Latest / The Paul Barron Crypto Show / XRP + Dogecoin ETF Launch!🚀Grayscale INTERVIEW

Transcript

XRP + Dogecoin ETF Launch!🚀Grayscale INTERVIEW · The Paul Barron Crypto Show

0:00
Speaker 1: Let's get into some ETF news today. It is a
0:02
Speaker 1: big day that will reveal some very interesting stuff. So
0:05
Speaker 1: you guys want to stick around for it, let's just
0:07
Speaker 1: jump right in. I do want to thank our sponsor,
0:09
Speaker 1: and that is BTCC. This is a great place where
0:11
Speaker 1: you guys can go in and get a little bit
0:13
Speaker 1: more creative in your trading. You get a ten percent
0:16
Speaker 1: bonus first time on the deposit just using our link
0:19
Speaker 1: down below also gives you some other benefits there when
0:22
Speaker 1: you sign up using the PBN link. And one thing
0:25
Speaker 1: I've started to do is long and short. Those are
0:27
Speaker 1: the simple things. Whether you're into leverage trading or not,
0:30
Speaker 1: those are the kind of activities you can do over
0:32
Speaker 1: on BTC regardless of market volatility. This is where traders
0:36
Speaker 1: are making their moves right now. Check it out down below.
0:40
Speaker 1: As you guys know, we've been talking about this for
0:42
Speaker 1: quite some time and one of the videos that we
0:44
Speaker 1: did a couple of weeks ago was this one right here,
0:47
Speaker 1: and it was Bullmarket Catalyst What it would take. Let
0:51
Speaker 1: me inform you that none of those catalysts have taken place,
0:55
Speaker 1: meaning we said these are the things that have to
0:57
Speaker 1: happen for the market to move, and it's been almost
1:00
Speaker 1: the exact opposite. So today I wanted to bring in,
1:03
Speaker 1: of course, our friend from Gray Scale, and that is
1:06
Speaker 1: Zach Pandel coming in head of research. How are you.
1:08
Speaker 2: I'm great, Paul, awesome to be with here today.
1:10
Speaker 1: All right, Zach, there's a lot of happening. The marks
1:12
Speaker 1: have been very volatile, to say the least. We've seen
1:15
Speaker 1: so much movement in the general market, and when you
1:19
Speaker 1: look at the reasoning behind this, many people would say, well,
1:22
Speaker 1: you know, it's og wall, it's selling, it's bitcoin kind
1:27
Speaker 1: of repositioning. You know, you've got all these scenarios that
1:30
Speaker 1: have played out within the market itself. What do you
1:33
Speaker 1: think is the bullish short term position right now for
1:39
Speaker 1: the markets? Now? I say short term next say sixty days? Yeah,
1:43
Speaker 1: great question.
1:44
Speaker 2: Look, crypto native investors often look for crypto native explanations
1:49
Speaker 2: for what's going on, even when what's happening in prices
1:52
Speaker 2: is correlated to lots of other things happening in markets.
1:56
Speaker 2: And so look what I see, Paul, is a repricing
1:59
Speaker 2: of macro expectations over the last few months. You think
2:03
Speaker 2: back to August, we were real optimistic about the US economy,
2:07
Speaker 2: anticipating further rate cuts from the Federal Reserve today, more
2:11
Speaker 2: caution about the labor market, about credit markets, or questions
2:15
Speaker 2: about the outlook for Federal Reserve policy. For me, the
2:19
Speaker 2: bull case thesis is that the reality is still pretty good. Honestly,
2:23
Speaker 2: for Marcus, the economy is fine, the Federal Reserve is
2:26
Speaker 2: still supportive. Within crypto, the kind of fundamental pillars for
2:30
Speaker 2: demand and what's been driving this bullmarket still very much
2:32
Speaker 2: in place. So I would say that the optimistic case
2:35
Speaker 2: is just that markets get a little bit more confident
2:38
Speaker 2: again about the economy and the broader market backdrop. I
2:41
Speaker 2: think that's enough for crypto to stabilize and begin to
2:44
Speaker 2: recover from where we are today.
2:45
Speaker 1: I'm looking for specific shorter catalysts, and one of the
2:50
Speaker 1: things I'm kind of comparing this to is back to
2:53
Speaker 1: this tweet here, and that is the activity that we've
2:56
Speaker 1: seen with bitcoin and og whales now been selling more
3:01
Speaker 1: bitcoin than ever before. This of course continues, I guess
3:05
Speaker 1: that's really one of the categories that I think will
3:09
Speaker 1: at least slow this market down, is if we see
3:11
Speaker 1: that stopping. If you think about that, along with unlikely
3:15
Speaker 1: to get clarity act in twenty twenty five, that's getting
3:19
Speaker 1: pushed in the next sixty days. I mean, if we
3:22
Speaker 1: were to get into a clarity regular maybe algatatory front
3:25
Speaker 1: is the way to go here. Do you feel like
3:27
Speaker 1: those bitcoin wallets slowing their selling and some more regulation
3:33
Speaker 1: that maybe gets confirmed, do you think those would be
3:35
Speaker 1: enough to get this market restarted.
3:38
Speaker 2: I do think that those would be enough, And I
3:40
Speaker 2: think you know some of the other macro topics, but yes,
3:42
Speaker 2: I think progress on market structured legislation on the Senate
3:47
Speaker 2: version of the Clarity Act, and some change in the
3:50
Speaker 2: fun flow picture is how I would would put it. Look,
3:53
Speaker 2: bitcoin og whales as you characterize them, have been selling
3:57
Speaker 2: really since the ETFs launched in jail when you're twenty
4:00
Speaker 2: twenty four, but price has been up since then, and
4:03
Speaker 2: that's because there's been a ready buyer on the other end,
4:05
Speaker 2: which is the ETFs. And so I think what you
4:07
Speaker 2: need to see is that ETF bid come back into
4:10
Speaker 2: the market. That would be confirmation that we've reached a
4:13
Speaker 2: bottom more a positive catalyst into the end of the year.
4:16
Speaker 1: Well, you also look at this percentage of supply right
4:19
Speaker 1: now held by public companies. This of course is flattened
4:21
Speaker 1: for Bitcoin, but if it's increased dramatically for Ethereum and
4:27
Speaker 1: even Solana. When you look at that both on Bitcoin
4:31
Speaker 1: EA Solana dats and you kind of compare where the
4:34
Speaker 1: market is right now, what would you say right now
4:37
Speaker 1: would be the winning factor here? Do you think we'll
4:40
Speaker 1: continue to see maybe these dats softening on bitcoin or
4:44
Speaker 1: do you think that we get more of a position
4:46
Speaker 1: on bitcoin in the future.
4:47
Speaker 2: I think that there will be a lasting role for
4:50
Speaker 2: these types of companies that are holding crypto on balance
4:55
Speaker 2: sheet and finding additional ways to get value out of them,
4:59
Speaker 2: either through changing their capital structure, their liabilities, or doing
5:02
Speaker 2: something on the asset side of the balance sheet. So
5:06
Speaker 2: you know, we're focused on ETF ETP products for our investors.
5:11
Speaker 2: I think digital asset trageries are another way to get
5:14
Speaker 2: crypto exposure in a portfolio, and I think that they
5:16
Speaker 2: will be a lasting part of the ecosystem. You know,
5:20
Speaker 2: there's always ups and downs in demand for these vehicles,
5:23
Speaker 2: and we're at a you know, we're at waning a
5:26
Speaker 2: point at this very moment, but I think appetite could
5:28
Speaker 2: come right back. As equity market says, stabilize, all.
5:32
Speaker 1: Right, let's move on to kind of the news of
5:34
Speaker 1: the day, and that of course is your launch of
5:36
Speaker 1: the XRP ETF that you guys have going on. Obviously,
5:40
Speaker 1: g sol already launched for you guys, and of course
5:43
Speaker 1: you have growth staking rewards of almost seven and quarter
5:46
Speaker 1: percent there. When you look at Solana and XRP, especially
5:50
Speaker 1: on the ETF performance, how do you think these play out? Now?
5:54
Speaker 1: You're going to have competing ETFs which are very competitive
5:57
Speaker 1: out there in the market space right now. ETFs between
6:01
Speaker 1: Soul and XRP, how do you think this play out
6:03
Speaker 1: compared to market cap?
6:04
Speaker 3: Well?
6:05
Speaker 2: Absolutely, you know, both both products major parts of the
6:08
Speaker 2: crypto eCos to large liquid assets with enthusiastic investor bases.
6:13
Speaker 2: I see them as a bit different and you know,
6:16
Speaker 2: different flavors for investors to consider and ideally build a
6:19
Speaker 2: portfolio of crypto assets that includes multiple things, usually starting
6:24
Speaker 2: with Bitcoin, but these smart contract platforms and other assets
6:28
Speaker 2: included in that as well. You know, XRP a battle
6:31
Speaker 2: tested blockchain originally designed for payments use cases but broadening
6:37
Speaker 2: to other use cases today one of the largest and
6:40
Speaker 2: most liquid assets in crypto. I think there will be
6:43
Speaker 2: significant demand for these ETF products, as we've seen with
6:48
Speaker 2: the Salana and Ethereum ETF products as well. You know,
6:52
Speaker 2: our view at Grayscale is that investors need digital assets
6:56
Speaker 2: in diversified portfolios to have the best risk adjusted returns
7:00
Speaker 2: over time, especially given the macro risk that investor is facing.
7:06
Speaker 2: And all of these assets can be held together, you know,
7:09
Speaker 2: in different flavors depending on investor preferences to build that
7:13
Speaker 2: crypto allocation. We are delighted to be able to broaden
7:16
Speaker 2: the access to these assets with new ETF products like this.
7:19
Speaker 1: Well, we've seen some pretty successful launches so far with
7:23
Speaker 1: the xrp ets, with Canary obviously Bitwise launching last week.
7:28
Speaker 1: This is the thing that I'm kind of curious about
7:30
Speaker 1: because these two I believe at some point institutional capital
7:34
Speaker 1: they probably will deploy into both, but they're probably going
7:36
Speaker 1: to have a preference one or the other. You have both,
7:41
Speaker 1: what do you think will happen right.
7:44
Speaker 2: Well, as you know, Paul, we've talked about this before.
7:46
Speaker 2: It's like deciding between my children. When I look at
7:48
Speaker 2: these large assets, look, I like to encourage institutional investors to,
7:53
Speaker 2: you know, start from the top, begin with Bitcoin, the
7:55
Speaker 2: largest most liquid asset that has the most clear macro
7:59
Speaker 2: use case, and then the rest of these assets. They're
8:02
Speaker 2: all unlocking types of innovations in digital finance, and what
8:06
Speaker 2: we want to think about is where are those uses
8:09
Speaker 2: stable coins, tokenized assets, prediction markets, DeFi, Where is that
8:15
Speaker 2: being built out? And the asset that you want to
8:18
Speaker 2: own is the thing that's becoming the platform for those
8:21
Speaker 2: digital finance innovations. Ethereum was the starter and the leader
8:26
Speaker 2: of this process, and so that's a natural first step
8:29
Speaker 2: to take is with Ethereum, and then the rest of
8:32
Speaker 2: these assets are all competing for a piece of that,
8:34
Speaker 2: and I think all of them will play role. All
8:36
Speaker 2: of them already play a role today in different aspects
8:39
Speaker 2: of this with stable coins or DeFi, et cetera. We
8:41
Speaker 2: want to figure out which ones are going to be
8:43
Speaker 2: the biggest platforms over time. It's going to be an
8:45
Speaker 2: intense race. I assure you that we're in the next
8:48
Speaker 2: five to ten years.
8:49
Speaker 1: Well, listen, one of the things that would give you
8:52
Speaker 1: an uneven advantage in this intense race is getting into
8:57
Speaker 1: staking on XRP. I'm looking at Doppler fine ants. They
9:01
Speaker 1: continue to kind of drive the position right here, and
9:03
Speaker 1: it's difficult for an XRP holder, especially native asset, to
9:07
Speaker 1: go out in steak. It's cumbersome to get it done
9:11
Speaker 1: until that starts to loosen up. Imagine if you had
9:13
Speaker 1: a stake opportunity within an ETF, I mean literally just
9:17
Speaker 1: right there, easy click, easy access for millions and millions
9:21
Speaker 1: of institutional and retail investors to stake their well, have
9:26
Speaker 1: stake XRP, I should say, exposure to it. Wouldn't that
9:29
Speaker 1: be a good product?
9:29
Speaker 2: Don't you think we are actively looking at all of
9:32
Speaker 2: these things? And I'm delighted to say that we began
9:34
Speaker 2: the process of staking in US listed ETFs with our
9:37
Speaker 2: ethereum products in October, and the Treasury and IRS have
9:43
Speaker 2: now given more detailed guidance about the treatment of these products.
9:47
Speaker 2: So I think you will see much more staking activity
9:50
Speaker 2: in ETF crypto ETFs. Paul, I think you're exactly right.
9:54
Speaker 2: The best thing of exeter experience is to have the
9:56
Speaker 2: token itself, but also any additional rewards that may be
10:01
Speaker 2: delivering in native form. So we want to be able
10:03
Speaker 2: to deliver that to investors, you know, with the restrictions
10:08
Speaker 2: of you know, having a successful risk managed at ETF.
10:11
Speaker 2: We think that we'll be able to do that in
10:12
Speaker 2: most cases. We've begun that on Ethereum gray Scale, the
10:16
Speaker 2: only asset manager providing steak to THEEUM products today. We've
10:20
Speaker 2: done that on Solana. I think it will be expanding
10:22
Speaker 2: to many of our other stakable assets over time.
10:26
Speaker 1: Well, you've got some a lot of activity right now
10:29
Speaker 1: when you look at XRP and DeFi in general, Firelight
10:33
Speaker 1: launching December third, their new whole Firelight protocol gets ready
10:38
Speaker 1: to go live. We'll see a lot of activity around this,
10:41
Speaker 1: which could be indicative of driving more interest I think
10:45
Speaker 1: for the investor community, because obviously as we see steaking
10:49
Speaker 1: become a big factors it has it. Do you feel
10:51
Speaker 1: like that's been one of the driving factors for what
10:54
Speaker 1: you guys have done with GSOL in terms of the
10:57
Speaker 1: staking component. Has that investor said?
10:59
Speaker 2: This is one of the reasons one hundred percent Staking
11:02
Speaker 2: is an important driver from institutional interest. They are laser
11:06
Speaker 2: focused on the ability to capture these reward rates on
11:10
Speaker 2: top of stakable tokens, and that's a key differentiator of
11:14
Speaker 2: the as you know, proof of steak assets versus proof
11:18
Speaker 2: of work based bitcoin and is a huge part of
11:21
Speaker 2: the conversation with institutional investers. They are looking for that yield,
11:24
Speaker 2: and on some of these protocols it's quite substantial seven
11:26
Speaker 2: percent plus on Solana. So has absolutely been a driver
11:31
Speaker 2: of demand for those ETF products. I think that will
11:33
Speaker 2: continue for all the proof of steak networks as we
11:36
Speaker 2: stand up more of than in ETF structures.
11:39
Speaker 1: Yeah, for anybody that's asset managers, all you have to
11:42
Speaker 1: do is look at this Doppler chart right here. In
11:44
Speaker 1: terms of demand, it's there for sure. Let's get on
11:48
Speaker 1: to the additional announcement that you guys have for today,
11:51
Speaker 1: and that of course is the fact that you're launching
11:54
Speaker 1: another big ETF today, which one is that.
11:59
Speaker 2: That is our g dog doge coin g d o
12:03
Speaker 2: G doge coin ETF. Look, talking about doge coin can
12:06
Speaker 2: but bring a smile to my face.
12:09
Speaker 1: You know.
12:09
Speaker 2: It is a kind of fascinating project within within crypto,
12:13
Speaker 2: and people have different ways for thinking about it. I
12:15
Speaker 2: think of it as tokenized Internet culture. You know that
12:19
Speaker 2: that memes are part of Internet culture, and crypto is
12:23
Speaker 2: the financial layer of the Internet, and so having one
12:27
Speaker 2: of these assets a kind of a meme that is
12:30
Speaker 2: designed to make you smile essentially be available in an ATF.
12:34
Speaker 2: I think is wonderful. Of course, investors should consider, you know,
12:38
Speaker 2: how do you think about putting all these assets into
12:40
Speaker 2: a portfolio? You know which ones are likely to make
12:43
Speaker 2: the best risk adjusted returns over time. And we have
12:46
Speaker 2: all of these thoughtful conversations with with investors. But you know,
12:49
Speaker 2: dogecoin and memes in general are a part of crypto,
12:54
Speaker 2: a part of the Internet, and a part of culture
12:56
Speaker 2: now I think will remain the case, and I think
12:59
Speaker 2: it is absolutely the right thing to have an ETF
13:02
Speaker 2: that provides access to the largest of these available to
13:05
Speaker 2: US investors. We're also thrilled to bring that product to
13:08
Speaker 2: market today.
13:09
Speaker 1: Man, I'm gonna have to get one of these shirts
13:11
Speaker 1: because I like the G dog. I like the g
13:15
Speaker 1: for sure. It's a good tacker, all right. So when
13:18
Speaker 1: you look at institutional capital, do they care about something
13:21
Speaker 1: like a doged? Are they in there playing in these
13:25
Speaker 1: kind of ETF Do you think they will.
13:27
Speaker 2: Be they care? In the sense that everyone is going
13:29
Speaker 2: through a process of learning about crypto, myself included. It's
13:33
Speaker 2: really a never ending journey, and we have these conversations.
13:36
Speaker 2: You know, how do I think about this asset, how
13:39
Speaker 2: is it built, what is it exactly? And I think
13:42
Speaker 2: that therefore an institutional level, I absolutely think there will
13:45
Speaker 2: be a trading interest in these structures, you know, for
13:49
Speaker 2: a shorter term oriented investors. Absolutely there will be that
13:53
Speaker 2: type of interest. Look, I think there are probably other
13:56
Speaker 2: assets Bitcoin, Theoreum, Salona, We've talked about some of them,
14:00
Speaker 2: many others on the list that naturally go together in
14:03
Speaker 2: building an institutional long horizon portfolio. But I think that
14:07
Speaker 2: there will be substantial demand for doge coin as a
14:10
Speaker 2: trading instrument, and it will have some institutional engagement as well.
14:15
Speaker 1: Well. One thing to consider and I think I look
14:18
Speaker 1: at it, you know, from a meme standpoint, I wonder
14:21
Speaker 1: if what we saw with Elon, Elon's kind of a
14:24
Speaker 1: double edged sword. Sometimes he can hurt you, sometimes he
14:28
Speaker 1: can help you. And when I think of crypto communities,
14:31
Speaker 1: do you think what his efforts were in general, do
14:33
Speaker 1: you think the doge efforts that Elon was trying to
14:36
Speaker 1: make actually hurt the concept of the of the coin itself,
14:41
Speaker 1: of the token itself.
14:44
Speaker 2: I think it brought attention to it. Look, dogecoin has
14:49
Speaker 2: the right attitude. I think if this is designed to
14:52
Speaker 2: make people happy, to make people smile, to think about
14:55
Speaker 2: community and generosity and these types of concepts is absolutely
15:00
Speaker 2: thing I can support. Of course, it's had volatility in
15:03
Speaker 2: the past, driven by you know, particularly visible people like
15:08
Speaker 2: Elon must talking about this asset, and I anticipate that
15:12
Speaker 2: some things like that will continue over time, and you know,
15:15
Speaker 2: great scale investors. The conversation that we have with them
15:18
Speaker 2: is to think about the risks of any asset in crypto.
15:22
Speaker 2: Dogecoin has a higher risk profile than bitcoin, it has
15:26
Speaker 2: different use case, and you're gonna want to think about
15:29
Speaker 2: constructing a portfolio in a different way when you're talking
15:31
Speaker 2: about each of these different assets. And I think, frankly
15:34
Speaker 2: investors understand that pretty well. They don't even need me
15:37
Speaker 2: to say it. But we do provide, of course, these
15:39
Speaker 2: kind of risk management conversations regularly as well.
15:43
Speaker 1: Well. Listen, everybody's going to be watching this the CTF launch,
15:46
Speaker 1: because if this one does well, then there's one more
15:50
Speaker 1: I think that should be in consideration, of course, that
15:53
Speaker 1: is Penga. I mean here you got congressmen. Simmons of
15:57
Speaker 1: course goes out and plays around everybody else in this
16:00
Speaker 1: is a congressman that presented the NFT bill out there,
16:03
Speaker 1: So this isn't just some random congressman. He understands this
16:06
Speaker 1: digital asset market. But he was able to generate some
16:10
Speaker 1: immediate impact on what happened right here. And of course
16:16
Speaker 1: Luca even commented right there, ten thousand likes, no problem
16:19
Speaker 1: coming right up, and then of course it gets it
16:21
Speaker 1: changes his avatar there. Do you think pengu is the
16:25
Speaker 1: new Doge? Do they have a shot at maybe becoming
16:28
Speaker 1: that cultural icon like Doze did in our previous runs.
16:33
Speaker 2: Look, look, I think both of them have achieved a
16:36
Speaker 2: kind of status as a meme, thought tokenize to culture
16:41
Speaker 2: in the context of crypto markets. And that's incredible to see.
16:44
Speaker 2: And honestly, I love this stuff from a personal level.
16:48
Speaker 2: I find it incredibly fun NFTs and memes. You know,
16:54
Speaker 2: you know, as an ascid manager, you know, we need
16:56
Speaker 2: to make sure that we also provide guidance about how
16:59
Speaker 2: to think about these things in the context of the portfolio.
17:02
Speaker 2: And I can't say that the penguin or the dog,
17:04
Speaker 2: I know with confidence, is going to be a higher
17:07
Speaker 2: market value in the in the fullness of time. What
17:09
Speaker 2: I can say is memes are not going anywhere. Yeah,
17:12
Speaker 2: these should be thought of as tokenized culture, and you know,
17:15
Speaker 2: don't don't count these things out as being real, big,
17:19
Speaker 2: valuable assets in the fullness of time. You know, with
17:22
Speaker 2: the caveat that it's tough to prick the right one.
17:24
Speaker 2: You're kind of making a judgment on cultural things in
17:27
Speaker 2: the same way as investing in fine art, et cetera.
17:29
Speaker 2: I'm sure not everyone will love the comparison of doj
17:32
Speaker 2: Quin and Pengo to fine art, but that is how
17:34
Speaker 2: I think about it. I think it's a reasonab way
17:36
Speaker 2: to think about it. It's an element of our culture today.
17:39
Speaker 2: I think it's great to see the success of these
17:41
Speaker 2: assets have had.
17:42
Speaker 1: Well one thing for pengu we did a video with
17:45
Speaker 1: Luca not too long ago, and yeah, of course Luca
17:50
Speaker 1: being Luca, says, hey, we're gonna flip. We're gonna flip
17:53
Speaker 1: dose one day. But I think the point that Luca
17:56
Speaker 1: was getting at and he's a you know, listen, this
17:58
Speaker 1: is one of the best marketers out there. I would
18:00
Speaker 1: call him the mister Beast of crypto in terms of
18:03
Speaker 1: him being able to getting really where that community should be.
18:08
Speaker 1: And that's something that is of value because in the
18:10
Speaker 1: Dose community, not saying that they don't have a face
18:14
Speaker 1: other than Elon. I guess you could kind of call
18:16
Speaker 1: that the face of Dose. But in reality, you've got
18:19
Speaker 1: someone like Luca who's really been very successful in marketing
18:22
Speaker 1: and including figitals, you know, the physical aspect. They've done
18:26
Speaker 1: things Walmart, many others. That starts to get investors looking
18:30
Speaker 1: at it a little bit differently than just a meme
18:33
Speaker 1: token or a meme ETF that I think has an
18:37
Speaker 1: opportunity to really be maybe next level. So we'll see.
18:41
Speaker 1: If we get an ETF for pingu I'd.
18:43
Speaker 2: Say you can probably count on it in sunshape or form.
18:47
Speaker 2: And he is a builder. It's been fun to watch
18:49
Speaker 2: that story. We have a couple of these penguins at
18:51
Speaker 2: my house for sure. Yeah, And you know, I think
18:55
Speaker 2: you will see more of these types of products brought
18:58
Speaker 2: to market to the extent that they're is demand. I
19:00
Speaker 2: think likely with the penguins, there will be enough demand
19:05
Speaker 2: to see it in the ETF.
19:06
Speaker 1: I want to jump over to a couple other things
19:08
Speaker 1: before we get out of here, and that is talking
19:10
Speaker 1: about what's happening in the markets dramatically around privacy tokens
19:15
Speaker 1: and also this most recent issue that happened with cloud flair,
19:18
Speaker 1: and I want your opinion on this. Obviously, as an
19:20
Speaker 1: asset manager you probably get questions around this all the time.
19:24
Speaker 1: I'm going to go to a clip because this shows
19:26
Speaker 1: a little bit about what happened with the cloud Flare outage.
19:28
Speaker 1: Take a look, say, once in a lifetime internet disaster
19:32
Speaker 1: just happened for the third time this year.
19:34
Speaker 4: Whether it's this outage. Recently, Amazon Web Services they had
19:37
Speaker 4: an issue. Microsoft Azure had an issue.
19:40
Speaker 1: Correct me if I'm wrong here, because a cloud strike
19:43
Speaker 1: or crowd strike, things are getting bad.
19:47
Speaker 4: The smart automations or AI built into these things. It failed,
19:51
Speaker 4: not because anyone is under attack, but because complex systems
19:55
Speaker 4: can and do fail.
19:56
Speaker 1: These are supposed to be the big gatekeepers.
19:59
Speaker 4: An thirty year old highway. The potholes are shutting to
20:02
Speaker 4: show up.
20:03
Speaker 2: We are moving into the holiday season, is the top
20:06
Speaker 2: time for cybercrime to come after consumers.
20:09
Speaker 1: Well, David, on that positive note.
20:12
Speaker 3: Uptime, this is really really important, this one hundred percent uptime,
20:16
Speaker 3: very very very important. A dozen clients working on this thing.
20:20
Speaker 3: There's thousands of nodes running this thing. Wall Street demands decentralization.
20:25
Speaker 3: There are only so many decentralized systems that can exist
20:28
Speaker 3: and have the security to support trillion dollar asset classes.
20:32
Speaker 3: This speaks to them all right.
20:35
Speaker 1: So the point there being that cloud flare centralized and
20:39
Speaker 1: most of our infrastructure is centralized versus decentralized that we
20:43
Speaker 1: already have seen within the Ethereum network and others that
20:47
Speaker 1: are out there doing a very good job on decentralization.
20:50
Speaker 1: Is this an important factor to institutional investors? Do you
20:54
Speaker 1: think they are concerned with understanding that the decentralized mechanism
20:59
Speaker 1: is really the future of where all of tech is going.
21:03
Speaker 2: Absolutely, this is something that I'm glad you played this
21:06
Speaker 2: clip and a very important issue, you know. I think
21:08
Speaker 2: crypto shows another way to set up these systems that
21:12
Speaker 2: has a greater resilience in different scenarios, and these can
21:16
Speaker 2: be technical, computer science, infrastructure related issues and also macroeconomic
21:22
Speaker 2: issues that it creates resilience against. I think the other element,
21:25
Speaker 2: you know, for being frank, is that you crypto shares
21:28
Speaker 2: some of these vulnerabilities to you know, cloud based services
21:32
Speaker 2: as well. Not everything is equally decentralized with industry, and
21:35
Speaker 2: I think it's also keep pushing in that direction to
21:38
Speaker 2: keep focused on long term resilience and reduce these dependencies
21:42
Speaker 2: so that it can be a strong as possible alternative
21:46
Speaker 2: to these traditional systems.
21:48
Speaker 1: Well, last question, and it is around privacy tokens. You
21:51
Speaker 1: see the run up right here that we're showing with
21:54
Speaker 1: z cash, which was trading back in September. Come on, guys,
21:59
Speaker 1: this is about nine er and thirteen million, and of
22:01
Speaker 1: course just exploding onto the scene over ten billion now.
22:06
Speaker 1: And if you compare that to a handful of other
22:09
Speaker 1: top ten, top fifteen blockchains, and I would include Swee
22:14
Speaker 1: and even avalanche in this First of all, do you
22:17
Speaker 1: think this is just a fad rotation? What is your
22:20
Speaker 1: theory around why what we're seeing within privacy tokens has
22:25
Speaker 1: exploded the market so much here recently.
22:28
Speaker 2: I really think it is a natural part of the
22:31
Speaker 2: maturation of the industry. When you look at public blockchain technology,
22:35
Speaker 2: it has come so far and a lot of things
22:38
Speaker 2: have been solved or at least have gone a long
22:40
Speaker 2: way to being solved. Security related issues, scaling related issues, increasingly,
22:46
Speaker 2: interoperability related issues. Privacy is a big open space in
22:51
Speaker 2: my view. It is like the most obvious missing element
22:55
Speaker 2: that needs the most development work over the next several years,
22:58
Speaker 2: and so I think it's just the time to tackle
23:01
Speaker 2: this challenging issue of privacy. I think this theme is
23:04
Speaker 2: absolutely not going anywhere, and you know, credit to Grayscale
23:08
Speaker 2: for being on top of some of these themes for
23:10
Speaker 2: a while. We offer a z cash trust for accredited
23:15
Speaker 2: investors today, and I think there will be a lot
23:18
Speaker 2: of interest in z cash as well as other privacy
23:21
Speaker 2: technologies over time.
23:23
Speaker 1: Interesting. Well, okay, last point I want to get on,
23:26
Speaker 1: and that is because this is I think is an
23:28
Speaker 1: important topic as to how institutional investors move and analyze
23:33
Speaker 1: the market in general, like this, is this a risk
23:36
Speaker 1: on environment in general? I'm looking currently at the amount
23:39
Speaker 1: of money that's flowing into the market right here. We're
23:42
Speaker 1: talking about VC money. If you look in October three
23:45
Speaker 1: point eight seven billion coming into the market, and it
23:49
Speaker 1: seems to be climbing. Obviously we don't have the November
23:52
Speaker 1: numbers yet, but clearly an up trend over what we
23:55
Speaker 1: saw was a downtrend. So does this give the market
24:00
Speaker 1: some you know confidence in the sense that there's a
24:02
Speaker 1: lot of money coming in? You know, as we start
24:05
Speaker 1: to see these markets move like this, especially with regulatory
24:08
Speaker 1: frameworks that are now in line, is that what you
24:11
Speaker 1: think investors are getting more comfortable.
24:13
Speaker 2: With longer term Anyone with a longer term perspective VC investors, builders,
24:20
Speaker 2: business operators, feels optimistic about where crypto is today, and
24:25
Speaker 2: you know, we include it's really difficult to kind of
24:27
Speaker 2: look broadly at the industry and not feel great about
24:30
Speaker 2: where the arrows are pointed over the short run. You know,
24:33
Speaker 2: there's lots of things can affect markets, like Federal Reserve meetings,
24:37
Speaker 2: But that chart, I think speaks exactly to that longer
24:40
Speaker 2: term confidence. There is a long way to go, a
24:43
Speaker 2: lot to build, and a very bright future for these
24:46
Speaker 2: assets and the technology in the future, and these investors
24:50
Speaker 2: are making that type of long term bet and we
24:52
Speaker 2: would encourage people to try to think about it in
24:55
Speaker 2: that way, although we're happy to help try to navigate
24:58
Speaker 2: the short term ups and downs as well.
25:00
Speaker 1: Understood. Zach Pandele coming in from Grayscale. Great to have
25:03
Speaker 1: you on the show. Thanks for stopping in.
25:06
Speaker 2: Always a pleasure.
25:06
Speaker 1: Paul, thank you, you bet. Good luck to you and
25:09
Speaker 1: your team on the two ETF launches today, so it'd
25:12
Speaker 1: be good. Hey, you guys know what to do if
25:14
Speaker 1: you're not in the diamond circle. Make sure and get
25:16
Speaker 1: in on that. You can do that by just clicking
25:19
Speaker 1: the link down below. It's a free group that you
25:21
Speaker 1: can join and it's worth it. I think you guys
25:24
Speaker 1: will like it. We send out an email each week.
25:26
Speaker 1: I do an analysis within that gives you guys some
25:29
Speaker 1: insights onto where the market is going. And of course
25:32
Speaker 1: hit me out there on x app Paul Baron. We'll
25:34
Speaker 1: catch you next time right here on The Paul Baron Show.