Tom Farley on Bullish, crypto's long game, and why tokenizing the $270T securities market is inevitable

exact location.

Okay, we will knock. We do know exactly where it is potentially. I don't know. This might be hallucinated, but it looks pretty it looks pretty accurate. Anyway, we've been keeping our next guest waiting. We have Tom Fairley from Bullish in the waiting room. Let's bring him in to the TVP Ultradome. How are you doing? What's going on, Tom?

Good to meet you. Welcome to the show. Can you hear us?

Cannot hear us.

Okay, we're turning on the audio. Hopefully, we'll hear him in the meantime. Let's go to this debate. Okay, Becky Quick at CNBC is getting in trouble because she claimed that GLP1s are responsible for school budget shortfalls. When I saw this, I was like, what could possibly be the connection? Uh, and Bioin Investment 5 said she's so misinformed. She fact checked it. Turns out it's true.

School budgets are paying for GLP1s. They're very expensive and so that's driving up health care costs in a lot of in a lot of schools.

Welcome to the show. Anyway, welcome to the show. Thank you so much for taking the time. How you doing?

Sorry about the sorry about the audio issue and uh I I found the uh the little bit about Becky interesting. She she's about to speak about somebody else, somebody on a on a different network, but uh she's a pro. She's a serious journalist. huge fans of everyone at CNBC. We love the Squawk crew. They pioneered this whole format, invented television over there. Anyway, uh let's go to you. Tell us about Bullish. Give us the update. Take us through what's recent in the business. And uh let's get started.

Yeah, sure. Just uh before I do, just to follow on on that, you said you're a fantasy NBC. I I too am a fan of NBC, but also we have our own media business here. No way. And I've watched with some as as both both a practitioner and and a fan of some somebody who's done a lot of it. I've watched with some astonishment the success that you guys have met with by just creating a a fresher, more interesting format. You guys do an awesome job. Thanks. Thanks for having me on.

Thanks for saying that. It's a lot. Yeah. It's been a really wild ride. Really fun. And uh best part is getting to talk to people like you all day long like and uh and and again and again and and talking to six people a day. Uh, a lot of people start podcasts because they want to talk to interesting people, but then they talk to one a week. We get to talk to seven a day. It's great.

Yeah. Yeah. Super cool. I'm uh I'm happy for you and happy for me. Yeah. What can we talk about?

Uh, well, why don't you uh take us through like the shape of the business currently and then some of the new deals that you've been working on.

Wait, can we get some backstory first?

Oh, yeah. Yeah. Let's start there. That's

You were at uh you're at NY, right?

Yeah. I was uh I was born in Buoie, Maryland, just outside of uh DC. I was going to say I was born on the stock exchange.

I was born on the floor home.

On the trading floor.

That would be amazing. Lore.

I actually didn't know like I wasn't born with any like pre uh any any destiny. I didn't I didn't know.

I always I was always interested in business and money and uh no I wasn't it nothing was pre-ordained. But so

grew up in uh

a lot of people are afraid to say that. I was never afraid to say that.

Yeah.

Yeah. No, I could tell my mother would shake her head sometimes. My mom my mom was a nun for five years and uh

and uh worked in uh you know, I grew up in a place called PG County and and she worked at Elizabeth Seat in high school, which you know, by and large had kids from a different socioeconomic strata than me. And then she would come home and I would talk about making money and uh you know, she looked at me like, "Oh, he's the black sheep."

Yeah.

But um met my met my wife at Georgetown. I need a dollar to buy Gatorade. And um she lent it to me and now we have we have three kids in in New York City and I just fell in love with business. And uh first couple years I I did like banking and private equity. Honestly, I love that too. But when when I really kind of hit got got my mojo is is in the markets industry cuz it's the intersection of tech and business and that to me is is my happy place and I've been there ever since. I I started when I was in my 20s. I'm I'm like granddad now in the digital asset space. I'm I'm 50 and I've been right there at that kind of overlap of the the ven diagram of of technology and markets. I um I I I had I had these friends, the Romero, and uh and I love them. I love them all. Stay in touch with all of them. There's four brothers and and they're all super smart, super successful, and three of them are just like meattheads, like you know, always had their shirts off and and wrestling and playing playing hoops. And then Danny was always like reading Java coding for for dummies when he was like 10 years old. And I would always keep an eye on him. And so in 2013, I'm like, "Danny, are you going back to Duke?" And he said, "No, I'm going out west to start a blockchain company."

And I'm like, "All right, I don't know what the hell that is,

but if you're doing it, I want in." And

you know, a few days later, uh, New York Stock Exchange, where I was at the time, we we agreed to put $10 million into a a little bitty, maybe pre-revenue company called Coinbase.

And so I got this bird's eye view of the digital asset space. Dan Romero.

Yep.

Whoa. Yeah, we know him well. He's been on the show.

That's a crazy That's a deep cut.

That's so good.

Oh, it was great. It was great. Literally, Literally, I'm like, Danny, going back to Duke. He's like, no. He's like, "No, Tom, I actually graduated this past May. You're a year off. I'm starting this blockchain company." Meanwhile, I know I'm going in to run the New York Stock Exchange. He does not.

And I'm like, "Hey, dude. You got you got a couple minutes. Come sit on the porch." And he comes up

and he starts telling me about blockchain. And I'm like, "Wait, I'd heard of Bitcoin, but this is early, right? It's like smart contracts." And and I'm like, "But what but but what use is there for these smart contracts?" He's like, "Oh, it's going to be amazing. It's going to disintermediate. It's it's this layer of programmable finance. that's going to disintermediate all the kind of big institutions like the New York Stock Exchange. And I'm like, wait, what? What are you What are you talking about? It can't be. And so I said, I I got to put some money in. He said, oh, well, my roommate Fred is going to be in New York tomorrow. Why don't you meet with him? And so I I met Fred Ers. I ended up meeting with with with Fred at at Union Square.

And we put that dough in. And it was like the best money we we ever invested. And we got lucky on the return. Just dumb, you know, just dumb luck. Is this like this series A stage? Like

I don't know. I can't remember last Tuesday. I let alone 2013. I could Google but early.

I mean, Coinbase was in my YC batch in 2012 and summer 2012. So, I think Ced or Series A was right around.

We should punch We should punch it in, you know.

Anyway, it was a long time ago. Punch in New York Stock Exchange, Coinbase. It'll come up.

That's crazy. That must have been what what kind of reaction did you get on Wall Street from that investment at the time? I don't know how public it was, but I imagine you still had some some of your peers that were saying, you know, what what the heck is Tom up to?

You know, was actually I think if if you asked Brian or or Fred um or or Fred at Union Square, I I think they would all say um with humility, it has nothing to do with me. it has to do with the NYC brand that it that it was hugely valuable for Coinbase. It was not only public, it was massively public.

So, in other words, if you were to look it up, you're going to find story after story after story after story, which is, hey, traditional bellweather uh a traditional bellweather, you know, firm, New York Stock Exchange, validates crypto firm Coinbase. Yeah.

So on the on the west coast it was it was like a a lot of celebration and you know hey this is finally the coming together of these two worlds. On the east coast it was like what the hell is this? You know what a weird investment from these guys. Yeah.

Uh and it and it wasn't as it wasn't as celebrated. I I will say just my thesis was this was a programmable layer of finance for institutions.

Yeah. Like that was the thesis. It was dead wrong if if I'm honest. You know, there were no institutions in until

Yeah. Was that just a You had the timing wrong. You didn't

Yeah. But pretty darn wrong, right? Pretty darn wrong.

Um

Yeah.

Yeah. But you're only off by only off by what, a decade?

A decade plus.

And just miss But miss that retail would be the the the early adopters.

Yeah.

And even some of the late adopters. Yeah, I guess how do you synthesize the fact that uh crypto did not disrupt the traditional finance system like entirely like you know JP Morgan, Morgan Stanley, these firms still exist. They're chugging along. New York Stock Exchange is still chugging along. NASDAQ and many others uh and yet crypto firms have been very successful. It was sort of a like heads win tails you lose situation like both both sides did well. there was not total destruction of the traditional financial uh infrastructure and in institutions um but crypto was a was you know wound up flourishing like what does that say about everyone's preconceptions I guess because there were two sides a decade ago either crypto is a zero or it's going to take over everything and it and we we wound up with the middle road

yeah I don't I agree Agree. I agree. And I'm going to challenge it a little bit. The

I'm not sure it was it it has been up to this point such a big win for crypto.

There's actually uh relative relatively for all the money and attention and time and and and you know, ink spilled and for all that has gone into digital assets, there's actually relatively few um successful companies.

Yeah. And uh certainly the disruption to traditional finance has been relatively small and very small actually.

I I and and and look, it hasn't always been great. Just I'm not a cheerleader. I call it I call I call balls and strikes. Like not only were there winters, but there were frauds and scams and

you know, like I'm not in it for the fart coins and monkey drawings. I'm just not. And I respect it and I understand why they're there. And and just to pivot to that, like the nice thing is they've brought a lot of attention into the industry, a lot of money into the into the industry. And I think it's all been a warm-up act.

Mhm.

And you know, remember like

blockchain's going down

in some in some cases once a day.

Yeah.

And none of that happens anymore. and they they've been battleh hardened

and regulators have now come around and and you've seen broad acceptance of blockchain rails for serious use cases in Asia in Hong Kong and Singapore in Europe in you know in Brussels Europe but then in the individual countries and now in the US not just with Genius which is the st you know it ratifies stable coins kind of gives them papal blessing but hopefully the cryp the uh clarity act

we can talk about

how to handicap that but if that gets passed that that'll be perhaps the biggest regulatory or or or legislative step ever. And so I am very very optimistic that I come on this show a decade from now and the global securities market is it's on blockchain rails. Yeah.

And that's a $270 trillion market. So I I I there's no mission accomplished banner behind me in terms of crypto

um up to this point, but it's it's coming and it's it's coming. It's coming in in real time. That's kind of how I view it. Yeah, crypto, you know, the the the cycles and the the hype cycles are so vicious and yet it keeps creating these opportunities where the true believers if you just maintain that conviction uh like this window right now where

there's some at least you know we we primarily cover priv private markets and so there's so there's some interest at the intersection of AI and and crypto there's There's been a decent amount of investment there, but I don't see, you know, hundreds of new companies focusing at the intersection of what you guys are doing, which is that like true institutional adoption across, you know, global equity markets and and other asset classes. And so I do I can I can you know thinking on that 10 year time horizon I very much can see how the best days are yet to come and huge opportunity to just like you know be in the foxhole and and focus on the opportunity.

Yeah. And I and I I think aentic commerce will intersect with blockchain technology. you know, I'm not one of those who says, "Oh, and 100% of, you know, Agentic Commerce is going to happen on blockchain rails and, you know, fiat fiat rails will will see their share." Um, but that's that's going to be a big driver as well. But you're absolutely right, Jordy, and thanks for doing the prep work and learning up on bullish cuz we you're absolutely right. We we are focused on institutions really uh institutions exclusively in our exchange business over in our CoinDesk and consensus business. Of course, we're a media business, so we service all sorts of people and and customers, but we focus on on institutions exclusively.

Yeah, I I'm I'm reflecting on the the the question of like the should there be a mission accomplished banner behind you and I I I take your point. Uh at the same time, yeah, there has been a lot of success in crypto, trillions of dollars in market cap. A lot of that captured by the the coins themselves, but there's a number of very successful companies. Yours is among them. Um, but I'm interested in in where you think we are in 2026. A lot of the prices are we're not in some insane falling knife scenario, but uh stable coin volumes are sort of stable even though they were growing very quickly. Uh the Bitcoin price is fairly stable, which is

what

fairly stable. micro strategy started selling.

But but it just doesn't it doesn't feel like oh there's this is the FTX moment all over again like the crypto is about to fall into zero and like people are panicking. It's more just like, you know, this is a mature, stable industry that's, you know, there's some there's some growth. There's some companies that are beating earnings. There's all sorts of different stuff happening. It feels very mature. And so I'm wondering um

Yeah. Well, it's mature, but still feels like there's an opportunity for pretty parabolic growth as you get real institutional adoption, not just, hey, we're going to hold some

Yeah.

you know, Bitcoin on our treasury.

Yeah. etc.

So, yeah.

I agree with every everything you both just said. I I think uh you know what John said is kind of feels like a more or ordinary industry. And by ordinary, I don't mean that in a pjorative sense, but it's no longer based on hype. It's based on real use cases like stable coins. And stable coins are being used for trading and stable coins are being used for payment. And stable coins are being used for for lend borrow. And they've gone from zero to 300 uh uh billion. And you know the whole industry is now uh 2.7 trillion and yes Bitcoin's more stable. Now we happen to be sitting here

uh at a moment in time when Bitcoin's down you know 15% over the last two weeks or something of that nature. Um but still

times when these when when like there's like the whole crypto industry is down 50%. And and like people are actually penning the take everything's going to zero and and it's being and it's being debated seriously and that's not happening right now.

No. So it is a different time.

And then what and what Jordy said that I agree with. So you know you mentioned John that crypto is a couple trillion. The last time I looked coincidentally uh I'm not that good at math in my head. It made the numbers made it real easy. 2.7 trillion and the global securities market is 270 trillion.

Oh yeah.

So and that and that is coming right. Money market funds have already moved on to blockchain rails. uh US equities have already moved on to blockchain rails. You know, you look at all the industry bigwigs from the new, you know, my old haunt the New York Stock Exchange or DTC the clearer or many of the electronic brokers, Kraken or Binance put out an announcement yesterday. They're all tokenizing stocks. You're seeing more uh examples of tokenizing fixed income. And so you're looking at the the parabolic growth that Jordy referred to, I believe, is going to come from the so-called tokenization of the global securities industry.

What's more important there, cost or speed? Because uh and when I mean speed, I guess I mean like 247 trading. Uh that seems like it's crazy. We don't have that yet everywhere. It seems like a purely technical issue. And yet I've talked to folks at hedge funds that are like, "Yeah, like we actually can't get traders who want to work at 2 a.m. Eastern on a Sunday." Uh it's hard to recruit the best to actually make that market and provide liquidity at that point in time. Uh but then on the other side, you have, you know, fees and all of the different things that happen with uh with crypto potentially dropping costs like what are the different pieces of adoption? Yeah, the the 247 what what people miss sometimes is actually the investing demand especially for the most liquid US-based securities like think Nvidia stock

comes come the incremental buyer comes from abroad and you know Singapore where we have an office is 12 hours away

and they don't want to trade some crappy derivative or they don't want to trade some like IOU they want to trade the actual stock and so by going 24/7 you can bring on new liquidity which drives down the the cost of equity of the of of of those companies. And so there's there's a real incremental benefit. I I think to answer your question like what what is the benefit that's most attractive? You have to look at the particular constituent. the issuers they hate little things like when you know I say little they're not little to them but like this issue of naked short selling which is illegal uh but as possible in a world where trading is obuscated in a Russian series of Russian dolls of of brokers or other intermediaries with blockchain rails there is no naked short selling you just look are the are the shares in a wallet or are they not in a wallet like it's it's done but also issuers want the ability to pay stable uh uh dividends and stable coins issuers ers want the ability to be able to reward long-term holders. Imagine you you're a company say, "Hey, we're going to pay a dividend of a dollar, but we're going to give an extra penny for every quarter you've held our stock."

Um, it's it's there was there was a whole exchange on the West Coast that started that was really great. I remember long-term stock exchange, right?

Yeah, exactly. Mark Andre introduced me to Eric Reese maybe

10 years ago, 15 years ago. And I remember the first meeting I had with him, I thought, "This guy's on to something." Like, "Yeah, we should we should reward that. We should reward long-term holders." Well, it turns out you can't do it if you don't know who owns the damn thing and it's buried within, you know, five Russian dolls. Well, blockchain technology, again, you just

you just look at it.

Oh, they own it. It's in that wallet. It hasn't moved. So, um, so for the issuer, it's it's actually incremental functionality as opposed to cost or speed. And then for for the investors, it's just the ability to do things at a at a lower cost. So I guess that's more uh that's that's more cost, but then on the on the speed perspective, being able to settle instantly is interesting. Um so it kind of depends depends which constituent looking.

Short on time. Couple questions. Uh people on the west coast who know nothing about finance have been uh excited about compute futures markets or treat treating compute like

uh like a like you know treating it like a commodity. Uh is that something you know how how do you think about that you know potential market? Is that something that you think could start on um on blockchain rails because it is a a new type of commodity in some way?

Um yeah, two two questions embedded in that. One is will compute futures act actually be a successful product? I I think it will be um the the issue is standardizing it and commoditizing it. um successful the the real successful futures contracts with lots and lots of open interest all come down to the question of are you able to standardize it and commoditize it and come up with the cheapest deliver that has value in the world and everybody agrees upon. So that's not going to be dead easy. It's still probably going to take a couple years but I suspect that that will happen. Uh the second question is

because is that because like an onion is an onion but a GPU is not necessarily a GPU like an an A100 is not a is not a blackwell. So then do you need you know

exactly and and the providers

submark you know basically submarkets

yeah and the providers have a vested interest in not being commoditized um so sometimes it it takes time for for the market to commoditize but it's it's ex it's exactly what what you just described.

Got it.

Um

go ahead.

One more random question. Uh Friday IPOs. We're looking at a a SpaceX IPO next Friday. Uh my my my sense is like that's does that not introduce like more chaos because you have like one you know real trading day there's going to be so much retail activity and then you go into a a weekend of course you know people will be trading it over the weekend in different ways but uh I know there was Alibaba and Uber that both went out on on the NY on Fridays. How did how did those go? Does that make it, you know, more complicated or chaotic or is it is, you know, are the exchanges set up to handle that?

I uh that was one the Alibaba IPO in particular was one of the best days of my career, maybe even my life. Um, but it was also

coming from the guy who as a young boy knew he loved money. I I also was so faking nervous that honestly when you just said that I like was tingling remembering it. I was I was we were in our beautiful uh ballroom that morning and Jet Lee was there, Masa and Jack and and Jimmy Lee who's who's departed um who's a iconic and legendary JP Morgan banker. He kind of cidled up to me. He's like, "Hey, uh Tom, did you guys test this thing at all? Like, is this actually going to work? Cuz you're about to get a gazillion retail orders. Good god, next Friday. It It's going to make Alibaba look like child's play. So, uh, Adena at the NASDAQ is fantastic and the NASDAQ is fantastic. Oh, man. It still makes me nervous. Um, but to answer your question, I think a Friday is fine. There there will be awesome price discovery on Friday and you're going to see extreme volatility for the first hour. It's that's nobody's fault. That's that's called markets. Could it be better? Could there be better mechanisms that could be put in place to smooth it out? Yes. And we should all strive to get there. I just went through an IPO. I have a thousand things that need to change. I think blockchain technology can be very, very helpful in the future. And I think you're going to see more capital formation on blockchain rails because it can do just that. But high volatility to be expected. It's going to calm down dramatically through the day and it won't be a problem getting through the weekend because there's not going to be any substantive substantive new news.

Right.

Thank you so much for coming on the show.

Maybe you should come back on. Maybe you should come back on on next Friday. We got fun. Uh this was super fun.

This is fantastic. We'll talk to you soon.

Yeah. Great. Great to meet you. Have a