Flip side.
When they start those distributions, you're going to be putting billions of dollars back into the hands of a lot of you know, individuals and institutions that still want to own crypto. So the reverse side of this could be quite interesting where we have a lot of that flow come back. But I think it's just great that we're kind of moving past like what happened with Voyager and you know, Celsius and FTX, and you know, we don't really see that type of you know, bankruptcy risk right now.
I mean, if these companies have survived this long, the most.
Likely are going to make it.
This content is brought to you by Uphold, which is a great crypto platform that I've been using since twenty eighteen. Uphold has all the top cryptocurrencies, Bitcoin and all the all coins. In fact, they have two hundred and sixty plus cryptocurrencies on their platform. You can also trade pressure metals, stable coins, and thirty seven fiat currencies. In addition, they are available in over one hundred and fifty countries and this platform is fully reserved. They do audits so you
can trust that your funds are safe. No commingling, no lending out your funds. If you'd like to learn more about Uphold, please visit the link in the description. Welcome into the Thinking Crypto Podcast. I'm your host, Tony Edward and with me is Chris Ryan, who's the head of Liquid Active Strategies at Galaxy. Chris, great to have you on.
Thanks for having me, Chris, excited.
To speak with you. Galaxy is doing some great things as it relates to crypto investment products and working with institutions and much more. And plus you have a plethora of experience in trad FI, so lots of questions for you. Let's start with your background, where you're from and what's your professional background as well.
Yeah, sure, so, I guess I'm from Central PA.
From where I grew up a small town in the middle of no but made my way to the big city for school. Right out of university, I joined Blackrock, which back then in the late nineties might have had seven hundred employees, much larger today. There I spent twelve
years really as an analyst and then portfolio manager. In twenty twelve, I left Blackrock and went to a niche asset manager called Conan Steers real asset manager and there I headed up the global natural Resources strategy, the strategic Equities strategies, and was a CopM of.
The listed Infrastructure strategies.
And then I finally made the jump professionally over to crypto when I joined Galaxy in early twenty twenty two to start launching a suite of actively managed products, the first one being our liquid Crypto strategy, which we launched in the frightful time of May twenty twenty too, right when Tara was having its you know, dominance.
Over the market at that point.
But we now have just over a two year track record and have built it to over one hundred million in assets.
Wow. So I'd love to talk a bit about your transition from tradfi to crypto. You know, what was your first encounter with bitcoin and how did that eventually lead to you saying, you know what, I'm going to leave tradfi. I'm going to go work in crypto and blockchain. Yeah.
Great question, and probably not the same as many others. I was actually looking at Nvidia in twenty fourteen, investing in Nvidia in our funds, and at that point in time on the calls, Jensen was talking about bitcoin mining as being a source of demand for GPUs, So the more work I did, and I was had a bit of a techy background, I decided to just spin up a bitcoin mining rig.
And see what it was all about.
And then that ended up leading to a number of them being spun up until my wife got very angry at how many were in our nursery. So I actually mined bitcoin with GPUs for a few years until the having actually in twenty sixteen, and then ended up shutting that down just because you know, at you know, I think it was around a nine hundred dollars price at
that point. It was not necessarily economical, classic mistake, and really, you know, I kept some bitcoin in a wallet, was really excited when I sold it in November of twenty seventeen for seventy five hundred dollars. Was very angry in December when it was over seventeen thousand, five hundred dollars. But then of course we had the correction, and for me, you know, as kind of I dealt further into crypto.
Then I had a good friend and he I would still call himn Ethereum MAXI was telling me about Ethereum. I spent a lot of time looking into it, and then seeing all of these other applications and protocols that were building on top of it, and it just started
spreading from there. It's probably a similar story with many others, and starting investing in it personally, and then was thinking through, you know, there's going to be a market where at some point investors, institutional investors, family offices, they want to get exposure to this, and I don't feel like there are a lot of qualified managers who have run institutional capital before, who know how to manage risk, who know how to deal with clients and deal with client reporting.
And that's kind of what drew me to Galaxy and the platform they have with the Asset Management Group here to really try and start that business from the ground up and provide a product like that, kind of top tier product with the risk management you would expect for institutional clients.
I hope you don't mind me asking this question, but I'm curious, you know, you, being an analyst working at these different firms and so forth, were you looking at crypto from a technical analysis standpoint back in twenty sixteen, twenty seventeen, or you were like, you know, I don't know what to make of this obviously it wasn't as mature of a market as it is now with ETFs
and so forth. But you know, were you looking at Elliott wave fib and Nazi models, all the the metrics of on chain supply and so forth.
You know, I was looking at everything through the lens of macro at that point. And I remember, you know, in.
Our National Resources Fund, we invested in a lot of miners, and I used to go to this quarterly mining dinner with McCrory and at one of the dinners, there's a gentleman and he's like, what the hell is bitcoin and why does it keep going up? And we started having this conversation about it, and you know, I think the way I was looking at it, and I had charted kind of this whole like Chinese currency relative to bitcoin, and the moves were similar back in the time, and
then that relationship broke down. And then it seemed like every piece of data you could find that mapped out in a short period of time, then it would break down as well. So I think that's kind of the story of what we continue to do with bitcoin. You know, it was supposed to be an inflation hedge, and then in twenty two, it.
Wasn't necessarily an inflation hedge.
We're constantly trying to find these you know, these drivers, these macro drivers, which are really kind of influencing the price, and we found in short periods of time they do, but the persistence hasn't necessarily been there. And I think the issue with bitcoin is we just have a lack
of history. You know, every other asset class, be it equities or fixed income, you know, you know, decades and decades of data to kind of scrape and go back on and look for these relationships, because, as you know, correlations can come and go, but you know, they could be higher for a longer period of time than lower.
And I think as we continue to get more data and crypto, we're going to continue to look at kind of where those correlations tend to be the highest relative to those that tend to be the lowest, and use that to try and base our thought process off, at least from kind of a fundamental basis.
Not luckily for me.
When I started at black Rock, my mentor, my portfolio manager, was a statistician and he loved technical analysis, so I did use a bit of technical analysis as well to kind of help dictate, you know, where you know things look like opportunities. But I'm definitely of the camp where I don't use technical analysis in days and weeks, but I look at very long term trends and I look for long term.
Breakouts and long term support levels.
I think using technical analysis in short periods of time is really just.
A lot of noise.
Yeah, I definitely agree with you there, And you brought up such a great point that we don't have as much history. We're still trying to figure out all the use cases for bitcoin. I think the strongest is probably digital goal, even though it was initially started to be or created as a digital currency, and don't get me wrong, it is that. But from a day to day use, you know, the fees and the speed and so forth, it's not ideal, but we can still use it that way,
depending on which part of the world we're in. But I guess maybe the strongest use case is digital goal. And what I found is it's the entire asset class is still correlated to global liquidity. And maybe that's part of the ethos, right, a hedge against the money printing, so it will rise with global money printing, and you know, the basement of fiah.
Absolutely, and you know, I think that's true not just with US central banks, but you know, if you're a citizen living in Argentina and they're debasing the currency, if you buy bitcoin, the benefit of that is is you're now an asset that's priced in dollars. So you actually can get away from that debasement using bitcoin because it's
priced in dollars. So if you think that your central bank is going to completely, you know, erode the value of the currency, Historically you had to buy hard assets, you had to buy real estate. You know, it's very difficult for a citizen in Argentina to buy Nvidia.
Or US equity.
It's much easier for them to get access to something like bitcoin, which can actually preserve their wealth.
I did want to ask you, what is it like to see your old firm, Black Rock and the other Wall Street giants now going all in on crypto. At one point they were skeptics, they were bad talk shit, right Larry Fink, back in twenty eighteen. Now they're all in there. They're building investment products, they're building with the technology, tokenizing and much more.
I absolutely love it, you know, I think it's really helping to almost certify or clarify digital assets as an investment class. And I think it's really helping to help drive the regulatory and political side of things into a less hostile kind of playground, into something where they're like, Okay, we now have many, many, many smart individuals who are talking about bitcoin and crypto as a real asset and
there's real value there. Maybe we should soften our stance a little bit and start to really proactively, not proactively, but more productively work with crypto companies and hopefully drop some of these you know, lawsuits and things like that.
You know.
And for Blackrock, I'd say their solutions business, their technology platform is top notch, and they've got a lot of great engineers there. I would love to see them build out, you know, risk management platforms like things that are just missing from kind of crypto portfolio management that I'm certain that they could really make a part of their broader platform.
Now with black Rock and these firms getting involved on launching ETFs and so forth, what type of impact has that had on galaxies big business? Have you seen an influx of demand from institutions for crypto products?
Yes, so, I guess the kneejer response is that before ETFs, the only way for investors to get access was through private fund vehicles, and what we've definitely seen is a reduction in the holdings in private funds that have rotated into ETFs.
Now, luckily, we're partnered.
With Investo on both the Bitcoin and the Ethereum ETF, and we've kind of been able to kind of route that flow back into those products. So there's been a little bit of you know, products switching going on. You know, in terms of what it's done for investors, it is only been positive. And I can say with complete certainty that if we didn't have those ETFs this year, we would not have the same type of.
Conversations we're having today.
And you know, FTX was a huge, you know impact to the credibility of crypto, and you know, the discussions with institutions just kept falling and falling and falling even through twenty twenty three. But now that we have these ETFs, those discussions are starting to pick back up again, and we're hearing more that we have to do our homework because they're starting to realize that, hey, this might be a very legitimate asset class in the not too distant future and we don't want to be left behind.
And to your point of the FTX situation, it feels the dark clouds of those days have been pushed away. There's a bit of sunshine and I don't know, it's like we've turned a new leaf because folks that have completely forgotten about that, and you know, like you said, there's a legitimacy. Now the stigma is gone and more people want to learn about it, want to put it
into their portfolios. And it's almost like you have a fuduciary duty to do that now because other products like bonds and so forth are not are not performing as well.
Yeah, it's true.
You know many people might know this. So we've actually worked very closely with the FTX estate and winding down a lot of their exposure because the bankruptcy port told them that they have to make returns to creditors as cash. So when we think about just the rally that markets have had since you know, September, and that was in the face of US selling billions of dollars of crypto,
it's pretty impressive. Flip side, when they start those distributions, you're going to be putting billions of dollars back into the hands of a lot of you know, individuals and institutions that still want to own crypto. The reverse side of this could be quite interesting, where we have a lot of that flow come back. But I think it's just great that we're kind of moving past like what happened with Voyager and you know, Celsius and FTX, and you know, we don't really see that type of you know,
bankruptcy risk right now. I mean, if these companies have survived this long, the most.
Likely are going to make it.
And the levels of leverage in the market are just way down. The levels of speculation on you know, a product that constantly returns twenty percent is not there. So I feel like the environment has has kind of been cleaned up, and it's definitely more amenable for investment than it had been back in kind of that.
You know twenty one twenty two where things definitely got pretty.
Fraud Yeah, And to your point of, you know, cleaning up of the environment, I noticed that the stand have been raised significantly with many exchanges, with proof of reserves and transparency reports, and you know, you look back and you're like, why weren't these things in place in the you know, but I guess you live and you learn, and hopefully we can put those type of issues and
collapses behind us. And I've been, you know, saying, to some people it almost feels like the kids have been put to bed and the adults are in the room now. And some of the adults are from Wall Street, right, Galaxy, Black Rock and so on and so forth. And where you have trust in these brands and institutions and proper custody and all all those things.
Yeah, I mean, we had the financial crisis of crypto, you know, back in the mid two thousands.
It was the banks that were really you know, taking.
Obscene leverage and putting together products that made no sense, and that led to a lot of regulation changes, you know, Dot Frank and numerous other regulatory acts that were put into place. And I think kind of the cleanup process is happening right now as well. And this goes back to what you say, like people are demanding more information, they want to make sure that their assets are safe.
But what we really need is that regulatory side to shape up a bit so that we can get those same type of protections that make sense in place.
Now, there was some big news issue today around Galaxy and that is a one hundred and thirteen million dollar initial close of the Galaxy Ventures Fund. One tell us about that.
Yes, So this is the team that's been working at Galaxy investing in.
Our balance sheet for the past five years and.
We probably we definitely have over one hundred different investments of you know, venture based companies on balance sheet. We made a decision that it would make more sense if we move that team over to the asset management group. And you know, Galaxy parent co can still invest capital into the fund if they want and participate, but now we can also take outside capital as well. So the
team's really excited. You know, it's going to focus on early stage investments and it's more focused on kind of the infrastructure layers of crypto, the payments type of companies in crypto, and you know, we're I'm on the investment committee as well. We're looking at a range of different companies there that are really interesting.
Really unique, and are finding.
These niche opportunities and opportunities that could grow quite significantly in the marketplace.
And are there plans to do all the rounds of funding this year or into next year.
Yeah, So we will probably have a second close in the fall, and I have to give props to kind of our team for putting together the first clothes as quickly as they did. I feel like they only spent maybe two months on it, and it was just too fast for a number of investors, where the IC takes a little bit more time.
So we're expecting second.
Closing Q four and feel quite confident that that's going to push the fund up to about one hundred and fifty million, and the team's comfortable with that level of capital going into these early stage companies because in early stage, you know, you're not investing significant chunks of money. We're typically doing maybe three million, five million if you're lucky type tickets. And the team wants to have, you know, a portfolio maybe thirty to thirty five different.
Names, and I don't know if you're able to tell us names or maybe the types of institutions you're raising from. Is it in Dowman's family offices and so forth?
So I would say there were a number of family offices. There was a very well known fund of fund. You know those right now are tend to be the biggest investors. There's still a lot of high net worth individuals that invest as well, and we actually enabled employees to invest into the strategy as well.
Awesome. Now, the Etherorem's bodytfs launched this week, and of course Galaxy, as you mentioned, Galaxy Invesco have the q eth ETF, and I would love to get your thoughts on how that launch went and what's your outlook for these ETFs. Obviously I don't think there's going to be as much demand as there was for bitcoin, but certainly significant and we're seeing good performance so far.
Yeah.
So the launch, of course, I think with all of the issuers was very much a surprise. On the nineteen be fours, Nobody had marketing plans in place, nobody really was prepared for it. So we had a very fast sprint in the month or so between the nineteen B four's and the s ones being approved. But you know, all of the issuers got the docs in the SEC approved and we're up into the races. So I agree with your assessment that I think there's a good long
term opportunity tactically. I'm just you know, seeing what happened with GBTC and knowing that we have a lot of arms still in the ETag product. We actually reduced our eth exposure just two days ago. Just thinking through the fact that I think flows are just going to really struggle in the near term, and it's really going to be due to the EB outflows.
And I think similar to what would happened with Bitcoin.
Where we had a bit of a pullback, we might see that with ethereum, and we're going to use that opportunity to step back in and as those you know, reductions from EB kind of start trickling down, then those positive flows are going to overwhelm that.
I think it's going to be a better market sentiment afterwards.
Yeah. Point, we saw a bit like you said of that with the bigcoin ETF situation, and it's just you know, uh, it'll resolve itself and then eventually we'll be on good ground there. I know. One of the things that people are really bullish on with etherorem is staking right the ability to earn yield and the passive rewards, but those are not available in the Etherorem ETFs is yet. Are you guys engaged with the SEC asking them about this.
I saw Hesler Purse, Commissioner of the SEC, spoke about it recently, and do you think once that's at it, that will have a surge and demand for eth.
So I think it's going to take a little time, uh for the SEC to to come around to that. You know, Gensler has already publicly stated that, you know, a state is a security, but he is not. So we kind of have to really work with the SEC to make sure that they realize what's staking is why it's done, instituted being a security, but just knowing you know, how things work with the SEC. I don't think that
that's going to be something that's completed this year. I do think to your point, if staking is introduced into the ETFs, it's a huge positive and I think a lot of individuals. You know, I have a very close friend he's like, why would I ever move my point to an ETF when I can stake it and generate yield?
He said, if it would stake it in the ETF.
Easy because you know, I want all of my assets to be in one tidy place where.
I can manage them.
So I do think we would see a bit of a pickup and flows from people who had been staking on their own and moving those into the ETFs. And part of that is you know, when a retail user stakes, the take rate from whoever is staking.
That tends to be higher.
And when you negotiate with these big issues, because there's going to be so much volume, we can kind of negotiate that take rate down to the end point coming.
To the staker or to the ETF could be much higher.
Yeah, I'm like your friend, I'm of the same mindset. I stake eth I self custody for the most part, and I don't want to, you know, go through the ETF because I won't be earning a reward. So hopefully, you know, the SEC can come around soon. I think that would be really great for the ETFs and for the market at large, and giving retail the general public who may not be you know, crypto enthusiasts and techies and so forth, they can at least get some of
those rewards. So hopefully you can get it soon. Now Solana has been on the rise significantly, getting adoption and so forth. It's now within the top five of the crypto market cap. Some folks have filed for a Solana ETF. Are you guys playing to do that? And do you think we see that in twenty twenty five?
I would give twenty twenty five kind of a forty sixty forty sixty zero twenty twenty six, I'd probably say the odds are much higher.
You know, Solana is.
In the same boat that it was named as a security in one of the sec lawsuits against coinbase, so we kind of have to first, you know, backtrack on that. I think it would be fantastic and to be fair, if we can get the staking in eth we would definitely want the staking in Solana as well because the reward is actually quite a bit higher with Salon right now.
But you know, actively in Solana ecosystem has picked up significantly, and it was left for dead after the FTX collapse, but more recently we even see D five volumes exceeding that of Ethereum now, so the ecosystem continues to grow. I think people are catching on to what's going on there, and I think, you know, the prospects for Solana look quite well. I would love to see an ETF but I just think it's going to take a little bit more time until we can get there.
Yeah, there's to your point of complications of those lawsuits against exchanges or Slona is named, but possibly Chris you know, Congress is able to get something like the fit twenty one bill to go through the Senate, and then whoever it becomes president, you know, they sign into law by twenty twenty five. That could you know, escalate things incredibly fast, and maybe we see it. But until then, you know, we'll have to wait and see.
Yeah, and you know, I think the Senate is going to have their hands tied into the election.
So you know, whether they you know, put.
Their fingers on it and make some edits and send it back to the House this year, if it gets pushed it early next year, it remains to be seen.
But you know, I'm kind of encouraged by what I hear about the Harris camp and kind of what their view is on crypto, And you know, it feels like, you know, it feels like crypto has kind of checkmated the politics a bit, where there's a lot of voters that phone crypto and like crypto, and this is going to be a very very close presidential race, and the crypto voter could really sway which direction that goes, particularly
in some of these swing states. So I wouldn't be surprised if the Harris camp comes out and takes a different approach to crypto than the you know, Biden's administration.
I certainly hope so. And i'm i'm I spoke to a Congressman Roe Conna just yesterday and he's talking about he's loving to her camp and so forth. And it would be great to not have crypto be a partisan issue. But it shouldn't even be an election issue. But it is because of Elizabeth Warren. I think there's a culprit
behind that. But what are your thoughts on? Man? It just seemed like a switch flip earlier this year, and you know Donald Trump certainly took advantage of it where he saw his opponents on the Democrat side, we're trashing this technology and you know, doing all kinds of things with regulation by enforcement, and you know, look, as a politician, that's a smart move. It's the art of war, right,
you expose your enemy's weakness and so forth. But it's incredible he's going to be speaking at the Bitcoin conference, you know, on Saturday and possibly announcing a plan to have bigcoin be used as a treasury reserve asset. It's it's pretty incredible.
Yeah, if he says it, well, he says whatever hits him on the top of the mind, so.
You know, most of his advisors would probably.
Tell him not to say that, but it doesn't mean that it will stop him from saying that. But I think it's you know, it's a really good signal to the crypto community that you know, he's going to take crypto seriously. And from what I heard Harris's camp, they were actually seriously considering going and they decided not to at the end of the day, which is probably the right decision for her too, because.
I don't know if the bitcoin crowd would have been.
Nearly as as kind to her as I think they will be to Trump.
M hmm. Yeah, it's fascinating. And I read the other day that Fairshake has the largest super pack within this election, and it's of course crypto funded right from Ripple, a sixteen z coinbase and so forth. What are your thoughts on that it's crypto has become like this political force now.
Yeah, And I think it's because we've been asking for, you know, changes to regulations, We've been asking for you know, politicians to really force the SEC in a certain direction, to set the rules, and really there's only been one candidate who's really talked about that, and if this is the only way that we can get traction on the things we've been asking for for years, then we're going to put capital behind that and make sure that those
types of initiatives finally get played out, because it has been such a barrier to you know, crypto employment in the US, crypto companies in the US, using crypto protocols in the US, and it's frustrating. So would love to see you know, either camp take a you know, a better view to really you know, embracing crypto and creating sensible regulations that make sense, and it creates a little bit more comfort from institutional investors to finally commit some capital to the space.
I wanted to go back to the bigcoin ets because obviously we saw record breaking performance and inflows for the ets, and part of the process right now is folks are going out educating rias and wealth managers and so forth. So it's only been what say, seven months since the launch, so I think we need like a year to kind of judge the performance overall. But what is your outlook? Do you expect inflows to come in waves and to increase as well?
Yeah, I think it's the most successful ETF launch in the history of ETFs.
I mean, you have seen just tens of.
Billions of dollars flow into these products, and it's been just incredible to watch.
You know.
I think in many of the big wirehouses and platforms, Bitcoin still hasn't even been approved, and in many cases financial advisors still have to wait for reverse inquiry to be able to offer them to clients. So there is still a huge pool of untapped investors that have yet to invest. And I think there is just going to be this steady inflow into the ETFs over time as you finally get more of these platforms onboarding, as you anniversary you know, kind of a one year probation period.
There's there's so many weird things that go on in the RIA landscape that have to kind of play out. But each RIA is different. You know, you've got smaller ones, you've got big public ones. But all of that is going to lead to just this steady flow into the Bitcoin ETFs over time, and you know, I think that's going to continue to paint a very solid picture for the opportunities.
For bitcoin going forward.
And I would really I'm really excited to see an options market developed on these bitcoin ets as well, so you know, hopefully we can we can get some traction.
On that and maybe have that in place by Q four.
I think that's going to improve a lot of liquidity. I think it's going to increase interest in the ETFs. So that would be a huge catalyst for me as well.
So, Chris, not financial advice, but what is your expectation for this bull get given that right now we're cooling down a bit. Maybe the stock market's been a bit overbought. You know, there's some correlation there. The DXY is finding some strength on the daily chart. Maybe the market's waiting to see what the raffetti is going to do with Ray cuts. You are you seeing higher highs into twenty twenty five or you know, are we going to be kind of any sideways movement for a while.
I think everyone is going to be surprised by what happens on the political side, and I think, you know, whether it's Trump or Harris, there's gonna be progress and that's not expected.
And then you know, I.
Think of the FTX stimulus when you're putting you know, the retail crowd, and then some of the institutions that were crypto funds. Even if you call it only six billion of the sixteen billion, that's six billion dollars that could flow back into crypto. Know, everyone's focused on German government selling and you know.
Mountain Dox returns.
I'm less focused on that in the near term, and I'm thinking, you know, six to twelve months out, there are some massive catalysts that are kind of on my radar, and I think that's really going to help propel you know, bitcoin higher, and smart investors would be looking at that and kind of taking advantage of weakness.
I think in the market.
Today, what are your thoughts on companies adding bitcoin as a treasure reserve asset on their balance sheet? Just this morning, I think Marathon Digital Holdings. They're a minor, but they bought one hundred million dollars in bitcoin, you know, Tesla SpaceX micro strategy. I'm watching Michael Dell closely. He's been tweeting a lot about bitcoin. You know, could Dell announce something soon as possible? But what are your thoughts on that trend?
Yeah, and the best one is Meta Planet, which went from twenty end to two hundred and twenty end. I think today ten xt On just on adding bitcoin to their to the treasury. And this company that generates like two million dollars of revenue per year and it's probably valued it like a quarter billion dollars now, you know, I think it's evidence that more and more, you know, senior individuals and companies are recognizing the value of keeping it.
In the treasury. Now, Marathon, and clearly this is their business.
They're they're a bitcoin minor, and you know they have historically they have held a lot of bitcoin and saved a lot of bitcoin on their balance sheet, and they've got a substantial amount of bitcoins. So I don't find it surprising that they're taking that route. I think the micro strategy kind of case study has been a bit of a success. A lot of us thought that once the ETFs came micro strategy stock was just going to collapse because why would you for a premium for that
bitcoin when you can get the ETF. But you know, it's a bit of a system that works because if you can issue equity or some type of finance based on a valuation that's two x bitcoin, and then you can buy the underlying asset for half the value of what your company is worth.
Well, that's creating value on its own.
So doesn't surprise me that other companies are taking a look at that and really diversifying some of the treasure.
Is the question follow question on that. I don't know if I'm off base here, but is it also kind of a dual benefit in that stocks rise with the depreciation excuse me, the the basement of fiat right and global liquidity where if you're in the Nasdaq, I mean, you know, NASAC is a top performing index, of course, and you have bitcoin. Is it the best of both worlds?
Is it a way to kind of diversify, Like I can hold bitcoin, but you know what, I can grab some micro strategy stuck because it's getting the overall stock market benefit.
Yeah, I mean that's a really good point. It could be.
You know, I think I think time will tell. Uh, We're still in a very narrow period of time on which this has been going on. Yeah, you know, clearly it was disappointing when you know, Tesla made a change to kind of how they were approaching bitcoin.
Would be lovely to see them readopt it.
You know, I think there's a lot of people that look to certain individuals is very smart individuals.
You know, Elon Musk being one of them. I love, you know, seeing Mark Cuban.
He's always supporting kind of crypto and he's really, you know, kind of immersed himself in crypto as well.
And these are people that have made billions.
Of dollars, So why would you not want to trust somebody who actually is done really well in their life and probably knows how to make a calculated investment much better than the average person. So I think it's great to see, you know, in the next kind of bitcoin downturn, let's see how steady those hands are, of course, but for now, I think it's a it's a really smart decision.
What's on galaxies roadmap for the remainder of twenty twenty four? Are you playing to launching a new products? And what can you share?
I mean, I think everyone in this company hasn't been busier. It feels like every division there's something going on, you know. In asset management, we just launched the theory of METF. We just you know, closed on the first first close for Venture. We announced a partnership with State Street to run some actively managed ETFs, which we'll probably launch in late Q three. And then my team is going to be launching a multi asset crypto themed absolute term product.
So we've got our hands full here and we're still working with the FTX estate on what I would consider more difficult type tokens.
At this point.
In our trading business, we got our swap dealer license.
I think we're the.
Only crypto company that has a swap dealer license at this point, and that really just expands our opportunities in the size of the book we can have the customers that we work with. You know, we continue to see a lot of activity on the trading side, they're constantly looking at opportunities, and then on our advisory side.
You know, things are starting to pick up again.
You know, they're they're seeing more activity, they're engaged in more of the deals out there. So you know, between and then I should also mention our mining side. You know, we've publicly said we're looking at our Helios data center down in Texas, which can scale the eight hundred megawatts, to see if there are other you know, practical applications for that.
You know, many of these.
Mining companies have been looking at AI high performance compute, and our facility is just situated exceptionally well, if it would make sense to do that, We've.
Already got you know, water.
Cooling infrastructure, We've already got the freshwater pond there, we're right next to the grid. There's just so many aspects where it gives us a lot of optionality, and of course we're going.
To take the route where we think would deliver the best value.
I mean, that's a ton of stuff, Chris, you guys are doing a lot, and it's pretty exciting news. And I wanted to ask a followed question on the State Street partnership. Can you elaborate a bit on that? Are they Are you planning to launch different ETFs or doing additional ETF products or financial instruments.
Yeah, so we are in a blackout period right now, so fortunately I can't really discuss much more than what was disclosed in the press release that there's, uh, you know, I think three different products that we plan to launch probably at the end of Q three.
That's exciting a sup tookenization because we're seeing from like your old firm, black Rock tokenizing and many others. Is Galaxy playing to do anything around that? Or even if you're not specifically tokenizing funds, are you able to trade with them and do different maybe add supplementary financial services and so forth.
Yeah, it's something we've been looking at closely.
I mean we've been talking about tokenization ever since last year. We have a tokenization team. We bought GK eight out of the Celsius bankruptcy which does a lot of the custody as well, and there have been a number of institutions which have approached us about tokenization.
We have publicly said that we're.
Going to be working with DWS in Germany to do a stable coin at euro based stable coin, so we'll be doing tokenization in that rounde in terms of fund products and things like that.
You know.
Coinbase actually just announced the other day that they're doing a token ises money market. Franklin already had one. You've got black Rock with theirs, so you're seeing a lot more interest there. And I look at these as test cases. They were a little bit easier to do and we're seeing how they work. But ultimately, what you'd love to do is to be able to use those assets as collateral on chain. And once we start being able to use those type of assets on chain and the use
cases start to really explode from there. I think that's going to start opening the door for other asset classes to be tokenized as well.
Yeah, let's follow a question on the stable coin that you and the folks there are going to help to launch. Tell us a bit about that, which markets is going to be available in and in addition, what do you think about this kind of what I would call the stable coin wars. It seems like everybody's launching one now, Ripple the folks at vanak just launch one. What are your thoughts on everything there?
So I don't think we've actually disclosed the markets that will be available.
In, but a euro based stable coin, you know, probably has a decent amount of use cases and practicality, particularly in the European market. If that's your base currency and the stable coin wars is going to continue. You know, it's a great product for the issuer right now because they're retaining all of the interest and it's been just a phenomenal money maker for Tether for Circle. So I think a lot of other institutions are looking at.
That as an opportunity. And you know, when when.
You have institutional investors stepping into the space, finally they don't know Tether, they do know van K and I think brand has a big draw there.
You know, I wouldn't be surprised if you see other, you.
Know, brand name institutions look at launching stable points, trying to sniff out if there's an opportunity to really scale that up and build it out.
Do you think there's and this may be an obvious question, but or answered to it, but do you think there will be eventually be a point where it becomes too saturated and some folks are going to go out of business, some consolidation and you know, some of the big whales buying up the small sharks or things like that.
Yeah, that's what always happened. So that's exactly what my expectation would be. You know, you really want to scale that up. It's very much like the asset gathering business, and when you're sub scale it really just it doesn't make much sense. So, you know, users don't want to use a stable coin that doesn't have a lot of volume,
that doesn't have a lot of activity. They tend to gravitate to the most used stable coins, and I think that's one of the reasons that USDT has been so successful, and even USDC to a certain extent, Although the regional banking crisis was a bit of a blow there. But you know, people who are trading on chain, the pairs that they're trading.
With are U, S, D T or USDC.
You can still find some pairs in some of the other stable coins, but you know, the liquidity pairs the LPs that you see in some of the trading protocols, it's just it's much different than the liquidity you can find with those other two stables.
Mm hmm, Chris. I got some wrap up questions here for you. First, if you could create your own metaverse, what would the theme be.
My own metaverse?
Where would you put your opals on and go to goodness?
Gracious, I don't know. I'm gonna have to think on this one.
I you know, I like horror movies, so I could think of something funny as as like, you know, Friday the thirteen metaverse where you're constantly trying to avoid Jason.
Jason. You know, I'm a horror movie fan too, and it would actually be pretty interesting and you have maybe the uh, even though it's kind of corny, you kind of maybe have the Jason the theme. Scary music, okay, rapid fire? Question, favorite food.
French fries.
A favorite musician or band.
It changes right now. I listen to a lot of rufus to soul.
Favorite movie, Oh, I have like a top five list there.
Probably Jaws, M classic favorite book.
The entire Game of Thrones series, love them. M.
And when you're not working at Galaxy, what are you doing for fun?
I spent a lot of time with my family. I have two girls and a wife, and I have a lot of fun with them.
Chris Pleasure chatting with you. You guys said Galaxy, you're doing some amazing things and looking forward to you know, the releases are on State Street and all these different things. But thank you so much for joining me.
Yeah, I appreciate you having it.
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