Welcome. Achillian's I'm Chill Webber and.

Welcome. Achillian's I'm Chill Webber and.

I'm Eric Belchernas.

I'm Eric Belchernas.

Eric. Everyone thought that crypto and bitcoin were going to go away, maybe well not everyone, but some people. And then all of a sudden, SBF went down and Bitcoin kept coming and kept coming and kept coming, and here we are at a high that we haven't seen for more than eighteen months, and a lot of that enthusiasm is about the prospect of an ETF.

Eric. Everyone thought that crypto and bitcoin were going to go away, maybe well not everyone, but some people. And then all of a sudden, SBF went down and Bitcoin kept coming and kept coming and kept coming, and here we are at a high that we haven't seen for more than eighteen months, and a lot of that enthusiasm is about the prospect of an ETF.

Yeah, no, this is huge.

Yeah, no, this is huge.

Ever since Blackrock I shares filed in I think it was June of twenty twenty three, there's been a lot of excitement about spot ETF approval, the SEC lawsuit with Greyscale that was another huge catalyst, and then we've seen very very good news in terms of these legal documents getting updated, which shows the SEC working with issuers. So we are basically, if this has been a ten year journey, let's call it a marathon, we're literally in.

Ever since Blackrock I shares filed in I think it was June of twenty twenty three, there's been a lot of excitement about spot ETF approval, the SEC lawsuit with Greyscale that was another huge catalyst, and then we've seen very very good news in terms of these legal documents getting updated, which shows the SEC working with issuers. So we are basically, if this has been a ten year journey, let's call it a marathon, we're literally in.

The last mile. We're a mile twenty six. So it's a big deal.

The last mile. We're a mile twenty six. So it's a big deal.

This marriage has been, you know, something in the mix for again a decade, and when it finally happens, there's a lot of you know, it's like building a bridge to the Advisor World in particular. And so you know, we thought one of the main players is ARC and twenty one Shares. They were honestly filed before black Rock. They deserve credit for having probably the most vision of figuring out this is the cycle, and so their filing is actually the one that has the first deadline in January. So because of them, we're probably going to see an ETF on January tenth, or at least approval by then. And so yeah, it's great to have both sides of that prospectus, both ARC and twenty one Shares.

This marriage has been, you know, something in the mix for again a decade, and when it finally happens, there's a lot of you know, it's like building a bridge to the Advisor World in particular. And so you know, we thought one of the main players is ARC and twenty one Shares. They were honestly filed before black Rock. They deserve credit for having probably the most vision of figuring out this is the cycle, and so their filing is actually the one that has the first deadline in January. So because of them, we're probably going to see an ETF on January tenth, or at least approval by then. And so yeah, it's great to have both sides of that prospectus, both ARC and twenty one Shares.

On the cast today.

On the cast today.

So joining us, we've got Kathy Wood of ARC and Aphelia Snyder of twenty one Shares, this time on Trillions. Let's talk about a bit points and more. Kathy, Aphelia, welcome back to Trillions.

So joining us, we've got Kathy Wood of ARC and Aphelia Snyder of twenty one Shares, this time on Trillions. Let's talk about a bit points and more. Kathy, Aphelia, welcome back to Trillions.

Thank you, Joel, thank you Eric.

Thank you, Joel, thank you Eric.

It's good to be back.

It's good to be back.

Okay. So Eric described this as a marathon. We're in a mile the miles sprint to the finish line. Are we going to get across that finish line?

Okay. So Eric described this as a marathon. We're in a mile the miles sprint to the finish line. Are we going to get across that finish line?

I think this is the perennial question, and I I think I've pretty consistently said the same thing on this, which is that if you would like a different outcome, A pattern break is a good thing.

I think this is the perennial question, and I I think I've pretty consistently said the same thing on this, which is that if you would like a different outcome, A pattern break is a good thing.

I have to give twenty one Shares a lot of credit on that, because you know, we were denied and denied and we just kept filing, and it was because twenty one shares, you know, the grip, the gumption, the determination, which which is very much in keeping with the way we work as well. So I think that's why we're first in line.

I have to give twenty one Shares a lot of credit on that, because you know, we were denied and denied and we just kept filing, and it was because twenty one shares, you know, the grip, the gumption, the determination, which which is very much in keeping with the way we work as well. So I think that's why we're first in line.

Okay, so there's this January date that's going to happen the tenth. Eric says, what's going to happen on the tenth?

Okay, so there's this January date that's going to happen the tenth. Eric says, what's going to happen on the tenth?

Everyone is very focused on the tenth makes a ton of sense. Completely understand why it's not how this works actually, right, These windows aren't quite as clean as what people seem to say, right, So it's completely conceivable that it's before. It's completely conceivable. You know, we hear something day of. If you look at previous rejections and delays and approvals, the day of is not necessarily like the key window. But I think from the minute you here go, what's going to happen is it's going to boil down to who's actually ready to go, because and it's not just a question of like the regulatory or a documentation critical critical component, but has everybody actually operationally set up these products in the background, because the SEC says, go whether whatever that ends up being, you're going to have everyone jump at the same time, and it's going to fundamentally be a question of who's got aps on board? Are the custodians ready, are the accounts open? Have you actually completed the process it's the exchange ready to go? Like how much of this have you actually operationalized? And I think that's a much bigger deal at an infrastructure level than anybody thinks right now.

Everyone is very focused on the tenth makes a ton of sense. Completely understand why it's not how this works actually, right, These windows aren't quite as clean as what people seem to say, right, So it's completely conceivable that it's before. It's completely conceivable. You know, we hear something day of. If you look at previous rejections and delays and approvals, the day of is not necessarily like the key window. But I think from the minute you here go, what's going to happen is it's going to boil down to who's actually ready to go, because and it's not just a question of like the regulatory or a documentation critical critical component, but has everybody actually operationally set up these products in the background, because the SEC says, go whether whatever that ends up being, you're going to have everyone jump at the same time, and it's going to fundamentally be a question of who's got aps on board? Are the custodians ready, are the accounts open? Have you actually completed the process it's the exchange ready to go? Like how much of this have you actually operationalized? And I think that's a much bigger deal at an infrastructure level than anybody thinks right now.

It's been interesting as different firms. We've been doing due diligence with different firms, and you know, some of those who have filed really haven't haven't issued ETFs before, so you know they're they're trying to figure out, wait a minute, who do we choose among this field of perhaps twelve if they approve twelve at the same time, and they're really thinking about, okay, how do I'm only going to pick three? Maybe so, and they're beginning to delineate, Okay, this is what these are my checkboxes.

It's been interesting as different firms. We've been doing due diligence with different firms, and you know, some of those who have filed really haven't haven't issued ETFs before, so you know they're they're trying to figure out, wait a minute, who do we choose among this field of perhaps twelve if they approve twelve at the same time, and they're really thinking about, okay, how do I'm only going to pick three? Maybe so, and they're beginning to delineate, Okay, this is what these are my checkboxes.

And I think one of the things that's so undervalued is clients service and client support. So obviously there's actually a third piece here, which is resolut and in some of the distribution on that side, Like at the end of the day, this is going to come down to you're going to get a go are you ready to actually do it? Is the thing you're bringing to market high quality because one of the things that I think the world is sick of is crypto products that are both more expensive and less good than what you normally get. That that's not going to work anymore. So it's going to be a question of are you bringing something that's high quality, can you do it quickly? And are you going to be able to actually help clients. Client service is huge. You've got advisors who are looking at entirely new asset classes for the first time, like are you ready to answer those questions? Because they're going to have them and you need to actually have answers and have a way to support them through that process. So I think you're going to see a flurry of operational activity followed by a very steep educational curve for the client base as they try to get up to speed and try to figure out like what are we doing here? Most CIO's offices don't have a policy on crypto yet, and if they do, it's negative. So what's going to happen here in terms of their need to be responsive to their own customer bases. As they start to allow product on platforms, they start to get comfortable making allocations. It's going to be a very critical time for cryptos and industry in terms of welcoming a whole new cohort of players. And it actually goes back to it, and I mean, this is this is the whole core of ARC right. This is about research and education and providing people who are curious about this space for the gateway.

And I think one of the things that's so undervalued is clients service and client support. So obviously there's actually a third piece here, which is resolut and in some of the distribution on that side, Like at the end of the day, this is going to come down to you're going to get a go are you ready to actually do it? Is the thing you're bringing to market high quality because one of the things that I think the world is sick of is crypto products that are both more expensive and less good than what you normally get. That that's not going to work anymore. So it's going to be a question of are you bringing something that's high quality, can you do it quickly? And are you going to be able to actually help clients. Client service is huge. You've got advisors who are looking at entirely new asset classes for the first time, like are you ready to answer those questions? Because they're going to have them and you need to actually have answers and have a way to support them through that process. So I think you're going to see a flurry of operational activity followed by a very steep educational curve for the client base as they try to get up to speed and try to figure out like what are we doing here? Most CIO's offices don't have a policy on crypto yet, and if they do, it's negative. So what's going to happen here in terms of their need to be responsive to their own customer bases. As they start to allow product on platforms, they start to get comfortable making allocations. It's going to be a very critical time for cryptos and industry in terms of welcoming a whole new cohort of players. And it actually goes back to it, and I mean, this is this is the whole core of ARC right. This is about research and education and providing people who are curious about this space for the gateway.

Our first research piece on bitcoin was in two thoy fifteen when it was two hundred and fifty dollars and we asked the simple question that it was a white paper, can bitcoin serve the three rolls of Money? And we did that in collaboration with Art Laugher, and when he really understood what this was, he said, I've been waiting for this since they closed the gold window in nineteen seventy one, so twenty fifteen, and then the next year we wrote Ringing the Bell for a New asset class Bitcoin, Ringing the Bell for a New asset class. So we've been trying to educate the market. And I remember in the early days twenty fifteen especially, you know, many people dismissed us. That's a marketing gimmick. Bitcoin market nothing but a marketing gimmick. So we've come a long way.

Our first research piece on bitcoin was in two thoy fifteen when it was two hundred and fifty dollars and we asked the simple question that it was a white paper, can bitcoin serve the three rolls of Money? And we did that in collaboration with Art Laugher, and when he really understood what this was, he said, I've been waiting for this since they closed the gold window in nineteen seventy one, so twenty fifteen, and then the next year we wrote Ringing the Bell for a New asset class Bitcoin, Ringing the Bell for a New asset class. So we've been trying to educate the market. And I remember in the early days twenty fifteen especially, you know, many people dismissed us. That's a marketing gimmick. Bitcoin market nothing but a marketing gimmick. So we've come a long way.

Oh yeah, absolutely. I was skeptical of myself. I remember the first one filed, the winklevoss etf in twenty thirteen, bitcoin was ninety nine dollars, so I knew about it, and I'm kicking myself for not buying any because it was I remember it was. I was doing a TV hit around then about the filing and Matt Miller was way more up to speed than I was.

Oh yeah, absolutely. I was skeptical of myself. I remember the first one filed, the winklevoss etf in twenty thirteen, bitcoin was ninety nine dollars, so I knew about it, and I'm kicking myself for not buying any because it was I remember it was. I was doing a TV hit around then about the filing and Matt Miller was way more up to speed than I was.

I could have acted then, but I was like, this seems so silly.

I could have acted then, but I was like, this seems so silly.

I don't know, it just seemed like, I don't know, like almost like a little bit of a fun craze, like something that would just go away, like a fad. Anyway, I want to go and talk. I know, Kathy, you've been into You bought GBTC in the early days with ARKK and you made it was a huge trade. It was a powered a lot of your returns early on, so I know you were in it early. Now Ophelia twenty one shares is over in Europe. You're launching all these ETFs. At some point you guys met and like, I guess talk me through that and then the filing in April, I mean, and like, how you guys work together on this.

I don't know, it just seemed like, I don't know, like almost like a little bit of a fun craze, like something that would just go away, like a fad. Anyway, I want to go and talk. I know, Kathy, you've been into You bought GBTC in the early days with ARKK and you made it was a huge trade. It was a powered a lot of your returns early on, so I know you were in it early. Now Ophelia twenty one shares is over in Europe. You're launching all these ETFs. At some point you guys met and like, I guess talk me through that and then the filing in April, I mean, and like, how you guys work together on this.

It's actually a lovely story. Kathy and I have known each other for a while, like way way before this partnership was public. I was like a super green that had just started my company, going to my first like gathering of people who know stuff about ETFs, and I sat down next to Kathy at lunch and we started talking and there was such a wonderful alignment between our philosophies as firms or views on crypto. We come at this from a very different perspective. I'm a total like wonk for structuring and things and rags, and I think Kathy definitely comes with more of a visionary technology perspective. And we just got talking. It was such a good match that we we kept in touch, and I was building an ETF business for the first time and transparently had a long way to go and learning how to do that, and it turned into I think a very productive and very enjoyable, like friendship and relationship and that sort of it was the genesis of these products.

It's actually a lovely story. Kathy and I have known each other for a while, like way way before this partnership was public. I was like a super green that had just started my company, going to my first like gathering of people who know stuff about ETFs, and I sat down next to Kathy at lunch and we started talking and there was such a wonderful alignment between our philosophies as firms or views on crypto. We come at this from a very different perspective. I'm a total like wonk for structuring and things and rags, and I think Kathy definitely comes with more of a visionary technology perspective. And we just got talking. It was such a good match that we we kept in touch, and I was building an ETF business for the first time and transparently had a long way to go and learning how to do that, and it turned into I think a very productive and very enjoyable, like friendship and relationship and that sort of it was the genesis of these products.

So I can give you a little bit more inside scoop here. This was at the annual ETF comfab called Denostia, and I remember, yes being late to the lunch, sitting next to Ophelia, and then she started talking and I said, I know what school you went to, and I know what school within the school you went to. You went to Stanford, the Earth System School at Stanford. And she was shocked because nobody knows about that. But if you'll remember Chris Bernisky, he was our first crypto analyst, and I heard Ophelia talking and thinking in the way that he did, so that's what really got us going.

So I can give you a little bit more inside scoop here. This was at the annual ETF comfab called Denostia, and I remember, yes being late to the lunch, sitting next to Ophelia, and then she started talking and I said, I know what school you went to, and I know what school within the school you went to. You went to Stanford, the Earth System School at Stanford. And she was shocked because nobody knows about that. But if you'll remember Chris Bernisky, he was our first crypto analyst, and I heard Ophelia talking and thinking in the way that he did, so that's what really got us going.

And then I definitely understood early.

And then I definitely understood early.

On how much into the ops and infrastructure and plat form part of the business Aphelia was and it was not what I do. But I said, I want you to meet Tom Stout, who's our COO, because he loves the same things that Aphelia does, and we were looking for someone who could help us with the platform play, the infrastructure play associated with bitcoins. So you know, very quickly we p came fast friends professionally as well.

On how much into the ops and infrastructure and plat form part of the business Aphelia was and it was not what I do. But I said, I want you to meet Tom Stout, who's our COO, because he loves the same things that Aphelia does, and we were looking for someone who could help us with the platform play, the infrastructure play associated with bitcoins. So you know, very quickly we p came fast friends professionally as well.

So you got together, you're filing for this ETF. Like, do you guys talk every day now? Because we're sort of at the eleventh hour here, Like how often are you communicating? Or Kathy, do you just sort of like let Ophelia drive this because you've got the stocks to pick?

So you got together, you're filing for this ETF. Like, do you guys talk every day now? Because we're sort of at the eleventh hour here, Like how often are you communicating? Or Kathy, do you just sort of like let Ophelia drive this because you've got the stocks to pick?

I mean, how does this work?

I mean, how does this work?

Like I guess today, I think Aphelia and Tom talk at least once a day if I'm no more, if not more, and we get together, you know, I'm update it all the time, but we get together regularly to compare notes and you know, just make sure that we're all on the same page. It's it's you know, we have to get everything right. This is really important.

Like I guess today, I think Aphelia and Tom talk at least once a day if I'm no more, if not more, and we get together, you know, I'm update it all the time, but we get together regularly to compare notes and you know, just make sure that we're all on the same page. It's it's you know, we have to get everything right. This is really important.

And one of the things to rize is we already have five funds out as part of this partnership, right, and we already have a suite of crypto ETFs. They came to market a couple of weeks ago. So it's not just a question of I think Kathy and I and not just a question of Tom and I. At this point, there are touch points across essentially every layer of our organization, and as there we're already in the trenches operating product together.

And one of the things to rize is we already have five funds out as part of this partnership, right, and we already have a suite of crypto ETFs. They came to market a couple of weeks ago. So it's not just a question of I think Kathy and I and not just a question of Tom and I. At this point, there are touch points across essentially every layer of our organization, and as there we're already in the trenches operating product together.

Yeah, our marketing teams. Our marketing teams are working very closely together. Our research teams are working very closely together. So it's across the both organizations.

Yeah, our marketing teams. Our marketing teams are working very closely together. Our research teams are working very closely together. So it's across the both organizations.

Okay, And so these new funds you okay, So for.

Okay, And so these new funds you okay, So for.

People who don't know, obviously the main headlining act is the spot bitwinn etf race, but there is this sort of under card with the futures. And obviously there was a Bitcoin Futures ETF put out, then Ether futures were approved. You guys have put a bunch like five or six products out. One of them is like an active Bitcoin future strategy, one's an ether, one looks like it's uh blocks, right, So these are all futures. I guess you know. Give given when I saw these, I'm like, I get it. But given that Spot is so close, you know, in the futures ETFs probably going to be a little outdated. Like you know, most advisors prefer Spot when given a choice, like we've seen that with gold. They don't really want to use the futures, like do you I guess give me the logic there, given that we're so close to the Spot, why put all these futures ETFs out.

People who don't know, obviously the main headlining act is the spot bitwinn etf race, but there is this sort of under card with the futures. And obviously there was a Bitcoin Futures ETF put out, then Ether futures were approved. You guys have put a bunch like five or six products out. One of them is like an active Bitcoin future strategy, one's an ether, one looks like it's uh blocks, right, So these are all futures. I guess you know. Give given when I saw these, I'm like, I get it. But given that Spot is so close, you know, in the futures ETFs probably going to be a little outdated. Like you know, most advisors prefer Spot when given a choice, like we've seen that with gold. They don't really want to use the futures, like do you I guess give me the logic there, given that we're so close to the Spot, why put all these futures ETFs out.

So a couple of things here. I the premise I agree with. I think Spot is a more accessible product for most people most of the time. I think Future is similar to gold. Futures are going to have a reason to exist and are going to be a critical part of certain profiles investments and how they choose to enter that market. And I do believe there will be a use case for them similar to what we've seen in other commodity markets. Beyond that, with this suite, we took an approach to bringing a series of highly differentiated products right that these are not really exactly the same as what was in the market before. At a strategy level, we're looking at a product that is strategic allocations of bitcoin versus ethereum, bitcoin versus cash, and a true multi asset product. These are designed to solve a very different set of problems for investors. Crypto is a massive, massive industry. This is not going to be one size fit solved. Different people are going to have different issues and this allows customers and advisors to take advantage of our expertise as a crypto firm. We've been doing this for five years. ARCS expertise inactive management, some really sophisticated on chain analytics, all of the benefit of our research and ARCS active management as well as our operational excellence, and it really packages these products. They're fundamentally quite different than something like just a pure play Bitcoin spot product, because that's not really what they're intended to do. These aren't. The vast majority of the suite is not intended to be a long only exposure, but rather more sophisticated exposures. Is to take advantage of that knowledge base from us as a firm, or actually as two firms. And so that's I think one of the key things with why we chose to do this. We don't believe that this is going to be one size fitsall. We intend to provide clients with solutions that fit their needs in this space that lets them take advantage as much as possible of our experience and expertise in the sector.

So a couple of things here. I the premise I agree with. I think Spot is a more accessible product for most people most of the time. I think Future is similar to gold. Futures are going to have a reason to exist and are going to be a critical part of certain profiles investments and how they choose to enter that market. And I do believe there will be a use case for them similar to what we've seen in other commodity markets. Beyond that, with this suite, we took an approach to bringing a series of highly differentiated products right that these are not really exactly the same as what was in the market before. At a strategy level, we're looking at a product that is strategic allocations of bitcoin versus ethereum, bitcoin versus cash, and a true multi asset product. These are designed to solve a very different set of problems for investors. Crypto is a massive, massive industry. This is not going to be one size fit solved. Different people are going to have different issues and this allows customers and advisors to take advantage of our expertise as a crypto firm. We've been doing this for five years. ARCS expertise inactive management, some really sophisticated on chain analytics, all of the benefit of our research and ARCS active management as well as our operational excellence, and it really packages these products. They're fundamentally quite different than something like just a pure play Bitcoin spot product, because that's not really what they're intended to do. These aren't. The vast majority of the suite is not intended to be a long only exposure, but rather more sophisticated exposures. Is to take advantage of that knowledge base from us as a firm, or actually as two firms. And so that's I think one of the key things with why we chose to do this. We don't believe that this is going to be one size fitsall. We intend to provide clients with solutions that fit their needs in this space that lets them take advantage as much as possible of our experience and expertise in the sector.

And I would say we have been investing on the research side. In our team, we have three cryptoanalysts, one of whom does nothing but on chain analytics. And what's beautiful about this ecosystem, especially Bitcoin, but others as well ethereum the transparency of these ecosystems gives us a lot of information to manage actively, and so this is the first time, while we've been developing these tools for a number of years now, this is the first time we've been able to activate them in a productive way. So I'm pretty excited about that.

And I would say we have been investing on the research side. In our team, we have three cryptoanalysts, one of whom does nothing but on chain analytics. And what's beautiful about this ecosystem, especially Bitcoin, but others as well ethereum the transparency of these ecosystems gives us a lot of information to manage actively, and so this is the first time, while we've been developing these tools for a number of years now, this is the first time we've been able to activate them in a productive way. So I'm pretty excited about that.

Okay, So obviously you do are both big bulls and have you know a stake and where this product can go. There's still remains plenty of naysayers, even Jamie Diamond coming out and basically saying that if he were in the government, he would just shut Crypto shut till day.

Okay, So obviously you do are both big bulls and have you know a stake and where this product can go. There's still remains plenty of naysayers, even Jamie Diamond coming out and basically saying that if he were in the government, he would just shut Crypto shut till day.

Yeah yeah, yeah, so crazy.

Yeah yeah, yeah, so crazy.

So you're still having to wrestle with a version of haters, right, And I think the haters actually, for a while within the last year and change kind of gained a little bit of an upper hand with the carnage that came out of the SBF fallout. So how do you wrestle with that sentiment that still remains, which is like, there's no point to this, why should I even bother?

So you're still having to wrestle with a version of haters, right, And I think the haters actually, for a while within the last year and change kind of gained a little bit of an upper hand with the carnage that came out of the SBF fallout. So how do you wrestle with that sentiment that still remains, which is like, there's no point to this, why should I even bother?

So I'll start there. I had to defend what we were doing throughout last year. So Terra Luna Celsius three arrows FTX and when FTX blew up. I basically said, and I think it's now clear that wait a minute, this proves the value of bitcoin and other cryptocurrencies. Bitcoin completely transparent, decentralized, no counterparty risk, whereas FTX completely opaque, centralized, and fraudulent.

So I'll start there. I had to defend what we were doing throughout last year. So Terra Luna Celsius three arrows FTX and when FTX blew up. I basically said, and I think it's now clear that wait a minute, this proves the value of bitcoin and other cryptocurrencies. Bitcoin completely transparent, decentralized, no counterparty risk, whereas FTX completely opaque, centralized, and fraudulent.

So that was the first step.

So that was the first step.

But even more provocative, I thought was during the regional bank crisis in March. As you pointed out earlier, Joel, bitcoin went up fifty percent as the KRE the regional Bank index was imploding, an SVP and signature went under, and we were able to say to our clients, wait a minute, Bitcoin is not just a risk on asset. It is now showing its stripes as a risk off asset when there's a financial crisis and counterparty risk becomes a question, because that was a question with the regional banks. I think that has gotten a lot of people's attention, as well as others in the industry who were negative. And you're right, it's so interesting to see Jamie Diamond and Elizabeth Warren on the same side of the agreeing with each other. Kind of what But someone like Larry Fink coming around after years of focusing on the environmental issues that he thought were a part of the bitcoin ecosystem. And you know, I think one of the most important things that happened actually happened five years ago when Cambridge Associates published its first report on crypto and focused on bitcoin in particular and basically said to its foundations and endowments, Look, you may not like this instrument, but you should get to know as much as you possibly can about it, because this seems like it's a new asset class with very low correlation of returns to other assets. And so I think, but one by one these points are I think are a are hitting home, hitting a responsive cord. And I do think the SEC coming around and blessing a bitcoin spot e TF is going to check the box for a lot of institutions.

But even more provocative, I thought was during the regional bank crisis in March. As you pointed out earlier, Joel, bitcoin went up fifty percent as the KRE the regional Bank index was imploding, an SVP and signature went under, and we were able to say to our clients, wait a minute, Bitcoin is not just a risk on asset. It is now showing its stripes as a risk off asset when there's a financial crisis and counterparty risk becomes a question, because that was a question with the regional banks. I think that has gotten a lot of people's attention, as well as others in the industry who were negative. And you're right, it's so interesting to see Jamie Diamond and Elizabeth Warren on the same side of the agreeing with each other. Kind of what But someone like Larry Fink coming around after years of focusing on the environmental issues that he thought were a part of the bitcoin ecosystem. And you know, I think one of the most important things that happened actually happened five years ago when Cambridge Associates published its first report on crypto and focused on bitcoin in particular and basically said to its foundations and endowments, Look, you may not like this instrument, but you should get to know as much as you possibly can about it, because this seems like it's a new asset class with very low correlation of returns to other assets. And so I think, but one by one these points are I think are a are hitting home, hitting a responsive cord. And I do think the SEC coming around and blessing a bitcoin spot e TF is going to check the box for a lot of institutions.

When when the SEC does whatever it does, and let's let's say that it approves, right, I'm curious what kind of modeling you've done. What happens to the price of bitcoin when that headline moves that SEC has approved a spot bitcoin product.

When when the SEC does whatever it does, and let's let's say that it approves, right, I'm curious what kind of modeling you've done. What happens to the price of bitcoin when that headline moves that SEC has approved a spot bitcoin product.

Some of it's happening right now, right.

Some of it's happening right now, right.

And there's this anticity the room building for that moment, But what happens at that moment?

And there's this anticity the room building for that moment, But what happens at that moment?

Yeah, very often, very often you will get a sell on the news because and I don't know where it will go between now and then. And you could have a sell on the news and you know you'll get maybe some week holders in kicking and screaming, and they may sell. But when you think we're at roughly nineteen and a half million bitcoint outstanding and we're only going to twenty one million, and I really do believe that, knowing the core some of the core developers the way I do, then I think this institutional push in will be the biggest reason that our target, which the base case is six hundred and fifty thousand and the bowld case is one point five million. One of the reasons that we have a shot that those numbers are close to the mark is the institutional interest in a new asset class.

Yeah, very often, very often you will get a sell on the news because and I don't know where it will go between now and then. And you could have a sell on the news and you know you'll get maybe some week holders in kicking and screaming, and they may sell. But when you think we're at roughly nineteen and a half million bitcoint outstanding and we're only going to twenty one million, and I really do believe that, knowing the core some of the core developers the way I do, then I think this institutional push in will be the biggest reason that our target, which the base case is six hundred and fifty thousand and the bowld case is one point five million. One of the reasons that we have a shot that those numbers are close to the mark is the institutional interest in a new asset class.

Can I ask just about how, just because those numbers are what they are, when you do the research and the modeling to get to those prices, how does that math work, Kathy?

Can I ask just about how, just because those numbers are what they are, when you do the research and the modeling to get to those prices, how does that math work, Kathy?

And you'll see this in our Big Ideas twenty twenty three, we delineate what we are assuming for twenty thirty. Those numbers are twenty thirty numbers. When it comes to digital gold, that role the institutional push and the use of bitcoin in emerging markets, which have from a use case point of view, when economies are hyperflating their money and spending egregiously and are corrupt, there's all the reason in the world to look for an insurance policy like bitcoin. So those are the three biggest reasons we think it will go there. But just the institutional case alone, and we did write a piece on institutional I think it was last.

And you'll see this in our Big Ideas twenty twenty three, we delineate what we are assuming for twenty thirty. Those numbers are twenty thirty numbers. When it comes to digital gold, that role the institutional push and the use of bitcoin in emerging markets, which have from a use case point of view, when economies are hyperflating their money and spending egregiously and are corrupt, there's all the reason in the world to look for an insurance policy like bitcoin. So those are the three biggest reasons we think it will go there. But just the institutional case alone, and we did write a piece on institutional I think it was last.

Year or the year four.

Year or the year four.

But if you do the analysis, if you and you're an institution saying this is a new asset class, if you want to minimize volatility, you will probably take it to two and a half percent in terms of an allocation to a new asset class, if you want to maximize your sharp ratio, so we're speaking their language, you'll look at something closer to six or six and a half percent. So those are the bull case is based on that six and a half percent. Now why are these numbers making sense to us? Well, if you look at new asset classes. So in the seventies and eighties it was real estate and pension funds. In the eighties and nineties it was emerging markets as a new asset class, institutions started tiptoed in with one percent than two percent, then end up a five percent or roughly thereabouts. So it's not crazy. These are not crazy numbers, and we used a Monte Carlo analysis to get to them. So that, I guess is the biggest the biggest source of the upward move in bitcoin from our point of view.

But if you do the analysis, if you and you're an institution saying this is a new asset class, if you want to minimize volatility, you will probably take it to two and a half percent in terms of an allocation to a new asset class, if you want to maximize your sharp ratio, so we're speaking their language, you'll look at something closer to six or six and a half percent. So those are the bull case is based on that six and a half percent. Now why are these numbers making sense to us? Well, if you look at new asset classes. So in the seventies and eighties it was real estate and pension funds. In the eighties and nineties it was emerging markets as a new asset class, institutions started tiptoed in with one percent than two percent, then end up a five percent or roughly thereabouts. So it's not crazy. These are not crazy numbers, and we used a Monte Carlo analysis to get to them. So that, I guess is the biggest the biggest source of the upward move in bitcoin from our point of view.

And one of the things people don't realize. And I think there's been a lot of statements made by people about the sell then news concept and what that's going to look like, and I you know, sure, yes you may see that. I think what you're going to end up seeing that is a little bit unexpected. Is there's less of a question of what does it take to get people off of zero? Most ras, most managers, most advisors are currently at zero, and the reason for that is there's not really a good way for them to access them. And typically the counter example is well they can buy Spot. In order to do that, you need to set up a new custodian, a new set of trading relationships, all new reporting. It's unclear how that tax reporting is going to work. Does this integrate with any of your systems? How are you displaying that to your clients, Like the operational burden and overhead associated with this is unbelievable. So even if you wanted to today, how much of an allocation are you been able to make and would you be able to access that in the first place? The answer is probably no. And so aside from this sort of regulatory clarity that comes from this kind of structure, as well as some clarity around like tax and efficient trading and all these other things, there's this idea that I don't think the market currently realizes what getting off of zero looks like for the big players, right because a couple basis point allocation is a lot of money. It's way more money than crypto sees or understands conceptually. Like there's a reason this podcast is called trillion and not billions or millions, right, Like, there's a difference in what these numbers look like, and it's very difficult for people to actually conceive of. So whether or not you have managers like appropriately timing the market, a lot of them may just throw something to get off of zero. If you have enough of that dynamic of like I'm just going to dip my toe, I'm going to put one bip of a portfolio in there, because like, why not that is going to proportionally look very different than the kinds of flows that you've seen historically in this space. And I think that's something that is not fully That's sort of what when when I hear this concept of institutional adoption, I think that's oftentimes misconstrued. There's a very real barrier to entry here, and I think to some extent that feeds into the narrative that that Kathy is discussing. When we look at it, we sort of we understand this client base. We've been serving this client base and other geographies for years. Their issues are very real, but that market is significantly large in the United States.

And one of the things people don't realize. And I think there's been a lot of statements made by people about the sell then news concept and what that's going to look like, and I you know, sure, yes you may see that. I think what you're going to end up seeing that is a little bit unexpected. Is there's less of a question of what does it take to get people off of zero? Most ras, most managers, most advisors are currently at zero, and the reason for that is there's not really a good way for them to access them. And typically the counter example is well they can buy Spot. In order to do that, you need to set up a new custodian, a new set of trading relationships, all new reporting. It's unclear how that tax reporting is going to work. Does this integrate with any of your systems? How are you displaying that to your clients, Like the operational burden and overhead associated with this is unbelievable. So even if you wanted to today, how much of an allocation are you been able to make and would you be able to access that in the first place? The answer is probably no. And so aside from this sort of regulatory clarity that comes from this kind of structure, as well as some clarity around like tax and efficient trading and all these other things, there's this idea that I don't think the market currently realizes what getting off of zero looks like for the big players, right because a couple basis point allocation is a lot of money. It's way more money than crypto sees or understands conceptually. Like there's a reason this podcast is called trillion and not billions or millions, right, Like, there's a difference in what these numbers look like, and it's very difficult for people to actually conceive of. So whether or not you have managers like appropriately timing the market, a lot of them may just throw something to get off of zero. If you have enough of that dynamic of like I'm just going to dip my toe, I'm going to put one bip of a portfolio in there, because like, why not that is going to proportionally look very different than the kinds of flows that you've seen historically in this space. And I think that's something that is not fully That's sort of what when when I hear this concept of institutional adoption, I think that's oftentimes misconstrued. There's a very real barrier to entry here, and I think to some extent that feeds into the narrative that that Kathy is discussing. When we look at it, we sort of we understand this client base. We've been serving this client base and other geographies for years. Their issues are very real, but that market is significantly large in the United States.

I'll just add one thing, one for the institutional side, one for more retail. Mas Mutual put one hundred million dollars in. I'm going to say maybe Aphelia was three years ago to two three years ago and it meant nothing. It was a zero point zero something percent of their book, right, So that one hundred million is against where are we right now a one point five trillion dollar total market cap for all crypto assets, right, So that one hundred million was point zero zero something, you know, So that gives you a sense. And then on the this is more on the corporate side. I should have said, remember when Tesla and block and micro Strategy they put bitcoin on their books. There's been a very important ruling in the last few months from Fasby saying this is no longer needs to be accounted for as an intangible asset which you can only mark down, and instead they're now going to allow mark to market I think officially in twenty five, but you can start doing it in twenty four, so we may see corporate treasuries move in here too.

I'll just add one thing, one for the institutional side, one for more retail. Mas Mutual put one hundred million dollars in. I'm going to say maybe Aphelia was three years ago to two three years ago and it meant nothing. It was a zero point zero something percent of their book, right, So that one hundred million is against where are we right now a one point five trillion dollar total market cap for all crypto assets, right, So that one hundred million was point zero zero something, you know, So that gives you a sense. And then on the this is more on the corporate side. I should have said, remember when Tesla and block and micro Strategy they put bitcoin on their books. There's been a very important ruling in the last few months from Fasby saying this is no longer needs to be accounted for as an intangible asset which you can only mark down, and instead they're now going to allow mark to market I think officially in twenty five, but you can start doing it in twenty four, so we may see corporate treasuries move in here too.

So just my two cents on that, I largely agree with you. I think advisors in particular love the ETF. That is their preferred vehicle. I have to I got to tell these crypto people on Twitter all the time, like He's like, why would you even need the ETF. I'm like, you understand a lot of people just like to click a button own it with the you know, the SEC stamp of approval. It's liquid, it'll be one basis point to trade. It's just something they're comfortable with. It's their familiar place. And I was like, well, maybe I zero point five percent of the advisor assets that's thirty trillion go in there. You're looking at one hundred and fifty billion. That's about what gold has a little less. So I see it somewhere in that ballpark. Now, the institutional money, a lot of times they wait to something's really liquid, Like they tend to love the liquid ETFs. It's harder to get them into something that doesn't trade a lot. So I want to fast forward to the race. And this is where I think the race is so fascinating and why I'm so obsessed with this. Even though it's probably gonna make up one percent of ETF assets, I spend like forty percent of my brain power on this. I'm even getting pushed back from some people on Twitter who are like, hey, easy, easy, you know, take it easy. And my Ethan on my team makes fun of James and I constantly anyway, but this is just so high drama. The race is going to start, as Ophelia said, some people may not make it to the starting line. Let's say there's six people who launch six issuers. Let's say you're one of them. It's usually a winner take most, and the one that gets really liquid probably going.

So just my two cents on that, I largely agree with you. I think advisors in particular love the ETF. That is their preferred vehicle. I have to I got to tell these crypto people on Twitter all the time, like He's like, why would you even need the ETF. I'm like, you understand a lot of people just like to click a button own it with the you know, the SEC stamp of approval. It's liquid, it'll be one basis point to trade. It's just something they're comfortable with. It's their familiar place. And I was like, well, maybe I zero point five percent of the advisor assets that's thirty trillion go in there. You're looking at one hundred and fifty billion. That's about what gold has a little less. So I see it somewhere in that ballpark. Now, the institutional money, a lot of times they wait to something's really liquid, Like they tend to love the liquid ETFs. It's harder to get them into something that doesn't trade a lot. So I want to fast forward to the race. And this is where I think the race is so fascinating and why I'm so obsessed with this. Even though it's probably gonna make up one percent of ETF assets, I spend like forty percent of my brain power on this. I'm even getting pushed back from some people on Twitter who are like, hey, easy, easy, you know, take it easy. And my Ethan on my team makes fun of James and I constantly anyway, but this is just so high drama. The race is going to start, as Ophelia said, some people may not make it to the starting line. Let's say there's six people who launch six issuers. Let's say you're one of them. It's usually a winner take most, and the one that gets really liquid probably going.

To have better luck.

To have better luck.

In the institutional crowd because they just love that big liquidity. They don't want to like be like one hundred percent of the assets or anything, and they want to have less impact costs. So how do you position yourself in the race to get liquid and get some mojo going early on? If you got a blame Brock in a fidelity next to you. One of my theories is that you're going to sell GBTC and put one hundred and thirty million rate into RCB, which is going to show up as flows and volume, which I think is an ace up to sleeve. So that's what I would do if I were you, But I'll get your take on it.

In the institutional crowd because they just love that big liquidity. They don't want to like be like one hundred percent of the assets or anything, and they want to have less impact costs. So how do you position yourself in the race to get liquid and get some mojo going early on? If you got a blame Brock in a fidelity next to you. One of my theories is that you're going to sell GBTC and put one hundred and thirty million rate into RCB, which is going to show up as flows and volume, which I think is an ace up to sleeve. So that's what I would do if I were you, But I'll get your take on it.

Well, we have to be very careful about what we say right now there. You know, GBTC right now is at two percent and we're at least in print at eighty basis points if we're approved, So there's a certain logic to what you're saying. Of course, there are also you know, as there are also some tax issues that we do have to focus on as all this is happening, and some of that depends some of that will depend on what happens to the price between here and there.

Well, we have to be very careful about what we say right now there. You know, GBTC right now is at two percent and we're at least in print at eighty basis points if we're approved, So there's a certain logic to what you're saying. Of course, there are also you know, as there are also some tax issues that we do have to focus on as all this is happening, and some of that depends some of that will depend on what happens to the price between here and there.

So I really.

So I really.

Shouldn't be talking about it very talktful.

Shouldn't be talking about it very talktful.

Well, here, how about this one. I can talk about how we're thinking about this. Look, a big piece of this is capital markets infrastructure. Everyone right now loves talking about like the create redeemed structure because it's like the topic du jour from the SEC.

Well, here, how about this one. I can talk about how we're thinking about this. Look, a big piece of this is capital markets infrastructure. Everyone right now loves talking about like the create redeemed structure because it's like the topic du jour from the SEC.

That's how Eric puts his kids to sleep.

That's how Eric puts his kids to sleep.

Well, I'm sorry, I'm sorry create redemption real quick though, I heard back channel. The SEC will only allow cash creates in the first trench to go out. So if you want to do in kind, which is better with the investor, I agree with you know, black Rocks definitely digging in on this. I think you are to an extent. I guess would you if you couldn't get out within kind in the first trench? Would you do cash for the time being until you could figure out in kind?

Well, I'm sorry, I'm sorry create redemption real quick though, I heard back channel. The SEC will only allow cash creates in the first trench to go out. So if you want to do in kind, which is better with the investor, I agree with you know, black Rocks definitely digging in on this. I think you are to an extent. I guess would you if you couldn't get out within kind in the first trench? Would you do cash for the time being until you could figure out in kind?

So I actually think the answer to both of these last two questions is the same thing. Having a being first is going to be critical. Obviously, first move for advantages. We get all of that, not arguing it. I think the next thing that's going to be critic goal that is currently undervalued is the way the primary market operates here in primary market efficiency is going to drive an enormous portion of how these volumes actually play out because there is no standard, right, no one has done this with these providers in America before. Now we obviously we've been operating a primary market in cryptots for five years, so we have a pretty standard playbook that we know leads to an efficient market. There are some obvious differences as you move between geographies, but that piece, the operational know how of how to make this primary market go correctly, is going to end up playing a huge role here on both sides. Right, it is about it's about how do you make that market work as effectively as possible because it's going to show up linearly in spreads. So the better you can do, the more cost you can take out of it, the more efficient you can make it, the easier and clean, or you can make it free market makers to hedge. The better this is going to be, and that's going to end up driving a big chunk of how volume plays out. You need those markets to be tight and providing a really stable, very well structured primary market is going to end up playing a really big role here. And so to answer your original question on like how do you do this, I think you lean into that operational experience. There isn't another There isn't anybody else in this race that has actually done this before. Lots of people and they're good firms. They probably can do this, but they don't know how to do this. They haven't done well.

So I actually think the answer to both of these last two questions is the same thing. Having a being first is going to be critical. Obviously, first move for advantages. We get all of that, not arguing it. I think the next thing that's going to be critic goal that is currently undervalued is the way the primary market operates here in primary market efficiency is going to drive an enormous portion of how these volumes actually play out because there is no standard, right, no one has done this with these providers in America before. Now we obviously we've been operating a primary market in cryptots for five years, so we have a pretty standard playbook that we know leads to an efficient market. There are some obvious differences as you move between geographies, but that piece, the operational know how of how to make this primary market go correctly, is going to end up playing a huge role here on both sides. Right, it is about it's about how do you make that market work as effectively as possible because it's going to show up linearly in spreads. So the better you can do, the more cost you can take out of it, the more efficient you can make it, the easier and clean, or you can make it free market makers to hedge. The better this is going to be, and that's going to end up driving a big chunk of how volume plays out. You need those markets to be tight and providing a really stable, very well structured primary market is going to end up playing a really big role here. And so to answer your original question on like how do you do this, I think you lean into that operational experience. There isn't another There isn't anybody else in this race that has actually done this before. Lots of people and they're good firms. They probably can do this, but they don't know how to do this. They haven't done well.

Let's let me let me let me push back a little. You know, using operations as you're marketing again, you're going to put some people to sleep. I think people are going to just I think there's maybe some you know, if if the spreads are different, surely that definitely speaks to that. Like no one wants to pay ten BIPs for one for sure, be talking about Blackrock in fidelity. I mean, people look at Blackrock as the ETF king. They've got four hundred and fifty funds, so I think, yeah, I got to assume they'll be somewhat good on that front. But you know, we'll see. I know you have this, you know you have the experience in Europe. But like I said, I think it's gonna be tough for everybody.

Let's let me let me let me push back a little. You know, using operations as you're marketing again, you're going to put some people to sleep. I think people are going to just I think there's maybe some you know, if if the spreads are different, surely that definitely speaks to that. Like no one wants to pay ten BIPs for one for sure, be talking about Blackrock in fidelity. I mean, people look at Blackrock as the ETF king. They've got four hundred and fifty funds, so I think, yeah, I got to assume they'll be somewhat good on that front. But you know, we'll see. I know you have this, you know you have the experience in Europe. But like I said, I think it's gonna be tough for everybody.

Eric Can, I, as a student of disruptive innovation, I'd like to make an observation, a couple of observations here. One and maybe I didn't emphasize this enough in the beginning or concretely in the beginning. Twenty one shares is the largest pure play crypto ETP player in the world. And as a student of disruptive innovation, we're maybe not thinking about this. You know, ETFs when it comes to equities and fixed income, you know well worn paths.

Eric Can, I, as a student of disruptive innovation, I'd like to make an observation, a couple of observations here. One and maybe I didn't emphasize this enough in the beginning or concretely in the beginning. Twenty one shares is the largest pure play crypto ETP player in the world. And as a student of disruptive innovation, we're maybe not thinking about this. You know, ETFs when it comes to equities and fixed income, you know well worn paths.

ETFs.

ETFs.

When it comes to crypto bitcoin, we think very different. And I have been incredibly impressed Tom Stout as well. Of course our president and COO, working very closely with Ophelia at how much does go into this? So it would be very interesting when we get off the mark here off the block to see what happens. Let's test this out.

When it comes to crypto bitcoin, we think very different. And I have been incredibly impressed Tom Stout as well. Of course our president and COO, working very closely with Ophelia at how much does go into this? So it would be very interesting when we get off the mark here off the block to see what happens. Let's test this out.

We talked about the operations. What else I mean, this crowded race that we've been talking about, like how I mean and to have somebody like a black Rock be out there, how else do you distinguish yourself in such a crowded marketplace if there's multiple people off the blocks at once, like the race is going to start all over again.

We talked about the operations. What else I mean, this crowded race that we've been talking about, like how I mean and to have somebody like a black Rock be out there, how else do you distinguish yourself in such a crowded marketplace if there's multiple people off the blocks at once, like the race is going to start all over again.

And let me just jump in here for the listener. As an ETF nerd for almost fifteen twenty years, this is fascinating. You've never had a situation in the history of ETFs where they've let everybody out at the same time and all the funds do something the same thing.

And let me just jump in here for the listener. As an ETF nerd for almost fifteen twenty years, this is fascinating. You've never had a situation in the history of ETFs where they've let everybody out at the same time and all the funds do something the same thing.

They offer bitcoin exposure.

They offer bitcoin exposure.

So it's the first time I've had like a I'm calling it, I'm trying, by the way, I'm trying to get coin.

So it's the first time I've had like a I'm calling it, I'm trying, by the way, I'm trying to get coin.

This phrase the bitucky Derby. What do you think about that? You like that? Or no, Joel, what do you think Bentucky Derby?

This phrase the bitucky Derby. What do you think about that? You like that? Or no, Joel, what do you think Bentucky Derby?

Because it's like it's like we'll talk about it offline.

Because it's like it's like we'll talk about it offline.

It's like a horse race and you know, some domake it's the starting gage, Joel, they have to got it.

It's like a horse race and you know, some domake it's the starting gage, Joel, they have to got it.

I got it anyway.

I got it anyway.

So this is the first time you have a natural horse race. So this is a case study from heaven. If you're an analyst.

So this is the first time you have a natural horse race. So this is a case study from heaven. If you're an analyst.

Look, I think the other piece of our marketing positioning here and like how we think we differentiate in this market. Experience is part of it. Ops is a part of it. That's my background. So it tends you to overemphasize that, and that's on me. The other half of what it is we do, which is extremely unique, is it's research. At the end of it away, we give it away. It's free, it's best in class. We're the only two firms on the street who do that, who can actually sit there and provide the client support. Right, you want to sit down with an advisor and like help them understand how this can fit into their client's portfolio, how they can support their clients through that. When there's a problem, they can pick up the phone and call somebody who'll explain to them what's happening in crypto. That's actually a huge piece of missing component in how you actually place these assets. And bluntly, that is not something people get from the king of ETFs because that's not actually their specialty. That's not their approach to the market never has been.

Look, I think the other piece of our marketing positioning here and like how we think we differentiate in this market. Experience is part of it. Ops is a part of it. That's my background. So it tends you to overemphasize that, and that's on me. The other half of what it is we do, which is extremely unique, is it's research. At the end of it away, we give it away. It's free, it's best in class. We're the only two firms on the street who do that, who can actually sit there and provide the client support. Right, you want to sit down with an advisor and like help them understand how this can fit into their client's portfolio, how they can support their clients through that. When there's a problem, they can pick up the phone and call somebody who'll explain to them what's happening in crypto. That's actually a huge piece of missing component in how you actually place these assets. And bluntly, that is not something people get from the king of ETFs because that's not actually their specialty. That's not their approach to the market never has been.

Another thing is and I'll go back, of course, to the research side of it. We have been researching and writing about educating our client based, prospective clients, anyone who wants to read our research since twenty fifteen when bitcoin was six billion dollars five six billion dollars.

Another thing is and I'll go back, of course, to the research side of it. We have been researching and writing about educating our client based, prospective clients, anyone who wants to read our research since twenty fifteen when bitcoin was six billion dollars five six billion dollars.

In market cap.

In market cap.

Today it is roughly seven hundred billion dollars in market cap. And again we think we've just begun, but I think we've earned some stripes because all we do three analysts focusing on crypto, and we have partnered our partner distribution partner here in the US, Resolute, the entire firm. It may be much smaller than Blackrock, but they have been working with us on disruptive innovation, exclusively disruptive innovation, and are incredibly excited and confident that you know that we could make a big splash.

Today it is roughly seven hundred billion dollars in market cap. And again we think we've just begun, but I think we've earned some stripes because all we do three analysts focusing on crypto, and we have partnered our partner distribution partner here in the US, Resolute, the entire firm. It may be much smaller than Blackrock, but they have been working with us on disruptive innovation, exclusively disruptive innovation, and are incredibly excited and confident that you know that we could make a big splash.

Well, first of all, good luck to you. I think this is again, this is going to be fascinating to watch. One just last question about ARC in general, and obviously this has been quite a journey for you.

Well, first of all, good luck to you. I think this is again, this is going to be fascinating to watch. One just last question about ARC in general, and obviously this has been quite a journey for you.

You you came and.

You you came and.

I remember meeting Kathy at the ETF's boot camp. I think you were like two months before launching, and I swear you told me the idea. I was like, yeah, I don't know, I might not see her next year because at the time nobody wanted active. But you proved me wrong and you went from like zero, and as an indie especially, it's hard to make it. I think you might have peaked at thirty forty billion. It's now your fund's are fourteen billion. You've had that huge run up, huge rundown, now you're up.

I remember meeting Kathy at the ETF's boot camp. I think you were like two months before launching, and I swear you told me the idea. I was like, yeah, I don't know, I might not see her next year because at the time nobody wanted active. But you proved me wrong and you went from like zero, and as an indie especially, it's hard to make it. I think you might have peaked at thirty forty billion. It's now your fund's are fourteen billion. You've had that huge run up, huge rundown, now you're up.

Again this year. It is a bit rollercoaster ish.

Again this year. It is a bit rollercoaster ish.

Your journey kind of reminds me of Steve Martin's quote in his great biography called Born, Standing Up, where he goes, at first I wasn't famous enough. Then I was too famous, like when the jerk came out and he goes, now I'm just right famous. And it sort of feels like that. Do you think fourteen to fifteen billion for your equity ETFs, let's move crypto aside? Is that the right spot for you? Because you know you're less visible in the markets now, you're not like pushing stocks around or do.

Your journey kind of reminds me of Steve Martin's quote in his great biography called Born, Standing Up, where he goes, at first I wasn't famous enough. Then I was too famous, like when the jerk came out and he goes, now I'm just right famous. And it sort of feels like that. Do you think fourteen to fifteen billion for your equity ETFs, let's move crypto aside? Is that the right spot for you? Because you know you're less visible in the markets now, you're not like pushing stocks around or do.

You want to be bigger or smaller?

You want to be bigger or smaller?

If we are right, and this is not just about crypto, it's about all of the innovation platforms around which we have centered our research and investing, then disruptive innovation broadly defined, will go from roughly fifteen trillion dollars in market cap globally equities both public and private, so a little more than ten percent of the market to more than two hundred trillion by twenty thirty. And we think we should gain share in that market because this is all we do. And so that's Steve Martin quote is very interesting. In late twenty and early twenty one, I was very uncomfortable. I was I'm on record saying keep some of your powder dry. We can't do anything wrong. And I sent this to my team too. We can't do anything wrong. This is not reality that we're going to have. There's gonna be another side to this. Did I believe Michael Berry when he said this is just the Nasdaq circa two thousand? Absolutely not. And I told him, you don't understand innovation. Well, what I didn't understand was the FED was going to take interest rates up twenty fourfold within roughly a year's time. Never happened in history. Vulgar took it up twofold ten to twenty percent, but only twofold twenty fourfold, shocked the system. I think we've paid our dues and I think we're on the other side of it. I'm much more comfortable today that many people don't think we can do anything right, although that's changing with this year's performance. But innovation gains traction during tough times, and that's what's happening. Our companies are now earning their place in our portfolios. Their earnings are surprising to the high side, and they're moving to the top of the heap. So no, we're really excited about the next five to ten years. This is why I started ARC.

If we are right, and this is not just about crypto, it's about all of the innovation platforms around which we have centered our research and investing, then disruptive innovation broadly defined, will go from roughly fifteen trillion dollars in market cap globally equities both public and private, so a little more than ten percent of the market to more than two hundred trillion by twenty thirty. And we think we should gain share in that market because this is all we do. And so that's Steve Martin quote is very interesting. In late twenty and early twenty one, I was very uncomfortable. I was I'm on record saying keep some of your powder dry. We can't do anything wrong. And I sent this to my team too. We can't do anything wrong. This is not reality that we're going to have. There's gonna be another side to this. Did I believe Michael Berry when he said this is just the Nasdaq circa two thousand? Absolutely not. And I told him, you don't understand innovation. Well, what I didn't understand was the FED was going to take interest rates up twenty fourfold within roughly a year's time. Never happened in history. Vulgar took it up twofold ten to twenty percent, but only twofold twenty fourfold, shocked the system. I think we've paid our dues and I think we're on the other side of it. I'm much more comfortable today that many people don't think we can do anything right, although that's changing with this year's performance. But innovation gains traction during tough times, and that's what's happening. Our companies are now earning their place in our portfolios. Their earnings are surprising to the high side, and they're moving to the top of the heap. So no, we're really excited about the next five to ten years. This is why I started ARC.

Okay, we'll leave it at that. Kathy Aphelia, thank you so much for joining us on Trillians.

Okay, we'll leave it at that. Kathy Aphelia, thank you so much for joining us on Trillians.

Thank you, Thank you, Joel and Eric.

Thank you, Thank you, Joel and Eric.

Thank you guys.

Thank you guys.

Thanks for listening to Trillions. Until next time. You can find us on the Bloomberg terminal, Bloomberg dot com, Apple Podcasts, Spotify, or wherever else you'd like to listen. We'd love to hear from you. We're on Twitter. I'm at Joel Webber Show. He's at Eric Balchnas. This episode of Trillions was produced by Magnus Hendrickson. Bye

Thanks for listening to Trillions. Until next time. You can find us on the Bloomberg terminal, Bloomberg dot com, Apple Podcasts, Spotify, or wherever else you'd like to listen. We'd love to hear from you. We're on Twitter. I'm at Joel Webber Show. He's at Eric Balchnas. This episode of Trillions was produced by Magnus Hendrickson. Bye