The Path Ahead for Crypto as an Asset Class - TOKEN2049 Singapore 2023

All right. Good afternoon, everyone. Very honored to be back here at Token 2049 again. And today being joined by a phenomenal panelist. Really, I think um all three of them needs no introduction, but I'll still uh give the floor to them for a for a quick self-introduction before I kick off today's panel, which is the path ahead for crypto as an asset class.

Uh I can start with you. me to begin? All right. Uh Dan Tapiero. Hello, everybody.

Um I'm the founder of 10T and 1RT. We are the uh as far as I know, the only growth equity fund out there exclusively focused on businesses in the digital asset ecosystem or blockchain, crypto, Web3, I don't know what we're calling it. Uh but in this world. So, um that's who I am. All right.

Uh Jenny Johnson, president and CEO of Franklin Templeton Investments. We are a 1.5 uh trillion-dollar old rails asset management company who's uh looking and actually have been in the crypto space for a little while and are big believers that it's the the future of asset management. I'm Tom Farley. I'm the CEO of Bullish.

We're an institutional digital assets exchange. Uh right now, we trade spot. And we're doing well. Uh second in ETH the past week in spot. Uh we're adding perpetual futures in November of this year, touch wood.

Um that's my intro. Awesome. Well, I want to kick off with Jenny here because Franklin Templeton has been in the news recently about your ETF application and you guys also put a money market fund on chain, I believe. So, wanted to get your perspective on on how you guys are thinking about crypto as an investable asset class and, you know, your road map. I mean, I So, I think the the most important way to think of it it is this is a technology that enables uh significantly reduced friction in transactions, right?

And so, if you think about financial services, there's a bunch of toll takers as a transaction happens. So, if you can take those folks out, there's a lot more creative things that you can do. So, this is going to enable new types of asset classes to invest in, but I also think So, we we did file for a a Bitcoin ETF today, but I have to tell you that I always say that Bitcoin is the greatest distraction to what is the greatest disruption in financial services, which is blockchain. That doesn't mean I I'm not a fan of Bitcoin, it just means there's so much more there. And I think eventually, why would you have an ETF or mutual fund?

You would just have a tokenized product that the smart cuz today, if you own a ETF, while it trades all day on the exchange, it actually only prices twice a day. So, you're actually buying something without all the information. So, imagine a token. One, it could trade 24 hours if you wanted it to. And two, the smart contract can ensure that you know exactly what the pricing is of the underlying assets at the time that you trade.

So, again, big believers that this opens up new investment opportunities as well as it it'll drive cost out. We we did we have an SEC-approved money market fund. We're the only asset manager that has is doing an actually on chain transaction as the official record. We built a shareholder service system, worked with the SEC to get it approved, and that was just what we think is the beginning of the opportunity. Great.

I mean, I think that's going to bring hopefully a lot more liquidity and volume into into crypto market, which we all so desperately need. And a question for you Dan here as a long-term macro trader gold Bitcoin since early days and with your 10T Holdings I think more recently won round table wanted to also get your take on Bitcoin its path ahead and also maybe some other areas you're looking to invest in. Yeah, I mean well Bitcoin is the core asset of the space and I think ethereum sort of right there with it. And so I think there's a big difference at least from my perspective between Bitcoin and eth which are established assets. I think eth has achieved network effect and you know, you've seen that ecosystem really explode in the last year or so there's a difference between those two assets and I think the rest of the space to me at least is still venture.

You know, I I I sort of look at it those two separately. To me the the bear market is finished. We finished it in Q4. In fact in London 2049, I was speaking. It was the day after the FTX collapse.

And um I said they asked me so what's the impact of the FTX collapse and I said, well, it actually is not going to be that great on our portfolio. And someone in the press quoted me and said left out the our portfolio part and quoted me as saying, oh, it's not going to be that great. But I think that was the moment of max panic and max negativity. And it was certainly a big shock and the price of ethereum at that actually couldn't make a new low in price. So, as an old trader, um it's called a bullish divergence.

It's a very sort of well-known uh sign that when, you know, an asset can't make a new low on horrible news, the selling has dried up. And so, in fact, actually within a few weeks of that um of that um uh event, we actually deployed the remaining $120 million in our in our fund three uh into the businesses in the space at pretty dramatic uh discounts. And so, right now, um the certainly the market in the secondary for crypto, Web3, blockchain businesses uh is virtually empty. I mean, we're very active in the secondary, um and we're seeing tremendous discounts, 50 to 80% uh on companies that are, you know, doing very well still. So, um I think that's a big opportunity, and also the opportunity to lead uh rounds in sort of B, C, and later, which is our focus.

Um some of the private equity uh players that had come into the space in '21, '22, they've pulled uh back out, and I think they've been pretty clear about that. I mean, even Temasek uh here in in Singapore has mentioned that they, you know, are not looking to invest uh in the space at the moment. And and certainly there are more high-profile uh private equity guys as well from the traditional world have pulled back out. So, you know, we're finding that we're some of the really only investors in the entire uh space in the sector. Um you know, companies that are a little more mature uh would be B and C rounds, making 50, 100 million dollars in revenue plus.

And so, I I It's never been a better time, at least for us, to invest in the companies that we that we look at in the space. So, There's a survival bias, too, right? Whoever's is around making 50 million revenue, it's it's it's a tough But there are quite a few There are quite a few companies, you'd be surprised. Yeah. Makes sense.

Um and then also, I guess speaking of um the whole FTX debacle, right? Tom, you're you're Speaking of it, Tom. Speaking of debacles. Speaking of exchanges, right? You know, the counterparty risk is at top of mind for for all of all of us now in terms of where even for Amber or where we choose to trade, where we choose to park our capital and um you know, how it's settled.

And with Bullish, it's it's a slightly different setup. Um so, what is, you know, in your current road map and how how are you guys thinking of the exchange setup in the new sort of environment? Uh I'm hoping that we find something to vigorously debate on for entertainment purposes, but so far, I agree with everything that Dan and Jenny have said. Uh I think that Look, things aren't great right now in the digital asset space. I agree, they're not as bad as the day after FTX went down, but let's not kid ourselves.

Like, things aren't great. It's difficult to make money. We'd all like to see more innovation, so on and so forth. But I'm a big believer in Bitcoin. I'm a big believer in blockchain, as as Jenny said, uh blockchain technology generally and a lot of what kind of what's what's going on in the space.

However, uh I I feel like granddad here at this conference. Um everybody's talking about decentralization, and I see an industry that with every passing day is ever more reliant on the US dollar. Not even other currencies, like the US dollar. And I don't know a lot about a lot, but I'm pretty sure the US dollar, no matter where in the world you're trading the sucker, is centralized and it comes back to the Fed. I was the other night at a party I met this young lady, super sharp, lovely, and she was telling me about a new stablecoin and she said, "Oh, well, it's a USD stablecoin and the the good thing is we're totally outside the reach of US regulatory authority."

And I'm like, "Are we going back to an algorithmic stablecoin or is this is this one that takes in dollars?" Yeah, it takes in dollars. Okay, you are not immune. That is centralized. And so we need to be able to figure out how to get along with the centralized world so that we can get to the dystopian decentralized vision 5, 10, 50 years from now, what whatever it takes.

And the exchange industry has not been running in a way to get along with the centralized world, with with the regulated world, with federal governments. Like, unfortunately, there needs to be some sort of relationship. And that's why I mean, I sound like granddad or a pariah here, and I know some people are shaking their heads, but I I am who I am. And so where we focus on a bullish is like just just run the business like an adult. Tell your customers how much cash reserves you have.

Have an audit. Be transparent about who owns the sucker. Like, where where are you regulated? What are your risk management practices? Don't be stupid.

Just just basic stuff like that is ultimately what you need to set the underpinning, to set the infrastructure. And that is not what has gone on in the digital asset space. But wait, hold on a second. You want to have the debate about I mean, I think it's so dramatically improved from 5 years ago. Um so I don't really have that negative view.

I think there are a lot of especially after FTX, there are a lot of serious, sort of buttoned-up, grown-up actors. Um I think people were put on notice. They also, you know, he's going to jail for fraud. He's a bad guy. I think people don't want that.

Um I I I think you know there may be there always be a handful of people out there on the edges, but I think generally people are much more uh careful and acknowledge that they have to work with Can Can I rebut Can I rebut it? I I agree in part, but in the spirit of of debate, I just came from a a lunch where there was discussion about how leading exchanges, I won't say whom, leading exchanges in the world are awash with fake volume to this day. Awash. Massive amounts of fake volume. Uh that doesn't feel right to me.

At the same lunch, there was discussion of leaders of those exchanges perhaps getting in big big trouble. I I don't think we're I don't think we're fully there. I've heard that a year ago. I heard it 2 years ago. Cuz it was true then.

traded in the traditional markets for 30 years. I mean I got jammed so many times trading gold because there was somebody front running me, you know, JP Morgan who couldn't figure out exactly why. Um meaning I'm just saying that you know, there's plenty of fake trading in the traditional world. Uh there's spoofing and all that nonsense. And so, I don't think this space will ever be devoid of that.

Yeah. I just, you know, since it's so new, I'm looking for improvement, right? And I do feel like the conversation's changed a little bit. Um but remember also this is fully global. So, the traditional markets grew up, you know, in in in certain countries and you have regulators.

It's going to be more difficult. You have to get all the regulators to agree. Um I think there are pockets in the world. There are places where they have, you know, made some nice advancement. I mean, the UK has come out with a clear regulatory framework.

You've got Dubai and Abu Dhabi, and you're Singapore, and you're Europe. So, I like what did And we What did we have any of that four or five years ago? We didn't. So, I I don't know, maybe I'm the big macro guy looking from 20,000 ft and I'm saying, "Oh, it's better than it was five years ago." I think that's right.

It's kind of But it's because the it will end up being regulated. Anybody who thinks it's not going to be regulated Yeah. It it will be regulated and and it takes time for that to And the US has been slow. Um Yeah, US is But yeah, you can look at the improvement. I I think anybody who thinks that's not going to happen is going to just fight swimming upstream.

Actually, speaking of this, right? So, from infrastructure perspective, what do you guys think institutional investors need to see or regulators want to see happen or the improve improvements you're talking about? What actually needs to happen before we can really take this asset class to a more legitimate level, right? Is it more risk management? Is it more regulatory oversight?

Is it custody solutions? What what needs to happen, really? Jenny? Well, I think it One is I think it has to be regulated. Um I you know, every time there Singapore is a perfect example.

They were actually the first to start to create regulation around this, and then they had a scandal, and they backed off from it, and then they're now getting back in. I mean, so anytime the consumers are hurt, especially in uh places where there's democracy, there's a lot of voters that are hurt, right? And they blame the regulators, um then, you know, the the regulation is going to step in. So, I think that's one. The second thing is, and I was talking to um a governor of a state in the US who was very anti anything to do with digital assets.

And in the end, the thing that bothered him the most was he said, "Every time there's crime, cybercrime, they're asking for Bitcoin cuz you can't track it. Right? So, that bothers. And And the reason I'm um I I think the Bitcoin can be hard to invest in this I know will become a good point of debate, but hard to invest in is because governments will always control their currency. The pressure in the EU, one of the pressure points in the EU, is because they have shared currency and uh unlimited spending at the various country levels.

Right? So, that puts stress. So, if ever Bitcoin threatened currencies, you're going to see regulation and it being banned. But, in a In If we had regulation that mandated the wallets have KYC like banking does, know your customer, it would improve uh some amount, but there will always be this ability, as long as there's value in Bitcoin, for this crime to happen. And I don't know how you stop that.

You know, it could because the actors don't have to be in a regulated environment. I I would also just say that I think that this world has grown so much. Um there are aspects of it that I don't think will be regulated. Um you know, there's a difference to me between, you know, Bitcoin and ETH things being used as value value transmission. And then, you know, the last panel with Yats and Animoca and the whole gaming side of things.

I think it's hard to, you know, regulate people exchanging, you know, PFPs or, you know, their skins or whatever it is. And I I I don't really see that that it can't seep into every aspect. But, currency, you know, as collateral, you know, part of the financial system of the world, that's different. I think Bitcoin and ETH just provide an alternative. Like, you get to choose.

You own dollars, you own euro, you own yen. You decide where you want to allocate your um assets. There's Bitcoin and and ETH, I think, are just an alternative. Not I mean, I don't think it's ever there supplanting the dollar. I mean, it could be I don't know.

I I don't even think in those terms. You said that the dollar's not going away. I never thought it was. I But, I do think it's a really attractive alternative. And, you know, as an investment, you know, manager or for have a trillion under management, you're all about offering choice.

So, my guess is that's attractive for you because you have clients who say, "This is an attractive alternative for me." And um you know, I have a gold business, a physical gold business that I started years ago. That's an alternative. So, it doesn't have to be that we're supplanting the existing system that, you know, is a revolution. I mean, there is a quiet one.

Doesn't have to be talked about, but there are aspects of this world that I I think are not, you know, digital asset as currency. Right. your gaming example's a very good one, right? I mean, that's almost loyalty points within a game. And, you know, to the extent that it starts to be able to be traded for dollars, the second it crosses into that, that's where you're going to have regulation step in.

Well, it could actually maybe just go into Bitcoin. Right. That's right. It could barter or it could go into big right. Now, if when people say, "Well, Bitcoin is going to, you know, be the global currency," that's where you'd have it became certain scale.

Right. But, that's such a leap. I mean, the it starts from where we are today. I mean, it's not even a trillion dollars of value in in Bitcoin. And, you know, the currency markets trade, you know, 7-8 trillion per day.

Yeah. So, we're just, you know, light-years away from that in my my view. I, you know, Just on Just on regulation, go back to what Dan said. Like, the if the choices are zero regulation and everything is regulated, then, you know, we could have this intellectual debate. Obviously, I think we would all agree that the former is better.

Neither of those is an option. I think we all can agree it is what it is that where there's actual physical currency being exchanged in on mass, it will be regulated. Where there's someone act acting as a major exchange across uh international borders, it will it will be regulated to some extent. And likely, if you're a large custodian, um it will be regulated to some extent. It just is what it is.

Like we can debate debate the merits of it. Besides that, totally agree with Dan. Let's keep regulation out. Let's let market forces drive what's going on. We're already seeing market forces like like Dan described like things are better.

The market is driving that. We're seeing customers are more discerning about choosing who they interact with. You know, we we have a nice balance sheet and lots of uh cash surplus and good practices, and customers are still putting us through the ringer. That did not happen before FTX. So, good things are are happening on their own without, you know, the ivory tower telling us how to do it.

But it there will be regulation, and the best thing that can happen from an infrastructure perspective is we all get real sure about what that's going to look like. Cuz then the market can flourish. Right now, there's just so much darn uncertainty, certainly in my home But let me ask you a question now. How can, you know, we have all these different jurisdictions, countries, I don't ever see a world where every country agrees with the other one about how it should be regulated. don't have that in the financial services world today.

I know I know I know I know I know. I I know. That's fine. Each country can decide on their own. I actually like that better.

I I don't like when countries collude, cuz then what you get is a superstructure of regulation. They don't say, "Let's choose this or this." They say, "Let's do both." Yeah. So, then what happens is, you know, this business ends up growing up in places where the regulatory framework is reasonable.

I don't mean no regulation. I just mean reasonable. That's right. And you're seeing it in Dubai, you know, for instance, we had one of our companies, actually Dutch company, has moved their home base there. And it was because they felt comfortable that it was a fair regulatory framework.

So, it's not necessarily regulation, people telling what to do. It's a framework that makes sense for your business. But best best jurisdiction is often a Venn diagram. It's not just most sensible regulation, maybe Dubai. It's also where are the customers?

And that's where you don't have the the the overlap. So, in other words, Dubai needs to have perfect regulation, really really smart, to be able to attract firms to go there. Whereas the US just constant just kind of needs to be sort of okay. And we're not even there. We're not even there.

like it's too the the whole space is too small really to matter to the US. I mean, the total value in the space today, all the cryptocurrency and all the equity that we see in the value, total value 1.7 trillion dollars, is our internal accounting. And that was, you know, that's not really that big, you know, for the US. For Dubai, it's big.

And for Singapore, it's big. And so, some of these jurisdictions that say, "This is innovation. We'd like to attract it. It could impact our economy in a good way." Um they're more reasonable.

I think for the US, it's just too small. It doesn't matter. Yeah, but if the if consumers in the US are investing or, you know, whatever, using that company in Dubai, they're still going to be US regulation that is going to have some overlap. So, I don't I don't think it just frees it. I think it's your point.

It's regulation and where the customers are. Well, I know that I mean, I don't know what the stat is today, and you would know better than me on because run this exchange, but I think 80% at least of the total world cryptocurrency trading volume is outside of the US. Um, so it's not a US business. Now, but their customers in the US that. No, I I I I heard, I don't know if this is true, but something like 80% of the companies setting up in Singapore were US companies that have want the regulation in this space, that want the regulation that you have.

So, I mean, they're not setting up in the US here. Right. After what's happening to Coinbase, I think they probably would run. And and and also Can I just make one more point, Annabelle? Institutions were There really isn't an institutional market in digital asset space.

I'm going to let everyone in on a little secret. It's unfortunate, but the truth of the matter is it is very, very small. The so-called institutions who are involved are really professional trading firms. Whereas in the rest of finance, when people talk about institutions, they talk about Franklin and and and others. Franklin She manages 1.

5 trillion dollars in her company alone. As Danja said, that's the size of the entire crypto industry. Jenny, I'm speaking for Jenny, and she'll rebut me, hopefully, yelling at me for putting words in her mouth. Jenny's not going to do something that might imperil the whole of her business uh, to, you know, say, go go get in the face of the SEC and start investing in altcoins and and risk picking a fight with with Gary Gensler. So, yeah, I take your point, it's not a US business, but it could be if we just had reasonable regulation.

There's tons of money in the US who would be interested, and we were close before all the crap that went down last year, all the fraud and shenanigans. We were close. There was a bunch of people on the doorstep, and we took so many steps backwards, unfortunately. Yeah, I was just going to say that, um, even for us who are based in Asia, right? Yes, uh, Singapore and and Hong Kong and Japan and Korea, I and even Dubai, speaking of regions, I think a lot of them largely look to the US regulations as well.

So, it is still very relevant and like all of you guys touched upon, right? It is still very highly dollarized industry. So, I think bottom line is whatever the US does is going to set the pace for for a lot of what happens. And and actually I that's a good segue to maybe throwing the question back to Jenny who I'm sure you look at the space very extensively and speak to the US-based regulators a lot. What is really going on there?

We hear a lot of the headlines, we read about, you know, maybe different political agendas, but what really is in the works? And how are you guys navigating? Well, I mean, the reality like so, we've been working with the SEC. I think we started the process of our money market fund in like 2017. And we'd work with them and and to be honest, they have a challenge, too, right?

Like we go in, 40 people would show up, we'd educate them on the digital asset space, we'd come back 4 months later, and unfortunately 39 of them had left the SEC, right? So, you're starting and and you know, they're trying that and there's a lot of people, some commissioners that are really trying um in the space. We So, you're constructive with the We have to be constructive with the SEC and you're exactly right. We're not going to risk the rest of the business by ticking off the most important regulator that we have um because that's where the bulk of our assets. And we also co-co-head the CFTC's.

So, this is the commodities um and futures uh trading exchange on on cryptocurrency because they haven't even agreed who should have jurisdiction on it. I mean, so in the US, there's already competition, it but it seems like it's a hot potato. Nobody actually wants it. Um and but little by little, we are improving, right? I mean, you do have to look where you were 5 years ago.

Oh, yeah. Um but, you know, if there's a blow up, FTX was really painful for the regulators. They got blamed for what happened. Yeah. But, I mean, actually a little to Annabelle's question, I I wonder, so what is the status in terms of, you know, all the different regulatory bodies?

I'm not You're engaged with them or you have people who are. Where Do you Do you have any sense of here here's how crazy it is right now. So, the accounting office within the SEC, which doesn't always talk to the other side, has come out with an accounting rule that if you have a tokenized asset, you have to keep on your balance sheet dollar for dollar. So, that means everybody who puts money in our money market fund, we have to keep a dollar on our balance sheet. Well, that pretty much will kill anything, right?

Yeah. Now, the good news is we're in there talking with them saying, "Hey, by the way, this is you know, this was unintended consequences of this." And they're really engaged in trying to figure out like they they did it for good reasons not understanding the bigger. So, you know, they're constructive, they're paying attention, people show up, they've got their own issues with turnover, and to your point, where do you draw that line on regulation, right? You know these things need to be regulated, these things shouldn't, but unfortunately, there's a big swath of gray, and that's where they're going to get in trouble.

Yeah. Yeah, well, I guess we'll have to see what goes happens next time. Yeah, thanks, Jenny. Um and then I think maybe we'll use the remaining 10 minutes or so and just talk about broader um macroeconomic outlook. That's also very relevant to uh the crypto industry.

I think it's more liquidity driven these days, and um actually, I was um in the US recently, and I felt this this sense of false um false sense of economic recovery or maybe it's actual resilience. I'm not sure, but people are still spending a lot even though inflation is high, things are getting expensive. And actually I think what happens to to crypto prices largely dependent on what the Fed does in in in the next course. All right, so yeah, heading the the floor to the rest of you guys to you know, to think about what what's going to happen in the next year or two. Don't look at me.

These two brilliant minds I I defer to both of them. I'm curious myself. So I don't think it's what the Fed does. I think it's a risk on risk off trade. And I always say to people you'll start to see the maturity in the market when ETH and Bitcoin don't trade together.

Right, they're actually two different completely different business cases and the fact that they trade right along with each other and the the entire crypto ecosystem trades together tells you that it's risk on. When risk is on, crypto goes up. When risk is off, that means people are moving money towards cash and others, there then you see crypto go down. And it just happens to be that the risk on risk off people are evaluating the Fed's actions as indicative of one way or the other. There's an inherent cost of capital, right?

If you if I deposit my money with money market funds versus putting on DeFi, the risk return Well, we we like our yield coin cuz actually you can put it in that and get yield. So you don't have to Whereas the stable coins you don't get any yield. Just a Yeah, what about you, Dan? Well, I mean I think the Fed is over tightened and I think they're done basically and um I mean I've been fairly closely watching cycles for 30 years and the Fed and my personal view is this is the uh, worst Fed that I've seen um, in terms of their ability to make judgements. What can I tell you?

That um, you know, they panicked and got very aggressive when the CPI headline hit 8% and they said, "Well, we're going to get CPI down to 2 to 3% then we'll be okay." So, CPI then hit three uh, last month or whatever it is. I think within the next sort of three to five months we'll have a two handle on CPI and um, I think it's untenable for them to raise rates in front of an election in November when they've hit their stated target. And so, um, I think they over tightened and the economy in the US is softening and there's certain sectors that are completely uh, getting crushed. Uh, housing and you know, the lending business and um, I just see growth and inflation slowing and so I think by Q2 honestly they probably are ending up cutting rates.

Um, but again, that's a a maybe a little bit of an outlier view, I don't know, but all the data and the leading indicator all the leading data I look at all suggests uh, inflation is going to undershoot. That'll be very bullish for our space. So, I think you know, I do think the bear market finished on that day, but now we're in this consolida- con- consolidation period. We're not in a bull phase yet, but you know, we're going to be causing a lot of pain as the market goes sideways and people are interested and then they lose interest and um, but you know what? To me honest, I I say that that's been my view, but I come here and I'm like, I'm getting like steam roll- I'm getting knocked down by how many people are here, you know?

It's 10,000 people. This does not feel like a bear market. You know what I'm saying? Oh, yeah. It doesn't feel like a consolidation phase either, right?

Like this is like boom time. So I don't know. I think we're going to have a resumption of the bull phase certainly by next year this time everything will be higher and I think rates will be lower. Amen. Love to see that.

Yes. Can I just offer one thing Anna but I won't share my macro thoughts especially after these two. The only thing I can guarantee is I'd end up being wrong. But I think we're all confident that we're not going back to a zero interest rate environment and so much of the digital asset space is built on top of stable coins. So one thing for us to just look out for is there's roundabout a hundred billion of money locked in stable coins that don't pay interest back to the users.

And Jenny Jenny hit on this. Their their money market fund their tokenized money market fund is essentially an attempt these are my words not not Jenny's but it's an attempt to kind of solve that. So you know if you invest in that then then the money goes back to the holders. I don't know if that'll be the right approach or not. I've no I've no idea but something's got to give because at 5% yields 6% yields 7% yields 5 6 7 billion dollars is a giant sucking sound on Yeah, it's going straight to the house.

On this on this industry. It goes it goes straight it goes straight to the house. So that's something to look out for. I suspect there will be pretty substantive changes if I had to guess in that in the in the relatively short term. But it's interesting right that the new narrative of real world assets really is just bringing the more traditional finance yield opportunities back to crypto and and I and I think actually for us right we we have the more Bitcoin Ethereum or stablecoin denominated hedge fund products and we just launched a underlying T-bill underlying fund as well and the demand there is just that that justify that justifies why there's a lack of liquidity and frankly a very very slow and not volatile market in in crypto land because there's really no need to trade too much, right?

So in that sense actually for for you guys Tom, what is the what are some of the newer products maybe you guys have in mind in in this slow grind before hopefully next year to get to answer it we'll have a bull market again. Well I'll answer quickly just cuz we only have a few minutes left. As I said, you know, tactically we're adding products here and there. We launched fixed yesterday and margin last month and we're going to do perpetual futures at the end of this year. The stuff that gets me most excited going back to Jenny's very first comment like the blockchain innovations are very exciting.

What is exciting about the blockchain? It's it's secure, it's transparent, it's final. It's basically instant settlement. So when you say Annabelle yield opportunities of trad fire are coming to digital assets, amen. Like I I love cartoon animals and frog coins as much as the next person but I think there's a more compelling use case to just cut out excess and large ass in the financial infrastructure using blockchain technology.

So we're spending a lot of time there trying to understand what's the future of stable coins, will we have additional currencies, what's the future of remittances, how can we move money from one country to to another country. Those sort of areas, those sort of products at bullish we're spending a lot of time on. I I think this concept of like cultural assets. So again, anywhere where there is a in the traditional space, anywhere where there is a revenue stream, there's an opportunity to essentially fractionalize it because of this technology. So what does blockchain do?

It's three things. It's a source of truth, so I know if Dan has that token, I don't have to go to a title company. He has all the rights that token has. It has the ability to do smart contracts and has ability to pay, right? So you can argue whether it should be ether or dollar whatever it has ability to pay.

My favorite example is Rihanna's 300 tokenized uh you know, she she issued 300 tokens, each one worth 0.00033% royalties in one of her songs. So when the streaming service Spotify plays that song, that little fractions of pennies can come back to Dan at because the smart contracts execute and you get paid. So you think about how this is going to open up really interesting athletes are going to sign big contracts and say, "You know what fans? I'm going to sell you 10% of my future revenue.

I'm I have essentially locked in my ability in case something happens to me." And oh by the way, my fans are going to probably pay a premium cuz they love me, right? So anywhere where there is a revenue stream, that's where the innovation's going to get really exciting and I think open up. Yeah, and I I agree completely. The next bull phase, I think that's going to be a big component.

The tokenization of real world assets we were talking about before, RWAs, you know, even this year has gone from uh 100 million to 7 or 800 and is basically zero, but I mean it I I think it's a huge area. Um yeah, huge area. Yeah, I agree. Great. I think we only have a minute left, so you know, we touch about touch upon some of the new innovations that you guys are excited about.

Maybe we'll let's just close it, you know, with anything you guys want to share with the audience, what you're looking forward to, what you you like to see being built in the in the market. Start with you, Dan. Well, um I would just say, you know, be patient, hold tight, and um I think that um the innovation in the space is the single most important thing and that's what's driving us forward. And so, yes, regulation will take time and um you know, other problems we're going to continue of course we'll always have problems but I just the the pace of innovation just continues regardless. I I think we're at that phase you know, if you think about the Android phone or the iPhone when it came out, right?

I always describe it like the iPhone came out and you you could have music and you had a camera and you had a flashlight and you had, you know, uh a telephone and you thought that was really cool. But what the you know, Steve Jobs and and Apple saw was they were giving a platform for the world's creativity. And this is is a platform it's going to be really exciting to the and I guarantee you they never imagined the types of things we can now do and the businesses that were created and that's the same thing that's going to happen here and we're just really at that stage of that early iPhone. All right, let's close with that and thank you all for your time today. Thank you.