Ethereum co-founder Joseph Lubin on bitcoin ETF decision, prospect of a spot ether ETF

Joseph Lubin, Ethereum co-founder and Consensys founder and CEO, joins ‘Squawk Box’ to discuss the state of SEC’s bitcoin ETF decision, SEC hack fallout, what an approval could mean for ether and crypto at large, and more.

CALL. MAY BE TRUE TODAY. WE’LL SEE. JOINING US ONE OF THE ARCHITECTS OF THE CRYPTO AREA, BLOCKCHAIN AND CO-FOUNDER OF WEB 3 A SOFTWARE COMPANY CONSENSUS. GOOD MORNING. WHAT DID YOU THINK WHEN YOU FIRST SAW THE TWEET YESTERDAY? >> SO I WASN’T WATCHING THE MARKET DIRECTLY AT THAT POINT.

I HEARD ABOUT IT FROM COLLEAGUES AND ESSENTIALLY IT’S AN UNFORTUNATE, UNFORCED ERROR. SYMPTOMATIC UNFORCED ERRORS THAT POLITICIANS AND REGULATORS HAVE BEEN COMMITTING IN AMERICA AROUND THE WORLD POLITICIANS AND REGULATORS HAVE RECOGNIZED THAT BLOCKCHAIN AND CRYPTO ARE POWERFUL DISRUPTIVE TECHNOLOGIES AND TAKING A CONSIDERED, MATURE

APPROACH TO UNDERSTANDING HOW THE TECHNOLOGY WILL BENEFIT SOCIETY AND HOW IT SHOULD BE REGULATED, AND THERE’S JUST BEEN SO MUCH PENT-UP DEMAND ALREADY IN THE SYSTEM THAT IT CAUSED SOMEBODY TO PLAY A PRANK OR TO TAKE ADVANTAGE OF THE S.E.C. SOURCES TO EFFECTIVELY

MANIPULATE MARKETS. >> TALK ABOUT THE PROSPECT MAY COME AFTER, FRANKLY, APPROVAL OF BITCOIN ETF, MAY WELL BE ETHEREUM. TALK ABOUT THAT IN A MOMENT, BUT I’M MORE CURIOUS ABOUT WHY YOU THINK IT’S — ASSUME THEY’RE GOING TO SAY “YES.” MAYBE THAT’S A GOOD OR BAD

ASSUMPTION, BUT ASSUMING THAT’S THE CASE, DO YOU THINK THEY SHOULD HAVE DONE THIS TWO AND THREE YEARS EARLIER? DO YOU THINK SHIFTS AND CHANGES IN THE EVOLUTION OF THAT ECOSYSTEM THAT NEEDED REGULATION AND OTHER THINGS THAT ARE NOW IN A BETTER PLACE THAT WOULD

EXPLAIN WHY TODAY IS DIFFERENT THAN IT WOULD HAVE BEEN THREE YEARS AGO? >> YES. I THINK ONE ARGUMENT IS THAT THERE WERE IMMATURE MARKETS THAT COULD BE USED TO MANIPULATE THE PRICE OF THE TOTAL ASSETS, BUT THE FACT IS PEOPLE HAD EXPOSURE EITHER DIRECTLY OR THROUGH OTHER

FINANCIAL INSTRUMENTS LIKE GPC AND RETAIL CATERERS, OTHER INVESTORS HARMED AND ETFs ARE MUCH MORE EFFICIENT INSTRUMENTS AND SHOULD HAVE BEEN MADE AVAILABLE A LONG TIME AGO. >> YOU MAKE A DISTINCTION, CAN YOU, BETWEEN BITCOIN AND ETHEREUM IN THE FOLLOWING WAY? BITCOIN, DIGITAL GOLD.

PEOPLE THOUGHT A TRUE CURRENCY RATHER THAN SORT OF A STORE OF VALUE. ETHEREUM IS VERY DIFFERENT. SO THE QUESTION IS, DOES ETHEREUM NEED AN ETF IN THE SAME WAY? >> YES. SO BITCOIN CAN BE A STORE OF VALUE OR A COLLATERAL CURRENCY. THERE ARE TRANSACTIONAL CURRENCY CALLED STABLECOINS.

MANY ARE ON ETHEREUM, ETHEREUM IS A COMMODITY. IT’S, WE CALL IT A CRYPTO FUEL BECAUSE IT POWERS TRANSACTIONS AND STORAGE ON A NETWORK. ETHEREUM IS A PLATFORM FOR BUILDING DECENTRALIZED APPLICATIONS AND DECENTRALIZED APPLICATIONS ARE PRESENT, A NEW KIND OF TECHNOLOGY, AND, OR A

NEW KIND OF INDUSTRY. WE NEED DEEP LIQUID AND BROADLY ACCESSIBLE FINANCIAL INSTRUMENTS TO ENABLE THE INDUSTRY TO OPERATE FOR EFFECTIVELY JUST LIKE AGRICULTURE AND MANUFACTURING, DONE FOR DECADES. >> YOUR SENSE, MORE PEOPLE WILL ULTIMATELY GET ACCESS OR BUY OR INVEST IN BITCOIN THROUGH ETFs

AND THE LIKE, OR BY ACTUALLY BUYING THE UNDERLYING ASSET? >> YES. SO IN 1997, AN EXECUTIVE MIGHT ASK THEIR SECRETARY TO TYPE UP AN EMAIL AND SEND THAT EMAIL. AND THAT’S SIMPLY BECAUSE THE TECHNOLOGY WAS DIFFICULT FOR THAT EXECUTIVE TO DIRECTLY OPERATE AT THAT POINT.

BUT THE MESSAGE GOT THROUGH, AND THE EXECUTIVE AND THE TECHNOLOGY BOTH GOT MORE CAPABLE. THERE IS SO MUCH MONEY ON THE SIDELINES MANAGED BY REGISTERED INVESTMENT ADVISERS AND DIFFERENT FUNDS LIKE RETIREMENT FUNDS AND COMPANIES THAT WANT TO ACCESS THE TECHNOLOGY WANT EXPOSURE TO THESE UNCORRELATED

ASSETS OR DIGITAL ASSET CLASS. AND SO THERE WAS A BIT OF RUN-UP BY SPECULATORS IN OUR OWN INDUSTRY, IN THE PRICE OF BITCOIN ANTICIPATING THESE ETFs AND SOON HOPEFULLY THAT THEY’RE AN ETF. BUT THE POINT IS, THERE’S A GIANT AMOUNT OF MONEY. HUNDREDS OF BILLIONS ON THE

SIDELINES THAT’S WAITING TO GET EXPOSURE TO THIS. >> WHAT IS YOUR SENSE IN TERMS OF CONVERSATIONS YOU’VE HAD ABOUT THE PROSPECT OF ETHEREUM OR SOLANA ETF OR OTHER CURRENCIES ALLOWED TO GO DOWN THIS PATH, IF IN FACT WE GET TO AN APPROVAL ON BITCOIN?

>> ETHEREUM IS ARGUABLY THE MOST MATURE SYSTEM, THE DEEPEST ECOSYSTEM AS A PLATFORM CENTRALIZES APPLICATIONS. SO MUCH INFRASTRUCTURE AND ACTIVITY AROUND THE WORLD. BITCOIN IS A NARROWER TECHNOLOGY BUT REASONABLY MATURE TECHNOLOGY SO BOTH CANDIDATES. >> AND IF — >> ONE IS A GREAT TECHNOLOGY,

BUT IT’S NOT MATURE ECOSYSTEM YET. >> TAKE THAT OUT OF THE EQUATION FOR A SECOND AND TALK ABOUT ETHEREUM. HAVE YOU SPOKEN TO THE S.E.C. RECENTLY AND GOTTEN ANY INDICATION THAT YOU ARE NEXT ON THE DOCKET? >> NO. >> NO?

>> THEY DON’T TELL US THEY’RE INTENTIONS. >> THE REASON I ASK, BECAUSE I THINK OVER THE LAST SEVERAL MONTHS IT’S BEEN CLEAR INDICATIONS OR SIGNALING OR SOMETHING GOING ON WHERE PEOPLE SEEM TO KNOW OR THINK THEY KNOW ABOUT WHAT’S HAPPENING AS

RELATES TO BITCOIN IN THE ETF? >> SO WE’RE LIKE MAYBE LIKE THE SECRETARY IN 1997 OR THE BUILDERS OF THE EMAIL SYSTEM IN 1993. WE HAVE DIRECT HANDS-ON TO MAKING THE TECHNOLOGY AND MAKING THE TECHNOLOGY USABLE. WE ARE MUCH LESS FOCUSED A