Speaker 1:
From the library of the New York Stock Exchange at the corner of Wall and Broad Streets in New York City, you're inside the ICE House, our podcast from Intercontinental Exchange on markets, leadership and vision and global business. The dream drivers that have made the NYSE an indispensable institution of global growth for over 225 years. Each week, we feature stories of those who hatch plans, create jobs and harness the engine of capitalism right here, right now at the NYSE and at ICE's 12 Exchanges and six clearing houses around the world. And now welcome Inside the ICE House. Here's your host, Josh King of Intercontinental Exchange.
Josh King:
As we close the books on a great first year of ICE House podcasts, 2018 has brought its share of surprises, none less than the brutal bear market for Bitcoin. As I record this, the price of one Bitcoin stands below $4,000, a far cry from where it stood at its height a year ago, then scratching 20 grand. For those who got in over the last year, buying your Bitcoin in whatever manner worked for you, here's hoping 2019 will begin the road back. But what if your major player in Bitcoin, perhaps the industry's most anticipated institutional solution and price agnostic. When you open for business, which Bakkt will do pending regulatory approval under the leadership of CEO, Kelly Loeffler, it doesn't really matter where the price is, as long as those who want to actually put Bitcoin to work can now seamlessly buy, sell, store and spend it.
Josh King:
This is the profound promise of crypto, not so much an investment to buy and hold, but rather a currency to use, to buy and sell like the dollars in your wallet. The value of a buck relative to other assets may nudge up and down over time. But it's real purpose is to give to someone else to get stuff you want. And while Bakkt is quick to remind those who followed the venture hatched by Intercontinental Exchange, since it was first announced that it was working with Starbucks, inspiring all those tweets about buying a mocha frappuccino with now 0.002 of a Bitcoin, you can do the math equally exciting as pondering friction free peer-to-peer exchange involving massive movements of value within a secure digital asset warehouse. I often think of Bitcoin, not as a currency for buying coffee, but rather leasing commercial aircraft free from the big financial players taking their cut.
Josh King:
When you think of it, the potential efficiencies are enormous, whatever the actual price of a coin. I first started hearing about Bakkt from Kelly and its ambition to launch a federally regulated one day physically delivered Bitcoin contract earlier this spring, which led to that big announcement in August. So as you are thinking about what the new year will bring, we bring you this special conversation at CoinDesks Consensus Invest conference in New York City, between Kelly Loeffler, along with Jeff Sprecher, the founder, chairman and CEO of Intercontinental Exchange interviewed by the MIT Media Labs, Michael Casey author of The Truth Machine: The Blockchain and the Future of Everything. That's right after this.
Speaker 3:
Arlo's a next generation smart home company that provides a super simple do it yourself, home security solution with up to 48% market share and class leading internet technology. We're looking at new products and even grow internationally. The NYSE obviously has a tremendous history. The way that they actually bring the stock to market, there was a human element that stabilizes the market and you could see that in the stock opening today. Having a strong partnership to actually bring Arlo as a public company was really important to us. You only get to do this once.
Josh King:
We're about to join Kelly Loeffler, Jeff Sprecher and Michael Casey on stage at the Marriott Marquis in New York City. As you'll hear Kelly and Jeff tell Michael, they took their first meeting on the idea of a digital asset ecosystem all the way back in 2014. Thinking about disrupting the crypto world like they've done in energy oil and a range of other commodities and equities exchanges for the last 20 years. And after all that time on the drawing board, there's huge anticipation for what will happen when the warehouse opens for business. Let's join the conversation in progress at Consensus Invest. The title of Jeff and Kelly's keynote appearance was institutionalizing crypto, Bakkt and the race to win Wall Street. Here's Michael Casey.
Michael Casey:
Pleasure to have you both here.
Kelly Loeffler:
Thank you.
Michael Casey:
And I just want to kick off the show with, I just want to start with a number it's 3722.55. This is the BPI that I just last read. As Nolan mentioned, last time we had this event a year ago, we were actually piercing up through 10,000. We then hit 19,000 for Bitcoin. And then when you and I met Jeff in February Boca Raton, I think we were back around 10. Does this price matter to you guys is what I'm trying to get at here? You're about to launch this important new exchange at a time when the Bitcoin market looks quite different from when you were first pursuing this.
Kelly Loeffler:
When I think about what we're doing at Bakkt what our peers in this space are doing, what all of you in this room are doing. I think about the headlines today, will digital assets survive? And I'd say the unequivocal answer is yes. If you look at the price discovery process, I think that's what we're really focused on. The price is merely an expression of supply and demand. So take Bitcoin, a known supply, a variable demand. The price is being expressed, but there's a lot of missing infrastructure and use cases. And that's what we're doing at Bakkt to kind of backfill for this asset class that's grown so quickly. We couldn't be more optimistic about where things stand today, price not withstanding as an exchange operator. It's not our objective to opine on price.
Jeff Sprecher:
Good morning as well, maybe by way of background, we're the largest exchange operator in the world. And we price all kinds of things on our exchanges. We set the world's price of oil. We set the world's price of various interest rates. We set the world's price of various commodities. So we're kind of agnostic to price. We see prices every day moving around, but what we do is develop systems where there can be transparent and confident price discovery. Michael rattled off a number that had two extra digits as if that is the price. I'm more skeptical. I don't know whether that price was manipulated or not. I don't know whether that was the price of a Bitcoin or whether somebody bought 25 cents worth of bit coin.
Jeff Sprecher:
And then the multiplication effect came up with that price. I don't know whether there are people that are arbitraging between various technologies and therefore pushing prices one way or another in order to exploit the operation of the various exchange technologies. So partly what we trying to do is to create a regulated institutional price discovery contract that people could have confidence in. That would say that is the price.
Michael Casey:
Okay. And when you say people here quite specifically, I think with targeting institutions, this is the holy grail for some people in this space, at least. Others who don't want to have the institutions coming anywhere near this, but ultimately this is the game. What are you doing exactly? Tell us a little bit about the Bitcoin futures that you're offering for example, and what exactly are you offering to these institutions that say a Coinbase or another can't offer at this point.
Kelly Loeffler:
When we started developing contract design for Bakkt, it's a daily physical delivery Bitcoin future. We looked at what institutions needed to trade certainly first and foremost is regulatory certainty. And that's why we're starting with Bitcoin. Bitcoin is the only digital currency or digital asset today that has federal regulatory oversight by the commodity futures trading commission or the CFTC. Starting with that digital asset, the second part of it was adding secure custody or as we call it warehousing. Thirdly, the price discovery process, a trusted mechanism for publicly discovering the price free from fraud and manipulation and all the things that go along with that AML, KYC. And really creating that institutional infrastructure that doesn't exist today that we think is a big opportunity for institutions to come in in a regulated way that they access their other markets through. So the way they trade crude oil, they can trade Bitcoin.
Jeff Sprecher:
You know, Kelly mentioned that warehousing is an important part of what we're doing. If you happen to read the Wall Street Journal over the long holiday weekend, which I suspect nobody did other than me. There was about a half a page article in the journal about the fact that we shut down a coffee warehouse, because we thought there was manipulation and problems in that warehouse. Part of what we can do as a regulated exchange that has trading clearing and the settlement in warehousing is actually put a regulatory oversight over that warehousing that regulatory oversight brings confidence for institutional investors. They've seen us take action in things like coffee. Confidence building is really about your firm's ability to perform and build trust, which takes time. And I think we have a lot of trust built in the institutional world.
Michael Casey:
It's interesting because the crypto concept of trust and in certainly the coming from the community, the initial community here, it's a focus in math. And therefore this game that everyone's been focusing on many respects in terms of how to win the institutional client has been custody. And what I think the early crypto community would say is like, "You got to get the math right." You really have to have the very, very best, multisig technology out there and so forth. What you're telling me is, in fact, it's a more complex picture. It's a whole lot of other factors that would define custody as a secure concept, I suppose. [crosstalk 00:10:25].
Jeff Sprecher:
Yeah. I think we've all known, and your book actually describes a number of instances where there's been theft and manipulation and fraud in the crypto market. So math can be defeated. There will be problems in any human institution. And really what exchanges do is we have these things called clearing houses. What a clearing house is there for is to manage the day to day problems that come up in human institutions. And those things have rule books, but beyond following the rule books, which is just a different kind of math, maybe someday that rule book will be written into a smart contract. But it takes humans to interpret it, the out cases that you failed to put into the math.
Michael Casey:
Sure. Now, but the engineering of this product does take a lot of work. You've been at it for a while.
Kelly Loeffler:
We've been at it for a long time. Jeff and I had our first meeting in this space in 2014. And we've been thinking about how to enter the space, talking to institutions. As we announced Bakkt in August, we put out an ambitious timeline to launch this year. As the pipeline filled up with customers, particularly around holidays and the onboarding we've really aligned the product with the existing workflow. But to give it the best chance for success, we just pushed it to after the holidays, to give more people time, to get ready to get on board.
Michael Casey:
You're saying there is a lot of interest here. Can you give us some picture, some profile of what types of institutions are knocking on your door at this stage.
Kelly Loeffler:
At ICE, we're the largest exchange operator in the world. And we operate a dozen exchanges across U.S., Europe, Asia, Canada, clearing houses. So we're connected institutionally around the world to the largest traders of all asset classes. So it's that customer base, it's the new emerging crypto trading customer base. And then we're getting inbounds from folks that we might not have reached out to traditional asset managers. Banks are definitely doing work to learn about it. And so it's been really encouraging, but that's not to say it's not be a long lead time in terms of the learning curve.
Michael Casey:
I spy the ginger hair of my friend, [Kaytln Long 00:12:41] Caitlin long over there in the corner. [Kaytln 00:12:43] has been quite aggressively asking questions about whether or not these clients that you're referring to are going to potentially build some sort of systemic risk in system. If there's leverage that gets built up, if there's rehypothecation of assets. And then in the event of a fork, it proves impossible to buy back those assets to cover whatever positions and collateral has been pledged in this process. You've answered this, but maybe give us a sense of why that isn't a concern if that's presumably what your position is?
Kelly Loeffler:
First of all, it's a fully pre-funded product. Bitcoin are maintained in segregated accounts. And in terms of forking, we have a policy that we would apply just as we apply policies across all of our regulated businesses. And we do have a forking policy. So the area that you see, some of the things that you're mentioning, and some of the concerns we've actually designed Bakkt to counteract those. And you see some of that in the OTC and cash market in terms of leverage rehypothecation and so forth. But certainly Bakkt is really designed to remove those headline risks.
Jeff Sprecher:
We see the cash market actually developing the things that you're mentioning as Kelly pointed out that that suddenly there's a lot out a leverage in the system. Suddenly the emergence of stablecoin has allowed people to move positions quickly back and forth arbitrage differences between technologies and protocols of various exchanges. And as a result of that, lending has increased against crypto assets. I personally think that once you have regulation, where you have essentially a public rule book, any changes or evolution that will be made, and there will be evolution, you're going to have to be in concert with the entire industry, because it's going to involve ultimately the approval of the government. One of the things I'm not sure people realize about at us is that we're going to trade this product and then we're going to send it through our clearing house. A clearing house guarantees delivery and payment.
Jeff Sprecher:
And the way it does that is, as Kelly mentioned, with respect to crypto, is we're going to have everything prefunded at the clearing house. So there'll be no leverage risk in that clearing house. But the clearing house is actually governed by a risk committee. The risk committee is made up of members of all of the major banks and brokers in the United States. So the approval that we are getting is the institutional community of the United States has already approved all these rules and what have you. And now we've been able to take that body of work to the U.S. government and say, "You've got the buy-in of all these major institutions. We'd like you to validate this rule book." And that's the process that we're going through right now.
Michael Casey:
Now I need a bit of a disclaimer here, because I'm going to just tell these people that I actually received a gift from you at some point, this is not because he was trying to buy [crosstalk 00:15:38]-
Jeff Sprecher:
I received a book from you.
Michael Casey:
You received a book from me? Actually, we had our roles reversed at some point, you were interviewing me on stage at a fireside chat and as is standard, there was a nice gift that was given to me as the speaker and I'm wearing them. And the reason I'm doing this is because actually for once I actually got a speaker's gift that I thought was actually pretty useful cuff links. But what's interesting about them is that these cuff links are embedded with wood from the floor of the New York Stock Exchange. What I like about this is, this is like the Jeff Sprecher of old, it's the guy who was the disruptor came out of nowhere with an electronic exchange and then ultimately took over the oldest, most storied exchange in the world and turned it into an electronic trading system that has a floor now as a kind of an artifact. And sort of ripped up the wood-
Jeff Sprecher:
And a cuff link-
Michael Casey:
Put it in a cuff link, right?
Josh King:
You've been listening to the first part of MIT Media Labs, Michael Casey, in conversation with Kelly Loeffler of Bakkt and Jeff Sprecher of Intercontinental Exchange recorded live on stage at the Consensus Invest conference in New York City. More of Michael's conversation with Kelly and Jeff right after this.
Speaker 7:
Cushman and Wakefield is one of the premier brands in the commercial real estate services space. We have 48,000 professionals around the world in 400 offices in 70 countries. This company, a hundred and one years old, if you can imagine it's never been public. There's a reason they call the NYSE the big board it's a great home for companies like us, big companies with big ideas. Cushman and Wakefield now listed on the NYSE.
Josh King:
Back now Inside the Ice House. Let's pick up where we left off at the Consensus Invest conference. Here's Kelly Loeffler and Jeff Sprecher in conversation with Michael Casey.
Michael Casey:
Here you are now, who are you representing? This is the community who... At least some of this community who see themselves as the disruptors, the disintermedians, the ones who are supposed to take down these old institutions and get rid of the regulatory model and basically transform this into a truly peer to peer system. You're now sort of in their eyes, I would imagine representing the old guard, you're the incumbent. What do you say to [crosstalk 00:17:54].
Jeff Sprecher:
I'm probably the oldest guy in the room. So that may be fair.
Michael Casey:
Between you and me it's going to be a battle, but the thing is let's see what is your... Are you going to innovate? I suppose is what I'm trying to say. How do you drive change when you're in effect representing the old God, the institutions, they're your clients after all?
Jeff Sprecher:
Yeah, so I'm a serial entrepreneur and other than two years where I work for somebody else, I've always started companies. And so I have a great affinity towards what a lot of people in this room and in our broader ecosystem are doing with this technology. And so we wanted to be a part of it. To put it in context, the New York Stock Exchange was started in 1792. Okay. 1792. It was started just after we started this country. I'm sure there was a period when people were like, "Oh my God, the Telegraph is going to put this thing out of business. Oh my God, the telephone is going to put this thing out of business." We have these great photos of these big computers with big tapes on them and what have you that were surrounding the floor of the Stock Exchange when the Stock Exchange adopted computer technology.
Jeff Sprecher:
Now, today, most people are buying shares of stock on their phone. These institutions don't so much get disrupted as the disruptors, cause the institutions antenna to go up and say,"Oh my gosh, there's a threat on the future. And maybe we better move." And so what you're seeing is us adopting a lot of what people are working on, looking for the best use cases for our particular business and institutionalizing the work of a lot of entrepreneurs. I happened to buy the New York Stock Exchange because it was slow to adopt technology. And the first thing we did when we bought it is put in all new technology. So it didn't go away. It didn't get disrupted in the sense that it went to zero. It got disrupted in the sense that a new management team came in, we enjoy running it. So I don't want a new management team to throw me out. Part of this is, we've been, as Kelly mentioned since 2014, pretty deeply involved in blockchain and various new innovative database technologies.
Kelly Loeffler:
If I could just add, because a lot of what Jeff talks about is what we call in the exchange space like social change, changing the way people do business and changing their workflow, but with technology and it takes a lot of acceptance. And when we think about digital assets, a lot of people call them an asset class. Okay. That's a way of institutionalizing an asset class, but it's really a technology. And if you think about what it is, this is a technology shift and it really felt like ICE should be there because technology at our core is what we do.
Michael Casey:
I actually like that we're framing it because obsessing with the price as inherently people in the trading industry do is sometimes to miss the point that the reason for the exchange is actually, as you said earlier, not necessary to take a position on the price, but rather actually to improve discovery. And therefore that exchange is not the end here, it is a facilitation of what we really want to see happen, which is all of the cool things that the technology could bring. That there are use cases that could be built upon this, if only we had a more stable and predictable price environment. So it's the servicing of the price that I think is quite interesting here.
Michael Casey:
So in that light, given that one of your partners in this is Starbucks, immediately that was one of the most interesting stories that popped up to me when the Bakkt announcement came. It's like, okay, what does Starbucks want out of this? They have their own loyalty points program, one of the most currency effectively. And you can't necessarily speak for them, but can you talk a little bit about what that long term roadmap might look like in terms of use cases that could be built on the back of the exchange function that you're starting with?
Kelly Loeffler:
Yeah. It's a really important question. And it's been tremendous to have Starbucks and Kevin's support. And when we started thinking through use cases for digital assets and Starbucks was doing the same, we couldn't think of a better partner to have really our first use case. And it's very intuitive. When you think about Starbucks having probably the most widely distributed payments app in the United States with probably well over 15 million, by this point. I know that this summer that's where it stood. Such an innovator in consumer experience, retail payments, and to be able to give their consumers more choice and options about how they pay and ordering through their app, paying with Bitcoin. What a great use case. And since that announcement we've heard from others that want to do that, obviously we're heads down with Starbucks right now and that's our focus, but use cases are absolutely critical to this. And I think that's really what this technology will benefit from as we layer on more use cases like that.
Michael Casey:
You mentioned earlier, you've been in this since 2014. I remember in fact, I was at the Wall Street Journal at the time and reporting on this news that New York Stock Exchange was investing in Coinbase at the time. And it was a really interesting moment at the time. Wow. Again, old meets new and this sense that somehow something big was happening in the crypto space simply just by the association of those names. And you're now essentially going into competition with Coinbase. So you're still investors, you still have... Can you talk a little bit about that relationship? And of course it has been noted that Adam Watt, one of the employee number five is now working for you. You guys still friendly here, or what's the story about the Coinbase [inaudible 00:23:28] relationship?
Jeff Sprecher:
Well, when we met Fred and Brian they were literally two of the smartest young entrepreneurs I've ever met in my life. It was easy to invest in their vision. They gave confidence to me as an entrepreneur, that they knew that this was an evolving technology. I'm not sure we're in competition with them. When you start a company, it's a bit like jumping into a river is how I think about, my life experience, particularly now at Intercontinental Exchange. You can fail by trying to row against the current. And a lot of entrepreneurs do fail. They've got some vision, the river's going in one direction. They say, "Oh no, that's wrong. I'm going the other direction." And they end up going the wrong way and drowning. The river's going to take you as an entrepreneur someplace. Successful entrepreneurs learn to move left and move right.
Jeff Sprecher:
And when there's a fork in the road, choose the right path. That's an attitude, it's a skill that can be learned actually. And we just saw that they had that and their performance since then has demonstrated it. So I don't know which fork down the river they're going to choose. I don't know where our river's going to take us. I don't know that we're necessarily competitors. I think in a weird way by both of us being successful in this area will validate the math, the technology, the infrastructure. I wish them really well. I hope they do well. And I'm actually confident they will because I have a lot of confidence in the individuals. Great companies are built by great people. You can have some really dumb people and some really great businesses and they wreck them. And you can put some great people and some old businesses and they can revitalize and change and take them to the top. And I've learned that by working with a lot of great people.
Kelly Loeffler:
You mentioned Adam, may I just say that Adam's a reflection of what they call the Coinbase mafia, if you will. Look what he did at Coinbase and it speaks highly to Coinbase and what they built. So having more like-minded people in this space, like a Coinbase, like a Bakkt and others, I think it's just critical to the development of the infrastructure here because that's really what's lacking.
Michael Casey:
So obviously Coinbase, aren't the only competitors you have in this space. Now there are obviously bigger names, more traditional names. And we had around the time of Invest last year, the news of the CME and the CBOE launching their future exchange. Just today, there was a report that NASDAQ is exploring Bitcoin futures as well. What's different about yours. You have a daily future. It's just a one day, that's this one simple single product, but of course it's physical delivery. So just talk through why that is different and what does that matter for institutions as opposed to whatever NASDAQ or all these other outfits that are looking to bring to market?
Kelly Loeffler:
Well, there's a number of differences. And again, differences that we think matter to an institutional audience. Most importantly, regulated price discovery. There is not today, a regulated physical delivery, price discovery contract in the market. It's a real shortcoming in the market. If you think about commodities or equity indices, think about the S&P 500, that price is established in a federally regulated market. We don't have that in the crypto market today. And that's really what we're focused on. Bringing along with a myriad of other features, including institutional grade custody. So if you marry together the certainty of price discovery free from manipulation and fraud publicly displayed prices. If you bring together that warehousing capacity, the institutional rails that we already transact across, and the knowledge that AML KYC is being done at the kind of banking system level, I think that brings a tremendous amount of confidence that really isn't being offered by any other platform today..
Jeff Sprecher:
We've been asking in the United States, our regulators to move faster, to acknowledge technology. We've been asking the SCC to create ETFs or allow the creation of ETFs and other kinds of investment vehicles for crypto currency. And what I think a lot of the entrepreneurs don't realize is what those regulators are used to seeing is the kind of infrastructure that exists around us. And all of the hundreds of institutions that are connected to us, which is a massive overlay of anti-money laundering.
Jeff Sprecher:
A massive overlay of billing systems that to talk to tax reporting infrastructure. And the algorithms that we run and the technologies that we have to look for fraud and manipulation and our rule book that allows us to actually shut people off, deny access, break, bad trades. All of the things that the regulators are used to seeing in a price discovery arena that just don't exist in these OTC broker platforms that exist today, you can call yourself an exchange and name yourself as such, but a regulator has a view of an exchange that has all of this overlay over the top of it. And so it's been a struggle to get institutions and institutional products into this ecosystem. And that's really what we saw as the opportunity to be a first mover.
Kelly Loeffler:
Let me just amplify on price discovery, because price discovery is a defined term by the CFTC. And today the price discovery is really relying on the OTC platforms or the cash platforms for their settlement prices. And we're going to dramatically change that paradigm. And I think that's a really important inflection point in the industry because without the trust of let's just say a Bitcoin price becomes a benchmark, you can then develop other products and hedging mechanisms and instruments around that once there's a trust in price in the market.
Michael Casey:
One thing that's just interesting hearing both of you talk here, I've been covering Bitcoin conferences now for five years. This is sort of making me weirdly enough, a veteran in this space. And the very idea that we would've been sitting here talking about what a federally regulated version of price discovery was and why that's important and sort of defining what you're bringing to the table here as something that is inherently valuable because of that government aspect of it. It sounds if you put it into the 2013 language, just kind of weird, right? Because [crosstalk 00:30:02]-
Jeff Sprecher:
It's weird for me as an entrepreneur, by the way-
Kelly Loeffler:
It's true.
Jeff Sprecher:
Evoking government.
Michael Casey:
Is this the end, I suppose? This is a little dramatic to hear of this dream, that a much more libertarian, almost anarchic type view of what this should be. It feels like the wild west has been tamed. The law has come to town and you guys are kind of helping bring the sheriff in. There's a lot of folks here who have a different vision of what this technology should be all about, that this is private money. This is something that's external from government.
Jeff Sprecher:
I was reading this morning that there's about 120 documented stable coin initiatives that have been announced. And you had Christine Lagarde of the IMF saying, we think the central banks should be developing their own Fiat based cryptocurrencies. If you have government basically adopt the blockchain and develop a complete digital infrastructure for capital movement, tax payment, portability. I don't know as entrepreneurs, whether this kind of utilitarian utopia that there won't be any government interference will really exist. And right now democracies in crypto are who has the most hash power, who's the richest. And I think that ultimately, even if organized government, the way we know it, doesn't get involved in this, we as a community will figure out how to create some kind of representative ecosystem that for all intents and purposes will be a government.
Michael Casey:
I just have to pick up on this, right? This is a rich thread because I think what you were saying will resonate with people here. We've just gone through-
Jeff Sprecher:
Are you kidding? [crosstalk 00:31:45].
Michael Casey:
Some people over the past couple of months, certainly the past few weeks, a brutal bashing down of the price of Bitcoin in many respects, somewhat connected to folks who might be described as whales with other alternatives. And so there certainly is without a doubt, excessive influence from small groups of people in this space. It just feels incredibly ironic that the solution to that is to bring Wall Street into the machine. Where do we square this circle? How do we actually get to some sort of positive dream? I got interested in this space, because I had lived six years of my life in Argentina and saw a complete institutional breakdown there. And thought here's a technology that allows people who don't have access to a trusted institutional government infrastructure to have a math-based trust structure, to therefore have access to an economy that they don't currently have. How do we sort of still live out that dream and keep the gatekeepers out of the system?
Kelly Loeffler:
But if you think about what Wall Street reflects is, it's investing on behalf of pensions and 401(k)s and it's the liquidity in the industry, it's funding, it's capital formation. And certainly Wall Street can evolve over time as well. But I don't think it's at odds with having institutional investors in to create the liquidity that's needed. And that's where this technology can bring competition. Certainly all the banks you've mentioned are aware of this. And I think the point is though that an institution can't come in and participate without regulatory approval. And can this technology grow without the investment capacity of a Wall Street or a major insurance company or the Providence that some of these firms bring to spreading the acceptance around the world.
Jeff Sprecher:
There's probably at least 400 countries that issue currency, what we may move to, to get to this kind of interesting utopia that we are talking about with the technology is a common currency that is free from poor governance, governments devaluing the net worth of their population.
Michael Casey:
So I think we have time for just one last question and this is going to sound like I'm asking you to give a price prediction, which I know you're not going to want to give me. But it is interesting that Bitcoin is the token that you, that you work with here. Nothing else, you just have one play on Bitcoin for now. This is the one token, the one cryptocurrency that has been sort of formally recognized by the government as a commodity. What does that say to the longevity of Bitcoin itself relative to say everything else? Was this a factor in your decision to actually, drill down onto Bitcoin itself?
Kelly Loeffler:
It was a tremendous factor. The durability of Bitcoin is really reflective of one of the features of what currency is. So there's durability and there's acceptance. And if you look at the flows in Bitcoin, it's over half of the market cap and over half the flows, I think what we talk about a lot is where does it go? Our job is really to say, how do we make it go? What are the tools that we can bring to the market to drive, not just participation in the market, but utilization. And that's equally our focus right now.
Jeff Sprecher:
Somehow the Bitcoin has lived in a swamp and has emerged and survived, been attacked and should have died. And there are thousands of other tokens. All of which you could maybe argue are better for some purposes than Bitcoin, but yet Bitcoin continues to survive and thrive and attract a lot of attention. We're used to that in traditional finance, like after president Trump was elected, the Dow Jones Industrial Average went over 20,000. It was huge, a huge piece of news that the Dow's at 20,000. I tell you now that, and I've mentioned this as you're listening in the news and somebody talks about what the market did, they're going to talk about the Dow Jones Industrial Average.
Jeff Sprecher:
We find that oftentimes in finance, it's not about being the best because we can all develop something that's better. It turns out to be about being the broadest and the most kind of commonly accepted. And for whatever reason, Bitcoin has sort of become that. At least for us Americans, our federal government has acknowledged that that is the only token of all the thousands of tokens that they are right now prepared to give have some kind of regulatory certainty to, for whatever reason.
Michael Casey:
So you've indirectly here and unintentionally perhaps, but given a nice plug to the crypto economic explorer that Nolan just outlined in front of you. The team made the decision that Bitcoin had to be the benchmark here regardless of its flaws or pros or cons. On that note, we'll have to leave at that. Please a round up applause for Jeff and Kelly everybody. Thanks very much guys.
Josh King:
That's our conversation for this week. Our guests were Intercontinental Exchanges, Jeff Sprecher and Bakkts Kelly Loeffler. If you like what you heard, please rate us on iTunes so other folks know where to find us. And if you've got a comment or a question you'd like one of our experts to tackle on future show, email us at [email protected] or tweet us at @NYSE. Our show is produced by Pete Ash and Ian Wolf with production assistant from Theresa DeLuca, Ken Abel and Steven [inaudible 00:37:13]. Some portions of the preceding conversation may have been edited for the purposes of length or clarity. I'm Josh King signing off from the library of the New York Stock Exchange. Thanks for listening. Talk to you next week.
Speaker 1:
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