Ep 56 - November 12, 2025 - Schwab buys Forge
Welcome to the weekly crypto check-in, your go to podcast for navigating the wild world of cryptocurrencies hosted by Andres and Dante and Robert Swartow. Today, recorded on November 12, we're diving into the latest market shifts, blockchain breakthroughs, and expert insights to keep you ahead of the curve. How's it going, Andres?
Andres Sandate:Good, Robert. It's been a couple of weeks, so I'm excited to dive into some the headlines that have made news here across crypto. There's some, obviously, some things going on on Capitol Hill. There's some deals that have been announced. There's obviously no shortage of, activity around, ETF fund formation and a pardon at the end.
Andres Sandate:So lots to unpack. How you been?
Robert Swarthout:I'm doing good. You know, we haven't recorded for a good bit, and, you know, part of it was there wasn't enough news, then I was traveling. But I never would have thought, like, how impactful a government shutdown would be just to the crypto news cycle. You think it would be somewhat immune, but I guess enough of our news these days is about, you know, we want legislation or we want ETFs to launch. And, obviously, those are both connected connected in with the government very deeply.
Andres Sandate:So Yeah.
Robert Swarthout:But, yeah, we'll get started here with our first one. So there's you know, I guess, this is a little bit in the weeds, but there's 19 acts and then nineteen thirty three acts ETFs. They they're, you know, slightly different varieties of each other, but, functionally, trade assets under a ticker, I think, is the easy way to say it. There was already a nineteen forties act e ETF out there for XRP, and that was the sponsor of that was Rex shares. And soon, I I believe as of tomorrow, the thirteenth, the Canary Funds XRP ETF, the it's a 33 act one we'll be launching.
Robert Swarthout:And, you know, because it's Twitter maybe originally, because it's crypto, it happened on Twitter. But it's just kind of a little bit of like, somebody trying to call first, basically, and and then getting called out for kind of not being first, which is kinda funny here. So the big I think the big thing here is is there's gonna be a lot of these coming. This one is the first, again, 33 x. It's a pure XRP holdings.
Robert Swarthout:There's no leverage, and it is more tax efficient. The '19 forties x ones can be partially exposed to XRP, and it is less, tax efficient structure is my understanding. So
Andres Sandate:Yeah. The the the 40 the 40 act funds, you get a little less of that direct exposure. Know, advisers, I think about this in the context of as we've talked about wealth advisers and allocators and people, you know, hopefully tuning into the show or part of our audience is, like, trying to make sense of the crypto space and using terminology that they're familiar with. You know, you don't see as many 33 act funds launched as you do 40 act funds. 40 act funds, are are more common.
Andres Sandate:Most people would know, you know, mutual funds for, you know, being a 40 act fund, red red regulated, lot more filings with the SEC. You know, there's a there's a certain litmus test. The difference in the 33 to me is you're getting this direct exposure to this underlying, in this case, XRP, you know, liquidity. And and, you know, big takeaway, I think, for the market and advisers or people allocating the space or just following the space is just more liquidity. Right?
Andres Sandate:And and more transparency around pricing. Mhmm. So you don't have this, you know, big, wide bid ask spread, you know, for for securities that are harder for people to get their arms around. I think the other thing is is just when you look at it from a adviser lens perspective as an adviser, we always think about, is this sponsor have the wherewithal to see this thing through? It's one thing to launch one.
Andres Sandate:It's another thing to get it to scale. So it'll be interesting to see the group behind this. I think we talked about it's called Canary. Yes. They've got a couple of other digital asset, offerings out there in the market.
Andres Sandate:I personally don't know a lot about them. But, yeah, it it will be interesting to see if they can reduce some of that friction that we've seen with advisers adopting, you know, more than BTC effectively.
Robert Swarthout:Right. And and I think, you know, you made the point a a bit ago. Like, to me, all these ETFs, it's not necessarily about getting making access easier, which it does. To me, it's bringing liquidity into the system. It kind of tightens the bid and ask.
Robert Swarthout:And Mhmm. Over time, I think what it will do is it will take control away from the way that crypto currently trades and kinda make it calm down a little bit in the sense. Right? I still think crypto has a long future up into the right personally. But at the end of the day, if you look at how crypto trades, it trades largely on its futures done on crypto exchanges on leverage.
Robert Swarthout:And it's the amount of control over the market that those traders have is disproportionate to the the value that they're adding to the system or or they have at risk in the system. So it'd be great to kinda see that kinda balance out over time and give a little bit of stability to pricing. So Yeah. And I'm not gonna say
Andres Sandate:anything here that that anybody that's in the wealth management or financial advisory or, you know, in investment space hasn't said probably before, especially to their clients, you know, I think it's pretty common knowledge, if you will, that, you know, asset allocation has a lot more impact, if you will, on a portfolio's overall returns than, you know, individual, let's say, security selection. Right? So I think from the standpoint of asset allocation, if you are in the camp of saying we should have digital asset exposure in the portfolio. Mhmm. Right?
Andres Sandate:And not everybody is, right, to be to be clear. Not yet. Not yet. But it but if you are in that camp of saying we should have some exposure to, you know, equities, Maybe within equities, we want some you know, we want large cap or we want, you know, small cap. Point being, if you if you believe that you should have, let's say, a one, two, three, some are going as high as 5% allocation to digital assets.
Andres Sandate:Now the question is, okay. We think that if if we're doing asset allocation. Now the question is how do you get that exposure? Right? And and how do you get that if if you're in the camp of we just think Bitcoin is crypto Right.
Andres Sandate:And crypto is Bitcoin, well, you've probably answered the question. But if you're in the camp of, crypto is much bigger, much broader, much more nuanced than just Bitcoin while a lot of it still moves with Bitcoin. I think the other thing that's interesting about this one, this, you know, this XRP ETF and others that are coming to your point, is it's gonna allow folks to start to get this more beta exposure to the market. Meaning, I'm not trying to pick and choose the winners per se. I just want low cost, easy, you know, highly priced efficient offerings.
Andres Sandate:You know, ETFs are synonymous with that. I'm sure the fees here will be a little higher. But, you know, there's a lot of people that are just like, I I don't wanna get into picking stocks or securities or cryptos. I wanna get into getting low cost beta exposure and let the market do what the market does. A 100%.
Andres Sandate:Yeah. And that's gonna I think that's gonna be, to your point, like, where we see, you know, this continuing to go is people are gonna be looking for these regulated familiar wrappers, you know, that's jargon for the fund structure Mhmm. That they can that they can access for their clients or to build a portfolio and do so in a low cost way. And you have to think that if this product, you know, from from, you know, from the 33 act, you know, spot ETF perspective with XRP works, like, there's gonna be imitators. Right?
Andres Sandate:So yeah. But I I think a pretty cool headline for, you know, for, you know, for evolution in the industry.
Robert Swarthout:Yep. I totally agree. Awesome. Well, move on to our second one here. You know, this is this will be a topic I think we talk a lot about over the next couple months, but, the big, draft bill came is coming out of the senate ag committee.
Robert Swarthout:Yeah. And, obviously, they haven't made tons of progress, due to the shutdown. But now that they're kinda seemingly getting back in gear, the draft was released. And there's some good parts. There's some, probably some parts that need improved.
Robert Swarthout:I don't say there's bad parts necessarily. Just opportunities for improvement in different places. I I think the big headline is or headlines is the CFTC is gonna be the main regulator of crypto. I think that most all that coming because most of these cryptos act like a, commodity when they're truly decentralized, so that's that makes total sense there. Again, the SEC will have a reduced role, because they are more securities focused.
Robert Swarthout:So the tokens that, or, excuse me, the cryptos that still act like securities will be regulated by the SEC under these current guidelines. And, you know, there's some work to be done around AML and stuff like that, but it's progress. You know, from a perspective, there was a quote, and they didn't name the person, but a crypto trade association chief was gave a comment that the bill is a good start, but it still has a long way to go before the industry can support it. So, you know, there was original hope that we would have this by the end of year. I think that that is highly unlikely at this point.
Robert Swarthout:Just obviously wasting a month or a month and a half, didn't help there. But, so maybe we'll see it early next year, and be able to celebrate along with everyone else.
Andres Sandate:Yeah. I keep, you know, kinda going back to some of the fundamentals around the the adoption of the space for broader swaths of the investing public. You know, things that I think, you know, individuals, I don't wanna say take for granted, but, you know, when you when you have money at a bank or you have money at a brokerage firm or you have money at a, you know, a custodian, you sort of take, I don't say take for granted, but you assume that those institutions are safeguarding those assets. And when you log in to your account, you're gonna see your holdings. You're gonna see price.
Andres Sandate:You're gonna see transaction history. You're gonna be able to pull these reports. Right? And and one thing that I did notice that the bill did is it allows for, I guess, this entrepreneurial, decentralized element of the crypto industry to to survive. Right?
Andres Sandate:I know that you and I talked about this. Yeah. Right. You and I talked about this stuff going back a few years. Like, does this whole industry go to a much more centralized, institutionally heavy, dominated by the big banks, dominated by the big asset managers, and it really pushes out that decentralized, you know Mhmm.
Andres Sandate:Business that is kind of the original sort of DNA of how this all got started. It it seems that they and correct me if I'm wrong, but the bill explicitly does protect for things like self custody and, decentralized kind of innovation to continue to happen.
Robert Swarthout:Yeah. It's a big deal because especially, you know, granted we had a four years under the Biden administration where they were trying every way to kill crypto. But, like, specifically, they went after software developers in a couple cases. And it wasn't like the software developers developed software and did something bad. They developed software that somebody else took and used in a bad way, and then they tried and then literally held the developer liable, which is not a way to promote innovation.
Robert Swarthout:Yeah. I mean, we
Andres Sandate:right. We saw we saw companies moving offshore or looking to establish, you know, their headquarters in Asia or Europe. It just does does seem that this this draft bill is saying we want we being, you know, I guess, the the the legislature the legislators and, you know, lawmakers are saying we we want this industry to not only survive in The US, but to to really thrive again.
Robert Swarthout:Mhmm.
Andres Sandate:And innovation to happen here. So I thought that was interesting. And then, yeah, from a timing perspective, I mean, everybody now, I think, focus shifts around this to not if is is this gonna happen, but more around when Absolutely. How fast. Right?
Andres Sandate:Are we talking the first three months of '26? Mhmm. Or do we get into danger territory where now it's been midterm issue and Right. And and there's a lot more, you know, sort of unknowns and variables that come into play.
Robert Swarthout:Yeah. Absolutely. It's let's hope that it doesn't get caught up in all the other drama that will be congress next year. So Yeah. But I guess we'll have to wait and see.
Robert Swarthout:So we'll move on here. Our third topic is Charles Schwab is buying Forge, and Forge is a secondary shares platform. A lot of privately held companies, you can go if you're an accredited investor, you can buy shares through their pre IPO type situation. So, you know, as we were kind of preparing notes for this, you brought up that, there was another deal that happened with gosh. I'm forgetting the name offhand now that Morgan Stanley.
Robert Swarthout:Morgan Stanley. Yes. Yes. Thanks.
Andres Sandate:Yeah. They acquired Equities Inn.
Robert Swarthout:Equities Inn. So there there appears to be a bit of a race to to gobble these guys up. And I and I imagine these platforms still get to live on and exist. I don't think this is anything about, like, putting away a competitor of sorts. I think it's really about trying to capitalize on people, going after alternatives.
Robert Swarthout:So
Andres Sandate:Yeah. Go a couple big big trends that you hit on it. Right? It's it's these platforms, you know, in the case of both of them, they serve large swaths of clients. I mean, Schwab is, you know, sort of the original, retail brokerage firm, and Morgan Stanley, one of the sort of preeminent wirehouses out there with the, you know, advisory, financial advisory platform, you know, with tens of thousands of advisers.
Andres Sandate:There's no denying, though, that it if you look at a few big things, this these these matchups or these hookups are potentially, you know, very lucrative businesses for both firms. On the one hand, you're hearing a lot more conversation in DC about, yes, expanding the definition of accredited, allowing people in four zero one k's to invest. You look at the number of companies that are publicly traded, you know, through, the last twenty years, and it's just gone down year after year after year. Yep. Yet the private markets and the availability of capital in the private markets, you know, has just skyrocketed.
Andres Sandate:Mhmm. And and so companies now can raise the money that they need, and want largely in the private markets. The IPO is no longer the only exit. For some companies, it makes sense. And so you have to have, as far as recruiting employees, you and I talked about this,
Robert Swarthout:and Mhmm.
Andres Sandate:You've started software businesses. I mean, one of the things that you can offer early employees is equity or options. And this this secondary market has just, grown, you know, dramatically in the last decade because of a lot of those variables. And these platforms now, I think, are a step towards you know, ultimately, I think you see tokenization. And I think you see these platforms offering their ultra wealthy clients first, but ultimately, you know, their retail client, the mass affluent, the ability to invest in the next, you know, x AI or the next Sure.
Andres Sandate:You know, hot tech company that they can get an allocation for. And and I would think that you'll ultimately have a large private market of these companies, you know, the 500, you know, most well known private companies available where there's, you know, regular buying and selling of shares like you do in the Right. In the equity market. I think that's where it all goes post personally. So I think these are moves to get ahead of all that.
Andres Sandate:Yeah. And, yeah, we just saw two of them in a very short period of time, so it made a lot of news.
Robert Swarthout:Yeah. You know, there's and, again, there's not a lot of these platforms out there. It's quickly like there won't be an independent one, if there is at this point. I I don't know the full full landscape, but it's gotta be getting close to that. So
Andres Sandate:Well we already know that Nasdaq private markets is is you know, they're they're more well known as the, you know, the the public facing or Sure. You know, tech heavy exchange. Exchange. Right. But they have a whole private market side of their business, you know, for folks that are listening that wanna go learn more about where, you know, they do a lot of things behind the scenes for these, you know, late stage, yeah, pre IPO companies, and they're very active in this whole ecosystem.
Andres Sandate:And I think more of these exchanges and more of these institutional firms are recognizing, like, we have to have a foot in the private markets in some way, shape, or form, or we're just not gonna see, you know, the kind of growth and get the kind of valuations that they wanna get from, you know, Wall Street.
Robert Swarthout:Yeah. You know, the only thing that I thought about when I saw these deals that I was like, good for them because this, you know, this Schwab buying Forge, was $660,000,000, a good sized deal. It's like, obviously, they took the deal in front of them, but, like, the the SEC is contemplating changing the accredited investor rule to broaden it. All of a sudden, that market gets a lot bigger. Obviously, this is why Schwab this is why Morgan Stanley wants these.
Robert Swarthout:But, like, it gets a lot bigger. Did they if they just had waited a year, like, does their valuation double or triple? Right?
Andres Sandate:Well, I I wonder that too. But if I'm on the board of these companies or I'm running one of these, how long and how much capital does it take for you to basically compete head to head with Schwab? Correct. Schwab could be that with more accounts.
Robert Swarthout:Like yeah. Absolutely.
Andres Sandate:Yeah. Yeah. Pretty fascinating. Like, but, yeah, I think so much of this comes down to two. I wonder if these smaller, nimbler firms are maybe further ahead than some of the bigger firms around tokenization and technology around adopting the blockchain, and and just that continued merger of traditional and and and decentralized finance.
Andres Sandate:And I'm like, maybe it was also about the people that they're getting and some of the moves that they're making Yeah. And to get ahead of their peers.
Robert Swarthout:Yeah. If that's I'd imagine even fast forwarding six months to a year, it's gonna be pretty clear how they plan to use these platforms, if anything different from what they're currently doing. But, you know?
Andres Sandate:Yeah. I think it comes down to liquidity, honestly. At at the end of the day, I mean, you're trying to you're trying to get liquidity in, more illiquid asset. Right? Illiquid shares in private companies.
Andres Sandate:And I think until you can offer some means of price discovery and structure around that, your more mainstream adviser, more mainstream investor is just not gonna play because they don't believe in it or they don't believe in the price. And the and and and there's a lot of, you know, valid concerns there. But I think to the extent you can centralize, you can put it on exchanges, you can marry these companies up Mhmm.
Robert Swarthout:All of
Andres Sandate:a sudden, oh, now Schwab's reaching out with this offering. Right. That's different. Morgan Stanley.
Robert Swarthout:Yeah. You know, this may be a cascading of, I guess, series of dominoes here, but, like so they they buy these. They they obviously have a much bigger audience on Schwab or Morgan Stanley to bring this these products to. What quickly could actually become the bottleneck is these private companies have a 2,000 shareholder limit on the cap table, or they have to start publicly disclosing information as if they're a public company. So it's like, did that number get moved?
Robert Swarthout:Like, this is all these things that might have to kinda be adjusted as they kinda broaden things out. So Yeah. Fun times.
Andres Sandate:Interesting for sure.
Robert Swarthout:Yeah. So our next topic actually about another acquisition is Ripple, who has been absolutely on this tear the last eighteen months with acquisitions, announced that they acquired Palisade. Palisade is a financial technology company that just offers crypto solutions to businesses is this is the very general way to say it. There wasn't too much on the deal publicly shared on this one, but it's a you know, the I had wondered when I saw this one. There was no dollar amount attached to it, and it didn't make too big a news that maybe this was a acquisition for the talent more so than the acquisition of the actual business.
Robert Swarthout:So Yeah. We'll find out over time, I suppose.
Andres Sandate:Yeah. I mean, to to your point about Ripple, I mean, they've been announcing acquisitions. It seems like every quarter, there's another one coming. And they they just continue to add to this to me, this this corporate narrative or corporate, story around just controlling more of the value chain. Right?
Andres Sandate:When you think about, like, they have they have the ledger, right, with the XRP net. They have the storage. They have payments. They have cuss you know, some custody solutions. They offer treasury services.
Andres Sandate:Right? So when you think about it The prime brokerage. The prime brokerage with hidden hidden road. It it it's starting to look more and they don't and and they're just not known to the retail investor, right, largely. But I think if you go and and talk to people that are active in these larger, you know, financial institutions, whether it's banks and, you know, brokerage firms, people on the, you know, the the technology side for sure of those businesses, they're recognizing that they they probably have a mandate to try to figure out how do we make things quicker, how do we make things more secure, how do we make things, and and who do we partner with to do that?
Andres Sandate:And Ripple certainly is trying to make a play to be, you know, one of those leading secure providers. I I read something about Ripple positioning itself to be the the JPMorgan of tokenized assets. Mhmm. I think we've also heard people talk about them being the Amazon or maybe it's Brad Garlinghouse, the CEO, talking about being the Amazon of of crypto, you know, in terms of people think about Amazon as just this retail storefront, and, obviously, it's much, much more than that today.
Robert Swarthout:Yeah. 100%. Yeah. It's I I think both analogies work, and they're if the rate that they're doing it, I think, is the surprising rate. The the most surprising to me that these acquisitions are happening.
Robert Swarthout:So, you know, we we literally and it's more than one per quarter, at least the rate that they're they've been over the last six months. So maybe they'll take a break for the holidays to kind of catch the breath. Anyways, our next topic is about EverNorth, is publicly traded. So EverNorth is a digital asset treasury. You're starting to hear more and more about these.
Robert Swarthout:These are the publicly traded companies that are, for all intents and purposes, just buying crypto or not or or it's a substantial part of their business where they're buying cryptos, whether it's Bitcoin, Ethereum, in this case, XRP. And, you know, they're they're generally implying applying leverage on it. Ever North has been super clear as far as I could tell about how they plan to do that, but, they bought a billion dollars worth of, XRP, and they did it, like, in a week. So it's pretty quick for them. And then they did a a SPAC, acquisition, or they were acquired through a SPAC that made them publicly traded.
Robert Swarthout:So, you know, wild wild west out there.
Andres Sandate:Well, you and I were at a conference a few years ago where we got the question from somebody about valuation and and crypto. And and, you know, the reality is is it's a lot of supply and demand right now because outside of a few big, you know, companies that it's hard to get information anyway because they're mostly private companies. So unless you're on the cap table, you're not getting a whole lot of financial information. Mhmm. The point is is so many investors who are looking at the space are looking at it through traditional lenses of, you know, PE multiples and, you know, growth metrics and EBITDA margins and these traditional metrics through which we value our industry, the financial community value publicly traded companies.
Andres Sandate:And as more of these companies go public, you'd think that more of those traditional metrics and traditional methodologies will come into play as these companies are required to do some minimal level of reporting. Right. Number one. But then they have to, obviously, to be viable, there's gotta be a business. Right?
Andres Sandate:Right. To some extent. There's been a lot of speculation in this crypto trade around these, you know, these dats, these digital asset treasuries. There's a lot of people that are very much not fans of them to be crystal clear, and there's a lot of people that are, hey. They've been beat up here of recent, and this is a great buying opportunity.
Andres Sandate:We're not here to sell people on one or the other, but, they've they've certainly made a lot of headlines. And so that's what we cover. But I also think this this this notion of being able to you know, if you think about the energy industry, there's people that wanna invest in the quotes and quote unquote picks and shovels of the energy industry. I don't wanna own the commodity. I wanna own the infrastructure, like the limited partnerships that move the product through a pipeline from point a to point b.
Andres Sandate:I wanna be in the picks and shovels. You hear that used a lot when comparing and looking at businesses as they are, I guess, looked at as as more safe because everybody needs a pick and a shovel. And it's interesting to see that used in the context of some of these names where you're trying to get away from this direct token exposure. And if you're like a wealth adviser or an allocator, you're saying, man, I don't know if I can go on this ride with the token. Can I get something that gives me exposure, I e, a pick and shovel business, that infrastructure without some of the gyrations that happen in the market due to headlines, due to politics, due to Right?
Andres Sandate:Whatever is going on. And I I think this is yet another example of just how the industry and more product is giving investors more choice. Doesn't mean it's easier. Doesn't mean it's easy to value, but it's giving people more choice. There's more price discovery.
Andres Sandate:There's more liquidity.
Robert Swarthout:Right.
Andres Sandate:All that, you know, looks to be more an example and validation that the market is maturing.
Robert Swarthout:Yeah. As you were talking, I just kinda looked up. So the ticker for EverNorth is x r p n, n as in Nancy at the end. They have traded sideways since they launched on October 30. It hasn't been long.
Robert Swarthout:But what I find interesting is I know that they have purchased a billion dollars in XRP on the open market. And the XRP price hasn't fallen drastically. It's down a little bit since then, but not drastically. But the market cap of this company is $404,000,000. So, like, the market thinks that for whatever reason, the billion dollars or whatever they bought wasn't worth a billion dollars.
Robert Swarthout:I don't I don't know what else to make of that.
Andres Sandate:Yeah. That would be called what we we call a arbitrage or a buying opportunity. If you have right? You have a an asset, if you will, on the balance sheet that's worth a billion dollars
Robert Swarthout:Mhmm.
Andres Sandate:Or at least that's what they they They
Robert Swarthout:paid for it?
Andres Sandate:Bought. They bought a billion dollars worth of XRP, but the market is saying the stock, if you will, is only worth 400,000,000. There's an arbitrage there. Right?
Robert Swarthout:So Yeah. I'm not quite sure why. I don't know. It'd be interesting to watch that one over time. Yeah.
Robert Swarthout:This this reminds me a little bit of of the when when it wasn't the Bitcoin ETFs and the Grayscale Trust was out there, and it was trading at a discount to NAV.
Andres Sandate:Yeah. Yeah. A discount.
Robert Swarthout:So I'm here to touch it. I again, this may be there may be a good reason why this data is wrong or or not necessarily wrong. This is not what I expected, but, want to see how how it plans out.
Andres Sandate:Well, there's a plenty of companies out there that, you know, have traded at discounts to NAV. You looked at closed end fund business and a a lot of other areas of of the capital markets. And, yeah, I, you know, I look at it too as this whole narrative shift around, you know, move to fundamentals. And, again, I'm not claiming that and saying that these are the right two businesses, that somebody should go and own, but more the notion that the ability to put value methodologies to in place is gonna become easier as more and more of these companies go public that are not as tied to the underlying token. In the case of EverNorth, it is.
Andres Sandate:But I think more and more of these companies, like, I think, is another sub headline is, you know, was another business that went public, very much tied to Ethereum.
Robert Swarthout:They're they're on their way to public, which is our next topic, so we'll just jump to it. So Consensus is going public, and they have you know, more so just bringing it up because there's a lot of these crypto companies coming through the pipe through the IPO pipe, I suppose. But they have selected JPMorgan and Goldman Sachs to be their to the lead their IPO. I don't necessarily know the timing on this one. My guess is before the end of the year or that we wouldn't be hearing much about this right now.
Robert Swarthout:But it is a, investor's about to have their, a full option of crypto companies invest in publicly. For a while, it has been very limited, potentially down to one if Coinbase, or some of these Bitcoin miners were out there. So
Andres Sandate:Well, there's a lot of advisers, and there's a lot of investors out there who just want beta exposure. Right? Good luck trying to beat the market. Just put money in low cost, you know Yeah. Index tracking ETFs, etcetera.
Andres Sandate:Right? There's a lot of people that believe that. And, again, it goes back to this whole conversation around asset allocation. And I think as you see more and more of these companies go public, what you probably end up with is indexes. You end up with low cost ways ultimately.
Andres Sandate:I mean, the fees will come down over time. They're probably not super cheap today on a relative basis, but it gives people the ability to get that quote low cost beta exposure to crypto, that I think people want. And they ultimately, I believe, over time, are gonna want diversification. I think you and I both agree that the space is much broader than just Bitcoin, although that is what's dominated the narrative for the last decade. I think that's gonna continue to change as more people learn more about the space.
Robert Swarthout:Absolutely. I could not agree more. So our last one, this is a bit of a I wouldn't say drama around this because there wasn't. This is it it smelled a little funny. So Looked
Andres Sandate:funny too. What? I said it looked funny too. I mean Yeah. Smelled, looked, the whole the whole thing.
Robert Swarthout:So rewinding a little bit, this would have been the '23. Binance all of sudden gets investigated by the DOJ. CZ, the founder of Binance, ends up having a plea deal where he goes to prison for four years for not having a adequate AML policy oversight, blah blah blah. That that that is out in the news. You can go read all about that.
Robert Swarthout:We're not gonna waste time on that. He serves his four year month prison sentence. He's out. He's off doing, I think, learning for children in, you know, I guess, third world countries or something like that. So he but he's stay he's staying close to the crypto space, this being CZ.
Robert Swarthout:The Trump family, more so the Don Junior and Eric Yeah. They run World Liberty Financial. It's a crypto company that they've started. They have their own stablecoin. Binance took $2,000,000,000 and gave it to them so they could hold $2,000,000,000 worth of the stablecoin.
Robert Swarthout:Okay? Nothing seems crazy there on the surface, but then you realize stablecoin providers cannot pay interest to holders, and they're basically earning $54,000,000 a year on just because they're because Binance is holding them. And then shortly literally within a month of them holding that deposit, CZ gets his pardon. And, you know, I imagine it makes him easier for travel. He's not on some kind of bad list anymore because he's already served the time.
Robert Swarthout:It's not like they can un serve the time there, but it's just it does I I wasn't thrilled to see this. I it was a bad look in my opinion.
Andres Sandate:Yeah. Well, this goes back to the industry was going through a very difficult transitionary period during, you know, the last, let's call it, three to four years, right, with the regulatory environment at the SEC, the Biden administration, were obviously it seemed very determined to make crypto, viable. Right. And and more than just a fringe business. And the crypto space didn't do a lot to help itself.
Andres Sandate:Right? You had a lot of bad actors to say to say the least and a lot of stuff that just made it difficult for, I would say, the more legitimate companies and actors that were out there trying to continue to build. My whole takeaway is that this you agree or disagree. This pardon is one of the last major, I guess, players from that prior era. And there could be another one out there or maybe there are.
Andres Sandate:I'm not saying that the whole industry is squeaky clean, and I'm not saying, that we're done with some of the bad actors that that are, you know, hopefully not causing investor harm. But it it does seem to be the attempt to try to turn the page and, and move on. And now let's see what happens with this, you know, legislation. Let's there's a lot of murkiness and a lot of things that are quite ugly with this deal, this pardon, as I'm sure every pardon in history Probably. Probably has.
Robert Swarthout:We just see more of the people in this case.
Andres Sandate:See a lot of it. You know? Yeah. But this narrative shift, right, around, you know, trying to usher in this era of compliance, this usher in this era of regulation. Yeah.
Andres Sandate:And, hopefully, in the end, this will be a bit to the broader story, like a small bit. Yeah. It's frustrating to see it play out in the day to day. But, hopefully, in the grand scheme of things, we'll look back and say, you know, some guys got off pretty easy, and the industry needed to move forward and is moving forward.
Robert Swarthout:Yeah. I But I will
Andres Sandate:say the but is that the Democrats and this whole legislation Mhmm. I think they have long memories. And I think Mhmm. You know, Republicans and the Trumps have to play very carefully. They've been able to push through a lot of their agenda, but you have this big bill out there Mhmm.
Andres Sandate:That I think the industry, the crypto industry, the financial industry would love to see come to come together.
Robert Swarthout:Right.
Andres Sandate:And I'd hate to think that we go back to bringing this and other related issues up as a reason why people are playing tit for tat. Yeah. I It could happen.
Robert Swarthout:Yeah. It it could totally could. And to that point, the only one out there with a pardon that I think of consequence right now not I mean, not with a pardon that some people will love, you know, would be the Democrats in Italy is Sam Bakeman Fried. Right? Yeah.
Robert Swarthout:He's in prison. Yeah. But he had given so much to the Democrats. Like, that could be a bargaining chip behind the scenes. Yeah.
Robert Swarthout:Yeah. In in a crazy world that we
Andres Sandate:live in. Imagine that guy resurfacing.
Robert Swarthout:Maybe people in crypto would be pissed.
Andres Sandate:Like Yeah. Yeah. No. No doubt. Yeah.
Robert Swarthout:I I think that's that's a good place for us to end. We don't we could talk about that all day. So Yeah. That's a wrap for this episode of the weekly
Andres Sandate:crypto couple weeks, you know, to say the least. I mean, a lot of stuff around adoption, institutional, adoption, a lot of stuff around just the further Mhmm. You know, storyline around the regulation and the emergence of some new offerings and, you know, some of the players that are making, you know, very aggressive strategic moves, to consolidate and to, you know, sort of build their moat. Yep. It's just more to come.
Andres Sandate:A lot more to come in the in the weeks and months ahead. No doubt. It's a fascinating space.
Robert Swarthout:Absolutely. Well, that's a wrap for this episode of the weekly crypto check-in. Keep up updated with the latest crypto insights by searching T Time Crypto Capital or the weekly crypto check-in on your favorite podcast player. Leave us a review to share your thoughts or like our T Time Crypto Capital LinkedIn page. Until then, next time.
Robert Swarthout:Take care.
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