XRP & Altcoin Spot ETFs Will Be Approved with Matt Hougan
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X R P is an asset that has sustained and proven itself over a long period of time. IT has a very strong community and very strong technology underneath. From my point of view, we haven't seen what I can do because the company, ripple, has been engaged in this difficult lawsuit with the sec.

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tony. Happy friday is so good to be here, matt.

The vives are off the charge. As we've been talking about before the recording. We have a procreate to president coming in, the most procrit to congress ever coming in, and the markets are lying in. Etf buying is blowing records out the water. How are you feeling about all these things?

Yeah, it's been a pretty amazing week at the end, pretty amazing year, right? We have come a long way this year. I feel like we've just shifted the overton window of what's possible in crypto.

They are now active discussions about the U. S. Government buying a million bitcoin for a bitcoin stock pile up. We're seeing, you know, filings and statements is just an incredible time to be involved in this industry.

You know, you brought IT up and I wanted to ask about that. The big one strategic reserve, uh, we saw states are going to do this as well. Yesterday, pensylvania has a bill that they introduced um mad if this thing goes through, what do you think is going to happen? Is onna be formal for bitcoin globally?

I think well, two things are going to happen. Yes, absolutely. It's going to be foo for big coin globally. If you're another country looking at the U. S.

And IT actually moves forward on acquiring a strategic reserve with a million big point, you can no longer be certain of how the future will develop V, V, crypto assets and crypto currencies. And as a result, you're going to need to get in line. You're going to need to stake your position before IT is too late.

So I think that will kick off a wave of purchases from nation states, and the impact on the market will be significant. Look, countries around the world own more than twenty percent of the gold market until we get to equal liberum there. You can say that that a gap that needs to be filled, its looking increasingly likely that, that will be filled in the next couple of .

years to your point um may not happen the cycle, but the conversation, the dialogues happening. You already have countries that are made betwen a legal tender, the term that are buying, adding IT to the uh reserves and so forth. But he feels like, where are the dawn of the next britain woods that this asset is getting, uh, recognition and adoption globally and IT seems like use central banks and world governments will eventually get there and come together and say, yeah, this is something we need to put a ripe aside of a .

go yeah I think at least you have to consider that as a possibility, right? If you back up five years or eight years or ten years, people talked about this, a of central banks adding bitcoin to their baLance sheet, or governments positioning strategic stockpiles of bitcoin. But IT was crazy talk, uh, you would be laughed out.

Rooms for for suggesting that now the polar market odds, I think, are are about fifty percent on whether the U. S. Will move forward on this or not. We have sitting senators putting forward bills that would push this.

Ford is now firmly within the role of possibility, and that means you can't discount IT if you're evaluating how to position yourself in this asset is certainly increases the upside potential. IT also makes the asset extremely hard to short because you could wake up every morning with this news, you don't want to be on the wrong side of IT. So I think it's important whether we get there or not, I don't know. Oh, but I think you have to consider IT as being possible.

Met yesterday, the folks at bloomberg shared a charge showing the collective supply of bitcoins boat through etf from all issue is including bit wise and IT is set to surpass the tox's holdings very soon. Ah this is kind of while I don't even know what's expected if that happens, IT seems there is so, so much demand for this asset.

Yeah, I I think the really incredible thing is I expect twenty twenty five flows into big point tf to exceed twenty twenty four flows. So as much as we've seen, I think it's really just a dow payment on this market. If we fast forward a few years, I would not be surprised to see you know big coin etf owning you know ten twenty percent of of the of the big coin market.

I certainly think that's within the realm of possibility down the road. IT has been an incredible launch, the most successful etf large of all time. But it's still true that most traditional investors have not yet allocated. So I do think this is just a dawn payment. People probably underestimate where we can go from here.

Do you think the Price action we're seeing breaking through ninety thousand and much more, uh, that's going to draw a bit of formal with the retail, the R I S. Wealth managers to say, okay, to have our clients have exposure to this.

Yeah, I think there's both. There's formal, which is certainly real. And you know I expect to see, let's say, wired houses who have been slow to allow access to bit in et.

I expect to see that process accelerate. I expect to see more institutions looking at their peers like emr university, adding allocations to big coin and saying maybe we should get off zero as well. But there's another element to a tony, which is of the reflexivity in the bitcoin market is actually fundamental, which is different from how reflexivity works in other markets. By that, I mean, as more people adopt coin and as the Price goes up to a certain point, big coin gentility becomes more valuable because IT is more widely accepted, IT is more liquid, is more established, it's less likely to go to zero. And I think you're gona start to see that positive fundamental reflexivity playing out in bitcoin over the next couple of years as this truly goes from alternative to mainstream, which is which is the mega trend that we're seeing right now.

Mad, do you think the folks are regarded kicking themselves like we have up here?

They're going to get there eventually. They're going to get there eventually. Tony, as you know, I come from the etf space.

Backyard today is one of the largest etf providers in the world. But in the early days of etf, they were very skeptical. They hated them.

They talked about them farming investors. They eventually got there. They're going to eventually get there on dick coin as well.

Um you know they aren't the only person to take a skeptical initial view and then eventually convert you know twenty seventeen I think called bitcoin in index of money launder ing. Today there are one of the more powerful forces in this industry. So you know we'll let the guard clock. We'll get there eventually.

I'm not that worried. Yesterday I saw you tweet out e etf flows are going to surprise people in two thousand twenty five. What are you expecting for eat and uh.

next year? Yeah, I think they could be really substantive. You know the net flows in the E T. Eat etf just went positive.

We saw a lot of outflows from E, E upon conversion to an et, and the inflows have just surpassed that. But I think eat is really appealing to an institutional audience. We talked about this a few times on the podcast previously.

But institutions love the utility of ease. They love the cash for like characteristics of eat. They are very interested in stable coins and ganim ation, which is being built on eat, you know, eat is out of removing the last shackles of regulating clouds that i've been hovering over IT.

I think you're going to see a lot of institutions wanning exposure to eat in the new year. I had one more thing, tony, which is I think you're going to see a lot more investors looking for broadly diversified exposure to cyp. To one of the things that's happening right now, encrypt o is what we discuss at the beginning of the the pod, which is the overtime window shifting on what's possible.

Could we see etf on more assets? Could we see institutions building on chains that are maybe you know, don't have etf associated with them? We're starting to see that already.

And I think a lot of institutions are just gonna want bad waste exposure. So i'm excited about eat specifically. I'm excited about other assets. I'm excited about index. I think that's going grow substantially in twenty twenty five.

Speaking of index, yesterday you got news that york octo change arc file for nineteen b dh four, two place bit wise top ten index one as an etf tells father.

yeah, unfortunate because the regulations, I can't comment much more than what's on the file. But yes, nazi iarc a file to up list B I T W S N etp will see how that works through the system. But I think if you brought out again, there are two megadeals that are going on right now.

One is that we're getting a regular or shift from no etf to a broad based etf market. We actually saw that under the current administration, right? As much as we all uh worry about gary gensler and many of us dislike against leadership of the sec, we did see the approval of spot big coin and spot atherton etf under that administration.

We're in the etf era of cypher. I did particularly if we get a change to a more procyta environment, there is a potential for multiple crypto etps. So I think that one thing to pay attention to and then the other thing is what I mentioned before, which is I think the demand for index based products could be really substantial if you believe institutional capital is coming into this space and wants a small allocation to crypto.

Many of them will just want to make a diversified bet. That's what they do in stocks, that's what they do in bonds. That's what they do in real state. That's what they will want to do in crypto. So I think that could be a significant trend if we see progress on this up listing application in twenty twenty five and your fingers cross, we will see what .

happens and even retail, right? I like pricks. I get my mom as an example. You know, he want, he told me to buy her big coin, eat, and yet some of the acid. But if you have like a, like a index, one like the as that or the S M P five friends, you know, just IT captures everything. IT makes IT so easy for a lot of investors.

one hundred percent. And even me, right outside of big coin, I think, stand alone as the leading monetary asset when we get into this other space. I'm excited about what's happening on IT.

I'm saying about what's happening on sala, I say with the reinvigoration of X R P. I'm excited about what's happening on adult and APP dos and sue and monad and bargain and many other protocols, right? I'm excited about all of them.

And I can try to throw a dark and hit the one that is going to emerge. But you know, it's going to be hard to find that. And IT may be many of them. And so if that your point of view, if it's if it's your mom, if it's me, if it's an endowment, I think many people share that point of view. And for them, an index solution is a really nice a nice choice.

Absolutely, you know, go back. Well, quick to the eat. E, T, F. I just thought that, look, with the change in the regime at the S, C, C, we could see the staking get approved next year, which would be so appealing for many investors to have the yell in addition to holding the underlying asset.

Yeah you know you do see abroad internally, you see eat staking E, T, P. And obviously that makes IT more appealing. IT makes IT a net positive to own.

You know, IT overwhelms the expense ratio. I do expect to have you know those sorts of conversations with regulators happening next year. I also expect you know people to to start to push for in kind creations and redemptions on etp.

So we're going to get some effort to iterate on the existing E T, P to make them even more perfect as well as new E T. P. I do think hopefully, that dialogue will continue and and sort of accelerate.

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There's a whole army that wants me to ask you about the x erp body. T, F guys filed even before the election, which uh, was amazing. Why did you guys decide to do IT in the timing? And so for IT.

yeah absolutely. I mean, let's first talk about the asset before I talk about the filing. You know x ropy is an asset that has sustained and proved itself over a long period of time.

IT has a very strong community and very strong technology underneath. From my point of view, we haven't seen what I can do because the company, ripple, has been engaged in this difficult lawsuit with the S C. C, which is sort of like trying to Operate with two arms tied behind your back.

I think if we fast forward a year into the future, if we get positive developments in that space, you see X, R, P unleashed. What can I do in the market is proving its technology. IT has a unique approach to the market.

IT has a strong community behind IT. IT has the quality. IT has interest from traditional wall street firms. We saw that was sock, you know expanding their stable coin onto onto the leger earlier this week。

I think it's a really interesting idea like what can this asset do if IT is unlived? So that sort of the investment this is without going to into the ways it's sort of international and developing. And then you know from a from a filing perspective, again, constrained with what I can say.

But i've said this before, every time we file, which is that bit wise, doesn't file for fun, we filed because we think there is a pathway to launch a product. We're not always right. We filed for a big coin a for five years before we eventually got there self. So take that with that rain of saw. But the reason we file out as we thought there was a pack way to get at lost, otherwise we wouldn't have file and works like to continue to pursue that twenty twenty five, particularly with a new administration.

Can we expect more all coin body T, F applications?

I think I think it's it's likely you're going to see the industry, uh, try to expand the type of assets that are available in E T P. yes. Um you know there there are some chAllenges there.

All coins are different than big coin in the theory um where they are regulated futures markets and there are other things you can point to. But again, I look abroad, I see a wide variety of cyp to e tps that have lowered costs and made IT more secure for investors that gain exposure to these interesting assets. I would love that to be true here in the us.

As well. And bit wise and other high quality firms. I think we will be pushing for that.

yeah. So now there were some, uh, big news this week that bit wise made another acquisition and that was artiste i'm saying IT, right, told about that acquisition and .

the goal there. Yeah, we're really excited about a testament, an incredible team. They're one of the leading staking providers in the authorities ecosystem for institutional clients.

I think there's something like three, four billion in state assets that they help manage and pursue. This is an important part of the ecosystem. You know we're calling IT uh bit wise on chain solutions.

Bit wise wants to be a service provider to investors looking to access the opportunities in that space. Some of that will take place in the traditional asset management side, etp at center. Some of IT will be on chain solutions. I think you can stick of this as bit while sticking its flag in the ground that this is a direction that we're moving in that we think will be much more important in the future than IT is today. And we're really excited about the team that has come on board and IT helped us expand into the market.

What do you think the future staking look like? You know, given this acquisition and so worth uh, with institutions and retail, is this going to be let me we get at some context here. In an economy where things are struggling, we're dealing with inflation. A certain traditional assets are not performing well, is taking in some of these proof of state block chains and uh gonna become more prominent as a way for people to earn because they're not getting any type of interest in their bank accounts and things like, but they can put in the asset when they earn a higher yield.

Yeah, I think I think get a good point. I mean, look, if you look at the traditional finance financial system, a lot of what he does is that takes people's idle assets and turns them into profit centers for banks. yeah.

I mean, that is effectively what the banking industry does. It's a lot of what the broken ridge industry does. If you look at A A business like Charles swap, they make a huge amount of their money of cash deposit that they underpay from an interest perspective, and that should frustrate every investor.

They are your assets and you should derive the economic value that they can generate. One way to think about staking from a big picture perspective is that allows, you know the actual owners of the assets to crew the vast majority of the economic value that can come for them. IT allows you to put IT to work in the market.

And of course, I think that's going to be much more important in the future than IT is today. And every investor should be excited about that. That doesn't mean every asset should be staked or one hundred percent of asset should be staked or that it's risk free.

But um you know a lot of the reasons that many of us gotten to cyp do is we saw things in the traditional financial industry that didn't feel right yeah, this is an example of something that doesn't feel right to me. And i'm excited to see these staking services come online and gain bigger traction to sort of put that in investors favor primarily. So that's that's the big picture where .

I think about IT. Yeah absolutely amazing stuff. I am so excited. Uh I am hoping bitcoin hits one hundred k we're very close up before the end of the year.

But yeah IT looks like twenty twenty five can be brighter days. Um thank you so much for joining me. Appreciate the insights .

picks for having me and having me back again. I look forward to doing IT again in a few months.

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