WisdomTree CEO Jonathan Steinberg says Crypto is the “natural evolution” of exchange-traded products

Austin, Texas – Crypto is the next evolution of exchange-traded funds and exchange-traded products, said WisdomTree CEO Jonathan Steinberg on “Planting the Seeds of a New Financial System,” a conversation with CoinDesk Editor-in-Chief Kevin Reynolds on the main stage at Consensus.

“What we were looking for is what can do with ETFs what ETFs did with mutual funds,” Steinberg said.

He said a world where blockchain enables investors to buy government bonds with additional functionality would have “huge appeal” to mainstream users, which is why the New York-based asset manager is preparing to launch a crypto wallet on the Apple App Store in the second quarter of this year.

The wallet will enable trading of real-world tokenized assets such as gold or real estate, Steinberg said. And he sees this as a huge benefit for holders of illiquid assets: “We thought through tokenization and blockchain-enabled financing that you could add functionality … When you add tokenized, physically backed gold with peer-to-peer exchange and payments , gold now becomes currency, as it was hundreds of years ago.”

Steinberg said that such a wallet does not exist on the market yet. “Tokenized securities do not yet have a place to launch,” Steinberg said. “Anyone with a brokerage account can buy an ETF without paperwork, and it’s pretty democratized, but nothing is more democratized than your smartphone. You can reach almost the whole world, he said.

“So for Wisdom Tree it’s just building on a new channel, building on our strength in bringing exposures to market in a safe and compliant way, and we’d like to try to do the same for crypto as well.

WisdomTree’s embrace of crypto as the next evolution of ETFs is controversial, Reynolds said in the on-stage interview. He brought up that an activist shareholder has nominated three candidates for the board and criticized the crypto wallet WisdomTree Prime.

“It’s wonderful to have the opportunity to share our vision with shareholders….But nothing will have the impact of actually launching the wallet,” he said, “which is really just the beginning of the journey.”

WisdomTree, which this month announced it reached $90 billion under management, currently has nine crypto funds approved by the US Securities and Exchange Commission that invest in traditional assets such as US Treasuries. Users will be able to access these funds through the WisdomTree Prime wallet when it launches.