From Access to Allocation How Institutions Are Scaling Digital Asset Portfolios

Uh guys, thank you for very much. I know you guys are busy and thanking uh for being thank you for being here so we can share our passion of the space with you all. Uh as always, my goal over the next couple of minutes is very very simple. Uh we're going to talk about client asset allocation, what's happening on the institutional side and my goal is very simple is to share with you some of the latest insights we are having and then let you make your own decision on what the impact could be on your business on the institutions but most importantly for you as well personally as well as we look at the future of the crypto asset space. My name is Henry Sleen as was mentioned I'm the founder of the first Dubai regulated crypto hedge fund but I'm also the founder of the biggest crypto compliance services firm in the world called OSEX compliance and then we're also many people know me I'm the host of crypto weekly on CNBC Arabia uh watched by 60 million people each week uh where we cover all these crypto topics every week a couple things we're going to well we're going to discuss today uh you know price by the way we just got on true panelists I have to mention a couple fun facts Tony you guys saw from uh Black Rockck.

He's been driving the crypto strategy for the last 5 years. One thing you may not know about him, by the way, he's a black belt in karate since the age of nine. So, be careful here if anybody tries to kidnap our crypto folks. Uh Tony is there Dunist, the head of digital assets at DBS um institutional bank. When she's not busy with crypto at DBS, by the way, she's a makeup artist.

So, here we go. We all know if you're not busy in crypto, something even more exciting on it. Uh I'm gonna come back to that but also uh uh when it comes to Chris before jumping at trading and crypto world he was in a parachute regiment in the UK. So you go a lot of people with military backgrounds and I'm going to kick it off today with Rahane uh Shahif Ascari uh who heads product and research at Gayscale and when she's not busy with crypto she paints abstract art. So here we go like the artistic side and kick talking about artistic I'm going to kick it off with you Ray.

Uh we're talking about allocations. Let's jump right in. The ETF, one of the big stories we had of the year at Grayscale. I know you guys been doing a lot of work on this topic. Were you surprised first of all that the ETFs were so successful?

And when we think about for our the audience perspective, what are the products we should expect to see in the next couple months and years when it comes to ETFs?

Thank you. Um and thanks everybody. I'm really excited to be here. I would say that we at Gayscale have been the least surprised because we have been working at this since 2013. Um some of you may be familiar with GBTC.

That is the product that was the uh original Bitcoin rapper. Um that was a security. Uh we in we sued our regulator in 2024 to create the first crypto ETF which was GBTC and that usher

sued the regulator. I think it's quite important.

Regulator we won. Um and so we you know we have helped to usher in the era of crypto ETF investing. It has been extremely impactful. the ETF rapper opens up access to the entire advice channel, the wealth channel and um and so we've seen so much innovation even since that you know we've had our Bitcoin Ethere BTFs Ethereum ETFs have been very successful and now as of September under the generic listing standards we have the ability to bring altcoin ETFs to market without the 19B4 process and so we have launched our Salana ETF we launched or chain link ETF and ultimately I think we're going to see a lot more products and we're going to see a lot more demand as investors think about you know some of them have their and maybe some of you are allocators have your Bitcoin exposure maybe you've wrapped your head around Ethereum and smart contracts and now there's a whole other you know 50% of the crypto market cap that is about 50 million tokens two to five more million tokens more every month. And so we're here to help um bring regulated compliant products that allow allocators to think about that asymmetrical upside in the rest of the crypto market cap.

You mentioned this allocators looking at these regulated products. Maybe I'll move it to you Evie. When you come from a DBS perspective, our clients looking at these regulated ETF products to get their exposure or they're going on Bitcoin spot instruments that you the bank offers.

So we started our own exchange in 2020 and the reason for that was because we had a lot of the private banking club. We were the third largest private bank in Asia. We had a lot of our private banking clients who were asking to invest in digital assets, but they wanted to do that in a safe way. So when the ETFs came, we did see some clients switch, but a large portion is still um in Bitcoin directly uh trading through us on the spot basis, but also uh through structured nodes or options which is are also available to them. Um the advantage of the uh the spot market is that it's 24/7 and uh while in 2023 2024 we saw a lot more buy in buy and hold we've seen a shift where there's a lot more trading this year happening Asia generally likes to trade.

So we've seen that in in in the in the coins as well and uh the advantage is 24/7 it continues to uh continues to trade. So we see a bit of both. On the structured product side, I wanted to say we actually give the optionality. We give the optionality to do it um on Bitcoin physical delivered, cash delivered, but also IBIT delivered. So we provide uh the optionality

and you know for the clients are looking at this exposure. Are they looking at this part of their diversified portfolio? They're putting this as a part of VC bucket hedge against debasement. Where you where you see that couple?

Very good question. So um a lot of the investors are non-digital asset natives. They are your traditional um uh traditional uh businessmen, people who started their own companies who actually have have their have made their wealth in a very different industry and for them it's an allocation an allocation of their capital to uh to uh the space for many of them

Chris actually on this point on allocation. So Brevin Howard has been very interesting. You guys have a fund and there's different buckets in it as well. like how do you see how do you think investors should think about the the role of the crypto in their portfolio especially on the active management side there's ETF we all know but on the active management side

Brenon Harold is very early in identifying that this is not just one trade this is not a narrow set of opportunities but this is a very broad application of the technology and so within our approach we look at both private and public markets and we look at this through the lens of the technology cycle the lens of a technology ology cycle is to think through a number of different phases. The first phase is specific on the technology. You typically have a run up in price. You then have a price correction and after that point you then have applications of the technology. The application of the technology is where most value occurs.

And so our approach is to look at not just tokens but also equity whether it's private equity whether it's VC growth or late stage and also listed equities as well this space is very broad this technology transition has started but we're still very early which means that the institutional adoption will drive more use case of what is effectively a decentralized opportunity but also a very much deflationary technology. I sometimes get asked give me a specific example and how do you think through it? An example is stable coins. So thinking through how does an active manager and how does brev think about making money for investors through stable coins? There's really three different verticals.

The first is the issuer. So the issue of stable coins capture net interest margin and there's been positive regulation in the US to support that. The second is the technology stack. So which technology is used? Some of that technology stack are in publicly traded tokens but some of that may be private as well.

And the third important part is the application of the technology. So through a combination of private markets and public markets, you can capture each of these different verticals with a coherent investment strategy that captures the breadth of the opportunity set.

It's interesting that actually I would love to talk how are you seen that value capture. I'll come back to that. You you mentioned the institutional adoption, how investors will look at it. I want to move it to you actually Tony. I mean, Black Rockck, man, over the last couple years went for complete 180.

Uh, from Larry Frink being super critical of Bitcoin, calling it a scam, to now being the biggest revenue line item of Black Rockck, which I find incredible, and it was the most successful ETF in history. I mean, for many people in the room, work in organizations that were arguably, you know, very critical of crypto. How was that journey at BlockRock? I mean, having been in it to see this complete 180.

Yeah. No, no, thank you, Henry. And I mean, I think you're absolutely right. Like I think of all the firms out there, the the journey from a Black Rock perspective has probably been the most profound and and public, right? Everybody's seen this play out.

I would say, and we talked about this, is I actually think that's a mark of a great company, an ability to repivot, to rethink and actually reposition itself as this market continued to develop. And to give you a sense, I mean, I know everybody thinks that perhaps this has all happened in the past couple of years. We've actually been working in digital assets for for probably about 10 years now and it's been a journey right we started very early in terms of thinking about what does this technology mean for a firm like black rockck and really importantly where could we add value particularly from a client perspective and where we've landed is really coalesing around three key areas as we think about commercial opportunities so firstly is on the crypto side of things we just look at crypto assets now as just another asset class. We are obviously building products like the ETF as you mentioned, but we're also integrating cryptoile assets in our underlying technology which I think is really foundational. You think about how we drive access to this is through the application of the technology piece.

So that's the first piece. Secondly, and as as Chris mentioned on the stable coin side, we look at stable coins as the evolution of money and evolution of value transfer. where we play an important role is in the reserve management side that very much aligns to our core ethos in terms of asset management. And then the last piece is in and around tokenization. We're obviously seeing more assets come on chain.

The piece for us that has been most profound is how we can use tokenization to create a new distribution opportunity for our our products. And I think that's where from an asset management perspective leaned in. So I mean taking a step back where I think we've been successful is been thinking about this space in almost like a duality right we take a crypto asset you wrap it in a traditional structure like an ETF you take a traditional instrument like a money market fund you wrap it in a token so really what we're trying to do is all about access and build bridges and I think that's where from a black rockck perspective we've been successful the one other piece I would mention is we've been doing this obviously globally we actually announced this morning a partnership with the ADI Foundation and Fin Street. So we're actually looking at how we do more here in the UEE which I think is super exciting too

on the stable coin side. Yeah, very exciting actually. Congratulations on that partnership. You just mentioned one thing and we know you're you're providing access and trying to bring this stratifi expertise actually in digital assets. Maybe Evie I move it quickly to you on on this point like are there actually best practices that we're that you are seeing now come in in the digital asset space?

I mean we all you know we've seen the evolution of the space and how it's changed but because there's a lot of things that probably we don't want from traditional finance to be honest and obviously digital assets works way better.

Um yes so when we started we already adopted the way that we set up our custody the way that we set up our trading was already following the traditional finance standards. Uh for example we sign ISDA agreements when we do OTC trades. Um so that we already set up but what we also see is a lot more demand because we bank a lot of the digital asset natives. uh we see a lot more demand in terms of products and services that are existing in traditional finance to have those in uh in uh the digital asset space as well. So whether it's uh third party collateral custody and security agency agreements or it's just the way that um counterparty risk is managed um is is a big topic which we see but at the same time we also see traditional firms come to us a lot to see okay what can we do how can we use this technology and how can we uh propel ourselves into the next generation and what are things that we have to think about when we deal with this new technology from a technology risk operational risk point of view and what are things that you've learned because indeed we've also been at this since 2016.

Um it's it takes a bit of time to learn. So we see a lot of cross learning there as well.

You know on the crossover so maybe I'll move this to you Chris. On the crossover side I've been where I was really wrong this year is we saw all the activity in crypto ironically potentially happen on traditional markets the IPOs of crypto firms DATs digital asset treasuries ETFs I mean that were obviously massive success. Are you surprised of that? I know that there's really the activity happened there and the value creation in many cases happened in traditional markets. not in digital tokens.

I'll come back to Absel Rey on that on that point as well.

It hasn't been a surprise. It certainly fitted within our investment thesis of having this four-stage cycle and seeing more and more companies through the equity cycle IPO. So that's really a function of having VC through to growth through late stage to then IPO. We've seen significant increase in market cap in terms of not just new IPOs but existing companies as well. and equity is an important part of the story.

But we've also seen debt issuance as well. So these are crypto related companies that are able to access both equity public equity markets and and also debt markets. There's been a few drivers for this. One has been regulation. So positive regulation in the US specifically around Genius Act and stable coins has set a different tone.

We went from regulation by enforcement to positive regulation and that set a very positive tone for companies coming to the market. We've also had a broad positive risk environment as well in equity markets and thinking again through the opportunity set in this space. A big part of this is around equity whether it's private or public. It is not just a story about tokens and investors are seeing that more and so this increase in terms of new issuance and new equities creates for us as an active manager more opportunities. We're able to be both long and short these new um these new companies and it highlights that this trajectory of private to public will be a big value big driver sorry of value creation going forward.

No, but I think I I get the private to public and I think for a lot of these public companies, we have ways to value the company as well, the things that we've been doing for decades on when it comes to tokens. So, you mentioned for example before you're launching the ETFs of all the other altcoins as well. How do you guys look for let's say people in the room, how should they look at when they come valuating Solana, you know, XRP and all these tokens, how do you guys value because we have that for Chris on the Trafy side, but how are you guys looking at that?

Absolutely. So, you know, they in traditional finance for equities for instance, you have earnings every quarter. In crypto, you essentially have earnings, so to speak, every time a new block is created. So, for Bitcoin, that's every 10 minutes. And for uh some of these more newer, more performant blockchains, it can be, you know, inside of a minute.

And so, for us, we we are creating tools and frameworks that take um metrics from blockchain. So we're looking at uh transaction volume. We're looking at other onchain metrics and we can use that just the way that investors think about for instance EV to EBITDA to translate what's going on on chain to um and the intrinsic value to market value. Um and then there's also the idea of you know thinking about sector taxonomy. So you think about um the taxonomies we have in traditional finance.

We've created the Grayscale crypto sectors which takes the investable universe and divides it into six crypto sectors based on investable exposure and use case. Um so the data is out there. It's transparent and it's just what we're doing is that we're looking at what's going on on chain volumes total value locked and you know thinking about the metrics that tie that back to um intrinsic value just like investors do for traditional assets.

Chris, do you agree with this from your perspective? I get it on the equity side but on tokens do you believe do do you also believe in this token economics and the way of looking at tokens?

I mean tokconomics is you well well researched and well looked at and certainly the metrics are described here is one angle at which to look at it. When you think about new technology the lens in which I think about it through is about network and about application and this is why having a diversified multiasset approach is really important. I think if we fast forward five years from this point, it's difficult at this point to know which of these technologies will be the ultimate winner. Which is why you need diversification. You need exposure to the entities and companies that are somewhat agnostic to the underlying technology.

And that's our approach to make sure that returns for investors are not linked specifically to one or two tokens or one or two technologies, but capture the broad opportunity set.

Interesting. I think I want to ask you guys afterwards what's the one advice you have to the room before that Tony I just want to touch one thing you mentioned before is on tokenization right so obviously we're seeing a lot in the space there's tons of announcements this week on that topic as well who do you think is benefiting from tokenization you'll be you think it'll be the institutional investors in the room who will ditch their ppm subscription docks and wires and go for it or it's the crypto treasuries are benefiting from it it's retail who's capturing that who's getting that value of that access

I mean I think there's I mean there's there's there's a number of opportunities where we have leaned in and where we see the biggest opportunity is is on the fund tokenization side right and and actually so Chris and I worked on something five six years ago and so we were probably too early when we started to think about how we could use fund tokenization to create new utility in fund tokens we're obviously seeing that continue to play out and it's applicable in things like collateral management so on the biggest opportunity as I mentioned before is in distribution right so we think about the evolution of even the wallet infrastructure. So if we all believe that fundamentally wallet infrastructure will continue to increase there'll be more applicability in terms of the user base then I think there's a natural evolution in terms of how do you think about bringing products to the web end of the market and that's what we've been focused on. If you think about what we've done with our onchain money market funds, we solved a fundamental problem that existed within the crypto ecosystem where if you were sitting long a stable coin that was okay when rates were near zero, but as rates continue to rise, it didn't make sense to sit idally in a stable coin. We created an opportunity to jump from stable coin to yield beer and token and a near instantaneous basis. We solved a fundamental problem for the web three end of the market, but we also created an opportunity to bring a traditional product onchain.

I think that's a theme that we're going to continue to see in different exposure types. And for us and for many asset managers, you need to think through that's a whole new distribution opportunity that didn't exist a couple of years ago, right?

I was quite surprised that treasuries took became the first tokenized asset at that scale. I thought it was going to be real estate years ago, but again, shows you how things change uh quite quickly. Uh guys, we have literally two three minutes left. Uh my best friend the bell is back with me. So I'm going to ask you guys quick two quick questions and I want one or two word answers.

You guys are ready? Well, even if you're not, we're still doing it so it doesn't matter. Let's start with you Tony. Uh we have a lot of allocators in the room. What is the one piece of advice you have to the allocators in the room when it comes to crypto investments?

Don't sit in the sidelines any longer. It's it's it's beyond that. So get involved.

Beyond lending, Evie.

Be mindful of counterparty risk.

Counterparty risk. Ooh la la. This is so institutional.

Don't let the volatility scare you.

Here we go. Diversification. Capture the application of the technology.

Chris, I'm starting with you this one. What industry would you be in if you're not in the crypto industry?

Uh, British military.

British military. Wow. Nice. Nice.

Art and designer or beauty?

I' I'd be a developer. I'm a computer scientist. I'd be a developer.

Here we go. I I'd like to think I'd be some kind of designer, maybe similar similar to you, doing some kind of art type thing.

What is the one thing that is exciting you the most right now in the crypto industry? The one thing that is exciting the most you're the most bullish on? I'm sorry with you, Tony.

I think it's the scale of institutional adoption that we're starting to see.

Y

the excitement of our peers stratify.

There we go.

The ongoing regulatory clarity and favorable backdrop.

Wow. Interesting. stable coins and investment opportunity across the three verticals.

Chris, I'm starting this one for me. It's an interesting one. With all AI changes going on in crypto, you're seeing all the changes going on the future of work, future of finance. You're 18 years old today. Would you go to university or you won't?

And if you would, what what would you study?

I'd go to university. I think AI is super important, but learning how to think and also challenging AI is super important. I think at this point two great technologies both of which are deflationary. I'd want to go to university and I'd want to understand blockchain and how it can be applied and I want to make sure I work for a company that utilized it use the application and captured shareholder value.

Love it. Ray,

it's a quintessential life experience. I would not give it up.

You would not go to university either?

I would not give it up. I would definitely go to university.

Here we go.

I would go to university and I would continue to study science.

Science. Okay. I I wouldn't I think university and the way we think about education is outdated. So we have to move beyond it and I think some Chris the intersection between digital assets and AI is where the future's at.

Starting this one with you Tony relation to what you mentioned uh Chris people in the room have kids and their kids want to start working in crypto. They have a choice between one of these four jobs. Working in a crypto startup, uh working in a in a listed crypto company, working uh for a consulting firm, or working for a crypto regulator. What job should they take if they want to get into crypto?

I mean, I think there's probably more longevity in a crypto regulator to be perfectly honest with this crypto regulator. Here we go.

Assuming they're young, startup.

Startup.

A great startup

as well, Chris.

Startup. We need entrepreneurs. We need people building the space. And I think it's a great education for for kids coming in from university to be in the real world.

This is a funny one. I'm starting with you, Chris. You have the chance to launch a new crypto startup tomorrow morning. You have a choice between these four co-founders. Who do you pick?

Elon Musk, Chungpang Jiao, CZ's Binance founder who just got the license at EGM, Taylor Swift, or Donald Trump?

Oh my god.

As your co-founder. So, I I co-founded a startup called IVNO, which is a tokenization business. I think I'd focus on the team. I'd probably take money from all of them. All of them.

Elon.

Elon Musk.

I'd probably go with Elon as well.

Elon Musk as well.

I I I would be the same to be honest,

man. Donald Trump and Cesar, Taylor Swift are alone there. And to finish it off, guys, to finish our panel today, uh I'm starting with you with you, Tony. My traditional question. Whoever comes on stage with me, you have the the opportunity to have lunch or dinner with one person dead or alive.

Lunch or dinner with one person dead are alive. Who you have lunch with?

I I would choose this esteemed panel to have lunch or dinner with.

My god.

There you go.

WHAT ARE you going to respond after?

I think you have to

heavy. Who you have lunch or dinner with? One person dead or alive. Lunch or dinner with?

I typically say Chris Jenner.

Chris Jenner. Wow. Interesting. I would typically say TSL at the poet.

Oh, here we go. And to finish it off, Chris, of how on the topic of Alec assets extra allocation, our Abu Dhabi finance 202 2025, you have a chance to have lunch

or dinner with one person dead or alive who you have lunch or dinner with.

Alan Turing.

Alan Turing. Wow. Interesting.

Educated at Cambridge, founder of uh computer science

and someone we owe huge credit to in terms of the way this industry has progressed.

Absolutely guys, thank you very much. That was a panel. See you guys later. Thank you very much for your attention.