B (3:30)

Yeah, nothing but tailwinds, obviously, for the industry. But interestingly, in general, price hasn't seemingly followed. I was actually looking at the historical prices of the crypto market going back to the beginning of the year. Although it's an arbitrary date. You know, you love to kind of just go back to the first week of January and see it's not pretty. We're recording right now. Bitcoin is 98. 3. It was 98. 3 exactly. And obviously Ethereum was much higher. Solana was much higher because that was in the meme coin craze in the Trump days. So it's almost hard to argue we've even had much of a bullet market in 2025. Yeah, that is, we went up 25%, down 25% to 75, and right back to sub one hundreds.

A (4:16)

So it's crazy. Yeah. It felt like we were right about forecasting all of the good news that would happen and wrong about the price. I think at some point in 2026, we'll look back and be like, oh, it turned out $100,000 was a big behavioral wall. And that will seem like, incredibly obvious, but, you know, I underestimated the size of that wall. I underestimated the number of people who would sell or who would write covered calls. I underestimated maybe the depth of the pain in the crypto retail market that just got kicked in the shins through ftx and then the meme coin collapse and then the lack of a Traditional altcoin season. Yeah. But I do think the big one may turn out to be that $100,000 is a big round number and it took us, you know, it'll take us a year to get over it or something. I think that's what we're going to learn next year.

B (5:13)

What I find so interesting, speaking of things I was wrong about, is that I just didn't anticipate that so many long term holders had a number, you know, that in their minds, these guys who'd held bitcoin from the very beginning, who you thought would hold to a million or 10 million, and by the way, they still very well maybe with the bulk of their portfolio because I think there's two things I underestimated their willingness to sell at 100,000 and above and just how much bitcoin they have that they could rock the market by maybe selling 20% of their positions and still have enough to rise it to a million dollars. It's a pretty wild scenario and I don't really know if it was like one guy sees another guy sell, they're all like, okay, maybe this is the price or maybe it's the government speaking favorably of the asset that they bought because they hated the government. I don't really know what the reason is, but clearly a lot of people with a lot of coins had no problem starting to unload in this area.

A (6:09)

Yeah, I think that's completely right. Not just unloading because I know there's this debate about you're not seeing it in the data. I think there are two things going on for what it's wor. There's outright selling and I agree it's like a portion of most people's bitcoin. And then there is a huge amount of covered call writing against existing bitcoin positions because they don't want to realize the tax loss. And I think that's where a lot of the selling is actually happening. It's people selling the upside of bitcoin which is from a supply perspective the same as selling the asset itself. It just doesn't mean that the asset moves on chain. Yeah, I underestimated it as well. Right. It turned out to be a very big deal. I also think there's something reflexive about it. I think some of those holders may be remembering the four year cycle and thinking like, boy, I just can't go through that again with all of.

B (7:02)

Yeah, they look and they say 126 on October 6th, the exact day that Reddit told me was going to be the top of the market. Right. Which actually happened strangely.

A (7:10)

Right.

B (7:11)

Whether a meme or not. And they think, man, I don't want to wait three more years to be back here. Which I don't think is happening, by the way. But I'm saying if you've been here for every cycle, maybe you deeply believe that the cycle's intact. I don't think you can look back at 2025 and think we're in the same four year cycle. No.

A (7:27)

And I don't think the cycle is intact. But I do think this behavioral element of expecting it to be intact or at least worrying about it and winters are really brutal. I mean, for people who haven't been through a winter, a 50 plus percent drawdown leaves a scar. It either leaves a scar or leaves you numb one of the two. And I do think some people just felt like we're at this good level, let's realize some gains and we'll get through it. ETF buying is still happening. Platform approvals are still happening. There's still much more demand than there is supply from a ETF versus new Bitcoin perspective. But, but it's taking a while to churn through the cell wall. It's taking longer than, than I expected.

B (8:09)

Yeah. I mean, Jordy Visser wrote that great piece about Bitcoin's IPO moment. I'm sure you saw it. And it kind of speaks to that, which is, you know, in the early days of any asset, you can look at Coinbase for example, right? Because they direct listed, they didn't even ipo. There literally wouldn't have been shares to sell when they went public without the early holders selling their shares to new retail. Obviously that sent the price down for a long time, but it did recover. But it's a similar phenomenon that you're describing and that he described, which is basically we have this churn finally from these people who are never going to let go, who are now willing to. And there needs to be a buyer to step in and become the new floor. And I think ETFs are it.

A (8:50)

I think ETFs are it. I love that piece. That was a, that was a, an important piece for this space. I think it really set the narrative. If you haven't read it, you should go read it. The thing that people miss about it though is they make these analogies to like Facebook's IPO and how Facebook traded down for 15 months from its IPO. But what they leave out is since it's gone from 38 to $650 a share. And I think, I think that is the piece that I've been focused on. That's what turns this sideways chopping into a gift instead of a challenge for those of us who are looking to hold for the next 10 years. I think, I think the IPO analogy is correct, but I think you have to expand out 15 years to see how a story like Facebook or story like Coinbase is playing out over time.

B (9:40)

I just love the price being where it is, to be honest. I told you this before, but you know, if you've been through it, as you mentioned, it's just another day in crypto. But I do understand the pain, I think, and it's mostly because altcoins have just gotten absolutely slaughtered. So do you think that talking about altcoins, I guess in general or just the way that the market is trending that we are really seeing a shift to the excitement being in anything that's publicly traded in the stock market and that kind of sucking liquidity out of the crypto native exchanges or assets? I mean, you can look, B Soul has had nothing but inflows since launch, right? Solana's way down, right? So like people are buying the, buying the heck out of this thing, but it's not making the underlying asset go up at this moment. So it's really, this is interesting sort of like relationship between the actual assets and what's tradable and then the ones that aren't tradable at all in public markets.

A (10:39)

That's exactly right. Because the other part of that story that's not being told is take an asset that's not Solana and has the same selling, but does not have B sold buying it. Right? That's what's happening in the rest of the market. That's why, you know, there's going to be in the bond market, there's this idea of on the run and off the run treasuries, which are the treasuries everyone's trading trade at a different price from the illiquid other treasuries that are sort of outside the norm. You're going to have that in crypto. You're going to have on the run crypto assets that have ETPs that are getting bought by institutions and then you're going to have everything else and there's going to be a. There's going to be a spread on valuation. And if you don't have institutions moving into your asset, who is the marginal buyer and when are they coming? I think that is a reasonably hard question to ask. For some of the deep altcoins and they're suffering as a result.

B (11:30)

That said, the Solana ETF has had ridiculous demand. I mean, from what I read, it was the best ETF Launch out of 850 launches in 2025. That's not just crypto, that's all ETFs. Of course that somewhat pales in comparison to the Bitcoin spot ETFs and even the ETH spot ETFs, but those are on such another planet that I don't think you can even compare them. There's clearly a thirst for more assets than Bitcoin and Ethereum and an ETF wrapper for people to buy.

A (12:02)

Yeah, huge thirst. Particularly assets aligned with stablecoins, tokenization or DeFi. I think all three of those categories are going to have really significant inflows when we go speak to institutions. I did, let's see, three calls today with advisor networks that had. That's right, too much of that. No, with folks who have a couple billion in assets. And every one of those calls, half the time is spent on Bitcoin, half the time is spent on stablecoins and tokens. So those are the two things that are getting discussed with financial advisors and institutions. And it's about 50, 50. Right. And then what that tells you is they're going to allocate and actually they're going to overweight coins that are linked to stablecoins and tokenization because they're hearing that these are the two big things. So that means Ethereum, it means Solana, maybe it means some other assets. Right, we will see. But I think those two particularly will get a bit.

B (13:10)

Yeah, that makes sense. I mean, I think rationally most of them think of Ethereum. When they think about that, I think.

A (13:18)

They think of Ethereum.

B (13:20)

You would know, actually, you know what, you're the one who made all the waves saying Solana is the Wall Street.

A (13:25)

The thing about these folks is a lot of them like to think they're clever. And so the idea of a challenger asset like Solana that's faster, easier to use, it's like not only can they tell their clients that they know about crypto, but you know, it's not just this Ethereum thing. Yeah, it's the big leader, but there's this really cool new technology called Solana. It's actually a resonant story. So I think both of those assets are going to do really well. A thing I always say is like, think about the media coverage of those two assets. It's like Roughly equal, but actually Solana is one fifth the size. One fifth is a lot smaller. And that's one of the reasons I'm so excited about Solana. I just think it's going to get more than its fair share of flows at least.

B (14:12)

You actually, I remember you kind of said the same thing about Ethereum versus Bitcoin when talking about what would those launches look like after a bit of time. We all know it was just a rough market when they did launch and what percentage of the flows would they gain. And there came a time when Ethereum was outpacing Bitcoin on a day to day basis. So I don't know where that, where that ratio lies now. But if solana captures 1/5 of eth, that's crazy upside.

A (14:38)

It's crazy upside. I mean we did a half billion dollars in flows in the first 12 days or something, you know, scaled for bitcoin, that would have been, what is that, $12 billion in flows in two, like on a scaled basis. Just an enormous amount of money. I think we think of Solana as much bigger than it is and that, you know, long term, I still think it's. Look, I'm, I should say to all the ETH maxis out there, still very bullish on Etherium. It has the dominant role in this space. I own a lot of Ethereum, but I do think Solana is uniquely well positioned from an ETF flow perspective.

B (15:18)

So thinking about this, we obviously had the Coin Tucky derby, as they coined it, when the Bitcoin ETFs all launched at once. And then even when they did Ethereum futures and Ethereum, it was sort of like which will launch first. It was a matter of hours though. Hours or days. And there were a lot of options. You guys kind of just launched Solana with staking with no competition. Like how did you pull that off?

A (15:47)

The team did some incredible work. They really did. I mean, the short answer is the team just worked extraordinarily fast to get the legal filings and materials in line and then to execute, not only on staking. One thing we're pretty proud about, it's 100% of the assets staked, which is rare and difficult and challenging to do because they're obviously lockup. So we set up a system that allowed us to do that and, and we moved really fast. Right. And we, we chose to focus to get Solana over the line because we thought it was the next big asset. So we've learned a lot in eight years of trying to launch ETFs and we put it to work on one night to get that thing over the line and we managed it so effectively.

B (16:29)

Being the first that has staking a. I assume now eventually we'll see all those applications for eth staking and such come through and we'll see a lot of other staking launched. But what are the actual mechanics? If you have 100% staked and there's a day where you know there's 300 million in outflows, how does that work?

A (16:46)

Yeah, it's a great question and that's why you'll see you've seen some ETFs launch with like half of their assets staked. We think investors want 100% staked. So the, the way that it works, if you dig into. It's actually page 90 of the prospectus if someone wants to go look it up, is there's a provision with third party market makers to exchange locked Solana for. For. For available Solana in. In moments where it's locked for, you know, a day and you have these outflows. So there's a provision. There can be a spread in that trade. Scott. It can be a small spread. So you could see like a slight discount in terms of the value of the Solana that you're outputting through this facility. But it's worth it if 99.9% of the time you're staking 100% and gathering the full yield.

B (17:36)

Right.

A (17:37)

It's just during these moments of stress, there's a provision to make it work. There's a little bit of a friction, but it's not much friction and, and we were really excited to put that in place. I think you'll see others sort of copy that as a way to get something close to 100% stake, which is what you want if you're investing particularly in Solana where the yield yield is like seven plus.

B (17:58)

Right.

A (17:58)

It's a big.

B (17:59)

How is that passed on to the buyer of B Soul? So I buy B Sol, I put it in my portfolio. It's obviously at a fixed price. That generally should be closely tracking the underlying asset. Right. Of Solana. But I'm also getting a 7% yield. How is that paid out? How is that like accrue to the value of B Sol or to the actual investor?

A (18:18)

That is. Right. Yeah, it's a good question. It accrues to the share price. So you're getting sort of to put it in DAT format. We would say you're getting more B sold more Sol per share, but it Accrues the price, you don't get a check for 7%. There's no mechanism to do that.

B (18:33)

Yeah, yeah, that is right. That is right. So are you paying a 7% premium when you buy it? Is it basically in there as a function of it?

A (18:42)

No, not at all. That's the beauty of ETFs. You pay one for one, you redeem one for one. It's. It's perfect in that way. You just also, over time, you get this yield. It's a little bit more tax efficient, for what it's worth, than getting a distribution that you would have to pay taxes on. So, you know, people who want that money would have to sell 7% of their exposure at the end of the year, and then they net back out. But at least you have a choice. If you don't need the money, you don't want to pay the tax, you don't get the distribution. I think that's actually a nice. A nice benefit.

B (19:15)

Okay, so we know that there's a clear narrative for Bitcoin Ethan Solana, right now, and that we can either we have a chicken and an egg problem. We can either say that's because they got ETFs, or we could say that, you know, the ETFs are a result. I don't know. Right. But either way, those clearly have massive tailwinds. Now we have a true XRP ETF that has launched and a long tail, I'm assuming. I mean, I think I saw a MOG ETF proposed today, like Trump etf.

A (19:41)

So.

B (19:42)

Right. We have everything. I don't know, Canary, whatever. Where does the. Where's the line? You know, because, listen, we've been talking about this for years, you and I, and there was a time when having a conversation about ETH was challenging for you. Even after the Bitcoin Spot ETFs were approved, it was like, we're gonna have to start this whole educational curve again to explain. And actually was easier than you anticipated, I think, once it started, once Tom Lee started talking. But. But either way, like, you know, there's got to be a line where all of a sudden there's just not that much interest.

A (20:18)

Yeah, there's a line, I think it's relatively soon, where there's not that much interest in individual assets. I also think many of these ETFs that are launching will not get any demand because if the underlying asset doesn't have demand, like, if no one wants to buy X, no one's going to want to buy the ETF of X. It's not like magic. So there's a power law distribution in crypto. I think there are five or six individual asset ETPs that'll be interesting broadly. There may be five or six that'll be interesting to specific communities and then there'll be a lot of slop thrown against the wall that no one will buy. Right. I just think they'll sit out there and nothing will happen. That's fine. They can.

B (21:00)

I would imagine that's not unique to crypto though, right? I mean, I have no idea. I know very little about the ETF market, but I would have to imagine that most ETFs that are launched end up having very little interest, end up.

A (21:10)

Having zero interest, and then they get shut down in a few years. That's fine, that's healthy. Right. But people shouldn't assume that just because you launch an ETF on Bitcoin cash, a lot of people are going to run out and buy it. Apologies to the bitcoin cash people. I think there's a scam, but that's what I mean. Like if no one is buying the underlying asset, if you launched a zcash ETF right now, people would be buying a lot of it.

B (21:36)

Right? Well, they launched a gas treasury company yesterday.

A (21:39)

Exactly. And it popped 370%. Right. Why? Because. Exactly, exactly. So it's just an expression of the underlying. I think. I think people will launch 50 of these and then I think five to 10 will be interesting. And then people launch index and thematic products, which I actually think will have a bigger audience.

B (21:59)

Are you guys still stalled on your index and thematic product that you propose? And it was. We had a celebration party. Balloons blew, we screamed Happy New Year and then all of a sudden there was an indefinite pause. It's like when it was like when Now Gore won the presidential election and then got hanging Chad. Yep. Launched other indexes since like grayscale got one through while you've been on indefinite pause. So I guess B Soul's a win. But there's some places where it doesn't seem to make sense the other direction.

A (22:31)

It's so brutal. Look, look, we thought we were very close right before the government shut down. Everything in crypto is harder than you imagine. You didn't plan to like work on something for four years, feel like you're at the doorstep and then get rugged because of a government shutdown. I'm hopeful that now that we're open, we'll get past the hurdle that it had, which is a weird administrative hurdle where one Commissioner sort of raised their hand and put it on a separate list. I think that we will, I think that we will get there. I think it'll launch relatively soon. But obviously the SEC is going to be backed up. Right now they're just getting back to work after 40 days out of the office. But I do think index funds will be one of the biggest categories in crypto, eventually.

B (23:13)

Should be the biggest, in my opinion. I actually don't understand the argument for single asset ETFs. If you can get a basket, at least through the mental framing of your average investor. Time when your average investor is like, if I want to buy Bitcoin, I'll just go buy Bitcoin. But I can't buy broad exposure on Coinbase, right? Or wherever they're buying their Bitcoin. I just have the assumption that bitcoin or crypto exchanges become big enough that they're viewed just like a Schwab or D trade. So people just start to buy those things. I don't think it reduces the demand, I think it's just increased demand. But like top 10 DeFi assets or top 10 assets or top 5 memes, I have no idea. But that's the way people invest. We've talked about this countless times.

A (23:59)

That is 100% the way people invest. And that's particularly the way the marginal investor coming into crypto invests. The legacy crypto investor has a view on Solana vs. ETH vs. Cardano vs. XRP. The marginal investor coming into the market doesn't know what those words mean. They just want exposure to the space. And so that's going to mean indexes. I don't know if they'll get to be as big as Bitcoin, but I think there's a great argument to be made. They'll be at least the second largest category in the space. So I'm excited to get our product out there, lower the fee and start talking people to about it. Because I think it's where most investors should start.

B (24:38)

So knowing that there's this sort of implied line where it just becomes ludicrous and maybe they're going to get zero flows, how do you guys view what you want to launch next? You've obviously over the, over the years you've got a lot of things out there, but what are you the most excited about? I guess and how. Now let's say that the governor's off and you can do whatever you want. We start to get the index products like where do you think that focus should be for bitwise over the next six months to a year.

A (25:06)

Yeah, I mean, index is my number one focus. We'll launch more single coin assets. Will launch single coin assets where there is a community that is very excited about them and it's a reasonable project. There can be a lot of people who dislike it. By the way, I'm not surprised the XRP launch is doing well. There's a lot of people who love xrp.

B (25:27)

They have a huge community that is excited about that thing and wants to buy it. Absolutely, yeah.

A (25:32)

People thought like, no, because the average crypto investor is skeptical of xrp. That does not matter matter. That just means they won't touch it. But you have this huge committed community. So we'll launch some single coin stuff. But I'm really, really focused on the index product. Right. I think there is going to be an S&P 500 of crypto. I want, Bitwise created the first version ever eight years ago, and I want that to be the largest. So, like, that's priority number one for me.

B (26:01)

And right now is the feeling that it's all getting approved eventually because the SEC has such a favorable position. Favorable position on the asset class.

A (26:11)

Yeah, I mean, I, I might, I.

B (26:13)

Might say no reason these things would get dinged at this point, right?

A (26:17)

Yeah, I might say they have a neutral view on the asset class. I, you know, I think they get positioned as extremely favorable. You, you read these speeches. They're just like, these are investments. Some are good, some are bad. But as long as we know what they are, why shouldn't we let investors decide? It's not, it's, it's, it's like it's radically sane.

B (26:35)

It's the pendulum swing. It seems very aggressively positive because it was so aggressively negative for so long.

A (26:41)

That, that, that's exactly right.

B (26:43)

Yeah, you're actually correct. It's not like they're saying, buy Bitcoin.

A (26:48)

No, absolutely not. They're just saying, we can put this in a wrapper that won't break and then people can buy it if they want or short it if they want. I mean, it's really. I love reading these, these speeches by the SEC chair because it's just making the point. Not regulating this space is what created risk. Actually regulating it is what protects investors. It's sort of an up is down moment. So I do think they're basically just neutral and reasonable on this asset class.

B (27:19)

It's funny because years ago in the peak Gensler era, I interviewed Hester Purse and I said, hey, you're affectionately known as Crypto mom, You're the only pro crypto SEC commissioner. And she said, I'm not pro crypto. She literally said that to me in an interview. She's like, I'm pro freedom. I'm pro, you know, reasonable ideas and regulation. But it has nothing to do with a belief in crypto. Her belief is that the SEC should do what its mandate is. Imagine that.

A (27:49)

It's a crazy idea.

B (27:52)

I think that's even being further proven right now, though, as you have, like, the token taxonomy coming out where Atkins is saying, listen, we want utility and payment tokens, commodities and securities, basically saying the SEC only has jurisdiction over one of those four categories, probably. And you have bipartisan legislation being floated now. The CFTC should basically take the reins on crypto. So it's almost like the SEC is washing their hands of it and saying, we only really have jurisdiction over a very small part of this.

A (28:21)

That's right. Which is. Which is correct. I mean, it's just such a reasonable interpretation. His. His speech on that, by the way, was so incredibly good. I don't know if you read it, but if I can go on a. On a slightly geeky entry point to that speech, I would love to. Is that. Is that okay? Is that allowed?

B (28:39)

Yeah.

A (28:40)

This foundational rule in crypto or in securities law about what the SEC should regulate is based on this case about an orange grove in Florida run by a guy named Howie. And the determination was that that was a security, because Howie sold tracks of land that he was going to go manage and have oranges on and then harvest them and pay the proceeds to a person. So security is something where you're relying on someone else to do something. And that's been what Gensler sort of used to position crypto assets, claiming that they were this. The beauty of that speech is he describes today what happened to those orange groves, which, of course, are now not orange groves. They're retirement homes and streets and suburbs and golf courses. And his point was they were securities when they were managing them. They're not securities now because they're literally roads. Right. These are not investment contracts. And he was making the point that a crypto project can start with a small team building it and be a security, but then become a commodity. Right. Sort of the case crypto has been making all along. It was just such a beautiful argument. I think it's irrefutable, and I really, really enjoyed it.

B (29:53)

And it echoes what Purse said for years about safe harbor. And listen, I think reasonably, if you look at anything, you can't really launch it without having a key person or a team behind it to get it going. And many of them don't want to hand off the keys to a decentralized community, but many do. And many of these things just jump the shark of like dependence on the foundation or some founder. Then again, listen, a lot of these, like it's funny and I don't not picking on XRP at all, but I had a conversation with a lot of XRP people on Twitter who did not like the fact that I was questioning the token value versus the company. Right. But the argument I kept getting was read Brad Garlinghouse's words. Look at his tweet. Brad Garlinghouse says that XRP is central to everything we're building and XRP is not a security. But that sounds like you're counting on some sort of entity to do something to make the value go up. So actually I would say that the security laws are pretty loose for crypto right now because a lot of these probably could be and won't be.

A (31:04)

Yes. Yeah, I think, I think, I mean, I think that's a great point. And some of them can be and should be securities. And that's also that like, that's also fine. We just need to know so they can do one thing or the other.

B (31:17)

Yeah. Maybe security shouldn't be a four letter word. Maybe that's the problem is that security became a bad thing.

A (31:23)

Right. Yeah. Nvidia stock is a security. Right. And people love that. It's fine. It's actually fine. There can be this spectrum of how crypto projects operate and some can be centralized and that could be interesting. And some can be Bitcoin and that can be interesting. And the beauty of this SEC is they're going to make that clear. I think you're going to see a million neat experiments flow from that.

B (31:47)

Yeah. Hopefully one of those experiments is getting the Clarity act passed. Because this could all go a completely different direction if it's just dependent on executive orders and speeches by regulators. Right. I mean, we're still at the point where there's a need for legislation so that these things are law.

A (32:08)

I think that's, I think the Clarity act moving forward is the catalyst that will start the next bull market. I think if that gets scuttled and we move into the elections and it's challenged, people will wonder if this regulatory progress is built on a house of cards. And conversely, if that gets codified into law and we have something to build the foundation of crypto on, I think prices go up substantially. And basically immediately. So if you're wondering, like, what is the catalyst that gets us out of this funk, that's actually the easiest one to point to. We maybe, maybe we just bottom out of this funk and eventually go higher. But if we need a spark, I think real progress on Clarity act will actually be that spark. And conversely, if you need something that makes the, like, you know, Punxsutawney Phil seeing a shadow would be the Clarity act sort of stumbling along. Yeah.

B (33:02)

Hoping that the government shutdown didn't just push it a little bit too far back to midterm season. But I still think it feels like they really want to get this done. And the fact that we got that CFTC legislation pushed means I think it's still very much on the. On the docket for both parties. And I don't think anybody wants to come out, I mean, out of. Besides the old cast of characters, but I don't think anybody really wants to come out outwardly anti crypto or be pointed at as the person who blew it coming into the midterms. Feels like right now being pro crypto probably helps you politically at least.

A (33:38)

Well, you're also afraid to be. I mean, 100%. The crypto lobby has more money now than it did in the last election and they're going to train that on the midterms. Sometimes we can talk in lofty terms or sometimes you can be very sort of Machiavellian. The Machiavellian view suggests that this thing is going to go through because again, no one wants to get targeted by whatever $250 million in political spending just because they oppose something that's net good for consumers. So I suspect we're going to make progress on it. And again, I suspect that that could be the catalyst that snaps us out of this funk. So do your buying while you can.

B (34:20)

Yeah, buy everything. I want to ask you just a random question. What if Harris had won and Gensler was SEC chairman right now? How fragile was this? You know, like, I think we're taking for granted how incredible the last year has basically been and all of the changes that we've seen. What would this have looked like if. And it's. This is not like I'm not asking for someone's opinion on politics. I just. Without any change from what we had for the last four years, are we even talking about Solana ETFs and this long tail of ETFs coming? And we even have the genius act?

A (35:04)

We wouldn't have the genius act. We wouldn't have any ETFs beyond Bitcoin and Ethereum, you would have seen the industry move aggressively offshore. There'd be no talk about tokenization. You wouldn't have every major Wall street firm moving into this space. You wouldn't have acquisitions of stablecoin companies. You wouldn't have the IPOs that we've been seeing. I think it would have been pretty bleak. I think the industry could only be beaten down for so long before it just decamped abroad and became a very different crypto industry. Internationally focused, maybe more privacy focused. I think it really would have pushed it underground. I think. Couldn't have. It couldn't have sustained. Another four years of that would have been impossible.

B (35:52)

So let's assume that that doesn't happen again, at least for a few years, that we get the Clarity act and things are as we hope they will be. What excites you the most moving forward? Obviously, the index funds. I get that. But, like, where do you kind of envision this industry going? And I'm not just talking about, like, what do you launch as an etf? You know, how. How much real adoption do we start to see, you know, from institutions, governments around the world. I got to say, when I heard Fed Governor Waller talking about crypto being woven into the fabric of the American economic system and talking about putting Fed on blockchain rails, I couldn't believe it.

A (36:35)

Yeah, I think we're in the exponential phase of real world growth. You know, you can sort of think from a meta perspective that crypto is reinventing finance line by line. So it reinvented gold first. We have the most market penetration there. We have the most comfort. Bitcoin will continue to do that. It's reinventing dollars through stablecoins. I think that ship has sailed. And the exponential growth there will be extraordinary in the next couple of years. I think people are probably underestimating that. I think tokenization is moving faster than people reinventing stocks. And so I'm very excited to see that progress. I'm also actually really excited about this Coinbase ICO thing. I think reinventing IPOs, particularly now that we can have crypto assets that have real economic value. I think if you pair the noise of the news of Coinbase launching a new ICO market with the news of Uniswap flipping the fee switch, you can start to see a world where a huge number of projects decide to be crypto securities or crypto tokens with real economic value and that launch directly to the public. I think we reinvent IPOs.

B (37:48)

Between redoing.

A (37:50)

Gold, redoing dollars, redoing stocks, redoing IPOs. I think all of that's going to progress really fast in the next few years. I think we probably underestimate it in terms of the speed of adoption.

B (38:01)

Yeah, I want to talk about that Coinbase platform because you're right and it's really interesting. They're launching Monad first, which has been highly hyped for years already actually, and even before it was a Coinbase launch. What I'm finding really interesting is that we used to have these just, I mean, disgraceful the way that tokens launched. Right. We would talk about that this was the future of fundraising, whatever, but we had these opaque tokenomics and the teams would vest quickly and they basically controlled 80% of the supply. You had no idea what market makers are doing. So I think a lot of that is not being solved yet, like maybe the people will demand it. But what I really find interesting is a coinbase is regulated, so it's not like they're going to be launching rug pulls, at least knowingly. But they did disclose for Monad who the market makers are, what supply token supply they got, how long their contracts would be. And these have always been the questions about why tokens trade the way they do after they're launched. And Monad being a actual, you know, it's a layer one, I believe. Right. Being a layer one, you should be able to at least make a case for the utility, as you said, and understand how the value accrues. So maybe we're getting a much more transparent way to look at the value of a token because it's happening through a Coinbase and not through pump fund.

A (39:25)

That it's, it's exactly right. I think what may not be well known in the crypto community is a lot of regulation in the traditional finance world is actually what are called SROs, which are self regulatory organizations. For instance, anytime bitwise puts out any piece of content, it has to go through something called FINRA which reviews it and makes sure we're not exaggerating things and we're disclosing risks. That's a self regulatory organization that finance set up to make sure, to police itself, to make sure it said reasonable things. When you look at a lot of how the New York Stock Exchange and NASDAQ and other exchanges operate, those are self regulatory organizations. When the CME launches a new futures contract, it doesn't actually ask for permission to do so. It self certifies that it's going to do so subject to internal rules. So a lot of finance is self imposed regulation that becomes sort of developed and firmed up. What I see in the Coinbase launch is the first example of crypto getting its act together to start to do some self regulation so that we clean up problems without relying on external regulators. We don't need necessarily the SEC to fix what was wrong with ICOs. We could do it internally with good disclosures, with lockups that we insist upon and monitor with punishment systems if people do bad things. And I think it's actually like it's a huge step forward. When these SROs developed in traditional finance, they developed as like little small ideas and now they're core part of the infrastructure of how TRADFI works. And I think you can see the kernel of that here and what Coinbase is doing. I think it's. I think it's like a really beneficial thing for the community and they should be applauded. Maybe they're not doing it perfectly, but they've definitely taken a huge step forward to whatever came before.

B (41:20)

Maybe that's the catalyst for renewed interest in altcoins, although I have a problem seeing that. Renewing interest in old altcoins that were launched wrong. But maybe this is where we get some interest in the new things that are launching, where people feel like there's some transparency, they can assign an accurate value or at least understand how it's valued and you have a trusted name behind it. I mean, maybe this is the alt season catalyst, some sort of altitude.

A (41:49)

I love that. That's exactly right. And again, when you pair that with Uniswap, turning on the fee switch, which, remember the reason there wasn't a fee switch primarily was because they were afraid that that would land them in jail. Right. So you had to launch these tokens that had governance rights but no economic tie to those applications. Now, because of better regulatory clarity, you can make economic ties to the actual application. When you get this better way of launching new tokens and you get much better tokens, that is the seed, I think you're right, of the next altcoin season. You can actually do legit projects in a legit way and retail can participate from the jump. That's a pretty exciting combo. So I'm excited about that. I don't think enough people are focused on that.

B (42:36)

Yeah, and we were talking about how tokenization is moving faster, I think, than most people anticipate or understand. Larry Fink's been screaming about that for a long time. You guys have obviously been talking about it for a Long time. It seems to have a huge narrative on Wall street with institutions. Do you think that value accrues to the assets that are already out there in crypto, Ethereum, Solana, other chains, or do you think that that becomes like a walled garden in Wall street and actually is not for retail? So I think a lot of this tokenization is just going to happen bank to bank, institution to institution, and I'm wondering if that's something we'll be able to invest in as normies.

A (43:18)

Yeah, it's a really good question, and the short answer is no one knows. History would suggest that open networks tend to win over time, but not exclusively. And I hear arguments on both sides and they ignore both of those facts. Like, it is the case that the open Internet won, not aol, but it's not always the case because you have examples like the Apple App Store, which is not an open ecosystem and it definitely won. So there's no guarantee exactly how this turns out. I think probably the right way to invest is just to broadly own both those underlying open architecture products and projects as well as companies that are doing this on their own. Right. Like go own Robinhood, Go own Circle. Go own, you know. Exactly. And that portfolio probably hedges you because there's going to be a lot of value created. You just don't know where it will, where it will accrue. So just like an index fund, just own the lot and you'll do all right.

B (44:22)

I was just going to say, I think you probably just described one of the products that you'll be launching.

A (44:27)

There's a possibility. We're looking at it, Scott.

B (44:29)

I mean, I mean, think about, and I'm sure you were launching them. I don't even remember what the specific details were, but like, you know, a, a index fund that owns Bitcoin, Ethereum, Solana, Robin Hood, Coinbase, Circle.

A (44:45)

It sounds pretty good, right? It sounds pretty good. I want it, too.

B (44:49)

Yes. Maybe throw a miner in there too, for good measure, you know, like. But I mean, those kind of products.

A (44:56)

Would crush, man, I, I from, from your lips to my product development team's ears. Yeah, I agree. I think that's what. And again, that's what the marginal new investor coming into this market wants. They don't want to have to pick which layer one. They don't have to decide where value accrues. They're just like, this is a big theme for the next 10 years. Larry Fink says every asset will be tokenized. Paul Atkins says the entire ecosystem is moving on to blockchains. I just want that. And then I don't want to think about it for 10 years and then we'll look back and we'll see how we did. I do think that would be a great product to have.

B (45:34)

I want to circle back on something you said at the beginning, which was that you spend these calls basically focused half on bitcoin and half on tokenization and stablecoins. What are they asking about tokenization in stablecoins? Exactly. And what's your pitch from your side? How do you explain it to them? What are they asking? Are they saying, how is this investable? How do I make money on this?

A (45:57)

First they don't really know what it is. The answer to this question is always much more. What is a stablecoin? Yeah, how does it work? And so I literally describe how it works. Sending money to a stablecoin issuer, minting tokens. Then they want to know how it's used. And there we walk through like the six or seven use cases. The ones that really resonate, you obviously have to say it's used for crypto trading because that is the dominant use today. The ones that really resonate are people in far flung countries using it to get access to dollars. That seems obvious to people. Business to business. Transactions between different countries also seems obvious to people. And then the third one, which I don't think we talk enough about in stablecoins is like, if we have tokenized assets, you need a liquidity pair against them when you're trading. That itself is going to be a huge chunk of this market. And when you combine those three things, people are like, oh yeah, I get it. People do have, for what it's worth, people do have personal experiences with the challenges of moving money. They have wanted to buy something on a weekend and not been able to wire it. They've gone to the bank to take out cash and the bank's like, we don't have cash. And you're like, you're a bank. That happened to me the other day.

B (47:20)

Even in the United States, which is the amazing part, like we're not even talking about the rest of the world, where literally the banking systems are broken. We have the best banking system in the world and every person you know has a story within the last six months of some friction with their bank.

A (47:32)

That is exactly right. And this is one of the reasons why stablecoins just really resonate because you can hit this example and someone's like, oh yeah, I get it. And so then they want to know how you invest in it and Basically you give the pitch I just gave which is there are two ways you buy the underlying assets. Like a toll road. Every time you move a stable coin, you pay a small fee. It's going to be a lot of traffic on those toll roads. You should own Eth Solana, et cetera and you should own these companies that are building this space. These are going to be really interesting companies. You saw Circle put up interesting numbers, the stock got crushed, but the underlying business is doing pretty well.

B (48:08)

I think JP Morgan just raised their actually target for Circle. The question I have for the stablecoin companies is nothing to do with their business. It's just that they've benefited massively from high rates. And what happens when rates come down? Yeah, there's no fault of their own. But like if you launch a publicly traded stock that's making a ton of money on, you know, 4% yielding short term treasuries, what happens when those are one? I guess the answer is you launch your own blockchain.

A (48:35)

I guess that's the answer. It's going to make them interesting investments. They're going to be counter correlated to market moves over long periods of time. So they're actually going to like they're going to. For instance we have them, we have Circle in a crypto equity etf. I think over time it'll lower the volatility of that ETF as we get more of these because they'll move counter to the market because you'll have the interest rate effect. And then also when markets are ripping, people aren't going to hold stable coins, they're going to allocate reverse flows as well.

B (49:04)

It's really interesting because in the early days of crypto trading when I used to think about my portfolio allocation and I had a mentor who used to teach this, but he would say 70% long term hold 15% whatever you want to trade or speculate, but 15% to play with and 15% cash. And he was like not cash on the sidelines, cash as a part of your portfolio. Because if you're denominating in Bitcoin, if Bitcoin goes down the cash value, you can buy more Bitcoin with that cash. So actually it's acting like an altcoin. It's buoying the portfolio. You're bitcoin value is not going down as much by just simply holding cash. Of course you have to deploy it at some point for that to work. But this is even a superior version of that because they probably will be yielding for a lot of reasons. But you need to have cash your portfolio and stablecoins are obviously the cash that people will have in a crypto portfolio.

A (49:58)

Yeah, I think, I think there'll be great investments for that reason and sort of counter correlated investments. And so yeah, people usually end that story wanting to buy exposure to these things, you know and obviously you raised a fund idea. But we see a lot of flows into B Soul, into EW as a result of these conversations and also directly into stocks like Circle.

B (50:21)

Right. You're not necessarily selling them Circle stock. You're not Schwab or like. No, no, but I want to get them into be. So those sweet, sweet B Soul over there and the Ethereum ETFs and stuff.

A (50:34)

Hey man, I'm a merchant of information more than anything else. But yes, yeah, we love the flows.

B (50:39)

Into Beast, but that's where that index comes in. You just got a little B Soul, a little Ethereum, a little Circle. Just buy this and you've got the exposure from both sides. Absolutely need that. Why don't we have that today? Launch it today.

A (50:53)

Don't tell anyone. I got to work on it.

B (50:55)

Sorry. You have till Sunday. You have till Sunday to get it out because we're going to tell everybody. I know, I know. The blackrock guys are listening to this and just salivates right now. We're giving them all their good ideas. Sorry. Listen, we got a couple minutes left. Like anything we might have missed, anything you're super excited about that's on your radar that you're looking for. I can, you know, maybe predictions on since we were kind of wrong. Ish. About 20, 25 so far. By the way. We're not. I'm not. It ain't over yet. I didn't hear no bell as they say, like wig. Would it even surprise me if on December 31st Bitcoin was like 150 grand? No. So I'm not saying that'll happen, but the year is not over. But what are you kind of looking forward for markets? Not by the end of the year, but generally. Do you think that.

A (51:44)

Yeah, I think they're going to get again? I think particularly if we see the Clarity act gain momentum and become a fait accompli. I think the market starts to rally. That could lead to Bitcoin 150 by the end of the year. If we see rapid progress on it more broadly, I think the market will Forget about the four year cycle at some point in Q1 and we'll start a significant march upwards. There are just too many gale Force tailwinds to keep the market down. Institutional buying, amazing regulatory progress. A new ICO market, better tokens. It's approvals on Morgan Stanley. I mean there's just, there's too much money that's going to come into the system to keep it down for long. So I look at this period as a gift to long term investors and I'm taking advantage of it. That doesn't guarantee it will go up but I do feel that way once we put the worries about a four year cycle to bed and start reflecting the fundamentals of the space.

B (52:49)

So I just saw XRPC the XRP one hit 58 million I think in day one volume.

A (52:56)

So that's pretty good.

B (52:57)

Still, still a pretty good thirst here for this stuff.

A (53:00)

That's, that's pretty good. Almost be soul like I'm glad we retained our crown. I think we did 75 but, but look that's a great launch and again you know kudos, Kudos to Steve McClurg and the team at Canary for getting that out the door and, and it shows you there is demand for any asset where there's a committed community and a story. You're going to see flows. I suspect that will continue to do well for a while but it doesn't guarantee that every asset with an ETF will get flows. A lot will launch and whimper but you'll see a few more of these big ones get out the door.

B (53:39)

Well Tom Lee is still on TV like this week as we correct and start testing 100 grand on Bitcoin talking about like 10 and 12 thousand dollars Ethereum by December 31st. So I'm glad somebody's out there still with fearlessly bull posting.

A (53:52)

He's, he's not afraid. Yeah we, we don't revise our predictions at bitwise. We put them out in December and we call 200,000 bitcoin so we'll see if we're right but I, I, I, I doubt we will get there. I hope Tom is right on eth. That would be wonderful. Who knows I'm really bullish long term.

B (54:11)

200,000. I like it. I'm, I'm going to just stick with 200,050 days easy, easy. That's nothing. Matt, thank you so much for everything that you do for I know you're like the busiest man in crypto so I always appreciate that you are willing to take the time because you're very rarely home. That is true. That is true.

A (54:33)

He found me at home. Thanks for having me. This was fun.

B (54:35)

Thank you so much. Matt really appreciate it. Let's do.