He's Half ETF, Half Crypto: One Man's Quest to Bring Progress to the Universe

or may not happen, and we've had some rejections already. Yeah, it looks pretty pessimistic right now, but the energy and excite message, you know, I've equated it to the Cannonball Run, which was this is a movie where they whoever could get to New York to l A the fastest got a million dollars. So some people tried to go in ambulances, some people took Lamborghini's, some people dressed up as priests just to get through the cops and whatnot. The filings

for Bitcoin and remind me of that. You see all kinds of deviations and tricks and ways that they're trying to appeal to the SEC's concern and so far there's been twenty six filings eleven alive today, But it's been just a crazy sort of derby to try to get out to be first. Then if you are first, it's probably going to be uh at least the billion dollar e t F, if not a ten billion dollar fund.

And one of the guys in the cannonball run is actually here with us today, one of the newest entrants who has a very clever and interesting way to try to get through the sec His name is Matt Hogan. He's at bit Wise Asset Management. How do you know, Matt. Matt is kind of an e t F analyst pioneer. When I was started covering ETFs in two thousand and six, there really was no model for being an e t F analyst except for Matt Hogan, Dave Nateigg, and a

couple of guys who kind of aren't around anymore. Um. But Matt and Dave in particular had an e t F podcast and I listened to it religiously. They were talking about flow in and out of junk bond ETFs ten years before anyone else cared, and I learned a lot from them. And so Matt has also went off to basically run the inside et F conference which is that we've been there. Yeah, that's the way I went and recorded all the people and you found you got

obsessed in the ice cream truck from Deutsche Bank. I mean, yeah, not um, some of the marketing is getting really crazy there. But Matt essentially is one of the most well known E t F analysts and thought leaders in the space, and boom about I don't know, six months to a year ago, dude went crypto. He went crypto soccer. Let's talk to him on this week's episode. Matt Hogan, who went crypto? Okay, so, just in case you've never heard of the bitcoin, it's this thing. It went up really

really high and then it came down. And that was when Matt was like, this seems like a good idea. Yeah, yeah, you literally went in when bitcoin came down in what January? I think I'm largely responsible for the fall, at least at least responsible. Now. There's nothing like jumping in trying to catch a falling knife. So so, what what did you see? What did I see? It's I'll answer that in two ways because there are two sides to it. So on the one hand, it's not like I had

just jumped into the crypto space. I had been following it for a long time. We had actually had the Winkelvy Twins at our conference. I think in twenty you can't talk about bitcoin without talking about that. You have to talk about They're always, they're always both. The's never one that's well, you always have to see one but and then you can just factor it. But um, so I had been I've been interested in the technology. I think there's a legitimate case for a non sovereign store value.

I think some of the smart contracting technology is interesting, important and possibly transformative. But I had gotten sort of to the end of what I wanted to accomplish for the core of what I was doing in E t F s right, as Eric said, when I got into E t F, there was no framework for analyzing E t F, there was no one following flows. Dave Nodding and I built the first et rating system. I probably gave an E t F one on one presentation. You're

like Eric, Eric, I'm pri Eric. That's right. He's a better, younger, more handsome version of him. He's the Woody Guthrie to my Bob, kind of generous, all supportive. Um But but I was looking at what to do next, and what I wanted to do. What I love to do is I love taking things that are complex and opaque and that people don't understand and trying to help make them simple, easy and digestible for investors, particularly when I think it can have a positive impact on investor portfolios. So I

looked at all the things that were out there. Actually ended up with two things I was really considering. One was crypto. The other were options strategies, both of which I think can be additive to portfolios. But Crypto had the most potential for sort of transformative effect, the most interesting disruptive potential, and also the worst existing analytics and

educational material reals surrounding it. And I thought I could help explain crypto to UH, to investors, to advisors, to institutions, to family offices, and that's what I've been doing for the last six months. I'm guessing you have had a lot of meetings. I have had a lot of one understands what's going on, and everyone wants to learn. Everyone

will take your meeting to talk about crypto. That's absolutely true, UH, and you get you get from people who love it, and I just want to talk about how great it is to people who think it's actually worth less than zero, which is an interesting perspective. So that that spread that margin between those two sides, you could say that there's um full crypto, maybe a little half crypto, and then

just anti crypto. Let me jump in on this um to go full crypto, I think is when you see somebody sit down and try and say something like your mind is like in the horse in the Age of Horses, and I'm talking about cars, like kind of weird stuff like that, like evangelism, hardcore, the kind of stuff that I think sort of scares the sec especially when you bring in like monetary policy and all kinds of stuff

like that. Right, yea overthrow, absolutely absolutely so. And people who are predicting bitcoin prices will be a million dollars and six months are how bigcoin? Where are you on zero? How crypto? How crypto? Give us a rating? Well, I'm

probably middle crypto. I'm probably middle crypto, probably probably crypto, which is to say, I believe that it has the potential to have transformative effects on various parts of the financial ecosystem, and I believe it has the potential to be a legitimate store value, but those aren't proven, and there's a potential that those don't pan out. And let me ask one question about this. I think that the energy and the resilience of bitcoin is really what has

gotten me to be someone of a believer. Every time it should be dead, it comes back to life and you meet people. It's got such a underworld that's enthusiastic. It does remind me of ets in a way, or passive investing. Here's the one problem I have, Like say, marijuana is on the rise in terms of investing, I literally smell more pot on the streets lately. I can literally smell it or see it, like when these things emerge from the underground. Normally you can like see them

around you in your life. I'm still yet to meet anybody or know anybody that's used bitcoin as a currency, and I thought I would. Yeah, I don't think it is a currency. I think I think you're expecting the wrong thing, Eric, because there are various reasons it's not a currency. The transaction rate is slow. It's actually a taxable event every time you buy something with bitcoin. So if you went to buy a cup of coffee with bitcoin,

that would be a capital gains taxable event. That's not an experience anyone wants to have, So you're never if you're expecting to see it in your daily life and you live outside of South Park in San Francisco, uh, you will not have that experience. Now, if you want to come out to my office and go out and buy a latte with ethereum, you can do it. But

that's a unique bubble situation. So what what you should expect to see is you should expect to see it fulfilling the role that gold has an investors portfolio as a non sovereign store value. You should expect to see it start to chip away at the parts of the financial ecosystem that are so grossly overpriced and indulgent, like like international transfers of money and remittances where Western Union is charging eight or nine percent and you can do

that with crypto for pennies and instantaneous settlement. It's always the case that new technologies disrupt the fattest part of the ecosystem where they can have a ten x reduction in costs. That that starts at international remittances. It might start at international trade transfer, it might start things like s grow for smart contracts, all of which are wildly overpriced. So you're gonna see it in a professional setting long before you see it in a sort of retail setting.

I think retail settings could be ten years from now. But let's take this investing now. Okay, so let's say it's used as a commodity. I want in. I read a book on cryptocurrencies on on a plane ride or bitcoin rather and the details to get a wallet and set it up. We're pretty numbing. They turned me off. It was too complicated. So I get the need for a fund? What is that? What you do? Now? You

have a fund? It's not an e t F for a mutual fund, obviously, it said, what a private fund that offers a convenient way for people to get exposure? Key talk about that. Yeah. Sure, So we launched the first cryptocurrency index fund. It's called the Hold ten Private Index Fund. It's available to all accredited investors, anyone with two hundred thousand dollars a year and income or a million dollars in assets. It holds importantly, not just bitcoin,

but the top ten cryptocurrencies weighted by market cap. Uh. Those capture about eight to eighty five percent of the market. What are those ten. What are those ten? They are bitcoin, ethereum, blight, cooin, bitcoin cash, MA, narrow Dash. I'm leaving out a few. Ripple. Ripple is in there, absolutely, and they change that proves only when you can rattle all those off. I think it might through. Yeah intentionally. Yeah, the seven was waiting for you to suggest ripple and then agreeing that it

was in um No. But I think that's really important, right, Like buying just bitcoin would be like buying just a o L during the start of the tech boom. This is an early stage technology. We don't know who the winners would be. It could be that the first move like Amazon dominates. It could be that bitcoin is my space and there's a Facebook that you have to emerge. So having a diversified exposure is I think a better

outcome for investors. And we make it easy, relatively cheap in the crypto space and convenient for people to do that by investing in our fund. And we have hundreds of investors and millions of dollars in assets. How similar do you think what we just lived through with the bitcoin going to twenty thousand and last December and then coming down and you know who knows where it is

and where it will go. How similar do you think that was to to I don't think it was similar to in that in everyone had an overweight to technology and their portfolios, and today, um, almost no one has an overweight to crypto and their portfolios. There are the dent crypto people that do, but our estimate it in our fund as people have but about two point three percent of their liquid net worth invested in the crypto markets, which is not the same case as it was in technology.

So look, crypto has had I think it's six or more draw downs. This is actually not abnormal. Even if you look back at some other sort of speculative assets that were reborn, like gold after we went off the gold standard, it had large ups and downs. Um, I don't think that was. I think we're actually a long way from that sort of hysteria. I think that was maybe you just described what sounds like a good as a class for a hedge fund. Right. It goes up

and down, It's very volatile. There's some concerns. This is what the SEC is concerned about. Should what you just describe be democratized via the et F? Oh? Absolutely absolutely, yeah, But let let me let me let me, let me let pretend on the se C commissioner. Sure, yeah, okay, it's just got really interested in, Mr SEC commission I don't know what my lawyers would say about this, UM

I would say two things, right. So, so first, on the one hand, people already are getting access to crypto and bitcoin, not just through funds like ours, but there are more accounts at coin based than there are at Charles Schwap. So people are accessing this space with limited education in unregulated vehicles at an expanding rate, and if we wait long enough, that number is just going to

get bigger and bigger. All of those people would be better in a vehicle that have been vetted and approved by the SEC, with requirements around disclosure, with clarity around trading costs, all the other factors that come with that. So that's that's that's one big piece of it. The other big piece of it is why should investors want this in the first place? And the answer to that

is just math. If you take away the emotion from crypto, if you stop thinking about it as this asset, that's people are a pent in or down the rabbit hole or whatever, and you just look at the data. It is a highly liquid, high return, high potential risk, low correlated asset. That's a magic combination. And even a one percent allocation to crypto in your portfolio if you rebalanced it the way an institution would since would have boosted

your sharp ratio by on a portfolio. So historically it's been a great portfolio, diverse fire at very low levels, and we think all investors, not just rich investors who qualify for our funds, should have have the ability to access that. Mistress Easy, what do you say to that, Well, I personally agree. I'm very liberal with this. I just think that it's going to be called a bitcoin fund that you're totally not, Mistress ec I know which is good. Now,

I'm Hester Pierce here. Hester Pierce is the commissioner that has dissented from the rest of the commission on this, and I agree, and I called a wolf and wolf's clothing. It's literally called a bitcoin fund. People know at this point, No, it's kind of uh, look, it's not large cap stocks, it's e t f s like the oil fund. I know you work at John hilland now that to me are a wolf in sheep's clothing. Um. I also think that there's triple leveraged e t F that are more

volatile than a bitcoin et F would be. And I think that it's in the best interest of the providers of these e t F to make it work. And if you and Matt as you know, when the e t F structure rocks, you can throw anything in there and it will be the best deal possible because it's going to bring in the richest, deepest liquidity from these market makers who will just figure out the best way

to arbitrage. They will bring liquidity to those exchanges. In fact, the e t F you could argue, will will help clean up and add more liquidity to the exchanges. So it's almost like a build it and and the e t F is actually what should be the proactive thing here, not the reactive ten years down the road. I mean, I will add I will just say in the SEC's defense, they are being very thoughtful about it, very cautious about

the questions that they're raising. Right, so they recently rejected the winklevoss Is application for crypto et F. The questions that they raised in those objections are legitimate questions that deserve very clear answers. I've actually been hugely impressed how fast they've come up to speed on the crypto space from say a year ago. They're dedicating real resources to it. So, um, I think they will get there. I think it is

a matter of when and not if. But they're actually doing a good job asking good questions distill their reservations down to a few points. Well, so you have to think about that. There's probably two sets of reservations that are worth talking about. There's the rejection of the Winklevoss application as one, and then there's the earlier letter from

Dahlia as another. So the rejection of the Winklevoss application had to do largely with the integrity of the underlying markets and the ability to prove that crypto or bitcoin in that case trades cleanly and with no market manipulation. Remember, crypto exchanges are largely lightly regulated or not regulated at all, and the SEC is concerned that those markets may be manipulated.

And the way to overcome those concerns is through greater data and analysis of of of pricing across different markets, of of volume trends, etcetera. And so what what they sort of hinted was, if this stuff comes into the light that might change it, but the way it stands now, no, that's that's correct. They want to see more trading on more highly regulated exchanges. That's the direction the industry is going. I also think additional data analysis around the trading that's

going on in those exchanges. That particular application also is focused on a single exchange. There's actually a broad ecosystem of crypto exchanges, so um, I think I think that will overcome. The earlier letter that the SEC wrote in January or December of this year also looked at things like custody, like accurately striking a NAV, like pricing in the crypto space, all of which our questions, I will say, and one of the things we're excited to talk to

the SEC about. Those are questions that we deal with in our own fund on a daily basis. UM, So we have some experience with that, but but they're legitimate questions. UM. You know. One of the reasons I am also in favor of an e t F is that the current product out there that people are using in place of an e t F. In fact, Schwab even puts it in their et F category is g BTC, which is

a I think it's called the Bitcoin Investment Trust. It's a private trust traded over the counter, and last time I checked, the premiums were between fift and it's sort of like a closed then fund in a way. So in other words, bitcoin could go up and you could go down simply because people sell out of the fund.

Because there's a fixed amount of shares trading. It seems to me that that should factor in because you're gonna get more and more people piling into something that is really flawed, and an e t F would probably i've heard maybe traded a premium of one to two with the kind of market makers that would be involved. What

do you think of that? I couldn't agree more. Uh, And our analysis of the arbitrage possibility in the depth of market in the crypto space, not just for bitcoin, but but across the largest assets in the crypto space suggest it will trade at spreads that are around the average for the e t F industry, which is somewhere between ten and twenty basis points, and that premiums will depend on the direction of of of trading and interest. Um. It's absolutely true. GBTC proves that people want to buy

exchange traded crypto. They are buying a flawed vehicle in that it trades at a large premium and discount. We know from the closed end funds, the history of closed end funds that buying closed end funds when they're trading at large premium is not a winning strategy, and so it would be better if investors could buy at a fair price. And there's two Bitcoin e t n s in Sweden which I've covered a lot. They do find they trade it pretty small premiums. They've seen flows in

and out. They've been around for a couple of years. They made it through that huge spike up and the draw down. Um is that not enough of an incubator for the SEC? I think it's a great proofpoint of what crypto can do. But remember the SEC doesn't care what's going on in other markets. They're concerned about protecting

US investors. And again they're asking good questions. So what I think people are making a mistake when they see these rejections is assuming that this is the end of the road, that there is no way around these objections. I don't think that's true at all. The crypto space moves at an extraordinary pace, the pace that which market makers are entering crypto. Six months ago, there were very few major market makers. Now we have Jane Street, we

have Susquehannah Goldman, saxes in Um. The spaces evolving very rapidly. I think these objections will be overcome quickly and not at the slow pace that some people project. So let's talk about that. Because there's outstanding applications that will be discussed in the near future. What do you think their opportunities are? Where? And where's the white space that the SEC hasn't addressed yet? And if I could, I'll just

read a couple them off, right. So there's the Van Eck solid x bitcoin trust, which could be decided on in a month or less. There's yours, there's Granite Shares Bitcoin, Granite Share short bitcoin, and then Direct has a couple one time and two times which are leveraged, which obviously probably stand a snowball's chance of hell unless one of the other ones get US approved first. Uh who's the favorite? Well, well,

I can't. I can't talk about any particular filing. I'm not going to handicap any particular filing, including our own, so I can't. I'm not gonna make a singular prediction. What I'll say is that we believe and the reason that we filed for a product, that the preconditions to allow an e t F to trade UM exists today. Right, So we think we can strike a nav accurately. We think we can price crypto accurately. We think the underlying

markets are sound. Otherwise we wouldn't have filed for an e t F. I think it's just a matter of how long and how much data the SEC requires to support that to get that launched. So I don't know, Uh, I don't know which of those applications will be filed first. We're broadly supportive of any crypto et F getting launched into the market. We think that an index based product can make sense for some investors. UM. But I think the preconditions to allow crypto et f s to function

exist today. So I gave odds this morning on this and on average, I'd say I I give seven percent chance this year and maybe thirty chance by the end of twenty nine. Am I in the ballpark in your opinion? Oh, I'm obviously more bullish than that. We wouldn't have filed any t F if we didn't think it could be approved in the near term. So, um, we're excited to talk to the SEC and uh and we're we're hopeful for that dialogue. Your lawyer will love the answer to

that question. That was really good. How do you lawyer up? I feel my lawyers getting on my shoulders right now. We saw him. I saw him, he's right there, he's having a coffee. Yeah. These aren't billable hour How do you layer up for this? Yeah? So so they're they're a wide variety of good of good lawyers. We filed our our et F with better price, but really it's about just getting involved well with the SEC and talking with them, you know. As as we mentioned earlier John

Highland as part of our team. John launched the first Crude Oil Future zt F, the first natural gas ETF. He has a lot of experience going first in the crypto space. Um, but we just filed. We we haven't engaged with them. We're we're looking forward to that. And what kind of dialogue do you expect now that you're on the other side of the WINKLEFI hearing? Like, what what what kind of questions are you preparing for? Yeah? So, so the thing that we can do that we hope

will be helpful. Uh, And I don't know because I haven't sat down with the SEC. We have an extensive amount of data, you know, we pulled data from all major crypto exchanges around the world, so we have a lot of analysis about pricing in crypto and how true the sort of law of one prices and with the crypto So I think I think analysis on around the quality of the crypto markets is something that we can

add value to. And we also have this experience running a fund and striking and have and serving investors in pricing crypto that we can talk about. Again, I don't know how helpful those things will be, but I think they're informative to us. Your fund, right, which you have said, has been called the vanguard of crypto currency, right, Okay, and it does charge two point five Yeah, that's that's not very vanguardian. What do you say to that. I

don't know, that seems pretty um. Hedge fund, well, a hedge fund with yeah, yeah, let's be clear, hedge fund would charge two in twenty last year, are are our fund was up? I think over the last twelve months the index that is behind our funds some of this is back tested data sum is live is up a thousand percent, so that would be a two expense ratio, which is a lot more than two word in a hedge fund structure. So why is it two and a half percent for regular accounts and two percent for counts

of a million dollars or up. The answer is that the crypto market is a nascent market, so the costs and crypto are substantially higher. Custoding crypto on an institutional basis is really not cheap. All the audit tax, et cetera is not cheap. It is expensive VSA v A. You know an smpt F obviously, but in the crypto space, two percent is or two and a half percent is

actually on the lower side of average. Speaking of Vanguard, I know one of your idols and somebody who's been very influential in her career is John Bogel, Vanguard's founder. He was asked about bitcoin. He's been asked a few times. I think reporters just do it to troll him to see how how far he'll go with his answer. One of the ones that stuck out with me is he said avoid it like the plague, and he said some other ones we asked him if Vanguard whatever launched a

bitcoin fund, and he said, over my dead body. So he's got these colorful, hardcore answers, how do you marry those two things? Somebody who's been so strong in the passive world completely kind of crapping on your It's the Matt Hogan paradox, mat paradox. Well, I'd start by saying, didn't he say the same thing about e t f s. He was extremely negative about e t f s, and I maybe called them weapons of mass destruction or there

were other fantastic terms. He is a hero of mine, and we've seen similar negative comments from Warren Buffett and other investment heroes that we all look up to. Look, it is a disruptive technology. It is divisive, it is new. Often when disruptive technologies come into uh come into being, they're dismissed by a large portion of the population. If they were immediately embraced by everyone, it wouldn't have the risk reward payoff that it has today. So I'm not

all that surprised. He also, I would add, and this is directly relevant, he's not a fan of commodity investing either. He likes assets that have cash flows and returns and crypto. Unless you're talking about staking rewards and emissions and air drops, it doesn't have those same cash flows in return. So I think a lot of where he trips up on is the same place he trips up on commodities. But but you know, I think, I don't know, five ten years from now, maybe he'll come around. Um, I gotta

ask about the filing. Do you have a ticker in mine? Because I know it's you know, it's the biggest thing in this. Also, somebody said yours is called the hold index. Why isn't it h O D l Yeah, So I can't talk about our filing. Here's a little lawyer. I can't talk specifically about our filing. We have talked about how much fun we are going to have selecting the ticker for it. We are going to get all available tickers and put them on a wall and run through

them until we find the exact right one. I do know who has reserved the whole h O d l uh ticker, and so I hope to have a conversation with him. That would be a nice one. But um, I don't know, do you guys have one in mind? No comment, my lawyer says, I can't say you're the king of tickers, Eric, I'd have to think coin is good and it's the the blockchain et f used coin with a K. That's kind of a cool one um try and kind of hard in my opinion, Eric, change

that letter. We could go with, Eric, just put it out there, celebrity adorsement. So let's play this out. Say there is say you get approved first, right, good for you. You're in there for your ticker is h O, d L. How much room for other crypto or bitcoin or or etcetera products? Et products? Do you think there is? Yeah? So I think there will be a lot of single coin products, at least because I think there's obvious demand for Bitcoin and ethereum and a few other single coins.

We think there are other indexes that are interesting and valuable. We're just about to launch mid caps, small cap, and total market indexes covering up to a hundred coins. There are also strategies that we think will be valuable. Look, this is a three billion dollar market today. We think it could be many many multiples of that if it becomes a couple of trillion dollar market. Will there be space for equal weighted crypto? Absolutely? Will there be space

for actively managed crypto funds absolutely? Will there be space for momentum crypto funds? Absolutely? And I'm not giving away the store. Everyone is thinking about this. These trends are obvious, and I think there'll be a lot of products out there. So do you ever think about if if all this were to go sideways? Yeah, what does that do to the et F landscape? If if it were approved? If what do you mean by go sideways? Unforeseen events and investor confidence wins? Uh So, So I think that's an

extraordinarily unlikely scenario if it's approved. Rent, If it's approved that the two black swan potential negatives that are out there that we think about a little bit are regulatory bands of owning particular crypto assets. Right, so, there is a history. It was once made illegal to own gold in the US many many years ago. You could imagine that scenario. In that case, the fund will just divest of that particular crypto asset. There will be no harm

to investors. UM. The other possible thing people talk about is a hacking of something like the bitcoin network. UM. I would say that it's been out there for ten years. It's the most obvious honeypot for hackers in the world with hundreds of billions of dollars in value, uh and and and bearer instruments. It hasn't been hacked, so we feel confident that it will stay that way. But obviously that would be a negative for the market. UM, let's talk quickly about et s. You've done a couple pieces

of work that I have just found great. The world's Cheapest portfolio. You you came up with this. Uh, this is where you take the cheapest TTF and every asset class like a legit portfolio, and you give the the asset weighted fee. Right now, I think it's six basis points five, it's down to five. Uh, it kind of goes down about a basis point Yere are we headed towards a free portfolio in a couple of years or is it? Is it going to top out at four

or five? I think it will top out at a couple of basis points because I don't think people trust free in asset management. I think people if you're giving them free asset management, they wonder how you're taking Yeah, exactly like like the robin Hood exchange. People know that there's some way that they are making money. People would rather be stabbed in the chest than stabbed in the back. UM, and that's awesome. So and we discussed this a lot.

Right now, Passive is about thirty of fund assets, which means it's six percent ownership of the stock market. So thirty Where will it be in ten years? I think it'll be fund assets and whatever the stock market. Absolutely, UM, Vanguard and black Rock are a duopoly. They're they're not taking in almost all the money out of seven asset managers. Will this continue or do you think, uh, there will be some kind of consolidation or something that like what

could stop them? I think what could stop them is networks that have distribution enforcing that distribution like Charles Schwab raising the price of other asset managers to to to access ETFs on their platform and keeping more assets for themselves. So I think all assets will default or most assets will default to extremely low cost beta vehicles as the core of their portfolio. But they might be captive within distribution networks. Morgan Stanley might launch its own products instead

of outsourcing them to others. That's the only possible way that that trend, that that trend could could be reversed or at least slowed. Bogol told us in our interview that what's he's running in his new book is that there's going to be mass mutualization of the big financial companies. In other words, they're all going to have to convert to Vanguard's mutual ownership structre or UH consolidating and lowering fees will not be enough. It's too late. What do

you say to that. I love that vision. Um, I don't know. That's an interesting question. Look, I think Black Rock has shown you can be very profitable even with an extraordinary amount of low cost assets. I think you're gonna see more people follow the Black right Rock paradigm of Barbell strategies with an extremely low cost core that they use them essentially as a marketing expense to attract investors, and then some high cost UH special sauce that they

throw on top. When does Crypto make it into the world's cheapest portfolio, It's going to raise the price a little bit. Look, uh, once once we once we launch an e t F. Look, the thing about crypto is, even as much as I love it and as much as I think it's important and additive to her portfolio. It should be uh, you know, one to three of your portfolio, no more, and you should diligently rebalance it if it ever exceeds that target band. So will it

come into the world's cheapest portfolio? Absolutely once a diversified crypto product is launched, but the allocation will be appropriate for investors, which is to say, about one whatever E t F gets approved in the crypto space, what do you think the first day inflow will be. That's a good question. Let me add on to that while you think, which is that the record to the fastest to a

billion is g l D took three days. Uh, b b JP just came in second in about a month, and then bond is third two and a half months. So that's just to tell you how hard it is to get to a billion takes a long time. Would crypto what a what a physically backed or coin based back crypto et F be able to get to a billion in less than three days? I don't think so.

I don't think so. I think uh, there is significant pent up demand for regulated exchange traded crypto exposure, but I think most of the money is still in the learning phase about crypto. The advisors, family offices and institutions were talking to right now are either in the dip their toe phase or they are still in the learning an education phase. So depending on how long it takes, how much pent up demand there is, that'll answer that question.

But if it were soon or right now, I think people are still investigating and learning more than they're all the way in. I want I want to do a quick speed run. Um, how many people are in your fun how many uh six plus LPs? And how much money in dollars was not in dollars? We've had over forty million dollars in influence. Do you get paid in crypto? No? Why not? You have too much basis risk versus your

daily expenditures. How many people do you employ now? We have fifteen people on our team and we're hiring a few more. How do you talk to your kids about what you do? My kids love three kids, right, yeah, yeah, yeah, so they how did you describe this when you left et F and went crypto? They were very suspected first, but they have come to realize that I'm now the cool dad in the family, a cryptocurrency asset manager. My my daughter Magnolia talks about digital money. That's what she gets.

And they fully like the idea of digital money. It seems native to them and obvious. And you're one of I counted six people this year alone. That's that's gone from the e t F world to the crypto world. What do you make of this and are there similarities that would attract somebody? Absolutely, there are two huge similarities that are really important to understand. One disruptive to the status quo and the financial ecosystem. E t f s were that, and they have disrupted mutual funds and other

parts of asset management. Crypto is that too broad swas of the ecosystem? And Two, at their core, a lot of what they're about is disintermediation. The reason e t f are low cost was they disintermediate a lot of distribution cost. That's the primary advantage of e t f s. They cut out a lot of junk. Part of what crypto does is it disintermediates huge parts of the financial ecosystem that our rents seeking and just distracting money from the population. Okay, So closing question, I want to ask

on Eric's behalf. He goes to some conferences sometimes and you guys, do the et F smackdowns. Eric doesn't win. Yeah, he actually doesn't even come in first or second. Um, you've you've seen, uh, you've won, I've heard I have one. Eric doesn't mean you win. I have one on Eric's behalf. How can Eric improve his game? Yeah, so the first is got to be fund selection, Eric, fund selection. You went with the marijuana e t F. You get you get attracted by these that seems like it could have.

You get attracted by these sexy, exciting, shiny objects. Shiny objects and not things that can fundamentally improve people's portfolio in the way. Let's say a crypto a t F you just got smacked down. Let me smack him down. In January. The one you won with was by, which is a sort of private equity fund that just looks for public stocks that look private equity issue. I mean, come on basis points, this drove Todd rosen Booth crazy

that you won with this. That's why I think it's more show to tell that Eric has still been out of shape over this. You still seem a little He did have a cheering section. I'll tell you what, Eric. Before next inside E t S, we'll do a two day offsite teach you on how to pitch these e t f s in front of a large You're gonna be by Mr Miyagi. I will be, I will be. Okay, I'm here, all right, it's a deal. Finally, can't wait

to see you try and do a crane kick. Alright, Matt Hogan, thanks so much for joining us in Trillians, Thanks for having me, Thanks for listening to Trillions Until next time. You can find us on the Bloomberg Terminal, Bloomberg dot com, Apple Podcast, and anywhere else you want to listen to fas we'd love to hear from you. We're on Twitter, I'm at Jewel Webber Show, He's at Eric Caltunist, and you can find Matt Hogan at Matt Underscore Hogan with a You or at bit wise Invest.

Trillions is produced by Magnus Hendrickson for Jessica Levi is the head of Bloomberg Pockets. Bye.