SEC APPROVES Crypto Basket ETF with XRP & Cardano Included! with Zach Pandl

Episode Transcript
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Speaker 1 (00:00):
Bitcoin, Ether, XRP, Solana Cardano. Just those five tokens account
for ninety percent of the investable crypto market capitalization in
equity markets. This is like the mag five for crypto.
Crypto investing is growing up and changing.

Speaker 2 (00:17):
It's great to see the progress that's being made.

Speaker 3 (00:19):
It's certainly been night and day compared to how things
were over the past four years.

Speaker 1 (00:23):
Yeah. Absolutely.

Speaker 3 (00:29):
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Hey folks, welcome into the Thinking Crypto podcast. I'm your host,
Tony Edward, and joining me is Zach Pandal, who is
the head of research at Grayscale. Zach, it's great to

(01:36):
have you back.

Speaker 1 (01:36):
On, Tony. Great to see you. Great to be on again.

Speaker 2 (01:40):
Yeah, Zach.

Speaker 3 (01:40):
We are recording this on Friday, September nineteenth day after
big news of the SEC approving the Grayscale Digital Large
Cap Fund. I'm ready to dive into that and much more.
Maybe let's kick it off with that, you know, tell
us about this fun what it encompasses. And I know
the SEC had delayed certain things in the past, but

(02:01):
now we have the approval. Yeah, great place to start.
Big news for for great skill.

Speaker 1 (02:06):
But let let's take a kind of step back and
talk about you know what, where we are for it
for crypto. Crypto investing is is growing up and changing.
We are broadening the access to crypto from to a
much wider range of investors than touch the asset class.
Before you know, many many investors see the value in

(02:29):
innovative technology and the sort of scarcity of these digital
assets in a time when valuations for many traditional assets
are challenged and we have new macro risks, stagflation risks,
you know, maybe downside risk to the US dollars, so
investors are thinking hard about how to build a portfolio
of assets that works for them over time, and many

(02:52):
investors are drawn to the crypto asset class for exactly
those reasons. At the same time, you know you you're
a crypto expert, gray Scale, we're crypto experts here. The
crypto asset class and blockchain technology has a lot of
complexity to it, and so while investors want to allocate
to crypto, they also sometimes become overwhelmed by the number

(03:15):
of choices. And that's why we're so excited to be
able to bring this product to market as an exchange
traded product or ETP. The Grayscale Coin Desk Crypto five
ETF product will give investors systematic access to the top
five crypto assets by market cap in a way that

(03:39):
will automatically rebalance over time, so as you know, many
investors when they allocate to stock, so they allocate to bonds.
They don't want to be a stock picker or a
bond picker. They just want exposure to the asset class
index like beta exposure to the accid class. And that's
what the Crypto five ETF product will be able to

(04:02):
do for investors in the crypto asset class. They can
incorporate these assets into their portfolio without having to worry
about picking the right tokens or rebalancing over time. An
index approach for crypto can work just as well as
index investing in all other asset classes, and that's really
what this product is designed to do. So we are

(04:22):
thrilled to be able to offer that solution to investors
and we think it's going to be a great fit
for many of our clients.

Speaker 2 (04:29):
I love it.

Speaker 3 (04:30):
It's something I've been talking about for a long time
that you know the S and P five hundred to
NASDAC Dow Jones. These are top performing indexes and you
get the basket right, and a lot of people back
to the point, they don't have the time to go
through individual stocks or individual crypto, but they want exposure.
They want to get exposure to acid class. So this
is really great and the top five makes sense. You know,

(04:50):
the most liquid assets you know, by market CAB, they're
up there. So this is a great product and I
think a lot of folks will definitely want to invest
in it.

Speaker 1 (04:59):
Yeah, absolutely, just building on that thought. You know, for
the stock market, there's many many companies with modest market
cap or so something like the S and P five hundred,
five hundred individual stocks is a great way to get
that broad exposure. But the crypto acid classes is very
top heavy, and there are some natural reasons for that

(05:21):
given the nature of the technology. So holding just the
top five tokens actually gets you ninety percent of the
investible market cap of the crypto asset class. So although
it's only five tokens, you're getting a sufficient exposure I
think for to the breath of the technology, and investors

(05:41):
are not going to be to miss something big that
comes along. If a new project, a new blockchain is
emerging and growing in market capitalization, the index will automatically
rebalance to give investors that exposer. Sure you're starting with
today's top five tokens, by could cap some of them.
The symbols are on your the pillows behind you. But

(06:04):
you know, Bitcoin, Ether, XRP, Solana, and Cardano. That's what
the product starts with today, those top five tokens. But
as the industry changes, the index will automatically rebalance to
incorporate new market leaders.

Speaker 3 (06:19):
Now to confirm this is an ETF, Is it a
spot ETFU? Break its break it down for us, because
I know there's a lot of spot et individuals bot
ETF applications in play.

Speaker 1 (06:30):
Yeah, it's a very simple product. It's it's an ETF.
The regulators like us to call it et P exchange
traded product, but the term of art widely used in
the industry is ETF. So I think we can use
them interchangeably. Yeah, so that the crypto five e TF
just holds the underlying spot exposures of the token. It's
not using derivatives or anything else. It's just giving investors

(06:52):
direct exposure to the tokens to Bitcoin, to Ether, to XRP,
to Solana in Cardano at the moment a market capitalization
weighted fashion and as those market capitalizations move around, as
there's underperformance and outperformance of certain tokens, the index will
automatically buy and sell the appropriate amount of bitcoin at ether,

(07:15):
et cetera to give investors that same market capitalization weighted
exposure as it rebalances over time. So it's a very
simple structure, but I think will be a very effective
solution for investors. We see Gray Scale US out in
the world talking to investors every single day about investing
in the crypto asset class, and I can't tell tell

(07:37):
you how many times we have been asked just for
exactly this product. Now, we have been running this fund
since twenty eighteen, but we weren't able until this week
to offer it as an ETP or ETF product. And
so that's really the breakthrough, giving investors this exposure in
the most efficient product structure ETP product structure, which is

(08:01):
so popular among investors. That's really the key the win
here and why it's going to be such a great solution.

Speaker 2 (08:08):
And where can folks access this?

Speaker 3 (08:09):
Is it simply how they've accessed ETFs and other absolutely
on platforms like Robinhood or whatever it may be.

Speaker 1 (08:16):
Yeah, anywhere that you already access your investment accounts. The
ticker is g d l C. G d l C
for the Grayscale Coin Desk Crypto five ETF and you
can find that in all the usual places, so all
you have to remember is the ticker and go check
it out there. Of course, you know the normal disclosures apply.

(08:38):
Crypto investing involves risks. Investors should do their own homework.
But when investors are ready to make a crypto allocation
to their portfolio in the context of a diversified portfolio,
this single fund can give you a great place to begin,
getting you ninety percent of the market cap of the
crypto ASSEID class just in a single a product. It's

(08:59):
going to be a great, one stop shop solution for
investors that are trying to build crypto into their investments.

Speaker 3 (09:07):
It feels like a very monumental moment, especially you know,
everything that we've experienced over the past four years and
the roadblocks and delays, but we have this basket ETF
so to speak, where people can get exposure. You know,
what can you tell us about the SEC and their
previous pausing and delays, But now it seems they've gotten

(09:28):
their act together, so to speak, and they're getting these
things approved.

Speaker 1 (09:32):
Well. We have had a great productive dialogue with regulators
for a long time at here at Grayscale, and you know,
for your listeners who have followed this journey over a
long time, we'll know that, you know, we have been
really at the front lines of trying to offer efficient
access to crypto investing to US based investors. In fact,

(09:54):
we first filed for a bitcoin ETF product all the
way back in twenty thirteen, if you can believe it,
a long time ago in kind of crypto market terms.
We finally were able to bring that product to market
in January of twenty twenty four, and since that time,
I would say the speed of approval and the process

(10:16):
of bringing regulatory clarity for the crypto industry in the
United States has only been accelerating. The Trump administration came
into office with really a mandate from voters to bring
regulatory clarity to the crypto industry here in the US,
to give investors safe and efficient access to crypto assets,

(10:40):
and to ensure that people operating in the space, developers, businesses,
operating crypto knew that they had a safe future here
in the US. And I think the Trump administration really
has delivered on that, and largely those efforts have had
bipartisan support. You know, we saw the Genius Act, for example,

(11:01):
stable coin legislation in July pass with bipartisan support support,
so it's clear that it's this you know sees a
across the aisle effort to help bring regulatory clarity to
our industry. Here and SEC approval of crypto investing products.
While it's very important for crypto are just are very

(11:21):
important for gray scale excuse me, are just one element
of that process. So it's great to see this change.
It's been a long time coming. We think that this
type of product will be a great fit for so
many investors, and we're thrilled to be able to introduce
it as an ETF this week. Yeah, and in addition
to you know your approval, I saw, the SEC also

(11:42):
introduced an accelerated basis of new listing standards to help
speed up the approval of crypto ETPs and to get
them listed. What are your thoughts on that.

Speaker 3 (11:52):
It sounds like it's going to make it easy for
gray scale and other players as well.

Speaker 1 (11:56):
Yeah, that's right. Maybe again kind of taking a step back.
You know, investors want to incorporate crypto assets into their
traditional investment accounts, a retirement account, a brokerage account, this
sort of thing, you know, tax advantage, type accounts that
they can be held for the long run. And over

(12:17):
the last couple of years, it's taken quite a lot
of effort, but we've been able to offer Bitcoin and
Ethereum ETPs in that structure. Essentially, what this news means
is that the SEC other regulators are not going to
have to look at every single crypto token on an
individual basis and decide, you know, whether it should or

(12:38):
should not be authorized to be available in an ETP
structure for investors in their retirement accounts, for example. Instead,
the SEC is going to give us a generic set
of criteria, and these are technical criteria related to the
listing of these assets on certain qualified spot and futures exchanges.

(13:02):
Those details are not terribly important for people to know,
but what it means is that for investors is that
the range of crypto assets that's available to choose from
in the efficient ETP rapper is going to increase quite significantly.
So it began with Bitcoin, follows shortly thereafter by Ethereum,

(13:24):
and investors should anticipate a significant expansion in the number
of other crypto assets that meet these new criteria and
that are available into the ETP rapper. So fundamentally, this
is about regulatory clarity on the one hand and increasing
consumer choice on the other, and Greyscale is delighted to

(13:44):
be part of that process and offer some of these
products to investors, hopefully in the not too distant future.

Speaker 3 (13:52):
Yeah, it's great to see the progress that's being made,
and it's certainly been night and day compared to how
things were four years ago. Over the past four years,
with the approval of this, you know uh G, D
l C E t F which includes the top five assets.
You know, there's the individual applications in play like the
x RP and Salonist body tfs and don't seem to

(14:14):
have the highest probability of getting approved because they have
the futures markets which the set has required for bitcoin
and e theorem. So is this an indication that you know,
the approval of those individual act ETFs are right around
the corner.

Speaker 1 (14:28):
Well, I want to give regulators the appropriate at time
to make all those decisions. But that's I think investors
should if they want to look at those criteria, can evaluate,
you know, which ones are more likely than others. As
a general matter, the highest market capitalization tokens with the

(14:49):
most liquidity with the broadest range of listings and product availability.
As you mentioned, things like futures products will be the
next in line to be available for ETPs. That being said,
I do want to go back to the crypto five product.
In this context, consumer choice is going to increase a lot,

(15:10):
and we would love for investors to have the opportunity
to buy a Salana ETP, for example, and I think
that those types of products will be very popular. At
the same time, many traditional investors are not that interested
in picking all the different tokens in the same way
that they don't necessarily want to pick all the individual's stocks.

(15:32):
So of course there is some of that and there
will be a lot of demand for these individual exposures.
But in mind of the diversified exposure, just like index
investing in other asset classes is so popular, I think
that the index exposure, diversified exposure will be just a
natural place to start. Even as we see a significant

(15:53):
increase in the number of single token ETP products, So
the investors will have that choice. They can buy any
single token and they want, but they will also have
the choice to buy a diversified index based automatically rebalancing
fun and in my personal view, having spoken to so
many investors over the last couple of years, that index

(16:13):
approach will be very popular for four investors and give
them some exposure to each of these tokens without having
to manage all the positions for themselves.

Speaker 3 (16:24):
Are their plans down the road. And this is very
early to have this conversation with the approval that just happened.
But to expand this from top five to top ten and
eventually top twenty, and maybe you have different versions, right
it's GDLC five, GDLC ten, GDLC twenty, things like that.

Speaker 1 (16:40):
Yeah, I think top five is actually the sweet spot
in my view. No Gray Scale is always thinking about
product innovation, of course, and you'll see much more from
us over the coming years, but forgetting this basic crypto
exposure into your portfolio, capturing a sufficient beta in the

(17:00):
asset class overtime, in my view, a top five selection
is about the sweet spot. Just those five tokens account
for ninety percent of the investible crypto market capitalization, so
you can add additional things to that over time, but
they become diminishingly small. Blockchains are networks and they're dominated

(17:24):
by network effects, and in those types of industries, whether
it's blockchains or something like social media, what you tend
to find is dominance by a small number of large players.
And I actually think that this will be a feature
of our industry over time, even as it grows up
more and more. In this constant innovation, there will be

(17:44):
a small number of large market leaders that capture the
lion's share of market cap. And for that reason, the
crypto five approach, in my view, does get very investors
very efficient access to the asset class. I think of
it as we have a MAG seven, Magnificent seven in
equity markets. This is like the MAG five for crypto.

(18:08):
It's really the large players capturing the megacap names in
crypto and giving investors sufficient exposure to this type of
technological innovation. And in my personal view, going beyond five
is probably going to experience diminishing marginal our returns. So
we've been thoughtful about structuring the product in this way

(18:30):
with those thoughts in mind, and I think a top
five approach is about the sweet spot for the crypto
asset class.

Speaker 3 (18:37):
Yeah, that definitely makes sense, Zach. Something else a lot
of people are waiting for from the SEC's approval of
staking in the etherrem spotty TFS. So a couple questions here.
There was a report that came out yesterday from Arkham
the great scale move some ETHER. I know this is
just unchained data, and they were saying, possibly you guys
were preparing for approval of staking in this body TFS.

(19:00):
Do you think that's around the corner and are you
preparing for that?

Speaker 1 (19:03):
Well, I can't verify that particular press report, but I
can tell you that Grayscale has been preparing for staking
in its investment products for many years. So we are
absolutely ready to offer that to investors when we have approval.
Let me take a step back and clarify what you know,

(19:24):
what that staking even means. You know, crypto assets can
be put to work, you know, can be put to
work to get increasing rewards for investors in and providing
a service to the blockchain, helping run the blockchain. Essentially,
that's what staking is all about. Provides a reward to investors,

(19:45):
and so the tokens that already sit in these investment products,
in these ETP products, can be put to work, can
be helped, can help in the process of running the blockchain,
and that'll provide additional rewards in what we call those
staking rewards back to end investors, and so the price
return and the price volatility of the ether token of

(20:07):
the Ethereum network, for example, will still be the dominant
consideration for investors. We can add a couple of percent
potentially to investors total return through those staking rewards. So
it's a process of helping operate the blockchain and earning
rewards in exchange. And absolutely investors will be interested in this,

(20:30):
and Greyscale is ready to offer that to investors as
soon as we have approval, and we anticipate that will
be happening in the not too distant future. That investors
can anticipate staking in US listed ETPs, and again I
think that that will drive additional investor interest.

Speaker 3 (20:48):
So how does the staking component fit with the top
five the GDLC ETF. Will the rewards be in that
or more so on the single asset to ETF.

Speaker 1 (21:00):
Investors should anticipate staking to begin on the single asset ETPs.
There's of course a lot of change happening in crypto
and a lot of product innovation. Bringing the bitcoin ETPs
to market in twenty twenty four was a huge step
forward and has really you know, began the ball moving

(21:24):
in terms of all this change happening throughout the industry,
and the products are getting more and more efficient every day,
you know, more consumer choice, more efficient products, you know,
better solutions for investors building portfolios. And eventually we will
touch all those elements, you know, staking in all the

(21:46):
products that can have them. But investors should anticipate that
beginning in the single asset ETPs over the coming months,
and eventually incorporated in all the products where it is appropriate.
Of course bitcoin doesn't have that feature, but all the
products where staking is potentially a source of additional return

(22:07):
for investors, we expect that that will be included over time.

Speaker 3 (22:12):
Yeah, so I'm assuming this is your point. Down the line,
we're going to see Salona and Cardano eventually jump jump
on that train as the SEC approves these things.

Speaker 1 (22:21):
Yeah, fingers crossed. You know, Greyscale has been in the
business for a long time of providing US investors, you know, safe, reliable,
regulated access to crypto products in traditional investment accounts, and
we work cooperatively with regulators in order to bring these
products to market. And so as you know, the regulatory

(22:44):
picture changes in the US as we get more and
more clarity from the bipartisan group of lawmakers and regulators
that are working on these issues. We will bring additional
products to market. And our investors already asked for these
UH for these things, so we know that there is
demand for these exposures and we're eager to bring those

(23:07):
to products as soon as our regulators give us the
green light. And we again work cooperatively with them every
day to help help them understand these products, the risks involved,
and and when it's appropriate to offer them to investors.

Speaker 3 (23:22):
Do you think and are you guys thinking about this,
we will eventually have ETFs for tokenized assets. I don't
know if it makes sense because let's say folks are
tokenizing stocks and certain equities they already exist in the market.
Do you necessarily need to have them in the ETF
or is there another opportunity there kind of the index aspect. Well,

(23:42):
I can get the mag seven tokenized UH and that
those those tokenized assets are being worked on or put
to work in DeFi, So that's the additional benefit of
holding the ETF for them.

Speaker 1 (23:54):
It's a great question. Investors can think of the crypto
ETPs like the bitcoin ETPs, as a way to build
a bridge from the world of crypto back to traditional
finance by putting bitcoin in these ETP wrappers, you know,
giving them access to traditional investors in traditional accounts. Tokenization

(24:15):
in some ways is building a bridge. In the other direction,
it's taking traditional assets you know, stocks, bonds, real estate,
maybe even a traditional ETF or an index exposure like
the mag seven that you mentioned, and bridging them back
to the world of crypto, putting these assets on chain,
and there's advantages to both the approaches. Fundamentally, I think

(24:38):
how investors should think about tokenization is a kind of
back office innovation in how our capital markets function, you know,
how you and me interact with our investments. In the future,
it's going to be not all that different than it
is today. We're going to have a web page where
we are brokerage accounts are sitting, and we go in

(24:58):
and can manage our assets. The difference is that in
the future, when we are trading and asset exchanging, an
asset borrowing and lending potentially that something different is going
to be happening behind the scenes. Instead of those transactions
taking place on the balance sheet of some kind of intermediary,
they'll be taking place in a decentralized way on a blockchain,

(25:22):
and the benefit to users will be things like twenty
four to seven trading, instant settlement, global access, potentially integration
with other DeFi applications that you mention. So our experience
as users is going to be very similar. We're going
to be buying and selling assets that we want exposure

(25:43):
to as we construct a portfolio. But tokenization, blockchain innovation
is going to upgrade the sort of back office of
our capital markets, the infrastructure to provide user benefits. And
there's lots of specific ways that's going to happen, but
I think that that's fundamentally how investors should think about
the process, and that's great. You know, we just want
to see a more efficient, more effective capital markets and

(26:06):
financial system and tokenization is one part of that future vision.

Speaker 3 (26:10):
And on the other side of the coin you have
digital asset treasury companies, a lot of them buying crypto
assets and this trend continues to grow a lot. It
started with bitcoin when Michael Sailor and strategy, it has
now moved to ethereum, Salona and other assets. Does it
make first, what are your thoughts on that and does
it make sense? To create ETFs around these companies where

(26:32):
you have their respective stocks in an ETF. Maybe it's
Solana treasury companies, Etheroreum treasury companies, that type of thing.

Speaker 1 (26:40):
Yeah, also a great question. Again, I would think of
digital asset treasury. So what are these things?

Speaker 2 (26:46):
First?

Speaker 1 (26:46):
Digital asset treasuries dats. These are just public companies that
put crypto assets on their balance sheet and they therefore
serve as an access vehicle to equity market investors that
are trying to get crypto exposure. So I mentioned that
ETFs or ETPs can be thought of as a bridge
from the world of crypto back to the world of

(27:08):
traditional finance. You can think of digital asset treasuries or
dats as another type of bridge, and I would consider
them complementary to the et aps. What we find is
that many investors just want to invest in public equity markets.
That is the scope of their mandate that they work
within the confis of public equity markets, but they want

(27:32):
crypto exposures. And so there are listed crypto companies, you know,
crypto industry players that have public shares that are an option.
We have lots of bitcoin miners, for example, and that's
been an option for public equity market investors for a while,
but really they want a broader range of tokens in
a public equity structure. So dats are that solution. Can

(27:56):
those things be put into an ETF structure? To your
question to apps so little the end. In fact, Grayscale
offers a product along those lines. So we have a
product tich or b c r B Core the bitcoin
adopters ETF, and this is a basket of companies that
have significant amounts of bitcoin on their balance sheet. And

(28:17):
so if investors they don't want to go select the
individual bitcoin dats, we can put them in an ETF
rapper and you can get a diversified exposure to those
types of names. So all of these innovations are possible.
You know, where there's an investor demand, we offer something
exactly like that. But the underlying point that I would

(28:37):
try to make is it's all about building bridges. You know,
the crypto or the blockchain based financial system is truly
distinct than our traditional intermediated financial system, and we need
all these tools to build bridges between them. ETFs, dats,
tokenized assets, these are all different ways to build bridges

(28:59):
between these two worlds. Of finance, and as crypto is
growing up, you know the size and quality of all
those bridges is getting improved, and we should expect investors
should expect that could continue over time, more ETFs, more
tokenized appset's, potentially even more debts.

Speaker 2 (29:16):
Yeah, for sure.

Speaker 3 (29:17):
It's it's amazing how the ecosystem is growing in all
these new avenues.

Speaker 2 (29:20):
Uh.

Speaker 3 (29:21):
The other one I was going to ask you about
is publicly traded crypto companies. So this year we had Circle, Bullish,
Gemini just last week, I think, e Toro and a
bunch of others are are you do you already have
one or are you playing to launch an ETF for
these publicly traded crypto companies?

Speaker 1 (29:36):
Well, I can't just say specifically about those types of
future product of plans, but I would say again, investor
choice increasing is a great sign, and maybe I would
call out a circle as a great example of the
kind of thing that is so welcome from for investors.
Investors are excited about stable coins, you know, stable coins
are you know today the killer app of smart contracts.

(30:00):
Smart contracts are a fundamental idea from computer science that
sort of as you well know, as your listeners know,
is a kind of building block of decentralized of finance.
You know, it's the kind of foundational idea that allows
us to build this rich ecosystem of financial activities on
top of a blockchain. And today stable coins or digital

(30:21):
dollars on the blockchain are the killer app of smart
contract based technology. So investors are aware of that. They
can see all the growth, all the activity in stable coins,
but until very recently, they didn't have a public company
that they could invest in to get that exposure. And
so the Circle being listed on US markets was very

(30:44):
well received by investors because mainstream investors are aware of
the stable coin a story, all right, they just didn't
have a way to get portfolio exposure to that. And
so yes, these IPOs help increase that investor a choice,
which is a great eye, a great thing to see.
And then you know, Ethereum is another way to get

(31:04):
stable coin type exposure. You know, the circle is kind
of like compared to our digital payment system. Today's circle
is kind of like the bank, and the theoeum is
kind of like where the transactions are processed, you know,
the equivalent of the kind of credit card networks today.
And so for investors that want to get stable coin
type exposure in a portfolio. A combination of a listed

(31:26):
public company like a Circle and a blockchain token like Ethereum.
That's a great way to start building those things in
a portfolio. So the investor choice has been increasing for
important themes like stable coins. It's exactly what we want
to see at greyscale.

Speaker 2 (31:42):
Yeah, it's so exciting, Zach.

Speaker 3 (31:44):
I mean, I know I mentioned earlier about you know,
the last four years and crypto's really matured and come
afar away, and it seems like there's this conversions with
trad fi companies going public, trad FI institutions like black
Rock and letters tokenizing launching different product, and the banks
are not saying they want to launch stable coins in
crypto training.

Speaker 2 (32:04):
It's it's amazing how far we've come.

Speaker 1 (32:06):
We have come a far away, but I would just
emphasize that there is still a great deal of ground
still to cover. So we've made a lot of distance,
but in my view, the progress is still very small
compared to the ultimate vision. You know, the goal here
is that blockchain based finance is going to really transform

(32:28):
the way our financial system and the way our capital
markets work. These are innovations and digital money and digital
finance that will be foundational for everything in finance in
the future. So, yes, we've made a lot of progress.
You know, the crypto asset class has come from almost
nowhere ten years ago to a four trillion dollar asset class.

(32:50):
That is a lot of growth and it's bringing a
lot of real benefits to users. But my vision for
the asset class and you know, for the option of
technology is much higher than where it is today. So
I think we have, you know, a ten fifteen twenty
year journey ahead of us, and I think, Tony, we're

(33:11):
going to have a lot of these conversations and look
back even to this year and say, remember how early
that was. You know, these about like big breakthroughs in
twenty twenty five. But in my view kind of looking
back with that ten fifteen twenty year perspective, it will
look like just the beginning for what we're trying to
accomplish with the blockchain based technology and the crypto asset class.

Speaker 2 (33:35):
Yeah, well said.

Speaker 3 (33:36):
And this year certainly a lot of landmark moments with
the Genius Act passing, we have the Clarity Act coming
up to vote this fall, and I'm sure you know,
we'll love to get your thoughts on is that once
that passes, it's going to open unlock a ton of
innovation and building because people will have As the bill
is rightly named clarity.

Speaker 1 (33:55):
That's exactly right. The comparison that we like to make
is sort of to the inter net itself. You know,
think back to where the Internet was, say in the
mid nineteen nineties. You know, we were past the very
beginning of the story where it was just about technologists
and hobbyists, you know, trying something new, and there was
a big increase in the big improvement in the user experience,

(34:21):
mosaic browser and other things that made it a lot
easier for the average person to get online and greatly
increased adoption. And so we saw a big acceleration at
that time as the user experience was improving, the applications
were improving, et cetera. I would think that crypto is
kind of at that place today. You know, we're past

(34:43):
the very beginning of the story where it's just about
you know, cryptographers and other specialists that were building the
early parts of this technology. We're already bringing value to
many people around the world today, of course, but we're
seeing acceleration in the improvement of the user experience and regulation,

(35:04):
you know, the financial markets regulation is an important element
to that. You know, to see the full vision achieved
for the crypto asset class, we need to make sure
that it is you know, these technologies and these investment
products are safe for consumers and safe for the financial
system as a whole. And that's what we're seeing now.

(35:25):
As you mentioned that, the Genius Act, bipartisan legislation on
stable coins passed by the US Congress and signed by
the President in July of this year, and now Congress
is taking up what people in crypto call market structure legislation.
This is a mammoth piece of financial services legislation, akin

(35:45):
to things like you know, DoD Frank or sarbine Zoxley.
For your listeners that are familiar with some of these things.
Every once every ten years or so, the US Congress
takes up a big piece of financial services legislation, and
that's what we're seeing work its way to the Senate
now for crypto and why this is so important, it
is just to build that foundation for future growth. You know,

(36:07):
we need clear regulatory structure in the most important economy,
the most important capital market system, which is the United States,
in order to achieve the full vision and encouraging the
Congress is working on that right now, and the US
will be a leader in this process. You know, once
the US, the most important market and financial system, lays

(36:28):
down these types of rules, it will be duplicated in
many places around the world, so kind of opening up
global access to the assets and adoption of the technology
all around the world. And that's what will help drive
us another ten, fifteen, twenty years into the future.

Speaker 3 (36:43):
It's exciting times. I'm really looking forward to seeing what
happens posts the Clarity Act passing into law, and I
know it's going to take time for folks to ramp
up and get going, but I'm really curious as to
the new innovations and new applications and the creat things
that are rolled out. It's just a great, great time
to be in the industry.

Speaker 2 (37:03):
Now.

Speaker 3 (37:04):
Final item here I want to ask you about is
what else is on your roadmap. You did touch on
a few things earlier, but anything else we can expect
from Greyscale.

Speaker 1 (37:12):
Yeah, I think a couple of things that I would mention.
Of course, going back to where we started, the grayscale
coin desk Crypto five ETF, the product that was introduced
as an ETP product ETF product just this week. We're
going to be spending a lot of time on investor
education around that product. We do a lot of that already,

(37:34):
but many investors just still have tons of basic questions
about how to think about crypto in the context of
a diversified portfolio. I have my stocks, I have my bonds,
I maybe have some alternative investments like private equity or
real estate. How should I think about crypto in that context?
What's it correlated to, what's the right amount?

Speaker 2 (37:56):
You know?

Speaker 1 (37:56):
How should I think about risk management over time? So
the same The most important thing that I'll be working
on is investor education about portfolio construction, building a diversified
portfolio for the future, and how something like the Crypto
five will fit into a portfolio like that. And then
beyond that, it's many of the things that you've already mentioned, Tony,

(38:17):
you know, staking assets beyond bitcoin and ether, like Solona
and many of the other assets that we are excited about.
Investors can anticipate a lot of greyscale education, you know,
in person, online on all those topics and Our goal
is very a simple one. We believe in the technology
and the value of these assets, and that almost every portfolio,

(38:41):
any multi asset portfolio that's being held for growth, held
for the long term, can benefit from corporating crypto assets.
And we just help investors try to understand the technology
and the investment risks and all that as clearly as
possible so that they are confident making an allocation to
the asset class. So that's what I'm going to be
working on over the coming months. Just thought over the

(39:03):
last several years.

Speaker 3 (39:04):
That's awesome. Well, I'm looking forward to the future updates.
I'm sure we're going to do another conversation pretty soon
as things are starting to heat up. It seems like
the SEC is getting ready to make a lot of
approvals and congrats on you know, the approval of the
GDLC to an ETF conversion Top five. I just think
that's a great product. I think if I'm you know,

(39:25):
the average Joe and Jane out there, you know, I'm busy,
I'm working, I got life, things in life, and I
don't have time to go through every coins, but I
can get access to those top five that that's just
a great, great product. You know, with crypto going mainstream,
I think it's it's a great timing for everything.

Speaker 1 (39:42):
Well said Tony, that's exactly the idea, A single solution
for the busy professional that wants to incorporate crypto and
their portfolio. The Crypto five ETF from grey Scale and
coined Us is exactly the type of solution that we're
trying to build.

Speaker 3 (39:58):
Zach as always pleasure, Thank you so much, appreciate your
insights and like I said, we'll have to do another
one soon.

Speaker 1 (40:04):
Looking forward to it. Tony, thank you,

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