The institutional era: who is buying BTC, ETH and SOL

Transcript

GM. Good morning. Welcome to the Milk Road Show, the daily crypto show that's like a slow cooker. Set it, forget it, and come back and hope for alltime highs. I'm your host, Jay Hamilton. It's Monday, August the 25th. We are not getting all-time highs so far today. Uh, but things are looking really good. And really what is happening right now is so interesting because we have institutions here in a big way that we've never had before which is driving real meaningful flows for the majors. Bitcoin, Ethereum, Salana. We have some news about Salana getting more action and excitement around treasury companies. Obviously we've talked lots about DATs on the

Ethereum side. Today's episode, we're going to dive into how institutional flows are unfolding, where the demand and the supply dynamics are playing out, and what of course the next big edge is for you as an investor. We're going to talk at the end about crypto and AI. Some interesting conversation there, and also institutional grade alts, why you need to be looking at alts that are made for institutions and that support the institutional DeFi. We're going to dive into all of this today with Jason Urban, the now head of global trading at Galaxy, previously Goldman Sachs. If you guys don't know Galaxy, they've got 9 billion in assets, 1,400 institutional clients, 1.1 billion loan book, and they

also run a large AI data center down in Texas. We're going to talk a little bit about that at the end. We're really they're they're one of the world's largest liquidity providers that's bridging Wall Street into the crypto frontier. Before we jump in, I was telling you guys this last week, I'm so so excited and the team is so pumped. We just launched a new website. Milkro.com is brand spanking new fresh milk for you guys. And to celebrate, we're giving you a discount on CryptoPro and all access pro. So, hit the link in the show notes or just go to milkroad.com yourself.

Check out the new website. Let us know what you think and get yourself some of that great great sweet discount. Today's episode is brought to you by Figure Markets. Grow your cash like a bank. No lockups, just real returns. Also brought to you by Ken, the verified distribution protocol, changing the growth game. With that, Jason, welcome to the Milk Road Show. >> Hey, thanks for having me. This is great. >> Pleasure to have you, my man. Really, really is a pleasure. Okay, before we jump in, I just want to give our audience, you sit in a very unique seat at Galaxy. Uh, and Galaxy sits in a very unique seat. Can you give us a quick overview of what Galaxy does so audience understands and what your point of view on the crypto market is?

>> Yeah, absolutely. So, GA the best way to think about Galaxy is, you know, traditionally as a merchant bank or an investment bank inside of crypto dealing with, you know, institutional client base. Obviously with the growth of our AI business, the best way to think about us now is two firms under one umbrella where the where the intersections make sense and that it's digital assets and AI. On the digital asset side, we're really doing everything that there is to do in crypto. I always jokingly say that the strength and the weakness of Galaxy is that we do everything in crypto.

>> So we have a markets business which is where I sit which sits on top of all the liquid things. That's the lending, derivatives spot onchain um, things that you would think about broadly as markets. And we're dealing with institutional institutional client base. We have an asset management arm that does things like funds, um, managing client flows. We were the adviser on the FDX estate. So, they're doing asset management, regulated things. And then we have an infrastructure business, which was actually the birthplace of AI because we were a large crypto miner. Now we're one of the largest validators say on the Salana network and Ethereum in a lot of the the proof ofstake uh chains as well and so and we have a custodial tech

business called GK8 that we bought out of the Celsius bankruptcy. So we really are doing everything you know full stream from from you know maintaining you know people's you know security networks with inflation and our validating to you want to buy five bitcoin we've got somebody working the telephone you know 1995 style sometimes depending on how clients are coming in you know saying hey I need to buy five five corn where are we so we do a little bit of everything and that you know allows us to get a really unique perspective ive of the ecosystem. We're seeing everything.

>> Yeah. And you recently uh in the last few months were part of the large whale that sold 80,000 Bitcoin. So that was led by Galaxy uh news or I don't know if this is news or speculation came out uh I believe it came out yesterday that you're involved in a a Salana digital asset treasury looking to raise a billion there. So, um, there's just to give a couple of the recent headlines of what you guys are involved with, as you said, you truly are involved with everything, which is why I'm so excited for this for this episode. Uh, let's before we jump into specifics, give us um your your let's say we're we're

sitting down for for beer at a bar. We're buddies. What are you telling us about the crypto market right now? I think that you're you're at one of these great turning points right now where you're starting to see that institutional, you know, flavor coming into the market. Now, we've been saying that and it's it's interesting in a business like Galaxies, it's always kind of a little bit be careful what you wish for. You know, during some of those crypto winters, you're like, if we could just get some institutions in now, they're here. And I'm looking at my loan book and I'm looking at my derivatives business and I'm looking I'm like, "Yeah, you know, they're here and they're going to be knocking on that door, you know, like all of a sudden, you know, you want them to come to the party and then you're like, who ate all

the pizza?" Um, you know, so, so you are, but we are seeing that turning and I think you're seeing it manifest itself in a couple different ways. One, the DATs, the digital asset treasuries. That's certainly something that while on the surface you might look at it and say why do I need if I already want to own soul or ETH or whatever why do I need this? Well, when you think about institutions, they need to be able to put these things into boxes that work for them, right? They already have prime brokerage agreements. They already have future agreements. They don't need to worry about not your keys, not your coin if it's in that kind of a vehicle. And so it makes it much easier for those players to step into the ecosystem. And

so that that part of that is that regulatory clarity that we're starting to get and there's more work to come. But it makes it it derisks it, right? For a lot of us who have been in the space for a long time, we understand these things. But for some of these people who were probably skeptics at some point and now you're going to say, "Well, you have to worry about custody and how many confirms on the blockchain." And they're like, "What are you talking about?" and we're able to say, "Hey, this is here. You're just buying a vehicle, no different than you'd buy shares of Apple or or Amazon or whatever, right?" And so that and I think that makes it easier for them. And that's and that truly is how you start to get orange pill. You get into the game and then you're starting to look at

the things that we all already know are valuable and say, "Hey, this is this is actually smart fiscally. this solves these problems that we've seen out there in traditional ecosystems. And so as we start to kind of play through that, this is where, you know, you're at that great turning where it's like, shoot, these guys are coming and they're for real. Uh it's interesting that you I want I want to just kind of get your view on um the way getting orange pill works for institutions because on the retail side what we see is is very different than it is on the institutions. On the retail side, people often come in because of

they come in because the attention economy. They come in because of some memecoin, some cultural thing that's happening, and it comes across their Tik Tok and they, oh, this person is getting rich and making money. Okay, I'm going to come in and do it as well. Right. Uh, very different than the way institutions. Give us the what's the typical flow of the way institutions come in and maybe you could also tie in a little bit about who is coming in on the institutional side. >> Yeah. So here there's push strategies and pull strategies, right? And and like anything, like any marketing attempt.

And so there are there are times where I feel like we're we historically have been pushing, you know, dialing for dollars, call these fund managers, call these financial institutions, call these banks, and we were pushing and it was kind of like, you know, it's kind of like selling sand at the beach. Yeah, great. You know, thanks. you know, look where your look where look where Bitcoin is, you know, 35,000. Call me later. Now, we're at a poll stage where everyone is calling and saying, how do I get how do I do custody? How do I think about liquidity provisioning? How do I think about derivatives? What's the same from the world we're coming, you know, that we're coming from and what's different and how do I solve for what's different? I think that it's been derisked from a career

perspective. If you're a money manager and you've got a great little business, why would you change that, you know, to to to put your clients or put your investor base now the investor base is clamoring for it? I think the administration change. I think that the um the regulatory clarity that we're starting to get, I think that that's a big thing. When we didn't have clarity, it it was like you were trying, yeah, you're going to be okay. You're not and you're like, well, wait a second. do I have to worry about this? And now we can point to it and say, "No, here's the the defined rules. Here's how it's going to work. Here's the the deck that's been cleared. And now you're able to hold this on balance sheet without it being

punitive. You're able to transact in these things without it being, you know, seen or viewed as money laundering or some violation of OFAC." And so that is really pushing it. And and who's coming? It really is everybody. And I know that we hear that, but you know, you've got the big banks who, you know, are traditional players, the white shoe firms. You have GI organizations who want to deal with custody. I think stables and stable coins have changed the way these these places start to think about it. So, in the stable world, you're going to have the GI custodial banks. I think in the, you know, the more liquid things, you have some of the larger banks. They're just not quite sure how to get there yet. But on the

asset management side, you have all of these people who are like, I need to have the next name. I can't be on the outs. And so, you're starting to see those people come in as well. And the combination of all of that together really paints a a great tailwind for the industry. >> And what are they buying? Are they coming for Bitcoin? Are they coming for Ethereum, for soul, for down the stack? >> It's the same. It's the same story. So I always jokingly used to say it takes about a year to convince a large institution to to get into Bitcoin and then it takes six months to get him into eat soul and then it's like three months later somebody on the desk is calling and like explain this DeFi thing to me you know and so like I think you're

you're you're seeing a similar trajectory. So right now it's it's certainly Bitcoin. I think that the DATs have really put a spotlight on ETH. Um that I think a lot of what I'll call the crypton natives or the dgenss were like, well, there's issues with this and issues with that. You know, they're coming in and saying this thing's, you know, look at the stable coin flows. I think Tommy Lee's done a great job getting out and kind of telling evangelizing that story. And I think now you're starting to see other stories come. It's the debt universe is very interesting because if you think back to the old regulatory regime, nobody wanted to be a company. Everybody needed to be a foundation so that you weren't a security. And now that all you know, you

heard Zach the other day say most of these cryptos aren't securities, right? Where you're you you've now the pendulum is swung, but you can't put that foundation genie back in the bottle. that exists and it's disingenuous to say, "Oh, well, now we're not a foundation." But you can spin up these digital asset treasuries that that start to look and feel they should be working hand and glove. I don't think they're necessarily a a puppet for the foundation, but a partner to the foundation. And so, if there are names that are if there are companies that are winners within the names that people like, they're going to naturally work with the foundation. we want to roll out

this protocol change. How do we think about this? I think that that works hand in hand. And so, you know, that will also that that helps bridge it back from what I'll call tradi back into crypto where you can start to talk about, you know, if you're Salana, what's the s the SIMD that we're going to do because inflation matters and you have these vehicles that are going to hold large amounts of it. It starts to it starts to kind of gel a little bit. Mhm. Where are we in that you mentioned uh those you know it takes a year to convince an institution to do Bitcoin and six months for ETH like where I know every institution is obviously at a different point in that spectrum but can

you generalize or give us >> we're still pretty we're still pretty early there's still a lot of runway you'll see you're seeing fast money that's come in but you haven't seen you know You've seen people dabble, but they haven't stepped in. You're like, "Oh, you did, you know, you know, for a large institution, doing 50 million of something is a is a dip your toe, right?" And you're starting to see a little bit of that where, you know, bringing real size to bear is going to come and it's just a matter of, okay, let me get a few reps under my belt with, you know, $50 million in andout transactions that way. And then pretty soon, one day, you're going to wake up

and you're like, whoa, that thing just moved. Yeah. Well, XYZ just bought my yard arm of it and you know got to help us all. >> Is there a particular is it just time that is needed in order to get to that go from you know experimentation and taking small bets in order to be ready or is there a catalyst that needs to happen further any regulatory or anything there? I I think regulatory like we're starting to get clarity and we're starting to get rules SAB121 you know being put on the back burner those things help. I think that once you get definitive and you need to have a little bit of a catalyst. So if we enter into a an easing cycle with the Fed and people

are looking at that, okay, what does that mean for the dollar? And and so the macro minds that think of things that way are going to say, oh, and now you have a regulatory backdrop that allows that or at least is is more is less murky. I think that you get you'll get a geopolitical markets catalyst that will put pressure and they'll be for they'll force their organizations to pressure test what they know from a regulatory perspective and I think that will will plow through but that's also a little bit of time you know it's it's hard here I mean I I've you know this will tell you where we are as an ecosystem you know all the we've worked our tails off all August and everybody that I talked to and mostly I would I would say if

you're talking about Europe or Asia where you know vacations August is like like everybody's plowing right through it. So you know Sunday calls all that fun stuff. So >> really okay. So that's different than now is that is that a crypto thing? Is that because you're in crypto? Are the institutions working in August? >> It's a crypto thing. It is all the crypto people because there's, you know, all this this Treasury activity. There are, you know, everybody's jockeying and you're getting price action. I mean, you're seeing us ramp up. You're seeing us sell off. The moves are, you know, I don't want to say they're violent because they're not that violent.

They're just a little more a little more extended. And so one, you've got eyeballs, you know, and so what we're finding is we get periods of intense action followed by everybody's like supposed to be on vacation with my family, you know, all right, let me go see let me go see a little Sally swim in the pool, you know, and then you come back and so it but it's been it's been intense. >> The best audience to distribute your product to your super fans. Duh. But what if you haven't found them yet? That's where Ken comes in. They help businesses scale digital distribution at a price that makes sense. Ked's verified distribution protocol identifies the best users for your product and connects you directly to them. Ready to find real meaningful users for your next big

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Okay. Okay. Which to me would say and and what everyone's trying to figure out right now is is at least all of our listeners and I I'm sure you you the same uh in your role uh at Galaxy is where are we in this cycle and where are we going for the rest of this year and for for the next year. You know, typically we would we've been following this four-year cycle for for several turns now. And the the initial thought coming into this year was that okay, the cycle is going to go until the end of 2025. A lot of people really built bought into that thesis. I don't think a lot of people predicted the selloff and

the dip we would have around tariffs, but now we seem to be on the way back up. Do you do you have a thesis around what you how you think the rest of this year plays out? >> I you know I think we're going to we're going to be strong into the close of the year. I think that it's going to be driven by things outside of crypto to be honest with you. I think it's going to be you've got an midterm election coming up. you've got an administration that's not afraid to to to act quickly or boldly and and that's going to, you know, there there are going to be things that are are positive or a positive backdrop for crypto that come out of that. Whether that's the interest rate environment, whether that is things that

we're going to do from a stimulus perspective to try to ensure that the administration's on good footing going into midterms. I just think that's a I think that's a catalyst for for for broad markets. You know, even though it does feel a little extended. Uh we've been on this run and if you step back and look and squint at a at a 10 or 20 year chart of the S&P or any other asset for that matter, it's kind of like a straight line and you know, so as you think through that there there's that element. Now, that being said, you've got you you've got the potential for some black swans out there, whether it's geopolitical, um, you know, what's happening in in, you know, Europe with Ukraine, what's

happening in in other parts. I know that Trump is is pushing hard to, you know, to end wars and be, you know, and do political, you know, political things there to cement his legacy, but whether he's going to be successful or not, that I I don't know. uh and I don't know what's going to rise out of that, right? And so I think when you when you look back, the fact that he's been as active as he has, I think tells you that, you know, that's going to ultimately be a great tailwind for crypto. >> Yeah, certainly. Uh and we've got um just well, you're bringing up Trump World Liberty Financials. TGE is coming up in the next month or so. Um and we got we got them coming on the show next

week. weeks. We'll be breaking that down as well. I want to talk about a concept that I've heard you discuss a bunch recently, which is focused on I want to focus on Bitcoin for this, but it does extend to other tokens as well. This one of the big impacts of institutions coming into the space is we're moving from weak hands to stronger hands. We're seeing at at at scale, at bigger sizes. what talk talk talk to us through what that means for markets and price of Bitcoin and this move from weak hands to strong hands.

>> Well, I I mean it's certainly going to be a volatility muting event, right? Like you start to see that and I think you're going to you're going to start to see that when I got into the industry, Bitcoin's realized V, if you're just doing the math is, you know, 70 to 100 type area, right? depending on the environment and and the particular window you pick. I mean, now we're seeing it in the, you know, mid to high30s, right? And and that's on pace with oil, right? And so as you look at something that's going to become more held in people's portfolios, whether that's 401ks, whether that's asset managers, you're going to see I think you're going to continue to see

volatility both from a implied and realized perspective, you know, contract and and and it starts to look and feel more like a normal asset. And and not that again as somebody who spent the last decade doing this, I don't want to say normal asset in a you know a derogatory way, but in a way that says a little old lady in Omaha should should have a little bit of this in her portfolio. Maybe not, you know, coin number 237, but but something that that has a you know that serves some of the purposes that we know that Bitcoin and other and other cryptos serve.

When you think about volatility, what do you think we see first? Do you think we're more likely to see below 80K first or above 250K for Bitcoin? >> Oh, well, I mean 80K is Yeah, there like 250K is rare air. I think you you've got a chance to see 80 first only because you you hit an air pocket, you know, a liquidation on a on a Sunday at 2 a.m., you know, no bids. I I think you're more likely to see that than you are, you know, there's always some seller that'll come out of the the woodwork, you know, in in some rare error. So, >> which is basically what happened yesterday, right? Yesterday, uh a big Bitcoin whale came and sold I don't even

remember the number, but uh it was something like 300 million I think of Bitcoin and it obviously pushed the price down. uh you know I wouldn't call it a crash or anything like that just a an adjustment as a result of a lot of selling pressure that and you do still have those large holders from the early days we are seeing more and more of them come out but it does it it still has the the the opportunity I just don't know if I mean we'll see we'll see where we go from here it feels I can't I don't know if we ever see below 80k again I'm I'm not convinced that we ever go that again.

>> Oh, I'm a I'm a markets guy. I think you're I think there there's an old saying that all prices will be met. It's just a matter of when and how. And granted, as somebody that's that's given their life to this and you know, I certainly my heart says I'd like 250 before 80, my head tells me that, you know, you hit a couple of air pockets and a couple, you know, forced hand that part of the problem and and I I I say this in a in a positive way, but it's it's a reality. Part of the issue of bringing in institutional money, you know, is there are times where people's hands are forced. If you're at a large institution and prices are rolling and risk mandates, you know, change, there's a sell at any price where I think if

you're looking at, you know, traditional holders inside of of, you know, the Bitcoin ecosystem or others, you know, like, listen, I I liked it at 20, I liked it at 40, I liked it at 80, I like it at 120. I'm not selling at any price. I'm just I'm riding it to to its million or what whatever that is. You don't have that in the institutional world. Those those players have to they have to behave and act in a way that you know is a function of their charter fiduciary responsibility etc. And so in those air pockets you can see a little bit of that. That doesn't mean it stays there but it just means that you you're you're changing the complexion of the market micro structure. And as you do that that comes with a lot of positives but there

are a few you know negatives as well. Mhm. Yeah, it's a great point to push point out. Who's buying Let's talk about Ethan Soul now. We talked a bit about Bitcoin. Who's buying Ethan Soul right now? >> You know, I I think that you're you're seeing a lot more institutional buyers to be honest with you. And the reason you're seeing that is nobody wants to buy somebody else's bags. Now, as as as a crypton native, you're moving way down the chain when you don't want to buy somebody else's bags. that, you know, to a to a money manager somewhere that starts to look and feel a little bit like gambling and less like investing.

But I think that with these, you know, what I'll call the, you know, eat, salana, etc. down that chain, there are a lot of a lot of great projects who are solving real problems and people are like, I'd like to I'd like to have a shot at my Bitcoin, you know, in my Bitcoin bag. Um, and so I do think you're seeing some institutions step in there. Um, I think the treasuries obviously play a role in that because it's either direct or indirect buying pressure, but it's, you know, it's real and I think you're going to continue to see more of that as as time goes on here.

>> Can you make any comments on this speculation that um, Galaxy Jump and Multicoin that you guys have partnered up to start a digital asset treasury, a DAT focused on Solana? You know, I I I have to be careful as to to what I what I can say. I can say this. The Galaxy looks and operates as we said on the onset of this this conversation, we do everything in the ecosystem. We have been a you know in parts of our business and if you think about an investment bank, there are always areas that are walled off. Um we've been an adviser, been a trading partner, etc. to a lot of these. Um, we've seen what works and what doesn't. And, you know, we're

always open to exploring ways to, you know, help our clients and help ourselves monetize that that experience. And that's that's as uh as as political as an answer as you >> your your compliance officer is going to be pumped about that answer. You just you can you just nailed that. >> Might not be, but it's the best. >> We've talked a lot about Ethereum recently. Everybody is talking about Ethereum. You know, it's been Ethereum's world ever since uh the digital asset treasuries popped off about a month ago and it's been all anybody's talking about. But Salana is is there's nothing's changed about Salana. It's not like we stopped talking. We've talked

less about Salana because there's anything wrong with Salana. And Salana has some digital asset treasuries, but not to the scale that Ethereum does. And it feels like Salonic could have a similar moment around digital asset treasuries where there's a lot of activity happening there. Plus, we also saw Vanic just filed for a Salana ETF with staking. So, you could buy an ETF on Salana using with Salana and and get, you know, seven 8% yield from that ETF. It feels I don't know what your thoughts are on Salana, but it feels like it could have a little bit of a swing back uh as as it catches more of the

narrative and more of the media attention in the same way that Ethereum has. Do you think the same or do you think that Ethereum continues to dominate the airways? >> I hear I I I do think that you always see in crypto it's always rotations, you know, between, you know, hot hands, good narratives, good projects, good roll out. You've certainly seen a lot of, you know, the magnifying glass put on Ethereum and partly because you've had some good storytellers out there telling the story. I think that with these these dats that are that are continuing to come out every day, every week, you know, you're going to have more storytellers. And I certainly think that you're not wrong in saying, you know, there are certain places where the

spotlight has been shined and certain places where it hasn't. Uh, and there's a great opportunity. um there's a great opportunity to shine a spotlight on on certain things. >> One thing that uh I know that Galaxy really focuses on in your seat is the institutionalgrade defy protocols. So as we and this is something that we've talked a lot about at Milk Road is there is as more institutions come into the space they are they're not just going to come in and hold spot they're also going to participate in DeFi.

>> There is a big opportunity to find those tokens identify them and focus on those as part of your investment strategy. How do you at Galaxy, how do you think about what is an inst what is institutional grade mean to you? >> Yeah, I mean it's interesting. We're probably one of the largest if not the largest DeFi player and we don't ever talk about it, >> right? Partly because you know we're we are helping our clients and therefore sometimes that means you know discretion is important.

I think that's that's something that we've we've proven time and again. Um, I think the important things as you think through that and I agree with your your your thesis or your premise here that there's going to be a natural flow there. I think what's important is understanding the the projects that have availed themselves to institutional or institutional focused things. How do you handle AML KYC? you know, in a pool you really can't in a pool you really can't, you know, KYC the other participants, but you can certainly AML them and you can certainly look at wallets and you can certainly, you know, attach attach scores to pools and so, you know, protocols and projects that are making

it easier for institutions. you know, don't think of a Galaxy as an institution because we're pretty cryptonative, but think of a, you know, a Goldman or a Morgan or somebody who's stepping in and how are they going to feel putting a billion dollars of of money into something? And are they going to feel comfortable when the regulator comes and knocks on the door and says, "Hey, what did you guys do appropriately?" and they're if the if because of the way the the you know the protocol is constructed they're able to say well here's what we did and here's how we know we weren't laundering money or acting with bad nation states or criminal elements etc.

here's what we've done and here's what we did on top of that to further enhance that and that's why we felt comfortable putting our money there and that's something that we do a lot of at Galaxy and that's what we see a lot of these institutions come to us and say how do we do it right the easy answer is okay you lend me money and I create a a trad 5 product that looks you know okay it's going to match this reference rate and so therefore you're getting the yield like that's the that's the first step which it's it's still the money still ends up in the right place, but the next step is when they're going direct.

>> And will they will they go direct? >> Yes, they're going to have to progress. >> Yeah. >> You know, I drove my car here today. I didn't walk and I didn't take a horse. I took the most efficient way to the pack. But but but but the uh the incumbents are maybe you're driving a a a gaspowered car because every car company is still pushing, you know, the gas powered cars, not the electric cars other than Tesla, you know, like there is this aren't the banks going to try to own this still? they still want to own the flows and they're going to like hey use our product >> like like here I think that any any business manager whether it's it's it's

the guy on the corner bodega or if it's you know one of the largest companies in the world has to think about how do I defend what I've got and how do I evolve in a way so you're going to see both you're going to see them you know you know I I don't like to malign anyone but you've seen some of the larger CEOs of banks in the world who are very publicly down in DC saying crypto is is is worthless and it's nothing. Meanwhile, behind the scenes, I can tell you we're having conversations about, hey, how are we going to do this and how do I do that? How should I? So, they're going in both directions. So, I think you're going to see the same thing. Yes, there is a there is definitely a cohort of people that are that are incentivized

for everything that we've put our lives forward to do to fail, but they also are hedging their bets and saying, "Ah, you know what? Maybe this DeFi thing isn't so bad. So is there any particular protocols that are well or or uh or blockchains that are well set up that you find that in your seat the institutions like that they they trust that you guys trust? Uh and if you don't want to call any particular protocols, are there um maybe uh um factors that you see over and over again within these protocols? I thank you for giving me the the the easy copout on the on the side there. Uh I'll

say this a lot we are based on what we do. We are a partner to a lot of protocols and so you know I I'm always hesitant to call out any any given you know because I have a large client base and I'm going to get a call from somebody tomorrow. Oh you didn't mention me. So that's I I always have to be careful. I'll say this, things that networks and and and projects that allow for speed and scalability, that's very important. How big can you get? I mean, how many transactions does Visa do a second, right? Why does Bitcoin not work at seven transactions a second without getting into lightning and side like just you know like people think about that and you have to remember that while

you and I and most of the audience here is fairly wellversed in all these things you know I still have conversations weekly with people that spell Bitcoin with a space and so you know it's so there are buzzwords that matter right throughput AML KYC those type of things, things that that focus on that and say, "Here's what we're doing so that it isn't just a bunch of our buddies getting rich, but it's actually we're building for the future." I think that that's important. I think that that's one of the things, you know, to take it back to the DAT conversation where you look at foundations working handin gloves with public vehicles, it has to be more than just a rapper that holds an

asset. there has to be underlying, you know, underlying businesses, whether that's staking, validating, whether that's, you know, building, etc. As you start to go down that path and you start to kind of look back and say, "Oh, that's a real company, right?" as opposed to, "Oh, that's just a thing that holds a thing." And maybe it's better because an ETF can only stake 75% of the assets and a treasury can stake a 100. Just, you know, ETFs have to be prepared to do recalls and what's on bonding period. >> Yeah. 24-hour recall is not easy when you're talking about >> especially when you're on bonding period is anywhere from from one day to you know one day to unknown to you know like well how do you do that I mean that's

one of the services we offer is like we'll give you instant liquidity and we'll deal with the back end but even then there's a limitation to what we can do you know in working with these to help them with that >> it it it just it feels it feels like and this is like this overarching feeling that I I am I keep getting so much right now is we are still so early. You said this yourself and if you're a an investor and you've been here for a while, the worst thing you can do is try to overengineer it. And really, you just need to be patient because maybe it maybe it whatever token you're holding is not

moving fast enough and it's not at all-time highs yet, but the when you when you sit back, you look at how early we are and all these institutions are coming. They all want to be here and how they come will differ. And maybe it makes the public companies stock price go up as opposed to the tokens price go up as much. But if you're just patient, everybody is going to win here. I think we just so inevitable. >> A rising tide lifts all boats. And that is what is happening. We Yes, there are going to be some some monstrous winners and monstrous losers in any process. Like if you think back to the internet circuit 2000, there was a pets.com and AOL and there was a Google and and an Amazon,

right? Like that happens, right? And so you're going to see some of that happen, but broadly speaking, if you were you were and have been invested in tech throughout, the the change has been, you know, lifealtering, right? And so I think you're going to see the same thing in crypto. I think you're going to see people who are going to to build things, change things, you know, in a way that revolutionizes finance. You know, so much of crypto is about democratization of finance. Like that's what we're going to see. Like the reality is at some point galaxy shouldn't be a a thing. It should be in the hands of each person. I believe that with all my heart. However, there's a long time for that where that where that starts and where that ends.

But that's, you know, like a lot of things are going to happen in the interim. >> Yeah. Yeah. Uh when we talk about exponential tech, obviously most people listening to the show are focused on crypto, but everybody knows that AI is the other exponential tech. And I would I can't forget to bring up AI in this conversation as well because you are Galaxy is large player in AI data. Talk to us about the shift for those who don't know. You have a uh a site down in Texas that used to be focused more on crypto mining and you have since shifted its focus to be on data storage, AI data storage. talk to us about this shift and a little bit around the convergence that

you see coming between crypto and AI. >> Yeah, absolutely. So, I mean obviously AI is playing a greater role in all of our lives and we can debate the merits of that or where that ends or you know how much is too much and you know that I'm sure that's for another show and definitely another another guest because that's not my strong suit. What what we've done and Galaxy is a forwardinking organization. Our job is to look at what makes sense for our clients, what makes sense for the future of our company and where we see finance and broadly the economy going.

when we when we started to really build out and focus on our crypto mining arm, uh we had a facility or have a facility down in Helios, Texas and the the convergence of opportunity where we were in the build, where we were in terms of power contracts and everything else made it made it, you know, pretty apparent to us that we we had a great opportunity to to to pivot into that. Um, and while there was a lot of consternation internally as we talked through does it make sense because of you know supporting the infrastructure of the

blockchain and you know proof of work and subsequently proof of stake you know how should we think about that and it didn't mean that we were going to stop that. It just meant that we were going to focus these large assets in a direction where you know quite honestly our shareholders were going to be going to benefit a lot more. What's interesting is as we continue to to go down that pathway and we think through, you know, some of the the intersection points, you know, one of the things that we talk about, you know, broadly in society, deep fakes. You know, how do you stop, you know, somebody from doing that? Well, you've got this immutable blockchain where you can now somebody will figure out a way to ensure that

what I'm seeing on television or what I'm seeing on a podcast or wherever is coming to me as a a genuine authentic version of myself as opposed to, you know, something that a political enemy or somebody tried to, you know, to to whip up. And so like there's that there's the markets elements of it like as you start to think about whether it's robo advisors or portfolio construction AI will will change that and that will change crypto but it also won't change the you know the innovations that people are seeing and so I think we're a long way before our our AO AI overlords take over. I think it's only going to enhance

and and speed up the cycles, so you'll see progress faster. >> Yeah. Uh, final question before we let you go, Jason. Um, we're at four about four trillion in crypto market cap today. Where do you see us going 5 10 years down the road? Oh, I mean here I I in my heart of hearts I believe that everything with a CQIP which is every financial instrument in the world for those who don't know have a CQIT attached to it. Everything with a CQIP will end up on the blockchain. Now the opportunity set I think is how those how those play together for a period of time right you'll have shares of Apple that

trade on you know a a regulated exchange say in the US or any other country you're going to have tokenized versions of it on each of the chains potentially each of the chains and different jurisdictions the myriad of things to trade um and and to you know quite honestly It's going to be a Cambrian explosion and then you're going to start to see everything drift back to what I think is the right the right place for it to be, whatever it is, right? But I think that where you see us in in 5 to 10 years is it's going to be enormous. I think you're going to look at all the other markets and say we've now consumed the bond market. We've consumed all the municipal finance.

We've consumed all the equities. We've consumed all the commodities. And then you're going to look at it and say, "Oh, and that's all tradable with Bitcoin and ETH and oh, some of it's on ETH or Salana or whatever." Like, you're going to start to see this. It's going to change. And that's the exciting thing of like why why I wake up in the morning, I'm like jazzed to do this even on a, you know, a lazy summer day is because this is progress. This is this is awesome. And and I want to be clear, the scale of what you're talking is I don't think anybody can wrap their head around that level of scale. Like just let's say we're talking about if we brought all equities on chain, we're talking about somewhere around $120 trillion of global

equities. And if we brought all even if we brought and right now we've got a few hundred million of equities on chain a few hundred million maybe like you know we we did an episode with with Ono last week because they just launched their tokenized equities platform and their guess was yeah like maybe we have 150 200 million in total right now. So you think about where that could go in the next 5 to 10 years. Even if we just brought on 10% of global equities, you're talking about over 10 trillion brought on chain and managed onchain and likely on a lot of the networks that exist today like Ethereum, Salana, and some others. So you think the I mean the opportunity is just it's it's enormous.

It's absolutely enormous. It it is it is enormous and there's going to be so many things that come from it like you know all the little businesses that are attached in in in traditional finance today are now going to you know manifest in some other form inside of crypto inside of digital assets broadly. It's just going to be it's going to be re really incredible. The the future's bright. Yes, there might be a few winter moments along the way, but we've all we've all lived through them. You know, we there'll be more that happens, but but progress is manifest destiny. That's what this is. Just financial manifest destiny.

>> And this and this is where the the um uh investor versus builder, founder, uh you know, getting your paycheck from this is very different than the investor side, right? And I think a lot of our listeners, they don't get their paycheck from crypto. They don't work in crypto. They're here for the investment opportunity. And that is quite difficult. If you're here for the builder, you're just building and you're grinding and you don't pay attention to markets and you don't care about price. You realize that uh nothing, you know, it monthto month, year to year, doesn't matter. A decade from now, we're talking a order of magnitude bigger than today.

But if you're an investor, you feel those ups and downs much more and you struggle with them more. and need that fortitude and that mental strength to to not get too caught up in the dayto-day, not be too influenced by the uh just quite honestly uh constant negativity on crypto Twitter that only either points out what's wrong or shows you somebody who just made a million dollars. Nothing else in between. If you get caught up in that, you can really you can get in your own way. And so I just don't >> You're you're 100% right. I mean, you you get you get lost in crypto Twitter and it's also think about this. We're inside of it, right? Like, and even the investor base that's here, like we're we're we're

very focused. If you can take two or three steps back and look at it and say, "Wow, that is like the fact that you can settle instantaneously atomically 247 that nobody thought about that." like the like if you're if you're a person in the United States who wants to send money, you know, to family in another country, you can do it instantaneously. You don't have to pay Western Union 15% or whatever it is. And sorry to any Western Union people out there. Like these things can happen, right? Like this is just the reality and that's so powerful. Wait till that wait till that has a few more cycles through it and it becomes exponential.

>> Yeah. Yeah. Yeah. It's uh it is it is very easy to forget the bigger picture when you're so involved in the day-to-day. Jason, absolute pleasure to get you on the show today. Thanks so much. >> Thank you for having me. This was great. >> Thanks so much for tuning in everybody. We'll see you back again tomorrow. And before I let you go, check out milkro.com, new site and discounts this week only on Milro where you can join a community that will help you through the ups and downs and make sure that you get the generational wealth that you're hoping to achieve. Thanks for listening everybody. Have a great day. As always, if you liked today's episode, please hit subscribe and make sure you follow us so you don't miss out on the next one.

There's also a link in the description to our free 5minute daily newsletter where we simplify crypto for you while making you laugh. And if you're willing to step up your crypto investing game, we're going to also leave a link for Milk Road Pro. You get access to our portfolio where you can see exactly what we are buying. This is your number one resource to help you invest successfully in crypto. One final note, this show is for educational purposes only and nothing we say is financial advice. Investing in crypto or any asset is risky and you should never invest more than you can afford to lose. Thanks so much for listening in my friends. Have a wicked awesome