VanEck, Bitcoin ETFs, and El Salvador: Everything You Need to Know | Matthew Sigel

Live from Bitcoin Beach in El Zonte, El Salvador, I sat down with Matthew Sigel from VanEck for an eye-opening conversation about Bitcoin, ETFs, and the incredible economic transformation happening here in El Salvador. Matthew shared his journey from Bloomberg journalist to Bitcoin advocate, his take on El Salvador’s groundbreaking Bitcoin experiment, and how it’s reshaping tourism, crime, and foreign investment.

We dove into the hot topic of Bitcoin ETFs—why they matter for institutions, but also the risks of losing self-sovereignty—and got a behind-the-scenes look at VanEck’s approach to bridging Bitcoin with traditional finance. Plus, we talked about the U.S. election’s impact on Bitcoin policy, the potential for a U.S. Bitcoin reserve, and even the wild idea of Bitcoin-powered “freedom cities.”

This episode is packed with insights on sovereign adoption, the future of Bitcoin in traditional markets, and why Matthew keeps coming back to El Salvador to learn from the people and the policies shaping its Bitcoin revolution. Tune in to hear what’s really happening on the ground and how it could change the world!

- Mike

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Live From Bitcoin Beach

Transcript

Matthew Sigel  
The way I envision it, and I'm going to plug a Twitter spaces that I'm hosting on Tuesday with Senator Cynthia Lummis and Michael Saylor and Jan van Eyck, and hopefully Bucha le will join, if he has the time. The idea is to share some lessons about what El Salvador is doing, and to hear you know how Cynthia Lummis plans to get this legislation through Congress? Because I think it's going to be a tough one.

Mike Peterson  
We got Matthew with us today from Van Eck, and I've already warned him that I'm not a believer in the Bitcoin ETF, so we'll we'll dive into that a little bit. But he's gracious enough to stick with us, and you were sharing a little bit about your your history in the space. So I'd love for you to give the viewers, kind of your backstory and and how you kind of wound up in this position. 

Matthew Sigel  
Sure, Mike, and thanks for having me. Great to be here. One thing I love about you is your idealism, but I think it's, you know, inconsistent with the reality when it comes to Bitcoin, ETFs. So we will get into that a little bit later. But, yeah, so I started as a news reporter at Bloomberg and CNBC covering finance, and you learned very quickly as a journalist that the point of the job is not to find the truth, but to fill time or column space, you know, and I got disillusioned with that business model, and frankly, envious of my sources who had a few more zeros next to their personal balance sheets. So started studying, went down the Chartered Financial Analyst path and started networking. Managed to meet Kathy Wood, who, at the time was running US equities at Alliance Bernstein. So joined Alliance as an analyst on her team covering tech. We were big investors in the web two companies, and kind of realized early the network effects and that these companies had the potential to produce margins that were unusually high for a long period of time, but in the course of those four years with Kathy, kind of learned what I liked about her style, but also learned what I didn't like, and found myself missing parts of journalism that you can find on the sell side, writing things, writing research, getting feedback from money managers. It's a little like less lonely and stressful than managing money as a 30 year old. So pivoted, went to work at a Hong Kong based investment bank. 

Mike Peterson  
Were you based in Hong Kong during that? 

Matthew Sigel  
Based in New York. So it was a global investment bank, but headquartered in Hong Kong, famous for its research on Asian equities. So I traveled frequently throughout China, Japan, Southeast Asia, and in the course of those travels, came across Bitcoin from just regular young people and had a realization that this open source database technology has the potential to take a lot of margin away from those like centralized web, two companies that we were so heavily invested in at Alliance. And then, of course, there's the money printing. And you know, all the things that we that we know about as Bitcoiners. 

Mike Peterson  
Hey guys, just a brief interruption. We'll get back to the exciting show here. But I just want to really ask a favor that you guys could make sure that you're subscribed. If you're watching this on YouTube, if you are listening to this on a podcast, please take the take a second and review this. You know, you don't even have to write a lengthy review or anything at all. Just click the the number of stars that you want to give us. It really helps us in the algorithms to make sure people are finding out about what's happening here. All right, back to the show. 

Matthew Sigel  
So I started, I was writing this market newsletter every week, and like, there was more and more Bitcoin in that newsletter, and the clients are like, What are you doing? And I was what I was doing was generating conviction and building positions. And when COVID hit, it really turbocharged the decline of that of the news media, right. There was just parallel universes going on. And, you know, of course, I had conviction that my lane was correct, and got to know the folks at vanac and joined in 2021 to try to launch more products and more research in the space. 

Mike Peterson  
So how long were you working with with CNBC in that space? What was yeah, how long did you last before you realized that you needed to get out? Yeah?

Matthew Sigel  
I lasted seven years. Okay, yeah, and the final straw that that did it for me. I was producing the TV show on Bloomberg, and I booked a guest to join this guest happened to be on the board of ExxonMobil and Goldman Sachs, at the time, influential figure, and the anchor of the show was like, I'm not interviewing this person. He's not newsworthy enough. I was like, Are you crazy? And, you know, we thought about it, and it escalated to like the executive producer, and he took her side on it, because she was the talent who made 10 times more than me. And I got pissed, disillusioned. He then demoted me for insubordination, and I was gone from Bloomberg, like, two months later,

Mike Peterson  
Yeah, the news media is I have a love, hate relationship with with the news media and my the business I had in the US, we had a food service business, and we actually relied pretty heavily on the news media and and I learned how to kind of work it. I learned that you want to kind of spoon feed them. They want something that has, you know, the title that's going to grab, you know, the click bait title of something. And so we'd come up with these wacky food items that I knew that they would have to cover. And so we wound up on, like, Good Morning America and a lot of like the big shows, but I realized early you have to make it easy on the journalist, because they don't want to have to work that hard, and they got all these other things. So if you can give them something they know that will give them a good headline and they won't have to work too hard, you can kind of get them to tell the story you want them to tell. And so I used a lot of that even as we were launching Bitcoin beach and we were trying to drive, you know, media recognition for what's happening here, because it the reality is, it is important. If people aren't reporting on something, then people don't think that it's important. They don't want to replicate it. And that's part of the reason I think El Salvador government took notice. Was an article we had in Forbes that was, for once, positive about the country and this thing happening, and so I learned early on, just the importance of that and how to work with it. But then on the flip side of it, and we've seen here in El Salvador, just the crazy like stories that have come out, and they won't even get the basic, like facts about the country accurate. And a lot of times, the reporter hasn't even visited the country, and they're talking about how bitcoins failed, or how Bucha is, you know, a complete dictator, or something like that, and, and, and they've never even talked to the people here, but then once one news story prints it, the rest of them all will, just like recycle the same information, and then it becomes Fact. And so it's crazy how quickly something that's not even true becomes basically fact on the internet, because so many people replicate it. 

Matthew Sigel  
Yeah. I mean, that was less so 25 years ago, when people were still paying for a subscription to their local press. And what I lived through was Google demolishing that business model. And 

Mike Peterson  
Well, there was a lot more money. They had a lot more money for the departments then, because that's what I'm saying. Now, right, the quality of the people that are hired at these places is just lower. Now, they hardly have any budget, and they'll send one, even if they send anybody, it'll be one person that I saw the contrast when when 60 minutes came down. I mean, they brought like 15 people, and, you know, they had like 80 pieces of camera equipment, you could tell they still had the budget. But most the media now, I mean, you look at even a lot of the the programs on CNN or they show that the viewership is like, lower than, you know, a mid rate like podcast, and so you can realize just economics from that they just don't have the budget for it anymore,

Matthew Sigel  
like the when I was at the investment bank putting out this, you know, weekly research. And the piece that got the most clicks that I ever wrote was in 2017 it was called Google is evil. And it was just an explanation of now, what we already know, which is that, you know, Google destroyed the local advertising and media business, and in the process, has created this hyper profitable entity that's going to be very hard to disrupt, as long as that search market share remains very high. And in that piece, I screenshotted my first Bitcoin purchase. So I'm a late comer like mid 2017 and you know, my thesis was that these guys were going to somehow get disintermediated, whether it was by regulation or by technology, they would eventually lose margin. And if the if the disruption came from the tech side, Bitcoin and blockchain was going to play a major, a major role in that.

Mike Peterson  
So what, what did you see happening at vennech that, like gave you guys more? What the right word is, but the that that kind of clarified things for you guys, that this was something you wanted to push into, because that's traditionally, I think bank runs a number of ETFs, right? Yeah, definitely different sectors. 

Matthew Sigel  
Our DNA is in gold, okay, gold mining, okay, so the firm was founded in 1955 um. Uh, the current CEO, Jan van Eyck. His father was an immigrant to the US. He got his went to business school at night, studied Austrian economics, and decided to launch, launch a mutual fund. And it was an international mutual fund, which, at the time, was quite innovative. There was a lot of home country bias. And he's like, I want to invest alongside the Marshall Plan. We're going to rebuild Europe. I'm going to invest outside the US. And you know, that was plugging along nothing special. And then in like 1969 he got conviction that inflation was going to accelerate and the gold peg was going to be a problem. And he pivoted that, really 69 Yeah, he had that, yeah, into all gold mining stocks. So it was a huge style drift, right? But it resulted in the best performing mutual fund in America in the 1970s and that built the firm. When we got into ETFs in 2006 we launched the gold mining van at gold mining was,

Mike Peterson  
were you guys the first one to launch the gold mining fund? Yeah. Gold mining fund, okay, yeah. But what about the the gold ETF? Were you guys? 

Matthew Sigel  
So we were early on gold mining. ETF, but one of Jan's biggest regrets is not being first on the physical gold. ETF, so we have a product. It's not black rock scale,

Mike Peterson  
okay, yeah. What about the silver? ETF, where you guys 

Matthew Sigel  
We do not have Yeah, yeah. So, so Jan got conviction in 2017 also, he was worried about his gold business getting disrupted. Bought Bitcoin. Buy Bitcoin, yeah. Okay, yeah. So he bought Bitcoin, tried to launch an ETF, which, you know, wasn't allowed, and started investing in venture capital in the space. So we're LPs and a bunch of different venture funds, and that was a way to build a network of people to trust and put some skin in the game. And then when I joined in 2021 I think during COVID, like a lot of people, you know, Jan's conviction got even higher. He's like, how do we bring products to market? So that was really the task.

Mike Peterson  
Just to be clear, you guys aren't Bitcoin only. You guys are crypto, like your thesis is crypto in general. So that would be obviously a point of difference that we would have on 

Matthew Sigel  
Well, US capital markets operate under a disclosure based regime. So we want to put out as many products as we can and, well, not as we can. We want to put out a lot of products that we have varying degrees of conviction in, and different people in the firm have varying degrees of conviction. And then we'll let our customers in the market, like, sort out which are the winners. 

Mike Peterson  
So what was it like going through the process, when it was like they made the false announcement that it had been approved, and they took it back, and then what was that? Was that hectic for you guys during that period, or was it,

Matthew Sigel  
It's been a very frustrating experience, because we were the first tradfi asset manager to file for Bitcoin ETF, and, you know, the regulator prohibited it, and then to learn about, To learn that the regulator would Okay, Bitcoin futures, ETFs in some obscure Gary Gensler speech like that didn't that felt like it wasn't the normal procedure for the SEC and they've really abandoned what was the traditional first come first serve Model, and instead, like wait for Blackrock to want to do something and then approve everybody at the same time. So if you know, I have high conviction that that's going to change under a Trump administration. But if that continues, we end up in a world where, you know, Blackrock has ten trillion and all products look the same. And how can anyone differentiate on it's hard to creativity or innovation, or any of those things that you know we love about us, capital markets. So it's been, it's been very frustrating.

Mike Peterson  
So, so convince me why the Bitcoin ETFs are a good idea. I'll just tell you for for myself, Bitcoin is, is freedom money. It's, it's to be used transactionally, like it is. It is the money that you don't need permission for anybody to use. There's no intermediary there. And and now we're sticking in an intermediary in the middle of it. So from my point of view, this, this takes the personal responsibility and sovereignty away from people of actually, truly owning Bitcoin, and now they're, they're owning, you know, paper Bitcoin that's in a fund that is now a honey pot for governments, if they decide they want to come and seize which you know, as we know from history, they did with gold in the past. So from my point of view, yes, it's good for price, for sure. 100% agree that it pushes price up. But that's not why I'm in Bitcoin So, so what would your response be to to that line of thinking? 

Matthew Sigel  
Yeah, I agree with you a lot about a lot of it, which is the utility of Bitcoin cannot be fully, fully realized if you own an ETF. Um. Um, that utility is most valuable for folks who live outside the US right, like the US dollar is the best currency in a very bad neighborhood, and for the billion people who don't have a bank account or are living in countries with consistently very high inflation or authoritarian governments that are more prone to seizing assets than the US government, although the US government has

Mike Peterson  
pushed back with you a little on that, because I feel like in the US we're seeing, you know, if you're not woke and you don't subscribe to the you know, the correct politics that your your banking relationships

Matthew Sigel  
It's an order of magnitude worse, agree in other countries, right? Yeah. So for for that part of the global population, an ETF doesn't make sense. But there is also the store value component. And if you set up a trust in America, and you appoint a trustee, and they are self custodying your Bitcoin. We've seen over Millennium that money managers will steal money if there are not regulations in place to prevent it. So US capital markets, money managers are not allowed to hold on to customer assets. It's it's very clear law. The only way to do it is to have a third party custodian that is entrusted with holding those assets. And because of the well trodden path of the ETF, it is actually the perfect vehicle for that purpose, which is, you want to hold Bitcoin, but you want someone else to hold it for you, for whatever reason that you're delegating that authority. There's many reasons why you might, but with that-

Mike Peterson  
but Bitcoin, you don't need to do that. It's not, it's not like having cash where you're worried about somebody physically. 

Matthew Sigel  
But what if you're, what, if you're the manager of a university endowment, and you're the portfolio manager, you have a team of five or whatever? Yeah, you report to the board of the university, okay? They do not want you holding onto that Bitcoin yourself. The temptation is too large. It might be ten billion and you might disappear to El Salvador with 1 billion of it, and then we never find you again, right? So there has to be a series of checks and balances to prevent that when you're dealing with institutional money management, and the ETF has been the perfect unlock for that use case.

Mike Peterson  
So have you guys been surprised at the firm, at the the uptake, I know it succeeded the, you know, initial estimates or expectations, or, I don't know if those were conservative expectations putting out there so that, you know, and really you guys, it's going exactly how you thought it would, but you were afraid to put out kind of bullish estimates, or

Matthew Sigel  
It did exceed our estimates dramatically. We credit it to really the individual investor. So about it seems as if about 80% of the ETF buying has come from just regular folks who want to hold the Bitcoin alongside the other securities in their brokerage account, and frankly, the institutional adoption. Van X, typical customers, the big Wall Street distributors of financial products, the wire houses, they have been disappointing in their adoption. A lot of that has to do with politics, some of it with kind of innovators dilemma. So I think that'll be one of the next catalysts for next year, is some of those larger entities getting some regulatory relief, getting some more internal conviction, and turning on that, that spigot. But even without that, it succeeded our expectations.

Mike Peterson  
So I was talking to a buddy of mine that I ran into it in Nashville, the Bitcoin Conference, who's, who's with Morgan Stanley, and he was saying, he said it's like nine to 12 months out still that they're it's just they're so slow moving, they're putting these things in place. But he said, like, and I was surprised to hear it from him, because he's not like a bitcoiner, but he's like, No, it's coming there. There is it. But it just takes a long time for the machinery to get up and running, which was kind of surprising to me. Are you seeing are a lot of the initial buyers of ETFs? Are they new to the Bitcoin space, or are they people that were already Bitcoin holders, and this is just an easier way for them to park, you know, in the retirement accounts or the other things like that. Because I granted, I know, for like retirement accounts, it is you can have self, self custodial accounts that combine hold the Bitcoin, but it's, it's a pain. You got to set up a corporation to hold it in minutes, this whole process. So so I definitely can, we'll see that it's much easier, especially in those type of accounts, to hold an ETF. So I'm curious, are these, are you finding these are new people that are new to the space, or are these existing Bitcoiners that are just kind of switching the way that they're holding Bitcoin? It's hard

Matthew Sigel  
to know for sure, because you. 80% of the holdings of the ETFs are not reporting to the SEC and so we don't actually know who those people are, which leads us to believe that they are individuals either new to the space or diversifying. Because

Mike Peterson  
if, if they were of a certain size, they would have to exactly, you guys would not exactly

Matthew Sigel  
of the ones that do report, I will say that since the election, I've done a lot of calls with advisors who are now ready to go from zero to one. And

Mike Peterson  
is that because the Trump administration coming in, they feel like it's politically safe for them to exactly Yep.

Matthew Sigel  
And then there's a smaller percentage who are already there at 1% who are like, hey, what do you think we go to 3% but I still think the biggest opportunity is the zero to one folks. So the buddy that I was

Mike Peterson  
talking to, he said in the meeting, he was in a meeting with Larry Fink, and he said 5% was going to be where everybody's going to wind up. Do you think that that's

Matthew Sigel  
depends what happens to the price and if people really huddle or take profits, we've done some quantitative analysis on where the risk reward starts to peter out, and it's pretty high Number, you know, like you can get to 20% allocation before you really are kind of sacrificing risk for the reward that you're that you're getting.

Mike Peterson  
So me being at 100%

Matthew Sigel  
you're on another level. You're on another level. But I think the most common allocation is in that, like, one to 5% range. And the way we think about it, we've been running emerging market strategies for quite some time, emerging market equities, emerging market debt, and on the emerging market equities side, they've underperformed the US now. You know, since 2007 basically, right? Like, yeah, you had a commodity boom from 2000 2007 and the brick story and em. And it was great, and the dollar was weak the whole time. But since then, it's been, you know, DM, out performance, big tech, Fang and and during that period of underperformance, China has grown from a de minimis portion of the EM equity index to north of 25% so and em equities are consistently negatively correlated with the dollar, just as Bitcoin is. So my pitch to the allocators is, except recently, except dump your em equities position. No offense to our wonderful PMS. And with a smaller allocation to Bitcoin, you get the same gearing to the dollar, but without all that China risk. And as you pointed out, the utility of Bitcoin, you know, is most relevant in those emerging markets anyway. So it really is a em play, as I see it. And generally, for allocators, em equities would be like, you know, 5% something like that. So

Mike Peterson  
I'm curious what, what are you doing here in El Salvador? What is, what is the, what is the poll? I know you're speaking at the conference here today. I'm just curious as to, yeah, what would bring somebody from then to want to be in El Salvador? Is this personal? Is this for the business or and, and I believe you met with some government officials. I'm not sure if you're allowed to talk about that, but, but yeah,

Matthew Sigel  
everyone kind of has their own investment thesis for Bitcoin, and a big part of mine is adoption at the sovereign level. Bitcoin is the ownership is still dominated by retail, individual holders. And in order to achieve, you know, mass adoption, I think that it will be, you know, used for settlement in global trade and owned by central banks. That's always kind of been my thesis. And when the 2021 legal tender announcement happened, I came right down and just started to get to know some people visited your neighborhood, came to this conference, and I've been back a few times. I always spend a lot of time interviewing my taxi drivers with Google Translate, you know, and what I you said, the media has been lying about El Salvador, and I instantly understood that from these conversations with the taxi drivers, where I heard from everybody how happy they were that they didn't have to pay protection money for their kids to play soccer. You know. No, that's really moving, you know. So that helped us generate a lot of conviction was that boots on the ground research, and we have bought the sovereign debt in our emerging market bond strategies,

Mike Peterson  
which is which has been very helpful to your portfolio. Yeah.

Matthew Sigel  
So we just want to be able to keep our conviction high by. Staying close to the close to the ground here. So yeah, we had a meeting with the president's office, and think that he's on the right path to dramatically increasing the GDP per capita of this country, is the short answer. What type

Mike Peterson  
of insights did you get from that meeting like what led you to that conviction?

Matthew Sigel  
I think that Bucha le is a guy who knows history really well, who has perspective of the US side, but the El Salvador side as well, has made the right relationships. Has a plan for like, fiscal responsibility happens to be sitting on a whole lot of gold resources as well that, you know, maybe someday could be monetized. And it's really just a story of low base. You know, when you're starting at $2,000 GDP per capita there, it's very hard to go down unless something dramatic happens. So if you cut regulations and cut taxes and invite foreign capital to participate in that growth, most likely good things are going to happen is,

Mike Peterson  
is the 2000 number a real number? A real number? I thought it was like five or 6000 Are we just throwing that out? I

Matthew Sigel  
thought it was 2000 or at least in 2021, when I first came down here.

Mike Peterson  
I think it's five or 6000 but it's still still a very low base, yeah. But so you feel very hopeful in the policy directions that they're taking that this, this thing is, it's not just a blip. This is where in the beginning stages of seeing this country rise. Yeah,

Matthew Sigel  
I think the brand has has changed, and tourism is like the leading indicator of that. I think tourism has doubled since they changed the law. Crime down 95% it's kind of obvious there'll be more economic activity if people are willing to go out at night

Mike Peterson  
well, and you just look around at all the construction happening everywhere. And it used to be, the complaints we heard from people was they can't find jobs. You know, now, the complaints I hear is from business owners that they can't find employees. And so that's a good problem to have in a country, exactly. So, yeah, it's definitely booming. I saw in the headlines recently that they just announced that they were going to do another repurchase of another one of their tranches of bonds. I haven't dove into it enough to understand where this money is coming to to to fund these repurchases. Do you have any any insight into some of

Matthew Sigel  
it has been refinanced with JP Morgan, okay?

Mike Peterson  
Like a private placement just with them, okay? And then, and that's because they were able to buy them back at enough of a discount that it still made sense to to place them with JP Morgan directly. That's

Matthew Sigel  
my understanding. Yeah.

Matthew Sigel  
I mean, generally, the country is de leveraging, yeah, and they have to do that because they were on the brink of default, and in order to restore some negotiating leverage with the IMF to maybe eventually get this check, they have to show credibility to the financial markets. So I think the ratings agencies were overly political in their downgrades.

Mike Peterson  
Well, especially once they announced the Bitcoin adoption. It was crazy how they exactly tank things,

Matthew Sigel  
and then the onus was really on the bukele administration to show why the ratings agencies were wrong, and by turbo charging tourism, cutting spending became obvious to financial market participants that there was a disconnect with the price of the bonds and 30 cents, and we still think there's upside to these issues if they can execute on the fiscal plans. So

Mike Peterson  
even even now that they're trading, I believe they're trading close to par Now, right? Yep, you still think there's upside.

Matthew Sigel  
So not financial advice, but our team thinks that the newest 2054, issue, so long term bond is still trading like 200 basis points wider than it should be okay, and if that were to normalize over the next year, that'd be a 33% return. So it's still quite attractive from from our perspective, and

Mike Peterson  
is El Salvador a big enough of a country that it draws interest from from some of the larger financial players, or is it? I'm not in that world, so I don't know if it seems like it's small enough of an economy that I'm kind of surprised that that the bigger banks would even be interested in El Salvador.

Matthew Sigel  
It's not big. Enough to, like, move the needle for most bond managers who are tracking the index. But any country that gets into a situation with the IMF will generate, like, considerable ink from the investment banks, right? Because there's all these fees and refinancing and issuing the new debt, so there's a lot in written about it. I don't really know how our competitors are positioned, though, but we, because of Jan's leadership and our conviction in Bitcoin, that emerging market bond team has managed to kind of identify some of these countries that are adopting Bitcoin and make some money by playing the bond side. So like Argentina, I mean, there were other reasons to buy Argentina as well, with Malay coming in, but that's been another successful investment for us. And the state owned oil company in Argentina, YPF, is now selling gas to bitcoin miner and we think that could develop into something more direct, interesting.

Mike Peterson  
So what is your take on the El Salvador's negotiations with the IMF? Do you think one? Do you think that they need to get a new loan from them in order to remain viable and or do you think they should look for another route? I

Matthew Sigel  
think that Trump's election has bought Bucha his administration some time to wait, let the market keep rewarding the more responsible fiscal strategy that he has put forth. And when, by the time January and February rolls around and the IMF is taking orders from a different administration,

Mike Peterson  
because the US really does, oh, yeah, set the margin orders for the IMF, yeah.

Matthew Sigel  
So then we think that there will be a deal done, and it's probably in everyone's interest to get a deal done. Okay,

Mike Peterson  
interesting and, and is that part of your guys thesis on why the bonds are by now? Is that deal happening? Yeah, yeah. Okay, so what are you talking about today?

Matthew Sigel  
Today, I'm gonna do like 10 minutes on kind of election takeaways for bitcoin and how we think about price targets. And then an old pal of mine, Chris Wood, who's the chief strategist at Jefferies. We work together at the at CLSA, which is the Hong Kong based broker. He's a really thoughtful thinker and very widely followed among institutional investors, and he put Bitcoin in his portfolio, in 2020 hold, savannak, hotel, ETF in that portfolio. So we're going to do a little Q and A on kind of how allocators think about Bitcoin. Okay,

Mike Peterson  
so give us a little preview. I'm curious what is your guys take away from the US election, and how that impacts things.

Matthew Sigel  
I think the prospects of a pro Bitcoin treasury secretary are enormous. You know, the the treasury secretary in for the past 50 years, had basically one job, which is to say the dollar, you know, is a strong dollar is in the US best interest. And whether we have Scott Besson or Howard lutnic, it sounds like that messaging is going to change, and that's going to give like intellectual cover to starting a Bitcoin reserve, or something that approximates a Bitcoin reserve. So it's really the cabinet. I think that has been positive surprise from my perspective. So

Mike Peterson  
do you think that you think the Bitcoin reserve is something that is likely to take place. I don't think

Matthew Sigel  
we're going to be spending taxpayer money to buy bitcoin in the open market. I think that we will, I'm hopeful that we will find a way to move the 200,000 Bitcoin that the Department of Justice holds into some new strategic Bitcoin reserve and

Mike Peterson  
BitFenix may have something to say about that. I think a big portion of that is still there that was recovered. So good luck

Matthew Sigel  
with that, you know. And then the way I envision it, and I'm going to plug a Twitter spaces that I'm hosting on Tuesday with Senator Cynthia Lummis and Michael Saylor and Jan van Eyck and hopefully Bucha le will join, if he has the time. The idea is to share some lessons about what El Salvador is doing, and to hear you know how Cynthia Lummis plans to get this legislation through Congress, because I think it's going to be a tough one. Do you

Mike Peterson  
know what that Twitter space will be called? Because by the time this comes out, it'll probably have already passed. But if people want to go back and listen to that, do you have a title yet that you guys are working on? I

Matthew Sigel  
can't remember it, but if you go to the van a US Twitter page or my page, Matthew, we'll be pumping it. Okay? And I. One idea that that I have, that I'm hoping, that I'm trying to socialize, is that Trump has announced plans to build 10 new freedom cities on federal land. Wants to have a competition for the best ideas, where they would be, how they would, you know, deal with infrastructure issues. Maybe that's a long shot too. But if we get 10 new and this is this would help solve the housing shortage. And I have not heard this. So he's been putting Trump's and putting out all these three minute videos on like how he wants to approach issues a, b, c and d. And this is one that really kind of struck my got my attention, because it also would reinvigorate the idea of building in the US, right? If you have to build a couple gigawatts of power to service a new city, who's going to fund that? Like, how do you know what the load is going to be? Why don't we bring some bitcoin miners along for the ride? You know, maybe let them sell their Bitcoin tax free, if it's mined in these cities, maybe the US government can get a tiny royalty on that and accumulate a strategic reserve just through tax code, tax breaks, essentially, so that, like, that's a way that maybe we end up with a strategic reserve without legislation that is going to probably piss off a lot of people, if it's taxpayer money buying Bitcoin.

Mike Peterson  
Interesting. So for you guys was the the election, something that was going to dramatically shift course of like, what direction you guys took things or, or at least the timeline that you guys wrote. You know, envision rolling things out.

Matthew Sigel  
Yes, short answer is yes. So we have a crypto huddle every Wednesday, like, all hands Jan chairing it, and the day after the election, he was like, product, product development. You guys need to get back to work, right? You've been doing nothing for a year. Nothing's been able to get approved. Like, what can we bring to market? So definitely, you're going to see more investment from us into the space and trying to bring new products to market. But then can't ignore like the market action as well. The one of the big impacts is is going to be a better regulatory environment for non Bitcoin crypto. So our we heard from our customers demand for X Bitcoin type of products. We run a couple of private funds that invest across the space. So we, you know, there's a variety of strategies and a variety of views, and not everyone's a Bitcoin Maxi. And thankfully, like those strategies have been able to catch some of this price and clients want to, want to allocate, has

Mike Peterson  
the I know going into it, a lot of people were talking about that, that you would see this kind of surge in the broader crypto space against the overall market share, the percentage that Bitcoin controls of the but I feel like Bitcoin dominance has, has not gone down since the election. But maybe I'm wrong. I don't really follow it that much. Yeah, I

Matthew Sigel  
think, like, Bitcoin dominance is skewed a little bit by how eth acts, and eth has some, uh, token specific issues, I would say. But when you go down the market cap spectrum and really try to pick, you know which doxxed teams are building great products that can be category killers and Return Value to token holders. The investable universe shrinks dramatically. So we've got a team to try to figure out like what those tokens are, and some of them have done very,

Mike Peterson  
very well just by Bitcoin. So do you,

Mike Peterson  
do you envision any opportunities here in El Salvador of doing any type of like El Salvador, ETF, or any type of thing to track what we, you know, I think you and I agree on is El Salvador is probably going to perform better than most other countries over the next couple decades, and so is there anything in the works that would kind of infuse the capital markets here?

Matthew Sigel  
Yeah. I mean, the primary way we're playing it is by buying the sovereign debt, which brings down the cost of capital for this country. And I think really does help ignite economic activity. We're also working on, like an index, and El Salvador index, that maybe it's a, you know, an average of all the bonds, but it's something that regular people on their, well, not regular people, but market participants on their Bloomberg or wherever they're tracking financial markets can have one index to see how El Salvador is doing, and maybe someone wants to tokenize that and put it on Bitcoin or l2 or something like

Mike Peterson  
this. There's no There's no stock exchange.

Matthew Sigel  
There is but there's nothing liquid enough that, like there's no, not even one company could make it into a the type of indices that that we build. So it would have to start as a as a bond index.

Mike Peterson  
So I know BitFinex and tether have have huge interests here in El Salvador, and have really been, I mean, I know they really believe that this will be. You know, the the birthplace of a tokenized financial market, where companies will be able to raise funds in a way that's lot less expensive than it is in the US, where it's, you know, you're looking millions of dollars to try to go to market to raise and so I know that they really see there being huge potential here. Have you guys looked at that at all? Or do you have your finger on the pulse of that at all? Or just curious, what your take on is on that? Yep, we

Matthew Sigel  
have researched the volcano bond proposals as it were, still not a fully formed idea. I think that one if you talk to those who want to bring the volcano bond to market, say that they have all the demand that they need, and lots of people would buy it. And that's probably true, right? As we said, Bitcoin is retail dominated asset, and there's lots of individuals who will do that, but if you want institutional money managers to buy it, you know, we run into those custody issues, so there needs to be a global investment bank who will help that sale, who we can deal with and I think that's one of the challenges, but also opportunities, is to Get a global investment bank to onboard with the regulations in this country and willing to export something like that to institutional managers. I don't think we're quite there yet.

Mike Peterson  
So how many times have you been down here?

Matthew Sigel  
Now, this is my third but so have you looked at property down here yet? Are

Mike Peterson  
you ready? I have. I've looked at it. Yeah, second home or global offices down to El Salvador.

Matthew Sigel  
We did in 2021 we looked into a hotel project, found a local partner, you know, went pretty deep down the investment memo process. But you know, the job of the big boss is to say no to most things. So it didn't quite pass. You know, the level required, I think some of that probably had to do with real estate's very long term investment. You know what's going to happen in four years when you know, maybe Bucha is no longer president, just the whole region has a history of political volatility, and we might still get there, you know, but we just couldn't at that time. Yeah,

Mike Peterson  
well, that makes sense. Well, anything else you want to talk about,

Matthew Sigel  
well, did I convince you on the ETFs? Like, let's you know,

Mike Peterson  
no, you didn't. You

Mike Peterson  
didn't. I mean, that's unfair, because I don't think you're going to convince me regardless, but so I'll tell people, don't buy ETFs, but if you do buy the Van Eck one, because they've been in the space, I think, longer than anybody and believers before, while everybody else was still naysayers. Yeah, so we, how's that for a partial endorse good

Matthew Sigel  
we are the only ETF issuer that owns 10% of the shares outstanding of our own ETF so we eat our own cooking pretty aggressively, and that's kind of the pitch to the clients. Like, all these products are the same, you know, but if bitcoin has a drawdown, and you want to talk to someone who has done some research and has a lot of long term conviction, like, we're going to be there with you during those periods, I

Mike Peterson  
definitely think that the ETFs will be a good financial investment. I just from an ideological perspective, I don't like to see that concentration, and I like to see people forced to be self sovereign over their funds. And so, yeah, that's a dichotomy there. So, but I appreciate you being willing to sit down, and I'm stoked you're here in El Salvador, and obviously it seems like you have a love for the country, and so hope, hope to make your talk later this afternoon, and then we'll, we'll look for that Twitter spaces, where can people follow you, or what, what type of things do you want people to be able to Yeah,

Matthew Sigel  
yeah, Twitter. Follow me on Twitter, Matthew underscore, Siegel, or go to vanac.com and you can subscribe to our digital assets research. Those be the two ways. Okay,

Mike Peterson  
perfect. Awesome. Thanks, Mike. Thank.