The Pomp Podcast - #1293 James Seyffart | Bitcoin ETF APPROVED: What You Need To Know

Episode Date: January 10, 2024

James Seyffart is a ETF research analyst at Bloomberg Intelligence. In this conversation, we discuss bitcoin ETF approvals, what this means for capital inflow, predictions for the first 48 hours, 30 days, & year, fund structures, issuers, and regulatory oversight.  ======================= This episode is brought to you by Frec — Just as easy as investing in an ETF, Frec Direct Indexing can help you earn more by unlocking tax savings, no matter the market. Done for you, automatically. Check them out at ⁠⁠Frec.com⁠ ======================= Trust and Will has simplified the process of creating and managing your will or trust online. They leverage a data-driven, design-first approach and amazing customer support to help you protect your legacy from the comfort of your home starting at just $159. Sign up today for 10% off using ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://trustandwill.com/pomp⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ======================= Pomp writes a daily letter to over 250,000+ investors about business, technology, and finance. He breaks down complex topics into easy-to-understand language while sharing opinions on various aspects of each industry. You can subscribe at https://pomp.substack.com/

What's up, everyone? This is Anthony Pompliano. Many of you know me as Pomp. You're listening to the Pomp Podcast, which is my effort to find the most interesting people in the world and sit with them for hours while I ask questions in an effort to learn. So it would mean the world to me if you would subscribe to the show on your favorite audio platform, watch episodes on YouTube, and tell your friends and family about the podcast. My goal is to help millions learn from the world's most interesting people. So let's get into today's episode. James Seifert is the ETF Research Analyst at Bloomberg Intelligence. In this conversation, we discuss the massive, massive Bitcoin spot ETF approvals, what this means for capital inflow, what his predictions are for the

first 48 hours, for the first 30 days, and for the first year. And then we go through a bunch of nuances of the market, the fund structures, the issuers, and regulatory oversight. It's a fascinating conversation and a big milestone moment for the Bitcoin industry. James and his partner, Eric, over at Bloomberg Intelligence have done a fantastic job over the last couple of months on this issue. So I thought it was only right to get one of them on here to talk to you and I to help us understand what is going on with the Bitcoin spot ETF. Here's my conversation with James Seifert. Anthony Pompliano runs Pomp Investments. All views of him and the guests on his podcast are solely their opinions and do not reflect the opinions of Pomp Investments.

You should not treat any opinion expressed by Pomp or his guests as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his personal opinion. This podcast is for informational purposes only. This episode is brought to you by Freck. Historically, the wealthy had a hidden secret in investing. They would spend a lot of money and use very big teams to conduct tax loss harvesting. Tax-loss harvesting is the timely selling of securities at a loss to offset the amount of capital gains tax owed from selling the profitable assets later. But now FREC is bringing this incredible advantage to any investor.

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They have thousands of five-star reviews and a rating of excellent on Trustpilot. It takes most people 20 to 30 minutes to complete their estate plan with Trust and Will. And not only that, but if you go to trustandwill.com slash Pomp, you'll get 10% off. Plus, you'll get free shipping of all your estate planning documents. So go to trustandwill.com slash Pomp and make sure you get an estate plan in place. whether it's for you or one of your loved ones having a trust and or a will can literally be the difference between someone being taken care of and someone not go check them out today at trustandwill.com slash pom all right guys bang bang i've got james here eric may be joining us

maybe not we're gonna see he's on train right now but uh james um etfs are approved bitcoin spot etfs you guys had 90 plus percent uh confidence you were right congratulations i think people on the internet are joking. This is your Super Bowl. How do you look at so many different ETFs getting approved at the same time? Is that something that we've seen a lot in the past, or is it usually like one or two and then some trickle in over time? Yeah. I mean, this is a one-of-one situation. I mean, the closest situation is what we just saw with Ethereum futures ETFs in October. They got no interest whatsoever for the most part. A lot of the same people were in that race and no one really bought those. They took no one that no one wanted to bite them. I think part of the reason

for that is because I also think spot appearing ETFs are going to be approved this year, which we can get into a little later. But yeah, this is a one of one situation. There's been so much hype and so many applications. This has been going on for 10 years. I mean, really, the Winklevoss twins applied over 10 years ago, but for the most part, it's really heated up over the last four to five years, 2017 ish. So I guess that's even more. But things have really heated up a lot here. And And the SEC has decided they don't want to be a kingmaker in the way they were with ProShares' BIDO, the Bitcoin Futures ETF, which commands 95% of the assets, 95 plus percent of the trading volume in Bitcoin Futures ETFs and US exchanges.

So they don't want to be kingmaker. And so they're doing everything they can to line everyone up, which is also something we've been saying since even long before we went to 90% odds in October. Yeah, I definitely think this is the fair way to do it. The first time I said it on television, one of the hosts was like, wait, you think they would do that? And I was like, it's the only fair way. they should do it that way. Doing it any other way seems kind of unfair, but what is your

expectation of asset inflows? Let's go maybe like 48 hours and then 30 days. So in the first two days, what do you expect? And then in the first 30 days, what do you expect? Yeah. So we've heard, so initially, so if you had asked me this before the Ethereum futures launch, I would have said it was going to break. They were, they naturally, all of them would break the ETF records that currently Biddo holds. It was the fastest to a billion and basically did it in two days. I think this then the Ethereum futures launch happened and just the interest was waning in this space I thought but I guess I was wrong we've heard rumors like corroborated rumors from multiple people that many of these issuers have hundreds of millions of capital lined up to invest

in day one or day two there's rumors that BlackRock has two billion lined up potentially which is an insane number in my mind I'll believe it when I see it I guess so I mean these we're talking about serious capital here that would be flowing into the space um so time will tell so you said 48 hours i mean the problem is if grayscale goes first it's going to be you're going to have to do net flows because i think there will be significant capital if grayscale goes in the same day that will flow out of gbtc and into these other products gbt's fee they're only dropping 1.5 percent as of this recording right so um that's a relatively high fee and i could see them basically a lot of people who maybe own them in tax deferred accounts or who don't really care

are going to take their money out. There's also a lot of hedge funds and private equity funds and people that are owning that thing that don't want exposure to Bitcoin. They're only viewing it as a special situation because it's trading at such a steep discount or was trading at such a steep discount. So maybe they just get out of it once the discount closes and this thing becomes an ETF. So if you net it out, I don't, it's hard to predict these types of things, but I think it will be measured in billions for sure. If we're talking at the end of the first week, I think we'll see net flows of, I don't know, 3 billion potentially. I mean, over the year, I'm on record as saying I was thinking around 10 billion as the over-under. So I'd probably go over 10 if for the

first year, but under 25, I've seen some crazy numbers for the first year. I guess we'll see. But net flows wise, I'm probably around that over 10, but not much over 10 if I had to guess for the first year. All right. First 48 hours, I'm definitely over 2 billion. I think this thing is going to smash every record. You guys are going to build a monument inside an ETF land of what's going to happen. But I don't think it's... Yeah, over 10, under 25, that seems pretty reasonable. I saw the 50 to 100 billion number that came out. That seems tough, but I don't know, maybe Bitcoin's price, if it triples plus inflows, maybe that helps it. Yeah. If you get to AUM levels there, I don't think that would be absolutely insane,

particularly if the price appreciates the levels that we've already seen in the past back in 2021. That said, if you look at gold ETFs, which is the most analogous situation in ETF history, I guess you would say, they have 100 billion in assets. I've said this on a whole bunch of different podcasts and spaces and what have you. It's possible I'm completely wrong, but I think of that as the upper end. I think these ETFs could get to 1%, 2% of total ETF AUM. Right now, we're at 8 trillion. So if you take 1% to 2% over the long term, say four or five years from now, That would say, assuming the assets don't change, but you're talking, what, $80 billion plus to $100 plus, but that's much longer term. I don't think we're going to see those numbers short term.

BlackRock is, or I'm sorry, Grayscale is coming in at 1.5. They're at 2%. They're dropping to 1.5. Everyone else is like sub one, right? And many of them are kind of like 0.25 to 0.5-ish. How much of a difference is there between 0.25 and 0.5? There's obviously a big difference between 150 basis points and 50. But what about the like big bunched up group between 25 basis points and 50 basis points? Does it matter? It's honestly going to be fascinating to see. I mean, the way I think about it is, right, there's going to be a whole bunch of different ways that everyone's going to try to spin these. You have the more crypto native people and the people that are more in crypto. I'll lump VanEck and ARK into that because ARK is partnered with 21 shares.

VanEck has been trying to get these things through the door, has been at crypto conferences that i've ever been to they've always there um and then you have bitwise which has been basically pounding the table pounding the ground on this front same with valkyrie hashtags so like there's this echo of like we're focused on this ecosystem a lot and some are like we're only focused on this ecosystem like 21 shares and some of those other names i just mentioned um but then you also have the big players like i shares and fidelity which obviously fidelity has been in the space for a long time so they're going to differentiate on brand name and say like what they're trying to to do here. The fees though, I think are critical. I think if you have a relationship with one of

these issuers that are trying to sell these things, as long as you're competitive, you're not like... I think 50 might honestly even be too high. So right now, Invesco and Galaxy, they're offering a six-month waiver. So there'll be no fee for the first six months and up to 5 billion potentially. But then they're going to 59 BIPs. I think they might have to lower that to be competitive potentially, but I guess time will tell. But if you're in the 39 BIP range like Fidelity is, but you have a relationship with Fidelity and you're thinking about going to somebody like, I don't know, Bitwise or iShares, it might not be enough if you already have a relationship. So as long as they're competitive, the distribution networks will be important

because the way we're looking at this is this whole ETFs tend to be a winner-take-most situation, right? One fund tends to get most of the assets and most, if not most of the liquidity, definitively liquidity. But that means that there's a huge opening for plenty of other people to have niche markets where they have 100 million, maybe a little bit more in assets that is profitable enough or at least somewhat profitable that they can offer the business. And it's just something they want to have to complete their offering when they go to an advisor's office or an institution's office. But there's going to be one or two that sit at the top on that asset level or trading level. And in some cases, in very mature markets, we actually see

one that is basically competing on assets because it has such a low fee level. But the dollar volume when things go crazy, it's always one. And it's usually the oldest one that tends to really dominate on liquidity and volume. And we see that repeatedly in different areas of the ETF ecosystem. After 30 days, who emerges with the most assets in your opinion? I mean, even with Grayscale going at 1.5%, I think it's, I mean, they would have to see record-breaking levels of outflows in a short time period to unseat them on an asset basis. But that said, if anyone can do it, it's probably iShares, just because of BlackRock's brand name. Their fee waiver isn't bringing it to 0%, but it is bringing it down to 20 basis points,

which is also extremely low. Look, I've been telling people to expect the terradome. We call the ETF terradome. It's because it crushes you. It forces people to cut fees if you want to compete. And we were talking about 40 basis points as a low end. Getting under 40 would be impressive. that we think it could happen within a year. And then Fidelity did it out of the gate and we were like, oh, wow, they're already doing it. And then now with these recent updates, I'm absolutely shocked how low these have gone.

They basically compressed a year or so of fee war down into a 36, 48 hour period. And honestly, we might still not be done. Technically speaking, they could lower the fees again if some of these issuers really wanted to. The idea of waiving the fees for six months or up to a billion dollars or whatever it is, why not go even longer? Is it just, hey, the difference between six months and 12 months doesn't really matter. It's more so just the

gesture of waiving the fee at all, or how should people think about what these companies are going through? Yeah. The way I'm thinking about it is, one, we've never had a situation like this. So in the time, and sometimes you have issuers come late to a party and they'll do that fee waiver to try and gather any new assets looking for a specific strategy or asset class. In this case, everyone's just trying to do something to differentiate themselves. The way I'm thinking about it is it's almost like a marketing expense. Here you go. We're going to eat the cost of operating this thing, which I think many of these, even at the fees they're currently offered, unless they get significant assets, they're probably going to be operating at a loss or

with virtually no profit to start. This is not like this is going to be a cash cow for these guys in the near term. Like this is, they're coming out and they're going with razor thin margins probably. There's a reason that everyone on the very low end is on that 20-ish, 20 to 30 mark, right? Like there's a reason they're that low. And it's probably because that's just how low things can get compressed right now with the ecosystem. But over time, as more scale comes into the space, we'll actually see this probably drop even lower. But it would be interesting to see how much scale comes in and how much it impacts the underlying fees. But there's nothing to say that like BlackRock, if they get enough assets, it's possible that they just get rid of it and

change their actual fee to 20 bps rather than going to what they're stating at 30 bps. But anyone can really do that too. And again, right now, all these documents, we call them red herring documents. It's a common term. It has all this red writing that basically says these are subject to completion. And all of these documents have that. So we could still see some of this stuff change before these things begin trading. So another thing that I saw was VanEck is going to donate 5% of their Bitcoin spot ETF to Bitcoin developers. I had written a tweet a couple of days before they announced that, and that was one of my suggestions. And then I talked to someone there and they're like, no, dude, we did this with the Ethereum ETF, just no one really paid

attention to it. And so they're like, we were laughing when we saw the tweet because that was the plan already. So one, why did no one pay attention? Does it not matter? And then two, do you think it'll help here with the Bitcoin spot ETF? I mean, I talked about it. I was covering it when they did it with the Ethereum ETF, right? But yeah, nobody seems to care, I guess, for whatever reason. It's interesting and it shows they're not just some tourist in this space. That's one way that they can show it. And they have people... The thing is, everybody has hired people at this point that have good pedigree and background in some cases on both sides of TradFi and DeFi world. So it's not like these guys are just going in and don't have any,

they have no idea how this market works. These are all, they're very smart people and they have good contacts. So, I mean, VanEck is doing it and hoping that maybe the crypto native players who want exposure to this in something like, maybe they have an IRA or some sort of account. So they're trying to go after people who really care about that industry. Whereas some of these other guys so their ticker is hodl that's obviously a little more retail and crypto specific you have valkyrie whose ticker is brr r for burr like money printer um and then other guys they're going with much more simple tickers which is indicative of them like going more after the boomer slash advisor type crowd they're not going for this flashy ticker um so you're going to see

these people both they're going to compete but they're going to try to compete potentially in different channels, maybe. So it's going to be fascinating to see. We've never seen this many ETFs launch something where the products will be so similar. I mean, I'm a nerd, but it'll be interesting to watch and see how this plays out. So the fee war, I think we all knew it was coming to your point. It came much faster and much more severe than I think most were anticipating. I'm probably more interested in the marketing war that is going to happen after this. So I think that probably $100 million gets spent at least throughout the first year on marketing these things. It's probably a Super Bowl ad. There's a bunch of these milestones you can kind of think

through. Am I off base there? How should we think about what to expect? Are we just going to literally every time we turn on CNBC, Bloomberg, or any of these platforms just get bombarded with ETF Bitcoin ads now? Or what should we expect? So it's funny. Technically, they're not legally allowed to put the ETF ticker or anything in any of those marketing. So if you looked at any of like none of them specifically have like an etf ticker in there they just talk about in this case bitcoin and then provide a like show their like their company name and and a link to their website so i do think there is we know for a fact we've been saying i mean i think eric wrote in october that this was going to be a marketing bloodbath it's going to be people are going to be going

neck and neck here they're going to do anything they can to try and differentiate themselves and they're going to try to market these products and so like some of these smaller issuers going against these massive firms with significant marketing capital. It will be interesting to see, but we've already seen some of the smaller guys come out with, in my opinion, smart, funny commercials. And when you see that happening in other ETFs, is there a connection between you spend more, you gather more in assets? It's not that big of a deal. The marketing spend on commercials and stuff like you're talking about here, right? The only ones that we see it for are things like the q's and some of the spider products like you've seen on center isa

at the at the rangers games and things like that but those are different because those those etfs are structured a way that no etfs are structured anymore um they're structured as unit trusts unit investment trusts and they have 12 v1 fees which are basically part of your expense ratio goes to spending money on marketing it's like brewster's millions like these funds have like billions of billions of dollars and they have like 0.01 percent that that goes to marketing, but it ends up being millions and millions of dollars that they have to spend on marketing. So they kind of use that to create commercials and different things like that. But this is more unique. You don't see too many things like this as much as I'm kind

of expecting. This is going to be, again, a sort of one-of-one situation as far as ETF advertising goes. So one of the other things that I see people talking about, I think Gabor Gabox, who used to be at VanEck is now an advisor there. He was like, look, all these low fees, like it's great for the people who are going to be investing in it. Obviously everyone wants the lowest fee possible, but it may actually incentivize other behavior

for these issuers to try to make money, including trading, securities lending, et cetera, on the backend. How much of that are, shouldn't people be worried about or should they be aware of? Yeah, I mean, one, they can't do any securities lending without disclosing in their documents, right?

So that concern I saw from multiple people online that just don't understand the ETF world specifically. So if they're going to be doing that and they do it and don't disclose in their documents, I mean, that's a nightmare situation for them. They're going to disclose it. Plenty of ETFs do it. I actually don't think that the grant or trust structure that all of these are using in the 33 Act, I don't think they're even allowed to do securities lending if they wanted to.

So I think ultimately, people will figure out wrappers and ways to offer this type of exposure and do some sort of securities lending, or in the case of ETH, do some sort of staking down the line, but not initially. They can't do that. I think what people are realizing with these fees is like, these are kind of like, like I said, they're offering them at cost or possibly even loss leaders. And then we'll see where things go and hope they get to scale where they're actually profitable. But like, I don't know, I don't think the incentivizing bad behavior is necessarily true. I mean, it's possible. But in the US market, specifically with the way the grantor trust is set up with these names, like BlackRock isn't going to be playing fast and loose

with the names. That said, as far as trading goes, the one interesting thing that everyone was focused on a few weeks back was whether or not these ETFs will be able to operate with in-kind or cash create redeem. So most ETFs, for the most part, if it's with the S&P 500, you hand over all the stocks in the S&P 500 and you get back shares of the ETF. For Bitcoin, it would be handing over Bitcoin and getting back shares of the ETF that represent ownership of that Bitcoin. The SEC basically said no go you cannot do in kind create redeem create and redemption um so here we are you're only allowed to do cash and a lot of people tried to fight it including grayscale blackrock you name it they want to do in kind part of the reason they want to do that is because when you

do in kind all the trading and acquiring of the asset is done by the market makers and the authorized participants think jane street virtu jp morgan these these big wall street banks and brokers broker dealers what have you gts throwing out names that probably people don't really know but this is like the people who do all the trading on wall street and they are the best at trading there's a reason why they make millions of dollars because they are very efficient with technology and how fast they are trading these things but by making a cash create those market makers and those authorized participants they can't hand over bitcoin because yes we can get into why they're doing it but essentially they're handing over cash to the issuers and the issuers have to then go out

and buy the bitcoin or vice versa if there is a redemption they're selling the bitcoin and handing over cash there is so that means that all of the trading and the relationships for getting the execution of the underlying bitcoin for the fund is going to be within the issuer which most of these issuers are not used to doing so it's probably outsourced to different people i don't know exactly how it's going to work i need to dive into that a little bit more but for the most part it's going to be interesting to see so you could end up with a case where one of these etfs has a situation where they don't have the best execution of getting exposure to bitcoin and their performance is going to lag another one who has the best traders in the market. Now, I don't know how

long it would take for something like that to show up, but that is one area that could happen here. But that said, again, I don't know how much bad behavior this is going to incentivize, but I guess time will tell. And I hope I'm not proven wrong. I hope Gabor is wrong. And everyone should hope that Gabor is wrong here, but Gabor knows his stuff. And I've known Gabor for basically since I got out of college when he was working at VanEck and before Bitcoin ETFs were even really that big of a topic. Yeah, absolutely. Now, there's a ton of benefits. Everyone's talking about the positives. Wall Street is now embracing Bitcoin, et cetera. There's definitely going to be some sort of trade-off. There's going to be some downside. What are some of the downsides that you

would expect for Bitcoin or Bitcoin holders now that Wall Street's involved? Downsides. I mean, personally, I know this is probably going to be out of consensus. I don't think there's that many downsides. I mean, it's not going to be impacting the underlying structure of Bitcoin. It's not changing the technology. It's not forcing anyone that they want to hold their own Bitcoin in cold storage or take care of their own keys. Obviously, not your keys, not your coins. But for the vast majority of people out there, particularly anyone in the advisor space, they don't want to deal with that, particularly for something that most people are going to put as 2%, 3%, 5% of their portfolio. So I think it's almost all net positives as far as I'm concerned. I honestly can't think

of too many negatives because it's not forcing anyone to do anything. And honestly, you talked about all the marketing aspects, the lower driving down of fees. Honestly, we didn't even talk about these fees that are driving down stuff, driving down these costs. It's going to impact everything else in the crypto ecosystem. Look at some of these institutional custodian fees. They're higher than the all-in expense ratios in some of these fees if you want to use some of these Bitcoin custodians. If I'm an institutional investor and I'm custodying my Bitcoin with somebody else. I already have counterparty risk. And the fee is 40 bps or what have you to custody my Bitcoin there. And I can go over to BlackRock right now and get 20 bps or go over to ARK or

Bitwise or VanEck, you name it, Invesco at 0% for a little while. Everyone's going to have to cut their fees. The commissions are way too high on some of these platforms when you look at the compared to the TradFi market. So I just think the reverberations are going to be positive. I think it's more likely that some of those other platforms that you use are going to have a hard time with some of those negative consequences that we spoke about, because they're not as regulated as these ETFs and these ETF issuers are going to be. Part of the reason why the SEC wants the Bitcoin ETF issuers to be the ones that are doing the buying and selling of Bitcoin, because we're a KYC, AML, we already know, you've

covered it, they don't want broker-dealers touching Bitcoin, SAB-121, all these different things. And basically, the issuers are under the SEC's purview. So the SEC can dive in and look at exactly what these issuers are doing at any point. So I just don't think there's going to be that many negative side effects. I don't know. What negative side effects are you worried about? And I'll give you my view on it.

Dampening volatility. It will dampen. I am very strongly of the opinion that these are going to dampen volatility, particularly if they get the significant assets. Because I'm assuming you're saying, because these advisors, what they do, just like many of the best traders, when these things ride up, they have set allocation goals. Maybe if it's 5% of the portfolio, if this thing runs up 100%, it becomes 10, 15% of a client's portfolio, they're going to sell it and vice versa. If this thing falls 80%,

they're going to buy it and get it back to the set allocation percentage. And so basically that means they're selling when things are ripping and then they're going to be buying once things are falling and that's going to decrease the vol on Bitcoin. And I think that it may be as simple as before and after ETF, like Bitcoin's life before and after ETF approval. And you're going to have before ETF approval, asymmetric life. And now you're going to move more towards like a traditional asset. Yeah. I've always viewed this as a call option on a store of value asset is the way that I've always referred to when I talk to people. And this feels like it's not as much of a symmetric anymore once this happens, maybe, I guess is the way that I would think

about it. So I agree 100% with you on that. All right. And maybe I'm a weirdo and I think that's a negative because you know everyone wants the asymmetric asset but yeah if that's the worst thing that comes out of this then i guess uh it's pretty net positive right yeah i'm with you 100 all right last two questions uh this is uh this is your guy's super bowl like i think everyone on the internet it just is so thankful what's been the most fun part for you and or eric in terms of uh let's call the last two years or three years where it's really kind of intensified You guys are putting out confidence percentages. Everyone on the internet is like, what do these two guys think about the ETF? What's been the most fun part?

Proving people wrong that have just been ripping on us for months. That has been the best. Just absolutely watching these people cope with being wrong. They're literally just constantly moving the goalposts on being wrong on these facts. They've gone from, it's never going to happen to, it probably won't happen to. Even if it does happen, it's not going to matter. It's not going get any assets nobody cares um so yeah that's that's been the most entertaining i guess i guess people realizing that like we are covering this from like a trad five perspective um and i don't know we're we're just trying to have fun with it be real people and meeting i've met a lot of like really cool really smart people in this space because of it so uh yeah but definitely the most

fun for me has been because you have people just constantly coming at you saying why you're wrong you deal with it as much as if not more than anyone with the amount of following you have so So being vindicated, I guess, is definitely the most fun, assuming it's officially done. It's all right. Look, the haters are the president of your fan club. Just let them keep chirping. That's fine. All right.

And then once the ETFs are out there, assets are flown in, what are you going to do next? Will you ever top this? Is there another potential ETF that could come along that could ever have more scrutiny and excitement and be talked on television every single day about? Yeah, this is the peak. i mean this is it this is this is it this is the top um that said i mean we're going to be covering this from trying to figure out where things are going to go next right like who's getting the assets where's the volume going who's who's trying to differentiate themselves who's showing those

addresses is doing proof of reserve who isn't uh so there's a lot of things that people are still going to be trying to figure out understanding nuances between all these different products and then obviously i kind of hinted at the beginning we think that we're going to see spot e approvals so that's the next thing i'm watching but i don't think we get it it's it's basically Bitcoin and then maybe Ethereum this year. And then I don't think anything else happens like barring a literal, like people make jokes, like you need an act of Congress. Like you might literally need an act of Congress or a complete change in the admin through the 2024 election before we could get another thing other than Ethereum. So I think it's Bitcoin and Ethereum

and then everything else. So, I mean, I'll be covering all of it as if there's more assets that are going to come into this wrapper and we'll see how far down the line we get. Maybe we have a bunch of different of these digital assets in the ETF wrapper in 10 years from now. And I'll be covering it there, but yeah, this is the peak and just happy to have been right so far. Awesome. Where can we send people to find you on the internet? Yeah. I mean, obviously if you have a Bloomberg terminal, we were writing on there. We have a dashboard, BI ETF, Al Tunis, who couldn't join because his train was too loud. He didn't want to ruin the recording. Um, he has a, we have a show ETF IQ on every Monday. We have a trillions

podcast, and then also obviously just my most active on, on Twitter, J S E Y F F. Um, so you can follow me there. Awesome. Well, listen, thank you so much for doing this. It's been a pleasure to, uh, to watch you guys rise, be right. And yeah, you were the one of the first ones in this space to have us on. So I haven't forgotten that you were one of the very few. Yeah. Very first. Nice. Yeah. You know what? I actually, I think I remember being like, Oh, wait a second. Like these guys are not like wacko Yahoo's who are just like, you know, everything's going up. They like seem like they're like intelligent about ETFs. And then I remember when I talked to both of you, um, I remember walking away being like, Oh, this is like that. Like that's one of

the intersection points, right? Where obviously this like new world and this old world are going to meet and you guys are all over it. So you guys have done a fantastic job. Yeah, it's funny. I tend to be like the much more pro side of this asset class and Eric's more neutral to maybe even possibly slight negative, but he's mostly neutral. And I find that most people have been on the other side of our calls here are just like they can't separate the prospects and what's going on at the SEC with the underlying asset class that they kind of hate. But yeah, it's been an interesting intersection here because I'm constantly talking to trad flight people, trying to explain like why this actually does matter. And then at the same time, I go to these crypto, DeFi, Bitcoin events,

and like people are hyping things up and I have to tone things down. I'm like, no, it doesn't matter that much. So I'm like playing both sides, depending on who I'm talking to here. I lied. I actually have one more question. Other funds taking their AUM

and putting it into the Bitcoin spot ETF. We saw one or two funds change their perspectives and say they could put up to 15 of the aum is that going to be like a trend that you think will get big and actually lead to a lot of inflows um i don't think it's going to be as big of an impact as some people have made it out to be so i have basically on my terminal i have all these alerts set up that look for certain documents that change and add the words bitcoin to them essentially or have the words bitcoin in them and i have seen like five or six different mutual funds typically more liquid alt or alternative or hedge fund type mutual funds that are really active or hold

alternatives and do alternative strategies. And they're just adding the ability to hold these things if indeed they want to. So basically, they have to put it in their documents. They can't just buy this thing if they didn't put it in their documents that they have the ability to do it. So if it drops 80% and they want to add a sliver to it, they need to have that in their documents. That doesn't mean that they're just going to automatically put 15% right away. So I think it's slightly being overwhelmed, but one of the biggest use cases of ETFs is by other fund managers and institutions. So I mentioned advisors, they're the biggest target market for these ETFs right that they take up two thirds, maybe 70% or more of the assets in the ETF world in the

US. That's the target market here for most people, but also institutions make up a huge chunk of this. These things were built for institutions to be trading vehicles. And right now, for the most part, many institutions can't hold this thing. They're literally restricted from doing it because of the way that they were structured and built. And this wrapper will allow them to get exposure to this asset class within the bounds of how

they were created. So, yeah, we'll see. All right, my friend, thank you so much for doing this. Congratulations to both of you guys in terms of all the great work you've done. It's been a pleasure watching it and we'll definitely talk again soon. Thanks, Bob. Good chatting.