Digital Asset Summit 2025 - NYC | Investor Track | Day 1

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all right everyone [Music] [Music] test test okay hi everyone I'm Mark Arjun this is the investor truck of the

afternoon session hope everybody had their fair share of food and discussions during the break we have a good um lineup of panels for us tonight this evening um we're going to start it off with crypto the trade of millennium joining us on stage first we have Chris Perkins let's give it up let's give it up for him is Ryan Silva Amy oldenberg [Applause] blue Matari and Matt Hogan [Applause] take it away all right you guys want to

sit down let's just do some brief intros uh as we get started so people every know know everyone's background Matt do you want to start sure Matt Hogan I'm the CIO of bitwise asset management we're a crypto asset manager managed about 122 billion in assets and uh before bitwise I was a ETF guy uh I'm blue match lari I'm head of digital assets at tro price we're a 1.7 trillion uh asset manager and before joining Tio uh I spent 25 years in a Emerging Markets hi I'm Amy oldenberg uh I'm at Morgan Stanley on the investment side of the business I head our Global Emerging Market Equity business and then also am involved in all of our digital asset initiatives sit on a couple of our

working groups there um like blue I've been in Emerging Markets just for about 25 years and uh used to trade emfs and one of the ways I um ended up in the space Hi everybody I'm Ryan Silva I'm a partner and head of trading at borderless Capital we are a web 3 investment manager uh excellent all right so Ryan we'll start with you these are some of the weirdest markets I think nobody expected what we've seen uh we had an election that everyone noticed and then we had a president come out and say hey we're going to make this country the crypto capital of the planet uh you fast forward to today Bitcoin is 25% down from its alltime high nobody expected

this can you unpack you know against these very favorable regulatory you know initiatives and outcomes what's going on in these markets right now so I'm again all these views are my own view not the view of the firm that being said we're at a true inflection point in markets right what we're seeing in terms of institutional adoption the onramps into the ETFs the you know the tokenization that's in that's clearly occurring across chain interoperability these are all happening real time there was a little bit of euphoria priced into you know crypto and broadly macro assets following the election that exuberance has kind of forcibly been you know delevered and kind of Unwound but it

didn't happen in a vacuum uh for Bitcoin to move 20 to 25% in a four-week period is quite normal for the NASDAQ to move 12 to 13% in the same reference period is actually unusual so this kind of highlights that Bitcoin and digital assets by extension have been just more institutionalized and they're becoming more factors of macroeconomics uh you know movements as well in macro markets so that's a brief summary of what's going on so this volatility um is pretty profound and I don't think traditional investors are used to this type of volatility blue putting your traditional asset management haton is this Mar is it too early for these types of investors

like how do they navigate that challenge um so yeah I think we've we've seen unprecedented um volatility across you know not unprecedented but extremely high vola U ility across all markets um and I think that one of the things is that it's one nice to be able to look around and and say well it's not crypto this time folks it's you guys um but I think that uh at least from my sort of putting my macro hat on I think that we see a lot of the levers um being pulled simultaneously in what seems somewhat familiar from a an Emerging Market sort of structural adjustment perspective and I think that it's a it's a period of pain that we got through um and I think that we had a lot of great news uh on

the crypto front we had sort of announcement after announcement and I think that we tend to be a sector that has a hard time sitting still without constant news coming down the pike and so we're sort of trading at the mercy of of larger macro factors so it's pretty interesting we we realized before the panel that both you and am have a background in em and so it makes sense you're putting on your em I guess Paradigm against these markets and it's not too crazy is is that fair Amy yeah it feels totally normal I mean it's actually for people that have been in EM for 25 years em has gotten pretty boring actually relative to what we used to do years ago I mean waking up in the middle of the night crisis overnight trying to get out of positions dump dump your positions down and I'm not talking about

the crypto Market this is like what we legitimately did um sometimes we wouldn't be able to sell positions you were trying to track them down they were lost they were being delivered by bicycle and the bicycle messeng Tri got run over and in India like this is the type of stuff that really happened um so I do think that there there are similarities it's why um between us and then even others we were talking about it earlier you tend to see similarities and personalities that do well in these markets derivatives uh emerging markets and what was our third one FX FX 247 markets not really well regulated all right Matt you've famously called 200k by the end of the year with Bitcoin yep um we're a little far off from that

right now uh what gets us there and what stops us from getting there yeah look I think we're going to get there um I still am very confident in that what what gets us there is there's a structural imbalance between supply and demand in the Bitcoin Market Bitcoin produces 165,000 new coins a year last year etf's bought half a million we think they'll do that again this year corporations bought 250k we think they'll do that again this year governments could guide between zero and who knows a million Bitcoin so there's this structural mismatch between demand and Supply which means the only way that's met is by existing holders selling and we think eventually this structural demand will overwhelm them so I I think that we'll we'll get there I

think what's going on in the market right now is you know as blue mentioned there's been an enormous amount of really good news if we backed up 6 months and said there'd be a Bitcoin strategic reserve and the SEC would drop all its lawsuits and you know have a crypto Zar it outrageous good news we should already be at 200k but there's uncertainty in the market so that increases the amount we discount risk assets so the market is down it's just an opportunity you know what what could prevent us there is if we fall into a significant recession and the government doesn't blink and forces us to go through an austerity period because that would keep pressure on risk assets if we skirt the recession or what I think will

happen if the government blinks in some way then I think we'll be at 200k and maybe Higher by the end of the year that would be nice so against this backdrop of regulatory de risking obviously you now have a a new license on life where you can go out and you can start offering probably an entire new array of ETFs how do you think about that how do you think about offering that uh and and how do you think about your product expansion yeah I mean it's it's it's wonderful to finally be able to do what we wanted to do um you know it took six years to to get our first uh ETF over the line now we can launch them relatively quickly I think there's a huge scope uh of growth for ETFs I think two or three of the largest categories haven't been tapped at all as an example

we run the largest crypto Index Fund in the world it's about a billion dollars I don't think in A3 trillion Doll Market there's going to be a billion dollars indexed I think it'll be 100x that so I think you'll see index based etps be significant we think a lot about what you can do around Bitcoin itself I think people have haven't explored that and then of course we look at select individual tokens that we think have strong communities in trading volumes and offer ETP exposure to that but you know you have to pick and choose you can't launch everything so we try to launch things into big Tams uh or very vibrant markets got it and Ryan as a Trader now you're going to have access to a number of different ways to express risk um ETFs spot I would still argue there's a lack of Futures markets out

there that I think is really hurting the market hopefully it's something we're going to solve here shortly um but against this backdrop with all these new products are there new ways that you seek to express risk absolutely and not only there are new ways to express risk there is significant dispersion in the assets that you're investing in so this cycle is in my view radically different than the prior cycle prior cycle was fed inject $4 trillion do of monetary stimulus every asset goes higher in price regardless of its utility regardless of its protocol regardless of its Revenue now we're seeing the kind of tide come out a bit where there is a big fundamental switch between the assets and protocols that that will perform and and have strong tokenomics and that have strong you know Revenue based versus not

so over time I I agree with you that there's going to be this dispersion um the way in which you can express that is with Futures I would say that the markets are getting more involved there uh if I told this you know crowd here that the CME has greater Bitcoin open interest than Finance maybe people wouldn't believe me but it's true uh you know they're starting to launch salana Futures as well uh the E uh Futures and ETFs have obviously been approved as well and there just is a growing uh I would say Tailwind towards more product offerings more institutions that come into the market right now as well are demanding this for risk management purposes they're more sophisticated

they're using options is all nonlinear risks as well structured products are coming on this is a massive transformation to where we were three years ago five years ago wasn't even heard of and more broadly what we're seeing is a compression in implied volatility so three to five years ago it would be quite normal to see Bitcoin traded 120 Vol right as more Capital has come into the space there's been greater liquidity spreads have been tightening more players that has compressed realized volatility because we're becoming more institutionalized and the offering set that people investors are demanding includes a greater array of products so it's spot Futures options all the above got it so and it sounds like fundamentals are actually going to

start mattering for a change it yes I think we're we're really starting to see that now and particularly what Matt just mentioned too post election the regulatory you know climate was extraordinarily different than where it was so the lawsuits being dropped the Civil penal you know the civil lawsuits that were attacking Founders Founders are now less afraid to build what they want to build for fear of getting jailed or fined and that allows more Capital to flow into projects more regul more clarity brings also uh you know just the institutional crowd closer and closer we'll go into that I'm sure Perfect all right Amy let's talk about the banks um everyone's favorite subject in the crypto conference um OCC came out

I think it was Bolton 1183 that now said hey you guys can do custody you don't have to necessarily ask us you're allowed to do it you can run validator nodes and you can also you we like stable coins again um you know go for it um how is that changing how is your approach changing now to the adoption of crypto we've seen Goldman starting you know they've been have a trading desk for a while they trade ndfs how are you thinking about it at Morgan Stanley and bringing this asset class online so I I think every step we see here if it's OCC um or some of the activity we've seen the SEC this year um you know it's all positive it wakes Folks up to pay a little bit more attention um but as a bank you uh you know care most about the

FED um and we do need some things to change uh at the fed too so you know I think um moving in the right direction the one thing that I would say there just beyond regulation I think the thing we keep thinking about is let's just say regulation opens up and um makes it a lot easier for us we do need to be able to um put the infrastructure in place to do this and um I've said this at permission list that the first permission list years ago um I'm against ETFs I understand they have a function maybe it's being an em person I want my liquidity 247 and and also we have clients that want to move uh assets that they have

and potentially Bank them with us and be able to leverage all of the features that the digital asset space allows you and an ETF still has limitations you're not doing staking in those products um you know I think we're probably going to talk a little bit about you know yield products which is potential um ETFs is not solving that right now so we need to be able to put the infrastructure in place for uh the for cusing those assets uh AML kyc one of the most critical things um if it's any um example of kind of what we have to jump through the Hoops we have to jump through on a regular basis when we were prepping for this panel um it's and it's very normal for any panel that I do

anywhere in the world hey we have a shared Google doc guess what I cannot get access to Shared Google Docs because of our firewall so if you just put that in perspective which is like the most basic thing that everyone that has kids in here and goes to school like your kids do everything on Google Classroom I don't do anything um and that's because of the security architecture that we have to follow um so infrastructure for us is still a big hurdle that we're trying to navigate even if regulation solves itself all right Amy doesn't like ETFs but Matt does Matt what do you what do you say to that well I mean Amy's absolutely right the longterm single spot Bitcoin ETF shouldn't exist I actually agree with

that the reality is right now they're better than V virtually every other alternative you get institutional pricing right 20 basis points for our ETF High liquidity custody trading Etc but longterm yeah it's it's a bridge technology we recognize that at bitwise the bridge probably lasts for 30 years or something um at the rate things are going but it's not it's not the end game for individual asset ownership um that should be direct and ETFs will end up being index and others but um but right now it's literally the cheapest way to acquire Bitcoin in the world yeah I'd probably throw a couple other things that that people benefit from from the ETF today it's regulatory certainty

because it's just another security it's operational ease because you just press a button on your brokerage account and then one thing that we should probably talk a little bit about more is security right we just had buybit and so I would hope that the institutional rails that that you know you're you're embracing are much more secure perhaps than you know other Alternatives yeah I mean the the the the core promise of an ETF is always been individual investors get to invest like the largest institutions in the world and that means worldclass security worldclass trading protocols Etc you know assets that never touch exchange that are always in cold storage and so they absolutely have that the other the other really important piece is there's just a lot of money that can't buy crypto yeah right there's 401K

money and there's pensions and endowment money and they they just can't period end of story and so for them the ETF is the ultimate solution but absolutely I mean right now the quality of custody and the quality of trading in ETFs is unparalleled and the price is cheaper than anyone of any size really can get so it's an incredible deal so so blue how do you advise your client to engage in this asset class is the goal ETFs make it easy you know are you looking to get them into the spot space derivatives ndfs you know how what advice do you provide so um so obviously tro is a an active manager um and so we would need to exist in a world that is beyond Bitcoin and ethereum uh and so we

actually don't have any TP products we don't have any products U for client use now but apparently we you can invest in in the spot um the spot utps on our uh individual self-directed brokerage platform and I was like really because we should get t-shirts made saying that so instead I'm just saying it here um but I think one of the most important things is to consider you know the the risk profile of the investor so we're having a it's a very different conversation if it is a if it is a retirement account um you know or if it is a 200 million you know oneill uh endowment or pension those are obviously very different ways to think

about both your liquidity needs over time your risk profile and your investment Horizon um I think it's it's a little bit easy to sort of say oh there's a this little window of percentage is Great and it's I have a hard time with the same percentage window is the same for everyone um my kids all have custodial Roth IRAs and my 5-year-old is allocated very differently than this middle-age mom with dependence right and it should be that way um and so I think we just really need to think about who the end investor is and what their objectives are sir yeah I would just chime in there too because what the ETFs have allowed the Bitcoin ETF specifically is a much more

sophisticated investor base to come in whether that's in a market neutral basis strategy that pairs it versus CME Futures and now with Bitcoin options trading on on the on the ETFs as well there's a level of sophistication for hedge funds for market makers to get more involved all that does is provide more liquidity into the space it provides tighter spreads it is at the margin more efficiencies so the type of participant that's come to the market now because of the ETF is Amplified Way Beyond just the long only passive manager or long only uh portfolio allocation which we can get into but it's a much more sophisticated

array and it leads to growth across all aspects of of crypto maybe just to add to that point too when you have that it it allows you to just have an AET allocation discussion and so I think that's one thing that's changed um and I know we've talked a little bit about it in the panel um also that it's not just the separate asset class or hey let me go park something over there it's what's the right allocation how do you think about this what does it add to overall portfolio that you have as an individual investor or an institution um so that's getting a lot more real and we're trying to have more of those conversations about optimal allocation um of this space rather than like hey you might

want to look at this and park some money over in the corner how do tokenize products come into play um so you know we're starting to see a lot of real world assets I don't say the RW because I'm a banker and and I can't stand it rwa so it gives me the cringes but um we're seeing coinbase is talking about tokenizing its Equity we're seeing um you know money market funds become tokenized how do you think about that product from an investment perspective would you prefer that or not prefer it and how do you how's that going to evolve so so I think that something um so what we've seen to date is that when we talk about um tokenized funds largely at least from an asset management perspective we talk about tokenized funds these are funds are sort of it's twinning right so it

exists in it exists in the real world and it exists in the tokenized world I think no one in this room including myself is prepared for the unlock that happens when the underlying Securities and assets are on chain like what happens when our Equity guys who are patting themselves on the back for t+ one are now you know um are are quoting Netflix in Amazon right like it's an extraordinary unlock when we see all of those security um come natively on chain H there's a fantastic paper which I'm sure many of you have read and I only recently discovered from uh Andreas Park from the University of Toronto and they modeled

what would happen if you put us Equity markets on an amm and it's um and it's like a 30% reduction in transaction costs it's insane when I travel to India in the Middle East um and you know I'm trying to raise money for our funds also like the only thing a lot of those investors want in these local markets is access to Tesla and apple and every other big Tech name which is very frustrating um but you can see if you had and I think that's been a big shift too like the tokenized always started in the private side hey we private or the private these private funds will tokenize them and like offer secondary liquidity but the public Equity Market I agree with you like that's the big I

mean these investors in other parts of the world are paying 30% premium just to get exposure that's that's pretty nuts um let's pivot to stable coins so we expect to have a stable coin bill I think Bo Hines just told us in the next couple of months in front of the the president's desk um that's going to inject dollar liquidity on chain as well you know complimenting this tokenization theme Matt what kind of impact do you think this is going to have on markets I think uh that I think P well I think it's a certainty that stablecoin legis ation will get ped huge bipartisan support um I think it'll be great for the crypto ecosystem it will bring more people into the ecosystem in a major way

I think the the specific area that will benefit most are are defi protocols which will suddenly open up to a much broader array of audience it's like a giant onboarding mechanism into the market so um I suspect it will be net positive I think it'll be good for layer ones I think it will be uh spectacularly good for certain defi protocols and um and it'll be good for equities that are playing in the space as well so I think there's a lot to be excited about in the stable coin space and I I take it one step further as well like the United States is the epicenter of innovation Capital markets we already have a $230 billion doll stable coin head start on the rest of crypto right Stables are

denominated in dollars uh they buy treasuries right there is significant Global demand for the dollar I think that stable coins are only going to grow in terms of adoption and in use uh you you know Amy talks about Emerging Markets oftentimes around the world people just want a stable reserve of their own Capital that they can custody themselves that not is in a you know a local emerging bank that could potentially fail or devalue people want exposure to dollars they want to be able to custody it themselves so I think it's a huge unlock and with the legislation that you've discussed it puts the us at the Forefront of clarity which again will bring more capital on chain and

allow institutions to really Embrace this we're seeing this on on on in real time right like big names big traditional names are coming on chain I I'd be hesitant to say names because I want to pick and choose but like private tokenized uh uh uh tokenized bond funds uh it's happening right now uh private credit funds are coming online these are huge amounts of capital that can be unlocked when you have greater Clarity with with regards to stable coins uh so I think it's and and put it this way even with this 25% correction that we've seen in in crypto market prices locally in that same reference period stable coins are at their all-time high Y right

so stable coins are already like 20% higher than the last cycle Peak right despite significant dispersion across across Bitcoin and across alts there is very clear demand for stable coins and also novel demand for derivatives of stable coins such as like tokenized uh synthetic dollar products as well that are like synthetic Cash and Carry products yeah it unlocks enormous amount of capital totally did you have something to say Matt oh I was just I I was knitting together the last two points you know I think stable coins teach us everything about where tokenization is going to take off which is two places and it's not where most of the Bia covers tokenization from it's Crypt native users and it's Emerging Market users because Emerging Market

users it's 10x better and crypt native users just can't think outside of the crypto native space I think if you're tokenizing products you should be serving those two markets first and and only thinking about sort of wrapping around to more developed financial markets uh second I see a lot of people experimenting with like developed markets tokenization but that's a big step for a traditional investor to make so I think I think people can look at where stable coins were adopted to see the the route that tokenization is going to follow yeah so today we have about 220 billion in Us doll stable coins it accounts for about 99% of stable coins are dollar uh I think traditional assets uh in traditional markets around 57 58% of of transactions are dollar it doesn't

seem like this 99% is going to stay there forever to to my friends from from from the EM space like do we expect to see additional non-dollar stable coins emerging I think you have too um so I do just generally think the stable coin discussion right now is really uh underestimated how much momentum is picking up underneath uh the surface here on stable coins it could be really transformative and even to Matt's Point like it could really start to build other things on top of this um I was just having this discussion with someone the other day it's mostly US dollar stable coins that get all the attention and um you do need that interoperate

operability especially if you're going to still have to pay people in the local market so if you're going to Argentina if you're going to places in Africa unless they want to transact in usdc or tether or some other or some other US dollar denominated stable coin which I don't think is going to happen um we're going to need more stable coins roll out but I think also there's a lot of discussion about do corporates have their own stable coins do you kind of go back to back and you have interoperability between like different corporates sort financial services companies that have stable coins I mean this is just a a big discussion that's really starting to open up right now yeah I I think also um when we I think we touched on that the FX guys um and crypto it's like the the dollar stable

coin um does an incredible amount to facilitate crossborder payments for non G7 currencies right so I mean if you want to do whatever a RG hiyi cross I mean the spread on that is a nightmare um but if you can go through the dollar stable coins you're reducing so many transaction costs and frictions so I think that um you see a lot of uh crossborder non-dominant currency like crosses happening through these and then there have to be on an you know there have to be local on andof ramps um because there are there are still a lot of non-convertible currencies out there

um but I think that it's an it goes a long way to strengthening the dollar and then I think we all finally see and the powers that be finally get this you know we found a huge demand yeah totally so I think the stable coin Bills going to result in a massive injection of dollar liquidity on chain I want to get your take on where it's going to go but looking at the FX markets those are seven and a half trillion dollar a day markets the most of them trade T plus2 it's just a better product so you got to think in time that's where we're heading but okay so we're going to have all this liquidity come on chain it's already at 200 billion probably get I I think it's going to about 500 billion by year end who knows where it's going to go um

that's got to be good for for Al Ryan yeah I think it's good for the market structure more broadly right we're seeing tremendous fragmentation in the market right now um we're based on certain exchanges now coming back that are now able to even offer certain alts before it was very uh you know hostile in terms of what assets you can list so by definition more liquidity coming into markets on centralized and decentralized exchang will help you know when you really look at defi in general and when you look at like kind of the core oil of like what powers defi it's programmatic smart contracts that run and at the end of the day it's it's usdc or usdt on the other side of it right so whatever liquidity pool you're looking at

injecting another 250 billion right is going to have a better impact on that Capital right it's going to have a better impact in terms of the liquidity and in general I think more liquidity will produce uh Better Price uh action in terms of like price transparency the clearing price of risk to the upside and the downside will be just a little bit more uh transparent and robust what we're seeing right now is market makers stepping away to a degree uh you know cascading liquidations this is very local in the past like couple weeks and that's because of the uh exchange you know incidents that you've mentioned and that causes fear but when you have more liquidity coming on chain that is deployed into you know smart contracts

it operates much more smoothly right but that that yields coming I'm sorry that St I've got ahead of myself those stable coins are coming on chain for a couple reasons I think one is for Capital preservation and the EM that markets that we talked about but the real driver is yield right everybody wants yield and so we're going to be in this environment we think where rates are going to be coming down potentially uh but so Matt how how do you think yield is going to play into into your philosophy and and your product um your product launch and like how does yield evolve in these markets and drive invest investor Behavior there's there's massive demand for yield anything yield related uh attracts significant attention that's been true in crypto for a while it will never be more true than it will be in the next few years for the reason um

that you speak about so as an asset manager we think about what we can do in that space there are a lot of things I think a lot about yield on bitcoin right now and we get a lot of inbounds from very wealthy Bitcoin people trying to generate a few percent you know and so we think a lot about that from a product perspective I think you know services that that tap into the yield that is available in stable coins which is still Supply constrained Market are pretty exciting and we think about that um and how we fold that into fund opportunities so um yeah I think it's one of the biggest product development opportunities for for an asset man can you can you talk a little bit about eth because I've always thought that the eth ETF is awful because e a wonderful

product that has limited Supply has smart contracts and it has this thing called yield but Gary didn't let us offer yield so now that Gary's no longer with us uh how do you go about offering restoring uh yield to e man I didn't know this was an anti-f panel they didn't put that in the title it's no it's great but the it's a great product man but the yield how do we get the yield back look I think we're going to get to staking in etps we already we we run e staked etps in Europe they work great I think we'll get to that here it's slightly more complex because we're dealing with regulations from the 30s and 40s so how you do yield in a granter trust is like something for lawyers to

figure out but you can do it you'll absolutely do it I suspect it'll happen by the end of the year but I don't know that and I'm not speaking about our filing just more broadly um you you should be able to do it and you should be able to handle the liquidity constraints that come with it I will say I don't think it's transformative for e ETFs from an AUM perspective because most people investing in an eth ETF want 50% returns or 100% returns and 2 or 3% is like nice but not great what we saw in Europe is that you got new flows when you launched a stake dtp and the old ETFs didn't get new flows so it switches where flows go and it increases them but

it increases it incrementally eth ETFs are going to end up being 10 2030 billion products but only when eth gets its Vibe back and people you know start it starts to benefit from all the stable coins and Define and tokenization and agentic AI That's taking place there the staking will be nice but it won't be transformative yeah and I love ETF by the way just pointing out the little thing about the yield that we'd love um but we'll get there let me push back a little bit on that because I think when I talk to a lot of my traditional hedge fund peers they say I want two things I want basis and I want Leverage Leverage is hard to come by basis I kind of see um I don't know my sense is that with

when you when you're able to trade total return against spot you know and you can lever that up that's going to be a really interesting basis trade uh for a lot of the traditional funds that are now coming in that that aren't in the space today because you know if you go long and you're down 5% in a in a month you're out at some of these big hedge funds you know we're down or up in 5% in 5 minutes like abut so how do you think about basis I think you're I think you're absolutely right I I do think I like like I think it's imperfect right I think it's imperfect and becoming more perfect and that's a part of the stack that uses the fund right right now it's really long-term long only investors who want exposure to this asset that's it and you're talking about these other

pieces that are part of the the the ETF stack um so right now yeah those won't come in and so AUM is lower but um you know but again we will get there I think we will get there I was just going to say like when you zoom out and we look at really if we're having a staking yield or not in terms of uh you know eth ETFs it may be a little narrow because what we're really talking about here is like the bigger zoomed out trade of the of our lifetime a trade of my lifetime for sure which is directional long exposure to digital Assets Now is in my opinion the only asset class that is growing on the planet that has a larger right tail than left tail period

I can't look at stocks bonds Commodities FX and say something similar and we have just experienced massive Tailwinds that were previously significant headwinds so a 3% staking yield annualized is Meaningful but for a very sophisticated investor who's probably already doing that on chain anyways yeah right the the greater you know discussion is what is like a relatively modest amount of capital allocation from a the traditional Pi allocated to digital assets and what does that do over the you know the long term and when I say long-term I'm I'm also including the demographic you know consideration here which is in 15 years from now there's

going to be one of the largest wealth transfers of a generation that that is going to come down and it's going to come down from retirees and Baby Boomers into young professionals right now who are going to be at senior leaderships in various organizations very comfortable with digital assets very comfortable with implementations very comfortable with risks associated with them and it's going to feel and be just as seamless as what your like web 2 experience is right now so like zooming out yes the sing Y is quite important but like it's the bigger picture is that this asset class is the only asset class that I could see that's poised for growth got it all right last question and uh we're going to go back to the title of this panel the trade of the Millennium so I think you talked about it already Brian it's it's going

long ta alt is that what I'm hearing It's a combination of all right it's so Bitcoin is definitely going to be like the the kind of Gateway if you will into the space most investors get their head around that this is now Beyond a white paper this is not an abstract thought anymore this is actually happening uh as education improves and as people get more involved they start to learn about l1's l2s protocols as well so it's a risk appetite there but uh certainly there's empirical evidence to support that even a modest allocation to digital assets uh improves the sharp ratio of an overall portfolio of traditional stocks and bonds um and I would I think that the time is not like any more clear than

like now now like especially considering this draw down that we've just had in markets broadly this is a a very attractive personal opportunity times so you know good setup Amy what's your trade of the Millennium I mean as an em person I'm I I will still always love Bitcoin you know being able to do the peer-to-peer not having any intermed medaries being able to access 24/7 I know I I will always get someone that'll tell me Quantum is going to kill it and you will be poor um that's fine uh it's just I it's still for me um one of the purest and clearest trades out there I do believe in the whole um air the the whole digital asset space though and I do think there's so many opportunities

from eth and everything that's being built on that um all the way down to the Sable coin solution so um I think there's more than one trade here bring it into every aspect of your portfolio and really learn the underlying technology blue um yeah so I think that uh I also um coming from a a macro very distressed like debt background in am like Bitcoin just resonates with me and it's what brought me into this space I was like I get it I know what a sovereign balance sheet should look like and I know what it should not look like um but I actually think that it is a diversified multi token um exposure across the board yes Bitcoin heavy but um but exposure across

alts and Matt sir yeah the way I invest is is that you know my own Capital mostly in in in index funds in crypto um I will say you know the setup for Bitcoin as mentioned is just so good we have chopped off all the existential risk the last one was that governments might ban it and somehow we co-opted governments which is mindboggling even to me to this day I don't know if they know it happened but it did um so I think we're left only with with sort of the tail on the right and I think it's beautiful um but I'm excited about everything in crypto as well awesome me too well please join me in thanking the panelists

thank you thank you that was a great M great work [Music] okay next up next up we're going to talk about Bitcoin lending and it's going to be centered around that so please join me on the stage and give a warm welcome for John [Applause] glav hey John how you doing one there hi everybody okay John let's just

kick it off quickly quick intro about yourself quick intro about lein sure my name is John Glover I'm the CIO of lein uh Len is a first and foremost A lender of dollars against big Bitcoin uh and eth collateral to the retail sector globally um but we also on the other side of that need to fund that book so we're also a very big borrower of dollars backed by Bitcoin perfect let's let's just start at simple right why Bitcoin what what makes Bitcoin this pristine collateral for this kind of job well I come from uh many many years in trafi as a lot of us do and uh when I look at the collateral that we were accepting when I was in the banking World they were things like bills or

stocks or other uh asset classes that had distinct trading hours so they were open from you know 9:30 to 430 Monday to Friday no holidays closed on weekends closed in the evenings um and so you had price Gap risk uh when you're accepting that as collateral and you have a liquidation threshold you've got this Gap risk that you know someone you've got Tesla stock that you've taken as collateral and Elon does something crazy over the weekend and Tesla opens 10% lower and now you're exposed to this this potential loss um so Bitcoin has 247 365 markets very very deep and growing liquidity um so you just don't have that exposure to uh you know something going wrong when you're

sleeping and the Market's closed you know yeah okay perfect makes sense so how about you give us a more holistic view of the Bitcoin lending space in general how we've come from a couple years ago from the you know the Celsius and the block FES of the world to to where we are know yeah I mean it's been a really interesting Journey especially for you know for someone who already had a lot of gray hair to start I've got a lot more since I got here but um so when when I joined uh Leen I was I was hired to help with the risk management of the firm um and when I looked at what some of our competitors were doing it was really concerning to me um because they were paying yield on tokens that didn't have an Institutional lending market so

there was no way to generate yield on the tokens that they're paying yield on um we saw we were approached by people like three arrows Capital to lend them money but they wouldn't share financial statements they wouldn't they weren't transparent at all about their uh their credit worthiness so we didn't lend to them but our competitors were so there were a lot of concerns that I had in the the way the market was growing um and I've got just this little anecdote to tell um there we had a board meeting where one of the board members said why is lein not as big as blockfi and I said I have no idea how they're as big as they are because we're growing as quickly as we can and they're growing 10 times faster they can only be doing that

through taking risk um and then it was like eight months later that everything blew up and block by went out of business and we remained in business because we just did not I'm not even saying it was groundbreaking risk management it was just traditional smart risk management in credit underwriting in Market exposure in making sure that we were very transparent to our clients and what they were doing in protecting our own balance sheet and protecting our clients's assets and so we were able to survive but what happened when celsis and blockfi and Genesis and Voyager all went bankrupt is trust left the marketplace um for a long time and so we suffered from that because people

thought that we may be the next blockfi so we saw our uh retail loan book go from about I think at the time it was around 300 million in outstanding loans to about 45 million CU people just paid back their loans because they were nervous about losing their collateral like you know some others did at block fire Genesis or um uh Celsius and so it was a matter of building back up that trust um and also we knew that since we survived and we did things the right way as long as we could stick around long enough for the wave to come back in that we would do well um and so what happened in March Mar of last year when everything kind of took off again uh we

saw our loan book grow and we're now almost double what our maximum loan book size was PRI prior to the uh the events of FTX and and Alam Etc so it's been very good been very good it's always s to hand it's a very common theme in the space where the Bad actors malicious or otherwise end up taking down the rest of the space with them especially reputational wise but um let's dive a little bit deeper so how does your Bitcoin back loans differ from a traditional loan that most of us are used to here um really not that different from you know we're not trying to reinvent uh the wheel here we're just trying to bring traditional Financial products into the digital asset space and it's very easy from a North American perspective to just go well you know if

you need money why don't you support it from the bank um well first off we've got a lot of clients who are really digital asset rich but don't have a lot of real world assets or even really high incomes um so and they can't borrow against their Bitcoin collateral at a traditional Institution so that's a big portion of our book but it's just like taking out a loan against your car or against your a mortgage against your house you're just taking out a mortgage against your Bitcoin um and then if we look at you know our Latin American client base which is quite a large portion of our of our exposure um they don't have access to traditional financial institutions period even if they have other assets they just can't borrow against them because that's really for the wealthy in some of those

countries and so that's another place they to Lon to access their to unlock some of the wealth that they have in their Bitcoin just to pay bills or to buy a car or to pay for the kids education or to go on holiday or in North America to start a business or to buy a house Etc so um it's really to go to your question of how is it differ from traditional lending products it really isn't different but it does have that pristine nature of the collateral so it's quite a safe uh it's quite a safe lending protocol okay that makes sense it's not it's not a different loan process it's more the collateral itself is more inclusive permissionless Global okay makes sense but and a faster loan

process and 247 transparent right and okay so on that note who so you you mentioned Latin America let's talk more about your customers like who who else are they is it is it institutions hedge funds retail and like what what are the typical loans that they coming to you for what are the purposes of this yeah let's just tackle that so we we've got number of different kind of cohorts of of lender of borrowers at Lon so we have our minimum loan size is $500 so we are retail focused primarily our average loan size is around somewhere under $50,000 but we have you know tens of thousands of these loans outstanding um we also have loans up to I think our

highest loan right now is five million or $7 million in in notional so it's a lot of high net worth individuals it's a lot of retail CL clients we have some corporate clients now that have treasury that they want to borrow against they want to put that to work um and they are in I think 122 countries around the world so it's very diverse uh you asked about use cases it's kind of what I was talking about it's to pay for the kids education it's to uh you know rent a bigger apartment it's to buy a car go on a vacation in some cases bu property or to invest in other asset classes so take out a dollar loan and invested into traditional asset classes and then with these customers are they how long is

these typical loans are there repeat customers that are coming off other services like can you go more into that sure so our all of our loans are a one-year term but you can repay at any time without penalty because consumer lending laws require that um our average loan duration is around 160 days um but we have loans that are much longer like some people will just renew their loan every year um because they still have need of the asset and their value of their collateral keeps going up so they can take more loans against the collateral that they have um so it's really it's really varied but we do see um our average client takes out about 1.3 loans per year so even those that are getting paid back they tend to take

out another loan later in the year as they need it and is that is that growing is that number trending upward 1.3 um it has been growing um which is great uh because we want to make sure that our clients are getting as much utility as possible as they can but also as I mentioned as the value of their collateral goes up they've got additional collateral they can take out a loan against so they'll add to their loan balance by just taking out a second loan against the existing collateral that they have okay very interesting so how how are you funding the both how is it being funded the demand side of this and the supply side so I said we've got kind of two facets of our business we have the retail side which is really where the vast majority majority of our dollars go to the retail

lending but we need to fund that so we have a couple methods that we can fund we have growth accounts we call them growth accounts it's like a savings account um where you can put usdc or usdt on deposit with us and we'll pay a yield for that the way we generate that yield is lending to our retail clients in an over collateralized basis that's one small source of funding it used to be quite large when we could offer that in the US and Canada we can't do that uh anymore so we that's only maybe maybe 15% of our book is funded through that um the rest of our book is funded through bilateral loan agreements with larger players that are um wholesale lenders into the space so we over collateralized to them with Bitcoin

and we use that to fund our retail loan book um one name that's public that we can talk about is Signum Bank out of Switzerland they did a syndicated the the world's first syndicated Bitcoin back loan uh was done for us and so that's one of our sources of funding and we have other counterparties like that and and you mentioned you're not allowed to do those similar loans in the US and Canada anymore the savings accounts we can't off the savings accounts do you expect that to change anytime soon given this new Administration I would I would think that it probably will change um and you know hopefully it does because it gives people access to higher yield on their dollars um we had there's a ratings agency in the crypto space called agio ratings we had them rate our

business they rated us at a minus which is like investment grade um so it gives people confidence that this is a safe way to generate yield on their dollars so hopefully we'll be able to offer that again in the US at some point and I assume when they did this this rating this methodology they looked at your I guess your risk methodology how you would require rebalancing of collateral based on LTV is it can you go a little bit more into into this risk methodology that you have sure so all of our retail loans start at a 50% LTV so if you want to borrow $100,000 you need to put on deposit with us $200,000 worth of bitcoin um once that LTV hits 70% our clients get an automatic notification

that their loan is getting into liquidation territory so you may want to add more collateral or pay down part of your loan but get that into a healthier territory um all of our loans are uh they're measured for uh LTV every 60 seconds 24 7 as soon as that LTV hits 80% we liquidate their collateral in a sufficient amount to repay the principal and acred interest the loan gets repaid the balance of the uh Bitcoin collateral is then given back to the client um we've done $1.2 billion worth of uh retail loans um across I think 57,000 or 60,000 individual loans and we've never lost a penny or Satoshi on any of the

loans because of that methodology never lost a Toshi that should be that should be the slogan there that's a great track record um okay that's great coming up on time I want to Circle back to the first question right Bitcoin as the pristin asset you're all a Bitcoin backed lender let me ask this in a kind of funny way are you all Bitcoin Maxis do you all see yourself offering these similar products on any other asset besides Bitcoin perhaps ethereum perh something else later down the line what are your thoughts there um first off I wouldn't say that we're all Bitcoin Maxis although do have some Bitcoin Maxis in the company for sure um but uh no I think we we're all uh we're all big Believers in digital assets very big

Believers in Bitcoin um but more Believers that we should be able to level the financial playing field around the world and give people access to financial products to your question on will we accept other assets as they'd rather do that then post it as collateral so they're happy to keep their Bitcoin intact um they don't want to wrap it and put it onto defi they just rather keep it intact posted as collateral borrow against that no that makes sense I mean for Bitcoin is not as of yet there's no Bitcoin defi there's no way that you can trustless Le just put your asset and earn yield in it so I mean ethereum there's some Alternatives with for your ethereum product though do you have different loan to value ratios is it is it more volatile

is it the same exact yeah no it's all the same we plug it into our same technology and uh as I said we've never had a loss from that the the volatility of ethereum is not high enough to concern us that our Tech's not correct for that and then and in the future I mean there's teams working on bitcoin defi right through these l2s through these other chains do you do you see that will create more demand in general for Bitcoin lending do you see that as a competitor I mean how do you view that well I mean already there is there's competition from defi lending we think that it's very different subset of clients who are interested in that I think once if Bitcoin truly can be used on chain as

collateral in the gii space without changing its formation so without wrapping it without having to bridge to another protocol um I think that will open up more uh demand and there will be people who would rather do it in that fashion I think the the difference from a CI lending perspective and the clients that deal with us is they want to make sure that it's uh that there is AML kyc and then they're not going to fall foul of any kind of regulatory or tax implications so I think there's a place for both um but we'll see when that really develops we see how it works out also you give give me your thoughts here I think another hindrance with defi lending is that the rates are all variable and they can change as quickly as the C crypto markets change on a

weekly basis so I I don't know if you have thoughts on that yeah for sure I know there are some uh there's some projects that are being worked on for fixed term fixed rate uh lending that's going on on now that's really just more of a a matching book and find people who are willing to borrow those rates and lend at those rates um yeah variable rate is definitely challenging for people people want the certainty of knowing exactly what they're going to have to pay month on month if they have to by the way you don't have to pay monthly interest to us it's all bullet payment at the end um which is one of the big differences with ourselves and our competitor but people want to know that um get that certainty so I think that until that market develops more there'll be more demand probably for the

CI space where it's fixed so when you borrow from us you know exactly what your interest rate is you can pay that back whenever you like but you know that for the next year that interest rate is not changing okay and last question here what are the um what are the big plans Lon has over the next year you know what are you what are you bringing to the space well we're do we're we've got some plans on the funding side which um I I'll be excited to announce when it's done but it's we're not there yet because one of the biggest challenges for everyone in this space is access to Dollars and I think the last panel talked about that a little bit we've developed some really great funding relationships with really strong Partners but the rates are still relatively high for an investment grade

borrower like ourselves um if we were to be doing this in trafi we'd be paying five five% five and a half percent for dollars we're paying a lot more than that uh for dollars because there's just not accessed yet what we're working on is going to be unlocking that for us in the trafi space which is really exciting so that'll be announced at some point um and the I I think really what we're working on is not to do anything that's groundbreaking we're just working on bringing more traditional Finance type products into this industry um and doing that in a very simple way we we've we're big Believers that the best restaurants have the smallest menus we're trying to be very focused on being the best Bitcoin back lender into the space but

adding things like uh Auto topup features so that if you are getting to that you know 70 75% LTV you can automatically have your Bitcoin that you've got with us moved over into your collateral pool um because once it gets in the collateral pool it's locked in there until uh so you don't necessarily want to over collateralize beyond what you have to but if you've got excess Bitcoin you can have that sitting in a transaction account as we call it and it'll automatically go and top up your Bitcoin collateral so that your loan becomes healthy again so things like that that are facilitating um ease of management for our clients is that's the kind of things we're working on okay great perfecting what exists love it everybody thank you John for your

expertise thank you very much [Applause] everyone cheers thank you okay next up we're going to be talking about the maturation of the crypto cycle so give a warm welcome for Thomas cladic Chris law Michael Higgins nille vathan and Tim Renu hey

cool so hi everyone um so next 40 minutes we'll be discussing with uh with my four fellow panelist uh the evolution of the infrastructure of of this ecosystem uh we super luy to have very experienced people that blending like traditional markets experience and and crypto specializations so maybe just as a quick start if you want to introduce yourself your company um very briefly yeah sure I'll go first um first and foremost many thanks to St and the entire team for organizing the event and giving me the opportunity to speak today uh quickly by way of background my name is Mike Higgins I'm the international CEO and Global head of corporate development at Hidden Road Partners based in London uh prior to helping set up hidden Road six years ago I spend 20 years in electronic trading uh

multi-asset and a bulk of my time in the foreign exchange markets briefly on hidden Road it's a multi-asset PB and clearing firm that was set up and funded by the buyid so it's a sell-side business funded with Buy side pension fund Capital uh we've been focused on two things one is to improve the technology behind the core infrastructure of prime clearing margin Finance in the traditional assets and then applying those applications into digital um and second is we've taken an Innovative approach uh to bring balance sheet into Capital markets including digital by tapping into the large pools of private credit and so suming up what we do as a prime broker really access providers access to two things um one is give access um uninterrupted access I should say to our clients uh to trade

across the entire liquidity landscape if you look at digital it's highly fragmented cross exchanges OTC and more of the regulated rails so full access there and then access to balance sheet that's our balance sheet to trade across all of those in a capital and cost efficient uh way I Echo Mike with thanking blockworks for the opportunity to speak today hi everybody my name is Chris law I'm CEO of el Technologies our headquarters is in London as well um might by way of background my uh predominantly was global macr trading buy side where I either built or ran trading desks or had a portfolio myself I entered the digital ASA space in 2017

and it's it's been quite a ride for sure and um prior to becoming CEO of Elwood Technologies I was on the brev Howard principal investment team uh and um it's been really really REM remarkable what I've seen over the last few years and we're getting there so who and what is Elwood we are product and Engineering Le technology company we are SAS we are FCA regulated uh we are front to back OEM PMS rist system and iore we give our clients the ability to transfer risk across a digital ecosystem with our proprietary alos built by quants we ingest that risk whether you trade

through us or anybody else we view our our uh post trade is risk capture our responsibility is to work with our clients to make sure that we reflect your risk live all the time basically we have live reconciliation and then uh essentially have risk metrics that are dozens and dozens of risk metrics and we have a portfolio management and construction tool and an iore so at the end of each day if you're a fund we will Mark your books and Records which will lead up to striking nav we think of ourselves as a connectivity engine so we are across the entire ecosystem Market data providers venues

LPS uh credit providers um fund admins you name it we're connected to it so we're we are in the space we know what we're doing and if you have any questions you know feel free to we do we have Q&A I doubt we'll have time for that but okay well then I'll I'll pass it on cool thank thank you I feel like if I don't thank block works and keep the tradition then I'm going to break it so thank you for the opportunity to speak I'm going to keep with the tradition as well we're headquarted in London so you've got a lot of headquartered um businesses here so I'm Tim Renu I'm Deputy CEO of BCB group uh my background is not actually from digital assets at all so um I started in uh e-commerce marketing very different

build a business that did that uh big investment from PayPal that got me into fintech then I built a company that uh does real-time payments powers realtime payments for uh businesses like Bank of America City National Australia bank and then I joined BCB nine months ago um to kind of take that on the journey because of the growth and what I was seeing in the market and so BCB um probably has the coolest name from every business here it stands for Bitcoin bro right that's a badass name started off as a as a OTC trading desk back in 2017 and then realized it was impossible to get um a bank account and so once eventually managed to get an account realized that we should kind of pivot and offer this services to the market Market the ability to to access banking Partners since 2017 we've scaled massively we now

are regulated in the UK by the FC regulated in France by the AMF regulated in Switzerland uh we're about 160 people uh we provide payment accounts in Circa 30 different currencies provide stable coin payments crypto payments um last year we moved about 235 billion in in feed payments so um so yeah we're kind of core infrastructure for about 350 400 of the leading uh exchanges liquidity providers and uh market makers within Europe and and uh southeast Asia hand it cool um I'm Nel I'm from Alchemy I'm basically the polar opposite of all these guys on the panel you're not from London I'm first off way worse dress uh not nearly as nicely suit we start fancy

and gradually get worse exactly uh I not from London I'm from rural Texas so opposite of that I don't work in finance I haven't been in doing stocks for 20 years I didn't even own a stock till a few years ago I didn't even have a credit card till a few years ago um I instead uh spent my college coding AI systems at Stanford and then spent the next 10 years doing that in my dorm room not dorm room but apartment room uh with my co-founder we built a software company how many of you have heard of AWS raise your hands okay so kind of like half the room every time you open Uber or door Dash or what Google Map or not Google Maps but any app you use basically Amazon actually Powers all the computerss that power that app so if you open every time you open Uber Amazon

makes money anytime you open a crypto app we are powering the technology underneath that so if you look at uh you're playing with Robin Hood or you are buying something potentially on coinbase or you are buying nft on Facebook or you're trading on defi or looking at nft we're powering all the technology behind that so um very opposite uh experience but a lot of fun to give you a sense of scale we worked for like basically 10 years with nothing and then 2021 was a really great year for us the ecosystem took off and uh the company grew really fast the last run we did was at1 billion and we do about over hundred billion do in transactions annually so you probably would not have heard of us but we are the kind of under

the scenes behind the scenes technology powering the apps to use every day okay cool that's very interesting I think all of us have been one way or the other involv in the space uh for the last five six seven years and the way I I like to look at things is kind of find the defining moments of each one of the different verticals um and so maybe Nik you mentioned like 2021 was clearly one defining moment maybe you want to spend a bit more time on on this one and Define exactly what it was and and then each one of you can can share his own kind of defining moment yeah I I think I think you guys will talk more about the banking fintech side so let me address more the technology side so a little bit historically 2017 was when a lot of

people started getting into crypto we actually got into crypto cuz we were building a social app company and the guys downstairs we play beer pong with we're building a crypto Bitcoin company and then we would always talk about Bitcoin and and that's actually what got us into crypto 2017 uh 2018 2019 2020 was kind of this hey this crypto thing's kind of interesting but when the market crashed everyone said yeah that was fun but we're done with that that was not a real thing 2021 you saw the first few like consumer use cases namely nfts how many of you own an nft raise your hand okay a few of you so 2021 is a year that really took off after that market crash you saw we did so for example we were working with some of the large Banks and

they had these research teams building crypto projects and so for example like loans on chain or tokenized equities however those were siloed to a few engineers in those large Banks the names are ND so I can't really say but some of the banks that you know you guys probably use today 20 and after that there was this uncertainty of will crypto come back is it actually going to be a thing coupled with the Biden Administration kind of really strong Crackdown in crypto we saw the there were small pockets of Technology teams inside financial institutions but they were scared and there was a lot of risk on the core business of these Banks and financial institutions so they were effectively blocked from doing that I think the last three weeks to four weeks

have been the probably the biggest shift we have seen so there's three things that really need to happen in order for crypto to take off more mainstream and we've seen progress in all of them the first one is the technology has to mature to get scalable enough and you see with all the layer tws coming out with salana coming out you see chains that can actually have close to the number of transactions that would take to sustain major applications if not exceeding that the second thing is you need a good user experience and there's a lot of user there's a lot of technology advancements things like count abstraction that have made it possible to have great user experiences today that weren't possible four years ago and then third one is regulatory there was I'm sure most of you guys are familiar with the repeal of Sab 121 the

OCC Charter there were a lot of things that absolutely flipped the bit in terms of banks being allowed to Banks and financial institutions and fintex being allowed to build in crypto and what we saw you know at the risk of offending everyone in this room you know you guys are not the fastest moving in general like and when I say you guys I mean the Bank of America the JP Morgan these type of Institutions after the the Sab 121 121 got repealed the number of bounds we got that said we need to talk to you today or tomorrow I was like that is not a word you guys like typically use in general so the given those three shifts in technology we're seeing like a massive Rush from all financial institutions across the board asset managers finex Banks to come jump into

crypto and I'm happy to talk later about what people are building yeah maybe as as we talk about Banks Tim you want to jump in I mean clearly there I mean we've seen the on ramping of ramping like six years ago was a disaster it's getting better uh not that that long ago like 12 months ago we had a bit of a kind of banking crisis in the US as well and that really dried up the liquidity for for crypto Traders and and crypto kind of active businesses do you want to elaborate this with with your perspective yeah of course so I think um when you look at the world most Industries are led by the US I think most Industries everyone looks at the US what they're doing um again not to offend everyone in the room but I think that I actually think crypto was very

much seems to be powering ahead across across Asia and Europe a lot faster than adoption in in in the US is and that was kind of um enhanced with all the back in 2023 when you had things like silvergate and you had uh signature you had Silicon Valley Bank clothes and the as you mentioned the Biden Administration stance on crypto maybe the SEC stance meant that it no one wanted to put their head above the the power pit and and stand out and work in in crypto um and so you know I think you find that a lot of Institutions found overnight there access to US Dollars was was closed off that access to a banking partner was closed off and uh you know you can't operate a business if if overnight you're you're you're shut off and so we saw a massive influx of people coming to

us we we sit in front of 12 12 banking Partners so one integration one on boarding and as Banks change their risk appetite we can just flip between different banks and different in different um institutions so I really think that made a that was one massive defining point I think another one that um is really big for European businesses is the introduction of Micah um I think I think it's a great first step and I think it's a great launch and and we're going to I can cover off more later how regulation is is playing a role globally but is it the right move is it the right um stance on stable coins for example um I'm not too sure I think I think it's the MAA regulation is about 2,000 pages

I haven't met a single person that said they've read all 2,000 pages of it so I don't actually know what's in there um we're not going to ask who's read it exactly so I think uh I think those are two um massive moments and I think everyone's now looking at how mik is rolled out what happens there and they're going to kind of launch that and and that's going to influence maybe what the US does what other markets do when they try to regulate regulate this but sure um defining moment for El Technologies a couple comes to mind uh we had a series a in 22 and just after that we recognized that there was a need in the market from an in institutional persp perspective there really wasn't regulated software that was out there for the institutions that at least I

worked for big hedge funds Banks or asset managers they wanted to make sure that there's a robust resilient uh you know product that's out there and so we decided to go from our Origins which was essentially an EMS to an oems PMS risk system iore and so we see all you know we see institutions across the uh you know different categories uh and when we made that decision it was validated with FTX and during the FTX uh crisis our clients were able to trade across ecosystems obviously not on FTX uh but we were able to help them from a risk

management perspective collateral management uh we were you know TW we are support 247 365 so that was a defining moment and it was good to you know feel that and see that the business strategy change was validated I think the other one was you know mentioned Sab 121 and then the ETF we were an OTC de we had an OTC desk and we decided to divest that OTC desk and focus on fintech and providing software for the institutions that are coming to the space and I agree with my colleagues here that since uh the election uh really since the ETF launch since the election Sab 121 we've seen a steep curve in you we're we're

educating again we're educating again we were educating before FTX and now we're doing it again and they I was at boka last week uh for the FIA conference just a quick story quick takeaway was there were two types of uh two feedbacks that I got one was essentially uh we know digital's here to stay we are prepared or prepared for it uh we know digital the other one is we know digital is here to stay we have no idea you know how to engage with it and uh what we're what I found what I took away from that is they want to partner with uh institutions or

Technologies where we can provide or integrate data back into them and that's what we do they're looking for reporting they're looking for risk metrics they're looking for realtime reconciliation uh they're looking for for help and it was very very very good to hear that they're looking for help and I think it's great for this industry uh one last thing I think the industry needs to come together and work together in order for us to go and partner with the institutions the institutions are looking for help and we have to do it together so look I think there's dozens of defining moments as you clearly said I'll I'll try to pick some different ones but maybe piggy back on on some so

there's two that I I think about number one is um the blow up in the lending markets that hasn't been mentioned yet and the second is the launch of the US Bitcoin ETF is a is a major milestone in a watershed moment but on the first one um that started to unravel in 2022 I think it was May of 2022 when uh us Luna BW up and then the following month uh three arrows who was a large borrower from those lenders uh defaulted that started this domino effect um and ultimately you saw the of Celsius and blockfi and ultimately ending with uh with with with FTX but I think it's important to kind of unpack those business models um very early on they were basically raising capital from retail investors promising yield that

those assets sat on their balance sheet they then lended those out on the other side and captured a spread and so when the market became a little bit quiet and they couldn't lend those out some of those lenders started using very aggressive terms I mean some terms we've heard are $300 million uncollateralized you don't even find that in the traditional space worse than that is they were lending to firms that didn't even produce financials let alone audited financials so I think when we look back we're going to point to the wild irresponsible unsecured lending as as an area that blew up um on a more positive note the launch of the US Bitcoin ETF is is certainly a big moment it's important for one thing and one thing only it truly opens the US market the US market is a very very very Equity

Centric market and um you know derivatives are effectively a sideshow if you look at the number of Futures accounts versus Equity accounts it's a fraction right it's not to say derivatives are not Central to investing um but getting Bitcoin into a regulated acceptable Equity format is the last and final step in opening the US and so with that we've seen greater liquidity greater product development options adrs coming online there's been a net positive on the native Bitcoin cash Market uh greater flows and and new entrance require greater accountability and greater accessibility um and so overall was was a was a was a was a big moment for us I think the other one that we didn't talk about is um just like the ETF to help maturing the market the

recent talk by central banks to potentially um put digital Assets in their Reserve could actually be the inflection point going forward um if Bitcoin is a permanent store of value then it would absolutely makes sense that central banks would hold it like gold gold is expensive to purchase and expensive to um to store it's expensive and environmentally difficult to get out of the ground Bitcoin is a much more efficient um store of wealth um and so you know again I I think this could be like the year that it happens geopolitically we're in a period of sustained inflation and protectionism so I couldn't think of a a better setup for a hard asset that preserves value um so we we'll see how see how it unfolds but

that could be the um the true you know way that Bitcoin Finds Its full expression pause there yeah kind of going back to to the infrastructure I mean if we look at at the at the crypto specific infrastructure today versus the the parallel of the traditional kind of Market infrastructure and if you had to look at what has been potentially just created for crypto usage on usage I mean 247 markets very fragmented etc etc probably brings like more complexity than potentially even in in traditional market and if you had to compare it to the journey of other asset class that we've seen over the the last two or three decades uh how would you qualify looking at your own business what is an

evolution or kind of an integration of what has been done in traal market and what's more like a bit of a revolution of a new way of doing thing uh maybe just starting the side yeah I'll I'll quick off so through the lens of of a prime broker we actually view digital assets as um uh very similar to traditional assets in fact on the technology side we wrote a single horizontal clearing infrastructure structure using modern Technologies and techniques kind of from high frequency trading and and bolted that into a clearing business uh that's important because it allows us to have a realtime holistic view of a counterpart's risk cross asset um cross product and so it's the same platform that I clear foreign exchange listed derivatives fixed income um that I do digital assets and so from

a technology perspective don't see much of a difference um a difference there as a prime broker we do basically four things um they're all very similar to um digital Assets in traditional markets uh the first is that our actuaries are experts in underwriting counterparty credit risk and so that underwriting process of counterparties is very similar uh the types of institutions in crypto may be smaller there's a little bit more on the kyc and the wallet side of things but ultimately the the process is similar are you able to integrate defi as well we don't support defi at the moment because of the kyc uh scenario and that that's a problem for that but we we're starting to see permission pool so um at some point but just to to to kind of quickly um finish

the other three things that we do is um we manage liquidity that's on our balance sheet as we provide sheet to the street um we manage term liquidity um so we you know give term loans same kind of concept traditional as as well as in um in digital assets and finally the actuaries set a series of limits for our counterparties so again on the technology side the way the mechanics of this work is um we set a series of limits we push those out program programmatically to all of the destinations where clients trade they trade we consume in real time post-trade drop copies or those events to the edge of our system and we do effectively two things one we put it in our Ledger and so that's the books and records and spits out a series of reports regulatory reporting and the other is into the risk

engine which recomputes the risks and pushes out uh new updated limits so again very very similar there are the nuances that digital assets is 247 um you have different tenures and and settlement windows that could be you know instant you have different decimals and those don't fit into some of the back offices of of traditional players um but overall again we see it similar the the last thing I would say is on the evolution side um I always comp digital assets to Foreign Exchange and if you look at that market how it evolved it was started by Institutions and then retail came in digital assets is the opposite it's started by retail and you have institutions coming in so we have a different set of problems on a different

period on the The Evolution adoption curve okay Chris I mean do you have to rebuild the whole kind of layers infrastructure of the of the PMS or were you able to adapt and make it evolve to to properly address stole my thunder so I'm just kidding um look Mike Mike said it uh correctly it's it was a retail Market I believe that it was a revolutionary right it really was if you think about it peer-to-peer uh it was brilliant I mean nothing short of brilliant that the products that are coming out of uh the digital asset space for sure uh and but it is retail and if you want uh institutions that are regulated to participate uh there needs

to be uh you coming together so to speak just for example it was mentioned before I mean 247 365 that's a big deal that's 40% more support 40 two extra days a week how do you manage your risk on the weekends how do you manage your uh your portfolio on the weekends do you Mar do you strike a nav on Saturday and Sunday we solve all that but but ultimately the way I think about in order for this space to really take off and if we want we are institutional we are regulated uh we are seeing an increase in closings and education and demos and all that but predominantly what I think needs to

occur is that there needs to be uh settlement clearing Central counterparty clearing which Mike uh has touched on uh which is his business so I'm not going to go into that in too too much depth but in trafi world where I came from the PB Network fcms PB Equity uh pbfx wheel the banks settled on behalf of their clients the market and Global capitalization uh Market Capital took off exponentially so if you want want this space uh to take off we need to have settlement and clearing in a safe and secure way and credit cross margining the next one is we have

jurisdictional fragmentation I mean it's honestly I probably can get in trouble saying this but I I find it absolutely unbelievable that the per contract which I think is fantastic is not in the United States I really do and a US person can't trade that product so how do we solve that really we have three options either the international derivative exchanges change their framework to operate in the United States or the US person is allowed to trade on those exchanges and to access those products which are Innovative uh or the US builds those products and if the US builds those products we're going to have a bifurcated market right which is more fragmentation which is what we

don't want and so you know I think it's very important that that's solved and lastly I'll finish up with this is standardization I mean there is no standardization because it was a retail Market marketplaces and infrastructure that was built around it was to mitigate that and give you access there's no standardization and Mike touched on it and so of others uh for apis Right In traditional world we fix the apis in digital world are not standardize and have issues uh symbology decimals uh workflows processes product fun ibility right each Marketplace has their own products so I think the industry we've

done a great job and we need to Pat ourselves on the back it's been amazing but we need to standardize and we need to come together and work with the uh coming institutions because they're coming I love that we're just going up and down the line but I'll go next um so you're going next but well I've been curious I mean obviously you're providing the on ramping off ramping the banking like service support that many of the bigger potentially kind of Institutions are not yet willing to provide how do you see this kind of evolving over the years what's you going you're going to be an addon you're going to be a facilitator you're going to compete with the banks what's so I think this is where this industry talks about so like I've only been in this industry

nine months but there's too much of this them versus US mentality it's them versus US Tred VI us Defi and if you look originally when finex were kind of invented or came about everyone thought that the f were going to come and eat the B the lunch of the banks right the big Banks were like no it's against finex and but realistically in the world you needed both right you need the the ones that have been successful is where a fintech has learned to work with a bank where you get the The Innovation that fintech brings you get the the speed to market the you know the talent that go and want to build new cool stuff and then you get the customers and liquidity that a bank provides and the scale that a bank provides the two of those you can't can't compete with and I

think that's what's going to happen to this Market I think there's things that we do extremely well um I think there's things that the traditional Finance market and traditional Banks do a lot better so if we go into if you look at something like the basil Accord that allows standardization globally on how Banks work across the globe there's no standardization for if we go to regulatory um setups if I want to get regulated in Dubai versus Singapore versus any other Market may be com to the US there's no standardization what I need to do in one market is completely different to something else and because this Market is moving at such speed we're making mistakes I mean um not to go into too much detail but things like AP Ford in the UK is uh in concept to

protect the consumer is a great thing you want to be able to support them you want to make sure that you know you you cross out Ford but the way it's been implemented just instead stops people wanting to work in the in the market so you get the anyone providing Retail Services um to Consumers just pull out to the market they just don't want to do it and then businesses like ours are then left in limbo understanding the rules what we're liable for how much we need to pay it's it's so I think standardization and it's using the same term is one thing and then one thing that maybe they could take from us is again using the same theme 24/7 so you know we see huge demand for our blink Network a lot of people would have known like uh um silvergate send Network we

basically have a a blink Network that powers instant settlement for fear 24/7 multi currency multi- entity and that is something that I think try fire really need to adopt is like this this notion of you know I can't transact after 5:00 p.m. on a Friday it's just like it's like how are we still in that position so I think I think there's there's things we can take from both and we need to just stop doing them and us and just start working together when moving forward but is is there I mean to some I mean we see that there's real demand for some of these things right but I think Chris when we were doing the prep call you mentioned that actually some of your potential clients that are more traditional kind of larger ones they don't want to trade over the weekend they don't want to price over the

weekend they like long weekends I guess um how do you and I guess I mean we'll rever back to that but where you guys see right now the biggest demand I mean is it from crypto Bros is it more from traditional Market I mean we talking about the maturation of the infrastructure but quite frankly the infrastructure the way it is today for what you do if you're a crypto Trader it's probably good enough if you're a bigger shop then you need more you need more complex you need the capacity to move balance sheet everywhere so I'll be curious to see what where do you see the the biggest demand and and how we can basically bridge that Gap um and and I mean Nik maybe you want to start with I know you have a bit of a differentiating kind of view and approach to to this to

this but from your your standpoint where do you see the biggest demand for your Solutions today from your client base will be interesting and then diverge more to tral finance again yeah totally um how many of you guys are in traditional Finance versus crypto raise your hand in traditional Finance world how many of you come from the crypto world what did the rest of you guys do it's like half the people um okay I wasn't sure if I was going to share this but I what I'm going to do is kind of like strip out any identifying information secret plans all that kind of stuff and share what we're seeing so to give you a sense of scale that we do I think I mentioned earlier we do like over hundred billion dollars in

transactions annually every country in the globe if you're using something in crypto we're probably powering under the hood there's a secret Playbook that we are developing for financial institutions and it's obviously different financial institutions a bank versus a you know a consumer fintech app versus an asset manager have different needs and different customers and different products but in Broad Strokes there's a Playbook and here's the Playbook it's three pieces number one you give users access to crypto that can be in whatever form can be in ETF it can be in you custody crypto and Bitcoins and eth for your users you could be you build a system that lets them self- custody that's one of the piece of software we have users can come self-

custody Assets in whatever form you let them access it because if you don't let them access it you are going to lose that user I actually just moved all my money from JP Morgan to another bank because hopefully they don't watch this video uh and see that but because they didn't allow me to custody my crypto there a uh um that's number one the second one is utility now that you have your crypto there what can they do with it can they access defy loans can they get yield on it can they lend it out can they do staking with it there's a and the reason it's really valuable is because there's a lot of ways you can make way more money on your on yield on your crypto than you can on a dollar and

that is something that all users will want and whichever if you are a uh asset holder or you hold assets for your customers and you don't let them do that they will move somewhere else that's piece two so number one hold crypto number two use that crypto number three the kind of next piece that everyone's really excited about bring your existing business on chain is that stock trading Is that real world assets is whatever whatever your product is make a tokenized version of that and you get a lot of the benefits that these guys were talking about before 247 trading it's much cheaper on the uh much less complex and much cheaper and much faster on the backend it allows you to tap into new markets it

allows you to tap into a ton of liquidity um the and if you look at the US treasury bills stable coins and this was a several months ago is like the 40th largest holder of us treasury bills more than most countries in the world right so stable coins lets treasury bills have a massive user base that they couldn't have before so and then there's one secret one kind of secret fourth uh thing which we'll talk about so first one access funds or hold your funds number number two use those funds number three bring products on chain the fourth one is launch your own chain this is a really really really exciting unique opportunity it will only be around for next six months to one year I I don't know if how many you guys know this but

coinbase actually launched their own blockchain and they make hundreds of millions of dollars on that and you can think of it as owning like a credit card Network effectively you get to be visa and you get to take interchange fees and today there's no dominant traditional Finance blockchain the first couple people who come have that opportunity to do that whether it's a massive bank or a fintech everyone's rushing to do this so that's kind of the fourth secret piece we actually power all those Solutions so if you're interested in learning more about this reach out to me come see me afterwards I think I see Paul over there right there uh come talk to him uh or email me my email is just nil alchemy.com but the the point here is like there is a Gold Rush right now it

will the winners will be set in the next year but after that there will still be a lot of opportunity but whoever acts first will have this like magical opportunity and untap potential cool thanks I mean clearly you're talking to people that are moving fast and there are some people are moving less fast um but so I mean kind of Chris getting back to to the point you mentioned when we're preparing for this I.E the demand you see and I what realistically we can provide as I mean as infrastructure and what is the real demand and what do you think could be those additional kind of features that could actually kind of bridge that Gap and facilitate like the better integration over the next few months what do you see it as as the

major ones um well like I said I was at bokeh last week for FIA uh you know we are institutional so are we're predominantly a Bui front to back uh end to end oems all the way through the eyeore system portfolio management so we we are modular uh what we're seeing recently is some of the digital infrastructure providers or custodians are asking for our help on one part of our on on our product specifically around reconciliation because we've built a scale reconciliation from the old institutional side about trip party reconciliation we built it out at scale

just one one aspect uh we're definitely seeing um digital natives that are institutionalizing asking for some help with respect to making sure that um our Forte which is essentially accurate recordkeeping and risk and trading and so we help them in that regard we're seeing that that's occurring as we speak uh for institutions and hedge funds we're seeing more and more uh we are educating uh we are in talks with a large asset manager here about how we can support them an international multi-billion uh asset manager not a

hedge fund asset manager how we support them and build out bespoke reporting so it is occurring and we are seeing it uh and because we are end to end and we are modular uh we're being asked for specific parts of our stack uh pref preferably we would prefer TurnKey where someone comes in and they trade with us but we know that EMS is you know in the tradire world commoditized in many ways but post trade uh I think that we're seeing more and more uh you know demos every day and closings and you know we're doing well and it's good to see and it's occurring but it's definitely started after in my view since uh the ETF Sab 121 and the election and it

picked up significantly cool Tim is it I mean do you need like more banking relationship what's what's what's what are the The Next Step to you I mean is it kind of having a broader kind of more stable Network or is it better kind of solutions for the end clients what's what's the thing is going to make the change so I think for for BCB you'll be kind of doing what we do just expanding our footprint so um whether it's regulatory wise it's getting where we plan to get regulated in the Middle East uh in in Singapore and then hopefully come to the US as well so that's going to be big for us uh we're always looking to grow the the currencies that we support at the moment we support 30 plus currencies um but we need to you know keep on adding um on local rails for

that I think that's going to be a big thing for us but also the demand we're seeing from institutional clients at the moment is um it's one thing you said about wanting to get into um kind of Bitcoin treasury is a big thing um I think you just see the success I actually found heard a great story once um about meta Planet success where they uh you know they were the best performing stock last year and it turns out that in Japan apparently takes six weeks from you wanting to buy crypto to actually being able to buy it and the final step is they have to send a physical postcard to your house to prove it to you like an actual postcard and so it's so complex to get it that people are just buying meta metap Planet stock because it's it's you know they're just a

Bitcoin treasury business and so that along with um moving into um again stable coins mentioned uh the ability for bridging using uh crossb payments with stable coins um we have the ability to to kind of take in any currency and pay out any currency whether it's coin whether it's stable coins whether it's um Fiat so I think expanding what we do expanding our coverage our blink network uh those are kind of the key things for this year that we're definitely going to see coming cool thanks Mike do you want to bring more traditional players to crypto or more or more better solution to to crypto Traders what's the biggest push I think we still need like we're we're really far away from the basic building blocks right um investors retail and institutional or have their

assets invested in in six uh assets right it's equities credit rates real estate Commodities and cash if crypto is the seventh then it's trading and investment mechanics need to um migrate towards um um other asset classes that trail blades before them um and so that'll be a number of things it'll be Financial transparency we need to get into this space um you need to improve clearing custody credit um we need to separate the number one thing we need to do is separate the function of trading from the function of asset holding and collateralization and by doing that at leite to best practices across both of those disciplines once those building blocks are in place then the institutional users can come in and I'll give you one quick statistic um foreign

exchange markets in 1995 the bank of international settlements did a report and showed the market turnover was $1.2 trillion a day with zero going through PB because the infrastructure wasn't there fast forward in 2019 the market cap grew to 6.6 trillion with 1.5 trillion a day going through Prime brokerage so it just goes to show as you lay down infrastructure markets can scale prior to PB coming online there was no industrial scale in foreign exchange there was a few bespoke deals there was no broad usage it was just the mega names the tutors the soros's the more capitals and because there was lack of institutional grade infrastructure a lot of institutional Capital sat on the sidelines similar story in crypto lack institutional infrastructure

institutional Capital sitting on the sidelines so once you solve that then the in institutions will come in um but I think my colleagues you know did a great job and the retail who built this out has been exceptional and so we need to work together with that my fear is shoehorning it into existing stuff um that might um suppress when we have the opportunity to create something new and and unique cool well I mean thank you guys thanks thanks very much I'm not sure we fully there in terms of maturity but I think we've gone a long way already thanks very much for sharing your experience and thank you very much you saying that was a that was an insightful

talk I think one thing that resonated me with there was the industry is educating again you know it halted for a couple of years but now the digital asset space is educating again and I think you know that's what part of this conference is about so it's really lovely to hear um up next we have our very own Cassie Wagner and Sam golden from rootstock they're going to be talking about the convergence of Bitcoin and defi so let's give a warm welcome for Cassie and [Applause] Sam you can oh Y where set

hi I'm Casey I cover um policy and regulation of block works and I'm with Sam golden who is the director of brand and Communications at rootstock Labs thanks for being here thank you for having me super exciting to be in New York as well hi everyone in the audience I know it's quite late on the first day thank you for sticking with us um Sam I wanted to start with something that you mentioned when we were talking offstage you said that if gold and Fiat is kind of like Fiat is a layer to of gold and and that's kind of how you think of layer tws on bitcoin as like we like to call it digital gold um can you kind of explain that and and kind of get into what root stocks focus is there for sure yeah I mean it's like a quite an old

analogy now like Bitcoin is digital gold but I think it rings really true in terms of security scarcity and value um and for a long time until the introduction of modern banking gold was used for the means of of transaction by Everyday People 16th century 17th century introduction of like the like paper based money um kind of paved a new way for how gold was used as an asset and I think we're seeing the same thing with digital assets here where you've got Bitcoin as the digital gold and now layers being built on top of Bitcoin that enable the additional functionalities that a fully-fledged financial system need like so payments is one but there's so much more to a

financial system lending borrowing Insurance Investments savings not all of that can be enabled on bitcoin on the base layer due to it being pretty expensive to transact with not having much programmability and so the layer tws give Bitcoin the ability to expand beyond the store of value and into a fully fledged Financial system and at rootstock that's what we've been leading since 2018 so building a defi layer for Bitcoin that allows people to be able to do all the other stuff that you might want to do with with Bitcoin as an asset yeah definitely and I want to get into Bitcoin Beyond a store value but you know given all those use cases can you kind of give us a general overview of the current landscape of Bitcoin l2s

where are we where how have we grown in the last year or so where do you see us going what are you working on yeah yeah um so it's really interesting like the emergence of like Satoshi even referenced the idea of other blockchain sharing the like hashing power security of Bitcoin back in like 2010 and the early entrance into the market where people like like Network who basically make as we just talked about like this layer above Bitcoin they make payments much faster much cheaper based on bitcoin around the same time in argentinia uh a few Cipher punks who were really focused on bitcoin started thinking about their own economy the capital controls and hyperinflation they were seeing and took that to basically combine the programmability of ethereum

with Bitcoin security and that's where root sock kind of emerged and then over the last year I think as a result of of some tech advancements things like T Ru uh bit VM in the world of Bitcoin and also like macroeconomic factors like the Bitcoin strategic Reserve ETFs all this kind of stuff there's been like a big wave of new entrance into the Bitcoin L2 Market which is good because it kind of validates the like the theory that we had that all roads lead back to bitcoin at the end of the day and now you're seeing kind of layers emerging on top of Bitcoin for everything so lightning Network very focused on payments root stock the kind of defi layer for Bitcoin and then you're seeing a lot of other

networks coming out with specialisms in things like nfts Collectibles that kind of things all kind of forming around this market and as a result we're also seeing a lot of VCH Capital funding coming back into the Bitcoin space as well which is it's really interesting to see yeah I want to get back more into the the kind of triggers that you mentioned with Bitcoin um you mentioned the Strategic Reserve which is certainly a newer development um ETFs which we got in the last year um what kind of in the last we'll say the last 12 months um do you think kind of sparked uh a new interest in in Bitcoin l2s and and how did that develop yeah I think like some of those factors played a a role I think there's also and like at rootstock Labs

we talk about our kind of purpose is making Bitcoin work for everyone and I think a lot of people had started acquiring Bitcoin either an in institutions holding it in a treasury or individuals and they wanted to figure out how to turn it from a store of value to a productive asset and so a lot of these opportunities emerg to do that like we're especially now you're seeing the altcoin market kind of detaching from the Bitcoin price as a whole and Bitcoin is remaining pretty consistent like it has dropped a little bit in the last few weeks but compared to the kind of wider crypto Market has held its own and I think that comes as a result of more institutional adoption one of the last panelists talked about um metap Planet there's also obviously micro strategy um forming like taking Bitcoin

as a pure part of their treasury as a business you also have strike as well the same people doing that and I think it's giving a lot of credibility to bitcoin as an asset and because of the security and scarcity of it people are seeing it in the same way as gold and being like okay we can start using this for more than just a store of value and that's what all of these Layer Two Solutions allow for with with Bitcoin and maybe we can talk about it a bit later but there's like there's also tradeoffs and Trust assumptions with how you use your Bitcoin and put it to work in in different ways yeah definitely I mean being at the digital asset Summit it's definitely more of an Institutional conference in in terms of the crypto conference circuit um you know you mentioned institutions being able to put

their Bitcoin to work Beyond just you know a store value Beyond something that they have on their balance sheet what are the challenges the institutions face when trying to get more into defi yeah there's there's a few big ones I think like number one is like security like understanding you retain control of the asset so making sure that if you you've got Bitcoin you want to earn yield on that Bitcoin at the end of the day you still have custody of that Bitcoin um incredibly important whether it's your own treasury or if you're working for on your client's behalf to to put that that asset to work um I think obviously there's a big regulatory question different markets that we look around the world will have different regulatory

Frameworks for how Bitcoin and and other assets are used um I think it's been great in the last few months to see more clarity in the United States in terms of Regulation and and this kind of thing and pushing forward for like Clarity because a lot of the time I think that's what people want they want to have like a list of rules they can look at and say okay I'm doing it by the book hereat when there's like kind of not that level of clarity is when people start understand not being clear on what they can actually do with their assets so that's going to be increasingly important in the next year is not just the United States but around the world more regulatory clarity around Bitcoin as an asset and The Wider crypto market for those institutions then to

understand how can I harness these layers built on top of Bitcoin to to put these assets to work earn yield on them maybe take a loan out against them maybe issue some kind of tokenized bond to raise money for the business like there's lots of different ways that Bitcoin is starting to be used in that way but I think like institutions have to get comfortable with the security around how they want to put this Bitcoin to work and then the other side is understanding the regulatory framework they're operating in and whether they can what they can do what's possible with with the Bitcoin they hold I want to get more into security I think that that certainly is one of the biggest challenges for institutions I'd love to hear kind of how you think about that as

an issue but also I think there's a big critique of sometimes security and decentralization not always existing in the best way maybe sacrificing decentralization um to get more security how does rootstock think about that and kind of balance those issues yeah I mean that is like one of the biggest questions I think decentralization is like a weird concept because there's no like real end goal like we always talk about being on a path of progressive decentralization I think in lot of uh projects adopt kind of decentralization theater this idea that things are fully decentralized and there's there's no centralized control but there's always going to be points that can be improved

and further decentralized and that's kind of over the last kind of decade since since root stocks white paper was published we've been on that journey to build to basically dismantle any kind of centralized entity that needs to control the the ecosystem and allow it just to operate on its own um how do you do that like from a technical perspective there's lots of different things to to do I think one of the biggest considerations not just for Bitcoin but for like crypto as a whole is like Bridges like moving assets between blockchains is not only one of the biggest kind of like points of security risk uh as we've seen in the past of multiple Bridges being hacked but also decentralization risk as well like there's so many projects and and new

chains that have launched where the bridge is literally a custodian it's a multisig wallet where you are sending your funds in they're being locked in this wallet that someone else controls and then you're trusting that the asset issued on their chain will always be redeemable for the asset uh that you deposited into their multi and we've seen in the past that isn't always the case how do you solve that problem with more expressive blockchains there's now like loads of innovation in like zero knowledge proofs uh to be able to allow you to make more trustless bridges um Bitcoin lacking the programmability of some of those chains it makes it way more challenging and that's one of the biggest challenges that like the Bitcoin defi industry as a whole has been trying to solve over the last few years it's

like how do you create that trust minimized or ideally one day completely trustless bridge between Bitcoin and another chain I think the approach that rootstock has taken and lots of the core contributors who work for rootstock labs and like kind of wider contributors in the ecosystem they talk about it as a kind of Defense in depth approach to security so what originally like six seven years ago emerged as the Primitive thing I just talked about a multi-c has now evolved to a pretty complex bridge where no centralized actor can control the funds that are moving in between rootstock and Bitcoin this is done in like as I talked about like multiple layers of security I think what's really interesting is there are nine trusted organizations around

the world including the likes of zapo Bank who hold these Hardware security modules each of those Hardware security modules contains a private key for a multisig wallet built into Bitcoin um that allows transactions to flow in between the Bitcoin main chain and rootstock the side chain or the defi layer of Bitcoin those Hardware security modules are completely tamper proof no one can access the private keys inside them they're geographically disp dispersed around the world in uh data centers and not only that they then needs to be a cumulative amount of actual hash power from the Bitcoin miners to sign the transactions that flow in between Bitcoin and root stock so you then basically abstracting like no one knows the private keys for the

network uh the Hardware security modules cannot be compromised by anybody um and then there's a final fallback mechanism so if some catastrophic event happens that probably will be worrying more about where our Bitcoin is um there's an emergency time lock that basically then releases all the Bitcoin in the network back to the people who deposited it in the first place so worst case scenario people get their Bitcoin back uh from the defi protocols inside root stock best case and I mean it's the bridge has been live since 2018 um it allows this trustless flow of Bitcoin and then once you move your Bitcoin into root stock that's where it can then be it's like defi ready so in the same way you do with ethereum or any other asset you can start employing into liquidity pools you

can start earning yield on it you can start getting loans against it and that's a really powerful thing because then it basically means you don't need the other tokens you can use Bitcoin as the asset to access all the same kind of defi that you used to um on multiple chains with similar trust assumptions which is really cool I went a bit deep there sorry no I I appreciate it um I we like getting technical on the investor stage um you mentioned Bridges specifically and and kind of root stocks um security measures there in terms of I guess connecting Bitcoin to the broader crypto economy how is that you know with Bridges with other things how has that improved recently where do you see that going why is that important for

institutions yeah so I think one thing that's really interesting that happened I think in October 2023 a researcher called Robin Linus published a white paper called bit VM and the idea was be able to compute anything on bitcoin and this has kind of given birth to multiple different teams is working on this solution and bit VM allows you to basically do zero knowledge uh proofs on bitcoin to have much more trust minimized bridges in the future um it's very early stages but I think this is like something that rootstock labs and the bit vmx projects but also lots of other different teams guys at Stark net uh lots of other projects are working on basically cracking this and if you can do this you can create an even better

bridge to bitcoin that has ever existed before um which I think is going to be really important for like kind of evolution of how people think about um bridging into Bitcoin um I think that's going to make a big difference to like that challenge I think there's also like a lot of proposals to bitcoin core so like despite many people seeing Bitcoin as this like fixed thing that never changes it does change very slowly there are dedicated contributors who are like working on introducing new Bitcoin Improvement proposals to the network there's many proposals live at the moment that would allow for better bridging in and out of Bitcoin potentially more programmability of Bitcoin and lots of other um improvements as well I think one of the

reasons why the like the core devs of Bitcoin are so hesitant is because it's such an incredible like the system is so simple and powerful and the way it is people are very reluctant to make changes like 10 years ago there was loads of bips being implemented into Bitcoin all the time but as the network has grown and the importance of the network has grown people are much more like hesitant to introducing new things but it does happen I think there's there's things like opcat um bit 300 which is by a guy called Paul S which is basically a drivechain proposal to bitcoin all of these different technical things will make Bitcoin well it kind of as I talked about before there could be a world where like all roads lead back to bitcoin Bitcoin is the core asset uh

there can still be tokens built on top of the Bitcoin network but the the proof of work of Bitcoin and Bitcoin as the asset starts becoming increasingly important and I think continue to see that in the cling yeah definitely I so we've talked about security we've talked about bridges and and Innovations there you mentioned regulation a little bit definitely in the US is is Shifting or has shifted is starting to shift we'll see um I don't want to get too speculative but you know as we only have a couple minutes left looking ahead into the rest of 2025 what Innovations do you think institutions are going to start to adopt how do you think they're going to start to either change or shift the way that they think about their allocation to bitcoin and defi yeah it's a really good

question I think like the first step that still hasn't like become widely adopted is is institutions considering Bitcoin as a as a piece of their treasury um larger organizations obviously do not hold all of their Assets in cash and Bitcoin should be seen as as an asset that could be adopted as part of a sensible treasury Management program um I think beyond that and this is where maybe we go like further on it's then how do you turn that Bitcoin into a productive asset not just a store value we're already seeing some of like the kind of Front Runners like doing this already but I think this become way more common to understand like can I get a loan against my Bitcoin to fund expansion into a new market um can I generate a sustainable yield in my

Bitcoin um and then maybe pass some of that savings and the value of that back to my customers like these are the kind of things I think institutions will start thinking about the reason I use sustainable as a word there is there's already a lot of projects out there promising sometimes astronomical yield on bitcoin and the big question is always where does that yield come from um I'd love people in the audience to tell me where your yield comes from um because I think it's a very complex subject and I think that like a lot of people are making very like bold promises about the kind of yield that can deliver on assets that already appreciate an astronomical value when you think about Bitcoin as an asset U and that's something that is going to be a lot of focus on it's like understanding where does this

sustainable yield come from so a lot of companies thinking about Yi gener ation strategies and I think also like maybe this goes back into like collateralized loans but I think like the US government already talked about this or I think maybe Michael sailor proposed it for the US government is issuing like basically like gold bonds but Bitcoin bonds to be able to raise money for for the government or an institution is another thing that I think people will start seeing Bitcoin as like the potential to do that in the same way we did gold like for the last 3,000 years everyone wants yield I think we know that um and then really quick just root stock in 2025 can you tell us anything what are you guys working on what are you excited about yeah it's really interesting because like I talked about before like this new wave of

entrance into the Bitcoin L2 Market kind of validated our thesis of like Bitcoin uh becoming kind of critical infrastructure for the future of Finance um and as a result of that we've seen a wave of a lot of inbound inquiries from institutions around how to put their Bitcoin to work managing those Solutions so thinking this year there'll be a lot of like big announcements around how more institutions are harnessing the power of bitcoin's defi layer root stock to actually be able to do more with their Bitcoin as an asset um we've been working really closely with a company called fairgate Labs on bit vmx which is as I just talked about a way to build better Bridges to bitcoin we have the union Bridge coming to rootstock which will be using this bit vmx technology to be able to create a more trustless

bridge between Bitcoin core and rootstock um last year we saw a wave of Kind of Blue Chip etherum protocols like sushi Swap and Unis swap integrate root stock I believe that Trend will continue over the next year as well uh and then finally I think like one the things that I'm super excited about seeing like in rootstock in general is like this wave of new Builders like we're almost seeing like a bit of an exodus from ethereum uh people realizing I can now do the same thing or build the same thing or launch the same project that I was on ethereum on bitcoin using rootstock we already saw the trickle of this at the end of last year we saw a lot of like kind of new Builders and projects coming into the ecosystem we saw more established projects building on bitcoin using root stock raise capital from like a load of

like big established VC firms I think we'll see that Trend continuing and we might even see the first kind of like super consumer facing Mass adoption of Bitcoin defi um by like a wider audience and that will not only be institutions but also like kind of mass Market as well so looking forward to seeing that yeah watch out ethereum um thank you so much it was really a pleasure and thank you guys thanks a lot thank you Casey and Sam personally I'm looking forward to seeing root st's next implementation with bit VM so that's that should be on the cards our next panel we're going to hear about um from Jason yanowitz and Eric Peters from

coinbase Asset Management what institutions are actually buying this cycle so let's give it up for Jason and Eric yeah right there it's good how are we doing good day one yeah all right good good this is GNA be a lively conversation um we have Eric Peters CEO of coinbase asset management also CEO of One River um if you don't know one River they were probably the first like real institutions to start allocating to crypto so very excited for this um this conversation welcome yeah thank you yeah um you've been trading and investing for a little while

um I think you said the other day when we were catching up this is the most interesting time in markets that you've ever seen I'd love to just get your view on markets uh what what is happening right now not just in the crypto markets but in the global macro markets right now sure um I yeah I've been I've been at this since ' 89 so I've been at it for a while um and it is the most interesting time I there there have been some very interesting periods throughout my career I think what what is remark remarkable about this one is there's a real transition from um uh the previous Paradigm which was dominated by um Central Bankers to politicians now so I think that happened during covid and

actually that was our impetus to get invested in crypto we saw this transition to extremely large um fiscal spending uh deficit spending uh which I think was rational coming out of covid but what what we thought was well now that the politicians are engaged politicians love to spend money um and for years they just kind of turned over the economy to Central Bankers but once politicians are engaged we thought okay now we're going to start seeing some real spending and so like for instance one of the Dynamics that's changing right now that's that's remarkable is that the Germans just today they passed this resolution to allow them to spend massive amounts of money uh in deficit spending and this is you know this is in reaction to a political move which was

Trump more or less not pulling out of NATO but more less walking away from nato in Europe and now you know yet again you have a a politician who's saying okay well we need to respond to this so we're going to borrow a ton of money 500 billion euros and we're going to spend it on defense so these types of Dynamics are just they they they haven't really existed politically over the course of my career yeah that's an interesting note it's the first time maybe at least that I've been alive I don't know if it this has happened before but it feels like the market decisions from the top are now politically driven instead of maybe economic Ally driven right poit econ decisions about maybe rates or easing or tightening used to be driven around like uh unemployment or things like that now

it's very politically driven is that a short-term phenomenon long-term phenomenon is this just how it's going to work for from here on out I think it I think it's long term as in decade plus um you know the the era of the central Banker um was literally the entirety of my career so ' 89 up until really 2000 uh and the thing about Central Bankers too is GL if you look at Central Bankers around the world they've all more or less studied the same uh from the same textbooks just you know in different languages and so the amount of policy homogeneity when Central Bankers are in control globally is remarkable when you get politicians involved I mean Trump is different from Biden is different from

you know name your politician so that so there's just a lot more dispersion a lot more volatility when when uh politicians are in charge and I don't see any reason like is Trump going to turn over uh uh control of the economy to Powell or the next Central Bank like there's just no chance right so it's it's that like that period is gone for a long time yeah maybe let's actually go there so if you talk to probably most people in this room who focus on the markets their view I think there's starting to be a consensus view that the reason TR what Trump is doing right now is he's kind of getting us really close to a recession in order to Strongarm Powell into lowering the tenure right he's basically saying this is the one area of the economy I don't have control over I I'm

a real estate guy I want to Inc I want to decrease the rates which will long-term help help the market and help help a lot of different other things um what what is your view of that yeah I I think that we're still uh early enough in this Administration where I Trump loves to blame people for all sorts of things I think he can blame Biden for allows the economy and and I think he already is doing that and I think when you look at um you look at bessent uh just this weekend on on Meet the Press uh he was pretty clear that we need a a reboot of the US economy we can't rely on the deficit spending that you know we inherited from uh from the Biden Administration and he's talking about recession Trump's not denying that there could be a recession I think these guys

are preparing us for you know one or two quarters of what they hope will be uh a shallow recession and then and then you know kind of coming out of that you can get economic acceleration into the midterm elections which are incredibly important to to Trump and the Republicans will he do you think he has the guts to take us into a recession and stay there because the other side of this would be yeah you got to do hard things for a little bit and Doge and there's all this cutting and the tariffs and uh a whole bunch of other stuff that's happening right now causing a lot of uncertainty but yeah I don't know if he's got the guts to maybe this last for another 60 days and then he cares about the market too much I you know I I probably thought I I

probably would have agreed with that statement a year ago I think just the way he's behaving is um is increasingly dogmatic about wanting to make real change in the economy and uh you know one of our advisors for our firm is now his chief economic advisor and so you know I've followed pretty closely their views in terms of what how they think about crypto but also how they think about the real economy and there's um you know there's there's a strong need for economic change and and I think they they really believe that so I I I think that if we had a market crash it's a different issue but I think some some Market weakness not an issue and Scott Scott Bon is someone that I've

I've known for years as well I mean he's a he is a super Savvy practitioner and you look at some of the things that he's doing that will affect crypto in this Bitcoin Reserve they're super clever economic things I I me I think that they want to make real change here why do you think is so clever about it well um so there they revised the the um that that Bitcoin Act and one of one of the things that they did in there so the question was how are they going to pay how are they going to pay for Bitcoin and I think the the kind of the obvious response was all right these guys are not going to go out and issue treasury bonds to buy Bitcoin and I would have agreed with that strongly I still agree with that but that doesn't mean that

they can't figure it out so the question is well how do they figure it out and so there's this thing called The Exchange stabilization fund um and so currently the FED has 11 billion dollar of gold marked on their books okay this was set up in I think 1935 um the last time it was I don't remember when it was last revalued it's it's valued at something like $42 an ounce so what what the treasury can do what Besson can do is have the treasury revalue its gold let's say they revalued it to to Market that that is about a 750 to 770 billion doll gain okay the FED can then transfer that cash to treasury literally they just create the

cash because now they have this new asset that just appeared on their books so they have value they can then transition or they can just pass that money along to Treasury and then treasury can in the exchange stabilization fund can purchase whatever they want they could they could purchase Bitcoin they could purchase but it it made it it made its way into that into that act so the point is that Scott's the kind of guy who understands the plumbing of this system and can figure out clever ways to do things like like that yeah that's interesting um take me into the mind of maybe a CIO you know it's end q1 risk assets are getting hammered it's not just crypto it's Tesla it's paler it's coinbase stock right things are getting hammered

what are what are cios thinking today specifically around risky R risk assets so when when you say CIO and I think a lot of people in this industry talk about number one you're talking about an Institutional CIO not a family office CIO presumably um there are cios of of hedge funds and asset management firms and then there's cios of pension plans and and large endowments and Sovereign wealth funds I think those when when people hope that institutions come to the market they're hoping that that group comes to the market because hedge funds are already here they're hoping that the the the big allocator the pension the endowment and The Sovereign wealth fund yeah so th those are what we would call

they're institutional investors but they're really the asset owners they're the ones everyone in the world myself included is scrambling to hopefully manage some of some of their money and some of it they you know they um they direct themselves as well of course so um what's going through the mind of of those folks right now we're seeing I I think that what we'll discover uh is that over the next year there going to be an awful lot of these sovereigns uh and certain institutions that have started to accumulate I think if you're if you're a sovereign and you're looking at what the us is going to do right now um it would it would kind of be foolish to not start taking a position um but there's no reason to really announce that so I I think that we're going to

start seeing um certain sovereigns invest when it comes to pensions and endowments just on the Sovereign side are these because we've seen some sovereigns it's like Bhutan is doing Bitcoin mining uh El Salvador obviously Middle East has pushed pretty strongly and well we see like I don't know like Western Nations like uh I don't know you mentioned Germany like are we going to see I guess like bigger Western Nations do this do you think I think so I I think look if the us is going to go down this path and I think that we are um then it puts pressure on everyone who's running one of these to make the decision to either do it or not do it and if you don't do it and the price goes up there are consequences if you do

do it and the price goes down there're consequences and uh it seems pretty rational that if you see a real pathway for the us to go down this path and US states go on this path you should probably acquire some yeah it feels like uh the US doing the Bitcoin strategic Reserve or whatever the official name for it was is actually the equivalent of remember when Paul tutor Jones said uh bitcoin's the fastest horse in the race I think it was May 2020 that was the that basically removed all the career risk for hedge fund managers they said all right ptj does it I I can do it now and if it goes down he did it so it's fine right so it feels like we this this is the equivalent for the on Sovereign side yeah I think so I mean there are 100 Sovereign wealth funds in the world

roughly with $15 trillion doar of assets so you know just a percent uh is a lot of money yeah definitely what about on the um endowments and pensions um those are kind of our clients we we do actually work with some sovereigns uh as well um and uh on sorry I should say on the non- crypto side of our business we work with sovereigns I'm not going to show the hand of any Sovereign when it comes to crypto um I think the the Journey of the of the pensions and endowments has been really interesting so um Yan as you said we we were an early uh institution uh to invest in Bitcoin and eth and that was in November of 2020 we were Regulators

forced us to disclose that in December which is and and I think the market got really excited about that which is that was when um prices blew through the old 2017 highs of the the 20,000 highs and I think that the it was interesting because part of that narrative um was okay the institutions are finally coming and what we didn't see as the institutions actually come so there was a big runup in price over 2021 and during that runup what you saw is the endowments and the pensions set up digital asset working groups they called them dogs um and everyone thought there was the most clever name in the world but they all had the same name and um and and then but they they really didn't allocate and so then the market

rolled over and I think um they just they just stepped away so even even the institutions who looked highly likely to commit and some of them we were working aggressively with and they they were ready to commit but they just didn't do it in in the depths of that bare market and then this bull market happened really so fast you know kind of post that FTX low people there were plenty of people who thought this Market was going to be dead forever and they just didn't want to touch it and the Celsius blow up took most of the Canadian pensions just off the board for quite some period of time because they had made some Investments that um that the news the local newspapers destroyed them over um and so this this bull market has been so has been so quick that now these digital

asset working groups are back um we're starting to see signs of allocation but the real wave of money is not yet here not at all um I think it's coming but it's and this time I think they have done enough work from 21 up now through 25 that um we we will start seeing these allocations are they going to allocate I feel like uh Venture I'm guessing they're not just like going out and buying Bitcoin in Neath and so tokens I'm guessing they're doing it by allocating to funds um I me tell me if I'm wrong there but on the fund side the industry has been dominated by Venture funds I'd guess like I don't know 95% of the allocator capital that's come in has gone to the Venture funds are we will that continue will it be more in the liquid funds am I wrong and they'll just

start buying tokens themselves I think they will start buying tokens actually interest yeah I think they'll be the majors um and that's where they'll they'll start they will also invest in investment funds that focus on crypto um I think we'll see some index investing um there's some very large investors in the world that are looking at at defining what their index is that they will measure their own performance by and so um you know we've we've put out uh the coin 50 index and so that for example that would be the type of thing that they'd be like okay well now we have a benchmark these big inv investors tend to need a benchmark to measure their own performance by so now that we're seeing pretty credible um uh or i' say very credible indices uh but you

know indices where you look at you're like okay this is thoughtfully put together you know our index uh has dodged some of the the real catastrophes in this space for instance and so institutions can then get comfortable with that and it would make sense that part at least part of their investment would be actually in their Benchmark will they allocate to anything beyond Bitcoin Ethan soul I don't think in size not the type of investor that I'm talking about right now I think they'll be they will be late to anything outside of of those maybe they'll be you know Trace Investments there then there may be some Investments that they do make because they're in an index they will have some Investments through their Venture Holdings but I I I don't think that they're going to they're going to

go you know down the cap table and be investing in the you know the the 15th or the 30th largest market cap um they'll get that pass I mean they will have some exposure through some of their managers but not direct buys I don't see that what is the story these days for the big allocators what what is the what so like if Bitcoin is digital gold that's an easy story to tell right I feel like a couple years ago you go in there get into an office you're like ethereum is like superc computered World computer all these apps are going to get built on top of it is that what is what is the pitch now what what is crypto to these allocators yeah I think I think think Bitcoin is digital gold for sure um I think I have always held the view

that it is not only digital gold but there is a embedded technology call option in there because it's the most secure network in human history and people just haven't yet figured out how to build something on top of that really not not at scale and so um I still think that we haven't figured that out but I I hold some hope um that we will and and if that were to start to happen I think Bitcoin is a lot more than digital gold because at the end of the day gold is mutable and and Bitcoin isn't really um I think ethereum you know this idea of This Global computer I and people talked about stuff like that but they didn't really understand it I think the way we think about ethereum is it's it's going

to be what the Global Financial system is built on top of um there'll be some other protocols as well but I think ethereum will be the most important one and when we speak with uh with investors that that's what they're thinking as well or at least they don't reject that yeah do meme coins and like this whole debacle of whatever's happened in the last couple of months or several months does that how much does that hurt our opportunity at this institutional allocation I don't it's a fair question I I think I think it's largely ignored yeah because they just knew that those silly games and they're like yeah the crypto people are just playing silly

games again I yeah I think I think that that type of activity has largely been tuned out which I think is a positive by the way because um I think investors are focused on on the technology I think the fact that the the government has made it that the US government has now made it clear that this is going to be part of the financial system the fact that black rock got behind this with the ETFs and there's been so so much flow I think that the the notion that these assets are Ponzi schemes or you know going to just disappear I think that that's more or less over at this stage and so the the really frivolous activity probably some portion of the people in this room

are really engaged in that or pay attention to it I don't I really think institutional investors are probably spending 98% of their time thinking about the portfolio that's not crypto and with that additional 2% they don't have the brain space to be thinking about mean points really yeah that's fair there's a good panel I think it's coming up next with Prav and David culk and some other liquid managers I'm sure they'll be talking about where we're at in the cycle and stuff like that but where do you think you said the cycle has happened really quickly do you think we're still in the cycle you think there's no such thing as a four-year cycle you think the fouryear cycle is very much intact and this were halfway through what are your views on that yeah I'm I'm not a uh I'm I'm not a fouryear

cycle guy on a forward-looking basis I think you can look back through time and you can see you can see or you can find Cycles in many things and if they persist long enough agricultural Cycles you know certain business Cycles then you can look at that and say you know that that makes sense and there's a a certain Cadence to it I think that there probably is an underpinning to a four-year cycle in these assets but due to the nature of the the the the massive change in market cap and the participants coming in I think it's going to change correlations I think it's already changed correlations uh and I think it will it it will it'll change the fouryear cycle do you think fundamentals like token fundamentals

like rev and uh like quality active address like like um well we start to Value these applications and these chains more on fund as as the institutional crowd comes in will they look at this on a fund fundamentals basis or will the industry just stay very like narratives driven for a while I suspect it's going to be narrative driven for look there just a lot of people that need to buy these assets uh and uh uh unless they're just going to dismiss them outright they need to they need to get they need to get a position on and that's going to be this next wave is going to be driven by um by investment committees at least from an Institutional perspective I think it's

going to be driven by investment committees who uh it sounds silly but who who just say okay well the us is going to set up a a reserve and there are going to be other sovereigns invested and uh it looks like they're being a lot of things are starting to be built on ethereum and Wall Street seems to be more engaged and I keep hearing more about tokenization and oh my God we actually own nothing so nothing is the wrong number and so that doesn't sound super fundamental I mean like at a very high level macro argument I think it is fundamental but it's it's not the kind of you know uh discreet not building a discounted cash flow for radium or something like you know what I think

what they'll do is they'll have their junior analyst try to try to build some of that stuff out and if they come back with the wrong answer be like that's just the wrong answer like we just need we need better give me a number that shows Ethan 10,000 yeah you know just yeah because we all we all know that we're gonna have to buy some of this stuff so let's just get it on yeah sure um maybe as we wrap up um is there anything just your your position at One River and at coinbase Asset Management you speak with more allocators and institutions than probably most of us in this room anything that feels very obvious to you right now that maybe to many people in this room we're not seeing yet um I think the the lack of the lack of understanding for how impactful

rebuilding the financial system on crypto rails is I think that's really underappreciated so you know when when we entered this space um I think that things that were really underappreciated by very otherwise very knowledgeable investors were they they thought that you couldn't store these assets safely um they thought they were they were overwhelmingly used for criminal activity um and they they thought that because Bitcoin could just be created and copied that there could be an infinite number of bit Bitcoin protocols out there and therefore there would be no value that would ultimately acre to any one or group group those were the I

think the big misconceptions now now I think people are being forced to uh to recognize that these assets are here to stay and they feel horribly about the fact that they looked into them in 2021 and then they didn't buy in the bare market and it's there's major brain damage that prices are as high as they are right now um and and I think yet what they what they fail to appreciate is you know 5 Years From now I think most of Wall Street will be well on its way to to trading everything in in a tokenized way and that there will be a lot of value that acces to the Technologies and the entrepreneurs that

figure out how to provide great you know great infrastructure great services and uh I I don't think that they they fully appreciate that yeah Eric Peters everybody thank you very much thank you Jason thank you Jason and Eric definitely sounds like the game theory of Bitcoin has been set into motion so our last discussion of the evening is going to be on outperforming in liquid token markets so please help me welcome to the stage RV troa Prav Canady Ben foran Ryan Watkins and David CK let's give it up

good afternoon everyone Equity Market are closed but the digital asset markets are open um I'm RF Chopra I'm co-founder managing partner at te digital we're a digital asset investment firm and we also focus on liquid markets and it's a pleasure to have some uh great peers here and so um let's kick it off with a quick introduction uh so Prav David Ben Ryan tell us about um your firm and just uh start with what differentiates your strategy um work at a firm called vanc um large asset manager I run our liquid strategy uh in a punch land what makes us probably different is we can do both

equities as well as tokens we can go where the opportunity is and um or or a long directional strategy my name is David caul I started reflexive Capital initially uh this business was run inside of a large macro hedge fund so the investment team comes from a macro background um you know I'd say this space is to me this space is almost never in equilibrium you know you have these violently different regimes this boom bus cycle in crypto and so uh I see a lot of people doing the same thing the whole time despite that fact and so I think there's an opportunity to adjust the portfolio to one that's consistent with the regime in a way that compounds money differently than

strategies historically have Ben Foreman a founder of parfi capital we're a multi strategy investment firm Focus broadly on crypto Capital markets um what differentiates us is really our scope so we invest in both tokens and Equity directional non-directional strategies and are early and both late stage markets we manage about one and a half billion have been around for seven years and our team really has a mix of both traditional Finance backgrounds as well as kind of deep deeply technical engineering backgrounds cool uh Ryan Watkins co-founder of syncrasy capital founded in 2022 uh we're a long bias hedge fund what differentiates us is we are

singularly focused on uh liquid token investing and we run very concentrated and we're very fundamentally driven great so we're going to launch into some real specifics but to start um since each of you have some pretty good perspective on how markets have evolved how has liquid token investing changed over the last 3 to 5 years and what does it look like for the next three years so at at the broadest level what's what's different and how's it going to evolve Ben you've been around the longest why don't you go first uh yeah it's we're at like a pretty interesting point in the market

cycle actually you know we kind of say it's the best of times and the worst of times um right now like we've seen this in some ways it's the best of times why because we've seen this surge of just institutional interest in the space right the Bitcoin ETFs most successful ETF launch in history you know tokenization on chain you have black rock that's you know tokenizing treasuries right you have stable coin volume at a very meaningful global scale uh used in payments you had Stripes acquisition of bridge there's a lot to be excited about and I think a lot of that excitement is spilling over into liquid token markets so in some ways it's the best of times in other ways it's a a very tough time uh to

invest in token cap uh Capital markets um I think fundamentally there are too many tokens uh there are Divergent incentives and governance issues that are plaguing the space um there are there's a big mismatch between supply and demand the institutional bid is really not coming outside of the top 10 coins to you know the previous panel with with Eric Peters he touched on this um and in prior Cycles you look at 2017 bull market 2021 bull market there was this idea of this ubiquitous bid across all alts you know alt season was what it was referred to and you know Bitcoin would would trade with a beta of one and ethereum would be up one and a half X

and ALT would be up anywhere from 2 to 5x and everything was kind of one big macro bet but what we're seeing today is just much much more return dispersion and as a token investor I think what it really comes down to is you need to untangle untangle complexity to identify Alpha in the market and not to kind of nerd out for a second but I think the return dispersion is more lepto CTIC so there's a fat right tail and then you know a a fat left tail and then a bunch of things that won't make money on a forward-looking basis so it's a tougher Market there's more of a flight to Quality more dispersion things like BuyBacks matter um we can probably talk

about that later but um the market and and this whole process I think is a healthy one because if you think about digital assets they've been around for 15 years the asset class overall has been in price Discovery like are these currencies are these Commodities are these Capital assets the market didn't really know how to Value them and now the Market's getting smarter so I think this is a healthy healthy process um and I think we're just going to be in a much much more of an alpad driven Market versus a beta beta driven one yeah so I think it very good points if you had a fund five six or seven years ago it almost didn't matter you you just got to be early and you know everything

did go up and so it worked out you could absorb whatever volatility came from the market because everything would go up a million perc and then down 90% And that worked out okay um but at not the first time in the history of capital markets that there's a certain set of performance that money chases in a way that satiates that performance and then some and the biggest problem even for being a liquid token investor at this point is there's just way too much money chasing very few Venture opportunities and as a result of that these tokens when they first come to Market are just priced at a at a price where no nobody wants to to touch them uh and so no longer can you perform in the same way by just having access and being early in the liquid Market um so yeah I think you

know the next few years looking for new ways to Source Edge in this market I do think we have a set of incumbents who are mostly investors or you know have succeeded based on their Venture Capital prowess uh I believe very strongly that a venture capital investor and a Trader are different skill sets and almost the opposite skill set and based on the fact that most tokens are being managed by VCS There's an opportunity for uh I think traders to come in and Source Edge uh and outperform by being Risk Managers by being professionals uh I think there will be more active management required more token picking as well because not everything will go up but um you know that does support new sources of Alpha from

here um we were all hanging out before uh coming here and I guess I was like the most bearish person in this panel um so the altcoin market is 560 billion give or take it's like take out Bitcoin ethereum and stable coins that's where you kind of end up I think that number is going to go a lot lower between now in like the next 18 months um many of the things you've talked about is probably the reasons why but generally um the industry is kind of overbuilt quote unquote infrastructure by using a lot of buzzwords and most of that stuff is commoditized um and on the other side of like stable coin legislation I think you'll see a whole range of companies adopt let's just say stables and the things around Stables like tokenized products and all these things but the

winners of that will be the actual companies that adopt it and and it's not necessarily going to be the things under the hood um because again the things under the hood in my opinion are generally commoditized and probably might not even be used used so most of that market cap is useless and will disappear so the question then is like if you have that view um how do you generate Alpha in that period of time between now and let's just say the future State 18 months from now and to us much that will come into public Equity markets um you know generally we were early to find coinbase and Robin Hood as some winners um in the last couple years similarly we're spending a lot of time today looking at internet companies e-commerce businesses um you know know just digital

native businesses that have interchange fees as their big cost line item and to the extent they can leverage stable coins in the future um how does that cost structure change and what does that mean for multiple expansion on these businesses so if I looked at my looked at my portfolio 18 months ago a lot of that was in tokens if I look at my portfolio going forward I think a lot of that will be in public equities and that's where I think most of the returns will come from yeah maybe just a couple final points because I think we we definitely talked about this before and don't want to be repetitive I think we're starting to see a material change in the underlying fundamentals of the projects so we go back to 2017 and most of the market was driven off ideas so the Ico

boom was all about people releasing white papers and white papers are really just broad ideas for what this technology could potentially achieve but it was all vaporware and you fast forward to 2021 and the expectation heading into that cycle was that this was all vaporware so all we needed to do to get the ground running again was just to show that this works and that's what we did we invented Defi nfts and all the things that people got excited about in that 202 2020 to 2021 cycle but the problem and I think this is still a problem today is that so much of that growth is very cyclical so you look at all of these different Financial protocols whether it be exchanges lenders it is very cyclical growth that is dependent on flows coming into asset

class and prices going up so cat this scenario where whenever prices are down the fundamentals actually start to deteriorate and that is a fundamental structural issue that the asset class has today but how does this look going forward because that was also one of the the points we were making in this and I think we're starting to get to a point and this will be a transition period it won't happen overnight where we will because we have more regulatory Clarity because we have more institutional participation because we have Enterprises starting to more seriously enter the game and really use these systems you know we talk about uh stripe acquiring bridge and starting to make a real Bush into stable coins we talk about Black Rock tokenizing assets on blockchains like these are actual not

just experiments but people really making bets on this technology reshaping the financial system now we can get to a point where fundamentally we're not just betting on cyclical growth we're betting on compounding growth and that is a much more compelling story that is a much more sustainable story and I think that's how you get people to underwrite this AET glass on a long-term Horizon and not just as this cyclical boom sector where you have to time the markets and get in and get out yeah great segue so there's been a lot of cyclicality but the question is what's what's structural and we've talked about the outsized role of macro in the investment process but on a fundamental basis in each of your investing activities have the fundamentals

actually led to an idiosyncratic return as far as token dispersion and outcomes and if it hasn't then when do you think that'll happen and are there key metrics whether it's just a few whether it's tvl or or others that you can pin down that are the true drivers of value acrel so where do we stand on that maybe I'll start by saying we should replace the word cyclical with um speculative because that's really what it is hyper cyclical well like speculative like people's desire to gamble um because I think it's most of like when people quote uh fee metrics and and you know priced your earnings on tokens and things like that it's really

like people's underlying driver is really like people speculate on going to different tokens with leverage um so so on the on the other side of it is like I think we've been spending a lot of time on our side talking to uh folks servicing fintex who are essentially facilitating crossb B2B transactions using stable coins and I think that's a non-speculative source of demand and activity and fees and ultimately that's going to trickle down to a variety of blockchain projects it's still not very clear um who exactly we have some views on who this could be but I think we're still in the early sort of Discovery stage of that and I think ultimately that will get you to the point where fundamentals will drive performance for

tokens but my personal view is really far away from that yeah I think I would argue that fundamentals do shape the outcomes but it depends on what sectors the crypto economy you're looking at so there are sectors that are are more mature and further along in their life cycle I think defi is one of them and then there's way more speculative early stage sectors like say Ai and if you're looking at Ai and none of these projects have any meaningful economic impact then yes of course fundamental Zone matters it's all about narrative storytelling flows and that's pretty much what drives the the returns and if you're looking at defi uh aru fundamentals do matter and yes there is a debate on how much of the growth that these protocols experience

is it the speculative is it driven by speculation is it cyclical or is it actually something that's more sustainable and compounding but it does actually shape the outcomes and I think a good example of this is salana from 2023 until uh you know basically end of last year where it did a you know public like a liquid 20x from the bottom and then maybe 10x from where most people could buy what was what caused that that run and and why was that so outsized compared to all the other smart contract platforms it's because it got the usage right you could actually pull up a chart and see that Salon was earning in way more fees than every other blockchain including ethereum and there's a wide variety of metrics you can use to make that make that call so I'd argue that fundamentals definitely do matter but

you have to take the fundamentals with a grain of salt given all of the uh kind of the flaws that almost like the the revenue quality of many of these projects is kind of low yeah just to add to that I mean I think people often pose the question like do fundamentals matter as if it's like a binary question like a onoff switch on on a you know a light switch but really it's more of a light switch on a dimmer right like how much do fundamentals matter and I think the reality is they're mattering more and more um I think if if you look at decentralized Finance I mean there are there's a non-trivial amount we estimate kind of like two to four billion dollars of onchain earnings these are people

users doing things on chain um and they're willing to pay protocols which are effectively these kind of toll booths on the internet a fee for engaging in either trading borrowing lending um or buying Insurance on chain or any sort of these fundamental transactions that's real GDP that's flowing through blockchains and I think at the end of the day like the challenge has one of the challenges with fundamentals is just there are too many tokens and it's very difficult for retail to who really has been the marginal buyer to understand which tokens have fundamentals and which ones do not because it requires like parsing

onchain data right there are no 10ks and 10 Q's in this market there are no Gap financials and so it's very difficult to to determine what really fundamentals are like is it users is it volume is it earnings and so as the data in the space gets better and also as protocols that are earning these fees actually like start buying back their own token I think fundamentals will matter more and more um it's been a long journey but I do believe that markets over a long term over a long periods of time Bend towards fundamentals it's just has to be the thing that ultimately drives market prices you know one of the tricky things and okay here's the macro guy coming in

to share a macro view is it like it feels like it depends on on the regime so you know I could see this regime like the fundamentals which guided me over the last 12 months it's like those could totally flip and multiply by Nega one for for the next 12 months and I see uh kind of fundamental analysis struggling with things tend to work episodically in a way that um make it hard to fixate on any set of fundamentals as long-term drivers of performance and so when we've done analysis okay did this you know should we look at this like a PE ratio you know in a bull market like again do the opposite because people are trying to 10x their money and not own something that has free cash fol or whatever and so so that's um it makes it very

difficult to to to answer that question and I think going back to the macro just reflects the um the role that capital inflows I mean the space is just never in equilibrium if capital is flowing into the space a certain set of things work if it's not a certain set of things or you know very few things things actually work so as the court of our process we like to start with do we see a feedback loop of price and capital Flows In fundamentals reinforcing each other if we see that then we'll play the fundamental game if not you got to run in the other Direction yeah good I mean the the complexity is like no other but that also puts the fun in fundamentals um what the uh over the last couple panels um

whether it's regulatory or institutional flows there's just a slew of forces and there's been a obvious sea change um the question here is since we're talking about outperforming what do you think is underappreciated as a bullish Force for the liquid token markets and what's underappreciated as a potential bearish Force um in your outlook so um Mr based on where we are what's what are people missing that that frames your view so so I'll give you the bull case I guess since I was bearish for the last couple times um I think I came into the space because I believe tokenized equities were going to be a thing one day just

businesses could tokenize this asset that's their equity and they can do useful things with that Beyond just represent kind of this ownership thing and that that's happening you know we're um we're tracking that very closely um the general thesis we have there is if you go on rwa doxyz you'll see that 150 million people in the world own stable coins that number could be exaggerated give or take let's just say that's the number five billion people on the planet have an internet connection so 150 of 500 is a decent number to start with um but as that number grows and more folks across uh Emerging Markets other places out the United States get stable coins in their wallets they're going to want to own productive assets with it and I think that productive asset is going to be um token ass equities it's great for

the issuer you know um every issuer is going to have their thing they want to do for their business with the tokenized equity and it's great for the purchaser because they're getting a productive asset So to that ex to the extent that story plays out faster than I expect um that's your bull case because that's going to create a very specific winners in defi that's going to create a very specific set of winners on l1's you know that's going to create some Market structure uh based on where all that activity takes place so um I guess I don't know that answers what you were asking but why should we be so bearish what's that why should we be so bearish because I think it's going to take longer than uh the next six months yeah that's a long time um uh to build off of the last thing I was saying

you know so what is like macro being applied to crypto to mean does that mean like you're looking at new home sales and buying Bitcoin you know it's more about using a macro toolkit to understand stand this closed system and is money coming in and out is credit coming in and out uh what is the cycle pattern that that we're seeing and I guess the the most bullish thing I can say around this current moment in crypto is we've had some episodic inflows into Bitcoin which has been tremendous but the rest of the space has not seen an inflow in two and a half years and so the question is like is is that going to happen because I think if it does we should we should be very open-minded to what that will feel like there's a lot of people sitting here um in March of of

2025 making terminal conclusions about what this cycle is there's too many tokens we're never going to have an ALT season like 2021 we don't really know what it's going to feel like if money flows in and and the the pattern which I am super fixated on with respect to this process is this self-reinforcing relationship and perov heard this about 30 times from me but this concept of Market reflexivity is just so important it just explains everything in this market because people are trying to identify Network effects and network effects are often people speculating and chasing price and so you get this Dynamic where price goes up the fundamentals in the space get much better and then Capital flows so then price goes even higher the funs get better Capital that's a feedback loop where we haven't had that in motion yet you can say it's not going to happen but

the underappreciated bullish potential is the fact that that could get set in motion and then I think all bets are off and we should be excited about a whole new setup I've heard the reflexivity pitch um I'll give you a different feedback loop which is um we start with money needs to flow in for the thing to kick off right um so then I ask you why why is money going to flow into the stuff because um the thing I noticed is like until we see real use cases where you know people outside this room are touching and feeling products that are leveraging some things on chain um I have a hard time seeing a lot of money flowing in especially enough to offset all the vesting and all the stuff that's happening outside um you know as I talked to folks outside the crypto World

from just purely from this asset manager perspective the thing I noticed is like the most common question is like I see all these positive regulatory headlines but like I don't touch in this stuff why am I supposed to care right where's my chat GPT and I think it will happen I think it's going to be tokenize equities just a question timing I sorry um uh yeah I would never want to comment on my actual fundraising process but I know there are allocators out there and I hear what they're saying and I I think the most important thing is they're still engaged in this asset class and you know I think basically there's just all the kindling is there for any Catalyst which yes it's impossible to see exactly what it is and maybe it'll take six months for for a Chase to build and I do think this atory Catalyst um

was significant enough to activate people in new ways they just were not going to come in in December they were not going to come in January these dog groups as Eric Peter mentioned you know these are six to n month timelines they have calendars to them they're having their first quarter committees and they figure out their managers over the summer and then maybe in the fall they're ready so yeah I think if if you force me to to tell tell you the Catalyst of what it's going to be I would say I don't have one and maybe that's not going to happen but I think this stuff can build in a way that uh it's very hard to see now but we shouldn't sell short for for Ben and and Ryan so on this right on this unlock question um under appreciated bullish or bearish forces but also is stable coin

legislation and Market structure legislation a real unlock for the liquid token markets or will it come and go okay so there there's a lot to unpack so I I think like we talked about cyclical but I think secular like demand for block for Block Space is really like ultimately the North Star and if our industry created nothing more than stable coins that would be an enormous Tam like the market for moving M moving dollars on the internet on blockchains is absolutely staggering and actually if you think about stable coins today there are $200 billion Market but 70 to 80% of

every transaction on a blockchain involves moving movement of a stable coin so if people ask you what are people using blockchains for today it's really moving dollars and I think the I think what you'll see in the coming years and this is agnostic to wherever token prices are um this is a secular Trend what you what you'll see is uh stable coin Supply will go from 200 billion to two trillion in the next 12 to 24 months uh you'll see senders and rece sending and receiving wallets of stable coins go from 25 million monthly active senders and receivers today um I think that number will also grow

meaningfully and both of those numbers like senders and receivers and stable coin volume have both compounded at 40 to 60% growth rate over the past five years agnostic of a bull or a bare market and I think the issue that allocators have is they group crypto with AI fundamentally I believe blockchains are more of a B2B technology I don't believe that consumers will interact directly with blockchains I I think that's the wrong framework um uh there's no chat GPT of crypto in in like I'm sure plenty of people disagree with me I believe that the 990,000 financial institutions in the world the banks the fintech

companies will be the consumers of blockchains and will use them to move money and I don't think that requires like anything else getting built in this industry for it to be very very valuable um so that's my take on on that and then look I think that with stable coins growing def5 is going to grow too uh because it's only natural if you have if you're moving dollars on a blockchain you're going to want to do things with those dollars um and I think the biggest underrated force today or going forward will be token BuyBacks the value of the stock market is the net present value of all the earnings of of the companies that are listed um I think the net present you

know the the value of altcoin markets or the net present value of all the onchain earnings that they generate primarily derived from these stable coin earnings that number is growing I think right now it's trading at a very low multiple relative to growth um and you have the supply and demand Dynamic uh and I so so again like I think BuyBacks will will be the prevailing Force um but yeah I I think everything we need is is actually been built today and anything extra is like optionality in terms of like new use cases and AI like I think people are get excited about that but stable coins real world assets Bitcoin just those three things are absolutely huge yeah so I'll I'll share a couple more points on the productive asset

points and then maybe I'll give a bearish take on this as well I think on the productive AET points what do blockchain do what Their core they enable you to create assets to move them around and then to enforce contracts between them and this isn't meant to be reductive because you know contracts are the basis of many institutions there's almost like a theory of Institutions that they Nexus to contract so I think it's just a core building block that you can use to build many different things what happens when you put this power into the hands of not only institutions but into hands of individuals well in some cases you get really great things like stable coins people put dollars on blockchains and all of a sudden you can move it around

the world super cheaply and it's fast and it's efficient and everyone in the world can access it but what people also do when you can create an asset on a blockchain for one cent and then you can have anyone will trade it is they create dog coins and Cat coins and all these ridiculous things right and that is what has happened and you look at even like salana which was like the leader the leading blockchain by by usage over the past year the the top exchange on salana was like radium about 70% of the volume were were meme coins at the peak I mean this is this is what people were were doing here so what is the issue the issue is not that uh these assets exist it's just that there aren higher quality assets that have been uploaded to blockchain so far so we talk about this

regulatory unlock this is the ability to take you know you look at like a in salana right now there's maybe around like tens of billions of dollars of assets that are on salana ethereum maybe like higher maybe like higher tens of billions maybe around hundred billion dollars of assets that are up in ethereum when you talk about uploading the rest of the financial system onto blockchain rails you're talking about like tens of trillions of dollars that are going to be uploaded onto blockchains and you're no longer going to have people that are just buying and creating and selling a bunch of nonsense it's now someone is funding an entrepreneur in an Emerging Market to go build a startup right it's now people are financing a government to go and I know fund some program I mean this is how you actually unlock the productive crypto economy and I think that the

regulatory constraint being lifted is actually like a huge huge underappreciated unlock and actually getting increased utility out blockchain so it's not just like this very circular economy where you neverone here is just questioning what is this used for and then on the bearer side because I I do think that I own a much this as well we talk about like almost the common theme among all the bull cases is that we have this regulatory unlock and then therefore we can go and do all these cool things with blockchains well one of the issues that I've seen recently is that it seems like the industry is starting to become more politicized and the risk that you have when you have an industry that a technology is starting to be politicized is that well administrations change like governments

change if we get a change in Congress if we get a change in the administration in the next two to four years and the technology is still a political right lightning rod then a lot of this can get Unwound and we'll be at back at square one where we're fighting against another really challenging SEC so that's a risk I do think about in back of my head good well we have uh a ton of other topics but it's lightning round time so whatever the safe harbors will allow since you're immersed in the space and we want to give real money value to our audience not not Financial advice is what you mean right never heard of that but um we're going to do um a packaged last question so um the question really is what do you think crypto market cap in trillions ends the year what do you

think Bitcoin dominance is and your best sector theme I'll let Brian go first yeah so I think we end the year probably around like the same same same more or less market cap I think this be a flat year and then as far as uh was it sector theme sector theme and Bitcoin dominance and Bitcoin dominance I think Bitcoin dominance uh also ends the year around the same and I know it's kind of boring answer and then as far as the sector theme I think is most exciting it's a it's def5 and basically for the reasons we just discussed which I won't repeat so I would say three and a half

trillion so maybe 20% growth from where we are today um Bitcoin dominance I think grows this year uh so we're at roughly 58 60% on bitcoin dominance at the moment so I think that that uh maybe grows modestly to say 60 62% um and then I'm going also uh not to be uh right but I'll go with defi as well okay I'll go uh 70% probability of four trillion market cap 50% Bitcoin dominance so that's Bitcoin basically right here and an altcoin cycle materializing uh and 30% chance of one trillion that's pretty that's pretty

good convexity though so the EV ends up where you are kind of yeah but not in all coins so that and Bitcoin Bitcoin the skew is bad the altcoin skew is good um I would so if you include stable coins or do you not include stable coins in dominance uh I think we've been including stable we've including um the big issue with with dominance is ethereum right so I would say Dom is lower U marginally because of staes um I think crypto market cap is well most likely lower but unless like Scott and figures out how to buy more Bitcoin um being budget neutral so that's a kind of like call option on

bitcoin so if that happens I think all bets are off in some ways um and the sector that's most interesting is again like public companies that have nothing to do with crypto that can leverage tables great Roundup thank you guys um and thanks blockworks um really great discussion and good debate thank you all okay thank you to our panelists that concludes the last session of the evening thank you everybody for coming this was the end of block Works day one something that you may like this happy hour already started upstairs so please feel free to go up Network and grab your

drinks thank you again only [Music] [Music] I'll do what I'm I put my world on hold every little