The Pomp Podcast - Michael Venuto, Co-Founder of Toroso Investments: Inside the World of ETFs

Episode Date: February 14, 2020

Michael Venuto is an ETF industry veteran with over a decade of experience in design and implementation of ETF-based investment strategies. In this conversation, Michael and Anthony discuss how ETFs are built, why they’re important, the benefits of access, and what he thinks is going to happen with the Bitcoin ETF in the future.  FIGURE-----Figure provides consumer financial solutions powered by blockchain to improve financial transactions (behind the scenes) and make them more efficient, secure, and less costly. With Figure, you can save time and money! -----If you enjoyed this episode and want to stay updated on everything Bitcoin, blockchain, and crypto. Check out Off the Chain newsletter by visiting offthechain.substack.com and join 35,000+ other investors currently subscribed to my daily investor letter.

What's up, everyone? This is Anthony Pompliano. Most of you know me as Pomp. You're listening to Off The Chain, simply the best podcast in crypto. Let's kick this thing off. Michael Venuto is an ETF industry veteran with over a decade of experience in the design and implementation of ETF-based investment strategies. He's the co-founder and chief investment officer of Teruso Investments, LLC. Michael is the lead portfolio for the first actively managed ETF focused on blockchain, BLOK, companies filed in the U.S. He is also behind the launch of the Teruso ETF Industry Index, which measures and monitors the performance of publicly traded companies that derive revenue from the exchange-traded funds ecosystem.

In this conversation, Michael and I learned all about ETFs, how they're built, why they're important, the benefits of access, and what he thinks is going to happen with the Bitcoin ETF in the future. I really enjoyed this conversation and I think you will as well. But before we get into the episode, I want to talk about our sponsors as well. They make this all possible. The first, Figure. That's right, Figure Technologies. We invested a large amount of money because we think that the future of finance is automated. Figure is helping people to take out Home Equity Lines of Credit, HELOCs, to do mortgage refinancings or student loan refinancings. You could simply go to figure.com and you can apply. They'll tell you within five minutes

whether you're going to get the loan or not, and they'll fund it within five days. Head on over to figure.com and check out their HELOCs, their student loan refis, and their mortgage refi products. And lastly, don't forget that Off The Chain's not just a podcast. You can also subscribe on a daily basis to receive the email I write every morning analyzing blockchain, crypto, and Bitcoin news. You can go to offthechain.substack.com or head on over to offthechainmerchandise.com to grab a sweatshirt, a t-shirt, or a hoodie. So offthechain.substack.com and offthechainmerchandise.com. All right, let's get into this episode with Michael and learn about ETFs. Anthony Pompliano is a partner at Morgan Creek Digital. All opinions expressed by

Pomp or his guests on this podcast are solely their opinions and do not reflect the opinions of Morgan Creek Digital or Morgan Creek Capital Management. You should not treat any opinion expressed by Pomp as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his opinion. This podcast is for informational purposes only. All right, guys. Bang, bang. I've got Michael here. We've been hanging out for a little bit, So we figured we probably should turn the microphones on and start actually recording. Thank you so much for coming to do this. We've got tons to talk about, and frankly, I want to learn about ETFs.

I'm super excited to be here. I mean, the last 45 minutes, we've covered so much, so I can't wait to get into the real meat of it all. We pretty much already recorded the podcast, so you guys missed out. But all right, let's start with your background and kind of how you got to ETFs, and then we can get into exactly what's going on there okay so um i guess at this point i'm kind of known as the etf nerd i gave uh some little uh trinkets out earlier but how did we get there uh my background i actually grew up in north carolina oh so did i where in north carolina

uh charlotte um i did spend some time in chapel hill i know you guys have that presence there i went to nc state actually ah very cool i was a duke fan yeah that triangle something's happening Every friend I had was a Carolina fan or a state fan. And they all thought I was weird for being a Duke fan. When I was a kid, I was pretty good at chess and debate. And that paid for me to go to school. And I studied philosophy and religion. Certainly didn't ever think I would be in this industry.

Really? Wait, how do you get to school on chess and debate? They give scholarships. Really? For chess or debate? I got the primary money for debate. yeah but they still wanted me playing on the chess team however there was this thing called girls and uh the chess didn't work as well but it's nice because you know chess translates into a

lot of other things yeah well hold on i want to talk about the debate for a second because uh to me it was always like they were trying to teach people how to argue uh and it seemed like the people who were just good at arguing to begin with like had this natural inclination uh but the the the education of how to argue or debate uh didn't really seep in in like high school etc did you have a different experience actually going through it no you're a hundred percent right it was it was really process um my we said we'd go some rabbit holes here so here's one my proudest moment in debate was i was at uh berkeley for a tournament and i got the first ever tie what is that so nobody ever thought there could be a tie yeah right and i was losing bad and the argument

they were making against me was a critique of my language that the way i was going about trying to win this debate was oppressing them right and i was like well then there can't be a winner and i won a tie so how do they determine who the winner is there's a judge there's a single judge well in the final rounds there's usually three judges okay but in the you know usually you do like six rounds and then you're in the finals but that's my crowning achievement the first ever tie that's pretty good yeah well maybe it'd be better to win but i was definitely losing so i'll go for the tie got it um all right so you go to school chess debate etc what do you do after school so um my grandmother passes away and my grandfather's left up here alone and i think before i figure

out what i'm going to do with my life let me go to new york and take care of my grandfather for summer and i had this friend from my childhood who was there and he was driving a lexus and uh you know the the joey tribbiani kind of stereotype that was this guy and i'm like what do you do he goes i work on the stock exchange i go what do you do there he goes i don't know that that's i wish i was kidding i'm not gonna say his name because he's a good human but uh uh so and he was just like a classic uh new yorker slick back hair gold chain the everything i'm envisioning right now everything whipping the lexus working on the stock exchange floor probably slamming donuts in the morning the whole nine yards right it right at 1999 ish

yeah 1999 2000 money falling from the sky bonuses are inflated yep i mean and he didn't know what he did um i know what he did what did he actually do he was a clerk for susquehanna or bear hunter I don't think it exists anymore, but it became Goldman or something. And so what do the clerks do? Nothing anymore. They barely exist. I mean, that's all been digitized. But when I saw that, I said, I'm going to write a book about how horrible Wall Street

is and all these terrible things. I'm like, philosophy, religion, this is my chance to tell the world how terrible this is. Yeah, fuck capitalism. Fuck them all, right? But here's where the story turns, right? So then I make two or three phone calls. I get an internship.

my grandmother buys me the worst sport coat i could ever imagine the other grandmother not the one that passed away and my grandfather gives me a pair of like alligator shoes they were the most uncomfortable freaking things i've ever seen and i look good though no i looked i look like a 22 year old lost kid who did not belong there who was a philosophy and religion major who's about to fuck up wall street yes yes who's gonna write this amazing critique i knew nothing okay uh so i get there and immediately actually fall in love with it it was like a meritocracy right it really wasn't all these high-powered brains just trying to scam the system was a lot of like blue-collar workers down there on the on the floor making what is now being done by

computers right like um but i fell in love with it three months into it uh first union offers me a job as a broker spent a year and a half learning what not to do and then i landed at a hedge fund mutual fund shop called horizon kinetics all right before we get to horizon uh what did you learn not to do oh so when most of the broker trading programs like if you've seen the movie boiler room or wolf of wall street all those i hate to say it they everybody thinks it's an exaggeration it's actually much worse i mean it was worse than that yeah in what way the part of wall street where they're doing the selling is a horrible part of wall street yeah right those cold calls those get the client in churn them all that sort of stuff doesn't matter how big the bank is at least

20 years ago it still existed that way yeah i can't say it does today because i don't i don't do it anymore and i never did it i i didn't succeed there i've had people come in and say basically their job was when they joined one of these brokerages they walked in in the morning you know 8 8 30 right before the market opens and the whole goal of the day was 800 dials yeah let's go yeah and just smile and dial smile and dial and let them keep going and you just heard no no click no click no answer no click no answer and then somebody wanted to talk to you and it was just reel them in to get them to buy a stock a hundred percent yes that's fucking crazy so so you'll appreciate the north carolina connection i'm working at first union okay in new york nobody

in new york knows what first union is everybody in the south does still had a southern accent i know you don't believe it now are you hearing me now you sound like you're uh joey from the bronx yeah all right i sound like that kid who got me into the exchange um but i was calling north carolina businesses and they're telling me to sell them global crossing convertible preferreds or sun microsystem stock or uh the aol time warner merger and i'm like what the hell i can't do this So what I did is I found these closed-end funds that were municipals for North Carolinians, and I called every North Carolinian and sold them that. And I got my 50 accounts, and I did everything I was supposed to do to get through the system. And then my senior broker looks at me and goes, you didn't help me at all. These guys aren't going to buy another thing from us. You sold them the right thing that they got to buy and hold. Right? So that's what I mean, but I learned what not to do. Yeah. It's almost like there was a very binary outcome there. Either you did something good for you or you did something. Yeah. Makes sense. That's been the biggest problem with finance

for a long time. Actually, that's what I do love about ETFs. I know we're going to get there eventually, but it's that transparency. It's that client alignment. That's why I got there eventually. Yeah. What's the craziest thing you saw? Like the Wolf of Wall Street, the boiler room, like what's the craziest thing you saw all right so there was this one day no names no names there was this one day where we were close to the end of some of this like the markets were crashing and a couple brokers lost their job and in protest they ordered 1 000 white castle burgers to the floor of the exchange you didn't see it on tv because they did it in one of the back rooms there used to be like six rooms now you only see one there's really two left but we all only see

one and they filled that room with that just to piss off grasso was the head of the exchange at that time really yes and then they had another trick that's not that crazy well no here's where it gets crazy um so they brought in the burgers the other thing is there's no way to get alcohol into the exchange legally there was a firm down there not a firm a restaurant down there that did red bulls this is before we had red bull as a energy drink or whatever a red bull back 20 years ago was a tomato soup that was half vodka so he ordered like two or three hundred of those as well and was handing them out and so it did get crazy right there's like a mountain they're like jumping into this mountain people get they're fucked up on the stock exchange floor and they had their

stomachs full from white castle yes there was i mean there was all kinds of crazy things back there was two clerks that worked down there that sold pornography like videos back when there wasn't really an internet yeah there's i'm sure there's tons of weird stuff for this so in 2000 and uh shit i think 2010 i actually spent a little bit of time uh at the new york stock exchange doing an internship and uh i didn't know this but next door to the stock exchange there's like a building attached to the actual stock exchange uh it's an office complex right like executive center and uh one of the buildings uh one of the offices up there i forget it was like hustler magazine or something and uh and that was like the talk of a bunch of the traders etc was

they were always looking for excuses how do they go up there because uh it was all filled with you know porn and all this kind of stuff it's it's amazing what entertained people back then and back then they had the super bowl poll pool there was 10 000 a box really and one winner one million dollars you know and i was 22 and i'm looking at all this going these dudes are rich as shit and most of them are blue collar and they're they're actually just working hard to get it um but i also watched them all disappear right when i was down there there was 10 000 of them and now i think there's like 500 oh i would be surprised to see that many but yeah yeah they're still walking around the guy who gave me my first job down there is still down there he's

still a floor like governor or something like that you see him on tv every day yeah you just know it so so the other thing that uh a lot of people don't know and i forget the guy's name and i wish i remembered but there's one guy who has been the overseer of the berkshire stock uh and he's been doing it for like 20 years or whatever it's been like basically he's been the one guy and uh in 2010 he was still down there and people would walk over and talk to him and stuff and he said look there's the two share classes and he knew everything but he was mid 70s or maybe even to his eighties then. And, uh, I remember asking him, I said, uh, how long are you going to do this? And he goes, why would I stop? Yeah. Yeah. I mean, if the human intervention is still good

and it's really the guys that do guys and girls that still work down there, they matter from 9 AM to 10 30. And then again, from three 30 to four 30 in the middle of the day, unless there's a disruption, that's why there's 500 instead of 10,000. Yeah. So how do you go from learning everything not to do uh to horizon what was that like so horizon was like eye-opening um it was such a different mentality right it was like they were managing their own money plus they had this internet fund even though they didn't believe in the internet but they they wanted to diversify and it was all about how do we find things that everybody else is ignoring actually that's why they're in crypto now like they're one of the few rias that actually do it um and uh

four or five years in, I went from being the fourth employee with a company that had a billion to like the 20th employee with 40 billion. We had 40 billion with 20 employees. It was amazing. In 05, our biggest position was Newmont Mining. And we watched it go straight down, like falling off a cliff, but gold went straight up. And we realized it was because the access has changed, right? So GLD, the first ever fund that could give you liquid exposure to gold was launched right at the end of 2004. And so all of our big clients, the Soroses and the Einhorns who wanted gold exposure now weren't getting it through the miners. They were getting it directly through the commodity. And we realized, well, Murray and Peter and them realized

I was still pretty young. ETFs are threatening the business of two and 20. ETFs are threatening the business of 125 on a mutual fund. ETFs are threatening pretty much everything normal in the financial industry. ETFs 10, 15 years ago were scaring people more than crypto. So they said, how do we hedge this? And it was a boutique firm. So young guy gets the job of how do we hedge this? And it became, let's get into the index business. Let's become angel investors. And some of the startups we got very involved with wisdom tree very involved with emerging global advisors we looked at a number of others and we said not only we want to invest in some of these we like incubated them in our offices to learn that whole creation redemption all that sort of stuff

fast forward to 2012 i said it's time to do this on my own and i started terosa what's what's the biggest thing you took away from learning uh to working at horizon oh stay with what you love right so i loved the research part of horizon i loved the trading part i loved making the deals by year 12 i had become in charge of 20 or 30 people and i had a person above me and then i managed a company and then 20 below me and then the clients and I became a manager of people, not a investment guy anymore. And six months of that was enough for me to say, guys, thank you so much, but I'm going to go start my own company. It was nice when they said, well, we'd like to invest in it. So you can't leave on better terms than that.

Yeah, absolutely. And so what was the general idea? You said, hey, I want to go do this on my own, but was it, I want to go invest in ETFs. I want to create ETFs. Like what was kind of that original idea that you had that really pushed you over the edge to leave? So for all you entrepreneurs out there, your first idea sucks. Your first 10 probably suck. So our idea was nobody has ever looked at ETFs under the hood. They've all said, if it says it's small cap, it must be, and I'm going to buy the cheap small cap one. And we thought, what if we look and make a research firm around what's actually in an ETF, right?

So for example, the Vanguard small cap ETF, ticker VB, if you go look at it, it's actually like 58% mid caps. So we thought telling people that they would give us money to manage. Guess what? They didn't. It became a really bad time. The other big ETF firms like F squared and good Harbor and Windhaven, they were hitting some hard times.

So for the first three years, we completely floundered while we built a brand around research and content and technology to look at ETFs, we were impossible for us to get in assets to actually manage of portfolios of ETFs. I think we stayed at 30 million in AUM for the first three years. Miserable. Yeah. And so as you're doing that, do you think, hey, we made a mistake and this doesn't work? Or do you think that we just got to kind of keep plugging along and then we'll get more assets? What's the thought process that you're going through when it doesn't take off how you originally thought it would? Yeah. You have to commit to things, right? You have to give them their real try, but you also can't walk into that definition of insanity for too long

because then you end up bankrupt. So I would say we kept trying for three years, but we had this one little piece that was a different angle. We were doing some consulting work for GlobalX funds using the research and technology. And that helped grow some of the assets at GlobalX. So on that year three, when we said, let's keep the research, let's keep the technology, but instead of monetizing it through trying to get SMA models, let's go out and use this to help other ETF issuers grow. And the very next day we had Direction as a client and then Robo Global as a client and then EMQQ as a client. Today we actually represent like 14 or 15 issuers. And it was just an epiphany point.

Today, we're eight years old. Really? Today? Two years? We did a party on the New York Stock Exchange floor on February 5th, eight years ago, to launch the business. Congratulations. It's like happy birthday, basically. It's kind of a happy birthday.

I didn't know that. I didn't realize it until Facebook told me this morning that this was a memory and it has the picture of the exchange and the date. Damn, I would have got a birthday cake. Ice cream cake is my favorite, though. So first three years lost, reposition, two years of getting to sustainability and the last two or three of finding scale. Okay. And so describe what the business does today, because you guys have kind of multiple components to it. Sure. So we oversee about 2 billion in assets. We have a traditional wealth management platform, five or six advisors that use ETFs under our

tutelage to help people invest. Then we have a traditional asset management platform where we're the sub-advisor of the active blockchain ETF, the active battery metals ETF, the active gig economy ETF. And we still manage some assets there that, you know, that's about 600 million as well. And then the last piece is our title ETF services. That's under our umbrella. Anybody who wants to launch an ETF, they come to us. We help them launch it. We help them grow it. We did eight funds last year, including some really innovative things like helping Blue Cross Blue Shields equitize their cash in an ETF and helping SoFi, the student loan lender, launch four ETFs, including the first free ones. And those eight funds raised $620 million in the first year.

That's crazy. So describe what exactly is an ETF? Because I think a lot of people hear ETF, they've seen all the people on Twitter or CNBC, et cetera, talking about ETFs. like what the hell is an ETF? Okay. So I'm going to quote one of my friends, Reggie Brown. I'm the ETF nerd. He gets called the ETF godfather. He's the one who kind of 26 years ago helped build all the pipes for the trading of it down on the American stock exchange and stuff. And his definition of an ETF is it's a mutual fund with benefits. And he says it very sultry. What does that mean? So it really is just that simple. The ETF is created under the same laws and same regulations

as a mutual fund. It really is the exact same structure. It is exempt from one rule. And that rule is that it prices once a day. So mutual fund, same thing as an ETF, but only prices once a day. ETF prices every second. Now, once you price every second, you get all these unintentional benefits. Okay. One unintentional benefit is you have to be able to create and redeem intraday, which means there's massive tax benefits. What are those benefits? So an ETF through the creation and redemption process, as long as there's flows, may never generate a capital gain. Most of them haven't. So if you took the same strategy and had it in a mutual fund wrapper and an ETF wrapper, most likely you're going to get a superior return after taxes out of the ETF version.

Got it. Right. It's just a distribution of taxes. So I love ETFs because I go back to the philosophy and religion. They're transparent, they're liquid, they're tax efficient, and they tend to be lower cost because they don't have all those embedded fees to pay the old brokers of First Union that I used to work with. Um, so it really is simply an access point. It is a better technology. It really reminds me of the precursors to what blockchain and things like that are doing to finance now. It really decentralized a lot of the original investments. And so give me some examples of like the most popular ETFs, right? So they're exchange traded funds. They basically are these baskets, if you will, of underlying, usually public securities or liquid assets, but what are some of the popular

ones? Okay. So this is a great question because I have an awesome resource for everybody and it's free. So we run this thing called the ETF Think Tank. It's literally etfthinktank.com. And it has on a daily basis, the answers to all those questions. And there's no ads. It's not a paid site. We just wanted for the ETF nerds out there, an aggregation site, right? And on there, it'll tell you that as of today, there's 4.4 trillion in U.S. dollars in ETFs. 4.4 trillion. 4.4 trillion. Damn. Okay. Average expense ratio, 19 basis points. Expenses. Okay. Okay. So that's pretty cheap, right? If you think about where it's going. The open to close ratio, this is one that I love. In the last 12 months for every ETF that opened, no, for every 1.56 ETFs that opened,

one closed got it so net gain every year it has been but it used to be for every three that open one closed it's been consolidating the industry is waking up and saying we can't just have six etfs for every little subcategory i think of it as a good thing another one that's i love to quote right now on average etfs own 7.5 percent of every u.s stock in terms of their market cap. ETFs own 7.5% of all stocks based on the market cap. Yep. When we started calculating that eight years ago, it was 2.67. Got it. So 3X essentially. Over the last seven years. For 26 years, ETFs assets have grown on average at 19.6%. So this is a private equity kind of growth. Yeah. Annualized. Annualized. How do I just invest in that? And that number keeps going

up man i where were you to i i did launch an etf once to track that okay and it was you know everybody's came out that's the meta etf we had ticker t-e-t-f right t-e-t-f okay uh two years of it out there nobody bought it why um because when it's all said and done that 19 bps times 4.4 trillion only equals about 8 billion in revenue so when people think of it they know the etf industries growing, but they don't see an $8 billion industry as huge. I mentioned to you earlier, the pet care industry generates $50 billion. Yeah. So here's one of the questions I've got, right? It seems to me like structuring the passive ETFs, right? So there's a whole bunch of them. Let's say just SPY is an easy one, right? So the S&P 500, I'm basically going to build that

basket and i'm going to allow people access through an etf structure to put capital in uh they don't have to be accredited so it can be unaccredited accredited qp whatever they want to be uh they can put very small amounts of capital in and also they can redeem intraday etc so they can buy sell liquid market the whole nine yards uh once i create that yeah there's some like blocking and tackling that goes into making sure that it still sticks to the index or the construction, stay straight. But for the most part, it's marketing, right? Like once you get it there, is that, would it be fair to say like that's the difference between ETFs that are successful and unsuccessful is who's good at marketing what they've built or are there other

things that go into the success and failure of an ETF? So there's one step before and then everything else you said is 100% accurate. You got to get the product right. Like I can't tell you how many people come to us and go, I've got this idea. It's very similar to something else that's out there, but I've got a better index. Yep. I'm sorry. Nobody cares about your index. But explain exactly what that means. They go, all right, there's a, let's say, there's a widget ETF out there. Okay. It makes this widget and it's market cap weighted, right? And they're charging 20 basis points. I'll get people who come to me and say, hey i want to do an etf on that widget but instead of market cap weighting it i want to weight it by

the revenue of this times the x of that i got it like a very nuanced technical component change and because i've got this better index i want to charge 40 bips failure there's there's no marketing that's going to make that work yeah all people look at is you're buying the same widget you're charging me double the fees exactly that might work 20 years from now right because it's how it happened in the mutual fund industry. You had the simple funds and then people came out with a more complicated version and it built on it. Right now, 99% of ETF investors are looking at the exposure. They're not looking under the hood. I thought eight years ago I could start getting them to look under the hood. I'm eight years in and maybe it's gone from 100% won't to now maybe

99 won't. So it takes a long time to get people to look past the name, the ticker, the expense ratio. You got the name, the ticker, the expense ratio, right? Then it's a hundred percent marketing. Got it. And so what are the areas that you've seen that are not the large ones, but they're new that have come out onto the market that you're like, bam, they nailed it. Like, are there certain sectors that you've seen that, that are really get you excited? So last year defiance came out with a 5g fund. That was brilliant. Okay. 5g. And how did they construct it? Like what's in the underlying assets? It's all the companies that are in

I mean they're going to be in some of the other indexes As well obviously but it's the Qualcoms And all that that are involved Rolling it out but They packaged it all in one nice clean sector They worked with a good indexer Not like Some of these specialty

Thematic things you don't really want to go To the old school indexers right because they're going to Market cap You want somebody who's going to think and research so he Used a company called Blue Star Indexes steven schoenfeld the guy was one of the original portfolio managers at blackrock 25 years ago so he's been doing this forever and they built an interesting index but nobody cares until they actually buy it and then the guy in charge of the firm just poured all the money into marketing it

you anybody who goes in google's 5g tomorrow you're going to be chased by this etf everywhere else you go yeah right is that is paid marketing and digital marketing a big part of the etf world now? A hundred percent. Yes. Really? Um, I would, I would have thought that it was much more what I would call, uh, not dumb as in like, it's stupid, but like dumb as in not intelligent data-driven marketing. So like, how do I get on television? How do I write a blog? Like that type of stuff. Not so much. Like I know that I spend $3 and I get a customer and that customer's worth, you know, $27 and it's more like data-driven acquisition. So when I was at global X, um, we started right away into this space because actually my partner, Guillermo Trias, had invested in some of these

digital marketing firms. Most asset managers won't even touch digital marketing. In the ETF space, it's different, right? Because it is decentralized. There isn't an intermediary that we have to go through, right? Like if the end client wants to buy it, they log into their account and buy it. Whereas with hedge funds, mutual funds, SMAs, they got to talk to some old boring person to help them get to the end investment. So at GlobalX, we did things like ticker targeting, right? So if we had a competitive fund to somebody else and they looked up on Yahoo Finance,

that competitive fund, guess what? Our ad showed up, right? Nobody had thought to do that in the finance world. When we started talking to the regulators about it and our compliance, we're like, I mean, you know how it is. Most hedge funds, they don't want to talk to the press. Yeah, yeah, yeah.

You know, with ETFs, you want the masses to know because you're 100% transparent. Yeah. You're basically marketing to the masses and therefore any way you can get to them, whether it's through kind of the broad base. Let me go on television. Let me write a blog. Let me tweet, whatever, all the way down to how do I actually run a Facebook ad campaign to get you to convert? Yeah. And it better be educational. Like if you just try and say, buy my thing, it doesn't work. right show me a growth story show me how you're capturing it show me you know that i want this like when we did the originally launched the blockchain etf we were watching the google adwords for blockchain and knowing that there's this demand people want to figure out how to get

this right so you know it was so much of a demand that the sec was scared enough to not let us call it blockchain so tell me tell me the story tell me the story of kind of what you guys the thought process and how you guys created that original blockchain ETF. Okay. So this is another one of those. My partner is faster than I am at this stuff. So I had for our SMA accounts been buying some blockchain stocks, Grow, Hive. I had bought some GBTC, sold it every time it went up because I was scared to death of the premium. And he kept saying, why don't we do an ETF of this? Why don't we do an ETF of this? And I kept saying, there's not enough companies. I can't make an index. And all of a sudden there was this epiphany. A friend of ours called us and said, I've built

an index, but it's not really investable. And he said, but I'm working with this other firm. They want to do it, but they need somebody to make it investable. And all of a sudden we said, all right, the three of us are going to do it together and we're going to do it active. And that was the epiphany was, you know, three years ago when we first started this, You couldn't really do a passive version of this and get anything that's a real blockchain company. It was the fastest we've ever moved in our lives. We went from agreeing to do it to filing in 11 days. Wow.

Especially with three partners, that doesn't happen fast. But we all saw it and we all trusted each other and it's been great. And so it's important to call out here the difference between these passive and active ETFs. What is that? Okay. So I talked about mutual funds with benefits earlier. So the first benefit has always been the low cost that people point to. And over the last three or four years, people realized, hey, it doesn't have to be passive to be low cost and it doesn't have to be passive to be an ETF. And I will say the pioneer here is Catherine Wood in ARK. What she did to bring active management into the world of ETFs is brilliant because not only did she make it viable by being good at what she does, she did something even more

important. It goes back to your marketing points. With a mutual fund, you only know what you own like 35 or 45 days later. So you're not allowed to talk about what you own. With an ETF, you tell what you own every 15 seconds. So rather than find that as a challenge, Catherine embraced it and said, since everybody knows what I own every 15 seconds, I'm going to talk about it, right? So she took what most active managers would see as a negative, embraced it, and ran with

it. So today, we have plenty of active ETFs. In fact, active ETFs represent about 3% of the assets in ETFs today, but represent 6% of the revenue. Yeah. so you can see why people might be attracted. Yeah, absolutely. And Kathy has been on the podcast before. And I think part of what has made her so successful is not only one, her investments and kind of the conviction she has, but in the marketing, but also on top of

that, she really embraces the idea that anyone can quote unquote participate by kind of open sourcing and open allowing participation in her research meetings, et cetera. And it's just a very different way to think about asset management than kind of traditionally has been done. A hundred percent. Like I've never understood these people who say, I need to have a lack of transparency in order to have alpha. Well, then you don't really have alpha. So I love that she's saying, I'm going to bet on innovation and my team, and I'm going to tell everybody what I'm doing because I got no secrets. She has embodied the values of the ETF structure. Yep. It's amazing. It wasn't easy, you know, but I'm, I'm very happy for.

Yeah, absolutely. And so as you look at the passive versus active, you guys decided to go with the active model for the blockchain ETF. What was going into that actual ETF? Like when people think of blockchain companies, most of them are private, not public. Absolutely. And that, that was really hard in the beginning. It's why, you know, my partner Guillermo kept saying, build it, build it. And I kept saying, it's not ready, not ready. And then the epiphany of going active was, oh, if I'm active, I can buy IPOs 30 days later. If I'm active, I can buy a hundred million dollar market caps. So for example, last year, there was three or four IPOs that I would call very close to pure plays in the blockchain space.

Which were? My absolute favorite right now is Silvergate. Probably half the people listening to you have banked with them because- Alan Lane's been on you. Yeah. They are the bank. They went public in December. It trades at a discount to what normal banks do. At some point when the big banks want to really get in, they're either going to have to build it or they just buy Silvergate. That's a great one. uh canon you know a6 chips maker like pure play miner and chip maker yep um uh one connect financial these are some that you know came out last year but we've also got things like hud 8 and hive uh galaxy digital novogratz's company i mean it's a merchant banking company you know

they're like stakes and ethos and stakes and hud 8 stakes and all of it um gmo internet i mean they're they're just cranking away a lot of what we own at the top are these large japanese firms like gmo and z holdings and um and uh digital digital garage that primarily are doing stable coins and getting into the uh decentralized finance or they're building exchanges so i think the original negatives that everybody talked about these are just chips companies or these are just big fang names, not so much anymore. If I look through my top 10, there's maybe two names that the average investor would recognize. For sure. As you look out at the space, what are the things that are coming down the pipe that are in the private markets that you're

saying, hey, when this gets into public market investors' hands or they can get exposure through ETFs or otherwise, you're like, that's going to be a really big moment. So in terms of the public companies, I think it's going to be the spinoffs. Okay. Explain. So right now you have awesome things that are 10, 20, 30% of big companies revenue and standalone, they're a pure play blockchain company, right? So I think we're going to see spinoffs of JP Morgan, that's their blockchain business or IBM, that's their blockchain business or backed being spun out of ice right like i think that's the play play because a lot of

the private stuff is partially owned by sbi holdings or softbank or digital garage or you know accenture has an arm here city groups invested here jp morgan they all have taken these little stakes you know mastercard's gone all in um i think that for the public markets that's that's the net now the other end of it you know whenever we talk etfs everybody wants to know about the bitcoin etf right um i think that's what everybody's waiting for ironically we don't see that as a threat to what we built the blockchain etf block is a hedge against crypto as alone okay explain this uh first as why do you feel like block is not threatened by a bitcoin etf because block is the technology. It's the companies making money off of it. If there is a Bitcoin

or cryptocurrency ETF someday, block will become like GDX. So GDX is the gold miner ETF and GLD is the gold ETF. So people who want to own the protocol will buy the Bitcoin ETF and people who want to use, buy the picks, axes and utilization of the protocol will buy the blockchain ETF. Got it. And as you think about the Bitcoin ETF, what's your analysis of where we are today? I know we're investors in Bitwise, obviously. They've got one of the applications in and a mutual friend of mine of yours is Hunter. What is the thought process there as to how that plays out? So, I've been a little controversial on this. If there was a crypto ETF, I would buy it. I would buy it for my clients. I think it would be great. Why is that controversial? Well, here's where it gets controversial. The part is, I don't think it's good for crypto. Okay, explain that.

So, crypto's part of the original mission is to get rid of the trusted third party, right? Like, that is part of why we want a decentralized network. That said, we have this whole group of investors that are waiting to get in until the trusted third party of an ETF and the SEC says it's okay, right? So, the reality is it's a contradiction, right? The SEC is saying when these markets are clean and we can follow them and all that sort of stuff, then we'll let you put it in an ETF. All right. So let me give you a scenario. There's a couple of people who have said this to me.

I'm not saying that you're wrong, but let's take cash, for example, US dollars. I can own that in a decentralized, self-sovereign way. I can have physical cash. right i got money right here in my pocket or i can take these same dollars and i can put them into an electronic version in a bank via a centralized third party right yep and i can get exposure through multiple ways to the same asset but it's my choice right i could take all every dollar that i own and i could put it all into physical cash and hide underneath my bed or i and go use centralized third parties. If I could only have it in one format, either or, right?

It would drastically limit the access. Bitcoin, in my opinion, is similar in that I can own Bitcoin directly, right? And I can self-custody it and kind of do all the things that is kind of that Bitcoin ethos that you're talking about, which without a doubt is super important and should be encouraged. But there is some percentage of the population, i don't care how much education you they'll never do it right and so when you add in a bitcoin etf all of a sudden you're just giving another way to access so it's not so much that i disagree with you it's i don't know if it's going to be as big of a moment as people want it to be right because there's still the people who on bitcoin today aren't going to just go buy bitcoin etf no why

am i going to go pay for it when i've already got it yeah when i already have it exactly so that's one and then two is you're actually just going to bring in the people who probably weren't going to go buy it directly. Like I keep going back to anyone who knows about Bitcoin and has made the decision to invest, went and bought it. Right. I agree. They're not waiting around for the ETF, in my opinion. Right. Maybe there's some people who are like, we haven't made the decision yet, but if an ETF got approved, then we would do it. But if people have decided to invest, yeah, it's difficult to go to Coinbase or to go to Gemini or go to BlockFi or whoever, but it's not that difficult. No, it's not. The reality is the reason most people want it

is so that advisors can charge fees on it. Of course. Yeah. It helps the advisors. Yeah. So to me, it's like they're signing their own death warrant, right? So I get the question, and this is kind of connected, what is the biggest threat to ETFs? It's this, the blockchain, right? Like once every security is tokenized, why would you need an ETF? Why would you need half the 500 people left on the stock exchange, right? And that's why people like NYSE are investing in Bakkt and things like that. So it's the same contradiction, but it's important to talk about it because if the average person is going to buy the Bitcoin ETF or the crypto ETF as a speculation, they need to know that the reason it has value is because it's going to replace

that whole system right like it is going to replace the etf if it works and that's when it's going to be worth an insane amount of money yeah what what do you feel like right now uh is the general sentiment of folks that are buying etfs are they saying i can't wait for the bitcoin etf or is that something that's more like the crypto community is waiting for and they think it's a big deal but people outside of crypto could care less um it will it will likely cause the price to go up because there will be a massive demand i i you do you so you do think that there's an i think it's a billion dollar fund within three months i think there is a lot of demand right because they look what do you think the fee looks like on that a reasonable one or what

is likely to come i think somebody could probably charge close to one percent because there's going to be storage costs you think that uh one percent so 100 basis points whereas the traditional fee structure right now is on average around 19 or 20 basis but that's asset weighted right so if i if i look at like the robotics etf that's done extremely well that's at 95 bps okay so there are ones that have high high in air quotes because when you have you know spy at two or 300 billion at seven bps or no 9.45 bps i love how now now they're rounding the half bps so that it, you know, it's almost 10, but it's really gets quoted as nine. It's very smart what they do nowadays. But when you have a quarter trillion dollars at nine BIPs, that takes the

whole average down. But there are plenty like ARK, I think is at 70 BIPs. Nobody has any problem with that. Or maybe 75. Our blockchain ETF is at 70 BIPs. Nobody's complaining there. We're doing a lot of active research. We got to sit down with Novogratz and Overstock and the Japanese companies, Digital Garage, meet all the IRs, figure out if Riot's a real company or not. We're being paid for doing the research. Absolutely. And so when you look at that, Bitcoin ETF gets approved, billion dollar fund in a couple of months, you're driving a billion dollars, that's probably a $10 million revenue uh business give or take for somebody um what yeah but if it keeps going up okay so that's my thing it's like like like what does it grow into though right you're talking

about 250 billion dollars in the etf world uh today um like how big could something like that get a bitcoin etf so the the problem is there's there's two variables here right so there's the variable of probably raises a billion dollars in three, four months. And then you get the price run up. That's part of why the SEC is being so careful. You're saying a billion dollars of capital inflow into the ETF. They then obviously have to go buy Bitcoin. All of a sudden, you get a billion dollars flowing into the asset. It's only 160, 170 billion dollar asset today. There's price movement. Now you see the price moving. Then people start chasing. You can see very quickly how here we go into this parabolic run. But at the same time, the SEC wants to protect

people from getting caught up in that mania a hundred percent yes they saw the the long island blockchain our long island et with t was it long island iced tea long island iced tea blockchain thing so like they changed their name to blockchain like overnight yeah literally the stock just exploded exploded and that was like two weeks before we launched our blockchain etf right and two days before we launched they called us and said you can't use the word blockchain in the name Really? Yes. Because they saw the mania that was happening.

Yep. Now for us, honestly, it was one of the best things that could happen. There's an irony here because we had a great ticker, BLOK. Everybody knew what it was. What is it actually called? The Amplify Transformational Data Sharing ETF. Jesus Christ. The Amplified Data Sharing.

Amplify Transformational Data Sharing ETF. I don't think I've said that in two and a half years. Yeah. A.K.A. blockchain. I mean, but I understand that the regulators are there to protect the public, right? And they did. You know, but anybody who went and looked at what we owned, they knew what we owned. We showed our holdings.

Yep. So, but at that time they were protecting. So, when they look at this stuff, they're always looking to protect because there's no upside in it for them, right? What is the upside for them to bring in this new technology, right? They've got enough to regulate. Yeah. So it has to actually prove itself out. And here's the irony back to the statement earlier.

I think once it proves itself out, I don't think people will need the ETF anymore. I agree. You know? I agree. We'll see. We'll see. When do you think it gets approved? Does the ETF get approved while Jay Clayton's in office?

I don't know. That's a cop-out answer. No, no. I'm going to give a little more. uh i would have bet this year uh because this year meaning 2019 or 2020 2020 okay 2020 we're recording this uh february 2020 yep so i would have bet february 2020 because we've seen the interval funds get approved and and i see trading in markets starting to understand it but then as i talk to a lot of the uh regulators directly on other things they don't seem to see a reason to

get here i always thought that the first product was going to be futures based and then you had you know cboe futures kind of fail so like i don't you know they wouldn't do the vix products until the futures were trading well they're not going to do this is so all the things that i thought were going to get it there aren't here's the wild card we got our having coming we don't know what's going to happen i love your warnings on twitter all the time you know got to be careful and you got to do your own research i agree with it but listen because here's why you ready because people accuse me all the time of never saying negative things or never saying the warnings. And so I say, you know what? Fine. Everyone, that's your biggest knock against me. I'm going

to periodically tweet, you know what? I'm going to tweet it out while we're on record right now is that I'm going to periodically tweet out saying, don't invest all your money, do your own research, all the things that people want to be, that people don't want to hear, but need to be told absolutely i mean it's you have to know what your own like that's that's what i love about this whole etf thing it shows you what your own there's no secrets and you know i don't want to be the the bull here and say oh the crypto winter is coming to an end and the halving is coming but that's the wild card do you not you don't think it's over i i am Um, well, I'm so on the record here that I'm afraid to say how bullish I am.

All right. Well, tell us some of why you're bullish. I just, I see the actual companies involved actually using the technology, not for bullshit anymore. Right. So when I, when I first started doing the actual company, uh, research, I'd go there, I talked to the IR department and blockchain was like ESG to them. Yeah. It was like, Oh, they have to talk about it. We need our blockchain strategy so that we can get some headlines and everyone pays attention. Yeah. And so I was like, ah, you know, how do I buy this? There's a little bit here. I got to see it. And now when I talked the second time I go on back to talk to them, it was, we've got a utility token.

And then the utility token era drove me insane. And that was basically when everything was crashing, right? Utility token this, utility token that. And then in the last, call it 18 months, I've watched so much happen with security token and actual finance things and actual transactions happening. And I mean, even Overstock, despite all the headaches that come with that, what they did with the token dividend forced certain parts of the financial system who've never thought about this to think about it it uh and we traded through it like it was not easy so i am bullish because

although i don't see the full killer app yet other than the cross border i see it coming because there are actual real projects now it's not it's not just hey we set it at our ir meeting so that we got some SEO and SEM on. For sure. What's the worst part of the ETF industry? There's a lot of good things. There's a lot of things that obviously are great for investors. They're great for the asset managers. What do you think is like the dark side of the ETF industry? Oh, man, I'm going to piss people off if I go here. Yeah, that's fine. I piss people off every day. I'll take the blame. I'm just channeling what I'm thinking to him. So he's only going to repeat what I say.

No, no. I'll just tell the truth because philosophy, religion, transparency, we're all there. It's gatekeepers, man. When this started, the ETFs could be bought anywhere. It was decentralized. It was just like a stock. over the years the bigger firms and it's every one of them have figured out how to put up gates to prevent investors that are acting or using them as an intermediary from accessing new innovative ideas and then they're asking the older firms that they already have relationships with to clone those ideas so give me an example of what like a gate would look like a gate would look like um bank xyz says you can't buy this etf because it's from a new issuer who we haven't approved oh got it but if you really want it we'll call this issuer that we already have business with and ask them to create a clone of it got it right that's innovation basically they take the

idea they hand it to the big asset manager the big asset managers that you're not going to get fired with going with ibm type model exactly cover my ass you as the investor you're going to get the same exposure. The big asset manager loves us because we're bringing them capital. We cover our ass. You're not going to fire us. But the person who gets screwed is that person with the innovative idea who's creating the small ETF. A hundred percent. And you got to understand ETFs are taking a massive business model away from these big banks, right? They make a ton of money on these mutual funds and that fee's not book banked into an ETF. So they deserve the right To figure out a due diligence, figure out this or that, but I don't like that it comes

at the cost of innovation, right? Like to me that, I always say there's two things pushing the growth of ETFs. We talked a lot about client alignment factors, right? I said tax efficiency, transparency, liquidity, low cost, all that. The other one is innovation growth factors, okay? ETFs made gold accessible. ETFs made leverage accessible. ETFs have made buy rights accessible.

ETFs have made robotics and blockchain accessible. ETFs will probably eventually make crypto accessible. You start stifling that innovation, and then we're just back to making 800 dials a day. Yeah, yeah. I'm up on. It's pretty crazy. Yep. Right?

What else do you think about the blockchain crypto space? What are you excited about outside of ETFs? okay so my favorite thing about blockchain is uh it takes the the values that i've talked about in utfs to the next level and i love how the next generation is going to embrace this so uh i have three children uh they're now 8 10 and 12 and each one of them got a bitcoin two or three years ago at like 850 bucks so that means every day they look at it they know the price right and to me that tells me this is really going to work because they're watching all the youtube videos they're understanding it my my eight-year-old he was seven at the time so but he has a raspberry pi he went

and built a bitcoin miner after watching a youtube video it didn't work he really didn't know what he was doing but he plugged a bunch of wires together and uh and uh put it there and i was so proud of him um i know show it to him yeah the listeners can't see it but uh for the youtubes i bought this for seven bucks online it's a it's a gold uh coin that has the bitcoin b on it yeah it's basically a piece of metal uh it's worth seven dollars and uh but i stuck it on his raspberry pie and when he came home from school he's like oh my god it worked but because of that i think i'm gonna buy him a coin mine for his birthday oh let's go so so what's interesting though is uh the kids they they don't question whether this is a thing nope they're like of course it's a thing

of course like they don't watch tv yeah right they they watch their their screens and and they don't They don't have the same misconceptions that we have. They're not walking in with this idea that the government has to tell me it's worth something. So every time I talk to one friend, he has two kids. They're around 10, 11, and then probably 13, 14. So kind of between the ages of 10 and 15. I wish I could say who it is, but a good friend of mine. um and he says that his kids are the ones who convince him to buy more bitcoin they don't

actually say like hey dad go buy more bitcoin but the way that they talk about it he's like this is absolute like i'm so fucking bullish because like my kids don't question it right and it's interesting to see um you know kids when they see technology one they're better using it like you ever seen like a six-year-old using a iphone they know everything my son sets up like iphone stores in the basement of all our old broken ones and he knows like he'll he'll list out the iphone 11 does this and that i have no idea what you're talking about but crazy yeah and but they just they understand what's going to work and what's not right which is which is pretty cool and they don't care about you know who is satoshi nakamoto or all the all the bs we deal with with trying to

explain to somebody who's you know 80 years old they buy things in video games um yeah so fortnight bucks uh the v bucks oh my god i hate v bucks but like because it's like he gets a christmas present and all he wants to do is buy v bucks but i get it that he's acclimated now um i know like my friends over at galaxy digital they keep telling me look at the cryptos that are working in gaming yeah because those are going to be very i know mike is real uh bullish on yeah i think yeah Yoshi keeps talking about it, too. Yoshi, man. Shout out to Yoshi.

He's been very helpful with us with blocks. I appreciate it. The kids get it, though, and they don't slow down, and that tells me it's going to get there. Actually, we did have a story to talk about that I promised I'd tell you today. All right, let's hear it. And it kind of links in here. So I mentioned the kids don't care who created it. Yep.

And I love and I always explain that the fact that we don't really know who created it is awesome. But this is one of those scenarios that people don't... A lot of history buffs might know, but this is history not repeating, but rhyming. There's this story of Nicholas Burbacke. Okay. Nicholas Burbacke was a Napoleonic general who lost multiple wars or multiple battles. Like I said, he didn't lose the full war. He got exiled to some island, tried to kill himself, failed at that.

He was known as the failure, right? That was... You know, a couple hundred years ago in France, that was the name. The elements of algebra, all the volumes that create the original text for how algebra works, written in France, are all authored by Nicolas Bourbaki. Really? No. Oh. It's the same as Satoshi.

It's a group of people who didn't want to have credit for it. Really? Yes. I did not know that. Yeah. So modern algebra is written by a group of mathematicians in France, and they claim the author is Nicolas Brabacchi all the way through. Because they didn't want to be identified. Because they wanted people to adopt it and not question the authors. Not be like, oh, this guy has this opinion because he's trying to sell that paper or this or that. Yeah, yeah, yeah.

That was a poor French accent. I just got back from France. They're a little bit rude. I must say that the stereotype is true. yeah it depends where you go paris no but that idea is really interesting because uh when you when you look at uh the removal of the creator yeah it does drastically increase the likelihood that people will adopt something i love it it's like give the ego away yeah marty bent calls it the immaculate conception beautiful right which is uh you know little fiat is religion and so is any money yeah and so you have to have a belief system somewhere i mean for sure what uh where can people find you on the internet um so there is a at michael underscore venuto on twitter i'm

pretty active there etfthinktank.com is probably the best place to get our unbiased content right and then we have plenty other websites where we're doing and selling stuff but i'd rather you find me where we're educating right where we're acting as a burbaki or a nakamoto i love it i love it um before i finish up rapid fire what's the most important company in crypto most important company in crypto in terms of public like what we're dealing with whatever public private i mean i guess from an adoption standpoint right now even though it's not the core i i think it's fidelity or or backed like from from getting to people understanding this and actually using it in the finance world you think they're huge custody yeah that's that's

the big thing um what's your most controversial thought in crypto that a bitcoin etf is a contradiction to the overall concept so that's controversial for everyone except for the hardcore are Bitcoiners. Exactly. I guess my price targets, maybe outside of the crypto world, whenever people say, well, why do you have Bitcoin? I go, one, I believe in it. Two, it's bug out money. Chaos engine. Yeah. I do believe if I've got to go to Europe, if I got to go to Latin America, I want to know I got a hundred grand that's probably going to be worth way more than that in that scenario. What's the one law or regulation that you would change or improve in finance? Oh, um, so there's a lot of ridiculous ones out there. Um, I think

probably the biggest ones have to do with, with taxes, right? I, I think that the tax code as it applies to investment should be changed to promote good investor behavior. People who trade in and out should be punished, right? From the tax code and people who buy and hold and do it as an investment should be rewarded. The ETF does some of that, but there's plenty of other parts of finance that are left out. Yeah. It's kind of like on a 10,000 foot view, they've done it correctly. But when you get into the details, that's where it gets messy quick. Yeah, absolutely. I could list a hundred other little ones, but they don't matter to the average investor. Taxes eat away. Taxes are fees. What's the most important book you've ever read?

so uh i i always like to give two here because i have my fiction one and my investment one fiction city of glass so we mentioned north carolina earlier city of glass helped bring me back to new york it's paul oster's book it's part of the new york trilogy if you haven't read it it's it's worth reading especially if you love how new york city works but it also candles language and city of glass, city of glass by Paul Oster. Okay. And then what about the investing book? I have to go with a classic cause he's been somewhat of a mentor to me is random walk down wall street. Uh, Burton Malkiel has helped us with our business over the years. And there's two things I love about it. He lays out the math case for buying and holding. And then at the end

of the book and, and, and edition number 10, 11, 12, he starts talking about where there's inefficiencies and how to do it so he's not an ideologue i hate people who come out and say this is the only way to do something um i love that he's laid out why indexation works and why it's a base and then he's laid out why active works where there's inefficiencies makes complete sense aliens believer probably i'm a believer that there's extended life why i just don't see how there isn't right like it's just the world's fight like the galaxy is too big yeah i mean i don't know i don't want to get too weird but no we get super fucking weird this can't be the only dimension there's i've met plenty of people that probably have a zipper on the back of their neck

you know like you think that it's a simulation no um no simulation i don't feel the simulation i i feel there's multiple parallels there's multiple there's too much space for us to be the only consciousness yeah and i think we have too much hubris to think that out of all the living beings that we could see on this planet that we're the only ones that are actually woke yeah um i think that's it's crazy when you start thinking about like we don't need to go off the planet to find yeah the the other life absolutely yeah i uh i saw recently another video on twitter uh of this fucking thing in the ocean i don't even know what it was but i'm telling you that shit ain't nothing that we learned about in school yeah well because it was moving in all weird

directions it was changing colors it was doing all kinds of crazy stuff there's so we've talked about some of my weird stuff with chess and debate and etfs and crypto and wokeness the other thing i love to do is fish i do that with my kids we're on the sea all the time i've been 100 miles out the sea overnight for three or four days you see weird weird stuff really like yeah what's the weirdest thing you see i mean i've seen i've seen uh swordfish come up with like a squid chasing them and it's supposed to be the other way around and there's lights like there's no light out there but you see it coming up from the depths with lights i saw a where's the light coming from the fish oh they're bioluminescent the squids have bioluminescence and then um i saw this uh

one time a lobster pot i pulled up on 80 miles off the coast of new york and there's a fin on it and i don't what is this i pull up and it's a shark that was like eight feet long that bit the rope and got his teeth stuck in it i spent a half hour getting this shark's teeth off the like you see crazy things yeah it's just it's just nature yeah and i could have just kept going yeah but i wanted to save that shark do you like do you have uh you have instagram uh no my kids do and they keep telling me about it all right don't don't tell them what i'm about to tell you because you don't want them watching this but uh if you just go on you know your browser go to www.instagram.com slash nature is metal m-e-t-a-l it's just absolute savagery in nature it's just complete violence of

animals eating each other tracking each other just shit that you would look at and be like it is a daily reminder of how uh humans are just soft right if you think of us as an animal compared to actual the wild the things that go on in nature most humans don't want to see oh i hear you i think my kids have shown me some of those videos i mean i was i was in florida at the etf conference at uh like 9 a.m i just get a picture of a giant tuna from my son and he's like look at the size of this fish like they just get excited they just love it yeah that's awesome what question you got for me to end this thing oh question for you um you know what i've heard so many of your pods so i kind of know the answers to a lot of them whatever you got it i got it what

question have you not been asked that you've always wanted to be i don't know um how's that for a turnaround there's that debate skill yeah the the question that i haven't been asked i'm more surprised that people don't ask about uh my motivations for certain things or uh they don't uh everyone wants to ask like the easy soft questions yeah no one really asks like super hard questions the people who have so like i'll give a shout out to matt odell matt odell came in and he had very specific questions he was like you know why are you doing this why are you doing that stuff so like he definitely gets credit there um and then uh melt them the first time that we did the interview melton demors came in and she pushed back on some stuff etc and like

what people don't realize is like i kind of enjoy that more um it's just like people come in that's like kind of like softball quite like well what do you think is gonna happen with bitcoin like okay everyone's kind of already heard that right yeah i listened to your uh ama on the train ride in today so i was like i know the youtube so i was like i i can't think of a question but it's interesting to hear how you just described that yeah because i think that's why you've been successful with this is because it's genuine of course right like people if people were sitting here going pomp is selling something yeah yeah so like here's what i tell i tell people behind closed doors i have no problem saying so this is the most selfish thing i do and everyone thinks

about it as uh that's so nice he creates so much content no fuck no i'm learning every single conversation i have and i'm writing every morning it forces me to put my thoughts i'm tweeting i'm seeing the way people interact with it like i'm getting all of these inputs and signals and feedback and critiques uh and it helps me accelerate what i think and kind of have a more thorough um thesis and so like it's selfish in that standpoint if i wasn't learning anything in these conversations i wouldn't have another conversation like i'd just see you but the fact that i then record them and i post them and people find value great like that that's a second order effect but this is the most selfish thing i do by far okay so when they want to edit this you just

go back and say mike's gonna ask the question why do you do these pods no let's leave it all in no we don't because we got to an awesome answer joe's in the corner we might do a behind the scenes video to post on youtube because joe's got his little studio set up we got the mevo camera we've got lights we we got him laughing think about this it took 220 something episodes before we got a fucking light in the room right but we got a light in the room now we are ready to rock and roll next time i want makeup yeah there will never be any makeup but the next thing i got to do is we got to get the uh some art for the wall or some of the foam stuff for the echo no i don't care about the echo people don't like well we're up on our ears i don't think there's much echo but

i think we we played jeopardy on that question yeah you gave the answer i gave the question afterwards that's fine all right man listen i appreciate you coming in and doing this you guys have done a ton of shit in the etf world so i appreciate you giving us a rundown there uh people can go check out etfthinktank.com, check out the Block ETF, and we'll have to do this again in the future. This has been a blast. Absolutely. We'll reach around. There we go. Thank you. Hey, everyone. Pop here. If you liked this episode of Off The Chain and want to help us take crypto to the top of the Apple, Spotify, and other podcast charts, please do us a favor and rate, review, and subscribe. To review, simply go to the Off The Chain homepage,

scroll down until you see the five blank stars. Taking 15 seconds to fill those stars in and leave a quick review. It goes a long way in helping us take the entire crypto ecosystem to the top of the charts. I appreciate you listening and see you next time on Off The Chain.