Exclusive: Inside Coinbase’s Institutional Crypto Strategy ft. Brett Tejpaul

26:17So are you seeing a lot of the macro guys now move into the space? Because that was the thesis that Dan Moorhead was first, obviously, and then there was a whole bunch of us and Alan and stuff. Are you seeing a lot of that? Well, just first, like a quick tribute to Nick, because I remember when I was a swap trader at JP Morgan, I met him for the first time and I was like, you know, like, oh, like the most amazing God. That's him. Let's just say he is one of the first people that I met in the context of crypto. And, you know, I'll leave it to you to talk about what he actually does in this space.

26:50But let's just say, you know, he's a legend. And so if legends like that activated in the space and they have for some time, I'd say a bunch of them and we know who they are. I won't name them. There was a core group and there was another group that just hasn't been doing it. And I don't quite know why. I think it was because in a world where macro funds were struggling, they were looking for like something else to generate return from. They had a bit of a strategy drift and people traded crypto as kind of a side hustle or side hobby. Now it's become a core investment thesis of something that has enough liquidity.

27:26And you can demonstrate that you can get in and out of the market efficiently and store it and buy it and all the things that we talked about before efficiently. And I actually think both quant funds and macro funds will be scaling their allocation from now into the foreseeable. And how do you provide liquidity? You know, because part of your old job and my old job was sourcing liquidity for funds who need to move money around. How's that done now? If somebody needs to come in and buy X hundred million bucks worth of whatever, whether it's perps or straight spot or whatever, how's that done for these guys in this market?

28:01Well, on the spot side, it's been done the same way we've been doing it this whole time. So notwithstanding the fact that you and I both came from principal risk trading backgrounds, and that's how we gave liquidity to clients by making prices and taking on risk. Since day one here, we've had an agency only model. And so the way that we have accomplished that, because no one exchange has sufficient liquidity to do the billion today or a couple billion a day sort of thing, is to do the smart order routing. So we have a cluster and venues that we trust, and then we will route those orders and have a whole bunch of very, very sophisticated ways in which you can layer an order book.

28:40And I don't want to descend too far into detail, but that's the way in which we orchestrate huge buying and selling programs. what i'm really excited about role is actually on a forward-looking basis uh we we made the deribit acquisition um i'm sure you want to talk about yeah i mean because i remember pinging you a while ago saying you guys should buy deribit you're like no no comment no you didn't even say no comment you just didn't respond and then you it comes out i'm like really it was it was it was a brilliant brilliant move because for me deribit was so important for the space because it does most of the options.

29:14And it's like, it's too important not to be in big hands, because, you know, you need to run an option market very carefully. And I thought was an inspired move. Even though options haven't been massive yet, I think they're going to be enormous. I think they will be too. So we obviously, we launched the what we call Intex, our perp exchange, And that's gone from sort of no volumes to quite significant daily volumes and market share. So 5 % to 10 % market share. And we've had lots of double-digit billion days. But we're missing options. And so options was the thing, the last completion of what we needed to have a full package and platform.

29:58And there was really only one platform with 80 % market share. It was Darabit. And so now that we've got that, we're doing a tech integration and it'll close later in the year. I'm really super excited to be able to offer eventually clients a place to trade, spot, perps, futures, options. Now you've got, I can see your wheels turning. You've got all the building blocks for everything that you want to achieve in one spot. The other thing that Darabit helps us accelerate is we've been talking for a while. And so long as I've been here, we've been talking about international expansion. Yeah, that's been a little slower, I think, than Brian would want it to be.

30:40And this helps accelerate our footprint. So not only does it bring, you know,$30 billion in open interest. And I think they did a trillion in, you know, volume last year. But it gives us an anchor in the UAE, an anchor outside. We've had it for a while, but like a big and scalable presence outside the US. And how do you compete with the existing options that are out there? How does that work? Why should people get a deribate versus, you know, what the CME is doing or whatever? I think the answer, we've learned that like liquidity begets liquidity. And so put a Coinbase wrapper on top of it to get that trusted brand or the amplification of two trusted brands is probably the better way to say it.

31:23I think we'll bring much more capital into this space. So we can go more into like the construction, the contracts themselves, but that's probably beyond the scope of this conversation. So being able to do everything in one place, I think, is awesome. And taking on other liquidity pools, you'll see the fight unfold. I just don't understand how you've got the bandwidth to do all of these things and then integrate these things as well whilst sprinting a marathon at the same time.

31:56By your face, you're like, yeah, that's right. There's some truth to that. I'm actually going to take a couple weeks off. That's my clever plan. Take a little bit of rest. It's been a five-and-a-half-year sprint without a break, but the time is also now. It is an incredible challenge. But actually, just having had our onsite, we've identified the big rocks for next year, what the focus is. So it's going to be international expansion. It's going to be derivatives. And we're going to narrow the focus and make everyone keep building. And so the big thing that we're working towards is now that we have all these different component parts, it's just making this seamless experience across them all.

32:35And that's going to take cross-margining across all these different things, essential risk engine, essential financing engine. Our portfolio margining already has 85 different pairs for hedge funds. So it's awesome. But it is actually a reasonable amount of hard work. And what about on the asset management side? What are you working on there? There, well, that was my reference to the Bitcoin yield product. So that's coming up. We've got a dynamic fund. I think what's happened is that it's a small group of people. They're amazing. They have the best pedigrees, great systems. They've passed institutional due diligence for a while now.

33:17But as you said, assets haven't been flowing in yet. And the number one thing really has been regulatory clarity. And so with that sort of cloud parting in the U.S. in particular, we've seen a lot of wealth platforms. We're seeing RAA platforms. The same kind of or similar enthusiasm that we saw for the growth of ETFs is in part reflected in terms of wanting asset management product. So it's still a small-ish business, but I have great hopes that it will scale. One of the things that was kind of cool is that we launched the Coin50, which is an index. I've been wanting an index in Brian for a number of years.

33:59And then not only did we launch the index, so the IP of it is from Coinbase Asset Management, but then we actually launched a PERP contract. And so that'll bring some liquidity to the tail. But it's cool, again, going back to our former lives. If now you've got options, you know, perps, spot, financing, cross product margin, indices of, you know, you can customize anything. Right. And then we haven't even talked about tokenization. That was my next question. We'll go on to that. But, you know, crypto has matured a heck of a lot. But now I think the I think the big picture answer to institutional capital is can can we get exactly what we want, you know, at the time?

34:44And if you have all those tools, you can construct the package, whether it's an actively managed package, it's a structured product, it's an index. But if you can give institutional capital a menu of options as opposed to just one, they're more likely to allocate capital. Well, it just feels more like the world that they know. It's the same questions. And, hey, how do we structure this? Oh, we've got the options. We've got the perp. We've got the swap. Whatever it is, it's like, oh, OK, this is the same world that we're used to. Because before everything was a bit clunky and nothing was all bundled together.

35:18But the closer you bundle it, the more it becomes like the services that they know from every other investment bank. And what about the other thing that people talk a lot about? Right now, the market's getting very excited about stable coins because there's a shit ton of the TAM is massive, as you said. It's almost infinite, right? The TAM of money is big. but real world assets something gets talked about a lot what is really happening there and who wants to move on it what kind of players first because I know Franklin have been doing some stuff you guys have been doing people have been tinkering still at the edges but it's not yet the big thing it is not yet the big thing and I think learning all the lessons that you and I learned early in our careers I was listening to someone talk about um um you know hood's announcement about open ai and uh spacex and the complexity of not knowing how the contract settle i mean you and i are old enough to remember like procter and gamble and the bank of korea and all the the whole you know early years of credit default slops and was it really a credit default or wasn't it and how do we settle the contract and the two sides and all that stuff and you can just see it playing out again in crypto we don't give a lot of thought upfront to exactly how these contracts settle.

36:37So coming back to the point, there's a long and very eclectic list of everyone that wants to tokenize stuff. I'll put it in a, I'll do this for the first time, but there's the TradFi world, which I think is interested in technology, ease of use, the sort of end-to-end cost of maintaining assets and tracking them. And we're not long that problem as an industry in crypto. We're not. So that's kind of more like the banking world's problem to solve. If you look at the asset management community, when they look at tokenization, I think they're mostly looking at avenues to distribute more funds. So if you can make, for example, U.S.

37:15funds, the tokenized version of it available to Europe, for example. If you can, and it's a good thesis to have, but you can't make an illiquid asset magically liquid it and perform perfectly, right? No, that's right. It's like real estate people who sell real estate want to tokenize it. The buyers don't really want it. There's a bit of a mismatch. Like all the private equity guys, they all want to tokenize their funds. I mean, Apollo's huge in this as their big thing. But I'm like, who's the buyer of tokenized funds? Because they're hoping it's going to be retail, which is the last buyer who hasn't bought PE yet.

37:54i'm like the kind of returns that retail get if you're going to buy a token you're going to buy a crypto token that goes up a lot you're not going to buy a 10 a year asset well i don't know i might challenge you on that i don't think so i just don't think young people give a shit about this stuff anymore i think they want i mean the pe companies want to sell this stuff because they've I think that maybe for the younger demographic, they may not be as up to speed on some of the epic returns that have come from private equity over the years. And they haven't had access to it. They probably don't have exposure to it.

38:34So I think it's probably more of a lack of awareness thing. I get the fact that they're probably drawn first to crypto, and that's more fun for all sorts of great reasons. But I think my thesis would be over time that if you believe in the democratization of things and equal access, and that's a really strong thesis for supporting tokenization. I'm not sure exactly when it happens, you know, and how much of the retail population winds up, you know, investing. Maybe that feels a little further out there. But I like the idea of it. Something that is clear to me is this whole model around VC is about to change just because of capital formation in crypto is now so fast and you can distribute at scale amongst so many people that you can lay off risk really fast in how it's done.

39:20It's just fascinating. When you saw the Trump token launch, it wasn't the fact there was a Trump token. It's because it coalesced so much capital in like two hours. I was like that was a wake-up call to me I'm like holy shit this ICO market is going to come back in a big way yeah I haven't thought through it from like a business model perspective on the buy side but I think your point is dead on I mean yeah the most notable thing was like holy cow look at capital formation and how much happened in a few short hours because remember in the past you have to go show your deck around a bunch of VCs blah blah blah blah here you capture attention People understand the story.

39:58You distribute risk amongst thousands or tens of thousands of people instantaneously. So people take off the bite that they need. I mean, that's amazing. And it all happened in two hours. I know. Just think about, again, where we grew up. I used to run CLO structuring. I used to have a pipeline of deals and fly around the world and try and sell three deals simultaneously for three months, all with the hope of selling 300 million of equity. and it took three months and a million meetings, you know, one-on-one, you know, to do it. And now look at what crypto has done. It's blow your mind transformational.

40:32Where's it all going for you? You know, if you think of your plans over the next, you know, two years or so, where's going to be the real focus? You've said, okay, you want to just tidy up the whole package offering to make sure you've got this great product. You've obviously got to keep your eye on any competition coming up, But what is the where do you think the next phase for what you've done? Because really, almost everything you've been building over the last five and a half years is come giving birth. And the next phase of crypto is going to come behind that. What is it? You know, we just did a survey.

41:06I think it came out today. And it's on our it's on our thread, our Twitter thread. But I think people that were surveyed said they wanted to allocate up to 5 % of their asset portfolio to crypto. And so I think, you know, for the deployment of capital into crypto, you know, two years out, that's a huge, huge, huge number. I mean, I don't know what our market cap as an industry is today, but it's still tiny relative to everything else. And people don't really talk about, you know, 3 % to 5 % allocations. Maybe with the rise in Bitcoin price, they have some of that, but it's been tiny. So I think the manifestation of actually being allocated to crypto, I think, will happen.

41:49The second part is kind of goes back to the first part of our conversation about crypto transforming financial services, you know, the technology and infrastructure play. And so I think that will mature. And so that in terms of driving revenue, I think that business scales in the next five years. And that arguably could be a bigger revenue profile than the current one. So probably those two things is what I'd say. Yeah, it feels to me that, and you and I have talked about this in the past, the whole infrastructure as a service, essentially, crypto as a service, is vast because there's many banks who are going to want to tokenize stuff.

42:28Well, you've got the platform for that. There's many banks that want to build stable coins and payment rails. You've got a platform for that. You've got all the corporations. I mean, there's no reason why these massive multinationals don't just use stable coins as their internal settlement. It's so much more efficient. So the scale of who wants to build on these rails outside of the investment thing, I think maybe even bigger. But as you know, that drives on-chain activity, which drives up the number, which brings in the investors. So it feels like that flywheel is the big one that's going to come.

43:03I couldn't agree more with you. That's exactly what we're doing. And I can't speak for the other side of the house, so to speak, on the retail side. But I know that Brian talks a lot about payments and actually bringing these use cases to life. And CAS now, crypto as a service, that whole infrastructure play. So I think we believe in that same thesis role. Yeah, it just makes total sense for me. There are both so many economic incentives to get both of those right. For anybody using payment rails, the savings are huge, or the tokenization for distribution, as we just talked about, or capital formation.

43:40OK, that's huge, which drives the price up, which drives the investors in, which is why when I, you know, in Global Macro Investor, I look at log regression charts of adoption curves, price, market cap. I think this space goes from, what, three and a half trillions a day to 100 trillion. And I think we do it in eight years. And that would assume a lower rate of growth as well over time. I mean, that's the largest, fastest accumulation of wealth in human history, the largest, fastest accumulation of value in any asset class. And then you think what it means for the equity in the space value as well, not this token space because many of the companies got equity.

44:22What that unleashes is gigantic. sake. I love it. I love your vision. I love your big picture thinking. That's totally aligned to it. You know, we were, again, I had this like eclectic panel yesterday of different types of people and we had this one ginormous bank on it. And I asked them, so I share your vision, by the way, and where we're headed, but I get humbled pretty quickly sometimes when I say like, hey, what'd you think about IBID and, you know, the massive scale? And didn't anyone there say like, like, oh, wow, it's BlackRock and look how much capital came. They said it was just a trade.

44:54It's like peanuts, nothing. And so it was pretty funny. And then he reminded me of just how big the balance sheet was and their volumes and all the rest of it. But anyway, we're headed fast in that direction that you talked about. I think crypto is going to eat financial services and transform it. The other thing that's interesting to me is because of the other parts of the business as well, you're going to get a lot of opportunity for wealth. There's going to be a lot of wealth from people in the space of which you can service that in a number of different ways. And we saw that with a banking model as well.

45:31Goldman, JP Morgan, everybody, that became actually the high margin, big business that came afterwards is once you enable everybody on this platform and the opportunity to invest, you generate a lot of wealth, which then creates yet more opportunity. Yeah, so we were arguably a little late to form a high net worth team here. And so we now have one and they're working overtime. And so with that wealth creation, we're seeing they have a desire to do more things and sort of be like tax efficient, capital efficient. Like buy NFTs. NFT, art NFTs, you know, fun stuff. And so, but that's a high touch, you know service um type call i touch high margin you know i touch high margin and and they love it and so yeah i i see that as being this this wealth creation they just talked about is going to lead to another opportunity for all of us to provide those those services and tailored products for sure do you know divash macken who um sounded iconic so i know yeah yeah amazing because he He happened to be the kind of wealth management banker at Morgan Stanley and Goldman back in 2000 when everybody got fired and he was the only person left.

46:53And he just went to coffee shops and hung out in Silicon Valley and met Zuckerberg and Reid Hoffman and Reid Hastings and all of these guys and then built this massive asset management firm just from those relationships. Because as their wealth goes up, their demand for products and services goes up as well. Yeah, we know them well. I can't comment in terms of exactly how well we know them. Let's just say we know them very well. And he definitely was ahead of the curve on that. But now what I'm seeing is all the other wealth platforms, and again, I won't name them, but you know who they are, they're actually heavily invested in the idea of charging forward here.

47:31And the first tangible evidence of that was actually getting the listing of all the ETFs on those platforms. But now it's kind of interesting. The past couple of weeks, we've seen a couple of those same wealth platforms say, you know, they have ETFs, but actually for some reason my client wants to buy Spot. So can we talk about how that would happen? And so it's nice to have, again, like a menu of services to allow them to both own the IBIT or the other ETFs and also own Spot. It also feels like if you're building the platform that you're building, that investment banking is the other part of it.

48:04So that is the capital formation side of the business. I know it's not on people's radar screens yet, but I see every signal that the ICO market is going to become much larger than people imagine, much faster than people imagine, as a different form of raising capital. And it just feels like that whole investment banking thing needs to be rebuilt as well for this world. I have to think about that. You know, we just made an acquisition. Did you catch that on Liquify? Liquify, yeah. Yeah. So it's like token management. What do Liquify do? I don't know them very well. It's like token management for LPs.

48:39So they invest in early recalls and sort of all the admins to support your investment and sort of vesting schedules and the full complement of services. So that's one of the places where we're trying to help more protocols to come to market sooner and have a comprehensive solution. So that's why we do that, so we can be more involved in day one listings. Exactly how the investment banking and go-to-market thing happens, I don't know, Roel. I think there's an on-chain crypto-native thing here that we're working on in terms of enabling entrepreneurs to be able to do their on-chain solutions in the absence, probably, of any bankers.

49:20to take out all the friction and high-touch stuff and just allow ease of use to market. Yeah, I was having an interesting conversation with Sandy Call, you know, Sandy from Franklin. Yeah, she's awesome. Who's lovely. And we were talking about somewhere some of these giant corporations that are existing now can tokenize different parts of their businesses. So if you think of a conglomeration like Exxon, right, you might not want to buy the oil refining business, but you want to buy the wind turbine business or you want to get streams from that or whatever. And we've got the ability to have smart contracts so we can, you know, once regulation fully allows it, we can attach different, you know, different income streams or price appreciation streams.

49:59And it allows businesses to be very efficient in allocation of capital. They want to build this business. They can then issue a token, use that business, share some of the revenue with the token holders. I think there's something that's going to happen there as well. It won't be this cycle. But over time, I can see businesses using it as a different way of accessing capital markets in a more very defined way that you can measure the risk reward of the bet that the CEO is taking in allocating of capital. It's actually really cool. I never really thought that one through until you just mentioned it.

50:33So I guess that would be the manifestation of crypto really having infiltrated financial services. Today's bankers are going to be offering tokenization and having offer, giving people access to a component part of the business via this mechanism. That would be awesome. And we'd be all over it as a crypto as a service offering to say, hey, let me help us enable it. Yeah. So, I mean, probably the best example of where you'd want to do this right now is actually Google or Alphabet. So Alphabet have a bunch of businesses, and maybe you don't want their ad business anymore. But they've got all this other cool lab stuff that they could then separately fund, tokenize, share some of the economics.

51:12But then you also get the distribution and the social graph and everything else that comes with tokenization. That, my guess, would triple Google's share price. Yeah, because you don't have to go through the sort of hiving off of an amputation of a limb and the retention of the people and the capital markets and who's going to run it. And how is it still going to be profitable if it's been sort of kicked outside the umbrella? Brilliant. I hadn't thought about that, but I love your long term view. Yeah, I just generally people only see today and really the game is seeing where we're going to go because that's what you've got to build towards.

51:53You say, OK, right, we won the big battle, which was like, OK, the game is on. We can start tokenizing stuff and everyone can start investing in this stuff. OK, great. But then what's the knock on effect and where's the really big opportunity from that? And that's why I start thinking about, well, we're going to create a shit ton of wealth. So wealth management in a more integrated format that is more digitally native. I think you may have some ideas on what to do with that wealth, right? Yeah, exactly. Exactly. Got plenty of ideas. Digital art might be one of them. um the and then the other side is okay if tokenization real world assets is a big thing people think great let's bring equities on chain great and i've been you know you and i've talked about that a lot robin hood are now doing it kraken are doing it it's going to be the big thing right all assets are coming under the same pool on these rails but then after that it's like okay well what else does this technology allow us to do that's never been done before and it's a lot of stuff you know what we think of is the kind of derivative markets and the hybrid markets that we grew up in.

52:52We don't think that smart contracts can be that. They can be anything. Wow. Another big thought to sort of chew on. Yeah, that's just, I just think there's a whole, a wholesale change in what happens. So how are you going to crack the international side? I know you've, you're building an Indian business now, which is brave because India has been stop, go, stop, go, but obviously one of the biggest opportunities in the world and pretty crypto native population as well. You know, I'm not involved as directly in the India part of things. I'm more involved in what you'd see the classic sort of international financial centers.

53:28I mean, my focus right now is really in the post announcement, pre-closed, Derivate and UAE and thinking about that as a hub to service the rest of the world. I'm thinking about our Mika license. How is Europe for you as a, you know, somebody building businesses and operating with different registry jurisdictions and different levels of reticence or acceptance? Where is Europe for you guys? And the UK as well? Yeah, the UK and Europe together are a big percentage of our business. So if you remember back to, you know, the U.S. being probably the biggest market from our former lives and then Europe being kind of 30, 35 percent, you know, sometimes more, sometimes less.

54:12That's really super important. And having the ability to passport across the 27 member nations there, plus the U.K. and Switzerland is really important. And so I kind of feel like the Europe at times was ahead, but now is behind. And so I kind of see Europe and the formation of capital, the deployment of capital and post-MECO. We've got to be compliant with MIFID as well. It's coming now. And so for us, you know, we're not going to take a we're going to be regulated here, but unregulated and outside the rules over there. We're going to be regulated in all the proper places. And the cost of doing that is significant.

54:50but we achieved our MECA milestone about probably three months earlier than I think we thought it might take. And so that's an important part for us. When Europe, you know, post-financial crisis went through the same thing, they established these sort of Mount Everest of compliance regulations. So it creates a real difficult bunch of things, a criteria to meet to be able to scale of business. So having achieved that for Spot now and Mika and Prime, I think it's awesome. Outside of hedge funds in Europe, because their mercenaries and will go anywhere looking for opportunity, are we yet seeing European institutions, wealth platforms in the space outside of Switzerland?

55:35Because I still don't get much signs that there's been a lot of allocation yet versus the US, which seems to be more vibrant on this side. That's true. I think you've got your finger on the pulse there. They were slower to form, but I think now they'll crop. I mean, particularly with not just today's rally, but with, I think Europe's appetite to allocate capital has in part been informed. And I can say this having lived in the UK for 12 years, in part informed by what the US is doing. So when the US is like anti-crypto, which it was for a while, Europe was allocating, but it wasn't massive. Now that I'm always traveling U.S., outside the U.S., UAE, Singapore, London, everywhere, the attitude of rest of the world has been prior to this administration was we have a little bit of a head start over the U.S.

56:23and that's kind of fun for us, but they weren't really allocating capital. Now that the U.S. flipped and the ETFs have ballooned and I travel abroad again, and they look at the actual evidence of U.S. regulation and passing bills and things moving, they're having a case of FOMO and catch up. And how do we keep our markets competitive? How do we keep the U.S. from actually sucking everyone back to that core market? So I would say the strange but true that the U.S. changed their position has been a catalyst for Europe to actually reawaken. Because, you know, if we go back to earlier in our careers, we'd find actually a lot of the innovators were the Scandi pension plans, the Dutch big pension funds.

57:08I mean, these guys would swing around size doing all sorts of interesting stuff. They were quite risk takers and innovative and it kind of they feel like they got left behind here somewhat. So I guess they've got to play catch up at some point. I totally agree with that. And they were always the ones that were the first ones to do the illiquid asset or to earn the, you know, the extra yield. for trading their long-term horizon for a bit of yield in one way or another. What I'm seeing now is actually it's the European asset managers. So I think I've looked at the U.S. managers and BlackRock in particular and gone, ooh, look what they've done.

57:42We need more on the shelf here. And as they move towards saying, well, let's have a European asset manager at the Ploy Capital in the space, I think it'll perhaps attract some of that pension from that dormant sort of allocation of capital from those players. At least that's my thesis. I'll tell you more next time we do the podcast. Yeah. The other one that shocked me is last time you and I caught up was at the beginning of our Dubai trip. And then I was shocked because I went to see some of the sovereigns and stuff and like, okay, this is like there are two mandates in the entire region. One is AI and the other is crypto.

58:21at every scale from building economies on it to driving licenses to everything, payments to investing in it by the sovereigns. I was like, wow, okay, this is not what I expected because that was a big shift as well that kind of happened this year. Yeah, you know, a couple of years back, we had Abu Dhabi Finance Week. Remember when we had the drone show and it was like the big announcement on crypto and I thought it was all happening. But then the following year was all AI. and then it was kind of a return of crypto, you know, this year. I got to say, I take my hat off them because they're really thinking about and sort of driving innovation, as you said, with driver's licenses and all sorts of different practical use cases in addition to the investment case.

59:05I still feel like they're really at the beginning, though. So maybe, you know, I don't know exactly how much has been allocated by those funds, but I feel like they're interested in doing more. I feel like that's where like active management and, you know, maybe some local solutions could really work. Hopefully, the terrible that efficient use us a lot more at treats. Now, you guys on the U.S. level are, you know, by far the largest and in Europe as well. But then finance is out there also trying to build a business. How do you do? Where do you come across them? Where is that thing? Is that the Middle East?

59:42And that's where it starts, where suddenly they start having, you know, a big presence in the market. I don't really run into them very much in the sort of more narrowly defined part of my institutional job. Yes, there's a subset of crypto hedge funds and crypto natives that do a fair amount of trading there. The crossover that I see the most is actually with the clientele that trades on our perpitch and probably the clientele that trades on Deribit. And so, yes, we run into them all the time in the Middle East. But in the classic sort of institutional, the capital I, the types of investors that I named in the beginning, I don't run into them very much.

1:00:25The other thing I was just thinking through, just Deribit keeps going around my head. another part of the market that you and I grew up with was like structured products with guaranteed return funds and all of that stuff and having an option you know a big option platform with liquidity you can build a whole lot of interesting things again because I I remember the Germans the Dutch the Scandies were all buying this stuff and the Asians would be the other ones they'd be this vol sellers and doing different stuff it feels like there's going to be a lot of explosion in that as well. Yeah, I'm going to have to like rehire all my French quants from Polytechnique.

1:01:04You know, they're all gone from equity derivatives into crypto somewhere. I'm going to have to like reassemble all of them to have the most complex derivative book on, you know, that no one can mark. So you can then blow up. Yeah, sorry, it was cross gamma. You're like, what? But I do see that coming. I mean, I've been an early, an early advocator to use structured products. I mentioned it you know earlier but um i i just come back to the point that having that full set of products allows us the ability now we have like a lot of tools to play with to create those those custom risk profiles so i hope it comes it'll come yeah it'll all come it's just a matter of time as you said i think we've got the foundations now in place for a further acceleration on what we're going to use this stuff for and how we're going to use it listen brett amazing conversation i think there's a lot in there for people to digest to try and understand i just i actually don't know how you do it.

1:01:57There's too much going on all at once, and it's all going exponential at the same time. So, well done you. You need a holiday. I do want a holiday. By the way, well done you. How do you keep track of all this stuff? You're the most interesting man in crypto. I can't wait for our next dinner. Because we're having fun. That's the difference. Right? It's energizing. So, you're the best. Thank you for inviting me. Love talking to you, and I can't wait to see you. Yeah, can't wait to see you. I'll see you sometime. End of the summer, somewhere in New York, probably. Yeah, I love these conversations with Brett.

1:02:29Really smart guy, lovely guy. And he just opens that curtain for us to give us an understanding that it's a privilege to hear about how big a scale what is happening in financial markets amongst the financial market participants. Whether it's on the investment side or the building side, everybody's doing it. This is a very big thing. And people don't yet understand it. People look at number go up, but adoption number is going up too and at scale. Anyway, see you next time. Hey, Real Vision viewers. A quick pause to introduce you to today's sponsor, Axelar. Axelar is building the rails for the next wave of global finance, not just crypto, but the future of how assets move, how markets connect, and how institutions plug into open systems.

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