WEBVTT
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This podcast is brought to you by
told the pro shares DJ Brookfield Global Infrastructure
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ETF. Look for ticker T O
l Z. A. Pro shares are
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distributed by Sei investments distribution code,
which is not affiliated with the Fund's Advisor.
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Welcome to let's Talk Ats. I'm
your host, Jason Capool, and
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I've been monitoring the investment space throughout
my entire career. Here at Seeking Alpha,
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I'm an ETF strategist and my role
is to uncover and bring forward news
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and information to the investor community that
is meaningful and actionable. Each week,
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a different guest and I will take
an indepth look at a particular aspect of
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the rapidly evolved in exchange traded fund
space, with a focus on how investors
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can best utilize ets to reach their
investment goals. Before we begin, a
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brief disclaimer. This podcast is for
entertainment and educational purposes only. Nothing said
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here should be taken as investment advice. All opinions expressed on this show are
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those of individuals expressing them alone.
A full set of disclosures will be included
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at the end of this show.
You can subscribe to let's talk ets on
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apple podcasts, Google podcasts, spotify
or whichever podcast platforms you prefer. For
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reference purposes, this podcast is being
recorded on the afternoon of July, Thirty
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two thousand and twenty one. Our
guest joining the podcast us today is John
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Patrick Lee, who's the product manager
over at Van Eck. John has a
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degree from William and Mary and is
also a chartered financial analyst. Moreover,
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he's been with Van Neck for over
seven years, where his role has progressed
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over the course of time. Prior
to joining Van Act, John Work for
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transamerica financial group, dorse right associates
and the Connors Group. He is also
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an expert when it comes to ETF
product design, where he's done everything from
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the research and design work pricing and
promote a new products to the van Ek
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audience. Were excited to have him
join us today to discuss our topic of
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how crypto markets and digital transformation are
seeping into the exchange traded fun world.
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So, without further introduction, I'd
like to welcome John Patrick Lee. Hey,
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thanks a lot for having me on
the show. I really appreciate it.
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Very, very happy to be here. Absolutely. How's everything going there
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for you today? It's good it's
not too hot in New York City and
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the sky is blue and it's Friday. So I mean, I don't have
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any complaints right now. Absolutely likewise. So, John, usually the best
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way to kick off our podcasts and
the way we like to operate in the
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beginning is if you could just perhaps
shed a little bit more light to our
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listeners on who you are kind of
on from a day to day standpoint at
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Van Act, what your role consists
of. You know, just a better
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picture of you know who John is? Sure? Well, for first of
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all, I go by GP.
Just say, my phonegies JP Lee.
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Not Out, it's fine, it's
just it's all good. So, yeah,
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JP, I'm a product manager of
Van Neck. I've been on the
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ETF product management team for almost four
years now. Before that I was in
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the trade settlements group at Van Ack
and prior to that I worked at doors
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right and TRANSAMERICA. Dor See right
was my longest tenure before Bannack, and
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I learned a lot about portfolio construction
from a systematic perspective there. They were
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really focused on momentum strategy. So
a diverse background, you could say,
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and advance neck. What what I'm
the job that I do can be broken
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up in a three basic parts.
It's it's product management, so managing what
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products we have now, figuring out
competitive analysis what other products I'm cold.
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You know, our suite is competing
with marketing, which I would say is
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like writing blogs and coming up with
a narrative of how to promote the this
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product seek that we have, and
then, finally, product development. So
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kind of a combination of those first
two things, figuring out what's out there,
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where are there potentially gaps in the
market that we could compete in,
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and then trying to design or work
with index partners to come up with ets
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solutions that could benefit, potentially benefit
investors by providing them access to specific segments
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of the market. So that you
know, we're going to talk about the
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digital transformation etf today, which is
digital assets, digital asset companies, but
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I'm also I really cut my teeth
on our video gaming and esports ETF,
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ESPO. So there's a little bit
of overlap between the video game space in
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the digital asset space. So I
had definitely kind of tilted towards thematic tech
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equities right now and that's what that's
what my bread and motor is awesome,
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excellent. So JP. Obviously,
digital transformation and even the crypto markets are
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two different topics that have drawn a
lot of attention for different reasons, and
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I think while the two topics are
obviously quite different at one end of the
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spectrum, you can also find them
overlapping and other ends, and I kind
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of wanted to get your take on
this space as a whole and understand how
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you feel the future fits for,
you know, the the growing, you
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know, global digitalized economy where blockchain
and all this stuff is becoming more and
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more, I guess you could say, impactful to businesses on a day to
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day operation versus what it might have
been five years ago, three years ago,
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and kind of what that space looks
like moving forward potentially. Sure.
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So, the way we kind of
categorize this ecosystem is a structural long term
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growth story and we're still very early. Right there's not a ton of companies
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like the semiconductor industry or the biotech
industry, where there's, you know,
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a million companies out there doing business. There's not a lot of companies out
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there right now. So we're still
very early. And when I say structural
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long term growth, I mean it's
not happening in a bubble. It's not
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just bitcoin and it's not just a
theorem. Right, and the thing I
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really emphasize is what we're seeing is
widespread adoption of the technology, the blockchain
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technology, not just by retail but
also by institutions. Right. So you've
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got this huge up swell of retail
adoption. You see, that was something
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like coin base. Fifty six million
verified users that are on the coin based
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platform, you know, maybe not
buying and selling all the time, but
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just interested in invested in some way. And then on the flip side,
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you've got massive institutional kind of adoption
and investment in the space, and that
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is one of those things that wasn't
really there five to six years ago.
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It's very easy to pull up,
you know, Jamie diamond headlines from five
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years ago or you know whoever it
is who are poopooing the idea of investing
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in a digital asset. Who are, you know, two thousand and twenty
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one all of a sudden launching initiatives
and trying to provide access to their their
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customer base and, I think,
the traditional finance kind of ecosystem. The
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reason they're doing is is because they
see the opportunity and they see the mass
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adoption of the retail side. So
they run the risk of kind of getting
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left behind. Right if you're if
you're an advisor, financial advisor at,
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you know, one of the big
wire houses like Maryland, Cher wherever,
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you want to be up to speed
on that. Because, going back to
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coin base, that's fifty six million
users, as a ton of people,
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and those people are investing their money
on a different platform that exists outside of
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the traditional financial ecosystem. So,
you know, some argue, I think,
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with this strong evidence, that it
is might be a case of the
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tail kind of wagging the dog,
where it's like institutions may not necessarily want
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to get invested or get, you
know, get dug into the space,
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but they have to because this is
where the world is going, where the
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population is moving, and they need
to play ball if they want to participate
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in the future economy. So that
that's kind of the overview. And then
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opportunities and risks. I mean the
opportunities are in a lot of ways limitless.
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This is a very disruptive ecosystem.
These are early stage companies. There's
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a future digital economy that's being built
out right now. And it's more efficient.
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It's it is creating new financial opportunities
for for investors. The easiest case
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use case for that would be some
of the yields that you can get on
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these decentralized finance swaps, for example
on a on a platform like blockfly.
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Or you can deposit money into a
stable coin. That stable point gets lent
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out to another investor who's using it
for margin and you're getting high single digit
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yields on your investment that you can't
really get in the traditional finance you know,
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like how much are high eel bond
sealing right now? Right like three
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percent. So there's new opportunities out
there. And then the risks are I
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mean definitely the regulatory risk is definitely
front of mine for a lot of this
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community. The China, you know, crypto ban that's occurred of a Laska
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unfolded of the last six months or
so kind of shows that what can happen
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is that the government, if they
want to, could make things hard right,
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and so that's a risk and you
see that also again go back to
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the black five example. They're having
to restrict some of those yield opportunities to
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specific states within the United States.
Because some states are cracking down right.
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So there are huge opportunities and there
are definitely risks out there. So it's
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just a matter. What we're doing
now is education, education, education,
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and learning along the way. So
that's how it kind of described the space
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as a whole. Yeah, absolutely, and I think that you kind of
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nailed it on the head with the
idea that the institutions are almost forced to
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adopt, you know, the new
way, whether they want to or not,
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because it is the way. The
land is shifting under it ups and
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it's either, you know, you
adapt or die, whether you like it
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or not. And although it has
some pitfalls that are almost unforeseen for everybody,
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it's interesting that how how much of
a buzz and how much of an
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interest has been growing around that transformation
area. So, you know, like
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you said, I think the opportunities
are are really our limitless. You know,
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I think the future, necessarily,
we might not even know what it
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is yet because those doors in front
of us haven't been open. So yeah,
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you know, that's one thing I
really kind of like to talk about
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too, is because when you talk
to somebody who is building something new in
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the digital ascid ecosystem, whether you
know, to decentralized application adapt or whatever.
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It gets into like science fiction land
very quickly and that you start hearing
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things like, okay, this is
a google distructor google is Google is under
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fire from, you know, this
new blockchain based, you know, web
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browser or air BB is under fire
because they're just middlemen and they're making a
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ton of money being middlemen and the
blockchain technology kind of facilitates getting the middlemen
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out of there and lowering fees,
increasing efficiencies so that somebody who wants to
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do business to do business with their
end user at in a more efficient way
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and pass on savings to those to
those end users. Yeah, absolutely,
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and I guess this could be a
good segue into what a van x ets
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that I know that you guys recently
launched a few months back, the van
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a factors digital transformation ETF, ticker
DAPP, which appears to address this kind
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of market area. I guess you
could say. Can you walk us through
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the story around, you know,
the designing an idea for this ETF,
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what made van nec want to bring
this to market and kind of what it's
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all about her? So, I
mean as a firm, van x committed
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to to providing forward looking intelligently designing
strategies that provide investors access. Right,
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that's what we're doing, providing access
to a group of companies in a way
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that makes sense from an investment perspective, like how the portfolio is constructed,
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but also from a big picture perspective, right, we're providing access to an
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early stage growth space that is dynamic, it is, you know, believe,
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it has legs. So that,
I guess you could say, is
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the velocity behind us. You know, we're very we are believers in the
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long term story of the blockchain ecosystem, and so this is just a way
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to provide access to the publicly traded
equities that are doing business within the space.
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And I think that's a huge distinction
and something to be very, you
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know, forward about. Is that
this ETF is, first of all,
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a it's a passive ETF, right, so we're not actively managing it,
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and then it's providing access to companies. There is no bitcoin or etherium or
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any other or those coin or whatever. There's no actual underlying cryptocurrencies in the
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portfolio. It's the companies themselves,
and one of our very popular and successful
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ets is the the gold miner ETF
and it's in it's kind of a way
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to think about it. Think about
as the gold mining ATF gx. There's
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no gold in that portfolio right.
We don't own positions of gold bullion or
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gold bars in there. It's just
the company. So we definitely view the
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opportunity as different when you look at
companies that are doing business in digital assets
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and then an investment in the underlying
digital asset themselves. So that's the that's
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the long story short. On the
on the TF, yeah, absolutely,
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and I'm glad you made that distinction
that it's not something that's actively holding bitcoin
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or any crypto for that matter,
but I guess you could say it's indirectly
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involved to some level and I guess
taking it a step further, you know,
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would you be able to provide us
with some of the specifications of the
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actual fund itself? I know you
just mentioned that it's passively managed, but
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what are some of the kind of
the key holdings that are, you know,
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maybe really driving the fund? I
don't know if you can highlight maybe
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too well to specific stocks that you
think are could separate damp from others,
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and you know why individuals should kind
of rally around it and, you know,
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short it offers. So it's a
pacid ETF and the different you know,
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passive versus actively active, as when, you know, portfolio manager,
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a team is saying, look,
we're going to overweight, you know,
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this company and we're going to exclude
that company because we think this company did
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to be better. Right, that's
not what we're doing. So this is
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a PACID ETF that tracks an index, and the index is essentially a theoretical
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ex expression of what the digital transformation
opportunity is, which is a group of
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companies that are pure play, which
means that the index provider has determined.
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Look, this company, they make
over fifty percent of their revenues from digital
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assets themselves. So that means they're
actually doing business in digital assets. And
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that's a huge distinction, because there's
a lot of companies out there like I
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mean, you you pick any one
of the conglomerates out there that are dabbling
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and the digital asset space or some
new companies maybe have created some digital asset
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initiative where they're going to utilize blockchain
technology somehow in their business and they,
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you know, as for a cress
release, they'll put that out but the
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core of their business is not working
within the digital asset ecosystem. So the
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index rules are really what define what
the portfolio looks like. And so the
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index provider says what's out there,
what's pure, and then we're going to
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create a portfolio. So twenty five
holdings right now and, like I said,
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this is an early stage. There's
not a ton of companies out there.
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So twenty four of the names are
what the index provider would be considered
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pure play and then there's one name
in their time on semiconductor week that's not
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pure. Those positions are cap trying
to keep that exposure as low as possible
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until the markets full enough so that
the portfolio would be completely pure. The
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index rebalances core or early and so
at you know, once a quarter.
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At the end of the quarter,
the NXPRETOR says, okay, what's the
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market and then they rebounce to you
know, the new weights and then the
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portfolios off and running again to the
next rebalance. So positions are capped at
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eight percent. So we're not trying
to overweight any one single position. We're
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trying to kind of diversify down the
market cap and then I think the only
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other wrinkle that will be interesting to
kind of note is that there's a fast
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track inclusion for new companies that come
to market so that they come into the
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portfolio more quickly so that we're not
waiting three months till the you know,
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till big name comes in at the
rebound. So an example would be coin
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base lists. So if some type
of company is over one billion dollars on
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the day it lists, or IPOs
or despacs, and then on that Friday
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it's over billion dollars, it'll come
into the portfolio on the following Friday.
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So socially you're getting minimum five day, maximum ten day to get included in
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the portfolio for those big names and
that and you know, there's different ways
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to slice up, you know,
a universe. There's different rules and it's
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just kind of very important for investors
to understand the rules of your portfolio or
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your index because it different rules apply
to the same universe, are going to
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spit out a different portfolio. So
it's important to kind of understand the nuts
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and bolts of and you know,
some people in the Etfspace, you know,
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look under the hood and looking under
the hood, I think a lot
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of people going and do the you
know, the bare amnimum researcher. You
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know what are the top ten holdings, and even just the top ten holding
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snapshot can give you a pretty solid
idea of what is in the ETF.
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So, with that being said,
I think if you can, want to
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talk about what kind of names are
in the portfolio. What are the kind
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of Marquis names? Coin Base again
biggest digital asset IPO in history. It
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was a direct listing. It's fifty
six million verified users. That is so
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many people, and I don't have
the numbers in front of me, but
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if you compare coin base users versus
Schwab users, you know, the Schwab
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Retail Robridge platformer, eat it.
It's bigger than those, those those normal
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traditional finance retail operations, and so
just that amount of user base is very
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compelling from an investment case standpoint.
So many people engage in an ecosystem signed
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up, not necessarily investing amount of
money every day, but just being there,
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being interested in signed up. That's
a huge deal and in a lot
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of ways coin based kind of like
the Marquis name in the digital astet ecosystem.
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Another name that's really exciting is riot. blockchain. So riot blockchain is
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a bit a bitcoin miner and they're
the largest US publicly traded minor a of
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a lot of very dynamic and compelling, you know, stories that are coming
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out of riot and I think from
an investment standpoint, where they are again
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is early stage. A lot of
capital investment there. They're buying their acquiring
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facilities that are going to allow them
too mine need and more bitcoin. You
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know, they're investing heavily into kind
of an ESG story. Their hydroelectric power
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their New York mining facilities is eighty
eight percent zeromission energy to mind the BITCOIN
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and their Ted their new Texas facility
uses almost thirty percent. So learned when.
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So the ESG story is definitely cropped
up a lot in the last six
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months and I think that is an
interesting wrinkle and I think that that's a
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good conversation to have and it's it's
a fun conversation to have, and riot
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it's kind of addressing those questions head
on. So coin base and rider kind
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of the two companies like to talk
about, but there's a lot of things
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going on in the underlying index.
It's not just miners, it's not just
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exchanges, like coin based. You've
got hardware producers that are creating the chips
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that are mining the bitcoin. You've
got financial services companies that are kind of
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bridging the gap between traditional finance ecosystem
and the digital asset finny financial ecosystem.
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That would be a company like silver
gate capital. So there's all these different
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things going on within the digital assets
ecosystem and this ETF in this index is
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an expression of all of those companies, kind of weighted by market cap,
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and it's going to change over time. The Way the index is today is
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not the way it's going to be
in three years, and that's kind of
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the beauty of the passive index is
we're not trying to say look, the
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miners are most important, they need
to be at thirty percent and forget about
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everything else. Now the market is
going to do with the market is going
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to do and the portfolio is going
reflect what the market is. So that's
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I just love talking about the passive
side. That how it changes over time
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as things develop. Alpha trader is
a weekly investor focused podcast produced by seeking
276
00:20:53.759 --> 00:20:57.599
Alfa that will dive into the most
impactful market news and it set the stage
277
00:20:57.640 --> 00:21:03.200
for upcoming market events. We are
your hosts, Aaron task and Steven Alpha.
278
00:21:03.640 --> 00:21:07.710
Episodes are available every Tuesday and will
include discussions with market experts on topics
279
00:21:07.750 --> 00:21:11.869
that are relevant to active traders who
are seeking out be sure to subscribe so
280
00:21:11.990 --> 00:21:21.819
you never miss an episode. Yeah, absolutely, and I love the aspect
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that it's kind of you get a
little bit of everything and the like.
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You just had the markets going to
dictate what's, I guess, most needed
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overall. From a longer term perspective
and even, as we mentioned in the
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beginning of the podcast, I guess
you could say that digital transformation space,
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you know, it's so new to
everybody that it's almost, in a way,
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you could say, more appropriate to
use that approach because, you know,
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to predict something that is, you
know, six months, a year,
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five years down the road is kind
of difficult when it's something that's brand
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new to everyone. This is it
not a change where we're a jet adjusting
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something that's something completely brand new,
a hundred percent, and it's going to
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be interesting to see the index develop
and I think from an investment point of
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view it's we don't know where it's
going and there's going to be like and
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the financial services. It's the financial
services aspect right I personally think that's a
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huge growth opportunity. So there's a
certain percentage of the portfolio right now that's
295
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kind of dedicated to the financial services
segment, separate than exchange is, like
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actual financial banking, asset management.
That whole area could become, you know,
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be able to support its own ETF
in the next five years, right.
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But right now it's just a segment
of this ecosystem. So it's going
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to grow, it's going to develop, and that's something I really want to
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hammer home is we are very early, early, early, still absolutely so,
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speaking from kind of, I guess
you could say, the other side
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of the fence. What would you
say to an investor, in individual out
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there on the street who may not
really, say, be a full believer
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in cryptocurrencies, be it themselves as
a whole or blockchain technology from an indirect
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standpoint? But you know, I
know DAB obviously doesn't have direct positions in
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Bitcoin and and crypto itself, but
it does have some degree of an indirect
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investment. But what would you say
to someone who really is not a believer
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or is doesn't maybe doesn't really comprehend
how it works? You know, why
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they should have this as part of
their portfolio, not necessarily just from van
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neck, but from anyone why this
is an important piece to a portfolio.
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You know, the Pete the majority
of people who kind of take that position.
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It come it really boils down to
demographics and nine out of ten cases
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and cut. You know, I
mentioned the video game kind of ecosystem earlier
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and it's kind of the same thing. So people who are under forty years
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old, they maybe you know,
maybe I'm thirty eight, so I'm not
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necessarily a digital data, but a
thirty year old is definitely a digital date.
317
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Of the younger generation inherently gets it. They understand that there is value
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to be had and something that is
exists on a blockchain is is a digital
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item that is immutable. You can't
change it. You could potentially own this
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item as a digital asset. So
it's generational in my opinion. Somebody who's
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older, forty and older, there's
it really is going to be an edge.
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It's much more an educational and nature
of saying look, people are living
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their lives purely digitally right everybody's on
their phone to everybody's got ten to twelve
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hours of screen time a day,
if not more. We live in a
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digital world now and that's different than
we live and the year two thousand even,
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right. So we're living in a
different world today and and so because
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of that, it creates new opportunities. There's a different paradigm or mindset or
328
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framework that people are using to interact
with each other, interact with media,
329
00:24:57.069 --> 00:25:00.630
interact with their investments. And you
know, something like the Robin Hoof and
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00:25:00.750 --> 00:25:04.069
Nomenon is a great example of that, right. You know who are Robin
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Hood's base users? They're young people
there, people who understand, Hey,
332
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I can just open my mobile phone
and start trading and it's no big deal.
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An older person, for whatever reason, just it's just demographics. So
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I think that, going back to
the video game example, you know,
335
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let's what is an nft? Right? Nft Is a nonfundable token. If
336
00:25:26.009 --> 00:25:29.650
you try to explain what a nonfuntable
token is and why it has value to
337
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somebody who's never played a video game
and video game in their life or doesn't
338
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play, you know, doesn't understand
that concept, it's going to be hard.
339
00:25:36.440 --> 00:25:40.799
So NFT's in a lot of ways. In some ways can be argued
340
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had the first NFT's weren't video games
because you wanted his game called team fortress
341
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to back in the like on say
mid two thousands, is very popular PC
342
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game, and they created a market
place where you could buy and sell these
343
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guns or shields or whatever in the
game on a market place. So I
344
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had this really cool weapon and I
would sell it to my friend and I
345
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would make fifty bucks for whatever,
and then that person would be playing the
346
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game with this unique digital item and
it meant something. It had bus you
347
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know, I had monetary value to
that person to where he would, you
348
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know, buy it on this marketplace. So somebody who plays a video game
349
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regularly and understands that they're in this
digital world and then they're interacting with this
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digital world and nft just, I
mean it just immediately makes sense. And
351
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so, you know, I think
it's just education, education, education.
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I you know, we do these
Webinot we do webinars, you know.
353
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So there's Qa's and and there would
be people in the QA's and so I'm
354
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doing the Webinar and I see in
this Qa feed and there's, you know,
355
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people who are like this is just, you know, why is this
356
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different than toolips? Why is this
different the tulips, and it's like people
357
00:26:45.759 --> 00:26:48.670
just kind of get stuck on it
and it's just a matter of education and
358
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showing the opportunities. And then,
I think, as more real world use
359
00:26:53.630 --> 00:26:56.829
case examples come to life, I
think that's going to be another thing that
360
00:26:56.990 --> 00:27:00.980
turns the corner for some of these
people that might be kind of still holding
361
00:27:02.019 --> 00:27:06.380
their breath and waiting for everything to
good as Europe and a great anecdotal example
362
00:27:06.380 --> 00:27:08.700
would be there. You know,
there's a person I work with who you
363
00:27:08.819 --> 00:27:14.740
know, would be, I think
describe as somebody who's not a bitcoin you
364
00:27:14.819 --> 00:27:17.329
know, not not like a bitcoin
believer. You know, it's kind of
365
00:27:18.170 --> 00:27:18.650
you know, we'll say, we'll
take it a lady. You can have
366
00:27:18.769 --> 00:27:22.009
on with that, but I'm not
going to get involved. However, when
367
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you know, you see the yields
on the stable coin swamps. So this
368
00:27:29.170 --> 00:27:32.359
is a person who isn't in a
Bitcoin doesn't, you know, isn't necessarily
369
00:27:32.400 --> 00:27:34.319
a believer, but he's got a
black fire account. He's get yield on
370
00:27:34.400 --> 00:27:38.799
stable coins because that is a really
used application for something that fits into a
371
00:27:38.839 --> 00:27:44.160
portfolio and makes sense from a financial
perspective. So once there's more of these
372
00:27:44.309 --> 00:27:48.509
real use cases like the the the
stablecoin yield, example. I think a
373
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lot of people are going to continue
to come around, just like Jamie dining
374
00:27:51.430 --> 00:27:53.069
has right. So, yeah,
that's how it answer up. Yeah,
375
00:27:53.230 --> 00:27:56.670
and I could almost in a way
agree with you. As an individual,
376
00:27:56.670 --> 00:28:00.779
I'm thirty three years old and originally, when I guess you could say the
377
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whole space exploded a handful of years
back, at first glance my first thought
378
00:28:06.579 --> 00:28:08.819
was, I don't really get this, it's whatever. I don't like.
379
00:28:08.859 --> 00:28:11.900
I didn't want to process it.
Almost, I like blank that out,
380
00:28:11.059 --> 00:28:15.730
like it's a phase at all.
Whatever fizzle out. And then, I
381
00:28:15.769 --> 00:28:19.650
guess, once you really start to
understand the intricacies of how it actually works
382
00:28:19.730 --> 00:28:26.650
and what the implications can have on
society. Yeah, I believe you almost
383
00:28:26.970 --> 00:28:29.720
become, I don't want to say
negligent, but you you almost have to
384
00:28:29.799 --> 00:28:33.039
believe that that's a possibility, because
once you could perceive something to happen,
385
00:28:33.279 --> 00:28:37.559
it's only a matter of time before
someone makes it happen. So and like
386
00:28:37.680 --> 00:28:40.920
we and like it boils back to
the beginning. The doors are endless.
387
00:28:41.279 --> 00:28:45.309
So once you kind of understand a
little bit about what that space brings forward,
388
00:28:45.710 --> 00:28:49.150
I think that it'll really open the
eyes to individuals to then become much
389
00:28:49.190 --> 00:28:52.670
more aware of you know, hey, this should be a part of my
390
00:28:52.829 --> 00:28:56.819
portfolio. And I think one other
argument for it, for the real they
391
00:28:56.859 --> 00:29:00.980
sayers and the haters out there,
is it just fifty six million people a
392
00:29:02.259 --> 00:29:04.660
time, and there's something called a
network effect, which essentially means, you
393
00:29:04.740 --> 00:29:08.700
know, the more people that are
using a specific network, the more valuable
394
00:29:08.859 --> 00:29:12.569
it is. So just the fact
that that many people, and as just
395
00:29:12.809 --> 00:29:18.690
specific to coin base, are interested
in using it means there is some inherent
396
00:29:18.730 --> 00:29:22.009
value in it. Right. So
I think the network effect is also something
397
00:29:22.089 --> 00:29:26.000
I can have. Yeah, you
got to get kate and push. Yeah,
398
00:29:26.079 --> 00:29:27.000
you got a gate it, you
got to get on board, whether
399
00:29:27.039 --> 00:29:30.400
you like it or not, apart
and yeah, a hundred percent, a
400
00:29:30.440 --> 00:29:33.079
hundred percent. So I guess this
question, I guess, could be a
401
00:29:33.119 --> 00:29:36.960
little bit subjective in nature and the
kind of building off what we were just
402
00:29:37.000 --> 00:29:40.589
talking about. You know, we're
being that if I guess, you could
403
00:29:40.589 --> 00:29:42.710
say a thematic approach. Where do
you see it fitting into, you know,
404
00:29:42.829 --> 00:29:45.309
a classic portfolio? You know,
usually, you know, you have
405
00:29:45.470 --> 00:29:48.269
your ear stock, your bonds in
your whatever. However, you have your
406
00:29:48.309 --> 00:29:52.670
portfolio constructed. This is a complete
new area. Where do you see if
407
00:29:52.710 --> 00:29:55.579
being plugged in? Do you see
it? Do you see it almost?
408
00:29:56.220 --> 00:30:00.539
I guess you can think taking place
of other positions or building up a bond
409
00:30:00.619 --> 00:30:03.460
stuff. You know, where do
you see a kind of FIF fit the
410
00:30:03.539 --> 00:30:06.660
Mesh? Sure, okay, so
I'm we're going to talk about I'll talk
411
00:30:06.660 --> 00:30:10.930
about dapt specifically. So these are
look at the characteristics of the portfolio.
412
00:30:11.369 --> 00:30:15.450
Early stage, high growth, global. So that's stuff one. This is
413
00:30:15.490 --> 00:30:19.369
a global high growth port folio and
it fits within you know it people bucket
414
00:30:19.410 --> 00:30:23.680
that kind of sleeve different. It's
like a game of semantics really, but
415
00:30:23.920 --> 00:30:29.680
it's high growth, it's early movers
and I think that when you look at
416
00:30:29.799 --> 00:30:34.400
the correlation numbers of this particular index
versus the broad market, your correlations are,
417
00:30:34.640 --> 00:30:37.990
I want to say, in the
mid S low s, which is
418
00:30:38.349 --> 00:30:42.630
good because that's what you want and
you know, from the modern portfolio theory
419
00:30:42.630 --> 00:30:48.190
kind of standpoint, you want something
that zigs when the market zags. Right.
420
00:30:48.549 --> 00:30:52.980
So when you look at the holdings, the holdings are not well represented
421
00:30:52.339 --> 00:30:57.500
in broad market benchmarks or even something
like the Nastac one hundred of index.
422
00:30:57.819 --> 00:31:03.259
So you you don't have these positions
and your traditional portfolio unless you own,
423
00:31:03.410 --> 00:31:06.410
you know, one of these kind
of ets that are, you know,
424
00:31:06.490 --> 00:31:11.049
portfolios. It's focused on this,
on this kind of space. So it's
425
00:31:11.089 --> 00:31:15.690
got relatively low correlations with the broad
market, it's got low overlap with the
426
00:31:15.730 --> 00:31:19.880
broad market and these are growth company. So to me this fits in your
427
00:31:21.240 --> 00:31:22.920
we're trying to generate Alpha here.
You know, these pumple. We want
428
00:31:22.960 --> 00:31:26.359
these companies to outperform the best market. These are not given in paying stocks
429
00:31:26.400 --> 00:31:30.039
that are going to be sleepy right. So that's where these kind of fit
430
00:31:30.160 --> 00:31:36.230
and depends on how you construct your
portfolio. Some people would say different name
431
00:31:36.309 --> 00:31:40.470
for whatever, but this is a
high growth sleeve, international or global in
432
00:31:40.509 --> 00:31:44.269
nature. It's not just us,
it's all over the world. And then
433
00:31:44.829 --> 00:31:48.619
you were looking, you know,
in the in the best case scenario for
434
00:31:49.579 --> 00:31:56.059
price and return out performance over the
market as these companies continue to grow and
435
00:31:56.180 --> 00:32:00.059
vest and develop new tools and use
cases and applications that are used by more
436
00:32:00.099 --> 00:32:04.089
and more people around the world.
Absolutely, and I think that's a fair
437
00:32:04.130 --> 00:32:06.809
way to put it, in that
kind of high growth global phase. And
438
00:32:07.210 --> 00:32:10.130
wherever your portfolio is, you know, you can either have it as a
439
00:32:10.170 --> 00:32:14.089
segment or a piece into that division
is. That's a pretty fair way,
440
00:32:14.089 --> 00:32:17.960
I believe, to paint that picture. Awesome, and I guess switching gears
441
00:32:19.000 --> 00:32:21.400
a little bit, I know we're
kind of coming to a little bit of
442
00:32:21.440 --> 00:32:23.680
the tail end of the podcast.
Yep, I did want to obviously bring
443
00:32:23.799 --> 00:32:28.160
this question up. You know everyone. You know, I guess, going
444
00:32:28.319 --> 00:32:31.509
out now talking a little bit more
about pure play Crypto as itself. Obviously
445
00:32:31.549 --> 00:32:37.150
van neck has submitted of Perspectus to
the SEC, as did many others for
446
00:32:37.230 --> 00:32:40.950
the first you know US based you
know, Bitcoin and Crypto, base etfs.
447
00:32:42.470 --> 00:32:44.700
I got to ask you, are
we going to see one in two
448
00:32:44.740 --> 00:32:46.779
thousand and twenty one? Are we
gonna have to wait longer? What's holding
449
00:32:46.819 --> 00:32:52.180
this up? What's your view?
I think that you know as much we
450
00:32:52.339 --> 00:32:54.140
could. You know, we could
both pick a date and who knows.
451
00:32:54.660 --> 00:32:57.940
I think there's a couple things.
I think there's a couple things in know
452
00:32:58.099 --> 00:33:00.650
here. Okay, so first of
all, timeline is unclear and I am
453
00:33:01.369 --> 00:33:05.250
you know, I'm not in any
position to make a comment on what the
454
00:33:05.369 --> 00:33:07.329
SEC is thinking or saying or,
you know whatever. So I'm not going
455
00:33:07.329 --> 00:33:12.609
to see here prognosticate in that way. But they you know, what just
456
00:33:12.690 --> 00:33:15.200
launched in the last two days or
three days or so was a new mutual
457
00:33:15.319 --> 00:33:21.519
fund, ETF, that provides access
to bitcoin futures. So that to me
458
00:33:21.680 --> 00:33:25.559
is a step in the right direction
and kind of pointing towards we're moving things
459
00:33:25.640 --> 00:33:29.069
along right. So what I think
I want to say? One of the
460
00:33:29.109 --> 00:33:31.029
difference being in Mutual Fund ETF is
that you can kind of close the Mutual
461
00:33:31.069 --> 00:33:35.630
Fund and New Fund new money.
So you can close it to new money.
462
00:33:35.910 --> 00:33:38.589
You can't really do that within ETF. So that might be one of
463
00:33:38.630 --> 00:33:42.380
the things that we're they're kind of
testing the waters. And then, as
464
00:33:42.380 --> 00:33:45.660
another kind of comment about the ETF, you know there's like twelve filings out
465
00:33:45.660 --> 00:33:50.940
there right now. Right everybody's got
an etfiling, literally every single basically every
466
00:33:50.980 --> 00:33:53.500
etfroviter there as need tfi, and
so they're not all the same. Some
467
00:33:53.700 --> 00:33:58.170
of them they're providing access the futures, some of them are providing access to
468
00:33:58.329 --> 00:34:00.809
physical bitcoin that you're going to hold
in a you know, in a cold
469
00:34:00.849 --> 00:34:02.930
storage locker or whatever. So they're
not all the same. So maybe only
470
00:34:02.970 --> 00:34:06.970
the futures get to prove maybe only
the physical get approved, maybe they both
471
00:34:07.009 --> 00:34:09.679
get approved, maybe that you know, there's no way to tell what happens
472
00:34:09.719 --> 00:34:13.599
or what the timeline is. And
then I think the last thing that kind
473
00:34:13.599 --> 00:34:21.679
of note is that historically Canada has
has been more aggressive and their capital markets
474
00:34:22.320 --> 00:34:25.829
side, where they release kind of
newer products before the US does. So
475
00:34:27.469 --> 00:34:29.550
do the US kind of let's Canada
try it out? They did this with
476
00:34:29.670 --> 00:34:34.630
the marijuana stocks, so that they
let they let Canada try it out first,
477
00:34:34.630 --> 00:34:38.820
which is what Canada has done with
no real issues with their etherium and
478
00:34:39.059 --> 00:34:43.099
Bitcoin ets, and I want to
say the premiums and the you know,
479
00:34:43.179 --> 00:34:45.780
the discount premiums on those things have
been very tight, right. So the
480
00:34:46.179 --> 00:34:54.730
the the ETF wrapper structure has survived
and been okay throughout this volatility that we
481
00:34:54.849 --> 00:34:59.929
saw, you know, starting earlier
this year and in the bitcoin space.
482
00:35:00.050 --> 00:35:04.090
So Canada's seems to have pulled it
off and it seems to be working just
483
00:35:04.210 --> 00:35:07.880
fine. And again it goes back
to education, right, not only man
484
00:35:08.000 --> 00:35:10.239
act but, you know, all
these other firms that are trying to get
485
00:35:10.239 --> 00:35:16.280
this listen, we're having conversations,
positive conversations, with the regulators, educating,
486
00:35:16.719 --> 00:35:22.989
you know, discussing risks and opportunities
right. So we're all trying to
487
00:35:22.030 --> 00:35:29.550
educate investors and then come to market
and provide US investors with something that makes
488
00:35:29.630 --> 00:35:32.469
sense and that everybody's okay with.
So we're all in the same boat.
489
00:35:32.510 --> 00:35:37.500
We're all waiting for the green light
and it's it's it's been a lot of
490
00:35:37.699 --> 00:35:42.380
fun, you know, have these
conversations, educating and learning with the world.
491
00:35:42.539 --> 00:35:47.099
So that's what we're doing, absolutely
and it's just interesting all the implications
492
00:35:47.219 --> 00:35:51.809
that blockchain could have, even just
from I guess you can say, I
493
00:35:51.849 --> 00:35:54.769
don't want to say like an arms
race of nature, but it's, you
494
00:35:54.849 --> 00:35:58.610
know, you know, like there's
this it's an almost a country battle,
495
00:35:58.650 --> 00:36:01.650
you know, who's going to become
more adapt to this space. And again
496
00:36:01.730 --> 00:36:07.639
it boils back down to the open
ended possibilities. But, you know,
497
00:36:07.679 --> 00:36:09.840
I do want to thank you for
joining us and before we kind of wrap
498
00:36:09.960 --> 00:36:14.440
everything up, I always want to
give our guests, whoever we're speaking with,
499
00:36:14.519 --> 00:36:16.400
kind of the last word. If
there's anything that you'd like to mention
500
00:36:16.440 --> 00:36:21.590
to our listeners out there perhaps that
we didn't discuss, and also, obviously,
501
00:36:22.190 --> 00:36:25.389
where individuals can potentially go to learn
more information about van Ek learn more
502
00:36:25.429 --> 00:36:30.590
information about yourself. That would also
be great to share. Great. Well,
503
00:36:30.869 --> 00:36:34.139
I thank you very much for the
time and they have Tony come talk
504
00:36:34.179 --> 00:36:37.780
to you. I think my final
word would be it's a very exciting time
505
00:36:37.940 --> 00:36:39.900
to be, you know, working
in the digital assets space. There's a
506
00:36:39.940 --> 00:36:44.380
lot of things going on and I
think if you're listening to a podcast like
507
00:36:44.500 --> 00:36:47.170
this and you're, you know,
actively reading a website like seeking off on,
508
00:36:47.250 --> 00:36:51.849
try to educate yourself, you're already
and some ways ahead of the game.
509
00:36:52.010 --> 00:36:53.849
So keep your eye on the long
ball. And if you want to
510
00:36:54.250 --> 00:36:59.809
learn more about Badack, the websites
van Accom and my I'm going to plug
511
00:36:59.849 --> 00:37:02.840
my boss here. My boss,
Ed Lopez, has a really awesome podcast
512
00:37:04.280 --> 00:37:07.599
called trends with benefits. So definitely
check out trends with benefits with. Ed
513
00:37:07.639 --> 00:37:12.480
Lopez has got a lot of great
guests and talking about some of the same
514
00:37:12.559 --> 00:37:15.639
things, but a lot of different
things too. So there's a lot of
515
00:37:15.679 --> 00:37:17.670
exciting stuff out there. Keep Learning, keep having fun. That's my final
516
00:37:17.750 --> 00:37:22.710
word. Awesome. Absolutely, and
will make sure to include links to all
517
00:37:22.829 --> 00:37:27.510
the information that JP just mentioned in
the show notes. But that's going to
518
00:37:27.590 --> 00:37:31.059
do it for this episode. Want
to thank JP Lee of Vanac for joining
519
00:37:31.139 --> 00:37:36.659
us and obviously our audience out there
for tuning in and listening to this episode
520
00:37:36.699 --> 00:37:42.460
around the Crypto markets and digital transformation
landscape, how it's penetrating the ETF universe
521
00:37:42.619 --> 00:37:45.170
and really the markets as a whole. But until next time, this is
522
00:37:45.210 --> 00:37:50.289
Jason Could Pool, your host,
signing off. Thank you. For disclosure
523
00:37:50.329 --> 00:37:55.010
purposes, Jason Could Pool is not
long any funds discussed. Jp Lee is
524
00:37:55.130 --> 00:38:02.119
long Van Ect Vector's digital transformation ETF, ticker DAPP. This podcast is brought
525
00:38:02.159 --> 00:38:07.000
to you by tolls. The PRO
shares Dj Brookfield Global Infrastructure ETF. Look
526
00:38:07.039 --> 00:38:13.949
for Ticker Tho. L Z pro
shaars are distributed by Sei investments distribution cod,
527
00:38:14.429 --> 00:38:15.309
which is not affiliated with the Fund's
Advisor.
1
00:00:00.400 --> 00:00:05.400
This podcast is brought to you by
told the pro shares DJ Brookfield Global Infrastructure
2
00:00:05.400 --> 00:00:09.310
ETF. Look for ticker T O
l Z. A. Pro shares are
3
00:00:09.349 --> 00:00:14.630
distributed by Sei investments distribution code,
which is not affiliated with the Fund's Advisor.
4
00:00:17.070 --> 00:00:20.710
Welcome to let's Talk Ats. I'm
your host, Jason Capool, and
5
00:00:20.829 --> 00:00:25.980
I've been monitoring the investment space throughout
my entire career. Here at Seeking Alpha,
6
00:00:26.140 --> 00:00:30.699
I'm an ETF strategist and my role
is to uncover and bring forward news
7
00:00:30.820 --> 00:00:36.049
and information to the investor community that
is meaningful and actionable. Each week,
8
00:00:36.090 --> 00:00:40.210
a different guest and I will take
an indepth look at a particular aspect of
9
00:00:40.329 --> 00:00:45.609
the rapidly evolved in exchange traded fund
space, with a focus on how investors
10
00:00:45.649 --> 00:00:51.439
can best utilize ets to reach their
investment goals. Before we begin, a
11
00:00:51.600 --> 00:00:57.960
brief disclaimer. This podcast is for
entertainment and educational purposes only. Nothing said
12
00:00:58.119 --> 00:01:03.640
here should be taken as investment advice. All opinions expressed on this show are
13
00:01:03.759 --> 00:01:07.750
those of individuals expressing them alone.
A full set of disclosures will be included
14
00:01:07.790 --> 00:01:11.510
at the end of this show.
You can subscribe to let's talk ets on
15
00:01:11.629 --> 00:01:19.060
apple podcasts, Google podcasts, spotify
or whichever podcast platforms you prefer. For
16
00:01:19.180 --> 00:01:23.980
reference purposes, this podcast is being
recorded on the afternoon of July, Thirty
17
00:01:25.340 --> 00:01:29.579
two thousand and twenty one. Our
guest joining the podcast us today is John
18
00:01:29.659 --> 00:01:33.769
Patrick Lee, who's the product manager
over at Van Eck. John has a
19
00:01:33.810 --> 00:01:38.890
degree from William and Mary and is
also a chartered financial analyst. Moreover,
20
00:01:38.329 --> 00:01:42.129
he's been with Van Neck for over
seven years, where his role has progressed
21
00:01:42.170 --> 00:01:47.439
over the course of time. Prior
to joining Van Act, John Work for
22
00:01:47.719 --> 00:01:53.280
transamerica financial group, dorse right associates
and the Connors Group. He is also
23
00:01:53.359 --> 00:01:57.719
an expert when it comes to ETF
product design, where he's done everything from
24
00:01:57.719 --> 00:02:01.150
the research and design work pricing and
promote a new products to the van Ek
25
00:02:01.230 --> 00:02:07.870
audience. Were excited to have him
join us today to discuss our topic of
26
00:02:07.550 --> 00:02:13.909
how crypto markets and digital transformation are
seeping into the exchange traded fun world.
27
00:02:14.430 --> 00:02:17.620
So, without further introduction, I'd
like to welcome John Patrick Lee. Hey,
28
00:02:17.780 --> 00:02:21.180
thanks a lot for having me on
the show. I really appreciate it.
29
00:02:21.379 --> 00:02:23.939
Very, very happy to be here. Absolutely. How's everything going there
30
00:02:23.979 --> 00:02:28.419
for you today? It's good it's
not too hot in New York City and
31
00:02:28.620 --> 00:02:31.009
the sky is blue and it's Friday. So I mean, I don't have
32
00:02:31.050 --> 00:02:37.050
any complaints right now. Absolutely likewise. So, John, usually the best
33
00:02:37.090 --> 00:02:39.050
way to kick off our podcasts and
the way we like to operate in the
34
00:02:39.129 --> 00:02:43.889
beginning is if you could just perhaps
shed a little bit more light to our
35
00:02:43.969 --> 00:02:47.039
listeners on who you are kind of
on from a day to day standpoint at
36
00:02:47.080 --> 00:02:50.719
Van Act, what your role consists
of. You know, just a better
37
00:02:50.759 --> 00:02:55.280
picture of you know who John is? Sure? Well, for first of
38
00:02:55.319 --> 00:02:59.949
all, I go by GP.
Just say, my phonegies JP Lee.
39
00:03:00.430 --> 00:03:01.550
Not Out, it's fine, it's
just it's all good. So, yeah,
40
00:03:01.590 --> 00:03:05.949
JP, I'm a product manager of
Van Neck. I've been on the
41
00:03:06.069 --> 00:03:10.349
ETF product management team for almost four
years now. Before that I was in
42
00:03:10.389 --> 00:03:15.180
the trade settlements group at Van Ack
and prior to that I worked at doors
43
00:03:15.340 --> 00:03:19.500
right and TRANSAMERICA. Dor See right
was my longest tenure before Bannack, and
44
00:03:19.979 --> 00:03:23.620
I learned a lot about portfolio construction
from a systematic perspective there. They were
45
00:03:23.699 --> 00:03:29.409
really focused on momentum strategy. So
a diverse background, you could say,
46
00:03:29.770 --> 00:03:32.770
and advance neck. What what I'm
the job that I do can be broken
47
00:03:32.810 --> 00:03:38.569
up in a three basic parts.
It's it's product management, so managing what
48
00:03:38.770 --> 00:03:43.479
products we have now, figuring out
competitive analysis what other products I'm cold.
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00:03:43.520 --> 00:03:46.919
You know, our suite is competing
with marketing, which I would say is
50
00:03:47.039 --> 00:03:53.800
like writing blogs and coming up with
a narrative of how to promote the this
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00:03:53.000 --> 00:03:57.509
product seek that we have, and
then, finally, product development. So
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00:03:57.830 --> 00:04:00.990
kind of a combination of those first
two things, figuring out what's out there,
53
00:04:01.669 --> 00:04:05.789
where are there potentially gaps in the
market that we could compete in,
54
00:04:06.110 --> 00:04:13.060
and then trying to design or work
with index partners to come up with ets
55
00:04:13.219 --> 00:04:19.660
solutions that could benefit, potentially benefit
investors by providing them access to specific segments
56
00:04:19.699 --> 00:04:21.980
of the market. So that you
know, we're going to talk about the
57
00:04:23.339 --> 00:04:28.490
digital transformation etf today, which is
digital assets, digital asset companies, but
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00:04:28.569 --> 00:04:32.810
I'm also I really cut my teeth
on our video gaming and esports ETF,
59
00:04:33.970 --> 00:04:38.329
ESPO. So there's a little bit
of overlap between the video game space in
60
00:04:38.370 --> 00:04:44.560
the digital asset space. So I
had definitely kind of tilted towards thematic tech
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00:04:44.639 --> 00:04:47.319
equities right now and that's what that's
what my bread and motor is awesome,
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00:04:47.439 --> 00:04:54.470
excellent. So JP. Obviously,
digital transformation and even the crypto markets are
63
00:04:54.589 --> 00:04:58.949
two different topics that have drawn a
lot of attention for different reasons, and
64
00:04:59.790 --> 00:05:02.990
I think while the two topics are
obviously quite different at one end of the
65
00:05:03.029 --> 00:05:09.139
spectrum, you can also find them
overlapping and other ends, and I kind
66
00:05:09.180 --> 00:05:12.939
of wanted to get your take on
this space as a whole and understand how
67
00:05:12.980 --> 00:05:15.459
you feel the future fits for,
you know, the the growing, you
68
00:05:15.540 --> 00:05:20.689
know, global digitalized economy where blockchain
and all this stuff is becoming more and
69
00:05:20.810 --> 00:05:26.209
more, I guess you could say, impactful to businesses on a day to
70
00:05:26.250 --> 00:05:29.889
day operation versus what it might have
been five years ago, three years ago,
71
00:05:30.329 --> 00:05:33.129
and kind of what that space looks
like moving forward potentially. Sure.
72
00:05:33.250 --> 00:05:39.600
So, the way we kind of
categorize this ecosystem is a structural long term
73
00:05:39.839 --> 00:05:45.439
growth story and we're still very early. Right there's not a ton of companies
74
00:05:45.519 --> 00:05:48.079
like the semiconductor industry or the biotech
industry, where there's, you know,
75
00:05:48.199 --> 00:05:51.230
a million companies out there doing business. There's not a lot of companies out
76
00:05:51.230 --> 00:05:55.870
there right now. So we're still
very early. And when I say structural
77
00:05:55.990 --> 00:06:00.470
long term growth, I mean it's
not happening in a bubble. It's not
78
00:06:00.709 --> 00:06:04.660
just bitcoin and it's not just a
theorem. Right, and the thing I
79
00:06:04.819 --> 00:06:12.699
really emphasize is what we're seeing is
widespread adoption of the technology, the blockchain
80
00:06:12.779 --> 00:06:16.259
technology, not just by retail but
also by institutions. Right. So you've
81
00:06:16.259 --> 00:06:21.649
got this huge up swell of retail
adoption. You see, that was something
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like coin base. Fifty six million
verified users that are on the coin based
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platform, you know, maybe not
buying and selling all the time, but
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just interested in invested in some way. And then on the flip side,
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you've got massive institutional kind of adoption
and investment in the space, and that
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is one of those things that wasn't
really there five to six years ago.
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It's very easy to pull up,
you know, Jamie diamond headlines from five
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years ago or you know whoever it
is who are poopooing the idea of investing
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in a digital asset. Who are, you know, two thousand and twenty
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one all of a sudden launching initiatives
and trying to provide access to their their
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customer base and, I think,
the traditional finance kind of ecosystem. The
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reason they're doing is is because they
see the opportunity and they see the mass
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adoption of the retail side. So
they run the risk of kind of getting
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left behind. Right if you're if
you're an advisor, financial advisor at,
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you know, one of the big
wire houses like Maryland, Cher wherever,
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you want to be up to speed
on that. Because, going back to
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coin base, that's fifty six million
users, as a ton of people,
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and those people are investing their money
on a different platform that exists outside of
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the traditional financial ecosystem. So,
you know, some argue, I think,
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with this strong evidence, that it
is might be a case of the
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tail kind of wagging the dog,
where it's like institutions may not necessarily want
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to get invested or get, you
know, get dug into the space,
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but they have to because this is
where the world is going, where the
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population is moving, and they need
to play ball if they want to participate
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in the future economy. So that
that's kind of the overview. And then
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opportunities and risks. I mean the
opportunities are in a lot of ways limitless.
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This is a very disruptive ecosystem.
These are early stage companies. There's
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a future digital economy that's being built
out right now. And it's more efficient.
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It's it is creating new financial opportunities
for for investors. The easiest case
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use case for that would be some
of the yields that you can get on
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these decentralized finance swaps, for example
on a on a platform like blockfly.
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Or you can deposit money into a
stable coin. That stable point gets lent
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out to another investor who's using it
for margin and you're getting high single digit
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yields on your investment that you can't
really get in the traditional finance you know,
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like how much are high eel bond
sealing right now? Right like three
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percent. So there's new opportunities out
there. And then the risks are I
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mean definitely the regulatory risk is definitely
front of mine for a lot of this
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community. The China, you know, crypto ban that's occurred of a Laska
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unfolded of the last six months or
so kind of shows that what can happen
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is that the government, if they
want to, could make things hard right,
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and so that's a risk and you
see that also again go back to
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the black five example. They're having
to restrict some of those yield opportunities to
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specific states within the United States.
Because some states are cracking down right.
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So there are huge opportunities and there
are definitely risks out there. So it's
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just a matter. What we're doing
now is education, education, education,
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and learning along the way. So
that's how it kind of described the space
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as a whole. Yeah, absolutely, and I think that you kind of
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nailed it on the head with the
idea that the institutions are almost forced to
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adopt, you know, the new
way, whether they want to or not,
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because it is the way. The
land is shifting under it ups and
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it's either, you know, you
adapt or die, whether you like it
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or not. And although it has
some pitfalls that are almost unforeseen for everybody,
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it's interesting that how how much of
a buzz and how much of an
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interest has been growing around that transformation
area. So, you know, like
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you said, I think the opportunities
are are really our limitless. You know,
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I think the future, necessarily,
we might not even know what it
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is yet because those doors in front
of us haven't been open. So yeah,
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you know, that's one thing I
really kind of like to talk about
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too, is because when you talk
to somebody who is building something new in
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the digital ascid ecosystem, whether you
know, to decentralized application adapt or whatever.
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It gets into like science fiction land
very quickly and that you start hearing
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things like, okay, this is
a google distructor google is Google is under
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fire from, you know, this
new blockchain based, you know, web
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browser or air BB is under fire
because they're just middlemen and they're making a
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ton of money being middlemen and the
blockchain technology kind of facilitates getting the middlemen
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out of there and lowering fees,
increasing efficiencies so that somebody who wants to
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do business to do business with their
end user at in a more efficient way
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and pass on savings to those to
those end users. Yeah, absolutely,
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and I guess this could be a
good segue into what a van x ets
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that I know that you guys recently
launched a few months back, the van
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a factors digital transformation ETF, ticker
DAPP, which appears to address this kind
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of market area. I guess you
could say. Can you walk us through
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the story around, you know,
the designing an idea for this ETF,
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what made van nec want to bring
this to market and kind of what it's
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all about her? So, I
mean as a firm, van x committed
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to to providing forward looking intelligently designing
strategies that provide investors access. Right,
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that's what we're doing, providing access
to a group of companies in a way
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that makes sense from an investment perspective, like how the portfolio is constructed,
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but also from a big picture perspective, right, we're providing access to an
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early stage growth space that is dynamic, it is, you know, believe,
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it has legs. So that,
I guess you could say, is
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the velocity behind us. You know, we're very we are believers in the
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long term story of the blockchain ecosystem, and so this is just a way
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to provide access to the publicly traded
equities that are doing business within the space.
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And I think that's a huge distinction
and something to be very, you
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know, forward about. Is that
this ETF is, first of all,
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a it's a passive ETF, right, so we're not actively managing it,
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and then it's providing access to companies. There is no bitcoin or etherium or
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any other or those coin or whatever. There's no actual underlying cryptocurrencies in the
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portfolio. It's the companies themselves,
and one of our very popular and successful
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ets is the the gold miner ETF
and it's in it's kind of a way
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to think about it. Think about
as the gold mining ATF gx. There's
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no gold in that portfolio right.
We don't own positions of gold bullion or
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gold bars in there. It's just
the company. So we definitely view the
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opportunity as different when you look at
companies that are doing business in digital assets
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and then an investment in the underlying
digital asset themselves. So that's the that's
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the long story short. On the
on the TF, yeah, absolutely,
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and I'm glad you made that distinction
that it's not something that's actively holding bitcoin
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or any crypto for that matter,
but I guess you could say it's indirectly
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involved to some level and I guess
taking it a step further, you know,
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would you be able to provide us
with some of the specifications of the
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actual fund itself? I know you
just mentioned that it's passively managed, but
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what are some of the kind of
the key holdings that are, you know,
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maybe really driving the fund? I
don't know if you can highlight maybe
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too well to specific stocks that you
think are could separate damp from others,
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and you know why individuals should kind
of rally around it and, you know,
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short it offers. So it's a
pacid ETF and the different you know,
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passive versus actively active, as when, you know, portfolio manager,
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a team is saying, look,
we're going to overweight, you know,
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this company and we're going to exclude
that company because we think this company did
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to be better. Right, that's
not what we're doing. So this is
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a PACID ETF that tracks an index, and the index is essentially a theoretical
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ex expression of what the digital transformation
opportunity is, which is a group of
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companies that are pure play, which
means that the index provider has determined.
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Look, this company, they make
over fifty percent of their revenues from digital
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assets themselves. So that means they're
actually doing business in digital assets. And
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that's a huge distinction, because there's
a lot of companies out there like I
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mean, you you pick any one
of the conglomerates out there that are dabbling
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and the digital asset space or some
new companies maybe have created some digital asset
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initiative where they're going to utilize blockchain
technology somehow in their business and they,
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you know, as for a cress
release, they'll put that out but the
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core of their business is not working
within the digital asset ecosystem. So the
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index rules are really what define what
the portfolio looks like. And so the
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index provider says what's out there,
what's pure, and then we're going to
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create a portfolio. So twenty five
holdings right now and, like I said,
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this is an early stage. There's
not a ton of companies out there.
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So twenty four of the names are
what the index provider would be considered
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pure play and then there's one name
in their time on semiconductor week that's not
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pure. Those positions are cap trying
to keep that exposure as low as possible
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until the markets full enough so that
the portfolio would be completely pure. The
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index rebalances core or early and so
at you know, once a quarter.
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At the end of the quarter,
the NXPRETOR says, okay, what's the
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market and then they rebounce to you
know, the new weights and then the
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portfolios off and running again to the
next rebalance. So positions are capped at
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eight percent. So we're not trying
to overweight any one single position. We're
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trying to kind of diversify down the
market cap and then I think the only
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other wrinkle that will be interesting to
kind of note is that there's a fast
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track inclusion for new companies that come
to market so that they come into the
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portfolio more quickly so that we're not
waiting three months till the you know,
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till big name comes in at the
rebound. So an example would be coin
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base lists. So if some type
of company is over one billion dollars on
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the day it lists, or IPOs
or despacs, and then on that Friday
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it's over billion dollars, it'll come
into the portfolio on the following Friday.
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So socially you're getting minimum five day, maximum ten day to get included in
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the portfolio for those big names and
that and you know, there's different ways
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to slice up, you know,
a universe. There's different rules and it's
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just kind of very important for investors
to understand the rules of your portfolio or
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your index because it different rules apply
to the same universe, are going to
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spit out a different portfolio. So
it's important to kind of understand the nuts
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and bolts of and you know,
some people in the Etfspace, you know,
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look under the hood and looking under
the hood, I think a lot
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of people going and do the you
know, the bare amnimum researcher. You
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know what are the top ten holdings, and even just the top ten holding
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snapshot can give you a pretty solid
idea of what is in the ETF.
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So, with that being said,
I think if you can, want to
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talk about what kind of names are
in the portfolio. What are the kind
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of Marquis names? Coin Base again
biggest digital asset IPO in history. It
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was a direct listing. It's fifty
six million verified users. That is so
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many people, and I don't have
the numbers in front of me, but
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if you compare coin base users versus
Schwab users, you know, the Schwab
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Retail Robridge platformer, eat it.
It's bigger than those, those those normal
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traditional finance retail operations, and so
just that amount of user base is very
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compelling from an investment case standpoint.
So many people engage in an ecosystem signed
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up, not necessarily investing amount of
money every day, but just being there,
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being interested in signed up. That's
a huge deal and in a lot
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of ways coin based kind of like
the Marquis name in the digital astet ecosystem.
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Another name that's really exciting is riot. blockchain. So riot blockchain is
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a bit a bitcoin miner and they're
the largest US publicly traded minor a of
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a lot of very dynamic and compelling, you know, stories that are coming
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out of riot and I think from
an investment standpoint, where they are again
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is early stage. A lot of
capital investment there. They're buying their acquiring
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facilities that are going to allow them
too mine need and more bitcoin. You
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know, they're investing heavily into kind
of an ESG story. Their hydroelectric power
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their New York mining facilities is eighty
eight percent zeromission energy to mind the BITCOIN
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and their Ted their new Texas facility
uses almost thirty percent. So learned when.
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So the ESG story is definitely cropped
up a lot in the last six
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months and I think that is an
interesting wrinkle and I think that that's a
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good conversation to have and it's it's
a fun conversation to have, and riot
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it's kind of addressing those questions head
on. So coin base and rider kind
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of the two companies like to talk
about, but there's a lot of things
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going on in the underlying index.
It's not just miners, it's not just
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exchanges, like coin based. You've
got hardware producers that are creating the chips
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that are mining the bitcoin. You've
got financial services companies that are kind of
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bridging the gap between traditional finance ecosystem
and the digital asset finny financial ecosystem.
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That would be a company like silver
gate capital. So there's all these different
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things going on within the digital assets
ecosystem and this ETF in this index is
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an expression of all of those companies, kind of weighted by market cap,
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and it's going to change over time. The Way the index is today is
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not the way it's going to be
in three years, and that's kind of
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the beauty of the passive index is
we're not trying to say look, the
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miners are most important, they need
to be at thirty percent and forget about
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everything else. Now the market is
going to do with the market is going
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to do and the portfolio is going
reflect what the market is. So that's
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I just love talking about the passive
side. That how it changes over time
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as things develop. Alpha trader is
a weekly investor focused podcast produced by seeking
276
00:20:53.759 --> 00:20:57.599
Alfa that will dive into the most
impactful market news and it set the stage
277
00:20:57.640 --> 00:21:03.200
for upcoming market events. We are
your hosts, Aaron task and Steven Alpha.
278
00:21:03.640 --> 00:21:07.710
Episodes are available every Tuesday and will
include discussions with market experts on topics
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that are relevant to active traders who
are seeking out be sure to subscribe so
280
00:21:11.990 --> 00:21:21.819
you never miss an episode. Yeah, absolutely, and I love the aspect
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that it's kind of you get a
little bit of everything and the like.
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You just had the markets going to
dictate what's, I guess, most needed
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overall. From a longer term perspective
and even, as we mentioned in the
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beginning of the podcast, I guess
you could say that digital transformation space,
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00:21:37.210 --> 00:21:41.329
you know, it's so new to
everybody that it's almost, in a way,
286
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you could say, more appropriate to
use that approach because, you know,
287
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to predict something that is, you
know, six months, a year,
288
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five years down the road is kind
of difficult when it's something that's brand
289
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new to everyone. This is it
not a change where we're a jet adjusting
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something that's something completely brand new,
a hundred percent, and it's going to
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be interesting to see the index develop
and I think from an investment point of
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view it's we don't know where it's
going and there's going to be like and
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the financial services. It's the financial
services aspect right I personally think that's a
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huge growth opportunity. So there's a
certain percentage of the portfolio right now that's
295
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kind of dedicated to the financial services
segment, separate than exchange is, like
296
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actual financial banking, asset management.
That whole area could become, you know,
297
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be able to support its own ETF
in the next five years, right.
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But right now it's just a segment
of this ecosystem. So it's going
299
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to grow, it's going to develop, and that's something I really want to
300
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hammer home is we are very early, early, early, still absolutely so,
301
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speaking from kind of, I guess
you could say, the other side
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of the fence. What would you
say to an investor, in individual out
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there on the street who may not
really, say, be a full believer
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in cryptocurrencies, be it themselves as
a whole or blockchain technology from an indirect
305
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standpoint? But you know, I
know DAB obviously doesn't have direct positions in
306
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Bitcoin and and crypto itself, but
it does have some degree of an indirect
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investment. But what would you say
to someone who really is not a believer
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00:23:14.940 --> 00:23:19.539
or is doesn't maybe doesn't really comprehend
how it works? You know, why
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they should have this as part of
their portfolio, not necessarily just from van
310
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neck, but from anyone why this
is an important piece to a portfolio.
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You know, the Pete the majority
of people who kind of take that position.
312
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It come it really boils down to
demographics and nine out of ten cases
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and cut. You know, I
mentioned the video game kind of ecosystem earlier
314
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and it's kind of the same thing. So people who are under forty years
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old, they maybe you know,
maybe I'm thirty eight, so I'm not
316
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necessarily a digital data, but a
thirty year old is definitely a digital date.
317
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Of the younger generation inherently gets it. They understand that there is value
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to be had and something that is
exists on a blockchain is is a digital
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item that is immutable. You can't
change it. You could potentially own this
320
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item as a digital asset. So
it's generational in my opinion. Somebody who's
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older, forty and older, there's
it really is going to be an edge.
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It's much more an educational and nature
of saying look, people are living
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their lives purely digitally right everybody's on
their phone to everybody's got ten to twelve
324
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hours of screen time a day,
if not more. We live in a
325
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digital world now and that's different than
we live and the year two thousand even,
326
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right. So we're living in a
different world today and and so because
327
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of that, it creates new opportunities. There's a different paradigm or mindset or
328
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framework that people are using to interact
with each other, interact with media,
329
00:24:57.069 --> 00:25:00.630
interact with their investments. And you
know, something like the Robin Hoof and
330
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Nomenon is a great example of that, right. You know who are Robin
331
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Hood's base users? They're young people
there, people who understand, Hey,
332
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I can just open my mobile phone
and start trading and it's no big deal.
333
00:25:11.460 --> 00:25:15.140
An older person, for whatever reason, just it's just demographics. So
334
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I think that, going back to
the video game example, you know,
335
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let's what is an nft? Right? Nft Is a nonfundable token. If
336
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you try to explain what a nonfuntable
token is and why it has value to
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00:25:29.769 --> 00:25:33.690
somebody who's never played a video game
and video game in their life or doesn't
338
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play, you know, doesn't understand
that concept, it's going to be hard.
339
00:25:36.440 --> 00:25:40.799
So NFT's in a lot of ways. In some ways can be argued
340
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had the first NFT's weren't video games
because you wanted his game called team fortress
341
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to back in the like on say
mid two thousands, is very popular PC
342
00:25:49.269 --> 00:25:53.470
game, and they created a market
place where you could buy and sell these
343
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guns or shields or whatever in the
game on a market place. So I
344
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had this really cool weapon and I
would sell it to my friend and I
345
00:26:02.269 --> 00:26:04.380
would make fifty bucks for whatever,
and then that person would be playing the
346
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game with this unique digital item and
it meant something. It had bus you
347
00:26:08.859 --> 00:26:12.180
know, I had monetary value to
that person to where he would, you
348
00:26:12.220 --> 00:26:15.700
know, buy it on this marketplace. So somebody who plays a video game
349
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regularly and understands that they're in this
digital world and then they're interacting with this
350
00:26:21.289 --> 00:26:25.529
digital world and nft just, I
mean it just immediately makes sense. And
351
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so, you know, I think
it's just education, education, education.
352
00:26:29.170 --> 00:26:32.250
I you know, we do these
Webinot we do webinars, you know.
353
00:26:32.450 --> 00:26:36.400
So there's Qa's and and there would
be people in the QA's and so I'm
354
00:26:36.440 --> 00:26:38.519
doing the Webinar and I see in
this Qa feed and there's, you know,
355
00:26:38.559 --> 00:26:41.920
people who are like this is just, you know, why is this
356
00:26:41.000 --> 00:26:45.640
different than toolips? Why is this
different the tulips, and it's like people
357
00:26:45.759 --> 00:26:48.670
just kind of get stuck on it
and it's just a matter of education and
358
00:26:49.349 --> 00:26:53.509
showing the opportunities. And then,
I think, as more real world use
359
00:26:53.630 --> 00:26:56.829
case examples come to life, I
think that's going to be another thing that
360
00:26:56.990 --> 00:27:00.980
turns the corner for some of these
people that might be kind of still holding
361
00:27:02.019 --> 00:27:06.380
their breath and waiting for everything to
good as Europe and a great anecdotal example
362
00:27:06.380 --> 00:27:08.700
would be there. You know,
there's a person I work with who you
363
00:27:08.819 --> 00:27:14.740
know, would be, I think
describe as somebody who's not a bitcoin you
364
00:27:14.819 --> 00:27:17.329
know, not not like a bitcoin
believer. You know, it's kind of
365
00:27:18.170 --> 00:27:18.650
you know, we'll say, we'll
take it a lady. You can have
366
00:27:18.769 --> 00:27:22.009
on with that, but I'm not
going to get involved. However, when
367
00:27:22.769 --> 00:27:29.049
you know, you see the yields
on the stable coin swamps. So this
368
00:27:29.170 --> 00:27:32.359
is a person who isn't in a
Bitcoin doesn't, you know, isn't necessarily
369
00:27:32.400 --> 00:27:34.319
a believer, but he's got a
black fire account. He's get yield on
370
00:27:34.400 --> 00:27:38.799
stable coins because that is a really
used application for something that fits into a
371
00:27:38.839 --> 00:27:44.160
portfolio and makes sense from a financial
perspective. So once there's more of these
372
00:27:44.309 --> 00:27:48.509
real use cases like the the the
stablecoin yield, example. I think a
373
00:27:48.549 --> 00:27:51.349
lot of people are going to continue
to come around, just like Jamie dining
374
00:27:51.430 --> 00:27:53.069
has right. So, yeah,
that's how it answer up. Yeah,
375
00:27:53.230 --> 00:27:56.670
and I could almost in a way
agree with you. As an individual,
376
00:27:56.670 --> 00:28:00.779
I'm thirty three years old and originally, when I guess you could say the
377
00:28:00.859 --> 00:28:06.420
whole space exploded a handful of years
back, at first glance my first thought
378
00:28:06.579 --> 00:28:08.819
was, I don't really get this, it's whatever. I don't like.
379
00:28:08.859 --> 00:28:11.900
I didn't want to process it.
Almost, I like blank that out,
380
00:28:11.059 --> 00:28:15.730
like it's a phase at all.
Whatever fizzle out. And then, I
381
00:28:15.769 --> 00:28:19.650
guess, once you really start to
understand the intricacies of how it actually works
382
00:28:19.730 --> 00:28:26.650
and what the implications can have on
society. Yeah, I believe you almost
383
00:28:26.970 --> 00:28:29.720
become, I don't want to say
negligent, but you you almost have to
384
00:28:29.799 --> 00:28:33.039
believe that that's a possibility, because
once you could perceive something to happen,
385
00:28:33.279 --> 00:28:37.559
it's only a matter of time before
someone makes it happen. So and like
386
00:28:37.680 --> 00:28:40.920
we and like it boils back to
the beginning. The doors are endless.
387
00:28:41.279 --> 00:28:45.309
So once you kind of understand a
little bit about what that space brings forward,
388
00:28:45.710 --> 00:28:49.150
I think that it'll really open the
eyes to individuals to then become much
389
00:28:49.190 --> 00:28:52.670
more aware of you know, hey, this should be a part of my
390
00:28:52.829 --> 00:28:56.819
portfolio. And I think one other
argument for it, for the real they
391
00:28:56.859 --> 00:29:00.980
sayers and the haters out there,
is it just fifty six million people a
392
00:29:02.259 --> 00:29:04.660
time, and there's something called a
network effect, which essentially means, you
393
00:29:04.740 --> 00:29:08.700
know, the more people that are
using a specific network, the more valuable
394
00:29:08.859 --> 00:29:12.569
it is. So just the fact
that that many people, and as just
395
00:29:12.809 --> 00:29:18.690
specific to coin base, are interested
in using it means there is some inherent
396
00:29:18.730 --> 00:29:22.009
value in it. Right. So
I think the network effect is also something
397
00:29:22.089 --> 00:29:26.000
I can have. Yeah, you
got to get kate and push. Yeah,
398
00:29:26.079 --> 00:29:27.000
you got a gate it, you
got to get on board, whether
399
00:29:27.039 --> 00:29:30.400
you like it or not, apart
and yeah, a hundred percent, a
400
00:29:30.440 --> 00:29:33.079
hundred percent. So I guess this
question, I guess, could be a
401
00:29:33.119 --> 00:29:36.960
little bit subjective in nature and the
kind of building off what we were just
402
00:29:37.000 --> 00:29:40.589
talking about. You know, we're
being that if I guess, you could
403
00:29:40.589 --> 00:29:42.710
say a thematic approach. Where do
you see it fitting into, you know,
404
00:29:42.829 --> 00:29:45.309
a classic portfolio? You know,
usually, you know, you have
405
00:29:45.470 --> 00:29:48.269
your ear stock, your bonds in
your whatever. However, you have your
406
00:29:48.309 --> 00:29:52.670
portfolio constructed. This is a complete
new area. Where do you see if
407
00:29:52.710 --> 00:29:55.579
being plugged in? Do you see
it? Do you see it almost?
408
00:29:56.220 --> 00:30:00.539
I guess you can think taking place
of other positions or building up a bond
409
00:30:00.619 --> 00:30:03.460
stuff. You know, where do
you see a kind of FIF fit the
410
00:30:03.539 --> 00:30:06.660
Mesh? Sure, okay, so
I'm we're going to talk about I'll talk
411
00:30:06.660 --> 00:30:10.930
about dapt specifically. So these are
look at the characteristics of the portfolio.
412
00:30:11.369 --> 00:30:15.450
Early stage, high growth, global. So that's stuff one. This is
413
00:30:15.490 --> 00:30:19.369
a global high growth port folio and
it fits within you know it people bucket
414
00:30:19.410 --> 00:30:23.680
that kind of sleeve different. It's
like a game of semantics really, but
415
00:30:23.920 --> 00:30:29.680
it's high growth, it's early movers
and I think that when you look at
416
00:30:29.799 --> 00:30:34.400
the correlation numbers of this particular index
versus the broad market, your correlations are,
417
00:30:34.640 --> 00:30:37.990
I want to say, in the
mid S low s, which is
418
00:30:38.349 --> 00:30:42.630
good because that's what you want and
you know, from the modern portfolio theory
419
00:30:42.630 --> 00:30:48.190
kind of standpoint, you want something
that zigs when the market zags. Right.
420
00:30:48.549 --> 00:30:52.980
So when you look at the holdings, the holdings are not well represented
421
00:30:52.339 --> 00:30:57.500
in broad market benchmarks or even something
like the Nastac one hundred of index.
422
00:30:57.819 --> 00:31:03.259
So you you don't have these positions
and your traditional portfolio unless you own,
423
00:31:03.410 --> 00:31:06.410
you know, one of these kind
of ets that are, you know,
424
00:31:06.490 --> 00:31:11.049
portfolios. It's focused on this,
on this kind of space. So it's
425
00:31:11.089 --> 00:31:15.690
got relatively low correlations with the broad
market, it's got low overlap with the
426
00:31:15.730 --> 00:31:19.880
broad market and these are growth company. So to me this fits in your
427
00:31:21.240 --> 00:31:22.920
we're trying to generate Alpha here.
You know, these pumple. We want
428
00:31:22.960 --> 00:31:26.359
these companies to outperform the best market. These are not given in paying stocks
429
00:31:26.400 --> 00:31:30.039
that are going to be sleepy right. So that's where these kind of fit
430
00:31:30.160 --> 00:31:36.230
and depends on how you construct your
portfolio. Some people would say different name
431
00:31:36.309 --> 00:31:40.470
for whatever, but this is a
high growth sleeve, international or global in
432
00:31:40.509 --> 00:31:44.269
nature. It's not just us,
it's all over the world. And then
433
00:31:44.829 --> 00:31:48.619
you were looking, you know,
in the in the best case scenario for
434
00:31:49.579 --> 00:31:56.059
price and return out performance over the
market as these companies continue to grow and
435
00:31:56.180 --> 00:32:00.059
vest and develop new tools and use
cases and applications that are used by more
436
00:32:00.099 --> 00:32:04.089
and more people around the world.
Absolutely, and I think that's a fair
437
00:32:04.130 --> 00:32:06.809
way to put it, in that
kind of high growth global phase. And
438
00:32:07.210 --> 00:32:10.130
wherever your portfolio is, you know, you can either have it as a
439
00:32:10.170 --> 00:32:14.089
segment or a piece into that division
is. That's a pretty fair way,
440
00:32:14.089 --> 00:32:17.960
I believe, to paint that picture. Awesome, and I guess switching gears
441
00:32:19.000 --> 00:32:21.400
a little bit, I know we're
kind of coming to a little bit of
442
00:32:21.440 --> 00:32:23.680
the tail end of the podcast.
Yep, I did want to obviously bring
443
00:32:23.799 --> 00:32:28.160
this question up. You know everyone. You know, I guess, going
444
00:32:28.319 --> 00:32:31.509
out now talking a little bit more
about pure play Crypto as itself. Obviously
445
00:32:31.549 --> 00:32:37.150
van neck has submitted of Perspectus to
the SEC, as did many others for
446
00:32:37.230 --> 00:32:40.950
the first you know US based you
know, Bitcoin and Crypto, base etfs.
447
00:32:42.470 --> 00:32:44.700
I got to ask you, are
we going to see one in two
448
00:32:44.740 --> 00:32:46.779
thousand and twenty one? Are we
gonna have to wait longer? What's holding
449
00:32:46.819 --> 00:32:52.180
this up? What's your view?
I think that you know as much we
450
00:32:52.339 --> 00:32:54.140
could. You know, we could
both pick a date and who knows.
451
00:32:54.660 --> 00:32:57.940
I think there's a couple things.
I think there's a couple things in know
452
00:32:58.099 --> 00:33:00.650
here. Okay, so first of
all, timeline is unclear and I am
453
00:33:01.369 --> 00:33:05.250
you know, I'm not in any
position to make a comment on what the
454
00:33:05.369 --> 00:33:07.329
SEC is thinking or saying or,
you know whatever. So I'm not going
455
00:33:07.329 --> 00:33:12.609
to see here prognosticate in that way. But they you know, what just
456
00:33:12.690 --> 00:33:15.200
launched in the last two days or
three days or so was a new mutual
457
00:33:15.319 --> 00:33:21.519
fund, ETF, that provides access
to bitcoin futures. So that to me
458
00:33:21.680 --> 00:33:25.559
is a step in the right direction
and kind of pointing towards we're moving things
459
00:33:25.640 --> 00:33:29.069
along right. So what I think
I want to say? One of the
460
00:33:29.109 --> 00:33:31.029
difference being in Mutual Fund ETF is
that you can kind of close the Mutual
461
00:33:31.069 --> 00:33:35.630
Fund and New Fund new money.
So you can close it to new money.
462
00:33:35.910 --> 00:33:38.589
You can't really do that within ETF. So that might be one of
463
00:33:38.630 --> 00:33:42.380
the things that we're they're kind of
testing the waters. And then, as
464
00:33:42.380 --> 00:33:45.660
another kind of comment about the ETF, you know there's like twelve filings out
465
00:33:45.660 --> 00:33:50.940
there right now. Right everybody's got
an etfiling, literally every single basically every
466
00:33:50.980 --> 00:33:53.500
etfroviter there as need tfi, and
so they're not all the same. Some
467
00:33:53.700 --> 00:33:58.170
of them they're providing access the futures, some of them are providing access to
468
00:33:58.329 --> 00:34:00.809
physical bitcoin that you're going to hold
in a you know, in a cold
469
00:34:00.849 --> 00:34:02.930
storage locker or whatever. So they're
not all the same. So maybe only
470
00:34:02.970 --> 00:34:06.970
the futures get to prove maybe only
the physical get approved, maybe they both
471
00:34:07.009 --> 00:34:09.679
get approved, maybe that you know, there's no way to tell what happens
472
00:34:09.719 --> 00:34:13.599
or what the timeline is. And
then I think the last thing that kind
473
00:34:13.599 --> 00:34:21.679
of note is that historically Canada has
has been more aggressive and their capital markets
474
00:34:22.320 --> 00:34:25.829
side, where they release kind of
newer products before the US does. So
475
00:34:27.469 --> 00:34:29.550
do the US kind of let's Canada
try it out? They did this with
476
00:34:29.670 --> 00:34:34.630
the marijuana stocks, so that they
let they let Canada try it out first,
477
00:34:34.630 --> 00:34:38.820
which is what Canada has done with
no real issues with their etherium and
478
00:34:39.059 --> 00:34:43.099
Bitcoin ets, and I want to
say the premiums and the you know,
479
00:34:43.179 --> 00:34:45.780
the discount premiums on those things have
been very tight, right. So the
480
00:34:46.179 --> 00:34:54.730
the the ETF wrapper structure has survived
and been okay throughout this volatility that we
481
00:34:54.849 --> 00:34:59.929
saw, you know, starting earlier
this year and in the bitcoin space.
482
00:35:00.050 --> 00:35:04.090
So Canada's seems to have pulled it
off and it seems to be working just
483
00:35:04.210 --> 00:35:07.880
fine. And again it goes back
to education, right, not only man
484
00:35:08.000 --> 00:35:10.239
act but, you know, all
these other firms that are trying to get
485
00:35:10.239 --> 00:35:16.280
this listen, we're having conversations,
positive conversations, with the regulators, educating,
486
00:35:16.719 --> 00:35:22.989
you know, discussing risks and opportunities
right. So we're all trying to
487
00:35:22.030 --> 00:35:29.550
educate investors and then come to market
and provide US investors with something that makes
488
00:35:29.630 --> 00:35:32.469
sense and that everybody's okay with.
So we're all in the same boat.
489
00:35:32.510 --> 00:35:37.500
We're all waiting for the green light
and it's it's it's been a lot of
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00:35:37.699 --> 00:35:42.380
fun, you know, have these
conversations, educating and learning with the world.
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00:35:42.539 --> 00:35:47.099
So that's what we're doing, absolutely
and it's just interesting all the implications
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00:35:47.219 --> 00:35:51.809
that blockchain could have, even just
from I guess you can say, I
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00:35:51.849 --> 00:35:54.769
don't want to say like an arms
race of nature, but it's, you
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00:35:54.849 --> 00:35:58.610
know, you know, like there's
this it's an almost a country battle,
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00:35:58.650 --> 00:36:01.650
you know, who's going to become
more adapt to this space. And again
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00:36:01.730 --> 00:36:07.639
it boils back down to the open
ended possibilities. But, you know,
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00:36:07.679 --> 00:36:09.840
I do want to thank you for
joining us and before we kind of wrap
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00:36:09.960 --> 00:36:14.440
everything up, I always want to
give our guests, whoever we're speaking with,
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00:36:14.519 --> 00:36:16.400
kind of the last word. If
there's anything that you'd like to mention
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00:36:16.440 --> 00:36:21.590
to our listeners out there perhaps that
we didn't discuss, and also, obviously,
501
00:36:22.190 --> 00:36:25.389
where individuals can potentially go to learn
more information about van Ek learn more
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00:36:25.429 --> 00:36:30.590
information about yourself. That would also
be great to share. Great. Well,
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00:36:30.869 --> 00:36:34.139
I thank you very much for the
time and they have Tony come talk
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00:36:34.179 --> 00:36:37.780
to you. I think my final
word would be it's a very exciting time
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00:36:37.940 --> 00:36:39.900
to be, you know, working
in the digital assets space. There's a
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00:36:39.940 --> 00:36:44.380
lot of things going on and I
think if you're listening to a podcast like
507
00:36:44.500 --> 00:36:47.170
this and you're, you know,
actively reading a website like seeking off on,
508
00:36:47.250 --> 00:36:51.849
try to educate yourself, you're already
and some ways ahead of the game.
509
00:36:52.010 --> 00:36:53.849
So keep your eye on the long
ball. And if you want to
510
00:36:54.250 --> 00:36:59.809
learn more about Badack, the websites
van Accom and my I'm going to plug
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00:36:59.849 --> 00:37:02.840
my boss here. My boss,
Ed Lopez, has a really awesome podcast
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00:37:04.280 --> 00:37:07.599
called trends with benefits. So definitely
check out trends with benefits with. Ed
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00:37:07.639 --> 00:37:12.480
Lopez has got a lot of great
guests and talking about some of the same
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00:37:12.559 --> 00:37:15.639
things, but a lot of different
things too. So there's a lot of
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00:37:15.679 --> 00:37:17.670
exciting stuff out there. Keep Learning, keep having fun. That's my final
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00:37:17.750 --> 00:37:22.710
word. Awesome. Absolutely, and
will make sure to include links to all
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00:37:22.829 --> 00:37:27.510
the information that JP just mentioned in
the show notes. But that's going to
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00:37:27.590 --> 00:37:31.059
do it for this episode. Want
to thank JP Lee of Vanac for joining
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00:37:31.139 --> 00:37:36.659
us and obviously our audience out there
for tuning in and listening to this episode
520
00:37:36.699 --> 00:37:42.460
around the Crypto markets and digital transformation
landscape, how it's penetrating the ETF universe
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00:37:42.619 --> 00:37:45.170
and really the markets as a whole. But until next time, this is
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00:37:45.210 --> 00:37:50.289
Jason Could Pool, your host,
signing off. Thank you. For disclosure
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00:37:50.329 --> 00:37:55.010
purposes, Jason Could Pool is not
long any funds discussed. Jp Lee is
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00:37:55.130 --> 00:38:02.119
long Van Ect Vector's digital transformation ETF, ticker DAPP. This podcast is brought
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00:38:02.159 --> 00:38:07.000
to you by tolls. The PRO
shares Dj Brookfield Global Infrastructure ETF. Look
526
00:38:07.039 --> 00:38:13.949
for Ticker Tho. L Z pro
shaars are distributed by Sei investments distribution cod,
527
00:38:14.429 --> 00:38:15.309
which is not affiliated with the Fund's
Advisor.
