Transcription
GM, good morning. Welcome to the Milk Road Show, the daily crypto show where rates are higher than your hopes for an alt season. I'm your host, Kyad. Today we're joined by Andrew Forsen, who's the president of DeFi Technologies, a publicly traded company building the bridge between traditional finance and the world of DeFi. Today, we're going to get outside of our bubble and learn about global crypto markets. We're going to chat about how and where the adoption of crypto is happening from the perspective of public markets, from the perspective of institutions, and of course, we're going to talk all about this bull market and what we can expect for the rest of it.
Before we get into that conversation, I bring Andrew up. Couple things to announce. First, you already know that the research team here at Belro lives and breathes crypto. Every week, we put out a clean, no BS report on what actually matters in the space. This Saturday, we're dropping one on Galaxy. Is it really the best AI crypto stock out there? Uh you'll have to subscribe and check that out. Comes out on Saturday. And then today's episode is brought to you by Figure Markets. Grow your cash like a bank. No lockups, just real returns in KGN, the verified distribution protocol, changing the growth game.
All right, without further ado, let's bring Andrew into the show here. How you doing, my man?
Hey, Kyle, how are you? Thanks for having me.
Yeah, thanks for joining. Uh I know it's late for you, so I appreciate you uh you coming on late night here uh and getting here on the on the Milk Road Show. Um, let's just jump right into it. First, DeFi Technologies is um is a very interesting company actually and probably unheard of by by some of our users is a Canadian company and you guys are doing um a lot of things globally. Uh and so I'd love for you to give us the high level just explanation of what DeFi technology is, what you guys are trying to do, and maybe you can touch on a little bit of the products you guys have.
Yeah, for sure. Uh again, thanks for the opportunity. So, DeFi Technologies is effectively a decentralized finance technologies company that also operates as an asset manager. So, what does that mean? Well, it means we're really good at doing blockchain stuff. We're so good at doing it that our own developers, programmers, and infra people actually set up everything from staking to custodial services to the trading systems. But then we go one step above and we actually provide means for people to invest in these digital assets and crypto. But how we do it is not just the traditional way. We uh in terms of people having to set up wallets and whatnot, one of our specialty is making it so that you can access these digital assets by buying them through your broker dealer and having them available on traditional stock exchanges and securities exchanges. And we've gotten pretty good at that. Uh that means we bring a lot of money or liquidity into layer 1 foundation tokens. all the tokens we've heard of uh from Bitcoin and Ethereum and Salana and some that are a little bit more altcoin uh like like Hideera or Sway or XRP, Ripple and we wrap them in an exchangeraded product and those exchange traded products are then listed on stock exchanges predominantly in Europe and that way institutional investors and retail investors ers can buy them a lot more easily and it's really good for the foundations because it brings liquidity to their tokens from an audience of investor that normally wouldn't have access to them. So primarily you could think of us as a bridge between the traditional capital markets and the modern world of DeFi, decentralized finance and technology.
Very interesting. So essentially what you're explaining is ETFs which we all know of in the in the US market. You know you have your black rockck ETFs, your Fidelity ETFs on Bitcoin and ETH. You guys are essentially doing that but in other parts of the world I believe you're not in the US as far as I understand. Which jurisdictions are you guys in or where are you like predominantly in?
Yeah, that's right. We're predominantly in Europe. Uh but it's not just Europe and the EU. We have recently launched in Switzerland. We have products listed in the UK, but our headquarters is actually as as far as listings go is actually the Nordic market. Uh predominantly in Sweden on the spotlight exchange, we have I think about 75 to 85 uh exchange traded products with these digital asset underlying. And interestingly enough, as quiet as we are, because we don't tend to spend so much on marketing, a lot of people don't know about us, but one of our claims to fame is that uh in the entire world, uh we're probably the company that has the most digital asset underlying exchange products in terms of a product library. And as markets get more mature and obviously uh people are more accustomed to dealing with digital assets and crypto, we're seeing increasingly a demand from other areas particularly the Middle East, uh Africa, um Asia, Latin America that our products be introduced there. So we're slowly working through processes to introduce our products into these other markets. and and that's the core of what we do. And the company that is the issuer of these instruments, it's a subsidiary company of DeFi Technologies, that's called Velour. So if you look up velour.com, v a lur.com, uh that is actually the the issuing company that is responsible for packaging these exchange traded products and getting them listed on exchanges.
Yeah. Now, we obviously all know about the ETFs on Bitcoin, the ETFs and ETH. Um, they've had incredible flows, at least on the US side, and we've recently had in the US a Salana ETF. Hasn't had great flows just yet, but it's it's still very very new. So, we can give it some time. But that's basically it. There there's, you know, applications for, I think, Doge and I don't know, a few others that are that are kind of coming. Um, but what you're saying is in Europe, I guess, uh, there's a lot of others outside of just the the kind of let's call it the majors, the three majors, you have something like 70 tokens that exist on some of these exchanges. So, you're saying I can buy a lot of these altcoins in ETFs today, but obviously of European in those markets.
Yeah, that's right. And uh if you can find a nice number and you go to velour.com, you'll see that we actually have a uh I think we have something like 85 exchange traded products, but we pretty much cover uh all the coin market cap top uh crypto tokens and wrap them in ETP form. Now, there's some fun facts here. Like I realize in North America the introduction of ETFs and exchange traded products is relatively new but our co-founder uh friend of mine uh Johan Watenstrom a Swedish gentleman he actually created the world's first uh exchange traded product back in May of 2015. So this goes to show that um DeFi Technologies and the team behind DeFi technologies, they've been strongly in the digital asset space and they've been technological innovators in that space. our other co-founder, I I think a gentleman that you've interviewed before, Olivier Russy Newton, a fellow Canadian, another good friend of mine. He was actually the founder of the world's first uh publicly listed um Bitcoin mining company uh called uh Hive. So we have a long history of either dealing with the digital asset space or the technology behind uh mining, staking and we put that all together to make investment products on novel markets.
Why um what's the benefit of of wrapping these tokens and bringing them to public markets? I mean a lot of our audience will say I just go to Coinbase or I go to you know whatever exchange and I buy it and I custody it myself. That's the whole point in crypto. Um now I I've explained many times I think why I think uh it is great to have these tokens you know exposure to them are available on public markets but just interesting to hear um what your guys take is and what you see in terms of like why do people choose to use your your products rather than just go buy the asset underlying themselves.
Yeah I that's actually a great question and I think the real thing is it's not actually uh competition between one way or the other. If you are a big fan of the uh crypto space or the decentralized asset space, digital asset space, what you're going to see is that what we do is we make it easy for money to flow into these markets from different forms. So take for example somebody who's not used to downloading a wallet and then finding the specific token that they want to purchase. Or take as an example somebody who's in a very tax sensitive space and they want to make sure that their tax recording is absolutely correct. So that's a second persona. And a third still persona is if you are a corporate treasury or a corporate entity. A lot of businesses just aren't allowed to handle wallets because wallets they have key systems that are very much tied to an individual. So if you have the ability of buying into these digital assets and crypto tokens in much the same way that you can buy a regular stock, it solves uh taxation. It solves uh simplicity. So your portfolio manager can say, "Hey, look, we hear Salana has a great token and this is how you can access it." And it also solves the ability for corporations to take a position in these instruments. And that's I think one of the reasons why foundations and a lot of governments are actually very happy for us to do what we do. We we just make it easier for these instruments to be accessed via traditional rails.
Right. Yeah. I I think I think for a lot of people too, it's just not the easiest UX in the world to custody your own asset. as much as like us crypton natives think it's easy and you know we've done it for years most people in the world they don't want to do that and it's it's not easy to do it and so they want to go and do it right in the place that they're already trading you know Tesla or Apple or whatever other stock they're they're trading and so if they can do it all in the same spot um I mean that that's way better self-custody is great but it's not the beall end all it's not the only thing we want right
Yeah well, it's actually tricky because like um for instance I myself I personally have some uh Cardano tokens and Cardano own native tokens, but it's on a datalless wallet on an old laptop and anytime I want to update it, it basically has to download the entire ledger. So sometimes it takes days and there's always some reason either it goes to sleep or I just have to go. So what happens whenever you're you're self-custodying custodying these wallets is after a while either you may forget about something if you're not actively trading them and there's a degree of uh I'll I'll call it inconvenience. Now that said, it is something that I absolutely do. But whenever you're working um in a portfolio management capacity, it it is nice being able to know that the instrument you're investing in is regulated and easily accessible via your broker dealer, via an ISA number, so you know exactly what you're getting. Uh I I think everybody who's uh either programmed or bought tokens in the crypto space, I we've all fallen if not fallen victim. There's often been times where you think you're looking at a token, then you realize that it's token that has the same name. Yeah. But it's not actually the same token. So th those sorts of situations are completely eliminated on uh stock exchange because right honestly the process we have to go through the regulatory process for each instrument it it's quite extensive so it's quite secure in that regards.
What is the adoption or growth um been like over the last you know I don't know how long you've been with D5 technologies or or been in this sort of space here but let's say over the last few years what's that adoption been like um you know we've obviously had incredible inflows on Bitcoin and ETH on the US side. Uh especially recently for ETH. What are the flows like for you guys? Who are your kind of clients? Is there a lot more clients? Is there different types of clients coming in now that maybe weren't here, you know, last cycle in 2021? Just talk to me about kind of like how that journey or how things are changing over the last couple years.
What I can say one of the most fascinating statistics to us is that since inception there has not been a month of negative inflows or a month of outflows. Every month we have new capital entering our broader portfolio of products and every time we introduce a new batch of uh digital asset ETPs even if they're uh very uh altcoin ETPs that increases the inflows of the products. Without a doubt, the interest in the instruments is growing and the people who are investing in our instruments are generally buy and hold investors, right? I think the other thing that we're seeing is there's an increased demand from institutions that want to invest. I think as uh regulations are sort of catching up to the technology, companies are now realizing like oh gez we should be in this space at least a little bit because the returns are really good. And then what I personally have noticed because I also serve as the chief growth officer of velour the subsidiary is that internationally we get a lot more jurisdictions and exchanges uh reaching out to say hey uh what could we do to get your products listed on our exchange and then it's sort of like a delicate dance because they want the product but you've got to go through this like maze of regular regulations and laws and obviously uh an educational process to help the products make it onto the local market. But yeah, the interest is is absolutely expanding and I don't think that's a surprise to anybody when you look at what's happening with stable coins and and all of the above.
Yeah, absolutely. the um the US has seen some like let's say a 180 from last year in terms of regulation and in terms of just like you know chokeoint 2.0 and and the administration supporting crypto. Um it was the complete opposite last year and so they've been making a lot of progress with the Genius Act etc. What about the rest of the world? Uh talk to me about like what you're seeing mainly in Europe because I know that's where you guys spend most of your time. Were they already well ahead of the US and now the US is playing catch-up or are they sort of were they waiting for the US and now they're gonna they're going to catch up to the US or like what's that been like?
Yeah. Yeah. Look, that's a great question. Uh to be perfectly honest, Velour has been issuing ETPs for for for years now, right? and uh I think since uh 2020 2021 and so in that way um and our instruments are able to be passported throughout the EU. So in that way Europe was certainly uh advanced compared to North America but what we have found is the US is one of the biggest markets in the world. So whenever the gates are opened up from a regulatory perspective to allow more investors to pour money into ETPs, ETFs, digital asset, treasury companies that sort of floats the entire market. It brings interest everywhere and it makes it more okay for other institutional investors and people to be interested. Global finance is connected. So what happens is when you have an opening in one jurisdiction, it normally results in openings in other jurisdictions happening too. And we're seeing moves for instance in Africa, in Latin America, in the Middle East. All of these jurisdictions are now saying, "Oh, so Europe has opened up and Europe has been known uh to be quite stringent when it comes to regulations, but the US, as you say, has had a 180 with the Genius Act, the Clarity Act. So now developers are able to make more applications. there's more comfort about uh being able to make big investments in the space without fear of doing something illegal because not too long ago if you're even like handling some of these assets in some jurisdictions it was considered illegal. So I I think the future's really bright for the frankly for the digital asset space and I think we're going to just see more and more adoption uh worldwide.
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Yeah, I I want to get into the future in a second and and what you kind of think for the future of this current bull market we're in. But before we do, you mentioned you're seeing a lot more demand in institutions and that's been like the big the big driver of the last little bit here. What does that word mean? Like institutions feels like a very generalized, you know, it's like we're seeing a lot of humans do this. It's like, well, who is that? What is that really? And so when you say institutions, who are these companies or these corporations or whatever that are actually, you know, showing demand for your guys products? Is it funds? Is it endowments? Is it, I don't know, just a average companies? Like, who would you say it is?
Great question. Well, in the last eight weeks, uh, we've basically increased our fund interest in our stock from 1% to over 10%. So what you're finding is a lot of funds, hedge funds, mutual funds, index funds are now happily targeting uh companies with exposure to crypto and digital assets and saying they must be included in our indices in terms of our products as well. What is happening is I think it's actually demand driven because people are seeing oh wow uh bitcoin is sort of here to stay. It's almost like the new digital gold and so people ask well how can I have this a part of my portfolio and technology providers are getting better at either wrapping them in things like ETPs or providing new custodial systems so that people can access them. So people want exposure to these instruments as part of building a diversified portfolio. So it like in the old days they would always say oh you should have you know a percentage of equities percentage of fixed income and perhaps a percentage of gold and now increasingly people are also saying you should have a percentage of exposure to digital assets. So when we talk about institutions it's pretty much the buy side. So pension funds, um asset managers, family offices. So they're now trying to figure out sovereign wealth funds, h how do we uh formalize our relationship with the digital assets buying other instruments? And there's also sellside which are the uh investment banks and uh providers of capital trying to say how can we get involved in driving more institutional money into the digital asset space by securities issuances or offerings or or what have you. And on both sides there are actual researchers. So like equity researchers, but you can call them like uh crypto researchers who are now looking closely at the digital asset treasury companies, the underlying chains, Bitcoin, Ethereum, uh Salana, trying to figure out how and what these platforms are used for. Uh what the impact of broad utilization of stable coins is going to be on these DTS. um it's pretty exciting uh and also the interaction of AI uh as well with uh the blockchain technologies. So there's a lot of growth.
How do these um so first I think the interesting thing is when you say like pension funds endowments these are just like passive buyers where they're just they're like dollar cost averaging basically every month they take people's you know 401ks or whatever it is in Europe and uh and they just keep buying and buying and buying right and they just they keep allocating which is um something we've been waiting for in the crypto space for a long time I think. So that's it's exciting to hear that they're coming in. How do these guys decide what they're buying? So like you talked about how, you know, they have a percentage of their portfolio in equities, percentage in gold, percentage in bonds, and now they're thinking, okay, a percentage needs to be in crypto. What what percent is that typically what you're finding? And then how do they decide what to that crypto allocation should be made up of? Is it just like mainly Bitcoin today? Are they thinking about going down into things like Ethereum or Salana or even farther down or like how do they how do they decide those?
Yeah, I I think that's uh a really sharp question. So, in terms of portfolio allocations, I don't necessarily know. And the reason why is if you have a portfolio manager that is focused on technology and digital assets, their allocations are going to be higher. If you have an index uh portfolio manager for lack of a better term, their allocations tend to be weighted according to the concentration of the digital asset companies on the exchanges. Now, in terms of like a retail portfolio manager, I don't know because I I've never been a like a financial planner in that regards. Well, what I do know is digital assets are still viewed as uh relatively risky by many players. So, I don't I wouldn't know of many portfolio managers that would encourage say having 80% of your portfolio in Bitcoin. But I I Yeah. Yeah. Yeah. But but I do hear anecdotally that people are certainly comfortable with having like 10% 15% of a portfolio in digital assets. So so that gives you a macro view of the division. Now as to what is purchased now this is interesting. Uh Bitcoin is the granddaddy of them all and this is what people are hearing about. people are hearing about um digital asset like treasury companies and most of those are Bitcoin based increasingly we're hearing more about like Solana treasuries, Ethereum treasuries. There's been big news about that and I was actually speaking with someone just earlier today who was running a uh a Binance chain uh BNB uh treasury. But Bitcoin is the the the token that people are most familiar with. And I think, you know, in fairness, if you look at the crypto market, it it's it's easy to understand why. Like the market value of Bitcoin is about, let's say, 2.3 to$2.4 trillion. But the market value of all altcoins, of all the crypto space, is about $3.95 trillion. So, Bitcoin is a healthy chunk of that. Yeah. Now, Bitcoin has also been referred to as analogous to gold. And what is interesting, a buddy of mine gave me this statistic and it actually maps out as true. The market value of Bitcoin is currently about onetenth the global market value of gold. So if you look at gold, it's about $23.5 trillion, but Bitcoin is running at around uh $2.35 trillion. So that gives you some sense of scale and space of where Bitcoin can grow into, right? But when you think of the altcoins, the altcoins which take up, you know, almost a little less than $2 trillion, money is flowing into altcoins at an increasing rate. So like the the more people invest in crypto and digital assets uh in total we're going to find that the more of that money as a percentage flows to other digital assets like Ethereum, Solana um and other altcoins. So that gives you a sense of how distribution will happen. I'd probably say it's 70% towards Bitcoin, 30% to altcoins, but that percentage is going to be increasing over time, I'd imagine.
Right. Very, very interesting. So, right now your guys focus is mainly on just um wrapping spot crypto assets and putting them on exchanges kind of around the world. Is there um other than obviously going into new jurisdictions, you talked about going into Africa and maybe the Middle East, etc. Um, so, that's interesting. Is there other products you guys are thinking about launching that you can discuss? Like I know there's a lot of talk around like indices coming out where it's more of like a basket of tokens instead of just like a one token. And you know most of what we have today in public markets is like an ETF which is just a wrapper of one. Um but very common in the traditional world is like is a basket of companies, right? Um we don't have a lot of that yet in in crypto. Uh so maybe that um you know you talked about DATs that's obviously a newer thing that's been coming along um and uh and going into a bunch of different tokens um maybe you guys are looking into that area. I'm not sure but like what do you guys think about when it's you know looking past just the ETPs?
Yeah actually uh very astute. Um we do have basket products uh for instance we have a a product in partnership with Bitcoin Swiss uh which is indexed by stocks. Uh so that is a basket product of 10 uh digital assets indexed and packaged as a product and it's just a velour bitcoin sweet. Then we also have a range of uh yield uh bearing products. Um we have uh yeah we're basically looking at creating a whole bunch of um instruments that will be indexed baskets of products yield generating products and those are from the ETP category but DeFi technologies itself also provides other products and services beyond just ETPs. Uh one of our our most successful portfolio companies is a company called Stillman Digital which is a liquidity provider to digital asset exchanges and they also provide um for large companies and institutions OTC buying. So that this is something that is happening as we see uh more demand for stable coins in many countries. These people are looking for pairs so that they have liquidity against their local stable coin or local currency so that they can take a position USDT or USDC. Well, Stillman Digital is an expert uh technology provider and service provider in that space. Um then we are also a significant shareholder for instance in a Swiss bank that is one of two uh Swiss digital asset native banks and that bank is called Amina Bank. It's based in Zoo. We also acquired a uh an asset management firm that actually does uses AI algorithms to create portfolios and manage trading. And this company is called Neuronomics. So with that company, we're going to be able to make really novel strategybased uh digital asset investment uh products that investors will be able to uh participate in. So they'll have an actively managed fund that uses AI to create optimized portfolios that actually have lower risk because of how it's able to trade. Um and on top of that there's also um we're looking at hybrid instruments that mix traditional asset classes like debt and equity plus digital assets. So we have a pretty big R&D division. Um I think one of the big initiatives we're also looking at is uh things like uh USITs funds and USITs funds are basically ETFs that pension funds are able to invest in. So this would enable us to attract big pools of pension fund money into the digital asset space because at the end of the day the rappers we make really just facilitate the flow of capital into uh the digital asset space. So there's a lot of innovation going on and and we're pretty excited about that.
I think um one of the things people need to you know our listeners need to understand is we always talk about this like big wall of capital that's coming in the institutional capital and it's like it's coming in but we still need to build a lot of different products that these institutions want to buy or or can buy ETPs is one of them but there's just many formats in which companies want to invest or need to invest because that's their mandate or whatever and like they can't always just buy spot they need you know whether it's different ways or maybe they want yield as you talked about or they want you know whatever it is they want to monetize the volatility they want to like there's so many different things that different funds want to allocate their capital to and and we just don't have all that built out yet, right? Like we just have we've just finally got ETPs. Dats are are kind of a newer one where you can also get some yield and they can do things on chain. That's kind of interesting. That's like kind of the next step. But there's so much more that I think that you know as a as a retail person on institutional investor like we don't even really wrap our heads around yet. And I think people are always like you know institutions are here. Why are we not at a million dollars by now? It's like this stuff takes time, you know what I mean? There's a lot of capital I think that wants to come in or or will eventually come in. We just there's still just a lot more things that we've got to build to actually enable it all to come in. You know what I mean?
You're absolutely right. And you know, I think sometimes in retail we invest and we're all uh we're all hoping for the dream that you read about in the news that somebody bought a token at like half a cent and it's at $100 within a month. Yeah. But like if we look at the grand scheme of things, let's look at where a Bitcoin was just even 10 years ago, right? Like we're now comfortably with Bitcoin over a 100,000. I remember when Bitcoin, you know, when it was 3,000 and everybody was saying, "No, this is the absolute ceiling." Right? M so I I do think that there has to be a sense of a bit of patience because you want whatever gains you have to have a solid foundation and along this journey we're realizing that you know there's a few killer apps out there that a lot of people are super comfortable with using like I look at stable coins now stable coins solve a real problem and they're completely international and people and businesses are getting so used to trading with these stable coins, but all stable coins are running basically on the rails of altcoin layer 1 blockchains. So, as these flows increase, I it goes without saying that the gas fees that the layer ones obtain are also going to increase and then prices will go up.
Yeah. Yeah. I think um let's talk a little bit about the markets actually because um there's a lot of debate, you know, for the LA if you've been in crypto for a while, we've been through these like four-year cycles, right? These huge booms and then busts and they've been they're just so crazy how Yeah. how big they are both ways. On the way up, they're crazy and then on the way down you're like, "Holy this is wild." Um there's a lot of debate now if like if that's over. Are we done with those four-year cycles and cryptos now sort of like grown up and now we're more like equities where we're still of course going to have pullbacks, but it's not as exaggerated. And now we're into the I like to refer it as like when internet companies and and we all sort of like migrated from the, you know, physical world to the online world. Internet companies have just gone up and up and up for 25 years, right, after the com crash. And so there's a lot of debate of like is that the stage we're at now? It's like the next 25 years we're just we're going to grind upwards for the good assets obviously with of course pullbacks or are we still going to be in this like crazy four-year cycle thing that we we've been like when you look at the markets what do you think where are we at?
So uh look, I I've been a student of finance for a while and cycles are in every asset class from currency to debt to equities and we're going to have cycles uh with digital asset because there are always bubbles and you know humans are irrational and there's always uh a lot of speculative action uh with these investments. That said, I think there's an acknowledgment that the the floors that we will reach are probably higher than they were prior to this phase of increased adoption. I think there's also an acknowledgment that because of increased liquidity and stickiness and comfort in these asset classes, the the winters or the the the troughs in the cycle, the bare markets will probably be shorterd because I think there are more people that now recognize that every time there's a drop, it's probably a great buying opportunity, right? And I think it really helps that more and more we're able to see that these assets, these digital assets serve a real purpose, right? When something serves a purpose, it's very hard to justify an extremely low valuation. And the more utility we get out of these assets and I think that these assets are slowly becoming indispensable and I think that the correlation or analogy of Bitcoin as the new digital gold for lack of a better term that has become so deeply entrenched that it it's here to stay. It's it's much like the internet. Like back in the day, people would always be like, "Oh, you know, the internet, it's a passing fad. Uh, you'll never use it." Like I I don't use my phone ever now, right? I I think the the only application that has really stood the time so well is email. But the internet, life without the internet just doesn't work. Like I like banking doesn't work. So much doesn't work. And I think soon and I think we're approaching that particularly in emerging markets, we're going to see that the idea of finance without blockchain is an impossibility. I mean, wait till we get more increases in RWA, real world asset. Wait till we get um you know, I'd mentioned that gold has a global market value of 23.5 trillion. Well, the market value of equities is about 125 trillion. The market value of debt is 325 trillion. Wait until more and more of these different assets are disintermediated and you have firms like like our firm, frankly, DeFi Technologies. Um we are actively working at novel products that link uh digital assets and equities or involve um representations of these different assets onto the blockchain. So I think we're at the beginning and not to mention AI. I I mean AI is starting to use blockchain all the more in order to prove the provenence of the data that they're using to train their LLM models on. Right? So in an instance like that you're realizing that oh wow we may have really just scratched the surface of what we're using these uh decentralized ledgers for. And I I think that's very exciting. So I think the markets they'll go up and down but the general trend will will be up right.
Yeah, I I agree completely in terms of the bull market we're in right now you know since let's say basically end of 2022 uh we came out of a real rough bare market obviously and we've been sort of at least on on some assets we've just been kind of up and to the right right uh Bitcoin has done incredible for the last two and a half years. Um, Ethereum was kind of slow, but it's it's it's now having its moment. Salana has done amazing. You know, you can list off a bunch that have just like uh really continued to grow and appreciate in price over the last two and a half years. And now people are kind of wondering when does this when does this bull market end? If it's the four-year cycle, it's actually this year. If it's, you know, what we've done in crypto previously, right? It's it's been about every four years. Now, whether that's because some people call it the happening, I don't believe that. Some people call it because of the liquidity cycle or the business cycle. I believe kind of more in that uh that side of things. Curious on your take uh on and you don't have to give me any prediction on exact dates or anything like that, but like when we sit here today, are you super bullish? Uh obviously you're bullish on adoption, right? You've just kind of explained that, but on let's say price action and whether you look at it from macro, you look at it from something else, I'm not sure. Um are you bullish today? Is that lasting for a while here? Are we moving into 2026? like what's your sort of like gauge on on on markets here?
Yeah, I I have to admit uh I you know I'm a traditionalist whenever it comes to finance, but I am bullish and I'll tell you why. A lot of this latest bull market is and you actually pointed this out. It's very much Bitcoin related. If you look at last quarter, the movement in altcoins was actually quite flat. So that means uh whilst Bitcoin was up and to the right, the altcoins were somewhat flat. And is there room to grow for the altcoins? Well, whenever you look at how they're being used, the the conclusion is yes, there there will be room to grow for the altcoins. And you also see that a lot of the major traditional players um like uh credit card processors uh bond issuancers all of a sudden they're deciding to run a lot of their services blockchain native and when they do that it actually it it pumps value into the digital asset space. So I I do think you will always have irrational exuberance in some asset classes and I think sometimes we see that in the digital asset treasury companies but I in the long run you are going to find that we're scratching the surface of utilization. We're scratching the surface of how we can bring uh real world assets onchain and bring liquidity into the digital asset space. So even if there are dips, there will be they they will be shorter lived because we're still finding new ways to use all this stuff, right? So as long as we're using the stuff a lot, then you're in good shape. when people stop using it, then you're in a situation where, well, there's no demand for it, so why is the price high? And right now, I definitely think um there's a lot of demand for for this technology, for the products that build upon it. So, there will be dips, but they'll be shorterdived.
Yeah, I think in famous last words that's why for me this bull market is a bit different than previous is previous it was always like we're going to use it this way. we were not actually using it this way. And this cycle for the first time, and I don't really like to call it cycle so much anymore, but this bull market, let's call it, is like there's actually real things being used on here, right? Like my company, we use stable coins all the time. It's how we pay most of our employees. And we couldn't imagine not paying our employees in stable coins because they're all over the world. They're in Europe, they're in, you know, India, they're in, you know, South America. And like we actually can't pay a lot of them in in in the traditional finance rails. And so like the amount of money we save, the amount of time that's saved using stable coins is just incredible. And so like I think we see it firsthand and I know many around the world are are actually using this stuff and that probably wasn't really true last cycle or any of the cycles before that. And so I I I tend to agree here that um the the dips will be much shorter uh lived because there's actual utility here. Um just one final question as we wrap up. You you've talked about a bunch of things of what how we're using crypto. You've talked about AI using crypto. You talked about stable coins, RWAs, and a host of other things. I'm curious like um two questions here actually. What are you most excited about out of all these like personally yourself? And what is like the next thing that's coming that will be like the fastest thing to come next? Like what's the thing that's like going to make waves soon? We've had I'd say stable coins is probably it over the last little bit here. Like it's really had it some people say chat gpt moment. So it's like really taken off and and you know now everyone kind of has heard of stable coins. Um, in your opinion, what's the what's the next thing that's coming?
Yeah, I actually I I can answer your two questions in one thematic area. What I'm most excited about is I think this is probably the first time in human history that um this technology is democratizing the ability for people anywhere in the world no matter where they are to create wealth. So in a lot of poor countries the idea of saving or having something that generates a return it was just impossible. you put your money in the bank, you are a victim of inflation, of bank fees if you're able to get to a bank. But in many of these places, the people are completely unbanked. And that leads me to the next thing that I'm very excited about. I think that we are just early in the curve of where we are along the product development space for financial instruments. I think we are going to see a boom in yield and revenue generating uh digital assets because the way financial engineering is working, we're able to take baskets of instruments, combine it with staking or real world yield and create passive income for holders of these instruments. And so you can see how now if you are somebody who was living in a poor country with maybe 15 20% inflation per quarter, you're able to gain access to a a token that is denominated in US dollars that is paying out yield. It sort of changes the calculus because instead of losing 20% a quarter, now you're gaining 4% a year. We're really with these technologies and these instruments, we're really giving opportunity to many in the world and that excites me.
I love that. Yeah, it's um I agree. It's one of the most exciting things that that crypto has to offer and it's taken a bit to get there. I think that's been a promise for many many years and it feels like we're we're finally kind of at that inflection point where it can actually uh impact people's lives which I think is is super exciting. Um great answer, Andrew. It was um it was awesome to have you on the podcast today. I I love learning a little bit from behind the scenes of like what you guys are doing. Um as as a wrap-up here, let us know where we can, you know, learn more about you uh or learn more about DeFi Technologies and and what you guys are doing.
Oh, for sure. Well, uh you can find me on XF Forson. Uh so that's pretty easy at Forson. Uh Defi Technologies. Our website is defi.te. Uh so that's pretty easy. And uh our our main ETP issuer is velour uh vo.com velour.com. And uh please uh follow follow me on X. Uh get to our website. You can find us on LinkedIn and X for each of those assets. And uh we we love to hear from people. Uh understand what they're doing, what they're interested in. Yeah. Please get in touch. Thanks so much.
Awesome. Awesome. Andrew, thanks again so much for for joining us here on the Milk Road Show and listeners, thanks for joining in uh and checking it out. We will see you guys in the next episode. Take care, everyone.
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