“I think Coinbase’s public listing is a moment of validation for the crypto industry and it should help fuel further adoption.”
Brett Tejpaul is the head of institutional sales at Coinbase, a leading company in the digital asset space that recently went public.
Coinbase is known for its role as one of the most prominent retail crypto trading platforms, but it is continuing to grow as the go-to solution for institutional investors getting into the digital asset space. Coinbase’s public listing marked another inflection point in cryptocurrency’s growth. With Coinbase’s public listing comes greater trust, transparency and security alongside its top tier trading platform. This has been key to attracting the continuing migration of institutional investors. “I think Coinbase’s public listing is a moment of validation for the crypto industry and it should help fuel further adoption.”
The key advancement in the crypto space is custody. The ability to buy and sell was always limited by the lack of options to store the digital assets safely and securely. “Custody was the linchpin- having a qualified regulated custodian. There are lots of ways to buy and sell, but if you can’t store it safely, it becomes really difficult.”
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SPEAKER
Brett Tejpaul
Head of Institutional Sales, Trading, Custody & Prime Services
Coinbase
MODERATOR
Anthony Scaramucci
Founder & Managing Partner
SkyBridge
EPISODE TRANSCRIPT
John Darcie: (00:07)
Hello everyone. And welcome back to salt talks. My name is John Darcie. I'm the managing director of salt, which is a global thought leadership forum and networking platform at the intersection of finance technology and public policy. Salt talks are a digital interview series with leading investors, creators, and thinkers. And our goal on these salt talks the same as our goal at our salt conferences, which we're excited to resume here in September of 2021. And if you're watching, we hope you can make it to that in-person event, but there'll also be options to participate virtually. But our goal on these talks and the goal at our conferences as well is to provide a window into the mind of subject matter experts, as well as provide a platform for what we think are big ideas that are shaping the future. And if you've been tuning into salt talks over the past year or so, you've known that we've done a series of salt talks on the digital asset space, but we also cover a through the traditional finance ecosystem as well.
John Darcie: (00:59)
Uh, big banks, hedge funds institutions, and our guest today sort of blends those two worlds. Uh, his name is Brett Taiji, Paul. He is the head of institutional sales trading custody and prime services at Coinbase, which is, uh, as you likely know, the leading company in the digital asset space recently went public by a direct listing. Uh, Brett joined Coinbase in April of 2020 after a 25 year career in the financial industry. 1.0 as he calls it at, uh, JP Morgan initially. And then most recently at Barclays, uh, he's an experienced builder in financial services, working with both institutional clients and FinTech companies, uh, at Coinbase, he's working to expand the institutional client base, build out the coverage team, introduce new features and services that institutional investors expect and educate the institutional community about crypto as an asset class and its role within a diversified portfolio.
John Darcie: (01:52)
And that's part of a mission that we share at SkyBridge, uh, with what Brett is doing over there at Coinbase. It, his most recent role at Barclays, he was the global head of sales. Uh, he'd developed large teams and incubated multiple business lines in that role. Now he pioneered the digital role across sales and trading, adopting new technologies and transforming existing platforms, including the creation of a digital bank prototype. So that's sort of step fully into the digital asset world was a natural step for Brett. Um, you know, as he joined Coinbase again early in 2020, uh, I'm hosting today's talk. So again, I am a managing director of salt and also a director of business development at SkyBridge. Uh, if you're watching this, you probably know that SkyBridge has substantial investments into Bitcoin. Uh, one of those institutions that's jumped on board, uh, in late 2020 in our case.
John Darcie: (02:41)
Uh, but excited to be hosting the talk here with you today, Brett, the first question I want to ask is about your background. So again, you joined Coinbase in April of 2020 to help lead the institutional side of the business at that time. Uh, Bitcoin was only about $7,000 a coin. It hadn't engaged in this sort of Supercycle that we're in the midst of today as we, but why did you decide to ultimately make that leap? You're obviously sort of straddling FinTech and the financial system 1.0 over there at Barclays, but what gave you sort of the aha moment or the Eureka moment to say, you know, what, it's time to make that jump fully into digital assets?
Brett Tejpaul: (03:15)
Uh, I became quite vocal about the fact that I thought that towards the end of my 17 years at Barclays, that technology was finally going to disrupt the trading floor. And so, uh, I wanted to do something about it and I coordinated that digital role. Uh, I was trying to help Barclays look to the outside world instead of building everything, sort of buying it and importing outside technology and then some early success with that. But the more success I have, the more conviction, um, I had before looking, um, in anticipation of, I think, uh, banking and finance, really being, uh, fundamentally disruptive. I looked at, um, opening an OTC trading desk, uh, in, in June of 18 and concluded at the time for an OTC, uh, crypto desk and concluded at the time that the infrastructure wasn't really there to support, uh, the sort of scale of trading I thought we would have. And, and also in a quite sort of regulatory heavy environment. But if you fast forward two years and took a second look at the crypto space, and I was amazed to see that the infrastructure I think largely had been solved for. So, um, when, when, when I then said, well, w w what's next? And if, uh, if I had this sort of super high conviction, you know, view on both cryptocurrencies and digital assets, Coinbase was the only place to consider.
John Darcie: (04:32)
Well, it's certainly, uh, been an interesting period from the time you joined to today. Uh, you know, Bitcoin has gone from today, we're trading around 50,000 from around $7,000 a coin. I'm sure it's been a interesting journey for you to say the least, but Coinbase, I think is known, uh, in the public sphere more for its retail crypto trading business. So it's the dominant platform in the U S where retail, crypto trading across a variety of different crypto assets, but it also has a very robust institutional side of the business, which you help lead. What does a Coinbase offer to the institutional community? What does that institutional business look like and what are reasons why as people are evaluating the different options out there in the marketplace, they should look at using Coinbase
Brett Tejpaul: (05:17)
Level four institutions is we have a prime platform that ties together. What I think is the best trading platform, uh, along with a qualified custodian. And then all of the services that one would expect from a prime broker, like, like financing. And so we also have an exchange which is operated separately. Um, but I'm trying to raise the awareness, uh, that, you know, Coinbase can be the go-to place for institutions. When I, when I think through sort of the top 10, if you like reasons why, um, institutions should consider coming to Coinbase, I want to begin with trust. It's super important. So that's why, you know, that that is at the top. And so trust transparency, uh, to where we're now a public company. And so last week in the back, we had had one of the world's larger hedge funds doing diligence on us for the past sort of five, six months.
Brett Tejpaul: (06:08)
And at the end of the talks and said, you know, we're really excited that you're going to be a public outbreak because we don't want to be beholden to, um, sort of private companies in this space. And we think that public companies are held to a higher standard. So I think that's important. Uh, three is we're regulated. So we operate as a New York trust company. We're fiduciary under your banking law, and we're a qualified custodian under the investment advisors act we're money transmitter. So that means we have to adhere to your KYC and AML for, uh, we're secure. So the first line of defense is, uh, of course our security protocols, and we've got an unblemished track record in that respect. And the second line of defense is the largest insurance policy in the industry, uh, five, uh, product. So, um, we have by far, I think the best trading platform, we can go more into detail why I think that's the case. Um, but I think it's second to that. Well, we're
John Darcie: (07:02)
Customers of that platform. So I can't argue with you on that one, but yeah.
Brett Tejpaul: (07:05)
Yup. Thanks. We're also the largest custodian in the world. So we have a quarter trillion of assets on platform and roughly 50% of that 122 million is now institutional when I started, um, it was, it was actually less than 3 billion. Um, and then C uh, on, on the product side, it's really the prime brokers of all solutions. So it's important that every single thing that we do stands on its own. So you can pick and choose, you can buy here and store there. But I think I'm finding to experience that institutions. I want a cluster seamless offering six, and this is a good one. It's the largest and most sophisticated investors in the world have chosen us. And so we have w w where you have a long list of companies that are announcing that they've come into this space. We've been fortunate to win exclusive mandates and most in pretty much all the cases.
Brett Tejpaul: (07:52)
And the second point I'd say is there's a long list of companies that have made pretty significant investments that have yet to disclose, uh, their, their participation. So I just, um, highlight the fact that we're, we can be trusted with confidential information seven, and we'll talk more about this later is we are a business, the business crypto infrastructure provider. So if you're a bank and you don't have native crypto capabilities, if you're a FinTech platform, if you're a challenger bank, uh, you can come to us and ask us to act as a sub custodian in the bank space, uh, and an execution platform where you can do an integration or a white labeling. So that whole, we should talk more about, um, the fact that we can white label solutions. Yeah. Do you,
John Darcie: (08:37)
Do you, uh, are you able to disclose different platforms that you guys help power on the B2B infrastructure side?
Brett Tejpaul: (08:44)
Uh, so fine. Revolut are two normal names that I think a lot of people would, would recognize, but we have about in my sort of finance lingo, we have 50 introducing brokers in the platform. So I think the, the high level of years that, um, institutions want to, um, find bulk crypto directly, they can come to us for that. Um, if instead they want to give their end customers the ability to participate in, in crypto. Uh, we can facilitate that three more points we've got,
John Darcie: (09:13)
And that top 10, I know we only got through six or seven, so,
Brett Tejpaul: (09:18)
So we had the biggest balance sheet in the world and we, and we, we were in this space rather. Um, but we put it to work on behalf of clients. And so we provide true credit intermediation. So talk more about that later as well, nine, I think we're the best long-term partner. So, so what I've learned is, uh, this space moves fast. Uh, and so, you know, generic Bitcoin custody today might be something else, you know, in, in the future. And I think you want to make a long-term investment and a partner that's going to evolve and stay in the forefront of innovation than 10, I know, long time getting here and make it easy. So, so w we've got all the available resources, um, to, to handhold, uh, to give white glove service, to give education. Um, and so we're, we're, we're really enthusiastic about welcoming, you know, new players in the space.
John Darcie: (10:03)
Yeah, man, I think, again, for us, we are customers of your trading platform. And I think for us, as we were, uh, diving into the Bitcoin ecosystem, we were evaluating different players and we were pitched certain things by different groups. We didn't at the time when we were starting our due diligence process, we weren't fully aware of the institutional capabilities at Coinbase. And so it's been an eyeopening journey for us to see just what you guys have built, the scale of what you built. And then also the most important questions we get from our customers are around trust security and insurance, as you mentioned, the largest insurance policy, some of the best cyber security capabilities, and the fact that you're a public company, the level of scrutiny that goes into all of that is also enhanced relative to some other companies that are private in the space. I want to talk about, uh, Bitcoin and crypto, you know, you, I think, as we mentioned in the open at, uh, Barclays, you helped pioneer a digital bank prototype. Um, and you, you started doing a lot of due diligence on the asset class in 2017, 2018, as many people did as it sort of burst into the public consciousness with that first rally, uh, to about $20,000. I'm talking about Bitcoin in that regard, but how in your view has the cryptocurrency market evolved and how is it different today than it was in 2017, 2018?
Brett Tejpaul: (11:19)
So if I were a ton of change, but if I put my finger on just one thing and point to it, I'd say custody, so custody and settlement, I think they're, they're really important things. And so, um, I think that was the linchpin, um, and, and having a, a regulated, qualified custodian. So now that that's there, there were lots of different ways that you can buy. Um, there's lots of different ways you can sell. You can do interesting things that you can run bots. You can do tons of different things to participate in buying and selling, but if you can't store it safely, and if he can't, you know, sort of have the complexity of storing your own sort of private and attracted away, it becomes really, really difficult. So I think the Coinbase custody solution that abstracts away, a lot of the difficulty in engaging with digital assets, I think was the breakthrough. Now on top of that, we can layer on the trading platform financing and all the things that people that trade asset classes like equities and FX and others that have grown accustomed to. Right.
John Darcie: (12:17)
And in terms of the institutionalization of the asset class, some that we've talked about, we think it's going to be a big price driver. And eventually a dampener of volatility is more strong longterm hands start buying Bitcoin and other digital assets. But from what segments of the institutional market, are you seeing the biggest uptake in interest? You talked about the fact that you guys are discreet. You don't have to necessarily name names, although there's been leaks over the last six to 12 months about, you know, big insurance companies, endowments, um, that, that have bought into Bitcoin. It's not publicly disclosing it, but from what segments of that institutional world, are you seeing the most interest?
Brett Tejpaul: (12:55)
So, uh, early adopters were pensions and endowments. Um, they, I would say in some sense long been in this space, but there's a, there's a, uh, an increasingly larger deployment of capital coming from them. Uh, when I think about, uh, hedge funds in particular macro hedge funds and multi-strat hedge funds. And so probably the biggest new entrance over the course of the past nine months has been macro funds really scaling up their activity. Um, I've also seen some equity funds and credit funds have starting to enter the space along the systematic, uh, as well. Um, three, I would say you've seen it reported that us banks are looking to get into this space, perhaps searching for sub custodial and execution partners. And so I think that banks have concluded that digital assets are a part of their future, and I'm seeing an uptick in activity.
Brett Tejpaul: (13:45)
And I anticipate the fact that we'll have some large us banks trading cryptocurrency before the end of the year, um, corporates. So corporates, uh, you've seen the big splash by MSDR, um, Michael Saylor sort of ways that you're out there. And we've had a lot of fast followers. When I think about corporates, they're there that arrive at our doorstep. Um, they talk about it in two ways. One is the hard-headed CFO or treasurer who, um, has an obligation to consider what's owned in treasury, and it's exploring the idea of owning a pretty significant chunk of Bitcoin. So that's, that's one way, um, that, I mean, corporates, the other way is a corporate who says, you know what, I think this digital economy is really going to happen. I need to position my firm to participate in commerce, uh, payroll, and as a consequence of conducting those activities in the north wind up having a bit of Bitcoin and, or other cryptocurrencies.
Brett Tejpaul: (14:39)
And so we're not gonna make a giant splash, uh, in terms of our treasury allocation, but we do want to position the firm to, to, uh, to participate in this space going forward. So, uh, corporates who have I left out. So family offices and foundations have been, you know, involved and, you know, increasingly increasingly more insurance companies. So I had a pretty memorable, um, experience with an insurance company and it's top leadership a couple of weeks ago where they actually started the conversations that of asking me what we could offer. They said, we thought through, uh, you know, 10 or 11 different use cases, uh, for stable coin. And so we fought about, you know, accepting, uh, premiums, uh, in USB-C we're talking about, um, paying out after cap on events and USB-C, and a whole myriad of other sort of use cases around, around, around payments. And then of course, we've got that large sort of last bucket, which is introducing brokers. And I scope in, you know, FinTech platforms and PayPals, and, um, you know, all sorts of, uh, brokerages and challenger banks, et cetera. And that's the world, the world that I'm, I'm also running hard after we're there, where I hope that they'll adopt, uh, some of the, the infrastructure that we can provide them that the power of those flows. Yeah. I mean,
John Darcie: (15:54)
You've seen places like PayPal, Venmo so far introduced it as they sort of build out their, build out their suite, you know, full suite of financial services. Are there others that you're in contact with that you think that all these neobank digital banks and even traditional banks are going to eventually all onboard a crypto capability? Or do you think that's several years down
Brett Tejpaul: (16:15)
The line, it feels like a trend, doesn't it? I mean, it's happening across that as I rattled through those different clients segments, there's not really a segment that I think is sleeping. I mean, I think I didn't get to asset managers yet, but, you know, we haven't seen, um, we haven't seen a Wellington, a Vanguard, you know, enter the space, but who knows? Um, I feel like they're slow moving giants, but, uh, the space also is lacking, um, from my perspective, it's lacking, um, a full suite of, of competing sort of options, um, for not just being able to we'll get the ETFs and hopefully one day soon or they're coming. But I do also think that one thing that can create a structured box. So if they have sort of cat downsides and custom payouts, I think is also coming soon. So let's
John Darcie: (17:01)
Talk about that ETF question. So there's, there's a variety of different use our sort of base case view based on conversations we've had, um, with, with former officials and, you know, not necessarily people that are directly involved in decision making process, but who have knowledge of the way these type of organizations and departments in government think, and who think that maybe we'll get an ETF by the end of 2021, late 20, 21 is sort of our base case. Do you agree with that? And what are the implications, if we do get the approval of an ETF or several ETFs, uh, on the business at Coinbase and what will be continue to be the differentiator that you guys offer in terms of people that are looking to transact in this?
Brett Tejpaul: (17:40)
I don't have any insight, uh, in terms of whether it will be this year or next year, or even the year after. Um, I do feel the marketplace, you know, wants one and I feel like the backdrop, or at least the, um, I think it's constructive. And so when I reflect about the sort of cascade of events that happen this year, um, which in part were led by, um, you know, the OCC allowing, you know, lifting the prohibition on banks to custody, uh, digital assets and allowing, you know, PayPal and non-depository institutions to the space. I think it sort of points in the right direction. So I can't, I can't be more specific on timing, but I do, I do think that that will come and, you know, w w w with respect to what happens at that moment, I, I think it's just another way for, for mass adoption, um, and participation in the space. You know, it's kind of easy to buy a ticker. Um, if you don't open a coin Coinbase, which by the way is super easy as well. Yeah.
John Darcie: (18:41)
And the interesting thing that we've seen, we saw Jay Clayton, the former sec chairman joined the board of one river asset management, a significant player in the digital asset space. You saw Brian Banks, uh, joined Binance as the head of their us business, as they try to build out a us business, or you're seeing all these former regulators jump into the digital asset space, we find it a hard to believe that those types of people would be joining us ecosystem if there wasn't some constructive level of regulation coming down the pike. Um, but also relating to the institutional market. Are there certain crypto assets that are dominating your conversations with these institutions? Is it 95% Bitcoin? And the other 5% is a theory. Um, and, and, uh, you know, in any other players in the space, is it a hundred percent Bitcoin? Is it more of a mix what's that breakdown, uh, that you're having a conversations with institutions about crypto
Brett Tejpaul: (19:35)
Assets? I would say a year ago, I started, it was almost, you know, 99% Bitcoin for institutions to the professional last year has shifted to more 80 20, between, um, you know, the base case for Bitcoin and Ethereum. And then I'd say, uh, some of the macro funds have gone, uh, outside of the, the two main liquid and are probably invested in a handful of other currencies. And so there's a pretty quick progression. I think once someone, you know, typically it tends to be Bitcoin as their first investment, and then it feels like, uh, if you're in, this is on the fastball. Yeah, no,
John Darcie: (20:14)
That makes a lot of sense. We talked about institutions. So an interesting question that I asked several guests that come on the show are sovereign governments. So there's been reports that Tamasic, which is a sovereign wealth fund based in Singapore is potentially already been buying Bitcoin. And it's on its a balance sheet, or is it in its portfolio and suggestion by sort of Bitcoin maximalists that and ultimate, uh, late part of the cycle. The Supercycle that we're in is when sovereign governments think that, uh, they need to own Bitcoin on their own balance sheets as a, as a long-term store of value. Have you seen any interest from sovereign governments or do you think that's somewhere that we're headed?
Brett Tejpaul: (20:55)
So 8 85 different central banks around the world are doing some sort of exploratory work on having digital currencies? And so, uh, I think you can read a little bit, uh, into the psyche of sovereigns through that, through that. Um, I, I do think it's a natural next progression for sovereigns that are heavily invested in fascial resources or national license of any, of any type to really begin to consider, you know, Bitcoin as a long-term store value. So I think it's, um, in scope and, um, I wouldn't be surprised if, um, we had sovereign participation sometime soon. So you
John Darcie: (21:31)
Were at Barclays before that you were at JP Morgan, as we've talked about, uh, in this episode you experienced what financial system, 1.0, looked like, and now you're on the other side of it where you, you started to sort of blend those two worlds in, in the later stages of your time at Barclays, but now you're fully in the digital asset world from your seat today, how much is traditional finance and finance 1.0 going to be disrupted by defy by crypto assets, by blockchain technology. And what does that ecosystem ultimately look like? Let's go say five to 10 years down the line. Are those banks going to be fully disintermediated? And they're going to have to either merge or acquire with digital asset companies or, or be left behind what does that world look like? If you look five, 10 years down the road,
Brett Tejpaul: (22:17)
That's a big question. Um, the, the person with the crystal ball, crystal ball at the aquarium basis, our founder, Brian Armstrong. So my mom, I couldn't really see out into the future maybe six months, maybe 18 months at best. Uh, so he's really the best person to talk through [inaudible]. But before I answer the question, I just want to widen the aperture a little bit and I want to move it away from Bitcoin Ethereum. And I want to talk about digital assets. So if you talk about visual assets, let me do that. I begin to think about tokenization of financial and physical assets, right? And so we're talking about, uh, engaging with assets other than those two, including stable coins. And when, when you do that, all of a sudden, you sort of set the expectation to say, okay, well, well, hang on a second. You've got banks that are, they do make massive payments.
Brett Tejpaul: (23:07)
They move money around the world. They trade management, spirochetes, they trade physical spirits, they do all these different things. And so I think it's just a natural and obvious progression for them to be able to transact and digital assets. I don't think it's about one disintermediating, the other, I think right now we're in the, we're in this sort of parabolic growth base of, um, having all sorts of institutions have the native, uh, capability to actually transact conduct, business, commerce payments, and other forms of lending, um, with digital assets. And so I think that's where we're headed. I'm I'm minded to as many partnerships with banks, private banks, you know, market counterparty is everyone's at the grow, what we call it, the crypto economy. Right.
John Darcie: (23:54)
Um, and, and people are going to hear some nice barking from my dog in the background here. So just don't mind that. But, uh, do you think the Coinbase, to the extent you're able to talk about the direct listing, but that serve as, as validation for the digital assets world, how do you think in a post Coinbase being public world, uh, people are looking at digital assets any differently than they were
Brett Tejpaul: (24:16)
Before. I certainly hope it's another important step of, of establishing the crypto economy and having, uh, you know, validation for this as an asset class. And so, I mean, everything, everything that I see, um, and it's not just the direct public lesson by itself, it's, it's everything else. Uh, and, and so again, if I reflect about the who's, who, and visual assets these days and cryptocurrencies, it's, it's sort of everyone. Um, and so, yes, I think it's a moment of validation and, uh, for, for the industry, um, and it, it should just help to fuel further adoption. Couple
John Darcie: (24:51)
More questions before we let you go. Um, we'll talk more about that B2B crypto infrastructure. How are you guys, uh, when did that side of the business start? How are you supporting those, uh, institutions as they build out their crypto capabilities and how big a part of that, uh, of the Coinbase business do you think that'll be, uh, in, in the coming years?
Brett Tejpaul: (25:11)
So w we we've been powering what, again, my, my terminology here, introducing brokers, which is anyone for whom, um, we help their end customers participate in so, you know, white label and, or, and, or other things. So I think over time it will be an increasing focus, but it's important to have, you know, each person or institution have the ability to hold crypto directly through us and also find, you know, other other avenues. And so it's a pretty bespoke integration that earliest can be. Uh, and so you'll have firms that may want to design the specific customer experience they want for their, for their end client, and we can figure out interesting ways to help them achieve it. And so I think over time, it will be an increasing focus, uh, for, for the firm.
John Darcie: (25:56)
Um, in terms of the, the details around everything you guys do on the prime, prime broking side. Um, could you go more in depth about all the different types of services you offer, um, you know, going a little more inside baseball here for, you know, maybe macro funds that, uh, that, that might be interested in using
Brett Tejpaul: (26:13)
Coinbase. Yeah, sure. So, uh, let's talk a little bit about the trig platform, because I think it's pretty differentiated. So we haven't, let's start with, we had a smart order routing. We have algorithmic execution. I think everyone pretty much knows what those are. Um, I would define this by saying that we're agency only on the institutional platform. So that is to say, um, if you're trading through our prime broker, I don't have a competing, uh, market maker desk, uh, which that felt so pure pure agency, um, because institutions, um, can trade through our trading platform with these phenomenally a phenomenal volume. You, you, you have an API integration and the fixed integration, you can have it on your desktop. You could call by NTC desk. So lots of different ways to initiate trading. Uh, when that happens, um, when I said, we, we have a big balance sheet and we're putting it to work on behalf of the customer.
Brett Tejpaul: (27:03)
So what that means is, um, when someone's doing their first trade, that might wire, uh, a billion dollars, but, you know, over to us, that's sitting in a bank account. And then if they're initiating a big, um, um, um, purchase of let's say, Bitcoin, what happens is they're, they're actually directing the working capital from our training empathy. And so it's that, it's that working capital, that's going out to 12 different venues and getting the best possible price of a Bitcoin in that millisecond. And so that's where I talk about the intermediation. So if by chance, there was something that went wrong operationally or otherwise on that, on someone else's exchange at the time, then, then that, that, uh, and, and institutional client wouldn't suffer loss. So, so that's a really, really big deal. And I think it's differentiator differentiating factor. There are, there are other smart order router platforms, but none of them, which I think before the protection that we can do in the way that I just described, couple more things there we traded in, on, on the bus and all the exchanges.
Brett Tejpaul: (28:02)
And so, you know, that like the more you trade less your fees are, and we w we pass that straight through to our end clients. And so that's super important. And then we give, uh, post-trade transparency. And so you'll see, and you've experienced it. It's pretty cool. You got a post-trade report, um, and you'll see exactly how the algos performed and what the, all the mini fills were. Um, another differentiating factor is, you know, how do you get billion dollar multi-billion dollar trades done in a marketplace, which is still trade pretty much like retail. And so the answer to that is, again, the trade platform. So we, we, we can, uh, be thoughtful. So if you were to engage in and, and, and want to buy, you know, a billion dollars on a, on a Friday afternoon, we we'd have a huddle with my trading team.
Brett Tejpaul: (28:46)
We'd go through it. We look at market conditions. We make some recommendations on how to layer in some T ops. We might consider putting some dip catchers in there. Uh, so if we get this big move that we saw on Saturday night, we can be optimistic and sort of fill our boots at the time. And so, and then we, we began to sort of work around the clock 24 7. And so every four to six hours, we'd get a report, we'd do a settlement. We would assess the market conditions. We go faster, we go slower. It's actually, um, I know you've seen it in action, but some of your years haven't, but it's, it's literally poetry in motion, my partner. It's fascinating.
John Darcie: (29:20)
Yeah. And as you mentioned, even, I think in Asia, uh, from people we've talked to on chain analysis, there's a lot more leverage in the system among Bitcoin buyers in Asia. So you see the market oftentimes move overnight more significantly than it does during regular trading hours in the U S and I think that's one of the things that's fascinating around Bitcoin is that the idea that financial markets, uh, only trade during certain hours is if you think about it a little bit strange, uh, you know, the fact that there's not constant price discovery taking place in markets. And, uh, you know, you guys obviously do a good job of staying plugged in around the clock to get the best prices for your customers in terms of, yeah, go ahead.
Brett Tejpaul: (30:01)
Let's just say, you know, Allison strange, um, is so pivoting from the, you know, the market opens the market closes, it's running a 24 7 trading operation in perpetuity. And so, uh, you mentioned Eric theaters, uh, earlier from one river. He actually did a, uh, a sort of test at us and a memorable moment where he wanted to see if it really was, you know, 24 7. And, uh, he, he put it in a giant sort of a series of orders and requests in on Thanksgiving morning. So when people were traveling to see, and anyway, long story short there, um, we, we, we, we did delivery, got everything done, and they sort of tested the limits of what 24 7 really meant. Right?
John Darcie: (30:37)
Yeah. Bitcoin never sleeps. Eric Peters is a brilliant guy. You know, we, we always compile sort of a handful of the best, uh, written materials around Bitcoin and his initial letter to investors as I, I think in the hall of fame of, of top, uh, macro cases for Bitcoin. So I would encourage everybody to read that last question I have for you, what stage, you know, I hate using the tired baseball analogy of what inning are we in? Are we in the third inning, the bottom of the second, whatever it may be, but you talked about how there's, there's still a large number of institutions that are either performing due diligence, or are currently invested in Bitcoin that we're not even aware of. What, what level of penetration and saturation within the institutional world do you expect to see, let's say in the next 12 to 18 months, relative to where we are now, are we, are we seeing a ton of people that are currently invested and we're seeing more people that are in the due diligence phase? Are we seeing more people that are now just becoming crypto curious, where do you think things are going to move in the next year to year and a half?
Brett Tejpaul: (31:36)
So, so if I reflect on 25 years of bringing new asset classes to institutional investors, and I think about exotic rates, I think about credit rated, as I think about, you know, uh, leveraged structured products. And I think about the cycle of adoption, it seems like it's about three to five years, right? If you're going full speed. And so it starts with nice players, it works its way up the medium-sized unabashedly there's adoption. What happened in this past year is just phenomenal. So what happened is we sort of skipped a few years and we went straight to the fifth year.
John Darcie: (32:06)
When does the clock start that it started in 2017, that a start on April 20th, 2020 when Brett page Paul joined Coinbase.
Brett Tejpaul: (32:14)
And I, I don't know where to start it because there's a lot of, I owe a lot to everyone that came before, but for me to set this wonderful stage, a wonderful business up, but all I can tell you is that it's, it's gone from fringe players. That sort of what I described that first kind of two years in my mind on adoption, straight to the, almost the sort of fourth and fifth, so sort of a year where you've full-scale adoption. And so right now I don't see anything that's going to come in between. Um, you know, that doesn't prevent that full full-scale adoption from happening. I mean, usually again, you have clusters of activity here. It's hedge funds, it's alternative asset managers and family offices, but it's not banks. And it's, you know, it's, it's not the biggest bonds, but now everyone's, um, you know, looking at it and w w and minded, I think, to deploy capital in the space. And so, I don't know, um, it, it just feels like if we continue at this pace, we're going to see adoption full-scale adoption sooner than we think. Right?
John Darcie: (33:15)
Well, Brett, it's been a pleasure to have you here on salt talks. Uh, you know, we were very happy customers and partners of Coinbase look forward to having you guys also involved in our salt conference in September as well. Um, you know, helping to institutionalize the asset class and educate people that still might be on the skeptical end of the spectrum, which to be honest with you, I was for several years, but as we've dug deeper into it, it's sort of hard to argue with the inevitability of, uh, digital assets and just the sort of reframing of our entire financial system. But thanks so much for joining
Brett Tejpaul: (33:46)
Us. Thanks, John. That's awesome. And thank
John Darcie: (33:49)
You everybody for tuning into today's salt. Talk with Brett page Paul from Coinbase. Again, we love educating people in our community, either that already know a lot about digital assets or just getting started on that intellectual journey, just to remind you if you missed any part of this talk or any of our previous talks, including a whole series we've done probably 20 or 30 now on the digital asset space, you can access them on our website@sault.org backslash talks and on our YouTube channel, which is called salt tube. Uh, we're also on social media on Twitter is where we're most active at salt conference, but we're also on LinkedIn, Instagram, and Facebook. If you're so inclined to follow us, and please spread the word again about these salt talks, especially, I think it's important to educate people on what's happening in the digital asset space. If you have a, an institution that's becoming crypto curious, uh, we'll, we'll feel free to pass along. Brett's email to you, and he can answer all your questions on that front. Uh, but on behalf of the entire salt production team here behind the scenes, uh, as well as myself, uh, signing off here from salt talkSPORT sport today, we hope to see you back here again soon.