Institutions Buy High Sell Low

Frank Hepworth 0:00

The most amount of Bitcoin ETF purchases happened in October 2025. And most ETF sales have been happening over the last three months, which means that the institutions were absolute rookies buying the top of the market in crypto, like making absolute beginner mistakes that a crypto investor who started 10 years ago would have made.

Meet Frank Hepworth And New Market Trading

Joeri Billast 0:44

Guys, if you're now wondering who I am speaking with, well, today's guest is Frank Hepworth, and he's the founder of New Market Trading. He went from advising the biggest crypto exchanges inside a top securities law firm to building professional crypto asset management firm where clients keep custody of their own funds. Frank, as my listeners know, I always like to dive straight in. You've spent years working across crypto law, finance, and entrepreneurship. What was the biggest misconception people still have about wealth management in digital assets?

The Three Tiers Of Crypto Access

Frank Hepworth 1:29

I think people have a pretty big misconception between what they're getting offered from their current wealth manager or advisor and what is actually available in the market because it actually gets broken down into tiers. So at the top is someone like JP Morgan or Goldman Sachs. They're going to give you a very limited offering. It's basically crypto within an institutional format product. So an ETF or a fund takes a long time to go from the creation of a crypto asset to this thing that an institution can hold on its books. So that's provided by JP Morgan, Goldman Sachs, these guys. Takes forever to craft a product like that and they offer the least. And then below that, there's like the crypto exchanges like Coinbase, Kraken, Crypto.com, Uphold, Robin Hood, you name it. These guys, they specialize in crypto. They're still fundamentally, though, what we would call off-chain. And so they still don't offer a lot of products. And when some more boutique wealth managers or wealth advisors, when they plug in Coinbase in the back end, they do get a lot more options than what, say, like a JP Morgan would get or Goldman Sachs would get and offer to their clients, but it's still less than what is available truly. And what is truly available is the bottom layer. And so that's what's on the blockchain itself. And so the misconception people have is they think that what either Coinbase offers or the JP Morgan provider offers is really what the crypto market boils down to. But these top guys, they're going to provide like five options: a Bitcoin ETF, an Ethereum ETF, a couple other stuff. And then Coinbase, they're going to provide about a thousand assets and a few yield products. But then if you go to the bottom layer, which is the blockchain itself, where there's only, I think so far, one wealth manager at that layer. Well, then you've got tens of thousands of assets, thousands of yield products because you're actually at the same infrastructure layer as the asset itself. And there's a lot of misconceptions there. I just went through three layers of them. But people don't quite realize that there's a huge difference between the asset layer and what the providers in wealth management are actually providing for those assets, if that makes sense. Yeah.

Tokenization Is Not The Bottleneck

Joeri Billast 3:49

It's a good explanation. Now, um, people talk a lot these days about tokenized assets. But you argue that the real problem is the investment account itself. So why has wealth management failed to move on-chain alongside the assets?

Frank Hepworth 4:10

You hear so much about tokenization, tokenization this, tokenization that. So they're kind of being shoved in a blockchain, like basically in a crypto asset that exists on a blockchain. And there's many different ways that people are doing tokenization. It's not just one way, and there's pros of cons of each that aren't worth getting into. But basically, it's like these real-world assets, these shares of companies, bonds, they are being shoved into a crypto asset product on a blockchain, and that's called tokenization. And that comes with a ton of benefits, means the whole world can access it as 24-7 liquidity. You can also make it like composable, interoperable, so you can do things with a crypto version of a share of Tesla that you wouldn't be able to do if you purchased it on the New York Stock Exchange. But all of those benefits don't get realized if the person you're using for managing your money, his investment account for you is still in his private books. Like the asset exists on the blockchain, but your investment account is the same old thing it's been for the last hundred years, which is just like an Excel spreadsheet entry on some private banker who needs like 30 different intermediaries to reconcile that with the New York Stock Exchange, with the investment banker, with the clearinghouse and all that stuff. And so who cares if the assets are getting tokenized, if you can't even hold them in your investment account. And I think anybody who's heard about tokenization of assets would also say that they've seen basically none of that at their current wealth manager. And so, yeah, I'm glad you asked that because what I'm getting at is unless your investment account is also on the blockchain, then how are you supposed to interface with assets that are on the blockchain? And that needs to be reconciled. We're doing that over here. That's why the company is built, but people really don't understand that. And it'll take a long time for people to get it.

Why Custody Breaks In Crypto

Joeri Billast 6:26

Thank you for explaining it. So, why do you believe that the traditional custodial model is becoming outdated for digital asset investors?

Frank Hepworth 6:35

Yeah, I'm becoming known for that. It's a bit of a hot take. Basically, a way to explain it is that up until crypto, if you wanted to have assets and have somebody manage them for you, you needed a custodian. So for example, I couldn't have shares of Apple shoved under my mattress, but then also somebody do buy-sell transactions for me. Right? And so if I want shares of Apple or Tesla, and then I also want to trust somebody to manage that for me, we have to agree some like we have to agree where we're my mattress isn't going to work because that guy's not going to come to my house under my mattress and then take it to the New York Stock Exchange, place a trade, and then walk it back to my mattress. So what do you do? So you you you have banks, you have custodians, and for the last 200 years, or like the the the New York Stock Exchange has been around for like 300 years. These companies set up to allow you to place your shares of a company or any financial instrument with a third party, and you allow somebody to manage those products. That way I can sort of own the assets, like I have a right to them, but somebody else is managing them in a way that I feel good about. I feel really good that this person isn't gonna steal it. I'm okay with those things not being under my mattress because then I get the benefit of somebody managing it for me and hopefully I'll make more money. And so when crypto came around, people started doing the same thing. You know, I want crypto, I don't want to manage it myself. I don't want to do the problem of self-custody. Look, there's this company called Coinbase, they're gonna like hold it for me, so I don't need to worry about the risks of that. And even better, like maybe my financial advisor can work with Coinbase and he can manage it for me. That's unnecessary now. People don't realize it, but it's unnecessary because where like shares of companies trade, it's on the New York Stock Exchange. You you can't access it from your house. The New York Stock Exchange is to New York, and you need to go to that. You can't go there. And so you need all of these institutions to allow you to trade those assets. But to access a blockchain, you need a computer. So it's like the New York Stock Exchange is in your house as long as you have the internet connection. And so, like how my company works is the customer from their house using a hardware wallet, they just open up their investment account on the blockchain, they deposit their crypto into it, they secure it with their hardware device, and then they delegate management to my team. And so the big difference there is they haven't given it to us or they haven't given it to a custodian, and then the custodian sort of like owns it, but then allows us to trade it. The difference is they still control it, only they can withdraw it, no one can stop them from moving their crypto, and they have allowed us to manage it. I wanted to explain the like the kind of the structural difference here. And so the the management difference here is that you can basically have the equivalent of your crypto stored under your mattress and then also having somebody manage it for you at the same time. And that wasn't possible until just a couple of years ago with some inventions on the blockchain, basically.

Account Abstraction For Investor Control

Joeri Billast 10:02

The comparison with the traditional market, say with a metres, I think it's makes sense for a lot of people, for a lot of my listeners. I wanted to talk about uh the concept of account abstraction. Can you explain what do you mean by account abstraction? And why do you view it as one of the most important developments for future wealth management?

Frank Hepworth 10:24

So account abstraction is a technological invention that came to on-chain markets to the blockchain in 2022 and 2023. It's it's basically allows an account that holds crypto assets to be programmable. And for example, what we do and how we provide wealth management is we have our customers connect their wallet to our platform. It opens up a programmable investment account. And this programmable investment account has some pretty powerful features. For example, only one person can remove the crypto assets in that account, and that's the person who created it. So there is zero custody risk from our company. It is technologically impossible for us to steal the crypto assets from that programmable investment account. And it also allows us to manage the crypto assets in that account in a very limited way that gives all protections to the customer, to the person who set up the account, and very few, if any, considerations or costs.

Joeri Billast 11:30

So, how does this fundamentally change the relationship between investors on the one side and then wealth managers on the other side?

Frank Hepworth 11:38

Yeah, I think it's super cool and super healthy. So if anybody's been using a bank over the last like 10, 15, 20 years, you're very aware that they have your money. And most of the time, nine times out of 10, they don't stop you from accessing your money. But one time out of 10, they give you some difficulty. And that's in those moments you realize, like, okay, they have my money and they allow me to it most of the time. This completely inverts that. When you open up your investment account, your programmable investment account through ours, like you own your crypto. And if you decide to withdraw, there is nothing techno, it is technologically impossible for us to stop that. And the trading permissions you give us of that account, you can eliminate those permissions 24-7. And there it is impossible for us to prevent you from stopping our access. You you have complete control because it is still fundamentally under your custody with your ledger. And as long as you have that, you are in complete control and you're you're just allowing us into your account, which before crypto came around, that that couldn't be possible, right? Like you couldn't custody the shares of Apple under your mattress and then allow somebody to manage it. You it doesn't make sense. So you have to set up this whole financial services industry to allow somebody to manage your assets in a way that you trust. It's completely inverted here.

Joeri Billast 13:09

Yeah, because you know, we used to believe or still many investors believe, and I'm also learning from you here on the podcast episode, Frank, that many people they assume self-custody means sacrificing professional management to see.

Frank Hepworth 13:28

You will get all the benefits of self-custody, but we will do like all the management of it, all the transactions. And so, yeah, it's like you do get the best of both worlds.

Joeri Billast 13:38

Yeah, I love

Regulation Mandates And The ETF Wait

Joeri Billast 13:40

that. Now, institutional adoption of digital assets is accelerating, as we know. Now, what pieces of infrastructure are still missing before on-chain wealth management becomes mainstream? There is a lot that's missing.

Frank Hepworth 13:57

People would say regulation is missing. I suppose that's true for institutions. I think institutional adoption is way less important than other people think it is. Institutional adoption is good to make the price go higher in the short term, but if the thing required institutional adoption to begin with or regulation to begin with, it was never that transformative of a product or technology to begin with. And so, yeah, institutional adoption is just helpful for making the price go higher in the short term. Ultimately, the consumer will decide what is useful and what is not. And that's where I think people should keep their focus. But to answer the question, yeah, institutions will only participate if the risk of them being litigated and sued goes down if something goes wrong. And so the reason that institutions, for example, waited for the Bitcoin ETF was not because they couldn't conceive of buying Bitcoin through Coinbase. It's not like they could not possibly figure out how to open a Coinbase account. It was just that these institutions always have mandates about what they are and are not allowed to do with client funds. And these mandates require them to operate in very tightly regulated areas. And if they don't operate in these areas and something goes wrong, then the people who run those institutions are very liable to being sued. And so the institutions and the people who run these institutions are just going to wait for lots of regulation to be in place so that when something goes wrong, they can say to their shareholders and stakeholders who are going to want to sue them, hey, we were in a regulated area, we were within our mandate, you can't sue me. And so that's, for example, why so many institutions waited for the Bitcoin ETF. And for the other aspects of digital assets, blockchain technology, we're going to need more regulation. But again, I will always stress regulation and institutional adoption is not fundamentally important. It just helps in the short term.

From RWAs To On-Chain Equity

Joeri Billast 16:07

Okay. Let's look at the next five years and let's talk about tokenized real Rust assets. How do you see them changing in the investment landscape over the next five years?

Frank Hepworth 16:21

Yeah, that's a good question. We're going to see it. I saw this great comment that crypto right now is basically RWA and meme coins. And operationally, that makes sense because they're the easiest to build. So operationally, creating a meme coin is so easy. It's just a program. That's why we've seen 30 million meme coins created already. It's just so easy to do. And it's why almost all of them go to zero. Operationally, creating an RWA, so tokenizing a share of Apple or Tesla and putting it on-chain, there are different ways you can do it. But operationally, it's not that complex either. And I don't get too excited about either, because a share of Apple, whether it's tokenized or not, is ultimately still just a claim on how many iPhones get sold. It's not like tokenizing that creates a new company. Again, it might make the price go up in the short term because if it's on a blockchain, there might be more demand for that tokenized asset. Where these two are going to converge and where the real impact will be in what I expect to see more of in not a year, but within five years, is the best of each of these things. So the best of mean coins is that they're composable, they're permissionless, they're completely on-chain. The best thing about RWA is that it's a claim on a business that is delivering value into the economy. And I want to see those two, and I do believe those two are going to merge. So what do I mean by that? I mean that basically a company is going to issue its equity on-chain, and it's not going to have the limitations that RWA typically has. So in order to buy it, it can't list on Uniswap. It can only list on some private, like RWA chain. That stuff is dumb and annoying. What you want is like on-chain native equity, just like a share of Apple, but there is no off-chain, it's not a tokenized thing. It's natively on-chain equity that can go in a liquidity pool, that can be swapped without a passport. It's truly permissionless equity. You can have truly on-chain native business. You don't need to have a bank account because customers are paying in stable coins, distributions are going to the crypto asset holder who are trading freely with each other in Uniswap. That is beautiful. And I do think we'll see more of that in five years. And that's, in my opinion, really what this space is about.

Joeri Billast 18:52

Yeah. I I love that you mentioned AWA and meme coins. Because meme coins, yeah, what is the value of a meme coin, of course? The sponsor of my post podcast, Rio, is launching a meme token with really some value behind it. When you have the meme token, they give you the utility to have access to a system to avoid scams and so on. Shout out Rio. Yeah.

Active Crypto Strategy Versus Passive ETFs

Joeri Billast 19:18

Now, traditional wealth managers, Frank, they offer clients access to only a small fraction of the on-chain economy, like you mentioned, it's a really small fraction. What opportunities are investors missing today?

Frank Hepworth 19:32

So if you're getting your crypto from one of these, like pretty much any wealth advisor or wealth manager, you're going to get between like three ETFs and maybe at most 40 to 50 crypto assets. I think like Fidelity and JP Morgan are integrating a bit of Coinbase in the back end, but not all of Coinbase, just like maybe the top 20 assets. Yeah, I want everybody to own some crypto. I always say don't sell your house and put it into crypto. But I also say don't own no crypto. Like you should have some, it should be part of any portfolio. And how much it should be in your portfolio is really just a matter of what your goals are and how much you're willing to pay attention to it or allocate to it in terms of risk. And if you're just using one of these traditional guys, it depends on your goals. I guess I have to be really honest about it. If your goal is just to have passive exposure, then a Bitcoin Ethereum ETF thing is okay. But it is the best performing asset class in the last 20 years, and it will continue that way, even though over the last six months or eight months it's in a bear market, it always cycles back. And so because it is the best performing asset class bar none, it seems a bit silly to me to just be completely passive on it. Whereas, like you know, the S P 500 doesn't absolutely crush it. And so to be passive on that, it's like, okay, you know, it's kind of difficult to try and get a 300%, 400% return in two or three years from the S P 500. That's pretty killer. But in crypto, it's not that tough. It can be pretty easily done. New market trading, we've been operating for just a few months now. But my other company, Yield School, we've been educating people on how to invest in the full crypto market since 2022. And we have seen many of our customers go from 100K to over a million dollars because they just know basic things. Invest with the cycle, barbell portfolio, liquidity pools for stable markets. There is a lot of growth left to the market. And if you just give it a little bit of effort or allow us, a company like mine, to give it a little bit of effort for you, you can get really good results. And so I think there is like Quite a big cost to being with one of the traditional guys and their very limited options. Also because they don't even know what they're doing. The most amount of Bitcoin ETF purchases happened in October 2025. And most ETF sales have been happening over the last three months. Which means that the institutions were absolute rookies buying the top of the market in crypto, like making absolute beginner mistakes that a crypto investor who started 10 years ago would have made. Because really, this is their first time crypto investing. So these institutions were buying the top and then they were selling the bottom of the market. You know, it's just like absolute rookie hour because for them, it is their first time trading crypto. And they're like, oh, okay, we should just take a small allocation, dollar cost average in. It's like, well, no, like this is a cyclical market. And that maybe it works for the SP 500, but it's not going to work for crypto. And so not only you're going to get worse options, way worse options with the traditional guys, they're just not even going to manage it, right? Because they don't know how.

Joeri Billast 23:06

Yeah. The market goes up, goes down. And you know, when you buy value, it's better to buy cheap than to buy expensive. Now, Frank, one thing that's really important, and I see it everywhere. I have talked to a lot of people on my podcast, is trust, of course. Because I just mentioned there are so many scams out there, meme coins that go to zero, rich quick scams because people want to go in crypto to get rich quick. So trust remains for me one of the biggest barriers at crypto adoption. What role do transparency and self-custody play for you in the building long-term trust with investors?

Frank Hepworth 23:49

Well, I think any so we're a private company. And so I'm not going to sit here and say that, like, oh, we're we're as transparent as we can, as we're 100% transparent. Like we're a private company and we're competitive. So we are not going to be transparent with like some of our practices because we're a competitive enterprise. What we do is difficult for our company. It'll be difficult for us to like be a scam. Like I'm all over YouTube, Instagram, I'm running ads all day. I'm a licensed attorney. You can

Scams Due Diligence And Real Transparency

Frank Hepworth 24:18

find all my team on LinkedIn. Like, that's how we generate trust, is not necessarily being transparent with our practices, but we're really like putting ourselves out here as people. Like you can find us here. Like right now, I'm in Canada. Like, if we do something bad, we've made ourselves so available and so public with so much information that you're going to be able to catch us like very, very quickly if we do something bad. Now, in crypto, there's a lot of the promotions, like like rug pulls. We we'll see it all the time. Like we'll have customers come to us because they've been targeted with an ad. And this ad will be promoting some like new crypto token that is like attached to water or attached to oil or attached to the US government reserve. And it it's just like very aggressive marketing from a company that is trying to promote their token that will always rug pull. And our customers don't even uh give it too much scrutiny because they just like the potential profits they like. The dopamine is going, but they don't even do the due diligence that would help them see that it's going to be a very difficult thing to make any money from, and it is almost certainly a scam. Like, who is the team? Are we sure they're not AI generated? Like this project says that it's like uh quoted by the US government. Is it actually like does Chat GBT or Claude or Gemini do they actually see that? Do they actually find that? Is there landing page or is there like resources literally one long landing page? And that's all kind of stuff that is not very transparent and should be a red flag. Transparency and self-custody was your question. And so self-custody doesn't help with any of that. If there's somebody who's convincing you to take your money, even if it's self-custody, you're gonna send your money to them. At least on our side, when it comes to self-custody, because of the way our business is set up, you do need to trust us a bit. But if you were to look at our auditor reports, like we put out audits by third parties who say that like the investment accounts you open through us, like it's technologically impossible for us to remove your funds. And these investment accounts have these limited permissions. And so it is through the fact that this is all in the blockchain and that it is audited by third parties that our customers for our service will get a very high degree of confidence that we can't do anything malicious with their funds. But I can only speak for my service on that one. Self-custody does less than you think, I would say, to help people protect themselves. Because if you get some like very appealing advertisement for some malicious guy, I would say sometimes self-custody is an even bigger risk. If that makes sense.

Joeri Billast 27:27

Now, what I always love to ask my guest is what excites you the most about where now on-chain wealth management is headed? And maybe, yeah, what should the investors be paying attention to today?

Frank Hepworth 27:41

Well, investors should be paying attention to us, because when it comes to on-chain wealth management, our service is the best in the market. We get you access to every crypto asset, every yield product, active strategies. You get all the benefits of self-custody, and we do it all for you without being able to maliciously do anything with your funds because of the programmed nature of the investment account itself, because it's on the blockchain. So people should be looking out for us because it's a good service. We invest a lot of money in building it and auditing it, and our current customers really like it a lot. What excites me about on-chain wealth management generally is the my ultimate goal is actually not on-chain wealth management. My ultimate goal is to see more companies

Frank’s Vision And Where To Reach Him

Frank Hepworth 28:30

come natively on-chain, like I was describing before. I really like this idea of for-profit enterprise conducting all business operations and all ownership being natively on-chain, not needing to defer back to some registry in Wyoming or Montana or Delaware. That the basically that the asset and monetary layer matches the pretty online and global nature of our society currently. Because I always feel a lot of friction when working with my international team. And I keep getting dragged back into some dispute with a bank or some annoying like state filing in some country that is giving me problems because if fundamentally they kind of want their cut, which is fair enough because they do provide a lot of services, but it's still like a attention and a cost that I don't want. That's my ultimate goal. Now I'm not able to just like convince everybody to start their company on-chain. But if people are slowly starting to come on-chain, being able to set up a wealth management service for the companies that do that, I thought that would be my way to contribute. Now, you know, I'm kind of like hypocritical here, like we still have a registry in Wyoming, like we're still an off-chain company because the infrastructure to allow us to be natively on-chain just isn't there yet. But I hope it will be soon. And so that's what I'm excited about.

Joeri Billast 30:01

Thank you for sharing all of that, Frank. I think it was a really insightful podcast episode. Now you made people think. And if you also made them think about wow, I want to know more about what you are doing, Frank, what you're doing with your company, what you are doing with new market trading. Where would you like me to send them?

Frank Hepworth 30:23

Yeah, just go to newmarkettrading.com, go to the contact us section of the webpage, and just send us an email. And I should also plug myself better. If people could follow me on X, Frank underscore H E T. If people want to follow me there and tweet at me, I'd be happy to tell them more about New Market Trading.

Joeri Billast 30:43

Amazing. Ask my listeners know, Frank. There are always show notes. There is a blog article. Your Twitter handle or your X handle will be found in there together with the right link to your website. Uh thank you so much for sharing all of that, Frank. Thanks for asking, Joeri. I appreciate the questions and the curiosity. Guys, what an amazing episode, and I'm sure that you know people around you that could also benefit from this episode. So I would say send him an email, send them a tweet, retweet what Frank is tweeting. I think it's really insightful if there is always something to learn every day, and then not take anything for granted, like for instance the self-custody and what is possible today in the world of crypto. Also, if you're not yet following the show, this is a good moment to hit the subscribe button. I would love for you also to help me to reach an even bigger audience, and you can do that by giving me these five stars on Apple Spotify on any other platform. And of course, I would love to see you back next time. Take care. Thanks.