Get Think Tanked Distilled with Dave Abner & Michael Watson

Crypto has been all the rage in 2023, not just because of the otherworldly performance of bitcoin, but also because it looks like a bitcoin ETF could actually become a reality in the not-so-distant future. Dave Abner and Michael Watson both have deep experience in the financial services & asset management spaces, but now specialize more in the use of technology in the financial markets. They join the ETF Think Tank to talk about the latest development in blockchain, crypto and more.

As artificial intelligence continues to emerge, it seems very reasonable that it will eventually converge with blockchain. Watson agrees and says that the idea of putting an AI decision making process in place of a human is really fascinating. In terms of portfolio construction, humans are making the decisions to transact, but it’s not unreasonable or far off to think that a ChatGPT-run model could do the research and make the buy or avoid investment decisions. AI agents could also serve as compliance officers making sure it runs through certain pre-determined screens and safeguards. By automating the process, you’re able to potentially remove human liability for decision making by using AI.

On the technology side of data research, Watson says the latest trend is that a lot of development is existing data that’s getting more nuanced. People are always trying to fill in the gaps, especially for underrepresented populations & demographics and there’s a desire to model those folks. Proprietary research is getting better and data models continue to improve. There’s a lot of value in stuff that’s proprietary and fundamental data & analysis is getting bigger again.

The conversation shifted to the potential for a Bitcoin ETF. Abner believes that the probability of a Bitcoin ETF getting approved eventually is close to 100%. We don’t have clarity on timing yet, but we’re on the approval path and it’s no longer considered a multi-year timeline like it was not so long ago. There will be at least one and probably multiple funds trading over time. He wouldn’t be surprised if we saw a scenario where Bitcoin sentiment leads to a Bitcoin rally ahead of a Bitcoin ETF launch.

Abner suggests that the approval of a Bitcoin ETF could potentially pave the way for the introduction of other cryptocurrencies into the ETF structure. Issuers are already thinking about this. There’s more talk about coins being actual securities and we’re seeing traditional securities and the token market coming together. Abner doesn’t know how it will play out, but he believes the trajectory is very likely to continue. If a bitcoin ETF gets approved, an ethereum ETF could potentially be next.

Other key takeaways:

  • Are you seeing data creators being able to monetize data or is it all about creating? Watson says someone with deep domain expertise can charge a high price, but it really ends up being one-time use. There’s some potential in digital access to some datasets for a monthly fee.
  • Watson says that having good ideas is more important than either the acquisition cost of data or the technology needed for data modeling.
  • Abner says it’s not really important whether or not a bitcoin ETF launches before or after halving. Everybody is trying to pull all these events together as if they’re massively interrelated. From an operational standpoint, it won’t be an interesting event.

You can watch a replay of this virtual happy hour on our YouTube channel here. While there, subscribe to our channel to stay up to date on our latest content.


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