Crypto Update | Dormant Investors Are 'Awake Again' for Crypto After the Election: Galaxy Exec

Summary

Markets Daily Crypto Roundup: Detailed Summary

Episode Title: Crypto Update | Dormant Investors Are 'Awake Again' for Crypto After the Election: Galaxy Exec
Host: Jen Sanasi
Guest: Kelly Greer, Head of America Sales at Galaxy
Release Date: November 19, 2024

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1. Introduction

The episode of Markets Daily Crypto Roundup opens with a brief welcome from host Jen Sanasi, setting the stage for a deep dive into the current state of the cryptocurrency markets. The focus is on the resurgence of interest from previously inactive investors following the recent U.S. elections, as discussed by Kelly Greer from Galaxy.

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2. Guest Introduction

Jen introduces her guest, Kelly Greer, highlighting her role at Galaxy and her background in both traditional finance and the crypto industry.

• Jen Sanasi (01:25):
  “On today's show, we are joined by Galaxy Head of America Sales, Kelly Greer. Kelly, welcome.”

• Kelly Greer (01:48):
  “Hi Jen, great to be here.”

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3. Current Market Overview

Kelly provides an overview of the current crypto market dynamics, emphasizing the resilience and growing momentum within the industry despite previous challenges.

• Market Momentum Post-Election:
  Kelly notes that after a period of stagnation, there is renewed optimism and increased activity in the crypto markets, particularly in Bitcoin.

• Jen Sanasi (01:50):
  “A really interesting, turbulent and I would say exciting time for the crypto markets right now. If we just look at what's going on this week. What are you watching?”

• Kelly Greer (02:01):
  “There's lots going on in crypto. We were just chatting about how we've, you know, we've been in space for several years now and finally there's tons of momentum behind the industry... post election there's a lot of renewed interest across all these metrics...”

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4. Transition from Traditional Finance to Crypto

The conversation shifts to Kelly's personal journey from traditional finance (TradFi) to the cryptocurrency sector, illustrating the growing trend of professionals moving into crypto.

• Jen Sanasi (02:30):
  “Before you were at Galaxy, you were actually at JP Morgan. What was your motivation? Were you into crypto when you were at JP Morgan?”

• Kelly Greer (02:52):
  “I found Bitcoin in 2017, which was actually like the ICO era. ... I was young and poor and starting my career in New York City, so I stuck around, met a lot of amazing people...”

• Jen Sanasi (03:18):
  “I have a feeling that you won't be going back to TradFi anytime soon.”

• Kelly Greer (03:25):
  “No, no plans anytime soon.”

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5. Institutional Interest in Bitcoin

Kelly delves into the resurgence of institutional interest in Bitcoin, attributing it to several factors including regulatory clarity and Bitcoin's performance.

• Post-Election Awakening:
  Institutions that had previously been dormant are now re-engaging with the crypto market.

• Quote with Attribution:
  Kelly Greer (03:58):
  “...post election, all of these folks who we've talked to who kind of went dormant for a while are awake again.”

• Factors Driving Interest:

  • Bitcoin's strong performance and new all-time highs.
  • Increased research supporting Bitcoin's portfolio benefits.
  • Anticipation of regulatory clarity in the U.S.

• Jen Sanasi (04:51):
  “What has awakened them? Is it the election? Is it the price hitting new all-time highs? Is it regulatory clarity?”

• Kelly Greer (05:09):
  “All of the above. Bitcoin is impossible to ignore now... regulation... a clear path towards regulatory clarity in the United States.”

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6. Portfolio Allocation Strategies

The discussion moves to how institutional clients are approaching Bitcoin allocation within their portfolios, highlighting reduced volatility and diverse investment strategies.

• Jen Sanasi (05:37):
  “Talk to me a little bit about portfolio allocation when it comes to Bitcoin.”

• Kelly Greer (05:49):
  “Volatility has come down and other asset markets, volatility has picked up. So, you know, it's really something that I think you need to have at least some exposure to... smart ways you can do it now in liquid options markets...”

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7. Meme Coins and Dogecoin Spotlight

Kelly addresses the rising prominence of meme coins, with a particular focus on Dogecoin, and its place in institutional portfolios.

• Jen Sanasi (06:15):
  “Meme coins have really taken over the spotlight... Doge you've been tweeting about... How are you looking at cryptos outside of Bitcoin, especially Doge?”

• Kelly Greer (06:52):
  “Doge has been around for a very long time. It's a very honest meme coin... It’s an enduring asset to get your meme exposure to.”

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8. Interest in Other Cryptocurrencies

While Bitcoin remains the primary focus, Kelly discusses the interest in other cryptocurrencies and the criteria institutions use to evaluate them.

• Jen Sanasi (07:29):
  “Are your institutional clients asking about any assets other than Bitcoin?”

• Kelly Greer (07:34):
  “Definitely. Bitcoin is the starting point... interest in other applications for those willing to take a little bit more risk.”

• Concerns with Layer Ones:
  Kelly expresses caution regarding layer one cryptocurrencies, emphasizing the need for enduring use cases and long-term viability.

• Kelly Greer (08:44):
  “I look for enduring use cases... Bitcoin has been adopted for over a decade now...”

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9. Future Predictions and Regulatory Landscape

Looking ahead to 2025, Kelly shares her insights on the anticipated regulatory developments and their impact on institutional participation in crypto.

• Regulatory Tailwinds:
  Anticipation of a new SEC chair post-election who may adopt a more crypto-friendly stance compared to previous leadership.

• Quote with Attribution:
  Kelly Greer (09:35):
  “I think the regulatory tailwinds will drive a lot more institutional participation... representatives... will be beneficial and much more friendly to the industry than Chair Gensler.”

• Potential SEC Candidates:
  Kelly mentions specific individuals like Robert Gallagher from Robinhood as favorable candidates for the SEC chair position.

• Jen Sanasi (11:12):
  “What are some of the catalysts that would prove beneficial for this industry as we move forward?”

• Kelly Greer (12:06):
  “We're watching Robert Gallagher... advocates for the crypto industry.”

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10. Overcoming Institutional Fears

Kelly addresses the lingering concerns institutional investors may have about integrating Bitcoin into their portfolios, particularly regarding custody and asset management.

• Jen Sanasi (10:10):
  “Are there any challenges or fears that the institutional clients are talking to still have when it comes to dabbling into Bitcoin?”

• Kelly Greer (10:20):
  “There's always a little fear about dealing with a bearer asset... but there's lots of now tried and battle tested licensed, regulated, qualified custodians for crypto...”

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11. Conclusion

The episode wraps up with Jen thanking Kelly for her insights, emphasizing the importance of understanding both the opportunities and challenges in the evolving crypto landscape.

• Jen Sanasi (12:28):
  “Kelly, thank you so much for joining Markets Daily. It was a pleasure having you on.”

• Jen Sanasi (12:33):
  “Thank you to our audience for watching... Subscribe to the CoinDesk Podcast Network...”

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Key Takeaways

• Renewed Institutional Interest: The post-election period has reignited interest among institutional investors in Bitcoin and other cryptocurrencies, driven by strong market performance and anticipated regulatory clarity.

• Bitcoin's Strategic Position: Bitcoin remains the cornerstone for institutional crypto investments, offering reduced volatility and a robust framework for portfolio diversification.

• Emergence of Meme Coins: While Bitcoin leads, meme coins like Dogecoin continue to capture attention, offering unique investment avenues despite their speculative nature.

• Regulatory Developments: The upcoming changes in the U.S. regulatory landscape, particularly the appointment of a new SEC chair, are poised to significantly influence the crypto market's trajectory.

• Custodial Solutions Evolving: Advances in regulated custodial services are mitigating previous concerns institutions had about integrating Bitcoin into their investment strategies.

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Notable Quotes:

• Kelly Greer (05:09):
  “All of the above. Bitcoin is impossible to ignore now. It's one of the best performing assets year to date... a clear path towards regulatory clarity in the United States.”

• Kelly Greer (07:34):
  “Bitcoin is the starting point for almost any institutional investor in the space...”

• Kelly Greer (09:35):
  “I think the regulatory tailwinds will drive a lot more institutional participation...”

---

This episode of Markets Daily Crypto Roundup offers a comprehensive analysis of the current trends in the crypto market, highlighting the resurgence of institutional interest, the strategic importance of Bitcoin, the role of meme coins, and the pivotal influence of regulatory developments in shaping the industry's future.

Transcript

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[Kelly Greer]

I found Bitcoin in 2017, which was actually like the ICO era. I love bitcoin and I joke. We were joking. I should have left when Jamie Dimon said he would fire any who held bitcoin at the company then. But you know, I was young and poor and starting my career in New York City, so I stuck around, met a lot of amazing people that I worked with who, you know, we continue to interact with at Galaxy and Institutional Trading.

[Jen Sanasi]

Hello and welcome to Markets Daily, hosted by me, Jen Sanasi. On this show we navigate the crypto markets, providing insights against the broader financial landscape. So, so whether you're actively investing or just interested in the volatility that is the crypto markets, this show is your compass to understanding what's happened, where we are and where we are going. On today's show, we are joined by Galaxy Head of America Sales, Kelly Greer. Kelly, welcome.

[Kelly Greer]

Hi Jen, great to be here.

[Jen Sanasi]

Great to have you here. A really interesting, turbulent and I would say exciting time for the crypto markets right now. If we just look at what's going on this week. What are you watching?

[Kelly Greer]

There's lots going on in crypto. We were just chatting about how we've, you know, we've been in space for several years now and finally there's tons of momentum behind the industry. You know, we've survived tons of tailwinds. Even this year alone, there was a lot of forced sell pressure specifically in bitcoin. And you know, post election there's a lot of renewed interest across all these metrics you can look at and we can talk about and a Lot of just all around optimism around what the next presidential administration will bring for crypto in the United States.

[Jen Sanasi]

Yeah, I mean, we were talking before the show about, you know, how long I've been at CoinDesk, how long you've been at Galaxy. It's a similar timeframe. But before you were at Galaxy, you were actually at JP Morgan. And I'm always curious about people who leave Tradfi to enter this crazy world that we operate in. And so what was, what was your motivation? Were you into crypto when you were at JP Morgans?

[Kelly Greer]

Yeah, so I, you know, I found Bitcoin in 2017, which was actually like the ICO era. But I res, you know, I love bitcoin. And I joke. We were joking. I should have left when Jamie Dimon said he would fire anyone who held bitcoin at the company then. But, you know, I was young and poor and starting my career in New York City, so I stuck around, met a lot of amazing people that I worked with, who, you know, we continue to interact with at Galaxy and Institutional Trading.

[Jen Sanasi]

So, so that's. And I have a feeling that you won't be going back to Tradfi anytime soon.

[Kelly Greer]

No, no plans anytime soon.

[Jen Sanasi]

All right, well, let's talk about, about the convergence of Tradfi. And I won't even say crypto. I'll say Bitcoin and the institutional interest that has really picked up momentum this year after the approval of the ETFs. You know, there was a lot of excitement back in, you know, March, April, May. Things kind of died down over the summer, as one would expect. And after the election, they're picking up again. Talk to me about the conversations you were having with institutional clients.

[Kelly Greer]

Yeah, you know, it's funny, I've talked to hundreds and hundreds of portfolio managers, fund managers, individuals about Bitcoin and digital assets over the years. And those who are interested and, you know, were intent about allocating stuck around. And, you know, we've, we've helped them facilitate allocations across their portfolios here. And it's funny, post election, all of these folks who we've talked to who kind of went dormant for a while are awake again. So we're definitely seeing renewed interest across all types of participants, whether it's very traditional institutions, fund managers, or, you know, high net worth individuals. So it's great to see. You can see it in volumes. You know, the seven day average exchange volume chart is amazing. It's like straight line up post November 5th. So it's great to see the activity back in the market. And I think there's a lot more to come as we get more details out of the Trump administration.

[Jen Sanasi]

You said that some institutional clients are awake again. What has awakened them? Is it the election? Is it the fact that the price hit new all time highs recently? Is it the fact that there might be some more regulatory clarity in the United States? What's the main driving factor there?

[Kelly Greer]

All of the above. Bitcoin is impossible to ignore now. It's one of the best performing assets year to date. It's making new highs almost every day for the past couple of weeks. You know, there's tons of research now about how adding even just a small percent of bitcoin to your portfolio is beneficial from a sharpe ratio for your fund exposure. And now, you know, I think one of the biggest sort of hurdles for investors to climb was regulation. And we now have a clear path towards regulatory clarity in the United States.

[Jen Sanasi]

Talk to me a little bit about portfolio allocation when it comes to bitcoin. When your clients come to you and ask, you know, how should I be looking at Bitcoin against the rest of my portfolio? What do you tell them?

[Kelly Greer]

Well, you know, it's funny, 2021, Bitcoin was a lot more volatile than a lot of other assets. And that's not really the case anymore. Volatility has come down and, you know, other asset markets, volatility has picked up. So, you know, it's really something that I think you need to have at least some exposure to. And there's lots of smart ways you can do it now in liquid options markets and through, you know, multiple ways you can buy and custody bitcoin with institutional partners.

[Jen Sanasi]

Now, Bitcoin is not the only crypto that has been stealing the headlines lately. Meme coins have really taken over the spotlight in this cycle. And I want to talk about one more specifically. I don't even know if you. I guess it is a meme coin, but maybe one of the more established ones. Doge you've been tweeting about. Of course, Elon is now at the helm of the Department of Government Efficiency, which send Doge kind of flying recently. How are you looking at cryptos outside of bitcoin, especially Doge, since you've been tweeting about it?

[Kelly Greer]

Listen, I think I wrote this that, you know, Doge has been around for a very long time. It's a very honest meme coin, if you will. It was a fair launch. It's a proof of work. And look, it's. It's something that has a windy effect to it. So there's lots of long term holders of Doge and I call it the lazy person's Meme Coin. If you don't want to spend your weekend, you know, on these apps like dexscreener and things like that. For all these other very, very small cap means, I think it's, it's an enduring asset to get your meme exposure to.

[Jen Sanasi]

Are your institutional clients asking about any assets other than Bitcoin?

[Kelly Greer]

Definitely. I think Bitcoin is the starting point for almost any institutional investor in the space. There's now some lower market cap layer ones or applications that are revenue generating at the end of the day. I think some of those may struggle with their value accrual or unlock schedules in the future. Bitcoin's path and its use case is now enough for it to be discussed by nation states and it has a lot of security around things like inflation and global adoption. So it's definitely the starting point. But we do see interest in other applications for those willing to take a little bit more risk.

[Jen Sanasi]

Kelly, you said some layer ones may struggle in the future. Talk to me a little bit about what some, I don't want to say red flags, but what makes you pause and take no or makes you proceed with caution when you're looking at layer ones?

[Kelly Greer]

I look for enduring use cases and I think other layer ones have really leaned into the speculative frenzy that we're seeing right now in things like Meme Coin trading. And that's fine, it's good for right now. But I'm looking for things that, you know, will continue to be used and adopted over multiple decades. And you know, Bitcoin has been adopted for over a decade now. And so I think there's just a lot more for other chains to prove themselves in terms of their lasting usability and staying power in the industry as.

[Jen Sanasi]

We move into 2025. Is there one narrative that you predict if you were going to look into your crystal ball is going to really drive us through the next year?

[Kelly Greer]

I think the regulatory tailwinds will drive a lot more institutional participation. I think, you know, we don't have a lot of clarity around what the administration will bring. We have some ideas, but you know, hopefully more traditional counterparty level participation will bring in things like financing versus Bitcoin that will level out the playing field for institutions to hold and trade with Bitcoin the same way they can with all of these other types of traditional assets that they trade with. At things that go traditional farm broker.

[Jen Sanasi]

Are there any challenges or fears that the institutional clients are talking to still have when it comes to dabbling into Bitcoin.

[Kelly Greer]

You know what, there's always a little fear about getting used to dealing with a bearer asset. Right. It's different than, you know, an equity or bond that you hold at custodian. But the end of the day, there's lots of now tried and battle tested licensed, regulated, qualified custodians for crypto. And I think that depth and breadth of support will continue to expand in a really meaningful way in 2025.

[Jen Sanasi]

And lastly, regulation is really the theme as we head into next year. I know you shared some research by your colleague Alex Thorne, who's been on this show before. What are you watching from the regulatory landscape or the regulatory shifts to come in the United States? What are some of the catalysts that would prove beneficial for this industry as we move forward?

[Kelly Greer]

Yeah, I mean, I think everyone is on the same page in terms of watching out for who will be the new chairman of chairman or chairwoman, I should say, of the sec. We expect that appointment or announcement to come after the treasury secretary is elected who will presumably want to take part in choosing the next SEC chair. If you look back in prior years, other chairs were nominated or appointed before the presidential inauguration. So I think we're expecting something in the coming months here before Jan.20th and we're eyeing all of the prospective candidates and trying to dissect what they could mean for the industry. But no doubt that almost all of the candidates in play should be or will be beneficial and much more friendly to the industry than Chair Gensler.

[Jen Sanasi]

Who are some of the candidates that you are watching just for our audience? Like who are some of the people who are in the running?

[Kelly Greer]

We're watching Robert Gallagher, who is currently with Robinhood, is a proponent of crypto. So a nomination from him would be great. But outside of the sec, I think there's lots of other folks surrounding President Trump who understand and are advocates for the crypto industry.

[Jen Sanasi]

Kelly, thank you so much for joining Markets Daily. It was a pleasure having you on.

[Kelly Greer]

Thank you.

[Jen Sanasi]

And thank you to our audience for watching. If you enjoyed this podcast or any of the other podcasts on CoinDesk.com, subscribe to the CoinDesk Podcast Network that is available on all podcast platforms. Subscribe to our YouTube. Give us a thumbs up. Thanks so much for watching. Thanks for listening. We will see you tomorrow.