What can a chillions.
I'm Joe Webber and I'm Eric Belchunas.
Eric, I thought the Bitcoin etf dream was dead and then all of a sudden it is like back, and it's back with a vengeance.
You've seen Godfather three where al Pacino goes. I thought I was out and they pulled me back in. Yeah, that's how I feel. Every time this race gets reignited, it's exhausting. That said, it's exciting, and this time around it's got another level of fascination because you've got Blackrock who filed. BlackRock's the biggest asset manager on planet Earth. The SEC's you know, obviously a big part of the government.
Bitcoin had FTX, and now it's sort of coming back as usual, you know, it's it never seems to go away, usually comes back after these sort of big issues that it has. So you've got a bunch of things sort of colliding here, and there's so many subplots. My team, James Sayford in particular, we've been all over this. A lot of it's playing out on Twitter, but we've been writing notes, We've been doing interviews with all the crypto
trade publications. There's a whole crypto underworld that is starting to look to James in particular as the expert on this. We had had some experience with the pro schars futures ETF about two years ago. We called that, we said it would happen, and it did, And now it's come back around and people are like, say, what are the odds? And so we're trying to handicap this thing in real time, and like I said, it's equal parts exhausting and exciting.
To walk us through what we think we know about the state of play. We're gonna have James Seifert ETF analyst with Bloomberg Intelligence, as well as Aphelia Snyder, co founder and president of twenty one Shares. She is in the ETF race, this time on Trean's The Bitcoin ETF race is back. Okay, Aphelia, James, Welcome to trillions. Thanks for having me, Thanks for having us, Aphelia. It feels like we did this in the pandemic. We talked about I think crypto and ETFs back then. I'm curious, like,
what the hell changed? Why is this happening all over again?
Oh? God, so much. It changed. Crypto moves very very very quickly, as market and the markets. The underlying market that is crypto evolves quite quickly. So the market itself is very different than it was two years ago when we talked about this at a like fundamental level in terms of the market participants are and what it looks like, and what volumes look like and what flows look like.
It is a very different market from that perspective, and I think that's part of what's contributing to why this is coming back. I think this most recent crypto winter has actually flushed out a lot of bad actors in the space, fleshed out a lot of like the garbage that kind of gums up the works in crypto markets, and we're starting to see people come out of that and sort of the work that's been done during that crypto winter, and it's part of what's reigniting this conversation.
So to be clear, there are already bitcoin ETFs, but they're futures based. What we're actually talking about here is a spot based ETF. Why does that remain the holy grail?
So twenty one chares as an issue runs about thirty seven of these products in Europe already, all spot based single assets indexes, shorts, all based on spot. The reason that remains the holy grail here is because futures products are great can be great things, but they're actually a little bit different than a spot product. They have a different exposure built into them, so you're dealing with different
factors that impact that market. It can be a really good product if you understand what all of those things are, and that's what it is you're trying to buy it is. However, what it is not is pure play bitcoin exposure. It's like, for example, it's why you saw oil future ETFs go negative. It's because actually there's something else baked into there. From an investment thesis perspective, there's nothing wrong with that, but
you need to actually want that additional thing. And for example, you saw this evolution in gold markets where we went through sort of the future is products and eventually ended up at spot spot. Really is that just pure exposure. There's nothing else in there other than long bitcoin.
And I think at the end of the day, people just want it to track the price, whether it goes down or up sideways. That's all anybody wants, and that's the beauty of ETFs.
And I want to do it with an ETF rather than bothering with whatever crypto while it is out there.
Yeah, I mean ETFs generally speaking, bring convenience, and they're also in the plumbing of a lot of advisors in particular, So the ETF. I think, if you want crypto and you're younger and really into this, you don't really need the ETF, but it can be convenient. ETF can trade on exchange, you can buy any brokerage, and it's in it fits its trust by the advisors of the world. I think that's a big They have like thirty trillion
dollars in assets. They trust the ETF, they're used to it, they're comfortable with it, and that's a format that they like, and I think that's also a big part of the story.
And yet the SEC keeps saying no. How many times has the SEC said no.
Let's go to James on that one? Yeah, yeah, thirty three.
Well, I mean, if you include the futures CTFs they've denied or forced issuers to withdraw, we're in like I think we're seventies, where we might be up there, we're in the fifties at the very least. That's a lot.
So what's changed now, Well.
What Ophelia said is one thing. The other saying is Blackrock which to be to be Frank Ark in twenty one shares were early. They filed back in April of twenty twenty three, and Blackrock just filed in June fifteenth. That's when we first saw their prospectus, and also when they filed their nineteen B four, which is the rule change proposal. That is what we're all here to talk about.
But really what which like I had never heard of until suddenly like nineteen B four.
It's objectively not interesting. It is objectively interesting because what it's supposed to be is a form document that's on the back end of some things that exchanges do. Most people with a normal ETF application, there's nothing in there that anyone would ever be interested in looking at.
But even nineteen B fours get their moment.
Yes, I mean they've had a lot of moments with all these Bitcoin ETF denials. Whenever you see people, if you see news stories or headlines with all the crypto publications, talk about them, and they'll say, oh, it's been delayed again, or it's denied or approved. Every time you see that that's a nineteen before application. I find that a lot of the crypto world over the last few years, didn't
really understand what they were writing about. They've gotten a lot better over the last five years since we've seen a denial after denial after denial, so more of them know what's going on now. But yeah, it's the nineteen B four process, which is basically as Ophelia said, it's an exchange. Applying to get a rule change to make something be allowed to happen is essentially what it is, and that thing in this case is to launch a spot bitcoin etf.
So you can't underestimate how shocking the Blackrock etf filing was. First of all, Coindesk deserves props. They recorded it, They said it was going to happen earlier one day. I did not believe it.
At first.
I thought, well, maybe, but this doesn't make any sense. And then it happened and it basically was shocking. It took me like a little while to process this. We were all trying to figure out why they would do it. Blackrock does not do things lightly. They like to bring a gun to a knife fight. This is a firm
that is very close with the government. They don't want to upset the government, and they could afford to be late in this race, to be honest, So for them to file and be the innovator here and come out of the blue like this again, it was shocking. What was your thought when you saw that filing.
There are a few moving pieces in the market right now, Blackrock is one of them. But when you ask like why now, one of the big things that doesn't come up as frequently as it should in these conversations is the Gray Skill lawsuit, because ultimately, if Gray Scale wins their lawsuit, what do they actually win. What they win is requiring the SEC to go back with a higher
burden approof That's it. They can't win an approval through that process, right, Like a positive decision is not here's let me hand you a you now get to go live. It forces the SEC to basically re explain their decision making process and do it with a higher standard, with a lot more scrutiny. That's really interesting because that's going to come through in the fall no matter. There's a standard judicial process that's going to happen around those filings.
That's really exciting and that changes things in this market. And so if there is and if you read sort of the early statements coming out from that lawsuit, it appears really promising. And so the question is, if you think that that moves the needle, then this timeline actually makes a lot of sense.
This is the timeline so that that inspires you to file back in was the grey Scale lawsuit, which, for just enybody listening who doesn't know what that is, gray Scale has a trust that isn't an ETF and they're basically assuming that the SEC and saying that by approving the futures ETF and not the spot, they were inconsistent.
And when the arguments were heard, which anybody could stream, people were shocked at how more on the side of Greyscale the judges sounded and how on the heels the SEC lawyer was, and our legal analysts went from forty percent possibility Grayscale could win to seventy just on that.
And I think that's sort of again a huge variable because if the SEC loses, that's like some egg on the face there at least if not, you know, they're not going to turn to an ETF, but that certainly would change things.
It raises the standard of proof for what they're saying, right, They're going to have to substantiate things more, which is not a bad thing. I think one of the from our perspective, Look, we never actually exited this race. We refiled last year, refiled the year before, We submit new analysis every time we do. We have an amazing research and quant team, so we actually do a lot of primary research ourselves. We're not just referencing other things around.
You know, how you think about like covariance between different markets, and you know, we've gone back and forth with regulators all over the world around how we sort of manage those statistics and helping them get comfortable with them. So we've sort of been engaged in this all along. But I think when you look at the Blackrock piece of this, why now that timeline actually does make a lot of sense.
And if you couple that with Larry Fink's letter for the year in terms of key themes, crypto being one of them that seems quite internally consistent.
And the other thing that we obviously haven't even touched on, which is the key thread in all of these recent wave of applications, is the fact that when Blackrock filed, they said they were planning to enter or were entering into a surveillance sharing agreement with Coinbase, which all the denials prior all I talked about those nineteen before denials, the one thing the SEC always said was we want surveillance. We want to have surveillance over a market of sin
gifting de size, specifically a regulated market. So this isn't the first time we saw a surveillance share agreement with coin with within a crypto exchange. The Winklevoss Twins applied with this. They said they were going to have a surveillance sharing agreement with their own Gemini, among many other things, and the SEC denied it, saying it was neither a
market of significant size nor a regulated market. So now we have these filings, everyone's saying they're going to have a surveillance sharing agreement Coinbase, which I have written this and I will argue this that coinbase is a market of significant size, especially if you just look at US
dollar trading. If you look at the global markets, they're like less than ten percent, but almost all of that is in stable coin pairs, which are just for those that don't know, it's essentially these coins that say they're peg to the US dollar. There's a lot of manipulation that's potentially happening on some of these other exchanges. The big player in the room is Finance, which SEC is suing. But if you look at just US dollar pairs, Coinbase
is the number one trading pair with bitcoin. If you just look at exchanges that accept US dollars, Coinbase is forty percent of that market. So Coinbase is the market when you're talking about bitcoin priced in US dollars, So I think they are marketed. It's a significant size, which
should satisfy some of the SEC's concerns. Combined with the fact that we have those CME futures, which we have the future CTFs that were approved, all of that points to the fact that the SEC might get comfortable saying they have enough surveillance. The only caveat that I'm looking at right now is basically Gary Gensler and the SEC need to kind of accept that bitcoin trading on coinbase is not a regulated market. That's the one hang up.
But honestly, I don't know what would entail a regulated market in bitcoin, because bitcoin, even Gary Gensler in the SEC would say, is a commodity and not a security. So I guess I would push it back to Aphelia and say ask if she has any comments on or disagreements with anything.
I said, no, I agree with you. I think the question is going to come down to how they define significant size, because it's not actually there's no standard for that. This isn't like a reference to a law where it says it needs to be x right. It's an undefined term, as is the sort of regulated piece of that. Neither one of these are things that actually you're standardized, and so I think it's going to come down to a
few of those points. And I also think if you look at I mean not Torp on this, if you go back to gold markets, which is the closest corollary we have, and you look at sort of the level of surveillance that's expected there, there is an understanding that you can really only surveil a portion of that market
because of the inherent construction of it. Gold markets involve everybody from like your pawnbroker to you know, JP Morgan trading gold bars in both London and Zurich with different prices, Like, how do you deal with that? The answer is you make do with some level of surveillance, understanding it's not going to be complete. And I think that's actually a likely model here.
Okay, So all of a sudden, we have Coinbase as this sort of third party that everybody agrees is going to have ability to have this surveillance agreement with. So why is coinbase so significant to all these resubmission applications all of a sudden, Well, part.
Of it is all the things I just said, right, They are that surveillan sharing agreement, which basically means that like NASDAK, who definitely has when CBOE is trying to enter one nice he's trying to enter one, they basically have contracts where they're trying to enter these agreements officially.
And all it means is like if the regulars come back and say they suspect some sort of manipulation in the market, wash trading whatever, they want to be able to go to a spot market and say, tell us what was happening with the trading on this time so they can back into with exchanges that have KYC Know your Customer and anti money laundering rules. They want to be able to be able to basically like figure out who was doing this and if it was actually happening.
So that's all this is. This is an agreement that the exchanges can go to coinbase and get that information affiliate.
Do you have those in any other jurisdictions.
No, but it's a different market construction. And one of the things that's come up a lot in the context of these sessays is sessays are not really commercial in that way, So there's no incentive to work with one exchange not another. That's not the design. In fact, like realize you would have an agreement like this between equities exchanges that compete with each other, right, This is not
that kind of thing. This is a piece of very wonky back end infrastructure for exchanges, and so I think what you're going to see is coin is coming in is great. I think you're going to see more of them. I actually think you will see more exchanges sign up to this because it actually helps normalize crypto markets to
standard market practice. And I think a lot of the centralized exchanges, especially the ones operating in Europe and the United States, have a vested interest in moving in that direction and they are so I think that's going to be something to look at. I think in the coming months is that I don't think this will end up being a one off I think you will end up seeing a movement in this direction ultimately long term and awesome thing for crypto markets.
And if you're the SEC and Coinbase is going to give all this data enter into these agreements with these different exchanges, and I mean if Coinbase is working with Blackrock, NASDAC, CBOE, we'll call those like sort of the traditional finance companies.
To me, it just seems like possible they would be able to maybe overlook the regulated given all of that, in other words, that's that's a regulated in quotes if you will, because it's it's with all these traditional finance companies and there's no actual bills coming through Congress that are going to regulate it anyway, So can you really regulate it? So this would be the closest thing and
it's good enough. And if you're Gary Gensler and you have you know Biden's going to let you have another presidential election coming up, and you want to basically say you move crypto forward, this would be a way to say, well, I left it with a lot of the traditional finance companies. It's doing well, it's safer than when I started. I checked that box.
And one of the questions, is regulated as what? And this is something James was alluding to, because you commodities regulated as what, and the issue is a regulated market of significant size. If the market is a securities market that has a defined meaning. If the market is a commodities market, now you're getting into a completely different set of things. There isn't necessarily a way to have a regulated market there. So I think it's going to come
down to some of those definitional questions. And it seems like if you look at a lot of the enforcement actions that have come out of the SEC recently, it seems like there is at least an internal consensus within the SEC around how to categorize some things as they definitely their opinion is that this is definitely a security. Whether or not that ends up being the case is neither here nor there. But they are stating an opinion in these lawsuits, right, so you kind of start to
see where their opinion's at. That also introduces some wiggle room here, because fundamentally, if it's not a security, then what is a regulated market? And I think that's one of the things that's going to shake out over the next few weeks, and we'll be quite interesting.
So there's some big names here, the black rocks of the world. You're basically going head to head with them. And I'm curious, what do you think is going to distinguish the filing and that plication that you have, Like say, everybody say SEC stamps everybody, I don't know when within the next year, and everybody's on the in the market, what's your product going to look like versus everybody else's.
So crypto ETFs are not copy paste products of other markets, they're not The types of things that happen inside of crypto are actually different, and there are corollaries, right, So like a fork is kind of like a corporate action, and air drop is also kind of like a corporate action. But there are a bunch of things that happen that are unique, and they're unique to how blockchains operate. And then that's true of settlement, that's true of dust that
accumulates on networks. There's a bunch of like things that can happen here. And ultimately, when we look at our positioning in the market, we've been doing this for five years. Our oldest product is celebrating its five your anniversary in November, which, by the way, was not a single asset tracker on
bitcoin was actually an index product. And we've done this, We've seen all of that, and there's something to be said for an actual experienced set of hands here, which is not true of most of the existing asset managers
in the space. And if you look at, for example, the European market, you know, we've certainly outperformed a lot of the traditional, if not all, of the traditional shops that have entered the space simply on the basis of you do need niche knowledge here working with investors to get them comfortable on where bitcoin fits in their portfolio. A lot of this is quite specialized information. And the way that sales process work is actually very different.
Yeah, I mean there's a lot of ways they can differentiate if we do get one approved, and I just think like, based on everything we've seen from the SEC and Gensler, the SEC will kind of back into legally like whatever they want to basically what Gary Gensler decides, right Like, we keep talking about what is a market of significant size, what is regulated market? I mean you can look at what we had two Cream Future CTFs approved.
We had Bitcoin Future CTFs approved under two Cream and Basically what the SEC said was the CME futures market is a market of significant size with respect to the CME futures market, which to any normal person would read that and be like, am I actually reading this from the SEC? So basically they can they'll back into what they wanted back into. And she said, what is a regulated market? I mean Coinbase, their shares trade on this,
the they trade, they're regulated by the SEC. They're regulated by NYDFS, which is the New York Department of Financial Services. There's money transmitter laws, so they can kind of back into whatever they want if they really want to, just like they can say it's not a market of significant size and it's not regulated, so there's all these things they can do and they have all these backdoors. But
my view, and it's all circumstantial evidence. Eric and I have talked about this and he can talk about a little bit more, but like, it's all circumstantial evidence. And if the SEC is suing Finance and Coinbase, they're going after all these bad actors in the space, and they're focused on all coins. They're focused on Honestly, some of the coins that Ophelia also has ETFs for in Europe. But the one thing that they that Gary Genzer always
goes back to is bitcoin is not a security. He it's the one thing he'll admit in the whole crypto ecosystem that he'll call a commodity. So like, if you're gonna give somewhere, and like Eric said, there's political wins here. Saying that they got a crypto exchange to come under a surveillance sharing agreement with exchanges that are regulated by the SEC. That's a win that he can pull. So there's a lot of circumstantial evidence that would show that
this isn't just like the last time. There's a lot of people on Twitter like it's gonna get denied, this is just like all the other ones. That's not the case here. There is a better shot here. Now, is it ninety percent chance of approval? Obviously not, But I'll let Eric chime in a little bit more here.
Well, we're at fifty percent, which some people are like, oh, that's a cop out. Fifty percent. I'm like, honestly, compared to our ETF expert colleagues out there, fifty percent is pretty high. A lot of them are just naysaying because that's what the SEC recently said, but I don't know. We feel as though there are definitely some things have changed. There's also some interesting back channel chatter. Blackrock is a huge variable. Like I said, they're not doing this just
on a lark. Okay, so there's a there's also I feel the winds of change fidelity Citadel or forming an exchange. There's been this whole schwab is with them, Yeah, schwab. There's been this whole trad five moving into crypto post FTX kind of thing. And this stuff matters. I mean, we're again we're trying to read the tea leaves here and all this kind of factors. And now that said fifty percent also means there's a chance of fifty percent
that is not going to happen. But there's a lot of connecting of dots that would tell you this makes sense, the time is right, and it would be obviously, both on the political and technical side, feasible.
Appelia, I'm guessing you're going to take the over on the fifty percent. Where do you put probability?
I actually don't. I think I agree with you guys on this. I think one of the things are going to see. I think we're still going to see the process take the full two hundred and forty. So we're not even in the first in here, like we've barely started this clock. This is not I think there's this expectation that, like they file, this is now happening maybe like maybe, but it's still going to take my guesses, the entire statutory time if it does.
Days for four months.
Uh, it's two forty.
Nine.
I can tell you the date that I have estimated for a which is final. I have twelve twenty seven as the estimated final date because that's.
On your filing, that's on from April.
Yes, this is a long game.
Could be a good Christmas for Ophelia and her who lives in Rome.
It's it's gonna be a it's going to be a long thing. And so I think for where we are at in the process, which is like a couple of months into a multi month process, that seems fair. And I I agree that I think the odds have increased with these types of arrangements, and I think we're going to see a different kind of conversation and that's ultimately all you can ask for from regulator. And look, we've
done this with regulators all over the world. All you really want is for them to come to the table with an open mind on and have a path forward. The path forward may not be we're going to do this tomorrow. The path forward. Maybe we need these thirty seven things. But if there's a thirty seven thing list, you can at least deliver those things. And I think that's what this does. It puts us in a position to say, Okay, we've cleared one of the things on
your list, what's the next one? Is there a next one? Or are we good?
Let me ask you this. So when we tweet about this, two thirds of the people are aren't thrilled. They're like, yeah, bitcoin, let the advisors buy and I love it. I love it two hundred k. There's definitely people who want the price to go up. Then there's you know, a third or like, whoahoa, guys, you want black Rock to touch your money? This is not your coin's not your wallet. There's this sort of like more purest form of the Bitcoin people who think this is like selling out, like
be careful what you wish for people. How does that play out in the crypto world? Obviously you're the etf issure. In my view, the ETF is the preferred platform for a big, gigantic want of money, at least in America from advisors, and that is what you're unlocking with this. But you are bringing in a lot of traditional finance, and some people would say, well, the whole point of
bitcoin was to be outside of that system. So is there any tension between that sort of ethos, right, and all this happening where and all this thing you can have, Like all these big asset managers have ETFs and all the boomer advisors own them and such.
So the not your keys, not your coin's crowd is a thing one hundred percent and will continue to be and should be. But I think the question becomes this, I do believe in more control over people's financial destinies. That makes a ton of sense. How much of your day would you like to devote to that? Because I'm perfectly happy personally, even as someone who uses crypto regularly, I have no interest in processing my own wire payments.
It's just not a good use of my time. I have other things I would like to do with it, and I'm very happy to pay somebody to do that service. And I think that's what you're going to start to get into with some of these purists, is at what stage are you no longer going to be doing this yourself? And I think with bitcoiny to you have some particular
where that comes in is my mom. My mom is honestly an amazing woman, but she started talking to me about bitcoin in twenty thirteen, which is an absurd concept if you think about it, and she was like, this makes perfect sense. I believe monetary policy should be centralized. Mirk spends too much money hedging. There should be a way to have a global currency one hundred percent spot on all of the economic arguments. I was like, okay, Mom, Like are you going to buy some She's like yeah,
but there's no way for me to do that. I'm not opening a new account with somebody I have never heard of, and at the time that was coinbase and coinbas was much smaller. I'm not going to get engaged with you know, I don't want to do this. I don't want to have to manage my own passwords. She can barely remember, you know, the password for her AOL account, Like this is not this is not her thing, and that's not where she wants to spend her time. But she can see value in it, and she sees value
in participating in that environment. And actually that is the reason I started my company, is because I wanted to be able to help her, like there was nothing to put her in. And these ETFs actually filled that gap. They fill a gap for people who for whom the infrastructure, like the juice isn't worth the squeeze on the infrastructure. They don't want to set that up. And I can appreciate that, And that's true for a bunch of people.
And it's also true quite frankly, like all the way down the retail chain, for example, like the types of crypto custody that are available to an average market participant in crypto is nothing compared to the kind of security we have, the kind of insurance policies we have, the kind of process we have to safeguard assets. It's just not even in the same ballpark.
I mean, we can try me like FTX blew up, a lot of people lost their money. I mean recently, Prime Trust was a trusted member of the community in the US crypto custodian world and they've completely blew up. They lost they lost the access to wallets, they put their client money in and tried to cover it up. And we don't need to get into that in this but basically there's a lot of bad actors in the space. And no, I don't think like bringing TRADFI and normal
people in is going to solve all the problems. But these people are used to being under heavy regulation and doing things right, and I think people that can tow that line a little better than the traditional I would say, crypto crowd. There's a there's a real selling point there.
My response after FTX was an ETF fixes this because an ETF is SBF proof. That guy, you could not do that with an ETF because at ETF's transferable that they take it and it's with a custodian. So and that goes with any ETF, whether it's stocks or bonds. It's the same concept, right. That's why ets were kind of invented to be a physically backed kind of futures contract,
because futures are obviously dependent on counterparties. Anyway, long story short, ETFs are I think a safe structure, and there again the asset manager could go crazy, but the ETF is transferable through the custodian.
Also realize you for example our products, they're all bankruptcy remote Like if our company implodes tomorrow, nothing happens to those assets. They don't even from part of the bankruptcy estate. They're a completely separate thing. And so what ends up happening is what you don't have is something like FTX. You don't find any or voyager or prime trust or BLOCKFI. And look, FDx is a weird one because that's just fraud, and I generally dislike putting them on the same list
as these other people. Like the other people there are issues usually do with credit, FDx is just a fraud case. And I think the difference with an ETF frapper is that you have that transparency, You have these requirements, you have a certain amount of controls process that's built around this. And this stuff is terminally unsexy and no one actually likes to think about them. But when the rubber hits
the road, that's when it matters. And no one cares about any of this until you're in a situation where you actually can't recover your assets and you're starting to realize, hey, wait a second, this thing that seemed boring is actually where I'm going to, you know, hang my hat and find the safe harbor.
Okay, So, just on the heels of this last question, if we've gone through this FTX and these crypto winters and retails backed off and FTX no longer has naming on the Miami Convention, et cetera, no more Super Bowl commercials, etc. And yet the institutions are sticking around and like almost showing up. Finally, how big of a of a market is this?
It's massive and it makes sense the institutions. How long does it take to get an institution comfortable with entering a new market? The answer is actually years. So most of what you're seeing now is actual work that was done two years ago. So during bull market, a lot of people did some work, and through a bear market, those seeds have been growing. It's true on the technology front, true on the institutional adoption front. It's just generically trund
crypto bears are for building. It's a trope, but it's accurate, and I think what you're seeing is you're finally seeing the return on that the return on years of work by people. So I think ultimately, even if retail's temporarily backed off of the space and risk on assets are
not popular across financial markets right now. This isn't unique to crypto, right, this is you're seeing the same thing in VC, You're seeing the same thing in inequities markets like this has been a change, right, It's why you're seeing layoffs at Facebook for the first time and that type of dynamic. And I think this market is massive, but it's just the beginning, and people somehow sometimes link
price to those types of advancements. Price is a lagging indicator of what's actually happening in the space by a long shot. So the question becomes where are we actually We're in a early good spot, and this is what the groundwork for the next bowl market is going to be.
How big is massive? They're a number for it.
That's hard.
But you asking about the ETF market, We'll start there. Well, how much is there right now in global crypto ETFs? Like fifty billion?
I mean, if you totally ets, no, it's less than that. But if you include the gray scale bitcoin, let's include that, it's twenty Yeah, it's around fifty billion. That it's right, it's forty billion, fifty billion. I haven't checked in a past in a little while.
Then I would say five hundred billion that's that's a little more than gold is. But I you know, I don't think all advisors will allocate and and I don't think they allocate a lot, but certainly an institution, some of them would use an ETF. Some would just go straight and rate with an asset manager and not use an ETF. But that's my guess. I would say five hundred billion in like five years.
Do you mean crypto or do you mean bitcoin?
I'm crypto Bitcoin probably a vast majority of that number, though.
Interesting because I think that's the question. Depending on how you think about what the future of crypto is, that number can be wildly different. So, for example, do you believe in the tokenization of the underlying securities, because then you're getting into whole other thing. So the question is the question is how big is the market for blockchain based things and investment products. That's a very different conversation. If the question is is it, you know, specifically crypto
including all the alts, that's different. I think those kinds of numbers for like a bitcoin product makes sense. But I think as you start to add these other line items, there's a version of the world where there's no difference between crypto ETFs and all ETFs because you can actually operate the plumbing on a blockchain. So then I think those numbers start to fall Apart.
From that's a little two next level for me.
I mean, I'm going to take it back and say I'm on the record, this probably will be if we do get a spot bitcoin ETF. There's a chance they all want to at the same time. But if they do launch at the same time, I think the assets the flow into these products will be like the biggest launch we've ever seen. So if we only get one ETF, I think it could beat biddoh, which is the Bitcoin Futures ETF that is currently the fastest launch to a billion,
the largest launch in the first week. I think these products could blow that out of the water, even if some of that is taking money away from biddoh and other products.
And just to just a final thought here, this is why this is so fascinating. It's a race, and usually biddo has ninety five percent of the Bitcoin Future ETF volume and assets, and it only had a three day lead over the number two launcher. So that is why this is utterly fascinating because if you're out first, you know, unless you're a big company, it's it's hard to catch up from that first, the first launch, the first.
To market, Ophelia. I guess we'll have you back in December, if not sooner, maybe Okay, James Aphilia, thanks for joining us on Trillions.
Thanks for having us, Thanks for having.
Us, Thanks for listening to Trillions until next time. You can find us on the Bloomberg Terminal, Bloomberg dot com, Apple Podcasts, Spotify, or wherever else you'd like to listen. We'd love to hear from you. We're on Twitter, I'm at Joel Webbers Show. He's at Eric Balchunas. This episode of Trillions was produced by Magnus Hendrickson. Bye