The Wolf Of All Streets - BlackRock Started The Bull Market | BTC Pump Not Over! | Crypto Town Hall

Episode Date: October 24, 2023

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Hi, everyone. What a time to be alive, getting all the speakers on stage, waiting for Randy to show up. But I think that everybody here is probably a little more excited than they were yesterday or even the day before, since this is after all the crypto town hall and not the macro town hall. Anyone who attended last night, we actually did an impromptu spaces. I think it was around 8 9 p.m eastern standard time my time and had an absolutely massive audience so you can tell when uh bullish price action hits uh that everything else seems to follow including interest in the space and people wanting to to hear us yammer and talk about what's going on with Bitcoin. So just going to give Ran a chance to get up here,

which should be happening imminently. But I want to talk first real quick as we get going here, man. I think it was Friday or Thursday that you were on and you gave one of the greatest explanations and quick speeches. It was a much more eloquent way of presenting the same sentiment I've been sharing about exactly why people needed to have at least a small bit of Bitcoin in their portfolio, discussing obviously the Sharpe ratio and the fact that it was idiosyncratic risk and that offers uncorrelated asset in your portfolio. I think we're seeing that in real time. What do you think?

Yes. So Bitcoin's sharp ratio has gone up strongly, right? So just as a reminder to everyone, the sharp ratio is the ratio between risk and return. And so basically you take the returns and you divide them by risk, that provides you with a sharp ratio um and then you what you want to do is you want to take that uh risk that risk is effectively a factor of volatility right so volatility provides you with the assessment of risk now we all know that bitcoin is an extremely volatile asset um but its volatility year in and year out for a decade and a half now has been sharply upwards. And that's the return part of it. One of the big things that people frequently talk about with Bitcoin, and this is what we discussed last time, is they try to talk about Bitcoin as a hedge. Because they'll say Bitcoin is an uncorrelated asset. And so you can use it as a hedge and that is

a misunderstanding of what a hedge is. A hedge is a anti-correlated asset in other words it's a kind of asset that you will hold which will go up when the rest of your portfolio goes down. Bitcoin is not so well behaved, Bitcoin does what it wants. So Bitcoin is an uncorrelated asset. And that doesn't mean that when other things are going up, Bitcoin will go down. And it also doesn't mean that when other things are going up, Bitcoin won't go up. What it means is that over any timeframe that you choose to look at it, especially long timeframes, Bitcoin is going to behave idiosyncratically. It's going to behave in an uncorrelated way,

unrelated to what the other assets are doing. And the last part of that is what brings you to the Sharpe ratio. So what you're trying to do when you're investing is you're trying to get the best possible Sharpe ratio. You can have a very high return portfolio, which is all lottery tickets, but the risk is so high that your Sharpe ratio is going to be extremely low. So that's a poor investment.

And you can have dollar bills tucked under your mattress. And that's zero volatility, except for inflation, which slowly eats away at the value. So that also has a shitty Sharpe ratio. So what you want is something which is going to have some volatility and that volatility is going to trend towards the upside. And Bitcoin is the best asset of all assets that we're aware of in terms of its sharp ratio. So its sharp ratio has always moved between two and four, which is unheard of. So real estate has a sharp ratio of just over one.

Stocks have a sharp ratio of just 1.3, which is considered the best of traditional assets. Bitcoin is between two and four. And that actually, even amongst crypto assets, Bitcoin has the best sharp ratio because while it has less volatility than say ETH, in terms of the returns that you get for the volatility, it is better. And then the final piece of this, right, is that the best way that you get for the volatility is it is better and then the final piece of this right is that the best way that you get the best possible portfolio is not to have just one asset but is to have a collection of assets which average out uh with their volatility in other words you want to have as many uncorrelated assets as possible because volatility averages out it

goes to zero the more you average it. And so when you look at the most uncorrelated asset, it's Bitcoin. So Bitcoin is the best sharp asset ratio in two ways. First of all, on its own, and second, as part of any portfolio. Absolutely love it. Ran, I have to say,

hey, I was just watching your show before this, but you've been saying over and over and over again that when we get the ETF approval, we're going to see a God candle straight to 40,000. So is this the God candle in advance of even getting it? And do you still think that when we actually get the approval, we get another God candle? Still not. Still not.

Still not. Still not. There's still another one. As I said before, I think 50,000 is my target for when the ETF gets approved. I think you have to understand the dynamic of what's going on here now yesterday when we were on the show i said to you that we had um the cme futures open interest going up yesterday was another record day then we now got options uh bitcoin options in in the highest open interest that they've ever had.

So you're now basically seeing the Wall Street people buying everywhere that they can. And actually, the only thing that's not going up is the crypto-related open interest. That's all that killed. Most of it was short and got liquidated in the candle. Now, I must tell you a little funny story about this guard candle that we had last night. So I went to bed and I realized something was happening. And I tried to delay going to bed,

but eventually at like 12 o'clock at night in my time, I figured, look, I better try and get some sleep. I've got to be up at like six in the morning. So I better try and get some sleep. At two o'clock in the morning, I woke up to go to the toilet and I made a terrible mistake. I used my phone as a torch and I walked to the bathroom. And as I walked to the bathroom, I saw the guard candle. And then obviously at that point, I knew I wasn't going to go to sleep. And then I saw that you guys were live on Spaces. And I was like, now you want to talk about the height of FOMO?

The height of FOMO is 2 a.m. You're supposed to be sleeping. You see a guard candle. And then you see Scott and Mario doing a spaces without you. I was like, this cannot be happening. We weren't trying to do it without you in our defense. No, no, no. I think you guys did it.

I mean, I wish I was awake. What I'm saying is, can you imagine the, the, the level of FOMO when all of a sudden you see the God candle, you have zero context as to what's going on and you see a spaces with 10,000 people. And can you imagine the level of FOMO that I had at two o'clock in the morning? Anyway, rest assured that there was no more sleep after that. There was zero sleep after that. It was game over. It was game over.

Well, I hope your sleep improves if the bull market continues because we all know how bad you can suffer when things really, really start to kick in. So interesting, though, that you think that this is sort of the pre-advance part. So do you think then – I want to ask you, and maybe we'll kick this around. I actually want to go to some of the Tradify people we have here, Nancy, Gordon, and Ross after this. But do you think now we kind of had a space last week where we said that higher low was canceled, that 30% retrace you always get in the halving cycle is canceled? I mean, do you think we're completely out of the woods at this point?

Yes. You know, that business of 2019, 17. Hot knife through butter. That's where it is. We said if we break that $31,800, it's a hot knife through butter to $37,000 or $38,000. Now there's a hot knife through butter. You're basically seeing it.

You know, like we haven't got the ETF yet. The stocks are going crazy. Again, barring some massive event, and when I say massive event, ETF denial slash World War III slash absolute US collapse, I don't see this market coming down for a long time. Remember, the only application that's actually got a ticker symbol at the moment is one of them, which is the, the, the, the BlackRock one.

Yeah. I BTC exactly. But what about the rest? There's still seven or either how many, how many other applications are there right now in the system? Six, seven. Yeah. Even Gary didn't know. He said eight, 10 in his last interview. Correct. Correct. Exactly. Yeah. I think you've got to keep your eye on that. And you've got to keep your eye on Coinbase as well.

I think Coinbase is probably a big no-brainer at this point. It is up a lot to death. But it's finally up. I was just going to mention the fact, and this will maybe help us segue into talking more about what Yago was saying about portfolio construction and where Bitcoin maybe fits in. The news, just for anyone who missed the spaces last night, I don't want to take for granted that people don't know what's going on who are listening here. We had Bitcoin already up $30,000, $31,000 yesterday morning, which was already pretty big because it had filled up the entire wick from the fake news Bitcoin spot ETF from a week ago.

But what we really had yesterday that seemingly is, Ran, your mic is out. I got you. What we seemingly had that really sparked this bigger move from, you know, 31 to 35 was the fact that, as Ran just said, we now have a ticker, IBTZ, which means that iShares Bitcoin Trust, which is BlackRock, is appearing on the Depository Trust and Clearing Corporation the DTCC website so this is indicative of the fact that whether they know

they're getting approved or are getting approved maybe they are not getting approved BlackRock thinks they're getting approved and they're moving forward with the next steps and the next part of that narrative that I think gets people really excited is that the filing vaguely mentioned that seed creation baskets for the ETF would be purchased in October, subject to certain conditions. Just for context, when you see this step taken in the ETF process, when someone's preparing for approval, they usually start to buy, it can be in very small amounts guys. So this does not mean that BlackRock's buying billions of dollars in Bitcoin, but they start to seed the fund basically saying that BlackRock is actively going to be buying Bitcoin. That could be one Bitcoin, right?

So this is a narrative driven thing. But clearly BlackRock believes they're moving forward. And I think that means that a lot of people are coming in to try to front run that news and get ahead of it. And that's the buying that we're seeing. But before we dig deeper into that, since we have Nancy, since we have you, we've spoken, obviously, on the TradFi space as many times. Where do you think, in context of this move, maybe it changes nothing for you, but where do you personally think that Bitcoin fits in the portfolio, or if at all? Not sure. There you go. Go ahead. Yeah. Hey, it's Nancy Davis. Thank you very much for having me up. It's my first time joining the space. I think I'm not allowed to give financial

advice. I'm not a financial advisor. I'm the portfolio manager for the Quadratic Interest Rate Volatility and Inflation Hedge ETF, iVol. And I would say coming at it from ETFs I see as really democratizing financial markets and giving access for everyone, whether you're a pension fund, an endowment, an individual, you know, anyone can access ETFs really around the globe to their global product. And so I think I really believe in the fund technology of having, you know, liquid securities in a public fund wrapper. And I think just like anything else, it's important to have diversification, right? Just having your financial portfolio, your life savings being in stocks and bonds only, you know, is not, I think, the way of the future. And so I think whether it's holding, you know, volatility, my fund is actually long

interest rate volatility. I think that's a nice diversifier. I think all, you know, just lots of different things are super important because when the portfolio is all making money together, it's not correlated. And the reason you want correlation to be low and to have these non-correlated assets is because you want something to be able to go up when other things are going down. And so I do think, you know, I'm not a Bitcoin or crypto expert. We'll get you, don't worry. I do own it personally, in full disclosure. I have some in my portfolio. I have all sorts of things, you know, including Ivol. I'm a holder of my own ETF as well. But I do believe in just trying to be as diversified as possible because we just don't know what the future is going to hold. And it's a really tricky time with the fiscal situation in the US and potentially having a stagflationary environment coming out, which is kind of what the price action was in 2022 when stocks and bonds sold off together.

That's really dangerous for people's life savings, right? So I think having non-correlated assets is super important. And I'm happy to be on the spaces and answer any questions. I'm not, again, a crypto expert. I can answer questions about volatility, interest not, again, a crypto expert. I can answer questions about volatility, interest rate, inflation protected assets, those sorts of things. Well, interestingly, so it really comes down to then you clearly agree with Yago's general assessment of portfolio construction and having assets that are uncorrelated or idiosyncratic

in your portfolio. So then it just comes down to for each individual determining what they believe those assets are. Correct. Like, obviously, Bitcoiners believe that you might believe that, you know, volatility. But to me, the real story there is at 6040 is just dead. Yeah, I don't know if I agree with the sharp ratio. Comments earlier, I'm not I haven't checked the data on that, so I'm not sure if I agree with that. And I would just caution, you know, kind of any sort of Sharpe ratio depends what the risk-free rate is. Like a lot of these markets use the 10-year treasury as risk-free, you know, the CapM model being the most famous. And that's like foolish because all investing involves risk. You know, the 30 year treasury lost more in 2022 than the NASDAQ. So nothing is risk free in the market. So I'm not sure. I wouldn't just go on, you know, and it's also what happened historically, right? We just don't know what's going to be happening around the corner. And that's why I hate using things like sharp ratios or other things, because it's making assumptions that the future is going to look like

the past. And so I think it's just super important to have non-correlated assets. And the thing is, we just don't know what's going to be non-correlated in the future. You can look at performance historically and say, look, this behaved differently. This was up when this is down. And I think that's really the key is having diversification. And I do agree that that 60-40 portfolio is, you know, is dead. And you have to have more things to protect your, you know, at the end of the day, you know, it's all our life savings. And it doesn't matter if you're, you know, a doctor, a nurse, a bus driver, a professional investor, everybody needs diversification in their portfolio. Right. So I mean, I assume that applies to any asset, right? Before looking, you can never know

what's going to happen. So you take your best guess based on the past price action. Yeah, I clearly want to respond there. And then I want to go to Gordon and Ross. Yeah, surprisingly, despite the fact that Nancy was supposedly disagreeing with me, I completely agree with her. The challenge is always trying to figure out what's going to happen in the future. So just because something was uncorrelated in the past or performed well in the past doesn't tell you very much about how it's going to perform in the future. And for that reason, I think it's important to remember that while

price is very sexy and it's what gets attention, price is a confusing metric. It blinds us to value and what we should be looking for is value. And so my assessment around Bitcoin, while it's supported by its historically powerful returns and its excellent Sharpe ratio is actually not driven by those things at all. It's driven by what I perceive to be Bitcoin's value. And Bitcoin is an extremely uncorrelated asset precisely because it is so valuable. And what makes it valuable is that it's totally different from everything else. It's an asset that you can own by yourself.

It's an asset that no one can stop you from transacting in it's an it's the the first and only and most well-established asset which provides people with true digital ownership and as we exist in a more and more digital world and as we exist in a more and more volatile and risky and frequently scary world the ability to actually directly own something, that's something that you aren't just, don't have just the beneficial ownership of, but is controlled by BlackRock. It's something that you can directly own.

It's becoming more and more apparent and more and more important to everyone. And as that becomes more apparent, more and more people, more and more portfolios are migrating to that asset. We're in a world that is in desperate need for some kind of stability, for some kind of real gold standard. And the gold standard of our day is Bitcoin. So my view is don't let price confuse you.

Look at the value. Look at all of the exciting things that are happening in Bitcoin right now. And really, it's an absolute renaissance. And if you can understand that, then you see the value and you base your assumptions and value rather than price. It makes sense. Gordon, I would love your thoughts on, A, what's driving this and your view on where this may fit into a portfolio or even in context of a macro asset. Yeah, sure.

Thanks for having me up. It seems like, and none of this is advice, it's just my opinion, it seems like clearly what's driving this is institutional involvement. And you're probably not going to like our view on Bitcoin, but it's been the same forever. I'll quote the great Charlie Munger in saying, you know, Bitcoin is rat poison squared. You know, our view is that, you know, Bitcoin is effectively a Ponzi scheme.

And, you know, I don't know if you want me to get into that. I didn't know you guys are going to have me have to chat on Bitcoin, but I can get into that if you want to. But I don't want to offend too many people because this sounds like a Bitcoin bull room. But with respect, one thing I'll say is, you know, and I can get into why I think it's a Ponzi scheme. But one thing I'll say is like the prior guy just said, you know, Bitcoin, nobody can control your ability to transact in it. As soon as Bitcoin becomes a real risk to any fiat currency, the government can immediately stop the acceptance of Bitcoin. And the reason why we believe in general, just very summarily, why we believe Bitcoin has no value is it's technology that doesn't

solve a real problem. It's simply used to speculate. It's not a real currency and can't act as a functional currency given there's fixed supply all cryptos are effectively unregistered securities and private currencies historically have always been a disaster that's our overall view but if you want to get into more detail we can't i don't even know where to start lord have mercy somebody should introduce this guy you know since i always argue with gordon somebody should introduce this guy. You know, I always argue with Gordon. Somebody should introduce this guy to Larry Fink at BlackRock. Does anybody know who that is? You know, I like responding to Gordon whenever I get a chance.

Go ahead, Ross. You know, Gordon, I certainly get your reticence to Bitcoin. But now that we've been doing this for, I don't know, what has it been, like 10 plus years? It's the law. You know, besides Madoff, it's a pretty long running Ponzi scheme. And considering the fact the U.S. government owns 8 billion of Bitcoin itself, and the fact that FTX and real frauds like Sam Bankman Freed are actually in jail. It shows that the currency itself is still a viable asset and one that has tremendous potential value. The value of Bitcoin, in my mind, is 100% related to the users. In other words, its utility is its value. the fact that governments around the world are unable to run themselves correctly, Bitcoin's value continues to grow. And we see it in country after country of just extremely poor fiscal and financial management, whether it's Turkey or Argentina, or many other places where the citizens

lose all the value of their money, because they trust their government. And in the United States today, our deficit is $2 trillion a year in our debt, $33 trillion, which was perfectly fine at 0% and 1% interest rates, but at 5% interest rates has the potential to bankrupt our country. And so a monetary system outside of governments existed up until 1971. And the fact over my lifetime that that was diverted was simply for the use of governments to spend money that they didn't have. So Bitcoin today has democratized finance on a global scale. And its potential for many more users because of financial products like the ETF has grown tremendously because owning Bitcoin directly has become highly risky and very difficult for the

average person. I agree 100% that it's a diversifier in a portfolio in a place that gold used to have in a portfolio. And so that could be anywhere from zero to 10% of a portfolio. And that's why the ETF has so much opportunity for people, and especially for Bitcoin. So the financial giant, I mean, ironically, the financial giants that Bitcoin was meant to subvert are now adopting Bitcoin because of its utility and because of the opportunity. And that's really what's going to bring Bitcoin to the next level. So now that we've, you know, dealt with the pain of the frauds of so many of the people, of the people, the people are the frauds, Gordon, not the Bitcoin. And now there's this opportunity as we move into mainstream finance.

Can I respond to that? Of course. Yeah. Two things. Number one, I would very, very much so caution everyone who's so excited about, you know, governments and BlackRock and these large institutional investors getting into Bitcoin. What I'll note is if you look at the price of gold right now and use the 1975 framework, the price should be around twenty five thousand dollars. And clearly it's not that the question is why and the answer is the u.s government got in and effectively basically pinned the price of gold at a level they saw fit and because the

u.s government can print money um and thus buy and sell gold as they see fit they've depressed the price significantly versus where again based on the 1975 definition it should be so while bitcoin is up today i think people should be very cautious about the U.S. government getting in, number one. Number two, crypto is a story that are bits of computer code uncorrelated with any real world asset. It's a Ponzi because an investment without value is a Ponzi scheme. This isn't new technology. Blockchain is at least 30 years old. It goes back to 1991 when Stuart Haberman and Scott Stornetta were working at Bell Labs, building off the work of cryptographers such as

David Chom who built the blockchain, which is just a distributed ledger. Nothing wrong with that. But if used to do crime, which clearly crypto is, it's a problem. The crypto industry would like us to believe it's in early days. But the truth is it's predicated on false ideas, i.e. crypto. You know, if crypto were to become a currency, it wouldn't be issued by the state. So it would be private money. You know, so there's issues here, you know, historically. You know, based on how you just described gold, then you're then you would you just described gold as a Ponzi scheme. It's a bizarre rationale.

No, I didn't describe it. I didn't mention that at all. other entities um are are you know taking control of the price of gold and thus the same thing is going to happen with bitcoin you're you're you're you're running around on two sides of the argument you know oh don't get excited about a bitcoin etf and blackrock because they're going to manage the price of it and control it so is it a ponzi scheme and going to zero or is it going to be controlled by BlackRock and the government? I'd also suggest... The other question I have is why would an organization

like PayPal be involved in a Ponzi scheme? These are bizarre. At this point in the argument, this is just so far outside the bell curve that, I don't know, this is strange, honestly. I don't know if you guys have argued with Gordon before, but that's common when you're arguing with Gordon. But secondly, the biggest Ponzi scheme I see is the U.S. dollar, if you're going to get serious.

I was just going to say that. Yeah, guys, I think we must encourage, I really do encourage debate here because I think that we're very much in the crypto echo chamber. But I think the foundations for the debate should be logical and factual. Otherwise, if people are making crazy statements here that are not really backed by anything,

I think that kind of ruins the floor for the debate. So I'm really open to debate, but the debates are going to be based on sound, factual, logical argument. Ran, the return of gold between 1971 and 2022 was close to 8% annualized. I just posted a tweet with a graph to this room of what that kind

of performance looks like it's extremely good performance it's the only uh performance uh close to from you know close to commodities or close to um stocks that we've seen and i i think it's not fair to attack gordon for his views i think clearly what's driving his views is- I'm not attacking him. No, no, no, no. No, yeah, I just, we need to be clear. Like, Gordon's just too young to remember a time before fiat. And so he has a certain naivety of the world,

and that's fine. And he is joining this space, I think, to educate himself. So, Gold has overperformed and outperformed most other asset classes, despite the US decision to get rid of it. And Bitcoin is doing far better because it is a new emerging technology, which is more rapidly replacing what gold can do

and can do it better. Yeah, I agree. A hundred percent. I mean, I don't know Gordon. You mentioned that Gordon's too young. I'm not sure that he's much younger than you. I think the idea was that Iago was alluding to the fact

that the world used to use hard money for all of eternity before we left the gold standard and moved into a fiat-based system. Correct, Iago? Fiat is a very new system. hasn't been around for very long, and isn't likely to continue to be around for very long. It's an aberration. It's not the norm.

Yeah, if you look at the history of money, it always functioned around a global currency, which was gold. So, like, whether you were Spanish or French or whatever, you could just use gold coins and you would just remelt it down and stamp it yourself. So this period of time from 1971 to the present, where fiat currency was, you know, divorced from any real asset, that was a period of time solely to serve governments, but for no monetary purpose other than to print money that they didn't have. And so, you know, when you look at something like Bitcoin that was formed through the financial crisis, it actually makes a ton of sense, historically speaking. I'd love to get I'd love to get Gordon's thoughts on in a very serious way.

Gordon's thoughts on Larry Fink's, you know, comments on a consistent basis associated with the tokenization of securities and real world assets on a go forward basis. Understanding and that crypto is a flight. Yeah. And starting with the truth that Larry Fink doesn't sit, you know, at Dealbook and talk about tokenization of assets because it's just he's having a good time, right? I'm just interested in his thoughts there. I'm legitimately interested. As a guy who's clearly skeptic of Bitcoin,

I think there's big differences between Bitcoin and crypto. I probably would side with Gordon as it relates to crypto and there being a level of significant issues there. Bitcoin, that's different. It's a reason why these global institutions have put their arms around Bitcoin. But I am very interested in the fact that larry fink is clearly telegraphing that they're working on you know the next version of finance and blackrock wants to lead in the same

way that they've led in creating etfs that now absolutely dominate markets and market structure so i'd love to get his take on that yeah Yeah, I don't have endless amounts of time. So this will be my last comment, because some of the comments that were just made border on the line of insanity, in my view. But I guess the argument boils down to if Larry Fink does it, it's right. Right. I mean, that's kind of what you're saying. And what I'll note is if you look at what Larry Fink said initially about Bitcoin, it was in line with what I'm saying. He said it was basically a Ponzi scheme. And now he's saying that it's not. Larry Fink is in the business of making money. Right. He's a private business and his Bitcoin ETF will make him money.

So for you to assume that because he does it, it's right. I think that could be that could be a false assumption. And you can get into a little bit of trouble. We're not talking about right and wrong or morality here. We're talking about what Larry Fink has said about the tokenization of securities and assets. Right, but you didn't hear what I just said. I just told you his initial comments were that it's a Ponzi fraud. I'm uninterested in his comments from five years ago.

That doesn't matter now. What are you saying today? What are you saying today? What are you saying today? The point is, you know, we've tried private money in the free banking era of the 19th century, and it was a failure

and it was a failure due to fraud. And the truth is, you know, Bitcoin, like I said, is not new. It's not new technology. The blockchain has been around for 30 years and it's not the future of money. It's the past based on actual data, right? How long it's been around. You years and it's not the future of money it's the past based on actual data right

how long it's been around you could you know ross can insult me all he wants and others can too but i'm just stating facts but how do you call it private money sorry i don't understand how you call it private money private money implies that there's some kind of private centralized issuer yeah all right guys thanks thanks for the time i don't know i mean i mean i asked a reasonable i asked a reasonable question based on you know the largest asset manager on the planet andrew we're gonna move on thank you i think yeah i don't think we need to exhaust this gordon thank you i appreciate your time and sharing sharing your thoughts with us obviously good to see you, Gordon.

No, Scott, I have to put my foot down here and say, with all respect to Gordon, come here and make blanket statements. And then when the statements are challenged with logic and reason, either keep quiet or say, I'm out of time and I can't do it. I mean, that's not what Crypto Town Hall is about. Right, I agree with you. and there are very quick responses i mean some of the arguments are just nonsensical i mean people a strong we held is probably the ethos of every guy guys guys i've been arguing with gordon for like a half a decade about tesla i literally have a video of gordon for the last 10 years telling me Tesla was a Ponzi scheme.

So let's just keep it in perspective. Yeah, Ross, not even to his comments. You know, I just want to sort of generally say that almost every ardent supporter of Bitcoiners, of Bitcoin, specifically on the institutional side, was once a skeptic or dismissive, including Michael Saylor, right? Yeah, including me, actually. Including me. I started off in 2014, a complete skeptic. I said the same things Gordon said. I thought it was totally never going to work. And a bunch of guys convinced me, who are now billionaires. And I invested in Bitcoin. And I've been on this journey now for almost a decade. And I still feel like we're at the beginning. And the opportunity is massive. My firm has been working with Gemini for now years trying to build a program for individuals to own Bitcoin with help. And we've had so many challenges in the last year, but we're, we're plugging forward, you know, and what I think is when institutions like myself, you know, I run the GK ETF and, and in this other very nice woman who runs her ETF and when it has democratized finance, that's why I started my ETF. And so the way I see it is

a Bitcoin ETF will democratize a product that many individuals are just scared to buy now because they've been burned. And that's why the potential is so big in the ETF space. Many of my clients want it as an asset class for the diversification that we're talking about. So I just think that...

You should do it every once in a while. Ren, you have a hot mic and I can't mute you sorry sorry sorry full disclosure i do not run an etf you know for for what it's worth i just find it it's kind of baffling that people would would would think i'm going to fade larry fink and BlackRock, who for all intents and purposes, you know, they're literally undefeated. And there's reasons why they're undefeated, right?

It's just a strange way to go about, you know, looking at where we're at, right? And what I find very interesting is the lack of understanding of the nuance and the question that you asked. And I think that that's for a broader conversation, which people are focused very heavily on BlackRock's application for a Bitcoin spot ETF, which is one part of what BlackRock is attempting to do and say in this space. And so when you ask people to seem to forget that in March, when BlackRock put out their annual investor letter, there was a huge section, as you said, on tokenization of real world assets and that being the future of how TradFi operates. That has nothing to do with a Bitcoin spot ETF. And if you listen to his comments,

he talks about that all the time, even more than he talks about the etf so yes maybe he's circling maybe there are certain things he can and cannot say we all know that he says crypto instead of bitcoin right but still there's a greater understanding here than simply talking his book on a specific product that he's trying to get yeah that that's not yeah of course he's smart enough from a you know regulators although would, I would suggest that the regulators and for all intents and purposes work for him, but he's not dumb enough to step in, you know, step in the, you know, what, as it relates to regulators. Andrew, do you think, do you think that we should read into the fact that BlackRock's the only one that's got a a ticker symbol and and none of the others do you think we can absolutely i i i said it when when the you know bitcoin when when black rock first applied right that listen you can't their uh history Their history with ETFs is 575 and 1. And that 1 was basically, it wasn't even necessarily a denial.

It was like a joint denial and pulling back. So, you know, everybody wanted to jump on the fact that, well, BlackRock, they're now in line. And there's a couple that may be ahead of them. None of that matters when you're the biggest asset manager on the globe and you have the ability to make a... Listen, you don't want to overplay this because people get conspiratorial, but this is the kind of guy in the kind of organization that doesn't even have to come from there, I think. He can make one call to the SEC and say,

okay, guys, you know what? We've done our thing here. We moved around. We played around with it. We've done some stuff, but it's time. We're going to do this now, so let's go ahead and work through it. So, yeah, Q-SIPS and DTTC,

you don't, generally speaking, that stuff doesn't get walked back. You know what I mean? Like, somebody go find me a time where a coming ETF with a submission and application got a Q-SIPS and registration with the DTCC. And a few weeks later, I said, oh, no, we're just kidding. Our bad. We didn't do enough due diligence here. That's canceled. We don't like that one. From BlackRock, of all people.

It doesn't happen. So, Andrew, in your opinion, how far are we away from the ETF approval? Now that there's a QSIP number and there's a ticket symbol, what are you thinking? So there's one of two pathways. It either gets done in the next six weeks, or because we then get in December, we just push it to January. It's one of those two.

If I had to lay money on it. I know you say within know i know i know you say i know you say within the next six weeks but i mean people are saying it could be as early as today i mean nothing would surprise me nothing would surprise me yeah could be can i can i jump in here for a sec because because i gotta run so when i started my etf two years ago i went to the new york stock exchange and i asked like the guy who one of the guys running the exchange and I said, what does it take to get a Bitcoin ETF going? And he said, oh, you know, this isn't going to happen until pricing and trading happens

with the major market makers. And on the New York Stock Exchange, there's like four, OK, starting with Citadel. And so BlackRock, Citadel, Fidelity, Virtu, Merrill, you know, the main traders of assets in the stock exchange need to be able to make a real price for Bitcoin that can be standardized by those market makers. The market makers is where they make the money. They don't really care about the Bitcoin as much as trading the Bitcoin and lending the Bitcoin. And so this Bitcoin will be approved. Do not be confused in any way. This will be approved. Now it's two years later. And now I'm looking at it going, these guys are starting to trade it. Why do you think Bitcoin's going up? Who's buying Bitcoin right now in scale? Who has the money and who has the balls to do that? And those are the... There's a Coinbase premium. There's a Coinbase premium there is, which shows that it's American, specifically public

institutions. There is a CME futures at all-time highs. Open interest futures at all-time highs. open interest in futures at all-time highs. I mean, it's obvious who's buying this thing. Yeah. I think Ross would agree with me in what I'm about to say. I think one of the biggest markers that this is going to be approved

and soon is the fact that Melvin Capital has put on a sizable short. That assumes price discovery that assumes price discovery you're not making that you're not putting that trade on if you think that bitcoin is uh manipulated by binance sorry yeah yeah and i think traditional firms you know including myself haven't really found an easy way in from the like buying and scaling client accounts in crypto and that's why the etf has so much potential because it's so scalable that's correct uh ran isn't the bigger questions you're asking who's buying in size that the bigger

question to me is who at this point would sell in size well they're not really selling because if you think about if you think about who's selling i i don't mean who's who's selling through the order book right now i'm talking about theoretically when we know how much demand there is in buying who could possibly counteract that what seller is there in the market that could stop this but they don't need to buy in size because they're buying they're buying futures there's just like there's just i mean teachers is unlimited i was talking about the spot sorry i i'm talking about this move is obviously driven as we've discussed largely by spot buying right you're talking about but it's not really spot buying it's it's not it's not it's there is spot buying but the big move is happening on the cme futures understand and there was actually and that's yeah that's unlimited obviously did you see

the thread from alex thorn intangible coins because he somewhat uh refutes that idea we had josh frank from the tie-up here, and I privately messaged him, and I said, what data do you have? He said, I have to go, but check this thread. And the contention on that thread in my private conversation with Josh, who I unfortunately had to drop, was that actually if you look deeper into it, this was largely that people were increasingly short Gamera

as the spot moved up and were covering, so that this is actually more of a technical move and that a ton of that happened on okay. Action actually in Asia, not in the United States. Have you, have you looked at that at all? I'm literally reading it as we speak.

Probably share it above. Can you hear Scott? Yeah. Can you hear me? I'm going to try to share the thread. Can you hear me? I couldn't hear you. I can hear you now. Can you guys hear Scott? Yeah. Can you hear me? I'm going to try to share the thread. Can you hear me? I couldn't hear you. I can hear you now.

Can you guys hear Scott? Yeah, we can hear Scott. Yeah. Yeah, I think maybe it was something. Will you just take me down? Hey, thank you. I got to run. Thanks for having me.

Scott, if you're right, this is Gary. Thanks, Josh. If you're right and that was a technical move and not a spot Bitcoin ETF kind of pre-move my god what's going to happen oh yeah and then that and that lends back to the question that i somewhat asked ran from the beginning ran i don't know if you can still hear me um i can't that i asked good good that i asked ran in the beginning was was this the god candle or is this just a preview of the world? No, this is the warm-up to the god candle.

Yeah, so you can see this thread above, which basically said that this is largely a result of market makers, option market makers being short gamma and having to cover. So, Gary, to your point, if that got us from 31 to 35, watch out above. Yeah, I mean, you know you know guys we need people like garden like we want the gardens of the world here i i thought his comment about some of what we were saying is insane was pretty much showed his colors but we want people late to the game you know you like we don't need all the i like having people that come from the legacy world and they're still pitching the ponzi scheme this is a guy that clearly has not done much research on this product

um i mean he sounded really really articulate but i think you're going to have a lot of people that represent him the people that come to these rooms we're all pretty pro um i think there's a large population of smart people that just have not come into this space yet. In that point about them being, you know, TradFi guys, that a spot bitcoin etf to market and then you know going from place to place talking about tokenization of real world assets how do you square that reality it's it he he's effectively intentionally putting blinders on and saying he didn't really say that it's a it's it's a fake i mean well well and the private money private money comment right like like to me we should be using the word

political currency and bitcoin because to me it's not fiat people don't really understand what fiat is political currency there are a lot of by the way there are a lot of things that failed in the 1870s that are not relevant today, as lessons, by the way. They didn't have medicine. I don't know. An argument that private currencies failed centuries ago does not seem to indicate what's possible with new technology. I just think that's the most nonsensical argument. Lawyer, I saw you had your hand up before.

Go ahead. Yeah, I was just going to say that I think it is really important to have people on the other side in here. It's just too bad when the arguments are, you know, based on emotion and words like Ponzi scheme with zero explanation of why this would be a Ponzi scheme. Things just don't hold up anymore. But I would love to get some, you know, if there's anyone in here who has a proper argument, you know,

that's what we should talk about. I totally agree. Patrick, any thoughts? I can't hear anybody. I can't hear anybody. Maybe if you could just take me down and bring me back up. I'll do that. So yeah. Patrick, then Carlo, please. Yeah. I thought it was interesting. Some of the comments about the technology not being new. And I know we're trying to move on from this, but if,

but if you want to argue that Bitcoin or crypto or smart contracts isn't new technology, then you're basically disagreeing with a lot of people who built the Internet as we know it. Right. People like Elon Musk, Peter Thiel, Mark Cuban, I mean, hundreds of other tech founders. And so so to argue that, I think someone has to has to try to make the case that all of these people somehow are wrong and fooled. And I don't think there's there's a realistic case to be made for that ran a quick post but i've asked them to do it go go ahead carl uh patrick if you're dumb to your point go ahead carlo yeah good morning thank you scott you know you cannot deny that this technology is here to stay and to suggest that blockchain technology is not going to be the future.

I mean, AI and the authenticity of information that we're seeing with respect to deep fakes is literally going to rely on blockchain to verify the truth of what we're looking at. This technology is going to be embedded in virtually everything we do. And we can see that by the fact that many, many big brands are starting to take their rewards programs on chain, starting to take their membership programs on chain. But setting all that aside, this is more of a question for the panel. Is this ETF a good thing for Bitcoin in the sense of, yes, you're going to have this fund buying up tons of Bitcoin, possibly that's going to drive up the value of Bitcoin. But at the end of the day, the people who are buying into this fund are not actually

owning Bitcoin. And the underlying premise of why Bitcoin is so valuable is the fact that it's a hedge against institutional wealth. So my question, the broader question is, is owning a piece of an ETF for Bitcoin going to be better than owning literal Bitcoin? And why would you why would you choose to do that? I know it's easier for the investor to not have to set up a wallet and so forth. But educate me on what is the benefit of the ETF versus just buying Bitcoin? I think that there's a lot of reasons. A, there's a lot of people who can't directly buy Bitcoin and can't do it certainly through an IRA or through Merrill Lynch or Schwab or wherever they trade. So I think that for a lot of people, that's a huge part.

Obviously, when it comes to custody and security, a lot of the biggest institutions, pension funds, endowments, the real wall of institutional money, they're not going to throw it on a wallet, right? And we know that some of our trusted crypto custodians, and I put trusted in air quotes, have already failed us. We saw Prime Trust commit pretty massive fraud. Nobody seems to be talking about. Then the guy, Scott from Prime Trust, went over and started Fortress. They lost $15 million of customers money. These are the custodians for the exchanges. So I think for a lot of them, they either need an ETF or they need to see BNY Mellon or State Street and those custodying these assets for them to feel safe. But there really are a lot of people who literally just don't have a way, especially institutions, to buy Bitcoin spot directly.

And a lot of people, frankly, don't want to be custodian. So I think that at the end of the day, this is just a much more familiar and viewed as safe asset, especially if you have the name BlackRock on it for most people. Listen, we would all, I think, love for everybody who buys Bitcoin to do it for the ethos of self-custody and being your own bank and opting out of the fiat system. But the reality is that 99% of people are going to view it as an investment, at least at first. So if an ETF or GBTC or whatever it is has to be their gateway, then so be it. I think that we should encourage that. But I think, you know, even if it just comes down to people going to their investment advisor

and saying, how do I add Bitcoin? 99% of those investment buyer advisors who have a fiduciary responsibility aren't going to be able to answer that question in a great manner. And buy a ETF is a very simple solution to that. And there's probably a lot more reasons to be honest, just off the top of my head, I think that's it. I think it's just that whether we believe in this system or not, those are trusted entities. Oh, and by the

way, you'll be insured. So I have to tend to agree with your analysis. And I think one of the big ways that blockchain and crypto win is when users are playing with it, but they don't even know that they're playing with blockchains. So I can see the logic of that. That's the definition of mainstream adoption. But forget Bitcoin spot ETF or Bitcoin. The fact that we have to say proof of state, proof of work, NFT, DeFi, RWA is real world assets means that we're not there yet. The only way that we achieve mainstream adoption is when the mainstream doesn't know that they're adopting it. When it's the underlying technology, you don't look at your iPhone and think, how the hell am I making this

call? You don't look at the internet and think, how the hell is this magic message being sent to someone on the other side of the world in real time? When we're not talking about the blockchain or the technology underlying will be the only time when we have meaningful mainstream adoption. I think that that's 100% accurate. Rand, can you hear us? I can indeed, sir. I can indeed, sir. I'm back. Good. I wanted to chime in. Yeah, I just wanted to chime in about one thing that I think the ETF really does, the wrapper. So ETF stands for exchange traded fund. It's just a fund that's listed on an exchange. It could be the New York

Stock Exchange, NASDAQ, any of the exchanges in the US or even global ETFs trade around the world on all these different exchanges. But I think the key thing is it creates a QSSIP. It Q-SIPs the market. For instance, when the mortgage market started trading, it wasn't Q-SIPed originally. It was not investable outside of sophisticated institutional investors that had access to mortgages. Mortgages are really, really complicated, especially in the US because homeowners are long the option to prepay. So mortgages, when they were Q-SIPed, then they became added to indices. And the world has moved so far into passive, quantitative, and model building. I think having a Q-SIPed product, whether it's Bitcoin, NFTs, crypto, I mean, i mean iqsipt interest rate volatility in my fund you know that makes it investable and accessible for the models index and it just kind of puts you

more mainstream in terms of access because a lot of people just would not necessarily open a crypto wallet and a lot of institutional investors can't do that. But when you make it a QSIP, it becomes something that's investable and something that everyone can see and can track easily in terms of the price and access. I love that. And taxes too. I think taxes are really important. The ETF wrapper is so efficient in terms of taxes. It's way better than, you know, they're all ETFs are part of 1940 act funds. So mutual funds are 1940 act funds,

but they're not tax efficient. So if you buy like a mutual fund today, you're going to pay the capital gains tax on the past, you know, 10 months of trading, even though you were not a beneficiary. So ETFs really are sort of the newer 1940x fund, and they're very tax efficient. I don't know about the tax treatment for- Oh, it's the worst. The tax treatment of Bitcoin and crypto trading is literally absurd. It's so laughable when you hear politicians talk about the tax benefit to be a crypto trader and they don't see that we're paying taxes sometimes three times on one transaction. It's absurd. I love your point about taxes because that alone is such a headache in this space and is ever evolving, right? The way that it's handled.

Taxes can be really complicated. For instance, in my ETF, we own about 700, over $700 million of the Bloomberg TIPS index. So these are Treasury Inflation Protected Securities. These are just Treasury bonds. But TIPS are really complicated from a tax point of view because you have to pay income tax as an individual if you own a T tip on the phantom income that's kicked out from the inflation protected notes. So I think the ETF wrapper really simplifies, it makes it a Q-SIP, and it makes the taxes more of the fund's burden and not the individual's burden. So I think those are just two added benefits of the etf wrapper generally

i'm here for the q-sip ran that means we have to now do a spaces i just realized on as we know blackrock is uh primarily an indexing business and etfs right is the inevitability of crypto index etfs from blackrock after they get a after they get a Bitcoin approval. For sure. I mean, there's no doubt about it. There's no doubt about it. There's the ETH one coming next, but there's already applications in.

The Grayscale one's in. ARK's got their ETH. Because the SEC have approved ETH futures ETFs, if they don't approve ETH spot ETFs, it's going to be capricious. And we wouldn't want to be capricious twice. It cannot be arbitrary more than once. Everybody knows that.

You can't. Once you've been arbitrary once, you can't do it twice. So when do we get the meme coin index ETF for BlackRock? So I'm hearing rumors that there's a Pepe ETF coming soon. I'm hearing rumors that there's a Pepe ETF coming

soon. I'm joking, guys. Only dogs. Only dogs in the first one. The dog ETF. It's coming. Guys, I think that we covered it well, Rand. Do you agree? We're good? Listen, Scott, if you want to do

a Spaces in the middle of the night I'm going to give you my other number just call me and I'll join you I will do that that was all actually it was funny it was Donish who messaged me and said I want to do a spaces because I think if Bitcoin's going up it means the world is ending in

true Donish fashion and then Mario I guess cut short his spaces on politics and started. I was actually only there for a bit of it, but man, it was big and it was really, really nice. When you're a breaking news spaces and you're actually there for the

breaking news, things go, things go very well. I want to say everybody, please follow that big red logo. That's hosting this crypto underscore town hall. You'll see that if you look at the account um they chose to put the most uh handsome and engaging of the three hosts in the front

that's me um maybe not i don't know why they did that but uh if you want to get the alerts on what's happening with these spaces that's where you need to be also you'll notice that that account will give you all of the breaking news summarized that you need. So it's more than just these spaces. It'll give you really highlights on what's happening with the market. Also, follow our guests, even Gordon, Andrew, Gordon, Gordon, Andrew, whatever his name was, Gordon, because you need to follow people with contrarian opinions. But if we let people up on stage, generally, that means we really like them.

And these are the people that we look to as well. Ran, any final thoughts? Don't worry, I can't cut you off. I think final thoughts. I want to just read you a message that Gordon sent to me. He says, this is an echo chamber of Uber bulls excited about a three-day price move. I wish you guys great luck. History is not on your side. I don't think he wishes us great luck, to be honest. No, I just don't think we're excited about a three-day price move. I think we're excited about the best-performing asset class this year.

I think we might be excited about the best-performing asset class in the last 10 years. I mean, again, I'm really happy to have debates, and I encourage debates with people who are not crypto people, but they've got to be based on logic, and we cannot be arguing like fools because that's not what crypto time is about. 100% agree. I think that was handled well.

All right, everybody. We are going to be back tomorrow, 10.15 a.m. Eastern Standard Time. And if Bitcoin goes straight to 50,000, we'll sign on in the middle of the night. Right. Otherwise, guys, that's all we got for we'll sign on in the middle of the night. Right. Otherwise guys, that's all we got for you. Thank you so much.

See you tomorrow. Bye. Nice applause.