#1293 James Seyffart | Bitcoin ETF APPROVED: What You Need To Know

James Seyffart is a ETF research analyst at Bloomberg Intelligence. In this conversation, we discuss bitcoin ETF approvals, what this means for capital inflow, predictions for the first 48 hours, 30 days, & year, fund structures, issuers, and regulatory oversight. ======================= This episode is brought to you by Frec — Just as easy as investing in an ETF, Frec Direct Indexing can help you earn more by unlocking tax savings, no matter the market. Done for you, automatically. Check them out at ⁠⁠Frec.com⁠ ======================= Trust and Will has simplified the process of creating and managing your will or trust online. They leverage a data-driven, design-first approach and amazing customer support to help you protect your legacy from the comfort of your home starting at just $159. Sign up today for 10% off using ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://trustandwill.com/pomp⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ======================= Pomp writes a daily letter to over 250,000+ investors about business, technology, and finance. He breaks down complex topics into easy-to-understand language while sharing opinions on various aspects of each industry. You can subscribe at https://pomp.substack.com/

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:02Anthony Pompliano?

  What's up everyone? This is Anthony Pompliano. Many of you know me as Pomp. You're listening to the Pomp Podcast, which is my effort to find the most interesting people in the world and sit with them for hours while I ask questions in an effort to learn. So it would mean the world to me if you would subscribe to the show on your favorite audio platform, watch episodes on YouTube, and tell your friends and family about the podcast. My goal is to help millions learn from the world's most interesting people. So let's get into today's episode. James Seifert is ETF Research Analyst at Bloomberg Intelligence. In this conversation, we discuss the massive, massive Bitcoin spot ETF approvals, what this means for capital inflow, what his predictions are for the first 48 hours, for the first 30 days, and for the first year.

• 0:47Anthony Pompliano?

  And then we go through a bunch of nuances of the market, the fund structures, the issuers, and regulatory oversight. It's a fascinating conversation and a big milestone moment for the Bitcoin industry. James and his partner Eric over at Bloomberg Intelligence have done a fantastic job over the last couple of months on this issue. So I thought it was only right to get one of them on here to talk to you and I to help us understand what is going on with Bitcoin spot ETF. Here's my conversation with James Seifert.

• 1:15Speaker 01

  Anthony Pompliano runs Pomp Investments. All views of him and the guests on his podcast are solely their opinions and do not reflect the opinions of Pomp Investments. You should not treat any opinion expressed by Pomp or his guests as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his personal opinion. This podcast is for informational purposes only.

• 1:40Anthony Pompliano?

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• 2:25Anthony Pompliano?

  Freck.com. Go check them out today.

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• 3:58Anthony Pompliano?

  All right, guys. Bang, bang. I've got James here. Eric may be joining us, maybe not. We're gonna see, he's on a train right now. But, uh, James, ETFs are approved. Bitcoin spot ETFs, you guys had 90-plus percent confidence. You were right. Congratulations. I think people on the internet are joking, "This is your Super Bowl." How do you look at so many different ETFs getting approved at the same time? Like, is that something that we've seen a lot in the past? Or is it usually like one or two, and then some trickle in over time?

• 4:26Speaker 02

  Yeah, I mean, this is a one of one situation. I mean, the closest situation is what we just saw with Ethereum futures ETFs in October. They got no interest whatsoever for the most part. A lot of the same people were in that race and and no one really bought those. They took they took no one that no one wanted to bite them. I think part of the reason for that is because I also think spot Ethereum ETFs are going to be approved this year, which we can get into a little later. But yeah, this is a one of one situation. There's been so much hype and so many applications. This has been going on for 10 years. I mean, really, the Winklevoss Twins applied over 10 years ago, but for the most part, it's really heated up over the last four to five years, 2017 ish.

• 5:05Speaker 02

  So I guess that's even more, but things have really heated up a lot here and the SEC has decided they don't want to be a kingmaker in the way they were with ProShares Bito, the Bitcoin futures ETF, which commands 95% of the assets, 95 plus percent of the trading volume in Bitcoin futures ETFs in US exchanges. So

• 5:22Speaker 02

  they don't want to be kingmaker and so they're doing everything they can to line everyone up, which is also something we've been saying since since even long before we went to 90% odds in October.

• 5:31Anthony Pompliano?

  Yeah, I definitely think this is the fair way to do it. The first time I said it on television, one of the hosts was like, wait, you think they would do that? And I was like, it's the only fair way. They they should do it that way. Doing it any other way seems kind of unfair. But what is your expectation of asset inflows? Let's go maybe like 48 hours and then 30 days. So in the first two days, what do you expect? And then in the first 30 days, what do you expect?

• 5:52Speaker 02

  Yeah, so we've heard so initially. So if you had asked me this before the Ethereum futures launch, I would have said it was going to break. They were they naturally, all of them would break the ETF records that currently Bito holds. It was the fastest to a billion and basically did it in two days. I think this then the Ethereum futures launch happened and just the interest was waning in this space, I thought. But I guess I was wrong. We've heard rumors like corroborated rumors from multiple people that many of these issuers have hundreds of millions of capital lined up to invest in day one or day two. There's rumors that BlackRock has 2 billion lined up potentially, which is an insane number in my mind. I I'll believe it when I see it, I guess. So, I mean, these we're talking about serious capital here that would be flowing into the space. So time will tell. So you said.

• 6:36Speaker 02

  Forty eight hours. I mean, the problem is if grayscale goes first, it's gonna be you're gonna have to do net flows because I think there will be significant capital. If grayscale goes in the same day that will flow out of GPTC and into these other products. GPT's fee, they're only dropping to 1.5% as of this recording, right? So that's a relatively high fee. And I could see them, basically, a lot of people who maybe own them in tax-deferred accounts or who don't really care are gonna take their money out. There's also a lot of hedge funds and private equity funds and people that are owning that thing that don't want exposure to Bitcoin. They're only viewing it as a special situation because it's trading at such a steep discount or was trading at such a steep discount. So maybe they just get out of it once the discount closes and this thing becomes an ETF.

• 7:17Speaker 02

  So if you net it out, I don't, it's hard to predict these types of things, but I think it will be measured in billions for sure. If we're talking at the end of the first week, I think we'll see net flows of, I don't know, three to four, three billion potentially. I mean, over the year, I'm on record as saying I was thinking around 10 billion as the over-under, so I'd probably go over 10. If for the first year, but under 25, I've seen some crazy numbers for the first year. I guess we'll see, but net flows wise, I'm probably around that over 10, but not much over 10 if I had to guess for the first year.

• 7:49Anthony Pompliano?

  All right, first 48 hours, I'm definitely over 2 billion. Like, I think this thing is gonna smash every record. You guys are gonna like build a monument inside of ETF land of like what's gonna happen. But I don't think it's, yeah, over 10, under 25, like that seems pretty reasonable. I saw the 50 to 100 billion number that came out. That seems tough, but I don't know, maybe Bitcoin's price, if it triples plus inflows, like maybe that helps it?

• 8:16Speaker 02

  Yeah, if you get to AUM levels there, I don't think that would be absolutely insane, particularly if the price appreciates to levels that we've already seen in the past back in 2021. That said, if you look at gold ETFs, which is like the most analogous situation to in ETF history, I guess you would say. They have 100 billion in assets. I've said this on like a whole bunch of different podcasts and spaces and what have you. And I just don't. I mean, it's possible I'm completely wrong, but I think of that as like the upper end. I think, I think these ETFs could get to like one, 2% of total fund, total ETF AUM. Right now, we're at eight trillion. So if you take one to 2% over the long term, say four or five years from now, that would say, assuming the assets don't change, but you're talking what 80 billion plus to 100 plus, but I don't, that, that's much longer term. Um, I don't, I don't think we're

• 9:01Speaker 02

  going to see those numbers short term.

• 9:03Anthony Pompliano?

  BlackRock is, uh, or I'm sorry, uh, Grayscale is coming in at 1.5. They're right, 2% they're dropping to 1.5. Uh, everyone else is like sub one, right? And many of them are kind of like 0.25 to 0.5 ish. Um, how much of a difference is there between 0.25 and 0.5? Like, there's obviously a big difference between 150 basis points and 50, but what about the like big bunched up group between 25 basis points and 50 basis points? Does it matter?

• 9:31Speaker 02

  It's honestly going to be fascinating to see. I mean, the way I think about it is right, there's going to be a whole bunch of different ways that everyone's going to try to spin these. You have the, the more crypto native people and the people that are more in crypto. I'll lump VanEck and Ark into that because Ark is partnered with 21Shares. VanEck has been trying to get these things through the door, has been at crypto conferences that I've ever been to. They've always there. Um, and then you have Bitwise, which has been basically pounding the table, pounding the ground on this front. Same with Valkyrie, hashtags. So like, there's this echo of like, we're focused on this ecosystem a lot. And some are like, we're only focused on this ecosystem, like 21Shares and some of those other names I just mentioned. Um, but then you also have the big players like iShares and Fidelity, which obviously Fidelity has been in the space for a long time. So they're going to differentiate on brand name and say like what

• 10:14Speaker 02

  they're trying to do here. Um, the fees though, I think are critical. I think if you have a relationship with one of these issuers or that are trying to sell these things, as long as you're competitive, you're not like, I think 50 might honestly even be too high. So right now, Investgo and Galaxy, they're offering a six month waiver. So there'll be no fee for the first six months and up to 5 billion potentially. Um, but then they're going to 59 bips. I think they might have to lower that to be competitive potentially, but I guess time will tell. Um, but if you're in like the 39 bit range like Fidelity is, but you have a relationship with Fidelity and you're thinking about going to somebody like, um, I don't know, Bitwise or iShares, It might not be enough if you already have a relationship. So as long as they're competitive, the distribution networks will be important because the way we're looking at this is it, this whole ETFs tend to be a winner take most situation, right?

• 11:00Speaker 02

  One fund tends to get most of the assets and most, if not most of the liquidity, definitively liquidity. But that means that there's a huge opening for plenty of other people to have niche markets where they have 100 million, maybe a little bit more in assets that is profitable enough, or at least somewhat profitable, that they can offer the business and it's just something they want to have to complete what they're, complete their offering when they go to an advisor's office or an institution's office. But there's going to be one or two that sit at the top on that asset level or trading level. And in some cases, in very mature markets, we actually see one that is basically competing on assets because it has such a low fee level. But the dollar volume, when things go crazy, it's always one and it's usually the oldest one that tends to really dominate on liquidity and volume.

• 11:44Speaker 02

  And we see that repeatedly in different areas of the ETF ecosystem.

• 11:48Anthony Pompliano?

  After 30 days, who emerges with the most assets in your opinion?

• 11:52Speaker 02

  I mean, even with Grayscale going at 1.5%, I think it's, I mean, they would have to see it at record breaking levels of outflows in a short time period to unseat them on an asset basis. But that said, if anyone can do it, it's probably iShares, just because of BlackRock's brand name. They're also, their fee waiver isn't bringing it to 0%, but it is bringing it down to 20 basis points, which is also extremely low. Look, I've been telling people to expect the Terradome, we call the ETF Terradome. It's because it's, it just, it crushes you. It forces people to cut fees if you want to compete. And we were talking about 40 basis points as like a low end, getting under 40 would be impressive. We think it could happen within a year. And then Fidelity did out of the gate and we were like, oh, wow, they're already doing it.

• 12:35Speaker 02

  And then now with these recent updates, I, I'm absolutely shocked how low these have gone. They basically compressed a year or so of fee war down into a 36, 48 hour period. And honestly, we're still, we might still not be done. Technically speaking, they could lower the fees again if some of these issuers really wanted to.

• 12:55Anthony Pompliano?

  The idea of waiving the fees for six months or up to a billion dollars or whatever it is, why not go even longer? Like, is it just, hey, the difference between six months and 12 months doesn't really matter? It's more so just the gesture of waiving the fee at all? Or how should people think about what these companies are going through?

• 13:14Speaker 02

  Yeah, the way I'm thinking about it is, one, we've never had a situation like this. So in the time, and sometimes you have issuers come late to a party and they'll do that fee waiver to try and gather new, any new assets, looking for a specific strategy or asset class. In this case, I mean, everyone's just trying to do something to differentiate themselves, right? The way I'm thinking about it is it's almost like a marketing expense. Like, here you go, we're gonna eat the cost of operating this thing, which I think many of these, even at the fees they're currently offered, unless they get significant assets, they're probably gonna be operating like at a loss or like with virtually no profit to start. So this is not like, this is not like this is gonna be a cash cow for these guys in the near term. Like, this is, they're coming out and they're going with razor-thin margins, probably.

• 13:57Speaker 02

  There's a reason that everyone on the very low end is on that 20-ish, 20 to 30 mark, right? Like, there's a reason they're that low, and it's probably because that's just how low things can get compressed right now with the ecosystem. But over time, as more scale comes into the space, we'll actually see this probably drop even lower. But it's be interesting to see how much scale comes in and how much it impacts the underlying fees. But there's nothing to say that, like BlackRock, if they get enough assets, it's possible that they just get rid of it and change their actual fee to 20 bips rather than going to what they're stating at 30 bips. But anyone can really do that, too. And again, we, right now, all these documents, they're, we call them red herring documents. It's a common term. It has all this red writing that basically says, these are subject

• 14:39Speaker 02

  to completion. And all of these documents have that. So we could still see some of this stuff change before these things begin trading.

• 14:47Anthony Pompliano?

  So another thing that I saw was VanEck is going to donate 5% of their Bitcoin Spot ETF to Bitcoin developers. Uh, I had written a tweet a couple of days before they announced that, and that was one of my suggestions. And then I talked to someone there and they're like, no, dude, we did this with the Ethereum ETF. Just no one really paid attention to it. And so they're like, we were laughing when we saw the tweet because like that was the plan already. So one, why didn't no one pay attention? Like, does it not matter? And then two, do you think it'll help here with the Bitcoin Spot ETF?

• 15:17Speaker 02

  I mean, I talked about it. I was covering it when they, they did it with the Ethereum ETF, right? So, um, but yeah, nobody, nobody seems to care, I guess, for whatever reason. Um, it's, it's interesting and it shows they're like, they're not just some like tourists in this space. That's one way that they can show it. Um, and they have people, the thing is like, everybody has hired people at this point that have good pedigree and background in some cases on both sides of the TradFi and DeFi world. Um, so it's not like these guys are just going in and don't have any, they have no idea how this market works. Uh, these are all, uh, they're, they're, they're very smart people and they have good, good, uh, good contacts. So, I mean, VanEck is doing it and hoping that maybe the crypto native players who want exposure to this in something like,

• 16:02Speaker 02

  maybe they have a, an IRA or some sort of account. So they're trying to go after people who really care about that industry. Whereas some of these other guys, so their ticker is H O D L. It's obviously a little more retail and crypto specific. You have Valkyrie, whose ticker is B R R R for Burr, like money printer. Um, and then other guys, they're, they're going with much more simple tickers, which is indicative of them like going more after the boomer slash advisor type crowd. They're not going for this flashy ticker. So you're going to see these people both, they're going to compete, but they're going to try to compete potentially in different channels, maybe. Um, so it's going to be fascinating to see. We've never seen this many ETFs launch something and where the products will be so similar. It'll, it's, I mean, I'm a nerd, but it'll be interesting to watch and see how this plays out.

• 16:47Anthony Pompliano?

  So the fee war, I think we all knew it was coming to your point. Uh, it came much faster and much more severe than, than I think most were anticipating. Um, I'm probably more interested in the marketing war that is going to happen after this. So I think that probably a hundred million dollars gets spent at least throughout the first year on marketing these things. It's probably a Superbowl ad, like there's a bunch of these milestones you can kind of think through.

• 17:10Anthony Pompliano?

  Am I off base there? Like, how should we think about what to expect? Are we just gonna like literally every time we turn on CNBC, Bloomberg, or any of these platforms like just get bombarded with ETF Bitcoin ads now? Or what should we expect?

• 17:21Speaker 02

  So it's funny, technically, they're not legally allowed to put like the ETF ticker or anything in any of those marketing. So if you looked at any of them, like none of them specifically have like an ETF ticker in there. They just talk about, in this case Bitcoin, and then provide a like show their like their company name and a link to their website. So I do think there is, we know for a fact, we've been saying, I mean, I think Eric wrote in October that this was going to be a marketing bloodbath. It's going to be, people are going to be going neck and neck here. They're going to do anything they can to try and differentiate themselves and they're going to try to market these products. And so like some of these smaller issuers going into these massive firms with significant marketing capital. It will be interesting to see, but we've already seen some of the smaller guys come out with, with really, in my opinion, smart, funny commercials.

• 18:06Anthony Pompliano?

  And when you see that happening in other ETFs, is there a connection between you spend more, you gather more in assets?

• 18:15Speaker 02

  Not, it's not that big of a deal, the marketing spend on like commercials and stuff like you're talking about here, right? The only ones that we see it for are things like the Qs and some of the spider products like you've seen on Center ISO at the, at the Rangers games and things like that. But those are different because those, those ETFs are structured a way that no ETFs are structured anymore. They're structured as unit trusts, unit investment trusts, and they have 12 V1 fees, which are basically part of your expense ratio goes to spending money on marketing. It's like Brewster's Millions, like these funds have like billions and billions of dollars and they have like 0.01% that goes to marketing, but it ends up being millions and millions of dollars that they have to spend on marketing. So they kind of use that to create commercials and different things like that.

• 19:00Speaker 02

  But this is more unique. You don't see too many things like this as much as I'm kind of expecting. This is going to be, again, a sort of one of one situation as far as ETF advertising goes.

• 19:14Anthony Pompliano?

  So one of the other things that I see people talking about, I think Gabor Gabox, who used to be at VanEck is now an advisor there, he was like, "Look, all these low fees, like, it's great for the people who are going to be investing in it. Obviously, everyone wants the lowest fee possible, but it may actually incentivize other behavior for these issuers to try to make money, including trading, securities lending, etc. on the backend." How much of that are, should people be worried about, or should they be aware of?

• 19:40Speaker 02

  Yeah, I mean, one, they can't do any securities lending without disclosing in their documents, right? So that concern I saw from multiple people online that just don't understand the ETF world specifically. So if they're going to be doing that, and they do it and don't disclose in their documents, I mean, they're gonna, it's, that's nightmare situation for them. They're going to disclose it. Plenty of ETFs do it. I don't even, I'm actually, don't think that the grantor trust structure that all of these are using in the 33 Act, I don't think they're even allowed to do securities lending if they wanted to. So I think ultimately, people will figure out wrappers and ways to offer this type of exposure and do some sort of securities lending, or in the case of ETH, do some sort of staking down the line, but not initially. This is, they can't do that. What I think what people are realizing with these fees is like, these are kind of like, like I said, they're offering

• 20:25Speaker 02

  them at cost, or possibly even loss leaders, and then we'll see where things go and hope they get to scale where they're actually profitable. But like, I don't know, I don't think the incentivizing bad behavior is necessarily true. I mean, it's possible, but in the US market specifically with the way the grantor trust is set up with these names, like Blackrock isn't going to be playing fast and loose with the names. That said, as far as trading goes, the one interesting thing that everyone was focused on a few weeks back was whether or not these ETFs will be able to operate with in-kind or cash create redeem. So most ETFs, for the most part, if you, it's with the S&P 500, you hand over all the stocks in the S&P 500, and you get back shares of the ETF. For Bitcoin, it would be handing over Bitcoin and getting back shares of the ETF that represent ownership of that Bitcoin.

• 21:09Speaker 02

  The SEC basically said, "No go. You cannot do in-kind create and redemption." So here we are, you're only allowed to do cash. And a lot of people tried to fight it, including Grayscale, Blackrock, you name it, they want to do in-kind. Part of the reason they want to do that is because- When you do in kind, all the trading and acquiring of the asset is done by the market makers and the authorized participants. Think Jane Street, Virtu, JP Morgan, these big Wall Street banks and broker dealers, what have you, GTS. Throwing out names that probably people don't really know, but this is like the people who do all the trading on Wall Street. And they are the best at trading. There's a reason why they make millions of dollars because they are very efficient with the technology and how fast they are trading these things.

• 21:50Speaker 02

  But by making a cash create, those market makers and those authorized participants, they can't hand over Bitcoin because we can get into why they're doing it. But essentially they're handing over cash to the issuers and the issuers have to then go out and buy the Bitcoin. Or in vice versa, if there is a redemption, they're selling the Bitcoin and handing over cash. There is, so that means that all of the trading and the relationships for getting the execution of the underlying Bitcoin for the fund is going to be within the issuer, which most of these issuers are not used to doing. So it's probably going to be outsourced to different people. I don't know exactly how it's going to work. I need to dive into that a little bit more. But for the most part, it's going to be interesting to see. So you could end up with a case where one of these ETFs has a situation where they don't have the best execution of getting exposure to Bitcoin.

• 22:33Speaker 02

  And their performance is going to lag another one who has the best traders in the market. Now, I don't know how long it would take for something like that to show up, but that is one area that could happen here. But that said, again, I don't know how much bad behavior this is going to incentivize. But I guess time will tell and I hope I'm not proven wrong. I hope Gabor is wrong and everyone should hope that Gabor is wrong here. But Gabor knows his stuff and I've known Gabor for basically since I got out of college. When he was working at VanEck and before Bitcoin ETFs were even really that big of a topic.

• 23:02Anthony Pompliano?

  Yeah, absolutely. Now, um, there's a ton of benefits. Everyone's talking about the positives. Wall Street is now embracing Bitcoin, et cetera. There's definitely gonna be some sort of trade off. There's gonna be some downside. What are some of the downsides that you would expect for Bitcoin or Bitcoin holders now that Wall Street's involved?

• 23:18Speaker 02

  Downsides. I mean, I personally, I know this is probably going to be out of consensus. I don't think there's that many downsides. I mean, it's not going to be impacting the underlying structure of Bitcoin. It's not changing the technology. It's not forcing anyone that they want to hold their own Bitcoin in cold storage or take care of their own keys. Obviously not your keys, not your coins. But for the vast majority of people out there, particularly anyone in the advisor space, like. They don't want to deal with that, particularly for something that most people are going to put as 2%, 3%, 5% of their portfolio, right? Um, so I think just there, it's almost all net positives. Um, as far as I'm concerned, I honestly can't think of too many negatives because you really, it's not forcing anyone to do anything. And honestly,

• 24:02Speaker 02

  you talked about all the marketing aspects, the lower driving down of fees. Honestly, we didn't even talk about how these fees that are driving down stuff, driving down these costs, it's going to impact everything else in the crypto ecosystem. Look at some of these institutional custodian fees. They're higher than the all-in expense ratios in some of these fees. If you want to use some of these Bitcoin custodians. If I'm, if I'm an institutional investor and I'm custoding my Bitcoin with somebody else, I already have counterparty risk. And the fee is 40 bips or what have you to custody my Bitcoin there. And I can go over to BlackRock right now and get 20 bips or go over to Arc or Bitwise or VanEck, you name it. Investco at 0% for a little while. Like everyone's going to have to cut their fees. The commissions are way too high on some of these platforms when you look at the, compared to the TradFi market.

• 24:45Speaker 02

  So I just think the reverberations are going to be positive. Uh, I think it's more likely that some of those other platforms that you use are going to have a hard time. Um, with some of those negative consequences that we spoke about because they're not as regulated as these ETFs and these ETF issuers are going to be. Part of the reason why that the SEC wants the Bitcoin ETF issuers to be the ones that are doing the buying and selling of Bitcoins, we're KYC, AML, they, we already know. You've covered it. They don't want broker dealers touching Bitcoin, SAB 121, like all these different things. And basically the issuers are under the SEC's purview. So the SEC can dive in and look at exactly what these issuers are doing at any point. Um, so I just don't think there's going to be that many negative side effects.

• 25:28Speaker 02

  I don't know. What negative side effects are you worried about? And I'll give you my, my view on it.

• 25:32Anthony Pompliano?

  Dampening volatility.

• 25:34Speaker 02

  It will dampen. I am very, I am very strongly of the opinion that these are going to dampen volatility, particularly if they get the significant assets. Cause I'm assuming you're saying, because these advisors, what they do, just like many of the best traders, when these things ride up, they have set allocation goals. Maybe if it's 5% of the portfolio, if this thing runs up 100%, it becomes 10, 15% of a client's portfolio, they're going to sell it. And vice versa, if this thing falls 80%, they're going to buy it and get it back to the set allocation percentage. And so basically that means they're selling when things are ripping and then they're going to be buying when things are falling and that's going to decrease the vol on Bitcoin.

• 26:07Anthony Pompliano?

  And I think that it's as it may be as simple as before and after ETF like Bitcoin's life before and after ETF approval. And you're going to have before ETF approval asymmetric life. And now you're going to move more towards like a traditional, traditional asset.

• 26:24Speaker 02

  Yeah, I've, I've, I've always kind of viewed this as a call option on a store value asset is the way that I've always kind of referred to it when I talk to people. And this feels like, or the, it's not as much of asymmetric anymore. Once this happens, maybe I guess is the way that I would think about it. So I agree 100% with you on that.

• 26:45Anthony Pompliano?

  All right. And I only, and maybe I'm a weirdo, and I think that's a negative because, you know, everyone wants the asymmetric asset. But yeah, if that's the worst thing that comes out of this, then I guess it's pretty net positive, right?

• 26:56Speaker 02

  Yeah, I'm with you 100%.

• 26:58Anthony Pompliano?

  All right. Last two questions. This is, this is your guys' Super Bowl. Like, I think everyone on the internet, it just is so thankful. What's been the most fun part for you and or Eric in terms of, let's call it last two years or three years where it's really kind of intensified? You guys are putting out, you know, confidence percentages. Everyone on the internet is like, what do these two guys think about the ETF? What's been the most fun part?

• 27:22Speaker 02

  Proving people wrong that have just been ripping on us for, for months. That has been the best, like, just absolutely watching these people cope with being wrong. And so like they, they're literally just constantly moving the goalposts on, on being wrong, on these facts. They've gone from it's never going to happen to it probably won't happen to even if it does happen, it's not going to matter. It's not going to get any assets. Nobody cares. So yeah, that's, that's been the most entertaining. I guess, I guess people realizing that like, we are covering this from like a TradFi perspective. And I don't know, we're, we're just trying to have fun with it, be real people. And meaning, I've met a lot of like really cool, really smart people in this space because of it. So, yeah, but definitely the most fun for me has been because you have people just constantly coming at you saying why you're

• 28:06Speaker 02

  wrong. You, you deal with it as much as if not more than anyone with the amount of following you have. So.

• 28:12Speaker 02

  Being vindicated, I guess, is definitely the most fun, assuming it's officially done.

• 28:16Anthony Pompliano?

  It's all right. Look, the haters are the president of your fan club. Just let them keep chirping. That's fine. Um, all right. And then, once the ETFs are out there, assets are flown in, what are you gonna do next? Like, will you ever top this? Is there another potential ETF that could come along that could ever have more scrutiny and excitement and, you know, be talked on television every single day about?

• 28:39Speaker 02

  Yeah, this is the peak. I mean, this is it. This is, this is it. This is the top. That said, I mean, we're gonna be covering this from trying to figure out where things are gonna go next, right? Like, who's getting the assets? Where's the volume going? Who's, who's trying to differentiate themselves? Who's showing those addresses is doing proof of reserve? Who isn't? Uh, so there's a lot of things that people are still gonna be trying to figure out, understanding nuances between all these different products. And then, obviously, I kind of hinted at the beginning, we think that we're gonna see spot E approvals. So that's the next thing I'm watching. But I don't think we get, it's, it's basically Bitcoin and then maybe Ethereum this year. And then I don't think anything else happens, like barring a literal, like, people make jokes, like, you need an act of Congress, like, you might literally need an act of Congress or a complete change in the admin, uh, through the, the 2024 election, um, before we could get another thing other than

• 29:24Speaker 02

  Ethereum. So I think it's Bitcoin and Ethereum and then everything else. So, I mean, I'll be covering all of it as if there's more assets that are gonna come into this wrapper and we'll see how far down the line we get. Maybe we have like, a bunch of different of these digital assets in the ETF wrapper in 10 years from now. And I'll be covering it there. But yeah, this is, this is the peak and just happy to have been right so far.

• 29:48Anthony Pompliano?

  Awesome. Where can we send people to find you on the internet?

• 29:50Speaker 02

  Yeah, I mean, obviously, if you have Bloomberg Terminal, we were writing on there, we have a dashboard, uh, BI ETF, um, Alchunis, uh, who couldn't join because his train was too loud, he didn't want to ruin the, the recording. Um, he has, uh, we have a show ETF IQ on every Monday, we have, uh, Trillions Podcast, and then also, obviously, just my most active on, on Twitter, JSEYFF, um, so you can follow me there.

• 30:15Anthony Pompliano?

  Awesome. Well, listen, thank you so much for doing this. It's been a pleasure to, uh, to watch you guys rise, be right, and

• 30:21Speaker 02

  Yeah, you were the one, the first ones in this space to have us on. So I haven't forgotten that. Yeah, we weren't one of the very few. Yeah.

• 30:27Anthony Pompliano?

  Very first. Nice. Yeah. You know what? I actually, I think I remember being like, oh, wait a second. Like, these guys are not like wacko yahoos who are just like, everything's going up. They like seem like they're like intelligent about ETFs. And then I remember when I talked to both of you, I remember walking away being like, oh, this is like that. Like, that's one of the intersection points, right? Where obviously this like new world and this old world are gonna meet. And you guys are all over it. So you guys have done a fantastic job.

• 30:54Speaker 02

  Yeah, it's funny. I tend to be like, uh, the much more pro side of this asset class and Eric's more neutral to maybe even positively slight negative, but he's, he's mostly neutral. And I find that most people have been on the other side of our calls here are just like, they can't separate the, prospects and what's going on at the SEC with the underlying asset class that they kind of hate. But yeah, it's been an interesting eco intersection here because I'm constantly talking to tradfight people trying to explain like why this actually does matter. And then at the same time, I go to these crypto, DeFi, Bitcoin events and like people are hyping things up and I have to tone things down. I'm like, no, it, it doesn't matter that much. Uh, so I'm like, I'm like playing both sides depending on who I'm talking to here.

• 31:33Anthony Pompliano?

  I lied. I actually have one more question. Um, other funds taking their AUM and putting it into the Bitcoin spot ETF. We saw one or two funds change their perspectives and say they could put up to 15% of the AUM. Is that going to be like a trend that you think will get big and actually lead to a lot of inflows?

• 31:49Speaker 02

  Um, I don't think it's going to be as big of an impact as some people have made it out to be. So I have basically on my terminal, I have all these alerts set up that are look for certain documents that change and add the words Bitcoin to them essentially, or have the words Bitcoin in them. And I have seen like five or six different mutual funds, typically more liquid alt or alternative or hedge fund type mutual funds that are really active or hold alternatives and do alternative strategies. And they're just, they're just adding the ability to hold these things if indeed they want to. So like basically they have to put it in their documents. They can't just buy this thing if they didn't put it in their documents if they have the ability to do it. So if it drops 80% and they want to add a sliver to it, like they need to have that in their documents. That doesn't mean that they're just gonna Automatically put 15% right away. So I think it's slightly being overwhelmed, but one of the biggest use cases of ETFs is by other fund managers and institutions.

• 32:33Speaker 02

  So I mentioned advisors, like they're the biggest target market for these ETFs, right? Though that they take up two thirds, maybe 70% or more of the assets in the ETF world in the US. That's the target market here for most people, but also institutions make up a huge chunk of this. They were, these things were built for institutions to be trading vehicles. And right now, for the most part, many institutions can't hold this thing. Like they're literally restricted from doing it because of the way that they were structured and built. And this wrapper will allow them to get exposure to this asset class within the bounds of, of how they were created. So, yeah.

• 33:07Anthony Pompliano?

  We'll, we'll see. All right, my friend. Thank you so much for doing this. Uh, congratulations to both of you guys in, in terms of all the great work you've done. Uh, it's been a pleasure watching it and we'll definitely talk again soon.

• 33:17Speaker 02

  Thanks, Bob. Good chat.