The Wolf Of All Streets - Bitcoin OGs Made RECORD Profits - Wall Street Paid Them

Episode Date: August 13, 2026

Bitcoin’s OG investors may have just had their most profitable cycle ever, while the market now waits for the next wave of institutional capital. We break down Goldman Sachs’ $2.25B acquisition of NEOS and the growing demand for Bitcoin income products, Wintermute’s $1B push into AI and traditional markets, and Kalshi’s move toward Wall Street-grade trading infrastructure. We also look at Japan’s potential rate hike and what it could mean for global liquidity and crypto. Learn more about your ad choices. Visit megaphone.fm/adchoices

Surprisingly, Bitcoin OGs made record profits during this cycle. And the reason may be because they had Wall Street to sell their Bitcoin, too. We're going to unpack that and everything else that's driving crypto markets right now with special guest. Dave from CoinDesk. Let's go. Good morning, everybody. Happy Thursday. And welcome to, is that rainy?

Is it raining? Rainy New York. I think it's New York. I don't know what city I'm in on any given day. Today it's raining New York. Yesterday we are at the beach with Jordy Visser. We're really trying to do anything to keep engagement high by changing our very scenic backgrounds on a day-to-day basis.

So listen, before I bring on Dave, I want to talk about one thing because people keep asking my opinion on it, and I think it's so nonsensical that we have to bring it up. There is this thing that went viral from Thread Guy here, saying that, oh, geez, I guess traders from previous cycles. This is the crypto-Twitter's degeneracy that I never touched, but here we are. We're trading against plumbers and had it super easy,

basically saying that it's much more difficult to make money in crypto now if you're like a meme coin trader and blah, blah, blah. What I found interesting is that this is just extreme bare market behavior, in my opinion, when people literally have nothing better to do than to debate who had it easier. Shockingly, all the people who were there in the past said that it was harder for them, and all the people who are here now think it's harder for them. I know it's shocking that everybody needs to be the oppressed,

person in this story. And I would just say that you've all had it easy and go try actually being a plumber, like maybe in Bangladesh and see if you think that your job as a meme coin trader is difficult. Okay, that was, I don't even know why I did that. I'm going to bring on Dave because he's got to have something. Dave, you know, I asked you how to make sure I had your pronunciation right. And he told me that people used to call you Dave LaValle email and it's going to forever. That's right. That's right. Well, let me, Scott, let me say that. I started my career on the floor of the American Stock Exchange. Every single trader that I've ever met said that they wish they started trading five years earlier because it would have been easier.

Yeah. I don't think this is a crypto thing. I think this is, you know, in a crypto, this cycle versus last cycle. I mean, this is just a trading thing. I mean, you know, I started on the floor of the American Stock Exchange in the late 90s with singly listed options. And I wish that I was, you know, an Intel Options trader five years earlier. I mean, aren't we all just grumpy old men who think that, you know, everybody's had it easier than us? I used to walk uphill both ways in the snow, carrying 400 pound weights to go to school. I just got off the phone before I hop down with one of my sales guys who's out in London. I said, hey, man, it's tough.

It's a tough slog. But I'll tell you what, every tough slog I've ever had, when I've gotten through it, I look back. I'm thrilled that I achieved it. So let's just keep on pressing forward. It's a tough market. Yeah, let's talk about the tough slog that is the market. you went ahead and did the nice segue for me first. So this was shocking and it became our title, right?

But Bitcoin OG traders just had their most profitable cycle ever. Unlike past cycles, crypto exchange traders were not the exit liquidity, right? It was ETF and DATs. And I know you have some strong opinions on ETF. So I know that you have some experience there. So we can talk about that. But the structural bid pushed finance traders, unrealized profits to nearly triple the 2021 top.

I mean, I think that we can go through it. I don't think it's necessary. But the idea here, and I think it actually is. is obvious is that if you were a Bitcoin holder for a very long time, we saw clear evidence that those guys finally sold above 100,000 and higher and then on the way down and made a whole lot of money. But the point here is that they were able to sell it to digital asset treasury companies, right? We thought we're going to be the liquidity, but they ended at the exit liquidity instead of the buyer. Right. Right. Right. Yes. Yeah. I mean, it's strange. You know, if I went back to

2021, 2021, I'm at Grayscale. We're trying to figure out how we get the Bitcoin ETF over the finish line. You know, Bitcoin Ball, 80, 60, 80, 60. And everyone was talking about eventually there'll be institutionalization of this Bitcoin market and the asset class holistically. And if you get institutional adoption and you get, you know, broader user base, that volatility is going to come down. And now we fast forward. It's 2026. Seven-day Bitcoin ball is like 20. 30-day Bitcoin bottle is like 25. It's lower than the S&P. It's actually what we had been talking about for a very long time.

And there is an institutional bid, not in the traditional sense of institutions like, you know, pensions and downments foundations. I don't think they're online yet. But there is a massive pool of capital with a constant bid in the form of these ETFs or DATs and or DATs that people can actually have exit liquidity. So I guess I'm not so surprised with that narrative. but it's a little bit surprising that, you know, people are excited over that or, you know, questioning that when it was ultimately what everybody wanted in the beginning. Yeah, it is. I think back to those days and you probably have a more unique perspective since you were actually building it.

But I remember when backed came in, right? And it was like, institutions are here because there was like this one company backed that was owned by ICE and they were going to, you know. And it was, I mean, we were just way too early and just completely wrong. But now to your point, the institutions are completely here. Grayscale led that charge there. Some nice lawsuits going on there and victories. I say I'm, I joke that I'm like three-eighth's an attorney after my, you know, my four or five years at Grayscale. It was pretty wild. But it was a fun run.

But yeah, I would say that backed was the first time that I raised my eyebrows because they're like, wow, ice is going to, you know, hop in his venture. That had a very institutional feel. it was the first time that my kind of institutional antenna around crypto really popped up. So it's funny that you bring that one up. It was the first for me too. Yeah, I just, I remember, you know, the institutions are here, right? And to your point, so I want to kind of unpack that volatility. We've obviously seen dampen volatility with that bid, but there's also obviously the, it's summer. And if we believe in the four-year cycle, then this would be the perfect time that there would be no volatility anyways, right?

I mean, I would imagine, I haven't looked at it historically, but I've lived it for 10 years. and I know that summers are bad, right? For volatility. There are just no interest in summers. And that this particular part of the cycle, it tends to be even worse. So I would say probably the seven day and 30 day maybe are also partially a reflection of just where we are in time beyond even just the institutional aspect. But I think that's probably massively contributing to make it even worse.

There's an apathy as well, right? You've got a confluence of events. There's the summer. There's an apathy. There's a dumpy market. There's the air being kind of sucked out of the Bitcoin trade and a shift to, you know, something that's a little sexier with AI. You know, there's a lot of things going on here.

But that institutionalization is something that I think is kind of undeniable. And when you think about different kind of, you know, bears or, you know, different winters that we've had, the narrative of the winter has changed. The last, you know, winter was more like, you know, oh, it's not going to zero and Bitcoin's not going away. it was when do we get back in. This time around is this narrative around institutionalization and how there's a broader adoption and what's the next wave going to be.

And tokenization and convergence of kind of tradfrying crypto are the two narratives that I hear the most. And it's a very different feel than the last winters that I have experienced. There's also a flip side to it. I agree with everything you said. But the flip side that I think is interesting,

though, is that we could explain the last winters. Yeah. And this one, I think, people don't really get it. Like, why is everything going up and our thing isn't if things are this good? Right? Yeah. You know, FTX Voyager, Celsius, BlockFi, Terraluna.

Yeah. It was very easy to explain why all of this was happening. You know? Rettables off really smoothly. No, and we also, obviously, we had like a really, I think, pretty clear catalyst for why it went up before that. You know, strategy came in in August. Elon Musk was talking about it.

We had Doge and NFTs and all these things. this time we just kind of had ETFs. Altcoins didn't participate and now nobody really understands why we're trading it half off. Yeah. Yeah. It is a strange it's a good point that you make and it does feel a little bit strange

in that regard. But what's the cattle that's going to be that's going to snap it back? I mean, listen, it's kind of hard to not ignore, although it's a very easy thing to say that this uncertainty on the legislative and regulatory side of things is really not actually acting as an

accelerant. So you have, you know, real institutions sitting on the sideline, but who's going to really, you know, pour capital in in a real way without having an understanding and a clear line of sight of what the rules of the road are going to be. And you have a funny thing that I've been watching happen, where you have, you know, the chairs of the SECC and the chair of the CFTC, you know, are both basically waiting patiently to see if there's going to be any sort of legislative clarity. Okay, we now know that Clarity Act is not going to get through this cycle. It's going to get pushed if potentially to September. And I think you're going to start to see some rulemaking.

You know, Chair Atkins has been very. It's at it. Like they're like it's happening. And they weren't going to get in the way of something happening in Congress, right? I mean, so, you know, is Chair Atkins going to put a rule out that could front run? I shouldn't use that word. Front run something like clarity? No chance.

But now that clarity has kind of died, these guys are like, you want to know what? We got a press to be working. Yeah, I mean, that's, I think the hearing, well, it's like, you know, how government works. You have a hearing to decide if you're going to have a hearing, to decide if you're going to have a vote on an idea that maybe you'll have if there's a hearing. But, you know, Reg Crypto has been the idea of Red Crypto, which I believe it's tomorrow will be the vote whether we should vote, you know. But, I mean, that's something that Hester Perth has effectively championed by a different name for the last four or five years, even through the last time of the idea of safe harbor, clear rules of the road, for who. can raise money and how and what kind of assets they'll be able to do it and what, you know, defines decentralization and a security. So, you know, this is going to go a long way if it does

happen to answer a lot of the clarity questions, whether that gets passed or not. I mean, you know, I've talked about this a lot with a lot of guests. Matt Hogan and I talk about this quite a bit. He's the best, by the way. I love watching him and you guys had a really great session recently. Yeah. And so, you know, Matt, I think it made the point many, many months ago. And It's something we've talked about where he said, you know, listen, like if we get good rulemaking, regardless of what happens at the midterms, we basically have two and a half years at the time it was three still to prove our worth, right? If we get good regulation, even if the legislation doesn't come, now we need to take the responsibility to make it all too big to fail and irreversible.

Yeah. If we just languish and do nothing for three years with good regulation, there will eventually be a regime change and the apathy will grow. 100%. And the concept of future proofing is something that I think is really prevalent. And whether you're focused on the legislation or the regulation, everyone will appreciate that a law is harder to change than a rule at an agency. And so you had to kind of sequence it appropriately to let a legislative move like Clarity Act push its way through. I mean, look at the value the genius brought, right? In terms of like, you know, really laying the foundation for stablecoin. legislation, and then money poured in. And the same is true for, you know, understanding exactly

how the infrastructure of crypto is going to be laid. If it's going to be legislation, great. If it's going to be rulemaking, great. Once you have the rules of the road, I think you see capital pour in because you're going to have more certainty. Yeah, let's switch a bit more to macro because I want to unpack your thoughts on whether this is a uniquely crypto thing or whether we're beholden to what's happening in other markets, right? Obviously, the big conversation is what will the Fed do? He's going to cut. I had the idea that, sorry, I don't know if you agree, but the idea that Warsh is going to hike rates after being put in position by Trump just to me blows my mind than anyone thinks that. But now we did have some, I guess, softening PPI this just came in, you know, 45 minutes ago.

So it's worth mentioning 4.7 below expectations of 4.9. Core was in line. We all know that it doesn't actually matter if we have inflation or not. It just matters what Wall Street sets is the expectation. Versus this arbitrary expectation because markets make sense. But, you know, so we did. have, you know, people are going to look at this, I will just say, and say, now worse, doesn't need to hike, as if he was doing to do it before, right?

Yeah, I mean, I just didn't see a hike. I just didn't see a hike. I mean, it's just that simple to me. It would have to have been something that was absolutely undeniable and astronomical and backed the entire country into a corner for him to hike, and I don't see it. I just don't see it. Japan might, apparently. Japan's government is said to support faster B.O.J. Rate hike. One of the bigger stories of the last few days was obviously, that the United States intervened in the yen, which is a pretty big deal and didn't work. Yeah, I mean, it's funny you mentioned Japan. I was actually talking yesterday about Japan.

Regulatory infrastructure in Japan is starting to thaw on Bitcoin and digital assets. In 2003, when I was at gray scale, we were identifying what we thought like, you know, the most, you know, exciting markets to kind of expand our business. And we looked at UK and Japan. I mean, we backed off because the market just wasn't ready. too much on our plate anyway to handle in the U.S. But now seeing some like, you know, regulatory thaw around digital assets and Bitcoin in Japan is going to be exciting to see because if they back it, I think you'll get some ETFs there

and you'll get another bid for Bitcoin globally. Yeah, interestingly, the UK seemed to have a very contentious approach to crypto until a few months ago and then backed off a lot of the worst parts of what we were expecting. I don't know if they saw Mika being implemented and all the problems that came with it and decided that they didn't want to, you know, fight it and wanted to capture some of it. But like, you know, they came out up with, I think, some pretty reasonable stable coin rules when it seemed like they were going to be the worst regime on the planet. I mean, it was so strange. Every time we had a conversation with the

FCA or the Bank of London or any of the regulatory agencies over there, they just kept on saying, hey, we were going to wait to see what the SEC does. We're going to wait to see what the SEC does. And then Bitcoin gets over the finish line, you know, not without some, you know, except but it gets over the finish line, the ETF gets approved, we go back, and then the narrative kind of changed. So I totally agree. All of a sudden, you start to see some sort of clarity, I shouldn't use that word, some sort of certainty around the regulation as it pertains to stable coins, and then it just kind of fizzled out. I couldn't believe it. There's a real opportunity in the UK market. I don't know what's going to happen. Yeah, so let's dig into ETFs.

There's a few stories, actually, that are probably worth talking about. Goldman Sachs to gain Bitcoin-Eath income U-T-Fs in up to 2.25 billion NEOS acquisition. So, listen, this is not necessarily a crypto story. I think crypto is the sidebar, but they're, you know, spending basically, I think that Nios has about 30 billion in AUM or so. Incredible business. I know the guys at Nios. I know the guys that started it. I know some of their investors.

The Nios business is an incredible business. And by the way, that's coming on the heels of Goldman buying the innovator business, which is another. So they're clearly very interested in ETFs here and becoming a meaningful part of that. But interestingly, these are more like the kind of options and actively managed ETFs and not just a Bitcoin spot ETF. Right. But so what they do acquire here is a $1.1 billion asset that is Bitcoin specific. And you'll remember that BlackRock launched their similar income ETF, which for those who don't know, it basically guarantees or a try.

to capture some sort of yield, it limits the upside by, you know, 20, 30 percent, maybe of a big Bitcoin move, but you basically get income because they're selling options. Yep. Well, Goldman had announced that they were going to launch one and then went quiet, now we know why, right? Because they bought one, and I think it's probably bigger than Black Rocks right now. I would imagine. Yeah, I actually haven't looked at the numbers.

I would suspect that it is bigger than that. But I'll just, I'll just like, you know, for the listeners that are interested, the whole concept of income-based ETP. So if you take a look at JPMorgan's JEPP E and JEPQ, those are S&P 500 covered call products. One is selling at the money, you know, basically selling at the money calls. So you're giving up all of your upside and you're capturing more premium because obviously volatility is higher on those options.

And then JEP Q is further out of the money. So you get a little of the upside performance, but the yields a little bit lower. Right. So those products are tens of billions. I mean, gosh, that complex is probably. like 30, 40 billion now. Massive complexes and everybody just kind of copied that. Grayscale launched the first covered call suite of ETFs.

They didn't have super success in gaining the assets. Goldman quickly followed and that gold, excuse me, BlackRock quickly followed. And that Goldman announcement of their covered call product, I think may have been more in response to Morgan Stanley announcing and launching their ETPs. But who knows, there's a massive opportunity for, you know, the advised market who are dying for income all the time and selling options is a pretty simple strategy that people understand cover call writing is uh you know it's pretty simple wrap it up embedded into an etf putting your portfolio right alongside everything else and you get a little income every month yeah i'm trying to see

so btCI i'm looking at the numbers represents less than four percent of neos assets so it's great that this is a crypto story but this is not a crypto story right uh except for in the way that we've talked about. Now, I think that actually it hasn't done particularly well, right? So this BTCI product is negative 41.66% one year total return, right? Which reflects the price action of Bitcoin. So even if you're offering this kind of high yield, it doesn't mean you can actually make money on these things. Well, your minus 41% is better than you if you own Bitcoin. That's the story in a down market. Yeah, it's like being a head. Exactly. Exactly. So it's not super compelling in a down market, but you're going to do slightly better and you get a little income.

I don't know. Yeah. Well, I mean, that's, I'm old enough to remember when that's what a hedge fund's pitch was. Yeah. Hedge funds weren't yelowing VCs into, you know, a massive upside. They were supposed to protect your downside. But I guess we don't have bare markets anymore in stock. So we don't need that.

Come on. Everything's up to the right, Scott. Who cares? Don't worry about it. Just go long. It's Matt Hogan, who famously said on my show, he said that recessions have been made illegal, you know, recession in bare markets. The governments don't allow them anymore.

No. Yeah, can't happen. So the other ETF news right now, Fidelity ads, staking, payments to Ethereum ETF. So listen, it's not like staking hasn't already existed in Ethereum ETFs, but, you know, this is a meaningful pivot. They've got to do it, right? But it's, I think it's interesting when you look at the last story that we just talked about, because clearly people, you know, the spot ETF market is popular, but who wouldn't want to actually earn a yield on their ETFs as well, right? Something a bit more upside.

Yeah, I would even take a step back. If you just talk about the value of ETFs more generally, you want the ETF, whatever it's holding, to really perform exactly like the underlying asset that it's capturing. And so if you have, you know, Salon or an Ethereum ETF and they have staking as, you know, a core component of the, you know, protocol and the ETF doesn't do that, it's hard to like sell it. I mean, you got to stay. Just like go buy Ethan and stake it. And so I do think, though, that where they kind of, you know, listen, the largest pool of investors that utilize ETS or the advised market, the advised markets are not really adopted digital assets holistically.

They're still on the path of kind of getting these products approved on platform. But when you start talking about like a Bitcoin ETP, it's very straightforward. Bitcoin is Bitcoin is Bitcoin. When you start talking about Salana ETPs or Ethereum ETPs, there's a real unique decision tree associated with how the firm and the issuer are going to treat those rewards. And you really got to kind of know what you own. I'm often quoted as saying, like not every ETF is created equally and not every, you know, ETF issuer is created equally.

So, you know, how, you know, what percentage of the underlying assets in the ETP are being staked? They say it could be up to 100 percent, I think, with an 85 percent pass through to, you know, the buyers. Right. And then what, what's, what's the charge associated? with it. How is that impacting? What is the frequency of the distribution? How is it going to be distributed? Is it going to be cash? Is it going to go back into the fund? As we reinvested? There's a lot

of questions around this. By the way, it's fantastic. And incorporating staking into these ETPs is 100% in my opinion the right way to go about doing it. But yet, you know, as an investor, you're really got to know how the firm is dealing with it. Yeah. Just for the structurally, I'm looking at it. Stake up to 100% of the funds, either normal conditions, retain 85% of gross staking rewards for the fund, pay 15% to fidelity, custodity. and node operators and make quarterly cash distributions after expenses. Obviously, you know, Grace Gale, as you know, began the staking, I think October 2025, the first one, right, with distributed awards in January.

I had ahead of the curve. And then also, obviously, you know, Bitwise is out there as well. And Morgan Stanley has just recently launched their Solana in Ethereum ETPs and have also incorporated staking, which is, you know, part for the course now. Yeah. I probably should have brought this story. up earlier because it lends to the apathy of the market that we talked about before, but it's two stories. Robin Hood's crypto-notional trading volume fell 33% month-over-month-over-month and 62% year-over-year

to 10.9 billion in July. I don't think there's any surprise there. We've seen it in their earnings. We've seen coin basis earnings. Anyone who's reporting anything in crypto and is relying on volume has been slaughtered if they haven't found somebody else to do. Of course, Robin Hood found prediction markets, so they're fine. But, you know, that kind of leads into the next. next story that I want to talk about, which is winter mute plans, one billion AI push beyond crypto, Bloomberg. I think this also follows what we're seeing with Bitcoin miners who are becoming AI data centers, right? If you're in crypto right now, you're worth a fine. Maybe that's the story that I'm trying to get to. Like, you can't depend, maybe we get another, like, massive ramp up

in October and a huge four-year cycle. Maybe. Maybe. Maybe. You can't depend on crypto trading volume right now if you're a Robin Hood, if you're Wintermute as a market maker, and you certainly can't, you know, just mine Bitcoin blindly at a loss when you can be an AI data center. We're seeing a lot of crypto diversifying AI. Yeah. It's pretty funny. I was looking at a couple of the, you know, equity-based crypto ETPs that, you know, hold Bitcoin miners.

And there are minor ETFs out there right now that are called Bitcoin minor ETI. They're all AI data centers now. So, you know, there's a real shift. it actually what these companies are doing. So I think it's going to be funny to watch, you know, how that transition happens as well. But you're totally right. If you have an undiversified business that is totally relying on, you know, volume or transactional based revenue, you have to diversify that type of, you know, revenue.

Take a look. Here's a great example. Take a look at Falcon X buying 21 shares. Yeah. I thought it was absolutely. 21 shares mug. There you go. There you go.

So there if you can see it. here's a business that on the Falcon X side was totally transactional and trading based. And then you have a business in 21 shares that is, you know, AUM based. And so low-val markets, the 21-shares business is going to be, you know, very strong and very steady-eddy. And high-val markets, the, you know, the Falcon X business is going to be, is going to be really rewarding. So that business combination totally made sense to me. And it wasn't that it was like a hedge on their trading business. It was just diversifying the style of the revenue that they have, which makes total sense.

Yeah, I had Ophelia Snyder, but, you know, now I guess since that acquisition is, I think, it's just on the board or something, but I had it on last Thursday, I think, in this, you know, very conversation same day. And, you know, fascinating. I think that you're, you nailed that absolutely. I mean, Wintermute has to do this, though, right? I mean, listen, they're using what they've learned in crypto as a launch pad to, right, on the Jane streets of the world, right? Why wouldn't they do that? You know, they now, if they can just build out the infrastructure, it's crazy. I'm old enough to remember when a billion dollars was a lot of money. I know. I know. That's crazy. It's like, you know, from, oh, stupid movie, I'm thinking about

$1 billion, right? It's $1 million, $1 billion. Now it's trillion dollars. Yeah. Awesome powers. There you go. I will say something about Wintermute that I think is a little bit of a different angle on the same story. And I totally agree with you, by the way. Isn't this just a story of convergence, right? You can't be like a crypto company. You can't be a trad-fi company. It's all coming together. You have to do it. You have to kind of do it all. You're going to be eaten up by the firm that does do it all.

And it's exactly kind of the strategy that we have here at bullish and at CoinDesk. It's like, you know, we went out and we bought Aquinity, which is a, you know, traditional transfer agent for a little over $4 billion because we were looking at what was going to happen here. The entire world's going to get tokenized. And we can't just sit here as bullish and think we're going to, you know, be generating all sorts of revenue off of crypto trading. We actually have to position ourselves for what we think the future. is going to be, which is tokenization.

And similarly, in our data and indices business, we're not going to sit around and just create indices for single token and multi-token crypto products. It's not where the world's going. We have to be able to create products that are everything. So I think the same story with Wintermute, a different angle on what you're saying, but I totally agree. It's that you can't just, they just can't sit around.

They got to do something. And I think everybody that's traditional crypto is thinking the same thing. Yeah, and listen, it's not like the traditional market makers aren't also coming into crypto. Right? It's not like James It's going to be around, right?

I mean, apparently if you listen to the, you know, the narratives on X, Jane Street is the reason for all of our problems. Oh, right. Those guys are. And apparently they were manipulating the ETF. This is not true, by the way, guys, is your evidence. I'm just saying that was the prevailing narrative for the spare market. Was it Jane Street was, you know, manipulating Bitcoin prices?

Listen, you're not going to hear me say a bad thing about Jane Street. In the late 90s, they were like a five-person firm on the floor of the American stock exchange where ETS were started. Those guys are sharp. They're hardworking. They're really intelligent. They're well capitalized. They do things the right way.

I don't have a bad thing to say. I bet they have huge houses in the Hamptons. That I can't speak to. I can't speak to that. But it would be a hard one for me to argue against. I would just bet. So, yeah, I mean, there's two more stories, actually, that also kind of tie into this. So we had two major recent crypto-IBOs, Securitize and BitGo.

They're kind of on the tail end of the eye. IPO wave and both reported and interesting. So we have this situation right now where we're seeing exceptional growth in tokenized assets and such, but that doesn't mean that there's exceptional revenue. Right. Right. So Securitized fell 20% after earnings miss as tokenization revenues fall short. Okay, whatever. I think they're doing great things. Bitco sees revenue jump 80% to 4.3 billion in Q2, but they lost money. Yeah. Right. So like we had this kind of big wave of crypto IPOs. By the way, I think these are bare market things. And once again, if prices go up, these revenues are going to absolutely skyrocket. This is no different than coin binoced. It's just crypto. But no, it does

sort of ask the question of, is it going to be hard to actually make money with these businesses, even if what we think is going to happen, happens with tokenization or custody or all these things. I mean, listen, I just said it. We've made a massive bet in tokenization. We think everything's going to be tokenized. I think the concept of like tokenization. I think the concept of like tokenizing real world assets. I'm not talking about the Mona Lisa. I'm not talking about the Empire State Building. I'm talking about the nearly 3,200. Talking about board apes. Say it again. You're talking about bored apes. Yeah, yeah. Oh, exactly. Right, right, right, right, right, obviously. Now, the equity market is nearly like 300 trillion dollar market. This is insane. It's

absolutely going to happen. In 1975 was the last time that there was a change to kind of equity market structure before Regan-Mess in 2005. I mean, that's crazy when you think about in 1975, they connected the markets regionally with facsimile lines. In 2005, they connected the markets electronically, creating an automated system that didn't have any human interaction. And now we're in 2006 and we're talking about that next wave of innovation where we're going to digitize a market. So I think this is just like a natural step in the right direction.

It's totally unfamiliar to the sponsors that are out there and the public companies that are out there. It's no different than in 2005 when these guys, realized, holy cow, like we have an automated market, and I'm used to 96% of my trading happening on the primary listing venue that I chose, you know, the New York or NASDAQ or the American Stock Exchange. And then they went to having fragmented trading and it was confusing to them. This is a same kind of, you know, shift that they're going to have to get used to. tokenization is 100% happening, whether or not they choose it. We would be very strong advocates to say that the sponsor should be

in control of that. And we want issuer sponsored tokenization, which, we think makes a ton of sense. But the reality is, is that, you know, the market is going to go where the market goes and these issuers are going to have to catch up. And I think that, you know, some of the comments that you were making about securitized and their profitability and not generating a lot of revenue is just a matter of a fair market cycle. And the markets are going to be tokenized in the future. And there's going to be revenue associated with it. We certainly believe that. We've made a big bet. Yeah, they're going to make so much money. So listen, I know we kind of cook through all the news stories, but there's something you said earlier that I just want to circle back on

when we were talking about where the flows are coming from, you know, where the liquidity is coming from. How much of wealth management do you think is actually allocated to this or the pensions and the endowments that you mentioned before? Do you think they're even here yet? Is this one of those things where we were talking about it way too early? And are they coming? And what would it take for them to come? Okay. Let's start with wealth management generally. These wealth management platforms and advisor platforms have not materially incorporated digital assets or even Bitcoin into their client's portfolios. The process goes like this. You have to get onboarded. And it took about 18 months, 12 to 18 months after the January 20 of 2024 ETFs coming online for any of these wealth

management platforms to even approve these products. Grayscale was the forefront of it. Black Rock was the forefront of it. But then once they get approved, it doesn't mean that, you know, all the advisors are, you know, pouring assets into their client's portfolios. There's a process of, you know, there's an unsolicited process. So the client has to show up and ask for it. Then you can, as an advisor, have a solicited conversation. You can go out to your client. Then they get added to, you know, models. Then they get added to house models. Then they get added to recommended house models. None of that has happened yet. And I think the reality is pretty simple. For a very long time, until the ETF got approved, advisors really didn't have anything to offer their clients.

And so they pretty much buried their head in the sand on how to incorporate digital assets into their clients' portfolios. Firms like Bitwise and Grayscale very early were having conversations and educating advisors about this, but there was no way for advisors to actually make an allocation. Now, that kind of downside risk that was formerly, you know, gosh, of an advisor, you know, said, hey, go buy some Bitcoin. That could be kind of suicide for them. And then you have an ETF and all of a sudden the client is showing up to the advisor

and saying, hey, what about this Bitcoin ETF? The advisor's not ready for their conversation. So there's like a lot of like, you know, competing factors that are making it difficult for advisors to really actually incorporate digital assets into clients' portfolios. So it hasn't happened. And so now we have the structural kind of approvals and you've got these Bitcoin ETFs on the platforms and you're now having recognition. by firms, large scale wealth management firms saying, okay, we have to incorporate this into

clients portfolios. And you're going to start to see that happen. And it's going to happen in a really material way. In conversations with Morgan Stanley, who, you know, our index is underpinning the Morgan Stanley Bitcoin, Salana and Ethereum ETPs. We've had lots of conversations on the investment management side. That's the side of the house that creates the products. And the wealth management side, that's the side of the house that manages client money. And they believe that there's, you know, tens of billions of Bitcoin assets in their clients, you know, portfolios that have not yet come onto, you know, the Morgan Stanley wealth management. Whatever, right, yeah.

There's tons of appreciated Bitcoin that are just sitting out there that needs to get pulled into these wealth management platforms. How that happens is going to be an interesting thing to watch. So I think we're probably, you know, baseball analogy, first inning of the process. With the BlackRock news that they went from 25 million to 1 million or whatever it was for basically a tax-free conversion from spot Bitcoin into Ibit. Everybody's going to try to capture all that sweet sweet spot Bitcoin, especially now you've got this cold card hack. And I think there's just a lot of people who want nothing to do with, sadly, right, spot Bitcoin. Like there's definitely a sentiment I can see and maybe it wants to get a bear market thing.

A lot of people who would just rather own the ETF. Scott, here's the deal. I'll tell you this much when the when the when the gold. old ETF came online in 2004. All the gold bugs were like, I would never, I would never own a gold in my backyard. Yeah. Newsflash. They all own the gold ETP now. You know, it's just simpler. It's easier. It's like a building block in your portfolio. Everything's right there. So, you know, you're not going to get a stronger advocate for using an ETP for your, for your, for your, for your, for your, for your, for your, for your, for your allocation and the same is true for Bitcoin. It just hasn't happened in wealth yet. Now,

on the institutional side, with some very, very, very small exceptions, or not even, like, we're like basically in batting practice to, you know, kill the analogy. It hasn't, the game hasn't even started. And there's good, there's good reason for that. And I think we're probably, you know, we're a little ways away from that yet. Yeah, how it is price to go up. price just goes up and everybody will be interested again. Yeah, there's a, there's a, there's a demand, very simple supply demand, you know, equation that suggests that, you know, Bitcoin price is up to the right.

By the way, you know, when Bitcoin's at $120,000 was the first time that the entire complex of Bitcoin ETPs got over $100 billion. And, you know, now we're not quite at $100 billion, but we're at, you know, we're like, you know, 80, 90 billion, but we're at half the price. So the share base is massively increasing. And so if you go from, you know, where we are today in the 60s to, you know, back to 100, $100, $120, you're going to see a $200 billion complex.

Like, it's going to compound. Yeah, totally agree. All right, Dave, I took up enough of your time. Thank you so much for joining. Love the perspective. Yeah, it's great, thank you very much. That was good, man. You have incredibly good takes and perspective.

and I'll just bring you back when price is up like 10 grand and then it'll be a completely different conversation. And we'll say that that's what we said was going to happen, all right? How about that? You heard it here first. It's 100,000 tomorrow. Dave said it. I heard it. All right, man. Thank you so much. Everybody else, I'll be back tomorrow. I've got Urian Timmer from Fidelity, which would be, I say Fidelity, and then I get yelled at from Fidelity joining. So that'll be great as well. Thanks, Dave. Thanks so much. Bye, everyone.