Exchange-traded funds and bitcoin have shared history, Crystal writes from Miami.

Why it matters: So observed an astute attendee at the Exchange ETF conference yesterday, where the spot bitcoin ETF was what everyone seemed to want to talk about — including how it might fit in an investor's portfolio.

Driving the news: "Listening to the discussion thus far, and mentally trying to keep track, it feels like half the time you could have said what you said but swapped bitcoin with ETF," the person said during the Q&A portion of a panel discussion on the subject.

Zoom in: ETFs have been derided (and sometimes are still) just as bitcoin is now.

• ETFs have been called "weapons of mass destruction" and "worse than Marxism."
• Headlines as late as 2015 wondered whether they posed a systemic risk to the U.S. financial system. (Sound familiar?)
• "There were congressional hearings about whether ETFs were destroying the American Dream. People were skeptical of it, because it was a new technology," Bitwise's Matt Hougan, said. "Now it's the apple pie of investing."

The tide had been shifting to ETFs and away from mutual funds for years, but it wasn't until 2021 that the gap between the two investment vehicles widened to record levels.

• That showed investors' embrace of the 2.0 version of the investment wrapper.

The big picture: That history suggests that the world's largest digital asset could too, at some point, overcome its stigma and become widely accepted tech in the investment arena.

• Eventually, Hougan predicts, people will use bitcoin, crypto and such applications without considering their past.

What others are saying: For now, many are still just putting their toes in the water.

• BlackRock's U.S. head of thematics and active equity ETFs, Jay Jacobs, said the firm is taking a more educational approach to bitcoin allocation talks: "We don't think it's absolutely for everyone."

State of play: A bright spot that came up: Fidelity Investments Canada last week incorporated between a 1% to 3% bitcoin allocation to its "all-in-one" funds.

• It's a sign of things that issuers hope will hit the U.S. soon. (Automatic allocation to bitcoin means more dollars.)
• 1% is conservative; 3% is aggressive.
• Hougan said the average Bitwise adviser had a 2.5% allocation.

What we're watching: Conference attendees were keen on the next big thing: when the world's second-largest digital asset, ether (ETH), would get an ETF — and if it was possible under Gary Gensler's SEC.

• Generally, the responses to those questions were: 🤷‍♀️

Also of note: ETF conference attendees are sharp. 🔪

• One gentleman wondered how CF Benchmarks, the index provider to many spot bitcoin ETFs, says its reference rate is representative of the bitcoin market if it excludes major offshore exchanges like Binance.
• Context: Constituent platforms include Coinbase, Bitstamp, itBit, Kraken, Gemini, and LMAX Digital, per spot bitcoin ETF prospectuses.
• CF Benchmarks analyst Gabe Selby responded: "You see a lot of volume offshore, but the tradeoff is, do you really want to risk having institutional funds... being tied to something that could be questionable?"

💭 Crystal's thought bubble: Pleasantly surprised that the folks in my old beat have been keeping up with crypto.

Grayscale Investments' advertising campaign for its ETF-converted GBTC is everywhere.

• On subway trains in NYC, in airports and now, on a T-shirt, Crystal writes.

Flashback: The front of the shirt 👆 is one I've seen on Bloomberg Intelligence ETF analyst Eric Balchunas, though it didn't have the "still no" crossed out then. (It was pre-approval.)

Zoom in: 🍑 The back makes it very GBTC.

• It's a section of its S-3 registration statement for a spot bitcoin ETF, in what appears to be a nod to what Grayscale had to do to make it happen. (That's suing the SEC and winning.)
• TIL: There's a reason Grayscale's bitcoin ticker is everywhere, according to Fortune — it's the only issuer allowed to publish its ticker symbol like that out of the gate.

Of note: The tee also addresses the fact that some people might know about GBTC, but not know that it was converted to an ETF. (Seems impossible from where we sit.)

💭 Crystal's thought bubble: Can't wait to see others' clever BTC ETF swag!

A quarter of all ETH has been committed to securing the Ethereum blockchain, Brady writes.

Why it matters: The more ethers are staked to secure it, the harder it would be for a malicious attacker to manipulate the network.

• The Ethereum community continues to commit more and more, such that they hit this milestone about a year and a half after activating The Merge, which switched it from a proof-of-work network to proof-of-stake.

Be smart: Staking refers to ethers posted as insurance that different blockchain validators will continue to act in the best interest of the network.

• As long as they do, validators share in the emissions of new ethers. It's one of the most consistent sources of yield in crypto.

Context: This is appealing because the supply of ethers has leveled off.

• The supply of ether, the coin of the realm on the Ethereum blockchain, has been basically flat since September 2022.
• This is because even though Ethereum generates new coins with each block, it also burns roughly the same number because in 2021 the network pushed an update that burnt a portion of the ETH spent in fees.

By the numbers: The portion staked could get much higher. Other blockchains that have been staking longer have vastly higher staking ratios.

• Tezos stakes 68%. Solana is at 67%. Avalanche is at 56%.

What we're watching: There's a very long line of new folks looking to get into the validation/staking game right now, which is good for the network's decentralization.

🇳🇿 A New Zealand central banker said that central bank currency is better than stablecoins. (Bloomberg)

🚪 Crypto custodian Fireblocks conducted a small round of layoffs. (Blockworks)

📱 Stuff Farcaster users can do that Twitter users cannot. (Decrypt)

Jack Dorsey rocked a Satoshi T-shirt as he hung out with Jay-Z last night at the Super Bowl, Brady writes.

• Even seeing this little of the shirt, any Gen Xer can tell: That's a riff on a classic Nirvana shirt.
• This post reports that the famous CEO wore the same shift to last year's game.

Quick take: This is as much of the Super Bowl as I saw.