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#92 - Media roundup January 2024

description: Overhead shot of a person, holding a phone with one hand and writing in a notebook with the other.  The phone is playing an audiobook or a podcast and it is connected to headphones.

The recently-approved Bitcoin ETFs bridge the world of cryptocurrency to America’s investments system. To understand why that’s such a Big Deal™, consider that the amount of mainstream financial coverage on Bitcoin ETFs is on par with the crypto-native variety.

I also saw that in the mix of podcasts I listened to this month. Here’s a 50/50 split of traditional finance to crypto-specific listens.

Shades of gray

Empire: The Bitcoin ETF: What Everyone Missed | Michael Sonnenshein, Grayscale CEO

(Runtime: 30mn)

We’ve heard a lot about “the” Bitcoin ETF, but it’s really a plural. Earlier this month the SEC approved the eleven groups that had been waiting to issue their own flavor.

Grayscale is one of those approved issuers. CEO Michael Sonnenshein met with Empire host Jason Yanowitz to talk about the company’s approach to their ETF and other offerings they have in the works. Sonnenshein shared his take on the race-to-the-bottom Bitcoin ETF fee wars, risk management, and how blockchain can address some of AI’s problems.

One of Sonnenshein’s points really stood out to me:

“This is really the beginning […] of this asset class firmly being woven into the fabric of the financial system in a way that would be exceedingly difficult, if not impossible, to undo. And I don’t think we’re all spending enough time having that conversation and what that means for the broader implications of crypto.”

He and Yanowitz then proceed to talk about how the EFTs ease the (indirect) ownership of Bitcoin, and how investors want additional cryptocurrency tokens to be available in this fashion.

I’m surprised they didn’t discuss the broader implications of the ETFs connecting Bitcoin to America’s traditional finance (tradfi) sector, which in turn connects to … just about everything else in the country. (And since America plays a key role in the global financial system, that means Bitcoin’s tradfi reach extends well beyond US borders.) This is a point I’ve raised before. I suspect we’ll hear about it again some day. For all the wrong reasons.

Three ETF experts walk into a podcast …

Trillions: A Bunch of Questions—and Answers!—About the New Bitcoin ETFs

(Also available on YouTube.)

(Runtime: 45mn)

To say that Bloomberg’s Eric Balchunas is “interested” in ETFs would be an understatement. He lives and breathes these financial instruments. They are why he gets up in the morning. And since 2017, they’ve been the topic of his podcast, Trillions.

For this episode, he pulled in fellow Bloomberg ETF analysts Joel Weber and James Seyffart to discuss the Bitcoin ETF approvals. This is 45 minutes of experts answering questions, as submitted by the public, about this slate of Bitcoin ETFs: how these instruments work; what backs the ETF receipts; what’s behind them; and so on. I found it particularly interesting to learn how the Bitcoin ETFs differ from other kinds of ETFs – including why you can’t redeem the receipts for the actual, backing Bitcoin.

Crypto aside, I highly recommend Balchunas’s book The Bogle Effect on the history and mechanics of ETFs.

Eleven years later

The Meb Faber Show: Bruno Caratori - The Bitcoin ETF is FINALLY Approved. Now What? | #517

(Runtime: 45mn)

Asset manager Hashdex was among the eleven firms approved by the SEC to issue a Bitcoin ETF. COO Bruno Caratori joined Meb Faber to talk about Hashdex’s ETF, their approach to crypto ETFs in general, and what it was like to issue the world’s first ever crypto ETF three years ago in Brazil.

This episode has the additional distinction of having been recorded right as the SEC issued its approval. (The pair didn’t know it at the time.) Which is especially funny, as the approval means that Faber – well-known investor, prolific writer, and enthusiastic social media presence – can finally retire a statement he has retweeted every year since 2013:

Happy to take any dinner bets that a bitcoin ETF makes it to market. (I prefer sushi.)

No idea who gets the sushi dinner. Probably not Gary Gensler, though.

Competing with large opportunists

Unchained: How Small Bitcoin ETF Issuers Will Compete With the Likes of BlackRock - Ep. 595

(Also available on YouTube.)

(Runtime: 1h15)

Matt Hougan (Bitwise) and Matthew Sigel (VanEck) represent companies that issued Bitcoin ETFs earlier this month. They’re not shy about what it’s like for their smaller, crypto-native funds to compete with deep-pocketed opportunists in the space. They still think it’s good that there are so many Bitcoin ETFs. Even if (for now) they’re all so similar.

Hougan, Sigel, and host Laura Shin discuss the point I raised earlier about crypto entering the tradfi space. (Hougan’s team even got to ring the bell at the NYSE. It doesn’t get more mainstream than that.) They also draw parallels between the history of cryptocurrencies and ETFs, and get into what the bigger brokerages might have against these new products.

The wrap-up

This was an issue of Block & Mortar.

Who’s behind Block & Mortar? I'm Q McCallum. I've spent the past two decades in the emerging-tech space. And I'm very interested in web3 use cases.

Credit where it's due. Big thanks to Shane Glynn for reviewing early drafts. Any mistakes that remain are mine.

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