Launching the First XRP, HBAR, & Litecoin Spot ETFs! with Steven McClurg

Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Bitcoin is clearly the winner when it comes to money.
But what's unique about light cooin is it was really
built to be a partnership to bitcoin bitcoin for larger
transactions like poorn for smaller transactions. As more and more
people own wallet's own bitcoin, it'll have a massive effect.

Speaker 2 (00:16):
I think for the first time, you have companies around
certain blockchain projects like a Ripple that could do an IPO,
but there's also that token that's connected to the ecosystem.

Speaker 1 (00:24):
Could we potentially.

Speaker 2 (00:25):
See ETFs around these companies that have both the token
and they're publicly listed.

Speaker 1 (00:30):
Oh. Absolutely.

Speaker 2 (00:37):
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So if you'd like to learn more about v chain,
go to vchain dot org. Link will be in the description. Hey, folks,
welcome into the Thinking Crypto podcast. I'm your host Tony Edward,
and joining me today Stephen mccluric, who is the CEO
of Canary Capital. Stephen, great to have you.

Speaker 1 (01:44):
Hey, Thanks for having me Tony, Stephen.

Speaker 2 (01:46):
I'm really excited to speak with you. We were talking
before the recording. I've wanted to interview you for a
long time because Canary is doing some great things as
it relates to crypto, ETFs and ETPs. And before we
get into all those details, tell us a bit about
yourself and where you're from and your professional background.

Speaker 1 (02:02):
Yeah. Absolutely, so. We're headquartered here in Nashville, Tennessee. I
actually spent a lot of my earlier career in the
LA area. Most of my careers at Gugenheim Partners, so
I was a bond trader. I was a portfolio manager
for large institutional portfolios. We acquired two ETF companies during

(02:27):
my tenure there, which is how I got into ETFs.
I moved over to be the portfolio manager for those
product suites and then launched some of our own flavors,
which Guggenheim was really known for fixed income, and I
launched all the first Guggenheim fixed income ETFs mutual funds,

(02:48):
some active, some passive, but a lot of it was
a lot of fun. So anyway were they were very
esoteric strategies. And then fast forward to when I got
into crypto full time was twenty sixteen, and I, you know,
did a lot in the asset management space as well
as security structuring and even on the development side of things.

(03:15):
But when it looked like ETFs were potentially moving forward,
we decided to get into that as well. My first
foray into that was with Valkyrie, where I was a
founder and we launched several bitcoin related ETFs through that firm,
which was eventually bought by coin Shares. When I launched Canary,

(03:36):
same thing I was actually looking at just running a hedgehound,
which is what I've done for most of my career.
And we saw an opportunity for all coin ETFs about
a year ago or a little over a year ago,
so we started, you know, moving forward there. We started
off with filings for ETFs that were related to light coin, Adera, Solana,

(04:00):
next RP, you know those. There's those first four for
various reasons, but here we are today. Two of them
are launched and two of them have yet to launch,
but hopefully they will.

Speaker 2 (04:10):
Say, oh absolutely so Stephen, you know, with your expertise
from the fun world and et ups and much more,
how are you looking at this asset class? And maybe
that vision has evolved over time. Is this like the
next macro trade or in addition to that the tech
rails that the economy and markets will run on.

Speaker 1 (04:30):
Yeah, I mean I actually see this as a very
easy macro trade. First of all, just given that a
lot of these tokens have a very direct relationship to
m to monetary supply, so you know, for instance, that
usually helps all risk assets go up in dollar terms

(04:52):
or in other currency terms. Crypto falls into the same boat,
but it's a little bit more clean. But the reason
why I got into to begin with is really really
a lot of it's global monetary rails, and that's what's
really important. So when people talk about, you know, what
drives price, it's really a function of two things. Bitcoin
is the easiest to explain because the function is, okay,

(05:16):
what is its relationship to the dollar, and if more
dollars are being printed versus a fixed apply a bitcoin,
then obviously bitcoin goes up in price. The other major
factor that's been a greater factor in the early years
and less of a factor now but still a strong factor.

Speaker 2 (05:32):
Is.

Speaker 1 (05:35):
Access to the ecosystem. So as more and more people
are onboarded into having bitcoin wallets and to use them,
whether it's for savings or spending, then that, you know,
that network effect actually causes the price to grow because
more people are involved in that. It's no different than

(05:55):
looking at say the Swiss frame versus the US dollar.
More people global citizens that use the dollar contributes to
the value of the dollar, and then the Swiss franc
has a smaller set or Singapore dollar or whatever it is,
has a smaller set of users, so it's not going
to be quite as valuable. So as more and more

(06:17):
people own wallets own bitcoin are onboarded, it'll have a
massive effect. And over time that effect goes down because
law of large numbers kicks in and a smaller percentage
of people continue to be onboard.

Speaker 2 (06:33):
So on that note, if you double click a bit
on network effects like metcaps law and reads law and
so forth, when you're analyzing a token for a specific blockchain,
are you looking at, like you said, on chain activity,
number of wallets, number of users, maybe daily active users,
monthly after active users, things along those lines.

Speaker 1 (06:53):
Yeah, so we're not only looking at that, but we're
also looking at what the potential is, right. So that
was one of the things that drew me to bitcoin,
was the potential of more and more users coming in
opening wallets, transacting or just simply holding.

Speaker 2 (07:08):
Uh.

Speaker 1 (07:08):
And if you look at all the other various tokens,
there obviously is a you know, number of wallets and
number of individual unique users that are that are actually
either holding it or are developing it. A lot of
developers will hold the tokens that they're you know, they're
developing blockchain, uh, you know, for future gas fees. So
you have that, but then you all start to think

(07:29):
about the potential, right, you know, and I hate to
say this because you know, you know, Eth was you know,
really early in in kind of like you know, and
adapts sort as the protocol goes, but the potential has
run out and the potential has now moved to you know,
other chains and other areas depending on what people are
interested in. And this is why we like things like

(07:51):
you know, h BAR, x RP Suite is another good
one that we like a lot. Even even Salona, Salana
still has a lot of potential, there's a lot of
people on it, there's still potential of more users, more adapts,
but something like Suite that's I would say direct petitors.
Salona probably has a higher potential because as it is,
is a fully realized yet whereas like some h bar,

(08:14):
you've got not only enterprise people that understand enterprise value
and enterprise users using it, but also the potential for
enterprise or XRP financial rails.

Speaker 2 (08:23):
That definitely makes sense. Now, since you mentioned some of
those tokens like h BAR, like cooin XRP, let's talk
a bit about those. You know, based on what you
just discussed, was that part of the analysis to launch
products around these given or were there additional things as well.

Speaker 1 (08:40):
Yeah, I mean what we try to do is find,
you know, in the initial four we were looking for,
you know, category winners. Right now, Bitcoin is clearly the
winner when it comes to money. But what's unique about
light coin is it was really built to be a
partnership to bitcoin bitcoin for larger transactions, like cooin for
smaller transactions. But also what makes like coin a little

(09:03):
bit unique is that they have implemented bimble Wimble, which
is a privacy feature that Bitcoin doesn't have. So you
do have the option of selecting privacy for some of
your wallets. Not isn't fully integrated across every wallet yet,
it's people have to choose to. But privacy has become
a really important factor. Even in the last year. One

(09:28):
of the things that's been a high correlation to people
just buying gold in other countries has been to buy
privacy tokens like minera, z cash and even like coin.
So we see a potential there on the privacy side,
and privacy is really really take it off in the
last month, so we see that as an important category

(09:49):
winner there. XRP the category winner for financial services in
my opinion, HBAR category winner for enterprise and then Solana,
in my opinion, is still the next category winner for
broad open source protocols.

Speaker 2 (10:05):
Absolutely, And I apologize that I remember this at the
top of my head because I remember reading it, but
it gave to me your ETF products their spot. Are
they launched under the thirty three rules or the forty rules?

Speaker 1 (10:20):
Yeah? So, and maybe I'll explain the difference between those two.
So forty ACT is a you know, a forty act
ETF essentially is an ETF that holds a good portion
of it in actual securities. So you and you have
to have securities in the vehicle in order for it

(10:40):
to even be under forty Act. Thirty three Act is
for non securities. So we filed all of these under
forty Act I mean sorry, under thirty three Act because
they're all pure SPOT and we don't believe any of
them to be securities. Now, there are some forty act
ETFs out there for crypto, but what they are is
not quite so clean. So, for instance, when I was

(11:03):
leading Valkyrie, we launched a bitcoin futures ETF because that's
what the sec was accepting before SPOT, and that was
under a forty Act wrapper. Because of the nature of
how you hold futures in a in a product, you're
essentially holding securities using that as collateral to buy the
to buy the futures. So some of the ones that
you might see out there today that our forty ACT

(11:25):
is a combination of things like futures, swaps, offshore vehicles
that might hold SPOT, or a fund of a fund
type type situation where it's holding ETPs from another country.
So you know the reason why we didn't go the
forty ACT route is because it is a bit more
expensive than going pure spot pure spot. You know, it's

(11:49):
you know, it cost us less and we can of
course you know, pass that on to you know, our
our customers, uh in terms of fees go. Whereas, if
you notice forty ACT funds that that are trying to
mimic Spot are a little bit more expensive and they're
also not a pure wonder one. Got it.

Speaker 2 (12:07):
Thanks for clarifying that. I know a lot of people
get confused, even myself at times.

Speaker 1 (12:12):
Now.

Speaker 2 (12:12):
There have been talks and I saw the folks a
Canary Capital posts on x that the XRP ETF may
be coming soon. I know it is probably not a
lot you can say, because it's still something that's not
launched yet, but tell us about when we could potentially
anticipate that and what that product would look like.

Speaker 1 (12:28):
Yeah. Look, you know, we we can't really name an
exact date yet, even though we internally know what the
date is. So, you know, we you know, we have
very high hopes that that this does launch very soon,
but it is, it is coming soon, and if you
kind of look online and do the math, you can
probably figure out what that date might be.

Speaker 2 (12:48):
Sure, dumb question, Steven. There has been the government shutdown,
so folks who are wondering, did you already get pre
approval of these from the SEC before the government shut
down or you don't need the exact approval given the
recent ETF listing standards update from the SEC.

Speaker 1 (13:05):
Yeah, so when you file a nineteen thirty three x ETF,
you typically file under two different scenarios. One is what's
called a delaying amendment, and you typically want to file
a delaying amendment anytime you have to sort out rule
changes with the exchanges. So this was the whole drama

(13:26):
around bitcoin. You had to file this nineteen before in
addition to the ETF, which means that you're applying for
a rule change with the exchange that you're using. In
our case it's NASDAC. And then once that rule change
is approved to be able to list that particular underlying token,
which in that case was bitcoin, then the SEC will

(13:48):
make effective your s one perspectus, right, And in the meantime,
they're giving you comments, making sure that you know they're
reviewing it. They're like, hey, can you add this disclosure?
Can you add this, can you fill in this blank?
Can you clarify this statement that you made? Those are
all part of the comment process. So initially all of
these ETFs are filed alongside a nineteen before for rule changes,

(14:13):
and then what happened was that the SEC created what
was called the Generic Listing Standards. That way, you don't
have to apply for a role change because the rule
already exists. So under the Generic Listing Standards, essentially any
spot cryptocurrency that has a futures associated with it trading

(14:36):
in the US for more than six months as follows
that rule. So in this case, all of these follow
that rule. And then you know, under normal circumstances, you
want to continue to go through the process having SEC
review and then and then they will make you effective. Well,

(14:57):
many of these products were opinion essentially ready to go,
that had gone through several rounds of comments with the
SEC uh Cork Finn staff, and the government shutdown actually
slowed everything down. Well, the SEC put out guidance saying that, well, look,
you know, even if even if we're shut down, it

(15:18):
doesn't mean the market should be. And they put out
guidance to simply remove the delaying amendment and make it
a what's called an ad A filing. So we did
that with light Coin and and h bar E tfs first,
because you know, those were the two that were further
so long we had filed them over a year ago

(15:38):
and received several rounds of comments wow. And then as
you may have noticed, some people did that with Solana.
You know, we we paused on Solana just because of
the staking, even though we felt like it was essentially ready.
And then when we saw others go, we followed. And
then with the x RP, we we felt like that
was always you know, uh, you know, that's been ready

(15:59):
to go for a while. Well, so so we went
ahead and changed that filing for that ETF so that
we're now relying on an aight A as opposed to
a a laying amendment and what that when what that
does essentially says that a you become effective twenty days
from when you refile a complete filing with the you know,

(16:21):
with the SEC. So so yeah, we we did that
way back in October and we're you know, coming up
close on that twenty day.

Speaker 2 (16:30):
Period, oh for sure. Now you mentioned staking, and we're
recording this on Monday, November tenth for those folks who
are going to be watching and listening to this. And
I would love to get your take on staking and
et apps and ETPs. But also we got some big
news from Scott Messent saying the US Treasury and the
i r S are giving clarity to allow staking and

(16:51):
ETPs and much more. I would love to get your
take on both items.

Speaker 1 (16:55):
Yeah, no, that's fantastic. And and of course Tony, you
know we you know, as we discussed earlier before we
came on, that that tweet had just gone out and
I probably only read about ten percent of it before
we before we got on. But it is really important
because what we have to do right now when it
comes to staking is we have to come up with

(17:17):
a formula. And by the way, we had already cracked
this cold code within a grant tor trust structure. So
I actually launched the first crypto grant or trust that
that that had staking in it. That this was several
years ago, working with you know, work working with tax experts,
and you know we we so we structured that shoot

(17:38):
four years ago. And given that ETF thirty three at
ETFs are essentially grant tor trusts, you know, we had
already again already saw that issue, had already structured a
way to do it. And really all we need to
do is just get that extra you know, kind of
you know, legal opinion from from from the tax side
of things, because you know, it's one thing when you're

(17:59):
doing in a private gren int or trust, a whole
other thing when it's when it's in ETF with you know,
hundreds or thousands or tens of thousands of people investing
in it. You want to make sure that everything is right.
You know. Again, that's that's something that has taken a
lot of time and energy and structuring and and and
of course you know cost and illegal opinions. But if

(18:23):
you know, really clean guidance comes out, you know, it
saves us, It saves us that effort. And I think
it helps the whole ecosystem and be able to take
those rewards for staking on the network.

Speaker 2 (18:35):
And do you anticipate as staking the clarity starts making
its way through the market, issuers like yourself start integrating
these things that we may see even more inflows into,
like etherorem ETFs and solana ETFs and so forth, because
you now have the confirmation that staking is okay, but
you get that built in yield that's running you know,

(18:56):
twenty four to seven and earning that passive reward if
you want to call that.

Speaker 1 (19:00):
Yeah, and I agree with that, you know. So, so
we actually filed the first We actually filed for the
first uh salona staking meut yet And I think at
the time a lot of people were, you know, a
little sketchy about doing that, but we were pretty comfortable.
But what I will say about that is, even though
we'd crack the code, we believe a lot of people

(19:21):
would be interested. A lot of institutional investors would not
be interested because even though you know, we say we've
done it, we've got a legal opinion that only goes
so far. You know, people want real assurances and if
you've got a you know, real guidance coming out of
the I R. S and Treasury Department that hey, this
is this is this is the way it works, and

(19:41):
this is how you're going to treat be treated from
his tax perspective, you will see a lot more institutional
investors interested in investing.

Speaker 2 (19:49):
Oh yeah, the clarity is so important. And I'm assuming,
you know, just spinball and are guessing here that some
of the guidance here that Scott bessoned to put out,
I'm assuming that you might that in the Clarity Act,
which is you know, currently in the Senate.

Speaker 1 (20:03):
This way, I don't know.

Speaker 2 (20:04):
I don't know if they need to, but I think
it would make sense.

Speaker 1 (20:08):
Yeah, I agree. I agree.

Speaker 2 (20:12):
Now, with all these different types of ETF products that
you're launching, and you have extensive experience with these products,
are you planning to launch let's say, an index or
basket e tips.

Speaker 1 (20:23):
Well, we actually have already filed for one. We we
do have a little bit more work to do on that,
and we haven't been able to move forward on that
at all since the government shutdown, you know, against some
of the ETFs that we filed for that you know,
we filed for in twenty twenty four, that has already
had you know, several rounds of comments and you know,

(20:45):
we're you know, those those were easy to get out
during the shutdown, but pretty much everything else is on
hold until the government reopens and we can you know,
get you know, regular comments back from the SEC and uh,
you know, and we want to make sure that we're
fully compliant there, so we so we definitely have to
we definitely have to wait on that, but we have

(21:07):
filed and you know, we hope that moves forward pretty
quickly once the government reopens.

Speaker 2 (21:12):
Now, we've seen incredible growth for these ETF products around
crypto steven As. There are more being put.

Speaker 1 (21:18):
Out there because there are a lot of crypto assets.

Speaker 2 (21:20):
And look, I'm not necessarily saying we're going to have
a thousand ets where all the thousand coins, but with
the records that are being broken here are crypto ETF
is going to dominate the ETF market.

Speaker 1 (21:33):
You know, I think for a short period of time,
because it's a new asset class, it probably will. But
what I will say is that, you know, it's not
going to be everything right. So so far you've only
seen things in the top twenty, and you know, I
think once you get to maybe the top thirty, it

(21:53):
starts falling off, and I don't know if if anything
beyond that is going to be viable. It could be,
you know, there could be a few here and there,
but it's not a really clean pattern of Okay, these
are the top thirty that are going to win. It's
going to look a lot like it's going to look
a lot like the et apps for commodities in metals,

(22:16):
so you know, gold obviously dominates, silver is pretty popular,
and then you start getting down to like copper, magnesia.
I mean, you know, like you know, you start getting
into fringe metals that people aren't really speculating on, and
these are very very small ETFs and people don't care
a whole lot about I think Crypto's gonna look the
same way, where you're gonna have a few that really dominate,

(22:37):
and then kind of a few that's more mid tier,
and then there'll be a few launches that I think
we'll just absolutely do nothing. And by the way, I'm
not the expert, because you know, I've launched things and
I thought we're gonna kill it, and it doesn't that.
I've watched things that I thought were kind of nih
and they end up killing it, So you just never
know what the market's going to like and accept. I

(22:58):
mean there's some things that you have a you know,
strong conviction like okay, bitcoin XRP, Marcus going to love those,
you know, other things. I mean, look, by the way, Hbar,
you know, I had a very strong inclination that it
was going to do quite well, and it even exceeded
my expectations. You know, I was expecting about fifty million
in eight which is a lot. I mean, launching an

(23:20):
ETF and getting fifty million in three days is is
unheard of, right, And we got seventy million in three days,
so you know, that's really exceeded expectations. And it's like
number twenty as far as market cap goes. So it
just goes to show that it's much more of an
institutional product. People that are you know, that Brokera's accounts,

(23:45):
they know it, they know the name. It's not as
popular within crypto circles, but it's very popular outside of
crypto circles, and that's and that's really important, right Whereas
you know, like Solana, you know, I you know, Salona
launched last week and yeah, it was a great launch.
So I mean it's it's but it's also you know,
the what is it the fourth largest cryptocurrency by market cap, right,

(24:09):
but it didn't perform like it was you know, I mean,
you know, I think it could have been bigger. So
it just goes to show that that crypto people really
love Salana, but people outside of crypto really don't know it.
And that's what, you know, is really going to mix
things up.

Speaker 2 (24:26):
Oh for sure. You know something that came to mind
as you were talking about that. I think for the
first time we have yeah, definitely, for the first time,
you have companies around certain blockchain projects like a ripple
that could do an IPO, but there's also that token
that's connected to the ecosystem. You also have exchanges that
could do that. You have binance and bn B and
then coinbase their public and then they're talking about, you know,

(24:49):
they're floating the idea of launching a token. Could we
potentially see ETFs around these these companies that have both
the token and they're publicly.

Speaker 1 (25:00):
Oh absolutely, you know, I think you'll see one of each.
And then I mean there's so many ETFs out there
even today that are all they do is hold companies
that are in the cryptocurrency ecosystem or the black chain ecosystem.
So so you'll see that and those are going to
be more for equities and they're going to see more
some some that are more for tokens for sure.

Speaker 2 (25:21):
Would it be possible to merge them together or maybe
not because there are different assets.

Speaker 1 (25:25):
I mean I think you could. It would It wouldn't
shock me if if that does happen. I mean I've
actually seen some ETFs that have I mean, let's take
micro strategy for instance. I mean, micro strategy is essentially
a lover bitcoiny TF Yeah, and that is included as
an equity in you know, and other equities that do
things more you know, as far as building an ecosystem,

(25:47):
whereas micro strategy is kind of like a buying old
and leverage.

Speaker 2 (25:50):
Yeah, that definitely makes sense. So since we're on that
topic of micro strategy, you know, there's a big talk
right now dat's digital last of treasury companies versus ETFs.
I'd love to get your take on that. And do
you see them co you know, running parallel, side by side,
or the ETFs are you know, maybe a far more
superior product that people trust and that's you know they'll

(26:11):
have a sliver of the market.

Speaker 1 (26:12):
Yeah. Look, I think I think a lot of dats
out there, you know, for for better or worse, there's
a lot of leverage, so they're actually paying people to
do things. But if you just want like a pure play,
exposure to a token etf is far more of a
superior product. I mean, I've seen dats you know that
that come across my desk that are like, Okay, we're

(26:33):
gonna we've got this massive management team. We're going to
pay bankers five percent. We're going to pay these people
five percent. We've got lawyers. We're going to pay an
asset manager. I've seen in some cases three to four percent.
So what they're paying for an asset management feed of
just like by tokens. So I mean, you know, at
the end of the day, you're putting in a dollar
and you're getting eighty five cents back, and it's a

(26:55):
it's a it's a very inefficient vehicle and also doing
something special. I think Micro's strategy worked because they were
kind of early and they had they had this operating
company that was profitable, and then as time went on,
the gains and bitcoin outperformed the operating company, but the
operating company covers the bills, so it's like, you're not
there's not a lot of drag there. But I've seen

(27:15):
some of them where it's like, Okay, you're you know,
we're taking fifteen percent off the top and you know
you're lucky to get eighty five. So so yeah, that's
are interesting. They're they're they're they're not one size fitable, right.

Speaker 2 (27:28):
And I'm I'm a big concern Stephen, because it feels
like there's a little bit of a bubble forming in
that area with dads, and I'm concerned what's going to
happen when a bear market or a major market downturn happens,
like some of these could potentially collapse.

Speaker 1 (27:43):
I mean, I think the bubble, I think the bubbles
already popped. I mean, look look at some of these
dats that have that have come in quite a bit.
And I mean look, I get calls every day from
makers wanting to participate and a DAT and I haven't
seen any of them get off the ground in the
last month. So I I think I think that market's run.

Speaker 2 (28:02):
Oh for sure, what's on your road map? I'm assuming
there's plans to launch additional all coin et apps. You know,
you mentioned like you guys had filed for the basket
ETF as well, anything else you want to highlight.

Speaker 1 (28:16):
Yeah, I don't anticipate doing a whole lot more beyond
some of what we've already filed out there. There there
might be some things here and there that that I
think are interesting. But look, you know, I mean I'll
just talk about a few other you know, like like Avalanche.
You know, I know a couple of people filed for
Avalanche ETFs. You know, we probably won't file for it.

(28:38):
Not that that we don't love AVAS and we don't
love the team, but like you know, we were not
going to compete with two other issuers that have already
done it, given that it's you know, you know about
number twenty in marketcap. Sure, just like with some of
the things that we've done, we haven't seen other people
file because okay, yeah, the Canary guys are doing that one,
there's probably not room for two or three. Yeah, and

(28:58):
we're kind of we're saying the same thing is right
height as another one. A few people filed for that Avalanche.
You know, we're just you know, if you're if you're
coming in coming in second or third it's you know,
second maybe third not worth their time.

Speaker 2 (29:14):
Question that just came to mind. So as we build
out these all coin ETFs, let's say unfortunately one of
these blockchain projects fails, right, and that's a real possibility,
just like companies in a real world can fail. What
happens in a scenario like that, How does that get
liquidated and funds and all these things? Or is it
just an inherent risk that you know when you're investing,

(29:36):
that's that's part of the game.

Speaker 1 (29:38):
Yeah, No, I think that's an inherent risk when you're investing.
I mean, these are these are passive products, so people
do need to do their own work and make sure
that it makes sense. I mean, we're we're trying our
best to be a screener to make sure that you
know that that you know, we follow the project, we
know it's happening there before we you know, agree to
do it. And then and there are some things that
are just like mean coins, right, you know, like there's

(29:58):
been filings for for for I think was I can't
remember if there's been a Siba one or not, but
there but there's been some you know, other other meme
coins that are out there, and you know, mean coins
aren't really a project, it's uh, it's it's culture. So
you've got to decide if if you think that it
has staying power or not. Right, So I do expect

(30:20):
to see a lot more memes now, memes are actually
a meme. Coins are safer from a security perspective because
the SEC declared that they're not securities, so that one's
super easy. But they are cultural and culture does change,
so we'll see what happens.

Speaker 2 (30:37):
That's a great point. Yeah, it's so fascinating those steven
to see. Well, I guess it's a natural evolution of
the Internet because there's memes online and we know how
that culture has expanded online and in different ways. But
now you can financialize it on the blockchain and it
can have a global reach. It's it's just a crazy concept,

(30:59):
but it's incredible.

Speaker 1 (31:00):
Yeah. Well it's no different than art too, right, So
so so if you think about it, there are financial
products that hold art, you know, publicly traded funds. Yeah,
and art is a cultural phenomen you know, different people
like different things, and if it goes out of favor,
it goes out of favor. So so you know, art
generally holds, its value, generally goes up in value, but

(31:20):
it could go out of favor very quickly. I mean,
here's a good example. There was a there was actually
a company that all they did was hold a bunch
of Charles Schultz drawings, you know, the Peanuts, Charlie Brown.
Oh yeah, and you know, and it kind of went
out of favor for a little bit a few years ago,
and that company went down like eighty percent. So you know,

(31:42):
so it's it's it's no different than than than things
that have already existed. It's just happens to be, you know,
in the world of crypto.

Speaker 2 (31:50):
Oh for sure. Yeah, well said, I would love to
get your take on what's happening would trad fis adoption
at crypto Stephen This year, it seems like we've seen
a lot of the nace just do a one to eighty,
you know, Jamie Diamonds and all these guys, But all
the banks, all of the major Wall Street firms are
now tokenizing, looking to launch crypto trading, even the likes

(32:11):
of Vanguard capitulating right to allow your clients to trade
et apps and much more. What are your thoughts on
how these folks are adopting crypto.

Speaker 1 (32:19):
Yeah, no, I think it's great. I mean I got
in a tokenization back in twenty seventeen and it was
just way too early, and so you know, we went through,
we figured it out, and then there was just no
market for it. And it seems like there's finally starting
to creep in a market for it, and we have
large players are that are jumping into in tokenization that

(32:41):
they control two sided markets, then you will see transactions
starting to occur. I think what's happening is is a
lot of the large banks have realized that, look, you know,
tokenization of assets is a way more efficient form of
of of trading and creating baskets. And if we can

(33:04):
get in front of this, then we can put in
esoteric assets that people want and they can trade freely
twenty four to seven. So that that's that's probably the
biggest driver right now. And by the way, that's one
of the reasons why Solana is super interesting because it
is so involved on the tokenization of asset side of things,

(33:26):
and you know, same thing with with Suie, with injective,
they're really important on tokenization. But then if you can
get back to like x RP you know, XRP is
building out rails for tokenization of any kind of financial
instruments such as you know, they just launched a stable
coin this year, so you know, and and and that

(33:47):
partnership with Gemini think is super important. So so you know,
there's there's a lot happening there that is you know
that it's really gonna be quite interesting to see several
years later.

Speaker 2 (33:59):
Yeah, and it seems like the move to tokenization is
to kind of mimic what crypto is doing, because Crypto
has been the twenty four to seven three hundred and
sixty five. They market no more, no opening or closing bell,
no holidays, and now Tradifi wants to go twenty four
to seven. And then it also opens up a global market,
more liquidity coming from different parts of the world.

Speaker 1 (34:21):
YEP, that's right.

Speaker 2 (34:23):
Yeah, it's teresting. I've I can't remember who mentioned is
if it was Larry Fink or someone else, but the
folks are looking to tokenize ETFs. What are your thoughts
on that?

Speaker 1 (34:31):
You know, it's interesting because here in the US, you know,
I think ETFs trade at decent hours where I think
tokenization might work. Though for ETFs is globally. So for instance,
you know, our checks in out of the UK has

(34:52):
tokenized a few crypto ETFs, including HPAR and what that
does It allows people in Europe to trade these without
having to go through their local exchanges. So that's actually
really important from a global standpoint. I don't know if
it's that you know, you know in the US, we

(35:12):
tend to tend to think in US terms, it's like, okay, well,
how's that useful? Well, for other people, it's very useful.
That can't you know that don't want to be at
the up and you know New York hours trading.

Speaker 2 (35:23):
It's it's kind of crazy. I think sometimes about this
where to twenty four to seven, Marcus, are we going
to drive ourselves nuts? And maybe we have AI helping
us trade while we're sleeping. But we'll have to see
how it all falls into place. I didn't want to
get your thoughts on this. The Clarity Act, right, that's
that's in the Senate the government. We're still waiting for

(35:44):
that to be reopen, hopefully today, and you know, the
Senate could get that through and President Trump signs it
into the law. What are your thoughts on the impact
that will have? Any industry and innovation and building and
much more.

Speaker 1 (35:55):
Yeah, look, I think it'll be pretty important. I think
a lot of the impact from the potential of the
Clarity passing has already been priced in, and I think
you know a lot of people care about price. But
also we've received a lot of clarity regulatory clarity outside
of the Clarity Act, So it really all it does

(36:15):
formalizes it. So you know, under this administration and under
this sec we have seen very pro crypto policies and actions,
but this will codify most of that into law, so
that under the next administration it's somebody that's not so
friendly crypto, it'll it'll persist as law. So I think

(36:38):
that's really where it's more important, is three years from
now as opposed to next month. Yeah, that definitely makes sense.

Speaker 2 (36:44):
And to your point, folks, all the spirit of the
law is out there where folks are, like the banks,
and these guys are starting to innovate and build, even
though they haven't put anything out to the public necessarily,
I think they see that it's coming. It'll be written
in stone, so to speak, and they don't have to
worry about getting a lawsuit or whatever it may be. Yep,
that's right, all right, Stephen, great stuff. I love what

(37:08):
you and the folks Can Area are doing, and I'm
looking forward to the launch of the x RP ETF
and the future ETF products. I've often covered you guys
in the news and all the things you're launching, but
I got some wrap up questions here for you. First,
if you could create your own metaverse, what would the
theme be?

Speaker 1 (37:23):
Oh wow, that's that's an interesting one. You know, the
two things I like to do probably the most is
work on old cars and shoot guns, So that'd probably
be my metaverse. I'd just be out in the country
tinkering on old trucks and honey.

Speaker 2 (37:43):
Can I can I confess something? And I've spoken to
my wife about it. I told her, if you know
I portfolio gets to a certain amount of cash, hot
be prepared. I'm going to buy a couple of hobby
cars and I'll be working on them because I love cars,
and I watch videos of people fixing and bringing to
life old cars, and you know, I just love that.
So I would love to have like a sixty seven

(38:04):
Ford Mustang or something and just be a project I
work on.

Speaker 1 (38:08):
You know, it is one of my favorite things to do.
And I learned by watching my dad growing growing up,
you know, because he was a mechanic an engineer, and
you know he would he would always, you know, he'd
get bored and like drive to the junk yard and
pull a car out and start make it run. So
but yeah, my my, I had a COVID project where

(38:30):
I bought a seventy one Scout and made it run.
You know, that was a lot of fun. I drive
it around. I haven't finished restoring the outside of it,
so it looks like like orange with you know that,
you know that nineteen seventy one orange with yeah, you know,
eight peeling off and you see splashes of gray and
some rust. But like it drives. It drives great. And
have fun driving it around.

Speaker 2 (38:50):
Oh yeah, I love it. I like the idea, the
idea of engines and working on them, and I'm fascinated
by how it all works. So I'm with you on
that rapid fire questions, favorite food, pizza, favorite musician or
band led Zeppelin, favorite movie Zoolander, favorite book Thinking Fast
and Slow? I think you answer this, But when you're

(39:13):
not working, what are you doing for fun?

Speaker 1 (39:15):
I go to the gym. That's about it. I'm a
i'm a i'm a big gym rat.

Speaker 2 (39:19):
Nice Steven, absolute pleasure. We're gonna have to have you
back on as you guys launch new products. Well, thank
you so much for joining me.

Speaker 1 (39:27):
Great thanks for having me, Tony H.

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