The Compound and Friends - My New Crypto Investment (with Greg King of Osprey Funds), The money revolution is here (with Tyrone Ross)

Episode Date: February 19, 2021

Tyrone Ross stops by to discuss his new project, Learn to Money, a crowdfunded video series that he hopes will revolutionize the way young people are taught about how the whole system works - from bank accounts to credit to building wealth. Check out more of Tyrone's initiatives here. Then, Founder and CEO Greg King of Osprey Funds joins the show to discuss Osprey's newly launched Bitcoin Trust and a conversation about the adoption of Bitcoin within wealth management. Josh has accepted an advisory board role at Osprey Funds and has made an equity investment in the company. This podcast is for informational purposes only and conversations about specific investments are not meant to serve as a solicitation to buy, sell or hold any security. This is not advice. Podcasts are not a substitute for financial advisors, so please consult yours before making any investment decisions.  Leave us a rating and review! It means a lot in Podcastland! Hosted on Acast. See acast.com/privacy for more information. Learn more about your ad choices. Visit megaphone.fm/adchoices

Hey, what's poppin? It's JB. Today's show is sick. We're making some news with a big announcement. How I will be buying my Bitcoin from now on. Greg King is the founder and CEO of Osprey Funds, and he's coming on to talk about why and how he's launched the brand new Osprey Bitcoin Trust, which trades on the market like a stock or an ETF, but it owns Bitcoin and it's got a ticker symbol and you can hold it in your brokerage account. It's a whole revolution. It's a whole thing going on. You probably saw something about it or read something about it. It's all happening. But first, we're going to hear from my guy, Tyronerone Ross about the creation of learn to money. Tyrone's out here changing the world. Like in real life, he's making a dent. This is real shit, not Twitter, not Instagram

bullshit. It's not memes. Tyrone's doing life changing stuff. Tyrone is definitely here for the revolution. So stick around. Let's hit this intro and then we'll get into all of it only on The Compound Show. Welcome to The Compound Show with downtown Josh Brown. Josh is the CEO of Ritholtz Wealth Management. All opinions expressed by Josh or any podcast guest are solely their own opinions and do not reflect the opinion of Ritholtz Wealth Management. This podcast is for informational purposes only and should not be relied upon for investment decisions. Cl opinion of Ritholtz Wealth Management. This podcast is for informational purposes only and should not be relied upon for investment decisions. Clients of Ritholtz Wealth Management may maintain positions in the securities

discussed in this podcast. Tyrone Ross, what's going on, man? What's going on, man? Let me see this shirt. No rich parents, no handouts, straight hustle from the start. Can I get that shirt, but a version that's like middle class parents?

Yeah. For you, yes. A couple of handouts. A couple of handouts. They got me a car in high school. I can't front. I love that. You have to get that shirt made.

All right. I'm going to have that. Yeah, man. Just like the whole collection of those shirts for different ranges, different people, the privilege collection. So I want to talk about learn to money. Yeah. And I'm probably learning a lot about what you're doing for the first time because you

and I, we catch up on stuff. We're on text. We're on the phone. It's five minutes. Let's do this. Let's do that. So I really want you to tell me like what you're doing with that, what it means to you. Like we can take this in bite-sized chunks, but let's start by telling people learn to money is what? Learn to money is a video series that is built to be a 10 part series of lessons on money, basic, right? Literally learning to money. So when you watch these videos, you should understand every word that is coming out

of my mouth. No options trading, no smart beta. No, no, it's none of that backdoor Roth conversions. It's none of that. Okay, good. And that's why the pilot was what is money? Flat out. And you should understand every word that's coming out of my mouth. The genesis of it was last May. And it's crazy that we did all of this in nine months. Shortly after everything was going on and all these companies, everyone was Black Lives Matter. Everyone was doing all this stuff. And I'm like, nobody's really doing anything that I think is going to be effective. So I tweeted. I said, here's what financial media needs to look like if everyone wants to say financial education is an issue. And I tweeted it. And a half hour later, I get a email from Eric, who is one of the producers. And he goes, you know, my partner and I

are producer for Decoded on MTV or whatever. Are you serious about doing this? I said, absolutely. The only thing is I don't want to be told what to say or nothing like that. You know, I want to own it. We control it, whatever. He's like, all right, two weeks later, we're in Newark, New Jersey, film in the trailer that we put out. And it's crazy. We did this all during COVID. So we put the trailer out and it went nuts. And I'm not a scripted person. I never talked from a script. Where are you putting this out? Where, where is it going out? Like, where's the main place that you want people to experience? The main place right now is learn to money.org. It's on our website. That's the only place it is right now. So if you go to learn money.org,

you can watch the whole video on there. And there's an email hello at learn to money.org, where if you have an interest, you can reach out. So we put out the trailer. This was late June and any and everybody reached out with like, this is it, right? Folks from CNBC and BestNet all over the place. And we did a GoFundMe on Twitter and all over the place. We raised like 40 grand, 40 plus grand in two days to shoot the pilot, to eventually tell people we want to shoot 10 of these, but we want to get it into school, right? I want to give, and it's paired with curriculum. Wait, hold on. Let me back you up. So you shot the trailer as basically the ad for the GoFundMe

to show people like this is the direction we're going to take this. Yep. And I don't want to leave here without some background to what this means to me personally. No doubt. We'll get there. We did the trailer, put the trailer out, and the buzz was nuts. And then we wanted to figure out, well, do we just ask for money or do we do a GoFundMe? And I'm like, I want this to be for the people, by the people. I want to see how interested people is really changing the narrative here because seeds are cheap.

The soil is expensive. So I like getting in the soil. So let's see if people really put their money behind it. And they did. And they trusted me. I put my brand on. I don't know these dudes from a can of paint. Right. We met on Twitter, but two weeks later was shooting it. And then we raised the money. And then it was like, all right, August, I believe, right? We were in Brooklyn. We shot all day, right? Caleb Silver helped us script it.

He also was on set to help direct it. And he came that day and we shot for three hours. We got that done. Caleb Silver, let me jump in here. Caleb Silver is the f***ing man. The man. Period. Absolutely. 100%. 100***ing man. The man. Period. Absolutely.

100%. 100%. I cannot thank him enough for everything that he threw behind this. A lot of cats don't even know. He's like a behind-the-scenes guy. Like our boy, Phil Perlman. I tell people all the time, I was like, y'all may not know Phil Perlman, but behind the scenes, he's pulling all the strings. So, yeah, man, it was incredible. And

then, you know, and this is all during COVID. Then I had to do all the voiceovers for it or whatever. So it was a lot of work, a labor of love, man. And again, no one ever blinked about doing it because it was so important to address financial education in this country. How are you doing these episodes? So it's 10 parts. Is each part a different theme or a different aspect of money? Yes, a different aspect of money. So the goal now is, again, we need a big donor to come in and fund all 10, right? And then we want to shoot all 10. And then we want to make it free. We're going to put it everywhere for free. It's going to live everywhere. We want to put it out. Ritholtz wants it to put up. Cool. Investment wants it. Great.

CNBC wants it. I'm talking to the NBA next week. We got a call with Tom Warner next week. So people see the need here. And I think that's one of the things that I care about, right? I can't be you on CNBC. We all play a role. But what I realized was my job, my responsibility is if you come from under the bottom like me, there's nobody that talks to us. This is the truth. So I'm like, my job is to take what Josh says and distill it to the people that I fight for, that I'm constantly going into because not that you can't get there or whatever, but we don't have time to be everywhere, right? My audience is not the CNBC audience. My audience are first generation high school graduates.

audience is not the CNBC audience. My audience are first generation high school graduates. Right. And nobody has a vested interest in talking to your audience because there's nothing expensive to sell them. And from a financial services purposes, the less they know, the better. Like the check cashing places don't want you talking. They don't want you speaking. No, absolutely not. I understand that. And I understand how important it is for somebody to just throw themselves in there and say, this is more than a business. This is like what I feel compelled.

I have to do it. I wake up every day, dumb enough, believing that I'm going to change the world. I am going to leave a dent in financial education in this country. Hella high water. I'm going to change the world. I am going to leave a dent in financial education in this country, hella high water. I'm going to die trying, literally. And it bothers me that, again, I'm in a business where this duality that you have to walk when you come from nothing and work on Wall Street is sickening, right? And when you see $17 billion, I said this in the trailer, $17 billion spent on marketing financial services, less than 1% on education for kids who walk, talk and act like me. And when you look at, OK, well, we want to start with financial literacy, whatever.

Well, financial literacy doesn't start with what is a stock. Sometimes you start with the difference between a checking a savings in a money market account. Add to that 10% of black boys and girls in this country that are in eighth grade read at level 10 percent. So if they can't read, what are you teaching them about ETFs and mutual funds? So this is a dual thing for me. Get in the soil. Let these kids know we're going to educate you. We're going to we're going to build your literacy. But also, I'm going to teach you to learn to money in a country where the language is money, capitalism. You live in a capitalist society and you don't speak the language. You're doomed to a life of failure if you don't learn with all of us, throw around and speak like it's just nothing.

Like I was listening to you guys last night and it's just like, right, here's six dudes that I rock with, but they're not speaking to people who don't speak the language of money. If you speak the language of money, oh, it was a dope conversation. But if you're my parents, they're like, what is this? Yeah, so you make a really good point that money is the language of this country. We passed this law, Citizens United,

I think in 2010, it's a train wreck. But basically what it says is that the way politics work is whoever can write the biggest checks has the loudest voice. And it's this whole thing with political action committees and PACs and super PACs. But essentially, that's now enshrined into law that he who has the gold makes the rules. So to your point, like when do corporations make changes to their policies when the money is up? Like when the money is being threatened, all of a sudden, a lot of shit happens really fast.

So we all understand this intuitively. But if people are locked out of being able to speak that language from a young age, it's hard to eventually break in and have a voice. Bro, children start picking up financial concepts at three. age, it's hard to eventually break in and have a voice. That's so important. Start picking up financial concepts at three. Your financial habits are set by seven. Research show this. Why are we still playing that stupid stock picking game as seniors in high school? Why does only 21 states in this country require that any type of financial literacy is taught in schools? And by the way, nobody could pull a wool over my eyes in this one because I've

traveled all around the country doing it. Out of that 21 states, I believe there's 11 or 12 that actually provide the funding and the money. This should be, you want to storm the capital, storm the capital for that. Let's work on changing that. So what are we doing with each of these parts? Like what are a couple of examples of things that you're going to be teaching? So I wanted to build, and again, you know, near and dear to me, cryptocurrency would be like the last video. But I wanted to build on the fundamentals again of just speaking money, but laser focused on it, right? So what is money, right? And then a broad, what is credit?

What does credit mean? What is debt, right? What is is money, right? And then a broad, what is credit? What does credit mean? What is debt, right? What is the stock market? What is stocks? What are bonds, right? What is the fixed income? So we want that to layer out. And then as we get to the back half of the series, right? Mutual funds, ETFs, digital currencies, things like that. But I want- They build on each other. They build on each other, right? And other. Right. And maybe at the end, there is a masterclass where it's an hour thing and it's you. Right. And you're talking about all of these different things in one. So that person goes, I watched all of these videos. And at the

end, I can watch Josh Brown or CNBC and listen to what he says and go, hold up. Hold on. I know what the fact is. Hold on. So I'm like the big boss on the last board? Yeah. Yeah. Yeah. You're the last one to beat. I'm the last boss that you have? I'm Mike Tyson?

Yeah. You're the last one. You're the last board. If they get by you, they win. Gamifying this thing is not that bad because if money is the language of America, video games are the language of the youth. 100%. So maybe having these things as levels might not be the worst idea. You could be like Double Dragon.

All right. Dude, I love this so much. All right. So how can people help your effort to build this thing out and finish the project? Yep. And how can people spread the word to others who can help? Like, how do we, 50,000 people are going to listen to you or 75,000 people are going to listen to you this week. What do those people do now? So the main thing is please go to learntomoney.org and

watch the video. If it resonates with you, share it, share it with politicians, share it with teachers. We're trying to get it into school. There are a certain subset of folks as well that are connected to money makers and rain makers. We need someone to fund this. We need a large fund or someone to say, all right, here's the money. What do you need? Roughly a half a million. We're figuring like 45,000 per episode. But that's on the high end. I think Eric and Andrew, the producers say they can make it work for 30, 40, but if we're going to do it right and make it matter, it's going to be a half a million, right? For all 10, with everything all in a half a million, and we'll be able to put it into schools. You can have it, you can give it away. We don't want to keep it.

This is for the world. This is for the children when we put it out. Would you take that half a million as a sponsorship? Like the donor gets their name on the front of it as we donated the money to make this? Yep. 100%. And we could have exclusive rights for a while, but as long as they realize where we want to go with it, put it out and have it live on social media for free. And you're not going to stop me from doing this and I'm doing it. I tell you this all the time and you never take your flowers from me. You do not understand how much this is because of you. Here's why. You DM me on Twitter. I don't know how you got, you will take your flowers. You DM me on Twitter years ago and was like, you're saying stuff that people need to hear. And because of you, man, I tweeted that. And if I didn't have the

audience that I have on Twitter, a lot of that has to be because of you, right? You got to take your credit for that. And I'm going to keep saying it until you do it. I say all that to say this, you know how hard I fight for the Tyrones and all other boys and girls that are out there who like me, who don't get an earshot of you. They will never get around people like you. And I've told you this every step of the way, you have no idea how you lend your voice to people at the bottom when you advocate for me. So I'm incredibly grateful for you. This better stay in. I'm going to watch the whole thing. I better see it. No, we'll keep it. We'll keep it. You have to take your flowers, man, because when I am in these poor, poor, poor countries, man,

these kids don't see you, but they do because I'm a reflection of you putting me in front of them. So please don't believe for a second that you don't have something to do with this. I'm incredibly grateful for you, man. I honor you. I love you. I appreciate you. And when this does happen and it's going to happen on a big level, you will absolutely be responsible for that. And I'm going to be the Mike Tyson. You're going to be the Mike Tyson. TR, you're the man and your passion for this stuff and not just passion, but action. The stuff that you're doing, forget it.

It's next level. And you're having a massive impact on so many people. And they will then in turn take the knowledge you're giving them. They'll pass that on and it'll, it'll ripple outward forever. So just, I'm, I'm so incredibly proud of everything that you're doing and I love watching

it and being a part of it. All right. So listen, rich people say you want a revolution. You want to change the world? This, this guy can be your change agent. Get in touch.

All right, TR, thank you so much. And everybody check out learntomoney.org. All right. Microphone check. One, two. I got my cool guy, Mike. Greg King's in the house. Greg's got his cool guy, Mike.

I think we're just all podcasters now. Like that's what the pandemic has done. Yeah. All right. So Greg King is the founder and CEO of Osprey. And there's a lot of excitement about, around what Greg has launched and I'm involved, which we'll get to later.

But I'm just really excited to have you on the show and to have you talk about what you're building, why everybody's talking about it, why it's potentially game changing. And we'll get into it. That sound good to you? Sounds good, man. All right, cool. All right. So first of all, tell us what Osprey is and tell us about what you've just launched. what Osprey is and tell us about what you've just launched. Sure. So company's called Osprey Funds. It's really our digital asset company. So I started RexShares about five years ago. And I guess you can think of Osprey as sort of a startup within a startup that we're sort of

giving birth to. We raised up about $1.8 billion in assets on the Rex shares side. And four years ago- Just for people that aren't familiar, Rex shares is ETFs, which has been your specialty throughout your career. ETFs and ETF. Right. Okay. Go ahead. Right. Right. So we built up $1.8 billion as of now in Rex products. But a few years back, I really started to focus on trying to get a Bitcoin ETF to market. And there was that big run up in 2017. We had started in 2016 really talking to the futures exchanges because I sort of, you know, my background is with commodity futures in exchange traded products. And so there was a close tie between, you know, what was developing on the Bitcoin side with the futures and what we had done with commodities and with VIX.

So it seemed like that might be the route to market. But in late 2017, all of us, you know, there were a bunch of ETF companies. Let's just go back for a second. So people, so I just make sure everyone understands what you mean by that. So you, your background, you had built ETNs, right? Which are, which are exchange traded notes in part, and they had futures exposure as a way to get people into commodity based investments. Is that what you're saying? That's right. Yeah. It was a suite of product called iPath, exchange-traded notes, went out of the marketplace. And it was a JV with

iShares. And the whole reason we built that product lineup and really kind of invented a new type of ETP is because of commodities. Commodities are kind of a different animal. We have two regulators, as you know, in the US, like for securities and commodities, and the kind of two different things, the way we approach it here in the US regulatory environment. So when you create a futures contract on something, by definition, it kind of becomes a commodity, the futures contract itself. So the Bitcoin futures start trading in November, December of 2017 toward the top of that rally. So you're thinking like, I've done this before with futures on other commodities. Now that these futures exist, I can build an exchange traded

product giving you Bitcoin exposure with the futures, but it didn't quite work out that way. Well, actually more than that. So a year before the futures existed, we were actually in Chicago talking to futures exchanges about, Hey, please, can you launch a future? Because we think that would be the way to, to actually build an ETP. If you think about, you know, commodities-based ETFs, they kind of come in two stripes, the gold products, they hold physical gold, right?. The gold products, they hold physical gold, right? But the oil products, for example, don't hold physical oil, as we all know. They roll futures just because physical holding brings other challenges. And that was true for the

Bitcoin space as well. So that's how we approached it initially. By late 2017, Bitcoin futures had finally got launched. But it was pretty clear that the SEC wasn't ready to entertain, you know, ETF applications at that time. The SEC is not comfortable with the underlying. That's been the issue, I think, that the opacity of the underlying market and who's operating in Bitcoin itself. So it's hard for them to wrap their heads around. Well, let's allow an exchange traded product for retail investors based on futures, even though we don't like the underlying as a market. Like we don't feel comfortable. So they were not going to do that.

They were not going to do it on futures or physical or really anything at that point in time. And, you know, so far, they might be closer. It's hard to say, but still nothing. So 2018, we kind of sort of went back to the drawing boards like, all right, if we want to deliver a product to the market because I think the demand is there. I think investors, you know, I invested in Bitcoin in 2013 for the first time. That's when I discovered it. Were you the guy that bought the pizza or that was somebody else? That was a different guy. Yeah. Yeah. No pizza. Yeah. So in 2018, we sort of regrouped and thought, what's the route to deliver a product to market? You know, everybody had seen

what Grayscale had done. They had been in existence for several years at that point. But the structure was suboptimal in that it traded on the OTC market, really didn't operate fully like an ETF. And so tended to trade at a premium. But it seemed like that was a, you know, the only the only route to the market in the US. So we started to explore that, do some homework, and figure out what it would take to launch a product like that, but also how to launch it in a way that might improve upon the products that were already out there. When you say a product like that, you're referring to the structure of a publicly traded trust security, which is what Grayscale had built. Right. And specifically a publicly traded trust

that cannot allow a redemption program because GLD is a publicly traded trust. Right. But it just has a creation redemption program and it's available to investors through the ETF market making community. These products have to be placed under private placement rules to accredited investors, basically. So they're slightly different. And I think everyone understands that a fully fledged

ETF would be ideal. But this is what we have to work with right now. And I think it's a viable structure. It's just you got to try and make sure to build it the best way possible. So that's basically what we try to do with Osprey. Okay. So the Osprey Bitcoin Trust, and I don't know the regulatory, we're going to put disclaimers all over this thing, like to the point, we're going to wrap this thing like a mummy. So just to be very clear before Greg talks about the product, we're not selling ETFs on this show. We're not telling people how to invest. We're not telling you to buy Bitcoin or to buy trust that own Bitcoin. You have to make your own decisions. None of us are your financial advisor and all standard

disclaimers about past performance, blah, blah, blah. All of that stuff applies. Please make smart decisions for yourself. Don't rely on what we're talking about. Okay. But so you're launching a product that's a trust structure. And the idea is that it's Bitcoin exposure, but at a reasonable cost to the end investor. And it's friendly in terms of being able to play with the rest of an investor's portfolio. Like it can slot right in like any other exposure that you're trying to get with a ticker symbol, with a QSIP, et cetera. Exactly. And the key is the ticker symbol, right? That allows it to get into retail accounts. And, you know, the thought process is a lot of us, you know, myself included, we've invested in Bitcoin maybe since a long time ago. But you essentially you've got to pull your money out of the system. Right. And there's some diehards who that's the only way they'll do Bitcoin. And that's totally fine. That's that's that's fine. But there are other people who recognize it as like an emerging technology and they just want exposure like they do to a stock, right?

It's a potential engine for growth in my portfolio. It's got certain risk characteristics, a certain volatility, certain downside risk, certain upside potential. But hey, if I write sizes and fit it into a diversified portfolio, it can make a lot of sense. So I'm a self-directed, here's a hypothetical. I'm a self-directed retail investor. I got a couple of million bucks sitting at Fidelity or sitting at Schwab or wherever. And I have 10% of my asset allocation in cash and short-term bonds, and that's earning me zero. And then I say, out of that 10%, I'm actually going to take 2%, and I'm going to buy GLD.

And then I'm going to take another 2%, and I'm going to buy the Osprey Bitcoin Trust. And I understand that I'm adding risk, and that it's not the same as cash, and that there's going to be way more volatility in both gold and then Bitcoin probably two or three times the amount of volatility as gold. But the cash is earning zero anyway, and I want these non-correlated streams of return and I can bear that volatility with that small part of my allocation. Is that how you see people using this Bitcoin trust in the context of their overall portfolio construction? I mean, that's a totally common way to look at it, I would say.

Yeah. I guess one of the questions you're asking is like, where does it fit in the portfolio? What do I sell? Because a lot of times people are thinking about investing in something, but they're already invested. What does it take the place of? Right. Yeah. What does it take the place of? Exactly. So some people look at it as a substitute for cash or gold. The thing to keep in mind there is you're going to dial up the volatility a lot, right? Because cash moves zero by definition. Gold, it's been a little bit volatile lately, but on a relative basis, nothing like Bitcoin. We all like the volatility on the way up.

Yeah, yeah, we do. Love it. No one talks about that. So you'll amp up the volatility. I mean, there's other ways to think about it. It really is a technology. So could it take the place of... So would you take it from the stock allocation then rather than the cash allocation or certain types of investors might? Honestly, you could, I've thought about it that way in, in terms of a high growth stock, you know, um, you, you've got a little allocation. I mean, people look at, uh, stocks like Tesla, right? I mean, at some, at some points in time, Tesla's got a higher ball than Bitcoin. So you could think about it that way, because ultimately what's happening is a new technology is getting adopted. And even though there's not a company behind it, there's a guy named, you know, Satoshi.

Yeah. It could be thought of that way. Okay. So regardless of how you choose to think about it, you've decided that you want part of your asset allocation, even if it's a tiny slice, to be in Bitcoin, but you don't want to move money away from your brokerage account into a different platform. You want to do that with your stocks and bonds and cash. You want a ticker symbol and you want it to just be a slice of the pie in the, okay, you're not buying physical Bitcoin then because that's just not available to do. So now you need a product.

So then the question is, well, what is the right product to get basically one-to-one Bitcoin exposure or as close as you can get in terms of the movements of the price, right? So that's the exposure that you're looking for. So why is the Osprey Trust a good version of that exposure? So, yeah, the Osprey Trust, by the way, OBTC is the ticker, you know, O for Osprey and BTC for Bitcoin. BTC is the ticker, you know, O for Osprey and BTC for Bitcoin. You know, it's starting trading next week, right?

This is going live on the podcast, the week of trading. So technically it's alive. It's trading already. Right. So anyway, we haven't observed how it trades, right, in terms of vis-a-vis the NAV. And with these products, that is a variable. But if the premium, let's assume there's a premium, holds constant, then it'll track. Let's explain that to people because you've spent your life in ETFs and you understand these things. And I think a lot of people in the audience, they hear these terms, but they really haven't thought that much about what any of it means. So the previous trust to yours, the Grayscale Trust, it trades with the price of Bitcoin.

It owns Bitcoins and that's what it's meant to do. But then, because prior to Osprey, it was the only product in the market that had a ticker symbol, it had a premium. So it has an NAV, which represents all of the Bitcoin it owns. NAV is like a mutual fund NAV at the close of trading. That's the value of all the stocks. But then above the NAV, there's a little bit of a premium in the price. And that premium comes from the fact that it's like the only access you can get to Bitcoin in a brokerage account. OK, so there might be a premium associated with Osprey Bitcoin.

We don't know. And that premium will vary. Some days it'll be 5 percent. Some days it'll be 15 percent. And you have nothing to do with it. Some days it'll be 5%, some days it'll be 15%, and you have nothing to do with it. That's purely a function of supply demand in people's brokerage accounts and in the marketplace. Yeah, it's sort of similar to closed-end funds. You know how they trade at a premium? Because it is closed-end, right?

So that's what gives rise to that. And that's just supply-demand dynamics. There are people who look to be opportunistic around that in the marketplace. But the underlying holdings are very straightforward. CEOs are putting Bitcoin on their balance sheet. Elon Musk put $1.5 billion on his balance sheet. But at the end of the day, it's an $800 billion stock, right? So $1.5 billion on on 800 is a tiny percentage of the market cap. So if anyone were to buy Tesla, hoping that it tracks Bitcoin, I mean, that's not a pure

play whatsoever. Our fund is 100% Bitcoin. That's all it is. It's a trust that holds Bitcoin. And by the way, the Bitcoin stored with Fidelity, we chose Fidelity because everybody knows who they are, old school firm. And it's the first publicly traded product in the US to custody Bitcoin with Fidelity. So Fidelity is going to handle the mechanics of where the Bitcoin is being held and how the buying and selling of Bitcoin is being handled. And Abby Johnson has been a Bitcoin enthusiast really for probably a decade now. And I think Fidelity through and through has been supportive of the idea of Bitcoin not just being a currency, but being an investable asset. Like from day one, that's the way they've been talking. So your trust, the Osprey Bitcoin Trust is Fidelity's chance to, I guess, prove, hey, look how well this fits into brokerage accounts. And by the way,

we're doing the servicing side and the custody side. Yeah. I mean, they've built out a big, big digital assets business at this point. And I know they have lots of clients. And just to clarify, they store the Bitcoin for the fund. They don't handle the trading. Oh, so who's doing the trading? We handle the trading. We do. Okay. You guys are. Okay. All right. Got it. Here's the beauty. Here's one of the advantages of this product is that accredited investors can come and deliver Bitcoin in exchange for shares. That's typically not a taxable event, although

everybody check with your tax advisor. But if we do that, there's no trading required, right? You just deliver Bitcoin and receive shares. So that's how people can get out of a Bitcoin position. They can give it to you and receive shares in the trust. And they'll receive the equivalent number of shares of the dollar value of Bitcoin that they're delivering into the trust. Is that accurate? Exactly. Okay. That's kind of cool.

And then so then they're out of their Bitcoin, but they're in Bitcoin for as long as they hold on to the shares of the trust. Exactly. Exactly. And one of the back to your question about brokerage accounts. Back to your question about brokerage accounts, one of the reasons that we felt so strongly about creating a ticker-based product is not only brokerage accounts, but frankly, IRAs. At least I know for me, if I'm doing something that I think has significant upside potential, I try to put that in my IRA if I can. Just so that, for obvious reasons, if I go to sell, it's not a taxable event or it's deferred anyway. So as of this conversation, Bitcoin is close to $50,000 per BTC, and it's about a trillion and a half dollar-ish market capitalization. And we think there's something like $100 trillion worth of movable wealth in the world, right?

The US, it's probably 40, 38 trillion or something. And then just globally, it's probably 100 trillion. So then let's say Bitcoin were to become some percentage of that, even if you weren't particularly bullish on Bitcoin itself, but you just recognize other people will be. Is that the way to think about how big this market could get or what percentage of investable assets might go into things like digital assets, Bitcoin, et cetera? I don't know. How do you think about the opportunity here? Yeah, great question. I think it's actually different depending on what crypto you're talking about, right? So people talk about the whole space and sometimes

lump it in, but it really is different. So like, for example, Bitcoin and Ethereum, the top two, those are really going after two different markets. Ultimately, they're trying to solve problems. And I think where Bitcoin is headed is as a substitute for gold that's digital, that's global. And if you start to look at it and analyze the characteristics of money or a store of value, you start to recognize that Bitcoin actually has some advantages over gold. I never thought I would say that. You know, 10 years ago, I was a big gold guy. I still got gold coins and things like that. And I believe in gold.

I don't think you should drop gold, for example. Yeah, but you can't move it. And you can't flee. You can't flee a country in the night. You just can't move it. And not that this applies to most people, but it's literally less than 120 years ago that the majority of the people in america's ancestors came here and they came with everything they owned in the world which was f***ing nothing in many cases so my so my family my mother's side

is irish and my father's side is eastern european jew So these are like the two of the poorest types of people ever to arrive in America. And they had jewels sewn into the inside of their jackets. Like that is the condition in which they came here. And they were worried about being robbed by other refugees on the way over, let alone what would happen when they got to this strange place.

Now that's not a thousand years ago. That's like within four or five generations, people have that story. So now when you read about Venezuela and you read, and these are small use cases, I understand, in dollar terms, but the idea of having gold, like a brick of gold as a portable, as portable wealth, it doesn't work that way as portable wealth. It's, it doesn't work that way. Yeah, it doesn't, it doesn't work that way. And, and there's a couple other issues too, like, um, ability to counterfeit, you know, it kind of makes you wonder I've got gold coins, you know, I've never sawed them in half to figure out, you know, are they, you know,

bite on the end of it, like in Looney Tunes? I mean, I tried that. All right. You know, so there's, there's other advantages, which is, which is pretty cool. So, so taking a step back, then let's say gold is 10 trillion, right? And, uh, you know, the, the gold Bitcoin pie chart, you know, Bitcoin still the tiny little slice of pie on a relative basis to gold. So the question is, you know, will it, will it become the same size as gold? Will it overtake gold? I've heard, you know, people talking about it becoming many times the size of gold, and that would be, you know, 20, 30 trillion. I'm not sure, but I do think that it continues to head in that direction as a substitute for gold that people are accepting more and more.

And I'm actually pretty astounded at the pace of, not the pace of acceptance by institutions, but the acceleration in the pace. Because it feels like anyways that there's a headline every single day where either it's a Fortune 500 company putting some on balance sheet, it's an old school, you know, insurance company taking a look at the space well we just heard we just heard from bank of new york melon that they're going to support they're going to do i guess they're talking about custody or trading what are they what are they saying they're going to do yeah i i saw the headline i haven't had time to dig into it but it looks like they're going to start getting into the custody business they are the plumbing of the financial services system in America.

That bank dates back to like Alexander Hamilton. And people don't understand how monumentally important Boney is, Bank of New York Mellon. Like they are – I talked to guys at Persian. talked to guys at persian like they these guys are involved in every facet of the the banking system brokerage system and how money moves in this country in ways that you can't even imagine and they have now said okay we're going to be involved with bitcoins there's no one left like there there are no holdouts uh on wall street anymore yeah i mean it's it's it's certainly getting that way so so you're now. So you're now going to have this product on the market, OVTC, the Osprey Bitcoin Trust. And you're not saying to hardcore crypto enthusiasts,

do this instead of your own cold storage wallet. That's a different market. The people that are transacting and they know their key and they're very confident with moving digital assets from one wallet to another, that's not who you're talking to with this product. That's something else. You're talking to the person that just says, you know what? I don't want my money flying around the world and bouncing back and forth. And I don't want to remember my personal key. And I don't want to take the risk of having millions of dollars that I forgot my mother's maiden name and I can't access it. They hear these stories. So you're talking to the person that's just like, look, I have money. I'm accredited.

I know my risks. I know how much I can, but I'm interested in this. I think it has a future. I want to have an investment in it, but I want it to be really easy. And I don't want to have to think about it, where it is or how it's held. So what you're providing is, hey, look, man, this is a relatively low cost. This is going to roughly track the price of Bitcoin. The lowest cost. The lowest cost for anything like it. And you don't have to lose sleep. Your money is sitting at Fidelity.

And if you're worried about Fidelity, then you might as well worry about, you know, America, like, like literally how much is Fidelity costing right now? 3 trillion, five.

I don't even know the number. I think it's more than that. Yeah. I forget the numbers, but it's, it's a lot. So that is a huge segment of, of the population. The person I'm describing, like of the investable markets, that's most people. Yeah. And, you know, it's not only most people, I think it's also their advisors, right? So advisors have a problem. Advisors have been getting asked about Bitcoin. You know, in 17, they were just getting bombarded. I think they're probably getting bombarded again now. And they don't have a lot of good answers, you know, until until now. All they had was one instrument that they could look at that was frankly pretty expensive.

That's the Grayscale Trust. Okay. The Grayscale Trust. Okay. They have an alternative that is, you know, much, much lower price. Can we say the prices? Yeah, I can say my prices. You know, it's a 49 basis point management fee, you know, which is, I think, you know, perfectly reasonable. It's a very ETF like fee. You know, we think that the potential of the spaces is, you know, big enough to build a business on on that type about my involvement. And I'm not running the

company or anything. I love my job. But every once in a while, a promising financial technology company comes along. And I've been involved in several. I've been involved in some in the crypto space as well. But I serve on the advisory board of just a couple of companies at a time where I think my input has value to the people running the company. And I can just share with them things that I'm seeing and hearing within the wealth management space and just kind of give them my take on how investors are thinking and how advisors are thinking. So I'm very excited and privileged and honored to have been asked to join the advisory board at Osprey. And I've said yes. And I'm putting up some of my own capital in two ways. Number one,

to buy into shares of Osprey, to be a shareholder of the business, but I'll also be putting in some personal money to the trust itself. So the'm the way I'm planning to do that. I don't know if this is smart or stupid, but I'll be dollar, I'll be dollar cost averaging, uh, rather than trying to pick the, and I own some Bitcoin already for years, but like, this is my new way that I want to do it because I want to do it in an IRA. Like I want to be able to, I want to be able to do this in a brokerage account, you know? So, so this will be my, my, my new method of getting exposure to, to crypto. Hey man, we're thrilled to have you and, and excited about, about the future.

And I think dollar cost averaging makes a ton of sense. We have, we've actually been speaking to investors and family offices and things that, that do exactly that. They kind of roll a weekly program or a monthly program or whatever, just because there is a lot of volatility. And we all know the math on dollar cost averaging. You buy low and average down. I talk to people all over the place. Like, I go get a protein shake down the street. The guy wants to know, what do you think of Tesla?

I go get my haircut. They want to know, should I hold my Apple? Everyone thinks that I have financial advice for them like that's appropriate for them i've never met you before but here's what you should do with your apple all right so i get the bitcoin question everywhere i go and i'm like what don't ask me i'm an idiot i should have millions and millions of bitcoin if i knew anything because i remember when it was $50 and I was sending mean tweets about it. So don't take my advice on the price of Bitcoin. I had 10 years to become a Bitcoin billionaire. I didn't do it. That being said, I think the dollar cost averaging version of how to

get exposure makes sense for me because I have no opinion on where the price might go. If you told me Bitcoin's at 75,000 in a month or 25,000 in a month, I could be convinced of either case. Absolutely. You could convince me of either one. So that's why for me, DCA and what the risk is, well, the risk is it goes to zero, but like the, to me, the more realistic risk is it goes much higher and I just barely own enough. And then that's okay. Cause I don't want that other risk where I put all the money that I'm going to allocate to it in today and it gets cut in half. I don't want that. That risk would bother me more. I'd be more okay with leaving money on the table than just plunging in and getting cut in half.

So that's the way I'm thinking about doing it. That may not be right for everybody. Yeah, I agree with that. Is that how you think most people will use your trust? Or you think there are a lot of people waiting for something like this that will just say, day one, I want 5% of my assets in it and this is how I'm doing it? No, I mean, I don't think that, I would say that even if it's just like a mini dollar cost averaging, I think most people will kind of leg into it a little bit. And we've already seen that. We've had investors that come in and they kind of get to know the product, the firm put in some amount and then come back and put in more. Right. But not necessarily on a, on a systematic basis, you know, for weeks at a

time or months at a time. So I think also just how, you know, you're saying that the guys cutting your hair want to know everybody's at a different spot with Bitcoin, right? Some people, what do you mean by different spot? Well, on the learning curve, we have some people that are saying to us, Hey, we've been investing in a grayscales product for years. We're really excited about this. And we, we understand how the whole ecosystem works. Other people are still just learning about it for the first time and trying to understand the space. Right. So I think those are different, two different ways to approach it. And it's going to be different for everyone. And not only that, there's really two ways to get access.

Right. One is the accredited investors that come to the company directly and subscribe units. Those have to be held for a one year holding period. That's kind of the U.S. regulation for private placements. That's kind of the U.S. regulation for private placements. And then there's a secondary market under the ticker OBTC where people can just buy and sell it like a stock or a closed end product. So it's kind of two marketplaces, if you will. Did you get a chance to hear what Hester Pierce had to say? So Hester Pierce is the U.S. Securities and Exchange Commissioner. And she gave a talk for Coindesk TV, where I guess she was in a fireside chat. And she basically said the world is ready, or America is ready for a

crypto exchange traded product. So you are already going to be an exchange traded product. But it sounds like the hearts and minds within the SEC are going to be nudged closer and closer to a true ETF. And you and I have talked about that offline, but that's probably the question you get more than any other question when you tell people about the trust. So what would you say about the likelihood of an exchange traded fund for Bitcoin in our, in our lifetime, in our lifetime. Yeah.

I think it's a relative certainty within our lifetime, statistically speaking, but I, you know, especially so Hester Pierce put out something recently. She frankly has been bullish on a Bitcoin ETF. She's, she's been very publicly for that for a couple of years, honestly,

but she was an outlier in the commission and that wasn't enough to get it done. Now you have a new administration coming in and the questions that I've been getting are more about that. Is that a sea change? Are things going to unlock there? Gary Gensler comes in from the commodity side too. Yeah. Which in itself is interesting. Right.

And apparently he taught a class at MIT that had to do with Bitcoin and crypto and so forth. So like, I think he understands the technology more than Jay Clayton, but that doesn't necessarily mean he's just going to walk in and flip the switch. I think that the SEC has proven that they're being very careful and thoughtful about this. And he's a very analytical guy. I'm sure he's going to, he's going to want to, you know, make sure he's making the right decision before he makes a decision like that. I don't really have a view about a timeline. I, you know, I built this business and set it up a few years back because I felt like the timeline was still pretty far away. It looks like that was the correct view. I still think it could be a while. The SEC is very cognizant that the US is the biggest market in

the world. A Bitcoin ETF would be basically a huge deal. And I think they want to be, you know, they want to be pretty cautious about it, but we're watching that very closely. And frankly, we would be involved immediately if we sense that things are changing in that direction. That's why I'm betting on you guys. I feel like, well, I feel like there's probably been a hundred applications for people to have a Bitcoin ETF.

Everybody wants it, but like, show us what else you've built. Oh, we don't have anything. You know, we have a white paper. Oh, that's good. But you guys, but you guys did it. You guys built it and you have built and launched, I don't know, dozens, hundreds of exchange-shared products in your career. Like you've been doing this for a long time. Okay. So I think that's important. Like I was at all the Coindesk events in New York, like at the Marriott Marquis.

Thousands of people in 2017. Dozens of people in 2019, by the way. Right. Dozens. Literally dozens. Dozens. I swear. I could hit the back of the room with the sound of my voice, no problem.

But I moderate, what did I do there? I moderated the panel, I emceed one year. So I've met lots of people working on public facing crypto products, investment products, but most of them have never done anything on traditional Wall Street at investment banks. They've not launched products before. It doesn't mean they're not capable, but you definitely have an edge when you've built things before and investors have benefited from those things.

I feel like track record still matters, even though crypto is still new. I still feel that way when it comes to releasing a customer-facing product. It still matters whether or not you've done it before and you've lived through it and you've been in that position. Don't you agree? It really does. And I'm sure it's kind of difficult to imagine for most of your audience, but there is a lot that goes on behind the scenes to build products like this. there is a lot that goes on behind the scenes to build products like this. I mean, you kind of have to ask yourself, why has Grayscale had a product for, I don't know, is it seven years now that has amassed $30 billion of asset center management? Why aren't there 10 of those already? Yeah.

Why not? Well, the answer is because it's tough. It's tough to kind of lay the structure together and it takes time. it takes a lot of time so you also become married to it the builder the architect becomes married to that product you're going to eat sleep and breathe this bitcoin trust you personally yeah for like the next three to five years minimum you know yeah and i already have been for a couple years it's just we were sort of in stealth mode like nobody nobody knew nobody knew this thing is, is just, just started trading, but it's, it's a two-year-old fund. It's been around for two years already. Was the happiest day of your, well, one of the happiest days of your professional life when you got the notification that this thing's approved and it's going to go.

Yeah. Yeah. I was definitely pumped. It was like, it took forever to get there, but I was pumped. Yeah. All right. It's great, man. So, so listen, we're wishing you all the best of luck. And I appreciate you having me in the mix as somebody who can advise you and, and answer questions for you about the wealth management space. And we hope everything goes well. And, and we all get a new product out on the market that we can use in different ways for different purposes. So it's a lot of work you guys put in, but we're proud of you. Thanks, Josh. You got it, man. Where can people do their due diligence and learn more about the risks,

the portfolio construction, the mechanics? They can go to ospreyfunds.com? .io. We're in crypto, right? So we got to be true. Ospreyfunds.io. Yeah, they can check it all out there. In fact, you can invest directly online if you're an accredited investor through a DocuSign process. It's really straightforward. But you've got all the material there. Go check it out. Follow our handle at Osprey Funds. Yeah, yeah. We'll link to that in the show notes. And thanks again, Greg. We'll talk to you soon. Thanks for listening. Check us out at thecompoundnews.com for daily investing and market insights. You can watch all of our videos at youtube.com slash thecompoundrwm. Talk to you next week.