Q2 2025 Bullish Global Earnings Call
In Q&A.
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After the Speakers' remarks, there'll be a question and answer session.
Like to ask a question during this time simply press star followed by the number one on your telephone keypad.
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And again.
I would now like to turn the call over to Michael for Delhi.
Please go ahead.
Good evening and welcome to our first ever quarterly earnings call as a public company I'm, Michael Fidelity, Vice President of Finance and I am joined on today's call by our Chief Executive Officer, Tom Farley, Chief Financial Officer, David Banana and director of corporate development.
William Foley.
On this call will contain forward looking statements, including those relating to our expected performance and business opportunities. These statements are not assurances of future performance. They are subject to risks and uncertainties and our actual results could differ materially for more details on these risks please refer to today's earnings.
Press release, and our SEC filings, including our prospectus dated August 12 2025.
We undertake no obligation to update or revise any forward looking statements.
This call will also include a discussion of non <unk> financial measures. A reconciliation of these metrics to the most directly comparable <unk> metrics can be found in our earnings press release and presentation, which also contains additional information regarding non <unk> financial measures and <unk>.
Key performance indicators I will now turn the call over to Tom.
Hello, I'm, Tom Farley, the CEO and chairman of bullish.
Joining by Dave Honan, our CFO. Thank.
Thank you for joining us today on our first earnings call since going public.
I expect to be a little longer winded today, and introducing myself and our company then in future sessions.
I am excited to discuss our results, but before I do I want to spend some time, highlighting my background bullish or missing that bullish and why I'm. So excited to lead this business going forward.
By way of background I've spent my career working in market infrastructure with exchanges and other regulated entities across multiple asset classes in several geographies.
And all I've been chairman CEO, and President now 10 regulated exchange or related businesses.
I've held various leadership positions at Intercontinental exchange, the world's largest traditional financial exchange grouped by market cap.
I served as president of the New York Stock Exchange.
Introduced electronic electronic trading.
To the New York Board of trade also as President and completed multiple large scale transformational M&A transaction, I know that market infrastructure business model well Mike.
My experience gives me a deep understanding of the amazing value that exchange businesses can offer our investors.
And perhaps even more importantly, our customers, but also of all the opportunities to further push the envelope go the extra mile. If you will and drive innovation.
For the past several years I've been applying learnings to make bullish to premier institutional digital asset market infrastructure business in the world.
Well it is an institutionally focused business that operates globally and provides market infrastructure and information services that are designed to help institutions grow their businesses.
Empower individuals investors and.
And drive the adoption of stable point digital assets and blockchain technology, we hold what I believe to be the four most respected and difficult to attain crypto licenses in the world.
From the European Union by way of Germany, and Boston.
From Hong Kong.
The United Kingdom, and as of yesterday, New York State a bit light.
Although the growth in the digital asset space over the past decade has been staggering institutional adoption has lagged behind.
Looking ahead, we're excited by the continued opportunity in the digital asset space and we're not alone industry analysts estimate that the crypto space or more than double in the coming coming years, and we expect this may prove to be conservative and we expect that this growth will largely be on the back of institutional adoption.
What's changed up until now we believe the lack of institutional adoption or largely to regulatory uncertainty things are indeed, changing however.
We are seeing increasing regulatory clarity all over the world.
Europe's Mika regulations in Hong Kong Aspire roadmap, both add clarity. We're also quite optimistic with recent progress in the United States, including the adoption of the Genius Act, which defined stable coin regulation and the progress towards a broader adoption of a crypto market structured bill, which intends to formulate the first.
National regulatory framework for digital assets market infrastructure, we believe that this regulatory framework is not only exciting in the context of existing blockchain and crypto adoptions, but could also plant the seeds for the large scale transition of many traditional finance work streams and markets to blockchain.
<unk> technology in the years to come.
Turning to our business.
Both operates two primary brands the bullets exchange.
Which includes arent things and related market infrastructure offerings, and pointing desk, our information services offerings.
Our exchange and related market infrastructure solutions differentiate us from other competitors through our suite of tier one regulatory licenses one global order book.
<unk> business model predictable and consistent liquidity with tight spreads.
In other areas of differentiation.
We offer spot perpetual futures and dated futures trading and will soon launch options at scale, we offer clearing and custody and more our calling card, it's deep liquidity and cryptos largest asset and at competitive low fees year to date through August 2025.
Our exchanges facilitated more than $530 billion of total volume, including more than $485 billion in spot volume alone. We support trading for many different trading person. We have established significant volume market share in bitcoin and ethereum and stable coin as compared to our identified peers that are regulated.
Changes, notably none of our volume to date has come from the United States. While we have already had the ability to operate in many states because of a regulatory approval, we refrain from launching our exchange in the United States until we received the New York State Department of financial services that license.
It both because of the prominence of the bid license as well as the relative importance of New York State through our business model well, we received that license yesterday, and we look forward to bringing our exchange and our leading liquidity to the United States Imminently and we believe this to be the largest geographic market by far.
We're also excited by our liquidity services offering which provides digital asset issuers with subscription is liquidity lifting visibility in distribution.
This revenue line has grown significantly in recent months as you can see including through various recently signed agreements that are not yet reflected in our financial results such as our collaboration with <unk>, which was initiated on July one and.
And agreements with various other stable point.
Digital asset issuers.
Including effectively now all of this calendar stable coins.
Our information services brand coined that offers three primary services <unk>.
<unk> indices, which designs tradable benchmarks that track the performance of digital assets. Our flagship products include coined as five which in conjunction with great scale has filed to become the largest multi token ETF in terms of assets in the world and coined F. 'twenty.
Which tracks the performance of the 20 largest digital assets by market cap.
Our ended these anchor about $41 billion AUM.
And over $15 billion of trading volume as of June 32025.
Second service coined up data offers a comprehensive suite of subscription based market data and analytics solution.
<unk> is a key resource for more than 11000 institutional investors professional traders and industry professionals recently, we announced we hired Dave will evolve a longtime industry executive well respected and well known in the industry to lead both the indices and coin desk data initiatives.
Our third serve has coined the insights provides news on the digital asset industry.
Having reached a global audience of more than 80 million people last year and serving as hosts for the consensus conferences in Hong Kong back in February and in Toronto earlier in Q2, our insights business earns revenue from advertising sponsorship and events and serves as a critical cross sell function for the rest of our business lines. Each of these three service.
Indices data and insights is growing due to our great leadership team introduction of new products and utilization of our broad reach to find new customers, while cross selling to our existing base, Dave will hit on a recent.
Dave will hit on our recent cross selling success in his remarks, I will now shift gears to highlight a few accomplishments and areas of focus for us.
First on regulatory approvals bullishness pursued intentionally a suite of difficult to attain regulatory licenses from the most reputable tier one regulators in the world.
Set us apart and prepare to prepare us for the institutional adoption, which we already hold type one anti <unk> seven licenses from Hong Kong, SFC and a benchmark administrator license from the United Kingdom FCS, while we were previously grandfathered into Europe's regulatory regime through our license with Germany's Boston Our license was recently.
<unk> lifted to full alignment requiring no further need for grandfathering with the European Union meter regulation and repeating our very recent good news we were approved for the New York DFS is prestigious bit license yesterday.
Throughout our positive communications with the team at New York DFS, we remain confident and optimistic in the impending approval of our application and are pleased to now share that we are licensed in New York the bit license is infrequently granted and known for stringent application requirements.
We believe this milestone is a testament to our ability to merge our innovative technology, including among others are automated market, making construction with the capability to operate within the parameters of a highly regulated environment. This caps off the completion of what we call the quad factor.
Which is the four top tier one digital assets regulatory regulatory licenses in the world. We're looking forward to launching in the U S imminently.
Moving on to our liquidity services. This business continues to grow rapidly and in recent months, we have entered into a collaboration with the Salon a foundation and many more liquidity services partners that are powering some of the most exciting projects in this space, including Pudgy Penguins World Liberty USCG Gitto saw a gora.
All unity, Sid Panda, and many more and have deepened our already strong sales pipeline for the future.
Our decision to accept our IPO proceeds and stable coin was very well received by our partners, both existing and new and while we've managed now to add many of the sizeable challenge or stable coin providers through our liquidity services client with the addressable market of both new stable coin entrants and non stable point Toby.
Issuers remains massive and accordingly, we have a deep and growing pipeline of future opportunities.
For our existing exchange operations, we are constantly optimizing our pricing starting in March of this year and stretching through Q2, we made several iterations to our change pricing. These optimizations included the adjustment of fees based on client types and client activity. This experimentation led to non standard.
<unk> in both our volumes and our typical spread rates.
We believe that the fruits of this optimization strategy of really started to manifest in Q3, you can review our monthly Kpis currently accessible on our IR web site to see that monthly spreads and particularly volatility volatility adjusted threats are a good deal higher in the first couple months of Q3 than they were in Q2.
Shifting gears.
We continue to make progress towards an anticipated full launch of our options trading platform in Q4 of this year in fact, our options trading product is already live in production as part of our mobilization or beta phase where clients are trading, but just in a risk limited manner and ring fence to only.
Collect number of clients.
I've been a part of many trading product launches in my career, including options trading product launches and this one has all the hallmarks of the successful initiatives so far.
We will report back as we move towards full launch.
It was a busy quarter for our information services business.
In addition to the hiring of Dave will fall on the coin debt indices side, we continue to add assets under management, ending the quarter with $41 billion of <unk>.
Assets under management tied to our indices.
An increase of more than $9 billion. In Q1, we also launched exciting new products, including <unk> Cohen desk overnight rates the benchmark interest rate for stable clients on the coin that data side, our integration of <unk> data acquired in Q4 of 2024 is now complete and we continue to regulate.
<unk> cross and upsell our customers.
For instance, recently, we signed a far more comprehensive coin that data contract with <unk>. We also continue to execute on the multi product cross and upsell, including through our recently signed customer deal with midnight.
We also executed a very successful consensus conference in Toronto during Q2, where we welcomed more than 15000 guests while.
While we loved our timing crop Toronto of the United States is once again, the capital Crypto and we look forward to hosting our 2026 North America conference in Miami on May 5th through seven please join us.
Finally I'd.
I'd like to discuss our U S launch.
As I mentioned, a moment ago, we have received the New York pit like this was the last critical item for us to launch in the United States.
So what's next.
From an activation standpoint, our team has already been pounding the pavement building a pipeline of interested exchange customers, including asset managers hedge funds retail brokers and more and in many instances, we can leverage our relationships with the very customers on the information services front to establish warm introduction and get them excited about the prospect of onboard.
The bullish our onboarding team and relationship managers have hit the ground running we're also advantage due to our global order book a single Global order book any U S clients at onboard to our exchange, we will have access to our already existing global liquidity from day, one meaning there is no zero.
<unk> won or cold start problem.
In meeting that U S customers will instantly benefit from our best in class liquidity and Cryptos largest asset.
It is worth noting that our targeted customer basis institutional institutional clients do take some time to fully onboard to the exchange and begin trading.
We are optimistic about the opportunity in the United States and we believe it could SaaS become our largest trading market that said, we wish to guide conservatively to volume expectations, particularly in immediately honest drilling quarters. Since it will take some time for clients to fully hooked to our platform technologically.
And initiate trading at scale.
Our receipt of the NY DFS that license is an important milestone and positions us well, we're glad we have the opportunity to share. This news with you folks today and look forward to addressing any questions about the license in our plants. During Q&A. While there are several other highlights that I could address including our recently launched investor trading competition.
Our IPO or the impact of accepting funds and stable coin or any of the exciting new coined as five and coined that 'twenty development I recognize that our prepared remarks are already pretty lengthy this time around and I wanted to ensure we save time for Q&A. So I'll stop here I'll give Dave a chance to introduce himself discuss our business model.
Review, the quarterly results and provide an outlook for the business.
Thanks, Tom and good afternoon, everyone.
Today I'd like to walk you through our business model, the second quarter results and provide some context on our operating performance.
Italy, we are building bullish around five core financial pillars that serve as our foundation for continued growth and drive our capital allocation framework.
These pillars are organic revenue growth.
<unk> and complementary revenue streams.
Operating leverage maintaining a well capitalized highly liquid and uniquely flexible balance sheet, and finally, creating value through M&A per shareholders.
So how did these financial pillars translate into our business model.
As shown on page 10 of today's Investor presentation.
Louis has a broad set of diversified and complementary revenue stream.
While these various business lines each have their own revenue models, they all make money and familiar ways as described on the page.
In particular I'd like to call out our <unk> revenue, which includes liquidity services and all of the coin. This branded products inside of information services, our assets and our revenue has grown to 45% of total adjusted revenue in the first half of 2025.
28% from the full year 2024.
This growth has been driven by significant new logo wins and cross selling into our existing base of partners.
On page 11, we featured several of <unk> recent business highlights across the business.
Tom already touched on most of these but I'd like to drill down a bit more into how our cross sell efforts are generating multi product adoption across both the bullish and digital asset ecosystem.
To do that I would like to highlight one extremely new exciting partner Igloo, Inc.
As featured on pages, 12, and 13 of our Investor presentation.
<unk> is the owner of the well known <unk> Penguin intellectual property and issuer of the paint do token igloo.
Hey, glue and buggy Penguins chose bullish for multiple mission critical subscription based services during the third quarter that highlight the multiple ways that bullish powers, our partners' growth ambitions.
Hershey Penguin is a global web three IP focused company Onboarding, new users to crypto through their globally recognized poachy paying character originally and then a T collection punchy paying with IP and trademarks were acquired by serial entrepreneur Loopnet in 2022.
They have since become one of the worlds most recognizable characters with over 220 billion, social media and gift use more than 2 million toys sold across more than 10000 global retailers, including Walmart target and one of the most popular racing mobile video games in the Apple App store.
Party.
The pudgy Penguins and a T collection and Pangu token have a combined market capitalization of approximately $3 5 billion.
The toys includes Scannable QR codes to download a digital wallet with an NFC that can be used in their online properties and video game.
Additionally, poachy powered buggy party excuse me is powered by an in game blockchain blockchain based marketplace for redeeming rewards and trading in game asset.
Equaling chose to partner with bullish across several multi year subscription based products, including our liquidity services. According to data and multiple insights products, including a research and coin that edge.
We are particularly excited about this partnership.
We're bullish on the future of this promising team and Theres clear line of sight to expanding the partnership by leveraging more of our quintet insights platform at poaching Penguin strong ties to the Salon and networking community. We look forward to sharing more developments with you here in the future.
Turning to our adjusted second quarter results on page 14, you can see we closed the quarter roughly in the middle of all of the previously provided ranges reconciliation of our non <unk> metrics can be found in the back of today's presentation as well as our 6K filed earlier today.
With the SEC.
Digging in a bit more into our adjusted operating result, as shown on page 16, the second quarter was shaped by historically low BTC price volatility, which led to lower market wide digital asset trading volumes.
Against these headwinds we delivered delivered record quarterly subscription service and other revenue, which helped to partially offset the lower trading activity leading to total adjusted revenue for the second quarter of $57 million.
Eight 7% sequentially and six 1% year over year.
Adjusted operating expenses for the quarter were $48 $9 million.
As seen on page 17 employee compensation expenses were 27, $25 7 million down, 13% sequentially and 3% year over year, and we expect quarterly employee compensation expense to remain broadly at this level going forward.
Additionally, I'd also highlight <unk> advertising and promotional costs of $7 4 million.
This largely consists of consensus events variable expenses, driven by our North American consensus event in Toronto.
Adjusted EBITDA was $8 1 million down, 39% sequentially and 45% year over year at <unk> lower adjusted transaction revenue flow through to the bottom line.
Now I'd like to turn to our Q3 guidance for adjusted operating ourselves.
We expect total adjusted revenue to be in the range of 69 to 76 million with adjusted transaction revenue between 25, and a half and.
28 million and subscription service and other revenue between 43, 5% and $48 million, we anticipate <unk> adjusted EBITDA between 25, and $28 million and adjusted net income between 12% and $17 million.
Going forward, we intend to provide guidance on a quarterly basis for adjusted operating expenses and net debts and no revenue.
Our monthly reporting for spot perpetual volumes and spreads should allow investors.
To see our performance at the exchange level on a regular basis.
Thank you for joining us today, we look forward to the questions and with that I'll turn it back to Tom.
Thanks, Dave we're thrilled to be able to share some of our accomplishments. Our latest plans with you. All Q2 was a strong quarter and the groundwork we've laid in Q2 should position us well for Q3 Q4 and beyond.
With that I'll pass it back to the operator to help facilitate Q&A.
As a reminder, if you'd like to ask a question. Please press star followed by the number one on your telephone keypad. Your first question comes from the line of Ken Worthington with JP Morgan.
Please go ahead.
Hi, good afternoon, thanks for taking the question.
Perhaps on the IPO congrats on the <unk> congrats on the.
Our strong liquidity and strict subscription services numbers.
My question goes to that liquidity and <unk> subscription services.
Line item you are guiding to sort of mid to high $40 million range for <unk>. If we look at <unk>, how many tokens, we're part of liquidity services at the beginning of the quarter and how did it end the quarter and as we think about three Q, where does that number grow.
<unk>.
Hey, Ken Thanks.
Good too good to speak to you again.
Yes.
That business kind of jumps out at me as well.
Paul.
Because it is really growing nicely if I can just.
Expand a bit and explain for the broader audience kind of what it is so what this business is that if youre a stable coin issuer.
Or a non state of point token issuers JFK.
Couple of examples of non state point token issuers.
You really need to have your product lifted and not just on bullish you need to have it lifted in a number of different places to ensure that there's appropriate.
Liquidity and you need to make sure that there is appropriate liquidity.
Just list your product somewhere in there is no bids or offers it's a tree falling in the woods.
Operator: Morgan, please go ahead.
And you need to be able to have some level of visibility into your product.
[Operator]: Hi, good afternoon. Thanks for taking the question. Congrats on the IPO, congrats on the BitLicense, congrats on the strong liquidity and subscription services numbers. My question goes to that liquidity and subscription services line item. You're guiding to sort of mid to high $40 million range for Q3. If we look at Q2, how many tokens were part of liquidity services at the beginning of the quarter and how did it end the quarter? As we think about Q3, where does that number grow to?
Hi, good afternoon, thanks for taking the question congrats.
Advertising or you need to be on stage at an industry conference or.
Congrats on the IPO congrats on the <unk> congrats on.
The strong liquidity and strict subscription services numbers.
You need to have research written on your token.
And when you look around and you say well Gee, who can give me all of those.
My question goes to that liquidity and subscription services.
The line item you are guiding to sort of mid to high $40 million range for <unk>. If we look at Q Q, how many tokens, we're part of liquidity services at the beginning of the quarter and how did it end the quarter and as we think about three Q, where does that number grow.
We like to think it is really just us and if you look around and you say who can give me.
All of those who can do it with the institutional group.
Raid wrapper with incredible and compliant.
Its certainly only us.
And so I suspect that that's what's really driving it to give you a little bit of directional answer without necessarily giving you the specifics about hay with this many in this quarter and that many in the following quarter that we have not disclosed that level of detail I will say it has accelerated.
Two.
Tom Farley: Hey, Tim. Thanks, and good to speak to you again. That business kind of jumps out at me as well, because it is really growing nicely. If I can just expand a bit and explain for the broader audience kind of what it is. What this business is, is if you're a stablecoin issuer or a non-stablecoin token issuer—Dave gave a couple examples of non-stablecoin token issuers—you really need to have your product listed, and not just on Bullish. You need to have it listed in a number of different places to ensure that there's appropriate liquidity. You need to make sure that there is appropriate liquidity. If you just list your product somewhere and there's no bids or offers, it's a tree falling in the woods.
Hey, Ken Thanks.
Good to speak to you again.
Yes.
Got it jumped out at me as well.
Rapidly throughout this entire year and I think a lot of it is just the groundswell of regulatory clarity all around the world everybody knows the rules of the road. So they are willing to kind of push the chips in the middle of the table and they're willing to make these kind of long term commitments to someone like us to pay us in many cases, maybe even most cases.
Because it is really growing nicely if I can get.
Expand a bit and explain for the broader audience kind of what it is so what.
If you're a stable point issuer.
Or a non state appointed Dave.
A couple of examples.
Token issuers.
Seven figures a year for this sort of subscription so regulatory clarity really helping us in.
You you you really need to have your product lift and not just on bullish you need to have it lifted in a number of different places to ensure that there's appropriate liquidity and you need to make sure that there is appropriate liquidity. If you just list your product somewhere and Theres no bids or offers it's a tree falling in the woods.
And the growth has has accelerated Q1 over Q4 Q2 over Q1 Q3 over Q2, but I'll hand, it over to Dave.
Yeah, Ken I would just note that in the third quarter guidance, we provided it's important to.
Tom Farley: You need to be able to have some level of visibility for your product, advertising, or you need to be on stage at an industry conference, or you need to have research written on your token. When you look around and you say, "Geez, who can give me all of those?" we like to think it's really just us. If you look around and you say, "Who can give me all of those?" and who can do it with an institutional-grade wrapper that's credible and compliant, it's certainly only us. I suspect that that's what's really driving it. To give you a little bit of a directional answer, without necessarily giving you the specifics about, "Hey, we had this many in this quarter and that many in the following quarter," because we've not disclosed that level of detail. I will say it has accelerated rapidly throughout this entire year.
And note that that at the beginning of this kalana contract.
And you need to be able to have some level of visibility into your product.
It's a large collaboration for us there's a lot to do for US there. Additionally, the additional <unk>.
Advertising or where you need to be on stage at an industry conference or.
You need to have research written on your token.
Proceeds from the IPO.
Do carry some return on them, so thats going to influence the third quarter.
And when you look around and you say well Gee, who can give me all of those.
<unk> guide as well is that those assets came on the balance sheet around mid quarter and I would just echo what Tom said, it's been a.
We like to think it is really just thoughts and if you look around and say who can give you.
All of those who can do it with an institutional grade wrapper with incredible and compliant.
Rapidly compounding line item for US is the bedrock and the head for the cross sell efforts and is the growth of just be the individual logos is is being amplified by the additional products and services that we're able to sell into our new partners and existing partners.
Its certainly only us.
And so I suspect that that's what's really driving it to give you a little bit of directional answer without necessarily giving you the specifics about hay with this many in this quarter and that many in the following quarter.
Great.
You remember from our first conversations we were certainly excited about this business.
Not disclose that level of detail.
We'll say it has accelerated rapidly throughout this entire year and I think a lot of it is.
But not overly so because we ourselves wanted to make sure theres product market fit and we wanted to make sure that the customers were getting.
Tom Farley: I think a lot of it is just the groundswell of regulatory clarity all around the world. Everybody knows the rules of the road, so they're willing to kind of push the chips in the middle of the table. They're willing to make these kind of long-term commitments to someone like us to pay us, in many cases, maybe even most cases, you know, seven figures a year for this sort of subscription. Regulatory clarity is really helping us, and the growth has accelerated Q1 over Q4, Q2 over Q1, Q3 over Q2. I'll hand it over to Dave.
Even more value out of it and we are receiving are being the subscription fees and thats exactly whats happening.
The groundswell of regulatory clarity all around the world everybody knows the rules of the road so they're willing to kind of push the chips in the middle of the table and they're willing to make these kind of long term commitments to someone like us to pay us in many cases, maybe even most cases seven figures a year for this sort of subscription so regulatory clarity really helping us.
We're hearing from customers that it's driving liquidity, it's driving credibility is helping them with their projects and not worried about.
That word of mouth is really accrue to our benefit.
Thank you.
And maybe thinking more about the outlook for that that line.
And the growth has accelerated Q1 over Q4 Q2 over Q1 Q3 over Q2, but I'll hand, it over to Dave.
I suspect that the passage of the genius X sort of pull forward.
Dave Shrier: Ken, I would just note that in the Q3 guidance we provided, it's important to note that is the beginning of the Solana contract. You know, that is a large collaboration for us. There's a lot to do for us there. Additionally, the additional proceeds from the IPO do carry some return on them. That's going to influence the Q3 guide as well, as those assets came on the balance sheet around mid-quarter. I just echo what Tom said. It's been a rapidly compounding line item for us. It's the bedrock and the balance head for the cross-sell efforts. It's the growth of just the individual logos being amplified by the additional products and services that we're able to sell into our new partners and existing partners.
Yeah, Ken I would just note that in the third quarter guidance, we provided it's important to.
A bunch of the stable coin as to kind of subscribe to your services what.
Does the pipeline looks like going forward for that have you basically locked up all of the.
And note that that at the beginning of the contract.
That is a bit.
Large collaboration for us there's a lot to do for US there. Additionally, the additional Prost.
Major new stable coins and is the growth that youre seeing maybe beyond <unk> and <unk> of this year comprised of you think more stable clients or is the growth as we look forward really expanding into non stable coin tokens.
Proceeds from the IPO.
Do carry some return on them, so that's going to implement in the third quarter.
Guide as well is that those assets came on the balance sheet around mid quarter and I'd just echo what Tom said, it's been a.
I appreciate that question.
Rapidly compounding line item for us is the bedrock and the head for the cross sell efforts.
Perhaps over sharing we actually had our first in our scripts and that we're working on that said, we have as customers substantially all of the challenger stable coins.
The growth of just be individual logos.
Is being amplified by the additional products and services that we're able to sell into our new partners and existing partners.
And tweaked it because.
Tom Farley: And.
Great.
We're seeing new stable client entrants appear literally every single day.
Dave Shrier: Ken, you may remember from our first conversations, we were certainly excited about this business, but not overly so because we ourselves wanted to make sure there's product-market fit. We wanted to make sure that the customers were getting even more value out of it than we were receiving in the subscription fees. That's exactly what's happening. We're hearing from customers that it's driving liquidity, it's driving credibility, it's helping them with their projects. That word of mouth has really accrued to our benefit.
If you remember from our first conversations we were certainly excited about this business.
So at one point it really around the time of the IPO, we looked at and we say, okay, let's look at our stable client partners.
But not overly so because we ourselves wanted to make sure those product market fit and we wanted to make sure that the customers were getting even more value out of it and we are receiving in the subscription fees and thats exactly whats happening. So we're we're hearing from customers that it's driving liquidity, it's driving credibility.
Paypal.
I assume I can say these names.
<unk>, which is which has been exited and ripple and really great U S. <unk> world So on and so forth.
Helping them with their projects and not worried about.
And we kind of had this really great group and so if that's the question.
That word of mouth is really accrue to our benefit.
[Operator]: Thank you. Maybe thinking more about the outlook for that line, I suspect that the passage of the Genius Act sort of pulls forward a bunch of the stablecoins to kind of subscribe to your services. What does the pipeline look like going forward for that? Have you basically locked up all of the major new stablecoins, and is the growth that you're seeing maybe beyond Q3 and Q4 of this year comprised of, you think, more stablecoins, or is the growth as we look forward really expanding into non-stablecoin tokens?
Thank you.
Is this just a onetime burst of stable point issuers on the back of the genius Bill and then we'll continue to grow our consolidate will it not I think that's an interesting industry question, Dave and I as you've heard US say Ive always believed it will continue to grow and this is our 1000 flowers bloom.
And maybe thinking more about the outlook for that that line.
I suspect that the passage of the genius X sort of pull forward.
A bunch of the stable coin as to kind of subscribed to your services what.
Does the pipeline looks like going forward for that have you basically locked up all of the.
And this will be a highly competitive industry and the last week and I will just give you two anecdotes.
Major new stable coins and is the growth that youre seeing maybe beyond <unk> and <unk> of this year comprised of you think more stable clients or is the growth as we look forward really expanding into non stable coin tokens.
On our call on Monday from an old friend from <unk>. So you would know cat.
I'm launching a new stable point I want to I want to talk to you about I want to work together and I got an email immediately before this earnings call I'm launching a stable point and I want to work with you from also an old friend one of my one of my closest friends in the world. So.
Tom Farley: I appreciate that question. Perhaps oversharing, we actually had a version of our script, Ken, that we were working on that said we have, as customers, substantially all of the Challenger stablecoins. I tweaked it because we're seeing new stablecoin entrants appear literally every single day. At one point, really around the time of the IPO, we looked down and we said, "Okay, just look at our stablecoin partners, you know, PayPal, and I assume I can say these names, AgoraX, which is VanEck, and Ripple, and really great USDG, World, and so on and so forth." We kind of had this really great groove. It begs the question, is this just a one-time burst of stablecoin issuers on the back of the Genius bill? Will it continue to grow? Will it consolidate? Will it not? I think that's an interesting industry question.
I appreciate that question.
Perhaps over sharing we actually had our first in our scripts and that we're working on that.
The answer is the current pipeline is heavier on non stable point token issuers in other words, if we look at the current pipeline and if I just say Hey give me the 50, most likely more than 25% are non stable point token issuers, but the stable coin issuers, just keep popping up in the product market fit that we.
We have customers substantially all of the challenger stable coins.
I tweaked it.
<unk>.
We're seeing new stable coin entrants appear literally every single day.
So at one point it really around the time of the IPO, we looked at and we say, okay, let's look at our stable coin partners.
<unk> is highly highly compelling which is why we had literally all essentially all of the challenger stable point at one point in time did that answer your question, Ken I know it was a little bit long winded.
Pay pay power.
I assume I can say these names.
<unk>, which is which has been excellent and.
Answered it well so thank you very much.
Ripple in USD.
Yes congrats.
<unk> world, so on and so forth.
As a reminder, ladies and gentlemen, we ask that participants limit themselves to one question.
And we kind of had this really great group and so that is the question.
Next question comes from the line of Peter Christiansen with Citi.
Is this just a onetime burst.
Table point issuers on the back of the genius Bill and then we'll continue to grow our consolidate will it not I think thats an interesting industry question, Dave and I as you've heard US say Ive always believed it will continue to grow and this is our 1000 flowers blooming and this will be a highly competitive industry and the last one.
Please go ahead.
Thank you good evening, thanks for the question.
And certainly congrats Tom and team, it's been quite a quite a month or two here.
Tom Farley: Dave and I, as you've heard us say, have always believed it will continue to grow. This is a thousand flowers blooming, and this will be a highly competitive industry. In the last week, I'll just give you two anecdotes. I got a call on Monday from an old friend from my Naibot days, who you would know, Ken, saying, "I'm launching a new stablecoin. I want to talk to you about it. I want to work together." I got an email immediately before this earnings call saying, "I'm launching a stablecoin, and I want to work with you," from also an old friend, one of my closest friends in the world. The answer is the current pipeline is heavier on non-stablecoin token issuers.
And certainly great to see.
The big license being awarded.
Fantastic News.
I was wondering Tom maybe is there is there like an analog that we should think of the back of our head and obviously, who knows what's going to happen over the next year and a half.
Weak and I'll just give you two anecdotes I got a call on Monday from an old friend for my <unk> days. So you would know cat.
I'm launching a new stable point I want to I want to talk to you about and want to work together and I got an email immediately before this earnings call.
U S institutional.
Sector.
We started opening up an analog in terms of.
And a stable point and I want to work with you from also an old friend one of my one of my closest friends of the world. So.
Sales cycle to sign up.
Institutional sized account time too.
The answer is the current pipeline is heavier on non stable coin token issuers in other words, if we look at the current pipeline and if I just say Hey give me the 50, most likely more than 25% are non stable point token issuers, but the stable coin issuers, just keep popping up in the product market fit that we offer.
Implement on the backend that kind of thing and then as you think about time as.
Tom Farley: In other words, if we look at the current pipeline, and if I just say, "Hey, give me the 50," most likely more than 25 are non-stablecoin token issuers. The stablecoin issuers just keep popping up, and the product-market fit that we offer is highly, highly compelling, which is why we had literally all, essentially all of the Challenger stablecoins at one point in time. Does that answer your question, Ken? I know it was a little bit long-winded.
Cross sell start coming after after volumes.
Building up.
I don't know if you have seen.
Our steady schedule.
Among some of your existing client engagements that that might be helpful to us and then I am going to throw in one last one here I did notice the $10 million trader.
<unk> is highly highly compelling which is why we had literally all essentially all of the challenger stable point at one point in time does that answer your question, Kevin I know it was a little bit long winded.
<unk> promotion, which you've seen.
How should we think about this I guess in marketing and selling expense going forward and.
[Operator]: Thank you very much. You answered it well.
And she did well so thank you very much.
Tom Farley: Yes. Congrats.
Yes congrats.
Just just just thoughts on that thank you.
[Operator]: As a reminder, ladies and gentlemen, we ask that participants limit themselves to one question. Your next question comes from the line of Peter Christiansen with Citi. Please go ahead.
As a reminder, ladies and gentlemen, we ask that participants limit themselves to one question.
Got it great. Thanks Pete.
<unk>.
Yes, I'm going to I'm going to let.
Your next question comes from the line.
I'll, let Dave address address the chatter trader challenge just in terms of the sales cycle. I think Pete's question is specifically about our U S launch again for the voice of that we'd never brought on a U S customer all of our customers are non U S. The bit license unlocks the U S as a market.
Peter Christiansen with Citi.
Please go ahead.
[Analyst 1]: Thank you. Good evening. Thanks for the question, and certainly, congrats, Tom and team. It's been quite a month or two here, and certainly great to see the BitLicense being awarded. That's fantastic news. I was wondering, Tom, maybe is there like an analog that we should think of in the back of our head? Obviously, who knows what's going to happen over the next year and a half as the U.S. institutional sector hopefully starts opening up, but an analog in terms of sales cycle to sign up an institutional sized account, time to implement on the back end, that kind of thing. As you think about time as cross-sells start coming after volume starts building up, I don't know if you've seen a steady schedule among some of your existing client engagements that might be helpful to us. I'm going to throw in one last one here.
Thank you good evening, thanks for the question.
And certainly congrats Tom and team, it's been quite a quite a month or two here.
And certainly great to see.
The big license being awarded.
Fantastic News.
Effective today.
I was wondering Tom maybe is there is there like an analog that we should think of the back of our head and obviously, who knows what's going to happen over the next year and a half.
We now can enter the actually I think it's effective Monday.
We can we can enter the United States. So Pete look Unfortunately, if you look at our pipeline right now.
Institutional.
Sector, hopefully starts opening up.
It's filled with companies that have the work back in the may or financial or investment. It's a more mature on a white shoes set and the truth of the matter is it takes a while to hook them up and that's why I asked but that's my prepared remarks in a while can rate.
Analog in terms of.
Sales cycle to sign up.
Situtions sized account time too.
Parliament on the backend that kind of thing and then as you think about time as.
Cross sell start coming after after volume starts building up.
<unk> from.
I don't know if you have seen.
Two months and that's if somebody has a.
A steady schedule.
Legally that act with Alacrity, and let's say, they're using it.
Some of your existing client engagements that that might be helpful to us and then I am going to throw in one last one here I did notice the the $10 million trader challenge promotion, which you've seen.
Someone to help connect them to trading in crypto to quite literally six months, if theyre going to do all the connectivity to the API themselves theyre going to heavily negotiated <unk>. The good news on RM, Pete as we have been able to because we have regulatory approvals.
[Analyst 1]: I did notice the $10 million Creator Challenge promotion, which seems—how should we think about this? I guess in marketing and selling expense going forward, and just thoughts on that. Thank you.
How should we think about this I guess in marketing and selling expense going forward and.
Just just just thoughts on that thank you.
Throughout the US just not in New York until until yesterday, we have advanced discussions in an advanced pipeline. So I think it's going to take a little while to see the first couple of customers come on board, but but if we don't start to see it in the next month or two I can tell you I'm going to have I'm going to have some hard conversations internally.
Tom Farley: That's great. Thanks, Pete. I'm going to let Dave address the chain of trader challenge. In terms of the sales cycle, I think Pete's question is specifically about our U.S. launch. Again, for the avoidance of doubt, we've never brought on a U.S. customer. All of our customers are non-U.S. The BitLicense unlocks the U.S. as a market. Effective today, we now can enter the, actually, I think it's effective Monday, we can enter the United States. Pete, unfortunately, if you look at our pipeline right now, it's filled with companies that have the word bank in their name or financial or investments. It's a more mature kind of white shoe set. The truth of the matter is it takes a while to hook them up. That's why I added that to my prepared remarks.
That's great. Thanks.
Yes.
I'm going to let.
The.
Address the Cheddar trader challenge just in terms of the sales cycle I think Pete question is specifically about our U S launch again for the avoidance of that we'd never brought on a U S customer all of our customers are non U S. A bit like the unlocks the U S. As a market so effective today.
We have invested in a team that's been out building.
I hope that gives you a little bit of color.
But that kind of gives you a sense of what to expect.
Thanks, Pete I think your second question you broke up a little bit there was related to the <unk>.
We now can enter the actually I think it's effective Monday.
Trading competition, we announced.
And there the prices.
We can we can enter the United States. So Pete look Unfortunately, if you look at our pipeline right now.
Up to $10 million seed investment in their funds. So we're not just giving away some money in promotional rewards.
We really like this type of activity is our first time engaging in it but what we've seen in terms of new customer onboard.
It's still with companies that have the work back in the may or financial or investment. It's a more mature on a white shoes set and the truth of the matter is it takes a while to hook them up and that's why I asked but that's my prepared remarks and a wildcard.
And participating in the program our ability to push our data and its availability.
<unk> into new user basis income trading on exchange and maybe you could get a fun one benchmark to our appointed indices products.
Tom Farley: A while can range from two months, and that's if somebody has a legal team that acts with alacrity, and let's say they're using someone to help connect them to trading and crypto, to quite literally six months if they're going to do all the connectivity to the APIs themselves. They're going to heavily negotiate for legal docs. The good news on our end, Pete, is we have been able to, because we have regulatory approvals throughout the U.S., just not in New York until yesterday, we have advanced discussions and an advanced pipeline. I think it's going to take a little while to see the first couple of customers come on board.
<unk> from.
General idea behind it was exposing a different customer segment to our cross sell potential and we're really excited about it and the $10 million is not a payment.
Two months and that's if somebody has a.
Our legal team that act with Alacrity, and let's say they are using it.
Some of them to help connect them to trading in crypto to quite literally six months, if theyre going to do all the connectivity to the API themselves theyre going to heavily negotiated but.
Yes, it's and it's an investment.
So we're yes, we're excited about.
Next question please.
The good news on our end as we have been able to because we have regulatory approvals.
The next question comes from the line of Dan Fannon with.
Jefferies.
Throughout the US just not in New York until until yesterday, we have advanced discussions in an advanced pipeline. So I think it's going to take a little while to see the.
Please go ahead, thanks, good evening.
Thanks, Good evening guys congrats.
Wanted to talk about customer concentration you guys mentioned, how you've been adjusting some of the pricing for your various customer basis. So curious how that's evolved maybe talk about <unk> and how that's progressed and ultimately do you think you're done here or is there. Some more tweaking we think about pricing going forward that you still likely need to make.
First couple of customers come on board, but but if we don't start to see it in the next month or two I can tell you I'm going to have I'm going to have some hard conversations internally because we have invested in a team that's been out building.
Tom Farley: If we don't start to see it in the next month or two, I can tell you I'm going to have some hard conversations internally because we have invested in a team that's been out building the funnel. I hope that gives you a little bit of color. That kind of gives you a sense of what to expect.
Oh man.
I hope that gives you a little bit of color.
The tweaking never at Dan.
But that kind of gives you a sense of what to expect.
I wish I wish it did.
Dave Shrier: Thanks, Pete. I think your second question, you broke up a little bit there, was related to the trading competition we announced. Yes, and there, the prize is up to $10 million seed investment in their fund. We're not just giving away the money as promotional rewards. We really like this type of activity. It's our first time engaging in it. What we've seen in terms of new customer onboard interest in participating in the program, our ability to push our data and its availability into new user bases who can then come trade on exchange, and maybe they get a fund one day and they can benchmark to our CoinDesk Indices products. The general idea behind it was exposing a different customer segment to our cross-sales potential, and we're really excited about it.
I mean that is a career long commentary I remember when we introduced electronic trading to the New York Board of trade in February of 2008.
Thanks, Pete I think you said.
Second question, you broke up a little bit there was related to the.
The trading competition, we announced.
Yes, they are the prices.
Gekko in.
Up to $10 million investment in their funds. So we're not just giving away some money in promotional rewards.
Hudson regular trading where 50% of our of our volumes.
It's a very common thing in markets, where you will see.
We really like this type of activity is our first time engaging in it but what we've seen in terms of new customer onboard interest in participating in the program our ability to push our data and its availability into new user basis.
A certain number of customers that amassed a significant amount of volume and thats. Okay.
It's something that we fiddle with currently and Dave and the team have actually done a great job.
Trading on exchange, maybe to get a fun one day and the benchmark.
That down to a reasonable level over the last several quarters, yes, Dan I'd just comment.
Indices products.
General idea behind it with disposing a different customer segment to our cross sell potential and we're really excited about it and the $10 million is not a payment.
The pricing changes, we've made which you can see the impact that in.
In the monthly.
Tom Farley: The $10 million is not a payment. I mean, it's an investment. We're excited about it. Next question, please.
Operating results we provide.
We're pleased with the outcome.
Yes, it's and it's an investment.
So we're yes, we're excited about.
We continue to have some.
Customers, who are heavier in terms of concentration.
Next question please.
We are okay with that in a relative new pricing framework.
[Operator]: Your next question comes from the line of Dan Fanon with Jefferies. Please go ahead.
The next question comes from the line of Dan Fannon.
Having had a flat pricing fee, which created significant customer concentration was not going to be way solution for us Walter So we're happy with the pricing changes the way its diversified customer base the way, yes spread out the fees across activity levels and customer type and so while we may continue to have a couple of customers who are heavier.
Jefferies.
Please go ahead, thanks, good evening.
[Analyst 2]: Thanks. Good evening. Congrats. Wanted to talk about customer concentration. You guys mentioned how you've been adjusting some of the pricing for your various customer bases. Curious how that's evolved. Maybe talk about Q3 and how that's progressed. Ultimately, do you think you're done here, or is there some more tweaking when we think about pricing going forward that you still likely need to make?
Thanks, Good evening guys congrats.
Wanted to talk about customer concentration you guys mentioned, how you've been adjusting some of the pricing for your various customer basis. So curious how that's evolved maybe talk about <unk> and how that's progressed and ultimately do you think you're done here or is there some more tweaking when we think about pricing going forward that you still likely need to make.
On top of.
The book in terms of volume.
More comfortable with that to current pricing framework than we were previously.
Tom Farley: Oh, man, the tweaking never ends, Dan. I wish it did. I mean that as a career-long commentary. I remember when we introduced electronic trading to the New York Board of Trade in February 2008, and GetGo and Hudson River Trading were 50% of our volumes. It's a very common thing in markets where you'll see a certain number of customers that amass a significant amount of the volume. That's okay. It's something that we fiddle with currently. Dave and the team have actually done a great job of bringing that down to a reasonable level over the last several quarters.
Oh man.
The tweaking never at that.
I wish I wish it did.
Your next question comes from the line, Brett Knoblauch with Cantor Fitzgerald.
I mean that is a career long commentary I remember when we introduced electronic trading of the New York Board of trade in February of 2008 and Gekko in.
Please go ahead.
Alright, Thanks, guys. Congrats on the IPO, Tom It seems like Youre a bit to talk about but that's five <unk>.
Hudson Greater trading where 50% of our of our volumes.
It's nice to see the quarterly increase in kind of AUM tracking very nicely some benchmarks.
It's a very common thing in markets, where youll see.
A certain number of customers that amassed a significant amount of volume and thats. Okay.
Should we think about the progression of maybe the asset linked fees going forward is there any catalysts on the horizon Lake a quantified etfs that could really accelerate some of those flows.
But it's something that we fiddle with currently and Dave and the team have actually done a great job of bringing that down to a reasonable level over the last several quarters, Yes, Dan I'd just comment.
Just more broadly about the indices business would be great.
Dave Shrier: Yeah, Dan, I just comment the pricing changes we've made, which you can see the impacts of that in the monthly operating results we provide. We're pleased with the outcome. If we continue to have some customers who are heavier in terms of concentration, we are okay with that in the relative new pricing framework. Having had a flat pricing fee, which created significant customer concentration, was not going to be a winning solution for us long-term. We're happy with the pricing changes, the way it's diversified the customer base, and the way, you know, spread out the fees across activity levels, customer type. While we may continue to have a couple customers who are heavy at the top of the book in terms of volume, we're comfortable with that as a current pricing framework than we were previously.
Yes.
The pricing changes, we've made which you can see the impact that.
<unk> correctly Brad.
Our past conversations I love this business.
In the monthly.
Operating results we provide.
We that $41 billion of assets under management Benchmarked to Orient it seems to be clear we're getting paid.
We're pleased with the outcome.
If we continue to have some customers who are heavier in terms of concentration.
Fees on the whole of that 441 billion, but the way it works in the multi token index world or even a single token index world as Youre talking about a small number of basis points.
Okay with that in a relative new pricing framework.
Having had a flat pricing.
Created significant customer concentration was not going to be way solution first Walter So we're happy with the pricing changes the way its diversified customer base.
When you run the math of the 41 billion times.
A small number of basis points.
It's a nice business, but it's not huge and so you are asking the absolute right question, which is what's going to cause us to really like what's going to enable us to be the MSCI a crypto if you will.
Yes spread out the feeds across activity levels and customer type and so while we may continue to have a couple of customers who are heavier.
Of the book in terms of volume.
And essentially what's happened in crypto if I can if I can cover a decade of history 30 seconds is the.
We are more comfortable with that the current pricing framework that we weren't previously.
The first thing people are willing to invest in.
[Operator]: Your next question comes from the line of Brett Knoblach with Panther Fitzgerald. Please go ahead.
Your next question comes from the line.
Notebook with Cantor Fitzgerald.
From an institutional perspective, with bitcoin and that really compounded with the introduction of that Bitcoin Etfs and then with the Etfs people were willing to say, okay. I'll have a little bit coin exposure and then we'll have an even smaller amount of east exposure as part of my overall portfolio, but now what we're seeing with Salon in Etfs and other token XRP for example, guardado avalanche becoming.
Please go ahead.
Dave Shrier: All right. Thanks, guys. Congrats on the IPO. Tom, it seems like you're itching a bit to talk about CoinDesk 5, CoinDesk 20. It's nice to see the quarterly increase in kind of assets under management tracking your indices and benchmarks. How should we think about the progression of maybe the asset linked fees going forward? Is there any catalyst on the horizon like a CoinDesk 5 ETF that could really accelerate some of those flows? Just more broadly about the indices business would be great.
Alright, Thanks, guys. Congrats on the IPO, Tom It seems like you're it's in a bit to talk about the 520.
It's nice to see the quarterly increase in kind of AUM tracking very nicely and benchmarks.
How should we think about the progression of maybe asset linked fees going forward is there any catalysts on the horizon like you quantified the etfs that could really accelerate some of those flows.
More mainstream people are looking for broader sets.
The dollar of the S&P 500, or for MSCI emerging markets index or something to be able to invest in a broad broader swath of the market, while maintaining bitcoin as a primary way to invest so we have the coin thats five which is quite literally five tuck ins into 'twenty, which is 'twenty covers a broader market to really be a catch up.
Just more broadly about the indices business would be great.
Tom Farley: Yeah, no, you sensed correctly, Brad, and you may know from our past conversations. I love this business. We have that $41 billion of assets under management benchmarked to our indices. To be clear, we're getting paid fees on the whole of that $41 billion. The way it works in the multi-token index world or even the single token index world is you're talking about a small number of basis points. When you run the math of the $41 billion times a small number of basis points, it's a nice business, but it's not huge. You're asking the absolute right question, which is what's going to cause this to really grow? What is going to enable us to be the MSCI of crypto, if you will?
Yes.
<unk> correctly Brad.
Our past conversations I love this business.
We that $41 billion of assets under management, thus far and it just needs to be clear we're getting paid.
For both of those.
So that trend that people move out the curve to the 520 and Theyre going great great scale private truck vehicle, which touch wood.
Fees on the whole of that $4 41 billion, but the way it works in the multi token index world or even a single token index world as Youre talking about small number of basis points.
We hope it will be approved by the SEC to convert to an ETF will be the largest.
When you run the math of the 41 billion times.
Multichannel multi token ETF I think in the world on day, one at a minimum quite quite possibly.
A small number of basis points.
It's a nice business, but it's not huge and so youre asking absolute right question, which is what's going to cause us to really like what's going to enable us to be the MSCI crypto if you will.
According to <unk>.
Our wisdom tree ETP in Europe that is gathering modest amounts of of assets inflows on a regular basis that two is exciting we have signed but not announced the particulars.
Tom Farley: Essentially, what's happened in crypto, if I can cover a decade of history in 30 seconds, is the first thing people were willing to invest in from an institutional perspective was Bitcoin. That really compounded with the introduction of the Bitcoin ETF. With the ETH ETFs, people were willing to say, "Okay, I'll have a little Bitcoin exposure, and then I'll have an even smaller amount of ETH exposure as part of my overall portfolio." Now what we're seeing with Solana ETFs and other tokens, XRP, for example, Cardano, Avalanche, becoming more mainstream, people are looking for broader sets, a la the Dow or the S&P 500 or MSCI's emerging markets index or something to be able to invest in a broader swath of the market while maintaining Bitcoin as their primary way to invest.
Essentially what's happened in crypto if I can if I can cover a decade of history 30 seconds.
With a major global futures exchange as well as a major global major U S equity exchanges to launch products on the five and 'twenty on those respective exchanges and we have a signed but not at not fully announced ETF arrangement in the U S for those products as well so it's going to.
The first thing people are willing to invest in.
From an institutional perspective, with bitcoin and that really compounded with the introduction of the bitcoin Etfs and then with the Etfs people were willing to say, okay. I'll have a little bit coin exposure that will have an even smaller amount of east exposure as part of my overall portfolio, but now what we're seeing with Salon in Etfs and other token XRP for example, Catano avalanche becoming.
It takes some time, Brett because the market needs to get more comfortable investing in more products than just bitcoin, but it is happening in real time.
More mainstream people are looking for broader set.
And we're therefore.
The dollar in the S&P 500, or for MSCI emerging markets index or something to be able to invest in a broad broader swath of the market, while maintaining bitcoin as their primary way to invest so we have the coin thats five which are quite literally five tokens that into 'twenty, which is 'twenty covers a broader market to really be a catch up.
The next question comes from the line.
Ryan the Dow with Deutsche Bank.
Please go ahead.
Tom Farley: We have the CoinDesk 5, which is quite literally five tokens, and the 20, which is 20, covers a broader market to really be a catcher's mitt for both of those, for that trend that people move out the curve, first to the five, then to the 20. They're going great. This Grayscale private trust vehicle, which, touch wood, we hope will be approved by the SEC to convert to an ETF, will be the largest multi-token ETF, I think, in the world on day one at a minimum, quite possibly. CoinDesk 20, we have a WisdomTree ETP in Europe that is gathering modest amounts of assets, inflows on a regular basis. That too is exciting. We have signed but not announced the particulars with a major global futures exchange as well as a major global, major U.S.
Great. Thanks, Thanks for taking my question and congrats on everything as well.
Just spit back to the liquidity services, and particularly the stable coin side.
For both of those.
So that trend that people move out the curve to the 520 and Theyre going great.
Just trying to get a sense of.
Given the Onboarding of these contracts for that growth trajectory potential beyond beyond <unk> and maybe just to clarify.
Gail.
Pivot across vehicle, which touch wood.
We hope it will be approved by the SEC to convert to an ETF will be the largest.
So it sounds like the guide of the 45 million plus for that for <unk>.
Multichannel multi took an ETF I think in the world on day, one at a minimum quite quite possibly.
I guess, it's 40 40 plus million dollars of that is liquidity services' indices in data so applying a doubling roughly of I guess, the second quarter run rate.
According to <unk>, we have a wisdom tree ETP in Europe that is gathering modest amounts of assets inflows on a regular basis that two is exciting we have signed but not announced the particulars.
How much of that additional growth is directly related to liquidity services from stable coin and then I guess back to the first part of the question which is.
With a major global futures exchange as well as the major global major U S equities exchange to launch products on the five and 'twenty on those respective exchanges and we have a signed but not at not fully announced ETF arrangement in the U S for those products as well so it's going to.
Given the really strong market potential here with adding more challenged or staple coins.
Tom Farley: equities exchange to launch products on the 5 and 20 on those respective exchanges. We have a signed but not fully announced ETF arrangement in the U.S. for those products as well. It is going to take some time, Brett, because the market needs to get more comfortable investing in more products than just Bitcoin. It is happening in real time, and we're there for it.
Should we think about that revenue growth potential.
Yes.
Yes sure Thanks, Brian.
The growth is all.
Segments within.
It takes some time, Brett because the market needs to get more comfortable investing in more products than just bitcoin, but it is happening in real time.
Subscription services and other revenue all the business lines and Theyre growing as Tom mentioned before all of them are growing organically.
Off of each other but the primary driver of the revenue growth that we discussed for Q3 is largely on the back of liquidity services.
And we're therefore.
[Operator]: Your next question comes from the line of Brian Baddell with Deutsche Bank. Please go ahead.
Your next question comes from the line.
Ryan the Dow with Deutsche Bank.
It is yes.
In terms of the revenue complexion, we spoke a little bit earlier about the pipeline and the outlook for the mix between non stable, but currently the revenue complexion is definitely weighted towards the stable and I include our work with the Salon and network.
Please go ahead.
[Analyst 2]: Great. Thanks. Thanks for taking my question and congrats on everything as well. Just a bit back to liquidity services, and particularly the stablecoin side. Just trying to get a sense of the, given the onboarding of these contracts, sort of that growth trajectory potential beyond Q3. Maybe just to clarify, it sounds like the guide of the $45 million plus for that for SSNO, I guess $40-plus million of that is liquidity services, indices, and data. Applying a doubling roughly of, I guess, the second quarter run rate, how much of that additional growth is directly related to liquidity services from stablecoin? I guess, back to the first part of the question, which is, given the really strong market potential here with adding more Challenger stablecoins, how should we think about that revenue growth potential?
Great. Thanks, Thanks for taking my question and congrats on everything as well.
Just back to the liquidity services, and particularly the stable coin side.
Just trying to get a sense of.
In that bucket as well because as you know standpoint.
Given the Onboarding of these contracts for that growth trajectory potential beyond beyond <unk> and maybe just to clarify.
Based collaboration although they don't issue a stable point with our partners that we work with the supplier network to move those over generate other activity and acceptance of the bullish exchange. So it is predominantly driven by by the liquidity services, but again.
The it sounds like the guide of the $45 million plus for that for instance, now.
I guess, it's 40 40 plus million dollars of that is liquidity services' indices in data so applying a doubling roughly of I guess, the second quarter run rate.
The bedrock for selling other recurring revenue streams into the customer base.
And just that sort of growth trajectory I guess since we.
Now if you give guidance in <unk>, but I mean, it sounds like it would be the way youre layering in these deals we would have to even more uplift in <unk> potentially and that's in that area.
How much of that additional growth is directly related to liquidity services from stable point, and then I guess back to the first part of the question which is.
We continue to see strength, we do expect to see growth in the fourth quarter of that line item just based on the bookings trajectory and where we are in the third quarter.
Given the really strong market potential here with adding more challenge or stable coins.
Should we think about that revenue growth potential.
The growth in the line has been pretty substantial this year in terms of sequential growth.
Yes.
Dave Shrier: Yeah, sure. Thanks, Brian. The growth is all the segments within subscription services and other revenue. All the business lines in there are growing, as Tom mentioned before. All of them are growing organically. They feed off of each other. The primary driver of the revenue growth that we discussed for Q3 is largely on the back of liquidity services. In terms of the revenue complexion, we spoke a little bit earlier about the pipeline and the outlook for the mix between stables and non-stables, but currently, the revenue complexion is definitely weighted towards the stables. I include our work with the Solana network in that bucket as well, because, as you know, it's a stablecoin-based collaboration. Although they don't issue a stablecoin, it's with our partners that we work with the Solana network to move those over and generate other activity and acceptance on the Bullish exchange.
Yes sure Thanks, Brian.
The growth is all.
<unk>.
The Q3 guide I wouldnt interpret that as the pace of growth well into the future.
Segments within.
Subscription services and other revenue all the business lines and there are growing as Tom mentioned before all of them are growing organically.
Look forward to kind of given you the guide on Q4 subscription services and other.
Off of each other but the primary driver of the revenue growth that we discussed for Q3 is largely on the back of liquidity services.
On our next call, but we do continue to see growth in all of the product areas.
Your next question comes from the line.
It is yes.
In terms of the revenue complexion, we spoke a little bit earlier about the pipeline and the outlook for the mix between non stable, but currently the revenue complexion is definitely weighted towards the stable and I include our work with a lot of network.
Brendan Lynch Rosenblatt Securities.
Go ahead.
Hi, Thanks, good afternoon, and congratulations from me as well.
Discuss the monthly metrics and kind of the uptick we've seen in the spread over the last couple of months, especially in August and maybe just give us a little color as we've talked about some of the pricing changes you're implementing but the sustainability of that and how it looks into your guidance into the fourth quarter would be great. Thanks.
In that bucket as well because as you know standpoint.
Based collaboration although they don't issue a stable point with our partners that we work with the Solano network to move those over and generate other activity and acceptance of the bullish exchange. So it is predominantly driven by the liquidity services, but again.
Dave Shrier: It is predominantly driven by the liquidity services. That is the bedrock for selling other recurring revenue streams into the customer base.
Yeah, Let me let me just editorialize for one moment and then Dave can give you the real answer the one thing I wanted to highlight it.
Bedrock for selling other recurring revenue streams into the customer base.
As.
Because.
And just that sort of growth trajectory I guess as we.
[Analyst 2]: That sort of growth trajectory, I guess, as we, and I think you've gotten some Q4, but it sounds like it would be, the way you're layering in these deals, we would have even more uplift in Q4 potentially in that area.
And crypto a lot of people focus on spreads in part because amongst the retail group so electronic broker serving the retail crown or exchanges service retail reps. They oftentimes, we will have 50, $101 50, $202 5300 basis points spread and we've all seen that movie.
And not to give guidance on <unk>, but I mean, it sounds like it would be the way youre layering in these deals we would have been even more uplift in <unk> potentially in that area.
Dave Shrier: We continue to see strength. We do expect to see growth in the fourth quarter of that line item just based on the booking trajectory and where we are in the third quarter. The growth in the line has been pretty substantial this year in terms of sequential growth. The Q3 guide, I wouldn't interpret that as this pace of growth well into the future. We look forward to kind of giving you the guide on Q4 subscription services and other on our next call. We do continue to see growth in all of the product areas.
We continue to see strength, we do expect to see growth in the fourth quarter of that line item just based on the bookings trajectory and where we are in the third quarter.
What ultimately happens.
To those kind of spreads whether you look at what happened in FX or equities or what have you.
The growth in the line has been pretty substantial this year in terms of sequential growth.
We are in a different world, we don't compete on price we do.
The Q3 guide I wouldnt interpret that as the pace of growth well into the future.
Institutional group you got to get to a fair value price and then you are competing on determinism youre competing on what other services, you provide or what margin capabilities licenses.
Look forward to kind of given you. The guide on Q4 subscription services is another.
On our next call, but we do continue to see growth in all of the product areas.
Reassuring as your custody solution all of those sorts of things so as we're moving our spreads around what we're really doing is optimizing the revenue and we've run experiment a lot.
[Operator]: Your next question comes from the line of Chris Bendler with Rosenblatt Securities. Please go ahead.
Your next question comes from the line of.
Brendan with Rosenblatt Securities.
Please go ahead.
[Analyst 3]: Hi, thanks for the afternoon. It's a conversation for me as well. I'd like to discuss the monthly metrics and the uptick we've seen in the spread over the last couple of months, especially in August. If you could just give us a little color. We've talked about some of the pricing changes you're implementing, just the sustainability of that and how it looks into your guidance and into the fourth quarter would be great. Thanks.
Hi, Thanks, Good afternoon, congratulations from me as well.
And that is something that is going to continue.
As discussed.
<unk> metrics and kind of the uptick we've seen in the spread over the last couple of months, especially in August and maybe just give us a little color as we've talked about some of the pricing changes you're implementing but the sustainability of that and how it looks into your guidance into the fourth quarter would be great. Thanks.
But what we have found is a nice sweet spot, where we kind of had overcorrected.
<unk> for revenue and really what we got out of it was volume and less revenue.
And Dave and the team led by Chris <unk> President of our exchange business have done a really nice job of finding a sweet spot over the last several months that we feel comfortable.
Tom Farley: Let me just editorialize for one moment, and then Dave can give you the real answer. The one thing I wanted to highlight is because in crypto, a lot of people focus on spread in part because amongst the retail group, electronic brokers serving the retail crowd or exchanges serving the retail crowd oftentimes will have 50, 100, 150, 200, 250, 300 basis points spread. We've all seen that movie of what ultimately happens to those kinds of spreads, whether you look at what happened in FX or equities or what have you. We're in a different world. We don't compete on price. The institutional group, you have to get to a fair value price, and then you're competing on determinism. You're competing on what other services you provide or what margin capabilities you have, what licenses you have, how reassuring is your custody solution, all those sorts of things.
Yes, let me just editorialize for one moment and then Dave can give you the real answer the one thing I wanted to highlight is because.
Yeah, and I think.
Youll see in the Q3 guide.
Got it.
The September implied spread if you kind of run the math that you can see the volume that's consistent with where we were in August.
In crypto a lot of people focus on spreads in part because amongst the retail group so electronic broker serving the retail crown or exchanges services retail crash. They oftentimes, we will have 50, $101 50, $202 5300 basis points spreads and we've all seen that movie.
With lower just based on lower volatility I would say that while our spreads have gone up.
And volatility adjusted manner versus where we were previously we still have some sensitivity to volatility.
It's been a bit lower Garen September than it was.
What ultimately happens.
To those kinds of spreads whether you look at what happened in FX or equities or what have you.
But we do think that from a from a spread perspective youll get a good deal where we should be particularly when we get out September results.
We're in a different world, we don't compete on price we do.
I just wanted to add I just wanted to add one item.
Institutional group you got to get to a fair value price and then you are competing on determinism youre competing on what other services, you provide or what margin capabilities.
It earlier.
When Brent asked the question and thanks for asking it Brett.
Our index business and I told you I was excited among other things about a greyscale product on our coined up five index.
Yeah.
Reassuring as your company solution all of those sorts of things so as we're moving our spreads around what we're really doing is optimizing for revenue and we run experiment a lot.
Tom Farley: As we're moving our spreads around, what we're really doing is optimizing for revenue. We run experiments a lot, and that is something that is going to continue. What we have found is a nice sweet spot where we kind of had overcorrected, pushing for revenue, and really what we got out of it was volume and less revenue. Dave and the team, led by Chris Tyler, President of our exchange business, have done a really nice job of finding a sweet spot over the last several months that we feel comfortable with.
That has just been during this call approved by the SEC.
So that product, which I don't know it approaches $1 billion of assets under management, which by the way is huge for a crypto multi token product will.
And that is something that is going to continue.
But what we have found is a nice sweet spot, where we kind of had overcorrected.
We will become and Etfs here in the U S.
Pushing for revenue and really what we got out of it was volume and less revenue.
And will likely be the largest etfs in the world on day one.
And Dave and the team led by Chris Tower, President of our exchange business have done a really nice job of finding a sweet spot over the last several months that we feel comfortable.
So very exciting news and really good for that point as five franchise. So Bret to answer your question how do we grow the thing well, we just we just chop some wood.
Dave Shrier: Yeah, I think you'll see in the Q3 guide, the September implied spread, if you kind of run out the math and you can see the volume, is about consistent with where we were in August, but a little bit lower just based on lower volatility. I would say that while our spreads have gone up, and volatility just didn't matter versus where we were previously, we still have some sensitivity to volatility, which has been a bit lower here in September than it was in August. We do think that from a spread perspective, you'll get a good feel of where we should be, particularly when we get out the September results.
Yeah, and I think.
Youll see in the Q3 guide.
So we'll take the next question.
Your next question comes from the line of Rena Kumar with Oppenheimer.
The September implied spread if you kind of right at the math and you can see the volume is about consistent with where we were in August.
Please go ahead.
Hi, This is grew on for arena.
Lower just based on lower volatility I would say that while our spreads have gone up.
No.
A lot of our questions have already been answered, but if you could just maybe touch on how we should expect the spread going forward I know this is directly in.
Volatility adjusted matter versus where we were previously we still have some sensitivity to volatility.
Okay actually follows the previous question. If you could maybe just give us a trajectory of what we can expect going forward. Thanks.
And a bit lower Garen September than it was.
But we do think that from from a spread perspective youll get a good deal where we should be particularly when we get out the September results.
Yes, sure and thank you for the question.
As I was saying on the.
Previous question, we expect spreads going forward to be roughly in line with the August numbers, they've remained somewhat sensitive to volatility September volatility has been lower than August when we put out the results. When we finished the month of August we're only about halfway through here.
Tom Farley: I just want to add one item. I said earlier, when Brett asked the question, and thanks for asking it, Brett, about our index business. I told you I was excited, among other things, about a Grayscale product on our CoinDesk 5 index that has just been, during this call, approved by the SEC. That product, which, I don't know, it approaches $1 billion of assets under management, which, by the way, is huge for a crypto multi-token product, will become an ETF here in the U.S. and will likely be the largest ETF in the world on day one. Very exciting news and really good for that CoinDesk 5 franchise. Brett, to answer your question, how do we grow the thing? We just chop some wood. We'll take the next question.
I just wanted to add I just wanted to add one item.
I said earlier.
When Brent asked the question and thanks for asking it Brett.
Our index business and I told you I was excited among other things about a greyscale product on our coined up five index.
Youll see depending on the oil market volatility.
Consistency if the volatility at the same with August slightly lower if volatility is lower and obviously higher if volatility is higher and again the reason we're doing the monthly.
That has just been during this call approved by the SEC.
So that product, which I don't know it approaches $1 billion of assets under management, which by the way is huge for a <unk>.
Disclosure on the transaction revenue spread is to provide that type of clarity for you guys to see it and it's real time, it's possible we do optimize for total adjusted transaction revenue as Tom mentioned before we're also launching new products like options, which hopefully will be come in during the fourth quarter that may indeed.
Crypto multi token product.
We will become and Etfs here in the U S.
We will likely be the largest etfs in the world on day one.
So very exciting news and really good for that <unk> five franchise. So Bret to answer your question, how do we grow the thing well, we just we just chop some wood.
So to adjust spreads in other.
Assets in order to maximize total adjusted transaction revenue given all the moving parts in there the dynamics around volatility.
And we'll take the next question.
[Operator]: Your next question comes from the line of Reyna Kumar with Oppenheimer. Please go ahead.
Your next question comes from the line of Rena Kumar with Oppenheimer. Please.
The best way, we can help you guys begin to tighten up your models is to do the monthly disclosure that we've been providing and then talk you through the trends as we go here and as of right. Now we did generally tend to view August is a good benchmark type month for the spot spread.
Please go ahead.
[Analyst 1]: Hi, this is Guru on for Reyna. A lot of her questions have already been answered, but if you could just maybe touch on how we should expect the spread going forward. I know this directly and indirectly follows the previous question, but if you could maybe just give us a trajectory of what we can expect going forward. Thanks.
Hi, This is drew on for arena.
No.
A lot of our questions have already been answered, but if you could just maybe touch on how we should expect the spread going forward I know this is directly.
Okay actually followed the previous question. If you could maybe just give us a trajectory of what we can expect going forward. Thanks.
Going forward.
Your next question comes from the line of <unk>.
Dave Shrier: Yeah, sure. Thank you for the question. As I was saying on the previous question, we expect spreads going forward to be roughly in line with the August numbers. They remain somewhat sensitive to volatility. September volatility has been lower than August when we put out the results and we finished the month of August. We're only about halfway through here. We think you'll see, depending on the full month volatility, consistency if the volatility is the same with August, slightly lower if volatility is lower, and obviously higher if volatility is higher. The reason we're doing the monthly disclosure on the transaction revenue spreads is to provide this type of clarity for you guys to see it in as real time as possible. We do optimize for total adjusted transaction revenue, as Tom mentioned before.
Yes, sure and thank you for the question.
I'll hop in the stats you with K B W.
As I was saying on the.
Please go ahead.
Previous question, we expect spreads going forward to be roughly in line with the August numbers, they've remained somewhat sensitive to volatility September volatility has been lower than August when we put out the results. When we finished the month of August we're only about halfway through here.
Hey, good evening gentlemen, congrats on the inaugural earnings call and strong sequential as us and all revenue print.
With respect to the bit license, obviously, the grant of it helps to firm up the timelines.
Penetrating the U S market, but I was curious whether we should be thinking about any other additional read throughs in particular I saw that the license allows for custody services.
Youll see depending on the oil market volatility.
Consistency if the volatility at the same with August slightly lower if volatility is lower and obviously higher if volatility is higher and again the reason we're doing the monthly.
In addition to trading is that an area that.
Disclosure on the transaction revenue spread is to provide that type of clarity for you guys to see it and it's real time, it's possible we do optimize for total adjusted transaction revenue as Tom mentioned before we're also launching new products like options, which hopefully will be come in during the fourth quarter that may indeed.
Perhaps bullish might be thinking of getting into down the road.
Yes sure Bill good question.
Sure.
We actually are in custody the provision of custody.
Dave Shrier: We're also launching new products like options, which hopefully will be coming during the fourth quarter. That may induce us to adjust spreads in other assets in order to maximize total adjusted transaction revenue. Given all the moving parts in there, the dynamics around volatility, we believe the best way we can help you guys begin to tighten up your models is to do the monthly disclosure that we've been providing and then talk you through the trends as we go here. As of right now, we generally tend to view August as a good benchmark type month for the spot spreads going forward.
We've taken.
<unk> approach, where we we enable our customers to custody with third party qualified custodians.
So to adjust spreads in other.
Assets in order to maximize total adjusted transaction revenue given all the moving parts in there the dynamics around volatility.
Or in some cases self custody using software.
For custody with us in our own bespoke customer solution. So to answer your question yes.
The best way, we can help you guys begin to tighten up your models is to do the monthly disclosure that we've been providing and then talk you through the trends as we go here as of right. Now we did generally tend to view August is a good benchmark type month for the spot spread.
But only in the sense that we're on.
We're already in custody.
We're not announcing any sort of mega changes to the business model with this with this bit license approval. We do have a few things in the works that were were not really ready to drop bread crumbs around.
Going forward.
[Operator]: Your next question comes from the line of Bill Papanastasiu with KBW. Please go ahead.
Your next question comes from the line of <unk>.
I'll hop in the stats you with K B W.
But no extensive business model changes with respect to coffee.
Please go ahead.
[Analyst 3]: Good evening, gentlemen. Congrats on the inaugural earnings call and strong sequential SSNO revenue print. With respect to the BitLicense, obviously, the grant of it helps to firm up timelines of penetrating the U.S. market. I was curious whether we should be thinking about any other additional read-throughs. In particular, I saw that the license allows for custody services, in addition to trading. Is that an area that perhaps Bullish might be thinking of getting into down the road?
Good evening gentlemen, congrats on the inaugural earnings call and strong sequential as SNL revenue print.
Our last question comes from the line of.
With respect to the bit license, obviously, the grant of it helps to firm up the timelines.
Joseph <unk> with.
Canaccord Genuity.
Please go ahead.
Hey, guys. Good afternoon and of course, my congrats here as well and we're just kind of double click a bit on progress progress on the options platform I know, Dave you just mentioned it a little bit it looks like maybe Q4 full rollout.
Penetrating the U S market, but I was curious whether we should be thinking about any other additional read throughs in particular I saw that the license allows for custody services.
In addition to trading is that an area that.
Perhaps bullish might be thinking of getting into down the road.
Any other anecdotes there plush.
Tom Farley: Yeah, sure, Bill. Good question. We actually are in custody, the provision of custody. We've taken a thousand flowers bloom approach where we enable our customers to custody with third-party qualified custodians or, in some cases, self-custody using software or custody with us and our own bespoke custody solution. To answer your question, yes, but only in the sense that we're already in custody. We're not announcing any sort of mega changes to the business model with this BitLicense approval. We do have a few things in the works that we're not really ready to drop breadcrumbs around, but no extensive business model changes with respect to custody.
Yes sure Bill good question.
Too early to really start.
Sure.
We actually are in custody provision of custody.
About what contribution may be there might be from a full rollout.
We've taken.
<unk> approach, where we enable our customers to custody with third party qualified custodians.
Trading volumes, thanks, a lot.
No great Great question, it's a Midi last question, we'd love to talk about it first of all let me let me start on a conservative note. It's a startup it's a startup so no promises it's hard to build derivatives volume no matter what market you're in.
Or in some cases self custody using software.
For custody with us in our own bespoke customer solution. So to answer your question yes.
Yeah.
And so you should hear from US that you should you should view this conservatively.
But only in the sense that we're already we're already in custody.
Nonetheless, we're really excited about it we were already lives like live lives I think lots of people are in their trading real dollars.
We're not announcing any sort of mega changes to the business model with this with this bit license approval. We do have a few things in the works that were were not really ready to drop bread crumbs around.
And our regulatory approved <unk>.
Environment, it's working.
But no extensive business model changes with respect to custody.
Some of the biggest options traders on Earth are in there every day.
Limited to a certain number of customers, we want to get it right, we're limiting those customers to a certain size of their position.
[Operator]: Our last question comes from the line of Joseph Vav with Canaccord Annuity. Please go ahead.
Our last question comes from the line of <unk>.
But but but looks good.
Joseph <unk> with.
Canaccord Genuity.
That's often the tough part is just getting off the ground with a system that works and then initial batch of customers with respect to options Hopkins have been kind of tiny marketed crypto like teeny tiny.
Please go ahead.
[Analyst 2]: Hey, guys. Good afternoon. Of course, my congrats here as well. Maybe we just kind of double-click a bit on progress on the options platform. I know, Dave, you just mentioned it a little bit. Looks like maybe Q4 full rollout. Any other anecdotes there? Plus, you know, is it too early to really start thinking about what, you know, contribution may be there, might be, you know, from a full rollout in trading volume? Thanks a lot.
Hey, guys. Good afternoon and of course, my congrats here as well, maybe just kind of double click a bit on progress progress on the options platform I know, Dave you just mentioned it a little bit it looks like maybe Q4 full rollout.
A percent volumes relative to the overall swap volume and we made this bet and we made it I remember talking to Dave and Chris higher about this a year ago, where we said it's got a graph. It's got every market you look at the options market is minimum 25%. So look at U S equities.
Other anecdotes there plush.
Too early to.
It really starts.
Looking about what contribution may be there might be from a full rollout.
25% or greater look at interest rate options really.
Trading volumes, thanks, a lot.
Easy market to get data on more than 25% options as compared to the linde.
Tom Farley: No, great, great question. It's a meaty last question. We love to talk about it. First of all, let me start on a conservative note. It's a startup. It's a startup. No promises. It's hard to build derivatives volume no matter what market you're in, and you should hear it from us that you should view this conservatively. We're nonetheless really excited about it. We're already live. Like live lives, not fake lives. People are in there trading real dollars, in a regulatorily approved environment. It's working. Some of the biggest options traders on Earth are in there every day. We're limited to a certain number of customers. We want to get it right. We're limiting those customers to a certain size of their position, but it looks good. That's often the tough part, just getting off the ground with a system that works and an initial batch of customers.
No great Great question, it's a Midi last question, we'd love to talk about it first of all let me let me start on a conservative note. It's a startup it's a startup so no promises it's hard to build derivatives volume no matter what market you're in.
The linear product and we just said this thing is going to grow and there needs to be competition and there needs to be institutionally focused competition low cost.
That has things like portfolio margining with the underlying futures you know the underlying hedge let's go ahead, and let's do it and we're being rewarded in August we saw auction volumes and crypto tick up in fact, they nearly doubled or maybe even more than doubled as.
And so you should hear it from US that you should you should view this conservatively.
Nonetheless, we're really excited about it we were already lives like live lives I think what people are in their trading real dollars.
As a percentage of the overall top line. So we're seeing the underlying options market growth.
We're seeing customers come in and work with us on our our beta launch here.
And our regulatory approved <unk>.
Environment, it's working.
And we're going to we're going to share a lot more information with you on the calls ahead, but like I said I put in my prepared remarks I've been involved a lot of watch it some real good ones. Some some losers and you'll get a sense of what makes a successful launch and this one has all the hallmarks of something that could work out nicely for us.
The biggest options traders on earth are in their everyday.
Were limited to a certain number of customers, we want to get it right, we're limiting those customers to a certain size of their position.
But but but looks good.
That's often the tough part just getting off the ground with a system that works and initial batch of customers with respect to option Hopkins have been kind of tiny marketed crypto like teeny tiny.
Tom Farley: With respect to options, options have been the kind of tiny market in crypto, like teeny tiny, a couple of % volumes relative to the overall spot volume. We made this bet, and we made it. I remember talking to Dave Shrier and Chris Tyler about this a year ago where we said it's got to grow. It's got to grow. Every market you look at, the options market is minimum 25%. Look at U.S. equities, 25% or greater. Look at interest rate options, really easy market to get data on. More than 25% options as compared to the linear products. We just said this thing's going to grow, and there needs to be competition, and there needs to be institutionally focused competition, low cost, that has things like portfolio marketing with the underlying futures, the underlying hedge. Let's go ahead and let's do it. We're being rewarded.
Ladies and gentlemen, there are no other questions at this time.
I apologize.
A couple of percent volumes relative to the overall spot volume and we made this bet and we made it I remember talking to Dave and Chris tire about this a year ago, where we said <unk> got a graph. It's got every market you look at the options market is minimum 25%, but look at U S equity.
There are no other question I'm sorry.
The call back over to management for closing remarks.
Sure. Thank you.
I also want to thank our team Liam and micro who got US prepared we definitely at the jitters a little bit it's our first earnings call.
25% or greater look at interest rate options really really easy.
Randy if you're out there you pulled us whatever you do you better not below it on your first earnings call. So I hope, we've got a passing grade.
Easy market to get data on more than 25% options as compared to the.
But we appreciate all of you, saying for what those of you on the East Coast, It's something like dinner time, and our commitment to you is we're going to do our best to be in touch with you not just during the earnings call, but in the interim and be transparent with you about the success or lack thereof of this business and we really appreciate your following along and.
The linear product and we just said this thing is going to grow and there needs to be competition and there needs to be institutionally focused competition low cost.
That has things like portfolio margining with the underlying futures underlying that let's go ahead, and let's do it and we're being rewarded in August we saw option volumes in crypto tick up in fact, they nearly doubled or maybe even more than doubled.
Tom Farley: In August, we saw options volumes in crypto tick up. In fact, they nearly doubled or maybe even more than doubled, as a percentage of the overall spot volume. We're seeing the underlying options market grow. We're seeing customers come in and work with us on our beta launch here. We're going to share a lot more information with you on the calls ahead. Like I said, I put in my prepared remarks, I've been involved in a lot of launches, some real good ones, some losers, and you get a sense of what makes a successful launch. This one has all the hallmarks of something that could work out nicely for us.
Rest assured we're working our butts off.
For certainly for our customers, but also also for our shareholders. Thank you all very much and good night.
As a percentage of the overall top line. So we're seeing the underlying options market grow.
Ladies and gentlemen, this concludes today's call. Thank you all for joining and you may now disconnect.
We're seeing customers come in and work with us on our our beta launch here.
Okay.
And we're going to we're going to share a lot more information with you on the calls ahead, but like I said I put in my prepared remarks I've been involved a lot of watch it some real good ones. Some some losers and you get a sense of what makes a successful launch and this one has all the hallmarks of something that could work out nicely for us.
[Operator]: Ladies and gentlemen, there are no other questions at this time. I would like to send the call back over to management for closing remarks.
Ladies and gentlemen, there are no other questions.
At this time.
I apologize.
There are no other question I'm sorry.
On the call back over to management for closing remarks.
Tom Farley: Sure. Thank you. I also want to thank our team, Liam and Michael, who got us prepared. We definitely had the jitters a little bit. It's our first earnings call. Randy, if you're out there, you told us whatever you do, you better not blow it on your first earnings call. I hope we at least get a passing grade. We appreciate all of you staying, for those of you on the East Coast. It's something like dinner time. You know, our commitment to you is we're going to do our best to be in touch with you, not just during the earnings calls, but in the interim and be transparent with you about the success or lack thereof of this business. We really appreciate you following along and just rest assured we're working our butts off, certainly for our customers, but also for our shareholders.
Sure. Thank you.
I also want to thank our team Liam and micro who got a prepared we definitely at the <unk> a little bit it is our first earnings call.
Randy if you're out there you pulled us whenever you do you better not blow it up my first earnings call. So I hope, we've got a passing grade.
But we appreciate all of your Stang for what those would be on the east coast, It's something like dinner time, our commitment to you is we're going to do our best to be in touch with you not just during the earnings call, but in the interim and be transparent with you about the success or lack thereof of this business.
And we really appreciate your following along and just rest assured we're working our butts off.
Certainly for our customers, but also also for our shareholders. Thank you all very much and good night.
Tom Farley: Thank you all very much, and good night.
[Operator]: Ladies and gentlemen, this concludes today's call. Thank you all for joining, and you may now disconnect.
Ladies and gentlemen, this concludes today's call. Thank you all for joining and you may now disconnect.
Okay.