#862 The Bitcoin ETF Is Being Held Hostage w/ Jan Van Eck

Jan Van Eck is the CEO of VanEck, an $80B Asset Management Firm and are heavily involved in Bitcoin & Cryptocurrencies In this conversation, we discuss Crypto regulation, the Bitcoin ETF, the importance of stablecoins, and how investors are changing their minds about Cryptocurrency. ======================= Choice is a new self-directed IRA product that I'm really excited about. If you are listening to this, you are likely part of the 7.1 million bitcoin owners who have retirement accounts with dollars in them, but not bitcoin. I was in that situation too. Now you can actually buy real Bitcoin in your retirement account. I'm talking about owning your private keys and using tax-advantaged dollars to do it too. Absolute game changer. https://www.retirewithchoice.com/pomp ======================= Imagine coinmarketcap - decentralized. 3X in valuation is 15 billion dollars from the current price. Cryptotoday.com starts at zero, at fair launch on 7th of March. No VC. No pre-sale. Team tokens locked. For the people, by the people. For decentralized crypto. Visit http://cryptotoday.com and read the whitepaper for the details.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:02Anthony Pompliano?

  What's up everyone, this is Anthony Pompliano. Most of you know me as Pomp. You're listening to the Pomp Podcast, simply the best podcast out there. Now let's kick this thing off. Jan Van Eck is the Chief Executive Officer of Van Eck. They're an 80-plus billion-dollar asset management firm, and they've been into Bitcoin and cryptocurrencies for some time now. In this conversation, we talk about everything from regulation, the spot Bitcoin ETF, and of course, stable coins. I really hope that you enjoy this conversation, as I did as well. But before we get into this episode, I want to quickly talk about our sponsors. This episode is brought to you by BlockFi. BlockFi provides financial advice for crypto investors. Those products include the BlockFi Wallet, a US dollar loan collateralized by your crypto, and a no-fee trading product. BlockFi also released the world's first crypto

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• 1:31Anthony Pompliano?

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• 2:13Anthony Pompliano?

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• 3:39Anthony Pompliano?

  All right, let's get in this episode. I hope you guys enjoy this one.

• 3:42Speaker 01

  Anthony Pompliano runs Pomp Investments. All views of him and the guests on his podcast are solely their opinions and do not reflect the opinions of Pomp Investments. You should not treat any opinion expressed by Pomp or his guests as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his personal opinion. This podcast is for informational purposes only.

• 4:05Anthony Pompliano?

  All right, I think we've got Jan here with us now. Jan, how are you?

• 4:13Anthony Pompliano?

  Sorry, you know, listen, when you hang out with your brothers, sometimes you just gotta make sure they're paying attention at all times, right? It's like head on a swivel and keep going.

• 4:20Speaker 02

  A hundred percent. I got three boys, so it's all the time.

• 4:24Anthony Pompliano?

  How old are they?

• 4:26Speaker 02

  Twenty-five and twenty-two-year-old twins.

• 4:28Anthony Pompliano?

  All right, so the twenty-five-year-old's definitely beaten up the twenty-two-year-olds when they were younger, right?

• 4:33Speaker 02

  All the time.

• 4:34Anthony Pompliano?

  I'm the oldest, so I could say that, and while my two younger brothers are sitting here and just like, shut up.

• 4:38Speaker 03

  The tables have turned, though, as you can tell.

• 4:41Speaker 02

  But the problem was, when you have twin brothers, then you're outnumbered, right? So you've got like, you've got two people.

• 4:48Speaker 03

  That adds a dynamic.

• 4:49Speaker 02

  So that was a really bad day for my oldest son.

• 4:52Anthony Pompliano?

  That is a great point. All right, we have one very serious question before we get into all the Bitcoin and crypto stuff. So I told everyone earlier that you were coming on, and my genius brother over here immediately goes, oh, the 14th-century painter? Is he named after him? Do you know anything about Jan van Eck, who spells it differently?

• 5:09Speaker 03

  He's got a Y in it.

• 5:11Anthony Pompliano?

  Is there any relationship, any connection here?

• 5:15Speaker 02

  Definitely not. It's Jan van Ike, you're right. And my grandfather, who was a Dutch lawyer, decided to spend a lot of his retirement on figuring out the family tree. And he went back that far, and we are not related. But since you're into Dutch trivia, I don't know if you know what my name means, but it's Jan is John, van is from, and Eck is corner. So there was a river in the southern Netherlands that had to bend, and I'm from that little town, or my relatives are.

• 5:51Anthony Pompliano?

  I'm gonna start hitting people with, yo, you know John from corner?

• 5:57Anthony Pompliano?

  Awesome. All right, so here's, we got a whole bunch of stuff to talk to. I feel like I could literally talk to you for hours, so I'm gonna do my best to kind of focus on what I think is the most important stuff for folks to hear from you. The first thing I think is important for people to understand is you don't run like a brand-new crypto-type investment organization. You guys have been around for a long time, you got a lot of assets, but you've also been... Paying attention to and participating in the Bitcoin and cryptocurrency industries for a while. So help people just understand like, how big is the organization? And then what eventually got you to get comfortable with and start to allocate assets towards this industry?

• 6:34Speaker 02

  Sure. VanEck was founded in 1955 by my father. So it's been around for a long time, as you said, and I think there's some good things to talk about there. But just to answer your question, we manage about $82 billion. About 90% of that is an exchange traded funds. I launched that business in 2006 and we're sort of the top 15 ETF sponsors in the world. We have operations, meaning local funds in Europe, Australia and the US.

• 7:03Anthony Pompliano?

  Got it. And so when you think about a business that was started in the 50s, I always joke that like, there's financial organizations, there's two types. There's ones that are brand new and they're going to survive or thrive in the current environment. And then they'll get disrupted and then there'll be a new crop of new ones. But then there's these organizations and you know, usually I point to like a Goldman Sachs or JP Morgan, but I think you guys fit this bill as well, which have navigated, you know, in some cases, literally the creation of electricity, the telephone, the internet, the mobile device, like all these different pieces of technology. And so if you start in the 50s till today, like you all have navigated a number of those. Why do you think it is that the organization's been so kind of durable?

• 7:46Anthony Pompliano?

  And able to kind of move through these transitions with success?

• 7:51Speaker 02

  I think it's, it's, that's very flattering. So, so thank you. I think that it's two things. Number one, it's mindset and the second is the ability to execute. So the DNA of the firm really came from my father, who was a historian, but the way I describe it, a functional historian, kind of like I am, which is trying to have mental models for the future. All that matters is the future in a way, right? But like his, his big bat pump, it's crazy, it's almost as big as yours is in 1968, he converted the only fund that the firm ran effectively into a gold Fund. Gold was pegged at $35 an ounce and gold had been pegged for the entire 200 years

• 8:36Speaker 02

  or so of US history. So he basically said, the world is going to massively be disrupted. And inflation is going to appear and you want to own gold as leverage into that trade. So it was very forward looking. And so that's just part of the firm's DNA. I think, you know, the second thing is having a, what I call like a founder's mentality. Cause I've thought about this and because people have said, wow, you were so early to ETFs in 2006. I'm like, early? I mean, this was so many years into ETFs growing at, you know, astronomical rates. And I think it's, look, sure, it's helpful if the enthusiast is running the firm.

• 9:17Speaker 02

  But I do think it takes that founder's mentality, almost what Zuckerberg is doing with, with Facebook, to really bet on your vision of the future. So those, those two things.

• 9:28Anthony Pompliano?

  So taking that mentality and looking at this new industry, when you all started to kind of dip your toes in at first into Bitcoin, cryptocurrency, etc., what did you guys do early on to actually get started?

• 9:40Speaker 02

  The first thing was hit the books, right? In early 2017, of course, you know, I've been following crypto for several years through my oldest son and, and other, other forms of, you know, conversation. We'll say, oh my God, is this going to disrupt gold, which is a huge, even two years ago, gold funds for 40% of our revenue. And so just listen to the podcast, went on the internet, did the white papers, did all that kind of research because no one would answer that question. I'd ask my colleagues, is Bitcoin going to disrupt gold? And no one gives you that answer. So just research it and, and then, you know, look, what we did is kind of trivial in a way is get organized. And we're in the ETF business and filed for Bitcoin ETF. I mean, we've done a lot more since then.

• 10:23Speaker 02

  But in some sense, what asset managers are doing is not the most exciting part of the ecosystem.

• 10:29Anthony Pompliano?

  Yeah. Why do you think the spot ETF, like what, what's the issues there? And obviously, given the fact that you guys have put forward applications and, you know, gone back and forth with regulators, I don't know what you can say, what you can't say, but just kind of, there's a futures ETF in the United States, there's spot ETFs and futures ETFs for Bitcoin internationally. What's your read on kind of the regulatory environment and what it'll take to get a spot ETF for Bitcoin in, in the United States?

• 10:54Speaker 02

  I mean, look, I could talk about this for a super long time. I think what I've said is the SEC is holding a coin ETF hostage until they get jurisdiction over the underlying crypto markets, which they don't have right now. And so that's that narrow issue. I mean, the broader issue, and I wrote a piece on stable coins a couple of weeks ago, is that I think the whole regulatory dialogue is not very healthy right now, because I think there's dialogue on shows like yours where there's actually a back and forth, a pro and con. But when you get to DC, it's one congressman doing their view, another senator doing their view. You listen to the hearings, you know, and the banking regulators want stable coins

• 11:37Speaker 02

  to be banking products and the future, you know, CFTC wants them to be maybe derivatives or their cash commodities. I mean, it's, everyone's talking their own book and there's not a lot of thinking through of really what these things are.

• 11:50Anthony Pompliano?

  If you could just wave a magic wand and, you know, you were SEC chairman for a day or president for a day, or what, pick your kind of role, what do you think would be the ideal scenario for the industry? Is it just approve a Bitcoin spot ETF and let the market kind of take it from there? Or are there other things that you think would be worth having conversation around?

• 12:10Speaker 02

  I think we need, actually, I don't know if I really care about that so much anymore because so many people can buy Bitcoin, you know, kind of retail. I mean, it would be nice, but I think, you know, in Europe, probably have eight different exchange traded products. So seven single tokens and a multi-token. So just Bitcoin, okay, but it really would be nice for retail investors through their brokerage accounts to have access to many more things in the ecosystem. That's just not happening, right? So I'm a little, I'm really of two minds. I think it would be nice to try some safe harbors, like I said, trade stable coins like ETFs and see how that goes. If you're really concerned about

• 12:52Speaker 02

  a regulator, a custodian and an auditor looking at the assets behind, I'll call them the traditional style, stable coins, because there's so many types.

• 13:04Speaker 02

  To start there, but at this rate, nothing's happening. So I'm almost the other mind says, just forget it. Let all the disruption happen because DC is never going to get organized. If they do anything, they're more likely to mess it up and create big regulatory barriers, which is really bad.

• 13:20Anthony Pompliano?

  Yeah, you mentioned this idea of treating stablecoins like ETFs. And I know you had this piece in Barron's, which I found fascinating. And you're arguing, if I can kind of summarize it in a very elementary, simplistic way, is that a stablecoin is actually more like a fund than anything else. And the idea is that somebody puts cash into a custody account. The stablecoin issuer is then essentially issuing the equivalent of shares. And those shares contract or expand with the inflows and outflows of the cash. And so it is acting as if a fund would act. Is that kind of your general framework or argument as to why these are more like ETFs than any other type of asset?

• 14:04Speaker 02

  Exactly. I don't know if I'm allowed to say the tether word on this program, but tether operates like an ETF. I mean, that's it. They have creation units. They have authorized participants who can add or detract shares. It trades on an exchange like ETFs trade on an exchange. It's just in digitized, tokenized form. So it's immediate settlement, which is brilliant. It's a great step forward. So now, listen, there are algorithmic stablecoins and all this other kind of stuff. But I'm just saying, it's so close to an ETF. Just take existing ETF regulation and do a trial. If your policy concern is the concern that there's no assets behind the 100 billion plus in stablecoins,

• 14:49Speaker 02

  well, take a peek at half of them.

• 14:51Anthony Pompliano?

  Yeah. And what would change? So let's say that we go down this path, right? And all of a sudden, it comes down from high on the mountain. Yes, these are going to get treated with ETF-like regulation. What would change in the crypto market or in the stablecoin market?

• 15:04Speaker 02

  I don't know if anything would change, right? I mean, I think we have this other problem, which is, you know, come and talk to us, right? This attitude that regulators, well, come and talk to us, but no one in DC approves anything, right? People aren't getting banking licenses, you know, funds aren't generally, Bitcoin ETFs aren't getting approved. So that's the other, we need some regulatory fortitude, which you had at the end of the Trump administration, not to politicize it, but I don't see it for the next four years.

• 15:34Anthony Pompliano?

  Okay.

• 15:35Speaker 02

  Three years.

• 15:36Anthony Pompliano?

  And then you've got in this article, I want to read this because I think it's a really interesting nuance. You say, "In a slight difference from mutual funds and ETFs, most stablecoin issuers keep the income generated from the assets in the stablecoin. Thus, even though interest rates are low, stablecoins are accumulating assets that are growing above the $1 price they promised to maintain. In response, some stablecoins now assign a part of their investment gains to holders. I believe these income-distributing stablecoins will likely proliferate." This is fascinating because in the ETF world, usually any of the interest or financial gain would automatically go to the holders of those assets.

• 16:16Anthony Pompliano?

  And the kind of fund wrapper essentially is just there to serve as a kind of organizational structure, and there's some fees extracted for that, but pretty much it's an organizational and kind of legal compliance thing. Here, the stablecoin issuers are actually, I don't think people understand, like, there's a lot of money to be made by having the stablecoin because you're generating the yield off of what almost kind of acts like a money market fund or something like that. And so, why is that important to distinguish between is that revenue being returned to the stablecoin holders, or is it being kept by the for-profit company?

• 16:50Speaker 02

  Well, right now, it's held by the stablecoin, which is, you know, God bless them. You know, if you, let's say interest rates go to 3%, even at the short term, right? They're earning all that, all that income. The positive thing for the ecosystem is presumably, I mean, I think most of these people are straightforward that run these things, you would have more assets, you know, standing behind the stablecoin than, than actually a stablecoin outstanding, right? Because as the income accrues over time, that compounds, which is a wonderful thing, as we all know. In a way, that can enable them to take more risk, meaning going further out if they, if

• 17:32Speaker 02

  they have more, if they have 103 cents right behind every $1 of stablecoin, then they actually can use some of that 3 cents to generate even more income. But you know, or you can consider it a form of insurance. My point, the second point that I make in the article, the consequence of that is, listen, it's a free market and there's competition in the world. And someone will come up with another stable coin, like who's getting that income? Circle is getting the USDC income right now, right, are the shareholders of that. So over time, I would expect someone to say, hey, listen, I'll pay some of that out, I'll keep one and a half percent, but you know, I'll distribute one and a half percent.

• 18:14Speaker 02

  The distribution part is really interesting, I think, just from an ecosystem perspective. Because then you have to have like a transfer agency mechanism where people can get that income paid to. So anyway, that's, thanks for picking up on that point.

• 18:32Anthony Pompliano?

  Joe, John, what questions you guys have?

• 18:35Speaker 03

  So my question would just be about what you're hearing from clients. You've obviously been looking at digital assets and crypto in general for a few years now. But like, how has that narrative for those conversations changed? Is there more demand? I'm assuming there has been other conversations around that as you guys look at other products. But just walk me through kind of what you're hearing.

• 18:51Speaker 02

  Well, I mean, the world has changed a lot since 2017, when it was really a retail phenomenon, but still, meaning institutions and CEOs that I would talk with had really no idea. And you know, you know, all the dismissive comments that they would have about crypto. I would say the institutions are way up the learning curve, but they're not up the doing curve. So like 90% of the volume in our ETNs in Europe is really retail. The institutions have been participating through VC funds, right? That they're investing in early stage, like the Andreessen Horowitz funds. But very few, I mean, they make headlines, but very few are actually buying crypto directly.

• 19:33Speaker 02

  And they can't, most investors do not know how to deal with the volatility. That is the biggest sticking point. I mean, they see something go up and down. They can't really explain it because the correlation of Bitcoin to NASDAQ and gold and everything else is so low. So it's still early days. I look at that as a really, really positive thing.

• 19:54Anthony Pompliano?

  Gotcha. John, what do you got?

• 19:56Speaker 04

  Nice to meet you. I will call you John Van Neek, as my name is John as well. Feels fitting. My question is, just thinking around the SEC and the spot ETF in particular, like, what are your thoughts around that, without getting too deep, as I know you guys are continuously applying for that spot ETF, but like, why has the SEC not approved a spot ETF yet in the United States?

• 20:19Speaker 02

  Because I think they want jurisdiction over... Look, it's, it's super complicated. This really is a, is a weakness in securities laws, because to define a security, it can really cover a whole lot of different things, right? In, in law school, you learn, well, can a membership in a golf club be a security? And the answer is yes. And so you have a range, so that's hard enough. But then, you know, in crypto, there's this range of assets between decentralized and centralized. And, and that changes over time. Like, I was listening to a colleague this morning talk about Terra Luna, saying, yeah, some of the steps they're taking is to decentralize,

• 21:01Speaker 02

  so they're less vulnerable to being sued for being a security when they come to the United States. Uh, so, uh, anyway, that's a, a long, complicated answer, but I just think it's, it's what I said before. The SEC wants jurisdiction over the whole, you know, universe, and they want it through, from Congress, I guess, uh, is, is ultimately it. Listen, we, we have a major, I like to point out, we have a major part of the financial services system that's just regulated at the state level, right? Crypto, right now, you need a money transmitter license, you're regulated at the state level. Insurance company, our insurance industry is entirely regulated at the state level.

• 21:41Anthony Pompliano?

  Yeah, when you start to think about, like, let's take the executive order that came out today, right? It seems to be very much like, go get information, bring it back with reports, and then we'll decide what we want to do. Um, but, but is there an element of, uh, maybe bifurcation, where the regulators already understand, know, and have been doing work on this industry? They realize it's not going away, and, and so, you know, they're working. But now politicians and kind of the current administration and like the political machine has realized and woken up and said, oh, wow, this is not going to go away. And so like, they're almost like saying back and forth to each other, you know, hey, get us information, get us information, and then we'll make decisions together. But like, do

• 22:23Anthony Pompliano?

  you think it's important that the politicians now recognize the size and kind of durability of the industry? Or do you think that it never really mattered and this is more just kind of bureaucracy that's getting in the way of the true innovations?

• 22:37Speaker 02

  I think politicians realize, and we saw this right through the legislative fights over the last couple of years, that the crypto community can organize and they're very participatory, meaning they will write letters to the House. And so I think that's gotten people's attention. I don't know where we're at with that. I just don't, I don't, I'm hoping that doesn't become like a partisan thing where, you know, Republicans are more libertarian and more pro crypto and Democrats aren't. But the House Blockchain Caucus is bipartisan, which is a really positive sign. I'm trying to have some conversations here in New York around the bit license that

• 23:20Speaker 02

  hopefully it would just be bipartisan and reviewing that. So that's, that's kind of it. I think, Pomp, look, the big macro, macro, macro issue is will Bitcoin be legal to hold in the United States?

• 23:37Anthony Pompliano?

  Do you worry about that? Do you think that could be an issue?

• 23:39Speaker 02

  I worry about that big time. I love, I love to go back to, you know, sorry, to repeat this story, but you know, in 1968, why did the fund that, you know, VanEck offered, why was the gold fund invested in gold mining shares? Why didn't it just buy gold bullion? Do you know the answer?

• 23:56Anthony Pompliano?

  Well, because it was illegal to hold. Gold, individual gold?

• 23:59Speaker 02

  Yeah, it was illegal. It was illegal for decades, right from FDR to the early 70s, illegal. So you could own coins and people bought crew grants. So you think that we can't make Bitcoin illegal? I mean, you know, I, I think we're one or two headlines away from something nasty coming out of treasury. Like, what, what if Putin evaded sanctions somehow using Bitcoin? So I think, um, you know, there's this whole discussion of, uh, you know, this using the financial system to regulate life. And, you know, Bitcoin is permissionless. And so the, you know, I don't mean to repeat your pro Bitcoin arguments,

• 24:41Speaker 02

  but is let, let the money move and then eventually we can track bad behavior, right? You don't have to stop everything ahead of time because people will always find ways around it. So I think there's a good answer from a policy perspective, but it's, it's the big macro issue. And I think it does drive the price too. I mean, I, I think that concern that I just talked about hurt, hurt Bitcoin over the last couple of weeks, but I can't prove it.

• 25:03Anthony Pompliano?

  Yeah. So I, I want to throw out something I've been thinking about. I want to caveat it with like, I don't know the answer here. And this is me just kind of thinking out loud. But as we think about the geopolitical stuff that's been playing out, uh, one of the things that I think, uh, more and more people are talking about is the potential, not guaranteed, but potential for, uh, kind of bifurcated financial systems. And if you ask somebody like, uh, Balaji, uh, he would tell you that, you know, hey, you basically, uh, are moving towards like a Western based system, an Eastern based system where you have kind of China, Russia, maybe in India, and then like a decentralized system. There's other people who maybe won't give the credit to Bitcoin or cryptocurrencies and they'll just say, hey, it's East versus West. And then other people who say, uh, the East will never be able to actually, you know, kind of get a financial system off the ground

• 25:48Anthony Pompliano?

  and, and the West will continue to dominate. Regardless of which one of those scenarios kind of plays out, one of the pieces that doesn't seem to be getting a lot of conversation, uh, coverage is obviously there's the sanctions with Russia going on right now. And everyone has run kind of to the extreme and said, oh, Bitcoin, that the, the thing that resists censorship and seizure and all that, like that will be used. But I keep saying like, man, the Chinese digital currency, this central bank digital currency is on different rails than what the US could, uh, effectively go ahead and, and implement sanctions on. It feels like, you know, these governments would be much more excited about like, well, why don't we just have our currency that we control?

• 26:32Anthony Pompliano?

  And let's just use this one and it's got some kind of insulation from sanctions, but also we can produce and, you know, expand and contract the money supply and do all this. Like, how do you think about just central bank digital currencies in general? Right? We talk about stable coins. I think people usually think of those as like US dollar backed coins, but what about these other countries that want to create central bank digital currencies? Have you guys thought about that or done any work there?

• 26:55Speaker 02

  I wouldn't say we've done any original research. I mean, I've certainly thought about it. I think that's one of the positive signs really is that policymakers in the US really understand, I think, the two risks of, you know, a central bank currency, which is the complete lack of privacy, which is maybe, I think, a minor concern relative to the fact that the Fed offering a central bank currency is basically the Fed offering retail access and retail competition to the commercial banks. And in time, you know, they don't want to compete with the commercial banks. I think there's a lot of vested interests that support the commercial banking system in the United

• 27:39Speaker 02

  States. So I think, because right in the time, time, the time of risk on, or sorry, risk off, everyone's going to move their money to the Fed, the Fed's stable coin, or the, you know, whatever it is. So, you know, the government's stable coin. So that it's that aspect where they're competing against commercial banks directly for retail, for whether it's payments or just deposits. I think that is the thing that's stopping a central bank currency in the US, which is great, because I definitely am against it for privacy reasons. And I think Americans are as well.

• 28:13Anthony Pompliano?

  Yeah. One of the things that I keep coming back to is like,

• 28:18Anthony Pompliano?

  The benefits that are being presented, it's very obvious why there could be positive benefits. The hard part is the trade off, right? Of all the financial surveillance, the ability to censor transactions, all this. And what I do wonder is, maybe in 2019, I went on television and they asked me, you know, "Hey, what do you think about this?" And I said, "Look, if I was the United States and I wanted to ensure the global accessibility and drive adoption of the US dollar, I would digitize it immediately so that anyone with an internet connection could have access to dollars." And regardless of why they wanted those dollars, that would drive adoption. Now, the other part of the conversation is when those people opt into this central bank digital currency, it increases the bad stuff as well.

• 29:03Anthony Pompliano?

  And so what I do wonder also is if you have digital currencies, so every central bank has one, let's say, at some point in the future, it means that everyone will have digital wallets. That's the only way that you can actually support this technology, etc. I keep coming back to this idea of the friction of switching cost. So, right now, if I have dollars and I want to go to Mexico and use pesos, I either go to the bank and ask them, you know, for pesos, so there's some friction there. I either go to a currency exchange at the airport and get ripped off, or I basically get into the economy in Mexico and then go to an ATM and pull out the money. Those are really kind of the three most basic ways for me to get my hands on the currency of that economy. But if all of a sudden everything's digital and it's on a device, I can just with the

• 29:48Anthony Pompliano?

  press of a button, switch back and forth between these currencies with relatively low friction, does that somehow change in a world where like, the liquidity gets sucked into the best store of value, and then you come back out of the store of value when you need a medium of exchange, whether it's dollars, pesos, or something else? And I don't know, right? This is all me kind of just like thinking about these potential things, but it does feel like there's this important technology advancement of the switching cost drops. And when switching cost drops, usually you see behaviors change. It's just what is that behavior maybe?

• 30:21Speaker 02

  Yeah, I guess I'm not sure for those who have money, we're indirectly invested in a Latin American fintech with a very weak local currency. And, you know, I was very intrigued like, what do they own on this crypto platform? And basically, they, I'm oversimplifying, they own a third of the local currency was Argentinian pesos, a third dollars, and a third crypto. And so I think, okay, right, I think then it's just a question of which is kind of what I would do. If I were Venezuelan or Argentinian, I wouldn't own a lot my local currency. But I'd adjust that Mexican peso, I'd have more. So I think your point is, hey, listen, are these

• 31:04Speaker 02

  transaction costs coming down? And I think they will come down dramatically. I'm a big fan of crypto for that reason, is that, you know, like Bitso, the Mexican payments company, I mean, you know, it's outrageous what people pay for Western Union, you know, money transmissions. And so that is the really pro-social benefits I'm very excited about in emerging markets in Latin America.

• 31:32Anthony Pompliano?

  Are there other pieces of the industry that you're really excited about that maybe people wouldn't expect or you haven't talked about?

• 31:38Speaker 02

  Dude, I think the whole financial services sector, except for ETFs and mutual funds, of course, is going to get disrupted, is being disrupted in front of our eyes. So I think payments. And I don't have this simple view that everyone's going to like just use Bitcoin or something like that. But it's the ability to go to this permissionless payment system is putting, going to put long-term price competition, I think, on Visa and Mastercard because they had such a stranglehold, right? Even with your iPhone, you need to use one of those stupid payment rails to move money around. So payments, brokerage, right? Cryptocurrency exchanges, you know, bang, instant settlement, who needs T plus two, all that garbage. Like, and they're, and they picked up more, Coinbase has more retail accounts than most of the

• 32:23Speaker 02

  online broker dealers. You know, so brokerage is being disrupted. And then DeFi, right? Lending and borrowing. Why not move that to a more efficient, more Better risk control platform. And I think it's, I think DeFi is at the most risk because I think it threatens the commercial banks. And I think the regulators, the commercial banks are just using the regulators to slow that down. You know, press is a lot of price competition in that area of the market, but oh yeah, it's all around us. I'm just waiting for the first, you know, kind of DeFi ETF company. I know some people think they're out there doing it, but.

• 32:56Anthony Pompliano?

  Yeah, it is, um, it's fascinating when you start understanding regulatory capture and like the arbitrage. And there's definitely stuff going on that even myself, I don't understand, right? In terms of what's happening in some of these conversations and all of it. But I do think that it's very similar to Uber coming to New York, right? One of the things I've talked to Bradley Tusk, who was kind of instrumental in that whole thing was they just one day said, you know what? The best way we have to make sure that this gets kind of pushed in the direction we want is allow the users to make their voice heard. And they just took all the cars off of the app one day and they said, this is what it would be like if the regulators get their way. And there's a lot of people who said, I don't want that world. And you know, they went and they started to become much more vocal.

• 33:42Anthony Pompliano?

  And I always laugh in these situations because I think you, I, and many other people who have thought about this, who have talked to whether it's regulators or market participants, we say, man, this is, you know, going so slow, it's so bureaucratic, whatever. But then we do see scenarios where people voice their opinions and there is change or there is the stopping of something that could have been, you know, somewhat harmful. And it reminds me like the democratic process works. It's not always perfect. It doesn't always end up, you know, obviously in the way that you want it to, but it's the best system that we have, right? And so it's a reminder to people that in these situations where folks are saying, hey, this is important.

• 34:21Anthony Pompliano?

  Make your voice heard, make your voice heard, right? Like go and write your letter, go and send the email, send the tweet. Do those things because the politicians do listen to some degree.

• 34:32Speaker 02

  Look, yeah, the positive is, I mean, the crypto world is innovating like crazy. It's going a thousand miles an hour. It's impossible, I would say, for almost anyone to keep up. Look in 2021, the whole NFT phenomenon just went mainstream, right? And who would have anticipated that in January? I don't think a lot of people. The negative pump to your scenario of, hey, you know, it's a benign, slow, but benign regulatory system is that enforcement is being used. And the enforcement mechanism, I don't think is particularly fair, right? So you don't necessarily get a rule ahead of time.

• 35:13Speaker 02

  And then, you know, they decide to pick on one firm and make an example of them. And, you know, and then they get, you know, they get fined, punished or jailed. Okay, crypto companies may have a lot of money. I just, I don't think that, that doesn't sound, feel very American to me. Not, not very fair.

• 35:30Anthony Pompliano?

  Yeah, I completely agree. You guys got any other questions?

• 35:34Speaker 03

  No, thanks for coming on.

• 35:36Anthony Pompliano?

  All right, Jan, I have one last thing for you, which is 25 years from now. The 80 plus billion dollars you guys have today, which is almost exclusively not crypto related. 50% is crypto related, 10%, 100%? Like, how do you think about the evolution of your business in the coming years? And kind of like, how much of it becomes crypto? Either because you guys are interested in it or just the financial system changes?

• 36:04Speaker 02

  So I think of crypto in two pieces. I really think Bitcoin is like digital gold. And I think that a lot of the other ecosystems are kind of classed in the growth category, like growth tech. So I would say, you know, you should have 10%, 5%, 10% in Bitcoin and gold. And, you know, certainly maybe the same amount in crypto, so 20%. So I hope, you know, our firm's assets and I, and I hope they go up. But I hope our firm's assets reflect just what would be in a normal portfolio so that people are having access to it at that point in time.

• 36:39Anthony Pompliano?

  Yeah, I mean, that would be, uh, that'd be pretty good. And I think, uh, you know, if, uh, if 20% of all financial assets, you know, essentially, right, ended up somehow in crypto would be, uh, multitudes bigger than it is today, uh, which is.

• 36:54Speaker 02

  We'll be living in a metaverse, Pom. We don't, we won't, we won't recognize that world.

• 36:58Anthony Pompliano?

  Yeah, I, I, I joke, I say, look, I, I get a lot of the reasons for some of this stuff and, and I'm excited about it. But then there's also just a reminder of like, you know, if you and I are in the same city and we want to go to dinner, we're not going to slap a headset on, we're going to go to dinner in person, right? So like, there's a balance between it all. But, uh, I appreciate you, uh, you coming on. Where can we send people to either find out more about VanEck or, or find you on the internet?

• 37:21Speaker 02

  Yeah, I'm on, I'm on social. So Yon VanEck number three and, uh, and I'm on LinkedIn as well. I kind of occasionally post content, uh, and then our website does vanec.com. So, so pretty easy, but please, uh, please reach out. We, I love talking to people, getting ideas and learning. I've got a lot of learning to do.

• 37:38Anthony Pompliano?

  I, I love that in your bio, it says history is a guide for the future, which is, uh, which is pretty true. All right, my friend, thank you so much for coming on. I think, uh, I learned a lot. I hope everyone else did. Uh, if you're not following on, please go do that and we'll definitely do this again in the future.

• 37:54Speaker 02

  Appreciate it. Nice to meet you all.

• 37:55Anthony Pompliano?

  All right. Thanks so much for listening to today's episode. I really hope you guys enjoyed this one. Make sure you subscribe on Apple, Spotify, or your favorite podcast player. And if you're looking to try to transition to get a new job in the Bitcoin or crypto industry, we've got you covered. Head over to pompscryptocourse.com. We've developed a curriculum with the top teams across the industry. It's a three-week intensive training program with over 50 events packed into that three-week time period. Go to pompscryptocourse.com to learn more and I'll meet you guys for the next episode.