The Pomp Podcast - #833 Building Institutional Crypto Infrastructure w/ David Mercer

Episode Date: February 21, 2022

David Mercer is the CEO of LMAX Group. Based in Europe, they're a leading specialist in FX trading and now have LMAX Digital, a leader in institutional trading in the Crypto Industry In this conversation we discuss institutions, high frequency trading, and all of the market infrastructure needed for the Crypto markets to mature. ======================= Choice is a new self-directed IRA product that I'm really excited about. If you are listening to this, you are likely part of the 7.1 million bitcoin owners who have retirement accounts with dollars in them, but not bitcoin. I was in that situation too. Now you can actually buy real Bitcoin in your retirement account. I'm talking about owning your private keys and using tax-advantaged dollars to do it too. Absolute game changer. https://www.retirewithchoice.com/pomp ======================= Imagine coinmarketcap - decentralized. 3X in valuation is 15 billion dollars from the current price. Cryptotoday.com starts at zero, at fair launch on 7th of March. No VC. No pre-sale. Team tokens locked. For the people, by the people. For decentralized crypto. Visit cryptotoday.com and read the whitepaper for the details.

what's up everyone this is anthony pompliano most of you know me as pomp you're listening to the pomp podcast simply the best podcast out there now let's kick this thing off david mercer is the founder and chief executive officer of lmax exchange they're based in europe and they're a leading specialist in fx trading they now have lmax digital which is also a leader in institutional trading in the crypto industry in this conversation we talk about institutions we talk about high Frequency Trading, and we talk about all the market infrastructure that's going to be necessary for the crypto industry to continue to mature. I really enjoyed this conversation with David, and I hope that you enjoyed it as well. Before we get into this episode, though,

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as the first decentralized token information site. You can read the white paper at CryptoToday.com. Again, go to CryptoToday.com to learn more. All right, let's get in this episode. I hope you guys enjoyed this one. 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. There's an event going on in Miami right now. What is this event that's going on?

So it's just, actually, it's from one to the other. I was at Trade Tech FX. So that's my traditional business, which is all about foreign exchange, which trades $7 trillion a day. So it's traditional asset managers and the biggest banks in the world. So I've hopped across the bridge to go from FX to crypto. All right. Now let's talk about the legacy FX market first.

$7 trillion a day is total market, or that's what you guys do? I wish I did $7 trillion. Okay, I was going to say, all right, so that's the whole market a day. It's $7 trillion a day. So look, the way I look at foreign exchange, and you've got a view on this, I can imagine that could be crypto. If you imagine, as you said to me yesterday,

that fiat currency won't be around in 20 years, well, it's only going to be replaced by crypto. So that's just global trade, right? So people making things in Thailand and selling them in Home Depot in the U.S., right? So you've got Thai baht trade or Korean won trade versus U.S. dollar. So that can be replaced by crypto. seven trillion dollars a day two trillion dollars is spot so i i need dollars for my tie bot today

and then there's people going well hold on a second the next tranche of the market two trillion dollars would be the swap market so um hey i'm long tie bar today i don't need to deliver it today but i want to win some interest in overnight so i swap that out either overnight or on a weekly basis or a monthly basis all the stuff also you're seeing in crypto guess what that's kind of you know the lending market all the things that the sec are looking at right now and then you've got the forward market like i know i need so that'd be another trillion dollars i know i need x amount of time up to pay for my shovels that i'm going to sell in home depot in a month's time and and then you have a non-deliverable market which is kind of i want access to korea to india to

Indonesia to Brazilian real, but I can't have an onshore bank account. So I just invest in the, uh, the economic interest effectively of that. So that is the FX market. That's what we do. In terms of Elmax, we operate six exchanges. Um, we trade about $30 billion every day. Jeez. So yeah, it's big, but you know, compared to the whole market, there's a lot more to win. Yeah. Yeah. Opportunity. That's it. You know, I said to you, you know, we did last year, So we averaged, of that $30 billion, we did $1.5 billion a day in crypto. So if I follow your thesis...

That'll get bigger and bigger over time. There we go. Yeah, so when it gets to $3 billion, it'll be 10% of your daily volume of common crypto. Explain to me the infrastructure differences in an institutional exchange versus a retail exchange. There's a lot of people who watch this who, I won't name names,

they go to all the retail exchanges. It's a good enough experience. For the most part, there's liquidity. they're able to buy and sell the assets they want sometimes there's a little bit of high fees sometimes there's downtime you know whatever but like from a retail perspective it gets the job done um but they're also not buying and selling 20 million dollars worth of bitcoin i don't want to speak for the audience they're very very wealthy obviously uh but getting wealthier by the minute yeah yeah that that's not what they're really doing right it might be kind of hundreds

of dollars thousands tens of thousands of dollars and so uh institutions obviously have different needs like how do you think about the difference in the infrastructure from a retail exchange so it's almost I sort of see it horizontal versus vertical so look I have empathy with those retail providers it's a bit like after the Superbowl ad

what do you say this was a great ad and so many people clicked on it or you say hey they were down for a minute so if you think about it in retail they've got to go horizontally they've got to accommodate for say a million users online at any one time asking a lot of different questions

so they'll be saying what is the price of bitcoin what is the price of ethereum can i see my statement can you show me a chart hey is is there a news feed from the pump you know all of these questions i mean i need to be able to service that so low latency or speed is uh is not the key prerequisite now in institutional trading there's three things that matter does it work is it fast is it cool guess what we never get to the third bit we never get to the cool bit which is probably where retail is right so how do you compete how does one platform compete with another in retail land well i should be a bit cooler or offer something a bit better so what that manifests itself in is i can't have a down second i can't have a down millisecond so lmax digital has been

around four years we haven't had one down millisecond on the exchange um ever since creation never wow and it's on my web page by the way you can go to web status pages just we don't go down right because you can't go down because it this was born out of um an fx exchange so the biggest banks in the world so we've got 35 banks connected all the largest proprietary trading firms in the world connected and they want to trade in response times that are now measured in microseconds right so response times roughly around 70 microseconds less than a millisecond what's a millisecond everyone it's the blink of an eye okay so jesus they want to know that response they want to send their order in have it acknowledged and have their trade acknowledged within microseconds now if i'm

down for a few micros or a few millis they just go somewhere else and they don't come back so very simply that's how we architect our exchange and that's the vertical thing i answer a few number of questions a lot in any one second so i process through non-farm payroll on a 1 30 on first Friday of the month, I'll probably process 100,000 orders per second. And I've got to do that sustained for five minutes. And if I'm not- So 100,000 orders per second for five straight minutes as people are trading off of data that just came out around the non-farm payroll. Yeah. So that's probably the key difference. If you think about it, what am I offering? I'm really saying, hey, do you want to buy or do you want to sell? And what's the price now? Not just

now now now what's the price really now and has it changed really now and by the way you must confirm to me within a microsecond that my trade is done because the biggest risk and you know the terminology the biggest risk is an out trade and you'll see that even on the retail platforms like hold on a minute i was trying to buy or it's going to sell am i done or not your biggest risk is you're sitting there going hold on a second am i long 10 or am i short 10 where am i and invariably if you don't know that price move is going to be against you so it's a it's just a different architecture and i think trying to put the two together that some of the retail guys are doing is tough because it's just a different layout it's just a different structure you've got

to architect it right from the beginning you can't suddenly go to a retail platform hey guys can you just do what lmax does and process seven billion orders a day right and make sure i've got latency measured in microseconds, you can't do it. You've got to get it right in the first place. So when you think about 100,000 orders per second for five minutes, how many could you guys handle? Could you handle 250,000, 500,000? How many is the maximum amount that you could actually handle?

You know what, you need to come and work at LMAX because my CTO, I ask him that question every month. So if I say, if we see the biggest, say, I think the last one we saw, the biggest spike was about 140,000 orders. Wow, in a second. Yeah. What was it, four?

Non-farm. So he tells me, hey, look at that. That's really good. That was our peak. And I went, okay, well then you can imagine this market's going to expand,

so you better build it for 500,000. So we're always adding, and it's back to that, does it work? Is it fast? Because they're not going to thank me. Institutions are not going to thank me. If I suddenly go,

hey guys, I did double the orders, but I also doubled or tripled the length of time your response time. So when it comes to crypto, we're fortunate. I'd like to say we were prescient but we entered crypto, started building it out in 2017, launched it in 2018 and I just lifted an FX exchange. Because guess what?

Bitcoin dollar, Ethereum dollar trades a bit like Euro dollar and a bit like cable. And much less of them. Correct. And I was like, I said, well, let's just move that infrastructure over to bitcoin so when we have all these spikes and you know you've seen the liquidations in asia you've seen what happens on the retail platforms i swear everyone calls me so investors call me

clients call me family call me how did you cope yesterday i'm like it was a blip it wasn't even a blip for us i mean the day the last time when you you probably read that you know all the all the retail exchanges were down my order rate was about 10 000 a second for bitcoin but remember So it's the same architecture, right? It's the same hardware as I have in my FX exchanges that can accommodate 10X. So I say right now, I could trade, we could execute every order in the crypto market today,

bar none. With the current every single order. Every single order. Pipe it in now, it's done. And if anyone disagrees with that, then, you know, put them in touch, right? What do you think the total orders are in crypto right now? I don't know, you tell me.

well the thing is actually you can almost work it out because I do know one thing compared to everyone else we're a factor quicker which means we have like so 10x quicker than the next best that's just a fact

from a speed standpoint speed but also obviously speed matters because what happens is it's just like it's just plumbing how do you get it down the pipes because I can process it faster I can take 10x down the pipe All right, I'm going to start asking you questions.

If you don't want to answer any of these, don't answer because I don't know what you want to talk about. First is, do trades coalesce around liquidity or performance? And that's more of like a chicken or egg question. Like, does performance bring liquidity or does the liquidity create the infrastructure that needs performance

and then that's where all the trades come around? How do you think about that? great question nice great question um you know what with that the best performance in the world without liquidity i'm not going to get any flow yep and this is why again i'm not going to criticize those retail platforms out there they have huge volumes huge amount of customers huge natural interest fair play to them so um if you like and if you're a market maker out there You just want the most volume, the most flow. So you're going to go there.

Even though you're going to say, guys, the performance is a bit chonky. But I'm going to put up with that. And by the way, the way you put up with that is the pricing is slightly worse. You increase your prices because you're actually having a little bit more slippage, et cetera, that you're dealing with. That's what they're going to do.

Whereas on an institutional exchange, you would expect tighter pricing because it's more accurate, more precise. So look, we need to be a bit of both. We need to make sure that we can scale 10, 20x and then we've got to keep engaging with the best liquidity providers in the street. And remember, that's how we started.

Why is LMX Digital around? These liquidity providers, these market makers were already in the market and they're making all the retail exchanges in Asia. Then they came to me and said, David, we need some institutional grade architecture where I can risk transfer with like-minded participants. So they came to me, they approached me I think

because of the performance but if number one was the only liquidity provider in there and they were the only customer then I wouldn't have an exchange. When you think about this business do you just go directly to the institutions, family offices, prop, trading desk, etc. Or do you actually provide a white label

or a B2B solution to some of these other exchanges so that they can execute with your performance but through their interface? Not quite the white label, but I would say I'm connected to most of those retail exchanges today. And that's to help them, to help their liquidity. And if you just, if I step out of crypto for one second,

if you'll allow me, in the FX world, I have 200 brokers as customers, right? Now they're effectively like the retail crypto exchange in FX. They're selling to the smaller customers. They're onboarding a million customers a month or a year. That's not my forte. That's not what we do. So I don't compete with those brokers. What I do give them is efficient, precise execution and scalable architecture. So in crypto, you see a lot of these guys that have been very successful and they are all things to all men and women. They are the best brokers. They're the best tech firms and

they're the best exchanges but i think maybe now they're realizing that at times they need help with liquidity and execution and that's where they're opening with us so i like to think um look i'd love us to just be the utility exchange going forward for crypto so all the names you talk about all the guys that are advertising at the super bowl connect right and they source a lot of liquidity from lmax digital how do you think about what tokens or assets to list and allow people to trade is it just like go wild and put as many as possible is it just the ones that meet a certain like uh liquidity or volume threshold i ask you what's hot and then you talk to me no look it's a couple of things like the easiest thing in the world for an exchange to do is

list a new token list a new asset very simple when i go back to fx you know we list 100 currency pairs and in fx you need to have more candy in the candy store i need more candy in my lmax digital crypto store but in order to list it i need to be able to store it effectively right so and the next big step for us is the storage of erc20 tokens so then that sort of will open up maybe 100 coins that potentially i can list and people want to trade but and you know this better than most and i'm sure your your viewers will in the institutional land they don't thank me if i list a coin and then i'm not offering two-way liquidity 24 hours a day after that so if it's illiquid and it's long only it's not an exchange product so first of all can

i store it are my customers secure are they happy that their money's safe with us yes that's number one number two is do i have liquidity so if an institution wants to trade five million dollars at any time of the day um they can do that so that's probably how we make the decision you know we launched only really with bitcoin ethereum added bitcoin cash light coin xrp just added usdc and solana hopefully within six months we'll extend that probably the top 20 but i'm not going to say top 100 at this stage joe what questions you got from like an institutional standpoint what are the conversations you're having right like are people fully on board with developing this market similar to other markets you guys exist in now in fx and others or is

there still some skepticism around kind of how big this market could be there's a bit of the latter yeah i mean anthony would have seen it last night he came to you know an event we had with some institutional investors this look i said to you before you know 34 34 banks traded me in fx four years ago zero zero of them took our market data feed or said they're interested in crypto now 14 of them take our market data for price discovery so that's they might be a little bit skeptical but they know they're going to have to do something and i think if you just follow your thesis which is look uh over time uh cryptocurrencies are going to replace fiat and inflation hedge etc then their customers, the customers are asking banks

how to access this. And if you don't give me access, I'm going to just open an account with the retail exchanges. That's happening today. So they might still be skeptical, but the biggest banks all have a strategy for it. Now, I've just come from an asset manager conference, right? These are guys that manage trillion dollar funds.

The biggest one there today manages an $11 trillion fund. They're not rushing into it, right? but they're going to have a small part of their portfolio and some of them are just saying it's too risky and when you push them on it like what do you mean too risky it's just risk they don't understand

so it might be they're coming up against credit risk that they don't see in traditional markets like they don't have a CCP they don't have a prime broker they can't just go to the bank so it's like I don't really understand this credit risk if I move into DeFi

I don't really understand this software or technology risk or this hacking risk that I don't have to deal with if I buy Tesla or if I buy euros or if I invest in gold. So I'd say they're being cautious. The thing that you'll see changing is just the increase overall in the size of crypto. So $2 trillion valuation today is good. $3 trillion was better.

When you get it to $10 trillion, i.e. about the market cap of gold, then it's in their face. and skeptical or not they're going to have to offer this to their investors and to their to their stakeholders are there a lot of customers that you guys have or partners uh that have multiple entities so for example a lot of hedge fund managers also have family offices or something like that i'm assuming if it's good enough for their institutional asset manager they're probably hey let's just replicate the same infrastructure of the family office uh

If that is true, do you see some of them being like, we are not yet ready at the hedge fund, but they're personally buying and selling? You're smirking, so I'm assuming that's happening a lot. A hundred percent, yes. You know, sometimes I think we paint the wrong picture of institutions, right? It's like they're faceless institutions.

You saw some of the people in those institutions last night. I guarantee you all of them owned Bitcoin. I'd be surprised if it wasn't 95%. Put it that way. It's just that they work in an institution that hasn't yet accepted it. Likewise in fund world, just imagine you run a billion dollar fund.

They go, hey, here's 20 bucks. They allocate that off to a smaller fund, a feeder fund, to a family office, and they see the performance there. If you like, they're testing it there. And that's probably, from a fund perspective, how I would describe our sort of fund customer base right now. So you're not getting the trillion dollar fund trading yet.

I hope they come. It's the smaller feeder funds or test case. You're based in the UK, which has a different kind of regulatory jurisdiction. How are you guys thinking about, we have customers all over the world, we service this global liquidity. The US has one regulatory jurisdiction.

the UK obviously is different and then you go around the world I'm assuming there's some differences in the FX world but it feels like crypto there's more bifurcation there's more uncertainty we're figuring it out how are you guys dealing with that right now?

So I think that's fair we're just going to make a choice I've got clients in 100 countries so if you imagine look at FX land I'm regulated in the UK by the FCA I'm regulated in Europe under ESMA

I'm regulated by the MAS in Singapore I've got registration in New Zealand I've got regulation for crypto in Gibraltar now you're going to say why Gibraltar David well the UK didn't have a crypto framework but so I wanted to have regulation we think it's a good thing plus some of my customers

they just want to see that stamp of approval so you end up with they had a digital ledger framework, the UK didn't. I approached my home regulator, which was the FCA. They said, you know, carry on, David, but we haven't got a framework. We'll let you know when we do. It's difficult in capital markets, but let's step back a little bit and remember why we have regulation. Mostly it's trying to protect investors. Now you and I can sit there and complain about them and say, you know, it's a pain in the ass. Look at all these regulations, Look at all these rules.

But mostly it's to protect actually private investors mostly. That's what's there. We have to adapt to it. I think what's different in crypto is there's a difference of opinion amongst global regulators what these assets and what these products are. I think everyone's almost accepted that Bitcoin is not a security. That's different when you move into the token world.

And I think that's the big debate in the US right now. So I'd have to be very careful. If I launched a token and I offered that for sale to a US customer, I'd be very nervous about that because I do think the SEC would say that's a security and you need to be regulated over here. But generally when you come from an institutional standpoint, they've got entities all around the world themselves

so they go, you know what, we're not regulating, and they're not doing anything wrong, we're not regulated to trade this from our US entity. We're going to onboard you from our Asian entity where we are permissioned to do it. Like in Singapore, for example, there's permission to do it. game on. One of the other things that you have a unique perspective on is I keep coming back to this idea that regulators will be able to write law into code. And, you know, I use kind of a very

simplistic example, which is, let's say that you're a credit investor, I'm not, you're going to trade me a security, I'm not allowed to buy it. And historically, they spent enormous amounts of money, time and energy to go figure out, hey, what happened? Who are the parties? Let's build a case let's go prosecute these people um and it's very reactive and and that's why it's so uh uh time consuming and cost consuming if they can simply just write software that enforces the rules they become proactive and so just on that alone if all of a sudden regulators could basically save a bunch of time money and energy and also create a more efficient safer you know kind of better executed market i think they're interested in now how do they do it how long does it take

all that's up for debate we'll see but let's say that that does start to occur yeah uh along that path you start to get the digitization of other assets as well so it's not just fiat currencies that now are being traded it's not just cryptocurrencies that are trying to either be currencies or you uh commodities if you will now mortgages now you know other types of assets get digitized is there a thought process where like you guys will also have to similar to the banks and others like kind of navigate some of this stuff or do you think of it as just like no we haven't really gone into other markets outside of what we do in the legacy world like we know what we do and we know what we don't do and so you take a similar approach in crypto as

well i love it i think it's a great idea and i think you know that we've discussed it vaguely you know back at the headquarters if you like but a compliance coin an onboarding coin you know if you think about the whole premise of crypto a lot of people like the anonymity right global anti-money laundering rules is you can't have ultimate anonymity right and comply with global laws but would you accept it that it's inbuilt to your coin it's inbuilt to your token and you can see who accessed it so it's not accessed for all right all your kyc information is locked up in the token. And only if the law enforcement agencies

want to look at it, will that be open. Would you permit that? So I think, you know, you could maybe, look, I'm not sure it'll ever happen. Regulators tend to be, they're going to be five to 10 years behind the market, quite rightly, by the way, because not every new thing works, right?

Whoever launches a new coin today, why should they create regulation for that? It might be gone tomorrow. So now it's probably the right size for them to be assessing crypto. But yeah, look, I think it's, I think that's, you know, you're back into probably above my pay grade,

but, you know, what can blockchain technology be used for? I think it's possible. And I think it can create what you want, what I want, what all your viewers want. It could create a more frictionless market. The biggest problem we all have

with every market right now is friction. I, it's hard to access it. now don't tell me anything you're not supposed to tell me uh talk to me about like the brain drain from legacy finance legacy tech it feels like a lot of folks who especially people who are paying attention to crypto like oh this is exciting you know i want to go to the frontier in various some want to go work at uh centralized equity based exchanges some want to go build in decentralized finance i want to build protocol there's a whole bunch of stuff to do you're unique because you actually have a crypto component to what you do right um are there

trends that you notice internally of like people wanting to shift into the crypto unit maybe people who go there and want to shift back and like hey to screw these people uh do you see that it's become easier or harder to recruit just talk to me kind of like how crypto is impacting uh talent and kind of recruiting process thank goodness we have a crypto one thank goodness we have lmax digital i like to think our technologists are amongst the best in the world um they're the modern day rock star right so i'm old enough i started on trading floors and the traders were the traders were the rock stars now it's the technologists if we more than money like more than um flexing more than the brand it's give them challenging problems to solve

the blockchain and crypto is full of challenging problems that haven't been solved yet and no one's around to tell you you're wrong or it's been done before because it hasn't so my attrition rate in technology department last year was zero percent wow in the company it's around 15 percent lower than normal i'd expect 20 percent because people young and they move on um because of the pandemic etc people are moving less but i don't think A, I'd be able to keep my talented crew. We also increased the tech crew by 40% last year, looking to increase it again by 50% this year.

If I wasn't doing crypto, if I wasn't offering challenging problems, I think they'd go elsewhere. Intellectual curiosity keeps people interested. Think about it. You know yourself, they're engineers. And they can't turn that off. And how many of them are,

I want to work on not crypto, or I want to work exclusively on crypto or are they like straddling both sides? Like what are you seeing there? Okay, so you don't let me sit on the fence, but I'm going to say they straddle both sides. But I can tell there's some who love crypto and see that being what they do for the next 20 years.

Yep. But actually beneath it all, I'd say all of them just love the technical challenge. It's something new. How do I store it? You know, we looked at custody, for example. They never looked at HSMs before. they never looked at the makeup

the computational power within those so they ended up talking to nuclear you know guys who were in nuclear energy they talked to people who were advising the German military to try and understand HSM so that sold if you like their intellectual

curiosity so most of them are interested in that but like the rest of the planet you could probably go to my technology department and I'm going to say 40% of them don't believe in crypto but they do like the challenges I mean that's a pretty big number

yeah but they're cynics do you know like engineers, techies they're cynics and they're always looking they might believe in Bitcoin but do they believe in DeFi and all those other altcoins all they see is potential software bugs

right all software has bugs so if all you're selling them is a new wrapped they want innovation they don't want the evolutionary uh bingo type thing yeah it's uh what about you like how much fun is the crypto stuff like and has this like i was talking to a recent hedge fund manager uh who's quite large and they were like it's re-energized our entire team right like it's similar to it feels like a little bit

like the technical challenge stuff right of like new markets lots of market share uh up for grabs people feel differently about this than they do of like, oh, we're just doing the same thing we've been doing for 15 years. Is that similar to kind of how you're thinking about it? It's very energizing. And again, you don't know everything. Like sometimes, look, I've been in FX markets a long time

and you think, you know, what's new? So you stay up all night or you spend your whole year coming and trying to come up with a new product. In crypto, there's just these new challenges all the time. But more importantly, so what do I run? I run an FX exchange, I run an FX broker, and I run a crypto broker and exchange.

I go and speak to the biggest banks in the world about the FX exchange. I can tell you, you know, last time I was in New York City, I sat down for lunch with the global head of FX at one of the largest banks in the world to talk about foreign exchange. And of course, I'm trying to get more business from him. It's always the case.

We spend 10 minutes discussing how that might happen. the next 50 minutes talking about crypto. Really? Talking about LMAX Digital. Now, he does not trade with me today. Right?

Do they trade? They trade the future. Right? They're essentially, they will definitely trade the spot and they will definitely trade the future. Don't ask me who it is. I can see,

I can see that look on your face, right? No, but all that, I don't think even I'd be letting the cat out of the bag. What I'd say to you there is that they're all going to do it.

Every bank's going to do it. They've all got a strategy. But look, I just think it's that variety. I've just come from what would be quite a blue chip state type conference. You know, it's not a Bitcoin conference. There's no rah, rah, rah. But I'm talking to these guys who trade FX for a living,

like trillions of dollars of the stuff daily. And I said, you know, for you guys, you don't have to necessarily be a believer. Just trade it, invest in it. BTC, USD, the way you do EUR, USD. just start there. So now when you start talking to them like that, and I said, within the Almax group last year,

BTC USD was my eighth biggest currency pair. Wow. They wouldn't have thought that four years ago. So I'm saying, just think about that. And they go, okay. So all of a sudden, then they go, how do you store it? How do you access it? What's the credit makeup?

Talk me through multi-sig. What do you think of these other coins? What about DeFi? Can I get into DeFi? and it just it makes everything that i do better for example anthony um we trade foreign exchange seven days a week now no one else in the market does it why do we do that well because you list bitcoin dollar um bitcoin uh yen bitcoin euro so guess what you have the triangle so i've got euro dollar dollar yen euro yen so we have weekend fx markets and i said to them guys wow

if you own this if you if you know you run you work for a big fund you run the fx desk if you own bitcoin mentally at least you own seven day a week currency markets that's 27 more opportunity for you guys to produce returns yeah if you're good that's it and they've got to be super receptive to this i hope so i don't get the reception that you might get yeah because you're thinking about it and they need the approvals internally but they see that coming look the first the first point is they're human beings and human beings say hold in a minute i work hard enough five days a week i said it's okay there's 27 more opportunity for your department you can employ more youngsters more young engineers and guess what the technology

is going to do a lot of it for you right but ultimately who tells you that you can't buy tesla on other stocks are available you can't buy tesla on a saturday who tells you that i've got to wait until the banks open to send my euros or to hedge my Vodafone stock into dollars. Why am I going to wait from Friday to Monday to do that? People sometimes have time at the weekend. So look, they're a bit worried about losing the weekend. I just think it's a great opportunity

for the whole of capital markets and really for the world at large because we're going to need to, as much as you expect to do your clothes shopping on a Sunday or change your car insurance on a Sunday, you're going to expect to remodel your investment portfolio, rebalance your investment portfolio at seven days a week, not just five days a week.

How many of your friends trade versus they just buy and hold stuff? Most buy and hold. And then what about all the wealth management at the banks and stuff? Most of those guys are trading or they're just buying and holding? I think it depends, right?

There's obviously some strategic things. Part of the job of the wealth manager is to bring ideas to the table and see what they're interested in. But there's definitely more strategic buying and trading and more trading in general versus buying and selling than just long-term holding, for sure. It just feels like the whole world's moving this way.

Let's hope so. It's good for all of us, right? It's great for you. People always say, what's your view on Bitcoin? No one's ever asked me what my view on euro is or dollars or pounds or gold. I don't have to care. I'm just trying to create an efficient marketplace.

Genuinely, that's what we want to also do in crypto land. I happen to be a believer in the asset class. I happen to be a believer in Bitcoin, but it shouldn't matter. I'm just matching buyers and sellers. To Joe's point, that's it. It doesn't really matter. If you want to buy and hold,

you can access it at LMAX Digital. If you want to speculate, day trade it, do it at LMAX Digital. Joe, should we have a trading competition? Oh dear. Sure, if you want to. I probably won't be very good at it. I think that you might lose.

That's what I'm saying. I think I might lose. Hold on. I'm just the exchange guy. All right. Where can we send people, especially the institutions that want to learn more

about what you guys are doing? Where can we send them? Very easy. Lmaxdigital.com or lmax.com if you want to see the group. Lmax.com or lmaxdigital.com.

Correct. Pretty simple. Fastest trading around. Fastest, most scalable. I feel like there's a commercial in here that's just like, you know, fastest, cheapest, no downtime. When you say,

No one wants to be cheap. You want to be cost-efficient, right? Come on. You write the script. The most gangster thing that you could say is like, yeah, everyone else goes down. We never go down. That's it.

Because ultimately, people are like, okay, fine. I probably should have an account there. Web status on the homepage. You'll see it. Putting it on my homepage, that is one of those things, right? If it's on the homepage, you're going to make sure you stay up. Correct. But, you know, look, again,

I'm going to take my hat off to the guys in retail land who've done it. Just like the Super Bowl ad again, sorry to get back to it, they didn't know they were going to be so successful. And they're victims of their own success, right? I didn't have to scale for a million concurrent users. Yes, I scaled for a million concurrent messengers perhaps,

but not users asking another hundred different questions. So they'll get there and I think they're providing a good service to the private investor market. literally the web status is right there you found it he's checking me out make sure it's up right now i mean how crazy would that be if you were down at the one second that you're on here it's true it's me thinking i'm live again you can't go you can't come on here and bs awesome well listen thank you so much for taking the time to do this uh i uh i've been a big fan of what you guys are doing for a long time now and uh and generally i think people are

just waking up to the fact like hey institutions have a lot of money right it's much bigger and obviously then the retail exchanges, but infrastructure matters and you guys got some pretty good infrastructure. So I appreciate it. Good to be here. Thanks for having me. Thanks so much for listening to today's episode.

I really hope you guys enjoyed this one. Make sure you're subscribed on Apple, Spotify, or your favorite podcast player. And if you're looking to try to transition to get a new job in the Bitcoin or crypto industry, we've got you covered. Head over to palmscryptocourse.com. We've developed a curriculum

with the top teams across the industry. it's a three-week intensive training program with over 50 events packed into that three-week time period go to pompscryptocourse.com to learn more and i'll meet you guys for the next episode