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More on the year that was and what may lay ahead, particularly in crypto. Now we're joined by Bill Barheit, CEO and founder of Abra, a global platform for digital asset prime services and wealth management for high net worth individuals and institutions. So if you're Abra, Bill, I'm tempted to ask, when is the Cadabra coming in? Is it next year?
Good question, Good to see you, Thanks for having me. Look, there's a lot of things that, as they say, history
doesn't necessarily repeat itself, put it off in rhymes. There's a lot of things going on that feel like twenty twenty to me, we had a market crash at the beginning, COVID induced here, we had you just brought up a crash in our Osober which was induced by the initially one hundred percent tirep announcement on China, but also some serious issues that were uncovered afterwards in a one of
the large exchanges internationally. And then you know, gold rallied right in twenty twenty, Gold rallied from I think it was fourteen hundred to two thousand, Silver rallied from about twelve to almost thirty. Bitcoin stayed in a range at that point, and it's trading very close to where it started the year right now. So you know, a lot
of this sounds familiar. But by the way, after gold peaked, we had a rotation into risk assets in twenty twenty, and bitcoin went on an epic run from twelve thousand to over sixty thousand, right and the market cap of the entire crypto space went up by eight x by mid twenty twenty one. So now gold is near record highs around forty five hundred, silver is around eighty dollars.
Bitcoin is been sideways this year. I actually think it went up significantly after the election because it was front running the idea that all of the regulatory obstacles to adoption were going to be removed, which has proven mostly true with additional legislation pending. Right we talked about October liquidation events, So it feels like with the FED and other liquidity catalysts, twenty twenty is going to repeat itself.
In twenty twenty six. Rate cuts, you know, leverage reserves and the banks are likely to get really relaxed, which means more leverage. Again, regulatory clarity, ETFs, et cetera, et cetera.
Hey, Bill, one thing I do wonder. I mean, you guys are a platform. You see things. You see investors, what they are doing, high net worth individuals. Also, institutions talk to us about activity, more money coming in, more money going out. Now, give us some color on what you are seeing on your platform.
Sure, so I think we're seeing a rotation. There's two types of rotations we're seeing. The first is there was a well known investor who referred to this as Bitcoin's IPO moment. And what I think he meant by that is we had people who've invested in bitcoin ten twelve years ago who were taking a little bit of profits, let's say fifteen to twenty percent profits. That's a lot
of money because those people have massive concentrations. Their entire wealth, if you've been holding for ten years, is probably based on bitcoin. And so that IPO moment represented a bit of a rotation. Now we're actually seeing a rotation where a significant percentage of bitcoin is no longer being held on exchanges. So we're not in exchange. We're a wealth
managing platform. It just like another ria. So money coming into a platform like ours tends to stay there for a very long time, stays in cold storage for a very long time. Now we're seeing a lot of clients asking to be able to borrow against those Bitcoin holdings because they think that it's reached a long term floor with significant.
Outside Well to your customer is not getting a little scared though, because I mean, it is extraordinarily volatile at the best of times. But just in the last three months, as we could see, we're down, you know, twenty five percent. Sure we're higher than we were, you know before the President took off us.
But still yeah, no, that's that's not that's not that's a trading phenomenon, right, So in our world, first of all, in video at points this year, was and Tesla rule were significantly more volatile than bitcoin. I would also posit that, right, it's it's traders that drive that price. The incremental float that's available for trading, and bitcoin is not nearly as big as it used to be because so much of it is locked up now, whether it's ETFs or or
in platforms like ours. Our clients are long term holders. They don't sell, and the rotation of money out of our platform is nearly zero. And that's not just a function of the fact that they like our service, which I'm sure they do. It's that, you know, our clients are just not interested in selling bitcoin. The biggest question I get is what would I possibly sell into? It's the best long term you know, capital gains potential asset that I own, right, and they're not speculators by and large.
What's important that you see from the administration that continues the support of bitcoin and other cryptocurrencies. We certainly know we have a White House safe to say that is very favorable to the crypto environment. The president's family is certainly involved in it. But what is it that you expect in terms of the environment. They're still trying to figure out regulatory there's still a long ways to go.
Does that get solved in twenty twenty six, especially when you've got midterm you know, midterms looming and maybe Congress coming back to kind of assert itself.
Good question. I see three things happening. The first is we're going to get a second bill passed. In my opinion, we got the stable coin legislation the Genius Act passed, which I think was pretty reasonable. We're about to get the Clarity Act out of committee, I believe, which is going to be the biggest overhaul in many ways to security and commodities regulation in decades, which is going to make it easy for the second part of my thesis,
which is the tokenization of everything. So you're going to see markets globally, including the US star to adopt tokenized versions of equities, commodities, real estates, et cetera, et cetera. And then the third I think you're going to see more of the same as it relates to global and specifically US debt markets.
Right where I have a problem with this build because I wonder why replicate and why would you buy the replica when you can buy the real thing.
I wouldn't buy a replica, So that's a good question. There's a nuance there. So the early days of tokenization are going to be tokenizing existing shares, which adds a little bit of value, which I'll explain in a second, But the real value comes in native tokenized equity issuance, and that has huge advantages. The first is stocks are stock markets are closed more than they're open. Okay, crypto
markets don't close. So now all of a sudden, you have the opportunity to have a twenty four to seven borderless market, right, that is twenty four to seven liquid, which is what investors in twenty twenty five, twenty twenty six wants in my opinion, Right, that's number one, number two.
As I mentioned, Bill just got about thirty seconds, So I just want to give you an opportunity to wrap up.
Go ahead, yeah, sure. And then the second part leads to what I said before. What is the fastest scoring service we see? It's people borrowing against the bitcoin. If you've tokenized Apple shares, Tesla shares, it's now just as easy to borrow against the value of those shares without having to pay capital gains taxes as it is against bitcoin. That is going to drive the tokenization of everything.
We will continue this no doubt. In twenty twenty six, Bill Barheide, He's founder and CEO of Auber, joining us