Starting a business can be overwhelming. You're juggling multiple roles, designer, marketer, logistics manager, all while bringing your vision to life. Shopify helps millions of business sell online. Build fast with templates and AI descriptions and photos, inventory and shipping. Sign up for your one euro per month trial and start selling today at shopify.nl. That's shopify.nl. It's time to see what you can accomplish with Shopify by your side. Hey, everyone. I'm Tony Edward. And I'm Amanda Whitcroft. And we're recording at the Solana Policy Institute Summit. And joining us is James Seyfert, who is a senior research analyst at Bloomberg Intelligence. James, good to have you. Thanks for having me. This venue is unbelievable. Yeah, for sure. Would you prefer Jersey or Brooklyn? I mean, getting here wasn't great. But once you get here and you see the views and this just it's a nice event space, to say the least. For sure. So, of course, we got to talk Morgan Stanley's Bitcoin ETF just launched last week. Tell us about what you saw so far as far as volume, inflows and things like that. Yeah, I mean, the numbers aren't anything like they're not like, oh, my God, blow your face off type numbers. But they're like top desk top percentile almost as far as the first day of trading flows were pretty strong. They've taken in money every day. They've traded three days so far, Wednesday, Thursday, Friday. Today's the fourth. Trading is strong. They've taken in money. It's about 50-ish million dollars to come in, 30 and then 10 and a little bit more than that. So, I mean, the numbers, the specific numbers don't matter because I think this is going to be a bit more of a slow burn type of thing. Morgan Stanley is kind of putting their stake in the ground, planting their flag, saying that they're here for crypto. And to come out with a 14 basis point launch is thoroughly impressive. And they've also filed for Solana and Ethereum. So we're at a Solana Policy Institute event. And yeah, they're going to launch those two. And I would expect them to also be very competitively priced. And their fees, if I'm not mistaken, that's the cheapest, right? Yeah. So Grayscale's BTC, their mini Bitcoin trust is 15 bps. This undercuts that by one. The other caveat I would say is VanEck's Holdel ETF has a fee waiver through the end of 2026. So right now it's a zero fee. But once that ends, this will be the cheapest on the market. It is the cheapest on the market. I have to assume they're doing this mostly at cost. Like, they're not making much money at these asset levels. They would need billions of dollars to potentially be profitable, maybe. I don't know for sure, but this is not something that they're doing and expecting to make tons of money on because there's a lot of costs. You need the custodians. You need like Coinbase and BitGo and BNY Mellon, whatever your custodian is for crypto. It's not cheap like it is to store equities. And I know they're a bit late to the game, James, but they have a huge network of advisors and many folks. Do you think over time, maybe over the next two years, they could be in the top three as far as AUM? I think top three is possible over the next coming years. Top five, I would say, is probably even like in the coming years. just because we have a product that's cheap. You combine it with the brand name Morgan Stanley, like you mentioned, 16 plus thousand advisors, seven plus trillion in AUM. I'm sure a lot of their clients already hold Bitcoin or other crypto assets off exchange. And these advisors will want that to come on platform, which is why I suspect they launched Bitcoin, Ethereum and Solana. So they can bring that money on platform and charge their fees on that. That's great. Also, I think it's just like a marketing and branding exercise to younger people like, look, we get this thing. We're believers in this. Whereas you have the likes of JP Morgan with Jamie Dimon, which until this weekend has been pretty negative on this whole space. This is kind of a thing where like, even if you don't necessarily garner, you know, hundreds of millions of new flows into this ETF, it's just something that looks good if you're trying to acquire new clients, I think. Do you expect Bitcoin and altcoin ETFs to increase as we head later into the year? Yeah. I mean, a lot of this has to do with, I would say two things. One, from October 10th through, we'll call it the end of February, Bitcoin and Ethereum ETFs got hit pretty damn hard. They saw decent outflows. When you take into account they saw 60 or 50% pullback, the outflows weren't that bad. If you told me an asset was going to crawl 50%, and Bitcoin, I think the peak we saw was 13% of those inflows reversed. Ethereum was closer to 20, 25%. Solana and XRP, on the other hand, which launched in that fourth quarter during this downturn, they really haven't seen much in outflows. They took in a bunch of money and they've just kind of sat there at this point. They're still taking a little bit of money. But later in the year, a lot of this flows into ETFs tend to correlate to what's going on at the price. So the price is going up. A lot more money comes in. There's momentum building. And it's kind of this flywheel that happens. But we're seeing, one, people aren't selling as much as we might have thought in the downturn. Actually, I will say this. We always thought the Bitcoin holder, the ETF holders were going to be diamond hands, just because that's the way they operate. People who are going out and buying ETFs know what they're getting themselves into. And also these things, whether it's Bitcoin, Ethereum, Solana, XRP, you name it, whatever crypto asset you can think of, these people aren't making it 50% of their portfolio. It's like one, three, five percent of their portfolio So if it drops 50 it hurts but it not like going to kill them that they going to have to force sell some of this stuff So I think all of that determines how much money is coming in this space But I would say assuming we come out of the crypto winter in the next few months or later this year I would expect more money to continue coming into this space. What do you expect? Morgan Stanley, do you think they're kind of setting the bar for other institutions of how they're going to be handling ETFs? Yeah, I mean, them coming in at four. First of all, I wouldn't I didn't expect them to launch a product. Um, I would, they only approve these products to be bought by their advisors in the fourth quarter. I think it was like October or November of 2025. And now we get to March, April of 2025, 2026, and they're launching products. Um, so I wasn't expecting that. I would say them also coming in with such a low fee shows they're not messing around. Like they probably could have come in. IBIT is the largest, most liquid ETF on the market for Bitcoin. Nothing else is even close. The liquidity on the options market. But if they really wanted to and they were just going to try to like, you know, siphon assets for their advisors from those other accounts or bring people's Bitcoin from exchanges or wallets under their purview, you could have just done it at 25 bps. But they were like, no, we're coming in and we're undercutting every single person in this market and we're going to be competitive. And you have to applaud them for doing that. So I think the fact that they've undercut everyone, the fact that they're so large, they have trillions in assets. Like I said, I'm sure there's billions of dollars in their client money that are on exchanges, in other wallets. I think this could be a top three, top five ETF in the coming years. I think it will attract billions of dollars this year, potentially, assuming Bitcoin doesn't stay sideways or go down from here. I think the price will determine a lot of what happens here. Now, another Wall Street firm that is kind of late to the game, but they haven't fully capitulated is Vanguard. They've backtracked on some of the statements as far as offering or allowing their clients to invest in it. do you think they might launch something? I would not expect them to launch product. I think, so they don't even have a gold ETF. They don't believe in gold. They don't believe in things that don't have cash flow. So maybe you can make an argument that something like Ethereum and Solana, which has, you know, staking income and revenue and stuff along those lines that you can theoretically model might be something they would potentially consider in the future. But honestly, I wouldn't bet on them ever launching a product. Starting a business can be overwhelming. You're juggling multiple roles, designer, marketer, logistics manager, all while bringing your vision to life. Shopify helps millions of business sell online. Build fast with templates and AI descriptions and photos, inventory and shipping. Sign up for your one euro per month trial and start selling today at shopify.nl. That's shopify.nl. It's time to see what you can accomplish with Shopify by your side. From the get-go when they ban these things from launching, me, my boss, Eric, about you and there's plenty of other people that I agree with in this space basically said it was a mistake. It was a PR mistake. There was no reason to do it. Their clients are self-directed. Why restrict them from doing it? There's plenty of platforms, including Morgan Stanley and UBS, that have super high restrictions and walls to get in to get these ETFs so you can buy them. Them not allowing these products initially for years even makes sense. That's just the way things typically work. For Vanguard to do it, it was a bad look. I don't think they're going to launch a product, at least not anytime remotely soon. But I also didn't really think Morgan Stanley was going to launch a Bitcoin product. Do you have anyone who you think will be launching a crypto ETF in the future or any ideas? I'm surprised State Street hasn't really done too much yet. So I wouldn't be surprised if they come in and launch some products. But again, we're at like 12 plus spot Bitcoin ETFs, tens of covered call Bitcoin and other buffer defined outcome Bitcoin ETS where you like have capped upside and capped downside. So there's so many products out there for getting exposure to Bitcoin and crypto in general that like, that was the other thing. Like when Morgan Stanley filed, I was like, there's nothing differentiating them from iBit or BitB from Bitwise or Holdel from Venek or any of these ArcB from Arc and 21 shares. Like so many of these other products out there, Grayscale, there's no differentiating factor. So I was surprised that they were launching. And then when they launched 14 Bits, it's like, this is why they're doing it and all the other things I talked about. But I think the big things coming down the pike are going to be more to do with the index side of things, basket products, not just single asset spot products. Because there's not, you're basically, when you get to this, you're just holding a single asset, you're differentiating on your brand and your fees and maybe like marketing and like being a crypto first person or being believing in crypto or somebody you can talk to crypto native. That's also branding. I don't know what else you would do, But I think active management, basket, passive index products, I think that's where things are going to go. Yeah, that makes sense. And do you see over time those index basket products may outweigh, as far as AUM, the single individual ETFs? I think they could be in the next three to five years the second biggest category after Bitcoin. So Bitcoin is far and away the largest right now. Then Ethereum, these basket products, we've had a few launched in the most recent months. We had a couple convert from Bitwise and Grayscale. That's the category I'm most bullish on getting the most flows. Just because a lot of this money is from advisors and institutions. And, like, advisors are used to buying the S&P 500. They used to buying the aggregate bond index They want diversified broad beta exposure You talk to a lot of advisors and people advising advisors if you will They kind of talked about it like the dot bubble in a way Some of these things are going to do really well You and I know there probably some of these protocols that you talk about all the time. They're going to be nowhere to be seen five, 10 years from now. If you've been here long enough, some of the protocols I was looking at, no one even talks about. They're virtually ghost chains, right? Right. And so people, these advisors, if you're putting in a 5% allocation, your portfolio, you might know, OK, I want Bitcoin and then I want broader exposure to the broader ecosystem. And I don't know which tokens I'm going to pick. So I'll either let an index pick for me or let an active manager pick for me and get that exposure. Because one, even if I do have the bandwidth, the ability to theoretically do the research and come up with my own conclusion, do I want to spend months like researching this and figuring out for what something is going to be three to 5% of my client portfolio? Probably not. I'd rather outsource it. I have a lot more better uses of my time if I'm an advisor. So a diversified portfolio from an advisor standpoint seems to be more just monetarial beneficial than just a single ETF. Is that what they're advised? Somebody investing, is that what they're advised to do? Yeah. I mean, it depends on your advisor, right? For the most part, advisors are just trying to get, you want exposure to the underlying asset. You want exposure to the growth of the U.S. equity market and U.S. capitalism. That's what you're going to do when you're buying a broad-based equity basket ETF. And theoretically, if you're going to buy a broad-based crypto basket ETF, you're going to be betting on the growth of crypto systems, theoretically, tokenization, stablecoin. And I don't know what platforms are going to be the winners there. I'm sure you have guests on your show that will know, but I don't. And I don't think these advisors are going to know either. So they're just going to basically say, if they believe in tokenization, They believe in the usage of stable coins. They believe in on-chain, whatever. They're just going to outsource it. They're going to get beta. They want beta to this. If this thing takes off, they want to have some exposure, but they don't know enough to pick the direct protocols they think are going to be the most successful. So James, the big question on many people's minds, when is BlackRock going to file for a Solana and XRP ETF? And why did Robby Michene come out and say, no, only Bitcoin ETH? Yeah, I mean, there's no inkling that they're filing anything else at this point. Honestly, I'm kind of surprised because they own the space. They are the most liquid products on Bitcoin. They are the most liquid product in Ethereum. They just launched a second Ethereum ETF that will actually do staking. Their first one won't. I don't know. I think they're going to launch a basket product at some point. I think they're going to use an index. I don't know who they'll use as their index source. I'm kind of surprised. It's like even it wouldn't be it's kind of within BlackRock's purview to launch a bunch of products and then launch an ETF that holds those other products. So theoretically, I could have seen them launching some of the names you mentioned and then launching a product that holds those underlying ETFs directly to get a broad based exposure in one click. But yeah, for whatever reason, they're not believers in Solana and XRP, at least not yet. I'm more surprised that they haven't launched a Solana product than XRP. XRP is a little more controversial as far as I'm concerned, even though it is larger by market cap. but yeah, I don't know. Nate Geraci, you know who Nate is. He's a big ETF podcaster. Now he has a crypto podcast as well. We've debated this. I was like, I don't think they're going to launch it. I see no indication they're going to launch it. They believe in Bitcoin and Ethereum as the leaders in this space and they're putting all their weight behind it. They're doing all their tokenization efforts, like the actual tokenization efforts that BlackRock is doing are happening on Ethereum. So they're putting their money where their mouth is. At some point, could they change their mind? Maybe. But I think the next product they might launch in the crypto space is going to be either an actively managed crypto basket ETF or passive index based product. Could they eventually be the owners of something? Are they you think they're bringing something almost in-house a product wise or something? Because they're so big and the leaders in this industry where they'll come out with an infrastructure piece of this. I don't know what that would look like, but could that be possible? Yeah, I mean, they have so many irons in the fire. They could do so much with whatever they wanted to do. They're spraying money everywhere. They've kind of gotten into securitized. They have money invested in a bunch of other protocols. But again, most of it tends to be around the Ethereum ecosystem. Starting a business can be overwhelming. You're juggling multiple roles, designer, marketer, logistics manager, all while bringing your vision to life. Shopify helps millions of business sell online. Build fast with templates and AI descriptions and photos, inventory and shipping. Sign up for your one euro per month trial and start selling today at Shopify.nl. That's Shopify.nl. It's time to see what you can accomplish with Shopify by your side. And Bitcoin, they have their fingers on a lot of tokenization efforts and stable coins. They have, they're doing it themselves. But yeah, I don't know that if you listen to Robbie Michnick, every interview he's given that somebody asked this question, the answer remains the same answer as it has been for well over a year. We're just doing Bitcoin and Ethereum and that's what they're comfortable with. I don't know if that's Robbie's opinion or if that's just the stated opinion of BlackRock, the entity going forward. And that's what he can say publicly. But you have to just take his word for it. Now, BlackRock's doing a lot with tokenization. They have their biddle fund They invested in Securitize Do you see them tokenizing ETFs or is that a bit further down the line Yeah they definitely going to be tokenizing ETFs They going to be tokenizing everything Larry Fink is very bullish on tokenization, if you listened to all the words he said. He was also extremely bullish on ESG and ESG narratives and stuff, and he's very much walked that back. So we've got to be careful about what we're saying here. But yeah, tokenization of ETFs is happening now already. it just makes sense i have some questions about how the underlying plumbing is going to work i think long term you're going to see all the stocks are going to be tokenized there's some questions to be had about like making markets in those products and different things along those lines like trading in the old way trad fi trading on defy crypto rails tokenizing underlying assets but eventually you get to a point where like an etf is just a smart contract and it's hoping that holding the tokens of the underlying equities that are in that smart contractor that index is tracking. But that's probably a decade away. But I think if all goes on the path that we're currently heading on or barreling towards, I think that's where things go. And BlackRock is a believer in doing this. And we have other ETF issuers doing this. Even FM Investments is a fixed income ETF company. And they've already filed to tokenize their treasury bill ETFs. So yeah, I mean, it's happening. It's going to happen. theoretically or maybe not a theoretical idea if you're tokenizing the etf and opening it up to the rest of the world would that allow more inflows on different parts of the world or there are certain securities laws and things you have this is the big question i kind of have how this is going to be handled because there's a reason that you can't just buy u.s securities anywhere because if the security laws you're talking about there's the there's you have to go through these hoops in order to get exposure um there's rules and regulations against just anyone owning these things. So I don't know. But there's some platforms that are more permissioned. Even BlackRock with their Biddle Fund doesn't allow just anyone to invest in it. You need to meet certain criteria. So I mean, there are ways that these smart contracts, these tokenization platforms can control who owns them. So I think there's going to be both. People are just going to tokenize things and put it on the platform in a DeFi crypto native way. And then you're going to have the companies themselves do it more in line with securities laws. And it remains to be seen exactly how this is going to play out. But that is one of the big questions on tokenization is like, how are they going to handle these laws and regulations? Like I said, there's a reason that not everyone can just go out and buy Apple stock if you're living in Malaysia, for example. Maybe that you can, I don't know. But there's other countries around there where you can't just do this. You can't do it. Well, James, thank you so much for joining us. This is really great. Thanks for having me. This was fun. Good stuff. precious metals like gold and silver via an IRA. And this gives you huge tax advantages. So you can invest in over 90 crypto assets, including Bitcoin, Ethereum, XRP, Solana, and many more. You also get access to stable coins such as Circles USDC and Ripple's RLUSD. And as it relates to precious metals, you can invest in gold and silver. And these are the physical assets. So you're not investing in paper gold and silver. So on this platform, you can redeem the gold and silver if you choose to, and not many platforms offer that. Now, the big advantage to investing via iTrust Capital's IRA is the huge tax advantages. Many of you know you incur capital gains taxes when you sell at a gain. Well, you can minimize the effect of some of that by doing it via an IRA, especially if you have a long-term view on crypto as well as precious metals. And you can buy and sell crypto and precious metals 24-7. It's low cost and no monthly fee. So this is a great option to get exposure to these two great asset classes. And in addition, they have a great custody solution. It's called Premium Custody Account. So it uses institutional-grade crypto custody, such as Coinbase Prime, which BlackRock leverages. iTrust also uses Fidelity Digital Assets, as well as Fireblocks, and it's a closed-loop system. So if someone hacks into your account, they can't withdraw funds. I believe this is the second safest way to custody your assets right behind self-custody, where you control the private keys. And within the custody account, You could buy and sell 24-7. It's low fees. So this is a great option for custody of your assets. And you can sleep at night knowing that you're getting the institutional grade custodial services. So once again, two great products here from iTrust Capital, the IRA, where you can roll over your existing 401k or IRA to iTrust Capital's version, getting the huge tax advantages and the institutional custody. And folks, if you sign up with my link at itrustcapital.com slash go slash thinking crypto, you can get a $100 funding bonus. I have an account with itrustcapital. So I encourage you to go check out itrustcapital, learn about their services and see if it's right for you. Again, you can get a $100 funding bonus by signing up via my link, which is itrustcapital.com slash go slash thinking crypto. Link will be in the description. Thank you so much for tuning in. Please hit the like button. Subscribe if you haven't as yet. If you're listening on a podcast platform such as Spotify or Apple, please follow and leave a five-star rating. Thank you so much.
