Elliot Johnson Podcast Transcript
Firstname Lastname joins host Brian Thomas on The Digital Executive Podcast.
Brian Thomas: Welcome to Coruzant Technologies, home of the Digital Executive podcast.
Welcome to the Digital Executive. Today’s guest is Elliot Johnson. Mr. Elliot Johnson is the Chief Executive Officer, chief Compliance Officer, and a director of Bitcoin Treasury Corporation. Mr. Johnson brings extensive experience in digital asset management, product development, and operational leadership.
As Chief Investment Officer and COO of Evolve, he was instrumental in launching some of Canada’s first crypto investment vehicles, including the spot, Bitcoin, ETF, and Ether, ETF. Evolv now manages nearly 300 million across six crypto ETFs, all offering daily liquidity and institutional grade custody. Mr. Johnson’s deep expertise in building and overseeing the infrastructure behind physically settled crypto products is directly aligned with BT cts Bitcoin treasury and lending strategy.
Well, good afternoon, Elliot. Welcome to the show.
Elliot Johnson: Hi, great to be here. Thanks for having me.
Brian Thomas: Absolutely, my friend. I appreciate it. And making the time. You’re in Toronto, Canada. I’m in Kansas City, so we just got an hour time between us. I again appreciate that. And Elliot, jumping into your first question, you were instrumental in launching some of Canada’s first spot, Bitcoin and Ether ETFs.
What were the biggest regulatory and operational hurdles you faced in bringing these products to market?
Elliot Johnson: Yeah, thanks very much Brian. So at my business, evolve ETFs, we were actually the first in Canada to file for a Bitcoin ETF in 2017, and we ended up getting there with SPOT Bitcoin in 2021. We were one of the first two in the world to have a spot, Bitcoin, ETF, in 2021, and then a spot Ether, ETF, a couple of months later.
So that was a big time for us. We thought, especially because, um, a big part of what we’ve been trying to do around digital assets over the past eight years has been to bring them to more and more people. And you’ve gotta meet people where they are. And so that means you need to provide products people can own in their traditional brokerage accounts and within the mandates that they have, whether it be equities or ETFs.
You know, you need to kind of bring. Digital assets to where people are, because not everybody’s gonna open their own account at an exchange or deal with their own keys or hardware or any of those kinds of things that are related to physically owning crypto itself. So the challenge, of course, is how do you fit these into existing regulations?
And I think it’s where we’re very lucky to have a super strong product team who was able to help to kind of figure that out. And really what it came down to was with the ETF structure. You can sort of put almost anything into that structure so long as you can solve for things like liquidity and custody and the big innovations that we were able to take advantage of between our first filing in 2017 and then our successful launch in 2021 had to do with infrastructure, which might be boring, but it’s something that I spend a lot of time thinking about.
And so here, what I mean is. World class digital custody. So for example, Gemini and Coinbase are the custodians for the ETFs at Evolve. Then you also need to have a futures market so that the people who are trading your ETFs, the bank dealers, have a way to hedge exposure. And so the futures markets on the CME.
Critical, and then you need to have a reference rate. You need to be able to price the ETFs and be able to trade at that price. And that’s again where those futures came in. But in particular, our index provider CF Benchmarks, who provides the index for those futures, allowed us to use their index rate and they have a transparent, heavily regulated index.
And all of these things put together means that people can go and buy an ETF today. It has SPOT Bitcoin or SPOT Ethereum, or Spot Solana or Spot XRP. Those are the four that are currently available in Canada in ETF form. And you know you’re getting full exposure. You know that you’re in a structure that is completely backed by the digital asset because it’s a one-to-one relationship.
Every dollar in IS is deployed into buying that physical asset, held in physical custody. And everybody involved in the process is fully regulated. And so that’s what Evolve ETFs does. And I think it’s, um, it’s been a real win for investors.
Brian Thomas: That’s amazing. Thank you, Elliot. You certainly were a pioneer by being that first in Canada file for that Bitcoin ETF, which is amazing.
You’re bringing digital assets to people wherever they are and making it easy. But the big innovation that I heard is you’re building that infrastructure around the access and trading, again, making it easy to access and providing that trust behind your name. So thank you, Elliot. At Bitcoin Treasury Corporation, you’re focused on Bitcoin, treasury and lending strategies.
How do you see corporate treasuries evolving with Bitcoin as a reserve asset?
Elliot Johnson: This is something that we are incredibly excited about. And so just to be very clear for the listeners, I’m CEO of Bitcoin Treasury Corporation. I’m also CIO of Evolve ETFs that I was just talking about. Evolv is providing the backend infrastructure for Bitcoin Treasury Corporation.
You can go to the website of either company if you wanna learn more about the relationship between the two, but I need to make sure that that’s very clear for listeners. These are not the same business. Bitcoin Treasury Corporation is a separate publicly listed company trading under the take care of BTCT on the Ts.
Accenture, we hold 771.37 Bitcoin, and as you mentioned, our vision for the business is to grow the Bitcoin. Per share for the benefit of the shareholders. And we think that we have a real opportunity to be a pioneer in institutional Bitcoin services. So this is where we think that the excitement is gonna be going forward, because what we believe is that we’ve hit a critical point where people have now accepted the Bitcoin is the highest.
Quality collateral in the world. People are now starting to use Bitcoin as a store of value, as a safe haven against market uncertainty, against inflation, against money printing, and even governments are getting there too. You know, as we saw in the past year with the US now having a strategic Bitcoin reserve.
But when you have an asset that has that level of adoption, institutions are now coming into the assets. Governments, as I said, are coming into the assets. It doesn’t make sense for the asset to just be inert, to just sit there in a vault somewhere, like a bar of gold at a bank, especially not when it’s a digital asset that can move around the internet at the speed of light and can be used and integrated into so many applications.
So we think that the first opportunity that’s quite obvious is lending the Bitcoin in much the same way as you might think of a real estate investment trust. They own buildings, but they rent them out to people in the same way. We’re gonna own Bitcoin, but we’re gonna rent out the use of that Bitcoin.
But in addition to that, Bitcoin is now getting integrated into new financial products and services, and we think that this is gonna expand the market for new Bitcoin products and services. So by this. I think we’re really excited looking at the way in which Bitcoin is starting to get integrated into credit products.
So Bitcoin bonds, Bitcoin mortgages, people have talked about including Bitcoin in treasuries, government treasuries, and those kinds of things are very interesting because when you include a hard money asset. Into other structures, you increase the quality of the collateral in those structures. And so we think that there’s gonna be a real strategic benefit to a company like ours that starts out with just buying Bitcoin.
Let’s just have a big inventory of Bitcoin. Let’s grow that inventory by providing it. As a service to other companies that are trying to use that Bitcoin and I, I kind of come back to the thought of the early internet, right? You didn’t really know what the internet would become when it first started, but you knew that there was something incredibly exciting about the possibilities.
And the same with the mobile phone. When the iPhone came out, we didn’t know Uber was going to disrupt the taxi service, but it did. So now Bitcoin is here. It’s the best money, it’s the best store of value. It’s built for the internet, and we’re only just starting to see the ways in which it can be used.
But we think a Bitcoin Treasury Corp, the first step is to acquire as much as you can and then look around at the industry that’s developing and think about the best ways to serve other institutions who need access to Bitcoin for products and services that they’re building.
Brian Thomas: Thank you. I appreciate that starting out there.
I really appreciate, I know the audience will better understand your role in Evolv, which provides that backend infrastructure for Bitcoin Treasury Corporation. So again, teasing those two companies apart. Appreciate that. But I really like the vision to grow Bitcoin per share for your asset customers. I think you’re, again, you’re looking out for the best interest of your customers and what I’ve seen in the last couple of years really.
Institutions, especially recently here in the US institutions, governments are now investing, improving more adoption in these digital assets. Absolutely agree with you. Bitcoin digital assets are transformational and, uh, will be best to support industry 4.0 and innovation going forward. So thank you, Elliot.
Given your experience with physically settled crypto products, what infrastructure challenges do institutions still face when adopting digital assets?
Elliot Johnson: I think the, uh, number one challenge for most institutions is that they’re very stuck in the structures that they’ve already built. And so those structures include things like compliance structures, how they think about assets, how they think about the infrastructure that they use, or perhaps maybe a better way to.
Put it, although less kind is how they don’t think about those things. So when you look at the traditional finance industry, it’s a central clearinghouse model. In Canada, we use Canadian depository for securities. In the US there’s a depository trust company called DTCC and all equities, all stocks that trade.
Clear through those entities. And those entities have been around since, you know, the stock market modernized decades ago. But nobody really thinks about how that infrastructure works. And then when it comes to compliance rules, people are, are not used to a new asset, right? I mean, you typically don’t see new assets.
You typically see new companies, so there’s a new ticker or a new symbol for a new company, but you don’t see a new asset class entirely. And so I think institutions are struggling to figure out how to put Bitcoin. Into their existing framework, whether they’re, it’s their internal infrastructure, their accounts and bookkeeping and so on, whether it’s into their compliance frameworks around how do they think about it, you know, we think Bitcoin is the best quality collateral in the world, but I’m sure that the regulators who govern bank capital.
All, all the countries coordinate through a, an agreement called Basel three, which is based on a negotiation in Basel, Switzerland, between countries to agree on how they treat big banks. They don’t have a framework for saying, well, Bitcoin’s better quality collateral than, you know, cash deposit. So you should treat it as, as such, and allow banks to use it as a reserve asset.
That’s a really long way away from here because there’s a lot of bureaucracy that has to change, so. I think it is gonna continue to be a challenge for a lot of institutions to figure out how to use Bitcoin within their existing tool, systems, processes, allocations, and infrastructure. But incrementally, every day, more and more people are figuring this out.
More and more institutions are figuring this out and, and I think that the most exciting part about it is because of this friction, because it’s so difficult. For big institutions to get there, the largest institutions are going to get there last, which is an incredible opportunity for those of us who are able to get there earlier.
And as I said, you know, we’ve been in the business of Access products now for a long time. ETFs, we’re an access product for people to use Bitcoin without having to open an account at an exchange, without having to deal with their own keys. Bitcoin Treasury Corporation is an access. Company that allows people who have to buy Canadian equities because they’re in a Canadian equity investment mandate to have Bitcoin in their portfolio.
So there are now more and more tools and more and more people are innovating, but the the biggest participants are not there yet. But that’s so good for everybody else. ’cause there’s only 21 million Bitcoin. It is the hardest money ever created, but by being infinitely divisible, there’s enough for everybody.
And being earlier to be able to use it within your product services, your life, your portfolio is an advantage. And so we’re very excited. We spend a lot of time talking to big institutions, trying to help them think about Bitcoin and figure it out and how they can use it. Everybody’s making progress. I think increasingly, everybody recognizes its value, but there’s still a lot of friction in the way, and so it’s gonna take some time for all of that to get resolved.
Brian Thomas: Thank you, Elliot. I appreciate you breaking that apart for us. Absolutely. I agree with you. Challenge for these large institutions, most institutions today that are still invested in their traditional tradify infrastructure and they’re trying to figure that out to really adopt and integrate their digital assets into their portfolio.
The interesting thing I took away is you said that probably the largest institutions will most likely get their last due to their large infrastructure and the amount of work to integrate those digital assets, so I appreciate that. Elliot. Last question of the day. Looking ahead, what do you believe will be the next major catalyst for mainstream Bitcoin adoption?
Will it be ETFs, corporate treasuries, sovereign wealth, or something else?
Elliot Johnson: Something else is probably the easiest way to answer that because I think usually we’re surprised by what it ends up being, but I really think maybe if I could then take a guess at what that something else is. I think what you’re gonna see in terms of mainstream use of Bitcoin.
Is, it’s gonna be the layer two networks that are getting built on top of it. And this is a very exciting part of the industry and it’s very, very early. So layer two networks that for, uh, your listeners who aren’t familiar with them, these are services that use Bitcoin as the asset that they move around, but they live separately to the Bitcoin main blockchain, and it allows you to send.
Bitcoin even faster than it already is sent, which is, you know, every a, a block, every 10 minutes. In this case, the biggest one is called lightning, where the movement to the Bitcoin is almost instantaneous and it allows you to send it at much lower fee in smaller size. So the classic example is a cup of coffee.
And the reason why. This is so relevant is because the developing world are using Bitcoin and and have more of a need for it than those of us in Canada and the US where we have a more stable currency than they have in some parts of the world that are suffering. Much worse. Inflation have a much weaker banking system and more de banked people, and so they’re turning to.
Using it much more so than we are. El Salvador is the best example. Bitcoin is legal tender. Down there, you can buy a cup of coffee at Starbucks or a hamburger at McDonald’s in El Salvador and pay with Bitcoin using the Lightning Network, which is that layer two network that I mentioned. And I think what’s gonna happen is more and more countries are gonna be doing that.
People from the developed world, from Canada and the us, they’re gonna go on vacation to these places and they’re gonna realize that actually it’s easier for them to put a little bit of Bitcoin into a digital wallet on their phone and pay for things on their vacation. And that’s much easier than them changing currency into the local currency.
Or figuring out how to like, you know, does this place accept Visa or MasterCard and all the fees and complexity associated with that, and they’ll be able to, Bitcoin will be accepted in more and more places. That’s gonna increase people’s awareness that this is a currency that they can use. And so I think that will again, continue to expand the mainstream adoption.
Which was, you know, I think what you were asking about. But I do think that the other thing that’s gonna get people’s attention is just gonna be big institutions, governments, and so on, bringing Bitcoin into their world as a reserve asset. But I think those two things combined are gonna, are gonna change the name of the game and people are gonna.
Forget about when they were skeptical of Bitcoin, and someday they’ll just be accepting that it’s a part of their lives. They know it’s a store of value. They know they can use it in certain circumstances, and that’s a lot like, you know, those of us who were old enough to remember the transition from Blackberry to iPhone and, and you know, you look back after a few years and you can’t remember how you lived before you had these tools.
I think this is happening to money and it’s gonna, it’s gonna happen faster than most people expect. When people realize that it’s happened already, the world will have changed for the better. And um, we’ll look back and go, wow, I can’t believe, you know, the old days before we had this technology. So this is where we think the world is going right now.
Brian Thomas: Thank you. I really appreciate that. You know, back to the question. In the future we, we don’t really know. We have an idea, and it may be something else, don’t know what it is, but we do know it’ll be innovative. Right? And one example you highlighted is, and I like this, the layer two networks, they’ll continue to innovate, right?
To bring crypto better, cheaper, smarter, faster to the masses, which is really cool. And another example I like to highlight, we talked about this on the podcast previously, is El Salvador’s, one of those countries that is fully adopting digital assets Bitcoin to easily use as a standard currency to make those everyday purchases, I think is pretty cool.
So thank you Elliot. It was such a pleasure having you on today and I look forward to speaking with you real soon.
Elliot Johnson: Thanks very much, Brian. I really enjoyed this. Appreciate you having me on.
Brian Thomas: Bye for now.
Elliot Johnson Podcast Transcript. Listen to the audio on the guest’s Podcast Page.
