Bitcoin's Hidden Yield: Why Options Are Taking Over Crypto | David Lawant, Anchorage Digital

Transcript

Bitcoin is a very interesting asset, right? Because it it has become this global macro asset, this kind of global commodity asset, but it doesn't have a native yield, right? So contrary to maybe Ethereum and Salon or Hyperlquid, it doesn't have this taking yield. So it's natural for folks, especially the more the more tready folks to look for ways to extract an yield from the asset. That's why we call it synthetic yield because it's not like some sort of native yield. >> [music] >> David, welcome to the Defiant Converge podcast. It's great to have you on the show. I'll introduce you really briefly for our audience. David Lavant is the

head of research for Anchorage Digital and author of a recent paper on Bitcoin options that we'll dive into during this conversation and other topics around the industry. So, first of all, great to have you on the show. >> Thanks for having me, Chris. I'm excited to be here. Big fan of the show. Big fan of the Defiant. >> Nice. Good to hear. So, you're somebody who spent your career researching trading in crypto probably before most of the people who are in the industry today even knew what these assets were. So, can you please provide us just with a quick overview of what has led you to this conversation today?

>> Yeah, 100%. Yeah. So my career basically I'm an engineer by training but I haven't worked as an engineer for most of the time. After graduating I was a software engineer for a couple of years but then I quickly shifted to traditional finance and then I moved to crypto. Both in traditional finance and crypto I've been spending most of my time in institutional finance. Some on the sell side sometime on the buy side but always close to financial infrastructure. And and this is something that I find very interesting. I think it's one of the big changes that crypto bring. I'm also very excited about Bitcoin as a monetary asset. So basically, I'm one of those Treadfi guys who a few years ago started to look into

Bitcoin and the whole crypto ecosystem. found it interesting, made a switch, haven't looked back, and I tried to apply a lot of what I've learned in my traditional finance days, especially as it pertains to those market structure, trading dynamic topics to see whatever what what I can apply and add value to the crypto market. Anchorage Digital is a broad company and we can talk more about what we do but we started as a custodian right almost 10 years ago and then over the years we started to add a bunch of services on top of that we started with some things that are more perhaps adjacent to custody so things like staking and settlement and governance are also we're also well

known for being the first crypto company that has a national trust bank charter we've been operating trading this charter for more than five years now. This is very important for things like stable coin issuance for providing banking services to crypto companies and other types of companies. We just announced an agentic banking offer. And then one thing that we've been doing for a while but that we formally announced mid last year was our global market service. So these are services that are usually more associated with crypto prime brokerage and these are things like spot trading, OTC derivatives trading, prime financing. This is all to say that Anchorage provides a pretty

broad range of services. We have a very al also a very broad range of clients. They go all the way from the most cryptonative VCs you can think of all the way to asset managers that are just starting to engage in the space. treasury companies, protocol foundations, high netw worth individuals and a lot in between. And the reason I'm saying this is because I mean at Anchorage because we're very close to this, let's say hardcore infrastructure, whether for institutions or on the more cryptonative side, I've been trying to apply a lot of what I've learned in traditional finance to crypto and also learning a lot of new things. Of course, it's an exciting technology. It's an exciting asset class. So, it's been a

thrill so far. >> Yeah. Good to hear. When when thinking about the the history of Anchorage in a way, we were talking about some of the most relevant trends today around, you know, like stable coin issuance, custody of digital assets, and this whole idea of tokenization. But it's also interesting to hear that you're now rolling out new products and services tailored to towards the more traditional like market side of crypto and with prices, you know, in being as they are currently and not a lot of positive sentiment out in in the market for major crypto assets. Where is the demand coming for for those kind of services that you're rolling out?

>> It's it's interesting. It depends a lot on the product and it can come again from each one of these investor personas that we cover. I can give you an example that might be interesting for for the audience here. Encourage was I think the first company that started to provide access to DeFi rails from a regulated custody perimeter. So for example, we announced an integration with Morpho so that clients could be having their assets on Anchorage custody. So that's qualified custody and access for example morpho vaults. These is this is for example one type of service that we started to hear from and we started to get demand from that. So treasury companies they wanted to be more

efficient and to how do they deploy their assets but once we launched it we started to see demand from a bunch of other client personas from VC high network. So it sometimes originates in one type of persona and then it kind of spreads out but it depends a lot on the product. Anchorage is now such a broad company and we offer all these infrastructure services that they can honestly come from a bunch of different places >> and and and those investor personas are increasingly including more traditional trading desks and shops because some of the the personas you mentioned are crypton natives in some way treasuries or VCs already comfortable with digital assets and they needed you know more

robust infrastructure qualified custodian. So when you're thinking about, you know, like derivatives and other range of of of products that you would imagine, you know, yeah, a hedge fund or or somebody like them being interested, I think we we had a a wave of interest in the EAL assets that in some way has eroded over time or or do you have a a different take on that? >> No, 100%. So I I would say that the type of institutions we've been interacting with, they've obviously been changing over the years, probably especially over the past year or two, they're becoming a lot more treadfi tilted. I mean, I think this kind of echoes the crypto enterprise era that we're seeing broader in the but just to give you a few examples, we we launched cashless

stable coin reserves offering in partnership with JP Morgan. We announced fiat yields at our bank accounts in partnerships with bony that's bank of melon. So these are like very established tradfi institutions that are already engaging with crypto in some way shape or form. So it's definitely been changing. I would say that it shouldn't be surprising for anyone who has been following crypto over the past what six months to a year that the caliber and type of institutions that have been engaging with the technology has been changing and we totally see this reflected for example in the partners we work with and is it also true on on on the trading side then you recently published this interesting paper around

synthetic yield on on Bitcoin who is after synthetic yield on Bitcoin today and and where Does that fit between other asset classes and you know the risk profile of an investment portfolio? >> Yeah, 100%. That's a great question. Bitcoin is a very interesting asset, right? Because it it has become this global macro asset, this kind of global commodity asset, but it doesn't have a native yield, right? So contrary to maybe Ethereum and Salon or Hyperlquid, it doesn't have this taking yield. So it's natural for folks especially the more the more tread five folks to look for ways to extract a yield from the asset. That's why we call it synthetic yield because it's not like some sort of

native yield. It's not a it's not a credit instrument. So it's it's a yield that you're kind of creating synthetically from more sophisticated instruments. The probably most straightforward way to do this is by covered call selling or an option strategy which is what we cover in the paper. But this has honestly been coming from a lot of places. So for example on one side you have the big hoarders of Bitcoin right? So you have a few dads, you you have maybe Bitcoin miners or even Bitcoin whales that might be willing to do some covered call selling in order to extract a yield on Bitcoin positions that are already sitting on top of. But you can also see that in the more traditional market. So for example,

there are some of the ETFs that are already starting to engage or or are filing vehicles that will start to engage with covered call selling strategies. I'll give you an example that for me was very telling. Chris Goldman Sachs announced their first crypto ETF and that was a Bitcoin covered call ETF. So it was not straight Bitcoin spot ETF. They went straight to this what they call premium income or some sort of covered call selling strategy. Part of the the reason that we're seeing that is the options market has grown immensely over the past two years. This is something that not a lot of people are aware of. We tried to address that this in the beginning of the report, but the Bitcoin options market has like 10xed over the past four

years and it has probably 5xed over the past two years and a lot of this growth is actually coming from IBIT options. So this is a tradefi leave of the market. Two years ago, basically all the Bitcoin options market was concentrated on Derbit, which is this very cryptonative venue where a lot of the cryptonative price discovery and options happened. IBIT launched and then shortly after that an options market started to develop around IBIT. In less than a year, IBIT was as big or almost as big as Derby. So, a lot of this interest in options is actually coming from the Treadfi side as well. there is cryptonative interest basically I would

say most folks who are sitting on top of a bit big Bitcoin position but also there is this stratifi component too >> that's that's super interesting so I have two set of questions the first one around I bit like taking over from derivit that has to do with institutions being more comfortable with those type of railings or understanding the underlying asset better or not wanting to go to different venues what what's driving that you know like greater adoption from that type of asset like options on that type of asset. >> Yeah. No, 100%. It's a great question.

Well, I think first of all, it speaks to the success of IBID, right? IBID is an ETF that at the time it launched and I think up until now, I don't know about this new AI related ones, but it was the most successful ETF launch of all time. It amassed a massive amount of assets. It was seeing very constant and active trading activity, right? I think it was normal for IBIT to trade well over a billion dollars a day. So, it's it's probably in the top five or top 10 ETFs in terms of activity and it's natural for us to start seeing an options market develop around that. Some of that is coming from institutions, some of that is coming from retail. I have to say one thing that I learned in crypto is that

you should never minimize the importance of convenience. And I think that just having options on IBIT, which means that these are instruments that trade on a traditional brokerage account that any retail person who has a Schwab or a a Chase account can have access to. This is of major value for the retail side of things, but even for the institutional side, Chris, if you think about being integrated with these more traditional finance pipelines, this means that you can use these assets as collateral with traditional prime brokers, right? So here we're not talking about the crypto prime brokers, but the traditional prime brokers, the JP Morgans of the world,

the Goldman Sachs of the world. So they can operate under that environment with for example using IBIT as collateral and trading those options. Those things come with a trade-off though. For example, if you think of a company like us, Anchorage, we're more of a crypto prime broker. The issue with listed options on on IBIT is that they don't trade 247. And we can dig a little bit deeper into detail, but that means to me at least my opinion is that risk management around these strategies, it tends to be a little bit more complex because you get exposed to these gap risks, right?

You're just trading traditional US equity hours. So, let's say 9:30 to 400 p.m. Eastern time. Whenever Bitcoin moves, and more often than not, it tends to move on weekends or it tends to move overnight. these it's it's these reflect as just price gaps in these in these markets. So that's why sometimes it's interesting to interact for example with cryptonative OTC options desk right so we run 24/7 and there are advantages on being more plugged into the cryptonative market just because Bitcoin or crypto trade 24/7 these things are volatile they can shift here or there but there is definitely this traditional finance

part of the market that exists it's very active and I think we should welcome it. It's great to see that traditional finance is engaging with crypto. I think we all benefit from it, >> right? And so it's essentially like an easier conversation, I assume, to start, you know, trading these type of options if there are against traditional collateral on traditional plumbing, but at the same time, you're buying other types of risks because it's an asset that doesn't stop during the weekend. Yeah, it it the question is whether institutions will make the jump into cryptonative venues and I would assume your take is that yes, but I wanted to ask you about other another thing that you mentioned. DATs have come through under you know greater pressure given

the market conditions and we were heard you know of strategy selling Bitcoin or going into fixed income to rebalance their portfolio. Where do options play in in in this like realignment of the DAT landscape? >> Yeah, so there are a few DATs that have been engaging with options. To the best of my knowledge, MSTR has not announced anything related to options, but there are some of the other DATs that have been engaging with options. And the easiest way to think that to me is again which is kind of a little bit the theme of the report is that options are a great way for you to extract the synthetic yield on your Bitcoin. So

especially Bitcoin which is an asset that doesn't have a source of yield. That's that's one way to do it. And I would say that another way to do it would be for example lending your Bitcoin to a credit desk. The thing is that today if you if you sit on on a big amount of Bitcoin and if you look for a credit desk and you try to lend your Bitcoin, they're probably going to offer you a very low interest rate. So this is something that is not very attractive today. With options, this will depend a lot on the factors you're going to choose. It's going to depend a lot on the market regime, but we show in the paper that if you look over three-year windows, historically median yields have been between four to six%. So in Bitcoin

terms, right? So over a three-year window, you can surpass the Bitcoin return on a four to six% annualized yield basis, which can be quite quite attractive. In the best scenarios, it can go well into double digits. These are very consistent returns as long as you are operating in what I call the safe corridors, right? So you're choosing the right combinations of deltas and expireies. uh you definitely need to have some sort of riskmanagement filter in place. This is not a passive strategy. This is sophisticated active management strategy. But as long as you have all these filters and guard rails in place historically, it has been a pretty interesting way to extract and

yield from your Bitcoin. And the gets I think in my view, they're they're they're a prime target for this because they're just sitting on top of this Bitcoin. a lot of them don't have plans to sell them for a long time. So this is one way to start generating some revenue on top of this asset base. >> So it's and do you see this also in traction for other cryptocurrencies? Let's say Ethereum for example, Ethereum has this passive yield staking. But have you done any parallel analysis for options on Ethereum and as the regulatory landscape has evolved, do you see more assets coming by as well?

>> 100%. And I'll tell you a lot of the investors and clients and counterparties who who read the report and and some of them that read an advanced copy of the report, they were like, "Hey, this is great, but you did a report only on Bitcoin covered call options. What about other assets? thought about this and and the thing is that the report is already long enough as this for those who are interested in looking at it is already 40 pages. So if I added more on other assets I feel like it would go way beyond what most people can digest in a single piece. Hopefully we'll be able to address some of that some of those going forward. But what I what I would tell you is there are basically two ways to expand this analysis in terms of sorry excuse me in terms of new assets and in

terms of new things that we could be looking for. So the number one would be you could be looking into non Bitcoin crypto assets right so you could be looking at ETH you could be looking at soul you could be looking at hype some of these markets are actually quite developed already ETH options are still are already pretty developed on there bit when you work with an OTC desk like the anchorage options desk you can go actually well well beyond that curve so we are able to provide pricing for options on on a bunch of different alts so that's an very interesting part of the market. The main difference here I would say is that first it's a different return and volatility profile and that you can just factor in the simulations.

But the main difference here is that these assets provide a staking yield. So in theory if everything else is equal, the staking yield kind of helps because your collateral is earning a yield. It's just not sitting idly there on top. So, so it's actually an interesting way and something that should help the return of the strategy if everything else is equal. So, for sure it's one potential venue to expand this report get into things like ETH, soul, hype. This these are all assets in which we see demand for options trading on. The other way that we could go and we also got a lot of questions on that and you alluded to this earlier is on things like let's say IBIT options, right? and not Bitcoin

derbit options, not not Bitcoin spot native options or things like MSTR, right? Strategy options. And what I would see here is that this is also provides a different trade-off. It's a little bit what I was talking to talking about before when you look at things like Derbit and MSTR. If you look at their volatility risk premium, which is kind of a way to gauge how attractive this strategy is, you would see that they have higher volatility risk premiums compared to just a Bitcoin spot option strategy. So, so in theory, the strategy has even more returns to capture. On the other hand, there is the trade-off that I mentioned before. risk

management is a lot more complex because both MSTR options and IBIT options they trade during US equity market hours which means if Bitcoin spikes either up or down outside these hours you don't have you you might not necessarily have the risk management capabilities to manage these things precisely in real time. So risk management gets a lot more complex but there's also probably more fat to extract from the trade. These are the two big ways that you can expand the analysis from here. Again, non-native cryp non- bitcoin crypto tokens, ETH, soul, hype, whatnot. And then the other, let's say bitcoin equity proxies like

hybit or bitcoin augmentation vehicles like MSTR. So, it's it's a very rich environment today. I think people don't appreciate how big the options market has been for the crypto space. It's been growing immensely. Today, if you look only at Bitcoin options, the open interest, when I published the report, which had data until the end of April, the Bitcoin options market had an open interest of around $60 billion. And $60 billion is is a big number for derivatives open interest. Just to give you a sense, this is more than the Bitcoin futures market in its entirety.

So, if you add all the pers, right? All the Binance BS. Okay, buy bit, hyperlquid. If you add the dated futures contracts, things like CME, Bitcoin futures, if you add all of that, you're probably going to get to something between 45 to 50 billion as of those comparable prices. So, the options market is already bigger than the futures markets, which is not unusual. If you look at the traditional equities market, the options market can be five to 10 times bigger than futures. In crypto is like 20% bigger. So in theory, if this ratio holds or if this ratio kind of is any proxy for what we can see about crypto in the future, there's room for the options market to grow even more. And along those same lines, so

where would you rate the maturity of the option derivatives days for for detail assets in terms both of the sophistication of the strategies and the and the type of products are traded compared to traditional asset classes and also compared in terms of how robust you know going through the the research for example things like you know this highly you know intense episodes come about And we have enough history to truly understand this type of risk of like the tailed risk in for this type of assets when thinking about how to how to price them and how to live with them in my portfolio for example.

>> Yeah, 100%. Well, what I would say is if I would compare let's let's maybe start by comparing how mature the options markets are in crypto versus in traditional finance. I would say that we're still obviously much smaller, right? So if you look at SPY or which is the S&P 500 ETF or the QQQ which is the NASDAQ 100 ETF these are like the biggest vehicles their options markets are in the trill trillions between one to2 trillion dollars each in Bitcoin we're talking about a h 100red billion like including their bitid plus I bet so we're still we're we're still relatively small which kind of translates into the size of of bitcoin compared to these bigger asset classes so we probably have

a long way to Well, as as Bitcoin matures, the other thing I would say is one very interesting way to look at how let's say developed the market is that I I I I actually write about this in the paper is what is the percentage of the open interest that sits in calls versus puts for example. That's a way to look at it, but I think it exemplifies a little bit. If you thought about the Bitcoin options market maybe just two years ago or so, it was basically one strategy being deployed and that strategy was be buying out of the money call just to have outsized asymmetric exposure to the Bitcoin price. That was it. That's that was what options were

used for in the earlier days. And that's fine. That's great. That works. options is a vehicle to capture that. >> You have the the leverage perpetuals as well being a key feature of of crypto as well. >> Exactly. For sure. That that makes total sense in in equities like you don't have per like we have in crypto. So you can get a lot of the leverage effects from perks. You can also get them through options. I would say you have more leverage. Slightly different trade-offs here, but you can get that done. But the thing gets really interesting when you start to use options for the things that you can only do with options. And that's one of the things that we have been seeing spring over the past couple of years as the market got more

sophisticated. So we started to see things like downside protection strategies or these synthetic yield extraction strategies or even just pure volatility trading. There's a these these can get very sophisticated. So we started to see more variance and more diversity in terms of the strategies that are being used in the options market. One way to measure this is that the participation of calls has been shrinking. So like probably just two years ago or so, the Bitcoin market had 70% of its open interest on call options. Today this number is something like 58%. So, so we're starting to see

not only the market growing significantly, but also more diversity in the strategies that are being deployed. That said, the Bitcoin options market is still a very coalheavy market. If you look in these more developed markets like SD and QQQ, about a third of the open interest is in calls and 23 sits in puts. The Bitcoin market is actually the other way around. So, two calls and one-third puts, more or less. So, I kind of it points to we're probably not going to get to to to the levels and to the ratios that we see in these established equity markets anytime soon, but it shows how how how far we still are and how early it is for the

Bitcoin options market complex. And some of these strategies that have to do with options like the one that's described on the paper we already mentioned are fairly active. So let's say I for some reason I've hold a substantial amount of of Bitcoin that I don't want to get rid of and and thinking about, you know, hiring a manager to, you know, go find me with some yield on top of my my Bitcoin. What would your managing like manager diligence involve? What would you look for? Do they exist? Where do I found find them?

>> Yeah, that's a great question. Yeah, it to your point, it's definitely an active strategy. The main risk with covered call selling strategies and any synthetic yield strategy through options to be clear is to following the traditional collecting pennies instead in front of a steamroller problem, right? Because when you are selling these call options, what you're basically doing is writing some sort of insurance and you're collecting a premium ahead. Now you you when when you don't want the event that you're hedging that you're giving premium against to occur. So and and and the interesting thing in the options market is that contrary contrary to maybe in insurance

markets, you can manage this risk in real time because all these options are listed. they're on the market. So, usually when you think about a professional options overlay strategies or an options overlay portfolio manager, what they are doing a lot of the time is buying and selling. They will very rarely just sell a call option and wait until expire and just see what happens. Right. So, to your point, yes, very active management strategy. There's there's a lot to cover in terms of the diligence for a a fund. There's a lot to do on operational due diligence of course but in terms of the more let's say market related themes the interesting thing to keep in mind in my

view is that there is a big trade-off. So if you want to incurring more risks you might be willing to sell options at higher deltas meaning with a higher probability of being assigned that will give you a higher yield but that will also give you higher risk and a higher possibility that you get assigned. you probably need to manage around that. So there is a trade-off between the type of yields that you're willing to underwrite and also the type of risk that you're running. That's that's one big thing, right? So always trying to understand where you want to operate here in terms of deltas, in terms of expireies and this and that. The second thing is that these types of option strategies, they work better when the market is either

sideways or down because those are the scenarios where your call options are that you're writing are are not going to be exercised. They're going to they're going to fall in value. So also underwriting an investor who understands what the market regime is is very important, right? So, it's not that you need to predict with accuracy where Bitcoin is going to be in a week or in a month, but at least trying to understand and have a few risk management parameters in practice that allow you to exit if the market gets too directional or allow you to give you some sense of when is a better time to enter. We developed some of these filters in the paper, but they're very basic ones. The idea for the filters we did in the paper

was to make them replicable, right? make them programmable, replicable, something that we can test within a simulation environment tens of thousands of times. The act in in in the real world portfolio managers, they have a much richer set of opportunities and they can look into much more sophisticated things. So yeah, these are some of the things that I will be looking into, but it's definitely a very vast space. There's there's definitely a lot to think through if you're choosing a manager to run, for example, a call overlay strategy. those those types of informations. For example, if you look into covered call ETFs, a lot of the times they're available in perspective.

So, I definitely think it's very recommendable to look into all these things before committing to one of these strategies. >> No, that makes total sense. And switching gears a little bit to the the context of all these things happening especially now in in the US. What's your take on clarity specifically on the ability of more traditional allocators to participate directly in digital asset markets making this part making them part of their portfolios and having digital assets sort of like permeate deeper into investments you know retirement funds eventually and and more broadly um asset recognized asset class.

Yeah, 100%. I would say clarity is probably now the biggest industry topic. I wouldn't say it's the biggest market topic because I do think macro risk on risk off environments, liquidity and flows, these are the things that are by and large driving prices right now. But in terms of industry specific topics, clarity is obviously the big one. There is I mean we just went through a Senate Banking Committee markup which means that we're now on the stage in which discussions are starting. So maybe we can get to a floor discussion and maybe get this approved in the Senate. I think in the best case scenario we would like to see clarity being approved in the

Senate reconciled with the House and being ready to sign at the president's desk before the Congress recess. So this would mean to have all these things done by early August. Our head of policy, his name is Kevin. He's great. He gives a 50/50% chance of us getting clarity passed this year. If my my personal opinion, if I had to choose one way or another, I think it's going to be passed, but there's definitely a lot of sticking points, a lot of discussions around federal government involvement with crypto. That's probably the biggest sticking point that we have right now.

So, it's definitely a a a give or take and back and forth political process that we're going to be seeing over the next couple of months. I hope Clarity passes. This is a massive milestone, right? We call it the market structure bill for a reason. I think it would establish very clear boundaries between who has jurisdiction over crypto in which and and also in which cases. there's a few interesting protections for developers. So, it's it's a very comprehensive bill that I think would massively advance the the the the institutional adoption for for crypto.

The the the one thing I would highlight though on this is important to keep in mind and this is something similar to what we saw on the Genius Act, right? The Genius Act was the stable coin bill that was approved mid last year. Uh the one important thing about these big legislation pieces is that once they get approved uh that's that's all obviously a great milestone and a very important development but there's usually a rule making process that can extend for a year year and a half maybe two years. This has been the case with Genius. I'm sure this is going to be the case with the Clarity Act too if it gets approved by August. So, we're probably talking, let's say, clarity gets approved by

August, we're probably talking about maybe 18 months or maybe even two-year rule making process. So, there's a lot to go. These things are complex. They are involved, but I think overall they're they're very important for us to continue to gain importance within the broader financial system. One of the things that you mentioned there and I understand you're not the the policy person for for agitate but still wanted to get your take on things like the protections to programmers and the centralized protocols and ecosystems. Do you how do you foresee the integration between traditional finance traditional instruments defy evolve under the light of what we are hopeful to see the

clarity the rule making that will come up >> yeah I can tell you that like from my my personal stance I think the clarity act is as it's written today it's actually really good in the sense that it's I think probably the best compromise that we could have achieved so are I mean I'm not a specialist on the developer protection issues but I've seen every single specialist institutions like Coin Center who I know pay a lot of attention to that saying that this is a a pretty good solution. So the the way I would say this is every single person I talk to and the folks who are more specialists within their fields, everyone I I I speak to, they say, "Hey, this is a pretty good compromise. It's

not perfect. It's a pretty good compromise." Which to me says that we got to a good point. So like when when nobody's perfectly happy, but everybody says, "Okay, this is this is good enough. I can live with that." It feels to me that I think we got to a good spot. And and I think this reflects a lot of of work that happened in Washington DC circles also the industry, right? A lot of education, a lot of a lot of proximity and discussion with the legislators. I think we got to a pretty good point. That's what I've been able to extract from all these conversations I had with folks who are more specialists in in these matters. Again, having that said, they're not perfect.

None of them said, "Oh, this is perfect on this side." But it looks like it's something that is good enough. One of the things that we glanced over at the beginning of the conversation had to do with the what Anchorage has been doing cryptonative firm for the wider adoption of of crypto as an asset class and and I wanted to get your your take on another trend that's happening is where a lot of the traditional financial products are getting tokenized and firms like ETCC NASDAQ they're all like moving to tokenized rails which is more of rails or technology discussion rather than them sort of like migrating to crypto.

Do you have a view on where things would land in terms of the interface between the two worlds? Is it just you know traditional finance adopted the the technology or are they truly becoming embedded these two worlds that currently only have you know those touch points through ETFs and the the assets that we have been discussing today? Yeah, this this is a great question and and it's it's a very close one to my heart because I feel like I'm I I feel like I'm a very cryptonative person in terms of ethos and values. I'm like hardcore Bitcoin guy like economics, sound money, so like all that sort of stuff. I love the the the crypto ethos, but also I understand that in order for us to move to the next stage, we need to start

integrating more with these existing systems and and processes that already exist and are in place. I'm actually bullish and I think that it's great to see that the traditional market is leaning more into crypto. One thing I always say is that I have the opportunity to talk to a lot of these big firms, right, who are doing who are engaging with crypto and the amount of folks who are actually very cryptonative and understand and respect the crypto values in these companies is actually you'd be surprised to see actually if you go to a lot of these firms, you're going to see folks who are deeply inserted and understand the crypto ecosystem very well. Of course, there's probably going to be some meeting in the

middle here and something that we need to we'll need to accommodate, but I I do think that these two worlds can actually live together. I'm actually looking forward to it. I very much welcome all the traditional players that are coming to crypto and I think they're using the technology and and and that's something good for the crypto ecosystem themselves, right? You can just think about how much blockchain activity or how much DeFi can gain from having much bigger tokenized assets and liquidity and stable coins flowing through blockchain rails. Right? So, one of these things I believe can benefit from one another and it kind of gets to the virtual circle that I hope we will be able to see developing crypto over the

next many years. >> No, fantastic. Well, I I think we're already on on time, but it will be great to have you again on on the show soon and we'll see how the market the structure evolves, how optional markets evolve for for digital assets and what what's next for you guys. So, David, really wanted to thank you for chatting with us today. It's been a great pleasure. >> Thank you, Chris. It was great being here. Always happy to chat. If you ever want to want me back, just give me a ring and we'll talk.