Ep 14 - July 17, 2024 - ETH ETFs launching 7/23
Welcome to another episode of the weekly crypto check-in recorded on July 17, 2024. I'm your host Robert Swartow. I'll be joined by my co host Andres Sanade. How's it going, Andres?
Andres Sandate:Hey, Robert. Going well. Man, it is hot and humid here in Atlanta. How are you?
Robert Swarthout:Doing good. It that and, it's been a while. We've took a hiatus here between our 2 different travel schedules, so it's tough to get together. So, we're back at it, and, we got a lot to talk about.
Andres Sandate:I was gonna say, wow. It's been, to say the least, an eventful couple of weeks, but definitely good to be back on and good to see you.
Robert Swarthout:Yeah. Awesome. Well, let's just dive in here. So, first up is, Morgan Stanley will be approving supposedly, ETFs on their platforms for their platforms by the end of August. You know, this is I guess a bit of more of the same here as you start to see these platforms, initiating, the ability for their advisors to sell it, to clients.
Robert Swarthout:But Yep. It's, you know, it's not on the headline here, but I was reading yesterday that I think Wells Fargo is gonna be around that same time. So, you know, the the fall could be eventful or just more of the same, which has been kinda up and down in crypto the last 2 or 3 months? So more so down.
Andres Sandate:Well, yeah, more so down, right, if if we're focused on the performance side. Well, you know, one data point I'll have for next week's call tonight, I'm attending a dinner in Buckhead with about 30 advisers, family offices, and, one of the 4 fund managers that's gonna be presenting in the dine around format is Bitwise, which, as you know, we've talked about this, is one of the one of the initial issuers of the, you know, BTC ETFs. So I'm sure with the pending launch of Ethereum ETFs and this big approval and others in the pipeline, you know, it'll be good to hear Matt Hogan's take on, you know, flows into, into Bitcoin ETFs and other related crypto, products, particularly from FAs over the next year or 2.
Robert Swarthout:Yeah. Absolutely. It's, you know, we we've gone over this so many times, but it's it's surprised everybody. And, I think another way to illustrate just how much it surprised people is kinda leads into our second point here. So the Bitcoin ETFs collectively are about 16,000,000,000 of AUM.
Robert Swarthout:Eric Balchunas, I always forget how to say his last name, but, From Bloomberg. Yes. From Bloomberg. Yes. He he was been all over the top of this and then news reporting since January on these ETFs.
Robert Swarthout:As, you know, his original projection was it was 12 to 15,000,000,000 for the whole year, and we are 6 months in and already passed his upper end. Yeah. So it will be interesting to see. Obviously, the price fluctuations in Bitcoin, can affect that number greatly. Bitcoin's been it's currently at 64,000 today.
Robert Swarthout:It's been all the way down to the mid to low, fifties and all the way up to 70 in the meantime in in those 6 months. So big big percentage changes there.
Andres Sandate:Yeah. Well, he's he's gotten into the forecasting game now and because the because the audience size is probably dramatically bigger, than maybe some of his earlier ETF tweets and reports, particularly when it comes to social media, you know, outlets like, formerly Twitter. You know, you put numbers out there in this this asset class, and it I don't know. It gets it just evokes a lot of reaction. So Right.
Robert Swarthout:It it's it's, it jokes it evokes the emotional side of most crypto investors.
Andres Sandate:Well, I'm curious what what what his prediction is on Ethereum ETF flows, which I know is our next topic.
Robert Swarthout:Yeah. It's our next topic. I haven't seen him mention anything. If anything, he's been, I think, learning along the way. He's obviously not a crypto expert, but he is either holding back or doesn't know what to say.
Robert Swarthout:And we could talk about that here.
Andres Sandate:Yeah. I think we talk about the next point, which is that ETH ETFs are expected to launch, you know, late, you know, later, in July, 7 7 23. So, you know, I I would love to hear, number 1, your take on the timeline because I know we saw additional comments requested by the SEC. But in light of what we just talked about, with, with Eric b, we'll call him from Bloomberg Yeah. I'd be shocked if the forecast or prediction is in the tens of 1,000,000,000.
Andres Sandate:And, I know we've talked about this offline, but, you know, how many people really are gonna understand Ethereum relative to what they understand about Bitcoin?
Robert Swarthout:Right. You know, I've often joke, advisors may or may not understand Bitcoin, but at least they know how to say it and spell it. Most people don't know how to say Ethereum correctly, certainly don't know how to spell it, and can't tell you what is good use what what is good use cases are. There's a lot of learning there. There's no 32nd elevator pitch.
Robert Swarthout:There's a lot of things that we've kind of maybe brushed over in the past. As for where it could be at the end of the year, I I've kind of told people to think about it. If you look at the ratios of market cap of Bitcoin to Ethereum within the true crypto market, eventually, I could see it nearing that within the ETF market, not in the short term. You know, if, you know, say, Bitcoin is at 20,000,000,000 by the end of the year, if Ethereum is, you know, 3 to 5,000,000,000, I would be surprised. I I just don't see where the demand's gonna come from and why they would want that.
Robert Swarthout:Besides this, they just want some diversified quote, unquote exposure, besides just holding a Bitcoin e ETF.
Andres Sandate:Yeah. And, you know, I I haven't followed this particular launch as closely. How many issuers, are are bringing in e ETFs out,
Robert Swarthout:out
Andres Sandate:of the there was
Robert Swarthout:I know there was, 9 app 8 or 9 applications. I don't know if they've all made it through. I haven't paid close attention to that part. As of today and tomorrow, assuming as of today, they're supposed to be filing their final s one, so we'll get tickers. We're gonna get fees.
Robert Swarthout:We're gonna get the things that people probably truly care about. Yeah. And I think it's important to remind people, like, this is exactly the same kind of product that the Bitcoin ones are, just a different asset underneath the hood. It's still cash create, cash redeem redemption. And there's in this case, there's also no staking allowed with the Ethereum.
Robert Swarthout:Yeah. Which is the big piece that immediately shoulda happened. Right. Hester first That
Andres Sandate:means they're not a yield play. Correct?
Robert Swarthout:Correct.
Andres Sandate:Yeah. Yeah.
Robert Swarthout:So they're purely just like you're you're diversifying away from Bitcoin potentially into having 2, but, basically, their function is following the same music. Yeah.
Andres Sandate:Yeah. Yep.
Robert Swarthout:So, you know, Hester Peers was quoted yesterday. She's one of the commissioners. The SEC was saying how, you know, she's always open to the idea of evolving these products to be it's changed to cash redemption so it could be in kind or, allowing in this case, Ethereum to have some some the ability to do staking and then have a yield on it. That's not gonna happen with Biden administration. I'll say it right now.
Robert Swarthout:So maybe things are different come January, and we can start having those conversations. But right now, that's a nonstarter. So
Andres Sandate:Right. Well, seriously, a lot of questions with respect to the ETF and and, like, what what's the next 6 months look like. I think we have that in general with the election and just all the uncertainty there, and ongoing developments, but also with respect to the, you know, ETFs. Yeah. You would think an advisor that wants to recommend an allocation to crypto is probably gonna be asked by a client, like, I heard about ETFs.
Andres Sandate:I've heard about Bitcoin. I've heard about Ethereum. Like, do we need to do both? You know, advisors are gonna need need to be thinking about answers. So Yeah.
Robert Swarthout:Lots lots of stuff to resolve. And, admittedly, they have a lot of education that they need to do, in in, I guess, I wouldn't say short order, but they need to get on it in some level. Because their younger client base is gonna be the ones asking about it. The older ones, they won't be much. So Yeah.
Robert Swarthout:Our 4th point, kinda shifting gears a bit, is the FDX estate. So this is FDX is going to bankruptcy. They filed in late 22, early 23. And, the attorneys apparently have gotten enough fees out of this. They're ready to start doing distributions, and they, are gonna be distributing $16,000,000,000 in cash.
Robert Swarthout:It's a lot of money. Obviously, this was money that was willing to have crypto exposure before. That's literally what it was. So it'd be interesting to see what the markets are like when that happens. Sounds like it's coming soon, and, you know, $16,000,000 is not a huge amount of money, but in the crypto space, it can start to move some particular tickers, probably less so for the tokens, like, Bitcoin, Ethereum that are the higher market cap, but who knows where that cash goes.
Robert Swarthout:Some of it may be going into another estates that were in bankruptcy because of this too. So it can't be locked up. So, you know, maybe we'll never see the true effect of it, but I thought it was cool to see that at least dollar for dollar, you know, we were in a bear market at that point. People that had assets on FTX are getting their, quote, unquote, money back. They didn't get to participate in the roughly four x upside that cryptos had since then, but they also got made whole.
Robert Swarthout:It's just this weird world of how widely, asset prices can change on something. Because I don't it's not typical in the real world. So Yeah.
Andres Sandate:I I my my takeaway from the $16,000,000,000 distribution, headline is, number 1, I think everybody would probably vomit if they saw the amount of fees that were paid to all the various parties that needed to be in involved in the bankruptcy. Like you said, the lawyers, the accounting firms, the valuation firms, bankruptcy advisory firms. I mean, it's it's it's probably pretty sickening. And then there's been a lot of horse trading, and and just really betting on the bankruptcy itself by a lot of institutional investors who, you know, who bought claims for pennies, on the dollar and are gonna make, you know, they're gonna make good good money on those bets. Now they unlike a retail investor who had 5 or $10,000 of retirement assets or or savings part, they have capital and time and arbitrage is a mandate that, they can go and buy this.
Andres Sandate:So, yeah, there's a lot of, there's a lot of angles here, that you could dissect this, But, yeah, I think one good takeaway is, you know, for that investor that had money tied up and it was frozen, yes, the opportunity cost, but at least they're getting some dollars back that were originally Right. Put in place in terms of their principal.
Robert Swarthout:Yeah. I mean and, admittedly, if you really do the math, yes, they were able to claw back some assets and liquidate some assets that, FTX owned themselves to kinda get
Andres Sandate:to this
Robert Swarthout:number, by also waiting and kind of allowing the fees to accrue of sorts, you, the market corrected enough to be able to allow them to sell some of these assets Yeah. The tokens to get to this number. So, you know, it's it's it's a double edged sword there, but it's, you know, fascinating to kinda watch because it's again, it doesn't happen in normal bankruptcies. You you get pennies on a dollar. You don't get made whole.
Robert Swarthout:So
Andres Sandate:Right. Right.
Robert Swarthout:Yep. Our next topic, is back on the, Gensler SEC lawsuits thing. But this one's different. This is Coinbase has filed suit against the SEC to get access to Gensler's private emails because they don't feel like what he's saying publicly and what he's writing privately are the same. Yeah.
Robert Swarthout:My guess is, you know, this there's not nothing public that said this. The first thing I thought when I read read this high level was they some somebody's a mole somewhere and somebody said something. Because why would they have a basis to even, like, go after this? Like, somebody had to have tipped them. And it does seem probable.
Robert Swarthout:So it'll be interesting to see
Andres Sandate:I mean, it's a it's a point in their finger in the chest, if you will, of of, you know, the the agency and the agency's de facto face, and its leader, at least for now, right, through the end of this administration, as is typical as you outlined yesterday. So
Robert Swarthout:Yep.
Andres Sandate:Yeah. Look. Throw the haymaker, see see where it lands, see how it lands. And, I I just think it's fascinating. I mean, these lawyers that are working on behalf of Coinbase, and I'm thinking the lawyers sitting there at the SEC and their counsel, it's like, I know all these people play golf together on the weekends.
Andres Sandate:You know? It's just, it it's it's maddening. But here we go. That's the way it is. Yeah.
Andres Sandate:It wouldn't be a crypto update with Teton unless there was something in there about Gensler. You know that. Yeah.
Robert Swarthout:And it's just that they didn't take I I dug real hard to find something.
Andres Sandate:I know. I know. So, well, the house the house of representative failed to override the veto of SAB 21.
Robert Swarthout:Yeah. They bumped it 2 consecutive days, the votes, and then and then it didn't happen. I mean, immediately, I think it was maybe a little bit too optimistic to think that they could override it. Because they had a majority before, but they didn't have a super majority they were gonna need this time to get it done. So this is something that you know, again, if there's a new administration come January, this is probably one of the first couple things that probably gets cleaned up.
Robert Swarthout:Yep. Yeah. That'd be my guess. So Yeah. This I guess, more so sharing it here so we could put Ty Bo on it for the time being.
Robert Swarthout:We've been talking about it was coming, but, we are, gonna have to wait a little bit longer.
Andres Sandate:Well, to to suggest that there haven't been major, political and, you know, events happening in DC with the assassination attempt on Trump and now the RNC, all the talk over the last month about is Biden gonna stay in the race. Like, it just seems like many things came to a halt with respect to momentum maybe that we thought we were gonna see at the beginning of the summer. I mean, it's just a lot that's transpired over the last month. So
Robert Swarthout:Yeah. Yeah. Absolutely. And this vote happened last week, So this was predates the Yeah. You know, the assassination attempt.
Robert Swarthout:But, you know, it does seem like the momentum is a little bit slowed. I think part of it is because congress is back in their districts. They're not actively doing anything. So there's a lot less stuff getting drummed up. It'd be my read on the situation.
Andres Sandate:It it's it's getting close to August. Right? So we're we're, like, deep into the summer. And, yeah, when they get back from fundraising, recess, it maybe it rears its head again. Yeah.
Robert Swarthout:But, but again, they they won't truly be in the, the depths of a political season, from there till November. So Sure. You know, at the end of the day
Andres Sandate:So Goldman yeah. This next one, Goldman Sachs, obviously, you know, when a firm like Goldman Sachs, a sort of traditional Wall Street investment bank launches 3 tokenization projects. That's a worthy headline.
Robert Swarthout:Yeah. So threw this in here because not because they're saying specifics about it, but this more so just showing that, like, you know, some of these well regarded firms as you're mentioning are really starting to, like, talk publicly about things that they're thinking about and trying to do. I'm sure more details will come. This I believe this is supposed to happen, in late q three, early q fours from my reading. So we got a ways to go, but, like, my guess is it follows a similar model that you're seeing JPMorgan do with their crypto.
Robert Swarthout:They're trying to tokenize bonds. They're trying to tokenize different kinds of other assets. They're they're playing around. I mean, they're trying to figure it out, and more credit to them for doing that. And obviously, they're trying to figure out how they can be relevant in this new world by being, I guess, a hub or a marketplace for this stuff.
Robert Swarthout:As much as crypto can just be a marketplace anywhere on the Internet, but I think a lot of this is still, you know, to be part of it you have to be on, you know, in JP's case you gotta be their platform. You have to be a accredited investor, and it's probably still select accredited. It's probably not full open to everybody yet. Yeah. We'll see them talking about it publicly.
Robert Swarthout:You know, you hear rumblings about them trying things. You see job postings where they're talking about new crypto experts. It's like, well, they're doing something if they're hiring these kind of people. Right. Right.
Robert Swarthout:But it's hard to see them come public about it is is great.
Andres Sandate:Well, yeah. One one thing about the, you know, the likes of a Goldman, their, you know, their their employee headcount, I haven't looked
Robert Swarthout:It's huge.
Andres Sandate:You know, recently. But it it's not only is it huge, but the number of folks in technology roles in in engineering and in mathematics and in, you know, areas related to AI and quant, machine learning, data. You know, a lot of people probably think about a Goldman Sachs as a traditional m and a shop that arranges, you know, financing, takes companies public. And, certainly, you know, they're they're high up and always have been for for it seems like eons when with respect to the lead tables in traditional investment banking business, you know, they tried to go into wealth management. They tried to go into doing more consumer related financial services.
Andres Sandate:That didn't work. But I think in this area, given the, just the human capital and all those areas I mentioned, I I would be, I wouldn't be surprised if we continue to see a firm like them try to really get, deep in, like, a Citadel and others, just because of the number of securities and other asset classes that are gonna get tokenized. Right? When you think about their their clearing and custody and related businesses, all the swaps, so and they're a truly global firm. So once institutions start to do more in, tokenization and in crypto and deep digital assets, you gotta think that, you know, Goldman Sachs is gonna wanna be right in
Robert Swarthout:the middle of it. So Yeah. Well, it'll be fascinating to watch. And, you know, it it I I just think it's, you know, an interesting thought experiment from time to time is like, it it's great that they're doing this. What firms are not doing this or not or way behind the curve?
Robert Swarthout:Will they get left behind? Will they yeah, how will finance look different in 10 years? Not just because blockchain exists, but, like, is there a reshuffling of names, the big names, all names, all that kind of stuff. So it's a bit of a pivotal moment, I think, for the finance industry. And I think most of the big players are starting to realize that, but maybe, you know, some others will have to play some catch up.
Robert Swarthout:So, the next topic kind of on the spirit of experimentation is an airline based in South America. I believe their name is Fly Bondi. I believe it's an Argentine airline, if I'm not mistaken. Has started allowing people to, when they buy their tickets, get an NFT of it, and that allows them to sell the NFT and do other things with it. You know, the first thing that came to mind is, like, if you if you could change the name on an airline ticket, like, this kind of puts us back in the world pre 911, where you could walk up and hand cash at the counter at the airport and get a ticket and jump on a plane.
Robert Swarthout:Yeah. So it's a little bit different. I obviously, I can't see this being rolled out immediately here in America. We have admittedly more restrictions, good or bad there at the airport, but, it's just cool to kinda see it showing up. You know, you can get reward points.
Robert Swarthout:There's all sorts of things they're trying, and, again, they're experimenting. So
Andres Sandate:Right. Well and and, you know, the the it sort of challenges the fundamental premise of I bought the airline seat, so I bought capacity on Right. The the air the airplane. Yes. Because I can't make it, why should I not be able to transact with somebody who can make it?
Andres Sandate:It's like a concert ticket. I bought a ticket to a concert. I can attend. There's now a market for somebody else to go and attend that. So, you know, oversimplified, but nevertheless, yes, a lot of questions around regulation and and being able to substitute passenger safety, etcetera.
Andres Sandate:But fundamental concept is they're just creating liquidity around a fairly illiquid, asset, like, capacity on a plane that a lot of people wanna be on. Yep. It's, be cool to see
Robert Swarthout:how that one evolves. So our, next topic, and I will say it upfront. I'm gonna try my best to try to keep politics out of this podcast for the next 6 months. Good luck. Yes.
Robert Swarthout:Yeah. It's tough. Yeah. But I I think it's important to kinda bring it. I'm bringing this point up because you you're seeing such a difference between the way the Democrats are handling crypto and the way the Republicans say they want to handle crypto.
Robert Swarthout:The Republicans really haven't had a chance outside of when Trump was in office before, and it was too, in my opinion, too nascent to really, like, do much about them. So you have you you know, Trump obviously selected his, VP candidate, JD Vance. JD Vance is quite the track record when it comes to crypto. You know, he voted to repeal sub 121 more. So that's pretty recent.
Robert Swarthout:He is, been very critical of the SEC, which is admittedly easy to do, over the debt box incident, which is when they were lying to the court, and they got, sanctioned for that recently. And let's see. He introduced a bill to improve bank regulations, which I only think can be better. They've gotten far pretty well, it's gonna be pretty terrible for crypto companies, with regards to traditional banking. And, you know, and I guess he also I mean, he wants to see He's
Andres Sandate:a former VC as well. So, I mean VC. Right? Absolutely.
Robert Swarthout:Yeah. So, I mean, from a tech intersection. So That's right. And then Yeah. He also holds, at least on its closure about $250,000 in Bitcoin.
Robert Swarthout:So there's obviously personal motives to see it go up, and maybe that's why he cares about those things. But it's, you know, Trump is gonna be one of the keynote speakers at the Bitcoin conference that's happening this week in Nashville, among many other big names in Italy.
Andres Sandate:And and and Trump's campaign, I mean, announced, I think it was earlier this week that they had raised 20 +1000000 in crypto donations. So yeah. I mean, you're right. Like, it when you hear the narrative around digital assets and crypto, the Republicans seem to have taken, you know, taken the mantle. Mhmm.
Andres Sandate:They they are out front. Yeah. And I think there's a lot of voters who are, paying attention to that. Particularly, like you said, the younger ones who who tend to be, by and large, you know, larger holders may not may not have many assets in crypto, but it but as far as participating in this asset class, certainly, more, you know, more active.
Robert Swarthout:Absolutely. Yeah. It's a, you know and I I guess to be fair to the Democrat side, I will say that Trump, his SEC chairman so that would have been Jake Clayton. He's the one that started the lawsuit on his second to last day or last day in office, against Ripple. So there there's some negative there.
Robert Swarthout:And maybe they were personally motivated, but at the end of the day, it's, I can't you know, in in hindsight, I was excited when Gensler came in because I'm like, this guy understands crypto, and he could not have gone any worse. Well, I guess it could've. It's it's hard to imagine it, but maybe it could've. But we are, potentially looking at a different, environment come next year. So depending all depending on how those Well, my
Andres Sandate:only other yeah. It it a lot does depend on the election clearly. When it comes to crypto, I think the next four years are gonna see even more change, and I would say the consequences and the opportunity versus the prior 4 years are even more, more are are likely to have more of an impact on the future of financial markets, capital markets. And I think that the leadership in DC, the ship in the regulatory agencies, and that obviously starts at the White House and their posture is gonna dictate a lot. You know, that there's all there's always that saying, you know, people underestimate what someone can do.
Andres Sandate:They overestimate pardon. They overestimate what somebody can get done in the short term, and they underestimate what they can do in the long term. And I think when you think about crypto and and digital assets with respect to this, you know, last second to last point, I think we're all totally unaware of the impact crypto, digital assets, DeFi, etcetera, is gonna have on the economy in the long term. It's just getting there. Seems like we're we're not making the quick progress.
Andres Sandate:And so I think whichever party, whichever leadership, whichever agencies decide to step forward and think about it in a sensible progressive way, they're gonna write history. So I think the 4 years 4 years are gonna be are gonna be big.
Robert Swarthout:They they they could be, and I will say with the caveat that, admittedly, it has to be not the democrats moving forward for the next 4 years, in control.
Andres Sandate:Well, you you hope that yeah. We don't see 4 more years of of what we've seen, right, enforcement by regulation and go offshore, and we're gonna try to score political wins in the near term to move voters, but then really have, no no appetite for innovation
Robert Swarthout:Right.
Andres Sandate:When it comes to the executive branch. So
Robert Swarthout:it should
Andres Sandate:be which would be bad, you know, for the space.
Robert Swarthout:For sure. For sure. And, you know, I've heard rumblings of, you know, if if it's if it's another 4 more years of what we currently have, a lot of crypto companies will be planning packing up and moving offshore, and just kinda riding off the US, which is pretty sad to think that in a technology, you know, US is largely viewed as a technology country. Like, we can now get our shit together. So
Andres Sandate:Yeah. That we would miss that opportunity to to lead this industry. Right. Yeah. For sure.
Robert Swarthout:Cool. Well, our The last
Andres Sandate:one, I was intrigued when you put this in, the update. So I'm gonna let you talk about it, but I'll read it. So the is the Bitcoin security model broken? So a headline of sort of a theoretical question. Tell us what you what what you're thinking, and what the implication is here.
Robert Swarthout:Yeah. So Bitcoin is an asset that largely is viewed as a digital goal. So it doesn't really do much. You can transact in it. Yes.
Robert Swarthout:But it's not efficient for that. There's better networks. So we'll set that aside and say that's not really the point of it. Up until this point, the way that miners get interested in running their hardware and doing all the hard work that is the bit running the network is they get rewarded for it. They get rewarded in fees.
Robert Swarthout:They get rewarded in mining new blocks. Well, as the block reward becomes smaller and smaller, you know, every 4 years we just went through 1 in May, so we have another, call it, 3 years 3 quarters left of this current, you know, reward cycle. The the amount of Bitcoin that they're mining, you know, the price needs to functionally double every 4 years to keep up with the curve that the miners need to stay on just to buy hardware. So they're not actually making any gains. It just needs to double every 4 years.
Robert Swarthout:Okay. That, you know, that is that has happened in the past. It has done way more than that. At some point, those those those curves are gonna cross. Right?
Andres Sandate:Yeah.
Robert Swarthout:And then it becomes truly fees. The miners could decide that's, you know, they're not willing to do the work. So that starts jeopardizing this is where the whole word security comes in in that in that phrase. The whole security model is the network's highly secure because there's lots of computers doing lots of math. They're competing for the same rewards.
Robert Swarthout:At the end of the day, if there's less competition, there's less security. Does the network find a way to evolve out of this? Like, I'm this I don't have an answer for this, I'll admit, upfront. But it's, you know, it's food for thought of, like, how different networks have been architected since, you know, Bitcoin came up. Bitcoin was the first one, so it's enjoyed all those advantages.
Robert Swarthout:Other networks that come along that haven't had the advantage being first, but they've had the advantage of seeing how they might do something differently. Yeah. It would
Andres Sandate:be how how they might innovate.
Robert Swarthout:You know, for fees and just a lot of other use cases. But, you know, for the biggest asset in the asset class, I don't even know what the current percentage of the total market cap Bitcoin is, but it's probably still over 50%. It it starts to make you wonder. And all the Bitcoin proponents, they're like, oh, we need we need people to buy Bitcoin. I'm like, why?
Robert Swarthout:Like, is it just because you think it's gonna appreciate? Is it purely like, price go up so I must buy type mentality? Or is there other reasons and, you know, at some point, does this become a bag nobody wants to hold? I don't think we're anywhere close to that, but I wouldn't say that's off the table. So long term.
Andres Sandate:It's a question about if if I if I sort of paraphrase liquidity Mhmm. The in this case, security and the benefit, that the technology promises is a non anonymity, decentralization, digital gold, etcetera. But without participation in that market, you lose those benefits. Correct. And in the in the case of a buyer and a seller, we saw what happened in 2008 to asset prices when, right, there was no bid.
Andres Sandate:Mhmm. Asset prices cratered. So they popped back over time as buyers came back in and eventually said, you know, these prices are too beat up, I. E. Stocks are too cheap.
Andres Sandate:We're gonna start to buy again. But think about how many people had stayed in cash since that correction. We talked about, you know, the couple earlier because it was their life savings that they saw, you know, go 30, 40% down, and they just kinda panicked. So Right. You you've gotta have liquidity in functioning markets.
Andres Sandate:You've gotta have regulation, to a certain extent, and you've you've gotta have the the in the case of Bitcoin, you've gotta have the market participation.
Robert Swarthout:Yep. And, you know, because that's that's a true marketplace. You know, there's the miners on one side and there's the users of the network on the other. And, you know, they kinda, in some ways, need to be, like, in a harmony, of the full amounts, and all that. So Yeah.
Robert Swarthout:Awesome. Well, I
Andres Sandate:think I don't know. Maybe we need to take 2 weeks between these calls because there was a lot to cover, but, I guess I guess the takeaway is we'll we'll see you next week. I'm I'm you know, if it's like anything last week, there's gonna be a lot more to talk about.
Robert Swarthout:Yeah. Well, hopefully, we have, it's a little less dramatic over the next week. Be great.
Andres Sandate:Oh, to say the least. Yeah.
Robert Swarthout:For sure. Well, thanks for joining us on this episode of the weekly crypto check-in. If you wanna stay updated on future episodes, you can find us on any podcast player by searching Teton Crypto Capital or weekly crypto check-in. Take care. Take care.
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