The Future of Finance: Bridging Traditional Stocks and Crypto

With crypto Week well underway, all eyes on the latest updates coming out from Washington DC.

Now the House Speaker had to cancel votes on crypto legislation last night after 13 Republicans expressed caution over the Genius Act and the potential creation of a CBDC.

But Trump stepped in and says he has persuaded the holdouts to vote in favor of the crypto bills.

Early Monday, Bitcoin blew through 120,000.

New record highs above 123K in past Bitcoin bull run, small investors led the charge, but this time there's a new buyer in town.

Corporations are now stockpiling Bitcoin, and for crypto enthusiasts, a watershed moment, Robin in trying to break down walls between traditional stocks and blockchain tech, announcing users can buy crypto-like versions of shares in companies like SpaceX and OpenAI.

For now, Robin Hood's. shares are only available in Europe.

Well, joining me here in New York City at the New York Stock Exchange is Kai Wu, founder and chief investment officer at Sparkline Capital.

Kai, great to have you back.

Thanks for joining me.

Thanks for thanks for having me back.

Well, it's been a very eventful week in the crypto landscape.

We kicked off the week with Bitcoin clearing those new record highs above 1200.

We are slightly below that level today, but tell us about some of the.

Actors that you're watching when it comes to crypto.

Yeah, look, I think the crypto market's pretty bifurcated.

Of course there's Bitcoin which has separated itself from the pack, and then there's basically everything else.

I think Ethereum and Solana you put into the other layer one category, and then there's the kind of long tail of the old coins that have a wide variety of different use cases from like centralized exchanges to media entertainment, AI, things like that.

And so.

It's important to track not just the Bitcoin price but also the price of these other segments because they, you know, give exposure to totally different factors in the market.

Yeah, absolutely.

The other cryptocurrencies aside from the majors are also moving the crypto markets as well, but we are here at the New York Stock Exchange, so I want to talk about equities in particular tokenized equities.

So for some of us, we may have heard about tokenized equities in the form of IPO companies say SpaceX or OpenAI, which are not publicly listed as of yet, and overseas and other markets that want access to markets such as the New York Stock Exchange and companies listed here, tell us what's happening.

This is not just a new concept, is it?

Yeah, no, look, for those of us in crypto, we've been talking about this theme of the convergence of traditional finance and crypto for years now.

And you know it's been, you know, to be frank, pretty slow, but I think over the past 1 or 2 months we've seen a bunch of major announcements that have, I think, really rekindled a lot of excitement in terms of this trend finally starting to play out.

So you mentioned the Robin Hood announcement, which was, I think just a few weeks ago, and so basically they are going all in on crypto and there are a ton of things that were announced.

I think the most relevant for tokenization is.

They are now rolling out, as you point out, tokenized stock trading in Europe with a plan to expand to the US.

They built their own layer 2 to facilitate all this and it's, you know, definitely interesting, right?

Like you've got to think about it in this way, which is we're in the New York Stock Exchange.

The big theme of last year was the rollout of the Bitcoin ETF, right, which is effectively, if you think about it, a traditional wrapper on a crypto native asset, Bitcoin in this case, allowing $130 billion.

Now of traditional assets and fidelity brokerage accounts to access these assets we're now seeing is the reverse taking traditional financial assets and wrapping them in crypto wrappers to put them on.

And what's interesting to me is it's less so much like what's going to happen in the next month.

Like it's a limited market that's currently trading and I'm on the New York Stock, so I have to say this, but you know the markets work pretty well right now.

They're pretty effective right now.

I think where the biggest delta will be is.

As you point out in private securities.

Now there's obviously regulatory issues that are being worked out in DC as we speak, and that could be a big unlock.

And then the other thing I think is if you think you listen to what Vlad the CEO of Rao talked about, he was really bullish on this idea of like the next, what's the next move?

So once you bring these assets on chain, what can you do with them? collateralized lending and borrowing, you know, self custody, and potentially even just the formation of DI applications that can trade these assets once they're on. ramped on.

So I think that's what we're most excited about is kind of the next phase out.

This is obviously just a kind of incremental improvement from a UI standpoint, but obviously under the hood it's, you know, potentially a big, a big difference.

Yeah, that's a great summary there, Kai.

And with opportunity also comes risks.

But in terms of the impact and what this means for retail investors, what are you keeping your eyes on and what is your timeline here?

Yeah, well, my timeline as an investor is like 5+ years, so I'm playing the long game here and my investors are too, you know, we view this technology blockchains and crypto as being transformative over a very long time cycle.

I think one of the challenges for, you know, crypto investors is just a massive volatility, you know, you have 10x gains and then 80% losses and so if you get Kind of wrapped up in those moves, you know, it makes it challenging just from a psychological standpoint and stay in the game.

So we're more long term focused.

A lot of what we track is just the underlying fundamental metrics on chain adoption, you know, daily active users, active developers, and those things continue to be, you know, moving on pace, total value locked, you know, we.

You look at stablecoins, another form of tokenization, tokenized dollars in this case, 20 $40 billion for basically $0 a few years ago.

Circle IPO, you know, a six bagger in in 2 months, right?

So like we're seeing a lot of excitement around this theme of tokenization, and you know we think that the energy.

Eventually translate into the crypto crisis, which, you know, to be fair, are just starting to now kind of recover from a lot of the trauma that has been experienced in the past year or so.

Well, Kai, great to have you here back at the New York Stock Exchange.

I look forward to continuing this discussion.

Always great to have your insights.

Thanks so much.

Thank you so much.