James Seyffart on Why 150 Digital Asset ETFs Are Coming

**Robbie** (0:00)
Guys, we've got James from Bloomberg coming in. First time meeting James in the flesh.

**Andy** (0:06)
I've actually met James before, but it's been quite a while. James, good to see you.

**James Seyffart** (0:10)
Thanks for having me back. It's fun to do this in person.

**Andy** (0:13)
Yes, indeed.

**Robbie** (0:15)
I'm loving the fit here.

**James Seyffart** (0:16)
It's quite the suit. Yeah, trad vi, you know, I'm not wearing a tie though.

**Andy** (0:22)
Yeah, I got this suit last week, so we gotta fit the part.

**James Seyffart** (0:25)
You got the suit for this event?

**Andy** (0:27)
It was an event last week, actually. Yeah, it doubled for this week.

**James Seyffart** (0:30)
Nice, very nice.

**Robbie** (0:32)
So James, how's your portfolio doing?

**James Seyffart** (0:35)
Things are fine, you know, it's not too bad. Yeah, I mean, if you hold too much crypto, this has been a really bad, I don't know what, six months at this point. So fortunately or unfortunately, Bloomberg doesn't allow me to hold too much crypto. There's a lot of restrictions of what I can and cannot hold, so I'm not personally being impacted by too much what's happening here.

**Andy** (0:55)
Well, you've been at this convergence between like TradFi and DeFi for quite a while.

**Robbie** (1:00)
It's like, this is your year, man.

**James Seyffart** (1:03)
It's wild. Yeah, this is, I've been, like, when I would come to these crypto conferences, I'm like, I'm interested in the intersection of TradFi and DeFi, and I talk to crypto people and they'd be like, I don't care. It's like, okay, that's somewhat interesting. Are the institutions coming? And then that was it.

**Robbie** (1:16)
Yeah, exactly. Yeah, so this year and kind of like the end of last has been this massive, massive adoption phase, right? I mean, today Securitize partnered with the NYSC. Invesco is taking over SuperState's $900 million on-chain fund. These are just two announcements that are seemingly normal. Like, we've gotten kind of used to these types of announcements now, which are just bonkers. But price isn't catching up, adoption is speeding up. How do you kind of describe the dynamic of this institutional bull market that's ongoing? Meanwhile, a lot of crypto is almost like trying to find itself in its usefulness in the world.

**James Seyffart** (1:56)
Yeah, I mean, there has never been a larger divergence between what's happening in crypto and the way that people are viewing the crypto markets versus what I'm seeing with the people that were telling me crypto was a joke and not real a few years ago. And now, all of a sudden, they're like, we're thinking about tokenizing our fund, we're thinking about doing X, Y, and Z, we're going to the DTCC, all these different things. And they're taking it more seriously now. A lot of it is kind of like the, go back to 2017, it was like Blockchain, not Crypto.
And that's finally kind of happening now. But yeah, it's weird because price is down, but as you said, all these announcements are massive. I was actually just talking with a couple of securitized people right before I came on here. They're talking about like, there's a lot of things they couldn't tell me, obviously, but they're like talking to a lot of these stratified people to do more and more and more of this stuff. And yeah, the price just doesn't care. Like if this was announced in 2020, it would have been without a god-given Bitcoin. But like the other part of it is, on the wealth management side, the advisors, the people that are buying these crypto ETFs, like if you talk to any of these ETF issuers that are issuing crypto-specific ETFs, they're like, this has never been a better time for like advisors asking us questions, advisors actually putting money into these things. Like this is as good as it's ever been, and it doesn't matter, Bitcoin is still down 50, 40%, whatever it is right now.

**Andy** (3:11)
I'm curious on your take about Blackrock's obviously putting tokenization first and foremost from Larry Fink. We had Matt from Bitwise on the show, and he was really deep in the ETF space early on. Now you're the ETF guy, but he was talking about how Blackrock, I think it was their CFO, it was Martin from Blackrock that said they're going to tokenize. Yeah, from, they're going to tokenize every ETF in the next three to 12 months. What does that look like on chain once Blackrock tokenizes all those ETFs?

**James Seyffart** (3:44)
So one, I don't actually know what this is going to look like. There's varying ways that this is going to, how it's going to be played out. Like if you're using, a lot of people are like, you're doing, you're whitelisting certain people to hold these things, because there are still securities laws. Like it's not like you can just take this ETF, you're subject to all these securities laws, and just throw it on chain, and like let it trade on Solano or Ethereum, or whatever digital ledger you want to talk about. There's rules that you still have to follow. So depends who you partner with, and there's plenty of people out there, Securitize, Ondo, I don't want to leave anyone out, but other people that are like playing in the space of the TradFi, DeFi overlap. It's funny, I was also talking to people from Bitwise, and I was mentioning the stuff I was just talking about. They've had like serious record success in the first quarter of this year, and it doesn't matter, because price is still down. But three to 12 months seems really ambitious to me. I mean, I could see them like tokenizing a couple ETFs in the time frame, but maybe. Honestly, I hope I'm wrong. The one thing I would like to figure out is like, where does the value accrue? Like, who actually benefits from these things going on chain and tokenizing? Blackrock is getting a new distribution channel, theoretically, but like, is the chain going to benefit from potential new demand? Is the people that are actually facilitating the tokenization going to get most of the, you know, economics from doing that? I don't know, that'll be interesting to figure out.