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- [00:00]
A
This week alone, we could get the acknowledgment by the SEC for Doge and XRP filings. So watch out. By tomorrow, according to predictions, that could happen. I think that would be a huge. A huge move to suggest green lights ahead. Let's go.
- [00:23]
B
We all want to believe in something. In Chinese, belief also means trust. We want to trust our systems and each other so we can build a future beyond what we know. Join us at Consensus Hong Kong, where belief becomes real. Hello and welcome to Markets Daily, hosted by me, Jen Senassi. On this show, we navigate the currents shaping the crypto markets, providing insights against the broader financial landscape. So whether you're actively trading or simply fascinated by the volatility that is the crypto markets, this show is your compass to understanding what's happened, where we are, and where we're going. On today's show, we have TMX Vetify investment strategist Cynthia Murphy. Cynthia, hello.
- [01:03]
A
Hey, Jen. It's great to see you.
- [01:05]
B
Great to see you, too. We are talking all about ETFs today. They really have been stealing the headlines. We have xrp, Litecoin, Soul, ada, Doge, all pending application approvals, all being talked about in this industry. Talk to me about how you're viewing this flurry of ETF interest and applicants.
- [01:31]
A
Yeah, we're at this point right now where it feels like we're getting filings for crypto ETFs by the bucket load, which is not totally unexpected because that's what we see in the ETF space. A new idea comes, it breaks new ground like the spot Bitcoin ETFs did last January. And all of a sudden, it works. And the demand was there. So every issuer wants to throw their. Their head in the ring. And so we're seeing all sorts of filings from everything from Spot, Doge, Spot, xrp, Spot, all these types of cryptocurrencies to also, like, leverage ETFs. And we have had some interesting launches recently that are like downside protection, Bitcoin ETFs. We have stacked ETFs, Bitcoin, and gold. So it is the wild west for ETF product development right now. And it's both exciting and a little overwhelming because if you're trying to keep up with what. Where this puck is going, it's. It's anybody's guess at this point. There's a lot of action in the regulatory front.
- [02:32]
B
Well, let's talk a little bit more about this, because we have Bitcoin and E3 ETFs these are the top two cryptocurrencies by market cap. Some of the tokens that and projects I just listed out there, you know, doge a meme Coin xrp, currently in litigation with the sec. They seem like a different type of product, you know, and it took so long in my opinion, just covering the space for institutions to really wrap their head around Bitcoin and Ethereum. And now we have this flurry of different products. Just talk to me about making sense of that. How do you see institutions looking at these types of projects? Are they just going to apen or is there a little bit more research to be done for, for their customers?
- [03:20]
A
I think there's a lot of research. If you think about if you just compare the spot Bitcoin ETFs to the spot Ethereum ETFs that came to market last year, I mean look at that adoption gap. So we have seen more than $40 billion go into the Bitcoin ETFs. The Ether ETFs have picked up maybe a tenth of that. So it already right there among the two biggest ones. It shows that the appetite to go down to the next level of due diligence and go figure out a whole new cryptocurrency, that appetite is a lot smaller. So I think it took a long time to get comfortable with Bitcoin. Chances are you will get a long time to get comfortable with these other, with these other ETFs. And you know, and I, and I think what's. I was looking at some timelines to kind of put in perspective. If you think about even just how much time we had to process these asset classes. It took 10 years between the first filing for a spot Bitcoin ETF and approval so arrival in the market. So we talked about that space for 10 years before we had a product for E30TS. It took three years between filing and launch. And now we're talking about 10, maybe 12 months for the next round of all these other coins. So it's moving at much faster pace. And I think it's going to be difficult for the advisory and institutional space to keep up. And I don't even know that they will even care to. So it'll be interesting to see.
- [04:40]
B
You know, I was reading an opinion from an analyst this morning. They said XRP is the least likely ETF to be approved because of priority litigation. Although the tides are changing when it comes to the administration in the United States. Which One of the ETFs that I mentioned at the top of the show do you think is the most likely and which one do you think is.
- [05:01]
A
The least see on this space? I defer to my colleague James Safer at Bloomberg, who like, lives and breathes this space. So I will go by his predictions because he's way better informed than I am. And you know, he's putting a 90%, a move the market, a 90% chance of approval, approval of the Litecoin ETF as the first one and then 70% on DOGE and, and XRP. So, you know, I would just quote him on that because he, he may have skin in the game. I don't have skin in that game. So those numbers look good. I actually think it's, it's both to me, surprisingly bullish here, 90%. But at the same time, this administration, to your point, has been so crypto friendly that maybe it's not bullish enough. So I think the regulatory change has been so dramatic so quickly, we're still, still making sense of what that means in terms of these products coming to market.
- [06:00]
B
James Cipher and Eric Balchunas over at Bloomberg Intelligence, they really do need a shout out when it comes to their analysis on the entire ETF space.
- [06:10]
A
Never sleep.
- [06:11]
B
Yes, they never sleep. I know. And their predictions are often right. I will give that to them. I know. Speaking of most recent administration, I know in some of the notes that you sent through to me, you noted that truthfi, that is owned by the Trump family, has a trademark for an etf. Talk to me a little bit about the significance there.
- [06:34]
A
So that was a little bit of a surprising thing. Now, this isn't a filing for a product, but they just, you know, filed to trademark TruthFi as an entity that would bring into market three ETFs and three separately managed accounts. One of those ETFs is a Bitcoin strategy. So I think it's really interesting to, to see. Of course, there's all sorts of questions about conflict of interest. Is this even possible? Can they do it? Can they not do it? All of these things are going to be up for regulators to figure it out. But if there ever is a rubber stamping on the moment in crypto from a regulatory perspective, instead of the, you know, a company owned by the President of the United States entering, trying to enter that space, I thought that was loud and clear. The path of least resistance here is going to be approval versus, you know, a lot of debate.
- [07:25]
B
I mean, you're absolutely right. I think there are a lot of questions that come up when it comes to conflict of interest. But in your opinion, I mean, you've been watching the ETF space for a very long time. You've been on multiple shows here at Coindesk talking about the ETF space. Is that the catalyst that crypto ETFs need or do you think, you know, we're going to see the same processes put in place. We're going to see maybe not as long timeframes as we saw in the past when it comes to some of these products coming to market. But it is, you know, not going to be so jarring as some might think if the President does launch his own etf.
- [08:04]
A
Yeah, I think it will be probably less of a nail biter for all of us watching the space. The SEC clearly, whether by once or by mandate, is definitely on a crypto friendly path. So we all get the sense that they are going to be moving faster on this. Now. They can sit on some of these filings and review processes and amendments and comments, public comments. I mean, this can go on for months and months. As we know. We talked about 10 years for Bitcoin ETFs. But I think, I mean, we're talking James to go back to James. I mean, by October we could have approvals on a lot of these ETFs. I mean, October will be, you know, 10, 11 months since the first filing. That is very, very quickly for assets that most of the market doesn't fully understand. If you think about, you know, we did a survey and I will talk a little bit about that with advisors and institutions and one of their biggest hurdles to adoption is that they don't know how to value these assets. So that's not going to Change the next 10 months when you're adding all these cryptocurrencies to the conversation. Bitcoin alone, there's two trying to figure out. So it's kind of an interesting dynamic there.
- [09:18]
B
Let's talk about that survey you just mentioned was a survey between Vetify and Bitwise. I'm going to let you tell me what was the most interesting finding that came out of the survey.
- [09:30]
A
There's a lot of interesting data and it really was just to get a sense of how the institutional and the advisory space is thinking about crypto. So like pension funds, foundations and on the whole advisor channel and I it was interesting that only a quarter of this channel currently allocates to crypto ETFs. Primarily Bitcoin ETFs. Pop Bitcoin ETFs. That said, that's twice the growth we've seen in a year that we had seen the previous year, number one. Number two is almost all of them, 99% said they're this year they're going to either maintain or increase that allocation. And all of them are saying their clients are demanding it. So if there's ever a story about the demand is there and they're just start getting started on the allocation. That is a really positive outlook for ETFs because the other finding was when they were asked how do you prefer to access cryptocurrencies directly through different accounts, 71% of them said ETFs. So the wrapper is brings that regulatory framework that a lot of institutions need in order to access markets that advisors need in order to build portfolios. So I think this appetite for crypto in ETF wrappers is huge. I just not sure yet how that's going to trickle down to some of these smaller market cap coins versus, you know, bitcoin. So that will be really interesting to see.
- [10:55]
B
As the ETF products become more understood and as there's more allocation to them. Do you think we're going to see some of these institutions looking at the spot product or do you think that for the years to come it's going to be safer for them to play in the ETF arena?
- [11:13]
A
I think they would look at some spot as well. But I think with the ETF they are getting that spot exposure. The only difference is that they pay a fee for that access. So as opposed to just winning the coin directly. But the ETF makes it easy to get in and get out and it fits in with other portfolio vehicles. So I think there's little reason to go to direct to the market and set up a digital in a wallet and buy some crypto. I think the ETF will remain the preferred vehicle here.
- [11:46]
B
All right, Cynthia, and just before we wrap up, I want to know from you, if we are watching the ETF space, what's the one thing that we should be watching for? What's the one catalyst that you are looking for next?
- [11:57]
A
Well, this week alone we could get the acknowledgment by the SEC for DoGE and XRP filings. So watch out. By tomorrow, according to predictions that could happen. I think that would be a huge, a huge move to suggest green lights ahead. Let's go. And I'm going to be watching this truth by. I'm really curious to see what that leads to. So I think that's an interesting wrinkle in the story. So that would be fun to watch.
- [12:25]
B
Cynthia, thank you so much for joining me today.
- [12:27]
A
Thanks Jen.
- [12:28]
B
And thank you to our audience for watching and listening to markets daily every day. If you don't already do it, subscribe to our YouTube channel. Give us a thumbs up. And if you prefer to listen to the show, we are on the Coindesk Podcast network that is available on all podcast platforms. Thanks again for watching, thank you for listening and we will see you tomorrow.