Bitcoin’s Wall Street Takeover: ETFs, BlackRock & The New Era with Eric Balchunas

What you're telling me is that music is about to stop and we're going to be left holding the biggest bag of odorous extra ever assembled in the history of that business, 1974198792972000 and whatever we want to call this, it's all just the same thing over and over. We can't help ourselves. I say when. We sell. Hey, OK, I say when we sell. This week we sat down with Eric Balchunas from Bloomberg. Great episode, was looking forward to it for a number of weeks. Eric delivered. We talked about his 20 years of Bloomberg, his first point of contact with Bitcoin back in 2013. And then we went up to 2023 talking about where he started to cover with his colleague James the filings for the Bitcoin ETFs and then fast forwarding 24, the launch of them. And then to the present really 18 months later, the most successful ETFs ever launched. So we talked about institutional demand, their retail appetite, where the ETFs are bridging the gaps. We also talked about where the ETFs are falling short. Michael and Eric exchanged a lot of thoughts there just on counterparty risk and how investors need to think about that while also balancing access and really just enjoy this one. I like I said it was there was a fun one. We had shared a lot of laughs and also a lot of signal, which, you know, I wasn't surprised given Eric Eric's background and since I've been following him since 2023 or so, he certainly delivered. And so to tie that all together, as I mentioned, we talked about the trade-offs as it relates to different products. And so ultimately, if you're someone who's serious about Bitcoin, whether you have a material position already or you're looking to build, 1 certainly would encourage you to speak to our team at Onramp. We'll walk you through a multi institution custody, inheritance, insurance, Bitcoin back loans, etcetera. Really, we're focused on helping to protect our clients, whether it's an individual, a business or institutional investor for the long term, for decades to come. So just give us a call, head to our website, book a consultation, speak with me or someone else on the team. And I hope you enjoyed this episode. It was a good one. All right, welcome back to the last trade. I'm excited for this one. I'm excited for many of our episodes, but I am particularly excited for this one as well because we have Eric Balchunis joining us from Bloomberg and I'm joined by my Co host Brian Cabela's and Michael Tanguma. So Eric, before we get into your background, I do just want to say I appreciate the work that you're doing. Yeah, it seems like so. The three of us, Brian, Michael, myself, we've been building in the Bitcoin space for a while and I came across your name first as really the leading source of information as the Bitcoin ETF's started to actually have some momentum even before approval and then after approval. And so I would say for anyone who's not familiar with your work, definitely check out Eric's ex profile because Eric, it's, it's a breath of fresh air, I must say, because there's so many accounts on acts that just post like crazy stuff all day. All caps. They don't actually read anything that they're posting. And you kind of take the opposite approach where you post signal and you have some of the best research reporting on the ETF complex for Bitcoin inflows, AUM. And really we're Bitcoin since today, the ETF complex or I've been in particular, being the 20th largest ETF. So, Eric, really appreciate your work. Thank you for joining us today. It's it's an honor. Yeah, no thanks. I'm glad you enjoyed that account. I enjoy doing it. So it's mutual. Awesome. Well, yeah, let's get into it then. So I think for the three of our sake in the the audience sake as well, Would love to just hear a little bit more about your background. I know you've been at Bloomberg for a long time. It seems like you've had this meteoric rise in popularity with covering the Bitcoin ETFs and you've probably seen how much fervor and passion there is in the space. So we'd love to hear just quick snapshot of your background at Bloomberg and then take us to kind of the time when you started to have more of your eyes on the Bitcoin ETFs kind of around the approval etcetera and then we'll get into where we are today. Yeah, I started at Bloomberg in public relations, believe it or not. I was went to college for journalism. And then after 911, I moved to Jersey and I wanted to transfer to the New York office. And the only thing they have in Jersey is Princeton, and that's the data office. So I went from PR to data, which I still think I'm the first and only employee to ever make that move in history. You know, there was a writer, I forget his name, from the 70s, and he talked about going from Harvard into the Army. And I feel like this was a similar move. You know, you think you're like going on to all these parties and PR is a great way to get like near the top of the firm quickly. You know, and then data is like literally like the factory. You know, that is where the terminal was made. So it was actually a really good move from my ego and also to learn how the company was made. You know, you got to put the data on the terminal. That's what we sell. So I spent 15 years in data. I'm surprised, I, I'm surprised I made it that long. It wasn't totally a perfect fit. But ultimately I then got into research, which is a combination of data and PR and journalism. So I'm actually using all of my facilities in research. And the research group was starting at Bloomberg maybe like 15 years ago and it was stocks and bonds. And then like, I don't know, when we, we bought the Barclays index unit and they got us some headcount and the guy who ran Bloomberg Intelligence had seen me around doing TV and being the ETF guy internally and said we why don't you cover for research? So since then I've been doing ETF's. And then I obviously got introduced the Bitcoin and crypto first in 2013 when the Winklevoss filed for their Bitcoin trust. People forget they filed when it was under $100 a Bitcoin. I should have just bought a shit load of Bitcoin then. And I wouldn't be talking to you. I would be, or I'd, I'd be on with a with a complete face covering and sunglasses. So you wouldn't know my identity. Maybe then I would give the interview. But I would, I, I, I blew it off like everybody else. I, it was like the way I look at pickleball, you know, it's for other people. I just don't get it. And ultimately though, I kept covering the saga of the approval. And then when BlackRock filed in 2023, that was a meteor moment, moon landing moment. If you're an ETF analyst, you're like, what the hell just happened? And from then on there, it was off to the races. And, and as Jackson pointed out, I used Twitter a lot and I found quickly that a lot of people had stopped covering crypto since SBF. Like there was a dearth of coverage in both the reporter and the analyst world from in the mainstream. There was only the trades, it seemed like. And I found a, a James and I say James Hayford on my team. We found a huge opportunity to develop this new audience by giving like real information about, I call it ETF splaining and SEC splaining because there's wack jobs out there who just say anything. Literally I'm like, I'm like, where's your source? And then they don't even reply. And so people would look to us for like the truth. And we also had good sourcing and we also were, we had a good feel for what was going to happen and how big it would be. And then when the ETFs came out, the flows were on to that's, that's really where we specialize. And so we were able to provide not just the data, but also like really experience color on what it meant. You know, why relativity, you know, those kind of things are powerful from someone who's been in the industry for 20 years. And so I think that's that's sort of where you we probably, you know, you probably probably followed me after I started covering the crypto stuff. It got to the point where I would post about like a dividend ETF and the crypto people would be like, dude, what's this? So it was, it was mostly a blessing, but a little bit of a curse, but I've enjoyed it. It's a great, it's a it's a really younger, more it, you know, it's just a very diverse, younger energetic industry. And I, I think it's given ETFs this like new jolt of energy. So I, I, I know for me covering it 20 years. That's why I like covering ETFs though, because it sends you to every place in the world. But this was like a really massive, interesting journey to this world. I mean, this was like a whole new asset class being on boarded into ETFs and it's really been exciting. Yeah, I think the to Jackson's point, I think you and James have a very like tempered take from this that really helped in tempered in both directions. Like being open to the to the craziness and and looking at it from their vantage point and saying, well, let's think about it from the everyday or the grand wall, like you can't do this stuff. But also not being like kind of stuck in the mud, as we've probably seen where, you know, the vanguards are the easy ones to pick on of like there's no interest or demand for this. And it's an interesting that whole notion of the mimetic nature of the world we live in and in the meme stocks. But then in particular is like been a big substrate of bitcoins growth for 15 years. Think about Trump, like how much he appreciates and enjoys that engagement, similar to yourself on Twitter, Like there's some serotonin hit and yeah, it's just been fascinating to watch. And then like the easiest example, there's probably you could go through a whole hundreds over 100 and a list of uh, crazy like misconceptions. But the most recent one with the in kind redemptions, it's like people think they're going to be able to park Bitcoin and yeah, send, send it out and it's like completely nonsensical from a pure logistics perspective like Fidelity or Coinbase isn't sending Jackson his ETF shares in a harbor wallet. Like from a compliance and OFAC perspective it's so insane but that's what people believe when they see this and then everyone posting all caps of this stuff. Yeah, yeah, I know. I also learned over the approval process, there is just such a demand for hopium that there's not enough hopium to fulfill the demand. And so the tweeters and the trade publication people end up leaning into offering hopium and the remember that COIN Telegraph tweet that said the Black Rock ETF was approved and like the price went up and it was all like some intern read something on a telegram or something. This is like, so there is, I've seen it first hand in both the headlines in the trade publications and then also with the tweeters. On the flip side, the mainstream media leans negative and just continues to see I, I think they underrated and underestimate it. So this interesting dichotomy, I feel like James and I are in the middle and I, I find it feel we feel comfortable there. But I also have gone to a couple conferences and I think I recommend people who cover this. I'm like, you should go to these conferences because you're going to see massive energy. I went to token 2049 in Dubai. There were like 15,000 people there. The average age was probably 2930. I mean, I felt like the boomer. They call me on Twitter, like they call me boomer and suit all the time. And I'm like, hey, I why? I do wear a suit on Mondays for the TV show, but otherwise I'm not wearing a suit. I'm Gen. X and honestly, I try to tell them ETFs are pretty punk. I mean, Wall Street doesn't love ETFs. They're cheap. They don't make any money for Wall Street. So when I go to the crypto conferences, I sort of try to present ETFs as like you should be careful not to underrate the power of the ETF. It is a kick ass vehicle that's going to be hard to disrupt, especially for the tokenization stuff. That said, this is that industry is just full of it's young, international, vibrant and real tech oriented. And I felt going there similar to how I felt when I first went to ETF conferences in like 20, 2006, 2007. And since I was like, this is kind of the future. And so that really helped bring me on in terms of being someone who takes it totally seriously. But at the same time, the industry itself is good of making fun of itself. Like when I would get into a fight with somebody on Twitter and like, I could see people jump in and be like, oh, yeah, this guy's insane. You know, Like, or when the price of Bitcoin goes down, like like let's say it has a sell off of like 20%, people will put a McDonald's hat on themselves in their profile picture. And so I do enjoy that self deprecating humor that is mostly there. You don't find that as much in Tratify. So I like that there's some features of it that I'm, you know, find that fit my personality. That said, I do think that that there is a large that under appreciation for how much has happened over the past 30 years in traditional finance to bring costs down. So I think the crypto assets themselves are like really powerful and interesting. But the you know, the intermediaries, I think they have their hands full with, you know, BlackRock and Schwab, these companies are live in a terror Dome of the ETF world, which is it's tough place to compete. So I think there's like, I think I think both sides, you know, it's almost like a generational gap and a cultural gap as well. And I've really enjoyed going between. I think both sides under appreciate things about the other sometimes because they do get into somewhat of a tribal state of mind. But there's a bleeding in they're coming together there. It's like a a marriage, whether you like it or not, Especially since Trump won and I, I feel like we're going to find a lot of blending of the two worlds over the next 20 years. Yeah, one thing to call out because Inter Jackson has a number of ways to take this buddy. There's a theme that's playing out here when you reference going from PR to the data room or try to fight a crypto. And this is how we built this business. It's like in it, this is a crude version of when 2 disparate ideas come together and collide. That's when they have set like when they have sex, like that's when the magic happens later. That's the beauty of life. It's like you have to have different parts of your brain working together to really like come from a frame of reference that the market has never seen. So there's a lot of alpha in what you're describing. How do you actually build the right way? And we've been in the early hobbyist phase. This is like what jobs really picked up on early is there was people putting computers together, but it was like, how do I actually make the most like democratize the access to a really nice power machine? And that's where we're at. And then we're still early like 1990s and the, and the Internet in this boom. And there's just no shortage of ways to like democratize and provide exposure to people. Yeah. It feels like I started my career in the mid 90s. I'm pretty old and I feel like this is Internet stocks, at least the block chains. Bitcoin is kind of a unique special thing, although that kicked off the block chain, you know, companies, but it's all feels like the 90s Internet where you know, these companies are, you're not quite sure who's going to grab the most market share, especially within the block chains, the area, you know, Bitcoin is such a unique thing. That's again, I, I separate the 2. That's another thing that there's this tribal warfare sometimes, especially with the Maxis where if you say crypto and, and you actually mean Bitcoin in there, they get, so they get so pissed off. They're like, like, it's like I'm trying to think of a metaphor where like they're like, don't do you dare call me that? Don't push me with those plebs, you know, Anyway, it's really funny. Like the, that, that thing. But I, I do use crypto to mean everything and then I'll use Bitcoin separately. But I do agree with them that Bitcoin is kind of a special case. Yeah, 100%, Eric. So, yeah, there's a lot that we could talk about, a lot of different directions we can go in. I think important though, so you do mention your Gen. X in your Twitter bio. Is that because people are calling you a boomer so often on Twitter? But actually I've put that in before because I like, you know, if you're reading these Wall Street Journal or Financial Time, any time they write about generations, it's always millennials and boomers and they might mention Gen. Z. It's like we're just forgotten, like Gen. X. It's like, you know, I was like, dude, look at all of the great music we produced, the great artist artists, the great athletes, Tiger Woods, Tom Brady, like we've produced the greatest shit. You know, between it's people who really came into this work, you know, to came into the prime from 90 to 2000, like the 90s. I just feel like Gen. X is, I'm proud of my generation and it just feels like underrepresented. So I throw that in there. That way people also know to to get ready for some of my metaphors, which tend to be 80s and 90s heavy. Awesome. I love it. So all right, so you took us like 2013 Winklevoss twins. Dismiss Bitcoin as most people do on on the first pass. And then so you kind of took us to your rise in popularity because you had the background and professionalism to cover the Bitcoin ETFs. I'm curious when the ETFs are starting to get momentum and you guys are tracking ahead of approval. So summer 23 and then into approval 2024, what was your thoughts like? Were you already kind of convinced on Bitcoin as an asset class, as an investment? Did you understand the thesis or did you kind of have to understand that in real time as you were digging deep into the ETF complex? Yeah, real time. James knew more than me, so I could always lean on him a little bit. But sometimes, you know, again, he's he's a millennial, he's in, doesn't have the same reference points, but he's really good. But ultimately I've had to learn in real time everything. Like I used to do a show called ETF Friday every Friday and I just was covering ETF starting in 2007 and they'd be like, oh, we're not going to cover small caps today. We're going to do VIX because the VIX went up. I'm like, what shit? So I'd have to sometimes be a quick study on like, what is the VIX? What are VIX futures? So I ultimately in my coverage of ETF's, I would just download books from Amazon constantly. So I did that with Bitcoin and with the blockchain stuff and it just became a quick study enough to get me by and then over time going to conferences, you know, context clues. So I, I really learned it all on the fly. And I think I underrated a couple things with Bitcoin. I underrated how much Satoshi was standing on the shoulders of giants. You know, I've written a book about ETFs and I've written a book about Vanguard. And in both those cases, a lot of shit happened. You know, you talk about that connection of two ideas. In each of those cases, a bunch of stuff happened before that that idea was able to happen. And there were, you know, there were a lot of technological advances. There was a community, a scene. These were smart people. They were real libertarians. And so when Bitcoin was birthed, it was almost like it had, it had just taken like 80% of what was out there, added 20% and that was it. That's why it became the one. Same thing with spider spies, the first ETF there were. Index participation shares, there were multiple attempts at similar things and obviously index funds that existed for 20 years. And so in each of these books I've written, it has that same consistency. When something is a big hit, it's never someone hitting their head in the toilet. Like I think the average person thinks like this dude, Satoshi just threw put a magical coin on the Internet. It's so much deeper than that and it's honestly a real, it's also a the indestructibility of it as a truly decentralized thing and how to make incentives work. There's so much go that goes into that design to pull it off and to pull off something that's decentralized and totally secure. It's worth them. It's worth something. I mean that alone. So I underrated that part for sure. And I underrated the scarcity. I guess I just never thought about it. But the idea that only 21 million Bitcoin can be mined and they were almost at that point, I mean, they're only like coming out in little tiny drips at this point. We'll just for all intents and purposes, like what is it? 94% of the Bitcoin are done. So like that is powerful too, because in every other commodity there are, they have a way to get the commodity. This is 1 where you don't have that anyway. So those are some of the things I underrated about Bitcoin that I've evolved on a lot and it's made me take it even more seriously. And then with the flows into the ETFs, that's been, you know, something that has been pretty mind blowing as an analyst because they've broken like every conceivable conceivable record. But you could have those flows and have me still not respect Bitcoin, you know, I that's, that could happen. And I think there's probably ETF analysts out there that feel that way. They're probably like, oh God, I wish this wasn't a hit. I, I'm, you know, but for me, I've, you know, something else that we've noticed again, James and I are working on a book about this, but we've interviewed all these people. Two things we've noticed. It's rare that someone goes deep into studying it and doesn't increase their allocation. Like, I've never seen somebody go, yeah, you know, this is fucked up. I'm, I'm going to go buy back to stocks. They typically get more into it. It's like there's a direct correlation between the amount you learn and the amount you allocate. The other thing is even people who say to recommend 1 to 2% for a normal person into Bitcoin, they themselves are like 20% or more. And this reminds me of ETF. So I would interview these institutions about their usage of hedge funds and all these like expensive type stuff. And I would say, what do you do? You use these this stuff in your personal account? They'd be like, no, for my personal account, I used to use cheap ETF's by Vanguard, but they wouldn't do it at their job. And I love those disconnects. And I find it here with some people, I think they're afraid to tell anybody to like follow them into being like 2030% because just in case it blows up or there's a problem, they don't want to hear it. But it is interesting that there's that gap. So those things also, you know, make me respect it and understand it more. But I am the classic case of, of somebody who, you know, kind of got at least half orange peeled. I, I don't think I could be fully orange peeled because I am a Bogle head. I wrote about Jack Bogle and Vanguard and I'm a true index fund guy. I like cash flows. So by being a true index fund investor and really appreciating stocks, bonds, not so much, but mostly stock investing, especially U.S. stocks, I'm never going to sell all that. And so I do feel like being a Boglehead and understanding, you know, why stocks are good investments. It gives me some level of vaccination from being totally orange peeled and being like, I'm at, I'm done, you know, sell everything, put it into Bitcoin. I'm not, I'm not anywhere near there. So that's where I'm where I am now. There's so much there and this is like watching, I would have said Boomer, but you said clearly said Gen. Xer. This is watching Gen. Xer in real time get orange filled and go through that because a couple things you referenced and Jackson pulled up, there was a Cornell study and this is something that we need to get better on our side about is like most people do. They've heard of Bitcoin, but they've never they don't know there's only 21 million and that's like foundational to the whole thing that the finite scarcity. So the second most people hear that there's only 21 million, it naturally means that there's some value there, potentially value if it's valued at 100K. And then it's just like underwriting that. Personally, the thing you mentioned about the one way St., there's a lot of weight because I've been in this space professionally since 20/19/20, but then was trying to get in back in 2018, was interviewing with a lot of the Genesis guys back in the day and they're all still around somewhere. Like so not only is it mental and personal capacity from a balance sheet, but also professional capacities. Like people don't come into the space and leave like it's just there. And where that ties into there's the component of everything you described about the shoulder of giants. You can basically, if you switch the word, it's gold. Like what we're what we're watching today is gold. If you think about thousands of years when people figured out gold had relative value, well, it didn't happen overnight. There was all these different people trading different rocks and then other people were trying to scam them out of other rocks. And then ultimately money has this liquidity profile and the more liquidity begets more liquidity and it's the ultimate market or the ultimate protocol. And so that's what we're talking about here is that you only get that once that finite scarcity. And so to your point about not being the ultimate maxi, where I was joking is like, that's where you will get because all you're going to want is equity that delivers more Bitcoin. So we have a whole venture arm that's just Bitcoin denominated. We only invest in companies that produce more Bitcoin and deliver it back. And that's where you get at the when you go far enough down this rabbit hole as you're like, oh, wait, I want more Bitcoin. And so you're ultimately invest in things that deliver more Bitcoin because that's kind of just the rational thing to do is if you're long Bitcoin as so anyway that that kind of is, it's very interesting how you've kind of gone through that and you're probably right there in the middle, but there will be a part when you come out the other side because you're honest with yourself, which is amazing because most people aren't honest in your shoes. And they're like, and this thing's just an asset. And I just need 4%. And to your point, a lot of people don't tell people to do anything more than that simply because most people can't handle the volatility. And so if they don't have the level of knowledge and and research you've done, then they're going to sell or they're going to sell when it double S when we know this is like a longer game than that. I also think the, I think the volatility shook out a lot of the casual tourists who bought it because Tom Brady advertised it in FTX and that whole last and I don't think they're coming back just yet. I think a lot of the newer investors are from the more up, you know, intelligent retail wing and advisors who buy the ETFs because ETFs are usually bought by smart people, not like dumb GameStop type investors, but more like intelligent logical retail. And so I think bitcoins getting better owners and I think it will bring the volatility down, not that it won't ever have a huge sell off. I'd have to it had to be have some Black Swan event. I think I don't see anything in the future that is such a huge wall of worry. It's mostly good narratives, but there, you know, you can't rule out a Black Swan. But I do feel like most people who buy it through the ETF probably are like 2-3 percent and in in which is good is because they have this boring core of Vanguard funds that they consider for like the real stuff. So this is like a small hot, I call it hot sauce on top. And I think that gives them more intestinal fortitude to withstand some of the volatility, even if they're not orange peeled. If they don't get this, I you know, I also think there's a place for Bitcoin if you're just somebody who gets pissed if you missed out later. It's almost like I don't even understand it, but I don't want to have FOMO later. And that's fine. You know, people invest in certain stocks and there's thematic ETFs that are the same thing, like uranium, like, OK, it's not really represented in my S&P 500, but like, I don't want to have FOMO. If we go completely nuclear for energy, I'll buy a uranium ETF just so I don't kick myself later because I had that idea. So I do think. We call those we call those spike corners. Spike corners. Spike corners because you, you brought it up before we jumped. So what happens? What happens if Yeah, I got a My mother-in-law was a Spike coiner because she couldn't, she couldn't let it work. Out there's a guy we interviewed for the book who is definitely a spike coiner. I mean, yeah, he that's really good. That's spike coiner is really good. We have a section of the book called Suit Coiners which is like which you can guess what that is Spike I. Wouldn't consider you a suit coiner. I think you you you passed the after this combo. You're you're not a suit coiner for sure. But real quick though, what happens if North North Korea hacks Coinbase? Yeah, no, this is the cut. That's a Black Swan in my opinion. Now this Coinbase issue is interesting. At some point if a, if somebody hacks, you know, XYZ third rated Ethereum exchange, that's the exchange's problem and the investor's problem. But if Coinbase is almost the size where it's, it would be everybody's problem. The government would have to step in, I think. And print more Bitcoin. I don't know, they'd have to. There's a point where I think if something gets. How would they print more Bitcoin? Well, let's go over this. If somebody hacked Bitcoin Coinbase, first of all, in this day and age, don't you think they'd find them pretty quickly? I mean, I just watched that. I mean, can't they can trace the wallets? You don't think? They What if they hacked it and burned the keys like in Iran? I mean, this is a lot of money. Like would the people never spend the money? What I meant like burn the keys like I know. This is, in other words, tackling. Just burn the keys and never use. Yeah, yeah, just for fun. They they were just for fun. Would this be like an Ethereum maxi who just wants to fuck? I'm joking emotionally, just. Mayhem. Yeah, No, no, I'm partially joking just because that's that that's a a thing. I think the overarching deal, and this is a real philosophical thing that the suit coiners don't get is there are no bailouts in Bitcoin like full stop. Now if if you have a certain size, then you might have the balance sheet of somebody to step in. But the core idea is everyone's long term view of the asset is up into the right. So at a certain point your balance sheet can't step in. And so the bailout is the government printing more dollars to buy Bitcoin in the open market. It's kind of like a proxy for FDIC. It's like, sure, you'll get made whole on your 250, but they're going to have to print a bunch of money. So you're really losing out in purchasing power. This is. Why the OK first of all, would this hack be the cold storage of Coinbase or the hot wallet? Well, it doesn't necessarily have to be Coinbase, like Fidelity is another great example because if you say like Fidelity holds 20% of the ETFs and the market cap goes to $1,000,000 per coin. So what does that put us at 10X from here? So it's $20 trillion. Well, Fidelity holds, let's just say they hold 20% of that 20 million. So they have 4 million, $4 trillion, Fidelity loses the assets, right, Fidelity? Let's go over the losing of the assets. You're saying somebody's going to hack into the cold storage? You got to be careful Eric, because I'm going to tell you that six months ago Fidelity lost all their clients data. It's all like all open, the most secure thing that they would have. So again, but in your scenario, are we talking about hacking into cold storage? Well, there's multiple levels of hacking in the cold storage. There can be collusion because the idea is the the core idea is like an ROI return increases with time, meaning it can be a 10 year game. Like there's a lot of different and the easy example probably is simply we've never seen an exchange last longer than X. Yeah. I mean, look, I, over time there will be a dilution of the custodians because Coinbase was early and like the most legitimate at the time that all the ETF started. But Fidelity is doing, I think their own and somebody else. And like Schwab is going to let actual just crypto trade on the, that they're going to trade. The banks can now custody it. And the custodian fees for Coinbase. I, I, they don't print them, but I believe they're pretty hefty. So in the ETF world, they're always competing on like cutting fees. And like we've seen on the stocks and gold world, an issuer will move from like, I don't know, JP Morgan to State Street to save like 2 bits. So I think over time, Coinbase will lose some of that business. So I do think they'll be a natural dilution in the gold world. What they do like GLD stores the assets in London, but IAU came around and said, hey, we're going to store it in London, Toronto and New York. So like they're they'll be probably a time where they evolve into storing it into different places just to minimize that outside Black Swan risk. The other thing is most of the Bitcoin is in in a cold storage, not a hot wallet, which I think the last hack, I forget the name of it, but it was a hot wallet that got hacked, not it wasn't in cold storage, which is I think easier to hack. Again, I'm a little out of my area here. But ultimately though, I think when it comes down to this, if you're an ETF investor, you have to look at the track record of a Black Rock and Fidelity. And yeah, they're not perfect, but you either trust them or you don't. And I think for the most part, people trust. That's why them coming in was so big, because they are lending their brand and trust to this area and they're not fucking around, man. I mean, they're not like going to, they're going to take every precaution necessary. But yeah, it's definitely something. And then Quantum obviously is a risk down the road. And there's just like, you know, it's a, it's something that people have to consider. And so if someone wanted to go and get their own wallet, we totally advise that. Like if, if this is something that even worries you a little or if you're in Bitcoin because you think there's going to be a societal collapse and we're going to go into Mad Max world, you want your own wallet. So we tell people if you are one of those people, gold has the same thing. There are gold bugs and there are they truly paranoid and there's actually an ETF that lets you get your gold delivered to you. They do have retail redemptions and there's a gold that stores the gold in Switzerland only because just in case these other Western countries have known to take the gold. So I think the Bitcoin ETS space will evolve to kind of account for some of what you're saying and to appeal to possibly like the real hardcore paranoid. Yeah. So I think we're both probably saying the same thing because I think we do trust, you know, I think Fidelity and Coinbase being hacked and all that's very long tail risk. I think the best mental model to use is what we're describing is like if we were using e-mail and we're explaining the Internet and it's like, well, I don't get it. And it's like, well, yeah, because we don't know what it looks like. And so the angle I'm referencing here is today the way you're talking about ETFs and how most people talk about ETFs is the pre coiner person buying 123 percent. But if we go down the logical progression year in the middle of you ultimately will have anywhere between 20 to 80 plus percent of your wealth and Bitcoin. And when that happens, it's the same thing of if you bought fire insurance on your house like this is the progression of like how this plays out because. Your progression? Is this the person increasing the allocation on their own, or just that Bitcoin went up so much it actually ate up their portfolio? Both because they're looking basically how it's performing against everything else. But so let me just finish the the thread. So that's the logical progression for like you said that most people as they get more educated, they increase their exposure. And So what happens there is very similar to like why you buy house insurance. You don't expect for your house to burn down, but if it does, you can't get knocked out of the game into the logical progression for the hardcore people. And This is why half of the 2 trillion sits on those hardware devices. I'm not saying that's the right move. I'm just explaining to you the rationale is because for 15 years, the only way to actually know that your house wasn't going to burn down was to sever the Internet connection. And if somebody's holding 80% of their wealth, the rational thing to do is not to leave it with a single custodian because even if there's .01% that that could happen, if it happens, you lose all of your wealth. The last thing I'll say is we've never seen digital scarcity in our whole entire life. So we actually don't know how to manage it. And two trillion is fundamentally different than 20 trillion. So to expect that some firm like a BlackRock knows how they're to do it is just kind of doesn't make any sense or Fidelity. Yeah, I don't know. It wouldn't go that far. Like BlackRock and Fidelity have both hired people from the crypto world. But also the other thing is, again, this is something that has been totally a worry with gold. When gold ETFs came out, they were, they were thoughts they would like rob the trucks or people. People didn't think the gold was there and then the gold. Well, the government robbed all the gold. That's the point. Well that was in the 20s, but the gold isn't like or about 100. Years, 100 years later. No, I get you. Like that's what I'm saying. If you go and and if you're somebody who even like starts to talk about how FDR confiscated gold, get your wallet, get your own wallet like you, you should do this on your own. You should and then print the phrases on dog tags and then bury them in three different spots in three different countries. That's the route that there is a Bitcoin investment path for everybody. But to your point, as if we look in a world where it's like 80% of most people portfolios, I'm sorry, that's that's, that is the America's problem. Hang on. Like it almost becomes too big to fail at that point. So can I start in here for a second? But I don't, I don't like disagree. I I I probably give a little more faith to the Black Rock infidelities of the world simply because they do have a track record, but. You're not really trusting Black Rock or Fidelity, you're ultimately trusting who they've outsourced it to which. Is why, of course, yeah, but you're I'm trusting them to pick good partners that I mean real quick at the end of the day, you know and I we've gone over this for years and ETFs every now and then there's like the huge sell off and like some ETF sees a discount. That's not normal because a market maker wouldn't make the market. And so over the years I have come to this conclusion that the ETF is but the thing here and beneath it is a whole ecosystem that has to that works everyday using market makers and APS and all this shit. And at the end of the day, the ETF gets the blame even if something over here was the problem and they know this. So I think we're like all kind of on the same page here. And I also would say that this is just the function of Bitcoin being a newer technology, a newer asset class, right? So we're still in the early stages of figuring this out. I think we should remember as well that the ETFs have only existed for 18 months and prior to that, right, people were telling what Eric said. You you stamp your seed phrase and steal and you distribute it in multiple different geographies or you just leave your Bitcoin on a Coinbase account. I think what we need to do though is kind of go back to what I think is one of the biggest stories in finance right now and would be very remiss not to talk about it. And that is just the meteoric rise of the Bitcoin ETFs. Like we kind of we kind of jumped over what I think is one of the most critical stories and what most people outside of this Bitcoin ecosystem and you know, investment community are talking about. So, Eric, I would love to go back to this maybe before we go into more discussion around custody and you know, in kind redemption, some of the things we wanted to talk about because you, like I said at the top of the episode, you and James have done a phenomenal job of tracking all of this. And so you've covered extensively the success of IBIT, in particular, the fastest growing ETF by a wide margin in terms of major milestones for assets under management. It's now the 20th largest ETF. Yeah, that's a great chart, 20th largest ETF. And I don't think we need to move that much higher in the Bitcoin price for it to be the top 15, top 10. So I'd love to just hear your thoughts, like, can you help contextualize the success of the ETFs? Because I still think it's not fully appreciated. And I think you're the perfect person to kind of take us from January of 2024 to about 18 months later, July of 2025. Yeah. So I can't understate overstate it. It was the greatest launch in the history of ETFs since day one, really just out of the gate. I, I'll give you like maybe two or three stats and then you know, I won't over talk it because the stats will do the most the talking. But the Bitcoin ETFs have 153 billion, OK, That's just almost as much as gold ETFs have. And they've been out 20 years, right? That's just about where gold is. And that's 1.5 years. So that right there gold to me would be their bogey because it's a very similar type of trade store of value. So to be tied about with gold, there was a time where it beat gold and gold had to run. But they're they're kind of in the same ballpark already, right? We think they'll triple gold ultimately. The other thing is I bid alone is the fastest ETF to $80 billion. It did it in 341 days. The next fastest was like 1600 days. So we're talking over 4 times faster than any other ETF. And the other ETFs that got there that are around that 1600 day mark are from Vanguard and BlackRock, right? These are like mega ETFs. There you go. Vu IFAI mean these are studs. Those are both in the top 10 all of all ETFs. So if your if your record is if you're that much faster than than these studs, It's not like those other ETFs were flashes in the pan. They were like they're legit legends still, so that's a good sign. It means you are four times faster than a legendary ETF. The other stat is now as you said, I bits no 20th in in the top is the 20th biggest ETF. And that is interesting because of the other 19 on the list, the the next youngest is like 12 1/2 years old and I bits 1 1/2 year old. So it's like a toddler hanging out with teenagers. That's insane. And then to add more around the 88 billion mark, which is where IBIT is now, it becomes the most profitable ETF that BlackRock has #1 it's rate or you know, let's just assume it goes to 90 in the next couple weeks, it will be the most profitable. And then they have 1100 ETFs around the world. So that's insane. So those are all just very the other, the other stat that's really fascinating is if you look at the holders, the only people who we know hold it have to file A13F, which is you have to have over $100 million. So it's like medium to big size fish half the file amongst those filings. The I bit has like over 1000 filers represented in only the first five quarters. And if you add them, all of them together, all the Bitcoin ETFs, it's something like 1600 different institutional filers represented. If you take some other ETFs launched in January 2024, they're going to have like 10 to 20 filers, right? It that's almost more impressive because it's easy to get little retail investors to bite on something new. It's like getting, you know, if you're ever going fishing, it's easy to get minnows and small fish to bite, harder to get the medium sized fish and really hard to get the big fish. It's the same thing for ETFs. Big fish need volume and like legitimacy and big brand. It takes a lot, but these ETFs have gotten medium fish early and a couple big fish and that normally doesn't happen until you're 3 or 4. So a lot, all, everything that would normally happen in like 10 years has happened in a year and a half. Hope you're enjoying the episode. If you could just do us a favor and drop a like and leave a comment on YouTube, that really helps a lot. If you're not subscribed already, please do that as well. We really appreciate it on Spotify, Apple five star rating. All these things help. We spend a lot of time booking guests and then actually preparing for the episodes to make sure it's a good use of your time and then recording, of course, editing and distributing them. So please, if you can, just leave a like a comment doesn't take too long and it goes a long way for us. And we hope to have Eric back on. So show him some love if you can in the comments section. Leave him a like we want to have him back on, especially as his book is published. And we'll want to reassess how Bitcoin is growing maybe the next six months or so where the ETF's are tracking. And yeah, hope you enjoy it the rest of the episode. Also, if you're not subscribed, check out our research on rampbitcoin.com/research. Yeah. I mean, that's a great recap there and one thing too. So it ties into what you just one of the points you just mentioned about Black Rocks ETF being the most profitable ETF and you said over 1000 ETF's in their complex as a firm. And then something you mentioned earlier is about incentives, right, and how Bitcoin aligns incentives over time. And I'd just be curious your thoughts on Larry Fink, not him in particular, but him as an edge case or an example where seven years ago, right, Bitcoin is an index for money laundering. And now whether he actually understands Bitcoin or he believes in its merits as an investable asset, he is a proponent of it because it is the most profitable ETF that his firm offers. So just curious like what you're input, what you think the implications are for this for traditional finance? And I'll just tie this in right before I hand it over. I'll tie this into one thing that Brian flagged ahead of this call as well, with T Rowe Price doing layoffs more recently, and they're a firm that really hasn't adopted Bitcoin in any meaningful way. Not to say that's the sole reason, but I'm curious to hear the dichotomy in your opinion between firms that embrace it and firms that choose to continue to ignore it. Yeah, you actually just gave me an idea of Bitcoin could could help. So OK, Sorry. Thank you for that T row. By the way, is is is Bitcoin would have helped T row, you know, or something, but they were late to the ETF game and they were late to find an answer to passive and Vanguard. Some of these old legacy 1990s mutual fund companies were just late to deal with the massive disruption that was Vanguard low cost in ETFs. That said, they stocks these mutual funds own going up a lot and have offset a lot of the outflows. So T row still makes a ton of money, but they lose customers because a lot of the assets become more mirage assets than actual new customers. Fidelity is probably a good example of somebody who got hit by that same problem, but they did go heavy into crypto and I think it's helped them. They also went heavy into some other things and saying Fidelity and BlackRock are two examples of firms where because of the Vanguard effect. And you know, I wrote a book called the Bogle effect. That's the guy who started Vanguard because so many people have gone to cheap index funds for their like stocks and bonds. It's Rob Wall Street of a lot of money. And so over the years, the firms that have thrived and managed to deal with the Vanguard effect best are ones that have been real aggressive. I call it hustle points. You know, they're diving for loose balls and Larry Fink is the ultimate hustle point CEO. I would say BlackRock is the equivalent of like a 12 year NBA All Star who still dives for loose balls. That is how you handle dealing with Vanguard. That's how hard Vanguard is to deal with because they're basically a nonprofit anyway. BlackRock, I think went into Bitcoin be for two reasons. One, opportunism. But you know, they have this public stock. You know, BLK is the ticker. They have to appease shareholders. So as they cut fees to appease to investors, they got to also make money to appeal to shareholders. They've got to serve 2 gods at once. And Bitcoin allowed them to get a new source of revenue because a big thing they were into that died, died down a lot was ESG. And so Bitcoin became like a new opportunity set for them. They also, I give him credit for just keeping an open mind because there's other people who have the same goal, but either their brains are closed or their politics is so strong. They're just, they still crap on it. At least Larry Fink was like, let me let me rethink about this. Let me listen to some of the younger people because there's one guy in his firm, Robbie Bitchnick, who by all accounts deserves a lot of credit. He came from XRP, but it took him like 7-8 years internally there. I think he was. I want to say he was hired in 2013 or 2015, something like that. So he, he was there for a long time before they followed for a bit, but I'm sure he was in people's ears talking about it. And so ultimately though, BlackRock was smart to hire him, right? That was pretty good foresight to hire somebody from that world and just bring them on board. So I think BlackRock deserves a lot of credit for being flexible and having, you know, that mental liquidity. But ultimately I don't, I don't know, I can't peer until Larry Fink's brain to see if this was how genuine this was. But I will say one thing that I have in my slides when I do Bitcoin presentations at these conferences is I show I, I talk about BlackRock being massive. And it wasn't just the ETF. Larry Fink himself went on CNBC and Fox Business. And the stuff he was saying was seemingly radical coming from Larry Fink. He was like, hey, if you think the government's, you know, totally debasing your currency or if there's going to be like, like, this is a way to protect your money. I mean, that is pretty crazy. And then you've got these wholesalers like Jay Jacobs, I'm telling you, who could sell ice to Boomer Eskimos. He's like down in Brazil talking about Bitcoin with that purchasing power of the dollar chart, you know, since the Fed came out. I mean, he's like, this is like serious orange pill type type stuff, but he's delivering it through institutional language and boomer tones and boomer dress. That's why the, I think the term Sue Corners is perfect. And that to me is very powerful. And that is also what you don't see with gold. I don't see anything like that. You know, I go to all the conferences. I don't see any, nowhere near the excitement and wholesale firepower aimed at gold. They all have gold ETS, but there's nobody talking like this and nobody doing this. So you can't overstate the importance of BlackRock, in my opinion. Bitcoin, you know, and again, you could disagree with this. It has two errors. It's almost like BE and AE before ETF and after ETF, but you could almost say BB before BlackRock. When that filing hit, the price was 28,000 or something. It immediately caused this by the rumor rally of 100% so that it doubled just on the filing. Then when the ETF came out, people thought, OK, that's it, it'll be the sell the news and can't you know, it went back up. So I did the math. It's up something like 280% since that filing, and it never looked back. And I think the ETF also legitimized it because remember when the filings were out and it hadn't been approved, there was a question of whether any APS would be willing to name themselves in the documents. Because if you can't have an AP, you wouldn't get it approved. But Jane St. stepped up and you got to thank them because they filled in that AP slot. That was crucial. After the Bitcoin ETF came out and it was hugely successful, the other big banks were like, you can put our names in there now too. And so, you know, Christian Laettner has a great phrase in that 30 for 30 documentary called I hate Christian Laettner because he was like kind of a prickly guy on Duke in the 90's, the basketball player. And he was like winning cures all. Like you may think I'm a Dick at practice, but when we won that championship, like we were all friends again. And this is sort of what Bitcoin I think is doing. It's kind of cured a lot of the skepticism and like second guessing. Then you throw in the Trump election and it's a done deal. I think ultimately it's been completely mainstreamed. It's there's no stigma attached at all. And really, I think the only people who are continuing to crap on it or not use it are just, you know, either they've just made an investment decision that they do think it's going to eventually go down, which is fine. Or there's a anchor bias issue where they attach it with Trump and they don't like him, where they attach it with SBF and they think there's just too much fraud. And that's, you know, that's their problem, I guess. But the big BLOB of like financial mainstream ecosystem is pretty much diving in. And I think the ETF started that snowball. Yeah, I think we tend to agree. There's the notion of nobody wants to catch a falling knife, especially institutional capital or wealthy capital. And the ETF was that first like signal that this is coming. I think it's kind of remarkable when you think about we got to $2 trillion market cap with no regulatory clarity and it's starting to to get clearer. How do you think about the ETF exposure and then what we're seeing this past year with the Treasury and public listing exposure and just thinking through, you know, how is that proxy happening? Is, you know, the, the assumption or the thing we kind of go with is the notion of it's hard to put Bitcoin in a bucket, right? You have a 6040 and then you have this commodity sitting there. And some of the assumption is that it's easier to put in equity with Bitcoin exposure into that. And that's some of the demand. Is that what how you think about it? Or how do you think about the fervor? Because it feels like it's just pick, it's just starting. We're only at. 100 and. 20K we have a lot more room to run there. Well, you know, MicroStrategy filled the void that was there for because there was no ETF. They became the surrogate ETF for a while. Makes total sense. And strategy is just like this very unique situation. These other treasury companies, though, I, I do wonder how much I don't totally get it given there are ETFs unless you're just a fan of the CEO. But I've heard one thing where it's a way for like O GS to kind of like get their Bitcoin off chain a little bit and then get get shares of the company and then they can like better manage cashing out a little bit if they want to rather than like moving old coins. I don't know, I've heard that is one reason to do it, but I don't see any of them getting too big. I think MicroStrategy will be like dominant and these other ones will, you know, I don't know. There's my only thing is like leverage is a double edged sword. So if you're going to have leverage, it's it'll help on the way up, but it'll hurt on the way down. And I do worry about that a little bit. Now the other side of it is I think most people will pick an ETFI mean if you look at the assets, I mean the ETFs as a whole have 1.4 bit million Bitcoin as a group. I think MicroStrategy is only half that. The other treasuries are nickel dime rounding errors. So they have double all of those already. So I think most people prefer to get one. For one, I want to buy the ETF and just have a track Bitcoin and that's always been the case in ETS. People love that direct physically backed exposure if they can get it. That's why the Bitcoin futures, ETF's weren't really that big of a deal. And so I think those will dominate. But I where are they in the portfolio? That's a great question. There's a lot of answers to this. Personally I think a lot of people are losing faith in bonds because the ag bond index hasn't kept up with inflation, doesn't even hedge you that well and sell offs anymore. So I think bonds may take a little haircut. Also if you are trying to hedge inflation this could be seen as a store of value and be in your alternative bucket if you have that. But it's a little volatile still so it also could be replacement for some mag 7 stocks. Bitcoin is just highly unique in that regard. Personally, I would probably trim my equity portion just to be safe because I, I don't know, you cannot rely on it as a, as a hedge for your whole portfolio or if the stock market implodes it, it may go down just as much. And so I think you have to look at it as a hedge for the global money printer and a technological opportunity and that and because it's volatility, I think you'd have to put it in alts or equity. But there are certainly other parts of the portfolio they're losing some of their appeal and namely bonds. And so there's a lot of opportunity right now, I think for these this whole world to sort of get into that 6040 portfolio in the next several years. But generally speaking, we have this chart called the Modern Portfolio and we have it, it says 85% cheap beta, which would be like stocks and bonds and Vanguard index funds for like 3 basis points. So it's like beta, you know what I mean? You know what beta is, right? OK. So cheap beta and then 15% hot sauce. And that would be like, I think crypto would fit in there perfectly. You could put, you know, single stock investing in there. You could put like thematic investing. There's things that you just want to speculate on that aren't covered by that cheap beta that give your portfolio a little spice and a little flavor. And to me, Bitcoin, that's why Bitcoin I think is stronger than gold in the modern portfolio because it can play that role of store of value, but also play the role of hot sauce, which is in high demand right now because a lot of people have married Vanguard index funds and are committed to wait 30 years. But in the meantime, they do want to make it a little more interesting because that's kind of boring to wait 30 years to compound. So to me, Bitcoin actually checks two boxes. And that's why I think it's got more appeal than gold for the time being. That gold had a good first quarter, though, you can't lie, but that's why we think it'll triple gold. But those are all good questions. But I don't think the treasury companies. Are going to like grow that big relative to MicroStrategy or the ETFs in my opinion, but it is interesting. Yeah, the the bucketing conversation is an interesting one. I think you you described it well and that like it is you know a multidisciplinary multi faceted asset. You can look at it in various ways. And I think that has been, you know, a driving factor in the sort of traditional finance persona being unwilling or just struggling to comprehend, like, where does this fit? How do I look at this? And then typically the, the, the answer is just like, I'm just going to ignore it and, and pretend it doesn't exist. And I think, you know, going back to what you were saying around the willingness to have an open mind about it like that, this is something that's always fascinated me about Bitcoin because like everyone's heard about it over the past decade. At some point somebody said something to you about Bitcoin and you probably just brushed it off and then it 10 XS, you hear about it again. That creates a real psychological bias in your brain that you missed it. And well, now I can't buy it now at 10X. So I'm going to continue to ignore it. And I think that proclivity or that psychological bias is even stronger in the trad 5 professional brain because they have an air of sophistication about them. And in many cases, rightfully so, they're, you know, they're it have invested for a living and some of them have been, you know, very successful in their own right and various other asset classes. And so that seeing it, missing it perhaps multiple times creates this ingrained bias against it. And it takes a real sort of you humility and and shot to the ego to say maybe I was wrong. And Larry Fink is an example of this. Whether you think he, you know, genuinely believes it or not, that's at least how he's talked about it, is that I had this realization. I realized I was wrong. Most recently, there was Philippe Lafont from CO2 who had a very similar commentary around it. Just like, you know, the most important quality you could have it as a successful investor is the willingness to say what it. What if I am wrong about this thing? And I think that is the biggest thing holding back the Triadfi brain is they're not willing to say what if I was wrong about this? Because to your other earlier point, if you actually look into it in a, in a, you know, genuine way, you come out the other side whining exposure. And so I think that's just a fascinating thing about Bitcoin because that is the adoption story. That is what drives price over time is education, people realizing what this actually is. And we know the supply is finite. So as that education increases, demand increases and the price goes up. Like that is the whole story in my in my brain. So it's fascinating to just, you know, think through how that evolution is is occurring and, and how the psychological factors at play, you know, are, are. Progressing one quick note to that, that is if you just view it as hot sauce or like a tech stock you missed out on. I do think there's another component here which is debt and the money. Like, you know, if you really dive into the amount of money that's printed and how we left the gold standard in the 70s and then how it really escalated in the past 20 years, you, you can get pretty scared If you look at that, you're like, you know, because everybody knows governments are irresponsible and they're going to throw money at any problem. Like, who wants to be like held back by like the amount of money you can print and the amount of money that it takes to pay off just the interest now on the budget is like the second item once you get there. I think that's a front door for anybody, regardless of what the price is at that moment. Because if Bitcoin is attempting to solve that problem, then, well, that's why it matter. It it's more than just you, then you didn't miss it because we're just the beginning of a lot of this. So I find that if, if, if you're like an MMT person, like Keynesian on steroids, you probably look at Bitcoin as like, you're like a novelty of, you know, a Ponzi scheme, whatever. But if you look at that currency debasement and the potential for inflation and, and what happens to money. And because stocks are a little long in the tooth, they've had a 20 year rally pretty much. And there are the valuations are really stretched to historical levels. He kind of opened up your mind like, well, I know the government's never going to stop adding to the debt. I believe that those couldn't, you know, those came along and like gave it a good shot. There was a lot of political will. It couldn't even do it. And so you're like, well, this will, this will something that is scarce and hard and the government can't get its grubby hands on it like it, it cannot dilute it. And just something, just something, anything that is undilutable by the government is a powerful proposition. If you go through all that, that it, then it then it becomes something we're like, well, maybe the price isn't that high. So I, I do because you're like, the debt is just getting started. We don't even know how crazy this is going to get because the, the amount that grows per year is crazy. And in America it's not even that bad. The other countries, it's like crazy. So I really am somebody who I'm not a full like hawk, but I do think this experiment of running up this much debt, irregardless of how much GDP we have is, is not something I'm really comfortable with. And so Bitcoin and gold or something like that, or even like art or real estate to a degree, these are these hard assets that I think help people have some comfort. But the thing with all those other assets, it's really hard to get those unless you're a lot of those other assets are a pain in the ass or for really, really rich people like who has access to like a Picasso painting. So I think Bitcoin is like a democratized version of one of those sort of real assets that can be UN dilutable by the government. And that to me is the front door where you don't blow it off anymore in in my opinion. I mean, I, I, you know, people have other theories on this, but that that alone is enough. And then you think, well, if if more people think like me and they buy it for a store of value and the volatility comes down, then it has a shot a fighting chance to be a currency too. But I will say that the, the interface has to get way better, you know, to, to go get a wallet and then they got to make it like, and it's also expensive. I'm sorry, but even 40 basis points to like exchange your dollars for Bitcoin is a, is a RIP off. I'm used to one basis point in the Triadfi world. So I think as the exchange rates come down and the volatility comes down and the interfaces are as easy as using fantasy football, then you might be having a talk about it being a global currency. So I think this store of value is like maybe the first step. So that's why in, you know, this project we're working on, one of our thesis is that the ETF it, it isn't responsible for all this. And obviously it didn't make Bitcoin, but it, it kicked off what is could be this nice chain of chain of chain reaction of making it legitimate. You know, the adults are here, you can feel safer. And then the IT got more mainstream, better owners, seems the store of value volatility comes down and ultimately it's a currency. This is not definitely going to happen. But if you trace it, it's you could honestly have this pretty logical chain of events that started with the BlackRock filing. So we don't have to not to go back there, but you can't do any of that if it's in the ETF, you can't use it as a currency. But either way, but the core component if you went through the logical correct progression that is absolutely correct. As long as Bitcoin enforces a fixed supply of 21 million, like that's the rational outcome. Is that so like as long as that stand? Do you, how would that change? Would you? Wouldn't you need 96% of people to say? Let's it won't change because it's just not the rational thing. Like we all don't want our money to be debased, so it won't change. And so, but you're one just easy quick because it's an easy one to dismiss. But it makes logical sense is in the same way like when you transact for gold or any fixed asset, there's like whether it's operations compliance or you want the security around it. So you naturally are going to pay something because nothing in the world's free. There's a reason where whether it's transaction fees or custody fees cost more today nominally than they will in the future because the delta between your cost versus the appreciation is nom like it makes zero sense to like bite over 40 bits when the price is appreciating at a CAGR of 49% year over year. So as the market grows, not only just like the Internet, everything will become a lot easier to use. All those costs will be easy. And this is the part of the the suit corners is sometimes the pejorative in the sense of like it's shit corners with suits. So like they're going to steal your money. And the reality is it goes back to crypto. Like the idea is have enough humility that not you, but just in general, if we got to 21 million finite scarcity, like that's the zero to 1 moment of similar how gold came about after being built on whatever happened before that, that you can figure out everything else, meaning how do you transact? How do you secure it? You don't create other ones like that. And so anyway, I'm just kind of sharing with you. I think you know these things, you're coming through it in this book, but this is the rational outcome and the alpha is in this middle part of saying this is where the market's going. You can't tell people to put a dog chain dog tag on it because that's not commercial and feasible. But also when you get far enough down the other side, because you've already worked through this, you're mentioning government and unsustainable in debt, but you also said before they're going to bail out Coinbase. Like those two things are completely juxtaposed. And so anyway. Not really. I mean part of the IT would be ironic if if there was a Bitcoin bailout given that, but how would that? Look. Given that Bitcoin was birthed, you know, in the middle of the bank bailouts. But no, I'm just saying that, you know, in in the case of like a hack at the size that you're talking about, which would be it would be the biggest robbery in the history of the world by like what, 50 fold? I just think the press and the government and the FBI and the amount of resources that would be put on that would be so monumental that it would overwhelm the situation. They would they would it would be it would this be it would be front page headline for for weeks. This would make it an an emergency. That's what all I'm saying. I'm not because like in that hack with the lady who was doing the rapping crocodile tear, whatever, what's her name? Lady Crocodile. I forgot. Her name, I know who you're talking about. Yeah, the couple, the Bonnie and Clyde couple that like, first of all, they only hacked, I think it was a couple billion, which is still a lot, but, and it was from some, it wasn't a mainstream exchange, but they ultimately couldn't spend their money The they, they, they couldn't really get the Bitcoin out. Ultimately though, they did some things that were traceable and they got busted and that made really big news. And that was only a couple billion. So you're talking about a trillion dollar theft that I just, you know, in the ETF world for 20 years now, people have been worrying about ETFs, this, that and the other. And some people be like, well, ETFs hold junk bonds and the junk bonds could go illiquid in a huge crisis and the ETF would then trade at a discount. And I'm like, OK, OK, fine. It trades at a 2% discount. And then but I'm like, no, what if it's a prolonged? I'm like, dude, at some point you're creating a picture of World War 3 and we're gonna have bigger fish to fry than the fucking junk bond ETF. So like you could take these scenarios to a point where they're so big and crazy that they would become such a bigger problem than just should I use the ETF or not? I think, I think the I think the easy example just to make it more rational is because you said this earlier. I forget the number, but it was like 5 to 10 X. The largest robbery in human history happened in the digital asset world that nobody talks about. It was the Bibit hack. It happened the past 12 months. It was 1.75 or roughly billion. The largest other hack was Iraq, Iraq, gold in Iraq, and then some painting in Paris, which were like 30 to 50 million. And this one was, you know, 20X, I think 20X. Point being is if we all agree this grows, then that means sovereign adoption grows. We're going to start settling trade and oil and other things. It would just be a sovereign that would take it. What are we going to go like we're going to start a nuclear war with Iran or whoever took it? Like there's a lot of progressions where it doesn't have to be an individual not worrying about stealing it because that's where this all goes. And again, it's not to say like this is crazy. It's more of the rational thing for investors as their exposure goes from 3 to 25%. You just if there's 10 percent, 2% point 1% that's I'm just I'm mainly sharing like this is going to become more. Of a narrative. As Coinbase goes from 800 billion to 1.8 billion because you already hear it in your 1.8 trillion. You hear it in your circles. People's uncomfortability with Coinbase's concentration. Imagine the price double S that's just going to increase and there's not that many world class custodians to actually pick up the scraps. You don't want a net new custodian to do it either because they don't have a track record. Yeah, 2 counterpoints, 1. I think if it grows and gets to be bigger part, I think the regulations will adapt to that because it'll be more, you know, people, even the people in Congress be like shit, this is like 50% of My Portfolio. I think, you know, you have to have faith in the system a little bit to sort of adapt to some of that change. The second thing is, you know, whether one of the thing about having your own storage now, I know if you are doing it for somebody and you're like putting their stuff in really safe places, I think there's always going to be a market for that. I mean, there's a market for Swiss bank accounts to this day. But for somebody to have a little bit of Bitcoin in a cold storage and then walk around with it, I think a like, I think in the LA fires, some people lost their Bitcoin forever. There's Bitcoin and the one guy who's trying to get his Bitcoin out of the Scottish dump for like 10 years. The ETF does fix that, you know, you know, I would say your firm fixes that also. But if you get too big and people know you have Bitcoin, then you get like a safety issue. Like you said, you want to get your finger chopped off. So I think there is this tension between wanting to not have, wanting control like safety over yourself versus safety of your Bitcoin. But I think that's a personal decision. It's subjective. It also depends on how much true trust the system and BlackRock and these other companies. And I think everybody will make the choice that's right for them and businesses will pop up to to like sort of cater to different types of people with different needs. So I just, I'm a little skeptical on a situation where Bitcoin is 80% of like normal people's portfolios. Coinbase gets hacked. It's a $4 trillion hack, which would be like what, 8,000,000 times the biggest robbery ever? Something like. That. So I think to be fair, before it gets to 80%, I can promise you it'll be figured out because nobody's going to park 80% in that scenario. To give you a little sneak peek from the regulatory, specifically SEC, when this next cycle, call it four years from now, three years from now, something like this will. And it doesn't have to be any of these people. The key holders didn't even have to be this firm, but this will effectively be the way it's set up because we've had ETF providers, Bitcoin ETF providers behind those doors tell us this is bulletproof. The problem is it melts brains because how do you go to the SEC and you go from explaining Bitcoin to explaining no institution has unilateral control and this skills proportionally. So don't get fixed on the number of keys because you can have 5 institutions have three or five have to agree before any assets move. It's just kind of like where we see the market going eventually when an ETF holds a trillion dollars, it's the rational. I mean, honestly, you should pitch this to the ETF issuers. I'm sure if an ETF came out and said, hey, we're going to be like IAU where they hold it in three different vaults, we're going to hold your Bitcoin with three different custodians and these custodians will have that may sell. I mean that that level of security may be a differentiator to the list of ETFs out there. I bet that you know I'm we we could see that. Yeah, I think when they're looking for marketability, I know we have to run. When they're looking for marketability right now, everyone, nobody got fired, nobody gets fired for going to Coinbase. So that's where we're at today in the in the process. Yeah, I I do agree. I think Coinbase, it's too it too much of the custodian market. I I would like to see it get spread out more. One other quick thing that that three keys that reminds me, I was like this guy Jamie Catherwood, I think his name, he's like a real historical financial guy. And we've had him on the show and every time we think something's new, he'll say no. That in the 1800s they your three key thing, they used to have these locks with gold or bonds in them, I think. And and they had three different keys and like 3 different banks would have a send a person like a three, you know, 3 lock. Yeah. That's what this is in digital. Form it is, yeah, no, they used to use that they. Explain it. Yeah, I love that. Yeah, anyway, to the to the. Boomers is like there's a lock safe or there's a safe and there's. Three, I could see a movie where the guy cuts the arm off of like the three the two guys with keys and then he, you know, you know, like some crazy shit. But there's also isn't there a movie where like multiple things have to be done at the same time to to? Maybe it's Mission Impossible, but this idea of like 3 keys going into the same lock at the same time is a powerful visual that I think people concern with security will respond to well. Unfortunately, we've had time and Eric, we're going to have to have you back on if you agree, if Michael didn't scare you away today, hopefully I'll have you back on in a few months. No, look, it's fine. Look, I I appreciate all this. This is keeping me sharper. And you know, almost everybody in the ET and the I do go on these podcasts where it's just straight like I own Bitcoin ETS made number go up. I love you. But some, in a lot of cases, like people do have businesses that compete with ETFs and they're not perfect. I just think they do check a lot of boxes for people. And we try to, you know, make sure that people know. But like, I will give you this one story thestreet.com ETFs got so big for like all these reporters were covering them and the media got a little ahead of itself and they write stories like here's 5 ETFs to play Amazon earnings. And I was like, you know what, just buy Amazon. It's OK. Like the ETF is not the salt, the solution for everybody. I love it. I dedicate my career to it. But there's going to be cases and things where people have different needs. You know, private equity is probably better in a different wrapper or something else. So, you know, there's. We, we personally believe ETFs, everything's good for Bitcoin and ETFs are ultimately good. And so we see that it's the gateway we can we kind of hold you to when this book comes, you're one of the first, this is one of the first places you come talk about it because. Yeah, sure. We'd love to have you on because it sounds, I think ETF is the beginning of the book and there's a whole progression of like how this. Yeah, it's like every part of society. And that's kind of where we we think it this all goes. Absolutely. We're, we're, we're focusing on the sense ETF cause all the other books written, there's so many books they didn't, they don't have any of that. So we're trying to cover the financialization of it, but it's like hitting a moving target. Whenever we hand it in, it's like 8 months little publish. It's like, my God, that's like 8 years and like Bitcoin years or whatever. And it's like, I'm not sure how we're going to deal with that, but we're doing our. Best we need a new chapter on the three keys. I know 3 keys. Yeah, I know. I mean, look there, there is a section on security and it's pretty small, but maybe you got me thinking, maybe I'll reach back out and try to evolve that a little bit because I do want the reader to know all the possible scenarios. Like, we're not it, you know, We're trying to give people every bit of information so they can be the jury for themselves. Yeah. The reason why I'm a stickler on this is because I've seen everything happen and everyone new comes in and they believe it can't happen again and it just continues to happen because, yeah, we've never seen digital bearer asset independent of if it's black. Rock, have you ever had a Coinbase person on your show? I worked at Coinbase for for 12 months Eric so. Oh, you did OK. It did, yeah, before joining on ramp. Are you like, so are you bring? Are you like the guy who was building the Death Star who gave the plans to be like, wait, the Death Star is actually like, you can blow it up, guys. What's scary about the Coinbase thing is I've talked personally to their head of institutional, very well known guy in the space he probably met. He has no idea how they custody the assets. When I explained what we did, what we do, he's like, why aren't we doing that? This is genius. And it's like we got to go you. Know. So yeah, I mean. It's a complex space, it's super nuanced. And so that's the problem is that like it just takes so much time and it's the whole notion of proof of work. You had a whole career to like dedicate pre ETF. So then you're coming up to speed on the Bitcoin and you're the best in the world to do it. There's very few financial institutions that also deeply understand Bitcoin. And so and then also when you think about the project, the trajectory and then ultimately what does an individual want? Because somebody that's holding like our type of client that has anywhere between millions to 1/4 billion, they just need a, a number of different things because it's the majority of their wealth. And that's not how Triify builds. Triify builds omnibus wallets. And they say, hey, trust us, bro. And that's just not going to work in this world. And people are going to. That's how we're going to make all our money and the businesses we invest in. Yeah. I mean, you're the IT it you should say there's an outside possibility it may not work in this world. I think like it's a little different. I will make any bet publicly here and I'll give you 10 to 1 odds, right? Why is your traction, your former company so much? I'll allow it. I'll allow it. Well, listen, you should have the, you know, you, you really need to have the Coinbase person on. We'd love to. I'd watch that. I love it. Eric Well, thanks for humouring us. This guy guarding the Coinbase Vault. Come on. See, you're actually, but you're helping because like there's no way on planet Earth, everyone, anybody knows how Coinbase custody. Is it in the same way Fidelity, in the same way Mount Gox, Celsius or Genesis? Because it's an operational security hazard for anybody to actually know how it's done, which by definition means you can't actually park all your money there. Interesting. All right, you. Give me enough time, Eric. If you give me enough time, you'll become a client and then you will have another chapter because you're going to realize I'm telling you, like the ETF providers have told us, this thing's bulletproof. It's just nobody gets fired for going with Coinbase. So everyone's going to do that to start. Well, listen, we're actually interviewing the Black Rock guy in a week. I'll, I'll, I'll definitely put this at least over to him and press him a little more than I probably would have. Yeah, and the reason why everyone won't will push hard against it because it goes back to the mental model of traditional finance. You got to have eyes and hands on the asset because then you can do the things you want with it. And so it's the same way the Internet. It's going to take a digitally native firm that understands Bitcoin deeply to build a new world in the same way it took Netflix the way to re change how media is distributed, not Blockbuster. It's really that simple. So there's no reason why BlackRock or Fidelity would win the new world. Like it's, it's really, if you think about this as that radical, that mental model is as simple as that. Like they're not going to win in the new space because they just, it's, it's, it's just not rational. Dude, I mean they, they BlackRock has the most Bitcoin besides Satoshi in a year and a half. I mean, that's pretty winning. But it's a $2 trillion. That's 2 trillion. That's winning dude. I'm sorry. I'm in. I'm at the long game. I'm at the long. Game, yeah, no, I, I, I would say this. I would say there's room for multiple winners. Of course that's true. This is a great this is a a great pod. I I appreciate Eric. Yeah. No, it's good. Humoring as a. Blast. Yeah, we'll, we'll have to have you back. Yeah, All right. See you guys. Good talking to you. I. Appreciate it. Bye. Thanks for listening to this week's episode of the show. If you found the information valuable, please share the episode with a friend or leave a rating on your favorite podcast app. All the links we discussed in today's show will be in the show notes inside your podcast app. Before we finish, a quick reminder that Onramp Media is for informational and entertainment purposes only, and nothing should be construed as investment or legal advice. 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