The Wolf Of All Streets - Why The Bitcoin ETF Is So Important For Crypto | Gabor Gurbacs, VanEck

Episode Date: October 19, 2021

After nearly a decade of speculation and anticipation, the futures-based Bitcoin ETF is finally here. ETF proposals have been endlessly denied by the SEC, but a compromise has finally been made. Gabor Gurbacs, the Director of Digital Assets Strategy atVanEck (one of the companies soon to have an ETF) came on the show to discuss all things ETF. Gabor laid out how the product will be structured, who will benefit, the untapped potential, and what we can expect to see next. This is shaping up to be one of the largest news events of the year. -- Sorare: Where fantasy meets reality. Collect, trade and earn weekly prizes on https://thewolfofallstreets.link/sorare. #OwnYourGame --- If you enjoyed this conversation, share it with your colleagues & friends, rate, review, and subscribe. This podcast is presented by Blockworks. For exclusive content and events that provide insights into the crypto and blockchain space, visit them at: https://www.blockworks.co ーーー Join the Wolf Den newsletter: ►►https://www.getrevue.co/profile/TheWolfDen/members

This episode is brought to you by SoRare. Stay tuned for more information on them later in the episode. What's up, everybody? I'm Scott Melker, and this is the Wolf of All Streets podcast, where twice a week, I talk to your favorite personalities from the worlds of Bitcoin, finance, trading, art, music, sports, and politics, basically anyone with a good story to tell. Now, the talk of the crypto town for the past few months, if not years and decades, honestly, has been a Bitcoin ETF. And in this case, a Bitcoin futures ETF in its impending approval. Well, as we're recording this,

it was approved last week and we will start to see them rolling out this week. Well, I know that a lot of you have questions about the ETF. What does it mean for the space? Does it mean the price is going to go up or go down? We don't know the answer to that, of course. But what we can do is differentiate the meaning between a Bitcoin physical ETF, Bitcoin futures ETF, and talk about what this means for institutional investors moving forward. I have the perfect guest for you guys today, the Director of Digital Asset Strategy at FANEC. He's a master of all things ETF and is the perfect person to talk about that is Gabor Gerbach. Thank you so much for being here. And I always butcher your name and I know everybody else does. So I apologize for butchering it in advance and now in the past. Hey, Scott,

thanks. Thanks for having me. My name goes really interchangeably, Gabor or Gabor, how it is in Hungarian. So really excited to be on, talk all the things ETS and anything that you want, big fan of the show. So yeah, whatever is helpful for the group. I can't believe that we're going to see ETS and that's the topic of conversation. It's kind of crazy. Let's talk about that, right? So last Friday, we finally sort of got tacit approval seemingly from the SEC saying we're going to let this thing happen. What does that mean? And what does that look like to you after working on this for four or five years already?

Yeah, definitely like kind of five years officially and a few years before trying to get an ETF to the market. And I don't know, regulators are late on this. I mean, what I usually like to say that, you know, just BANAC has an ETP available in 14 countries in Europe, Brazil, Canada, other countries to approve ETPs. So it's like, it's pretty late for the US to approve anything. And it looks like they're open for a futures ETF. I think what it means is that a larger group of both individual and institutional investors are going to be able to access Bitcoin through a financial vehicle. And why, you know,

why is this important for people while ETFs have a lot of kind of unique benefits? And one of them is you can hold it. Do you want to go into this or like? Yeah, there's a great time to certainly go into it because I think there's just a lot of confusion about the definitions for your average person. Yeah. So ETF is an exchange traded fund. Literally what it means is it's like a mutual fund. So it's like a fund, but it's traded on an asset and quoted intraday and have a price at the end of the day. So basically a fund that you can trade every day at a specific price. And on a major stock exchange like New York Stock Exchange, NASDAQ, or the CBOE.

So first of all, it gives you access to all these big markets and the US capital markets, which is, let's just say roughly a $20 trillion kind of space. So all these asset allocators for trading ETFs in their brokerage accounts now will be able to access Bitcoin as an asset. So that is the biggest thing about an ETF is just access to the traditional capital markets. A few other benefits again, is that you get a price intraday

and at the end of every day that you can trade. So currently the OTC funds that are in the market, you don't get that one. And they're locked. You have six month lockups at minimum. Some have full month lockups. So now you have a fund that you can trade every day on a stock exchange. So that's a big deal. So you get more liquidity, more access. And then there are other things like you get tax documents that's easy, you're plugged into your brokerage system. So everything gets just way easier. And I think they will actually get a bigger group of investors to the market. Right. I mean, if you're a traditional investor who's never invested in Bitcoin and you just want

everything under one umbrella and you're used to using Schwab, well, now you have the ability to trade Bitcoin in your Schwab account, right? Before maybe you had GBTC or MicroStrategy or Coinbase or sort of these secondary ways to gain exposure, but you never had directly. But that said, this is still a futures-based ETF and not a physical ETF. So can you talk about the difference between those two and why it matters? Yeah, absolutely. So it's a futures-based ETF. There are going to be multiple futures-based ETFs coming to the market. And what it means is that literally the exchange-traded funds invest into a derivative, like usually the CME Bitcoin futures contract. And what happens is you own this exposure, so a derivative to get the performance of Bitcoins.

You don't actually own the underlying. So one of the big differences is as you invest into the ETF, what you own is the rise to a derivative as opposed to the rise to the underlying Bitcoin. So you're, again into sort of a futures that expires at the end of the month. And so ETS are, quote unquote, rolling that futures contracts, investing from September to October, October to November, and so on to get a continuous exposure to Bitcoin. So again, you're owning sort of like a paper derivative contract that gives you exposure. That said, most of the commodities market today is paper-based exposure. So gold, oil, and all other sort of instruments are futures-based as opposed to physical-based. So this is going to be no different than the market is used to it. My preference, a strong preference for a physical Bitcoin ETF because you can own the underlying, you can get higher liquidity, and you don't have to pay for the cost of rolling the contract. Last time I looked,

the difference between a physical exposure and a futures-based exposure is like 18% a year. So it's dragging on performance. It's kind of crazy. Yeah. Okay. So in theory though, since it's a futures contract, it's not going to always exactly track the spot price of Bitcoin, correct? Which a physical theoretically would, or at least much closer. Yeah. Yeah. That's, that's the idea. I mean, traders the markets are going to get a fit are going to get efficient and traded track the spot better because now there's, you know, Bitcoin does not have a deliverability issue. Like many futures. Yeah, yeah, yeah exactly so how do you bring those

barrels and throw them in the backyard come on yeah yeah exactly so you know that issue is not existing so i expect you know tracking to be decent but um you know you see 10-15 percent difference it's still a lot um what people are getting, though, is they're not locked into these OTC structures with sort of like wacky and vitally varying premiums and discounts. So we have seen premiums collapsing from 60% to negative 25% and then going back and forth. So that is not an issue in an ETF. And so one of the things I'm excited about is sort of getting away from that structure and providing daily creations and redemptions, which is unique to exchange rate funds. So in that respect, the market is kind of getting better. But then again, like our experience with the, I think right now we have five ETPs and Europe all physical and they are tracking spot prices very closely.

So like your basis points. So like we'd love to do that in the US. But regulators are not open to that right now, it sounds like. Their reasoning is that the CME futures contract is, quote unquote, regulated. They have surveillance sharing agreements. It's a federally approved contract available in the US. And I'm like, well, the underlying exchanges to that contract are still state by state. It's purely semantics, right?

Because to my understanding, they basically said, well, if you apply for it this way, we're not going to look at it. But we can't say no if you apply for it this way, we're not going to look at it, but we can't say no if you apply for it more like a mutual fund that is a futures contract, right? They basically just didn't have any grounds to say no because they've approved so many futures-based ETFs that look just like this outside of crypto. Yeah, absolutely. But I mean, the argument holds for physical like GLD, for instance, or, you know, some of our friends at OUNC that we are running for gold or other commodities. There are multi $10 billion funds that are just the same as the Bitcoin fund would be. And again, 14 European jurisdictions and three other countries have approved a physical Bitcoin ETP.

So there's no real reason not to approve one. So we have our, I can't remember, I think it's November 14 or 15, when our decision date is coming up for the physical Bitcoin ETP. 14, yeah. I thought you did. Yeah, so that's coming up. I'd love if that was approved because it's a sensible product. And so our application is the first one that is coming up for decision. I think the roadblocks, at least the ones that I, that's just my understanding, is really the state-based regulatory nature of the underlying crypto exchanges. So crypto exchanges today are in the US or state regulated, meaning that New York, Connecticut, like Florida and other places have

different rules of how they do business. And the new administration really wants federal oversight for crypto in order to do something. I think it's kind of unreasonable. What I tend to bring up today is that the entire insurance industry is state-by-state regulated. So the largest insurance for everyone has like four or five different insurance for whatever, like medical, dental, car, house. And so that's all state-by-state regulated. And it's a multi-trillion dollar industry, arguably more important than crypto right now, at least right now. Probably, probably. We wouldn't argue that, but I think that there's plenty of people who obviously would.

The state by state structure, we've seen the headaches that that causes for other platforms and companies in the crypto space, right? I mean, first of all, you talk to any exchange and they're like, we're not even touching the United States because we would have to go state by state to try to get approval. But even Celsius, BlockFi, who have seen certain states, you know, taking issue, I guess, with their lending products. Then, of course, the SEC completely blocking Coinbase's lending products. There's very little clarity. And that's both at the state and federal level. So I can I guess I can see from that perspective why it would be a massive headache

to try to do it state by state. Yeah, I mean, it is sort of a headache. But then if you look at crypto exchanges and lending platforms managed to get approvals for state money service businesses in like six, eight months. So there's a way to do business. Same with insurance companies.

And I found that states are kind of more reasonable with most crypto platforms and they come to uh closer kind of better conclusions because there's actual economic activity linked to uh crypto and and specifically just like texas bitcoin mining new york bitcoin mining this is all sort of like all generating revenue for a state. And while the, you know, on the federal level of these regulators are having kind of academic exercises and ivory towers. Yeah. It's just like, and we were waiting for their decisions on a space they don't really

understand. States really want to get stuff done because it's their revenue base and their businesses are serving customers. So. Yeah. They have to actually answer to their constituents, unlike national politicians. Yeah. And to your point, like, well, I guess so to the ETF, and I don't believe that it's necessary to have a federal regulator to create like an ETF on Bitcoin. Like, just look at the,

just the marijuana businesses out there. Marijuana is still federally legal and states are all over the place on just marijuana businesses. And there's actually a marijuana ETF out there. So like, why can't Bitcoin have an ETF when you have pretty solid state by state regulation and you have entities like VanEck and

kind of larger funds and firms that are sort of like helping this business happen. And then you need federal regulation. Why? I think regulators are just obsessed with this space and therefore they can't move forward. But anyways. Yeah, it feels like they're just kicking the can down the road waiting for as much clarity or as much as an excuse to delay as possible, right? But you guys have experienced that at VanEck more than anyone. I mean, you had your entire first round of the 2016, 2017, if I'm correct, ETF proposals that were eventually denied. And now, as you alluded to, November 14th, they've already kicked the can three times, which is as many as they're allowed, right? So they finally have to make a decision by November 14th, no matter how badly they want to delay it.

So to me, it just feels like they're always just waiting till the last possible second, because nobody wants to be the one responsible for making a decision. Yep, absolutely. And I think this is just so that you know, like us and issuers are very actively talking with regulators, but it doesn't mean that they're making up, they made up their minds and yes or no on those funds, which is obviously very frustrating. And to me, the fact that Bitcoin is available to tens of millions of Americans today, and you can't buy it in an ETF is kind of a joke.

Like, how's your exposure better on a crypto exchange than on, you know, like it's like issuers and like ETF issuers and sort of like banks and other providers should be able to compete. So I think it's like an odd situation. You know, I've hoped that we come around. One example is, you know, gold was, my firm has a history in gold and our founder has built a gold equity fund just a few years before gold was made illegal. So we kind of navigated through that landscape,

eventually ended up launching mutual funds and exchange rate products on gold. And I think similarly to that, we're going to, you know, hopefully succeed with Bitcoin. And in fact, there's so many more people supporting the space, I can't see a scenario where Bitcoin would not have an ETF, even a physical one, I think it's a matter of time. Yeah. I would, again, like best case scenario would be getting this ETF approved for whatever miraculous reasons regulators make up their minds and like, you know, this November. And then the worst case scenario, I think is two, three years out after federal regulation, which is, I think a federal regulatory regime would take two, three years at minimum.

That's just my kind of view on that space. Right. But federal regulators are known for being so agile and fast. Yeah, of course. Of course, it'll take three years because it'll take them two years just to get their office set up. But I guess that's that that's besides the point. So I think what most people want to know now, we have a very firm understanding. You talked briefly about the implications being that, well, there's plenty of people out there who, A, just are afraid to buy Bitcoin but would buy an ETF. But to me, it's more this sort of institutional wall of money, right?

It's my understanding or at least assumption that the pensions and endowments and this huge wall of money have probably been looking at this space for years, likely want to get 1% of their money in or 2%. And the risk managers literally just can't, right? They can't buy GBTC, the discount is absurd. They can't go on Coinbase and buy in custody because they don't have a firm understanding of the security aspect. That's all gone with this, right? So in theory, that floodgate could be open if they actually want it here, correct? That's correct. And I would say I'm sort of bearish on this personally, and I guess professionally too, I can say this, because one of the issues with futurist-based ETS is the underlying is a

derivative. So whenever you go to a bank, sort of a wire house or pension allocator, they have a very limited bucket for derivatives because of the way in which they get exposure is mostly through stocks and physical things. So I don't have crazy high faith that the futures-based ETF would gather billions of dollars. And we talked about the structure is not super, it actually holds a derivative. So I think it may take more time, and I wouldn't have as high expectations. I think the physical, if physical gets approved, I actually do believe that billions can come into the space. And a point of reference to you is that right now, gold is a $12 trillion asset, roughly. About half a percent of portfolios of all managed portfolios, so pension funds, investment

accounts, RIAs, banks, so half a percent hold about 0.7% gold or gold-related assets, including equities. And that small percentage actually made the assets $12 trillion assets. So having a, like, it's crazy. So like, if you see the ETF approval chart on gold, what happened after it over the following decades is insane. Yeah. So I think something similar could happen on the physical side. Futures is a step to the right direction, but I think like we, I'm sort of a little bit bearish on this. I don't think we're going to see, you know, billions coming into the space, extra money. They may switch over from existing, you know, more liquidity. I mean, that makes sense. So it's basically a step in the right direction, but not all the way there for most of them, in your opinion, which is why we want to see that physical.

In fact, I mean, we've had people who have said, this isn't really a good thing, right? And a lot of people, certainly if you're talking about price, they like to point at the other similar events and what it did to Bitcoin price, right? Obviously, CME launched Bitcoin futures in December of 2017. The day it launched was the dead top of the market for a third of a decade. And then, you know, what Coinbase launched and Bitcoin retraced over 50%, right? People see that as sort of a corollary. I mean, do you think that there's the chance that this is one of those epic buy the rumors, sell the news opportunities, and that it'll launch this week and we'll see a massive retrace here from just almost making it back to the all-time

high? I think to me, I see a natural floor at 35K. There's a lot of institutional money there. So there might be a little bit of a retrace, but overall, I think the Bitcoin. Yeah, it's 35. 35 isn't a little for most people, but I agree. No, I know. I know. But it would be a big draw. But I don't like I think that's an absolute floor if the market were to correct. But I don't believe like I think generally we have a bullish trend that is just kind of emerging and there's more and more money coming into the space. And the thing about these futures-based ETFs, they're actually not great to short as an instrument. So a professional investor would go straight to the future to short or express a bearish opinion. And the investors that are accessing these vehicles are sort of like,

I would think 90 plus percent longs or sort of not professionals, which means again, the short. Yeah, you're buying it because you wanted some Bitcoin exposure in your IRA. Exactly. So it's not like I don't see shorts in that respect. I just think that the expectation of this particular type of ATP or ETF like bringing in like billions of dollars of new capital for natural wrongs

might be misplaced. Yeah. So that seems reasonable. That makes a lot more sense. Do you love sports collectibles or fantasy sports as much as I do? SoRare is blending this together to create an entirely new gaming experience powered by its community. SoRare cards are officially licensed NFTs for over 160 clubs, including Real Madrid, Paris Saint-Germain, and Liverpool, and all built on Ethereum. You truly own your collectibles.

They are productive gaming assets that will generate rewards if you're a good fantasy player like me. Join SoRare and connect with your favorite teams, live the game with passion, and earn weekly prizes. You can do all of this at the wolfofallstreets.link slash SoRare. You know, especially at the beginning of this year, one of the biggest ways we talked about some of these DeFi, C5 platforms and their struggles with the regulators, but what people don't talk about very often is how they offer their yield, right? I mean, they get yield by trading basically futures, the cash and carry trade, right? You buy physical Bitcoin, you short the future, you make money when the two prices sort of converge at the most basic level, right? Is that opportunity even greater now with a Bitcoin futures ETF potentially?

Because like you said, first of all, people are buying it for long exposure. And if these institutions do want to come in, in theory, they're going to push the futures price up by buying the futures ETF, right? So that makes a wider gap theoretically between spot and future, meaning that there's more yield to be made

on the cash and carry trade. Do you think that that's something we're going to see more of? Probably, but then that you match that with more efficient executions from the authorized participants and market makers. So that itself might balance out. There's going to be firms that will arbitrage the difference there. But again, from a volume perspective, I don't think that's, and we don't know the curve structure and how it's going to work out.

Like we were just assuming everything is always in contango and we're not. It wasn't two months ago, right? We were, I mean, slightly, but it was in backwardation. So we've seen it. So that is, I think I'm actually

kind of concerned that that might change. Like if you see a short, like a pullback and some like liquidations, say leverage liquidations on some of the bigger platforms and the curve structure changes that eliminates a lot of yield seekers and platforms that might not be able to come back at size. So yeah, I don't know, like if there's not going to be more yield opportunities. I think the yields are generally compressing because bigger and bigger pools of capital is available. So there's going to be more dollars coming into the system. So yields will drop. That's just my view. It's just a more efficient market, right? I mean, that's sort of, I guess, the downside,

depending on how you view it. The more of these instruments we get, the more efficient market, right? I mean, that's sort of, I guess, the downside, depending on how you view it. The more of these instruments we get, the more efficient the market becomes, the less opportunities there are for someone to sort of arbitrage or take advantage of those inefficiencies. Yeah, absolutely. And yeah. And so I think like to me, just the whole ETF, what it opens up and what I'm excited about generally is that larger firms and asset managers are learning about the underlying asset and hopefully the technology. So I think there's going to be a lot of interesting, like when physical ones particularly get approved, then you'll see a lot of companies trying like more Bitcoin native solutions

and a number of them will start working with crypto exchanges. And, you know, we actually started working with crypto exchanges, work with FTX on some perpetual swaps. So those are derivatives as well on market indices. So I'm really excited for traditional firms to branch out and actually better their technology stack and interact more directly with customers. And I think there's the whole, like the group of crypto exchanges like FTX, Bitfinex, Coinbase and some of the others, they're just getting so much better at the retail customer game than traditional brokerages. So, and I think like basically ETFs and some of the asset managers might tend toward crypto exchanges as partners, as opposed to traditional places where money is raised. So the capital shifting from the architects to the new brokers is fascinating to me.

And the ETFs are, you know, I think they're just actually opening up that relationship. But yeah, that's what I'm most excited about. Yeah, all you have to do is go, you know, check out Tom Brady's Twitter account and see the FTX commercials, which are amazing to illustrate how well the actual crypto exchanges are doing at bringing in retail, like you said, which we're not going to see from the legacy side, in my opinion. Would you say that then, so it's temper expectations seems like something that's worth sort of saying to people as far as the actual Bitcoin futures ETF structure. It sounds like this is more of one of those institutional zero to one moments, right? Like we just never had it, never had anything like it.

So now we've got it. And now we need to see where everybody can take it from one to actually make this more bullish for the market. Is that an apt sort of way to look at it? Yeah, you know, as Peter Thiel says, zero to one is always the most difficult thing to do and it takes time. And then the one to end is sort of execution and discipline. And I agree like that. So having this milestone opens up a lot of one to end options.

So just, and I think like people will just come to the conclusion that I came to over time is that, you know, the traditional finance space is boring and, you know, the, we'll build instruments that are different, like, you know, self-custody options, assisted custody options are super interesting to me. You know Interacting directly with customers is also very interesting to me that the traditional bank and intermediary system just completely broke. So sort of the Bitcoin is bringing that back. And I think ETS are just kind of a way to get more legitimacy. But the end goal is actually to build a different financial system that is more direct to customer. And I don't think the traditional guys are doing well with it.

I mean, I'm lucky to have, you know, Jan Vanek and some guys at Vanek who are forward looking, but most of the space, like 90, 95% of the space doesn't even care or downright like bearish. And then the other 5, 10% is kind of exploring. But yeah, I think, again, I'm excited about our transformation as a firm once again to kind of focus more on Bitcoin and crypto-based stuff. And one of my favorite stats,

and I'll send this to you, maybe we can post it like next to the recording is there's a six to eight trillion dollar wealth transfer from um it's kind of like baby boomers and the older generation to uh millennials and gen z and um and so that six to eight trillion dollars is not going to invest in uh value funds it's not going to invest in traditional system. It's going to buy sort of thematic funds, going to buy Bitcoin. It's going to try crypto exchanges. It's going to buy kind of NFTs and stuff that is different. So that $68 trillion about transfer is happening in the next

20 years. And about 10 to 12 years from now, more than $45 trillion will be controlled by sort of this new group of investors. So I think there's just a ton of growth opportunity. And so that's why we're kind of just building products in the space that make more sense than products in the past 20 years. Yeah, I love that. So all the baby, basically, the baby boomers will die off, their money will go to their children who will not be looking at gold and legacy mutual funds. And actually, you can also add into the fact that millennials in the next five to 10 years will come into their own for their own earnings. And so the money that has not yet been realized in that generation will finally start to be put into the market. We know that that money is going to largely flow into crypto rather than traditional. So one of the, yeah, absolutely.

And one of the things that I actually just learned about four or five months ago from one of the presentations I did is by 2024, so that's like two years from now, e-commerce transactions. So all e-commerce transactions, more than 50% of them will be done from a wallet. So that includes Venmo, PayPal, crypto exchanges, and so on. But as you are in the US, most people swipe their cards or pay cash. But we don't think about this. But actually, most of the e-commerce transactions are already, like 40 of them are already going out from wallets it will be so credit cards and debit cards combined will be less than money spent from

wallets online wallets uh in two years so that is gonna like just hugely transform the world and i think uh that's where that's where the traditional system needs to emerge. And I think just wrapping these crypto assets into ETS will start that discussion in a different way that we could without having those instruments. So I think that's why I think this whole approval is kind of, it's a good stepping stone that is necessary to start exploring other stuff. So do you think now we have this Bitcoin futures ETF approved, do we see a Bitcoin physical ETF next realistically, or do you think we're going to see Ethereum futures ETF approved? Because now we know that the futures product structure

is going to be approved by regulators. So I think like, I personally don't believe that regulators are ready to approve a physical structure just yet. I think that, yeah, just they're just pushing this sort of, you know, the whole federal oversight thing, which I think is wrong, and they might be challenged on it, and they might budge. But so I think other sort of like futures based structures are more likely. I think it's more dangerous for investors to get like Ethereum and all these other coins into a future structure. Yeah, because the lower the liquidity goes, I mean, the crazier the products get to trade. So, Scott, you know, actually probably better than I do.

Like if you look at some of the multi-asset products out there on the OTC market, what is it? We have seen more than a thousand percent premium and then collapsing to like 60% discount or like those. Even Grayscale. I mean, the Litecoin trust for Grayscale is all over the map. Hundreds of percent, I think, in each direction. Yeah. Yeah. So that is like, I'm afraid that, you know, futures are carrying not that kind of risk, but fraction of that kind of risk, but still pretty significant double digit percent risks that people are not aware of. So, you know, I don't think regulators are doing service to investors by their decisions. And because a lot of people will lose money, therefore they will approve eventually better and better structures. I think that's the only way to learn. That has never changed over the past 100 years. People lose money and that's how regulators and

everyone learns. All of this seems like when we're talking that the real main goal here still is mainstream awareness and adoption. The ETF is one more step in that direction, but it doesn't quite get us there. There's all these other things. Well, FedEx is not your only job, right? I want to just ask you about Pointsville very quickly because it's super cool. I'm sure you want to talk about it even though you didn't know I would ask. But, you know, to show sort of other ways that crypto is becoming more mainstream. Yeah, absolutely. So like five years ago i remember i did um one of the a panel discussion and uh i said we're gonna see 10 000 tokens from five years from now and uh it's pretty accurate and i was like you know that sounded absurd to someone when they saw i think you know

maybe ethereum starting just trading on Coinbase around that time. And there's like Bitcoin. And then we see 10,000 tokens. Many of them are protocol assets. A large percentage of them are scam and scams and pump and dumps and stuff. But there are a number of them that are good protocols that will potentially become important assets. But there's also, so what I believe and why I built Pointsville is the assets that you're investing in today are mostly protocol assets. And someone else is issuing a coin and they have a pre-mine

and they get paid for you to participate. But if you and I wanted to create an asset, we would want to do it without a pre-mine. And let's just say, you know, so Pointsville enables one to create an asset without the gambling part. There's a lot of gambling in crypto and there's not a lot of use cases. So we work with Major League Baseball. We work with ski resorts. The top crypto exchanges are on our platform. So we're enabling people to create rewards in a way that's focusing on e-commerce as opposed to gambling and trading. So I think that so that angle is not very well explored. And that's going to take us from 10,000 tokens to a million tokens, maybe next five, 10 years. But I've seen, you know, baseball, for instance, wanting to

create their own program, but they didn't want any of the volatility and, you know, the crazy offshore exchange trading and, and so on. So, so Pointsville enables people to create those rewards programs that look and feel like crypto, but they are not on crypto rails. We had a state pension fund and the state of Texas has come onto the platform and created that collective one rewards program and the big exchanges. And so I think the next phase of adoption will be getting major brands and pension funds

and bigger institutions to create their own program that looks and feels like crypto, but without the ICO type of gambling and trading. So anyways, I'm excited about that. And one of the other fun things that we do is we have a Pokemon Go like AR feature. So you're able to go out and collect these branded points. And yeah, so that's obviously i'm excited about that and uh i see some of the gaming i used to be a professional gamer i played starcraft and so i i did um i'm seeing that emerge and kind of connect with this uh tokenized space and i'm

excited about crypto gaming play to earn is you could do 10 more hours probably talking about that, but the potential of that is absolutely incredible. Hearing you talk about that, and then you have this bipolarity of talking about ETFs and institutions and institutional adoption. I always like to just think back to why we all got into crypto in the first place, and it had nothing to do with whether you could trade Bitcoin in your Schwab account, right? Like there's people all over the world who use Bitcoin every day because it saves their lives from like predatory. They don't have either a predatory loans or a predatory government or they're unbanked or underbanked. And I think

it's important to see what mainstream adoption can look like. And to remind ourselves as exciting as ETFs and structures like this are, that's not really what we're here for. We just love it. We get so excited about it because we think the number will go up. But I think that that's because we're like living in our,

you know, here in our nice houses in the United States without the problems that come with our money needing to be fixed. You know, so I always love to just kind of talk about that fact when we talk about all these things. We're so excited at how big news ETF. That really doesn't matter to 99% of the people who need crypto. Yeah.

And obviously, we're lucky to have the dollar and dollars are relatively stable comparing to other fiat currencies, not so much comparing to Bitcoin. But and so, I mean, like just since I was born, and I will not disclose that in the pod, but like not, I'm not that old. So the, let's just say 30 some years old. So in the past 30 years, the dollar lost,

I think around 54 or 55% of its purchasing power. And just, you know, just last year, I think 30 plus percent of the dollar money supply was printed. So it is, you know, it's becoming a problem for us, like buying houses, houses are getting so expensive, general, the gas stations, my refill, my car are now 15 to 20% more expensive than a year ago. So it's becoming a problem. And so that's why generally why I actually came to this space is the idea of private money. I think private monies are going to make a comeback.

And some corporations will issue their private money. And sometimes they're going to be more reliable than government money because I think corporations just manage money much better. And so that's what we are seeing as a big sort of like overarching trend. And Bitcoin is obviously not issued by a corporation. And it's a whole different game and it's helping people and it's decentralized. No one controls it. However, I think the whole corporate money idea is coming back and there are different forms. So anyways, I'm sort of like bullish in that space. And if we make it sufficiently easy for companies to create private money and link back to the economy, that's going to be a game changer.

So I'm excited about it, but it can be all gambling. It doesn't have to be Facebook though, right? It doesn't have to be. It does not. I mean, it does not, but like, you know, you ask yourself, like would Facebook manage money better than a government? Than a central bank? Yes. Yeah. Yeah. Yeah. So, yeah. So I think that's, those are, those are the questions that will be asked and, um, and why, and why shouldn't Facebook have their own money? I mean, of course within their ecosystem is a no brainer, but why shouldn't they, why shouldn't Amazon

have their own currency that you use, uh, and you get benefits from within Amazon and don't have to worry about Jerome Powell and friends. Yeah, exactly. I think that's what we are going to see. And there's the roles. It's really interesting. I think working on the technology side at Pointsville and working with VanEck on the institutional side, I think the role of an institution is transforming a little bit and it's becoming more like the architects, product architects and sort of the designers and sort of legal structures.

That role is gonna, we're gonna preserve that role and that will always be there in societies. But the whole crazy intermediary system where you have to go to three, four different banks and, you know, asset sort of like intermediation companies is disappearing. So I think overall, you know, net, it's a good thing. And that's why most people are in the Bitcoin. That's why I'm in the Bitcoin space. And so anyways, I think that's that's important, that role being preserved in a different way.

And yeah, I mean, VanEck launching kind of with our index options area, perpetual swap with FTX, like it's kind of cool that we're able to do that. It's a little bit different. Companies are sharing their own NFTs and I have second thoughts on the gas fees and all the silly things that are happening in that space. Like it's kind of cool, you know, like. You're not buying lazy lions and mayhem monkeys and, and pinky penguins or whatever else. I think I'm good. I like art. I used to run archeology companies. So I collected real things and still collect them, but like. I was an archeology major in college.

Oh yeah. That's, I mean, that there's, there's a lot to learn from that space and civilization. still collect them but like as an archaeology major in college oh yeah that's i mean that there's a lot to learn from uh that space and civilization so i think again the money part of it over time we learned like money got debased over time right like it first was silver and it was 80 50 30 20 10 silver then people printed their own so like like, you know, that is kind of playing out again, just in a much faster way. Yeah. I agree. Well, it's good that the guy who's working on our ETF still understands why we should be here in the first place. So it gives us gives us all hope. So where can everybody follow you after this conversation? Keep up with what you're doing. So I'm on Twitter and LinkedIn. Mostly use Twitter. it's at Gabor Gorbacz. So that's, that's my name, pretty simple. And so I have some kind of fun

stats usually posted there. I love your, yeah, I love your Twitter. Well, thank you so much for taking the time to do this. I think that gives a lot of clarity as to what's happening and what's coming and what reasonable and realistic expectations we should have for Bitcoin futures ETF. So thank you so much for explaining that to everyone. I appreciate you coming on. Thanks for hanging out, Scott. It's always fun.

Love your show. Thanks, man.