Blurring the Lines Between Crypto & Traditional Asset Classes with Brett Harrison, President, FTX US. John D’agostino, Director of Institutional Sales, Coinbase. Ari Rubenstein, Co-Founder & Chief Executive Officer, GTS. Thomas Gallagher, Chairman & Chief Executive Officer, Miami International Holdings, Inc. (MIAX).
Moderated by Jon Najarian, Co-Founder, Market Rebellion.
SPEAKERS
Brett Harrison
President
FTX US
John D'Agostino
Senior Advisor, Strategic Partners
Coinbase
Ari Rubenstein
Co-Founder & Chief Executive Officer
GTS
Thomas Gallagher
Chairman & Chief Executive Officer
Miami International Holdings, Inc. (MIH)
MODERATOR
Jon Najarian
Co-Founder
Najarian Advisors
TIMESTAMPS
EPISODE TRANSCRIPT
Jon Najarian: (00:07)
You guys are going to get the idea as we start the presentation, we can all sit down, gentlemen, that this is a crypto conference and it's not, of course it's an alternative asset conference, but one of the hottest alternative assets, of course, is crypto right now. And I think we have a great panel to talk about that with you guys, to talk about DeFi and some of the exciting things that are going on. So I'd like to introduce immediately to my left, Brett Harrison from FTX.US. Brett and most of us, by the way, come from a traditional finance background, I think it's safe to say. And like a lot of you, we've migrated over towards crypto because of the opportunities and just this is one of the most exciting areas of finance to me. I mean, I'm launching a hedge fund this month, crypto hedge fund.
Jon Najarian: (01:04)
You see me walking around here, please grab me, talk to me. We'll be happy to talk to you about it. But this is about them, not about me right now. So Brett Harrison FTX.US. John D'Agostino. When I first really got into crypto, it was John D'Agostino and I that were talking and, in some cases with John's partner at the time, traveling over to Europe and Asia talking about crypto. And Johnny is with Coinbase. I've got Ari Rubenstein from GTS where he is the co-founder and has some fabulous new news for us, Ari, today. And Thomas Gallagher from MIAX or the Miami stock exchange, options exchange, crypto exchange. And Thomas, of course, it's hard to get more traditional finance than an exchange that has broken into the traditional finance space the way MIAX has. And Tom and Brett will have to tell you why out of all the places on earth that they could have put their headquarters, they both put them in high tax states instead of down in Puerto Rico or in Florida.
Jon Najarian: (02:19)
But let's in fact start with Brett Harrison, president of FTX.US. Brett, some of the things that are going on in crypto, of course, Sam was here yesterday. Bankman Freed and talking about FTX, your FTX.US. Describe for the audience quickly maybe what the difference is between the international and the US space.
Brett Harrison: (02:44)
So FTX.US is a spot crypto exchange. It was founded about a year ago. We've had enormous growth in the past year. I think back in January, we were doing something like a million dollars a day in spot volume. We're now doing around $200 million a day in spot volume. And we're looking to push into other, especially regulated assets, stocks, derivatives. Recently, we acquired LedgerX, which is a CFDC regulated DCM, DCO and SEF, to be able to offer futures and options on crypto to US customers.
Jon Najarian: (03:19)
And why Chicago, Brett?
Brett Harrison: (03:21)
Because I live there.
Jon Najarian: (03:23)
Exactly. And from the traditional finance side as I said, Thomas Gallagher, I'm going to pronounce it like they pronounce it in Ireland, Thomas, because I'm a dual citizen.
Thomas Gallagher: (03:33)
There you go. Me too.
Jon Najarian: (03:35)
You're oh fabulous. Well, see the rest of you guys are jealous now, probably. Thomas, how does a regulated traditional exchange like MIAX fit into this new DeFi world? How are you guys making that move?
Thomas Gallagher: (03:51)
Well, thanks for the question, Jon. I think the way we fit in is by buying new platforms where we can launch really innovative new products. So, last year we bought the Minneapolis Grain Exchange and the Minneapolis Clearinghouse, one of the oldest clearinghouses, if not the oldest clearinghouse in the United States of America. So what we want to do is we want to bring to market new proprietary products and innovative products that the global trading community can use. And the first one we're bringing to market in the last six months has been our SPIKES Futures Volatility Product. It's really gotten off to a great start.
Jon Najarian: (04:35)
Fabulous. And I'm sure those of you in the audience who are active in crypto know that crypto, in particular Bitcoin, that I trade a lot of derivatives on is in the neighborhood of five times to 12 times the volatility of the S&P 500. And your SPIKES product, of course, is on traditional stocks rather than crypto, but that's probably going to be one of the next moves, I'm betting.
Thomas Gallagher: (05:05)
Well with the licenses we have, John, we can pivot. No one knows where this is going to end up in terms of the regulatory bodies that are going to be looking at things, whether it's the SEC or the CFTC. So owning US stock exchanges and options exchanges and a futures exchange gives us the ability to kind of be ready. Whether it's the CFTC looking at crypto derivatives or the SEC looking at an ETP, spanning both regulatory regimes is one of the reasons that we wanted to get into Minneapolis.
Jon Najarian: (05:43)
Fabulous. John D'Agostino and Coinbase, you guys of course have been in the news and Ari's got some news that he broke this morning, and he's going to break even more to you guys here, but Johnny, you guys have been in the news and you have wanted to be in the news. Because the SEC has been saying to Coinbase, well, what about this lending and all the rest. Tell us a little bit about some of the challenges that you have when you're trying to have a discussion with a regulator that you don't even know if they really regulate you.
John D'Agostino: (06:16)
Well, thanks for the easy and not at all uncomfortable question. Softball, softball, big announcement, a hammer to the face. I really appreciate that. So I'm going to show you an expert's lesson in how to answer and divert which I'm going to do right now.
Jon Najarian: (06:31)
You've always been good at that.
John D'Agostino: (06:32)
Look, we go way back. I was head of strategy for the New York Mercantile Exchange. Exchanges as price discovery mechanisms are fascinating vehicles. They're always going to be at the forefront of a relationship with the government because they are they're the last legal monopolies. They're essential to the critical financial infrastructure. When 9/11 hit, the NYMEX was one of the first entities that the US government wanted open. We were flown over on helicopters to get it open. That's their absolutely essential. And so by definition, because of that critical importance, they're going to, when they innovate, have massive repercussions for the entire economy and therefore the government's going to be watching and regulators are watching very, very closely. So I don't think it's unusual that anyone here, because everyone here is looking to innovate in the exchange space is going to have to engage and evolve. And so if those things aren't happening, that means you're not moving forward.
Jon Najarian: (07:28)
Well, and that's a great diversion, John, and I'll say it for him, but I think it should have been the office of the controller of the currency or perhaps even CFTC if somebody's going to talk to Coinbase about regulation, not the SEC, but-
John D'Agostino: (07:44)
That's got to be worked out, right? They have to work that out. And it took, people forget it took, I mean, try trading compos swaps versus single asset swaps, right? You're dealing with the CFTC versus the SEC. So that tension and that land grab has a existed way before crypto, it'll exist way beyond crypto. So we can't control that. That's going to happen. We can only just keep an eye on what's going on and try to make everybody happy to degree possible.
Jon Najarian: (08:11)
Great. Thank you, John. And sorry about the fetch ball.
John D'Agostino: (08:15)
Now on to Ari's great announcement.
Ari Rubenstein: (08:17)
Someone's got to take a rough one.
Jon Najarian: (08:18)
Yeah. And I thought when we were going to talk with Ari today, that I'd be talking about Pyth and Virtu and Jump Trading and all this, but all of a sudden, you guys broke news this morning through a Wall Street Journal story, Ari. Tell us a little bit about Radkl with this Radkl investor that he brought in for Radkl, Steve Cohen. You tell us the rest, rather than me tell the story.
Ari Rubenstein: (08:43)
I had nothing to do with the timing. Nothing. But thanks, John. Radkl is a digital asset trading and investment business. And our goal is to provide liquidity to the marketplace, make the markets more efficient that way and ease the access for investors to get involved in digital investing. And we were talking earlier, it reminded me of what we did with GTS. GTS right now is a global electronic trading business. We're one of the largest market makers on the New York Stock Exchange. We provide liquidity to all sorts of investors, retail investors, institutional investors. On a daily basis, we might trade 5% of US equity markets. And now we trade nearly 20% of the Grayscale Bitcoin Trusts which have become a huge business. And really what happened 20 years ago, I was a floor trader on the commodity markets in the '90s when everything was traded open outcry in a pit, and very quickly, they went all electronic.
Ari Rubenstein: (09:53)
Your partner was a big part of that. And investors at the time were very apprehensive because you had all of these different centers with complicated technology protocols where trading was happening. So it became very fragmented. So what GTS did was we had a very sophisticated technology. We were able to figure out how to write to all these different venues and produce algorithmic pricing in securities and bring that efficient pricing to investors, whether it was anonymously on the exchanges or directly. And the same thing is going to happen in the digital asset space. It's even more multi-dimensional and more complicated with centralized and decentralized protocols, staking yield farming, all of these things are going to influence the digital asset prices. So we need scale liquidity providers to come in and do two things. Provide accurate pricing by leveraging technology to connect up to all of these different protocols, and provide risk transfer services, which is a fancy way of saying we'll hold inventory in different securities as a dealer.
Ari Rubenstein: (11:05)
Once that starts to happen, all of the things that everyone at this conference are talking about where there'll be more mainstream institutional investors in like your business in crypto are going to happen because there'll be more liquidity, there'll be less volatility and larger institutions who have large size to move will feel more and more comfortable net of all risks to get involved. So we're really excited about it and Radkl will be a separate business from GTS. It'll leverage a lot of the technology and experience we have at GTS, but it'll be a separate global business.
Jon Najarian: (11:41)
Yeah. And for those of you who have watched CNBC, Bloomberg, anybody, and seen the New York Stock Exchange, you've seen their logo everywhere, GTS. And a billion shares a day or something like that goes through-
Ari Rubenstein: (11:56)
Sometimes not every single day.
Jon Najarian: (11:57)
Not every single day, but it's close to a-
Ari Rubenstein: (11:59)
Sometimes. But it's interesting. Slow days, right? You mentioned the New York Stock Exchange and GTS has been the leader in the last five years in IPOs, essentially being the secondary market liquid provider on IPOs down at the exchange. But what I think you could see happen and what a lot of folks at the conference talked about is that companies themselves might be thinking about raising money in different ways than the traditional IPO route. And I see that because we talk to a lot of these companies at early stages before they go public, but I believe the future is going to be one where companies are raising money differently and they're accessing the capital markets differently. So we intend to take some of that experience and bring it into the digital spaces as well.
Jon Najarian: (12:55)
Brett, with the new challenge you've got coming over from Citadel traditional side over into FTX, and like you say, more or less, I guess, Sam picking you to head up FTX.US, be the president here. A lot of that is because of your traditional finance background, but also applying some of those things that, of course, we've been following what Solana and FTX have been doing in terms of this central limit order book and things like that. What can you tell us about the sort of liquidity that you guys are drawing into FTX.US and so forth?
Brett Harrison: (13:34)
So as you said, the builders, the founders of FTX, a lot of us come from the traditional finance background, which means we understand what it means to not just build an exchange, but to trade on exchanges. We know what traders need in order to have a platform that's reliable, that's scalable, that has great uptime and has good margining and risk systems. And so FTX from the scratch, it was really built for institutions. So we've attracted huge liquidity pools from name your favorite high frequency trading firm, hedge funds, big institutions are trading with us. And we're now really starting to go in the other direction and doing user acquisition more in the retail space, but that's primarily been our big push has been with the big institutions, which is again why we're so interested in working with the regulators in the US, the CFTC, the SEC, to bring regulated products to the US space, because there's so much institutional demand for things like NDFs on Bitcoin or options on Ether.
Brett Harrison: (14:47)
And we will see even more the explosion of the institutional demand for these products, as it starts to overlap more with the kind of liquidity they're used to providing on exchanges, like more traditional exchanges.
Jon Najarian: (15:00)
And Johnny, now with Coinbase, but as you said, starting the career and really growing yourself and your exposure with commodities in particular, and then looking to new asset classes, no big surprise that you get grabbed by Coinbase and charged with helping build liquidity out of all these basically 22 million accounts that Coinbase already has plus the institutional side. Well, he's given me the thumbs up, like 25 million, 30 million?
John D'Agostino: (15:35)
It's republic. I can say, just look at the filings, but yeah, the rising tide has lifted all the boats including us. Yeah.
Jon Najarian: (15:42)
And as far as providing that liquidity in these new asset classes, the fact that you've gathered this much on the retail side and yet Coinbase pro also is a liquidity pool that you guys hope to use one side to feed the other, if you will.
John D'Agostino: (16:01)
Well, look, I mean, it's encouraging to me to hear how well Brett's doing because I generally believe, and I believe this since the days of NYMEX ICE. I remember the NYMEX board and saying let's kill ICE. And I remember saying, well, hold on. When we overlap trading hours, our volume spiked by 30%. So traders love oligopolies. They don't want all of their order flow in one place. So there's not going to be one winner. There's going to be multiple reputable, regulated, lit market winners and the basis trading and the innovation, because the separates we are talking about, we're all going to be pushing each other and competing with each other. In my experience, you sit with a whiteboard and you create a beautifully structured options contract or some type of risk that you think is going to be traded and work and it flops, and you don't know why it flops. It flops for a variety of reasons.
John D'Agostino: (16:49)
And so it takes a lot of energy. It takes a lot of innovation. We're lucky to have scale. Scale is a significant competitive advantage in the exchange space, but we need others. And that activity and that variance trading is going to really get more and more institutional investors excited because having one trading venue or having one type of product is like having one soccer team. There's no one to play against. It gets boring really, really fast. So it's encouraging to see all the success. It's encouraging to see all the innovation because in the mix of all this innovation, we're going to see what the next big contract is.
Jon Najarian: (17:27)
I agree. I think it's going to be, like I say, we avail ourselves. We're derivatives traders. This week marks my 40th year as a trader. I started in Chicago, still live part of the year in Chicago, part of the year in Puerto Rico because I love kite surfing and that's always my reason for Puerto Rico. But I think that a lot of what these guys are talking about here, and a lot of what you guys look for, either in the investments you make or the businesses that you guys are running is access to liquidity pools. And so what John just touched on is that access, what Ari talks about all the time is that access. So the fact, Ari, that Pyth has become so big, so fast, and that Jump Trading, yourselves and Virtu are on that platform and yet there'll be dozens more pushing throughput through there. 50,000 transactions a second sort of thing versus 12 or 20 Ether or whatever.
Thomas Gallagher: (18:36)
John, I don't know if you realize, but MIAX was the first US exchange group to participate in the Pyth network through the Bermuda Stock Exchange. And went live earlier this week and it wasn't by accident that we got approached by the foundation, the Pyth foundation. They saw what we had done creating liquidity over the last eight years in the US, in the multi listed options. This year, we're number 15 in the world. We didn't exist. We did not exist eight years ago. And so we got that call early and I thought about it, and I said, you know what? This is really the cutting edge. We're going to leapfrog several generations of technology. We want to be a part of it. So obviously others have announced, IEX has announced behind us. We were the first one. And we went up live and it's going well this week.
Jon Najarian: (19:28)
Well, and you guys have the benefit, Thomas, if you don't mind me saying so of a lot of... I was lucky enough to sell a firm to E-Trade folks in 2016. You guys have seen how traditional brokers like that many times bolt on things on top of their existing platform. And it's kind of wonky the way it works then. But you guys were lucky to be able to start out after the international securities exchange, the other ICE instead of the Intercontinental that John spoke of. But you guys starting eight years ago have been able to start with a clean slate without some of the legacy issues. So how important is that technology to allow you to make that first move, Thomas, into Pyth and some of these exciting protocols?
Thomas Gallagher: (20:19)
The whole basis, the whole thesis for MIAX was that you could innovate, you could invest in technology, invest in people and keep them together. And that innovation and that technology, we've been up now almost eight and a half years, John, we've had two outages. So you talk about 5 nines reliability. You look at the incumbents, and I'm not being disrespectful to them, but we've had two or three down incidents since 2012. And we're a brand new exchange, built all the technology in-house. So we started with the options issue, because it's much harder technology-wise. We have 11 market makers trading 1.1 million securities at any given moment and they may want to refresh their prices.
Thomas Gallagher: (21:05)
So we created liquidity as a result of good technology, partnering with our members who now own about 33% of us, I don't know if you realize that. And so we think we can bring that knowhow, how to build an ecosystem and how to bring flow. And we're going to put that effort into things like Pyth and we're really proud about it. And I have to applaud the folks on the panel who are looking at this next generation and looking at it thoughtfully.
Jon Najarian: (21:38)
Thank you, Thomas. Ari, as far as this Pyth network-
Ari Rubenstein: (21:41)
Well, I think the speed of that. It's a very interesting [crosstalk 00:21:44].
Jon Najarian: (21:46)
You have to have that. A human being can't step in front of high frequency. You can access liquidity there.
Ari Rubenstein: (21:51)
What's interesting about the architecture there because what Pyth is it's just a building block but it's also the potential connection between decentralized trading and centralized trading, and a connection between the trading of something real in spot and trading of things that are based off of that in a digital way. So it's not just the equity markets, which is what Pyth is, but it could end up ushering in a tremendous amount of secondary market activity in things that there isn't a secondary market today. Our interest is twofold. We believe our responsibility is to supply technology, to create efficiency and liquidity in any market. Our technology is infinitely scalable. Today, we make a market in half a million instruments, but in a few years it could be 5 billion instruments. And we see digital assets explode as the secondary market exploding and both in centralized and decentralized manners and oracles are going to be very, very important for that. So it's something to watch out for. And so far it's been a pretty big success.
Jon Najarian: (23:15)
Oh yeah. I'd say so. Brett, with the ledger acquisition, how do you guys see that playing into your strategy at FTX.US?
Brett Harrison: (23:27)
Sure. So what makes LedgerX special especially as an acquisition target for FTX.US is that, so in order to be able to offer derivatives in the US, you need to be licensed by the CFTC. And there are a few different licenses that are relevant here. There's a DCM, the Designated Contract Market, which allows one to become an exchange. I actually host the matching engine for derivative products. There is a SEF or Swap Execution Facility, which allows you to basically print swap trades between two different eligible contract participants. And then there's the DCO or the Derivatives Clearing Organization, which is the clearinghouse of which there are very few in the US, and MGX, Minneapolis Grain, is also one of them. So LedgerX has all three of those licenses, which took an enormous amount of time and effort and dedication and constant collaboration and dialogue with the CFTC to get them comfortable with the kind of model that LedgerX wanted to do, which is this dis-intermediated model where LedgerX can offer derivative contracts, not just to institutions, but directly to retail.
Brett Harrison: (24:38)
And that fits in very well with the FTX and FTX.US strategy which is FTX is not just the matching engine. We are also a custodian, we're a money transmitter. We are a payment service, we're an NFT marketplace. We are an iPhone app. We're a web app. We have the full stack. And so what we think could be incredibly unique for our strategy in terms of bringing these kinds of products to the US masses, is that we can provide not just that whole vertical stack for spot cryptocurrency, you know Bitcoin USD, Ethereum USD, but also for these derivative contracts, which have enormous amount of interest from the institution and retail user base. And so we're very excited to be able to integrate these two platforms together over the coming months and year, to be able to kind of put LedgerX and FTX together behind the FTX front end and offer those products in our usual way to our customers.
Jon Najarian: (25:32)
The more we get a direct connection to those sorts of things, the better the liquidity pools are going to be. One of the things, folks, that I look at when I look at some of these value moves that, for instance, Bitcoin made last week that whatever three and a half billion dollars worth of liquidations. Three and a half billion dollars worth of liquidations on a $2 trillion market, or in the case of Bitcoin itself, nearly a trillion dollar market shouldn't really make as much of a difference. But it's the that these folks are using or misusing because some of that 20 to 1, 50 to 1, 100 to 1 offshore leverage that folks have, that's one of the things that I think the regulator... In a DeFi world, how do you deal with that? How do you deal with the fact that there are Deribit and others offshore that are offering that kind of offshore leverage when domestically, people can't access that kind of leverage?
Ari Rubenstein: (26:39)
Well, I would just say we're in early days. I mean, this is I think the garage band days of this industry. And I remember when we first started automating our trading systems, we were one of the first ones to connect directly to the matching engines. And with this one exchange, which I'm not going to mention, we connected right into the matching engine, I don't even think the exchange had any idea. And we were sending an obscene amount of order flow. This is in like early to mid 2000s. And I mean, it's like I cringe to think about it. And we had the server stacked up in this office overheating and there wasn't any market access rules, there were no regulations with regards to what we were doing. I think I had maybe a few million dollars in my account and we had like billions of dollars of open orders trading.
Ari Rubenstein: (27:34)
But these were our capital markets, and we ended up being part of some of the input for some of the market access rules that came about in the later part of the 2000s. And we ended up commercializing our risk management platform that would risk manage direct access flows. And I bring that up because we're in those early stages where not just in leverage, but connectivity, resiliency, the market is vulnerable and is going to be volatile. And it's up to us to get involved and bring our experience and our technology, which over time will increase the amount of liquidity available, increase the resiliency, regulators will catch up and write rules. I think the sequencing of that is going to be a lot more tumultuous than people would like. I don't think they're ready to do Vinyasa yoga with everybody in the morning, but eventually it'll catch up and the markets will be more stable and more appropriate, I think, for scale institutional players. That's going to happen.
John D'Agostino: (28:40)
John, if your business model is to target and grant excessive amounts of leverage to retail investors, I'm not sure that's sustainable long term, and I'm very confident that the rest of the market will grow to a point where it'll temper the volatility of that business model. So it's something to be careful about, but I don't know if over time as the overall breadth and depth of the market continues to grow as it's growing that that should hopefully start to be modified a little bit.
Brett Harrison: (29:15)
Even on the international platform for FTX, there are larger amounts of leverage offered sort of as a default parameter. But the average leverage on the platform is somewhere between two and three X and it varies based on, for example, the size of the position, the volatility of the asset. So one thing we're seeing is even though there's no SRO for crypto, there's no existing ground rules for how these things are supposed to happen, the exchanges are incentivized to have orderly and fair markets. And that's what enables something like FTX to be able to handle the multiple billions of dollars worth of derivative trading that's happening every day. And it's up to us to police that and enforce that. And so I think that what we've seen over time is yes, the platforms which have encouraged irresponsible leverage are not going to win in the long run and I think we're already seeing that. And the ones that do make sure that we are having reasonable risk parameters around leverage are going to last.
Jon Najarian: (30:16)
Right. Well, and for instance, some of the comparisons US to offshore leverage, Thomas, when I look at the CME and I see the open interest on the CME contracts, for instance, the derivatives, whether it's the futures or the options, it's one-tenth of what's trading overseas. And yet the spreads are much better versus what we're seeing overseas. So, that maybe plays into what Brett just said and John as well, as far as people eventually not only do they blow themselves up, but they get tired of having the spreads be wide and they need that liquidity to tighten up those spreads, to what Ari's saying, but I'll throw it to you first, Thomas.
Thomas Gallagher: (31:01)
Well, I'm having a little trouble hearing the question, but one of the things I think is coming is more regulation. And whether it's looking at margins, leverage, who's trading on platforms. Jay Clayton about three or four years ago said that a lot of these digital securities are securities and he sits on the ninth floor with the commissioners. But the people that actually have to make the functional regulatory changes to allow crypto derivatives and these type of securities to trade are on the fourth floor. It's going to take some time to figure this out. So when you talk about the margins and the leverage overseas, I think you're looking at three or four years before the regulatory regimes that actually create the trading regulations are going to be ready. So I applaud people like Sam and the guys on the panel here for buying something like LedgerX to adopt a regulated environment, because it's coming.
Thomas Gallagher: (32:04)
And I think my strategy is we bought the Bermuda Stock Exchange because they've embraced digital securities in a big way. The DABA act. Bermuda had some tough challenges the last 18 months with COVID and a big part of their economy has seized up. So we found that a welcoming place to start doing digital securities opportunities while the US regulatory regime figures out exactly how some of these products are going to be margin traded, listed and cleared. So I think having a dual strategy will help us. But I do think regulatory regimes, whether it's the CFTC or the SEC, they're going to start to develop the specifics and we need to be ready for it.
Jon Najarian: (32:50)
Ari, how much do you guys access some of that offshore? If your algorithm determines that things are too much one way or the other, do you guys access that [crosstalk 00:33:03]?
Ari Rubenstein: (33:02)
On the GTS side, it's our responsibility to access liquidity wherever it's being priced and how it's being priced. You have obviously spot and you have derivatives and our markets today, I'm talking about the traditional financial markets are very much interconnected, which is why security's prices reflect investor sentiments so fast now. You've heard things like flash crash, flash rally. All that means is that the markets move very quickly and they reflect that sentiment very quickly, because they're all connected in and fairly automated. Radkl just launched, so we're actually not live. We'll be live trading in 48 days. So we're actually not in production yet, but we intend to take that experience in pricing multidimensional instruments that are traded across the world with different technology protocols and synthesize them into prices that investors can consume. So we will be overseas, we intend to have personnel all over the world.
Jon Najarian: (34:16)
John, retail versus institutional and the liquidity that you guys provide there. Obviously the mix has been evening out a little bit, but it's still very heavy on the retail side through Coinbase. No?
John D'Agostino: (34:30)
Yeah. I mean just because there are large numbers, right? It grew so incredibly rapidly even the success of the institutional side looks small in comparison. But as with Brett, we're growing very, very fast in the institutional side, which is what I represent. You talked before about the sustained vault that exists in even the very sizeable market. Well, that has repercussions which scale helps, which scale assists. So when that price move you talked about, we're still seeing between the different liquidity pools onshore offshore for Bitcoin price inversions we're seeing, which are significant. So if you don't have the scale and the capital, because it's expensive to put capital at all these venues and to be able to access them, then your customers are not getting the benefit of best pricing.
John D'Agostino: (35:14)
So, again, I think that you're going to see the players on this stage continue to grow because they're at least from the hedge fund institutional investor side, there's significant advantages to that. We need Ari and we need Radkl to start trading a billion lots a day or a billion round turns a day because that's what's going to start to temper some of these price differentials. But until that happens, you've got to be there. You've got to be willing to give your customer access to those menus.
Jon Najarian: (35:43)
Yeah. Brett, you guys are plugged into virtually everything, both domestic and offshore in order to do exactly what John just described. Do you see that as more and more of your competitors doing the same thing? That they have, that's the price to pay to enter the game is you have to be able to access those liquidity pools and or those price points otherwise your customers say I'm not really getting the best price in this market.
Brett Harrison: (36:11)
I think it's interesting that the spot exchange is a very competitive business in the US. And there's only so much one can do with offering the same sort of suite of products to be able to trade your basic crypto pairs on exchanges. And so what we're seeing is there's all this innovation of the spot exchanges moving into different niches. And I think that there's a lot of room for Coinbase, for FTX.US, for a lot of our competitors to sort of coexist and do different things. So for FTX, it's been primarily grown up as a offshore derivatives exchange, but now we're coming onshore. I'm sure Coinbase has plans for international expansion, and we welcome that because the international markets are not as mature and well developed and well organized and self-regulated as we have been in the US, in general. And being able to bring more of our sort of like-minded competitors into the space on the foreign side will eventually help those markets mature and be seen as important institutions globally, and not treated as something that is the wild west or something like that.
Brett Harrison: (37:22)
So I think that it's going to be an important part of the development there.
Jon Najarian: (37:27)
Thomas. I mean, again, I applaud you for the moves you guys have made so quickly into things, into liquidity pools like Pyth. Do you see these other 16 or the other exchanges that you regularly compete with following your lead very quickly? Or can they not because that technology issue that we discussed earlier?
Thomas Gallagher: (37:51)
I think that-
Jon Najarian: (37:52)
And we're in our final minute, by the way.
Thomas Gallagher: (37:54)
Yeah. I think that we have some advantages that we can pivot quickly. The other thing is I don't have a huge data business. So the New York Stock Exchange and NASDAQ and SIBO, everybody's complaining about the cost of data. I don't have that problem because we don't have a data business. So being able to distribute our equities pricing vigorously with putting a lot of technology behind it is where I think we gain our advantage.
Jon Najarian: (38:21)
All right. Well, ladies and gentlemen, if you wouldn't mind giving these gentlemen a hand for a great crypto panel.