker 1: arguing over jurisdiction. You have the SEC calling this thing
Speaker 1: these things salon as specifically a security, CFTC is saying
Speaker 1: it's not. And then so like you don't know who
Speaker 1: has control over what. You don't know what exactly is
Speaker 1: a security or what is a commodity. So you kind
Speaker 1: of need that cleared up. Whether that's in the case
Speaker 1: of kind of similar to like what Ripple has gone through,
Speaker 1: you've got like some at least a little bit of
Speaker 1: like binding clarity from the courts. You might need something
Speaker 1: like that, or more likely, I think what you need
Speaker 1: is a literal like Act of Congress to kind of
Speaker 1: clear all this stuff up for some things other than
Speaker 1: bitcoin and ethereum to get through. I mean, the way
Speaker 1: right now it's set up is you need a futures
Speaker 1: market that's regulated and surveilled and the CFTC feels comfortable
Speaker 1: with it, and the SEC will allow it, and you
Speaker 1: can kind of use that to get a spot etf
Speaker 1: That's what we had with bitcoin, that's what we have
Speaker 1: with ethereum. We don't have any other markets for any
Speaker 1: other digital assets that could go through that same process,
Speaker 1: right so you kind of need some other thing out
Speaker 1: there to happen for these things to get approved. That said,
Speaker 1: there is nothing like in the SEC regulation that says
Speaker 1: like you need a futures market that is surveiled for
Speaker 1: all these things. That's just kind of the process that
Speaker 1: this SEC has followed and what they wanted. It's not
Speaker 1: like that's hard coded into any law or language or anything.
Speaker 1: That's why I said, if we get a change in
Speaker 1: the admin at the SEC, then that could also change.
Speaker 1: But there's a few other you need catalysts one of
Speaker 1: those three or four things I just mentioned to happen
Speaker 1: before you can get something like a Salona or possibly
Speaker 1: even a ripple ETF.
Speaker 2: Yeah, great point, And most likely we'll see what the
Speaker 2: landscape looks like in twenty twenty five, because twenty twenty
Speaker 2: four it's done right Lane ducks coming up campaigning and
Speaker 2: gants are still there, so we got to wait to see,
Speaker 2: like is there a regime change, and under Trump it
Speaker 2: will be more pro crypto, So Bringers, it'd be nice
Speaker 2: to have Solana maybe an ex r p ETF in
Speaker 2: twenty twenty five. But then it goes back to what
Speaker 2: we were talking about earlier. Would it be too saturated
Speaker 2: for the masses, right, They get confused, Why do I
Speaker 2: need to invest in Solana? Isn't the ethereum the same thing?
Speaker 2: Let me just handle big, Let me just have some bigcoin, right.
Speaker 1: Yeah, I mean, the one thing I would say is
Speaker 1: that like the Selani, there's Salon ETFs elsewhere, right, Like, yeah,
Speaker 1: we don't have a US, but we have them in Europe,
Speaker 1: and there's a couple of billion dollars over there in
Speaker 1: those ETFs, so they're they're big business. I think a
Speaker 1: lot of that has to do with money came in
Speaker 1: when when Solana was like in single digit prices, so
Speaker 1: there was a lot of money that was in there,
Speaker 1: and then so you don't need that much to be
Speaker 1: in there, a few million dollars for it to get
Speaker 1: to the level it has when the price has gone
Speaker 1: up like I don't know, twenty x or whatever it is.
Speaker 1: So I think that also played a role. But it's
Speaker 1: still there's there's a lot of dctfs elsewhere, just not
Speaker 1: here in the States, so there will be demand. But
Speaker 1: like you said, I just think right now, as things
Speaker 1: certainly look, it's kind of bitcoin first, and then everything
Speaker 1: else will be slower burn or just maybe not garner
Speaker 1: as much interest from the trad FI world, at least
Speaker 1: in the near term.
Speaker 2: Now, I wanted to ask you about bit Wise Asset
Speaker 2: Management and their acquisitions. First was etc Group and then
Speaker 2: they I believe, Osprey and Emerge the funds accordingly. So
Speaker 2: this is this is pretty big. It looks like they're
Speaker 2: trying to grow their market share, expand as much as possible.
Speaker 2: What do you think about these acquisitions?
Speaker 1: I love them, honestly. I mean there's been this huge
Speaker 1: There's always been a lot of consolidation in the ascimnage
Speaker 1: industry around ETF. So for many, many years it has
Speaker 1: been a lot of like large legacy asset managers buying
Speaker 1: ETF issuers who know the ETF market and how to
Speaker 1: do it, and basically then launching their own products with
Speaker 1: the IP that they get from those products. So that
Speaker 1: that's been going on for over a decade. And now
Speaker 1: we've seen a lot more consolidation where like these bigger
Speaker 1: etf issuers in the US are buying smaller shops elsewhere
Speaker 1: where in the world, whether they're European specialists or even
Speaker 1: in Asia. So in the case of there's actually some
Speaker 1: some asset managers in Asia that have bought big US
Speaker 1: issuers to kind of drum up the interest there. So
Speaker 1: that's been just an overwhelming trend that we've seen over
Speaker 1: the last few years, and it's picking up and I
Speaker 1: think it's a good thing. It's basically bit wise sees
Speaker 1: them they bought etc Group. They have a bunch of
Speaker 1: ETFs in Europe, particularly particularly holding crypto asseids, so there's
Speaker 1: probably a lot of overlap they can do there. I mean,
Speaker 1: for example, they own now a Salona ETF in Europe,
Speaker 1: so twenty one shares. Who's another issuer the one that
Speaker 1: we just talked about who also filed with van K,
Speaker 1: They have some some ETFs. They they have the largest
Speaker 1: salon of ETF in Europe. And you have van K
Speaker 1: also who has etns or etcs wherever you want to
Speaker 1: call them in Europe that hold these things. So there's
Speaker 1: plenty of experience over there already with dealing with these
Speaker 1: types of products. And then OBTC is unique. I think.
Speaker 1: So obtc's structure was similar to those gray scale trusts
Speaker 1: where they were kind of closed ended. You can come in,
Speaker 1: but you couldn't really leave unless but you had you
Speaker 1: could sell your shares, you can redeem them. So theoretically,
Speaker 1: if it was trading at a massive discount, you just
Speaker 1: had to sell at a discount if you wanted to sell,
Speaker 1: and these things were trading a bit of a discount.
Speaker 1: A lot of people thought that Osprey was going to
Speaker 1: go through the same process that Gray Skill did and
Speaker 1: you know, convert this thing to an outright ETF But
Speaker 1: I think this was probably the best case scenario for
Speaker 1: everyone involved. I mean, doing that is very expensive. They
Speaker 1: only had one hundred and thirty million dollars in assets,
Speaker 1: I think, so it's not like it was a huge
Speaker 1: cash cow. And this way, those those holders of OBTC
Speaker 1: are basically just going to get bit wise as bit
Speaker 1: B shares in return of equivalent value. So all of
Speaker 1: a sudden you get out, you're no longer a discount,
Speaker 1: and you still have this coached pitcoin. It's a non
Speaker 1: taxable event. So and then also Osprey doesn't have to
Speaker 1: spend a bunch of time, effort, energy, money, you name it,
Speaker 1: going through and converting this thing into an extremely competitive
Speaker 1: market where fees are twenty BIPs and lower. And there's
Speaker 1: already you know, wealked about this ten to eleven products
Speaker 1: that hold spot bitcoin, like Osprey just launching and converting OPDC,
Speaker 1: it'd be hard to like compete there, So I think
Speaker 1: just makes sense for everyone. And like you said, bit
Speaker 1: wise is growing its asset base. It now holds it
Speaker 1: now owns that one hundred and thirty million. I don't
Speaker 1: know what they paid for it, but they have those
Speaker 1: assets now inside or they will have those assets in BitB.
Speaker 2: Tough question for you. Does this move put them ahead
Speaker 2: of any of the folks they were behind in the
Speaker 2: market capitalist so to speak.
Speaker 1: I can tell you in a second. So bit B
Speaker 1: they have right now they have two point two two
Speaker 1: point one billion dollars and they're just behind ARC and
Speaker 1: twenty one shares, and then you obviously have Fidelity at
Speaker 1: ten point two, and then you have I shares at
Speaker 1: twenty point seven. So they're over twenty billion, and GPDC
Speaker 1: is down at thirteen point three. So they didn't jump anyone.
Speaker 1: It extends their lead over the mini trust. So we
Speaker 1: didn't really talk about this too much, but Grey scales
Speaker 1: unique process of spinning out and mini trust at a
Speaker 1: much lower fee. Now that product ticker BTC has nineteen
Speaker 1: or one point nine billion in assets. So, I mean
Speaker 1: the other thing we I should mention here is like
Speaker 1: everyone talks about these things, they're looking at it, but
Speaker 1: like all of these ETFs are extremely successful. I mean
Speaker 1: most ETF fishers, they get one product that could have
Speaker 1: over one hundred million dollars in assets, they view it
Speaker 1: as an extreme success. And all of these guys have
Speaker 1: gotten there within eight months, not even so it's been
Speaker 1: an absolute smashing success. But now, I mean, also, it's
Speaker 1: only one hundred and thirty mil, so I mean, obviously
Speaker 1: that's a lot of money, but it's not a huge
Speaker 1: deal in the type of numbers that we're talking about,
Speaker 1: but it will be beneficial. It'll probably get them much
Speaker 1: closer on the once it's fully complete too. ARCB ticker RB.
Speaker 2: Yeah, it's pretty amazing. I think it's important for us
Speaker 2: to have perspective. Like you said, traditional said to ETFs,
Speaker 2: I mean, to have one hundred million would be successful.
Speaker 2: We're talking black Rock having twenty billion. I mean, it's
Speaker 2: incredible in just months. It's wild.
Speaker 1: Yeah, they're very close to twenty one. They're at twenty
Speaker 1: point seven, they're over twenty point seven, so wow, Yeah,
Speaker 1: very very close to the fame Bitcoin number.
Speaker 2: Okay, final item here. We got news yesterday from the
Speaker 2: FBI that North Korean hackers are supposedly targeting crypto ETFs
Speaker 2: and they're targeting I think the custodians from the mistaken
Speaker 2: which would be primarily Coinbase. What are your thoughts on this,
Speaker 2: And it seems just in principle we need some diversification
Speaker 2: of custody here, right.
Speaker 1: Yeah, honestly, I do think that's the one thing where
Speaker 1: I'm fully on board. I think there needs to be
Speaker 1: some diversification of the custody of these things. For the
Speaker 1: most I think it will happen. It's going to happen
Speaker 1: over time. Some of these issuers are gonna stick with
Speaker 1: Coinbase as their sole custodian. Obviously, there hasn't been any
Speaker 1: issues really yet. I think it's highly unlikely that it's
Speaker 1: gonna happen, but I would never say never. But also,
Speaker 1: isn't that surprising considering like I feel like every other
Speaker 1: month I hear about the Lazarus Group or or North
Speaker 1: Korea hackers like getting on board on some like project
Speaker 1: and then siphoning away assets and things like that. So
Speaker 1: it's not surprising at all that they would target like
Speaker 1: what is I don't know, it's the biggest honeypot of
Speaker 1: bitcoin in the world. If you're gonna, if you're gonna
Speaker 1: go look at how much how much bitcoin the coin
Speaker 1: base holds. I don't know what the exact number is,
Speaker 1: but it's it's it's it's an absolutely stupid number. M M.
Speaker 2: Yeah. I'm hoping we don't have any issues like that
Speaker 2: because that would be so detrimental to the market by
Speaker 2: no coinbase. They do have uh, you know, Tier one
Speaker 2: security and services and so forth. But I think, like
Speaker 2: I said, just out of principle, we need some diversification
Speaker 2: and maybe you know, Congress and they can get this
Speaker 2: SAB one two one situation figured out with the SEC
Speaker 2: and maybe b N Y Melon and somebody, these banks
Speaker 2: can come in and take some of that custodies over.
Speaker 1: I don't know, Hey, I mean all those banks, they
Speaker 1: they're trying, they want to be able to do this
Speaker 1: stuff that we've heard rumors that there is going to
Speaker 1: be exceptions to say and twenty one and they will
Speaker 1: come into the space and compete. So time will tell.
Speaker 1: I mean, you also have you have Bicco and Gemini
Speaker 1: that are already here. So Gemini has plenty of it
Speaker 1: has a bunch of products that use them as custodians
Speaker 1: in Canada and elsewhere. Vanak uses them as a custodian
Speaker 1: on their etf hold Will and then obviously bicco Is
Speaker 1: is trying to get into space as well. So I
Speaker 1: think we'll see more of these issuers, you know, split
Speaker 1: up who they use. I mean, Fidelity uses their own
Speaker 1: custodial service, so I assume they're just going to stick
Speaker 1: with their own custodial service. I think black Rock is
Speaker 1: likely just going to stick with their partner and coinbase,
Speaker 1: and they have some that their partnership going on. But
Speaker 1: I think some of these other issuers, I think I
Speaker 1: would not be surprised at all to see them, you know,
Speaker 1: diversify and use some of these other you know, the
Speaker 1: current ones, the biccos of the world or like you said,
Speaker 1: b and Y, Melon State treet gets into space, any
Speaker 1: of these other are like traditional qualified custodians. If they
Speaker 1: enter the space, I think we'll see it, We'll see
Speaker 1: it happen.
Speaker 2: James, always great insights, my friend. Thank you so much.
Speaker 1: Yeah, thanks for having me, Tony. This is great