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00:00I do want to start with the price action. Bitcoin fell about 7% to just about $59,000 on
00:07Friday.
00:07It fell below $60,000 for the first time since the president's re-election in 2024.
00:13What is your view about what's going on here? Yeah, I think one of the areas that people look
00:19at is correlation of BTC against the markets, against gold, etc. I think short-term flows are
00:27pretty much very noisy. And then long-term holding base has been continuing to grow. And I think
00:33that's the signal that you have to focus on. And I think volatility is a feature, not a bug in
00:37this
00:38market. So when you see real volume show up, you find out who it is and who owns that part
00:43of the
00:43infrastructure. But the price action back and forth, depending on what it looks like, I wouldn't
00:50look at anyone who's, especially a trader and what we do in our market, trading on that candle. I think
00:56what is really important is like, what does the rails represent and whether, and it's not about
01:01whether it's up or down 10% or 50%. So there's been a little bit of chatter in recent weeks
01:06about
01:06some of the mega cap tech IPOs from SpaceX. We're going to talk about that in just a second. Perhaps
01:12Anthropix, forthcoming IPO, OpenAI's forthcoming IPO, drawing investor interest, at least retail investor
01:19interest away from crypto. Do you buy into that at all?
01:24You know, I think one of the, if you are a risk manager, so think of yourselves as like a
01:29Jane Street or a
01:30Citadel, you're thinking about arbitrage plays. That's on one side of the house. If you're another risk
01:34manager that is employing, you know, billions of people's assets. And if you look at the total amount for
01:41someone like the T-Rows of the world, where they all have trillions that they're allocating, they think about risk
01:46management in a different way, which is like, should we be in commodities? Should we be in equities? Should we
01:50be in other
01:50assets? But specifically in equities, they'll think about, should we be in the AI race? Should we be in the
01:55semiconductor race? So on and so forth. And I think, you know, part of what has happened over a period
02:01of
02:01time is that a lot of those same allocators have also thought about, okay, well, should we be in BTC?
02:06Is that
02:06actually pegged to the tech ecosystem? Is it a technology play? Is it an AI play when you've seen a
02:12lot of the
02:13miners move into that direction? So what ends up happening is that you've seen this pull of, you
02:18know, SpaceX, Anthropic on the AI side. And again, these are the most valuable companies in the world
02:22and frankly, in our generation. And as they're moving into this ecosystem, you're seeing a
02:28reallocation of capital moving in that direction. However, one thing that I think people forget about
02:33is that there's a lot of capital opening up where some of these same allocators were in the private
02:37market are now staying in the public market and can allocate more into these companies. So I would
02:42actually advocate that you're going to see a larger flood of capital, not necessarily a recycling.
02:47Oh, that's an interesting, that's an interesting view. We'll have to wait to see if that happens. You
02:51mentioned the rails and sort of distinguishing from what's going on on the rails. And that's kind of a
02:55perfect segue. How do you draw distinction between the boom that's happening within the crypto industry? So
03:01tokenization, stable coins, some people might even throw prediction markets into that category with the
03:07sell-off that we're seeing when it comes to some of these tokens.
03:11So in the late 1800s, if you saw the number of companies that went public from then to where we
03:17are today, 90%, almost now 99% of those assets today no longer are listed, right? Those companies
03:24don't exist in many cases. And I think when you see in the crypto ecosystem, there are assets,
03:29depending on how you define them, that have listed on some exchanges, decentralized or centralized,
03:33they may not exist. And some of them have stayed, right? So there's a power law for the ones that
03:38stay and they continue to compound, let's call it the top 10 or the top 25. This exists in private
03:43markets. This exists in public markets. This exists in commodities markets in some cases. And you're
03:47seeing this happen in the crypto markets. When you see a convergence, I think you're starting to see
03:52the world change more in that like the access is what gives people why they want to be in crypto
03:58in the
03:58first place. So Bitcoin was access, Ethereum was access, all coins were access, meme coins were
04:03access. And now we're seeing tokenized assets as well as real world assets as access. And so more
04:09and more people are coming into the ecosystem that have worldwide 24-7 capabilities. And so the question
04:14we all ask and what we're building towards is, okay, what does that access mean? How do you think
04:19about risk allocation? And how do people participate in this moving forward? And that's what we've been
04:23building. But more importantly, you're seeing that happen regardless of what we build in the
04:28on-chain markets or the DeFi markets. Some of these concepts that I'm explaining seem complicated,
04:34but I think what you're really talking about here is people just have access to assets. So they have
04:38the ability to roll off between a stable coin or a crypto asset like BTC or ETH. And now think
04:45about,
04:45okay, well, do I want to move some of these assets and roll them 24-7, seven days a week
04:50into a SpaceX or an Anthropic or an OpenAI in the future? So let's talk about SpaceX and access
04:55because last week you said that eligible Kraken customers in some regions of the world will be
05:00able to get access to that SpaceX IPO via X-Stocks. It's Kraken's parent company's tokenized equities
05:06offering. How exactly does that work? So what we did is we built a permissionless 24-7 system. We
05:15already built an exchange and Kraken is that exchange. And so X-Stocks is our infrastructure
05:19platform where we don't just use it ourselves as our own customer, but we also distribute it with
05:24other exchanges that are worldwide. And through that partnership, you have 24-7 trading, you have 24-7
05:31liquidity, and you have the ability for anyone in the world within the regulator purviews that we have
05:36with our partners to be able to have access to that. That's very different than a bunch of intermediaries
05:41between each country, each market, where they're charging 10, 20, 30 percent in order to get access
05:46to this IPO. We don't. And we allow anyone to be able to do this permissionlessly within any wallet
05:52in a lot of these jurisdictions. And so, again, when I say these words, I go back to what's most
05:57important is that we're giving people access all over the world to be able to participate in the
06:01American economy, American companies, very similar to what you've seen stablecoins do, which is
06:06people getting access to U.S. treasuries. So it's a vote towards the types of companies people want to
06:12have access to, no matter where they are in the world. Well, SpaceX is an incredibly sought-after
06:16offering for retail investors. It's also competitive. It's also complicated, I think
06:23some people would say. How does this help rather than confuse retail investors?
06:30Well, one, the S-1 is out there. So it's available for anyone to be able to take a look
06:34at the company,
06:35how they've been performing, what the cap stack looks like, what their earnings look like today,
06:39what it may look like in the future. It's up to everyone else to be educated. So we're not in
06:44the
06:44business of recommending it. I think the business that we're in is to be able to have people have
06:49access to any asset that they want to, regardless of what that asset may be. And so SpaceX is being
06:55one of them. Yes, it's one of the most anticipated IPOs this year. We'll have a few more later on
06:59this
06:59year. And we want to be one of the venues for choice worldwide for people to be able to have
07:04access
07:05to it. But this is what people do, right? They want to be educated to be able to vote
07:10towards investing into a company. They want to be able to be alongside the upside of what that may
07:15or may not look like in the future. And so having a company go public and having access to it,
07:20regardless of where you are, on the one side, you can say, hey, it's an IPO frenzy. On the other
07:24side, you can say, hey, it's access. And so if you looked at the 2000s and from 2000s to 2010s,
07:31if you weren't in some of the most basic companies in technology that became the largest
07:36compounding companies in the world, you missed out. And so there's going to be a power law to
07:40these types of companies. From a recommendation standpoint, I think people should do their own
07:44work. But the fact is that they have access on chain or on DeFi or through these venues,
07:49regardless if that's ours or anyone else in the United States. But worldwide, being able to choose
07:54that company is really important. And I think probably one of the most exciting things that I've seen
07:58in a long time. We want to talk, too, about the new partnership that you just announced with FIFA.
08:03We learned that Kraken has become the official crypto exchange supporter for the FIFA World Cup
08:072026. It's about to get kicked off here in North America. What does that partnership do to you and
08:13do for you? And why align yourself with an organization like FIFA and the interest around the World Cup?
08:19So one of the things that we've done at Payward and Kraken as a whole has been,
08:25how do we align ourselves with what I would call permissionless brands or permissionless
08:30sports or permissionless activities worldwide? So someone who's in Argentina or someone who's in
08:36Southeast Asia or a lot of our constituents who are in Europe, they love all types of sports.
08:42And so FIFA specifically to us represents that delivery where you have a permissionless way to
08:47be able to watch. You have a permissionless way to be able to participate. And so we wanted to be
08:51able
08:51to partner with a partner that believes in that same philosophy. Now, what is that philosophy?
08:57Well, for us, it's open rails, it's open access, it's financial global system that we want to be
09:03able to have everyone participate regardless of what that asset may look like. And so when you think
09:07about programmable money, programmable assets, that's what we want to be able to stand behind.
09:13And for us, choosing FIFA didn't happen overnight. A lot of what we wanted to be able to explain was
09:19this is what we believe in. This is what we started believing in when the first Bitcoin white paper came
09:24out. And then we asked them rather than them asking for us, like, how do you adhere to our values
09:29of
09:29what we want to be able to build? And so I'm really excited that they're on the same page of
09:33what
09:3324-7 instant settlement global access looks like. And that's why we wanted to plant our flag with them.
09:39Well, speaking of what you've been building, got to ask, as I do whenever we speak, Arjun,
09:44about the status of your own IPO plans. Our Bloomberg News team reported last month when
09:49you announced layoffs that the IPO may not happen until the end of this year, perhaps even early
09:552027. Has the timeframe changed for an IPO for you? Yeah. So just to be clear, one of the things
10:02that
10:02we do at Kraken and then Payward, our parent brand, has been focused on performance. How does the
10:10company perform and how do we make it better over time? And that's something that we started more
10:13rigorously. Two is how do you build a durable business in order to do that? And so what are
10:18your sources of revenue? And then how do you bifurcate it across not just trading, but banking and
10:23financial services? And we've done that. And then last year, we announced that we had
10:27confidentially filed. And so that's the way in which you should think about what we're doing at
10:31Payward and what we're building out. So there's banking, and then there is trading in terms of
10:36the assets that we have underway. How does this sell off, like external factors, how does that play
10:42into the timeline? You know, we're just focused on building our company for the long haul. So in
10:50terms of timing, it's not something that I could speak to today. As far as layoffs go, are you done
10:55with those for now? Well, the only layoff that we ever did in the company was when I came in
11:01roughly about two years ago. And it was in a way in which we thought about how do we want
11:06to think
11:07about setting ourselves up foundationally as performance first. But since then, on average,
11:12we have focused on performance cuts. We've also added more folks. From the moment I came on,
11:18I think we're roughly about 2,400. Today, we're about 3,100. So net gains has been continuing to be
11:23higher. I think what's really more important is like what type of company you want to be,
11:27however you fit, and what's the culture that you're building. And we're very focused on performance
11:30as we continue to grow. Well, how connected, or maybe a good word would be leveraged,
11:36like how leveraged are you to external crypto prices, like the price of Bitcoin? How much does
11:42that matter to the health of your business? That's a great question. So when we started,
11:47that's all we had. So we were 100% leveraged to Bitcoin. But then over time, you had Ethereum,
11:53and then you had alternate coins on top of that. And then we had meme coins. Now you can make
11:58the
11:58argument that that was all correlated crypto assets. Then over time, a lot of our customers
12:05deposited fiat, and then they deposited USDT, USDC, other euro stable coins, and that's continued to
12:12proliferate. That's a pretty large and significant source of our deposits worldwide. And as I'd mentioned,
12:17we do trading and we do banking and financial services at the same time. And so when you add
12:22all these pieces, and then recently tokenized assets are becoming a larger and larger portion
12:26of our assets. So you add the bifurcation of what we've built, you're able to do between trading and
12:33banking. Within trading itself, we do spot margin, futures, and derivatives. But a lot more of what
12:39we've done has been TradFi. So we've listed all the equities, we've listed all the commodities,
12:43one of CME's largest partners, retail partners in the United States, and that's global.
12:46And so globally, about 60% of our revenue comes outside the United States. And then so you can
12:51think about it from a micro and macro market. And in our last financials, even though we're a private
12:57company that we released for the last quarter, we grew when the market was down. So I think over
13:03time, you'll see that we'll be less cyclical with the crypto markets and we'll be cyclical with the
13:09macro markets.
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