The Last Trade E081: Confronting the Chaos of Currency Collapse with Ralph Gebran

Jackson Mikalic (00:01.033) All right, welcome back to The Last Trade. As always, joined by my co-hosts Michael Tanguma and Brian Cabellus. And this week we have Ralph Gibran, managing partner at OnRamp MENA. Great to have you on, Ralph. How are you doing? Ralph Gebran (00:13.721) I'm doing great. Thanks for having me guys. Always a pleasure. Michael Tanguma (00:17.04) It's long overdue to have you on the last trade. We've had so much exciting stuff happening in the Middle East and I think a number of trips for this whole team. So it's fun to be able to talk about what's been going on out there. The conference that happened - it was early December. Ralph Gebran (00:34.453) Yes, four weeks ago, yeah, four weeks ago. Jackson Mikalic (00:46.079) Yeah, and Ralph, it's great to have you on. I think you've actually been on some of the other shows that we produce here at OnRamp, but you haven't been on The Last Trade before. Maybe for those who are not familiar with you, we could just start with your background in traditional finance and what shaped your personal journey into Bitcoin and ultimately led you to join OnRamp MENA early on. Ralph Gebran (01:19.641) Yeah, for sure. So I had spent the vast majority of my career both academically and professionally in traditional finance. So the last 10 years, I've been in the institutional asset management space where I worked with two top asset managers, CIBC Asset Management and TD Asset Management based in Canada, Montreal. Before that, I worked on trading desks. I've done foreign exchange, treasury management. I managed the foreign exchange reserves of a bank in Lebanon, because that's originally where I'm from. I also traded at TD brokerage, a variety of instruments across equity, fixed income, commodities, foreign exchange, and derivatives. But when you're so knee deep in traditional finance and especially institutional finance, you fail to look at the underlying layer - the money. What got me into Bitcoin really is tied to where I'm from. It was really when the banking system in Lebanon slapped me, my parents, my family and everyone in the face by basically placing unofficial capital controls on withdrawals. We had withdrawal limits - $100 per month, $50 per month, basically what they determined to be fair. So the country didn't go bankrupt officially. These capital controls are actually imposed purely by the banking system and not by the government itself. Ralph Gebran (03:02.767) Now that was a wake-up call. I had been in Canada at the time so I was a bit more lucky, even though I did have some savings back home. What they did is they incentivized people to actually move money back home because when the US dollar was paying 0.5% on your deposit account, you could get 10% in Lebanon on your US dollar deposit account. So a lot of people transferred their savings back home and placed it in these term accounts where they were making 10%. That's kind of what got me into Bitcoin and to really try to understand it - because if that was something that happened once, who's to say that's not going to happen again? So right now in Lebanon you have five different accounts. You have your old accounts where technically there are numbers on the screen. You have something called the fresh account - accounts post that date where you can actually withdraw the money. But who's to say these fresh accounts won't be blocked in the future? That's kind of how I got into Bitcoin. It was really pain. I like to say pain is the best educator. We learned the hard way that trust comes at a cost. There's a risk in trust and trusting institutions, large scale institutions. The currency peg was 1,500 Lebanese pound to a dollar on average, and skyrocketed to 80,000 and to 100,000 per dollar. In Lebanon, it's similar to Venezuela where you walk around with a little purse that has millions of Lebanese pounds and that just covers potentially a dinner for two. The country has fully dollarized since then. Michael Tanguma (05:28.718) What year was that? And you being insulated in the West - can you share how friends and family suffered? Ralph Gebran (06:00.061) Yeah, so that was a year or two before the port explosion, which added to the problems of Lebanon. So 2019, 2020 were the peak years of the economic collapse. We haven't fully recovered. We've hit the fully dollarized stage. We were blessed being outside of Lebanon and lost only a single portion. But friends and family - you wake up one day and some individuals have worked their entire life in Lebanon. Some individuals have transferred every penny they made outside of Lebanon to Lebanon and you wake up overnight and realize that it's just evaporated. So what happens is it changes societal structures entirely. Those who were untrusting of the system and had invested in gold or in real estate, the initial stages were much better off. But after the collapse, even real estate - which a lot of people say is a store of value - in Lebanon, you bought a house for $500,000, there are no mortgages so it's a cash economy. Now it's at half the price because people are paying cash. Did you really store the value of your life energy and hard work? Not really, because you ended up having to liquidate at half the price. Ralph Gebran (08:04.597) So really, bank accounts in Lebanon are used just for small timeframes. You keep the money in there for 5-10 days and then you move it out and find some better investment. It's a very big pill to swallow, waking up and realizing that if you're at the age of retirement, you can't retire anymore. It opened up a black market. People started selling checks - they would cut a check and give you cash for that check at a discount. They'd tell you, okay, I'll buy that $20,000 for $10,000 cash. So people value a harder asset. They're going for the dollar. Even though in the West you view the dollar as a debasing, depreciating asset, in countries like Lebanon, the dollar seems stable. Michael Tanguma (10:21.145) Yeah, not to derail this too much, but this can't help but call out how uncanny this reminds me of the crypto markets and claims on bankruptcy notes. In the digital asset crypto world, you have that option - you can choose to come in or not. And some people come in and get rugged, but others look at it and like, why would you want to participate in what happened in Lebanon? You don't. It ties into what we talk about where you shouldn't have to trust a single entity with your assets, because they've been shown that at a certain point, that trust kind of fades away. Jackson Mikalic (11:41.769) Ralph, does... Appreciate you sharing your background. It's really devastating to hear first account stories of friends and family that have lived through that. And it's not isolated to Lebanon, right? This is happening all over the world. In 2022, we saw financial controls and bank account freezes in the Western world too. Do you see the challenges that exist outside of the West as a precursor to what happens in countries like Canada? Ralph Gebran (12:19.974) No, actually the way I like to see it - the vast majority of the world has hyper inflating currencies. Very few countries have stable solid currencies. And usually it's the countries that have those strong currencies that make it harder for other countries to get out of that environment because they export the inflation. But what happens in countries like Lebanon basically happens at hyper speed. The exact same thing is happening in Western countries, but at a much slower rate. It's gradually then suddenly in the Western world. In the less developed world, it happens suddenly, it just happens overnight. What happened in Canada - there was a trucker incident which was surreal. They used executive wartime powers to freeze accounts. The banks supposedly are independent entities from the government, they're not public entities. But when the government states something, the banks have to not be on the wrong side of that statement in fear of repercussions. Ralph Gebran (14:39.734) But definitely, over the years, Canada inflation has skyrocketed. The cost of living is crazy. There's been a massive deterioration in the healthcare system. It takes nine months to get an appointment with a specialist. And the peak of this was when the trucker convoy had their whole accounts frozen. Some of them are coming out now, years later, winning their cases. But that doesn't mean that they didn't suffer. Ralph Gebran (16:34.494) Now is a good time because things are changing. We're witnessing change across the Western globe with Trump in the United States, Trudeau resigning in Canada and upcoming candidate Pierre Poliev being more on the sound monetary side. But what he says about fiscal spending, monetary debasement - it's just common sense. And it's either that or the handout economy, which Canada over time really took to heart. Michael Tanguma (17:37.671) It's a fascinating dynamic. When I was in Dubai last, Ralph was telling me about the healthcare system and just the deterioration of everything. And it was just so fundamentally different than what the media portrays. Ralph Gebran (18:03.008) Sad. Michael Tanguma (18:24.857) And these are like third world countries. We know what's happening in New York City subways. We know what's going on right now in California, Canada. It's a very interesting dynamic on the way these societies are portrayed as being progressive. And it's usually the closest to the money spigot - the academics and the people in high finance - that are living the best while everyone else is effectively just getting sucked dry. Ralph Gebran (18:51.119) Yeah, and you know, this might surprise you, but you'll get way better healthcare in Lebanon at a fraction of the cost. You just show up to the doctor, see what's wrong with you. If you need a surgery, you do it in a week and you're in and you're out and it costs you a fraction of the cost. Some people don't do their dentistry in Canada. They go to Lebanon because it's way cheaper. Even with insurance, you end up paying less in Lebanon with no insurance. And that's crazy from a third world country that has a hyperinflating currency. In Canada, someone is making $150,000 and in the top five percent of income earners, you're going to pay around 55-57% effective annual tax rate. And someone making $20,000 - when you enter the healthcare system, there's no distinction. A homeless person in Canada will go sit in a hospital the entire day. They don't care about waiting 10 hours to see a doctor because for them they're sitting in warmth. So those who are creating value or having higher salaries are getting the same service level as someone who produces no value in the economy. Michael Tanguma (21:27.591) Yeah. And to reframe this - you can't insulate yourself from a bad form of money over a long enough time. This can happen to anyone. The states that have adopted lower income taxes or made it more favorable - Tennessee, Florida and Texas have really thrived. The best human capital is moving there. Jackson Mikalic (22:08.801) I do. Yeah, I want to appreciate that. And Ralph, I want to drive toward your experiences now in the Emirates. So you lived in Canada for a while, you're Lebanese, and you've since moved to the UAE, which is now closer to home for you and you're a managing partner at OnRamp MENA. How do your experiences in the UAE in Dubai and Abu Dhabi compare to what you've seen in your traditional finance background, mostly in Canada? Ralph Gebran (23:06.228) Yeah, so the Emirates - I'll speak to Dubai for starters. One thing I'll start off with: there's no income tax, and there are roads and tons of infrastructure. So you don't really need income tax to build infrastructure. They've been at it for 30 or 40 years. If you came 40 years ago, it would be like images you see of the desert. There was no infrastructure. One big contrast to Canada is the quality of the infrastructure. The stuff they're building here is out of a sci-fi movie. There's a level of excellence. They have a much more entrepreneurial mindset. They are willing to try the untried or to test the untested to grow the economy. They've been labeled in the past as being only into oil, but if you come here, you'll realize that you don't really notice oil. What you see is a very thriving economy that's really diversified. Ralph Gebran (24:58.519) What they do here is more of an enablement. They don't take the money away from you. They will find other ways to take it away from you by making life so easy - you can get gas delivered to your home while your car is parked outside. Everything you want can be facilitated here. And the government aspects of things - in the West, getting something done at the government level is slow and painful. Here, everything is digitized. Government agents are quick to respond. I almost never wait on a queue line when I call a government agency. So what they're trying to do is incentivize growth. And to do that, they are enabling people to come here and actually build. Within the digital asset space - the UAE has taken a very different stance than Western countries. They saw an opportunity and decided they want to take advantage of it. While the West was still battling about whether to legalize this, here they decided to sit down, build a whole framework around it to incentivize people to come here and build. So unlike other countries, here you're very quickly capable of knowing what you can and cannot do. The gray area has been removed from the equation, which allows entrepreneurs to build effectively. Ralph Gebran (27:07.787) I would say, but now there are rules and things are set in stone. But rules are not supposed to be broken, they're supposed to be enhanced when they are outdated. One thing we've noticed - because we're trying to bring multi institution custody into the region to safe keep Bitcoin the right way - the regulators are always fascinated because it's new and different. And the first thing they're thinking is how can we grow the ecosystem? When you come with a solid value proposition that they can't deny is an upgrade to the current state of affairs, even if it's not regulated under their current guidelines, they will speak to you. The answer no doesn't come across often. It's more like, okay, let's talk more about it. They have a division called regulatory enablement - if they notice there's something they want to bring in but the rules don't allow it and they think maybe they put in the wrong rule or an outdated rule, they will work with you to try to adjust that rule or to find a way to fit you in the economy. So that's every entrepreneur's dream. Ralph Gebran (29:16.88) The UAE is one of those countries, and then there are areas within the UAE called free zones that use basically common law. Foreign companies can come and set shop in a very familiar way and start working the market from those free zones. Bahrain is a tiny country, but the regulators there - a few months ago, we were inside the central bank of Bahrain. As someone in Bitcoin, I never thought in my entire life I would set foot in the central bank, even less so that I would have a very productive conversation around Bitcoin custody and multi-institution custody. I don't think anyone in the West can say that. Jackson Mikalic (30:35.838) Yeah, I appreciate that, Ralph. One thing that you mentioned that I think really ties into this conversation is there's an attitude of complacency versus competitiveness. In the United States, we think that we're the best at everything and we've had that attitude for decades now. That's ultimately led to the deterioration and this pain that we're kind of living through as a society. And now hopefully on the other side of this, there will be more of an attitude of competitiveness in the United States, which I think would mirror more closely the competitiveness of the Gulf countries. With the Trump administration coming in, I think this ultimately ties into sovereign game theory. What are we seeing in terms of geopolitical competition for Bitcoin, for gold, for hard assets outside money versus inside money? Because ultimately what's going to drive these economies forward and what drives Bitcoin forward this next decade is competitiveness between nations. Michael Tanguma (32:18.118) Before jumping into that, I just want to call out one thing. Dubai gets an interesting rap because you usually have a polarizing feel. It's either super pro, everything's amazing, or you'll get the other side saying it's a dictatorship or kings or they have oil. A lot of these things come down to leadership, but also this notion - talk about startups - the UAE is effectively like a really well run startup because they have leadership that has autonomy and control. But any good startup, you know that the leadership, while they can move fast and direct, you need buy-in from your effective constituents, your employees to be bought in, or they won't be there very long. And so that's where we're kind of seeing in the West these populist movements and new leadership - because eventually people get so tired of being cold and poor and broke. Citizens are ultimately always going to be able to move with their feet at a certain point - and now their capital via Bitcoin. That's where the game theory starts to take off. Ralph Gebran (34:27.692) And also the government is extremely efficient. They've aligned their incentives. They are very patriotic and all they really care about is to see their people prosper and to have other people come here to build and prosper as well. What allows them to do that is they have a lot of control over decision making. There's no bureaucracy. The level of bureaucracy is really minimal compared to the West where a thousand people have to look at a document until a final decision maker signs off on it. I think people, when they come here, a lot of them are surprised about the openness, the progressiveness, and they're shocked by the amount of freedom they have here. You forget your wallet in the middle of the road and no one picks it up. There's so much security and so much comfort. Michael Tanguma (35:57.712) It reminds me of - would you rather work for Uber as employee number 11 or the SEC as employee number 5,000? There's two different people that want to do that, but one wants to be able to have a meritocracy and be able to exceed. Over time, one ends up just eating itself and the other one ends up innovating and becoming a leader. Brian Cubellis (36:31.227) That's why I do love the analogy of America being the greatest startup ever, losing our way in some sense, and also ties to what Jackson was saying around complacency. If you think about whether it's the United States or other countries in the West getting complacent, thinking that they're ahead, and also just having this administrative state build up, metastasize over time - that's what the bureaucracy you're talking about. Ralph, it's like you can't move fast and make decisions and be innovative and forward thinking if you have all of that bureaucracy holding you back. And I think that's why it's been refreshing. I feel like we have turned a corner in some sense, at least in the US. And now it looks like Canada with Trudeau resigning. Ralph Gebran (37:41.296) I don't think it was that moment itself. I think this has been something in the making for quite some time. The trucker incident was the kickoff. The COVID vaccine authoritarian policies was secondary. And then similar to the US, the cost of living. Canada has no gold, for example. Really they have no industry or foundation and their energy sector is taking a hit because of all the carbon tax. Ralph Gebran (39:13.756) It's a combination of people seeing what happened in the US as well. Trump is loud and Trump has had a lot of say and he's backed by a lot of very influential people. So when you're in Canada, you look a lot at what's happening in the US because they're your direct neighbor. What they decide to do or who's coming to run the show is definitely going to affect your living standards. And Trudeau just seemed somewhat weak in that regard and couldn't stand face to face and negotiate with someone like Trump. Pierre Poliev is kind of the equivalent of Donald Trump in a lot of the things he says. He wants to build things internally. He wants to reduce the cost of living. He wants to stop fiscal spending. He basically wants to audit the government and figure out where the waste is happening. I think the world hit a turning point. When you're in pain, you look for solutions. You start to think I have nothing else to lose - I'd rather change than no change. So it doesn't matter who the other candidate is. You just want a fighting chance with someone new. He was overthrown by his own ministers - basically they all turned their back on him. Michael Tanguma (41:35.458) You know the game theory on the coalition that happened in the US - with technologists and business individuals realizing what the other administration looked like. You have to make a concerted effort to back someone. We saw this with the Trump election win. But tying back to what Jackson was referencing, whether it's game theory of Bitcoin or any hard tech, every government, every country is fighting on behalf of their own constituents and natural resources. And so the UAE, among others, have started to invest heavily - whether it's in AI, mining - we know a lot of these countries have been mining years before this. Luke Grohmann was a big inspiration for the piece our team put together. It references that post-08 financial crisis there hasn't really been a sustained treasury buyer from an external perspective, because if you're exporting natural resources and recycling those assets into treasuries that are effectively losing capital, you're in a really bad spot over a long enough time horizon. That's where the heavy gold accumulation and dumping of treasuries has occurred, and it was accelerated post Russia being sanctioned. Countries starting to realize they need to hold something other than government debt. Jackson Mikalic (43:24.672) So just real quick on that - it's almost the perfect analogy just at the sovereign level to, Ralph, what you described at the start of the show about the banking system in Lebanon. The same thing happens at the sovereign level where historically other nations are purchasing US treasuries, but are inclined to decrease those purchases over time because of the inflation embedded in fixed income securities issued by the government, and because it could be confiscated. So it's pretty much the same thing you described earlier, but now happening at a sovereign level. Brian Cubellis (44:22.501) Yeah, I would even go as far as to say the past three or four years, the preference by various cohorts is to own or at least have some allocation to a form of outside money. That's been the main driver of Bitcoin adoption and demand for the asset in my mind. And it was very much exacerbated by Russia's treasury being seized. The other note, which I think is not often talked about - it's very different than every other instance historically of sovereign game theory in the sense that the individual can participate. In almost all other scenarios of sovereign game theory, whether it's resource control or nuclear arms race, the individual is completely removed from that game. This Bitcoin game theory is this very egalitarian thing where yeah, now we're seeing it play out at the sovereign level, but the individual is very much involved and can play in this game. Michael Tanguma (46:49.906) Well, and it is the thing because I think it's the interplay that sovereigns are playing at a level that ties back to - in its essence - I don't think many people talk about what you just described. The common notion is that Bitcoin is competing with the dollar and the government will never allow that. But there are like two factions or concerns: one is competing with the dollar and the other is competing with national security. National security effectively means you have to produce arms and weaponry to protect your citizens. Luke Grohmann makes the case that in Ukraine, it was shown that we cannot manufacture the things needed at the scale of other sovereigns. And so if you're going to reshore all these things that need to be made here, that isn't a natural cause for inflation. Well then your citizens have to be able to have an asset that they actually hold a form of money that's inflating faster than the assets cost so they can still be able to buy things. Ralph Gebran (48:20.765) Yeah, and I'll just add - 20 years ago, it was unheard of that Russia or China would be so involved in the Middle East and Africa. Nowadays, that's just a regular occurrence. The reason we've seen the shift is especially since the Russian-Ukraine war with the financialization of the financial rails, because sovereign game theory is reliant mostly on financial rails. The easiest way to choke your opponent is to cut them off the financial system. Bitcoin solves this political maneuvering because it is much more efficient to be able to just buy or mine Bitcoin and build a strategic reserve than to have to move human capital resources and investments into those areas to try to build loyalty and influence. By owning Bitcoin, these nation states are technically reducing the capital load on their nations. Ralph Gebran (50:12.087) Now in the region here, you'll notice most of the countries have been stockpiling tons of gold - that's another form of outside money. And Bitcoin just makes sense because as an asset, it will be much easier to transact at a global scale. I view Bitcoin as the end game when it comes to political influence. The reason why is because it removes the need for excessive deployment of troops to secure the financial rails of your nations. Brian Cubellis (51:18.619) Yeah, the other component too - whether it's the work that Jason Lowry has done on Bitcoin being this new form of power projection - if you can get to the assumption that this is going to be a heavily trafficked monetary rail into the future, then you want to be able to secure some amount of that. Bob Burnett does a really good job talking about this - not only is Bitcoin itself scarce, but block space is scarce. So if there are blocks every 10 minutes, you as a nation state want to have some amount of confidence that you'll be able to transact on the network. Ralph Gebran (52:25.47) Yes. Brian Cubellis (52:42.917) I think that's the other component too - you need to have access to the rails, to the scarce block space in order to truly participate. Yes, owning a stockpile helps you from more of a financial or economic perspective, but in terms of actually using the rails, that's where the mining game theory comes in too. Ralph Gebran (53:04.253) Yeah, and you know, in the UAE, no one will confirm that the government at the sovereign level is building hashrate. But every single person you speak to that's involved in energy infrastructure or data centers and mining will tell you that the government is mining. Their sovereign wealth fund has an allocation to Phoenix Group, which is one of the biggest miners in the region. Bitmain and Giga are really present within the region as well. There is someone who is buying these machines and building these mining farms. I wouldn't be surprised if some country within the GCC, mainly Oman or the UAE, comes out and says, yeah, we've already been doing this for 18 months, for example. Michael Tanguma (54:26.998) The best part about all the stuff we talk about and how everybody's talked about Bitcoin in the space at all these levels is they always sound theoretical, but they're generally rooted in some micro, practical example. Like Texas having a deregulated grid - and now up to 23.5% of all mining hashrate lives in Texas. It is an actual example of game theory playing out. And then it happens at the micro example from every individual who buys Bitcoin because they're expecting others to buy Bitcoin because there's only 21 million. Ralph Gebran (55:26.185) Yeah, and the difficulty - Bitcoin is funny in a way because it's much easier for the individual or the small corporation to get into it than it is at the higher levels, because one of the most complex aspects at those institutional or sovereign levels is securing it, because the amounts are extremely big and history hasn't been kind to safekeeping Bitcoin at the institutional level. A lot of them would rather internalize it until they see a better solution come into the market. But definitely in the UAE, we see a lot of qualified custodians coming out. And what we've been talking to them about - multi-institution custody - when I first got here, people were kind of reluctant to look into that. But over the last few months, a lot of these players have found interest and are starting to understand it. I met a guy when I first got here and he was into all types of digital assets and investing. He said he had a small stack of Bitcoin. I saw him two months ago and he said, dude, I sold everything. Now I'm Bitcoin only. You see a shift in mindset because his altcoins, what he thought was going to perform, did not. The only thing that's basically dominating the market is Bitcoin. Michael Tanguma (57:03.209) This is a polarizing take and we don't have to go deep on it, Jackson, but I will call it out because it's the perfect contrast of what Ralph started at the beginning of the conversation, referencing the gravity of having a bad form of money and what happens if it's not sitting in your control. Over the course of Bitcoin's 15 years, every cycle, every couple of years, there is a new thing that takes your Bitcoin and it always looks good until it's not in retrospect. It goes back to the outside money notion of - if you have your money, you can control it, you can have trust-minimized ways to have a bearer asset that you know you can sleep good at night knowing that somebody can't rug you the next day. Brian Cubellis (58:31.051) I think that's also what you're describing is also just part of how adoption plays out because there are various pools of capital that aren't necessarily prepared or don't have the mandate to go to the fully outside version of Bitcoin. That's why MSTR, everything Saylor is doing from sort of creating different flavors of proxy exposure to the asset, I think it's super important just generally for broader awareness, people adopting not Bitcoin natively, but getting exposure and learning more about it. I think where it eventually goes is they realize there's a better way to own it outright. And you don't need to do various leverage games because it's just going to continue to be the best performing asset. What you're getting at is more on the retail side of people - I get concerned when people say they're selling their Bitcoin to buy MSTR. That feels like a bad idea and it's kind of what you're describing, this financialization that is ultimately getting people to not own the asset outright. Ralph Gebran (01:00:53.846) Yeah, and financialization doesn't necessarily have to be a bad thing. I think it's how the product is built that gives it a bad rep. Like if you read the filings of the ETFs, basically what they're saying is that if the custodian goes bankrupt, you're gonna be an unsecured creditor and so the Bitcoin's not even yours, so you might lose everything. Having the ability to actually take out - because with stocks, you can't take out the stocks from an ETF. But with Bitcoin, because it's a bearer asset, it just makes sense that any financial product you build should allow you to take custody of the asset and that's secured in a more decentralized way. Jackson Mikalic (01:02:12.32) Agreed. Yeah, I mostly agree with Brian here too. 2024 was really just the first touch point for mass adoption, at least here in the United States as it relates to the ETFs. And for many people they still have not gotten exposure. Brian, I think I know we're kind of coming up on time, but I do want to give you some airtime on the shareholder letter that you published yesterday because there's a lot of things we could talk about. The thing that I thought of immediately was that you call out in that letter that in 2024, there's only four top tier hedge fund managers that beat the S&P 500, which returned about 24%. Brian Cubellis (01:03:28.389) Yeah, sure. So for starters, I always love putting this piece together, mainly because in my prior life when I worked at Brown Brothers Harriman, a lot of what I did was read shareholder letters and quarterly letters from a variety of asset managers. So it's been fun to put this together the past couple of years. What I wanted to talk about with this one was the trend of really the past two decades - the debate around active versus passive management. There's been a massive trend of capital flowing from active managers to passive managers for a few reasons: one, just the costs associated, index funds are much lower cost than an active managed strategy. And the other reason is the continued underperformance of active managers. It's sort of this recursive flywheel in the sense that the index funds like the S&P are increasingly driven by a handful of mega cap stocks. What that does over time is capital flows into these index funds, it adds to the performance of those top names, their weight increases, that increases their performance, increases the flows. And if you look at the past two years, the weight of the top seven companies - the MAG7 - has increased, now over a third of the S&P. So where does Bitcoin fit into all of this? It's somewhere in the middle. At its core it's very passive in the sense that the predominant strategy is just accumulate the asset, buy and hold it, don't trade around it. But on another hand, it is the most active macro bet you could be making. So I sort of coined this phrase 'actively passive' as an allocation because it doesn't really fit within this traditional finance active passive debate. It's somewhere in the middle and it's actually very unique in the sense that you're taking a very deliberate stance that you're concerned about currency debasement and you don't want to own all these other assets that are linked to that currency debasement. Well, at the same time, it's very simple - you don't have to be a stock picker. You're just owning a better form of money. Ralph Gebran (01:15:08.104) Yeah, and Brian, just the report was amazing. So I encourage everyone to read it. It made me think of one thing, especially when you talk about MicroStrategy being now a part of NASDAQ 100. So let's say MicroStrategy joins S&P 500, another Bitcoin company that holds Bitcoin joins as well. Over time, similar to what happened with the Magnificent 7, the top performers of the index will be Bitcoin companies that hold Bitcoin as treasury reserve. So inevitably, passive investing becomes Bitcoin investing over the next maybe 15, 20 years. If more companies hold Bitcoin and more companies in these indexes are holding Bitcoin and their performance is tethered to Bitcoin's performance - over time, it might not make sense anymore to diversify into an index and you would just hold Bitcoin. Brian Cubellis (01:16:17.445) Yeah, no, that's exactly right. Part of what I was trying to get out was this sort of osmosis of capital flowing from all these other asset buckets into Bitcoin. MicroStrategy is what that looks like in some practical sense right now. As those equities and other instruments enter indices, that goes back to the same recursive flywheel I referenced earlier where higher performance adds to the weight, more flows - and so I think you're exactly right. That's what we're gonna see play out over the next 10, 20 years. Jackson Mikalic (01:17:06.687) Yeah, well I'd encourage anyone who hasn't seen it to check out the report. We got to wrap here in just a moment, but we first have to call out the single point of failure of the week. There was this crypto influencer, someone who moderated a forum at some sort of event in Canada, who was kidnapped - him and his family were kidnapped and tortured for their Bitcoin and their crypto. I don't necessarily think when I think about the risk profile that most people have to worry about this just yet, but I do think there's a recognition that as Bitcoin appreciates, when Bitcoin recovers back above six figures and into 2025, 2026 and beyond, this is going to become a more real threat for more people. There's not enough talk in the industry about people thinking about these types of physical threats. Brian Cubellis (01:19:19.109) Yeah, I think part of it too is it's most likely to occur with known folks in the space or if you're vocal or public about your ownership of the asset. That's certainly true today, but I think in a future state 10 years from now, everyone's holdings are doxxed. Whether you're famous or not, someone's going to be able to sleuth out how much Bitcoin you have and where you live. That's the reality of data leaks. Jackson Mikalic (01:22:02.539) Yeah. Well, appreciate it guys. And Ralph, thanks for joining us this week. If anyone is wanting to get in touch with you to learn about OnRamp MENA or if your story resonated with them, where's the best place for them to get in touch with you? Ralph Gebran (01:22:19.486) So through our website onrampmena.com or through LinkedIn. We're extremely active. It's at onrampmena, similar to Twitter or X at onrampmena. So we're very proactive and very responsive. Please feel free to reach out. Happy to walk you through Bitcoin's value proposition, how to custody it, and talk about multi-institution custody. And even if you're just curious about what we're up to in the region, happy to share details on that. Michael Tanguma (01:22:51.087) And one last plug, OnRamp Institutional Series kicking off next week with James Lavish and Dave Foley. Brian's shareholder letter, I like to think it was the kickoff for the institutional work that we'll be doing this year. If you want to attend, you'll be able to find it on our LinkedIn and Twitter page. Ralph Gebran (01:23:16.767) Amazing. Hey, my pleasure. Thanks, guys. See ya. Jackson Mikalic (01:23:16.877) Sweet. Thanks, Ralph. Appreciate you joining. Michael Tanguma (01:23:20.409) Thanks, you're all. Brian Cubellis (01:23:20.933)