The Bitcoin ADR Moment: Rewiring Global Market Access | Bitcoin 2026

[music] [applause] >> All right. Good afternoon, everyone. My [clears throat] name is Tyler Emmert. Today, we're here to talk about ADRs, another nice three-letter acronym. Uh Ishaan, I'd like to love to start with you. What is an ADR and why should people care? Why are we talking about it today? Absolutely. And then thanks, Tyler. And thank you all for for being here today. Um so, ADRs are effectively a wrapper. They've been used for actually almost 100 years uh to wrap foreign stocks into the US stock market. Um and before that, you know, they sort of stemmed out of receipts that were used to connect commodities like gold into the sort of traditional banking system. So, the idea of a receipt has a long history in connecting markets. Um so, that's really what an ADR is. The whole point of an ADR is to allow folks who own a particular asset to be able to bridge it into another market, to continue to own the asset, but also um to then use it in that market that they they bridged it into. So, that's conceptually what an ADR is. And uh I know you spent a lot of time at at Citibank working on the ADR team there. Well, what are some examples? What What are ADRs that people may be familiar with or or that a a traditional investor would um have access to in the US? Yeah, so from a stock market perspective, a typical ADR is uh when you say as an investor want to buy Alibaba, you want to buy Nokia, you want to buy Nestle, Sony. Uh so, these are all foreign issued stocks that you as a US-based investor want to own, uh want to be able to hold in your brokerage account, but you may not want to set up a brokerage account in those markets. You may not want to deal with the market regulations. You may have sort of restrictions on what you can hold. And so, an ADR is the gives you the ability to own and hold those assets in your US account and just treat it like any other US stock. And then David, I guess from the from the banking side, with your role at ClearStreet, um what are the things that holding an ADR enables an investor to do on your platform or in their in their brokerage account? Sure. Yeah, so if you think about the construct, right? ADR is a wrapper, right? And in crypto, we talk a lot about tokenization of stocks and moving them on chain. Uh and this is a version uh of wrapping an asset uh so that it fits within a framework, right? And so, from ClearStreet's perspective, prime broker, uh we can hold and custody any asset, uh and we're able to help service customers that are trying to bring foreign stocks onto US soil, uh just like Ishaan mentioned. But then in addition to that, particularly as we're talking about the crypto space, like one of the the biggest issues is operationally and infrastructure, the systems aren't talking together and they're not connected. And so, from that perspective, taking Bitcoin or crypto and putting it into a depository receipt framework allows you to hold it within your prime broker or your custody account. So, you don't have to do anything special. There's there's nothing additional that needs to be done except for the DR conversion. And now you've converted, uh which enables you to have access to the things that a prime broker gives you. Primarily, margin trading, uh and and the use case for being able to trade it alongside any other asset. So, Ishaan, we're here at a Bitcoin conference. We're talking about Bitcoin. Where does Bitcoin fit in with depository receipts? Yeah, it's a great question. And you know, I kind of laid out the uh history of the ADR. It's being used and constantly being innovated to allow different assets to integrate in different markets. And now the the moment has come to integrate Bitcoin into the traditional stock market directly. And that's what we're doing with an ADR. So, the idea is now Bitcoin can sit within an ADR framework where owners of the underlying Bitcoin can deposit their Bitcoin, get an ADR in return, continue to own the underlying Bitcoin, but now use Bitcoin in the traditional stock markets. And that's what we're doing when we bring Bitcoin into an ADR, we now bring Bitcoin into the traditional stock market with the choice for that holder to always be able to redeem back to the underlying. So, this bridge is what we're building here, what we've built. And we want to really help integrate Bitcoin into traditional markets so that not just existing Bitcoin holders can access traditional markets, but also traditional investors can have a tool to get closer to Bitcoin and the Bitcoin ecosystem with the goal eventually to get them to the underlying ecosystem directly. And I understand uh RDC's been working on this Bitcoin ADR concept for a long time. Why Why isn't this already a thing where, you know, uh more than a decade in a Bitcoin's history, we have Bitcoin ETFs. Why uh why hasn't this construct existed historically? Yeah, it's a great question. So, um ADRs are typically issued by by banks when it comes to uh the traditional stock market. And uh you know, as Tyler mentioned, we came from one of those banks and we realized that, you know, in order to really connect markets, you do have to step outside of the existing system, observe it, and realize there's an opportunity, which is what we were able to do when we left the bank to start this business. And um part of it is also just making sure there was market structure clarity, there was regulatory clarity. And as the regulators have understood and appreciated that Bitcoin is an asset that should be part of the traditional markets, we've been able to follow along that path to build this bridge. And so, this is the time for for this bridge to really expand. Today, we are offering this solution, uh but under certain restrictions. So, we do do this for accredited investors and up. Uh but we are working on a path to further expand this to everybody. And so, that's one of the goals of of the year for us so that everyone can benefit from this uh this product and this solution. And then David, from the ClearStreet perspective, how how do you guys interface with ADRs? How do How does the plumbing actually work? How can you magically transform your Bitcoin into something the traditional finance system can understand and lend against and and uh utilize? Sure. Yeah, so if if we take like the traditional finance concept, uh there's a handful of shops. Ishaan used to work at one of them. Uh where they basically do the conversion for you and issue the note on a transfer agent. Uh this fundamentally works the same way. So, if a client wants to create the depository receipt, uh they'll simply come to the desk, either deliver it to us, and then we'll we'll convert it, or they'll give us cash and we can buy Bitcoin. And then the next step is to send it into a uh custodian, a qualified custodian, that is going to hold the underlying Bitcoin under safekeeping. Then there's a notification gets sent out to a transfer agent. Transfer agent then basically matches the trade on DTCC. Uh and then those shares are then received in by ClearStreet, right? So, very simply, there's a couple of different steps that happen pretty quickly, but the underlying technology is the same tech that is being used in TradFi for trillions of dollars of stock settlement uh that happen on a regular basis. So, basically, like this is really a format of being able to take something that is unique, uh but putting it into a framework that already exists, which is one of the biggest things that we see at ClearStreet. Number one thing is like people want to get access. And I believe that a lot of the adoption of cryptocurrency in general has been hampered by operational infrastructure as well as the regulatory landscape. And we've gotten an updates on both of those things over the past few years, but this is a step in the right direction to be able to very simply hold your Bitcoin in a prime broker account and then get the benefits of of having it all integrated with one system that all financial systems currently work on today. And it makes it a lot easier for people to drive adoption as well as get more fungibility and use cases out of the underlying asset that aren't necessarily available to them today. What you're describing sounds to me a lot like a a Bitcoin ETF, which have been the fastest growing ETF products ever launched in Wall Street. Is it the same? Is it different? What What's the nuance here? Yeah, so I think there there there's a couple of different things when I'm talking to prospective clients about it. Number one is uh that like a lot of funds, right? If you run an active ETF or you run a mutual fund, uh you're capped at how much you can put capital into other vehicles, other funds. Uh and depending on the underlying structure, that can be really complicated for somebody to get Bitcoin, right? Because most funds or ETFs aren't going to own Bitcoin outright. Uh so, then the next reaction is, "Okay, great. I'll buy IBIT." But then it counts against the capital me holding other funds. Uh also, from a manager's perspective, you're managing capital, your investors don't want you putting your money into somebody else's vehicle. They want you to manage capital appropriately. And so, the way that I'd phrase it is what has resonated outside of like better capital efficiency uh and other things like that, I think the number one thing that really resonates is this is the purest form of representation of Bitcoin in traditional finance uh because you're holding the the underlying instead of shares in a trust vehicle. Yeah, and just to add to that, right? So, if you think about um what the ADR enables, as we've sort of all been alluding to, it sort of aligns really directly with the ethos of Bitcoin uh because Bitcoin is about ownership. It's It's about choice. It's about freedom. And so, when you uh decide as an asset owner to wrap your Bitcoin into an ADR, you continue to be the owner of the Bitcoin. You're just reformatting it so you can use it in the stock market because the stock market isn't there yet when it comes to directly dealing with Bitcoin based on what we've been saying. But, you are still the owner of the underlying and you still have a choice in the future to go back to the underlying Bitcoin when you're ready. So, that's something that really is is not a feature of a fund or or any other product like that. This is limited to a product like an ADR. So, you mentioned getting your Bitcoin back in the future. I think that's something that uh this audience probably cares very very much about. How how does that kind of differ from the in-kind redemptions we've heard about in in the Bitcoin ETFs? Is it is it the same thing? Yeah, so that's a great question. So, uh maybe just taking a step back, right? With the ETFs, the primary purpose of creation and redemption is to make sure that the ETF is efficiently tracking the underlying from a performance perspective. So, the primary goal of creation and redemption is for authorized participants contracted with the ETF, typically broker-dealers, to be able to create redeem all the time to make make sure the ETFs are efficiently tracking the underlying. Sometimes certain clients do get the ability through the APs to create redeem, but there are certain nuances there, all right? So, one, it's not available to everybody. It's only certain clients of the APs. Two, um every day, you know, the the underlying Bitcoin held by the ETFs is being sold to cover the expenses of the ETFs. So, theoretically there's less Bitcoin per share than when you started off if you had initially created. In the case of an ADR, uh we don't touch the underlying. Uh the underlying just sits in custody for the benefit of the ADR holder. There's a fixed ratio of Bitcoin to ADRs. You can always redeem for that exact amount of Bitcoin whenever you want. That doesn't change regardless of the price of Bitcoin and it's open to anyone to create or redeem. There is no concept of an AP because this is not a fund. The entire product is designed for asset owners to be able to move back and forth between the two markets based on choice. Yeah, I'd also say like the the way that I kind of think about this product in general is like when when Bitcoin first got wrapped, wBTC, and obviously there's been a handful of other DeFi wrappers uh to get Bitcoin on a variety of different chains. But, that was a really critical moment for crypto because it integrated Bitcoin with the decentralized ecosystem, right? The way that this product works in my mind is basically takes Bitcoin and wraps it and puts it into the traditional financial system so you can access traditional products, traditional rails, uh as well as being able to have more fungibility and use like putting it in a margin account, using it uh as collateral for repo transactions. And and it's kind of like the same premise of what wrapping Bitcoin onto a chain like Ethereum unlocked for the DeFi ecosystem. You you mentioned uh the repo [clears throat] market, which I think is a really interesting one. If we if we uh you know, zoom zoom down in a future where uh Bitcoin ADRs hold hold billions of dollars of Bitcoin, like what does this enable in terms of capital markets? Sure. Yeah, I mean the repo market, most liquid market in the world, uh fungibly, right? You post assets as collateral, you borrow cash uh or vice versa. Uh the the critical point right now is there's not a lot of like a lot of people in the room, a lot of people that are here all working on different use cases for Bitcoin. There's been a handful of projects that have rolled out of like generating yield on Bitcoin. And this potentially is another way for you to enact that using the traditional financial system. Repo markets work by posting assets, borrowing cash. Extremely liquid, you get to work with all the largest banks in the world. And typically what that means is that cash finding cash financing rates are going to be open and available and cheaper uh than what you can normally get within the crypto ecosystem, right? And so, if you think about like uh take a platform like Aave or Compound or Communitas or anything like that, like you're segmented by the amount of capital that is provided within that market, which has grown tremendously over the past few years. Awesome to see. But, being able to have a uh an asset like a Bitcoin DR potentially eligible uh to post into repo now unlocks all the capital in the entire world held by every single bank. That's a pretty good pitch. >> deal. Eshaan, uh backstage a little bit, you're talking not just about the US market opportunity, but really the global opportunity. What does that unlock for ADRs specifically? Yeah, so um that's a that's a very interesting question. So, um ADRs are again, as we mentioned initially, have been used primarily connect markets, primarily used to connect cross-border markets. We've taken that concept and applied it to Bitcoin and we've started to see this trend in the Bitcoin space where there's been treasuries and other companies that hold Bitcoin globally. And Bitcoin is after all a global asset. It's not meant to be held within a particular border. It's meant to be accessible across borders. Similarly, ADRs are meant to connect markets across borders. And so, there's a natural alignment with kind of the purpose of the ADR and what Bitcoin as an asset represents. So, there is an opportunity, of course, to connect, you know, treasury companies from different markets to the US market, for example, and bring that sort of uh corporate entity, that corporate strategy into the US market so US investors can access it. So, that's an opportunity there. There's a similar opportunity to take US treasury companies and take them abroad and so let other investors in local markets access it. And so, that's something ADRs enable at the security level that goes beyond, you know, what we've been talking about in terms of wrapping Bitcoin into the ecosystems directly. So, there's a two-layer play here, which really helps recognize that borderless concept of Bitcoin across markets. And that's where we think the ADR further adds value. Well, unfortunately, that's all we have time for, but thank you both for sharing about the most direct way to own Bitcoin in the TradFi system. Thank you. >> Thank you. >> [applause] [music] >> Every year, this community comes together to celebrate, >> [music] >> to debate, to build what comes next. >> [music] >> And every year, the stage gets bigger. >> [music] >> Sound money center stage. So, where do you go to celebrate the next chapter in Bitcoin history? You come home. >> [music] >> Nashville, July 2027.