Bankless - From BlackRock to Ethereum: Betting It All on ETH | Joseph Chalom

Episode Date: September 1, 2025

What does BlackRock’s former crypto lead see in Ethereum that others still miss? Joseph Chalom joins Bankless to take us inside the IBIT/ETHA ramp, why BUIDL launched on Ethereum mainnet, and the simple—but powerful—framework he uses to value ETH as “high-octane money.” We break down staking inside ETFs, the tokenization roadmap from stablecoins to the S&P in your wallet, and the real mechanics of ETH treasury companies—mNAV premiums, ATMs, converts, and the transparency metrics that matter. Less hype, more architecture: if security, liquidity, and 24/7 settlement are the future, this is the bridge. --- 📣SPOTIFY PREMIUM RSS FEED | USE CODE: SPOTIFY24 https://bankless.cc/spotify-premium --- BANKLESS SPONSOR TOOLS: 🪙FRAX | SELF SUFFICIENT DeFi https://bankless.cc/Frax 🦄UNISWAP | SWAP ON UNICHAIN https://bankless.cc/unichain 🛞MANTLE | MODULAR LAYER 2 NETWORK https://bankless.cc/Mantle 🎩DEGEN | JOIN THE COMMUNITY https://bankless.cc/degen --- TIMESTAMPS 0:00 Intro 3:53 Larry Fink’s arc: skeptic to champion 9:15 Joseph’s crypto journey 18:09 Aladdin × Coinbase Prime 20:55 Building IBIT 24:28 ETHA & ETH ETF staking approval 36:04 Tokenization roadmap & magnitude 44:48 SharpLink’s ETH bet 50:13 Ether as “high-octane money” 58:54 Beyond ‘buy and hold’ 1:03:11 ETH vs BTC treasuries 1:06:09 Radical transparency 1:10:31 mNAV, ATMs & buybacks 1:19:10 Where’s the price impact? 1:25:32 How many treasuries win? 1:29:25 Closing thoughts --- RESOURCES Joseph Chalom https://x.com/joechalom Sharplink https://www.sharplink.com/ --- Not financial or tax advice. See our investment disclosures here: https://www.bankless.com/disclosures

We are building an institutional grade treasury, not just with incredible talent, but through our partnership with consensus. You know, we have Joe Lubin, the co-founder of Ethereum on our board, and that gives us lots of opportunities to do interesting things. We're not content to buy and hold a percentage of the ether ecosystem and stop and become a vehicle and a dividend company. Our goal is to have a really positive influence on institutional adoption and to build businesses that are correlated to the ecosystem. Welcome to Bankless, where we explore the frontier of internet money and internet finance. This is Ryan Sean Adams. It's just me today.

David's out. So I'm here to help you become more bankless. Joseph Shalom on the episode today. Now this is the guy who led BlackRock's digital asset group. This is the group that rolled out the Bitcoin and Ethereum ETFs at Black. Rock. They launched Biddle, the on-chain treasury fund. He retired for a few short months, and now he's back as co-CEO of an Ethereum treasury fund. This is the story of going from Black Rock to Ethereum. And I think this is very much the theme of this cycle in crypto. The institutions

are coming to Ethereum, and Ethereum is coming to the institutions. This is the great convergence. And Joseph's story is almost a microcosm of the story of this cycle. And I think maybe it's most interesting where Joseph has ended up. He's at Esbet. That's the second largest Ethereum Treasury company, a company co-CEOed by Joe Lubin. Now, his job at Esbet is to accumulate ETH to educate investors on ether, the asset, to build a company that's all premised on increasing the amount of ETH held per share. This is a full-blooded ETH bull coming from an unlikely source, at least from previous cycles. He's coming from the largest asset manager in the world. I've got nothing more to say other then I think this episode will leave you quite bullish. So let's get right to it. But before we do,

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drives value back to you, embodying the entire stack and future growth of this super app ecosystem. Follow Mantle on X at Mantle underscore official for the latest updates on blockchain for banking. That's X.com slash mantle underscore official. Bankless station, very excited to introduce you to Joseph Shallum. He helped bring BlackRock to crypto. He and his team were responsible for BlackRock's Bitcoin and ETH ETFs plus the Biddle tokenized shares. And now he is on a new mission. He is one month ago. So he's one month in. he became the co-CEO of Sharplink, that's Espet. That is a $3 billion ETH Treasury built to stake, restake, and scale, ETH the asset.

And we want to find out why he made this leap. What does he see that maybe most of the world doesn't at this point in time? We're about to find out, Joseph, welcome to bankless. Good morning, Ryan. All right, I got this question for you, just to start us off a little hot. Were you the guy who convinced Larry Fink to get bullish on crypto? No, Larry didn't need my help or a... a yellow pill from anyone. He happens to be an incredibly and intellectually curious person,

not just about the markets, but about technology. And it says a lot that he has the mental acuity and flexibility to learn and come around and believe deeply in this technology. So the answer is it was on his own with a lot of help from others. Well, I'm wondering if you could kind of parse this, because we've been on a Larry watch over the years at Bankless, as well as some other folks in Tradfai, and I have seen kind of the shift in Larry's thought process with respect to crypto. And I think because Larry think is such a bellwether for what Wall Street thinks, what institutional finance thinks, it's somewhat relevant. Now, others haven't followed him on this trajectory, right? We've got Jamie Diamond, maybe he was a bit more skeptical. But back in

2017, Larry was saying things like this, Bitcoin is an index of money laundering. That was 2017. That was a quote from him. By 2020, there was a bit of a softer tone, okay? He thought at that time, Bitcoin could evolve into a global market asset, but it's still untested. There's a thin market. 2021, he was saying things like this. We see very little demand for crypto from clients. And then by 2022, something started to shift a little bit more where he said, this is post-FTX. So it was still when crypto is kind of people thought in its death throes, that the tech was still very important and the next generation of markets is tokenization of securities. So he's pretty early on that. And then by July

2023, he was saying things like the spot Bitcoin ETF was coming and it will democratize crypto. And then later, now January 2024, he says he sees value in the Ethereum ETF stepping stones towards tokenization. My opinion five years was wrong ago. This was

July 2024. Bitcoin is a legitimate financial instrument. It's digital gold. So we sort of can track the trajectory of Larry thinks sort of changing his mind. and why do you think he changed his mind in that way? What was different over those last, you know, I guess eight or so years?

Yeah, people have a misimpression that Black Rock's crypto ambitions began on January 11th of 2024 when they launched the iBit Bitcoin ETF. In reality, some of the earliest exploration was happening in 2016. We hired our first dedicated, brilliant, young digital asset professional, Robbie Michnik, who was on this podcast September of last year. He joined in 2018. So it was an evolution. And if you have to take a step back and ask, what were the bellwether moments?

I think it was a series of things. First was hundreds of conversations with clients, regulators, crypto natives, folks from the traditional financial system who were learning. And in the beginning, it took education. I wouldn't say it took convincing. But over time, as people realize that there are two real plays here, the first is ownership of some of these assets in your portfolio on an uncorrelated basis. That was an investment thesis in the underlying. And the second was just the institutionalization and maturity of the ecosystem, you know, the likes of partnerships with Coinbase, the fact that NASDAQ was listing these things, it took time and it took readiness for BlackRock.

And I think if you look at the arc of BlackRock's learning and experience and client feedback, the arc of the maturity of the ecosystem to institutional standards, Larry's views evolved in line with that. And I'm not as spokesman, but I said earlier, if you're a student of technology, then this is not a hard thing to follow. It just requires a level of institutional readiness and some view of the future. And I think there's no firm in the world who's been ahead of the curve on financial services and what's coming next than BlackRock. And it was ready at the gates when institutional interest was there. Joseph, what does your own crypto journey look like? How did you traverse this?

I had been interested in it going back to 2017, 2018. It was only in 2019 that I took responsibility for the digital assets team as part of a wider role to run partnerships and a whole bunch of ecosystems, hyperscalers, data, digital assets. And initially the interest was really around just blockchain and how blockchain can make centralized processes more efficient. And that's, that was initial, BlackRock's initial foray into this space was to see if there are blockchain technologies on a more permission basis to make processes efficient. As we started building a digital asset team at BlackRock around 2018,

2019, 2020, we decided to find people who had deep crypto knowledge, but also traditional financial finance experience. And to be honest, you being the oldest person on that team, it was incredible to learn from them. Like learning doesn't stop at age 50, 60 or 70, but also to impart on them the experience we had, you know, in very complex ecosystems with, you know, market structure and traditional rails and boards and regulators. And so there was a bit of a discovery that it takes experience to have experience. And so I and my team learned from one another, and we got ready and we got organized so that when the time was right, we could play a very positive impactful role, not just on the crypto ecosystem, but in being the bridge that didn't exist

before. One thing that I think is particularly commendable, Joseph, is that your digital assets grip at Black Rock and Black Rock in general just kept at it. So we've been observing other institutions to the extent we can from the outside in. It seems like some institutions, maybe Goldman Sachs, for instance, they seem to open up institutional trading desks and things during the bull run. And then when crypto goes down during the cycles, you know, 2022, 2023, all of that energy kind of disappears. And I've been told other large sovereign wealth funds and pension funds are somewhat like this.

You know, at the top of the Bull Fury in crypto cycles, they open up desks and they're very excited about crypto. and then when there's a downturn, all of that energy dissipates. It seems like in contrast, BlackRock has maybe just kept building. Yeah, I think if you take a step back and think of what institutional investing is, it's largely trying to figure out how to build a portfolio that meets your goals. It could be short-term, mid-term, and long-term. And the reason why I start there is that's very different than speculation.

It's very different than trading. It's very different than having a short-term outlook on how to transact in an ecosystem and collect rents or make money. So when we came to the thesis that this was here to stay, you know, Bitcoin and Eath had a role in a client's portfolio that was constructive. Then you take a long-term view because that's what our clients are asking us to do. And so when we first initially got involved, our partnership was with Circle. And we did something very traditional.

Black Rocks invested from its balance sheet in circle. We were interested in institutional adoption of stable coins. And then we did something super comfortable and traditional. We became the asset manager for USDC's treasury reserve. It's a very natural evolution. We then figured out back in the day that in order to manage Bitcoin or Ethereum or Ether, you needed to have the tooling that was the same, no different than managing a stock, a bond, a derivative, a private fund. And so we built a partnership between our Aladdin

operating platform, which happens to be an operating platform for a large part of the buy side. We built an integration with Coinbase, and that was in August of 22, before the FTX collapse and the crypto winter. And while other institutions were dissuaded and stepped back, and we're fearful of what happened with FTX, at that point, BlackRock doubled down. And I think sometimes if you take a long-term view, the best time to build is during a winter. And when regulatory headwind slowed down and we got permission from the SEC to launch a Bitcoin ETF, we were ready, willing, and able and prepare to launch. And so again, if you take a long-term view that there's a thesis here, it's a macro thesis,

and it's for the benefit of our clients, you don't slow down it bumps in the road. You double down. Yeah, I love the conviction here. I actually want to go back to that in 2022. This is the first time BlackRock and crypto came, at least on my radar in a public way, because there was a press release about the Aladdin platform in this Coinbase Prime integration. Coinbase Prime, of course, is that's the institutional side, the institutional desk. at Coinbase, and there was some sort of an integration.

But this brings me to the question of, I almost want to understand a little bit about TradFi. I think a lot of folks listening to this episode, and Justin Bankless in general, they learned about investing and they learned about finance by route of crypto. And so many of them haven't even logged into a Bloomberg terminal at any point in their lives, okay?

I mean, they're very, like, they see the on-chain data. And so when you talk about the Aladdin platform itself, I'm almost curious what that means because to a lot of folks listening, what is Aladdin? I mean, that's a Disney movie. But no, this is apparently an investing operating system as of 2020, and this is old data, 20 to 30 trillion in capital touches it. So it's absolutely massive.

What is Aladdin and what was the significance of that first step in 2022 when you integrated it with Coinbase? Yeah, I think if you take a step back, if you're managing money on behalf of a client, and it could be because you're an asset manager, It could be your pension fund, you're a corporate, you're an insurance company, you're a sovereign wealth fund. It's a real responsibility to manage money for people. If you don't do it well, people don't retire in dignity. Did you hear what I just said? You can't get it wrong.

So there's a level of technology sophistication that's necessary to manage a dollar of somebody's money. And you can think of Aladdin as an end-to-end enterprise platform that'll allows you to do every function oriented with that, like knowing your position every day, understanding the risk profile, doing portfolio management, trading operations. Think of it as an end-to-end operating system. And later we're going to talk about Ethereum,

potentially becoming that end-to-end operating system. But in order to do that, you have all your assets in one platform, fixed income, equities, derivatives, private funds. And when we at Black Rock had conviction that it was time to launch exposure products for Bitcoin and Eath, we weren't going to do it on some separate system in a spreadsheet and a different wallet. We wanted to make sure that the end-to-end life cycle was sophisticated, was secure, and we decided to partner with the leading crypto custodian in the industry through an integration

in August 22 with Coinbase Prime. I would tell you the conversations had probably started a year earlier. I'm not sure at that point we really understood Coinbase's business. I'm not certain they didn't understand everything about our business, but we knew we would be better together. And the integration essentially made it simple for asset managers like BlackRock or others to be able to invest in Bitcoin and later Ethereum. So the idea that they didn't have to worry about pre-funding accounts, they don't

have to do that with traditional assets. They don't have to think about decimal points. They don't have to think about managing wallet infrastructure. All of that can be abstracted. And in order for institutions to really start putting exposure to crypto assets, they have to do it in a way that's secure and comfortable. And that was a first foray. And in August of 22, we made that announcement. I think we broke their stock that day. And I think it was a bit of a bellwether moment, kind of a good housekeeping seal of approval that institutional was ready and let let the starting gun begin. That's fantastic. All right. So Aladdin then is basically, it's almost like a battle station for somebody who is an asset manager, particularly of a large institutional size,

and they can see their entire portfolio. So they can see all of the assets under management. And then they can also take action. So the verbs of, you know, buy, sell, I don't know, fancy derivatives and options and this type of thing. And they can execute all of those trades in one interface. So I imagine Aladdin on the back end taps into all of these, you know, private ledgers, we might call them, of different, I don't know, brokerages or all of the traditional finance backend. It integrates it and taps into all of that and creates this one seamless user interface. I'm trying to picture in my head what this looks like. And for me, it's almost like a crypto wallet aggregator that pulls together all of your

different assets across all of the different ledgers within crypto, the L1s and the L2s, and provides you a place where you can execute trades and see everything at once. Is that sort of what Aladdin is? That is what Aladdin is. But I think the way to think about it is the center of it is your portfolio. Right. So it doesn't matter what assets you have in their portfolio. they're not distinct from one another.

They need to be risk management managed together. Cash management has to happen. Any leverage you have on borrowing, you should just need to think of it as an enterprise portfolio system. And you mentioned that traditional crypto investors have never seen a brokerage fund, never seen a portfolio.

But what's interesting is, for those who only hold crypto in their wallets, we believe, or I believe, that the next thing they're going to own is a tokenized version of a traditional fund, probably not in their brokerage account, but in that wallet side by side with Bitcoin and ETH and any other assets. And as people mature and start thinking of goals and move away from speculation and trading to investments in a long-term thesis, tokenization will be a way that crypto-native investors

are going to get access to the traditional markets, no different than what we've done in the past, which is, you know, essentially put a wrapper on crypto and give it to institutional investors. So it's a bit of a paradox. These things will meet and it will be measured in trillions and trillions of dollars. So a lot of my mission over the last five, six years, working with an amazing team at Black Rock was helping be that bridge, that educator. And joining Sharpling was just a continuation of that mission. I can't wait to talk about that. Yeah, because there is the theme here, right, in this cycle very much is a convergence. So some of the traditional finance assets, the TradFi assets are coming to crypto wallets, right?

And some of the crypto assets are coming to Tradify. And you can now view them in systems like Aladdin. Staying with kind of the BlackRock story, because there was another milestone moment. And that happened at least publicly in January, 2024, when BlackRock rolled out the Ibit Bitcoin ETF. And of course, this was during a environment that had been particularly hostile towards crypto, at least in the U.S. government, the SEC on downward. And to see that happen in January 2024 and then to see the success of this product, believe it was the fastest to $10 billion and $50 billion milestones, like it kind of,

I mean, you tell me, it seemed like the ETF analysts were telling us that it blew all other ETFs out of the water with respect to how fast and how successful this product was. Take us back to that moment in January 2024 and maybe the months that preceded it in getting this product to launch. How did the Bitcoin ETF at BlackRock come to be? I think it really started three years earlier when we started believing that there was a role for Bitcoin and Ether in a client's portfolio. We started learning. but also educating through hundreds of meetings with financial advisors, with the home offices, with institutions, explaining what the investment thesis was, not for crypto writ large,

but why Bitcoin in a portfolio? What is digital gold? You know, how is it uncorrelated in the long run to stocks, bonds, and other assets? And what would be a sizing in a portfolio? And Ethereum, I would say took less convincing, but it took a lot more education to explain it is a store of value. But unlike Bitcoin, it is a network that you can build thousands of applications on. It's more than just moving Bitcoin back and forth. And it has a yield component where Ethereum and Ether will work for you. That took more education. But on the one hand, when I look back and I retired from Black Rock two months ago,

we are surprised by the magnitude that it got to 100 billion of assets. But I don't think we were entirely surprised because we knew what the institutional interest was. We knew there was pent-up demand. We knew that our clients could not invest in spot. They didn't want to deal with custodians. They didn't want to deal with crypto exchanges. So in some ways, what we were providing in others, there were 11 other issuers that same day on January. 11th, 2004, we were taking something that was foreign to them, but they had an investment interest and wrapping it in a wrapper, an exchange traded wrapper, that they had been familiar with for years. So when I look back, the magnitude is immense. I'm actually super proud about how we did it

and who we did it with. And I think when you look back at your career a decade later, some of the numbers will fade, the people you worked with, both at BlackRock, as well as the partnerships we struck, I think we'll be enduring. I believe so too. I mean, this is the first of its kind, is definitely a huge milestone. And then to follow that, six months later with the Ethereum ETF in the summer of 2024, that almost caught, I think, more people by surprise versus the Bitcoin ETF, because there had been a lot of discussion about the Bitcoin ETF. People sort of knew it was coming, knew it was only a matter of time. The Ethereum ETF, that was a dark horse. I think a lot of people didn't see that coming in 2024. They thought it might take a new administration,

a different SEC leadership. How did the Ethereum ETF get approved in the summer of 2024? We wouldn't have launched it at BlackRock if there wasn't client interest and client understanding. And the process was very similar. We worked with SEC. We had the benefit of having a really positive relationship. And we saw ourselves as educators of the administration and of the SECs through series and series of calls to explain why, you know, an in-kind model was beneficial for investors, why Ethereum was investable. And we didn't do it for the third, fourth, fifth crypto asset, but we knew there was customer demand. And ultimately, you know, it's not a situation that many think if you build it, they will come.

There needs to be customer interest and there needs to be an investment thesis and people got it. It took a little bit more education for Ether than it did for Bitcoin, but once people understood that this had a network effect, once people understood that it will be a generational shift in how traditional finance runs,

I think they understood that this was a bit of a moment of, do I want to miss the next intranet investment opportunity? And that's why I think Ethereum is having its moment now. So I will have asked the question about what do you think about the approval of Ethereum ETFs? Yeah, I think staking will come and I think it'll come with approval from the SEC faster than people think. You know, the SEC under the Trump administration had a prioritized agenda, getting legislation done through the Genius Act. I think being very, very clear, for example, that liquid staking is not participating in a securities transaction. They approved in-kind subscriptions or redemptions for the Bitcoin and ETH ETF.

I think staking will come next. And then the question will be these ETFs, what percentage of their funds will they be able to stake in order to maintain redemption liquidity, given the queue of staking and staking withdrawal? So I think, think it'll come. Something else that happened in 2024 that in some ways is more innovative, more kind of pushing on the edges of what's possible was the Biddle tokenized fund that BlackRock launched. This was in March 24. And these are essentially tokenized maybe money market funds, tokenized short-term treasuries, I believe. And you launched this on Ethereum. I was very excited at the time. I said this is the equivalent of Black Rock launching a bank branch on Ethereum. It

sort of felt like that, right? You have a smart contract. You could see it on chain. And these are tokenized treasuries. Tell me about that story. How did that come to be? What's the strategy there for tokenized treasuries on chain? Yeah, I think if you take a step back, I remember people talking about 2017, 2018, being the years of tokenization. And it turned out they weren't. And there was a reason why tokenization has incredible promise. You know, a digital version of ownership that is programmable, that can be borderless, that is instantly settleable through trust on a network like Ethereum. But there needs to be an ecosystem around it that is ready. And there needs to be a purpose meaning if there's not liquidity, if there's not people who can trade, if there's not utility,

then it's really just experimentation and press releases and proof of concepts. And I've said this before, if you are not putting a product in the hands of a customer, that is experimentation. Once it's providing utility, that is innovation. So I think there was an element of the market that demanded yield. You know, if you're holding stable coins on chain, you need that liquidity 24-7 to transact in crypto on crypto rails. But there was a trade-off.

You were giving up the yield. And at that point, it was 4.4.5%. That's a significant trade-off to be on-chain. And so there was a view at BlackRock that we could solve this problem by tokenizing a short-term treasury fund, but not doing it in a way that only provided access, you know, 930 to 4 p.m. through a mutual fund wrapper, not in a way that made you wait till Monday if you're redeemed on Friday.

So the idea of tokenizing, and we partnered with an amazing firm securitized through an investment from BlackRock, tokenizing on public Ethereum that in a manner that that token was interchangeable as a stable value with a, stable coin so that when you need to be in stable coin, earn no yield, transact on chain, great. At three in the morning on a Saturday, if you wanted to get yield bearing, you can easily transfer into the Black Rock Biddle token. That was an unlock and it over time, you know, grew to two and a half to a three billion dollar fund, not because Black Rock's name on it was on it. It was because it was providing utility to the holder, and it was native on chain. And if you take a step back, I talk a lot about the mission of bridging traditional finance with crypto, but also bridging

crypto with traditional finance. If you think about our conversation, there's a bit of a paradox. We're, you know, wrapping a crypto-native asset like ETH or Bitcoin in a traditional wrapper of an exchange traded product is a bridge. Rapping yield. really boring fund in a traditional crypto wrapper is another bridge. And I think what we're going to see is that tokenization is going to be the macro trend that will collapse this all into almost a single ecosystem. So there's less of a distinction of the $4 trillion of crypto market cap and the $100 trillion of traditional market cap. It's all going to exist in digital format. And it'll be in wallets. Traditional investors are going to have crypto in their funds, and crypto investors are

going to have access to the S&P 500 in that same wallet in tokenized form. So it's paradoxical how this is coming together. But if you take a step back, it is about bridging worlds and basically incredible utility that's going to inure to investors and holders of these assets by running it on chains like Ethereum that provide neutral trust. And we can talk about this a little bit more. I think people are missing that story that these ecosystems are going to converge, and it's going to be a digitization and decentralization story.

I guess that's maybe a good point of why did BlackRock and why do you think institutions chose Ethereum for Biddle as the home? I mean, there are other chains that you could deploy to, including maybe spin up your own BlackRock chain. We see some fintechs kind of moving in that direction, creating their own layer ones. Why biddle on Ethereum mainnet? So the inside scoop on institutions, if you have to summarize what they like most, it's security and its liquidity. And, you know, Ethereum just celebrated its 10th anniversary last month. and it is a system that has been trusted, neutral, and always on in a highly secure manner,

to the point that you have dozens and dozens of layer twos that derive their security from Ethereum L1. And I think institutions, including what we did at BlackRock, we were attracted to that track record and that always on neutral, trusted security layer. And that's why we decided to do this on a permissionless network, but through an application that was permissioned. You know, we needed to know who the investors were in Biddle. And two, I think there's an element of trying to make a point that, you know, permission networks are great, but you can build KYC'd applications and products on a

permissionless network like public Ethereum. And I think that was an important statement to make. You think the decision criteria of security and liquidity will cause others to follow in Black Rock's footsteps, which is basically what I see in deploying the Biddle Fund on Ethereum and making that kind of the home, the headquarters for liquidity and security reasons, is you have that place on Ethereum as sort of the main branch office. It doesn't mean Biddle isn't available on other chains, other layer 2s and layer 1s. it's just that home headquarters, main branch, if you will, the place where you're primarily issuing and pooling the liquidity

and have the most assets under management remains on Ethereum layer one. Do you think that's a pattern that other institutions will adopt as they start to tokenize things on chain using Ethereum for its security and for its neutrality and for its uptime? I believe deeply in that thesis, and that's the reason after retiring from BlackRock, I joined Sharplink. It's a bit of a continuation of that mission and a macro thesis, and I'd love to get to that. But I think we talked about security of Ethereum. I also think it's worth talking about liquidity.

And if, you know, you exclude the Bitcoin network and you look at Ethereum and all the L2s that are built on a top of it and derive security from it, it has about nine times to 10 times liquidity and high quality liquid assets. of the next largest chain. And I'm talking about, you know, 60 plus percent of stable coins. I'm talking about defy. We're talking about tokenized real world assets. And again, liquidity begets liquidity, security begets security. And those are the things that institutions are betting on, rather than something one lane over where there might be a press release or an incentive to do something in the short term. I believe that institutions will gravitate towards the Ethereum ecosystem, which is why I joined Sharplink just a month ago. That tokenization path, is it starting with these less risky assets like treasuries,

money markets, and then are we moving to other asset categories? I guess I'm wondering if you think that all of the traditional finance assets will be tokenized and come on chain in the fullness of time. What does that roadmap look like? Are we starting with safe assets and treasuries and how big will that grow? how soon until we're fully tokenizing other assets. Of course, equities are on the menu, but there's other sovereign bonds as well. What do you think this trajectory looks like? Well, I think we need to step back and realize that stable coins, which are roughly $275 billion as an asset class,

is just a version of tokenized money. So like before you even get to real world assets, you start there. And the investment thesis is that this will grow. Secretary Bessent said, just a little while ago, that it's not unreasonable to believe that by 2008, you know, less than three years from now, stable coins could reach two trillion dollars in asset value. So that is clearly step one of tokenization, and that is digital money. The second element will be real world assets. You're seeing that go from, you know, less than a couple of billion a few years ago to now about $30 billion, and I think it's on the verge of J-curving. And in the beginning, it was a scatter plot of things that were tokenized. And again, I want to remind people why tokenization and the

promise, programmable, liquid, instantly settleable, using smart contracts, borderless, and 24-7 always on. That, initially, that scatter plot of what we were tokenizing from buildings to, private equity funds, it really wasn't providing the liquidity that was promised. So I think it then went to the short end of the curve, go with the most liquid assets where you can prove utility, and then before you know it, you know, a combination of asset managers and crypto natives, you know, now have $10 billion of digital treasuries. I think it's clear that stocks are next. You've seen announcements from the likes of Robin Hood and Itoro and others. who are going to be tokenizing individual stock names.

And I think that's very interesting because it will provide a place in someone's wallet to finally have a traditional exposure, but in a tokenized form, that can be tradable 24-7. I think the real step functions are going to be when you look at these really large mutual funds and ETFs that at some point will realize the benefits to distribution and democratization and access

and a realization that there's a pool of investors who don't have brokerage accounts and they want to own the S&P 500 or they want to own the MAG7 in tokenized form. And if you think about the size of some of these funds, you could talk about tokenizing funds that are measured in the hundreds of billions of dollars each. So think about a step function increase

from what exists today. You know, it's really interesting. You know, that BlackRock launched the largest tokenized fund in history, but it's still measured in sub three billion space. What if some of the largest ETFs were tokenized? You could 100x that just by the size of the fund. And when that happens, I think velocity starts, liquidity starts, and I think it's inevitable. And I think it's going to happen on Ethereum. And that is why I'm super excited about this mega trend, ETH, long-term opportunity. There are some that.

are not yet convinced in traditional finance, I would say, Joseph. So you're among one of the pioneers in BlackRock, particularly in the digital assets, like division you operated, was one of the pioneers here. But it strikes me that changes hard. There are a lot of people that have done things, the way they've done it for their entire careers. There's some not invented here syndrome, right? This movement did not come from Wall Street, did not come from traditional finance. It came externally. There are entrenched interests that will, frankly, lose out if we migrate to this future. Not to say that there aren't benefits for existing players and adopting sooner, but we see things like, for instance, in Vanguard, you still can't buy a crypto

ETF. For whatever reason, you just can't buy it. I saw earlier this week, there's some banking association that they don't like that there's a loophole, as they would call it, in the genius bill, that allows exchanges to offer yield to stable coin holders. My argument would be, well, you know, if you own a stable coin, you're a citizen, why let banks keep that 4% yield? Why can't that go back to consumers and users? But the banks, of course, have some vested interest in collecting that yield for themselves.

So there's pushback in places. And I'm wondering how strong you think that pushback might be. And you do seem confident that in the fullness of time, we will tokenize everything and that this movement is inevitable. but there can be roadblocks along the way. And how big are those roadblocks? How strong do you think this a counter reaction will be to crypto, quote unquote, like eating Wall Street?

I think there was a great litmus test. About a week ago, there was a really excellent Bank of America research report that found that 75% of asset managers still did not have any exposure to crypto or tokenized assets. And that's a really interesting stat. And you could focus on the 75% who don't. I am a glass three quarters full optimist type of person. And if you focus on the fact that 25% of global, large asset managers, and this is a highly concentrated industry where the top 20 or so asset managers probably control on behalf of their clients large decision making pools of capital, that means 25%

do. And if you look three, four years ago, the number was closer to zero percent. So that's number one. The second thing is if you're a student of history, you know there are trends that are in the benefit of customers and institutions. Take the electronification of the equity markets, take the electronification of the bond markets, which are still underway. You know, there were always going to be institutions, stockbrokers and others who made money on opacity, who made money on, who made money on friction, who made money on intermediating risk and intermediating yield. And I think once you realize the benefits, it becomes inevitable. And it starts slow and you speak a lot about the trends of people who could be threatened or blockers. But I'm going to focus on the positive. Just take for a

moment the benefits of trading an instrument in a tokenized form that settles atomically. Okay, now let's not get that excited. Forget about atomically. Let's just say it settles in hours or the same day. The amount of risk capital that is going to be unlocked by that, the idea that you don't have to worry about your trading counterparty failing overnight, the fact that you don't have to worry about overnight financing, the fact that you don't have to put capital towards collateral management, the unlock here for institutions is going to be measured in the tens of trillions of dollars of freed up capital and reduced risk. And let's not forget, risk reduction is a cornerstone of what institutions are trying to achieve. So if there's a better, more programmable

way to settle and secure transactions in an instant on a trustless basis on neutral platforms and reduce that risk and the capital that you have to allocate towards settlement risk, counterparty risk, credit risk, this is going to happen. And I think the barriers will be overcome. And my sense is it'll get enough momentum that even those intermediaries who don't like it are going to realize they have to participate and will participate in this ecosystem. I have a very positive, optimistic view of this. And if you look back in history, history tells you that technology innovation is not going to be stopped. I'll Joseph, let's talk about maybe the more recent history here and the more recent present,

where you're maybe actioning that optimistic bet that you just highlighted. So about a month ago, you joined S-Bet. S-Bet is Sharplink Gaming. It is an Ethereum Treasury company. It has been buying a lot of ETH in a hurry. I think the count is about $4 billion, maybe between $3 to $4 billion, let's say, depends on the price. At the time you're listening to this bankless listener and all,

Also, of course, S-Bed is acquiring even more ETH in a hurry. It strikes me that after launching some incredibly successful digital crypto products at BlackRock and just having the pedigree during a case where the institutions and Tradfai and crypto are kind of converging together, it strikes me that Joseph, you could have gone anywhere, you could have done anything, including maybe just let a quiet life and just kind of retired and watch these products grow and knowing that you had a part to play in history here of this convergence, you decided instead to come out of retirement

and join S-Bet, and you had a lot of different options. Why? Why S-Bet? And this in particular structure means a couple of bets here. One, it's definitely a bet on Ether and Ethereum and that future. It's also a bet on the treasury structure, and then it's a bet on S-Bet specifically.

So tell us why. I want to disabuse a myth that's running in the industry that I didn't retire from BlackRock and I jumped directly to Sharpling. I retired after 20 amazing years working with some of the smartest professionals in financial services. And it was honestly an incredible privilege and honor to do that. My intent was to take somewhere between six and 12 months off, spend time with family, sit on a beach and really decompress and enjoy myself. One of the amazing things about leaving a firm after your best years, is that you can leave a positive legacy,

and then you can pass the torch to a younger generation. You've had Robbie Mnichick on your podcast September of last year, and it was amazing. At a certain point, you know, I said earlier it takes experience to have experience. The team had experience, and it was time for them to run it. And that's part of the humility of life is to recognize when others can do it as well, if not better than you. I have spent time with Joe Lubin since earlier this year,

got to know him personally. I've been a fan of technology change and really, really during the period of tokenizing Biddle got to understand Ethereum. We got to understand consensus, consensus being the most experienced and most commercial Ethereum company in the world. And I was pretty fascinated that this was the next mega trend. And I got a phone call about a month into my glorious, and it was glorious retirement. And I think what got me out was this idea of continuing the mission. You know, like, how do you build a company that will be an acquirer of ether, not as a financial vehicle alone, but as a powerful company that can acquire the highest

octane money being ether. We could talk about what I mean by that. And to do it in a way that is supportive of the. ecosystem. We are not here to raise ether to a limit and stop and, you know, become a dividend company. We're here to build an Ethereum company side by side with our strategic partnership with Joe and Consensus. So what got me out of bed is the idea that I could continue this mission, this thesis-driven mission of helping bridge capital from traditional finance, from retail, a global capital with a story. And, you know, when you think about the treasury vehicle,

it has some real positive superior characteristics. One is you get a capital appreciation story around Ethereum. Second is, you know, ether works for you. You can compound it, which makes it a very, very positive, unique reserve asset in some ways superior to Bitcoin in that you can actually generate revenue. The wrapper of a public company means you have a forward valuation of both that revenue and expectation of growth. And if you could start staking and restaking and participating in defy yield, there are a lot of interesting things you could do with that pile of ETH, including building businesses with ETH denominated revenue. And I think that's what got me out of bet, that what got me out of retirement. And I must say, if

we didn't have the differentiation of the relationship with Joe Lubin and consensus, I'm not sure I would have been as attracted, but I'm super excited to build a business, not just a strategy. And some people will describe it as an Ethereum trade. Again, I'm here for the macro Ethereum opportunity. And I'd love to spend more time talking about why I and Sharplink have so much conviction that this is going to be a decades-long megatrend. Let's do that. Decades long Megatrend and maybe let's talk for a minute. There's all sorts of

different facets we could talk about, but let's talk for a minute about ether the asset because that is a big part of what S-Bet is doing. It is buying more ETH as fast as possible it seems like. And I think ESBet is on a mission to maybe acquire even

more ETH than Tom Lee and he is acquiring a whole lot of ETH at this point with his treasury vehicle. And there are a number of other treasury vehicles, but Let's start with why ether the asset. You called it a little bit earlier high octane money. Can you describe why is ether high octane money? Describe it for maybe in simple terms, I suppose, for institutions.

How should people think about ether the asset? And why is it attractive to put on a treasury balance sheet? Sure. So rather than start with a view of what the price of ether will be, what I'd love to do is maybe give you a fundamental framework to think about how the value of ether can change over time. And what I want to do is, you know, refer to an amazing consensus report. You can almost call it the industrialization of Ethereum or the trustware report. And I would encourage everyone to read it. And there's a bit of a framework that if you look back over the last five years,

There's a high correlation between the value of ether, the token that's securing Ethereum, and the value of the underlying assets, high-quality liquid assets that are secured on Ethereum. And what do I mean by high-quality liquid assets? I mean three categories. Stable coins where Ethereum has the majority of all stable coins issued and running on its chains is number one. Second is tokenization of real world assets. And the third is the slice of defy that is real world activity.

I mean borrowing, lending, and exchanging of capital, so high-quality TVL. If you take a step back and look at how that has grown over the last five years, there's almost an uninterrupted view that for every $2 of high-quality liquid assets secured on Ethereum, there's about a dollar of appreciation. in the market cap of ETH. And I'm not suggesting that as it goes j-curved, that correlation will continue to be linear, but I'm suggesting there's a correlation.

So if that's your framework, then you can look at each of these pools of assets, stable coins, you know, $275 billion going to potentially $2 trillion over the next few years, tokenized real-world assets going from $25,30 billion to some much larger multiple, potentially measured in the trillions. And then if you look at the institutionalization

and adoption of liquidity on defy, and I'm talking again, lending, borrowing, and exchange of value, those three things, if you look at what some of the experts are saying at Boston Consulting Group, that over the next several years will get to $4 to $16 trillion.

So if you take a step back, just think of my, you asked for simplicity, a simple rubric that if these high-quality assets are secured by Ethereum and the L-2s that derive security from it, you can put your inputs in and it'll give you an output. And in any forecast, that output of what the price of ether is going to be is significantly higher than it is today.

So if you believe there's a long-term trend of tokenization, if you believe that it's going to happen on the most secure, trusted, and liquid chain Ethereum in the L-2s, then you have a thesis that the price of ether will be going up significantly. Now is the time to take advantage of that macro trend and accumulate as many stacks of ether as you can at the current values. Before you even talk about businesses and things you can do with eth, the second thing, the second way to answer your question of like why eth and why it's the highest, you know,

powered money, I would answer it in two ways. You know, Ethereum as a network is not like the Bitcoin network. It is highly programmable with apps that are coming. And so far we've only spoke about real world assets and tokenization and the like. But if people take a look at the recent protocol development on Ethereum around ERC 804, we are talking about an ability to use AI agents to transact across domains with registrations, with registries that understand identity, reputation, and validation. And I don't want to go into the hype of AI and what it could be.

All I'm suggesting is the thesis that I've just laid out doesn't even include a world where AI agents are going to be a very large part of the workflows that happen in traditional finance, that happen in our personal lives. And when you think about the velocity of money, it's going to be agents who help do a lot of that. So I think there's a long-term promise. That was a super long answer to a very short question. This is why I'm really excited about, as I said before, a decades-long trend. I've read the Consensus Trustware reports fantastic.

And just to highlight what I think you're saying here, right? What you're saying is that for every $2 that is secured by Ethereum on top of Ethereum, that would be maybe TVS total value secured for every $2, then ether the asset tends to be worth over its history about $1. Is that correct? So if you want to scale this up, you get to $10 trillion in total value secured, all of these high-quality liquid assets on top of Ethereum. And if this correlation holds, then you get an eth price of $5 trillion.

$10 trillion, total value secured, eth price of $5 trillion. I know it's not that simple. I know what happens in waves. I know there's correlation. I know that the J curve of this might not hold completely to the 2 to 1 ratio. But is that the simple mechanic that you're saying is at play here? Yeah, that's been the correlation over the last five years. At certain points, there's been a higher or lower premium associated with that correlation.

I'm not suggesting that as it j curves, it will continue in a linear basis. But directionally, the more high quality assets secured by Ethereum in the L2s, the higher value of ether, and we have a very strong conviction that there'll be more assets secured. Therefore, now is the time on behalf of investors to accumulate as much eth as possible and make it work for investors. That is the macro long-term Ethereum opportunity. Yeah, the reason why I think that's somewhat interesting is because everyone is trying to figure out, oh, how do you price these assets, right? How do you price something like an ether? How do you price a Bitcoin, that kind of thing, right? It is, in some ways, easier to think about,

the value on top of Ethereum that will be secured, right, if network effects and liquidity and security continues to matter. Because you can think of things like the Genius Bill and Secretary Treasury Bessent, who says that he thinks by 2008, $3 trillion, $1,000, in stable coins. And if you think if the Ether market share is 50% of that as it is today, maybe 60%, something like that? Well, we're already in the trillions. And so that's just one category. That's just stable coins. If you take all of the other assets that are going to be tokenized, AI type assets, defy crypto-native assets, and then traditional real-world assets, you can easily add those together in some sort of McKinsey type of analysis report and get to numbers like $5 trillion, $10 trillion,

$20 trillion. And then you just have to take that and say, okay, what's the relationship between total value secured and ether the asset? Does it remain two to one? Maybe in the future it's three to one or four to one. That's still a lot higher in terms of eth price than today. And so at some level, I feel like it's easier to project total value secured than it is eth price.

But if those two things are interrelated, then you actually get some sort of extrapolation of ether price. Is that the intuition here? It's as simple as that. It's pretty simple. It's pretty simple. Okay. So, what else besides building a treasury is Espet trying to do here? So you implied that there might be some other activity. Of course, the first step is to continue to acquire ether, but there's some building going on on top of Ethereum as well? Well, I want to take a step back. There are a lot of people entering the ether treasury space. And I actually welcome that. And, you know, I use, use the word co-optition is a positive thing. What do I mean by co-opetition? There are some really, really savvy people entering this space. And that means that there's a number of people who have the

same thesis that there's a long-term Ethereum opportunity. So like validation through competition is a positive thing. I think what we're trying to do at Sharpe link is distinguish ourselves in two or three different ways. One is we are building an institutional grade treasury. And we're building an institutional great company, not just with incredible talent, but through our partnership with consensus. You know, we have Joe Lubin, the co-founder of Ethereum on our board, who's built the most successful and sophisticated and experienced Ethereum native company in consensus. And that gives us lots of opportunities to do interesting things, not just in terms of how we stake and restake Ethereum, but in building businesses that are one lane over

and either complementary or synergistic with things happening. And when you have a large stack of eth, you know, measured in the several billions to, you know, what could be double digit billions, it gives you an opportunity to participate in the ecosystem in a very positive way, not just by seeding protocols, but by providing liquidity and by providing an ability to build businesses that can scale not linearly with headcount, but that can scale through ecosystem growth. And I'd rather not share the specific plans today, but what I will share with you is we're not content to buy and hold a percentage of the ether ecosystem and stop and become a vehicle and a dividend company.

Our goal is to have a really positive influence on institutional adoption and to build businesses that are correlated to the ecosystem. So I think what we're trying to do first is build the best team in the industry, the deepest bench with the most Ethereum knowledge, and I think we're off to a pretty good start

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Joseph, Bitcoin has had a treasury strategy for a while. Micro Strategy, of course, pioneered maybe digital assets in a treasury company in 2020 and has continued to grow to this day. What's the difference between Bitcoin in a treasury versus Ether in a treasury to you? How would you explain that? Sure. I think first you have to start with recognizing that what Michael Saylor has done has been really, really positive for the industry. To be able to sustain an MNAV, you know, over a period of four years and generate outsized returns for over the underlying for investors is an incredible case study. I think that there are two differences between Bitcoin and Ether as a Treasury strategy.

One is just the fact that Ether can work for investors and it has an ability to generate yield. And if you think about a Treasury whose job it is to accumulate and safely protect the principle, that is an incredibly positive story. But you can add three, four, and more percent yield on top of that, in a public company context, that will be viewed and categorized as revenue. And then, you know, in a public company, the revenue accumulates a multiple. So it's this righteous life cycle and circle that I think makes this a superior asset for a treasury reserve. And second is the ability to participate in the ecosystem and to build businesses. Ethereum is different than Bitcoin. You can build many different types of applications.

You can build different types of pools of liquidity. And I think if you think about what global finance is going to be built on and what real world economy can be built on, it's not going to be on the Bitcoin network. It's going to be on the Ethereum network. So then you go from having a treasury reserve, which is thought of as a digital gold store of value to something that could be much, much greater. And I think that capital appreciation in ether based on that differentiation will be more positive over time. I want to share one thing. You're probably going to ask me about it like Heath versus Bitcoin. Are you an ether person? Or you're a Bitcoin person? I actually think there's a role in investors' portfolios for both. And I don't wake up every morning thinking of flipping

somebody else's treasury. I don't wake up every morning of ether flipping Bitcoin. It's just not who I am. I think of waking up every morning and building the most transparent, trusted Ethereum Treasury and related companies for the investors. So like, I'm less motivated by the religion in this ecosystem as I am in trying to accelerate this macro trend and give as many people, you know, access to it through Sharplink S-Bet as I can. And I'll leave the religious wars to others. One thing that we often repeat on the podcast, Joseph, is the most bullish thing for Ethereum is actual education, is for people to know about Ethereum. And one of the things I'm ironically, this sounds weird, but I'm most excited about with some of these treasury

entities, including ESBET, is your quarterly earnings reports. Because I find that that will be a way to show analysts how you're deploying ether as a productive asset and the types of revenue yield that it's generating in what types of things can be done with this asset. And through the course of reading those SEC filings, I think that will provide analyst coverage and education to the entire industry. I don't know if that's just a nerdy thing to be excited about, but like I'm really looking forward to the quarterly reports, man. I'm excited to having a full quarter as an ETH Treasury company. I joined after the end of the second quarter of Sharplink, but I'm going to out nerd you. I'm excited for Tuesday

morning press releases from Sharplink that are super boring. They lay. out how much capital we've accumulated in the previous week. It lays out how many eth we've purchased, how many we hold, what are the staking rewards so that investors can then understand the count of our fully diluted shares and have complete transparency in what's happening. So, like, if you're excited for the next queue, I'm excited to have a transparent and differentiated treasury company that will allow investors to understand us week over week, rather than waiting until the next quarter. So, like, I just out-nerded you.

No, that's pretty impressive, actually. And getting into kind of the nerd topics of, like, what metrics are really important to ESBET right now? Just, you know, get a little nerdy for me. One thing I've heard ESBET, and you guys are, I feel like you're leading the charge with respect to transparency in your ETH holdings. But one thing that I see the ESBET accounts I talk about a lot is

ETH per share as being a primary metric for you. Can you talk about that metric and some of the others that you think are important for ESB. I think whether you call it ETH per share or what we call it ETH concentration, it's the idea of how we concentrate ETH in the treasury and in a creative way. So you can think about it almost like take all our ETH holdings, divide it by a thousand fully diluted shares. And when I say fully diluted chairs, I mean like the most recent share count that investors

can understand on a weekly basis. so complete transparency, and then you get an east concentration number. When you do the math, in early June when we started, it was roughly 2.0, was that ETH concentration metric. And I think it's grown over 80, 90 percent to the point where it's in the high threes at this point. And that is telling you that we're building a highly concentrated ETH per share machine. And that is our North Star. But there are some other North Stars.

Like, we don't believe that Ethereum treasury companies should be built on the back of a handful of people. And we are building a best in-class institutional but crypto-native team that has incredible experience, not just in raising capital, but how we deploy that capital and how we do it in a really smart, risk-managed way so that investors have complete transparency. You mentioned earlier this idea of education. And I think it's imperative. You know, when I was at Black Rock, the idea that the managers of exchange traded products had to spend time educating investors, not just because it's good for adoption, but that is what a fiduciary does.

You go over and over to the same home office and talk about a thesis. I think it's imperative. And I actually want to tip my hat to Tom Lee at PMNR, who's doing an amazing job at educating, and I don't mean mind share, I mean educating on what the long-term opportunity is, and we're doing the same. And we want to make sure that we hit every channel. And that's why I'm excited to be on this podcast. I'm also excited to put out 10 Q's. I'm also excited about being on Twitter for the first time in my life, X. Yeah, it's been great to see you, actually. I just recently followed your account. We'll include that for bankless listeners in the show notes so they can see

what Joseph is up to here. I'm wondering if you could enlighten us a bit more. on the mechanics of these treasury entities because I feel like I've developed in talking to many of them over the last few months. I've developed somewhat of an intuition for it. And I'll throw some stuff at you and maybe you can kind of correct or help confirm my understanding or edit as necessary. But there's this thing called MNAV premium, of course, which is the value of these entities of ESBET, for example, above your book value and your book value being primarily the assets, the ETH assets that you hold. MNAV premiums, you know, there was a time where micro strategy was like in the high twos, which was incredible. It's collapsed down to about 1.6 or so recently.

Some of MNAV premiums and ETH treasury companies have floated from between 1 and 1.4. So one just means it's basically book value. It's not even the ETH staking rate, which seems kind of low. Some have actually gone under one for the first time that I've seen. These are some of the smaller entities and you sort of wonder what's going to happen there. We've seen some of these treasury entries buy back their shares when MNAV premium seems absurdly low. But positive MNAV premium gives treasury entities the ability to essentially mint more shares. These are called at the market purchases ATMs and they can mint more shares and then they can

what? They can buy more of the treasury asset. They can buy more ETH in S-BETs case. So positive M-NAV kind of is. moderated by the fact that positive MNAV will result in share dilution as you're going to buy more E. That's a primary capital raising technique that these treasury entities are doing. There's also some other capital raise techniques that are more on kind of the debt side of things. And it strikes me that you start to access those capital markets on the debt side

of things once you get to a certain scale and once you can establish those institutional relationships to tap into that. And it seems to be the case that the most successful of all treasury entities to tap into that has been Michael Saylor, and he's had five years at this, and he's done a fantastic job, and he's kind of written some of the playbook of accessing some of these debt markets. It's unclear to me how much more is available from these debt markets to bring back into treasuries. I haven't seen many ETH Treasury companies do this at scale. So most of the purchasing I've seen has been ATM types of purchases and not funded from the debt markets, though maybe that is going to change. I threw a lot at you, Joseph, just because I want

people to get kind of the picture of what's going on. Could you reflect on any of that? I guess the takeaways you are, ideally, you tap into some of the debt markets, but you also don't want to get over leveraged. How do you think about the strategy for SBET? Sure. I think to date, we've relied on raising common equity and raising it at times when we have an ability that each time we raise, it's going to be accretive for shareholders. And there is a sensitivity around, you know, not raising so quickly that it puts pressure on your stock price. But again, if you have a long-term thesis that the value of ether is going to go up, you want to take advantage of raising capital when you can as quickly as possible.

So you're accumulating and stacking eth at the lowest price. So that's number one. We've been public that when we get to the point where we're a seasoned company and you can raise capital through converts, we are looking at that. And there's a really important reason, and that is ether is a highly volatile asset, and there are many investors who like to get exposure to a volatility trait.

But there are different ways of raising capital in the convert market. You could do really stupid things, like have it secured against your ETH and you blow a covenant and you have to sell it. What we're looking to do is a very high quality way of doing this. So a low coupon, unsecured, try to do it in a way that's syndicated to thoughtful institutions. And when we're seasoned and ready, we will do that. I also think we are wary of taking on unnecessary leverage. You know, we get the question of a lot, like these ETH treasury companies have only existed in times when the price of the underlying is going up, right? And you get the question,

what happens if the price of the underlying goes down? And even though we have a long-term thesis that this will step function positively over time, we all know this runs in cycles and maybe it's a four-year cycle, maybe it's extended, maybe this breaks the cycle. But there are things you could do to make sure that you're set up for success in both bull markets and winters. Part of that is keeping your OPEC down and building a high quality team, but not over extending yourself. And the second is not by taking on too much leverage. So I think we're going to be very, very thoughtful, but we're going to continue raising capital every moment that it's accretive for investors. And we're going to be less influenced by, you know, the price of ETH today and the price of ETH in a

week from now. It is a long-term conviction. And I think when we look back a year or two years from now, we're going to actually thank ourselves and our investors will be thankful that we were raising capital at these price levels. So that is the thesis. So that high quality leverage, is that market like tapped out or is there still some available in the future? Maybe some of these Ether Treasury companies need to mature including ESBET to kind of tap into that. But I don't know, I've always just been wondering if maybe Michael Saylor got it all and there's nothing left for other Treasury entities. It disabuse me of that. Well, there's capacity. There is a very large.

pool of liquidity that likes to invest in a volatility trade is number one. Number two is, you know, ether in some ways is a better asset for a convertible bond offering for two reasons. One, it has more volatility right now than Bitcoin does. It just by definition at this moment, it's a good thing. And two is if you think about it as a debt instrument that requires, you know, interest payback, what better asset to do a convert. on than one that's already paying you three plus percent yield. So you can cover the debt coverage just by owning the asset. So I think both the volatility and the yield bearing makes it ideal for a convertible. And we believe very strongly there's capacity for that. But I think it has to be done

responsibly. We're not here to raise capital at all costs. We're not here to do stupid things to catch up to the largest ETH Treasury. If you're in it for a debt, decade-long trend, you do it the smart way and you don't do things to regret later on. Do you have a take on what the steady state MNAV premium is going to be? I mean, it certainly seems like it should be above one, but how high above one? You know, I think it'll vary over time. I also think in this world, things mean revert, and there'll be periods of time where we or others have a higher MNAV, there'll be periods of time where it gets closer to one and that's okay. What we want to do is be transparent

with investors that we're going to continue to buy when it's accretive to shareholders. We don't want to be in a situation of making a statement and then having to change it later. We're going to continue to invest while it's accretive and while the price is at its level. One thing that's still perplexing to, I think a lot of people observing this effect is with all of this net new buying pressure from ETH Treasury companies, and it's happened so soon. I mean, we're talking with the past like 60 to 90 days or so. And we're looking at ETH Treasury companies and it's, how 10? to $15 billion worth of ether that they've accrued. With all of that net new buying pressure

in a collapsed period of time, the summer of 2025, how is price not higher? Okay, I know you don't generally reflect too much on price, but of course, we have, I guess, doubled from some of the lows that we saw early in the year, and that's impressive. We have hit an all-time high. So some people listening will say, Ryan, why aren't you satisfied? I mean, we have gone up in price. Now, I'll acknowledge that that's true. But what we're seeing is 10 to 15. billion in net new buying pressure. And it seems to be the case that Ether could, like, how is all of this buying pressure happening without the price of Heath absolutely skyrocketing? Is there something that you're seeing behind the scenes that would give us a clue here?

Look, I listened to all your podcasts and the last two you've asked the same question. I don't think we have a, you've asked the same question. I'll give you my personal answer, which is I will share that it's a weekly held view, which is it's clear that the markets don't always run in a correlated way. We had a step function increase in ETH. So if you look back, it's hard to say that the buying pressure didn't influence the price of ETH, but it's also probably clear

that there are sellers in the market that are countering today's demand. And so I think it's some element of, we're still educating the market. There's some element that there's still liquidity to absorb this buying pressure. And it's probably certainly true that there are sellers out in the market

that are balanced, this as well, people taking profits, given that the price of ETH has nearly doubled in the last two and a half months. So I think it's a combination of all the above. I think we'll only know for certain when we look back over time. I'm wondering if you'd comment on this, Joseph, because it was not long ago, at least in crypto kind of narrative cycles that circles at least that Bitcoin was viewed as sort of the institutional asset as evidenced by, well, Bitcoin is digital gold, as evidenced by massive volume in assets under management in the Bitcoin ETF versus the Ethereum ETF, as evidenced by the Treasury companies, and again, we're talking earlier this year and

a year ago that had been stockpiling Bitcoin and none had yet entered Ether. And so it has seemed this crypto cycle that Ether has had a slower start, and many have pointed to that and said, look at the price, it's not being valued as a high-eastern. octane money. It's not being valued as a store of value asset. There's only one. Bitcoin is the special snowflake. Some of that narrative has reversed. And sometimes you wonder if narrative is just following price after all. As the price of ETH has jumped up and these treasury companies have sprung up, but it's still there. It's still out there. And people are still wondering, some people are saying that these ETH treasury companies are a trade, whereas you've called it an

opportunity. I'm wondering if you could talk about that. Why has Eith been slower this cycle, is ether the asset really an institutional grade asset worthy of being on treasury companies for the long term? Why is this an opportunity and why is this not just a trade? Yeah, I think Bitcoin took a lot of education, but there's only one Bitcoin. And if you told the story early in the cycle and we were telling the story in 2020, 21, 22, 23, when I was at BlackRock to all sorts of institutions and advisors and home offices and wealth managers and pension funds, it was a very easy story to tell. It is digital gold. If you look back over a 10-year period, even though from time to time it looks like a risk

on asset, it's actually highly uncorrelated to equities and fixed income. And therefore, it had a role in a portfolio where it can provide you asymmetric upside. while not being tied over the long run to what looked like a NASDAQ trading strategy. Ethereum took longer to explain because it wasn't Bitcoin. You had to explain, yes, it's a store of value. Yes, at periods of time, it has been deflationary,

but actually more interesting is it's a network effect asset. And if you believe in the long-term view that there's going to be a digitization of ownership, not just of stable coins and D5, but of real world assets and other real world's activity, then it's like investing in the intranet in the early days. You're going to be early in the scale and network effect. So you're telling a couple of stories.

It is a digital asset. It is something that secures a network. It is something that you get in return for, you know, it's a payment mechanism for transacting on Ethereum. But it's actually more of an internet-like network effect. That's going to be a megatrend. And just like you saw Web 1 be a decade-long trend and then Web 2 in a more commerce and interactive way, you can think of this being the decentralization of finance.

And if this is the token that's going to help benefit and secure that, it's been not harder for people to understand. It doesn't take convincing, but it takes a heck of a lot more education. And that's why I think there's a role for ETH Treasury companies to be more than just a vehicle to accumulate on behalf of investors, we have an obligation to tell the story, not just because it's good for us. And I think what's interesting, you said the story follows the price. I think when you look back in a decade, the price is going to follow reality. So on that, what do you still think the misconceptions are out there among institutions and

among Wall Street when they look at ether the asset? I think there's a view that Bitcoin, there's only one, it's singular, it's unitary, and there's no competition. competition. There is still a bit of an overhang, you know, on Ethereum versus the L2s and other chains that have been announced. It's really interesting. I'm going to go back to what I said earlier. You know, there are other chains who have beautiful websites to talk about their downtime. Ethereum hasn't had downtime. Ethereum has been secure for 10 years. There's a whole ecosystem that derives security from that Maynet-based layer. And I think if you look at the Ethereum roadmap and the new leadership of the Ethereum Foundation, there are going

to be incredible scale advances on the L1. And so I'm quite bullish that this ecosystem, the Ethereum, L1, and L2 ecosystems is going to be where capital is attracted to. And even though there are announcements of independent layer ones and layer two's, you're not going to see those people pull their assets off Ethereum because that's where transactions are being secured and happening right now. That's more of an economic play to secure the economics of stable coins and other transactions. How many ETH Treasury companies you think exist in five years? What does this, look like? Are there power law winners? Is there just one that's attracted all of the liquidity? You look at other charts and it seems to be the case for Bitcoin ETFs that they kind of concentrate to

the largest winners. Will the same thing play out with treasury companies? I think I'm on the record as saying co-opetition is a good thing. Like, it's lonely if you're the only one having a mega trend thesis. It's actually reinforcing if there are many really smart minds launching businesses and capital. I think in general you look at scale businesses. It's always one, two, three, maybe four that attract most of that scale and influence. I think this will be the same. I think this will be the there will be a handful who accumulate most. Partially because it takes liquidity to beget liquidity. You talked a little bit about the at the market, you know, that's the principal way to date of raising assets, and it's based on the liquidity of your stock. And those who have the

most liquid stock will be able to raise the most assets, and it's a flywheel. I think I want to repeat again, we want to be more than a vehicle that accumulates Eath and at some point dividends out to people, we think there are businesses that can be built with that derive ETH denominated revenue. And I think that can be really reinforcing in a public company context. So we're going to be in the business of building in addition to accumulating. I know you're optimistic. I know you're a glass half full type for sure. Three quarters. Three quarters full. As am I. But a question, just what could go wrong with the ETH opportunity? Like if you're wrong on this, how might you be wrong? How could it be delayed, for example?

What comes to mind when you think about that? Sure. I think if you think about the ETH treasuries, I think the biggest risk is that people who are far behind are going to take risks that I don't think are prudent. And that could be in how they raise capital. It could be in trying to differentiate themselves in the yield that they derive off their ETH.

There are many ways to get double-digit yield, but people need to recognize it comes with credit risk, it comes with counterparty risk, it comes with duration risk, it comes with smart contract risk. So there will be people, just like in traditional finance, who want to get that last hundred basis points of yield and think that it's riskless. So I think there's, you could be tainted by people who do imprudent things. It's not going to happen on our team. You know, we have the experience, have them lived through both traditional credit cycles that

there are risks you take, but it has to be on an adjusted risk reward basis. And I think, too, is if you overbuilt and there's a downturn, how do you make sure your cost structure isn't such that you've built to the highest price of Ethereum? And the beautiful thing about ETH Treasury companies is they're almost infinitely scalable. You need a high class staff who can do the accumulation, the staking, the risk management, the building, and the education. But it does, doesn't need to be more than 15 people. So if there is a downturn, you're protected. But I think our alignment with consensus says a lot. Consensus has been around for 10 years. It plans to be around for much, much longer and to build the future Ethereum economy. And if you are taking that long-term

bet, you'll weather downturns in price. In fact, downturns in price are just a great time to accumulate. So I am an optimist, but I'm also pragmatic. You know, this is not a risk-free world. We'll have to make the right risk-reward trades. And I think Sharplink will do it as well, if not better than any. Well, Joseph, it's been an absolute pleasure. So we maybe come full circle on this conversation. I feel like a few months ago, maybe after your career at Black Rock,

you were at the point where you had a number of these products and initiatives that you helped lead across the finish line. And you were at the point where you could say, mission accomplished. I feel great about the things. we launched the milestones I achieved, the team we've created here at BlackRock. I'm wondering something similar. What would be a mission accomplished for S-Bet? I do get the sense that you're in this for the long term. This is not a single cycle play for you. You're in this for the long-term. What would make you say, hey, you know what? Retirement's looking good. I accomplished what I want to

accomplish here. S-Bet is sort of what I wanted it to grow into, and I feel like I can ride off into the sunset. What does that look like for you? I plan on being a sharp link for many years, but you can imagine a world, fast forward five, ten years, and adoption has been j-curved. You're not even using the word j-curve anymore because you're going straight up. And, you know, ether is fulfilling the role of securing this additionally economic activity and ether as an asset is doing amazing. You know, I do have a view in life that you have to build legacy.

And at some point in life, there'll be a generation of people who can do it better than me. And just like at Black Rock, I passed that torch to people who are incredibly motivated, who are younger than me. At some point, we all have to replace ourselves with people who are younger, better, and smarter. It doesn't mean I won't follow this for the rest of my life. But I think that would be the moment when, you know, the adoption is there. The Treasury is doing incredibly well. But it's hard to talk about my retirement two months in.

There are two funny things. Like my kids have no idea what I do. But I think the first time they understood that I was doing something interesting was when they saw a meme somewhere around July 26 a few days in. I saw a meme, you said. They saw a meme and it was like me and Joe Lubin, somehow another, both wearing suits. And it said something like it took two Josephs to reinvigorate a, sorry,

two ball Josephs to reinvigorate Ethereum. And somehow or another, my kids thought I was doing something interesting. I also think it's funny in your intro. You didn't mention that your partner is out at Burning Man. And it's ironic that he's in Black Rock City, Nevada. And the first half hour of our conversation was about Black Rock, but a different one. So I love it. Did you ever been to Burning Man?

No, I have not. No, I have not. But I have fun in other ways. Yeah. But I really appreciate this opportunity. I loved the conversation and I actually look forward to looking back a year from now and telling the story that it's happened already. Well, two ball Joseph's definitely bullish for Ethereum. I look forward to the memes in the future, my friend, because you are now on a crypto Twitter and we've got lots of those, loads of those

coming in the future. It's been a pleasure to talk to you. I wish you much success on building out this legacy and thank you for coming on today. My pleasure, and I look forward. to speaking soon. Bankless station, got to let you know. Of course, crypto is risky. None of this has been financial advice. You could lose what you put in, but we are headed west. This is the frontier. It's not for everyone.