Latest / The Paul Barron Crypto Show / Tariffs vs Crypto ETFs📉Canary Capital CEO Steven McClurg

Transcript

Tariffs vs Crypto ETFs📉Canary Capital CEO Steven McClurg · The Paul Barron Crypto Show

• 0:05
  Speaker 1: Let's get into it today. Is the market on a
• 0:08
  Speaker 1: rebound and are we set for maybe one of the
• 0:11
  Speaker 1: biggest bounces ever Today we'll break it down for you
• 0:13
  Speaker 1: and I've got a special interview for you. My name
• 0:14
  Speaker 1: is Paul Barren. Welcome back into tech path. I want
• 0:16
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• 0:46
  Speaker 1: So there's a couple of things that are happening right now.
• 0:48
  Speaker 1: You look at where the tariffs impact is on the
• 0:51
  Speaker 1: crypto business along with the S and P five hundred,
• 0:55
  Speaker 1: and then also you look at the success of what
• 0:57
  Speaker 1: we've seen with crypto ETFs. I want to go to
• 1:00
  Speaker 1: a quick clip of Scott Bessend talking about have we
• 1:05
  Speaker 1: peaked yet in terms of all of this fud in
• 1:08
  Speaker 1: the market. Take a look. Can you guarantee clarity in
• 1:12
  Speaker 1: ninety days?
• 1:13
  Speaker 2: I think clarity is through the eye of the beholder.
• 1:17
  Speaker 2: But I can guarantee you that we're going to run
• 1:19
  Speaker 2: a robust process. I don't want to make market calls,
• 1:23
  Speaker 2: but I think that the VICS spiked and is likely peaked.
• 1:28
  Speaker 3: Is the worst over the worst of the shock is
• 1:31
  Speaker 3: probably over you today. What we saw is normally when
• 1:35
  Speaker 3: we see a tariff headline in the morning, like China,
• 1:37
  Speaker 3: you're saying they're going to halt deliveries of Boeing. That
• 1:40
  Speaker 3: would have caused a pretty thousand decent Maybe not, but yeah,
• 1:43
  Speaker 3: a pretty decent selof and future sold off a little bit,
• 1:46
  Speaker 3: but they've recovered a bit since then. What you want
• 1:48
  Speaker 3: to watch for is when you start to see less
• 1:50
  Speaker 3: negative reactions to these headlines which previously caused much bigger
• 1:54
  Speaker 3: shock value in the headlines.
• 1:56
  Speaker 1: All right, So as you can see, there are maybe
• 1:59
  Speaker 1: cooler heads prevailing. And of course I wanted to bring
• 2:02
  Speaker 1: in a special guest today. This is Stephen mcclerg, who
• 2:05
  Speaker 1: is coming in CEO of Canary Capital.
• 2:07
  Speaker 4: How are you, Steven, fantastic, Thanks for having me, Paul, you.
• 2:10
  Speaker 1: Guys being a capital company that's doing a lot in
• 2:13
  Speaker 1: the ETF sector, where is your current position? Do you
• 2:17
  Speaker 1: guys feel like this is kind of a position of
• 2:20
  Speaker 1: pause and an opportunity for the markets to go up.
• 2:23
  Speaker 5: Yeah.
• 2:23
  Speaker 4: We actually had quite a bit of risk off the
• 2:26
  Speaker 4: table going into last week, and I agree with Scott
• 2:30
  Speaker 4: Bessett that most of the volatility and most of the
• 2:34
  Speaker 4: peak of tariff tantrums is over and it can only
• 2:41
  Speaker 4: go up from here. That being said, I do want
• 2:44
  Speaker 4: to point out that tariffs are really secondary for Trump.
• 2:48
  Speaker 4: Trump has always said that his main concern is getting
• 2:52
  Speaker 4: interest rates lower. And if you noticed last week, Jamie
• 2:57
  Speaker 4: Diamond pushed Trump to put a pause on tariffs. And
• 3:02
  Speaker 4: Jamie Diamond runs the largest bank in the US, which
• 3:05
  Speaker 4: also pretty much controls the FED. Yeah, so I guarantee
• 3:09
  Speaker 4: that Trump had a conversation with Diamond and agreed to
• 3:14
  Speaker 4: pause some tariffs in order for him to push Powell
• 3:18
  Speaker 4: to force rates lower.
• 3:21
  Speaker 1: Well, we did see a little bit of a positive
• 3:23
  Speaker 1: report in terms of inflation. If that does continue to trend,
• 3:27
  Speaker 1: then you know, Powell at least has a little bit
• 3:29
  Speaker 1: of ammunition that they have tamed inflation. Now, whether or
• 3:32
  Speaker 1: not do you think we'll get a rate cut in
• 3:33
  Speaker 1: May or what's your position right now? Right now it's
• 3:36
  Speaker 1: at least the market seems to say no, But what
• 3:38
  Speaker 1: are your thoughts?
• 3:39
  Speaker 4: I actually do? I believe we'll get our first rate
• 3:41
  Speaker 4: cut in May and three more to follow all in
• 3:44
  Speaker 4: twenty twenty five. Okay, you know, I'm going to stand
• 3:47
  Speaker 4: by the fact that Trump didn't just do what Jamie
• 3:50
  Speaker 4: Diamond said to do what he said that there was
• 3:53
  Speaker 4: a there was a conversation and there was an inkling
• 3:57
  Speaker 4: that Howe would be ing rates if he were to
• 4:02
  Speaker 4: pull back a tariff talk. In addition to that, one
• 4:05
  Speaker 4: of the things that you can look at as far
• 4:07
  Speaker 4: as inflation goes, inflation is trending lower. The biggest portion
• 4:12
  Speaker 4: of a CPI that we're looking at is transportation. The
• 4:16
  Speaker 4: tariffs probably have the biggest impact on autos, which could
• 4:21
  Speaker 4: see prices go up as much as five percent, But
• 4:23
  Speaker 4: transportation is also made up of fuel and energy for
• 4:28
  Speaker 4: those autos, So since gasoline prices go down largely offset
• 4:33
  Speaker 4: the potential five percent cost and increase automobiles.
• 4:37
  Speaker 1: This of course, is our audience loves this guy, Jim
• 4:40
  Speaker 1: Kramer because they usually just go the opposite way. But
• 4:45
  Speaker 1: here's what he had to say about the markets.
• 4:46
  Speaker 6: Take a look, say how many people say gold's peaking.
• 4:50
  Speaker 7: It's not peaking. I believe that.
• 4:52
  Speaker 6: Gold is back because crypto has quietly lost its luster.
• 4:55
  Speaker 6: I watched a guy today talk about dosee coin. I said,
• 4:57
  Speaker 6: which would I rather have gold?
• 4:59
  Speaker 7: Or Yeah?
• 5:02
  Speaker 6: Right, You've just been given the most boring portfolio in
• 5:05
  Speaker 6: the world. It's exactly what you need with the president
• 5:09
  Speaker 6: who generates too many headlines and a confusing economist, at
• 5:12
  Speaker 6: least for now.
• 5:13
  Speaker 1: Kramer, of course, playing right into the inverse kramer Twitter
• 5:18
  Speaker 1: account for sure. On that clip, what is your position?
• 5:21
  Speaker 1: Do you feel like the market is at a standstill
• 5:24
  Speaker 1: in terms of crypto just not going anywhere, or do
• 5:27
  Speaker 1: you feel like maybe we do need to invest in
• 5:30
  Speaker 1: more of these you know, calm things in the market
• 5:34
  Speaker 1: if you want to call gold calm.
• 5:36
  Speaker 5: Yeah.
• 5:36
  Speaker 4: Well, as an investor who's over my career, invested in
• 5:40
  Speaker 4: several different asset classes, including gold, including energy. Right now,
• 5:46
  Speaker 4: usually what happens is gold for shadows an increase in
• 5:51
  Speaker 4: inflation is because investors usually investing gold when they believe
• 5:55
  Speaker 4: that inflation is going to go up or that money
• 5:59
  Speaker 4: here policy is going to go in a much more
• 6:03
  Speaker 4: of a dubbish position. So gold always moves first, but
• 6:08
  Speaker 4: crypto usually runs after M two has increased. So if
• 6:13
  Speaker 4: I'm right and Powell does begin to lower rate starting
• 6:17
  Speaker 4: in May, it's possible that the FED rate goes all
• 6:21
  Speaker 4: the way down to three and a quarter. I don't
• 6:25
  Speaker 4: see a reason why the ten year at the end
• 6:27
  Speaker 4: of the year will be below four percent. Okay, then
• 6:30
  Speaker 4: crypto should go up. Now a monetary policy that's dubbished
• 6:36
  Speaker 4: in that regard. When rates go down, usually all asset
• 6:39
  Speaker 4: prices go up. But the one thing that is going
• 6:44
  Speaker 4: to continue to drag equities down is going to be tariffs.
• 6:47
  Speaker 4: So I believe that there's going to be a shift
• 6:50
  Speaker 4: and even an uncoupling between equities and crypto in this
• 6:54
  Speaker 4: part of the cycle where crypto rises and equities stay flat.
• 6:59
  Speaker 1: Interesting if you look at the current ETF tracker right now,
• 7:03
  Speaker 1: I'll just look at coin market cap. You can kind
• 7:05
  Speaker 1: of see the ETF NetFlow right there. And one thing
• 7:08
  Speaker 1: you'll notice, guys, right there, the historical over the last week,
• 7:12
  Speaker 1: month and three months down quite a bit, both on
• 7:15
  Speaker 1: bitcoin and on ethereum in general. When you look at that,
• 7:18
  Speaker 1: do you feel like that is mostly retail Steven? As
• 7:21
  Speaker 1: far as where the ETFs are right now.
• 7:24
  Speaker 4: Well, I think what happened was when the Bitcoin spot
• 7:27
  Speaker 4: ETF's launched a little over a year ago, there was
• 7:30
  Speaker 4: a massive inflow of capital into that ETF and it's
• 7:34
  Speaker 4: gone up quite a bit since then. And usually financial advisors,
• 7:38
  Speaker 4: if it's a financial advisor, or even an individual or
• 7:41
  Speaker 4: a family office, if they're looking at their position, they say, okay,
• 7:44
  Speaker 4: we want to have a one to two percent position
• 7:46
  Speaker 4: in bitcoin. And even if they went in one percent,
• 7:49
  Speaker 4: well that position now exceeds two percent. So what I
• 7:52
  Speaker 4: believe is happening at the moment is a massive rebalancing
• 7:57
  Speaker 4: that really began in December and has continued on into
• 8:00
  Speaker 4: this year. It's better to rebalance, by the way, on
• 8:03
  Speaker 4: a large position or a large upswing position like that
• 8:07
  Speaker 4: after the year. That way, you wait another year to
• 8:09
  Speaker 4: pay the taxes on it.
• 8:11
  Speaker 7: Gotcha.
• 8:11
  Speaker 1: Well, yeah, if you look at the chart here twelve
• 8:14
  Speaker 1: to one, that was the height of both bitcoin and
• 8:17
  Speaker 1: I would say to a certain extent, maybe even the
• 8:19
  Speaker 1: ETHTF and then the trend down as you're alluding to
• 8:23
  Speaker 1: in terms of rebalancing many of the markets. When you
• 8:27
  Speaker 1: look at vcs that invest in web three, what we
• 8:30
  Speaker 1: thought might happen throughout this industry because there's a lot
• 8:34
  Speaker 1: of key things that are possibly going to be going
• 8:37
  Speaker 1: into IPO, one of which is going to be Circle.
• 8:39
  Speaker 1: I want to go to another clip real quick to
• 8:41
  Speaker 1: kind of explain what many of the investors think about
• 8:45
  Speaker 1: it so far.
• 8:46
  Speaker 4: Take a look, So what are you doing.
• 8:49
  Speaker 7: Well? Luckily for me, I mainly invest in early stage
• 8:52
  Speaker 7: technology companies that are private. Not an easy environment for
• 8:56
  Speaker 7: that met all. It's basically four years of no liquidity
• 8:59
  Speaker 7: invent capital at all. And the thought was that the
• 9:02
  Speaker 7: combination of the election of Trump and the reduction of
• 9:05
  Speaker 7: interest rates, what's going to make twenty twenty five the
• 9:07
  Speaker 7: year where liquidity finally started to happen both IPOs and
• 9:10
  Speaker 7: m and as that's not really the case. You know,
• 9:13
  Speaker 7: we had two portfolio companies, StubHub and Circle that had
• 9:16
  Speaker 7: announced IPOs that now have them someone on hold number two.
• 9:20
  Speaker 7: I haven't had a single conversation about investing in a
• 9:23
  Speaker 7: new startup or working with a startup, even really early
• 9:26
  Speaker 7: stage companies where tariffs now doesn't come into play, where
• 9:29
  Speaker 7: their supply chain doesn't come into play. Usually speaking, you're
• 9:32
  Speaker 7: trying to figure out what are the most innovative companies.
• 9:34
  Speaker 7: Tariffs shouldn't be a big part of that equation, but
• 9:36
  Speaker 7: they now are.
• 9:37
  Speaker 1: Because he's talking about liquidity, all right, the lack of
• 9:40
  Speaker 1: being able to exit some of these companies where vcs
• 9:43
  Speaker 1: and high networth individuals can start to make that, you know,
• 9:47
  Speaker 1: that capital start to go to work elsewhere, which could
• 9:50
  Speaker 1: go into risk markets. Wouldn't that slow the money supplied
• 9:55
  Speaker 1: down if we start to see a slowness, especially with
• 9:58
  Speaker 1: one of the big sectors like tech.
• 10:00
  Speaker 4: Yeah, absolutely. I mean Tech has really been a big
• 10:03
  Speaker 4: driver for Nasdaq and the SMP over the last few years.
• 10:08
  Speaker 4: Tech has been has really benefited from low rates coupled
• 10:15
  Speaker 4: with high inflation. So now that inflation is coming down,
• 10:20
  Speaker 4: rates are a little bit higher, and less rates come
• 10:23
  Speaker 4: down than Tech is going to have an issue.
• 10:26
  Speaker 1: What I'm getting at more in the side of where
• 10:29
  Speaker 1: a lot of large investors have so much tied up
• 10:32
  Speaker 1: in these companies, so they're in a position where they're
• 10:35
  Speaker 1: kind of cash poor. They're looking for those exits. The
• 10:39
  Speaker 1: opportunity can happen if you get an IPO coming through,
• 10:42
  Speaker 1: And of course, even if it's a scenario where you
• 10:44
  Speaker 1: get investment capital starting to get active, they can take
• 10:47
  Speaker 1: out the lower cap table that puts more money into
• 10:50
  Speaker 1: the market. Back to your point, which is d M
• 10:53
  Speaker 1: two supply, which starts to energize. What could happen in crypto,
• 10:56
  Speaker 1: I guess is the question I had is whether that
• 10:59
  Speaker 1: slows it down Now.
• 11:00
  Speaker 4: It absolutely does. And even if you look at a
• 11:03
  Speaker 4: lot of venture and even smaller private equity funds, it's
• 11:07
  Speaker 4: been a lot more difficult for them to raise capital
• 11:09
  Speaker 4: in the last three years for new funds. And with
• 11:13
  Speaker 4: Trump coming into office or the election results positive last
• 11:17
  Speaker 4: year and then Trump come into office this year, a
• 11:20
  Speaker 4: lot of these funds have gone out and started raising
• 11:23
  Speaker 4: for their new funds starting in January. So we've seen
• 11:25
  Speaker 4: a lot of activity of capital raisers, but not a
• 11:29
  Speaker 4: lot of people contributing capital, not a lot of capital
• 11:32
  Speaker 4: formation occurring. And that one or two really good IPOs
• 11:38
  Speaker 4: would really help distribute cash to LPs that would enable
• 11:41
  Speaker 4: them to come back into fund too. So we're seeing
• 11:44
  Speaker 4: a lot of these next funds not being able to
• 11:49
  Speaker 4: raise capital to be able to launch and to invest
• 11:52
  Speaker 4: in new startups. A bigger issue though, even with private equity,
• 11:58
  Speaker 4: was some of the banking issues two years ago. A
• 12:01
  Speaker 4: lot of private equity companies utilize leverage in order to
• 12:06
  Speaker 4: buy out companies and turn around in three years and
• 12:09
  Speaker 4: then turnaround to sell them. But a lot of that
• 12:12
  Speaker 4: went away during our you know, semi banking crisis with
• 12:15
  Speaker 4: Silicon Valley Bank and others two or three years ago.
• 12:19
  Speaker 1: Let's jump over to ETFs. Obviously the reason we wanted
• 12:23
  Speaker 1: to get you guys on Canary Capital. You guys are
• 12:26
  Speaker 1: very active in the ETF category, and if you look
• 12:29
  Speaker 1: at the alternative crypto ETFs, this is an interesting statement
• 12:33
  Speaker 1: from MoU Blockchain in terms of is this a marketing ploy?
• 12:35
  Speaker 1: And I want to ask that question to you, But
• 12:37
  Speaker 1: you guys have applied for a suite ETF AXLRE like coin, Solana,
• 12:43
  Speaker 1: x RP, even Pingo. So within all of these different ETFs,
• 12:48
  Speaker 1: First of all, do you think you're going to get
• 12:50
  Speaker 1: a pingo ETF through.
• 12:52
  Speaker 4: Yeah, you know, we're really gonna We're really gonna try,
• 12:55
  Speaker 4: you know. In kind of going way back in time,
• 12:58
  Speaker 4: I launched a few ETFs when I was working at Guggenheim,
• 13:03
  Speaker 4: I was the portfolio manager for the UH for all
• 13:06
  Speaker 4: of Gugenheim's ETFs, and you know, we launched things like
• 13:10
  Speaker 4: bullet Shairs that everybody thought we were crazy. It's like, okay,
• 13:12
  Speaker 4: why would you launch an ETF that holds bonds that
• 13:16
  Speaker 4: when they mature, the ETF actually goes away. And we
• 13:20
  Speaker 4: were thinking about it more as you know, as a
• 13:22
  Speaker 4: former bond trader, I'm like, well, that's the kind of
• 13:24
  Speaker 4: ETF that I would want, you know, I'd want to
• 13:26
  Speaker 4: buy a bond with a basket of ETFs, especially if
• 13:30
  Speaker 4: you have an interest rate environment that's going up and down. Anyway,
• 13:33
  Speaker 4: long story short, there was a lot of There was
• 13:35
  Speaker 4: a lot of things that we launched there that ended
• 13:36
  Speaker 4: up being very successful that seemed to not have a
• 13:39
  Speaker 4: market when we first arrived at it. Same thing with
• 13:43
  Speaker 4: you know, when I when I found at Valkyrie, we
• 13:45
  Speaker 4: filed a few ETFs for you know, bitcoin futures, bitcoin spot,
• 13:49
  Speaker 4: bitcoin mining companies. We actually pulled a lot of financial
• 13:53
  Speaker 4: advisors and they said, yeah, you know, we would be
• 13:56
  Speaker 4: really interested in a bitcoin ecosystem ETF, but you can
• 13:59
  Speaker 4: include my And then we thought, well, maybe we just
• 14:02
  Speaker 4: take the miners out of the ecosystem ETF and create
• 14:05
  Speaker 4: a bitcoin mining ETF and see how it goes. And
• 14:08
  Speaker 4: for two years it had no assets and then all
• 14:10
  Speaker 4: of a sudden it had over two hundred million. So
• 14:13
  Speaker 4: I'm kind of looking at this market in the same
• 14:15
  Speaker 4: way that now that the floodgates are opening for other
• 14:20
  Speaker 4: versions of ETFs that are single token that aren't the
• 14:24
  Speaker 4: biggest names, like you know, bitcoin and ethereum, that there
• 14:28
  Speaker 4: will be demand. People will begin to move their assets
• 14:31
  Speaker 4: over off the exchanges into ETFs, just like they did
• 14:36
  Speaker 4: with bitcoin, okay, and it makes it easier to trade.
• 14:39
  Speaker 4: So so a lot of the things that we did
• 14:41
  Speaker 4: were yeah, they're probably second tier as far as asset size,
• 14:45
  Speaker 4: but we do believe that in the long run that
• 14:47
  Speaker 4: these are going to be very good place.
• 14:49
  Speaker 1: I mean, some of the ones I look at I'm
• 14:51
  Speaker 1: still leaning in on, you know, h bar XRP, those
• 14:54
  Speaker 1: I feel like have very real utility, and they're big
• 14:57
  Speaker 1: enough to where institutional investors could really you know, kind
• 15:02
  Speaker 1: of plug into them. But then you would go into
• 15:04
  Speaker 1: things like swite Network, one of our channel partners, they
• 15:08
  Speaker 1: themselves have a potential with an ETF. Out of all
• 15:12
  Speaker 1: of these that you have listed right now, what's the
• 15:15
  Speaker 1: likelihood if you were to rank them in likelihood of
• 15:18
  Speaker 1: getting through first? How would you rank them just in
• 15:22
  Speaker 1: you know, based on your expertise.
• 15:24
  Speaker 4: Yeah, you know that's that's that's a really tough one.
• 15:27
  Speaker 4: Maybe instead of ranking them, I'll tell you the one
• 15:29
  Speaker 4: that I think is my favorite to get through from
• 15:32
  Speaker 4: a regulatory perspective, and it's light coin. You know, one
• 15:37
  Speaker 4: of the reasons why we file for light coin is
• 15:39
  Speaker 4: because Gary Ginsler and this is the old administration. Gary
• 15:43
  Speaker 4: Ginsler had a speech where he said bitcoin and theory
• 15:46
  Speaker 4: and light cooin are not securities. If anything, the new
• 15:49
  Speaker 4: administration is probably what's holding it up because they're just
• 15:53
  Speaker 4: holding up everything right now until Atkins is fully in
• 15:57
  Speaker 4: the seat and they can start making decisions. But but
• 16:00
  Speaker 4: like coin in no world is like coin in et
• 16:03
  Speaker 4: I mean, it is not a security. It's it looks
• 16:06
  Speaker 4: exactly like bitcoin.
• 16:07
  Speaker 1: Well, I mean, you also have all the legal positions
• 16:09
  Speaker 1: now that have been as a basis of law for
• 16:13
  Speaker 1: XRP as well that would flow into that, so which
• 16:17
  Speaker 1: I still believe XRP is going to be the first
• 16:19
  Speaker 1: ETF we see next after ethereum many people would say
• 16:22
  Speaker 1: maybe Solana could possibly be there. I know you have
• 16:25
  Speaker 1: some positions on Solana, but if you look at coin
• 16:30
  Speaker 1: coin desk is stating x RP and Salona are leading
• 16:32
  Speaker 1: candidates for the US spot ETF approval mainly because of
• 16:35
  Speaker 1: liquidity out of Solana and XRP. Which one of those
• 16:40
  Speaker 1: do you think might fall in favor of the SEC first.
• 16:45
  Speaker 4: That's a really good question. I'm gonna I'm gonna go
• 16:48
  Speaker 4: with XRP for a number of reasons. Okay, I think
• 16:52
  Speaker 4: x RP. You said it, Uh, it's it's a it's
• 16:57
  Speaker 4: enterprise value, it's financial system value. You and the court's
• 17:02
  Speaker 4: rule that it's not a security that makes it easy.
• 17:04
  Speaker 4: So XRP is a favorite for all of the above.
• 17:08
  Speaker 4: Let's get into by the way as well. Great way,
• 17:13
  Speaker 4: same thing.
• 17:14
  Speaker 1: Listen, there's quite a few projects I think here in
• 17:16
  Speaker 1: the United States that will I think we'll end up
• 17:20
  Speaker 1: a year from now. I think we'll look back on
• 17:21
  Speaker 1: this and see a lot of new ETF products in
• 17:24
  Speaker 1: the market, many of which we will have known, you know,
• 17:27
  Speaker 1: because of much of what our community has been tracking around.
• 17:31
  Speaker 1: Several of these, including XRP. Ripple with their expertise is
• 17:34
  Speaker 1: around as well as Hbar. We've had them on the
• 17:37
  Speaker 1: show many times. I wouldn't be surprised if we see others,
• 17:40
  Speaker 1: obviously Sweet Network and maybe even Solana starting to make
• 17:43
  Speaker 1: their ways into that and those to me have a
• 17:47
  Speaker 1: really good appeal from the retail side. And this is
• 17:51
  Speaker 1: where I want to go into your argument, and that
• 17:54
  Speaker 1: was based on your tweet right here and you went
• 17:57
  Speaker 1: over to eat Denver and basically we're kind of challenging
• 18:00
  Speaker 1: the point of maybe ETH is lost. It's a useful
• 18:04
  Speaker 1: its usefulness and when you look at that on the
• 18:07
  Speaker 1: ETH developers, obviously Solana also was kind of bagged into
• 18:11
  Speaker 1: this as well. What was your position beyond what you
• 18:15
  Speaker 1: were talking about in this tweet that would make you
• 18:18
  Speaker 1: think that ETH and Solana would not necessarily be in
• 18:21
  Speaker 1: this cycle as high performing assets.
• 18:24
  Speaker 4: Yeah, I'm seeing where people exit the ETH community as
• 18:27
  Speaker 4: either developers or enthusiasts in pretty large droves. I'm also
• 18:33
  Speaker 4: seeing a lot of projects move off of ETH onto
• 18:37
  Speaker 4: new networks like Suie for instance. You know, I'm not
• 18:41
  Speaker 4: seeing a lot more there were a lot moving from
• 18:44
  Speaker 4: Eth to Solana. I'm not seeing that as much, and
• 18:47
  Speaker 4: maybe I'm wrong, but I am seeing them skip over
• 18:49
  Speaker 4: Solana and go straight into things like Suee. And that's
• 18:53
  Speaker 4: really on the more open source networks that I'm talking
• 18:56
  Speaker 4: about here. As far as enterprise goes, you know, we've
• 18:59
  Speaker 4: already talked about this. Xrp R and HPRT make a
• 19:02
  Speaker 4: lot of sets because they do have controls in place
• 19:05
  Speaker 4: that benefit enterprises. They're not going to use some open
• 19:09
  Speaker 4: source chain for what they do.
• 19:12
  Speaker 1: Well, okay, so I'm going to defend Ethereum a little
• 19:14
  Speaker 1: bit here because even if you look at court developers,
• 19:17
  Speaker 1: they've continued and this is just you know, over the
• 19:19
  Speaker 1: last six months, since November of last year, continuing to
• 19:24
  Speaker 1: climb in terms of overall core developers. But also when
• 19:27
  Speaker 1: you look at Ethereum and you look at token is securities,
• 19:31
  Speaker 1: the efforts behind what we've seen at Blackrock, most likely
• 19:35
  Speaker 1: we're going to see over it securitized, which has many
• 19:38
  Speaker 1: you know, networks within that. But the likelihood is a
• 19:42
  Speaker 1: lot of our WA's right now real world assets moving
• 19:45
  Speaker 1: into Ethereum, or at least on the basis of if
• 19:49
  Speaker 1: our WA's are successful, I believe they will be. Would
• 19:52
  Speaker 1: that not lend to a very robust Ethereum ecosystem.
• 19:57
  Speaker 4: Yeah, I think what I think is going to happen
• 19:59
  Speaker 4: is teams are going to start working on Ethereum and
• 20:02
  Speaker 4: realize very quickly that there's a lot of work that
• 20:05
  Speaker 4: has to be done to to actually put securities on
• 20:09
  Speaker 4: that chain. Ethereum doesn't doesn't inherently have whitelisting or k KYC,
• 20:16
  Speaker 4: which other chains actually do inherently. So there's a lot
• 20:20
  Speaker 4: of other chains out there that are just built to
• 20:23
  Speaker 4: support token I securities, and I believe that developers, good
• 20:28
  Speaker 4: developers will move very quickly to that. Now, some of
• 20:30
  Speaker 4: the old ones, you know, like like Securities, they've been
• 20:32
  Speaker 4: around forever. They've you know, I'm surprised they're they're they're
• 20:35
  Speaker 4: still around and uh, you know, they've been trying this
• 20:38
  Speaker 4: for eight years and hasn't really produced anything. But there
• 20:43
  Speaker 4: are there are groups that are that are moving into
• 20:46
  Speaker 4: tokenization that are you know, like like black Rock for instance,
• 20:49
  Speaker 4: or or Cebow or you know, Bank of New York,
• 20:53
  Speaker 4: and they're not going to just use Ethereum. They they've
• 20:57
  Speaker 4: either forked Ethereum themselves or utilizing another chain. And I'm
• 21:01
  Speaker 4: actually from what I'm hearing, they are utilizing other chains
• 21:05
  Speaker 4: out there. And then privatizing a fork of those chains
• 21:08
  Speaker 4: to use on their own networks.
• 21:10
  Speaker 1: How would you Okay, well, then how would you justify
• 21:13
  Speaker 1: what's happening with like r l usd. This is a
• 21:16
  Speaker 1: ripple stable coin that's having activity and growth within the
• 21:21
  Speaker 1: ETH ecosystem, again because of DeFi why would you not
• 21:25
  Speaker 1: see that continue going forward, especially if we start to
• 21:28
  Speaker 1: see olusd getting listed on more exchanges, which is most
• 21:32
  Speaker 1: likely going to happen.
• 21:34
  Speaker 4: Yeah, what's what's happening is you know, and that's a
• 21:36
  Speaker 4: good case of bridges that are moving between that They
• 21:40
  Speaker 4: are moving securitized assets between protocols, and everybody builds on
• 21:45
  Speaker 4: ETH first because it's the biggest. Most custodians and exchanges
• 21:51
  Speaker 4: support ERC twenty and then in some cases ARC fourteen
• 21:54
  Speaker 4: oh four, which is the protocol that was that was
• 22:00
  Speaker 4: created more for securities and more for transfer agents, so
• 22:05
  Speaker 4: they're building on that first. But really from a practicality standpoint,
• 22:10
  Speaker 4: they're utilizing other chains and using bridges to move in
• 22:12
  Speaker 4: between those chains until the infrastructure is in place for
• 22:16
  Speaker 4: some of the other protocols.
• 22:18
  Speaker 1: Okay, all right, Okay, so I think we both got
• 22:21
  Speaker 1: good position have good positions here I'll consider that a draw.
• 22:28
  Speaker 1: But before I want to get the last word in,
• 22:30
  Speaker 1: and that is around ETFs that could be used in
• 22:34
  Speaker 1: DeFi so I want to go to Matthew Siegel a
• 22:37
  Speaker 1: clip from him real quick, just so you can kind
• 22:39
  Speaker 1: of get your opinion on this. Take a look, and.
• 22:42
  Speaker 5: I think one thing that we should be on the
• 22:44
  Speaker 5: lookout for from this SEC are some no action letters
• 22:50
  Speaker 5: that might allow tokenized equities to trade on decentralized exchanges
• 22:56
  Speaker 5: without a broker dealer license. That would be a big deal.
• 23:01
  Speaker 5: I think that Hester Pearce wants to see that. You'll
• 23:04
  Speaker 5: know it before it happens, because they will issue some
• 23:07
  Speaker 5: no action letters giving these exchanges kind of permission to
• 23:11
  Speaker 5: go ahead and try it.
• 23:12
  Speaker 1: What do you think about that, Steven? Do you feel
• 23:14
  Speaker 1: like are you in alignment with where van kas is
• 23:17
  Speaker 1: kind of looking on this.
• 23:19
  Speaker 4: I would say that I'm in I'm in partial alignment.
• 23:22
  Speaker 4: There's some things I agree with, some things that they don't.
• 23:25
  Speaker 4: I do know that the you know that the large
• 23:27
  Speaker 4: exchanges are really working on the ability to trade tokenization,
• 23:32
  Speaker 4: and I think they're the ones that are going to win.
• 23:33
  Speaker 4: By the way, I think some of the legacy crypto
• 23:36
  Speaker 4: players that have been doing it probably won't and the
• 23:39
  Speaker 4: main reason why is because they just don't have a market,
• 23:42
  Speaker 4: whereas CEBO, NASDAK, New York Stock Exchange, Texas Stock Exchange.
• 23:46
  Speaker 4: If they do something there, my guess is that's where
• 23:48
  Speaker 4: black Rock we'll probably fit in. On their tokenization sides.
• 23:53
  Speaker 4: If they're a partial partial owner, they have actual markets,
• 23:57
  Speaker 4: they have buyers, whereas where everybody's filled before is they
• 24:01
  Speaker 4: don't have the buyers. They only have sellers of things.
• 24:04
  Speaker 4: I do believe that they'll pursue no action letters to
• 24:06
  Speaker 4: be able to trade securities that have been tokenized, or
• 24:11
  Speaker 4: or even real world assets that aren't securities that are tokenized.
• 24:16
  Speaker 4: They have they have two way markets, they have buyers,
• 24:20
  Speaker 4: and so I believe that they're going to win. The
• 24:22
  Speaker 4: one part that Matthew stated that I don't know if
• 24:26
  Speaker 4: it's going to happen or not, is I don't know
• 24:29
  Speaker 4: if they're going to weigh the requirement to be broker
• 24:32
  Speaker 4: dealers in order to trade those That's that's really hard.
• 24:37
  Speaker 4: I mean, if it's if it's a security and you're
• 24:39
  Speaker 4: in you're trading it, you probably need to be a
• 24:41
  Speaker 4: broker dealer, whether it's a token I security or a
• 24:44
  Speaker 4: security and ETF or just a flat security. I don't
• 24:48
  Speaker 4: think that requirement is going to change.
• 24:50
  Speaker 1: Well, that'll be the question because I think what you
• 24:52
  Speaker 1: look at around beyond broker dealers, you know, now you
• 24:56
  Speaker 1: get into these DeFi you know, organizations and a lot
• 24:59
  Speaker 1: of what these systems are doing. If you look back
• 25:02
  Speaker 1: at even unicewap, which has had massive volumes that has
• 25:06
  Speaker 1: rivaled even Nasdaq before, and if you look at the
• 25:10
  Speaker 1: existing and I granted I know that we're going to
• 25:12
  Speaker 1: see a large amount of new adoption which may not
• 25:16
  Speaker 1: necessarily go the way of Unice swap, but it definitely
• 25:19
  Speaker 1: has a large market already that are very crypto native,
• 25:23
  Speaker 1: crypto curious investors that will use something like a Unice
• 25:27
  Speaker 1: swap to kind of go forward. Obviously that's an ethereum
• 25:30
  Speaker 1: ecosystem in terms of opportunity there. So what are your
• 25:33
  Speaker 1: thoughts about platforms like unic swap would that Do you
• 25:37
  Speaker 1: feel like those will continue to excel.
• 25:40
  Speaker 4: I don't know. I think they will for people that
• 25:42
  Speaker 4: are more crypto native, But what I believe will happen
• 25:46
  Speaker 4: is again the larger exchanges with a lot more volume
• 25:49
  Speaker 4: and buyers will probably be the winners coming from a
• 25:53
  Speaker 4: more traditional finance role. You know, one of the great
• 25:57
  Speaker 4: things about any kind of tokenized equities or other types
• 26:02
  Speaker 4: of securities is the need to borrow against those against
• 26:07
  Speaker 4: those instruments. So if you're able to take an ETF
• 26:10
  Speaker 4: and you know, and stake it in a DeFi pull
• 26:13
  Speaker 4: and earn interest on it just like you would from
• 26:16
  Speaker 4: you know, REPO and traditional markets, then you've just you've
• 26:21
  Speaker 4: just leapfrogged into the world that DeFi was actually made for.
• 26:26
  Speaker 4: And that's that's what you have a mass adoption from institutions.
• 26:29
  Speaker 1: Okay, so that you bring it up, and that is
• 26:31
  Speaker 1: if you look at what's happening right now in DeFi,
• 26:35
  Speaker 1: even if you look at GDO soul good example of
• 26:38
  Speaker 1: just that very point. Could we see ETFs actually getting
• 26:42
  Speaker 1: rewards like that maybe in twenty twenty five. Do you
• 26:46
  Speaker 1: think it's early enough or do you feel like that's
• 26:48
  Speaker 1: going to take some time.
• 26:49
  Speaker 4: I think it will take time, but I'm excited for
• 26:52
  Speaker 4: that time to happen. It'll probably be closer to twenty
• 26:54
  Speaker 4: twenty seven. But if I could take my basket of
• 26:57
  Speaker 4: ETFs that I have in my own PA and actually
• 27:00
  Speaker 4: state them and and be able to, uh, you know,
• 27:04
  Speaker 4: lend them out and borrow money against them to leverage
• 27:08
  Speaker 4: myself up. If that's something I wanted to do, then fantastic,
• 27:11
  Speaker 4: or even just or even just lend them for periods
• 27:14
  Speaker 4: of time without leverage. That's also a you know, a
• 27:18
  Speaker 4: great use case of how of how DeFi can be
• 27:21
  Speaker 4: employed to a world that was previously on and available
• 27:24
  Speaker 4: for large institutional investors.
• 27:26
  Speaker 1: I want to get your opinion on this last point,
• 27:29
  Speaker 1: and that is the potential of gaming ETFs. And you
• 27:34
  Speaker 1: look at some of the strategies being implemented in the past,
• 27:37
  Speaker 1: I would say by semi serious people. Now we're talking
• 27:41
  Speaker 1: about maybe some more serious people. And this, of course
• 27:44
  Speaker 1: is President Trump's digital asset platform out there. UH is
• 27:49
  Speaker 1: getting ready to launch a game and they're going to
• 27:51
  Speaker 1: He likes Monopoly, so it's going to be a Trump
• 27:54
  Speaker 1: branded crypto game. It's going to have a monopoly like feel.
• 27:57
  Speaker 1: You know that He's probably going to have many of
• 27:59
  Speaker 1: the NFTs and other assets within this. So could this
• 28:02
  Speaker 1: be something that could actually get mainstream adoption and possibly
• 28:08
  Speaker 1: get a gaming ETF brewing out there in the market.
• 28:10
  Speaker 1: What are your thoughts?
• 28:12
  Speaker 4: You know, I'm really hesitant when anybody pushes either a
• 28:17
  Speaker 4: gaming or even an AI focused blockchain, just because I
• 28:21
  Speaker 4: feel like the blockchain itself would slow down both of
• 28:24
  Speaker 4: those activities to a point to where in gaming it
• 28:26
  Speaker 4: wouldn't be fun, or an AI it wouldn't be practical.
• 28:29
  Speaker 4: It's almost you know, like it's like it's like putting
• 28:33
  Speaker 4: a putting a train on the road and hoping that
• 28:36
  Speaker 4: it'll go faster. It'll move faster on train tracks, so
• 28:40
  Speaker 4: it's it doesn't really work in my opinion. I've seen
• 28:45
  Speaker 4: a lot of people pursue it, a lot of games
• 28:47
  Speaker 4: being launched on the blockchain, but but the speed and
• 28:53
  Speaker 4: you know, I really don't see it working. I hope
• 28:58
  Speaker 4: it does, but you know, the fun games that people
• 29:02
  Speaker 4: play have to be fast and nibble AI is the
• 29:05
  Speaker 4: same thing. You know, you slow it down with the
• 29:07
  Speaker 4: blockchain and all of a sudden it can't process data
• 29:10
  Speaker 4: at speeds that say you chat GBT cam.
• 29:13
  Speaker 1: Well, we'll definitely find out if it's going to work.
• 29:14
  Speaker 1: Be Obviously there's a huge test right now going on
• 29:17
  Speaker 1: with Off the Grid. Obviously that being in the Avalanche ecosystem,
• 29:20
  Speaker 1: they themselves in a very unique position in terms of
• 29:25
  Speaker 1: blockchains because of their l one strategy and what that
• 29:28
  Speaker 1: might look like. So it will be cool to watch.
• 29:30
  Speaker 1: But don't you think investors would want an ETF on
• 29:33
  Speaker 1: gaming just like any other kind of gaming sector out there?
• 29:37
  Speaker 4: Oh? Absolutely, I mean investors love ETFs and the next
• 29:41
  Speaker 4: hot thing, and if there was a potential that gaming
• 29:44
  Speaker 4: was the next hot thing and in blockchain, I think
• 29:48
  Speaker 4: money would pile in it would it practically work? I
• 29:52
  Speaker 4: don't know.
• 29:54
  Speaker 1: Well, all early stage tech, you know, you look at
• 29:57
  Speaker 1: the evolution of almost any bell curve. It's it's a
• 30:00
  Speaker 1: little clunky in the beginning. Eventually developers find their way
• 30:04
  Speaker 1: to a market, and if it's a good enough product,
• 30:07
  Speaker 1: it always seems to find its way to a market. Steven,
• 30:09
  Speaker 1: it has been great have it. Yeah, it's been great
• 30:12
  Speaker 1: having you on. We'll definitely have you back. I love
• 30:14
  Speaker 1: your answers and I love your position, which is sometimes
• 30:18
  Speaker 1: against what I'm thinking, but that's the point of a conversation.
• 30:21
  Speaker 1: So we love to have people like you on the
• 30:24
  Speaker 1: Thanks for coming in today. We appreciate it.
• 30:27
  Speaker 4: Hey, thank you, Paul. Really excellent here.
• 30:29
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• 30:31
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• 30:33
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• 30:37
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• 30:39
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• 30:41
  Speaker 1: the things I'm doing in the markets, what I see
• 30:43
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• 30:46
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• 30:48
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• 30:50
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• 30:53
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