WEBVTT NOTE This file was generated by Descript 00:00:00.145 --> 00:00:03.204 On today's Public Keys at the New York Stock Exchange, Bitcoin ETFs rack 00:00:03.244 --> 00:00:05.765 up a $2.97 billion outflow streak. 00:00:06.046 --> 00:00:09.426 Everything you need to know about margin trading and the DTCC names 00:00:09.466 --> 00:00:12.524 the first public blockchain for its tokenized securities platform. 00:00:12.844 --> 00:00:13.565 I'm Jen Senesi. 00:00:13.745 --> 00:00:14.825 Dave Laval is with me. 00:00:15.006 --> 00:00:15.785 Let's get into it. 00:00:22.979 --> 00:00:23.839 Happy Monday, everyone. 00:00:23.940 --> 00:00:27.440 Today's episode is brought to you by Kraken Pro, regulated spot margin trading. 00:00:27.499 --> 00:00:29.199 It's finally available to US traders. 00:00:29.559 --> 00:00:31.119 Size your trades to match your conviction. 00:00:31.240 --> 00:00:32.799 Trade margin on Kraken Pro. 00:00:32.959 --> 00:00:35.079 All right, let's dig into where we are this morning. 00:00:35.440 --> 00:00:38.839 Dave, I am so happy to have you here as my cohost today. 00:00:38.860 --> 00:00:39.579 Happy Monday. 00:00:39.639 --> 00:00:40.120 How are you? 00:00:40.339 --> 00:00:40.540 Happy Monday. 00:00:40.659 --> 00:00:41.440 I am so happy. 00:00:41.479 --> 00:00:43.620 Consensus is so much fun cohosting with you, so. 00:00:43.659 --> 00:00:43.819 Ah, 00:00:43.940 --> 00:00:45.339 it's always a good time to be back on the show. 00:00:45.440 --> 00:00:45.839 Of course. 00:00:45.899 --> 00:00:47.379 Excited to have you here at the New York Stock Exchange. 00:00:47.440 --> 00:00:50.960 We kick the show off, uh, by talking about what we're watching, what we're 00:00:50.979 --> 00:00:53.579 watching going into the week, and, and some of the big events from last week. 00:00:53.599 --> 00:00:58.440 For me, the Jamie Dimon, Brian Armstrong back and forth has been something 00:00:58.480 --> 00:00:59.499 that- Yeah … has really stood out. 00:00:59.679 --> 00:01:04.300 I mean, look, it makes sense that there is uncertainty in the market, 00:01:04.419 --> 00:01:08.179 and there's a lack of clarity, no pun intended, on what the regulatory rails 00:01:08.219 --> 00:01:12.539 are gonna be around stablecoins and yields that are generated from stablecoins. 00:01:13.039 --> 00:01:18.940 Obviously, this is like, has a potential material impact on banks, the larger scale 00:01:19.019 --> 00:01:23.519 banks and also the, you know, smallest regional banks and community banks. 00:01:23.979 --> 00:01:27.559 So until there's real, you know, definition around what the regulatory 00:01:27.579 --> 00:01:29.599 framework's gonna be, obviously, there's gonna be some debate, and 00:01:29.639 --> 00:01:32.999 everyone's gonna be, you know, playing their own cards and making sure 00:01:33.039 --> 00:01:36.199 that they're, you know, positioning themselves as best as they possibly can. 00:01:36.239 --> 00:01:39.239 So I'm not totally surprised by any of this. 00:01:40.079 --> 00:01:43.819 Um, but everyone's waiting to get- Yeah … you know, that definition. 00:01:44.896 --> 00:01:49.056 You know, Dave, something you and I heard a lot from our guests at Consensus was 00:01:49.116 --> 00:01:53.366 that, um, the passing of clarity isn't really gonna affect business, how it's 00:01:53.396 --> 00:01:58.956 being done, but it is really that stamp of approval that is really going to tell, um, 00:01:59.016 --> 00:02:03.436 investors, wealth managers, advisors, that this thing is here and it's here to stay. 00:02:03.936 --> 00:02:07.596 Things like this, when I hear this back and forth, it makes me feel like, ah, are 00:02:07.696 --> 00:02:10.866 we at a contentious point where maybe this doesn't get across the line as fast as 00:02:10.916 --> 00:02:14.976 it needs to, and some of those companies that we were talking about maybe start 00:02:14.986 --> 00:02:17.196 to roll back some of their offerings. 00:02:17.276 --> 00:02:21.416 I, I, I don't hear much in the market that talks about it not 00:02:21.456 --> 00:02:22.736 getting over the finish line. 00:02:23.016 --> 00:02:26.496 Everything that I hear in market is what the finer details are going to be. 00:02:26.556 --> 00:02:26.716 Yeah. 00:02:27.086 --> 00:02:30.216 And so obviously you have a very strong community bank lobby, right? 00:02:30.336 --> 00:02:34.096 Who knows where that, you know, community lobby is being, you know, pressured, 00:02:34.176 --> 00:02:39.416 but that really gets the attention of every senator, every congress, 00:02:39.456 --> 00:02:43.126 you know, member, because that means that there's a constituent base that 00:02:43.136 --> 00:02:44.316 they all really have to care about. 00:02:44.376 --> 00:02:47.456 So if a community bank lobby or community banks in general are making 00:02:47.536 --> 00:02:51.196 noise about an issue, it's very hard for, you know, any member of 00:02:51.236 --> 00:02:53.136 Congress to, to not pay attention. 00:02:53.656 --> 00:02:56.256 All right, so you think we're gonna get to a happy medium on this? 00:02:56.756 --> 00:02:58.216 I, I… Listen, I think it's gonna come down to kind of, 00:02:58.536 --> 00:02:59.616 you know, the ethics provision. 00:03:00.276 --> 00:03:04.126 Um, and then after we get over that, you know, we'll, we'll, we'll… You 00:03:04.136 --> 00:03:06.156 know, there's gonna be some debate on the floor, for sure, and there's gonna 00:03:06.196 --> 00:03:10.076 be a lot of, you know, constituents who are, you know, gonna be ensuring that 00:03:10.116 --> 00:03:13.496 they're, you know, paying attention to, you know, their, their interests, but 00:03:13.556 --> 00:03:14.556 I think we get over the finish line. 00:03:14.776 --> 00:03:15.276 Yeah. 00:03:15.376 --> 00:03:19.056 Uh, two other big stories that I'm watching- Yeah … uh, and inform 00:03:19.096 --> 00:03:21.036 kind of the programming today. 00:03:21.096 --> 00:03:24.796 One, is, I mentioned it at the top of the show, that $2.97 billion outflow- I 00:03:24.876 --> 00:03:26.186 know, I was gonna, I was gonna gr- … from Bitcoin ETPs. 00:03:26.186 --> 00:03:26.696 I was gonna… Yeah. 00:03:26.796 --> 00:03:28.676 I was like, "It's not that big of a deal." Here's the deal. 00:03:28.716 --> 00:03:29.056 Let me tell 00:03:29.116 --> 00:03:29.216 you. 00:03:29.236 --> 00:03:29.276 Okay, tell, tell me. 00:03:29.296 --> 00:03:30.055 All right, here's the deal. 00:03:30.676 --> 00:03:35.336 We got Bitcoin prices to roughly $120,000. 00:03:36.036 --> 00:03:41.496 Um, and that got the overall pool of Bitcoin ETPs to over 100 billion 00:03:42.412 --> 00:03:45.032 And then we obviously saw kind of a retracement in the Bitcoin 00:03:45.052 --> 00:03:46.492 price down to kind of the 70 range. 00:03:46.972 --> 00:03:51.682 And we have, you know, once again eclipsed 100 billion in ETF assets 00:03:51.712 --> 00:03:53.032 in the Bitcoin kind of cohort. 00:03:53.632 --> 00:03:58.352 So we're talking about, you know, more shares coming online and more assets 00:03:58.472 --> 00:04:01.392 being, uh, accumulated in these products. 00:04:01.992 --> 00:04:04.092 You and I have been on the show and talked about Morgan Stanley 00:04:04.432 --> 00:04:05.672 bringing a product to market. 00:04:05.922 --> 00:04:09.152 Mm. That has garnered hundreds of millions of dollars in assets in the 00:04:09.212 --> 00:04:10.652 first, you know, four to six weeks. 00:04:11.112 --> 00:04:12.672 So there's plenty of runway for this. 00:04:13.052 --> 00:04:17.112 I think what people fail to realize is ETFs definitely are an investment vehicle, 00:04:17.632 --> 00:04:19.452 but they are also an exposure vehicle. 00:04:19.532 --> 00:04:23.552 So they are built for investors, for buy and hold, long-term investing, but they 00:04:23.562 --> 00:04:28.332 are also a very, very strong capital markets vehicle for short-term exposure. 00:04:28.892 --> 00:04:30.992 And so you have a non-correlated user base. 00:04:31.052 --> 00:04:34.362 You have this buy and hold, you know, cohort, and then you have, you 00:04:34.392 --> 00:04:38.792 know, very kind of more quick money cohort, and that allows for real quick 00:04:38.832 --> 00:04:40.412 capital allocation coming in and out. 00:04:40.532 --> 00:04:42.892 So I see 3 billion coming out of a $100 billion pool, 00:04:42.932 --> 00:04:44.112 and I don't think much of it. 00:04:44.412 --> 00:04:45.612 So not that big of a deal. 00:04:45.792 --> 00:04:49.112 We are gonna talk to Eric Balchunas in just a moment. 00:04:49.172 --> 00:04:50.892 But curious for your read on this. 00:04:50.952 --> 00:04:53.992 Last week on the show, we took a look at those Bitcoin outflows. 00:04:54.092 --> 00:04:57.492 We, uh, took a look at some analysts that were saying, you know, the capital's 00:04:57.572 --> 00:05:01.532 actually rotating- Right … into some other ETFs, like HYPE, SOL, XRP. 00:05:01.632 --> 00:05:02.392 Uh, what are you seeing? 00:05:02.452 --> 00:05:03.492 How are you watching that? 00:05:03.512 --> 00:05:08.512 HYPE has really been the, the shining star in the ETF stories lately. 00:05:08.872 --> 00:05:09.182 Yeah. 00:05:09.232 --> 00:05:12.231 At hundreds of millions of dollars in assets, not billions. 00:05:12.272 --> 00:05:12.812 Not billions. 00:05:12.992 --> 00:05:17.682 So, you know, I think, you know, there may be a rotation, but, you know, I think 00:05:17.712 --> 00:05:22.092 this is really more of a story of the Bitcoin ETF acting as a capital markets 00:05:22.132 --> 00:05:27.472 tool, acting as an institutional exposure vehicle, and allowing investors, um, 00:05:27.712 --> 00:05:30.172 you know, institutional investors to have high conviction that they're going 00:05:30.192 --> 00:05:34.632 to get a precise price of Bitcoin with quick ability to kind of get in and out. 00:05:35.180 --> 00:05:35.380 All right. 00:05:35.440 --> 00:05:39.420 So let's take a look at the ETF flows now. 00:05:39.460 --> 00:05:43.670 Of course, as we hear this, take it all with a grain of salt, as Dave has 00:05:43.800 --> 00:05:45.640 just explained to us what's going on. 00:05:46.040 --> 00:05:49.620 Uh, Bitcoin spot ETFs are heading into June a little bit battered. 00:05:49.700 --> 00:05:53.920 They shed, uh, $1.42 billion last week, the worst weekly drain since late 00:05:53.960 --> 00:05:58.960 January, capping a brutal stretch that saw single-session outflows of $649 million 00:05:58.980 --> 00:06:02.600 on May 18th and $733 million on May 27th. 00:06:02.960 --> 00:06:04.500 BlackRock's IBIT led the bleeding. 00:06:04.760 --> 00:06:06.340 Ethereum didn't fare much better. 00:06:06.480 --> 00:06:10.020 Spot ETH ETFs logged 14 consecutive days of outflows, with last 00:06:10.080 --> 00:06:12.280 week's total hitting $241 million. 00:06:12.580 --> 00:06:16.420 The outflow leader was BlackRock's ETHA at $188 million. 00:06:16.520 --> 00:06:20.970 Analysts point to the same macro cocktail behind both CPI running at 00:06:21.080 --> 00:06:25.480 3.8%, the highest since May 2023, PPI jumping to 6%, and rate cut 00:06:25.540 --> 00:06:27.420 expectations getting pushed further out. 00:06:27.780 --> 00:06:31.340 And then there's the HYPE ETF that we were just talking about becoming the lone s- 00:06:31.540 --> 00:06:36.100 bright spot with both the HYPE token and US spot ETF products attracting steady 00:06:36.180 --> 00:06:38.480 inflows, outperforming the wider market. 00:06:38.700 --> 00:06:42.160 21 shares of Bitwise have products on the market, with Grayscale updating 00:06:42.200 --> 00:06:45.260 its filing last week, saying it's negotiating to sell shares in the fund 00:06:45.320 --> 00:06:49.540 in exchange for 21 million HYPE tokens. 00:06:49.820 --> 00:06:50.800 You saw that Grayscale story. 00:06:50.880 --> 00:06:54.130 I mean, I, I know you- Yeah … you come from, uh- Yeah … Grayscale. 00:06:54.300 --> 00:06:55.780 What, what did you make of that? 00:06:55.810 --> 00:06:59.270 Listen, Grayscale has been working towards bringing their own HYPE product to market. 00:06:59.480 --> 00:07:02.020 I think in the filing, it also talks about, you know, their ability 00:07:02.060 --> 00:07:03.320 to have a pretty strong seed. 00:07:03.440 --> 00:07:06.360 So I think you're gonna see Grayscale being a real player- Mm-hmm 00:07:06.480 --> 00:07:10.520 um, in this, you know, HYPE ETF race, um, despite the fact 00:07:10.540 --> 00:07:11.660 they're gonna be third to market. 00:07:11.720 --> 00:07:14.580 So I think HYPE is probably the most exciting kind of, you know, 00:07:14.700 --> 00:07:18.720 single token crypto ETP story, um, that we've seen in a while. 00:07:18.900 --> 00:07:23.520 And I think, um, you know, as, you know, um, HYPE continues to, you know… I 00:07:23.560 --> 00:07:24.980 think it's, like, HYP-4 is coming out now. 00:07:25.020 --> 00:07:26.780 It's gonna have something to do with prediction markets. 00:07:26.860 --> 00:07:28.480 You know, there's gonna be opportunity to have more 00:07:28.500 --> 00:07:30.580 development on that, uh, protocol. 00:07:30.800 --> 00:07:31.420 It's gonna be exciting. 00:07:32.180 --> 00:07:34.100 The competition is heating up. 00:07:34.120 --> 00:07:35.040 We're gonna take a quick break. 00:07:35.080 --> 00:07:39.140 When we come back, Bloomberg Intelligence Senior Analyst Eric Balchunas joins 00:07:39.180 --> 00:07:42.320 us to talk more about all things ETFs. 00:07:43.063 --> 00:07:45.224 Ever had a trade you called right but sized too small? 00:07:45.583 --> 00:07:48.023 It happens all the time, and it can change today. 00:07:48.424 --> 00:07:53.683 Regulated spot margin is finally available to US traders on Kraken Pro up to 10X, 00:07:53.884 --> 00:07:55.403 the size your conviction deserves. 00:07:55.723 --> 00:07:58.464 Head to pro.kraken.com and start trading today 00:08:36.045 --> 00:08:38.885 Welcome back to CoinDesk's Public Keys at the New York Stock Exchange. 00:08:38.985 --> 00:08:42.665 Here to make sense of what's been a brutal few weeks for crypto ETFs, the outflows, 00:08:42.725 --> 00:08:46.166 the macro headwinds, and whether the hype race is the real deal, Bloomberg 00:08:46.246 --> 00:08:48.585 senior ETF analyst Eric Balchunas. 00:08:49.286 --> 00:08:49.785 Hey, Eric. 00:08:51.085 --> 00:08:51.605 Eric. 00:08:51.685 --> 00:08:52.466 Hi, how are you? 00:08:52.486 --> 00:08:52.516 How are you? 00:08:53.085 --> 00:08:53.626 Hey, Dave. 00:08:53.685 --> 00:08:53.946 What's up? 00:08:54.165 --> 00:08:54.425 Eric- I 00:08:54.565 --> 00:08:55.946 thought we were gonna see you down here. 00:08:55.966 --> 00:08:56.275 What happened, man? 00:08:56.275 --> 00:08:57.405 We thought you were gonna be here with us. 00:08:57.845 --> 00:08:59.706 You know, gracing us with your three dimensions- 00:08:59.786 --> 00:09:03.145 I do all these crypto things, and it's, like, 95% of the time it's Zoom. 00:09:03.185 --> 00:09:05.225 I just… I don't know, I just assumed it was Zoom. 00:09:05.446 --> 00:09:08.485 If you told me to be down there, I would've said I couldn't do it, 00:09:08.665 --> 00:09:11.365 'cause I have all my stuff in New York today in our office here- 00:09:11.705 --> 00:09:11.745 All 00:09:11.786 --> 00:09:12.326 right, we're gonna go to the receipts afterwards 00:09:12.326 --> 00:09:13.025 which is in Midtown. 00:09:13.265 --> 00:09:14.265 Couldn't have made it physically. 00:09:14.605 --> 00:09:15.286 We're gonna, we're gonna 00:09:15.325 --> 00:09:16.075 get to those receipts, Eric. 00:09:16.075 --> 00:09:18.105 Okay, Eric, I, I need, I need your help. 00:09:18.365 --> 00:09:22.405 Everyone is making a big deal about 3 billion in outflows 00:09:22.466 --> 00:09:23.466 in $100 billion market. 00:09:23.545 --> 00:09:24.505 I made a big deal of it. 00:09:24.585 --> 00:09:28.265 And I was like, "It's not a big deal. This is, like, not at all a big deal." 00:09:28.405 --> 00:09:34.145 So come join me in calming all the, uh, you know, quelling all the 00:09:34.185 --> 00:09:37.185 concerns that, uh, there's something, you know, bigger going on here. 00:09:39.138 --> 00:09:43.038 Yeah, I-- this is-- people-- I mean, you guys work in the crypto 00:09:43.358 --> 00:09:47.938 media, so y- you're even, like, probably more chill than most people. 00:09:47.978 --> 00:09:51.598 But the regular media loves it when bad things happen to Bitcoin, 00:09:52.198 --> 00:09:53.358 and so they're all over this. 00:09:53.418 --> 00:09:56.398 I just saw Wall Street Journal, like, "Brutal outflows." And 00:09:56.418 --> 00:09:58.117 I'm like, this is all so absurd. 00:09:58.778 --> 00:10:01.738 Uh, Dave knows better than anybody, having worked at State Street, that, 00:10:01.778 --> 00:10:06.638 like, you know, we, we, we sometimes see flows out of SPY or VOO or IVV. 00:10:06.998 --> 00:10:08.998 These are the big S&P 500 ETFs. 00:10:09.038 --> 00:10:09.818 It's no big deal. 00:10:10.198 --> 00:10:12.978 I mean, if anything is within, like, five percent of the 00:10:13.058 --> 00:10:14.518 assets, it's totally meaningless. 00:10:14.578 --> 00:10:15.318 It's just noise. 00:10:16.218 --> 00:10:21.038 But I will say Bitcoin has been down-- It, it went on a 50% drawdown, just about. 00:10:21.838 --> 00:10:25.518 And for it to be about even year to date in flows, that's even with 00:10:25.558 --> 00:10:29.978 the recent outflows, it's about flat, is a minor miracle, frankly. 00:10:30.058 --> 00:10:32.578 Uh, normally, when you have these sort of higher, higher volatile, 00:10:32.678 --> 00:10:36.138 I call them hot sauce type strategies, the money is less sticky. 00:10:36.918 --> 00:10:38.398 Bitcoin kind of broke that mold. 00:10:38.478 --> 00:10:40.467 It's almost got S&P 500 stickiness. 00:10:41.078 --> 00:10:44.718 And so when, when I look at the flows since inception, which to me is the most 00:10:44.758 --> 00:10:46.098 important number, that's the one to watch. 00:10:46.798 --> 00:10:48.288 So you look at the flow since inception. 00:10:48.988 --> 00:10:51.318 The cumulative number hit sixty-three billion. 00:10:51.358 --> 00:10:52.438 That was the high water mark. 00:10:52.918 --> 00:10:55.078 It's now come down to about fifty-seven. 00:10:55.858 --> 00:10:57.758 That's pretty close to its high water mark. 00:10:57.858 --> 00:11:02.998 So I mean, considering a fifty percent drawdown, that is extremely durable. 00:11:03.498 --> 00:11:07.278 So if the price were to go back up, if it goes on a nice run, it won't 00:11:07.318 --> 00:11:10.118 take long before it reaches back to that h- new high water mark. 00:11:10.538 --> 00:11:15.418 The other thing I would say is sixty-three billion in two years and change is absurd. 00:11:15.498 --> 00:11:20.618 Again, this was the biggest ETF launch by far, um, multiple times over. 00:11:20.718 --> 00:11:24.418 And IBIT in particular, I think it still has, like, fifty bill- 00:11:24.498 --> 00:11:25.538 fifty-five billion or something. 00:11:26.558 --> 00:11:28.718 Even though it hit a hundred billion in eighteen months, which again 00:11:28.818 --> 00:11:33.098 shatters all records, even if it's stuck at fifty billion until the year 00:11:33.158 --> 00:11:37.038 twenty-thirty, it would still be the fastest ETF to hit fifty billion. 00:11:37.278 --> 00:11:41.598 So it has like four years to just do nothing, and it would still be the 00:11:41.658 --> 00:11:45.838 fastest ETF to fifty billion, which a- again, just gives you some idea 00:11:45.898 --> 00:11:47.438 of how amazing the flows have been. 00:11:47.478 --> 00:11:51.098 So when someone looks at this, it's almost like looking at Michael Jordan 00:11:51.118 --> 00:11:54.478 and being like, "Oh my God, how come he only scored thirty-two points and 00:11:54.518 --> 00:11:56.858 not thirty-four in this one game?" 00:11:56.918 --> 00:11:59.578 Yeah, it's actually a really funny thing when you start looking at the 00:11:59.638 --> 00:12:03.598 actual shares outstanding, Eric, because you had a massive drawdown in price. 00:12:03.698 --> 00:12:08.258 People forget that AUM is a very simple arithmetic of shares 00:12:08.278 --> 00:12:09.698 outstanding times asset price. 00:12:09.758 --> 00:12:12.538 So you've had massive drawdown in asset price, but you haven't lost 00:12:12.658 --> 00:12:16.918 AUM, which is showing that the shares outstanding is continuing to climb. 00:12:16.978 --> 00:12:20.778 And I think you and I would both agree that the real adoption for the wealth 00:12:20.858 --> 00:12:25.658 management market and kind of the advised market hasn't truly got going yet. 00:12:25.698 --> 00:12:28.478 We haven't seen, you know, these products being added to models. 00:12:28.558 --> 00:12:31.818 We haven't seen broad-based adoption by the advisor community, and so there's 00:12:31.878 --> 00:12:33.318 a real opportunity for an accelerant. 00:12:33.708 --> 00:12:36.638 And by the way, that's not including any sort of asset price increase. 00:12:38.413 --> 00:12:38.673 Yeah. 00:12:38.874 --> 00:12:39.773 You, you bring up a good point. 00:12:40.113 --> 00:12:42.714 There's two ways to get assets, either the price of the thing 00:12:42.774 --> 00:12:44.273 you track goes up or flows. 00:12:45.113 --> 00:12:48.673 The reason flows are good is because it eliminates market appreciation. 00:12:48.853 --> 00:12:53.734 Flows are pure sentiment and investors voting with their feet. 00:12:54.213 --> 00:12:58.253 So that's why I think the most important number is cumulative net flows lifetime. 00:12:58.314 --> 00:12:59.613 Again, that's at 57 billion. 00:13:00.053 --> 00:13:01.273 It had a high of 63. 00:13:01.393 --> 00:13:05.293 So you, you'd like it to be up at 63, but it had a huge drawdown, so 00:13:05.353 --> 00:13:07.553 I just think 57's really strong. 00:13:07.893 --> 00:13:10.433 Uh, the other thing I would say, to your point, Dave, is you're right. 00:13:10.994 --> 00:13:12.753 People love to overthink things. 00:13:13.113 --> 00:13:14.893 You just have Morgan Stanley coming in. 00:13:15.354 --> 00:13:20.293 Goldman is about to put out a Bitcoin premium income ETF, and the guy launching 00:13:20.334 --> 00:13:24.473 it was the mastermind of JEPI, which is an equity premium income ETF, which is the 00:13:24.533 --> 00:13:26.733 largest active equity ETF in the world. 00:13:27.053 --> 00:13:30.173 That guy is now applying that thing to Bitcoin. 00:13:30.693 --> 00:13:33.753 Then you've got iShares putting out their own pr- premium income ETF. 00:13:34.174 --> 00:13:37.653 So you have BlackRock and Goldman coming out with new products soon as well. 00:13:38.154 --> 00:13:40.713 This whole Wall Street apparatus is very into this asset. 00:13:41.173 --> 00:13:45.793 That should keep it with at least a, a good amount of future bid offers. 00:13:45.814 --> 00:13:49.453 The only thing I do worry about, and I think this is something where the 00:13:49.513 --> 00:13:55.133 industry itself has to kind of figure this out, is the messaging shouldn't 00:13:55.233 --> 00:13:58.053 only be, "Hey, the boomers are coming." 00:13:58.113 --> 00:13:58.473 You know? 00:13:58.513 --> 00:14:00.553 That, that, that makes it seem more Ponzi-ish, like 00:14:00.613 --> 00:14:01.753 we just need more investors. 00:14:02.354 --> 00:14:07.693 I think the message is that the fundamental purpose and value here is 00:14:07.733 --> 00:14:10.993 that the government is gonna print money like crazy no matter who's president 00:14:11.833 --> 00:14:15.833 And if you want a hedge, something that the government cannot debase, this is a 00:14:15.893 --> 00:14:17.893 powerful asset for that, similar to gold. 00:14:18.293 --> 00:14:20.933 The fundamental story is what they should be talking about more 00:14:20.993 --> 00:14:23.973 because you wanna have investors outside of the ETF apparatus. 00:14:24.273 --> 00:14:27.093 The ETF is gonna get you a lot of people, and it, and 00:14:27.174 --> 00:14:28.613 obviously the message will help. 00:14:29.033 --> 00:14:32.754 But I just think they need to also focus on, like, going back to the 00:14:32.813 --> 00:14:37.094 roots of what Bitcoin is for, how interesting of a technology it is. 00:14:37.413 --> 00:14:38.193 Don't forget that. 00:14:38.233 --> 00:14:41.014 I think the whole thing shouldn't just be, "Oh my God, there were ETF outflows. 00:14:41.153 --> 00:14:45.353 Everything's over." You have to remember, like, that's just one part of the 00:14:45.413 --> 00:14:48.934 whole big deal, and I think sometimes the ETFs became such a big story they 00:14:48.973 --> 00:14:50.433 alm- almost overtook the narrative. 00:14:50.813 --> 00:14:52.153 But that isn't the main narrative. 00:14:52.193 --> 00:14:54.434 It's just like icing on the cake, in my opinion. 00:14:54.774 --> 00:14:55.153 Yeah. 00:14:55.893 --> 00:14:58.693 So everyone needs to calm down, is what, what I'm hearing? 00:14:58.893 --> 00:15:01.713 Well, I, I mean, Jen, uh, he makes an incredible point. 00:15:01.774 --> 00:15:03.913 But the truth of the matter is, like, it's, you know, what do you call it? 00:15:03.953 --> 00:15:04.973 Spicy sauce or hot sauce? 00:15:04.993 --> 00:15:05.193 Hot 00:15:05.233 --> 00:15:05.613 sauce. 00:15:05.673 --> 00:15:10.274 It's not, it's not hot sauce to talk about anything about debasement of currency. 00:15:10.513 --> 00:15:10.633 Mm-hmm. 00:15:10.673 --> 00:15:13.313 And so pop a little Bitcoin into your- Yeah … you know, client's account. 00:15:13.353 --> 00:15:18.813 So I think, um, you know, when things, um, become a little bit more deterministic 00:15:18.893 --> 00:15:22.794 and you have a better, you know, settling down in Congress and you have a more, 00:15:22.834 --> 00:15:27.073 you know, even regulatory infrastructure and there's less uncertainty there, 00:15:27.133 --> 00:15:30.533 I think people will kind of get to a, to a, a less spicy story. 00:15:30.573 --> 00:15:30.833 Yeah. 00:15:30.974 --> 00:15:33.253 But, but hype, all right? 00:15:33.294 --> 00:15:33.373 Hype. 00:15:33.413 --> 00:15:35.173 Talk to… Talk… What do you think? 00:15:35.233 --> 00:15:37.614 What's the asset base in the hype ETFs gonna be? 00:15:37.633 --> 00:15:38.153 What do you think? 00:15:38.193 --> 00:15:42.233 And do you think that this could be the next, you know, hot sauce? 00:15:42.353 --> 00:15:42.673 Yeah. 00:15:42.713 --> 00:15:45.433 Hype reminds me of Hansel from Zoolander. 00:15:46.170 --> 00:15:48.550 Remember, like, he's the hot new model. 00:15:48.570 --> 00:15:50.170 It's like, "Hansel's so hot right now." 00:15:50.910 --> 00:15:55.250 And then Ether and Solana are like Zu- Uh, they're like Zu- They're like Ben Stiller. 00:15:55.290 --> 00:15:57.810 They're like, "Oh my God." I can tell they're getting jealous. 00:15:58.410 --> 00:16:02.070 But yes, this is the hot new crypto, and honestly, crypto probably needed a good 00:16:02.130 --> 00:16:05.810 story like this because, you know, the ETF thing had kind of like flattened out. 00:16:05.870 --> 00:16:07.510 It became like a little bit old news. 00:16:08.030 --> 00:16:08.810 And here comes hype. 00:16:08.990 --> 00:16:11.390 Uh, there have been a couple launches like Avalanche, and I forget 00:16:11.410 --> 00:16:12.650 another one, like didn't do much. 00:16:12.830 --> 00:16:13.009 Right. 00:16:13.270 --> 00:16:14.849 But this one has moved the needle. 00:16:15.390 --> 00:16:17.410 It did something that's very rare with ETFs. 00:16:17.470 --> 00:16:20.090 It came out and it traded, I think, like 10 million the first day. 00:16:20.690 --> 00:16:21.430 That's really good. 00:16:21.490 --> 00:16:22.470 That's like top 1%. 00:16:22.490 --> 00:16:23.850 It's like, okay, good, it had a good first day. 00:16:24.170 --> 00:16:27.890 Normally, they'd be… It sort of like goes down in increments 'cause 00:16:27.910 --> 00:16:30.370 there's a huge like first day, everybody's excited, and then it kinda 00:16:30.450 --> 00:16:31.929 comes down and settles at an average. 00:16:32.370 --> 00:16:35.510 This went up every, every day after for about 10 days. 00:16:35.910 --> 00:16:38.990 Now it's trading like 40, 50 million a day, and there's two of them, 00:16:39.390 --> 00:16:42.030 and they're both up 50-something percent since they launched. 00:16:42.370 --> 00:16:46.730 So you have really h- hot sauce returns and a, an increasing volume. 00:16:47.140 --> 00:16:48.330 That's a very good sign. 00:16:48.350 --> 00:16:51.189 And what I learned about Hyperliquid seems very powerful. 00:16:51.370 --> 00:16:56.250 I really like the idea of the token holders getting paid via the 00:16:56.310 --> 00:17:00.070 buybacks from the fees, because sometimes it is unclear how a token 00:17:00.170 --> 00:17:03.170 actually benefits from the growth of the block- blockchain or the fees. 00:17:03.190 --> 00:17:07.130 And I like that really easy to understand one-for-one narrative of 00:17:07.150 --> 00:17:12.030 like, "Okay, if this thing grows, I get a direct result of that with my 00:17:12.070 --> 00:17:14.310 token." So I, I think it's a good story. 00:17:14.790 --> 00:17:18.030 I think it's a much needed story for the rest of crypto, which had been kind 00:17:18.070 --> 00:17:19.950 of like, uh, floundering a little bit. 00:17:20.450 --> 00:17:25.090 And, um, it also shows that this space is always innovating, right? 00:17:25.190 --> 00:17:28.210 Like you think, "Okay, there's… It's everything's been known," 00:17:28.310 --> 00:17:30.570 and boom, here comes this new one. 00:17:30.650 --> 00:17:32.590 And, you know, it just shows there's people out there who are very 00:17:32.690 --> 00:17:34.410 smart, building stuff all the time. 00:17:34.470 --> 00:17:35.560 That's what I tell people sometimes. 00:17:35.580 --> 00:17:37.330 It's like, you may not like this industry. 00:17:37.370 --> 00:17:39.670 You may think it's like, you know, uh, this thing over there you 00:17:39.710 --> 00:17:41.590 don't need to worry about, but there's a ton of smart people. 00:17:41.630 --> 00:17:43.870 If you go to conferences and talk to people, like these 00:17:43.910 --> 00:17:44.910 are very innovative people. 00:17:45.050 --> 00:17:48.210 There are real business solutions in the crypto world, and Bitcoin 00:17:48.290 --> 00:17:51.670 obviously is, uh, more like a gold, but the rest of crypto is again, 00:17:51.730 --> 00:17:55.090 really like upstart tech companies, and I think Hyperliquid shows that. 00:17:56.530 --> 00:17:58.970 Hyperliquid, the hot new model on the scene. 00:17:59.060 --> 00:18:02.590 What do you think happens to the crypto ETFs when we get, 00:18:02.670 --> 00:18:04.570 uh, ETFs related to SpaceX? 00:18:04.810 --> 00:18:07.910 Do, do you think that becomes the hot new, hot new model and we start 00:18:07.950 --> 00:18:09.090 seeing some capital rotate out? 00:18:10.861 --> 00:18:13.961 Well, to be fair, we've already seen a lot of capital get sucked 00:18:14.002 --> 00:18:18.021 up by, uh, the AI trade in general and the high bandwidth stocks. 00:18:18.041 --> 00:18:22.062 Like, uh, this one ETF, DRAM, came out of nowhere to take in more- 00:18:22.381 --> 00:18:24.102 It's incredible … to get to 10 billion faster than I bet even. 00:18:24.682 --> 00:18:27.561 So this is the sexy, hot new trade for sure. 00:18:28.022 --> 00:18:30.241 Stocks rarely get this hot. 00:18:30.301 --> 00:18:32.721 This is almost like '90s internet hot, right? 00:18:32.821 --> 00:18:34.762 So this is unusual. 00:18:34.841 --> 00:18:35.561 It will calm down. 00:18:35.841 --> 00:18:38.701 The valuations are very stretched, and I think that's a good point. 00:18:39.102 --> 00:18:42.061 I think a lot of people… Somebody had s- talked about how a lot of 00:18:42.102 --> 00:18:46.401 people have spent their gold profits to buy tech stocks right now, and 00:18:46.481 --> 00:18:47.901 I think we're seeing a lot of that. 00:18:48.442 --> 00:18:53.441 So I think Bitcoin feels a little, like, you know, um, just average right now. 00:18:53.942 --> 00:18:57.561 But at some point, you know, things that go down look like opportunities a- again. 00:18:57.641 --> 00:19:02.262 So this hot money will flow from here to there, but I've seen this in ETF. 00:19:02.301 --> 00:19:03.841 I call it the trading crowd and the hot money. 00:19:04.541 --> 00:19:06.081 You don't wanna always rely on that. 00:19:06.201 --> 00:19:09.181 I think generally the bigger, more important thing is the slow money. 00:19:09.442 --> 00:19:09.501 Yeah. 00:19:09.541 --> 00:19:12.701 The advisors who are like, "Yes, let me allocate for 5 or 10 years." 00:19:13.141 --> 00:19:14.361 That's the more important money. 00:19:14.401 --> 00:19:17.181 But sure, the hot money will come in and out depending on momentum, and 00:19:17.241 --> 00:19:21.021 right now I think the AI stocks have, like, all the momentum, and SpaceX 00:19:21.061 --> 00:19:22.501 is only gonna, like, add to that. 00:19:22.522 --> 00:19:25.261 But I think down the road it's that base of advisor money 00:19:25.302 --> 00:19:26.161 that's way more important. 00:19:27.034 --> 00:19:30.894 Eric, thanks so much for joining us, uh, joining us, albeit not in person. 00:19:30.974 --> 00:19:33.194 We look forward to the day when we get- … to see you in the flesh. 00:19:34.634 --> 00:19:34.914 Take care. 00:19:34.954 --> 00:19:36.204 Next time, maybe. 00:19:37.334 --> 00:19:38.094 All right, bye. 00:19:38.174 --> 00:19:38.834 Bye. 00:19:38.894 --> 00:19:44.054 All right, that was Eric Balchunas, Senior ETF Analyst at Bloomberg Intelligence. 00:19:44.440 --> 00:19:46.380 moving right along to our next segment. 00:19:46.420 --> 00:19:49.900 This is 10X, brought to you by Kraken Pro, now with up to 10X 00:19:49.940 --> 00:19:51.740 regulated spot margin in the US. 00:19:51.920 --> 00:19:56.080 Make the right read at the right size with margin on Kraken Pro. 00:19:56.120 --> 00:19:59.000 Over the upcoming weeks, we'll be talking to some of the highest conviction 00:19:59.079 --> 00:20:02.200 traders in crypto to understand what they're sizing into and why. 00:20:02.540 --> 00:20:05.820 But first, we build on last week's segment and unpack more of the 00:20:05.860 --> 00:20:07.800 mechanics with Dave Lavelle. 00:20:08.030 --> 00:20:09.839 Dave, let's get into it. 00:20:09.900 --> 00:20:10.520 Yeah, let's go. 00:20:10.640 --> 00:20:10.760 You ready? 00:20:10.780 --> 00:20:11.000 Yeah, let's do it. 00:20:11.000 --> 00:20:11.900 You ready to talk margin trading? 00:20:11.960 --> 00:20:12.320 Let's do it. 00:20:12.380 --> 00:20:12.820 All right. 00:20:12.880 --> 00:20:15.060 So last week we, we really got the, the basics. 00:20:15.100 --> 00:20:16.030 What is margin trading? 00:20:16.070 --> 00:20:16.080 Yeah. 00:20:16.080 --> 00:20:19.220 What's the difference between crypto margin trading, equity margin trading? 00:20:19.800 --> 00:20:22.200 My first question for you is what separates a professional 00:20:22.280 --> 00:20:25.200 trader from everyone else when it comes to using leverage? 00:20:25.420 --> 00:20:27.600 Uh, I have to be honest, it's education. 00:20:27.690 --> 00:20:29.360 It's understanding what you're dealing with. 00:20:29.640 --> 00:20:33.960 And, um, you know, I always talk about kind of what we saw in the ETF market, 00:20:34.020 --> 00:20:37.180 'cause it's where I come from, and there's a lot of levered opportunities in ETFs. 00:20:37.740 --> 00:20:39.680 You have to know what you own, and you have to know how it works. 00:20:40.120 --> 00:20:43.080 And so there's really kind of a suitability concern, and I think that 00:20:43.160 --> 00:20:47.600 oftentimes, uh, a levered trade for a retail investor is more of an emotional 00:20:47.660 --> 00:20:52.720 trade- Mm … and a momentum trade, when leverage for, you know, an institutional 00:20:52.760 --> 00:20:57.740 investor or an institutional trader is really, you know, rooted in, in, you know, 00:20:57.880 --> 00:21:00.960 totally understanding where your entry points are, where your exit points are, 00:21:01.040 --> 00:21:03.920 how you're thinking about the volatility, how you're tracking the data you have. 00:21:04.420 --> 00:21:06.540 So I think there's, like, a big difference between the two. 00:21:07.000 --> 00:21:09.060 Leverage is great when it's going wro- or going right. 00:21:09.320 --> 00:21:11.380 It just gets really uncomfortable when it goes wrong. 00:21:11.500 --> 00:21:11.660 Yeah. 00:21:11.720 --> 00:21:13.520 We talked a little bit about that last week, too. 00:21:13.580 --> 00:21:15.720 I mean, let's, let's build on that. 00:21:15.960 --> 00:21:19.660 Just watching the space, speaking to traders out there, um, both on the 00:21:19.720 --> 00:21:23.320 institutional side and retail side, what's the biggest mistake you see or 00:21:23.420 --> 00:21:27.540 you've heard of that people make when they start trying to experiment with leverage? 00:21:27.600 --> 00:21:28.480 Just not knowing their out. 00:21:28.800 --> 00:21:29.040 Right. 00:21:29.050 --> 00:21:29.060 Right? 00:21:29.060 --> 00:21:31.740 And not understanding the margin, you know, realities. 00:21:31.800 --> 00:21:36.300 So you put, whatever, if it's three-to-one leverage, you put up your margin, you 00:21:36.339 --> 00:21:37.640 have three times that buying power. 00:21:37.760 --> 00:21:40.900 If you have a drawdown, you need to kind of up your margin to 00:21:40.940 --> 00:21:42.160 ensure you don't get a margin call. 00:21:42.720 --> 00:21:46.540 And margin calls never come at the time when, you know, the retail investor wants 00:21:46.580 --> 00:21:49.490 it, and so then you can put yourself in a really precarious position, and then 00:21:49.520 --> 00:21:53.330 you can end up being, you know, kind of unwound, um, and taking a loss that 00:21:53.340 --> 00:21:54.380 you didn't necessarily wanna trade. 00:21:54.420 --> 00:21:56.920 So the most important thing is really knowing what your entry point is, 00:21:57.340 --> 00:21:59.770 knowing what your risk tolerance is, and knowing where your out is, and 00:21:59.800 --> 00:22:01.000 really being disciplined about it. 00:22:01.080 --> 00:22:05.440 But you tend to not see that with retail investors, and you tend to see 00:22:05.520 --> 00:22:06.900 that with institutional investors. 00:22:07.340 --> 00:22:10.620 Institutional investors or traders that I have managed in my time- 00:22:10.980 --> 00:22:14.540 Yeah … that don't have discipline in the way they trade don't stay 00:22:14.580 --> 00:22:16.040 institutional traders for very long 00:22:17.587 --> 00:22:20.527 Okay, the last question I wanna ask you here- Sure 00:22:20.547 --> 00:22:22.948 is this, this whole segment is about conviction, right? 00:22:22.988 --> 00:22:23.007 Right. 00:22:23.007 --> 00:22:24.887 We're gonna have traders on the, the segment. 00:22:24.968 --> 00:22:27.767 They're gonna be talking about their highest conviction trades. 00:22:27.887 --> 00:22:29.527 People are gonna be listening to them. 00:22:29.908 --> 00:22:32.327 What should people be listening for? 00:22:32.427 --> 00:22:34.867 We obviously are not giving financial advice- Yeah … but what should 00:22:34.908 --> 00:22:38.047 people be listening for when, when they're hearing about these- 00:22:38.088 --> 00:22:38.607 Process 00:22:38.667 --> 00:22:39.767 high conviction trades? 00:22:39.787 --> 00:22:41.668 Of c- we hear it on social media all the time- No … you know? 00:22:41.807 --> 00:22:42.447 Process. 00:22:42.668 --> 00:22:42.688 Mm-hmm. 00:22:42.707 --> 00:22:46.427 I mean, people that I have seen to be the most successful traders 00:22:46.467 --> 00:22:48.027 have a process and have discipline. 00:22:48.387 --> 00:22:50.747 So understand, and this is the questions that we should actually 00:22:50.787 --> 00:22:53.867 be asking these traders that come on, talk to me about your process. 00:22:53.907 --> 00:22:54.188 Mm-hmm. 00:22:54.207 --> 00:22:56.988 It's less about what the actual idea is, 'cause something can be hot in 00:22:57.008 --> 00:23:00.607 the moment and you can ride a momentum trade and you can be very successful. 00:23:00.647 --> 00:23:01.988 But talk about the process. 00:23:02.027 --> 00:23:02.847 What's your entry point? 00:23:02.867 --> 00:23:03.727 How do you think about it? 00:23:03.947 --> 00:23:06.488 How do you kind of put stuff in the funnel and narrow it down 00:23:06.567 --> 00:23:07.488 to what you want to invest in? 00:23:07.508 --> 00:23:09.467 Then how do you know your risk tolerance? 00:23:09.508 --> 00:23:11.827 How do you assess that risk tolerance, and how do you set 00:23:11.907 --> 00:23:13.467 a disciplined, you know, out? 00:23:14.168 --> 00:23:14.707 All right, Dave. 00:23:14.767 --> 00:23:17.927 Well, what a pleasure it was unpacking- Good fun … margin with you. 00:23:18.027 --> 00:23:18.767 Good fun. 00:23:18.807 --> 00:23:22.007 We're gonna have more fun on this segment as the weeks progress. 00:23:22.068 --> 00:23:24.007 Uh, right now we're gonna take a quick break. 00:23:24.348 --> 00:23:26.087 When we come back, Danelle Dixon joins us. 00:23:26.722 --> 00:23:28.883 ever had a trade you called right but sized too small? 00:23:29.242 --> 00:23:31.682 It happens all the time, and it can change today. 00:23:32.083 --> 00:23:37.342 Regulated spot margin is finally available to US traders on Kraken Pro up to 10X, 00:23:37.543 --> 00:23:39.062 the size your conviction deserves. 00:23:39.382 --> 00:23:42.123 Head to pro.kraken.com and start trading today 00:24:24.831 --> 00:24:28.931 To CoinDesk's Public Keys at the New York Stock Exchange, US clearing giant 00:24:29.011 --> 00:24:33.351 DTCC picked Stellar as the first public blockchain to connect its upcoming 00:24:33.431 --> 00:24:35.331 tokenized security settlement platform. 00:24:35.651 --> 00:24:38.271 Joining us now is the CEO and executive director of the Stellar 00:24:38.331 --> 00:24:40.111 Development Foundation, Denelle Dixon. 00:24:40.151 --> 00:24:40.671 Hey, Denelle. 00:24:42.331 --> 00:24:42.751 Hi. 00:24:42.951 --> 00:24:43.891 Hi, nice to see you guys. 00:24:44.311 --> 00:24:45.631 Yeah, nice to see you as well. 00:24:45.671 --> 00:24:45.731 It's 00:24:45.751 --> 00:24:46.591 great to have you here. 00:24:48.191 --> 00:24:53.291 All right, Denelle, uh, I just wanna start with a, a big picture question for you. 00:24:53.411 --> 00:24:55.351 Lay the foundation for us. 00:24:55.371 --> 00:24:57.951 When we, when we think about this partnership, talk to us about the 00:24:58.011 --> 00:25:01.471 future that you're building towards when it comes to tokenization. 00:25:01.531 --> 00:25:04.551 I know we've got some numbers out of Citi this morning predicting that 00:25:04.571 --> 00:25:08.851 tokenized securities will go to five and a half trillion dollars by 2030, 00:25:08.971 --> 00:25:10.211 but what are you working towards? 00:25:12.031 --> 00:25:13.231 I mean, we're working towards all of that. 00:25:13.411 --> 00:25:16.411 The truth of the matter is we've been doing this for the last 14 years, 00:25:16.451 --> 00:25:19.871 and really, Stellar was built for exactly what's happening right now. 00:25:20.191 --> 00:25:23.491 And just in the last few months, if you think, we, we crossed, uh, a 00:25:23.591 --> 00:25:28.131 billion in tokenized assets on Stellar, or on RWAs on Stellar in December. 00:25:28.231 --> 00:25:33.051 We're now at three billion, uh, in just, uh, five months, and that's kind of crazy. 00:25:33.171 --> 00:25:35.901 So we're watching this market just really, really take off. 00:25:36.531 --> 00:25:40.471 And I think that this partnership with DTCC just demonstrates that when you 00:25:40.551 --> 00:25:44.381 actually build for institutions and you build for compliance and with all of 00:25:44.411 --> 00:25:46.971 that in mind, uh, the, the assets come. 00:25:47.191 --> 00:25:50.811 And so for me, I look at this as just, like, the moment Stellar was built for. 00:25:50.871 --> 00:25:51.961 There's so much more to come. 00:25:52.091 --> 00:25:57.011 But I also look at it like that real shift of it's watching these institutional 00:25:57.111 --> 00:26:01.411 players really take this technology seriously and understand the value, not 00:26:01.451 --> 00:26:04.331 just to their retail side, but also to all the businesses that they build with. 00:26:04.871 --> 00:26:05.131 Okay. 00:26:05.451 --> 00:26:09.571 So let's just take a giant step back for a moment, because before we dive 00:26:09.631 --> 00:26:13.021 into the announcement with the DTCC, which is, by the way, fantastic, 00:26:13.031 --> 00:26:16.971 congratulations, I have a question about kind of what we've seen on the 00:26:16.991 --> 00:26:19.091 regulatory side and the legislative side. 00:26:19.151 --> 00:26:22.151 So how much do you think the Genius Act and kind of, kind of getting 00:26:22.251 --> 00:26:27.071 stablecoins, right, as the, probably the greatest example that tokenization 00:26:27.091 --> 00:26:31.231 does work, um, how has that acted as an accelerant, do you think? 00:26:31.331 --> 00:26:35.871 And then also, how much of this success hinges on the Clarity Act? 00:26:37.754 --> 00:26:38.794 Yeah, those are great questions. 00:26:39.115 --> 00:26:42.635 The Genius Act was one of those things that really did demonstrate that we're 00:26:42.714 --> 00:26:47.415 here now, and that institutions can build because the US government has said, "This 00:26:47.475 --> 00:26:50.314 is an industry that we're gonna support through this regulatory environment." 00:26:50.814 --> 00:26:54.014 But the truth of the matter is, the SEC and other players were actually 00:26:54.094 --> 00:26:57.555 already… Like, Franklin Templeton built the money market fund on Stellar, 00:26:57.614 --> 00:26:58.954 the very first money market fund. 00:26:58.975 --> 00:27:03.674 They started building in 2019 with SEC going alongside with them. 00:27:04.034 --> 00:27:08.534 So there was always this lean into this technology, but the Genius Act allowed 00:27:08.574 --> 00:27:13.754 it to really take root and s- and we then saw so many institutions say, 00:27:13.815 --> 00:27:15.374 "Okay, we're really gonna do this." 00:27:15.475 --> 00:27:17.234 We've been talking to so many for so long. 00:27:17.294 --> 00:27:19.894 They were building sort of in stealth mode, and the Genius 00:27:19.975 --> 00:27:21.194 Act really moved that forward. 00:27:21.734 --> 00:27:24.894 The CLARITY Act is complicated because of there's so much going 00:27:24.995 --> 00:27:28.975 on with respect to it, um, and, uh, so many different tensions now we 00:27:29.054 --> 00:27:30.294 see with the ethics piece of it. 00:27:30.914 --> 00:27:33.334 Uh, I, I don't think that the… 00:27:33.554 --> 00:27:36.434 I- if the CLARITY Act goes through, that's gonna be great for us, uh, 00:27:36.554 --> 00:27:40.594 great for the industry, I think great for just the creating that stable 00:27:40.655 --> 00:27:43.914 market, creating some, the, the, that you can build this infrastructure 00:27:43.954 --> 00:27:45.254 into lots of different pieces. 00:27:45.675 --> 00:27:48.794 I don't actually think if it doesn't go through that it hampers that sort 00:27:48.834 --> 00:27:51.094 of excitement about the technology. 00:27:51.135 --> 00:27:54.434 I just think that there might be some players who will get spooked 00:27:54.495 --> 00:27:57.094 by the fact that it didn't happen, but that's a short-term blip. 00:27:57.154 --> 00:27:59.634 I think that long-term, this technology's here. 00:28:00.154 --> 00:28:04.714 Everybody sees the value of it, and now we're, we're moving into mainstream. 00:28:05.474 --> 00:28:07.534 I wanna talk about the technology for just a second. 00:28:07.574 --> 00:28:12.954 The DTCC processed $4.7 quadrillion in securities transactions last year. 00:28:13.254 --> 00:28:18.214 I think we see that number and we think, are blockchains ready for 00:28:18.274 --> 00:28:20.514 this, this level of transactions? 00:28:20.554 --> 00:28:24.694 Talk to us about how you're preparing, uh, for this launch in 00:28:24.834 --> 00:28:26.934 2027 from a technical perspective. 00:28:28.518 --> 00:28:31.778 Yeah, I mean, Stellar's been, uh, it's one of the oldest blockchains. 00:28:31.938 --> 00:28:35.978 It's, uh, has 99.99.99% uptime. 00:28:36.038 --> 00:28:38.358 So from that standpoint, we feel pretty good about it. 00:28:38.398 --> 00:28:40.859 There are billions of transactions that are processed, 00:28:41.018 --> 00:28:42.419 uh, on Stellar every quarter. 00:28:42.818 --> 00:28:46.478 And so when we think about the, I, like, the, the network is ready for it. 00:28:46.718 --> 00:28:49.339 The volume is going to take time to creep up. 00:28:49.358 --> 00:28:52.679 It's not gonna be the, the quadrillions on right away. 00:28:52.998 --> 00:28:55.599 But I think, you know, you always have to look at scalability as 00:28:55.679 --> 00:28:58.458 being your bottleneck, and so it's something that we focus on a lot. 00:28:58.658 --> 00:29:02.018 We focus on it not just with respect to making sure the tech deck has, 00:29:02.119 --> 00:29:05.299 the tech stack has that security in it, but you also need to make sure 00:29:05.358 --> 00:29:08.279 that it's gonna scale so that you can continue that uptime, because 00:29:08.298 --> 00:29:09.658 that's what these folks care about. 00:29:09.939 --> 00:29:13.919 You can't have a network halt when you're processing these types of 00:29:13.978 --> 00:29:15.858 transaction for an institution like that. 00:29:16.338 --> 00:29:19.638 So it's one of the things we'll, we always pay close attention to, 00:29:19.698 --> 00:29:22.478 but as the, and, but the scale's not gonna happen on day one. 00:29:22.498 --> 00:29:24.838 It's gonna take time, and then you'll see, like, the things that 00:29:24.898 --> 00:29:26.298 you need to be able to bring into it. 00:29:26.698 --> 00:29:27.759 I'm really excited about that. 00:29:27.778 --> 00:29:30.958 Like, it's one of the things that, you know, we've always built for institutions. 00:29:31.018 --> 00:29:34.698 We always have really focused there, even when the institutions weren't there. 00:29:34.959 --> 00:29:38.158 So now to see the institutions coming to it, we're like, "We're ready for this." 00:29:38.999 --> 00:29:42.578 So let's talk specifically about, uh, for a moment, specifically about 00:29:42.618 --> 00:29:45.038 the DTCC kind of digital twin model. 00:29:45.078 --> 00:29:47.918 Talk to me about how you feel about the digital twin model, if you think 00:29:47.959 --> 00:29:51.198 that's gonna be the winner, um, if Stellar is somewhat agnostic. 00:29:51.218 --> 00:29:54.098 I mean, there's a lot of talk about tokenization and whether it's gonna be 00:29:54.139 --> 00:29:57.778 an issuer-led decision, and, you know, everyone is kind of jockeying to figure 00:29:57.819 --> 00:30:01.958 out where they fit, um, in this kind of wave of tokenization innovation. 00:30:03.794 --> 00:30:07.654 I think it's always, uh, it, it, to assume that it's gonna be issuer-led 00:30:07.674 --> 00:30:10.794 is hard, because issuers don't necessarily always have the background 00:30:10.834 --> 00:30:13.175 and understanding of the tech stacks that are available to them. 00:30:13.754 --> 00:30:15.394 So I think it's a combination of both. 00:30:15.794 --> 00:30:19.895 And frankly, if you think of, there's gonna be the, it, there 00:30:19.954 --> 00:30:23.074 has to be this focus on what the tech stacks have to offer. 00:30:23.475 --> 00:30:27.954 Stellar built compliance in at its core, so it's always open at the base layer, and 00:30:27.994 --> 00:30:31.114 then it's, uh, you can, it's composable so that you can actually figure out when 00:30:31.174 --> 00:30:32.794 you wanna put the compliance pieces in. 00:30:33.094 --> 00:30:36.834 The callback functionality, all of that was built in to the network layer. 00:30:37.095 --> 00:30:39.194 So you didn't need a smart contract to be able to… 00:30:39.274 --> 00:30:42.555 You can, you can use a smart contract, but you didn't need one to issue an asset. 00:30:42.794 --> 00:30:45.194 You could issue it on the native, uh, platform. 00:30:45.235 --> 00:30:48.735 And that's the same way that we're contemplating privacy, is that privacy 00:30:48.794 --> 00:30:50.134 is being built with the same thing. 00:30:50.215 --> 00:30:53.114 Open at the base layer, and then you can compose what- however you wanna 00:30:53.174 --> 00:30:56.735 be able to, to bring the different pieces of privacy in for the assets 00:30:56.774 --> 00:30:58.334 that you have, you can do that. 00:30:58.594 --> 00:31:01.735 I think those are really important pieces for blockchains to be able to 00:31:01.834 --> 00:31:03.954 offer from a tech stack standpoint. 00:31:03.974 --> 00:31:07.055 But frankly, not every issuer is gonna understand those details, so 00:31:07.074 --> 00:31:08.755 they're gonna take someone else's lead. 00:31:08.814 --> 00:31:12.874 We were just speaking about the hot competition when it comes to crypto 00:31:12.895 --> 00:31:17.414 ETFs, but there is also a very hot competition when it comes to blockchains 00:31:17.435 --> 00:31:19.894 vying for that institutional adoption. 00:31:19.935 --> 00:31:22.034 Denelle, talk to us about how you're thinking about that. 00:31:22.075 --> 00:31:25.674 Is there gonna be one blockchain to win it all, and is that gonna be Stellar? 00:31:25.814 --> 00:31:30.374 Or is there gonna be, um, a blockchain for different use cases and, and 00:31:30.395 --> 00:31:33.414 y- you can all kind of thrive in your own area of expertise? 00:31:35.442 --> 00:31:37.442 So the answer I wanna give you is that there's one blockchain 00:31:37.482 --> 00:31:38.522 to win it all, and it's Stellar. 00:31:38.843 --> 00:31:41.323 But the truth of the matter is, that's not the way that it's gonna go. 00:31:41.882 --> 00:31:44.323 Uh, we're gonna see lots of blockchains out there be successful. 00:31:44.382 --> 00:31:46.763 There's probably gonna be five, six of them that are gonna really 00:31:46.802 --> 00:31:50.522 take on the lion's share of the RWA piece, and it is gonna be based on 00:31:50.602 --> 00:31:53.322 what your strengths are and what those asset issuers are looking for. 00:31:53.863 --> 00:31:58.062 And I think that that's a, it's, it's, it, there's a, a multi-chain world, and 00:31:58.123 --> 00:32:01.582 for anybody to, to pretend like there's not, it's just ignoring the fact that 00:32:01.863 --> 00:32:06.262 there's a lot of strong competition out there, and that benefits everyone. 00:32:06.402 --> 00:32:07.543 It makes us better. 00:32:07.822 --> 00:32:11.002 It makes it better for the institutions that wanna come build here because 00:32:11.043 --> 00:32:12.682 we're constantly gonna be evolving. 00:32:13.082 --> 00:32:16.922 The important thing is open public networks are the ways that, is, is the, 00:32:17.002 --> 00:32:21.442 is the path that everyone should be on because those networks move and change 00:32:21.502 --> 00:32:26.063 dramatically and very quickly based on all of the, uh, uh, the people and 00:32:26.082 --> 00:32:29.502 entities that are building on top of them globally, just like the internet. 00:32:29.522 --> 00:32:33.022 It's here to stay, and it's something that is, like, exceptionally valuable for 00:32:33.102 --> 00:32:34.422 everyone that's building on top of it. 00:32:34.703 --> 00:32:36.863 All right, Denelle, we are gonna have to leave it there. 00:32:36.922 --> 00:32:37.942 Thanks so much for joining us. 00:32:39.322 --> 00:32:39.443 Yeah. 00:32:39.562 --> 00:32:40.123 Pleasure to be here. 00:32:40.142 --> 00:32:40.623 Thanks, guys. 00:32:40.962 --> 00:32:45.022 That was Stellar Foundation CEO and Executive Director Denelle Dixon. 00:32:45.543 --> 00:32:47.502 Dave, we've … It's come to an end. 00:32:47.602 --> 00:32:47.642 Oh. 00:32:47.682 --> 00:32:48.842 The show has come to an end. 00:32:48.862 --> 00:32:49.022 We're out 00:32:49.043 --> 00:32:49.902 of time again. 00:32:49.943 --> 00:32:50.302 I know. 00:32:50.342 --> 00:32:50.682 We'll do it again. 00:32:50.723 --> 00:32:51.782 It was such a pleasure having you here. 00:32:51.782 --> 00:32:51.802 It 00:32:51.903 --> 00:32:52.402 was great being 00:32:52.462 --> 00:32:52.642 here. 00:32:52.662 --> 00:32:53.522 Come back anytime. 00:32:53.702 --> 00:32:54.802 I'm always happy to come. 00:32:54.882 --> 00:32:55.262 All right. 00:32:55.562 --> 00:32:57.602 For Dave Lavalle, I'm Jenn Sanasi. 00:32:57.642 --> 00:33:01.262 Thanks so much for watching Public Keys at the New York Stock Exchange. 00:33:01.302 --> 00:33:01.902 We'll see you next 00:33:01.962 --> 00:33:02.868 week