On today's Public Keys at the New York Stock Exchange, Bitcoin ETFs rack
up a $2.97 billion outflow streak.
Everything you need to know about margin trading and the DTCC names
the first public blockchain for its tokenized securities platform.
I'm Jen Senesi.
Dave Laval is with me.
Let's get into it.
Happy Monday, everyone.
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All right, let's dig into where we are this morning.
Dave, I am so happy to have you here as my cohost today.
Happy Monday.
How are you?
Happy Monday.
I am so happy.
Consensus is so much fun cohosting with you, so.
Ah,
it's always a good time to be back on the show.
Of course.
Excited to have you here at the New York Stock Exchange.
We kick the show off, uh, by talking about what we're watching, what we're
watching going into the week, and, and some of the big events from last week.
For me, the Jamie Dimon, Brian Armstrong back and forth has been something
that- Yeah … has really stood out.
I mean, look, it makes sense that there is uncertainty in the market,
and there's a lack of clarity, no pun intended, on what the regulatory rails
are gonna be around stablecoins and yields that are generated from stablecoins.
Obviously, this is like, has a potential material impact on banks, the larger scale
banks and also the, you know, smallest regional banks and community banks.
So until there's real, you know, definition around what the regulatory
framework's gonna be, obviously, there's gonna be some debate, and
everyone's gonna be, you know, playing their own cards and making sure
that they're, you know, positioning themselves as best as they possibly can.
So I'm not totally surprised by any of this.
Um, but everyone's waiting to get- Yeah … you know, that definition.
You know, Dave, something you and I heard a lot from our guests at Consensus was
that, um, the passing of clarity isn't really gonna affect business, how it's
being done, but it is really that stamp of approval that is really going to tell, um,
investors, wealth managers, advisors, that this thing is here and it's here to stay.
Things like this, when I hear this back and forth, it makes me feel like, ah, are
we at a contentious point where maybe this doesn't get across the line as fast as
it needs to, and some of those companies that we were talking about maybe start
to roll back some of their offerings.
I, I, I don't hear much in the market that talks about it not
getting over the finish line.
Everything that I hear in market is what the finer details are going to be.
Yeah.
And so obviously you have a very strong community bank lobby, right?
Who knows where that, you know, community lobby is being, you know, pressured,
but that really gets the attention of every senator, every congress,
you know, member, because that means that there's a constituent base that
they all really have to care about.
So if a community bank lobby or community banks in general are making
noise about an issue, it's very hard for, you know, any member of
Congress to, to not pay attention.
All right, so you think we're gonna get to a happy medium on this?
I, I… Listen, I think it's gonna come down to kind of,
you know, the ethics provision.
Um, and then after we get over that, you know, we'll, we'll, we'll… You
know, there's gonna be some debate on the floor, for sure, and there's gonna
be a lot of, you know, constituents who are, you know, gonna be ensuring that
they're, you know, paying attention to, you know, their, their interests, but
I think we get over the finish line.
Yeah.
Uh, two other big stories that I'm watching- Yeah … uh, and inform
kind of the programming today.
One, is, I mentioned it at the top of the show, that $2.97 billion outflow- I
know, I was gonna, I was gonna gr- … from Bitcoin ETPs.
I was gonna… Yeah.
I was like, "It's not that big of a deal." Here's the deal.
Let me tell
you.
Okay, tell, tell me.
All right, here's the deal.
We got Bitcoin prices to roughly $120,000.
Um, and that got the overall pool of Bitcoin ETPs to over 100 billion
And then we obviously saw kind of a retracement in the Bitcoin
price down to kind of the 70 range.
And we have, you know, once again eclipsed 100 billion in ETF assets
in the Bitcoin kind of cohort.
So we're talking about, you know, more shares coming online and more assets
being, uh, accumulated in these products.
You and I have been on the show and talked about Morgan Stanley
bringing a product to market.
Mm. That has garnered hundreds of millions of dollars in assets in the
first, you know, four to six weeks.
So there's plenty of runway for this.
I think what people fail to realize is ETFs definitely are an investment vehicle,
but they are also an exposure vehicle.
So they are built for investors, for buy and hold, long-term investing, but they
are also a very, very strong capital markets vehicle for short-term exposure.
And so you have a non-correlated user base.
You have this buy and hold, you know, cohort, and then you have, you
know, very kind of more quick money cohort, and that allows for real quick
capital allocation coming in and out.
So I see 3 billion coming out of a $100 billion pool,
and I don't think much of it.
So not that big of a deal.
We are gonna talk to Eric Balchunas in just a moment.
But curious for your read on this.
Last week on the show, we took a look at those Bitcoin outflows.
We, uh, took a look at some analysts that were saying, you know, the capital's
actually rotating- Right … into some other ETFs, like HYPE, SOL, XRP.
Uh, what are you seeing?
How are you watching that?
HYPE has really been the, the shining star in the ETF stories lately.
Yeah.
At hundreds of millions of dollars in assets, not billions.
Not billions.
So, you know, I think, you know, there may be a rotation, but, you know, I think
this is really more of a story of the Bitcoin ETF acting as a capital markets
tool, acting as an institutional exposure vehicle, and allowing investors, um,
you know, institutional investors to have high conviction that they're going
to get a precise price of Bitcoin with quick ability to kind of get in and out.
All right.
So let's take a look at the ETF flows now.
Of course, as we hear this, take it all with a grain of salt, as Dave has
just explained to us what's going on.
Uh, Bitcoin spot ETFs are heading into June a little bit battered.
They shed, uh, $1.42 billion last week, the worst weekly drain since late
January, capping a brutal stretch that saw single-session outflows of $649 million
on May 18th and $733 million on May 27th.
BlackRock's IBIT led the bleeding.
Ethereum didn't fare much better.
Spot ETH ETFs logged 14 consecutive days of outflows, with last
week's total hitting $241 million.
The outflow leader was BlackRock's ETHA at $188 million.
Analysts point to the same macro cocktail behind both CPI running at
3.8%, the highest since May 2023, PPI jumping to 6%, and rate cut
expectations getting pushed further out.
And then there's the HYPE ETF that we were just talking about becoming the lone s-
bright spot with both the HYPE token and US spot ETF products attracting steady
inflows, outperforming the wider market.
21 shares of Bitwise have products on the market, with Grayscale updating
its filing last week, saying it's negotiating to sell shares in the fund
in exchange for 21 million HYPE tokens.
You saw that Grayscale story.
I mean, I, I know you- Yeah … you come from, uh- Yeah … Grayscale.
What, what did you make of that?
Listen, Grayscale has been working towards bringing their own HYPE product to market.
I think in the filing, it also talks about, you know, their ability
to have a pretty strong seed.
So I think you're gonna see Grayscale being a real player- Mm-hmm
um, in this, you know, HYPE ETF race, um, despite the fact
they're gonna be third to market.
So I think HYPE is probably the most exciting kind of, you know,
single token crypto ETP story, um, that we've seen in a while.
And I think, um, you know, as, you know, um, HYPE continues to, you know… I
think it's, like, HYP-4 is coming out now.
It's gonna have something to do with prediction markets.
You know, there's gonna be opportunity to have more
development on that, uh, protocol.
It's gonna be exciting.
The competition is heating up.
We're gonna take a quick break.
When we come back, Bloomberg Intelligence Senior Analyst Eric Balchunas joins
us to talk more about all things ETFs.
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Welcome back to CoinDesk's Public Keys at the New York Stock Exchange.
Here to make sense of what's been a brutal few weeks for crypto ETFs, the outflows,
the macro headwinds, and whether the hype race is the real deal, Bloomberg
senior ETF analyst Eric Balchunas.
Hey, Eric.
Eric.
Hi, how are you?
How are you?
Hey, Dave.
What's up?
Eric- I
thought we were gonna see you down here.
What happened, man?
We thought you were gonna be here with us.
You know, gracing us with your three dimensions-
I do all these crypto things, and it's, like, 95% of the time it's Zoom.
I just… I don't know, I just assumed it was Zoom.
If you told me to be down there, I would've said I couldn't do it,
'cause I have all my stuff in New York today in our office here-
All
right, we're gonna go to the receipts afterwards
which is in Midtown.
Couldn't have made it physically.
We're gonna, we're gonna
get to those receipts, Eric.
Okay, Eric, I, I need, I need your help.
Everyone is making a big deal about 3 billion in outflows
in $100 billion market.
I made a big deal of it.
And I was like, "It's not a big deal. This is, like, not at all a big deal."
So come join me in calming all the, uh, you know, quelling all the
concerns that, uh, there's something, you know, bigger going on here.
Yeah, I-- this is-- people-- I mean, you guys work in the crypto
media, so y- you're even, like, probably more chill than most people.
But the regular media loves it when bad things happen to Bitcoin,
and so they're all over this.
I just saw Wall Street Journal, like, "Brutal outflows." And
I'm like, this is all so absurd.
Uh, Dave knows better than anybody, having worked at State Street, that,
like, you know, we, we, we sometimes see flows out of SPY or VOO or IVV.
These are the big S&P 500 ETFs.
It's no big deal.
I mean, if anything is within, like, five percent of the
assets, it's totally meaningless.
It's just noise.
But I will say Bitcoin has been down-- It, it went on a 50% drawdown, just about.
And for it to be about even year to date in flows, that's even with
the recent outflows, it's about flat, is a minor miracle, frankly.
Uh, normally, when you have these sort of higher, higher volatile,
I call them hot sauce type strategies, the money is less sticky.
Bitcoin kind of broke that mold.
It's almost got S&P 500 stickiness.
And so when, when I look at the flows since inception, which to me is the most
important number, that's the one to watch.
So you look at the flow since inception.
The cumulative number hit sixty-three billion.
That was the high water mark.
It's now come down to about fifty-seven.
That's pretty close to its high water mark.
So I mean, considering a fifty percent drawdown, that is extremely durable.
So if the price were to go back up, if it goes on a nice run, it won't
take long before it reaches back to that h- new high water mark.
The other thing I would say is sixty-three billion in two years and change is absurd.
Again, this was the biggest ETF launch by far, um, multiple times over.
And IBIT in particular, I think it still has, like, fifty bill-
fifty-five billion or something.
Even though it hit a hundred billion in eighteen months, which again
shatters all records, even if it's stuck at fifty billion until the year
twenty-thirty, it would still be the fastest ETF to hit fifty billion.
So it has like four years to just do nothing, and it would still be the
fastest ETF to fifty billion, which a- again, just gives you some idea
of how amazing the flows have been.
So when someone looks at this, it's almost like looking at Michael Jordan
and being like, "Oh my God, how come he only scored thirty-two points and
not thirty-four in this one game?"
Yeah, it's actually a really funny thing when you start looking at the
actual shares outstanding, Eric, because you had a massive drawdown in price.
People forget that AUM is a very simple arithmetic of shares
outstanding times asset price.
So you've had massive drawdown in asset price, but you haven't lost
AUM, which is showing that the shares outstanding is continuing to climb.
And I think you and I would both agree that the real adoption for the wealth
management market and kind of the advised market hasn't truly got going yet.
We haven't seen, you know, these products being added to models.
We haven't seen broad-based adoption by the advisor community, and so there's
a real opportunity for an accelerant.
And by the way, that's not including any sort of asset price increase.
Yeah.
You, you bring up a good point.
There's two ways to get assets, either the price of the thing
you track goes up or flows.
The reason flows are good is because it eliminates market appreciation.
Flows are pure sentiment and investors voting with their feet.
So that's why I think the most important number is cumulative net flows lifetime.
Again, that's at 57 billion.
It had a high of 63.
So you, you'd like it to be up at 63, but it had a huge drawdown, so
I just think 57's really strong.
Uh, the other thing I would say, to your point, Dave, is you're right.
People love to overthink things.
You just have Morgan Stanley coming in.
Goldman is about to put out a Bitcoin premium income ETF, and the guy launching
it was the mastermind of JEPI, which is an equity premium income ETF, which is the
largest active equity ETF in the world.
That guy is now applying that thing to Bitcoin.
Then you've got iShares putting out their own pr- premium income ETF.
So you have BlackRock and Goldman coming out with new products soon as well.
This whole Wall Street apparatus is very into this asset.
That should keep it with at least a, a good amount of future bid offers.
The only thing I do worry about, and I think this is something where the
industry itself has to kind of figure this out, is the messaging shouldn't
only be, "Hey, the boomers are coming."
You know?
That, that, that makes it seem more Ponzi-ish, like
we just need more investors.
I think the message is that the fundamental purpose and value here is
that the government is gonna print money like crazy no matter who's president
And if you want a hedge, something that the government cannot debase, this is a
powerful asset for that, similar to gold.
The fundamental story is what they should be talking about more
because you wanna have investors outside of the ETF apparatus.
The ETF is gonna get you a lot of people, and it, and
obviously the message will help.
But I just think they need to also focus on, like, going back to the
roots of what Bitcoin is for, how interesting of a technology it is.
Don't forget that.
I think the whole thing shouldn't just be, "Oh my God, there were ETF outflows.
Everything's over." You have to remember, like, that's just one part of the
whole big deal, and I think sometimes the ETFs became such a big story they
alm- almost overtook the narrative.
But that isn't the main narrative.
It's just like icing on the cake, in my opinion.
Yeah.
So everyone needs to calm down, is what, what I'm hearing?
Well, I, I mean, Jen, uh, he makes an incredible point.
But the truth of the matter is, like, it's, you know, what do you call it?
Spicy sauce or hot sauce?
Hot
sauce.
It's not, it's not hot sauce to talk about anything about debasement of currency.
Mm-hmm.
And so pop a little Bitcoin into your- Yeah … you know, client's account.
So I think, um, you know, when things, um, become a little bit more deterministic
and you have a better, you know, settling down in Congress and you have a more,
you know, even regulatory infrastructure and there's less uncertainty there,
I think people will kind of get to a, to a, a less spicy story.
Yeah.
But, but hype, all right?
Hype.
Talk to… Talk… What do you think?
What's the asset base in the hype ETFs gonna be?
What do you think?
And do you think that this could be the next, you know, hot sauce?
Yeah.
Hype reminds me of Hansel from Zoolander.
Remember, like, he's the hot new model.
It's like, "Hansel's so hot right now."
And then Ether and Solana are like Zu- Uh, they're like Zu- They're like Ben Stiller.
They're like, "Oh my God." I can tell they're getting jealous.
But yes, this is the hot new crypto, and honestly, crypto probably needed a good
story like this because, you know, the ETF thing had kind of like flattened out.
It became like a little bit old news.
And here comes hype.
Uh, there have been a couple launches like Avalanche, and I forget
another one, like didn't do much.
Right.
But this one has moved the needle.
It did something that's very rare with ETFs.
It came out and it traded, I think, like 10 million the first day.
That's really good.
That's like top 1%.
It's like, okay, good, it had a good first day.
Normally, they'd be… It sort of like goes down in increments 'cause
there's a huge like first day, everybody's excited, and then it kinda
comes down and settles at an average.
This went up every, every day after for about 10 days.
Now it's trading like 40, 50 million a day, and there's two of them,
and they're both up 50-something percent since they launched.
So you have really h- hot sauce returns and a, an increasing volume.
That's a very good sign.
And what I learned about Hyperliquid seems very powerful.
I really like the idea of the token holders getting paid via the
buybacks from the fees, because sometimes it is unclear how a token
actually benefits from the growth of the block- blockchain or the fees.
And I like that really easy to understand one-for-one narrative of
like, "Okay, if this thing grows, I get a direct result of that with my
token." So I, I think it's a good story.
I think it's a much needed story for the rest of crypto, which had been kind
of like, uh, floundering a little bit.
And, um, it also shows that this space is always innovating, right?
Like you think, "Okay, there's… It's everything's been known,"
and boom, here comes this new one.
And, you know, it just shows there's people out there who are very
smart, building stuff all the time.
That's what I tell people sometimes.
It's like, you may not like this industry.
You may think it's like, you know, uh, this thing over there you
don't need to worry about, but there's a ton of smart people.
If you go to conferences and talk to people, like these
are very innovative people.
There are real business solutions in the crypto world, and Bitcoin
obviously is, uh, more like a gold, but the rest of crypto is again,
really like upstart tech companies, and I think Hyperliquid shows that.
Hyperliquid, the hot new model on the scene.
What do you think happens to the crypto ETFs when we get,
uh, ETFs related to SpaceX?
Do, do you think that becomes the hot new, hot new model and we start
seeing some capital rotate out?
Well, to be fair, we've already seen a lot of capital get sucked
up by, uh, the AI trade in general and the high bandwidth stocks.
Like, uh, this one ETF, DRAM, came out of nowhere to take in more-
It's incredible … to get to 10 billion faster than I bet even.
So this is the sexy, hot new trade for sure.
Stocks rarely get this hot.
This is almost like '90s internet hot, right?
So this is unusual.
It will calm down.
The valuations are very stretched, and I think that's a good point.
I think a lot of people… Somebody had s- talked about how a lot of
people have spent their gold profits to buy tech stocks right now, and
I think we're seeing a lot of that.
So I think Bitcoin feels a little, like, you know, um, just average right now.
But at some point, you know, things that go down look like opportunities a- again.
So this hot money will flow from here to there, but I've seen this in ETF.
I call it the trading crowd and the hot money.
You don't wanna always rely on that.
I think generally the bigger, more important thing is the slow money.
Yeah.
The advisors who are like, "Yes, let me allocate for 5 or 10 years."
That's the more important money.
But sure, the hot money will come in and out depending on momentum, and
right now I think the AI stocks have, like, all the momentum, and SpaceX
is only gonna, like, add to that.
But I think down the road it's that base of advisor money
that's way more important.
Eric, thanks so much for joining us, uh, joining us, albeit not in person.
We look forward to the day when we get- … to see you in the flesh.
Take care.
Next time, maybe.
All right, bye.
Bye.
All right, that was Eric Balchunas, Senior ETF Analyst at Bloomberg Intelligence.
moving right along to our next segment.
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Over the upcoming weeks, we'll be talking to some of the highest conviction
traders in crypto to understand what they're sizing into and why.
But first, we build on last week's segment and unpack more of the
mechanics with Dave Lavelle.
Dave, let's get into it.
Yeah, let's go.
You ready?
Yeah, let's do it.
You ready to talk margin trading?
Let's do it.
All right.
So last week we, we really got the, the basics.
What is margin trading?
Yeah.
What's the difference between crypto margin trading, equity margin trading?
My first question for you is what separates a professional
trader from everyone else when it comes to using leverage?
Uh, I have to be honest, it's education.
It's understanding what you're dealing with.
And, um, you know, I always talk about kind of what we saw in the ETF market,
'cause it's where I come from, and there's a lot of levered opportunities in ETFs.
You have to know what you own, and you have to know how it works.
And so there's really kind of a suitability concern, and I think that
oftentimes, uh, a levered trade for a retail investor is more of an emotional
trade- Mm … and a momentum trade, when leverage for, you know, an institutional
investor or an institutional trader is really, you know, rooted in, in, you know,
totally understanding where your entry points are, where your exit points are,
how you're thinking about the volatility, how you're tracking the data you have.
So I think there's, like, a big difference between the two.
Leverage is great when it's going wro- or going right.
It just gets really uncomfortable when it goes wrong.
Yeah.
We talked a little bit about that last week, too.
I mean, let's, let's build on that.
Just watching the space, speaking to traders out there, um, both on the
institutional side and retail side, what's the biggest mistake you see or
you've heard of that people make when they start trying to experiment with leverage?
Just not knowing their out.
Right.
Right?
And not understanding the margin, you know, realities.
So you put, whatever, if it's three-to-one leverage, you put up your margin, you
have three times that buying power.
If you have a drawdown, you need to kind of up your margin to
ensure you don't get a margin call.
And margin calls never come at the time when, you know, the retail investor wants
it, and so then you can put yourself in a really precarious position, and then
you can end up being, you know, kind of unwound, um, and taking a loss that
you didn't necessarily wanna trade.
So the most important thing is really knowing what your entry point is,
knowing what your risk tolerance is, and knowing where your out is, and
really being disciplined about it.
But you tend to not see that with retail investors, and you tend to see
that with institutional investors.
Institutional investors or traders that I have managed in my time-
Yeah … that don't have discipline in the way they trade don't stay
institutional traders for very long
Okay, the last question I wanna ask you here- Sure
is this, this whole segment is about conviction, right?
Right.
We're gonna have traders on the, the segment.
They're gonna be talking about their highest conviction trades.
People are gonna be listening to them.
What should people be listening for?
We obviously are not giving financial advice- Yeah … but what should
people be listening for when, when they're hearing about these-
Process
high conviction trades?
Of c- we hear it on social media all the time- No … you know?
Process.
Mm-hmm.
I mean, people that I have seen to be the most successful traders
have a process and have discipline.
So understand, and this is the questions that we should actually
be asking these traders that come on, talk to me about your process.
Mm-hmm.
It's less about what the actual idea is, 'cause something can be hot in
the moment and you can ride a momentum trade and you can be very successful.
But talk about the process.
What's your entry point?
How do you think about it?
How do you kind of put stuff in the funnel and narrow it down
to what you want to invest in?
Then how do you know your risk tolerance?
How do you assess that risk tolerance, and how do you set
a disciplined, you know, out?
All right, Dave.
Well, what a pleasure it was unpacking- Good fun … margin with you.
Good fun.
We're gonna have more fun on this segment as the weeks progress.
Uh, right now we're gonna take a quick break.
When we come back, Danelle Dixon joins us.
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To CoinDesk's Public Keys at the New York Stock Exchange, US clearing giant
DTCC picked Stellar as the first public blockchain to connect its upcoming
tokenized security settlement platform.
Joining us now is the CEO and executive director of the Stellar
Development Foundation, Denelle Dixon.
Hey, Denelle.
Hi.
Hi, nice to see you guys.
Yeah, nice to see you as well.
It's
great to have you here.
All right, Denelle, uh, I just wanna start with a, a big picture question for you.
Lay the foundation for us.
When we, when we think about this partnership, talk to us about the
future that you're building towards when it comes to tokenization.
I know we've got some numbers out of Citi this morning predicting that
tokenized securities will go to five and a half trillion dollars by 2030,
but what are you working towards?
I mean, we're working towards all of that.
The truth of the matter is we've been doing this for the last 14 years,
and really, Stellar was built for exactly what's happening right now.
And just in the last few months, if you think, we, we crossed, uh, a
billion in tokenized assets on Stellar, or on RWAs on Stellar in December.
We're now at three billion, uh, in just, uh, five months, and that's kind of crazy.
So we're watching this market just really, really take off.
And I think that this partnership with DTCC just demonstrates that when you
actually build for institutions and you build for compliance and with all of
that in mind, uh, the, the assets come.
And so for me, I look at this as just, like, the moment Stellar was built for.
There's so much more to come.
But I also look at it like that real shift of it's watching these institutional
players really take this technology seriously and understand the value, not
just to their retail side, but also to all the businesses that they build with.
Okay.
So let's just take a giant step back for a moment, because before we dive
into the announcement with the DTCC, which is, by the way, fantastic,
congratulations, I have a question about kind of what we've seen on the
regulatory side and the legislative side.
So how much do you think the Genius Act and kind of, kind of getting
stablecoins, right, as the, probably the greatest example that tokenization
does work, um, how has that acted as an accelerant, do you think?
And then also, how much of this success hinges on the Clarity Act?
Yeah, those are great questions.
The Genius Act was one of those things that really did demonstrate that we're
here now, and that institutions can build because the US government has said, "This
is an industry that we're gonna support through this regulatory environment."
But the truth of the matter is, the SEC and other players were actually
already… Like, Franklin Templeton built the money market fund on Stellar,
the very first money market fund.
They started building in 2019 with SEC going alongside with them.
So there was always this lean into this technology, but the Genius Act allowed
it to really take root and s- and we then saw so many institutions say,
"Okay, we're really gonna do this."
We've been talking to so many for so long.
They were building sort of in stealth mode, and the Genius
Act really moved that forward.
The CLARITY Act is complicated because of there's so much going
on with respect to it, um, and, uh, so many different tensions now we
see with the ethics piece of it.
Uh, I, I don't think that the…
I- if the CLARITY Act goes through, that's gonna be great for us, uh,
great for the industry, I think great for just the creating that stable
market, creating some, the, the, that you can build this infrastructure
into lots of different pieces.
I don't actually think if it doesn't go through that it hampers that sort
of excitement about the technology.
I just think that there might be some players who will get spooked
by the fact that it didn't happen, but that's a short-term blip.
I think that long-term, this technology's here.
Everybody sees the value of it, and now we're, we're moving into mainstream.
I wanna talk about the technology for just a second.
The DTCC processed $4.7 quadrillion in securities transactions last year.
I think we see that number and we think, are blockchains ready for
this, this level of transactions?
Talk to us about how you're preparing, uh, for this launch in
2027 from a technical perspective.
Yeah, I mean, Stellar's been, uh, it's one of the oldest blockchains.
It's, uh, has 99.99.99% uptime.
So from that standpoint, we feel pretty good about it.
There are billions of transactions that are processed,
uh, on Stellar every quarter.
And so when we think about the, I, like, the, the network is ready for it.
The volume is going to take time to creep up.
It's not gonna be the, the quadrillions on right away.
But I think, you know, you always have to look at scalability as
being your bottleneck, and so it's something that we focus on a lot.
We focus on it not just with respect to making sure the tech deck has,
the tech stack has that security in it, but you also need to make sure
that it's gonna scale so that you can continue that uptime, because
that's what these folks care about.
You can't have a network halt when you're processing these types of
transaction for an institution like that.
So it's one of the things we'll, we always pay close attention to,
but as the, and, but the scale's not gonna happen on day one.
It's gonna take time, and then you'll see, like, the things that
you need to be able to bring into it.
I'm really excited about that.
Like, it's one of the things that, you know, we've always built for institutions.
We always have really focused there, even when the institutions weren't there.
So now to see the institutions coming to it, we're like, "We're ready for this."
So let's talk specifically about, uh, for a moment, specifically about
the DTCC kind of digital twin model.
Talk to me about how you feel about the digital twin model, if you think
that's gonna be the winner, um, if Stellar is somewhat agnostic.
I mean, there's a lot of talk about tokenization and whether it's gonna be
an issuer-led decision, and, you know, everyone is kind of jockeying to figure
out where they fit, um, in this kind of wave of tokenization innovation.
I think it's always, uh, it, it, to assume that it's gonna be issuer-led
is hard, because issuers don't necessarily always have the background
and understanding of the tech stacks that are available to them.
So I think it's a combination of both.
And frankly, if you think of, there's gonna be the, it, there
has to be this focus on what the tech stacks have to offer.
Stellar built compliance in at its core, so it's always open at the base layer, and
then it's, uh, you can, it's composable so that you can actually figure out when
you wanna put the compliance pieces in.
The callback functionality, all of that was built in to the network layer.
So you didn't need a smart contract to be able to…
You can, you can use a smart contract, but you didn't need one to issue an asset.
You could issue it on the native, uh, platform.
And that's the same way that we're contemplating privacy, is that privacy
is being built with the same thing.
Open at the base layer, and then you can compose what- however you wanna
be able to, to bring the different pieces of privacy in for the assets
that you have, you can do that.
I think those are really important pieces for blockchains to be able to
offer from a tech stack standpoint.
But frankly, not every issuer is gonna understand those details, so
they're gonna take someone else's lead.
We were just speaking about the hot competition when it comes to crypto
ETFs, but there is also a very hot competition when it comes to blockchains
vying for that institutional adoption.
Denelle, talk to us about how you're thinking about that.
Is there gonna be one blockchain to win it all, and is that gonna be Stellar?
Or is there gonna be, um, a blockchain for different use cases and, and
y- you can all kind of thrive in your own area of expertise?
So the answer I wanna give you is that there's one blockchain
to win it all, and it's Stellar.
But the truth of the matter is, that's not the way that it's gonna go.
Uh, we're gonna see lots of blockchains out there be successful.
There's probably gonna be five, six of them that are gonna really
take on the lion's share of the RWA piece, and it is gonna be based on
what your strengths are and what those asset issuers are looking for.
And I think that that's a, it's, it's, it, there's a, a multi-chain world, and
for anybody to, to pretend like there's not, it's just ignoring the fact that
there's a lot of strong competition out there, and that benefits everyone.
It makes us better.
It makes it better for the institutions that wanna come build here because
we're constantly gonna be evolving.
The important thing is open public networks are the ways that, is, is the,
is the path that everyone should be on because those networks move and change
dramatically and very quickly based on all of the, uh, uh, the people and
entities that are building on top of them globally, just like the internet.
It's here to stay, and it's something that is, like, exceptionally valuable for
everyone that's building on top of it.
All right, Denelle, we are gonna have to leave it there.
Thanks so much for joining us.
Yeah.
Pleasure to be here.
Thanks, guys.
That was Stellar Foundation CEO and Executive Director Denelle Dixon.
Dave, we've … It's come to an end.
Oh.
The show has come to an end.
We're out
of time again.
I know.
We'll do it again.
It was such a pleasure having you here.
It
was great being
here.
Come back anytime.
I'm always happy to come.
All right.
For Dave Lavalle, I'm Jenn Sanasi.
Thanks so much for watching Public Keys at the New York Stock Exchange.
We'll see you next
week