WEBVTT 00:08.978 --> 00:14.584 [SPEAKER_02]: All right, everybody, welcome back to another episode of the crypto 101 podcast. 00:14.725 --> 00:20.972 [SPEAKER_02]: I'm your host, Bryce, as always joined by my good buddy across the country, Brendan, how you doing, sir? 00:22.137 --> 00:23.838 [SPEAKER_02]: I'm doing good, Bryce, how about yourself? 00:24.338 --> 00:26.139 [SPEAKER_02]: You know, no complaints at all. 00:26.179 --> 00:28.780 [SPEAKER_02]: We've got an incredible guest today. 00:29.260 --> 00:31.741 [SPEAKER_02]: So, look, I'm super excited. 00:31.821 --> 00:36.903 [SPEAKER_02]: I have seen John Dagestino on CNBC pretty much every week for the past couple weeks. 00:37.043 --> 00:45.166 [SPEAKER_02]: And so it is a true joy to have you, John, join us ahead of Coinbase's institutional strategy. 00:45.846 --> 00:47.387 [SPEAKER_02]: John, welcome to show how you're doing. 00:48.087 --> 00:48.907 [SPEAKER_00]: I'm doing great, Bryce. 00:48.987 --> 00:51.088 [SPEAKER_00]: Thanks to you and Brendan for having me today. 00:51.638 --> 00:53.179 [SPEAKER_02]: Yeah, no, we're really pumped. 00:54.059 --> 00:58.362 [SPEAKER_02]: You know, we've had different folks from the Coinbase ecosystem join us. 00:58.862 --> 01:04.985 [SPEAKER_02]: And so we're really excited to dive into particularly things that you are all doing on the institutional side. 01:05.946 --> 01:08.888 [SPEAKER_02]: You know, which is probably, in my opinion, 01:09.568 --> 01:36.454 [SPEAKER_02]: the most interesting aspect of coin base because that's what's going to be driving the adoption that's what's going to be driving over the course of the next decade really the big price movements in crypto as well so we're not going to be speculating on price we're not going to be providing financial or investment advice or recommendations but we are going to be looking at the landscape from high level before we do John we just want to get acquainted with you with the audience tell us a little bit about how you got into crypto into the role that you are 01:37.902 --> 01:38.702 [SPEAKER_00]: Sure, I have to do it. 01:39.403 --> 01:44.285 [SPEAKER_00]: The quick version is I've always been attracted to sort of videos in credit asset classes. 01:44.385 --> 01:53.869 [SPEAKER_00]: So when I graduate a business school instead of going to traditional route, I took a weird job with a weird little building on the corner of North End Avenue in New York. 01:54.429 --> 01:56.011 [SPEAKER_00]: called the New York Mercantile Exchange. 01:56.251 --> 01:58.473 [SPEAKER_00]: And that's where C'monly did maybe this is what's traded. 01:58.493 --> 02:02.457 [SPEAKER_00]: Yeah, the 9x, yeah, back when it was, we're at a cup of tail end of the open-out cry era. 02:03.218 --> 02:05.280 [SPEAKER_00]: This sort of wild, crazy days. 02:05.701 --> 02:09.705 [SPEAKER_00]: Any of your older viewers ever saw the movie trading places that was filmed on the floor? 02:09.725 --> 02:10.526 [SPEAKER_00]: It's Eddie Murphy. 02:10.546 --> 02:12.307 [SPEAKER_00]: Yeah, that was filmed on the floor of the exchange. 02:12.327 --> 02:14.650 [SPEAKER_00]: So, got to see the sort of tail end. 02:14.690 --> 02:16.171 [SPEAKER_00]: And it was interesting as I got to see, 02:18.053 --> 02:41.926 [SPEAKER_00]: Capital Markets undergo one major transformation, which was shifting from open-out cry to electronic trading, like the electronefication of trading, and I always just kind of liked, I liked volatility, I liked kind of the math, it was hard, I liked options math, it always seemed, it always seemed more interesting and more fun to me, so I built a career in that and then went on to trade at a hedge fund in the same asset class. 02:42.606 --> 02:52.811 [SPEAKER_00]: And just to be able to academic curiosity about crypto, I've been lecturing at MIT for over a decade now and sort of studying crypto from academic perspective. 02:53.151 --> 02:58.794 [SPEAKER_00]: And the way I got into it to be very frank, is I wrote a paper right around the right after the Dow Hack. 02:59.714 --> 03:10.580 [SPEAKER_00]: And I analyzed the downhack within MIT professor and we published this paper and the paper I called myself a cynical enthusiast about crypto because I was super excited about the tech. 03:10.600 --> 03:22.607 [SPEAKER_00]: I was a little bit cynical about the people and that paper caught the attention of a hedge phone called polychain, pretty famous fund and they put me on the board back harsh as we. 03:23.287 --> 03:26.249 [SPEAKER_00]: I think read the paper, or at least I was told he did. 03:26.890 --> 03:31.833 [SPEAKER_00]: And wind up being on the board of polychains, so good practical learning about crypto there. 03:32.434 --> 03:36.517 [SPEAKER_00]: And then got the call from Coinbase when they started building out their institutional arm. 03:37.117 --> 03:41.140 [SPEAKER_01]: The institutional side has been a booming one for sure. 03:41.160 --> 03:43.922 [SPEAKER_01]: I mean, look at the last couple of years here. 03:44.342 --> 03:50.126 [SPEAKER_01]: It's been big, especially on the ETF side, which we'll get into, because you guys play a big role in a lot of those ETFs 03:50.947 --> 03:54.208 [SPEAKER_01]: exploded onto the scene, and let's say the last two or so years. 03:55.028 --> 03:58.929 [SPEAKER_01]: But can you help the, I would say the general audience may be understand a little bit more. 03:59.249 --> 04:00.509 [SPEAKER_01]: A lot of them use you all. 04:00.729 --> 04:02.390 [SPEAKER_01]: We've talked about you for a while. 04:03.270 --> 04:06.691 [SPEAKER_01]: And I don't think that they're as familiar with the institutional side. 04:06.711 --> 04:07.851 [SPEAKER_01]: They say, oh, hey, it's Coinbase. 04:07.871 --> 04:09.031 [SPEAKER_01]: You know, I use them as my brokerage. 04:09.431 --> 04:11.752 [SPEAKER_01]: I buy a little Bitcoin and all coin through them. 04:12.492 --> 04:17.893 [SPEAKER_01]: And I want to get into some of these other features, but beyond that, what really is the giant 04:20.914 --> 04:33.025 [SPEAKER_00]: Yeah, I appreciate that opportunity because it is interesting to me, so when people say, when they talk about institutional, I think they under represent the degree of influence that sector is going to have on crypto. 04:33.065 --> 04:37.389 [SPEAKER_00]: So let's say, for example, like when you say, who's the biggest, biggest institutional player in crypto, right? 04:37.409 --> 04:38.090 [SPEAKER_00]: People say black rock. 04:38.830 --> 04:52.927 [SPEAKER_00]: Which is fair to some degree and they've been a fantastic partner of us, but the majority of BlackRock is a as a conduit for retail So it's through their massively successful ETF and another other types of products Same thing for me. 04:52.948 --> 04:57.153 [SPEAKER_00]: We read about you know big firms like fidelity in Franklin Templeton and Schwab and everyone getting into crypto 04:58.313 --> 05:01.814 [SPEAKER_00]: The large part that's going to largely be as a conduit to Broadway's retail. 05:01.934 --> 05:15.918 [SPEAKER_00]: So I know that crypto to some degree part of the wonderful characteristics of crypto is the ability of self ownership through self custodial wallets and the ability for anyone in the world who can afford some compute and some power to participate in the ecosystem. 05:15.998 --> 05:20.059 [SPEAKER_00]: And that is a wonderful characteristic that is essential to the value proposition. 05:21.039 --> 05:26.360 [SPEAKER_00]: The reality of how most people think about their money is they rely on some type of intermediary and some type of advisor. 05:26.841 --> 05:36.683 [SPEAKER_00]: So until the day where we're all knowledgeable enough to make our own investment decisions and then more so want to, I use a financial advisor. 05:36.923 --> 05:39.044 [SPEAKER_00]: I'm perfectly capable of managing my own money. 05:39.224 --> 05:39.964 [SPEAKER_00]: I choose not to. 05:40.104 --> 05:42.905 [SPEAKER_00]: I just choose to allocate that time to my children and my hobbies. 05:43.545 --> 05:43.745 [SPEAKER_00]: So, 05:44.445 --> 05:48.586 [SPEAKER_00]: I think for a long time, we will be relying on these financial intermediaries and advisors. 05:49.187 --> 05:51.187 [SPEAKER_00]: And so that is a big chunk of institutional. 05:51.607 --> 05:54.248 [SPEAKER_00]: Then the other piece you have is what I call asset owners. 05:54.708 --> 06:02.971 [SPEAKER_00]: So asset owners are, you know, sovereign wealth funds, pension funds, insurance pools, who are investing on behalf of themselves for the most part. 06:03.031 --> 06:05.132 [SPEAKER_00]: And we have citizens, but we have for their own entity. 06:05.652 --> 06:20.015 [SPEAKER_00]: And then, finally, you have, you know, folks like hedge funds who are kind of act like acid owners, they make their own investment decisions, but they have fiduciaries that they have to make money for or have responsibility to which are either retail or institutional investors. 06:20.055 --> 06:31.538 [SPEAKER_00]: So, who add all those up together, they are massively powerful and influential form of capital development, and that's where we focus on, but against not just 06:32.258 --> 06:37.789 [SPEAKER_00]: making money for corporations, it's assisting those corporations in those companies and assisting their retail clients. 06:39.461 --> 06:42.383 [SPEAKER_01]: which side would you say makes up most of the business? 06:42.624 --> 06:44.285 [SPEAKER_01]: Is it the retailer or the institutional? 06:44.785 --> 06:57.975 [SPEAKER_00]: So it's been, I think, I should know this, I think on a, so there's volume, which is largely retail, and then there's profitability, which I think institutional, I think it's about 30% when we get in trouble for this way. 06:58.015 --> 06:59.737 [SPEAKER_00]: Think about 30% now, maybe a little bit higher. 07:00.978 --> 07:07.002 [SPEAKER_00]: So we certainly have more retail, certainly about 120, maybe even more now at this point, retail users. 07:09.245 --> 07:14.367 [SPEAKER_00]: We are certainly much larger on retail, 120 or more a million users. 07:15.367 --> 07:19.288 [SPEAKER_00]: Institutions tend to use capital markets more, and they tend to use in different ways. 07:19.328 --> 07:29.471 [SPEAKER_00]: They tend to borrow, they obviously use this for custody, they use this for trading, best execution, both just over the centralized exchange, but also OTC orders. 07:30.092 --> 07:34.153 [SPEAKER_00]: So your institutional business can constitute more activity over time, 07:38.058 --> 07:38.999 [SPEAKER_02]: Yeah, no, absolutely. 07:39.039 --> 07:42.224 [SPEAKER_02]: And you guys have really leaned into the new product development. 07:42.244 --> 07:52.639 [SPEAKER_02]: I think one of the coolest things that I've seen recently was the SEC registered AI agent financial advisor, the very first of its kind. 07:52.679 --> 07:54.902 [SPEAKER_02]: I was like, when I saw this, I was like, Oh, my gosh. 07:54.942 --> 07:55.042 [SPEAKER_02]: How 07:55.182 --> 07:55.342 [SPEAKER_02]: Cool. 07:55.362 --> 07:58.163 [SPEAKER_02]: I mean, this is for sure going to be the way of the future. 07:58.223 --> 08:11.007 [SPEAKER_02]: No more, you know, nine to five can't talk to your advisor on the weekends or the holidays or he goes on vacation and you're trying to get some orders in like this is 365 seven days a week 24 seven. 08:11.908 --> 08:15.849 [SPEAKER_02]: So I want to talk a little bit about maybe some of the new products. 08:17.073 --> 08:18.896 [SPEAKER_02]: that y'all have launched. 08:19.016 --> 08:23.902 [SPEAKER_02]: I know Perps, the perpetual derivatives, contracts are starting to make a big push. 08:25.004 --> 08:30.672 [SPEAKER_02]: Can you give us an overview of some of the things that maybe Coinbase has launched or things that you've been involved with as well? 08:31.775 --> 08:32.315 [SPEAKER_00]: Yeah, sure. 08:32.395 --> 08:52.260 [SPEAKER_00]: So, we just had our system reset, so Brian got up on stage with some of the other leaders of the firm and talk through, a ton of these wonderful products, and I think thematically if you just start from the top down, it's all about this notion of everything app and consolidating the average person, the average institutions, financial transaction needs. 08:53.020 --> 08:53.600 [SPEAKER_00]: on one place. 08:53.800 --> 09:01.283 [SPEAKER_00]: And so we need as a business and as an industry, we need to prove the value of transacting on chain in all of its forms. 09:01.763 --> 09:07.966 [SPEAKER_00]: So we all can intuitively understand the value of receiving payment in minutes versus months. 09:08.306 --> 09:08.786 [SPEAKER_00]: That that. 09:09.446 --> 09:34.325 [SPEAKER_00]: intuitively makes sense to everyone, but what might not be as obvious to everyone is the value of consolidating different types of asset classes on to one fungible platform, which is what we're trying to do through perps tokenized equities, as well as perps on commodities and eventually moving all of that on chain to be to exist alongside digital asset assets. 09:34.745 --> 09:35.826 [SPEAKER_00]: The reason that's really 09:37.433 --> 09:46.427 [SPEAKER_00]: especially for institutions is it makes the the process of giving and receiving leverage much safer and cleaner. 09:47.007 --> 09:52.395 [SPEAKER_00]: So if you think about like so if I have if I'm long gold just physical gold or derivatives on gold 09:52.956 --> 09:57.198 [SPEAKER_00]: and I'm short, gold miners via equities. 09:57.758 --> 10:10.123 [SPEAKER_00]: It's challenging to find one institution that can effectively lend against that entire pool of assets and giving you the proper credit for the offset of the commodity position versus the short equity position. 10:10.604 --> 10:11.644 [SPEAKER_00]: And that's not their fault. 10:11.744 --> 10:13.405 [SPEAKER_00]: It's just that no one can be good at everything. 10:13.865 --> 10:14.005 [SPEAKER_00]: Right? 10:14.025 --> 10:15.246 [SPEAKER_00]: It's very, very different. 10:15.306 --> 10:16.526 [SPEAKER_00]: It's a very different skill set. 10:16.606 --> 10:20.648 [SPEAKER_00]: Very different group people you have to hire to get good at making markets and equities. 10:21.188 --> 10:26.751 [SPEAKER_00]: versus credit, versus commodities, versus derivatives, because they all exist on very, very different systems. 10:27.732 --> 10:47.262 [SPEAKER_00]: And if we can start over time to consolidate that activity on chain and make those instruments fungible, then you A, improve liquidity, and B, you make it a lot safer to lend, because as a lender, I know I have an ability to sell or move those assets quickly and efficiently if I need to. 10:48.085 --> 11:08.426 [SPEAKER_01]: You know, one of the things that you just mentioned was that the whole Perps area and obviously this has been pretty closely tied to the crypto community because I would say when people think of Perps, right, they largely think of a crypto base Perps, right, just in the same way that I would say if you think of like futures and options, you probably think of the traditional markets. 11:09.430 --> 11:13.953 [SPEAKER_01]: I would, as someone who's involved in both, when I think of Perps, I think of like, hey, go trade crypto. 11:14.333 --> 11:18.876 [SPEAKER_01]: But it's been kind of this back and forth, especially inside the US here. 11:18.976 --> 11:26.561 [SPEAKER_01]: And I saw that recently, Coinbase updated its U.S. Perp listings, and this was something that launched. 11:26.681 --> 11:28.182 [SPEAKER_01]: I think it was last July. 11:28.662 --> 11:38.068 [SPEAKER_01]: And so when this update changed, the term or the listing was changed from, I believe it was U.S. styled Perps to now just being U.S. Perps. 11:38.468 --> 11:45.725 [SPEAKER_01]: So what does that actually change and what does that mean for the users that are interested in this kind of thing? 11:46.090 --> 11:52.977 [SPEAKER_00]: Yeah, so that the requirement to call it U.S. style was based on current then regulatory requirements. 11:53.157 --> 12:01.064 [SPEAKER_00]: And the CFTC came out with a new act with a relief letter, a new action letter that basically said that we could eliminate the need to use that modifier. 12:01.224 --> 12:08.852 [SPEAKER_00]: Because we didn't have to, really, the only difference was we had set a very, very long duration for the future for the perpetual future. 12:09.412 --> 12:17.441 [SPEAKER_00]: and they allowed us to, quite frankly, state the obvious, which is these things really have no termination date and call it what it is, which is a perpetual future. 12:18.322 --> 12:21.285 [SPEAKER_00]: And offer those two U.S. citizens for the first time. 12:21.365 --> 12:24.529 [SPEAKER_00]: So, you know, purbs are, it purbs been around for a long time, by the way. 12:24.549 --> 12:26.611 [SPEAKER_00]: They're not, they're not, they were not invented for crypto. 12:26.951 --> 12:30.014 [SPEAKER_00]: They were popularized for crypto, but they're not invented for crypto. 12:30.574 --> 12:39.342 [SPEAKER_00]: And there's a lot of misunderstanding of them, mostly caused by groups that don't want to see perps exist, because perps solve a pretty significant problem. 12:39.542 --> 12:43.046 [SPEAKER_00]: And I came from the world's largest commodity futures exchange. 12:43.166 --> 12:45.428 [SPEAKER_00]: I love futures, they're incredibly efficient instruments. 12:45.928 --> 12:50.070 [SPEAKER_00]: but the one problem they have is they're short or fixed duration instruments. 12:50.150 --> 12:57.434 [SPEAKER_00]: If you want to hold the position for a long time, they just expire and then you have to sell them and buy them by the Mac and that's called the role. 12:57.974 --> 13:02.077 [SPEAKER_00]: And the role is problematic for the long-term holder for a lot of obvious reasons. 13:02.117 --> 13:04.458 [SPEAKER_00]: First and foremost, it costs money to buy and sell. 13:05.258 --> 13:13.604 [SPEAKER_00]: if you had to like, if you want to keep your car for 10 years, but every year you had to sell it by it back, that's not an efficient way to own a car for a long period of time. 13:14.064 --> 13:28.254 [SPEAKER_00]: The second reason is, the institutions know that you have to roll them, and when they know that you have to, you are forced to sell something and forced to buy something back, guess what they do, they step in front of both sides of that trade. 13:28.954 --> 13:30.495 [SPEAKER_00]: So the roll is really, 13:32.697 --> 13:37.079 [SPEAKER_00]: because it creates volume where, quite frankly, you shouldn't need to be. 13:37.719 --> 13:43.202 [SPEAKER_00]: And it's really, really good for sophisticated market participants who can time those roles. 13:43.822 --> 13:45.923 [SPEAKER_00]: So, otherwise, in that, Perps are exactly the same. 13:46.003 --> 13:48.704 [SPEAKER_00]: They cost about the same. 13:49.905 --> 13:54.687 [SPEAKER_00]: And in fact, over the longer periods of time, they're a lot more economically efficient than shorter data features. 13:54.747 --> 13:57.048 [SPEAKER_00]: So, crypto-popularize them. 13:57.848 --> 14:01.971 [SPEAKER_00]: We are offering them, we offer them commodities, we are offering them for pre-IPO equities. 14:02.852 --> 14:06.654 [SPEAKER_00]: We'll also be offering post-IPO tokenized equities. 14:07.115 --> 14:14.940 [SPEAKER_00]: And so the idea is that for every stage of the life cycle, you'll have the ability to get exposure if you want it. 14:15.521 --> 14:17.322 [SPEAKER_00]: And that's really what we're solving for. 14:17.342 --> 14:21.465 [SPEAKER_00]: You know, if you think getting nicks tickets are hard, try getting serious be anthropic. 14:22.185 --> 14:29.487 [SPEAKER_00]: It's really, you're not getting it, I don't care if you're worth 100 million bucks, you're not getting it. 14:29.607 --> 14:40.371 [SPEAKER_00]: That is a closely held group of individuals in every industry that get access to those, and by the way, to their credit, they're willing to take the risk of super early access, because for every anthropic there's 500 zeros. 14:41.991 --> 14:49.801 [SPEAKER_00]: So if we can start to get people the optionality to get exposures that entire value chain, then we can become the everything app. 14:49.841 --> 14:52.204 [SPEAKER_00]: We can become place people go to live their financial future. 14:53.059 --> 15:04.322 [SPEAKER_01]: Yeah, it's a good point because when you think about the hurdles that it takes to get through some of this stuff, it's like, well, the bare minimum is you have to be, you have to be an accredited investor or qualified investor, right? 15:04.582 --> 15:13.784 [SPEAKER_01]: And that's a tough hurdle for I would say if you have rich retail trader, if you want to get exposed to some of these massive companies behind the scenes and it's like, all right, well, that's the bare minimum. 15:14.124 --> 15:19.705 [SPEAKER_01]: And then it's like you said, even if you are that, getting your hands on this stuff is still not easy. 15:19.845 --> 15:22.346 [SPEAKER_01]: It is that is like, it might even be a harder stretch 15:23.606 --> 15:24.106 [SPEAKER_01]: after words. 15:24.126 --> 15:24.586 [SPEAKER_01]: I can happen. 15:25.026 --> 15:26.067 [SPEAKER_00]: It's just happening. 15:27.107 --> 15:27.547 [SPEAKER_00]: Yeah. 15:27.567 --> 15:27.667 [SPEAKER_01]: Yeah. 15:27.847 --> 15:28.967 [SPEAKER_01]: I mean, you made a great point. 15:29.007 --> 15:45.011 [SPEAKER_02]: And so I think the more that we can open up access to these products, I have a follow-up on something you were talking about, John, actually, on just like the incumbents, very clearly not wanting this technology with purpose to go mainstream. 15:45.591 --> 15:49.212 [SPEAKER_02]: I don't know if this was like a clickbait thing or if this was real, but I saw that 15:53.173 --> 15:59.857 [SPEAKER_02]: because the CFTC is letting perpetual is that real and like I don't know if you guys are already that suit can you talk about it? 15:59.917 --> 16:14.465 [SPEAKER_00]: Yeah I can't really talk about the suit because for obvious reasons because because we're offering those products but the CME it's public knowledge the CME is is suing the CFTC that's that's an unusual situation. 16:14.485 --> 16:16.026 [SPEAKER_00]: I was like is this is this 16:18.567 --> 16:35.285 [SPEAKER_00]: And anyway, I come from that world and know a lot of those guys, you know, I'll be, I'll be, I can't really talk about the case itself, but I'll just say this in general, I said this on CNBC this morning actually, I don't, it doesn't surprise you to me that that they would defend the vote. 16:36.046 --> 16:36.406 [SPEAKER_00]: I get it. 16:36.686 --> 16:37.547 [SPEAKER_00]: I understand, right? 16:37.607 --> 16:41.749 [SPEAKER_00]: No different from money center banks being upset about stable coins, right? 16:41.789 --> 16:52.496 [SPEAKER_00]: If I were, if I were getting free money from the government and then turning around and being allowed to charge 5% for people to borrow the money that I got for free, I would protect that business as well. 16:53.096 --> 16:54.117 [SPEAKER_00]: I would, I wouldn't do it right. 16:54.137 --> 17:02.780 [SPEAKER_00]: If I were if I was getting paid 5% from the government and I was turning around and giving 10 basis points to my checking account holders, that's a business side fight for as well. 17:02.920 --> 17:05.201 [SPEAKER_00]: So none of this is particularly surprising to me. 17:06.402 --> 17:19.868 [SPEAKER_00]: I think you know, over time, you know, what's best for the American consumer tends to win, which is why I think you're seeing these rules coming out, whether it's SEC Interpretive Rules or CFTC No Action Letters or I hope with the Clarity Act and the Genius Act. 17:20.408 --> 17:28.577 [SPEAKER_00]: You know, it takes a while, it takes longer than people want, but eventually, you know, we do live in a democracy so we can vote in people who will do what's in our best interest. 17:29.178 --> 17:32.021 [SPEAKER_00]: And that seems to be grindingly happening. 17:33.293 --> 17:41.537 [SPEAKER_02]: Yeah, on on that same point about grindingly happening, I see the odds of the clarity act passing in 2026. 17:42.817 --> 17:44.298 [SPEAKER_02]: Pretty much out of coin flip. 17:44.338 --> 17:58.724 [SPEAKER_02]: I checked two days ago, it was 43% today, 49% you know, in March, it was 70% and so I'm just curious, does Coinbase have a firm a firm level view of where the clarity acts stands? 17:59.704 --> 18:01.025 [SPEAKER_02]: If it's going to happen this year, 18:01.805 --> 18:20.130 [SPEAKER_02]: does it matter for you guys I've heard some folks come on the show and say pass or no pass you know we're still going to be building the business it's still going to you know not I mean not have a he wanted to happen we want to be clear want to happen uh and you know poor gurus are are fantastic uh general counsel and and far out she saw these are those are fantastic 18:20.903 --> 18:32.115 [SPEAKER_00]: had a policy and, you know, they're competent, confident, I just quote their public public statements on Twitter, you know, they think it's going to pass and, you know, I'm confident as well. 18:32.335 --> 18:39.562 [SPEAKER_00]: People forget, like, genius up until the day, genius, up until the week before genius passed, it was a coin flip as well, like, no, no guarantees about this. 18:40.303 --> 18:47.628 [SPEAKER_00]: So I believe in Paul and Farrier and they've done a great job and so I believe in what they're saying is right, they're much closer to the action than I am. 18:48.409 --> 18:49.069 [SPEAKER_00]: But I will say this. 18:49.790 --> 18:54.453 [SPEAKER_00]: Again, Coinbase, I was asked this question as well, but what's the big catalyst? 18:54.793 --> 18:57.715 [SPEAKER_00]: So I think you have to stop looking for a big catalyst quite frankly. 18:57.755 --> 19:04.460 [SPEAKER_00]: So even if a clarity passes, I think to some degree, some of that's been priced in, so I don't think we're going to have this massive run-up just because 19:07.442 --> 19:08.222 [SPEAKER_00]: that of two things. 19:08.322 --> 19:21.005 [SPEAKER_00]: One is clarity passing is a fundamental building block of the longer term institutionalization of crypto and blockchain so it can start to fix problems in U.S. capital markets in the economy, right? 19:21.025 --> 19:27.167 [SPEAKER_00]: You just got to believe in that and I know people want price to go up, I do too, but it's a very, very positive thing. 19:27.627 --> 19:31.768 [SPEAKER_00]: If it doesn't, which I think it will, but if it doesn't, we still get to build. 19:32.548 --> 19:42.475 [SPEAKER_00]: Stablecoins have quadrupled since the passage of the Genius Act without the Clarity Act, and they will continue to grow because they're good tech payments are improving. 19:42.835 --> 19:47.718 [SPEAKER_00]: We're seeing movement and tokenization of equities that will happen with or without clarity. 19:48.199 --> 19:53.002 [SPEAKER_00]: All that will happen is some of this will happen offshore and US citizens won't be able to benefit. 19:53.772 --> 19:55.613 [SPEAKER_02]: which would not be the ideal scenario. 19:55.633 --> 19:56.413 [SPEAKER_02]: I'll tell you that much. 19:57.273 --> 20:03.396 [SPEAKER_02]: Um, yeah, I, you know, back to the Genius Act being a 50, 50 thing up until that week. 20:03.656 --> 20:14.880 [SPEAKER_02]: That was the first time when the Genius Act caught past last year where I actually opened up C-span and was like live streaming, just the still shot of the Senate, everybody walking in, yay, nay. 20:15.820 --> 20:30.696 [SPEAKER_02]: and i'm like there like eating popcorn just like oh my gosh is it gonna pass and uh... i was so excited my wife's like what are you watching right now i was like it's the genius at you know like that that Charlie day at you know thing or you're like you know but but all the dots together for it was exciting 20:31.426 --> 20:35.768 [SPEAKER_00]: I got to have a quick story about that, so last year, remember when everyone was talking about D-banking? 20:36.528 --> 20:37.428 [SPEAKER_02]: Yeah, of course. 20:37.468 --> 20:39.329 [SPEAKER_02]: There was a Trumpers talking about it too. 20:39.389 --> 20:44.731 [SPEAKER_00]: He called out Brian Monahan for Bank of America, so there was a Senate hearing on D-banking. 20:45.331 --> 20:51.734 [SPEAKER_00]: And I am on the board of directors of the Senate, he called Amah, it's the largest industry lobby in group for funds. 20:52.454 --> 21:01.299 [SPEAKER_00]: And I was passionate about this, so I had AMA do, or I helped AMA do, really comprehensive survey work on its member base, which is thousands of people. 21:01.959 --> 21:07.782 [SPEAKER_00]: And that survey was entered into evidence by one of the witnesses, a wonderful guy named Austin Campbell. 21:08.062 --> 21:10.424 [SPEAKER_00]: So anyway, long story short, I got named, any name dropped me. 21:11.264 --> 21:16.745 [SPEAKER_00]: One of the senators, one of the senators who wasn't too fond of crypto made some comment like, is there any evidence of this? 21:16.765 --> 21:22.806 [SPEAKER_00]: And you want to actually, John Dagestino from Aima and Coinbase, and I'll say some people watch C-Span. 21:23.286 --> 21:25.847 [SPEAKER_00]: My phone blew up. 21:26.087 --> 21:32.068 [SPEAKER_00]: It is, it is people, it's like New York 1, a local T. It's like ASMR for people. 21:32.088 --> 21:33.568 [SPEAKER_00]: They just watch C-Span all day. 21:37.360 --> 21:38.021 [SPEAKER_01]: It's funny, man. 21:38.041 --> 21:38.821 [SPEAKER_01]: You just never know. 21:38.901 --> 21:41.504 [SPEAKER_01]: You never know what you're gonna get yourself into these days. 21:41.824 --> 21:50.391 [SPEAKER_01]: But on a lighter note, Coinbase also serves as really one of the primary custodians for a lot of these ETFs. 21:50.451 --> 21:51.972 [SPEAKER_01]: We mentioned that earlier. 21:52.773 --> 22:12.058 [SPEAKER_01]: But I was hoping you could expand upon it like why is that right it's more than just saying oh there's a couple of Bitcoin spot ETFs now now there's a whole lot more than that But Coinbase still serves as really the primary custodian when it comes to crypto ETFs What does that mean for Coinbase and why is that yeah, I'm also curious about the business model there for you guys too 22:12.897 --> 22:13.378 [SPEAKER_00]: Sure, yeah. 22:13.398 --> 22:19.083 [SPEAKER_00]: I mean, look, I've been involved in many of these RFPs, one in particular, actually in Saudi Arabia. 22:19.704 --> 22:26.030 [SPEAKER_00]: And, you know, quite frankly, it's having speaking to the folks who conducted the RFP, you know, and I don't like... 22:26.814 --> 22:33.400 [SPEAKER_00]: I don't like talking bad about competitors, but there isn't a vantage to being public for as long as we have. 22:33.941 --> 22:34.881 [SPEAKER_00]: It's just that simple. 22:34.902 --> 22:42.929 [SPEAKER_00]: It's like I kind of liken it to the Kenyan Marathoners, you know, training and ultra high altitude since they're children, right? 22:43.610 --> 22:52.418 [SPEAKER_00]: You compound that training, you compound that exposure, you compound that difficulty over time, and you just produce some more hardened athlete. 22:52.878 --> 22:57.604 [SPEAKER_00]: And I think the way to think about Coinbase custody is it's a very, very hardened athlete. 22:58.185 --> 23:05.593 [SPEAKER_00]: And this a reason why we are, I think it's over 95% and the only major ETFs that don't choose us have their own custody. 23:06.715 --> 23:11.220 [SPEAKER_00]: Because I think when you, when you put us up relative to that institutional requirement, 23:12.101 --> 23:15.942 [SPEAKER_00]: There's really no competition and there's some things that we can't do as fast as others. 23:15.982 --> 23:16.322 [SPEAKER_00]: What not? 23:16.362 --> 23:18.163 [SPEAKER_00]: Because we have to be highly locked up. 23:18.723 --> 23:23.785 [SPEAKER_00]: But those institutions appreciate that concert of nature. 23:25.245 --> 23:34.848 [SPEAKER_00]: And the business model, as you would imagine, there's a custodial fee based on basic assets that kind of goes down as you step up the number of assets. 23:35.068 --> 23:36.969 [SPEAKER_00]: We obviously also want to lend against those assets. 23:36.989 --> 23:39.530 [SPEAKER_00]: We offer, for example, if you want to keep there's different products. 23:41.090 --> 24:02.542 [SPEAKER_00]: Your assets and cold storage for security reasons, we can loan you effectively the asset to sell, so it doesn't have to move into hot wallets, there's bridge financing, so there's a number of different ways that that business makes money for us so we can help clients, but they take a lot of comfort in the fact that we have the most secure custodial solution in the world. 24:03.359 --> 24:15.706 [SPEAKER_02]: Yeah, it seems to me at least from from an outsider's perspective looking in that there's never been a serious breach of, you know, customer assets that and once that trust is, is that right? 24:16.406 --> 24:18.508 [SPEAKER_00]: No, there's never been a breach of customer assets. 24:19.437 --> 24:42.261 [SPEAKER_02]: Yeah, and once that trust is broken, it's just so hard to kind of regain it back, and so I think that's just one of the other stamp of approvals, and it's one of the, you know, the exchanges that we always sort of tell our folks who watch the show, just like, hey, this is, you know, state of the art in terms of where you're going to, to hold crypto trade crypto, and it's just so cool to see, you know, beyond the security, how much you guys are innovating. 24:42.281 --> 24:47.502 [SPEAKER_02]: I mean, you guys really are rolling out updates like you are a startup, but there's already, you know, 24:48.242 --> 24:54.230 [SPEAKER_02]: It's about 3,000 people that work there at Coinbase now, so it's really cool to see the balance there. 24:54.250 --> 24:55.812 [SPEAKER_00]: Yeah, 3,000 or so. 24:56.673 --> 24:57.013 [SPEAKER_00]: Yeah, look. 24:57.033 --> 25:00.357 [SPEAKER_00]: I mean, they set, you know, Brian sets very aggressive targets. 25:00.838 --> 25:03.781 [SPEAKER_00]: We're told we're launching this thing on X-Date. 25:04.522 --> 25:18.202 [SPEAKER_00]: And I mean, he didn't do the podcast or he posted something that day about, you know, the value of setting these close to impossible targets, because it is extraordinary how much you can get done if the whole team knows you have no choice, but to get it done. 25:18.683 --> 25:18.903 [SPEAKER_00]: So, 25:19.745 --> 25:27.957 [SPEAKER_00]: We are very, very close to launching security tokenization, both hopefully in the US, but definitely XUS shortly. 25:28.358 --> 25:29.439 [SPEAKER_00]: We've got Perps live. 25:29.480 --> 25:34.507 [SPEAKER_00]: And one of our most popular products were Kamali's Perps, so gold and crude oil. 25:35.548 --> 25:37.130 [SPEAKER_00]: for obvious reasons, right? 25:37.170 --> 25:57.587 [SPEAKER_00]: I mean, if you think about, you know, about a year ago, maybe a year or so ago, if we had a situation like we haven't around, and the US launched a missile or the Iranians attacked a ship in the straight of her move on Friday at 6 p.m. You would have to wait until Monday morning at 9 a.m. for nine months to open. 25:58.922 --> 26:00.664 [SPEAKER_00]: Now, obviously, you don't need to do that. 26:00.884 --> 26:11.713 [SPEAKER_00]: And so, once at your point, once that horse is out of the barn, I ask people, do you think we'll ever go back to watching movies when movie theaters tell us we can? 26:12.551 --> 26:12.791 [SPEAKER_00]: Right? 26:12.931 --> 26:20.735 [SPEAKER_00]: There's about the same level of likelihood of that as a trader waiting 36 to 48 hours to hedge their exposure. 26:21.236 --> 26:23.697 [SPEAKER_00]: And so if you think about kind of where we're going with tokenized equities, right? 26:23.717 --> 26:30.040 [SPEAKER_00]: So it's not that I think that every single night will have the same liquidity we have during the day for the S&P 500. 26:30.421 --> 26:36.004 [SPEAKER_00]: But once you tokenize the entirety of the S&P 500, every single night something happens. 26:36.664 --> 26:45.989 [SPEAKER_00]: that affects a company and industry a sector and so to have the optionality to go and get liquidity and hedge your exposure overnight. 26:46.769 --> 26:48.430 [SPEAKER_00]: That's an extraordinary change. 26:49.112 --> 27:05.140 [SPEAKER_02]: Yeah, that's huge, you know, I think about like pretty much all of the market moving events, I feel like happen after the market closes, whether it's earnings or people are doing mergers or reverse mergers and, you know, the FDA's coming out with announcements for different things. 27:05.180 --> 27:07.101 [SPEAKER_02]: It's like none of that happens during market hours. 27:07.141 --> 27:11.123 [SPEAKER_02]: I mean, even the president was waiting to declare war after the market closed. 27:11.583 --> 27:12.944 [SPEAKER_02]: It seems like all the interesting things. 27:12.964 --> 27:15.805 [SPEAKER_02]: And I even heard a great stat about like overnight drift. 27:15.925 --> 27:22.367 [SPEAKER_02]: Basically, if you bought every S&P clothes and sold every open, you would outperform that actual returns of S&P. 27:22.408 --> 27:28.150 [SPEAKER_00]: So, it's a big one work because the price doesn't actually stop. 27:28.670 --> 27:30.271 [SPEAKER_00]: You just can't see it. 27:31.287 --> 27:41.814 [SPEAKER_00]: So I remember, we were in IMAX every time the price of crude oil and natural gas or something would spike, sometimes we get protesters outside, like little protesters saying, you know, shut down the exchange. 27:42.739 --> 27:45.060 [SPEAKER_00]: And I remember one, this was during the last couple of weeks. 27:45.541 --> 27:51.423 [SPEAKER_00]: Yeah, during the last couple of weeks, during the last couple of weeks, I walked around and I started talking to some of the people. 27:51.904 --> 27:54.005 [SPEAKER_00]: And I was like, look, maybe you'll be successful. 27:54.065 --> 27:55.385 [SPEAKER_00]: Maybe you'll close down the exchange. 27:55.425 --> 27:55.726 [SPEAKER_00]: I don't know. 27:55.966 --> 28:00.348 [SPEAKER_00]: But you understand that the only thing you'll be doing is hiding the truth from yourself. 28:01.128 --> 28:06.091 [SPEAKER_00]: Because when the market opens tomorrow, or if it lets you shut this whole thing down, it never opens again. 28:07.200 --> 28:14.446 [SPEAKER_00]: you're going to have horrific pricing because you'll be able to get robbed by everyone because there's no pricing benchmark. 28:14.626 --> 28:27.817 [SPEAKER_00]: So, hiding, blaming the exchanges is, I get it from a gut emotional perspective because it's the thing telling you how the price is going up and you feel bad about that, I get that. 28:28.157 --> 28:32.181 [SPEAKER_00]: But all you're doing is to dine yourself the information you need to make a decision. 28:32.876 --> 28:34.557 [SPEAKER_00]: Ignorance is bliss, as they say. 28:35.657 --> 28:37.438 [SPEAKER_02]: But you don't want to be living in an ignorance. 28:37.458 --> 28:38.199 [SPEAKER_02]: I'll tell you that much. 28:39.879 --> 28:43.961 [SPEAKER_02]: Now look, I've got a little gear shift here for us. 28:44.722 --> 28:49.944 [SPEAKER_02]: I feel like we have to talk about the volatility we've seen in the crypto markets. 28:50.805 --> 29:00.409 [SPEAKER_02]: As of really, 2026, I think Bitcoin's down more than 30% year to date, Ethereum's down, call it 50% or something 29:02.390 --> 29:12.940 [SPEAKER_02]: But I have seen again, been watching this some of the CNBC episodes that you've been on and you've been vocal that family offices, sovereign wealth funds are actually on the bid. 29:13.060 --> 29:14.842 [SPEAKER_02]: They're buying during this drawdown. 29:14.882 --> 29:25.292 [SPEAKER_02]: So I'm curious, um, during all of this extreme fear a lot of this question about, you know, the Bitcoin bear market now everybody's like, well, how long is this going to last from your vantage point. 29:25.332 --> 29:26.093 [SPEAKER_00]: What are you seeing? 29:26.673 --> 29:28.234 [SPEAKER_00]: Yeah, so from the smart money. 29:28.834 --> 29:30.335 [SPEAKER_00]: I've been super lucky in my life. 29:30.355 --> 29:35.438 [SPEAKER_00]: I've worked with some of the best investors, both literally some of the best investors. 29:35.458 --> 29:43.902 [SPEAKER_00]: I worked around them with them, you know, John Arnold from Centaurus, Tacos Bragas from Alkeon, just really extraordinary people. 29:44.563 --> 29:51.947 [SPEAKER_00]: And the one thing I've learned is it will, the question, the short answer to your question how long can it last, it can last twice as long as you think it can. 29:52.947 --> 29:54.929 [SPEAKER_00]: in both directions on the upside and the downside. 29:55.450 --> 30:07.421 [SPEAKER_00]: So what I see happening right now, and so the question that everybody has is, well, if they're buying, if they are buying, if institutions are buying, why is the price falling? 30:08.262 --> 30:11.146 [SPEAKER_00]: And again, I get, I understand the nature of that question. 30:11.206 --> 30:16.212 [SPEAKER_00]: That's a fair question, especially if you just don't have a lot of experience with markets. 30:17.153 --> 30:24.862 [SPEAKER_00]: The reason is that while I would love it, if institutions would write in on their white horse and prop up the price of everything they like, that's not how they think. 30:25.523 --> 30:31.249 [SPEAKER_00]: If anything, they trade on momentum, and so they're interested in getting the best price over time. 30:31.570 --> 30:35.114 [SPEAKER_00]: So if they see weakness, they are not going to stop that weakness. 30:35.254 --> 30:37.356 [SPEAKER_00]: They are going to have anything, they might accelerate the weakness. 30:37.376 --> 30:40.400 [SPEAKER_00]: They might go short for a while before they pick up their long. 30:41.320 --> 30:44.803 [SPEAKER_00]: And this isn't like the conspiracy theory, market manipulation, nonsense. 30:44.823 --> 30:45.944 [SPEAKER_00]: This is not that. 30:46.324 --> 30:47.805 [SPEAKER_00]: This is rational behavior. 30:47.925 --> 30:49.446 [SPEAKER_00]: They're going to watch the market. 30:49.726 --> 30:51.748 [SPEAKER_00]: They're going to participate on the long and the short side. 30:52.789 --> 30:55.110 [SPEAKER_00]: They don't get emotional about an asset. 30:55.350 --> 30:57.732 [SPEAKER_00]: They're not only long an asset. 30:58.693 --> 31:03.776 [SPEAKER_00]: So the institutions are not your friends, necessarily during these periods. 31:03.996 --> 31:08.420 [SPEAKER_00]: However, they dramatically accelerate price increases because they follow momentum. 31:09.000 --> 31:10.380 [SPEAKER_00]: So they help you on the way up. 31:11.041 --> 31:14.581 [SPEAKER_00]: So what I can tell you is they're closely examining this asset class. 31:15.061 --> 31:18.302 [SPEAKER_00]: This asset class is behaving exactly as it has for 15 years. 31:18.762 --> 31:23.243 [SPEAKER_00]: It's this is the 6th or 7th cycle where we've hit new higher bottoms than they row at a higher tops. 31:23.884 --> 31:30.125 [SPEAKER_00]: And so if you're an institution that's done the work, and asset behaving exactly how it's behaved in the past is not scary. 31:31.125 --> 31:35.326 [SPEAKER_01]: You know, on a similar note, is there a divergence between what's happening 31:39.315 --> 31:39.995 [SPEAKER_01]: There's got it. 31:40.656 --> 31:43.637 [SPEAKER_00]: Certainly from a sentiment perspective, there's no question. 31:44.558 --> 31:52.001 [SPEAKER_00]: I think sentiment is about as low as it's been on the retail side, and I wouldn't say sentiments higher, low in the institutional side. 31:52.021 --> 31:58.625 [SPEAKER_00]: They're just plotting through the math, so they're acting like they're supposed to act as good fiduciaries. 31:59.305 --> 32:02.387 [SPEAKER_00]: And again, I'm talking about the ones, not the ones that are conduits for 32:03.667 --> 32:08.832 [SPEAKER_00]: For retail, like the ETF providers, I'm talking about the acid owners and the funds. 32:10.537 --> 32:15.819 [SPEAKER_01]: And you have to think that they have a longer term more patient vision of all of this, right? 32:15.879 --> 32:26.122 [SPEAKER_01]: Whereas I would imagine retails a little bit more short-term focus, probably a little bit more emotional, probably a little bit less patient, maybe more easily influenced. 32:27.962 --> 32:28.702 [SPEAKER_01]: Is that accurate? 32:29.443 --> 32:31.043 [SPEAKER_00]: I think for the asset owners, certainly. 32:31.183 --> 32:34.164 [SPEAKER_00]: They can have 10, 20, 50 year visions, right? 32:34.184 --> 32:36.925 [SPEAKER_00]: If you're the lucky, if you're a stop and well, find your thinking in terms of decades. 32:40.585 --> 32:43.386 [SPEAKER_00]: You know, they can be more patient than retail for sure. 32:43.406 --> 32:44.907 [SPEAKER_00]: And they certainly, they don't get emotional. 32:45.147 --> 32:46.728 [SPEAKER_00]: They'll double triple quadruple down. 32:47.248 --> 32:50.709 [SPEAKER_00]: But they have to worry about quarterly reporting and they have to worry about, you know, year and year. 32:50.749 --> 32:53.230 [SPEAKER_00]: And so they're not, I wouldn't say the most patient of capital. 32:54.311 --> 33:06.596 [SPEAKER_00]: But what they're going to do is size it correctly, based on momentum, whereas I think some people, especially when they use leverage, they get over their ski tips a bit on what, it never feels too big a position when it's going up. 33:07.338 --> 33:09.900 [SPEAKER_00]: Right, people don't think about that when it's going up. 33:09.920 --> 33:12.042 [SPEAKER_00]: They only think about it when it's going down. 33:12.322 --> 33:18.227 [SPEAKER_00]: Hedge Funds, press professional investors, tend to size it properly, whether it's going up or going down. 33:18.927 --> 33:20.328 [SPEAKER_01]: No, it's a fair point. 33:20.889 --> 33:33.238 [SPEAKER_02]: You know, one of the things that I've heard discussed and had my own thoughts about is one of the reasons for kind of an accelerated descent in crypto over the course of the past nine months or so 33:37.542 --> 33:37.922 [SPEAKER_02]: AI. 33:38.543 --> 33:50.956 [SPEAKER_02]: And of several of these other, you know, adjacent technologies to AI, like the data center build out and, you know, all of these hard assets and everybody is talking about nuclear energy and robotics. 33:51.177 --> 33:56.663 [SPEAKER_02]: And it feels like when we all started investing in crypto, you know, again, almost a decade ago, 33:57.660 --> 34:24.498 [SPEAKER_02]: there wasn't that it was you know zero percent interest rates there wasn't that much uh... you know interesting technology that was really in the public equities market i feel maybe that's just my memory but now it's like man there are so many really other interesting areas to invest even in my own personal broker jacan i'm like okay well you know i'm pretty loaded up on crypto maybe i'm gonna try some robotics stuff maybe i'm gonna deep dive on the a.i.s semiconductor stuff in that has been potentially 34:25.158 --> 34:37.956 [SPEAKER_02]: And again, I want to get your opinion on this, is that a liquidity suck or an attention suck or everything from crypto, which used to be where all of the tech visionaries were sort of pointing towards and maybe that'll come back. 34:39.418 --> 34:40.759 [SPEAKER_00]: Absolutely, there's no question. 34:40.799 --> 34:44.160 [SPEAKER_00]: I mean, AI investment has been just astronomical. 34:44.200 --> 34:48.062 [SPEAKER_00]: It's been unlike anything we've ever seen from a capex perspective to a liquidity perspective. 34:48.762 --> 34:50.263 [SPEAKER_00]: There's no question that that's playing a role. 34:50.863 --> 34:53.805 [SPEAKER_00]: Production market interests as playing a role. 34:53.825 --> 34:58.207 [SPEAKER_00]: Again, I think that's why Coinbase strategy is to be the everything app, right? 34:58.247 --> 34:59.447 [SPEAKER_00]: So we have prediction markets. 34:59.867 --> 35:01.168 [SPEAKER_00]: We have pre-IPO markets. 35:01.188 --> 35:05.010 [SPEAKER_00]: We have tokenized securities markets for some of those names you're talking about. 35:06.111 --> 35:17.881 [SPEAKER_00]: I think like the internet itself, financial services will become to some degree about the attention economy and we have to make ourselves the one stop shop for all things in your financial health. 35:18.541 --> 35:20.643 [SPEAKER_00]: So I agree. 35:21.544 --> 35:24.387 [SPEAKER_00]: I think that all things mean reverts. 35:25.548 --> 35:32.393 [SPEAKER_00]: Don't need to say I think there's going to be a massive correction in AI stocks anytime soon, but attention certainly mean reverts. 35:33.174 --> 35:44.219 [SPEAKER_00]: So, you know, we just have to build when people are looking the other way and we have to offer these products that get their attention onto our platform and then let them make the decision which of those products is right for them. 35:45.319 --> 35:56.704 [SPEAKER_02]: Yeah, no, I think, yeah, it's a great sort of synopsis of what I was trying to explain in my own feelings and I think you kind of hit the hammer on the head. 35:57.724 --> 35:58.925 [SPEAKER_02]: One of the other things that I want 36:03.260 --> 36:26.835 [SPEAKER_02]: you know crypto used to be or bitcoin particularly used to really be this digital gold thesis right when the government is overspending and irresponsible and misdirecting capital you know crypto and bitcoin is this alternative asset that's really outside of the purview of government and people could rush into crypto when you know they're they're having policy errors and all that kind of stuff. 36:27.475 --> 36:31.358 [SPEAKER_02]: Um, do you feel like the digital gold thesis is still intact? 36:31.758 --> 36:37.883 [SPEAKER_02]: Do you view it more as like, you know, I've heard other people say, oh, crypto's down because the software stocks is down, right? 36:37.983 --> 36:44.188 [SPEAKER_02]: Software stocks are down because AI now makes anybody with, you know, a brain in a and a $20 subscription currently. 36:44.989 --> 36:46.810 [SPEAKER_02]: Um, the ability to create their own software. 36:46.850 --> 36:52.795 [SPEAKER_02]: And so, so where do you kind of stand on on the high level understand of like, where, or should I say, what is Bitcoin? 36:55.933 --> 37:00.718 [SPEAKER_00]: So I got to start with a quick little story that's how I explain I love stories. 37:01.959 --> 37:11.347 [SPEAKER_00]: So when I was at the 9x, you know, there was a lot of, back in the day, so commodity hedge funds were cryptophones before cryptophones. 37:11.387 --> 37:14.110 [SPEAKER_00]: Meaning they were the, the hot new darling on the street. 37:14.150 --> 37:16.432 [SPEAKER_00]: They were making just a land-ish outsides returns. 37:17.252 --> 37:17.833 [SPEAKER_00]: And, um, 37:18.712 --> 37:33.935 [SPEAKER_00]: we would talk to them, and the earlier ones, the first tranche of them went around telling everyone, hey look, the great thing about investing commodities is it's zero to negatively correlated with equities and fixed income. 37:35.035 --> 37:37.536 [SPEAKER_00]: And they all got wiped out, and they all got sued. 37:38.116 --> 37:42.236 [SPEAKER_00]: And then the next tranche of mine defense came in and I sat down with them and said, okay, just don't say that. 37:42.477 --> 37:44.757 [SPEAKER_00]: Because here's the big dirty secret. 37:46.383 --> 37:49.345 [SPEAKER_00]: when people panic, all correlations go to one. 37:50.246 --> 37:51.627 [SPEAKER_00]: That's just, that's just a reality. 37:51.667 --> 37:53.448 [SPEAKER_00]: It's a reality of us as a species. 37:54.629 --> 38:01.853 [SPEAKER_00]: The nine or 10 quant trading firms in Chicago that control 60% of all order flow in the world. 38:02.994 --> 38:06.476 [SPEAKER_00]: Those algorithms are written by the same 150 programmers. 38:07.717 --> 38:14.322 [SPEAKER_00]: So we are a panicky species that when things go bad, we tend to all through the same thing. 38:15.503 --> 38:29.915 [SPEAKER_00]: And so, I think Bitcoin, I do believe Bitcoin is the as digital gold thesis, I think it's more powerful than digital gold because I think the new modern commodity is compute and power and that's what Bitcoin creates a ledger for. 38:30.236 --> 38:31.557 [SPEAKER_00]: That's what it stores, if you will. 38:31.977 --> 38:37.222 [SPEAKER_00]: So I think it stands alongside gold in a complementary fashion, not in a competitive fashion. 38:38.282 --> 38:40.043 [SPEAKER_00]: Gold has had problems over the year. 38:40.063 --> 38:45.986 [SPEAKER_00]: Gold is not behave the way you want it to behave at many, many points in time, beginning of the great financial crisis, et cetera, et cetera. 38:46.046 --> 38:55.210 [SPEAKER_00]: So the fact that Bitcoin is not behaving the way we want it to is not a function or a failure of Bitcoin. 38:55.870 --> 38:58.732 [SPEAKER_00]: It is largely a function of failure of us as investors. 38:58.792 --> 39:01.093 [SPEAKER_00]: We are not the most thoughtful investors. 39:01.413 --> 39:05.315 [SPEAKER_00]: In short periods of time, over longer periods of time, that comes out. 39:06.055 --> 39:06.376 [SPEAKER_00]: So I 39:09.499 --> 39:13.940 [SPEAKER_00]: do think that it serves its purpose. 39:14.100 --> 39:18.361 [SPEAKER_00]: It's, you know, every 40 or 50 years we as a society we create a new store of value. 39:18.841 --> 39:27.043 [SPEAKER_00]: And the notion that we haven't created a digital one up until now is kind of silly, given we've been as a world for the last 30 or 30 or some ideas. 39:27.523 --> 39:30.023 [SPEAKER_00]: So I think Bitcoin is that store of value. 39:30.384 --> 39:36.365 [SPEAKER_00]: I think it's reached that tipping point of critical mass where the cost to unwind it exceeds 39:37.105 --> 39:44.914 [SPEAKER_00]: Um, uh, exceeds the cost to continue it, and so I see it continuing to find that not that everyone's going to want another portfolio and that's okay. 39:45.614 --> 39:50.279 [SPEAKER_00]: Um, uh, you're not dumb or let it if you don't want this particular asset or versus that. 39:50.800 --> 39:57.707 [SPEAKER_00]: Um, but it is now firmly established as an option, uh, with very, very unique characteristics. 39:58.308 --> 40:00.270 [SPEAKER_00]: So, you know, I get it. 40:00.350 --> 40:02.351 [SPEAKER_00]: We want these things to behave the way we want them to. 40:03.292 --> 40:04.773 [SPEAKER_00]: But that's not a function of the asset. 40:04.793 --> 40:06.615 [SPEAKER_00]: That's a function of us as a market. 40:07.035 --> 40:09.377 [SPEAKER_02]: Yeah, also good at that point about the correlation stuff. 40:09.397 --> 40:10.218 [SPEAKER_02]: Sorry to interrupt Brendan. 40:12.019 --> 40:20.966 [SPEAKER_02]: One random thing is that I noticed like the one-year sort of rolling correlation between Bitcoin and the S&P 500 is at like an all-time low. 40:22.007 --> 40:35.134 [SPEAKER_02]: And so we've got typically like a really correlate, highly correlated sort of view of, you know, if crypto goes up and stocks are going up there, they're going to go up and down together, but that hasn't really been the case this year. 40:35.194 --> 40:47.241 [SPEAKER_02]: So it kind of makes it maybe more attractive for an institution to look at and say, hey, like, you know, we're going to have stocks and we're actually going to get like a non-correlated asset in Bitcoin, because it just hasn't had that 40:50.075 --> 40:50.835 [SPEAKER_02]: Um, right. 40:50.855 --> 40:51.315 [SPEAKER_02]: Yeah, right. 40:51.355 --> 40:51.795 [SPEAKER_02]: Right. 40:53.036 --> 40:53.296 [SPEAKER_01]: Yeah. 40:53.476 --> 40:59.437 [SPEAKER_01]: Well, you know, mine was a little bit off that, that, that, that path, but I think it's a good point because people have been watching that, Bryce, right? 40:59.797 --> 41:13.440 [SPEAKER_01]: I think people have been watching the movements of crypto here, really over the last, you know, you could say the end of last year, but really this year, right, because everything came down with a lot of the geopolitical news and all these other uncertainties that we've kind of seen through on our way. 41:14.060 --> 41:17.442 [SPEAKER_01]: But on the recovery, you've seen this extremely sharp recovery in tech. 41:17.782 --> 41:21.243 [SPEAKER_01]: You obviously had metals melt up to the upside and that historic run. 41:21.523 --> 41:24.624 [SPEAKER_01]: You saw tech kind of going this massive recovery to new all-time highs. 41:24.945 --> 41:27.266 [SPEAKER_01]: You know, most equities kind of did that as well. 41:27.666 --> 41:30.067 [SPEAKER_01]: You know, energy surged up to these record levels. 41:30.387 --> 41:38.010 [SPEAKER_01]: And then you had crypto, which right now, you know, worked basically sitting at a cycle lows here for the last year or two for a lot of these assets. 41:38.050 --> 41:40.571 [SPEAKER_01]: And so I think people are looking at that price and it's a good point. 41:41.992 --> 41:47.915 [SPEAKER_01]: And I think the idea of it being somewhat uncorrelated, people look at that and they go, oh, that's a bad thing. 41:47.935 --> 41:50.437 [SPEAKER_01]: Everything else is doing good and it's not, you're right. 41:50.457 --> 41:52.938 [SPEAKER_01]: I think it just helps people look at it in a different way. 41:53.759 --> 41:56.241 [SPEAKER_01]: And it really is its own asset class. 41:56.261 --> 42:00.363 [SPEAKER_01]: Now, I mean, you've looked at it evolve into a multi-chilling dollar asset class. 42:01.023 --> 42:04.205 [SPEAKER_01]: And I think it is honestly best that it does behave in its own sort of way. 42:04.245 --> 42:06.367 [SPEAKER_01]: But I want to... Yeah. 42:06.387 --> 42:07.888 [SPEAKER_00]: Silver's down, Silver's down by 55% 42:10.149 --> 42:11.329 [SPEAKER_00]: Crudoyle is pretty funny. 42:13.310 --> 42:20.072 [SPEAKER_00]: The Iranians shot at a tanker, less than 72 hours ago, and Crudoyle is still trading under 80. 42:20.652 --> 42:21.772 [SPEAKER_00]: Yeah, last time I checked. 42:21.832 --> 42:30.395 [SPEAKER_00]: So, you know, look, you've got to be prepared, I'll quote Jeremy Grantham, ironically, given what he just did on CNBC. 42:30.775 --> 42:38.237 [SPEAKER_00]: He had a, I've devoured his letters over the years, and he's got some great lines, and he says, you know, markets can be gloriously inefficient. 42:39.570 --> 42:45.693 [SPEAKER_00]: And he says, and they can go against you until you lose your heart and your mind. 42:46.613 --> 42:49.854 [SPEAKER_00]: And the trick is to be persistent and to survive. 42:51.155 --> 42:59.939 [SPEAKER_00]: So this was never going to be, I mean, I feel sympathy for folks who watched Bitcoin's early days and did some basic linear interpolation. 42:59.959 --> 43:02.480 [SPEAKER_00]: And so that was going to keep growing in 10,000% per year forever. 43:03.400 --> 43:04.200 [SPEAKER_00]: Things can't grow. 43:04.821 --> 43:05.241 [SPEAKER_00]: That's bad. 43:05.921 --> 43:09.524 [SPEAKER_00]: They can't help out, but larger than the global economy, pretty, pretty soon. 43:11.085 --> 43:26.795 [SPEAKER_00]: So it's not linear and turbo-live, it's a sign curve, but the sign curve that increases over time, we've got more adoption coming, what I tell people who say what's the catalyst, my new thing is that I'm lucky enough to work at Coinbase, so I get to see what I call micro-catalysts on an almost a weekly basis. 43:27.736 --> 43:33.301 [SPEAKER_00]: new clients, new sovereigns, new nation states, new products we're offering, the prime offering. 43:33.702 --> 43:36.144 [SPEAKER_00]: We now have a, so we never really had that in this industry. 43:36.204 --> 43:43.451 [SPEAKER_00]: We now have a prime broker offering that is equivalent to the prime broker offering that is this for equities and credit. 43:44.251 --> 43:53.640 [SPEAKER_00]: That allows for thousands and thousands of new institutional clients to engage with this asset class in the way that they know, they know how. 43:55.268 --> 44:09.717 [SPEAKER_01]: It's a good point, and kind of realigning us with what institutions are thinking and what the institutional side is doing here, like, how is the institutional allocation shifting just beyond Bitcoin and Ethereum? 44:09.737 --> 44:11.238 [SPEAKER_01]: Because I think that's the popular thing. 44:11.718 --> 44:12.879 [SPEAKER_01]: Everyone always brings it up. 44:13.379 --> 44:19.403 [SPEAKER_01]: People probably see a million clips about it, but beyond the big two, beyond Bitcoin and Ethereum, you know, 44:19.963 --> 44:24.964 [SPEAKER_01]: Is there, and if so, how is that institutional allocation kind of shifting beyond? 44:25.965 --> 44:31.926 [SPEAKER_00]: So, that's a great question because it's the boring stuff that builds a great business, right? 44:31.946 --> 44:38.468 [SPEAKER_00]: So we have, you know, over billion dollars out on the lending side, we're looking to grow that substantially. 44:39.428 --> 44:42.549 [SPEAKER_00]: This is very, very high-quality credit at great rates. 44:42.629 --> 44:46.370 [SPEAKER_00]: So there's a massive institutional credit component that's growing very fast. 44:47.310 --> 44:53.055 [SPEAKER_00]: As I mentioned, our perps market for commodities and pre-IPO equities is growing very, very fast. 44:53.455 --> 45:06.405 [SPEAKER_00]: That's a very, very exciting place for funds to play because if your job is to find alpha, and if you're limited, how many stocks are on the New York Stock Exchange? 45:06.445 --> 45:15.332 [SPEAKER_00]: Because less than 3,000, if you open up a new array of potential liquid to semi-liquid security type instruments, 45:16.272 --> 45:21.574 [SPEAKER_00]: You're creating new sources of alpha for these funds that have been starved for alpha for a very long time. 45:21.794 --> 45:25.196 [SPEAKER_00]: The reality is 75% of more funds don't be the S&P 500. 45:26.396 --> 45:28.037 [SPEAKER_00]: That's down a lot from previous years. 45:28.257 --> 45:41.422 [SPEAKER_00]: So we're offering these institutions through lending products through alternative equity type exposure, alternative commodity type exposure, we're offering them new ways to gain alpha. 45:41.802 --> 45:48.909 [SPEAKER_00]: and we're getting them to do it all or mostly on Shane, and eventually all on Shane, which just makes everyone's life a hell of a lot easier. 45:49.890 --> 45:58.599 [SPEAKER_00]: So institutions, they're hungry for new types of exposure, and they really haven't gotten that over the last 20 years. 45:59.099 --> 46:02.983 [SPEAKER_00]: So this is a learning curve for them, but this is what we're offering. 46:04.182 --> 46:04.542 [SPEAKER_02]: I love it. 46:05.523 --> 46:21.320 [SPEAKER_02]: Look, John, I mean, we greatly appreciate the time that we've spent with you and to kind of round out the discussion, I want to ask the question that's probably burning in all the listeners' hearts and wallets is what's it going to take to kick this bear market 46:22.020 --> 46:47.080 [SPEAKER_02]: uh... in the groin uh... in and finally slap the ball uh... on the butt and get it moving in the right direction is it going to be a slow sort of you know we got us have a slow bottling process is there something in the technicals that you guys are looking for again you're just your personal opinion uh... is it that landmark regulation is it a big name starting to buy crypto how do you kind of think about this 46:48.148 --> 46:55.151 [SPEAKER_00]: I'm sorry to be boring here but again I had the luxury of learning from some of the best in the world and one of the best equity tech investors of all time. 46:55.171 --> 46:57.132 [SPEAKER_00]: I don't already said his name. 46:57.152 --> 46:58.453 [SPEAKER_00]: I'm saying again he's very private. 46:59.553 --> 47:04.896 [SPEAKER_00]: You know his first rule is that he runs a $40 billion tech fund without standing track record. 47:04.916 --> 47:10.418 [SPEAKER_00]: I worked for him for several years and his first at three rules and one of them was don't try to market time. 47:11.119 --> 47:13.560 [SPEAKER_00]: So the only thing that's going to get out of this bear market is time. 47:14.540 --> 47:29.025 [SPEAKER_00]: And if you're committed, you know, figure out what you will indicate, slice it up and dollar cost average in, because you will be happier a year or two years, five years from now, as everyone has been when they bought into high quality assets during bear market periods. 47:29.605 --> 47:31.985 [SPEAKER_00]: Now, I want to give you a more honest answer. 47:33.006 --> 47:38.848 [SPEAKER_00]: Even though, you know, I was a little bit sanguine about it before, I do think clarity passing is important. 47:40.548 --> 47:55.813 [SPEAKER_00]: I do think that it, I don't think by itself, I don't think people who have the interest in willingness to buy crypto now are waiting until post-clarity to buy, but it does accelerate the onboarding of a lot of large institutions and increased capacity. 47:56.214 --> 48:02.256 [SPEAKER_00]: So I think that clarity, again, maybe not immediately following clarity, but it does make the industry healthier over time. 48:03.196 --> 48:05.037 [SPEAKER_00]: Um, and then that's about it. 48:05.177 --> 48:18.283 [SPEAKER_00]: I think you just have to have to just be, um, if to believe in the asset class and, um, you know, we, you can see from our reports and from what we put out, you know, we are, we are very, very excited about the state of the industry. 48:18.983 --> 48:21.524 [SPEAKER_00]: And, um, you know, time that's the only answer. 48:22.525 --> 48:22.805 [SPEAKER_02]: Awesome. 48:23.325 --> 48:24.686 [SPEAKER_02]: Well, I'm not going to let you go. 48:24.707 --> 48:32.474 [SPEAKER_02]: It's something you just said about clarity made me kind of spark my imagination there, which is like kind of again this will be the last question. 48:33.215 --> 48:41.743 [SPEAKER_02]: But the clarity act like why does a bank or why do some of these large fiduciaries, you know, why are they waiting for the clarity act? 48:42.243 --> 48:47.989 [SPEAKER_02]: Why do they need that designation of like this is for sure a security, this is for sure a commodity. 48:48.390 --> 48:55.577 [SPEAKER_02]: And once we have those, you know, regulators, who are responsible to report to, then we could jump in. 48:56.318 --> 48:57.879 [SPEAKER_02]: Why is that so necessary? 48:58.080 --> 48:58.600 [SPEAKER_00]: Sorry. 48:59.101 --> 49:00.662 [SPEAKER_00]: We have to be honest with ourselves about our industry. 49:00.682 --> 49:01.744 [SPEAKER_00]: Our industry is still small. 49:02.703 --> 49:03.104 [SPEAKER_00]: Right. 49:03.124 --> 49:06.427 [SPEAKER_00]: Crypto overall, crypto as an investible asset class. 49:06.448 --> 49:07.729 [SPEAKER_00]: But blockchain is eating the world. 49:07.749 --> 49:08.490 [SPEAKER_00]: There's no question. 49:08.550 --> 49:11.713 [SPEAKER_00]: Solving massive problems integrated into ledgers all around. 49:12.094 --> 49:14.176 [SPEAKER_00]: But crypto as an investible asset class is still small. 49:14.196 --> 49:17.079 [SPEAKER_00]: So represents two and a half to four percent. 49:17.900 --> 49:20.143 [SPEAKER_00]: of global equities, real estate, fixed income. 49:20.624 --> 49:24.990 [SPEAKER_00]: So if you're a massive organization, you get it philosophically. 49:25.030 --> 49:29.896 [SPEAKER_00]: You've got younger employees, chomping at the bit to invest in these assets. 49:29.916 --> 49:33.221 [SPEAKER_00]: You've got some subsection of your customer base. 49:33.241 --> 49:35.083 [SPEAKER_00]: That's calling and saying, hey, we'd love for you to do it. 49:36.244 --> 49:41.768 [SPEAKER_00]: But to, so crypto has punched above its weight to some degree in a very real way. 49:41.808 --> 49:44.430 [SPEAKER_00]: I mean, it's extremely given the size of the asset class overall. 49:44.730 --> 49:50.334 [SPEAKER_00]: The fact that we have black rock and fidelity in Schwab and all these folks in it is, is, in fact, an Amazon accepting crypto payments. 49:50.774 --> 49:53.436 [SPEAKER_00]: This is an extraordinary testament to the value of technology. 49:53.896 --> 49:57.280 [SPEAKER_00]: But these institutions have to make ROI positive decisions. 49:57.320 --> 50:00.744 [SPEAKER_00]: So they're looking at the size of the asset relative to the rest of their business. 50:00.784 --> 50:03.146 [SPEAKER_00]: They're saying, OK, we get it philosophically. 50:03.227 --> 50:07.411 [SPEAKER_00]: We like the young partner that is excited about it, and we're going to let him or her run with it. 50:07.832 --> 50:09.774 [SPEAKER_00]: But to make that capital investment, 50:11.617 --> 50:19.063 [SPEAKER_00]: in a fiduciary way, especially for a public company, they have to be able to tick all the boxes off of the major things that could go wrong. 50:19.423 --> 50:22.385 [SPEAKER_00]: One of the biggest things for these institutions is regulatory clarity. 50:23.206 --> 50:24.907 [SPEAKER_00]: So it's a new asset class. 50:24.927 --> 50:27.048 [SPEAKER_00]: They're looking for some type of guide to it. 50:27.328 --> 50:30.691 [SPEAKER_00]: We've got some of that ingenious, which is why the stablecoin uses is exploded. 50:31.151 --> 50:35.574 [SPEAKER_00]: And you don't hear institutions arguing about whether nothing can get into stablecoins, because they have genius. 50:36.035 --> 50:37.376 [SPEAKER_00]: So clarity provides that 50:38.036 --> 50:45.704 [SPEAKER_00]: security net needed to justify the decision to invest in a small-book growing industry. 50:46.826 --> 50:47.707 [SPEAKER_00]: It's not unreadable. 50:48.227 --> 50:48.988 [SPEAKER_00]: It really isn't. 50:49.569 --> 50:50.590 [SPEAKER_02]: Yeah. 50:51.130 --> 50:51.471 [SPEAKER_02]: Yeah. 50:51.491 --> 50:58.699 [SPEAKER_02]: They're playing not to lose at the end of the day and one of the ways that they could lose is by tripping a foul of securities law or something I guess. 51:01.604 --> 51:06.007 [SPEAKER_00]: Again, I'm sympathetic, I'm not in that position, but I'm sympathetic to that position. 51:06.408 --> 51:15.835 [SPEAKER_00]: So I think market structure, also the fact that we're considering passing market structure for this asset class is also testament to how important this asset class is. 51:15.935 --> 51:18.337 [SPEAKER_00]: We don't pass market structure very often in this country. 51:18.897 --> 51:24.522 [SPEAKER_00]: Generally we pass it to fix a massive problem when there's been some massive financial crisis. 51:25.062 --> 51:28.305 [SPEAKER_00]: And so the fact that we're looking to create proactive market infrastructure, 51:29.725 --> 51:36.587 [SPEAKER_00]: regulatory infrastructure for an asset class that again represents less than five percent of equities is extraordinary. 51:37.147 --> 51:38.207 [SPEAKER_00]: And we should be proud of that. 51:39.287 --> 51:40.367 [SPEAKER_02]: Yeah, absolutely. 51:41.367 --> 51:46.168 [SPEAKER_02]: Mr. John Dagestino, thank you so much for coming on head of Coinbase's institutional strategy. 51:46.208 --> 51:53.690 [SPEAKER_02]: Where could people follow along on your personal journey as well as of course Coinbase's journey? 51:54.510 --> 52:17.985 [SPEAKER_00]: Well, we have, or, or, or, or, or, or, or, or, or, or, or, or, or, or, or, or, or, or, or, or, or, or, or, or, or, or, or, or, or, or, or, or, or, or, or, or, or, or, or, or, or, or, or, or, or, or, or, or, or, or, or, or, or, or, or, or, or, or, or, or, or, or, or, or, or, or, or, or, or, or, or, or, or, or, or, or, or, or, or, or, or, or, or, or, or, or, or, or, or, or, or, or, or, or, or, or, or, or, or, or, or, or, or, or, or, or, or, or, or, 52:20.032 --> 52:20.312 [SPEAKER_02]: Awesome. 52:20.492 --> 52:32.478 [SPEAKER_02]: Thank you so much for your time and everybody who is watching or listening today We really appreciate your support and your interest come back same time same place next week We'll have some more great guests for you. 52:33.039 --> 52:33.499 [SPEAKER_02]: Thank you John. 52:33.659 --> 52:34.179 [SPEAKER_02]: We'll talk to you soon. 52:34.199 --> 52:34.560 [SPEAKER_00]: Bye everyone. 52:34.820 --> 52:35.120 [SPEAKER_00]: Thank you