If if we saw a black rock file for Solana ETF and I would say, maybe something's going on here. But they've been on record here for the past week or so. I've seen comments on a multiple of their executives where they've essentially said it's bitcoin and ether and pretty much nothing else at this point. So they don't seem to have an interest there. But that would be the wildcard. If you see black rock file, I may change my turn.
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It's so good to be back here.
Yeah, for sure, Nate. I thought of you last week as the etherorem ETFs went live, Like I got to get Nate back on and you know, there's some things developing around the Salona ETF, so I want to get your perspective there with the Ethereum ETFs their launch. We've seen some stats and numbers. Has been about a week or so. What is your take on how the launch went?
Yeah, it's interesting. So we're now a full week into trading. I think flows overall look pretty strong. I think if we exclude the grayscale ethereum trust so ticker ETHER, which I will come back to that in a moment, there's been about one point three billion dollars that has come
into the other eight spot etheror ETFs. Now, just for context, Tony, if we were to view those eight ETFs altogether, which I think is the right way to do it because he's all launched at the same time, and we can talk about that, talk about that as well, But that one point three billion dollars in inflows, that would be good enough for the top five of all ETF launches this year. Wow. And here here's the funny thing about that.
The four ETFs ahead of spot E three ETFs. Again, if we view these cumulatively, the other four ETFs, guess what, they're all spot bitcoin ETFs. So you know, think about this. There's been something like three hundred and twenty five new ETF launches this year, and in the ETF space we're actually tracking for a record gear of new launches, and Spot e F ETFs as a whole already in the
top five of inflows after just one week. Now, I know many people will quickly say yeah, but and that yeah, Butt is ETH, which has had one point seven billion dollars in outflows, and the narrative is that the money coming into the eight new spot Ether ETFs is all just recycled money, right. It's people moving out of ETH and it's two point five percent expense ratio and they're
allocating to the less expensive spot ether ETFs. I don't fully buy into that because we know from the Spot Bitcoin ETF situation and gbt see the Greyscale Bitcoin Trust, there were a lot of GBTC investors who were simply playing the discount to close, right. They were rbing that
discount waiting for Spot ETF approval. And so I think a lot of the EE outflows are simply hedge funds and traders taking profits after the discount and ETH fully closed, and now they have the full liquidity of the ETF wrapper, which makes it very easy to exit if they so choose. You have to remember when you think about GBTC and ETH, we don't know all of the motivations of the investors who own those products. It's not just long term buy and hold investors, right. There are a lot of different
types of investors with different motivations. So I guess I would say, in summary, is there some money that has been recycled from ETH into the new ETFs? For sure, but I honestly think it's the minority. I would peg it at something like twenty five percent or around there. But either way, what we know for a fact is that one point three billion dollars in investor money has wanted to be allocated to spot e three ETFs in the past week. We know that, I think that's the important number.
And didn't we see something like this with the Bitcoin ETF launch where money was flowing out a GBTC, but then you just saw a surge of new capital come into the ETFs. And while we don't have all the details, it's safe to say, Okay, there's a small percentage of the GBTC excuse me, the gray scale etherorem trust is coming out, but there's new capital flowing into the ETFs as well.
Yeah, I mean, there's no question. I mean, what both GBTC and ETH have done is they've muddied the waters in terms of trying to understand exactly what's going on with flows. And to your point, the further away we get from launch day, the more clearer those waters become and we can really decipher what's been going on with flows. My expectation is that it will be a similar situation to what we saw with the spot bitcoin ETFs. At the further out we get, the or the outflows from
the grayscale products will start to slow down. I think we're seeing that a little bit and we'll get a much clearer indication of how much demand there is for the spot e through ETFs. I've said this multiple times and in multiple places. Longer term, my expectation would be that the demand for spot ether ETFs would be roughly a third of what we saw with spot bitcoin ETFs.
And it's a very simple calculation. We know that if you look at the underlying spot bitcoin and etheryum markets, we know that Ether is about a third of the market cap of bitcoin. ETFs are simply passed through vehicles right their delivery vehicles. They're vehicles that allow investors to get very low cost efficient exposure. But what they do
very well is just replicate the underlying market. And so if the underlying market has a ratio, you know, roughly Ether being a third the market cap a bitcoin, that's what I would expect to see in the ETFs now, it's possible longer term that changes. Right, It's possible that Ether goes down and maybe it's only twenty percent of the market cap a bitcoin, or could go the other way,
maybe it becomes fifty percent of the market cap. Either way, I would expect ETFs to reflect whatever the underlying market looks like.
So on that note of it potentially growing, there's talks about the staking component, which is not currently president in the et APS. Hester purs SEC Commissioner recently said, you know, they're going to look into this and the SECU should re visit it. That in conjunction with change in the regulatory landscape, politics and so forth, which we'll touch on a bit later. Could we see next year to stay can get at it and that drives more demand.
Yeah, there's a lot we can talk about there when you add in the political thread. But if I had to, I would say yes, I do think it's a matter of when, not if. But clearly the SEC isn't comfortable with staking right now, and so from my standpoint, the question is, okay, well, what would change that. I think it's certainly possible that the current SEC comes around on this, but it's probably more likely that it would take a
change in administration. So in this case, it would take a Trump administration, which theoretically would then put in Actually not theoretically. Donald Trump said he would fire Gary Gensler, so we would have a new SEC chair who might
expedite this. Now, one thing I'll caveat that with and this gets a little bit into ETF mechanics, so I won't go too far into the weeds, but there are some operational considerations around staking within ETFs, because if you're staking e it's locked up right and it may take X number of days to unlock it. That could present an issue if you have an ETF that has a large amount of each stake and that ETF also has a bunch of outflows. Now that's not something that ETFs
can't easily overcome. They can get lines of credit and such to handle that, but there are some considerations from a liquidity management standpoint, and it's possible, I say possible, that that's playing a bigger factor in the SEC not allowing staking at this point, that they just want to see how the spot ETFs operate in their existing format. Once they see everything's working properly. Maybe they add that
and they get comfortable operation. However, I think more likely it's that the SEC is still evaluating whether offering the staking component trips Ether into becoming a security right versus a commodity, and that's going to have to get resolved before staking is allowed. One other quick point that'll make, and I made this several places as well, but I think it's an important one, is that, well, there's no question staking is important. That's part of ethereum, that's part
of the Ether, that's part of the ecosystem. You have to remember that right now less than thirty percent of all Ether is staked, and the current staking yield is only around last I check, it's something like two point seven percent, two point eight percent. My point is this, I don't think that this is a huge deal in terms of driving spot ethere etf demand. It's one of those things that would be very nice to have, for sure, if you can get an extra you know, three percent yield.
I'm an advisor. Every basis point count, so it's important. I want to be clear about that. But you have to look, Ether is up what forty five percent this year? This is a high ball asset and so I think missing out on a three percent yield isn't going to dissuade investors from buying the spot E three ETFs in my opinion.
So what etherorem getting the clarity with the ETFs launch and possibly with a regime change we get this staking, What does this mean for Solana where there's filers who will put out their application for an ETF like van K and so forth.
It's funny because that's the big question now right. We had the debut of spot bitcoin ETFs, we had the debut of Spotty three ETF, so everybody wants to know what's next, and naturally Solana comes to mind. So I believe the SEC has a decision to make on both the van K in twenty one share Salona ETF filings by March of next year. So nineteen B four's were filed on both of those in early July. So if you do the math, I think that puts us into
March of twenty twenty five. Now, a lot can happen between now and then, but as we sit here today, my sense is that similar to what I just mentioned with Staking and spot E three ETFs, it will probably take a trump administration in order to get Solana ETFs
approved at least in the shorter term. And my rationale for that, Tony, is that there's just been nothing to indicate that at Kamala Harris administration, which theoretically they would keep a Gensler led sec impact, there's been no indication they have any interest in further embracing crypto right now. That could change, but you might recall last we chatted, I said it would take one of two things in order for additional Spot crypto ETFs to come to market,
which would include obviously Solana. So number one, we either need regulated futures contracts to be trading, so in this case, we would need CME traded Solana futures, which keep in mind, even if we got those, they still have to have a track record. Then we would probably need to see Solana futures ETFs, and then you'd get the Spot ETF. So you're talking probably, you know, a couple of years
at a minimum for that to play out. The other path would be Congress implementing a crypto regulatory framework that clearly spells out what is the security and what isn't. We had some some movement on that in may would fit twenty one and those sorts of things, but in general, there just hasn't been much progress on either of those, and so it feels to me like it would take a change in administration in order to get a Salona
ETF in twenty twenty five. It is certainly possible that happens, I think, both the change in administration and Solana ETF approval, but I just think that's a tough thing to handicap
right now. The other thing that I'll mention real quick is it pertains to a Salana ETF or any other spot crypto ETF, is that even like let's say, Congress is able and fairly short order to put in a full crypto regulatory framework, the SEC is still going to need to be comfortable with how they're surveilling the underlying spot market. So whatever the spot crypto is, that the
ETF would hold because remember right now crypto exchanges are unregulated. Now, perhaps a crypto regulatory framework, if that's implemented, that would all be clarified, and so it solves that problem. But my point is the SEC, regardless of who is leading it, is still going to need to be comfortable with whatever the surveillance sharing agreements are that they have in place
with the underlying crypto exchanges. So again it gets a little bit into the weeds, but I think that's an important point.
Yeah, those are great points. And I had a quick follo up question on the futures because you stated that potentially it might need to that needs to be in place for years. Do you think that's that's a Is that a rule or is that kind of like, yeah, it's.
Not a requirement. I'm simply just going off how the SEC has approached spot bitcoin and spot ether ETF approval where they've wanted to see this truck record. They wanted to see this correlation analysis right that the futures in the spot market are very tightly correlated, which to me that's intuitive. I mean, the markets are highly intertwined, but I get it. A regulatory agency such as the SEC, they want to see the hard data. They want to see the numbers. So yeah, I think it's a matter
of time. It takes a little while to show the mathematical, you know, the underlying correlations there. That's not something that happens overnight. So they want to see that track record. And then again the path that we have walked at least with spot ether in Spot Bitcoin ETFs is then we saw the futures based ETFs come to market, right, and then we saw the spot ETFs come to market. So I just feel like that is probably a longer
term path. The quicker path would be having this crypto again regulatory framework implemented.
Rook rookie question for the futures Who would it the same issuers that do the SPOT that issue the futures ETF or would it be like the CMEME or something like that.
No, yeah, it would It would likely be the same issuers that we saw futures based crypto ETFs. So we saw everybody from pro shares two bit wise you know van act. There were a number of issuers who filed futures based ETFs that then subsequently have filed or and or launched at this point the Spot ETFs.
There were some interesting news that broke this morning. I don't know if you saw it, but it's not confirmed, but there's indications based on a court filing that the SEC is removing Solana Cardano, Maddic and so forth out of the finance lawsuit where the judge wouldn't have to
rule if those coins or securities are not. Now they haven't removed anything from coin based lawsuit Orkraken, But it seems to your point earlier that potentially Kamala Harrison her administration, if you want I call it, that, are gonna maybe do a one eighty. But until we see actual proof, it's just all speculative. But that seems promising that maybe they're dropping some of these cases against these projects.
Yeah, I saw that headline, and sure, I think you can read that as a promising sign. But what I have learned over the years is that it's really difficult to read the tea leaves when it comes to the sec and I take a step back, and let's put Solana or x orp or any other crypto asset aside and just think about the products that we currently have trading with Spot bitcoin and Spot e through ets. Remember, we still don't have cash creations and redemptions on either
of those products. We don't even have options trading on Spot bitcoin ETFs, which have now been on the market for whatever six or seven months. There's some basic things like that that until I see those, it's hard for me to believe that the current administration is all of a sudden going to do a one to eighty it to your point, and you know, approve something like a Solana ETF, but you never know. The political wins can shift quickly, and you know, I could see how again
that headline could be interpreted as a positive sign. I've just learned over the years not to read too much into those sorts of things.
Yeah, I same, And until we see concrete evidence and they actually do what they're hinting at, it's it's all just fugazi, right, it's help.
I will say this though, if you want a wildcard, I don't think it's going to happen. If if we saw a black Rock file for a Solana ETF, and I would say, maybe something's going on here. But they've been on record here for the past week or so. I've seen comments on a multiple of their executives where they've essentially said it's it's bitcoin and ether and and pretty much nothing else at this point. So they don't seem to have an interest there. But that would be
the wildcard if you see black rock file. I may change my ten.
On that note. Maybe it makes sense that there's not a third all COINYTIF because I don't know, maybe it takes time for the market to get familiar with these products and to be accepting a crypto entry. You throw too much at them at the same time, it may turn them off. But if you just say here's bitcoin, if you want, you can get some ethereum as well, it's a much easier.
Pitch, perhaps, But you have to remember that we have these products trading over in places like Europe. If you go look at the products from it, even anituer who now has products in the US twenty one shares, or you can look at Vanec. There are Salona exchange straded products over there, there are Cardano, and you can go down the list. So I hear you. And certainly those other crypto assets are a much smaller portion of the
overall crypto market. But those products have proven to be able to function properly in other markets around the world, so there's no reason that that wouldn't be the case here in the US.
That's true. And then given how dominant the industry is right now in politics and trad fy and so forth, people are paying attention. So yeah, I think it's a good point.
Now.
I saw recently hash decks they filed for an index ETF, which would include bitcoin and ether and also opens the door for other all coin ets. What are your thoughts on that here are probably going to see black Rock and these other folks do the same.
Well, first of all, I am absolutely shocked that hash decks is the only issuer has filed for this so far. I really can't believe we haven't seen bit wise or twenty one shares or grey Skills jump in. But longer term, I think I mentioned this last time we chatted. I think that this is where it is all heading. So spot Bitcoin ETF and Spotty three ETFs they were just the first step down the path towards what will ultimately be index based crypto ets. We'll see actively managed crypto ETF.
And what's interesting is that if you go and read that hash decks filing, it's clear they plan on adding additional crypto assets as they're approved. So it's not just I mean, right now it would just be a spot bitcoin and spoty through a combined spot dickcoin and Spotty three ETF, but the way the language is written as such that as other crypto assets are approved, they could add those as well. And from the standpoint again, I'm
an advisor. I'll just tell you that advisors love stuff like this because they love diversification, especially in an emerging area of the market like crypto. And so if you can have a basket of crypto assets, whether it's index based or actively managed, I do think that will be extremely attractive, particularly to the financial advisor Crome.
Yeah, that absolutely makes sense. And it's as you're saying, as a financial advisor, this is what you guys do, and you advise you you know, tell your customers to put into this fund and that fund and so on and so forth right.
Yeah, And what's interesting too, is like you and I know, and you probably more than I, but I know enough around crypto to be dangerous. For sure. Clearly there are tremendous differences between Bitcoin and let's say Ether, Like there's no question about that. You and I both know that. Yeah, But for somebody who maybe is not as familiar with the crypto space, what they want is just exposure to
the category overall and they'll learn. I'm not saying that advisor's just going to allocate to combine bitcoin and ether etf because they don't want to do the homework and figure it out. I'm just telling you that in an emerging category, they may like the idea of saying, hey,
let's spread our bets around here. I don't know exactly how this is all going to play out, so why don't we put a bet on the bitcoin horse, put a bet on the ether horse, put a bet on the Salata horse, so on and so forth, and see how this plays out. Longer term advisors like to approach things like that, and so that's why I think that could be a successful path.
Yeah, that absolutely makes sense. Now let's talk about the adoption of the bitcoin ETFs. We got some big news last week that the Michigan State Pension fund bought arc bitcoin etf Jersey City, which I'm now far from. I'm trying to actually get the mayor on the podcast, and he's like, we're going to allocate some of our pension towards the bitcoin ets This is mind blowing to me. What are your thoughts on that.
I have several thoughts on there, some of which you may have seen come through my x feed. I guess, first of all, just to be fair, the amount of bitcoin ETFs that these pension funds are buying is still extremely small. I mean, it really is a sliver. It's a small sliver, not through portfolios. But what this does indicate is that it's not just the quote unquote Djen
retail investors buying Spot bitcoin ETFs. From my standpoint, we already knew that because we could just look at the thirteen F filings and see that there were advisors and hedge funds and even some institutional investors buying Spot bitcoin ETFs. For some reason, there's been this narrative that is just a bunch of robinhood traders or whatever buying Spot bitcoin ETFs. Here's why I think about this. Even how do I explain this? Even if we were to only include the
assets that are on the thirteen F filings. Okay, So what I'm saying is if we look at the first seven months or so off Spot Bitcoin ETF tradings and we only look at what's been disclosed on the thirteen F filings, which those are investors with more than one hundred million dollars and you know, equity assets, you're still talking about a highly successful debut from Spot bitcoin ETFs. And from my standpoint, and maybe I'm too close to it, because again I'm out there on X and see this stuff.
I feel like some people were just completely wrong on what they were expecting from spot bitcoin ETFs, and now they're like grasping at straws to defend their bad prediction. So I guess I should put that out there more importantly to what you were saying. I think that when you see Michigan in Jersey City, we saw Wisconsin, when you see pension funds like this allocate the spot bitcoin ETFs,
remember these types of entities, they don't make investment decisions. Lately, I've said it's like turning an aircraft carrier right when these funds are making investment decisions. So that should tell you something about how they're now allocating or when they're allocating the spot bitcoin ETFs. And the last thing I'll say here is I still think we're very early. I know I said that last time we chatted, but I mentioned this is a very small sliver of these pension
funds portfolios. We're only now seeing a few of these pensions allocating, right. That's why they're getting the headlines. That's why you see the different cryptomedia organizations write articles anytime Jersey City or Wisconsin or whoever allocates, Because there's still not many out there doing it, but that's a good thing in terms of adoption because we are still very
early and where this is all heading. And I just think you're going to see that adoption continue to increase as we head into the back half of the year and into twenty twenty five.
So Nay, you kind of have this trifecta of adoption happening. You have the et apps, you got these pension funds, endowments and so forth allocating. You've got corporations putting bitcoin in your balance sheet globally. I'm seeing companies in Japan and so forth. And then you have Donald Trump and RFK Junior at the Bitcoin Conference, along with Cynthia Alumus proposing the United States by bitcoin use it as a treasury reserve asset. So you've got countries like El Salvador
and obviously the United States talks about it. I mean, are we seeing the tipping point here for bitcoin adoption that it is no longer to stigma, it is no longer a dgen retail, but hey, we need to put this on our balance sheet.
Well, first of all, I'm going to be very clear or very careful here diving into politics. I learned my lesson. I posted a couple of tweets out politically related I knew better, and that was the wrong thing to do. I learned my quick lesson on that. But if I try to put politics completely aside, you know, think about last week. I thought it was a very monumental statement that we had the Republican presidential nominee speaking at the
Bitcoin conference. If we go back a year or two years, who would have guessed that that would even happen now? You know, I don't know if you watched the if
you watched Trump's speech. I watched it, and I would have liked to have seen him focus much more on the details of some of the talking points that he brought up, whether it be on bitcoin as a strategic reserve asset or how he's going to implement a cryptoregulatory framework like we were talking about before that really would put the US and the driver's seat of crypto innovation. But it is important that he did have the high level talking points now, and I think he should get
a lot of credit for that. I just feel like it was somewhat of a missed opportunity because his speech fell a little more like a campaign speech and someone really trying to connect with the bitcoin community. Now RFK Junior. I didn't get to see him speak, but from what I read, he seemed to connect much more deeply with the bitcoin community, just in terms of his his grasping of understanding really the underlying ethos and how all of
this works. But to your point, this has come a long way, because nobody would have ever thought that bitcoin and crypto ETFs and everything would be in the political sphere this quickly. And so I think that it says something about the mainstream adoption of crypto assets that this is becase becoming more of a mainstream issue, which is why we have our presidential candidates, you know, looking at
this sector. And I'll say the same thing that I said with the pension funds allocating to bitcoin and TFS, I think this is still we're still very early. I think we're going to see more focus in the space from politicians. You're going to see more rhetoric. I think that they realize that that you can't ignore the bitcoin community. You can't ignore the crypto community anymore. It's become too large, there's too much money at play here. It's becoming a
real part of our overall financial system. So I again, I think we're early, but I expect to see more political rhetoric around us. Yeah.
I'm fascinated by that because on one level, I'm obviously investment in bitcoin, so I want to see the price go up. But I'm also just fascinated by the political impact, psychology and demographics and the Overton window and all these things. Right, it's just fascinating to watch a play out. I feel like becoming a crypto investor, I've learned so much about politics, money investing. I guess before I had no clues. Listen to Jim Kramer on CNBC, and.
That's what I absolutely love about interacting with the crypto community. I've said this before. The reason I have so much fun there and it's intriguing to me is just the level of knowledge. I feel like people who are outside of the crypto community they think that everybody within the crypto community is all just number go up, right, But when you actually start having real conversations with people involved in this community, these are people well versed on economics
and monetary policy. They're learning about politics and the interplay there. I've noticed even on the ETF side in a million years, I could have never envisioned just an average person in crypto talking about nineteen be fours and s onees in creation and redemption. And so I love that. I feel like people who are involved with crypto have a real thirst for knowledge. They want to understand how things work, because it takes a lot to understand how crypto works,
in my opinion. But and so maybe there's some soul selection there that maybe you do have a higher caliber of individual operating in the crypto space. I don't know if that's the case, but it's just a very curious community and I love that.
Yeah, it's amazing, I would say, if it's the right statement, my IQ level went up. And then understanding of how the world works since investing in crypto, and I think money is a big part of that, right and what is money? The history of money and what the future may look like with this technology is fascinating. Now we got the Fed telling us this week what they're going to do with interest rates, and this impacts crypto to stock market and so forth as much as you can.
Because you're a financial advice or you got to stay in certain lanes and there's guardrails. What is your outlook. Do you think the FED is going to signal a cut coming later this year or twenty twenty five, and the market's start rallying off of that.
Well, first of all, what I think is interesting is that coming into twenty twenty four, the expectation was for six rate cuts by the market. Clearly the market was wrong on that. Now expectations are that the FED is going to cut rates here at the meeting this week
and then potentially another time later this year. What I'm watching, you know, there's been here recently a very interesting rotation in the market where we've seen money come out of some of the large megacap tech names that have really been leading the market and rotating into smaller cap names,
and you can see that reflected in performance. I think last I check, if you look at the Magnificent seven stocks, something like one point five trillion dollars in market cap has come out of those firms over the past several weeks, which one point five trillion a market cap that's like a full Meta, like that's the market cap of Meta
or something like that. But I think that it's going to be interesting to see how the FED messages the rate cuts because the way I'm looking at things, the stock market is up SMP's up fifteen percent this year, something like forty five percent going back to the beginning of last year. Typically rate cuts would bode well for higher growth stocks, and I would say stocks in general. So I think it's interesting to see the FED cutting into an environment where stocks have done really well. Now,
supposedly the Fed's not watching the stock market. They're watching the economy, and if they're seeing some of the economic data rollover, they're trying to get out ahead of that. Right, they have a dual mandate. They're trying to maintain price stability so keep inflation under control, and they want to
maximize employment. And so if they're starting to see some data in the labor market that's rolling over, they want to stay ahead of that because they don't want the labor market to start going the wrong direct direction and into a spiral to where then you know, it tips the economy into a recession. So I'm saying a lot here would maybe saying without saying a lot. In terms of the market, I think it's going to be fascinating
to watch. Here's what I'll tell you I think is really interesting from a crypto perspective, there's this narrative that bitcoin and ether and a lot of other crypto assets they're just risk on assets. And if that's the case, similar to what I was saying with growth stocks, if rates were to come back in, I could paint the argument that could be beneficial for crypto So I'm really fascinated to watch how different crypto assets react if and
when we get rate cuts. That's going to be, you know, a dynamic that I think a lot of people want to see how that plays out, because theoretically have inflation coming down as well. And I'll add one other wild card in there, Tony, which is that last I checked,
there's something like six trillion dollars in money market funds. Okay, So as rates have come up over the past couple of years, you had a lot of investors that put money into money market funds because pretty much risk free, they could scoop up a five to five and a half percent U Okay, if rates start dropping, short term rates start dropping, obviously, the yields on those money market funds comes down, and I could see a scenario where investors say, Okay, I'm not getting my five five and
a half percent yield. I'm going to take that money my money market fund and allocate it somewhere. Now where might that go? Does it just go into bond ETFs where they're trying to lock in longer term rates and maybe play some capital appreciation of rates come in. Perhaps, But you could also make the case that some of that money goes into the stock marketer goes into crypto. So that's another fascinating area to watch what happens to that money and money market funds.
Nate, you are spot on, and I'll use myself as the anecdotal evidence. I have a financial advisor. Look, I'm heavily allocated to crypto. But for my wife and me, you know, we have a financial advisor, and we put a lot of money into the money market accounts because rates are high. Move some of our stuff in our traditional checking and savings sit there to get the higher rates. But if the rates start cutting, we're going to revisit and say, well, what are we doing with this money?
There's no point in keeping it there if you can get a higher return on assets.
Exactly, and I think you're going to see a lot of investors think that way. Now. Again, to be clear, there's a huge difference in the risk profile obviously of a money market fund versus stocks or crypto, no question about that. But it does it's a catalyst, it's an impetus for investors to go, you know what, I'm not getting that same rate, so just what you were saying, maybe I should consider other options out there. So it's
going to be it's a wild card to watch. But what I've learned over the year, similar with the SEC and not reading the tea leaves, is I try not to read the tea leaves too much with a FED because I always say, nobody knows anything, nobody has a crystal ball. And you know that's why you want to take a long term approach to investing. You want to take a diversified approach to investing, and I've always tried
to take that. TAC doesn't mean you don't follow the day to day moves and what's going on in the market. You always stay educated, but I think you have to take a longer term approach and not get too hung up on short term moves such as the FED cutting rights.
Yeah. Absolutely, but do you think that the markets though it's kind of like, look, Jerome Power comes on says, hey, look, in September, we're going to cut by twenty five basis points. It's not that they have to cut by two hundred or whatever, right, but rather it's a signal to say, easy money cycles coming back.
Quantity Ansually, that's where it gets into the commentary surrounding it, and you know, they'll talk about exactly which economic data points they're looking at, what has their concern right now, maybe what doesn't have their concern. You have to read into some of that. It's not just the headline rate cut, it's the commentary surrounding that, and then more importantly, it's the economic data that comes in subsequent to the rate cut. What do the jobs reports look like, what does the
CPI the PPI data look like. You have to look at all of that data and try to paint a picture, which isn't the easiest thing in the world to do.
And Nay, I don't know if you've seen these charts. You probably have, but as a flintil visor, but historically, and this is not one hundred percent accurate, but there's some correlation that when they're cutting, something is kind of breaking, and it's usually some major market correction coming I don't know what you think about that, And it doesn't happen instantaneously, but maybe in twenty twenty five we see the markets correct because of this.
Yeah, again I tried to read too much into that. I'm sure there's some charts out there that may paint the case that when rate could start happening X, y or Z happens after that. Again, I don't subscribe ascribe to that. I don't have a crystal ball. I try to watch the data that we have, and I know it sounds really cliche tony, but really, just take a long term approach to investing. I think if you do that, you can cut out some of this noise in the shorter term. So look, the FED has to thread the
needle here. What we do know is that when inflation started running really hard, the FED got it wrong, right, they said it was transitory. They were too slow to react. And so I guess what I will say is I don't have a whole lot of confidence that they're necessarily going to get it right coming the other direction. But I think trying to read exactly how that plays out is I just think it's a difficult proposition. I think we just have to look at the data.
Yeah, and the year spot on because another anecdotal evidence, I found that having a ten year outlook on some of my investments, regardless of what the hell the volatilities that's happening this week or this hour, next month or this quarter doesn't matter because I'm just compounding and letting
it grow. And I've done it with some of my investments, and I look back and it's like, you know, I save myself some sanity and have some peace of mind by not looking at every chart and every volatility marker and whatever it may be.
Well, it's the same thing. We were talking politics earlier, and I tweeted out a chart a couple of weeks ago that showed the stock market going back to nineteen sixty and the different presidents that we've had in office, whether Republican or Democrat. And the takeaway from the chart is,
guess what, Over the long term, stocks go up. Yeah, And so people put a lot of mental horsepower into, you know, trying to figure out how the election is going to impact the market, and all of this bottom line is is over the long term, historically we know stocks go up. So focus on.
That absolutely well. Put Nate we'll wrap up on that. Thank you so much, man I appreciate your insights.
Always a pleasure. Thank you for having me