Dan Weiskopf and Erik Smith join Tyrone and Jay for this episode of Crypto Office Hours.
Office Hours are hosted by Jay Coulter and recorded LIVE on all FinancialAdvisor.TV social media properties.
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Transcript:
00:03
Welcome to this episode of Crypto Office Hours with Tyrone Ross and Jay Coulter. This is our second edition. We're glad you're here. This show is just for financial advisors and topics around cryptocurrency, blockchain, and investing. We are recording this live. If you're watching live and you'd like to ask Tyrone or any of our guests today a question, simply type in the comment session and we'll be able to pose it to our guest.
00:31
Coming up later, we'll have Dan Weisskopf, the portfolio manager of the Amplify Transformational Data Sharing ETF. And we'll have Eric Smith from 401 Financial. We really though Tyrone, we need to start with one of the more pressing issues of the day. An obnoxious tweet that you put out on July 4, stating the case that somehow a British man, Phil Collins, is better music to be played at a Fourth of July conversation. How do you justify putting something like that in the public domain?
01:00
So let me start here by saying this. I don't even think that this is a debate, but I will entertain it for this reason. One, not only the 4th of July, but all cookouts. Phil Collins gets played over Billy Joel, right? Especially the last two hours where everyone making to go plates and going home. Phil Collins is it. Not that Billy Joel doesn't have some hits. I also need to be very specific here. Phil Collins tends to be
01:29
favored amongst those with the particular hue that I have. So this is more of a personal thing, flavor, but look, let's do a side by side. I challenge anyone now, if you are on Apple Music, pull up the essentials for Billy Joel and Phil Collins and go hit for hit. Just with their music. Now add Phil Collins and Genesis into it. It really starts to get unfair. Not that Billy Joel doesn't have some hits, right?
01:58
Uptown Girl, absolute banger. After that, you lose me. But I will give you the floor to tell me why I'm wrong if Phil Collins doesn't absolutely wipe the floor with Billy Joel. Go. Absolute nonsense, Tyrone. I'm a data guy. It's about math. Billy Joel's logged 33 number one hits, Phil Collins, seven. I imagine there are a couple there from Genesis, not even close. Your reference of Uptown Girl, while valid, that was the end of the Billy Joel's good run.
02:27
his music comes from the 70s in the early 80s, where he made classical albums where every single song was a great, great song. And who gets excited at a barbecue over su su sudeo? I mean, they are listen, we're going to do this right now. And I know this is usually the argument with folks want to talk about number one hits and so on and so forth. But we're talking about leaving
02:54
a legacy, a cultural legacy, right? And I do again, right? This is Top Songs, Phil Collins. Like honestly, let's do this. I'm talking about cultural hits. In the Air Tonight, 1981. So there we go. Is there a bigger song? I mean, we could do a verses right now. I mean- Piano Man, he plays the first three chords of Piano Man and almost every person in the world knows how to sing the rest of the song.
03:24
One More Night, 1985. And let's just be honest, I think this is a divide between black folks and white folks. I don't think black folk can name more than five Billy Joel songs, but they can run down a whole host of Phil Collins songs. So I do think we divide here in terms of, again, cultural things here. But I mean, yes, we can take Genesis out of it, but I mean, if we really just look at what...
03:54
I don't know, easy lover? 1984. I mean, really quick, we won't get off this. Now, I understand there's some folks out there of a particular age that will be very upset at this argument because I know folks love Billy Joel. I get it. Again, Uptown Girl phenomenon to me. Piano Man is Piano Man, right? 1973. Uptown Girl 1983. So 10 year timeframe there. We didn't start the fire.
04:23
1989, you're not going to hear we didn't start the fire wherever there are Black people, just not. Let's see. Uptown going for sure. It's still rock and rolling me. 1980, never going to hear that around Black people. Moving out, my life, scenes from an Italian restaurant, never going to hear that around Black people. So I guess I should have made that distinction. So when I made Cookout, like a Ross Burns Cookout.
04:51
You're not gonna hear Billy Joel, you will hear Phil Collins. But I hear you 33 to seven. I get it based on numbers. I know you're a numbers guy. But just pure listening cultural effect. I don't know. All right, well, we'll wrap up on that. Maybe it's a cultural divide. It's also a generational divide. My son once said to me who's 16, dad, I like all your music, except that Billy Joel stuff. Oh, your son is my favorite.
05:20
Yes, my favorite. I love it. Play a little Phil Collins. I think he'll he'll swap. All right, we've got we got a lot of crypto and blockchain stuff to talk about. I'm going to bring in our first guest. My friend Dan Weisskopf. Dan, welcome as our first guest. Colin, you got it. I'm laughing so hard trying to control myself with you guys.
05:47
But actually, this is a passionate subject for me. And I'm not gonna go on the black white thing, sorry. But, Christie Brinkley, I mean, come on. You gotta have a fantasy about, well, I should have said that. But I married the uptown girl too, by the way, in my case, she was only two blocks away from me. And only the good die young, you guys forgot about that. All the good die young, that's it, that's it. And.
06:16
a little personal history, I used to have an office in Allentown, right, that I used to visit. So, and my last comment is I did go to a Billy Joel concert two years ago, thanks to my wife. I haven't gone to a Phil Collins concert. So, sorry, man.
06:36
I got a bias here. You didn't know it, but I just gonna throw it out. So here's all I'll say to end this. Next time you are somewhere and there are a bunch of people singing only the good die young, I want you to take 30 seconds to count the black people in the room. You won't see any, but anyway, all right, we move along. That's better. Black people are forced to know that song because of all of our white friends. Like we know it word for word, but anyway.
07:05
All right, let's talk crypto. Let's talk blockchain. All right, guys, remember, this show is specifically for financial advisors and issues they deal with with their clients around it. Dan, you run one of the the largest blockchain ETF in the marketplace, I believe is it the longest running ETF as well? Been meaning been around the longest? Yeah, we'll go with that. But it's a tight race. Tight race. Okay.
07:29
So how should advisors when they have clients that are looking for allocations to this space, look at using existing, we'll get into soon to come ETFs, existing ETFs that provide access to the space. To the blockchain space. Okay, so it's really clear. I mean, to me,
07:47
You can look at it as a factor. You can look at it as a growth strategy. That's what we're doing. And it's all about disruption and innovation. And people are real excited around the cues these days, but we're offering far more diversification. You can see it in our performance this year, where we actually didn't get any outperformance per se from Apple and Amazon, Tesla and Nvidia.
08:16
we have no overlap to the queues. So it's a growth strategy. We're really proud of how we're going after the blockchain space. It's very diversified with about 50 holdings. And that helps you with risk management as well. Did we lose him? Oh, there he is. No, I wanted to give you more of the screen. Oh, cool.
08:44
All right. So you're you're a financial advisor, you're an RIA, you want to be able to provide your clients some exposure to the space. And you don't want to go into the world where Tyrone and and our next guest Eric are comfortable operating. What are advisors missing out by just allocating to an ETF that isn't buying actual Bitcoin? I think that they're missing that the blockchain is a technology.
09:12
And that's a far different discussion than a store value. So the blockchain continues to ramp up and create opportunities to lower cost for large companies in the context of whether it's supply chain or it's
09:35
just computerization, right? It's just another way of looking at things. And I'd also say that we've seen some further inroads into AI, because I think there's going to be almost like an integration or an overlap between AI and blockchain.
09:57
All right. Tyrone, how do you approach that with advisors? Because I know it's different. Approach the blockchain versus Bitcoin. Yep. Well, it's funny, me and Eric was having a conversation about this this morning. I think with advisors and getting access to this right now, I've been saying it for years, is the easy button. Right. They want it.
10:22
They'll get it in a package or form, whether that's an ETF, an SMA, whatever the case may be, they want it very easy. What I've always tried to get advisors to understand is there's a lot of utility from holding the underlying asset, right? Or token Bitcoin, right? On the actual blockchain and also getting them to understand every blockchain that has come after Bitcoin and this is some way a derivative of the Bitcoin blockchain, right?
10:50
A lot of you say you hear Bitcoin, you hear Ethereum. The second oldest crypto is Litecoin, right? Which again, just take some code from Bitcoin. Vitalik who created Ethereum was at Bitcoin very early. So a lot of these folks have looked at Bitcoin and say, how do we improve on it? So there's what you can actually do.
11:07
on chain, right? And then holding the underlying all the things that you can do with that. So I try to separate those, right? Because there are some advisors that just say, look, I want to get exposure for clients. I want to deal with all the goofiness here. Where it's going to get interesting, though.
11:25
is when advisors move to where we are at 401, where you're managing your own treasury, when you are doing, when you are trying to have a full on-chain offering for clients, what does that look like? Right? And we can, you know, I want to read a tweet when Eric comes on about what he just posted. And I actually, let me dig for here really quickly, because it's, I think it's pertinent to this conversation. In the event, TradFi does move on chain.
11:53
Will people choose to buy an on-chain BTC ETF through their self-custodial wallet or BTC itself? Most advisors or trafi folks reading that will go, oh man, that's a bit of a, right? So there's levels of thinking here that comes along with the levels of understanding.
12:16
Dan, what are your thoughts? Yeah, so I think it's going to be a bit of a function of how you built your book, right? If you want to slide in that ETF as a 2% holding in an ALTS strategy, using the ETFs can be really easy. If you want to build a portfolio of crypto,
12:44
then you're going to have a different completely on-ramp strategy. So I think it all depends on how you build your book. So with that, I appreciate the, the on-ramp reference as sure, as I'm sure my friend, Eric Irvin would, but that's exactly what on-ramp, um, height zero, all these other folks have been trying to do.
13:06
What people really don't understand is that there is an architecture that needs to be laid here for advisors to do everything that you were talking about to be able to build a portfolio, have, you know, quantify risk in that portfolio rebalance that portfolio and be able to activate on it.
13:25
right inside of my existing workflows. When that happens, when I can do that in Orion or Adapar, I can use riskolite nitrogen, sorry, Aaron, where I could do all of these things, then what you just said will be a lot easier, right? That was the vision that Eric and I had. That's what the vision that Chris at Eagle Brook has. That's what the height zero gang has, right? All these folks, we had that vision. So I think...
13:53
With that, there is some beginning there of how that's, you know, of where this can go. But which is why I say, even if advisors want an ETF, it doesn't solve all of the issues that advisors still need to be solved to do this in the book of business. Just doesn't. Most, not all. Oh, I think you're, I think that's fair.
14:12
You know, absolutely. I think a lot of folks are going to use both. And the underlying premise behind Block, to your point, Tyrone, is all about the infrastructure, right? People want to do things, but if the infrastructure isn't easy, it's really, really hard to do that. All right, let me throw out our first question from somebody watching. I'm not able to post it on the screen. There's a little bit of latency here, but this is from Cole Klein.
14:41
She says, the scenario of Bitcoin going to zero does not exist anymore. Bitcoin is playing much the same role as gold did in the early days of banking. Dan, what are your thoughts? Going to zero? It's not going to zero. I think at this point, it's really a question of where is that foundational level?
15:06
We keep getting tested, right? When is Bitcoin going to zero? And we find that it's, I mean, this is just about adoption, right, and more utility value, I think, as Tyrone has pointed out. So the question really isn't about zero, it's about how high is it going to go? Tyrone. I'm a very big Howard Marks fan.
15:34
And because of that, I won't say that it can't go to zero. It may, right? 0.001%. But I think it's highly unlikely that it does. But again, anything could happen here. I mean, folks are putting.
15:47
Billy Joel in the same conversation as Phil Collins. Of course, anything could happen here. So there's a possibility. Now, again, I think to Dan's point, is there much more upside than downside? Sure, if you had to bet that we get to 50,000 before we get to zero, yes, right? We'll reach all time highs again, sure. So I think that's what you're starting to see in what 80 plus percent this year.
16:14
16 plus percent since what happened, you know, with the Coinbase news and everything else. And then we'll see what happens when, um, you know, we do get approval of an ETF. When that happens, I don't know. Will it? Yes. Wall Street loves money, so they'll still start to print money off of this thing. So it'll get done. But I think with that, you'll the flows are just gonna be ginormous and, you know, number go up as they say. With that, let me share a tweet.
16:43
This is from Nate Jorasi, who's been doing an excellent job covering these Bitcoin ETFs. And he said, BlackRock CEO on a major news network talking Bitcoin is really all you need to know. This thing is gonna happen in my opinion. What's more interesting to me is that, is more than anything Bitcoin ETF related, is Larry talking about the future tokenization of all securities. Dan Weisskopf, what's your take?
17:13
I actually thought Larry looked very uncomfortable in front of the TV talking about Bitcoin to tell you the truth. I was really surprised, right? Very much so. Yeah. I won't go further than that as to why. I think...
17:31
Larry's vision is probably right. And we were early on that vision in the context that, stocks may trade that way, right? But we're a ways off. I mean, let's be honest. I mean, just trying to get a spot Bitcoin right now. When you start talking about that other stuff, it's far away. Tyrone.
18:00
I think tokenization of securities is going to be a thing. I think, again, something that Eric and I have actually discussed is when on-chain happens, right, when the tokenization happens, again, it's going to be on-chain. It's not going to be tokenization at Fidelity, tokenization at NASDAQ.
18:28
I don't believe that. But again, we are way, we're 20 years ahead here. I think that that's going to happen on chain. And I think you can start to see with
18:39
Fidelity and Schwab and Virtu and all those folks building a self-custodial exchange, right? They still have to add some things there. That's where it's going. It's not going where they're going to fit that inside of existing antiquated infrastructure. It's going to go to EDX, right? So I do think tokenization is going to be a thing, but that's going to move all on chain. It's not going to be sticking a Lamborghini in a barn.
19:07
Hey, Jay, can I give you a little scoop? Please. Yeah, a little scoop is, you know, we were very long over stock and trimmed a little bit of our position a couple of days ago for no real reason beyond, and frankly, it was over a 5.5% weighted position in our portfolio. Now, they've got that position, T0.
19:37
because they've got a big venture capital portfolio, right? What happens with T0 is still a bit of a mystery, but I know that they're working on some stuff in the context of tokenization.
19:53
We'll see. Yeah. Yeah. I think it was your partner, Michael Venuto, who once told me it was ironic that everybody in the ETF industry is so interested in blockchain because it's probably going to blow up the ETF industry someday. Yes, he's known to say that. But here's what no one is. Yes. Shout to Mr. Venuto. That's my name. Shout to Mr. Venuto. Love to get his take on the Phil Collins Billy Joel thing. But to that point, if you really think about it,
20:22
deeper blockchains themselves are essentially that wrapper or ETF for the actual tokens. So yes, he's very smart in saying that he's been in this space a long time. He studied it. So again, there's a learning curve here that I still think needs to happen. But he's spot on when he says that.
20:44
And you know, remember, as much as it might be exciting to have tokenization of securities, tokenization of real estate and so many different other things is more exciting. You know, I love to own a piece of a baseball player, right? How exciting would that be? Yeah, please. Or a piece of Billy Joel's royalties over Phil Collins.
21:12
Well, Dan, listen, we appreciate you coming on this office hours here. I anticipate you being a regular guest if you have time because you have such a wide lens into the blockchain space with all the on site interviews you do in the portfolio that you run. If somebody wanted to learn more about the block ETF, where could they learn more information? Well, they can check out the amplify website or
21:36
They can always look at the ETF think tank for some of the interviews I've done and feel free to reach out to me on Twitter, ETF Professor. Looking forward to being on the show. Thank you for including me. Tyrone, you're awesome. Yeah. Even if we don't agree. Yeah. You are as well, my man. I appreciate you. Have a great weekend. All right. Thanks, Dan.
22:01
And so I've been doing interviews with Dan for a while. He was like you Tyrone, one of the first people I reached out to, I guess, five years ago now when I wanted to learn more about the space because advisors were asking more about it. But now we're in a space where it's not just allocating to publicly traded companies that have access to it. Now the industry has grown so much in terms of the availability for our A's and advisors to advise clients and provide access and and I think 401 and I'm talking your book here is going to be at the forefront of that and
22:30
I want to bring in Eric Smith, your CIO, who is at the forefront of it himself, and start really with the most important question. Billy Joel or Phil Collinger. So the entire time you guys are talking about that, first of all, thank you for bringing me on. Tyrone and I talk about this stuff all the time. We always say like, gosh, we should be recording our conversations and all that. So this is an awesome venue to do this. Really appreciate it.
22:59
while you guys were talking about that, I had to, I'm just sitting here thinking like, if I'm gonna go to a barbecue, I am not listening to Phil Collins or Billy Joel. It's not happening. I'm literally not listening to either of them. So I don't know if that's my youth speaking there. I was born in the early 90s. Look, I like Phil Collins. I like Billy Joel. I don't care to listen to him at a barbecue. But if I had to give you an answer,
23:28
I'd probably say Billy Joel.
23:31
up? Yeah, well, it sounds like you're right. So I'm glad you're here. And some of the thought leadership from 401. Here's my question for you. And I get this from the advisor community. If I want to start advising on crypto assets for my clients, where do I start? What do I need to do?
23:54
That's a great question. So first of all, similar to what Dan and Tyrone were talking about, the biggest piece to all of this that's happening is the technology itself. I think one of the things that we get lost in the Western world is that this is just an asset class and an investment opportunity. And to me, that misses a lot.
24:24
like 99% of what is actually happening behind the scenes here. So to give you a short answer, I'd say there's so many resources out there, educational material. You can start by just reading the Bitcoin white paper and going to Ethereum's website, checking out what they're doing. And then I would say just get involved in the conversations. There are a lot of people that are talking about.
24:53
what's happening in this space. I believe that a lot of, there's a lot of people who may choose to avoid that based on everything that we've seen in the last year with centralized exchanges and in the issues that the space has had. But I would just encourage you to look a step past that. And like Tyrone hit on, we're already building on chain.
25:23
at 401 and we plan to move further along that route, whether this, you know, ETF filing, for example, goes through or not. So that's what I'd encourage.
25:39
watch crypto office hours, watch crypto office hours. I like it. There's a clip from this show for sure. Alright, let me push just a little bit. Alright, so I work with advisors, I work with aggregators, helping them optimize practice management investment systems, whatever, wherever their pain point is. Let's say one of them says to me, Jay, do we need to add the opportunity for advisors to join our firm, the ability to advise on crypto? And how do we go about it? Yeah.
26:08
How do you answer that question and then how do you execute? Yeah, so answering the question is a lot easier than executing. And I know Tyrone has pounded the table on this for a long time. But to answer the question in a simple way, look, crypto affects almost every part of a financial plan. So that's what actually got me interested in the first place. I'm a financial planner. I advise on not just a portfolio, but also
26:37
Cash and Debt Management, tax planning, estate planning, etc. And even back a few years ago, when I was at my previous firm, we were doing comprehensive planning and our clients owned crypto, so we had to understand, okay, this is held outside of the advisor's purview, now there's tools to help solve for that with more coming, obviously with Tyrone and Turnkey, but
27:06
From a high level perspective, the first thing we have to do is be able to see what they're holding, have the conversation with them about why they're holding it, how does it align with their goals? And then we have to be able to take those assets and basically, Jay, put them in a financial planning tool, put them in a modeling tool, for example, to get an understanding of how they interact with a traditional portfolio. If we're just talking from the asset class standpoint.
27:36
So when I say all that, what we've done at 401, we've actually built those tools ourselves because they don't exist. We can't go and plug in Bitcoin and ETH and a few other crypto assets alongside a traditional portfolio and run an appropriate back test and showcase how it interacts with the portfolio. You know, what percentage is needed in each asset, for example.
28:03
So all of those things we've built internally and plan to continue to put out there, hopefully for more people to use. But I would just say, first understand how crypto assets interact with the portfolio. If we talk from that asset class standpoint, in the, from the financial planning side, you really have to have an idea of the tax consequences of buying and selling crypto assets.
28:29
how to set up an estate plan for crypto assets. These are all very important things, especially if your client's holding anything that's material to their overall financial picture.
28:42
But let's step back a little bit higher level. And Tyrone, maybe this question is for you. So why? Before even the how? Why do these aggregators that want to be enterprises that want to serve their clients? Why do they need to go and start incorporating the ability for their advisors to give advice effectively in the crypto space? So before I want to answer that, after we get off of here, if no one can reach Eric, and his stuff is just all dormant is because he's been cut off.
29:09
from any communication with me in the world because he chose Billy Joe. But to answer the question, so a couple of things here, let's go layer one, right? The advisor conversation, right? Whether I've said this before, Mr. and Mrs. Client, we think you should have X amount of allocation of crypto or Mr. and Mrs. Advisor, I hold crypto. That's layer one, right? Now the advisor has to determine, all right, what resources do I have to handle those two prongs of the conversation, right? For the purposes of your question.
29:39
Let's just say Mr. And Mrs. Advisor wants to have that conversation with the client about why they feel like they should own it. They should own it. Now let's go layer two. I had the conversation with the client. I've done a risk analysis just based on the personal risk of the client and background. Hopefully the client is younger, has ample liquidity. And this is something where you get a reason. Why do you want to hold this Mr. And Mrs. Client, right? Versus why do we feel like you should, right? A two to three.
30:06
3% allocation could mean this sharp ratio, all these other things, right? When that happens, we get to the layer three, which I think is the most important thing. All of the firms that are not allowing the advisors to do this right now are probably uncomfortable because they aren't giving them the adequate tools to be able to do that. So whether you're an aggregator and tool or firm, right? Because it's funny, I thought about this after we.
30:34
after we got off last week is like aggregator, meaning a firm that kind of aggregates firms and then aggregator returns the actual tools. If either of those, you want to give the advisor the ability to get that what we use a lot, that holistic view. 20 to 40%, right? Depending on who you ask, 20 to 30, 20 to 40% of assets are normally held away. 75% of advisors get questions on held away assets, no matter what they are, right? 90 plus percent feel as though they don't see everything that the client has.
31:03
So it is an important reason to want to bring that in. Read only, those are the two most important words, read only, just be able to see and then have a conversation, say, all right, Mr. and Mrs. Client, now we want to actively manage, right? And or allocate to that. And then when that happens to Eric's point, I think the ability for an advisor, come into office, know that they have a meeting with the client, they want to allocate the crypto, be able to run an analysis, print that out.
31:33
If they're still doing that, show that to a client, say, Hey, Mr. Mr. Client, circle it. We're going to take two to 3% away from fixed income or stocks or 2, 3% of your cash and go into Bitcoin. Bitcoin is a risk score of X. This is going to change the risk profile of your portfolio to this expected returns of this, and then prepare for that meeting. Advisor has the meeting. Mr. Client, this is what it is. The client goes, Oh, great. Fantastic. I've been hearing about this on TV or whatever the case may be.
32:02
Right. I was watching crypto office hours on LinkedIn. The advisor finishes that meeting sits down at their workflow and able to execute against that, whether they are at a Raymond James, LPL, Schwab, fidelity, Pershing, altruists, right? That's still not there. We need to get there. But I think that's why, um, all firms should be thinking about that. And I think what happens is one rising tide lifts all boats, right? You get a full view. Can bring it outside assets. You do a UA business. Great.
32:32
or if you want to start allocating on behalf of clients, it's a really good way to introduce a new and novel asset class and appeal to the children of your 60, 70 year old clients that have all that wealth and gonna pass it down to them. Okay. So let's say I am that aggregator, that enterprise. And I say, all right, Tyrone, Eric, I buy it. We need to start providing the availability for, ability for our advisors to start executing in this space.
33:03
What do I do? What's next? You say that to us. You then get the C suite of the firm together for console an hour console two hours with whoever you choose to get a good feel of how it's going to work, right? What assets are we are we going to do top 100 or just Bitcoin and ETH? Are we gonna what tool are we going to use to get access and to make sure everyone
33:33
Compliance, IAs, right, and principals are all on board. Everyone needs to be on board before you start hanging the shingle out to the firm and saying, hey, we're gonna do crypto, right? Step two, meeting with the full firm, letting the advisors know, hey, this is coming, but it's only gonna be read-only access to see what a client holds away. Or this is coming, we're gonna give you the ability.
33:59
to buy GBTC or this, that or whatever, or Bitcoin ETF, whatever that, hey, this is coming, but we're gonna allow you to create plans, do all these other things, let them know what that's gonna look like. Step three, send an email to all of the clients. If you have an interest in this, let us know, let your advisor know, advisors report up, hey, I have 20 clients, I have 200, I have whatever, everyone now.
34:27
Does a group webinar on how it's going to work, disclosures, what needs to be signed, what needs to be approved, what it's going to look like, when it's going to roll out, everyone is on the same page, done. Before you launch, separate webinar with advisors and clients separately with a professional that can walk them through, answer any questions, is there insurance, is there disclosures, beneficiaries, dot, dot, dot, dot, dot, all of that.
34:57
Not a second before any of that is done, you do not press play and launch that at that firm. So now when you do that, everyone is set at every level from compliance to the IAs to the principals to the clients. And then you have a full on launch and then you go from there.
35:17
There is a whole show in multiple points inside of there. I'm not gonna go any deeper in that because we're already past our half hour. Eric, I wanna give you the final word. What do financial advisors need to make sure they understand about allocating to crypto before they get started?
35:39
I'd say the biggest thing right now that's on the top of my mind is that you can't just buy crypto assets or recommend crypto assets to clients without understanding the fundamentals and the actual supply dynamics of the given crypto assets. And it's...
36:08
I see trusts out there that have passive crypto exposure and other products that are going to be built that have passive crypto exposure. And it misses a key point in that when we say on chain, I'll give you one example. There's blockchain crypto assets that may have 15 to 20% inflation.
36:38
but you can stake them on chain and receive similar staking rewards to keep that inflation in check. What I've seen from the space so far in terms of passive allocation within the traditional sense, it doesn't take into account any of those dynamics and then the actual fundamentals behind the crypto assets themselves. So even if we're starting with just Bitcoin and ETH, I'd say
37:07
Make sure you really understand what these assets are, the technology behind them, and how these assets do potentially have cash flows or do have other fundamental metrics and how those can be important to the actual allocation of a crypto portfolio. Can I add to Satoshi's really quickly, please? So I know we give them the last word, but a couple of things here.
37:37
One, really quickly, yes, I agree with what he said, but I think Jay, you would agree with me, and I've heard this for a long time, is there are a subset of advisors who don't wanna understand the underlying technology or any of that, they just don't want to, and Eric and I know that, but there is a subset that they don't wanna do that. For those that don't, I wanna say this, and I brought up OnRant before, and I'm sure some folks that I've also got big, but I mean it. There are some folks that have been grinding.
38:06
to try and make this possible for advisors for years. On-ramp being one, right? Shout to Eric and the team, they're still at it. Height zero, Eaglebrook, Bittria, right? What Dan and the team has built to Bittria. I would encourage advisors to look there. There's a lot of materials and resources that are out there that have been provided. I know an ETF is gonna come or whatever, but look at what's already out there. What does a team called Truvius that Eric and I have been having a conversation with? They're launching QWOP models.
38:33
Right. You got, uh, L one advisors. There are a lot of options out there right now. And independent of what, you know, had happened with me and on ramp or whatever, I think we were fully dedicated as was Eric is to making sure that advisors understood this, right? And I mean, Eric Irvin here and Mike Venuto and Juraise and all those folks was involved in that. So there have been people here a long time. So anyway, I just say that to say, I think that's a good step for advisors to really look at what's out there. What's your options are.
39:02
regulators probably going to ask you if you went through that anyway. So you might as well look at all the options that are out there and choose what's best for you. Excellent. Eric, what'd you think of your first crypto office hours? It's amazing. Dan did a great job as well. I just I appreciate you bringing me on. I think there's we're scratching the surface, Jay, there's going to be a lot to discuss here soon. So happy that this is off the ground and running and yeah, look forward to tapping in.
39:31
Awesome. I'm going to move you to the green room and wrap up here with Tyrone real quick. Thanks for coming on. Make sure you follow Eric on Twitter. That is Eric Smith CFP. And that's Eric with a K. Thank you, sir. Yep. Tyrone, I went the whole office hours and we didn't talk about a spot Bitcoin ETF. I cannot do that this week. And I want to give you your the opportunity to share your thoughts on a spot Bitcoin ETF and where it sits today.
40:00
Um, we do not have a lot of time, but, um, I gotta be honest, I've been very frustrated with the conversation that I've been seeing on my timeline. And I know I have a venue to say this here, so I didn't want to jump into any conversations there. Here's my, and again, this, you can go back 2017, I believe a consensus. I stand on the fact that we don't need it. And everyone said, well, don't you don't.
40:30
We don't need it. The space was built for retail. You can't say that this is great for retail when retail has had access to Bitcoin for years now. Years, decades, right? A decade plus, actually. The other thing is, let's just admit that it's about money and flows if we're gonna talk about a Bitcoin ETF. Well, why do you say that, Tyrone? Because if you're saying it's for retail and they could get it through an advisor,
41:00
What is that expense ratio is going to be? And then we're probably already tacking on 1%. So there's been this thing about how much it costs that Coinbase. Coinbase is not the only way for someone to get access to Bitcoin. So yes, will we get it? Wall Street loves money. Yes, we are going to get a Bitcoin ETF. Do we need it? No, I will stand on that. We do not need it, but we are going to get it. And that's fine. But I think if we are going to admit
41:29
And be honest with ourselves, we have to say that that is an institutional vehicle and it's not a vehicle for those that can get access in their pocket right now. Seen an advisor, seen Coinbase, seen any of the things that are out there. Last thing that I'll say is this. For me, can't speak for anyone else, for me, if Bitcoin has come to be, and since Bitcoin has been released into the world, we've seen overdraft fees come down.
41:59
We are going to get a real-time payment system with FedNow. We see that the treasury now is going to be using FedNow for social security payments and things like that. To me, that is a win. And I cannot be convinced that that is not because Bitcoin has been a thorn in the side of traditional financial system for the last 14 years. So if now we get an ETF, great, but let's not pretend in any capacity.
42:27
that this is about retail. It is not. Let's stop that. That is a farce. It is not about retail. It is about institutions getting exposure and to be able to drive AUM, right? Assets under monstrosity so they can grow and get even bigger. This has never been about retail with an ETF. Let's stop that. It has been about flows and it has been about money, it has been giving access to those who are heavy handed already.
42:57
But if we're truly talking about retail, we're talking about the underlying asset and the ability for them to get it many of places, not Coinbase being the main one. I have stepped off Soapbox. Excellent. That's a great way to end. In fact, I've just decided that's how we're gonna end every crypto office hours. I'm gonna give you a Soapbox and let you speak. What is on your mind? I wanna thank Dan Weiskopf for coming on board. Learn more about his ETF by going to...
43:24
block ETF calm that's bl okay, ETF calm. And Eric Smith, who I'm sure will also be a regular as he is your partner. Learn more about his firm at 401 financial Tyrone our first episode we had 1000s of people watch either live or in the replay. Looks like we're having similar success with this one. I appreciate you coming on and be an advocate for advisors as it relates to this topic. Absolutely. Go Phil. Good seeing you my man.