On The Brink with Castle Island - Weekly Roundup 02/26/21 (Bitcoin vs Fedwire, ETF prospects, Is the Tether Saga Over?) (EP.186)

Episode Date: February 26, 2021

Nic and Matt return for more news and deals of the week. In this episode:  Is Bitcoin more reliable than Fedwire? Are stablecoins already superior to legacy infrastructure? Tether-Tron transactions exceed Tether-Ethereum The social utility of trading wholesale energy One chapter in the Tether saga closes Is the Tether story over? The ultimate takeaway from the Tether saga Square buys more Bitcoin Nic evangelizes bitcoin to his hairdresser A bitcoiner joins the Federal Reserve How big will a Bitcoin ETF be on approval? Why exchanges are prudent to delist BCH and BSV

Brought down by bad mortgage investments, Lehman, which has 25,000 employees, will be liquidated. The federal government loans American International Group, AIG, $85 billion. This is a different kind of market, and the Fed is asleep. The federal government is stepping it to stabilize Fannie Mae and Freddie Mac, the two mortgage giants that have been threatened by the housing crisis. The Bank of England has pumped 75 billion pounds more to Britain's ailing economy with a new round of quantitative easing. You print a couple trillion dollars, and all of a sudden, people start to worry. So out of this worry, we have something called a Bitcoin.

Bitcoin. Welcome to On the Brink. I'm Matt Walsh. And I'm Nick Carter. And we're risking being very out of date because we are recording this on Wednesday. So anything could happen on Thursday and you will not hear about it in this podcast. Yeah. So hopefully nothing interesting happens tomorrow. But knowing these markets, that seems very unlikely.

Seems exceedingly unlikely. Fedwire is down or was down. so this could be a developing story right now. We tried to do a wire transfer and we could not do it. Isn't that crazy? So, yeah, we were actually in the middle of a significant wire transfer and turns out Fedwire was down. I think it might be back up now,

but how funny is that? Bitcoin is definitely at this point more reliable than the Fed wire system. At this point, why would anyone be funding transactions, not in stable coins? Like the last three out of five transactions that we've done have funded in USDC. Yeah, we do stable coin based settlement now. It does make me nervous when we're copy-pacing addresses, though. I'm still not over that.

And I've done it, obviously, probably thousands of times at this point. There has to be a better workflow. That brings me back. You remember when we did the first Bitcoin purchase at the fund at Fidelity when we were reading out. And I think we had to move. we bought Bitcoin and then we had to move it to a cold storage wallet. And do you remember how nerve-wracking that was? Just having, I think we had three people around a room reading out loud and then like three witnesses.

It was very harrowing. Yeah, literally reading out public keys. It was an operational nightmare. I hope that things are easier these days. I think they might be. I think there's a picture of that transaction. That'll be left to see if the person has it still. That's classic.

But yeah, the whole notion of public key addresses, public keys and addresses, alpha numeric strings, the problem with them is that, like, they're not human recognizable, right? So it's not easy at all if they've been tampered with or if some stray program in your computer has replaced the clipboard contents. And that's like a classic attack vector. So, you know, I guess you can do your checks and check the first few characters and the last few characters. But it's just a huge burden.

It's like a mental burden that is placed on you when you're transacting. So I feel like in five years, we're going to look back at that and say that was barbaric. And we're not going to be doing that anymore. That's going to be like command line, right, where you just look back and you're like, how did anyone ever do that? Well, actually, not a lot of people did it. Yeah. Yeah, there's a risk premium involved with the difficulty of operationalizing access to crypto, I think. But at a certain point, we have to mature fully.

And I don't know what comes after addresses, but addresses are not the steady state outcome here. The usability of stablecoins, I think, is completely underappreciated in terms of why these are going to win against legacy payments infrastructure. It's just so much easier. Put the alpha numeric string aside. The fact that we can close a transaction on a Saturday morning, the fact that you have full auditability on chain and you don't need to reconcile it against like logging in and having your auditor log into your bank account and reconcile it.

It's just so much better. It's 10 times better. Yeah, it's not even close. And a cross-border transaction, you're not going through correspondent banks. You're not waiting three days for each bank to update their ledger in turn. there's not additional fees based on every hop, hop, hop, hop, hop, hop, hop, and then hop, hop, hop, hop on the way out to get to some correspondent banking system

that's pretty far from the New York one. Everybody takes a cut. None of that nonsense. Totally flat payments to apology, obviously better. It's 10 times better, as you say. It's 10 times better. And it's interesting now because it's happening on different blockchains, at least with USDC. And so the on-chain fees, I was talking to someone today who does.

a lot of transactions and stable coins. And he was just talking about the fee burden on Ethereum in how, you know, Solana is now an option. And there's all these different, you know, platforms algorithm that you can do it on. So it's actually, it seems like there's going to be, there's like runoff from using the ERC 20 version of USDC. And it's starting to become more prevalent to use them in a high fee environment on some of these other chains. So here's an interesting stat. I'm looking at the coin metrics right now. USD tether transactions on Tron are about double the all-time high number of daily Tether transactions on Ethereum.

So as Ethereum fees have skyrocketed, Tether has increasingly moved to Tron, and it's doing way more transaction count there as opposed to Ethereum. In transfer value terms, Ethereum is still ahead. but it's, Tron is closed and quickly. And so clearly users are, Tron is acting as kind of a spillway for Ethereum here. Yeah. Yeah, that's actually a good dovetail. I don't want to hop too far ahead here because we want to talk about some of the podcast this week. But in that Stablecoin conversation, there's a deal this week that we participated in, DFX,

which is a startup that's building foreign exchange platform for stablecoins. So with the kind of insight that we're going to have other types of fiat currency stable coins on chain. And so building the kind of a mechanism to go in and out of them and do a foreign exchange transaction. So they raised $5 million in around led by True and Polly Chain, BoostVC, Kessel Island Ventures, CMS, and others. So we're all in on stable coins over here. Yeah, I mean, we've wrote a whole white paper about it. So it's not a secret that we think stablecoins are pretty transformative. and probably in the near term more disruptive to sort of existing structures than just Bitcoin,

for instance. Yeah, I really do see public blockchains as foreign exchange clearinghouses. Now that you've got exchanges in every country, every jurisdiction, and the blockchain settles transactions between those exchanges, to me that looks like a way of creating new foreign exchange markets in a super liquid and sort of direct-to-consumer way was not very much intermediation. So the question is, I think, will there be non-dollar stable coins? So DFX will have to answer that. But I think there will be. There already are some, interestingly enough. And my guess is there'll be plenty more. I mean, obviously, we think there's going to be since we did the investment. But, you know, the mental model there that I have is, do you think that there will be other fiat currencies

that exist besides the dollar and obviously there are and so I don't know why there wouldn't be you know it's not like the the dollar is the apex predator of money at least fiat currency money but I don't see it washing over the world well it's worth noting that if you look on chain something like 96 97 percent of all stable coins are dollars yeah so dollars are more they've a higher dollar there's more of a dollar dominance on blockchains than uh there is in the actual real world. So that's a weird thing that I haven't discovered why that's the case yet. Yeah. Yeah. Well, we had an interesting podcast week. I really like the timing of talking to Brandon McBee, the chief strategy officer of CoreWeave about the U.S. energy grid and about some of the

energy trading dynamics and specifically about Texas. That was well-timed. Yeah, this was a really well-reviewed episode based on what I heard. Brandon is a former energy trader. So that's actually a real job that I wasn't aware of. Energy trading. Yeah, of course. I mean, it's the same thing that everyone knows energy trading by his Enron. He was exactly right.

So he was an actual energy trader. Like apparently those are the people that basically look at weather forecasts all day and decide what grid price makes sense. And then interestingly, unlike other arguably, you know, liquid instruments, that are being traded, the price signals provided by energy traders are actually really useful to society because that's used by consumers of energy and by the grid operators to plan. And they're the ones that are the fastest to take weather conditions and feed that back into the grid pricing. Whereas with public equity or interest rates, like, is there really a societal

utility in hedge funds trading those instruments? Saving the world through price discovery. Come on. Yeah. So this is price discovery, like real like rolling up your sleeves and like looking at the spreadsheets and figuring out how is this rainstorm going to affect, you know, the price of wholesale electricity in Texas. And so Brandon discovered the price a full week before Texas stuff. The Texas meltdown happened. He told me about it. He's like, Nick, you got to watch Texas energy prices. And then the whole thing exploded. It was crazy. And so I got him on the show. to talk about why that happened and, like, was wind, is wind to be held responsible for that. So he gives an answer on the show. I thought it was really great. And I learned so much about how the U.S. energy grid works. Speaking of early warning indicators, this is totally off topic, but container ships are backed up in mass outside of California right now. And I don't know if there's going to be like T-shirts on the shelves at Walmart next month.

Really? Yeah. Is it that bad? I don't know. Yeah. What you said about Brandon McBee kind of seeing this energy grid thing early. I wonder if I don't really understand why it's all backed up, but there are pictures of just huge container ships outside of the port of Los Angeles that are waiting to be accepted through. And my understanding is that there was some COVID issues on both sides of the pond that are backing it up. So I don't know. I wonder if there are certain things that we should be hoarding right now. Interesting. It seems like the story of 2021 is going to be a certain imbalances in supply and demand. You know, as people awaken from their slumber and leave their homes finally, you know, they're going to want to consume. But our supply chains are all screwed up kind of. And, you know, that's a perfect cocktail for inflation, by the way. So we're seeing the stirrings of inflation. Yeah.

Not to be inflationista or anything, but it's kind of. It is coming. We also talked to Andy Edstrom. Andy's a financial advisor. He's the head of institutional law on Bitcoin, and he came on the show to talk about his new book, which is called Why Buy Bitcoin. And we talked about how RIAs are approaching Bitcoin,

talked about the prospects for Bitcoin as a corporate treasury asset. I actually met Andy back in 2017 at the Coin Alt conference in Chicago, I believe. I think it was in Chicago. It might have been in, might have actually been in San Francisco, but he's been on the scene for a while, and I enjoy talking to him. Yeah, you know, one thing that is a very underrated feature of Bitcoin, how much literature exists about Bitcoin? Andy's book, it's dozens, I have quite a few on my bookshelf here. What other crypto asset has that many books written about it?

Bitcoin has an unbeatable lead when it comes to literature. Sure. It does. It's in the pole position of books, but, you know, books are easy to write. Well, they're not easy, but there's a lot of books. So I think we're going to have a lot of, you know, there's a couple of Tron books out there, I'm sure. Do you think there's Tron books? I don't know. If there's not, I'm sure there will be serious books. If there's a way to make money on it, there's probably a Tron book. I think we just said nice stuff about Tron earlier in the episode. So, you know, the thing is with the books is that, you know, books are like a, I'm using them as a mentonomy for like rigorous thought as it relates to Bitcoin, right? And there is a real like merit to that. I think the fact that there's Bitcoin has been analyzed from every possible angle, you know, to code wise, obviously. technical but also economic and like those new interesting economic books like Nick Batia just published layered money yeah which I've been reading you know

kind of like almost a sequel of sorts to save's book that gives Bitcoin real credibility I think like the fact that serious thinkers sat down and spent a lot of time on it that matters at the end of the day it does also some really good long essays, right? There's, you know, there's no shortage of PDFs floating around the internet with people. Some have real names. Some don't just with their analysis of Bitcoin as an asset. You know, my favorite recent essay on Bitcoin was, it was, I think it's called Bitcoin is Venice from Alan Farrington. Yeah. You read this one. Yeah, I read that over the weekend. So it's, Alan's like got a reputation for being a little long-winded. I can see.

say that because we're friends. But his last one is so, so good. He's a totally underrated bitcoiner. He's, yeah, he's really good. I will agree with you on the length, though. When you see a medium that pops out at like 32 minutes estimated read, that's a, it's daunting. I try and keep mine under 10 minutes now.

I've done some short essays recently. Yeah, I mean, why not just break it up, right? They're called chapters. Yeah. But I will post on the show notes. Bitcoin is Venice. It's a lot of like little Bitcoin vignettes. Really, really well done. Good job, Alan. Well, let's talk about some deals. We already talked about DFX. Next one up is bottle pay. This is a payment startup. They're building on lightning. They raised $15 million from Alan Howard, fintech collective, Nydig and others. This is great. bottle pay

they were around like last year it's great to see things being built on top of lightning I feel like I've I feel like I've come across bottle pay

did they shut down for like a KYC issue or something yeah there's some new regulation either in Europe or the UK and they actually close their doors and like a Phoenix they're back that's awesome

pretty cool like Bitcoin you know they never die next up we have convergence protocol which is a project focused on connecting real world assets to defy protocols they raised two million dollars from hashed ngc ventures alameda cms kinetic and some others next one up is oxygen talk about a good name that's a good name a prime brokerage platform for defy protocols they're built on salana they raised 40 million dollars from alameda multi coin genesis capital and cms I'm surprised oxygen wasn't taken. Yeah, I feel like every cool word, especially relating to like physical properties and atoms,

they've all been taken at this point. Well, that wraps it up for the deals. There was some news this week as it transpired. As with most weeks, there has been news. There's always news. Let's talk about the Tether Bitfinex, New York Attorney General. roll let's talk about it what happened so we were debating this before the show because you said it wasn't that big of a deal and i said it was a big deal so well i'm going to maintain that all right well

let's tee it up and then we'll talk about it well if you'd like to you know it's a good opportunity to go back and listen to what people had to say on the tether topic we had an episode of the show where we i think i named it something like our tether perspective where we talked through the tether issue because if you recall, there was a period a few months ago where it was just wall-to-wall, non-stop programming, people, you know, getting very concerned and nervous about tether and everyone was certain. I mean, a lot of like serious allocators called us and said, hey, like, we're not sure about this Bitcoin thing. Like, is it exposed to tether? Is it the whole thing a gigantic Ponzi?

So it was like the thinking man's fud, right? like it was a critique of Bitcoin somehow that Tether was unbacked and hence the price of Bitcoin was somehow fraudulent. And we didn't exactly vouch for Tether, but we just cleared things up a little bit. I mean, the critiques were not exactly grounded in fact. And now it has finally really, I feel like the dust is really settled here. I would say the Tether Saga is not over. per se, but one chapter has closed and it's a good outcome for pretty much everyone, whether you are a fan of Bitcoin or you're an opponent of Bitcoin. The settlement with NYAG is a good outcome. So what happened was Tether agreed to pay a nominal settlement of 18.5 million dollar settlement,

which in the grand scheme of things is not very much. They agreed to cease activities. in New York, which they were not operating in New York in the first place. So that doesn't really affect them. They agreed to provide two years' worth of transparency into their reserves, which is a huge win, a huge win for everyone. And NYG clearly didn't really find much else aside from that. So I think that's a great outcome. Tether is finally going to be more transparent.

That was our critique, if you listen back to our episode about it. and so, you know, we can probably put this behind us. I think there's a couple things here, right? Because there's, so Tether, you know, whatever. I think this was fully, probably fully backed. Who knows? Our kind of thoughts on this were sort of that we thought it was likely to be backed, but there might have been other bad things happening.

And it wouldn't have surprised me at all if the New York AG found a bunch of things that Tether and Bitfinex had done. but I think you kind of have to disentangle the tether part of this versus the Bitfinex part of this too, where, you know, I think there's a worldview, kind of an opinion of a lot of people actually in the industry that are on the centralized side of things that are kind of playing by the rules and operating under SEC or CFTC or OCC or state MTF or state lending licenses. They were kind of looking at Bitfinex as saying like, that, like that shouldn't fly we're not really competing on a level playing field with an outfit here that can be just so fast and loose with it and so i know

that's not really what the it seems like that wasn't what the investigation was about just kind of like you know the parity of competitiveness with brokerages and exchanges in the u.s versus bitfnex but there are definitely a lot of market participants i would say that are saying like how is this allowed to persist when we have to play by all these other rules here in the United States. Do you get that vibe at all? I mean, I think that applies to BitFanex and really to any offshore exchange. And it is interesting that these offshore exchanges,

you know, operate with such freedom, whereas the onshore ones are so restricted. And I think that was part of the justification for CFTC going after Bitmex for sure. Yeah. Yeah, and yeah. And so I wouldn't, and that's where I was kind of going with this, is I don't even know how to read this New York Attorney General settlement with Tether.

I don't know if this means that, you know, there's no likelihood of DOJ going after some of these venues like BitFenex in the same way they went after Bitmex. So I think we have to just be prepared for enforcement actions against some of these venues at some point. I would say it's not a foregone conclusion. a lot of people immediately jump to, oh, well, the DOJ is going to take them out, which to me, it's more of a political question. Like, is there political capital? Is there sufficient political capital for any of these other enforcement bodies to go after Bipfnex or Tether?

Or are there other priorities, frankly? And Bifenex and Tether have not really engaged with U.S. clients in years. I mean, I tried to send a wire to Bipfinex in 2016 back when there was no ban. on US clients and my bank shut that down. So the BitFinex, you know, BitFenex has been like kind of a pariah from a bank perspective for years and years. And that's actually the interesting thing about this press release,

I thought, is that it focuses on how Tether had no access to banking for long periods. And so as a result, you know, they questionably backed the Tethers or they weren't holding them in sort of the appropriate places. They might have commingled reserves with BitFinex. You know, they were engaged in shadow banking, like a ton of sketchy stuff. The reason for that was because they were systematically de-platformed from U.S. banks. So, and this is the part of the story that people will miss, which is Tethers' troubles stem from

the fact that the U.S. banking system was continually de-risking them. right yeah that's why all these that's why they had to use shady payment processors where they lost money that's what caused them you know to enter into this like ersatz loan facility that was the main thing the nyaa g was actually going after them for the ultimate genesis of all of that is the fact that bitfinex and tether had always had very spotty access to the bank system and the reason for that is because banks are super super risk averse and are totally hostile to the crypto industry. So that's like really my big takeaway from this. We've done our choke point 2.0 series. I highly recommend that. It's just another example of the government through the banking

sector basically depriving the crypto industry of oxygen. Whether or not you think they acted in responsible or not, that's the cause of all of this. Maybe banks shouldn't, I mean, you know, you could always argue the banks shouldn't provide services to these firms, but that is the cause. of their troubles. Yeah. Yeah. I think that's right. So, I don't know, something tells me that we haven't seen the end of this, but I think

Cryptoanonymous, not a good day to be Cryptoanonymous, whoever that dude is, who wrote the FUD piece on Tether. And here's the thing. Like, so NYG, by the way, Tether admitted no wrongdoing. So if the NMIG had had a much stronger case, we would have seen a different Sullivan. So they took their best shot and this is what, this was the outcome. come. Equally, Tether is going to provide an attestation of reserves. If NYAG in their negotiations with Tether had realized that the whole thing was fully unbacked, I doubt they would have entered to

an settlement that said Tether is going to provide reserve attestations. So if they come up with $36 billion or whatever it is, that defangs this line of argument from the critics, frankly. So I'm very excited to see those reserve attestations. So we can put at least that argument to rest, whatever the historical crimes of Tother were. Yeah, long overdue on that proof of reserve. Just get it done. Yeah, that's what I've been advocating for. We talked about it on the show. Look, like if you are the largest stable coin, you probably have an obligation to provide transparency. You don't have an excuse.

All right. Let's talk about some Bitcoin purchases this week from publicly traded companies. So micro strategy, as we talked about last week, doing that conversion. convertible note offering. It got upsized, no surprise, 1.05 billion, 0% coupon, 50% conversion premium, Michael Saylor is an absolute savage. And the proceeds were immediately used to purchase Bitcoin, a little bit underwater, actually. They bought some highs. Looks like they bought 19,452 bitcoins at about 52.7 per BTC. So, you know, a little bit underwater as we, talk right now, but by the time you hear this, who knows? Normalize buying the top.

Someone's got to do it, right? Yeah. And so did Square. So ahead of their fourth quarter earnings call, Square announced that they purchased $170 million worth of Bitcoin. I mean, that's it. That feels about right. Their first foray, it was like, really?

That's all you got? It was a little small. So, yeah, that brings them to 220 total, I think, in terms of capital deployed in Bitcoin, which is about 5% of their cash reserves. It was interesting. I was looking forward to their earnings because I wanted to see the numbers of what their clients had bought on the platform. And then the earnings come around. And the surprise we get is they bought some more Bitcoin.

And the client number is actually the growth was sort of marginal from Q3 to Q4. I think Q1 numbers are going to be the really interesting ones. Q1 number is going to be monstrous, largely driven, I would say, from you just getting people in the Boston area onto the cash app, including your barber. So here's something interesting. Even in the year of our Lord 2021, it's still our duty to evangelize Bitcoin, of course. And you always have to be finding new folks and taking whatever opportunity you can. And so I went to get my haircut out of a new barber, my old barber left. And since I had him captive for about an hour, I explained to him what Bitcoin was.

And I was like, yeah, I'll give you your tip in Bitcoin if you want. and I use the Square Cash App Bitcoin P2P product which settles internally on their own database. So it's instantaneous. So I must say that it's a very, very good product and I use a lot. So my hat tip to square. I would say this about the haircut.

It's a little bit high and tight. It's a little short, but that's okay. That guy was just like learning so much about Bitcoin. He was like, let me just cut your hair for like 20 minutes extra. That could have been it. I don't know if he was too thrilled to be receiving a Bitcoin lecture at work. But either way, you know, do your part, you can do your podcast and do it with high leverage or do with low leverage in person too.

It's all in service is the same thing. Yeah, spread the word. A lot of people are apparently spreading the word about Bitwise asset management. They surpassed a billion dollars in AUM. This is on the heels of their recent announcement of the DeFi Index Fund. And I'd have to think a big part of this was just Teddy Fusaro talking about cured meets on our podcast a couple weeks ago that drove a lot of these inflows. Yeah, you really can't discount the Supi effect. So big congrats to Hunter and the team.

Here's another congratulations. So do Galaxy Digital hired our friend Alex Thorne, longtime Fidelity stalwart who's gone over to Galaxy to run their research desk. So huge congrats to Alex. Speaking about big hires, Sunaina Tutajia, formerly the head of digital assets at TD Ameritrade, also was on our podcast, has joined the Federal Reserve as the chief innovation officer. And Fed wire it down. So I don't know if her first act was to try to transition them to a public blockchain, but something happened over there. Someone hit a button. And hopefully it was not Sunaina.

I like to think that, look, we're not spinning conspiracy. experiences over here. But is it a coincidence that a Bitcoiner joins the Fed and then it immediately goes down, thus making Bitcoin look great by comparison? Who's to say? Who knows? I mean, we might have more to that story. But a huge congrats to Sinana, awesome new role. I don't know if she'll be able to come back on the podcast now that she works for the Fed, but really excited to see what she does over there. Next one up is Long Blockchain. This is the Ice Tea Company. that changed its name to long blockchain in 2017 because that's what you did back in 2017

when you're trying to print ICO money as you turn your name into blockchain and your stock goes up. So they had their shares delisted by the SEC. I had to actually check the timestamp to make sure this wasn't a story from late 2017 because that's probably when this should have happened. Yeah, about time, I would say.

Here's another one, moneygram is not using Ripple anymore due to the SEC lawsuit against Ripple, which is pretty, I don't know if ironic is the word, but talk about an investment that didn't pay off. I mean, Ripple bought a lot of MoneyGram stock at a premium in order to effectively get the PR boost from a payment processor, remittance provider using Ripple. and then Moneygram turned around and said they're not going to use Ripple anymore. Yeah, I mean, if you're a Monegram, you don't want to stand in front of that firing squad.

Well, Monegram's like in kind of dire straits too. So either way, things are not looking good over there, whether it's Monegram or Ripple. Speaking about the SEC and their attitude towards public blockchain, so on March 2nd, we're going to get a confirmation hearing from Garretel. Gary Gensler. And I think the crypto community is eagerly awaiting. I think if he is confirmed, then March 3rd, we're going to start to have a Gensler administration over at the SEC.

And of course, there are some big issues in our community to talk about, you know, Bitcoin ETF being one of them. I think the regulatory status of certain defy tokens is another one that he'll have to confront. There's a lot to figure out. Yeah, the stakes are extraordinary. high. And of course, his job isn't just crypto exclusive, like he has other securities markets, as it turns out. But there are some critical issues here. First one being the ETF. And Eric Balcunis over Bloomberg was making some good points about it. His allegation was that the

SEC held off on making a Bitcoin ETF decision too long, such that now the stakes are extremely high, which is potentially, you know, not, not where the SEC wants to be, because now they're in the position to be a kingmaker in terms of ETF approvals. And, you know, whether or not they do it sequentially or approve a lot of ETFs all at once, that's really going to, you know, make a huge difference to all those sponsors. And so Eric was posting the other day saying, well, they should have approved an ETF or two when the stakes were much lower, as opposed to Now the Bitcoin ETF might be as big as GLD once it gets approved. So they're kind of in a difficult situation as it pertains to the ETF.

I wonder how big a Bitcoin ETF could be from an AUM perspective. If they were to approve, I mean, could you see a Bitcoin ETF that is $100 billion in total assets? Unquestionably. And I think that would be within a month. Look at the GPDC. product. That thing touched 40 billion the other day. That's not that far off GLD, which is the biggest commodity is ETF. This is going to be fascinating because these traditional asset managers, very few of them are here to party on Bitcoin ETFs. And it will be jaw dropping to see the inflows

into whatever the first. I don't think, I actually think it's unlikely that we're just going to have one approved at the same time. It's more likely to me that we'd have two or three. But I think the flows will be jaw-dropping because the RIA channel will be activated for the first time. Retail Direct will be activated in an efficient way for the first time. And you're just going to have tremendous amount of appetite for this product. And I do think it'll be a top 20 fund out of the gate if you compare to, you know, just take a leaderboard. I don't have it up in front of me, but top 20 mutual funds. I think you could probably see an ETF get bigger than, you know, the 20th largest mutual funds.

fund, which is probably around $100 billion, something like that is my guess. Yeah. Well, the largest ETF is the Spider, SMP 500. It's got $3.30 billion. Spider Gold Trust is $65 billion. You know, the GBDC product, which is not an ETF, that's safely in the top 30. And that's a trust that trades on the OTCQX. So, I mean, if it hits 100 billion assets, it would be the sixth largest ETF.

Yeah. Just behind Invesco, QQQ. So I think it's going to be right in that top echelon or collectively, the Bitcoin ETFs will be right up there. And if you look at the Canada numbers, there have been a couple of ETFs approved in Canada and the inflows have been staggering. Yeah. So there's clearly a ton of pent up demand for good ETP.

An interesting thing about the Canada one right now is that you have a lot of institutional participants in this market that are scrambling to see if their offshore subsidiaries can access the Canadian ETF and trying to get involved in that. And so, you know, capital is flowing into that product. And some of it is actually, my belief is that some of it is, you know, U.S. affiliated entities that are figuring out of way to invest in it through offshore subs. That's a good point. So on the exchange front, I thought this was interesting. OKCoyne has taken an interesting turn from sort of a PR perspective. They are sponsoring devs.

They've become more explicitly Bitcoin friendly. And their latest move is to de-list Bitcoin Cash and BSV to failed Bitcoin forks. So thank you for doing that. OKCoy, you are on the right side of history. Yeah, that was nice. I think, you know, it also probably just makes engineering sense to stop supporting things that people don't want, right? So at a certain level, you have to do a product portfolio analysis and start to cut your losers. Yeah, and from a security perspective, actually, those two coins share a hash function with Bitcoin,

which is you never want to be a minority chain on a shared hash function. That's a recipe for disaster because that means that there's a lot of spare. capacity that can mine your coin but is not faithful to it. So, you know, some Bitcoin miner could probably turn their guns over to BSV and mess with it. And if they were successful, their value, the coins, the value of their A6 would not collapse because it's more a function of Bitcoin's value, not BSVs. So you just never want to be on a shared proof of work function. if you're the minority chain. So exchanges tend to be the targets of attacks.

So this actually just might make pragmatic economic sense too, if they expect that these coins wouldn't be not secure and you'd see attacks on exchanges listing them. Yeah, yeah, I think it makes sense for the community. It makes sense from an engineering perspective. Probably makes dollar and cents as well. So good to see. Well, I think that's it for the week.

we hopefully caught all the news this week. We'll have a one-day lag before posting this. So if anything huge happens, that's the reason why we're not talking about it. Yeah, maybe we can try and guess it what it is and then analyze it ahead of time. Okay, let's take a quick guess. I'm going to say that a Fortune 50 company bought Bitcoin on Thursday.

Okay, yeah, that was wild. Didn't see that coming Good for them Yeah I know Can you imagine if that actually happens We won't really be able to prove That we recorded this on Wednesday though Maybe we should timestamp it

We should timestamp it using a testive They have a workflow to take audio and timestamp it We could put a hash into Bitcoin that's right So if a large company buys Bitcoin tomorrow And you heard it here first Well I guess you didn't but Yeah no yeah At this point, it would have been yesterday once people are hearing it.

So this is like as complicated as that Christopher Nolan film. Inception. No, Tenet, the new one, because that one's the one with all the time travel, which I didn't understand at all. And I was disappointed because I like Christopher Nolan. I haven't seen it yet. But I couldn't follow it. Yeah, it's all about like people going backwards and forwards and time. And it's like, I'm sure that it actually is coherent.

and logically make sense, but I just couldn't follow it. Yeah, I'm more of like a linear time guy. If I need a spreadsheet to understand a film, it's probably lost me. Yeah, yeah. Well, I think that we'll close it out. We will say thank you for the five-star reviews. We have a very generous fan base here, and we appreciate it. We read them, and we appreciate you.

Yeah, we got some really good reviews and comments and stuff. Honestly, I don't really know if that matters in terms of our ranking at all. So we might have lied to you in that last episode. Doesn't matter. Who knows? But you know what? You, the listeners, got a kick out of doing it. And that's all that matters. And there's some good inside jokes. And we got them. So thank you for putting those little inside jokes in there. You can't acknowledge the inside jokes. Okay. Well, there was some good, don't like bombard us with more inside jokes, but there are some good funny ones. No, that's funny. No, definitely, definitely do.

Anyway, thanks for the reviews. We are the number one Bitcoin, Crypto VC podcast in Cambridge, Massachusetts. Probably, I haven't checked. I don't know. We might not be. Are there others? Check the rankings.

Yeah, I think there's, we might be two. Simply the best crypto podcast in Cambridge. All right. everyone we'll see you next week