The Wolf Of All Streets - Bitwise CEO LIVE: BTC ETF DAY 9 | The CRASH Continues | Crypto Town Hall

Episode Date: January 19, 2024

Crypto Town Hall is a daily X Spaces hosted by Scott Melker, Ran Neuner & Mario Nawfal. Every day we discuss the latest news in crypto and bring the biggest names in the space to share their insight. ►►TRADING ALPHA READY TO TRADE LIKE THE PROS? THE BEST TRADERS IN CRYPTO ARE RELYING ON THESE INDICATORS TO MAKE TRADES. USE CODE ‘2MONTHSOFF’ WHEN VISITING MY LINK.  👉 https://tradingalpha.io/?via=scottmelker  ►► JOIN THE FREE WOLF DEN NEWSLETTER, DELIVERED EVERY WEEK DAY! 👉https://thewolfden.substack.com/    ►► OKX Sign up for an OKX Trading Account then deposit & trade to unlock mystery box rewards of up to $10,000!  👉  https://www.okx.com/join/SCOTTMELKER ►►NGRAVE This is the coldest hardware wallet in the world and the only one that I personally use. 👉https://www.ngrave.io/?sca_ref=4531319.pgXuTYJlYd ►►THE DAILY CLOSE BRAND NEW NEWSLETTER! INSTITUTIONAL GRADE INDICATORS AND DATA DELIVERED DIRECTLY TO YOUR INBOX, EVERY DAY AT THE DAILY CLOSE. TRADE LIKE THE BIG BOYS. 👉 https://www.thedailyclose.io/   ►►NORD VPN  GET EXCLUSIVE NORDVPN DEAL  - 40% DISCOUNT! IT’S RISK-FREE WITH NORD’S 30-DAY MONEY-BACK GUARANTEE. PROTECT YOUR PRIVACY! 👉 https://nordvpn.com/WolfOfAllStreets    Follow Scott Melker: Twitter: https://twitter.com/scottmelker   Web: https://www.thewolfofallstreets.io   Spotify: https://spoti.fi/30N5FDe   Apple podcast: https://apple.co/3FASB2c   #Bitcoin #Crypto #Trading The views and opinions expressed here are solely my own and should in no way be interpreted as financial advice. This video was created for entertainment. Every investment and trading move involves risk. You should conduct your own research when making a decision. I am not a financial advisor.  Nothing contained in this video constitutes or shall be construed as an offering of financial instruments or as investment advice or recommendations of an investment strategy or whether or not to "Buy," "Sell," or "Hold" an investment.

The man that hates making money. How are you? Morning, I just say you got cut off there, dude. I don't know if you know this, but I have pretty severe ADHD and the amount of WhatsApp chats that you guys have added to me too, or that we have created is so overwhelming and astounding that there's literally no way I'm going to be able to continue to do business with you guys.

You're not alone by the way my wife she's always like why are you on the phone all the time are you like looking at Twitter or scrolling tick tock I'm like I don't even have tick tock I'm literally just talking to Mario and Romy and their team and 17 other people I don't I I it's very very overwhelming I'm gonna get there though i'm gonna you know it's good for me it's like uh but yeah man i don't know how you do it you must have 400 essential whatsapp chats going at all time am i talking to myself no no you weren't i was laughing like crazy also i'll say goraf yeah can you hear me yeah yeah, we can hear you. But Gaurav, by the way, he went through a phase. He hates groups as well. Gaurav is a common friend, everyone.

And I've got another story about Gaurav. I was on a call with him. You'd like it to do with Davos and escorts. But before getting to that, I was, so he, he one day just snapped. He literally left all the groups and my team freaked out. Like, Mario, what's happening? Guys, don't worry. He has a WhatsApp chat overload. We'll add him back gradually.

It worked. So yeah, we use WhatsApp a lot. Yeah, I think that's going to happen to me so much. Yeah. But yeah, in Davos, I was just chatting to Gaurav and he's like, so usually I go to Davos as well. I was there for the last couple, but I didn't want to go this time. He's like, Mario, you're still here in spirit.

The number of people that sent me, so my team did a post, so they get the credit, not me, about how escorts in Davos are booked out. And they put it on their website. We're booked out throughout Davos. So the team did a post on it and it went viral, a few million impressions. And then Gaurav, he's in Davos now with the Cs. Mario, the main topic of discussion in Davos is everyone's trying to figure out who's booking out the escorts. Everyone's sending me that link. I'm going to important dinners, important lunches, important meetings. And the question everyone's trying to figure out is the source of your tweet.

Who booked those escorts? So that was, at least you finished the call with him about 10, 20 minutes ago. My money's on Jamie Dimon. I think that when he did that CNBC interview, they were lined up just off camera. That's why he was so impatient. Say, I don't have time to talk about Bitcoin. I'm never going to talk about Bitcoin again.

I'm done. Can you see? I've got 700 women over here. And then they start talking about the use case of Monero. It's like, when I want to pay these women i paid them with monero no one knows about it bitcoin is very transparent everything on blockchain i would say we're off to a great start here really just a compelling conversation guys this is the quality you could expect when you tune in early uh to crypto town hall is rand coming today i don't know man i i uh i hope we didn't block him

like oh doesn't he have a doesn't didn't he like fly in 700 people to south africa to do ayahuasca or something what's what's yeah yeah he got his he got his team to do some retreat and uh taking different substances um i didn't ask for more information so he'll probably either be late that's literally what he said on the show yesterday. I don't know. I think they might have a dinner or something. Either they have a dinner, he'll be late, or he'll come on high. But it's a shame if he doesn't come on, because this is the ETF discussion again. And I think it will be, again, a good debate on why the markets are crashing and the numbers. But I know you covered it in your show, so maybe you can start it off with an overview.

And we've got Matthew here, as as well as dave jason simon yeah listen we've had the daily debate over whether these were a massive failure or massive success i think by any metric they're a massive success and i think as time passes we're seeing that you know uh we always look to sort of james safer and eric baltunis to track this for us that becomes sort of et Jesus or ETF Batman and Robin at the very least for all of us. And Eric continues to beat the drum that these were really the most successful ETF launch of all time collectively. Just a few things to note. BlackRock, theirs was the third most successful ETF of all time itself in a vacuum,

the third fastest to a billion AUM, only beat by Biddo, which was the Bitcoin futures ETF and GLD. And you have to remember BlackRock obviously competing with 10 others and still got to a billion, I believe, in four days, sitting at around 1.2 billion. Now, Fidelity's already over a billion. On the fourth or fifth day of trading, it was either Wednesday or Tuesday, Eric Balchunas noted that there was a 34% increase in volume,

which is something you never see on a spot ETF launch, an ETF launch of any sort. You generally see obviously a trickling in demand and it slowly goes down, but there was actually a major increase in demand for these, which he thought was of note and a really good sign. Really by any metric, volume especially, and volume is what brings interest. They've been extremely successful. I think the story here is just the GBTC overhang. And the selling of GBTC is a huge headwind. But it's going to eventually end. Listen, I think we should talk to the guests about it. That that's the gist of it. I mean, for people who don't understand why GB people would sell GBTC, just a very quick and dirty. There's three reasons.

A there was a ton JP Morgan estimated 3 billion worth of trading on the discount strictly, literally traders who had no interest in Bitcoin, GBDC, anything, who are just taking advantage of a 50% or lower at a certain time discount, waiting for a conversion when that discount to NAV went to zero, immediately taking profit. They sell GBDC. Grayscale has to then send Bitcoin to Coinbase to sell on the open market. We've seen hundreds of millions of outflows every day. And obviously, that's selling pressure, legitimate selling pressure. You have people who are locked in GBTC, unable to redeem for an extended period of time, who are looking to get out at any point. And of course, the final one is that Grayscale decided to keep their fees at 1.5%

when they have competitors that are at 0.2%. So they're making the gamble, obviously, or the bet, they've probably done the math, but there's quite a few people who have a large position in GBTC and don't want to take the taxable event or pay capital gains on selling that GBTC to buy something for a lower fee. So they're willing to pay the 1.5% fee. There's also some who will just value the size and liquidity and the ability to get in and out and won't mind paying that fee. But anyone in a tax advantaged fund or who would rather pay for that lower fee is going to sell their GBTC. And that money is going to come back in through another ETF, right? And some of that is delayed because of a T plus one and T plus two settlement. So there's a lot of dynamics here. But

the real story is GBTC is being sold off for various reasons, and that's putting sell pressure on the market, and that will eventually end. To be clear, there's a lot of bad takes on X where people are saying that Grayscale is dumping on the market. This is not Grayscale. This is the mechanics of the ETF. Yeah, so question for the audience. Scott, usually you ask the questions and never give your opinion. Today, you gave your your opinion it didn't ask any questions at all but the the yeah i love it because you hit me with so many whatsapp chats and my brain's not functioning no no literally if you look at the dm i just sent you now i think you giving that recap is is incredible i think you should do in every single space and matthew i'd love you to jump in on this one essentially the the performance of the etfs i was going going through the numbers as Scott was speaking.

And then the market, like everyone's question is that, do you expect the market to go lower? I know it's a question that's impossible to answer, but maybe giving us your high-level perspective on where you see things a week after the ETF launch or whenever. It's been more than a week, I think. Yeah, Scott, I think you did a great rundown.

I want to thank everyone, really, for the support of HODL. Eric Belkun has said there's going to be a strong middle class to these products. And this is one of the biggest ETF launches we've ever had in terms of organic volumes. Day after day, we had so many retail orders at the open that the market maker couldn't handle it. And that's why we opened 10 minutes late. There have been virtually no orders above 7,000 shares. So it's all the plebs out there supporting the middle class. Thank you for that. I think to the point on GBTC, these are sophisticated investors who have switching costs. And some of that is taxes and some of that is just trading in the market. And they're they're doing it in pieces and then they're going to get back in in pieces. And yesterday is the first day that you can see kind of net outflows across the board because of the GBTC, you know, coming out and then people taking their time to come back in.

And, you know, we can talk to some of those people and that's what's going on. So, you know, be careful buying an ETF on the first day of trading with a market order like that. That's, you know, you're going to get some volatility. And I think now the market is just digesting that froth. If you look at the BTC long short ratio on Binance, it reached almost 3x. It's still quite elevated. And you can see some defense here at 40K. And I think a lot of that is going to be, you know, a little bit of macro from here as BTC ETF kind of takes the back foot in terms of the news flow.

But, yeah, thanks for the support on HODL. This is going to be a long game. You know, these products are going to be around for a long time. There's going to be a lot of them that do well. Yeah, I love the point that this is real volume coming from retail and that the community who is looking to buy this was obviously supporting the crypto native firms like VanEck. I think that's an inspired and great story. I'm actually curious, Matthew, one of the bigger stories that we've been talking about, obviously, is Vanguard in particular, but of course, Edward Jones,

Merrill Lynch, a number of financial institutions not even offering these products to their clients. I think some of them are probably waiting to do due diligence, see the dust settle and bring them in. But Vanguard pretty much said, we're never doing this, right? And so have you been hearing from anyone that's saying, man, we tried to buy it, but we can't, we literally don't have access? Not on the institutional side. You know, on the retail side, I'm reading the same news story that you are, there's going to be the no coiner firms like Vanguard. And, you know, and that's's until the younger generation kind of takes over. And then there's going to be the bulge brackets, like the UBSs, where if you're over 10 million in AUM, you can buy it, even though they tell you that their macro folks don't like it. And those AUM levels are going to come down by orders of magnitude over the next two years and or disappear

for some portion of the firms that don't offer them now. And then, you know, that ratio will be interesting to observe. Go ahead, Tom. Hey, morning, everybody. So just to echo Matt's point there a bit, this is really going to be a generational shift. And it's, you know, it's gonna be a trickle now, but eventually, it's going to be more of a tsunami, right? I just saw a report the other day from FINRA and the CFA Institute, so really reputable firms. And they did a survey of what Gen Z millennials and Gen X holds. And by a large percentage margin, those classes, especially Gen Z and millennials, hold more crypto than they do individual stocks, mutual funds, and ETFs. So it's one of those things like skate to where the puck is going, which still boggles my mind how some of these politicians don't see it.

I mean, the younger generation is already investing in this stuff. And the drumbeat's only going to get louder for each cycle as numbers go up. So it's just going to take a little bit of time, a little bit of movement from some of the old boomer money as things change, but we know where the puck's going. Yeah, I mean, devil's advocate to that. I, by the way, 100% agree with you, but I'm hosting here. Are those Gen Z and younger millennials going to just continue to buy Bitcoin and never touch ETFs?

Like, has anything changed with the launch of an ETF product for the generation that's already crypto-native NZ and younger millennials going to just continue to buy Bitcoin and never touch ETFs? Like, has anything changed with the launch of an ETF product for the generation that's already crypto native and buying these assets, do you think? I mean, have you seen the ETF flows for 2023? Another record year. This is just a killer app, killer rap. You know, it continues to take meaningful amounts of share within Trit, even if TradFi is losing share to crypto, which is what 50 bits of the world, not going to change ETF momentum, obviously, self serving in my view, but there it is. Yeah. Go ahead, Tom, I was gonna ask you another question. Go ahead, please. No, just very briefly, like fundamentally, ETFs are just better products than mutual funds. There's

very few reasons to really use a mutual fund anymore. And in my view, it's just inertia from the old guard of individuals who are still selling those products or buying those products. The fees are higher, they're less tax efficient, and everything's moving towards ETFs. So just really getting other generations. Isn't Vanguard the... I could be wrong, but isn't Vanguard the largest mutual fund company in the world? They're certainly up there. Yes. Yes. Okay. So that tells part of the story, I would say, with Vanguard.

Guys, I'm curious in the comments, actually, if anyone in the audience can tell us if you had any experience trying to buy these and have struggled to be able to do so if you're in the United States, if your brokerage offers them or not. We'd love to hear from all of you. Simon, go ahead. Yeah, I think the whole story here is tax. So, you know, I imagine people own in both. So, you know, you have your tax efficient retirement structures, you've got a job,

you get a set amount every month, you put that in your Roth IRA or SIP or whatever you've got in your jurisdiction, but it's capped at a certain point. So as you generate a certain level of wealth or you start to come into money, people do the whole self-custody story as well. people will hold like to the cap of the tax efficiency within the ETF structure based upon their employment income and any and any and any other side they'll probably do the whole self custody thing as the younger generations even the price action I think it's a tax story as well so imagine you've got a bunch of people that were in grayscale from the $69,000 top. Everyone wants to get out of grayscale because the fees are ridiculous. But those that are in a lower cost base are probably not going to get out because they don't want to take the tax heat. But those who are at the higher tax base, they'll take the capital loss and then come back into do some tax harvesting, come into

a more efficient ETF. So I imagine as well that if you're in grayscale, and you're the generation that didn't really have the stockbroker account and stuff like that, you were just forced into it for GBTC, you probably got a bit of an onboarding process and a time lag in order to get into the next ETF. So I can't imagine that a bunch of people sold, and then they don't want into Bitcoin again. I mean, there'll be some of that. So I think it's just a time lag and a tax story that we're seeing. Yeah, as I said, I have spoken to investors, whose tax lawyers have taken the view that swapping the GBTC ETF into a different Bitcoin ETF is a like for like swap, even with the cash creates, and therefore, not taxable. I'm not a tax attorney, but I'm telling you that

sophisticated investors have told me that there's a position that tax attorneys are taking. If that is true, we need to literally tell everyone so they'll stop selling their GBTC already. Come on. I mean, that would be an incredible hack if that is the case. Not something that I've heard, but it does make logical sense. Problem is, the IRS generally doesn't make any logical sense. Tom, I thought you had another comment, but I might have missed it. No, I didn't. Just that was more. Yeah. So because I can actually can I ask you a question? Of course, it's the opposite. If you if it is tax efficient, you'll sell your GBTC and buy something else.

Can I? Yeah, absolutely. A hundred percent of the time, unless you literally need, unless you're trading with such size that you need, you know, the fact that it's the one with 23 billion rather than 1 billion or something. Like you need to move 500 or 600 million in and out or something, you would obviously still have to choose GBTC purely because of size. But I think that's not really applying to many people.

By the way, I'm just looking at the comments. You're apparently inspiring a lot of people to move off Vanguard. You got yesterday night, that's the account's name. I've moved my entire Vanguard account this morning, the morning of ETF. I had to call them to find out why the trades were not going through. So it's a very anti-Vanguard sentiment in the comments. The question I have for you, Scott, and anyone else could jump in on this one, it's a very simplistic question. It's like, I don't understand how anyone could call the ETF launch a failure when you got Bitcoin, which was an asset that wasn't even recognized as an asset

just a few years ago, is now the second biggest ETF of any commodity, much bigger than silver. I think Bitcoin is at, what, 30-something billion? And then silver is at 11 billion assets in management. Isn't that enough to say the ETF launch was a success? I think so. There's people, obviously, who will make the argument that since GPTC already had roughly $25 billion, that it's not apples to apples. But I think that certainly the people who are in that we're seeing are making their choice and they maybe are exiting or going to a different one. And so, yeah, I think that every metric, every metric you look at, the volume of these is astounding.

Balchunis had a tweet. Let me look really quickly, to put this in context. He said, another way to put the Bitcoin ETF flows in ETF context is how they stack up to all ETFs in past one-week flows. Even after four days, two of them are in the top five and three in the top 10, up there with the studs VOO and QQQ. So you're talking about QQQ, obviously, is the ETF for tracking the NASDAQ. And this is doing comparable flows to that. And that's with multiple products. These are massively successful.

But to answer your question, Mario, it's just simply because of price. That's all they're looking at. No, no, it's not. It's only price. It's only price. I think the point that Scott made that GBTC represents the majority of that. So we're sitting at $5 billion without GBTC. But then when do Eric and James expect the ETF excluding GBTC to be silver?

What are the predictions for the next few months? What do they expect it to reach? I haven't actually seen that, but it would be a great question. I have no idea. Math to you, Andrew. Has anyone looked at what the prediction is? Yeah, we're at $40 billion. I haven't looked at all. The work that we've done, we're at $40 billion in net inflows over one to two years, which is based on an analysis of what GLD did and adjusted for the changes in money supply. So $40 billion would put it right around where silver is.

Matthew, at a net inflow, how do you decide that it's net inflows versus total market cap of all the ETFs? That's the meaningful metric. Well, because I think Bitcoin is going to go up a lot, right? So I just want to think about what what people are putting in and in current fiat terms mario i just want to share really quickly i'm looking at a terminal uh that i have that has all the utf information effectively and we have one of the indicators on here is the date is from the tie the daily gbtc on-chain wallet outflow so people are wondering just how much selling pressure there is. This is literally the Bitcoin that's being sent from Grayscale directly to Coinbase.

So on the 12th, which was right when they launched, it was like 58 million. But so this week, the 16th was 396.18 million major selling pressure. Then the 17th was the really big day we were all talking about, just south of 800 million, 791.98 million in Bitcoin sent from Grayscale to Coinbase. I think that happened on the 17th Wednesday because of T plus one and T plus two. Someone else can correct me, but because of the settlement time

and because Monday was a holiday, probably the bulk of the selling from Thursday and Friday after the launch really started to hit and Grayscale then had to sell that Bitcoin. And then the 18th, which is yesterday, 375.86. So slightly down from the 17th, about half actually. And then today we're at 164 so far. We don't know if we'll see more, but that's half of yesterday. So we could be on a trend here of it trickling down, the people who exited it first, that coming through the system now. And so, Matthew, I want to go back to what you said earlier. So what do you expect the assets under management to be by, let's say,

end of next year for all Bitcoin ETFs? And what are maybe, if you know, other predictions out there? I'm just going to put an average if we sum them all up. I haven't seen them. I haven't seen them. And have you guys come up with any predictions or are you on a personal level? Well, I have a year-end target for BTC of 80K. So I don't know, like maybe

if half the flows come this year and the price doubles, then you're at 40 billion and that assumes GBTC stabilizes at 20, I guess. So now we're looking at, just to kind of put it into perspective for the audience,

and I don't know who's just jumping in, I'll give you the mic right after, just kind of put it into perspective for the audience. And I don't know who's just jumping in. I'll give you the mic right after. Just want to put it into perspective for the audience. All silver ETFs, just looking at the numbers, are sitting at 13 billion. So you're looking at Bitcoin again, that was barely recognized as an asset a few years ago, will be almost four times, if we hit those targets, will be almost four times what silver is. And let's say Bitcoin's price remains the same, then we'd still be, let's say, 40 price remains the same and there would still be let's say 40 divided by 2 at 20 would double what silver is now we're a fair way away from gold just kind of shows the potential upside as well gold is sitting at 226 billion and then bitcoin um as you said you know

expected to be 40 billion which i think is pretty realistic um so you know 6x uh potential upside i'm not sure who's trying to jump in so Quickly, Mario, but before someone jumps in, just to update what I was just saying, the numbers that I was reading were as of basically midnight last night. And we just saw a report that half an hour ago, this report from 50 minutes ago, so just over an hour ago, 12,865 Bitcoin, that's $520 to $ million worth, were transferred from the Grayscale Trust Address to Coinbase Prime. Grayscale Trust Address has transferred a total of 54,343 Bitcoin, which is $2.3 billion to Coinbase Prime during the opening hours of the U.S. stock market for five consecutive trading days starting from January 12th. So we actually, to correct what I was saying before now with the new data, there's an uptick. So it's another 500 million have been sent today. The new GBTC trade is basically liquidation of that particular ETF. And the reason is, it's very simple. There's probably three groups of folks

that are in that particular product. There's a bunch of Genesis creditors that own it at size who are pissed off and are going to sell no matter what. There are probably a bunch of folks that are cost conscious. And the reason why they're cost-conscious is because the fee for GBTC is 5x plus what VanEck's or anybody else's is. That's insane, right? So anybody with a meaningful eye towards financial planning and has even a hint of a financial advisor in their life, they're going to get out of the product, right? And then there are folks that just want to sell to grab profits or not be associated with Grayscale because of their parent company. That's an enormous amount of sell pressure that's going to continue for a significant amount of time. There's also a reason why Grayscale and DCG set the fees at 1.5%. If they're smart, they the bet that the lion's share of the assets would stay.

They didn't do that. They set it at 5x everybody else. Why? Because they knew they were probably going to get cut in half in the first 12 months. I mean, that's a reasonable look at the landscape of GBTC. And it's not like there's going to be a significant deceleration of selling, you know, in the next week or two or three, it's just going to continue. There's no reason for it not to continue. Andrew, what does that mean for price then? I mean, we, it's, you know, I would say that it's held up astoundingly well, considering how much supply we're seeing hit the market. But clearly, it's starting to be a serious debt. Well, it's, you know, everybody talked about, you know, when the whole DCG debacle happened, and by the way, it's still ongoing from a court

standpoint. Everybody talked about Reg M and could Grayscale be forced to liquidate? What kind of, you know, response would, you know would Bitcoin price have at that point? What would that do to the market? We're seeing that play out right now. It's just happening in a more measured way based on how the markets work with an ETF, right? We're going to see it again and again and again. And it's funny that, you know, Barry, he erased all of his tweets, right? But we should all go back and say, it's my turn, Sam, right? It's his turn. So this is another version of that, is that they set their fees at a number that anybody with a meaningful financial planning, you know, brain cell is going to bounce out of that product. It's going to keep downward pressure on the price of Bitcoin and keep a cap on that pressure. Because unless there's some

event with political, who knows, that busts through that amount of selling pressure on a day to day basis, you know, best case scenario, we trundle around baseline of 40, 41, 39, 42. It's just going to sit there. It's going to sit there for a while until this abates. That would be my guess. They've only got $23 billion worth of Bitcoin left at $500 million to a billion a day. that's to be real. They're not going to exit at all, right? I mean, they're going to keep significant AUM. There's plenty of people who don't want to pay capital gains taxes on exiting GBTC. There's also plenty of people who literally just own GBTC and have not thought about any of this. Yeah. But my point is, is at minimum,

there's probably a third of people that fall into those three categories that I just talked about. So if that's a third, you're talking about what? $8 billion. $8 to $9 billion. Yeah, $8 to $9 billion, right? That's pretty significant selling pressure. I see that Simon has his hand raised. I would like to bring Simon into the discussion.

I'm not a host here. Thank you for hosting, Andrew. Thanks for having me, Andrew. Yeah, thanks for having me, Andrew. Yeah, Scott, let's put our hands up as well for when Andrew's ready. Mario, I'm going to have to mute you. Wait until your turn.

Yeah, I just want to have to mute you. Wait till your turn. I just want to point out the evil of what Digital Currency Group actually did. And I know because Andrew's here. But essentially, it used these arbitrage, Barry Silbert, the genius structurer. It used this arbitrage in order to dollarize all of the creditors out of their Bitcoin in these lending services. So you can lock in the dollar value of the debt they own to the creditors that had Bitcoin through the whole Genesis Gemini saga, and then sit on the Bitcoin gains and keep the fees high within grayscale in order to knowing that a percentage of those would stay

there for tax reasons and so essentially it really took everyone's bitcoin gains and they used that in order to pay down the debt on the shitty investments that they made as a result of the whole 2022 deleveraging and saga so So it really was an evil thing. And so, you know, I do encourage, I know that it may have some negative impact on price while we go through this arbitrage, but I think people should be supporting those that are taking a percentage of their fees

and giving it to core developers and actually supporting Bitcoin rather than scamming people out of their Bitcoin gains. That's Bitwise and VanEck, by the way. That's Bitwise and VanEck for anybody who's wondering. Yeah, sorry, I didn't mention. You can name names around here, Simon. Oh, actually, Andrew, is it okay if we name names or should we not? Yeah, go ahead. That's a policy I just approved this morning. So we're good.

Okay, thank you. Thank you for the approval. Zach, go ahead. I was going to say, I think the other axis on which if I were thinking about which ETF I'd want to go with, I mean, one of the factors is how much, like how deep pockets the issuer has, right? Because if something goes wrong, if there's an issue with custody and you're in your BlackRock or Fidelity, you can afford to cover those shortfalls. Whereas the smaller ones, maybe there's some concern and that's an edge case that matters. But I do think that ideology is important here. And so, look, it's great to support the smaller issuers that are supporting core devs,

if that's what you want to do. But even if you're choosing between the big guys, I think there's a real difference between Fidelity, which custodies its own Bitcoin, and the Fidelity digital assets team is ideologically pro Bitcoin. They sort of get it if you read their research papers versus BlackRock, which invented ESG. And, you know, if there's a fork down the road or, you know, they could even be responsible for an ESG fork. Are you going to see the benefit of both sides of that? So I think there are both selfish and ideological reasons why even among the big guys to prefer the Fidelity one prefer the fidelity one

over the BlackRock one. I would encourage everyone to read the perspective around what the insurance levels are per cold wallet and what the limits are with what the custodian can do. But I would argue that the Winklevoss twins, if you read Bitcoin billionaires and how Gemini was originally set up and the way that they approach cold storage and the fact that they're regulated under NYDFS, this is aligned as well with Bitcoin's core values. That's all. Yeah, I just want to double thumbs up the Fidelity thing. I've seen Fidelity at Bitcoin conferences since 2014. They've been in this, they've been mining.

And so as a TradFi financial institution, you know, on the buy side, I think they're as Bitcoin as it gets on the TradFi side. Yeah, I guess consider something other than BlackRock, maybe, if you're looking to allocate to one of these, right? Like, VanEck obviously has been on the right side of this for a long time, and I went to college with Gabor, and he's awesome, and I don't mean to denigrate the smaller issuers,

but even if you don't want to be with one of the smaller issuers, like, maybe don't do BlackRock. But also, Jamie Dimon is still saying that Satoshi is going to come up and mine a few million Bitcoin. Satoshi. His name is Satoshi. He pronounced it wrong. Is that Binance?

Is that Binance? Yeah, it's Binance and Satoshi. Go ahead, Tom. Yeah, so I think the key thing here is, so we're talking about advisors, about education and getting, you know, most people don't even look at the fees, right? It's through the advisors that they look at the fees. So it's all about distribution and incentives for these advisors to recommend these products. So I guess while we have Matt here on stage, could you guys, could you maybe just expand on your plans or how you guys are thinking about engaging with the advisor community or others who may recommend these products to the end consumers are actually going to have flows? Yeah, so we've been actively engaged with advisors, and specifically the wire houses, the old, you know, the old fashioned Wall Street distributors of mutual funds, and now ETFs. And those are typically our best relationships and strongest clients. And those are the folks who have been kind of ideologically unwilling to

let their clients have access to these products because of the political implications, frankly, is the root of a lot of it. And there's a handful that you'll see change by lowering minimums or making products available and integrating BTC into their asset allocation models in the second half of this year. But then there'll be, as I kind of said at the onset, like some just no-coiner organizations like Vanguard that won't do it until

leadership changes. So we've been saying all along that the early flows here are going to be from retail and from kind of institutional managers who will now change their own prospectuses so that they can buy Bitcoin. There's some 60-40 mutual funds out there, for example, that are now adding Bitcoin. But that the real advisor funds are coming in more in the second half of the year. And it'll be some subset of those like the UBSs that I mentioned that will be lowering their minimums. Hunter, I'm glad you just showed up because I was about to literally say something that we spoke about last week and then you appeared in the audience.

But you told me to that question that Tom just literally asked Matthew. You told me when we talked last week when they were launching that you guys had already had 20,000 phone calls. Right. Yes. Yeah, yeah, yeah. That was, over the course of 2023, we had about 20,000 phone calls and meetings with financial advisors and traditional investors. So much like Matthew, I imagine the work you do, a lot of blocking and tackling. And the conversations often feel a little bit like

being a teaching assistant for Bitcoin and help helping people with wherever they're at and, and whatever, you know, they're working through in terms of thinking about making an investment. So we love doing that. It's really the only thing we do. And I'm incredibly excited by the conversations that have started with these things launched. Of course, traditional investors don't, you know, they've got 99 other things to do. So they can't drop everything and clear their schedule just to make time to buy a Bitcoin ETF 48 hours after it launches. But I think I just I just heard a bit of what you were saying, Matt and Matthew. And and yeah, I think we're excited by the the audience that's opening up here. Do we have any concept for what percentage of people don't even have access to these products yet?

Obviously, we mentioned like Vanguard and Merrill and all this, but I've got to imagine a huge swath of the population just can't buy these yet. It's huge. I believe we do a survey. We've done a survey of advisors every year for the last six years. I feel ancient, but the most recent one came out maybe two weeks ago, and we asked advisors, do you have access to crypto

and i think that i think it was something like 20 percent 19 thought they had was it 19 is that right yeah 19 i've studied that study i've referenced it so many times and you're turning blue in the face yeah i mean it's it's it's uh it's really low and and the other thing that is so fascinating about that number is that the reality is actually probably higher you know there was there was another fascinating number in there that over 60 of advisors didn't think a bitcoin etf would launch even just weeks prior so i you know i think the right mental model for a lot of people on uh on advisors is that it's a little bit like if you imagine your uncle or your cousin or something. They're not necessarily as focused on Bitcoin as the rest of us.

Not out of negligence, just out of them having a lot of other responsibilities. They're getting a call from a client today who needs help with something going on in the family or needs help initiating a wire or they have a meeting about what the Fed's going to do on rates. They have a meeting about rotating into the great VanEck Gold Miners Fund for this part of the market. So there's just a lot for them to juggle. But actually, I was exchanging emails with one of the top advisors in the country. And he said, wow, I didn't realize it had launched. And it was three days after it launched. So that's going to change. But they're not as up to speed as everyone in Crypto Town Hall.

Yeah, broadly speaking, we kind of started the conversation with whether these were a success or not i think we have kind of consensus amongst us that we think they're a great success but like looking back i guess on the eight days since they've launched how do you sort of appraise uh this versus your expectations as you know uh up or down, it's in sort of the top echelons of the history of launches. So through that dimension, a success. I think that setting that aside and anecdotally, the response from our client base, the fact that some of them have already made allocations in 48 hours has been stunning. And even some of the largest firms in the country have prioritized this and are having meetings this week about it or plan to have meetings in the next month or so. The banks are moving pretty quickly.

So I think it's a resounding success. I think that the timescale of this audience, you know, I think crypto wants to wants the mainstream to embrace the vision and the asset that all of us have seen for a long time. But part of what makes the mainstream the mainstream is that they just they move at a different pace. And, and I think it's a it's a different, you know, it's a different sort of speed than than crypto is used to. But but we're incredibly excited by the response we're seeing. And I think this is a train that is going to run for a long time. I mean, the fact that that a few products are are at the size that they're at now is very exciting, but it will keep going. The one other thing that I think has been fascinating that people may have followed is that there's been a lot of activity right now with

people selling GBTC and buying other products. Our product is BITB to lower their fee in their IRA or to lower the fee on their Bitcoin exposure. And that has been, I would guess, maybe 50, 60, 70, 80% of the action. If you look at the flows, I think it's something like 2.8 billion in to the new funds and 2.2 or 2.3 out of GBTC. You know, if you net that you get maybe half a billion or north of that of net new dollars. But I think the first movers in the first this is the sixth day of trading. There's been a lot of really fast action from GBTC holders. I think that that will shift. I think we will shift towards more net new investors over the coming few weeks here. But again, as I said, they just need they just need a bit of a bit of time to get organized. Yeah, and hopefully we'll see a slowing then of the GPTC aggressive sellers too,

you know, who we're looking to get out from the beginning. There hasn't been any meaningful flows from a traditional asset allocation type of conversation within the ranks of financial advisors like that. That will come over time, that will come, you know, quarter by quarter, that will come as we hit, you know, certain velocities and clients are bringing it up at asset allocation type of meetings. We haven't gotten anywhere near that type of the conversation. And so, you know, agreeing with Hunter over time, I don't think that it's interesting dynamic that a good portion of the GBTC sales are pushing into the other products. That's an obvious point. But it's interesting that that will probably bridge the gap to these asset allocation timeframes. And then the deposits and the inflows

will pick up from there and only grow. You know, there's somebody on Twitter, Dead Kate Bounce. She's been in traditional ETFs for a long, long time. And then it's in the Solana ecosystem now. I know her and know that she did a great job in TradFi and I've got a long history in TradFi. Her commentary, she's got a thread that's pinned about the long-term effects of ETF and them existing on platforms. So if you think about it, something like 60 to 70% of all financial advisors would be considered independent. So there are a type of, of organizations, and there's about three to four platforms that they use as their backend type of custody foundation, right? So when you get to a

point where the RIAs of the world are including Bitcoin and Bitcoin ETFs as a 1%, 3%, 5% type of allocation conversation on a quarterly basis with clients, that's never going to stop. When that starts, that doesn't stop. And it gets bigger and bigger and bigger and bigger. To say nothing, like the Merrill Lynch's, the UBS's, the Morgan Stanley's, that's the smaller subsection of financial advisors. It's about 20 to 25% of all the financial advisors in the United States. The bigger portion are your independent RIA type of advisors that exists across the country and are committed to the fiduciary standard associated with putting clients in the best possible product based on the allocation that suits them. It's not about what makes them

the most money. So the allocation to Bitcoin, that's going to happen over time in waves, quarter by quarter. You'll probably see blips in quarterly adjustments to inflows based on those over the next 6 9 12 18 months but it's not going to stop it's only going to slowly kind of that the spigot will slowly continue to turn a little bit more a little more open a little more open a little more open, a little more open, a little more open. I agree. Sorry. No, no, no. You go ahead. I was just going to say,

I think for anyone who is anticipating that all of a sudden every RA in America was going to get their clients 1% of their portfolio into Bitcoin in the first week. It's just nonsense. I would like to mention that Simon has his hand up again. You don't have to mention his hand up. You just call on him as our

host. Simon and Dave. Dave has too. I actually had a question. Scott was talking about the inflows from to Coinbase to go to the other ETFs. Isn't GBTC cussing at Coinbase as well?

And does anyone know whether each ETF will have their own segregated custody service? Because obviously one of the interesting things about Fidelity is they're doing their own custody and it seems like we are chucking a bunch of money at Coinbase and creating a really big honeypot here. Does anyone know whether they have their own segregated custody? Yes, yeah. I believe eight out of the 11 ETFs custody with Coinbase Custody Trust Company. This is a subsidiary that is separate and different than the brokerage, than the app. The Coinbase Custody Trust Company is regulated as a bank with a trust charter in New York. The accounts are segregated and held in cold storage. It's not a hot wallet environment.

They are the largest Bitcoin custodian in the world with the longest track record. And I think with any custodian, even if you use Fidelity's custodian or you use Gemini's or Anchorage's or BitGo's, and there's a lot of great custodians these days. I don't know if everyone remembers back when it was just Kingdom Trust and Zappo on the, on the qualified custodian side. But it's really come a long ways and I think it'll, it'll keep advancing. But what I was asking is if,

is if each ETF has its own custody set up, segregated within Coinbase custody, where they might have like a multi-sig or something. I don't know if anyone knows like or whether everyone's subject to the same setup within that one trust company. Yeah, each ETF should have a segregated set of wallet addresses. It's a great question. It's a great question. And that's the answer. Dave? Yeah, I mean, I think when you look at outflows, it's really important that we also understand that there were huge outflows from the CME futures during the last week and a half.

I mean, about 3,800 contracts by my dead reckoning. And it shows up both in obviously the open interest collapsing, but also the simple fact that the premium that people have been willing to pay, which I've talked about on this show multiple times, has reverted from double or quadruple a calculation of fair value to somewhere around fair and sometimes even below fair. So it's kind of moving around a lot now. That's a lot of money. That's like $600 million worth of Bitcoin. And actually more. That was at $3,000. Anyway, it's a fair amount. And that adds, and the marginal buyer and seller is what matters here. So sure, people are going to sell out of, you know, I made a tweet this

morning. The other point is, is once you have an asset that is tradable, people will trade it. And, you know, every study that's ever been done says greed is a big factor, but fear is far worse. And it should be noticed that all the normal people who like to dance on Bitcoin's grave and are almost invariably the perfect predictors of when a bottom is, have all started chirping over the last two days. These people don't understand the importance of the narrative that our friends from Bitwise, Hunter was talking about and others, that this narrative change is a big deal. It's literally the beginning of the narrative change.

This is a multi-year kind of deal. But if we're all dealing with an asset class that we think needs global adoption and mainstreaming to get to 10, 20x from where we are, well, this is the beginning. It doesn't mean it's going to go in a straight line. For sure, it won't. That's all. Dave, how closely are you tracking the GBTC outflows or the sort of relationship between inflows and outflows? I mean, it's hard to track because, look, the thing is, is we don't know. There's information we don't know.

And I'm not going to call up my friends at, you know, at Grayscale and think that they could answer. Because, look, the trade that Ryan Selkis dubbed the widowmaker was huge. We know an enormous amount of the open interest or the holders of GBTC were in it for the arbitrage at the end, but were originally in it for the other arbitrage that got trapped in it. And so we do not know who holds all of that stuff. And most of that stuff was hedged completely, meaning you could see outflows and it wouldn't matter because there would be spot or derivatives on the other side of it. We don't know how much of the percentage of the liquidations we're seeing are that trade being unwound vis-a-vis people like me who have GBTC and taxable and non-taxable accounts.

The non-taxable is going to stay there. I mean, the taxable is going to stay there. I mean, the taxable is going to stay there until I decide I want to sell Bitcoin. And which, as you could probably guess, is not very likely. Never. Yeah. I mean, I wouldn't say never because there's a price for anything, Scott. We all know that. But, you know, not now. We'll leave it that way. And on Monday, I'm going to, on Macro Monday, I'm asking you what your price is, by the way, so just get ready. No problem. And I'll answer it and it will piss off Mike, but that's okay. In any case, the point is that we don't know the composition. So all we can do is see what's coming out,

what's actually being sold. So when it's being transferred to Coinbase and being sold, what we don't know is if someone is on Binance Futures getting rid of a position on the other side that's hedging it, right? We just don't know that. And the only people who do know that are the people who are doing it. So it's really hard to track that. So the answer is, no, I'm not paying that much attention, but we are looking at pressure. And to be honest, I mean, we've just seen a retracement that is classic. I mean, literally, we're almost directly in the middle of the first and second Fibonacci retracement levels.

And I know you talk about it with your chart guys all the time, but we had a run from 25 from the day that BlackRock announced to 48. And just look at it. And by the way, it's getting slower and slower. And liquidations, over the last day, we saw 250 million liquidations that's a pretty large number it feels like the flush is mostly done that's the way i would look at it andre i'll just add to that i'll just add to that that the the most profitable um technical strategy for bloom on Bloomberg.

They track like 15 different either trend following or contrarian technical strategies. The most profitable strategy over the last two years just flashed a green. It's been a while. So, you know, I'm not saying we're, we're definitely going higher, but that one has a pretty good track record. Matthew, do you think the ETF, I think Hong Kong, there's a new application, VSFG, just applied or is aiming to apply for a spot Bitcoin ETF. I think there's a movement in South Korea as well to try to get one approved.

Could those have much of an impact on the markets or really it's just the US leads it all and the rest won't have much of an impact? I think Hong Kong would be pretty important. Not sure about South Korea. Yeah, I saw also that Singapore said no, by the way. I think that was just on the tape yesterday or today. Why did they say no? Did they say why?

I just saw the headline that there won't be a Singapore listed one, but lots of Singaporeans have access to US brokerage accounts. And your thoughts on South Korea and Hong Kong? I think it's helpful. Even if we get some weakness here because of the lumpiness of GBT selling and kind of pre-hving jitters, miners, they're really underperforming. Like the equities are really underperforming. Our DAP ETF is down 28% year to date. Coinbase is down 28% year to date. So even if that kind of choppy trading continues into the halving,

the second quarter post-halving with the possible Asian ETFs adding fuel to that fire, that's where things can really get interesting. The question is from what level that starts. Yeah, Mario. I mean, the American United States spot ETFs aren't the first, right? We all know that they've existed in Europe, Canada, South America. So it's pretty clear i think that uh the big boys are the united states but it is worth noting that all over the

world they don't generally have access to ours right yeah i was also i was also surprised that east asia um that singapore south korea don't have an etf um maybe not surprising to you guys but i thought they'd be they'd be ahead of us especially considering the sentiment remember when you went to east to to the singaporean event uh 2049 you were talking about how uh the sentiment is very different exactly exactly but for any it was surprising for me to know that they didn't have an etf in singapore just rejected uh the application so yeah go ahead uh i was just saying mario, it's a great question. And Matthew, I think you made a great point there. The US ETF market is the largest in the world by a factor of 10.

It is absolutely head and shoulders above the rest. Part of that is many other markets can buy US ETFs. I think that you're seeing outflows in the European ETF, Bitcoin ETF market right now is some are rotating into the US one. So the good news is that there are a lot of non US investors who can buy these products. And so the launch of Bitcoin ETFs in the US, open up access to Bitcoin through the ETF format, even outside of the US. But also, I would say in terms of just the popularity of the products, it's a different order of magnitude.

The US is really the big prize and a tens of trillions market. So the fact that it's finally arrived I think is a huge deal. I agree. Now, my question more is from a symbolic nature if you get an ETF approved in South Korea, maybe not as important, but Hong Kong I thought was pretty important symbolically. Yeah, that makes total sense. That's a great thought.

By the way, Manta launched yesterday. I'm just going through the news. Didn't they have a DDoS attack or something immediately? Did you say DDoS? It's called DDoS, man. It's called DDoS, not DDoS. And then China and China

formed a metaverse working group. Did they have a DDoS attack? A DDoS? You guys don't know about the DDoS? DDoS. Oh, DDoS? DDoS. You guys don't know about the DDoS? DDoS. DDoS. Okay, boomer.

Yeah, go ahead. I'm just going through the news. Go ahead, Hunter. Matt Hogan, our CIO, was in the U.S. ETF space for 20 years. He wrote the CFA's book on ETFs. And he likes to remind me that in the early 2000s, ETFs themselves were so new in the US that people used to call them EFTs, which I thought I would submit as we're mispronouncing acronyms. But if I could just chime in one other thing, I would say, you know, I think Dave kind of hit on this. It's about to be an unbelievable year. I think that there, you know, I've heard

from some clients who are disappointed that Bitcoin is not up at the moment. You know, I can't remember when we crossed 40,000 in the fall. It wasn't that long ago. But this is a structural development that is going to be an amazing boon and tailwind to the space for a very long time. So I just want to have said that as a bitwise person here and make sure that I made the comment that I really think this is an extraordinary thing. And day to day, there's some choppiness as the market learns this new market participant. Dave also commented on the futures. I think when most people think about the market, they think about the retail trade, they think about leverage, occasionally a big new institutional buyer.

The ETFs represent a whole new class of citizens in the flows and in the markets. You have the market makers who are hedging creations and redemptions and stepping into the futures markets. You have the ETFs themselves, our portfolio management team. I've been tweeting about it most days. Our portfolio management team goes into the market to buy it. Most days, our portfolio management team, you know, goes into the market to buy Bitcoin at a specific in a specific window of time. All of that, you know, means there's some some new dynamics relative to the flows in the space day to day. And I think over the next few days, the market will continue to sort of process that that new player and that new constituent. But, you know, zooming out, I just think this is one of the biggest steps forward

for our space in a long time. So I just want to convey a lot of enthusiasm for what this means for the space that we've all sort of believed in and committed a large part of our lives to for a while. I think it's going to be a great, a phenomenal year. Hunter, before I go on to Tiger, I see his hands up. We also have David and Zach. We never did a legal recap. We've talked about Coinbase. I had a question on that, but also any other important cases

that we probably missed while hosting the show. So, David, Zach, that's my general question for you. But Hunter, before going to Tiger, I want to ask you about the markets. It's something we've asked many speakers in the past is the narrative that the Bitcoin halving will be the start of the next bull market. It's kind of become a self-fulfilling prophecy in a way. But there was an argument made in one of our spaces that once institutions come in, now with the ETF approved, they don't care about the halving. For them, the halving is not part of their calculations, which means for the first time,

it's not the crypto community that's going to lead the next bull market. It's going to be the institutions, the traditional markets. And for them, they're not waiting for the halving. We'd love to get your thoughts on that particular point. Yeah, I think that's such a salient point. You know, this new constituent, the ETF constituent, is less of an enthusiast. And that's not a criticism of Bitcoin. If people are familiar with the framework of crossing the chasm,

that is just a phenomenon of moving from early adopters to the mainstream. The mainstream is by definition, just less ingrained with all of the same things that I think early adopters are plugged into. So I think it's right that it will not be as in focus for many of the buyers of the ETF. But we talked about it with clients. And, you know, so it might be a third or half. But I do think it will dilute the impact of that narrative a bit. Having said that, of course, the ETF buyer notices prices. So if the early adopter and the community is pricing in the halving and that causes prices to go higher, the traditional investment community is most sensitive to prices. So in an indirect way,

even if they don't know why the price is going higher, if the price goes higher, they will ask more questions to understand what they're seeing on the statement. So I think it'll be slightly dilutive to the power of that narrative, but through that indirect vector will still be absorbed by the traditional. And do you think now that we've been institutionalized, is Bitcoin, could you still consider Bitcoin a non-correlated asset so that non-correlation has been diluted as well? No, I think non-correlation, absolutely.

And that's part of the attraction for many of the traditional investors. You know, the traditional investor, they conventionally buy 60% equities, 40% bonds. I was actually just arguing about this with someone the other day. He was like, why don't I just go long the S&P is, well, the bonds have a low correlation. And so you give up a bit of return, but you get the comfort and peace of mind of knowing that not everything will go down at the same time. That is sort of the bread and butter of modern portfolio theory, which is the sort of subject matter of most investment professionals. So they definitely care about the correlations. Correlations have come down substantially over the last 12 months. And I think that low correlations are here to stay. Ultimately, Bitcoin doesn't care about low employment numbers. Bitcoin doesn't care about corporate earnings reports in the S&P. So I think

that Bitcoin does care about hash rate. Bitcoin does care about adoption use cases. So I think that those those things are underpinning drivers, the having that will, you know, influence Bitcoin and don't influence stocks or bonds. And conversely, some of the things that influence stocks and bonds won't influence Bitcoin. And I think that is the underlying reason why correlations over a reasonable time period should be low. And I think them being low is a very, very, very valuable aspect. If you think about hedge funds, hedge funds often underperform the Nasdaq. And you can say, well, then why does anyone invest in hedge funds?

They invest for low correlations. So the traditional investor wants a few features out of an investment. They don't just want returns. They're interested in returns, but they're also interested in making investments that have low correlations to the rest of their investments. And so that is actually a killer feature of Bitcoin and crypto to many traditional investors. There was a BlackRock study, I think it was a year and a half or two years ago that literally came out, I'm gonna have to find it that said that the ideal portfolio construction when looked just I think, through the lens of a sharp ratio and idiosyncratic risk was like 86% Bitcoin. I don't know if you guys saw that, but this literally came from BlackRock long before they filed for a spot ETF that when you looked at

it, I did, I did see that. I will say that that stuff like that makes traditional investors sort of fall out of their chair. Yeah, absolutely. Yeah. But, but yeah, I saw that. I have to hop, but I just want to say I love, I love Crypto Town Hall and you guys do an amazing job with this and, and it's, it's going to be an amazing year and I'm grateful to be part of this community. So thanks for hopping on, man. We really appreciate it. Really appreciate it.

Yeah. Tiger. What's up everybody? Yeah yeah just a few things i mean i think everyone's super focused on this etf and like this thing has been around for like a week like let's all just relax like so much from like such little data i i knew i knew tiger i knew when i brought i knew it every day you get fucking bitmex with the report i'm like i don't care about the one day man uh but um yeah in the short run i think scott's about to block you man don't block scott and number two

like everyone on twitter is like schizophrenic about the big about bitcoin going down like this is is this like your first run man like everyone's like 35k i'm like okay great guess what that's like in line with like corrections during pull fuck kids like what the fuck you talking about and the problem is most people on Twitter no offense don't have much money so they take 500 bucks and they put 50x leverage so every time it moves 1% everyone loses their shit so everyone needs to calm down. All right. And I think that what's not often being discussed with the ETFs is that passive flows suppress volatility, right? Like in the last 15 years, you know, you've had the advent of passive flows from, you know, just your mom and pop investors. Where's the VIX?

The VIX has been suppressed for 15 years for that reason. So I don't think anyone is discussing that. So I think the volatility in Bitcoin over a longer period of time will be suppressed. I don't think anyone is really discussing that. Cool. I think the first part of what you said has been extremely valuable. I appreciate the first part of what you said has been extremely valuable I appreciate the insight there I do want to go to Zach and David

Zach, David, I know you wanted to jump in but also get a quick legal recap I know we're going to wrap up soon Actually the question I had for you is when do we expect Coinbase's decision to be made regarding the dismissal and is there other legal cases that we're not paying attention to that we should? Because I expect a lot more from the DOJ and the SEC, unless they should be expected over the next 12 months. You know, it's kind of after the Coinbase, Binance, and a few other big ones, XRP, etc. We had the NFT, a couple of NFT ones as well.

It's been relatively quiet, unless it hasn't been, we just haven't noticed it. Yeah, I would say one to four months probably to get this decision. I think this case, along with the Binance and Kraken cases, really is what people ought to be paying attention to in crypto right now. This is really the ballgame. These are directly on the question of, is secondary trading in the most popular tokens, illegal securities transactions. And so like, this is really, you know, can we have crypto in the United States is going to hinge on the outcome of these sort of marquee cases. I think one thing that we previously, when we discussed the case, we talked about the main issue here, which is about the secondary trading of, you know, tokens like Solana and Axie Infinity and stuff like that. I think it's very,

very unlikely that those get dismissed at this first stage in the case. I think what's more interesting to look for when we get the opinion is some of the other questions that are up to the judges aside that have more of a likelihood of getting dismissed. One of them is the question around staking. Under the Howey test, the question is, staking Ethereum when you're actually running a validator node, I don't think anyone thinks is engaging in a securities transaction. You're providing a service validation to the Ethereum network. You get rewarded if you do that honestly. You get slashed if you do it dishonestly. But that's not a securities transaction. And then the next question is, if a company like Coinbase

is facilitating the staking for you, they are doing the pools, they're making sure that their validator node has uptime, is that the kind of managerial efforts that turn your giving them your ETH to stake into a securities offering in the form of their staking services? And that's, I think, more of a purely legal question, whether the work they're doing is administrative, which would make it not a securities offering, or managerial, which would make it a securities offering. That's something we might see the judge rule on. That's going to be really important for the DeFi and restaking ecosystem, the way that comes out. And then the other question that I think a lot of folks are not focusing on is the question around Coinbase's wallet, which allows you to interact with DEXs. The question is, is that effectively an exchange

or because it's non-custodial that it's a separate thing altogether? And so those are sort of two of the Coinbase adjacent to the sort of main question around the trading of tokens that I think is really important. We might get a motion to dismiss ruling on. And one more question, maybe David, you could take that one as well. David, comment on what Zach just said, but also on the PYUSC PayPal stablecoin. I think the SEC allegedly has been reported the SEC is looking into it. Not sure if you have more information on this. So, you know, I kind of laugh because Meta Lawman and I were at the hearing yesterday and the Coinbase hearing was

weird. It sounded like Coinbase One. It felt like Coinbase One. It looked like Coinbase One. And I walked out and the only thing I said to James, Meta Lawman, was I kind of feel like I'm at a strip club right now and the stripper's in love with me. Because at the end of the day, everyone felt like the same thing. Like they were, this was heaven for the vacuum of crypto Twitter. That this was exactly what everyone wanted. And we just all walked out and we were like, wow, this was so one-sided. And I think what Zach just said is really true. No one is betting that, and it's going to take the one to three months, Zach just

said, but none of the lawyers who walked out yesterday were like, this is what the, this is what people who aren't lawyers are going to miss in this. Even though everything sounded like Coinbase won, Coinbase isn't going to win the motion to dismiss. They're not. She's not going to dismiss the whole thing outright. She's going to keep bits and pieces. I think she's going to keep most of the case going, just like they did in Ripple. And then summary judgment, she'll knock the whole thing out. The judge was clearly concerned yesterday about being precedential. She wanted to, she wants, she wants to combine what Rakoff did,

what Torres did. She wants to be someone who stays in her lane. She very much did, you know, the major questions doctrine, which is legal mumbo jumbo for saying that, you know, the court doesn't, the court has the right to say, no, this is a congressional thing. She clearly didn't like that. She clearly was, she was so well prepared yesterday. And I think that's the craziest thing for a crazy week in crypto. And from my perspective, this is,

I might've been talking about the ETFs. You guys have covered that ad nauseum. It's what you, it's the biggest thing in crypto. But for a crazy week in crypto, all of these blockchain association, Coin Center, they all did amicus briefs for the Coinbase case to say Coinbase is doing nothing wrong. There's no SEC jurisdiction. And the judge was buying it. She was quoting these briefs from the industry like they were gospel. And that is such a big difference and shows how far we've come. Where in the week the ETFs became legal, that a judge was quoting all

of the policymakers in crypto and the crypto Twitter vacuum as if they were gospel. It was amazing. It really was. The other really big thing that no one's talking about this week from a legal perspective is the IRS walking back the mandatory reporting of digital asset transfers over $10,000. I mean, people should be, that was a really big thing for people in crypto that the IRS walked that back because a lot of people, I mean, I'm going to Satoshi Roundtable and at Satoshi roundtable bruce of all people was like i can't take uh bitcoin anymore because of the reporting requirements and it was incredible that the irs walked that back this week um because look it was it was an impractical reporting requirement

with a required extensive reporting from almost everyone in crypto besides who Tiger was speaking about, the kid who leverages his $500 50x for real people conducting business. That was a really big deal. And from a legal perspective, the IRS throwing up their hands and saying, we made a mistake. It's in the bill, but we're not going to do it. I think that's great. A great sign for crypto long term. And the third thing I thought was really cool in crypto this week from a legal perspective, everyone knocking around Senator Warren for her letter saying all these lobbyists and people in power saying that, oh, they're bad people for jumping on the crypto bandwagon. And everyone giving shots to Senator Warren saying these guys are legal patriots.

They're still patriots, and moving forward, you know, they are doing what's best for this country by protecting people and digital assets. It just shows that the needle's moving in the direction of digital assets, which I think is fantastic for everyone. That was a great recap. Tiger, don't ruin it. No, Tiger, don't ruin it. Mario, you're a robot. Mario, you're a robot. I'm not actually going to ruin it. Hold on, David.

You should look up Coinbase's lawyer. That's the only alpha you need. You should look up William Savitt. Okay? They're going to get the best fucking deal you've ever seen, man. Okay? They're winning. But they're not winning on the motion to this.

I'm just saying that in the context of quote unquote winning and winning could be a fine and like, okay, they improve listing standards. All right, fine. And maybe like they have to add some more risk of disclosures and whatnot, but look up William Sabat. That's all you need to know. I'll do respect as good as a lawyer as he is. Like that does not mean Coinbase is going to prevail on the idea that none of the tokens that are listed are investment contracts. Right. That is the core claim by the SEC that at least one of these tokens is a security. But can we.

It was trading on Coinbase, which is not a registered security exchange. And so Coinbase is violating the law. Like, it's a big stretch to say they're going to win on all of them. Yeah, so guys, do you think at least we'll get clarity on what is a security, what is not? Something we've been looking for for many years now. Is that fair to say? Definitely not going to get that. No.

You won't get that clarity? Not from this case. We might get some clarity that some of these tokens are securities from the judge we might get some you know refinement of like judicial precedent about how the howey test applies to crypto that would be great that'd be a good step forward but in terms of like actual clarity about what the line is i don't think we're going to get that unless we get like actual laws passed or you know there are many many more court cases down the road we're not going to get clarity i think i think we've got another lawyer that disagrees with you i know you want to end it scott but it's getting interesting joe's never sent me so many emojis

at once um so let me he's connecting now because i thought we'd be getting that clarity and and for you to say otherwise zach is a bit surprising and joe would you agree with zach that we won't get the clarity we're all looking for because that that's important, at least for me, on a selfish level. So most people, when they talk about clarity, they mean a uniform, bright line rule that can be applied in every circumstance. And I think what Zach is alluding to, which he's correct on, is that the whole purpose of Howey is to provide a flexible standard, which which which with which which can be assessed against multiple different innumerable situations. OK, where, you know, you could have all different types of schemes and contracts that could come exist and have flexibility in an approach for a judge to decide it based on the particular facts and circumstance. So I don't think you get a bright line rule from this case. This is definitively not a security. This arrangement here is definitively

not a security. Now, what you have is you have more precedence, which is a big advantage, right? If you have a case law in a landmark case that explains, okay, here's something that pushes the needle, that puts a thumb on the scale, or you want to put it towards, it's more likely true than not true. It is not falling under an investment contract. That's really helpful for the industry. And to say that it's not, I think it's discounts it too much, but it's also correct to say that we're not going to have absolute clarity with a bright line rule following this case, every single token or every single circumstance moving forward. And that's how you reconcile those two thoughts. And by the way, I'll jump in for one more second on what Joe says, because I agree with him.

It's really important, especially for people in our industry. We don't want the courts making the rules. It is literally an abomination that the courts would be making the rules for crypto. We need the government to tell the regulators to do their job. For those who believe the SEC have the power to do this, and for people like us in the Twitter vacuum who believe the SEC doesn't have the power to do this, we need the clear rules to come from Congress, not from the courts. It's really bad when things come from the courts rather than from our elected leaders. But why are they coming from the courts? They're coming from the courts because their Congress is dysfunctional and can't get anything passed. And I think from the industry's perspective, that is probably a good thing, right, David? I mean, wouldn't you agree that they would rather the Congress not speak on some of these issues so that there's still this opaqueness that allows at least certain

participants to continue in doing what they're doing? Yeah, but I've been here since 2012. So, you know, I'm as close to OG as you can be in this space without being actual OG. And, you know, I used to get up in the early conferences and say, don't steal money and, you know I used to get up in the early conferences and say don't steal money and you know the law will take care of the rest the opaqueness needs to disappear because these are becoming every single day more in entwined into society and as they become more entwined I believe that you know it it Congress is we that's a political conversation that Congress is a stand still and can't accomplish anything.

I think there are a lot of people who are advocating to elect people who are pro-crypto. I believe, you know, Vivek before he dropped out was, you know, very pro-crypto. I think everyone's talking about crypto on the federal level. I think it's going to slowly work its way down. I do hope before I retire, you know, in 10, 20 years that this is not opaque in the courts. I think clarity is good, but true clarity. And this is where I 100% agree with what you were saying, Joe. True clarity will only come through actual congressional and federal law. Cool. I think on that point, scott i know you wanted to end it like 20 minutes ago because

you're being lazy today but i think it's a great i love the debate at the end and i think we should do this every time scott remember to do it every time so ask out because we just got an incredible panel every time unplanned just ask him what are your recaps for the day or for the week that we missed i think it's a question we should always ask what are the important things that happened today or this week that we missed because i think david and question we should always ask. What are the important things that happened today or this week that we missed? Because I think David and Zach gave us a good reason to always do this.

I mean, the answer was great. So on that note, we'll wrap it, but we'll see everyone on Monday, Scott. Yeah. All right. Let's do it. Bye, guys.

Bye. Bye, everyone. Thanks a lot. It's amazing. It was the greatest space ever. You told me I needed to be more enthusiastic at the end. I forgot.

Exactly. Hey, guys. I appreciate you all. We love you. I'm going to dream of enthusiastic at the end i forgot exactly exactly hey guys i appreciate you all we love you i'm gonna dream about like subscribe share repost quote tweet smash smash the smash the like face button place and that's the end the space