John McCorvey, CEO of Stonegate Global Financial Group: From Cannabis to Crypto

John McCorvey is the CEO of Stonegate Global Financial Group. In this conversation, John and Anthony Pompliano discuss alternative assets, global asset allocation, cannabis and medical marijuana, Bitcoin and crypto, paying NCAA athletes, and what it was like to win a national championship playing for the legendary Bobby Bowden. ----- BlockFi allows you to keep your crypto, put it up as collateral, and receive a USD loan funded directly to your bank account. They do loans ranging from $2,000 to $10,000,000, and they're perfect for helping you reach your financial goals of all sizes. Visit BlockFi.com/Pomp to learn more about putting your crypto to work without having to sell it. ----- If you enjoyed this conversation, share it with your colleagues & friends, rate, review, and subscribe. This podcast is presented by BlockWorks Group. For exclusive content and events that provide insights into the crypto and blockchain space, visit them at: https://www.blockworksgroup.io

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

• 0:01Anthony Pompliano?

  What's up everyone, this is Anthony Pompliano. Most of you know me as Pomp. You're listening to Off the Chain, simply the best podcast in crypto. Let's kick this thing off.

• 0:13Anthony Pompliano?

  John McCorvey is the CEO of Stonegate Global Finance. In this conversation, we discuss alternative assets, global asset allocation, cannabis and medical marijuana, Bitcoin and crypto, paying NCAA athletes, and what it was like to win a national championship playing for the legendary Bobby Bowden at Florida State. I really enjoyed this conversation, and I hope you do as well. As many of you know, crypto investors store their digital assets on exchanges or in cold storage for long-term safekeeping. However, this strategy doesn't help them grow their investment holdings or build overall wealth. With the new BlockFi interest account, users can now securely store their Bitcoin or Ether at BlockFi and

• 0:56Anthony Pompliano?

  receive 6% annual interest, paid monthly in cryptocurrency. 6% is an absurdly high rate. It's the best rate in the industry. I highly suggest you go check out blockfi.com/pomp. Again, that's blockfi.com/pomp to sign up and start earning crypto today. Anthony Pompliano is a partner at Morgan Creek Digital. All opinions expressed by Pomp or his guests on this podcast are solely their opinions and do not reflect the opinions of Morgan Creek Digital or Morgan Creek Capital Management. You should not treat any opinion expressed by Pomp as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his opinion. This podcast is for informational purposes only.

• 1:41Anthony Pompliano?

  Bang, bang, guys. I am here with John. We got a whole bunch of stuff to talk about, so thank you very much for coming.

• 1:48Speaker 01

  Hey, thanks for having me.

• 1:49Anthony Pompliano?

  Absolutely. All right, uh, let's get to your background before we get into all the investing and smart people stuff. Um, you grew up where?

• 1:58Speaker 01

  I grew up in the Midwest and down south. My life's mission at that point was to play college football at Florida State.

• 2:05Anthony Pompliano?

  All right, and you ended up at Florida State playing football?

• 2:09Speaker 01

  Yes.

• 2:10Anthony Pompliano?

  This is what, early 90s?

• 2:12Speaker 01

  Yeah, early to mid 90s.

• 2:13Anthony Pompliano?

  Okay.

• 2:14Speaker 01

  I was there 92 through 96.

• 2:16Anthony Pompliano?

  Okay, so 92 to 96, Bobby Bowden is the coach, right? Absolute legend in his own right. We'll get to him in a second.

• 2:24Speaker 01

  Yep.

• 2:25Anthony Pompliano?

  What is it like playing college football at one of the powerhouses in the mid 90s?

• 2:31Speaker 01

  It was amazing. I mean, it's, you can't describe it. Words really can't describe. I mean, first of all, you're, you're playing for, you know, the legendary Coach Bobby Bowden. Amazing, amazing experience. Mark Richt was our offensive coordinator. John Eason was our wide receiver coach. I played tailback and wide receiver. A little bit hard to see the playing field behind Work Done, one of the most prolific tailbacks to ever play the game. But, you know, we had guys like Charlie Ward and Derek Brooks and Peter Bolware, just, you know.

• 3:05Anthony Pompliano?

  Animals.

• 3:06Speaker 01

  Absolutely, just killing people out there. And we, you know, I would say probably half of our team went to the NFL and just, just amazing, amazing experience. And it was, it was a time in history where I believe kind of college football evolved from where it was in sort of the 70s and 80s to more of modern football, where you had guys that were just getting bigger, faster, stronger. And I think Florida State was one of the schools where that, you know, just, we just attracted all of that talent. And it was, it was insane, so.

• 3:39Anthony Pompliano?

  I mean, it's pretty much Florida State and Miami University.

• 3:42Speaker 01

  Yeah.

• 3:43Anthony Pompliano?

  Those two schools just started doing things differently, was the best way to kind of put it. And what was it like playing for Bowden? Like, he, and he, he's a legend in terms of, you know, wins and losses. And I think everyone knows, hey, he's a good coach, but from a player's perspective, what was he like?

• 4:00Speaker 01

  I mean, first of all, just the, the history and tradition and the legend. And if you look at the story of, of the history of Florida State football under Coach Bobby Bowden.

• 4:13Speaker 01

  There was actually a film produced called The Bowden Dynasty. Definitely go out and pick that up, download that. That was an amazing, amazing story. And it talks about his life's journey and, you know, he's a man of faith. He's a Christian, believes in God, and he he kind of goes through sort of his life. And I forgot the health condition that he had when he was a little boy, but in the in the documentary, he walks into his bedroom and he points to his bed and he says, you know, I knelt right there in front of my bed on the floor and I said, God, you know, I would love to serve you. And if you'll allow me to live, then I'd love to serve you through football. And then it kind of continues on the documentary continues on his journey. And he takes Florida State, who was an absolute

• 4:54Speaker 01

  terrible, you know, football program in the 70s and and just really put the put the institution on the map and the football program, obviously, you know, sort of the rest is is history, as they say.

• 5:06Anthony Pompliano?

  For sure. And was he somebody who would like, if you guys were screwing up, he'd come in and yell and scream? Or he was more kind of everyone just feared him and he didn't have to do too much yelling and screaming?

• 5:15Speaker 01

  Yeah, you're gonna push me to do my Bobby Bowden impersonation.

• 5:18Anthony Pompliano?

  All right, let's hear it.

• 5:19Speaker 01

  I'm gonna try to hold off. And I could tell you story after story. I haven't I had the I had the privilege of introducing him to my wife about two years ago.

• 5:27Anthony Pompliano?

  Okay.

• 5:27Speaker 01

  He was speaking at a charity event at the College Football Hall of Fame in Atlanta. And and so funny story, he says, he turns to me and he looks at he looks at my wife and he looks at me and he points at her and he says, son, how in the hell do you talk this pretty girl into marrying you?

• 5:43Anthony Pompliano?

  [laughing]

• 5:45Speaker 01

  I was like, well, Coach, it's because I played football for you, so.

• 5:47Anthony Pompliano?

  Exactly.

• 5:49Speaker 01

  No, but he was, you know, just absolute, you know, it's like your it's like your grandpa. It's he's a combination of, you know, God being on the field, your grandfather, and, you know, one of the best coaches ever, you know, from a from a mentorship perspective. And, you know, he always brought the message of faith. He really believed. And as a matter of fact, there's a there's a there's a social media group called Bobby's Boys that we're all members of. So we we can all stay connected and it's, you know, and his, you know, some of his family is connected on there with us and and they just tell story after story about how, you know, he sacrificed time with with us so that he could mentor you, you boys.

• 6:33Speaker 01

  And and that was his life's passion, you know, that was what he saw as as how he could make a difference and how he could bring, you know, the message of Christ to, you know, to to the world and to us boys and give us guidance. So those are the, you know, things that that you take away from that experience. Now, the on the field stuff, the football, all of those things, amazing, incredible experiences. And you had.

• 6:57Anthony Pompliano?

  You guys won a national championship, so that's that's fun.

• 6:59Speaker 01

  Yeah, absolutely. So it was interesting also, just that season, I forgot how many total teams of our during that season that we actually blanked teams. So it was like, you know, forty to nothing and fifty to nothing and so on and so forth. We had an amazing, amazing defense and just just incredible talent out there at every position. It was it was a an incredible experience to be there. It really was.

• 7:24Anthony Pompliano?

  Yeah, I I so I played football in college, as we were talking about before, and in the video games, Madden, right, kind of the twenty one rule. So for those that don't know, when you're playing these video games, a lot of, yeah, a lot of people basically say if you get up three touchdowns or twenty one nothing, or you're at any point in the game up twenty one, it's over, right? Like, we're just gonna stop and let somebody else play. And I remember being on the sidelines and whether we were up twenty one or down twenty one, everyone, hey, man, can we just stop?

• 7:54Speaker 01

  We can check out after the third quarter.

• 7:56Anthony Pompliano?

  Yeah, forty to nothing, fifty to nothing is is a whole nother world.

• 8:00Speaker 01

  Yeah. Again, just an incredible program and and and, you know, going up thirty, forty, fifty to nothing, we we were, you know, we had second string guys in there and third string guys and so forth. So it wasn't like we were leaving our first stringers, but there was just such a huge depth of talent.

• 8:18Anthony Pompliano?

  Yeah.

• 8:19Speaker 01

  It's amazing, great recruiting, great coaches. It was just, you know, and you look at, you know, coaches of the modern era where you have guys like Nick Saban and. You know, Dabo and, you know, those guys are, yeah, they're doing a great job of recruiting. They're doing a great job of mentoring guys. And, you know, guys want to be a part of that.

• 8:40Anthony Pompliano?

  Yeah, ingredients don't change.

• 8:41Speaker 01

  No, they don't.

• 8:43Anthony Pompliano?

  All right, and so obviously in the 90s, no one was getting paid legally. I'm sure there was a couple of guys who were getting paid in other ways.

• 8:51Speaker 01

  Yeah, I cannot admit, nor did I.

• 8:54Anthony Pompliano?

  But it's recently become a big issue, right? So you take like, you know, Zion Williamson at Duke. Looks like he's about to get hurt, right? In the kind of middle of the season. Guy's obviously ready to go to the NBA. He's got tens of millions of dollars waiting for him. If he gets hurt in college, he's not going to be able to go get that money, right? And so it's all kind of every couple of years, the conversation comes back up, right?

• 9:14Speaker 01

  Absolutely.

• 9:14Anthony Pompliano?

  In the mid 90s, when you were towards the end of your career, there was actually a push, right? That you were a part of to start looking at, should these athletes be getting paid? Maybe tell us a little bit about that.

• 9:25Speaker 01

  Sure.

• 9:25Anthony Pompliano?

  It's just something I'm fascinated with and I kind of just don't understand why they're not getting paid.

• 9:29Speaker 01

  Yeah, I mean, the good news is, you know, the athletes can get Lloyds of London policies and so forth. And the schools work out ways to assist with those, those types of things. So that helps in terms of the risk.

• 9:46Speaker 01

  You know, but in the area of compensation, so even back, you know, as you mentioned, back when I, back when I played, I, I worked with Walter Byers, who was the founder of the NCAA to create the NACA, which was the National Association of College Athletes. And it was an initiative that I worked on for about a six month to a year period of time. And unfortunately, I kind of had to put things down just because of career reasons and things that I was involved with.

• 10:14Speaker 01

  But, but Walter Byers signed on as the chairman emeritus of that organization. And, you know, essentially the theme behind the National Association of College Athletes was that we were, you know, starting the process to, to sort of recruit all of the major programs, all of the athletes from across the country to make that push to have athletes, you know, compensated for, for what they were doing or compensated more. The scholarship, obviously, that athletes are receiving is a form of compensation.

• 10:47Speaker 01

  And, and that was the theme behind, you know, Walter Byers perspective. And at the time, he had just written a book called Unsportsmanlike Conduct. Unfortunately, Mr. Byers passed away just a couple of years ago. But back when he and I were working on this initiative, you know, in this book, he talks about how, you know, he founded the NCAA and he created these, sort of the student athlete term and amateurism was sort of the premise behind that. And he fundamentally, wholeheartedly believed in that concept until he got into the mid

• 11:27Speaker 01

  70s, I believe, when he began to negotiate sports contracts or television contracts. And at that point in time, he started to step back a little bit and began to say, you know, this has gone from sort of amateurism to a professional sport. And certainly, you know, college football and college basketball where you have big funds, big dollars flowing into the schools. And, you know, so over time, these schools are making, you know, 50 million, 100 million plus dollars a year, and it's truly a professional sport. And, you know, so the athletes are being compensated, but they're just being compensated at a wage that's essentially below the poverty line.

• 12:12Speaker 01

  And you look at, you know, guys like myself, I blew my knee out the summer before my junior season. I had, you know, a number of college scouts looking, or pro scouts looking at me even as a sophomore. But, you know, unfortunately, I was injured. Fortunately for me, I was as passionate about investing in finance and economics and my studies as I was football. But a lot of guys don't have that same passion for their education and ultimately end up, you know, doing whatever with their career and stumbling throughout life because there's no, there's no sort of safety net. So our theory with the NACA was essentially...

• 12:52Speaker 01

  That, you know, at that point in time, most of us are, you know, relatively unsophisticated, right? And, you know, if we were being paid fifty or a hundred or two hundred thousand dollars a year, we'd probably squander it anyway. So our theory was, take a reasonable compensation package and put that in a, you know, essentially a savings account, so you don't even have to, you know, sort of invest it.

• 13:21Anthony Pompliano?

  Yep.

• 13:22Speaker 01

  So you take out that risk for the, for the player, but, but that money is sort of stashed away until they get to be thirty or thirty-five, so that they're at least at that point, you know, hopefully mature enough, educated enough to where, you know, they can manage their own, their own capital and so forth. So that was our thesis around the NCA, NACA. Unfortunately, you know, we weren't able to, to really pursue it, but, but it began to gain traction and, and obviously, again, this comes up from time to time, so.

• 13:50Anthony Pompliano?

  Yeah, I mean, look, it, it's, I, I definitely agree with you that, look, players should be compensated, right? Schools making absolute killing on putting these athletes on the, on the court, the field, wherever. Then you look at, well, you can't just hand the kids cash, because they'll do all kinds of crazy stuff with it, and it's not so much that they're gonna like, go do illegal things with it, it's just the odds that they're actually going to have the money by the time they leave are very low, right? And some of it is, and I've seen people make like the psychological argument, like their brain is literally not developed enough to be mature enough to manage.

• 14:19Speaker 01

  The frontal lobe is not developed.

• 14:21Anthony Pompliano?

  Yeah, like, you hand an eighteen-year-old fifty thousand dollars a year, good luck, especially if they're the star athlete at, you know, Florida State.

• 14:29Speaker 01

  Yeah, and like you said, I mean, even if, even if they don't do anything illegal, it's like, they are going to do stupid things with that money.

• 14:36Anthony Pompliano?

  Yeah.

• 14:37Speaker 01

  And it's gonna bring embarrassment to the organization and just all sorts of crazy things that can happen from there.

• 14:41Anthony Pompliano?

  Well, and imagine now, in the world of Instagram and all this stuff, right? All of a sudden, these guys are buying, you know, oh, how'd that kid get a Ferrari? Right? Really gave him fifty thousand dollars, he got a Ferrari somehow. So I think that like, you know, there's that element of, hey, how do we protect them but compensate them? And, and I have seen everything from, you know, more like savings plans to like true retirement plans, so hey, you're not getting this for, you know, decades, but it's gonna be there, to even, you know, one of the things is just health insurance, right? You know, so take for, you know, your situation, I actually blew out my knee as well, and when you go through that, there's some people who. The school will take care of, right, while they're actually still playing. But if you blow your knee out, you're no longer on the team. Let's say if you were to say, hey, I'm not going to play anymore.

• 15:26Anthony Pompliano?

  All of a sudden, all that care goes away. Right. So we literally had in college, we had guys who would get hurt. They knew they would never play again, but they stayed on the team so they could get the care of the trainers, etc. And so it's just, it's a very, very interesting thing, right? And obviously, the professional leagues have now extended a lot of that health coverage post-playing days.

• 15:43Speaker 01

  Right.

• 15:43Anthony Pompliano?

  And, you know, you've got to think at some point it'll happen in college. I just, there's going to be some kind of catalyst, right?

• 15:48Speaker 01

  Right.

• 15:49Anthony Pompliano?

  It's going to be some big star player who gets hurt in college, doesn't end up going pro. And you know, everyone says, okay, enough's enough. But it's just interesting that, you know, coming especially in the mid 90s. College football at a major university. You know, kind of you guys are having the same conversations as people are having today.

• 16:04Speaker 01

  Yeah, yeah, absolutely.

• 16:06Anthony Pompliano?

  All right. So when you leave, you end up going to the Florida Pension Fund? Is that correct?

• 16:10Speaker 01

  Correct.

• 16:11Anthony Pompliano?

  Okay. And so tell us about kind of when you joined, what you're doing there? And kind of how you started thinking about investing?

• 16:16Speaker 01

  Absolutely. So I was there, I forgot the exact year, but mid 90s. And I was an analyst on multiple portfolios. This was, you know, keep in mind, this was during the time that, you know, the internet was just being created, right? So, thank you, Al Gore.

• 16:34Speaker 01

  But, you know, so you have sort of the integration of, you know, computer modeling and the ability to, you know, pull down data and analyze data with your, with your systems. And so those were some of the projects that I was implementing for the Florida pension system was leveraging technology to do data analysis, portfolio analysis for multiple portfolios. So great experience. I kind of cut my teeth on asset allocation. At the time that I was there, we managed 65 billion in total assets. They're about 150 billion now. From what I gather, they're one of the better performing pension funds.

• 17:14Speaker 01

  You know, clearly there are a lot of underfunded pension funds at this, at this stage, which is, you know, which again, I think, you know, you know, creates an opportunity for alternative investments. You know, many foundations and endowments and sort of the smart money in the room, the Harvard foundations, the, you know, Yale.

• 17:33Speaker 01

  Numerous institutional investors that have embraced leading areas of alternative investments have performed well and others have been left behind and ultimately have found themselves in some sort of fiscal trouble.

• 17:48Anthony Pompliano?

  A lot of people actually don't understand how big the difference is, right? So I was recently looking for another reason, but I was looking at Harvard and Yale's performance. And in 2018, I forget, I want to say that Yale did 10 plus percent, you know, it was like 10, 11% and Harvard did like over 12, right? So 10 to 12% returns in a world where, you know, stock market is just going up and to the right seems like forever. Does it sound super impressive because we've seen kind of double digit years in just public equities, but.

• 18:22Speaker 01

  How did they get there though? Right? What is the standard deviation of that return?

• 18:25Anthony Pompliano?

  Not only how did they get there, but they're also dealing with $40 billion.

• 18:29Speaker 01

  Absolutely.

• 18:30Anthony Pompliano?

  That's what people forget, like, oh yeah, you did 10, you know, you did 10% in your personal portfolio and you got a couple hundred grand.

• 18:35Speaker 01

  Hundred thousand dollar account.

• 18:36Anthony Pompliano?

  These guys just did it with $40 billion. And so I think it's just the side, like the sheer side of how much capital these people have to invest, a lot of times is where do they put it?

• 18:46Speaker 01

  Right.

• 18:47Anthony Pompliano?

  Right? And so when you start to look into the public markets, sure, you can go and put stuff there, but when you look into the alternative space, it's not like, hey, let me go find a strategy that I can put $10 million to work.

• 18:57Speaker 01

  Right.

• 18:58Anthony Pompliano?

  I need to find an alternative strategy that's going to drive great returns, going to have a kind of risk mitigated approach to it, but also that I can put usually hundreds of millions of dollars to work if the strategy, you know, is successful. And there's just not that many of them, right? So you got to do a lot of work to find the ones that are going to work.

• 19:12Speaker 01

  Yeah. And the asset allocation models, you know, cover everything from, you know, equities, fixed income, you know, global equities, derivatives, you know, real estate.

• 19:22Anthony Pompliano?

  The whole thing.

• 19:23Speaker 01

  Runs the gamut. One of the things that I really liked about the Florida pension system was that they allocated half of their assets was outsourced to outside managers and then the other half was managed internally.

• 19:36Anthony Pompliano?

  Oh, interesting.

• 19:37Speaker 01

  And I thought that was a good combination because it created a little bit of a cost savings there. I think that was a little bit of an arm for the fund.

• 19:44Speaker 01

  But again, whether, you know, to your point, whether you, whether you outsource all of that capital as a pension system, or a foundation or endowment, or whether you manage it all in-house, either way, there's a cost of doing business. And then you have the overall pension liabilities, right, that eats away at principal if the, if the investment fund is not performing well. So.

• 20:05Anthony Pompliano?

  But let's talk a little bit about, and you tell me how, how much you want to go into, a lot of these pensions, the pension problem, right? So kind of this underfunding of pensions. And, you know, I've even met with some pensions recently that had told me, we're a mature pension. Right? And I said, well, what's a mature pension? And what they basically mean is they're cash flow negative.

• 20:25Anthony Pompliano?

  So it's, so for those that don't know, in the pension world, basically, there's a pot of money, the investment team is directed to grow that pot of money in a risk mitigated way at a certain rate of return, right? So usually it's kind of six to eight percent kind of is the target. We're going to take our money, we're going to grow it. And the reason why it's 68% is that's how much we need to make in order to pay out every year the liabilities of our pensioners, right? And so when they said mature, what that meant was they are actually paying out more money than they're bringing in every year. And so there's a net negative on assets every year, which means that at some point you go to zero, right? There's no more assets left. And so the people who are going to be waiting on that pension aren't going to have anything there.

• 21:08Speaker 01

  Absolutely. The pyramid scheme.

• 21:11Anthony Pompliano?

  Yeah, yeah, yeah, for sure. So let's talk about how you think about alternative assets, right? Because you basically, once you left Florida, you've got, you know, a whole bunch of different things in the alternative asset space today. We can get into what those are, but just how you think about the alternative assets versus some of the more traditional ones.

• 21:27Speaker 01

  Correct. Yeah. So, so I think on our side, I mean, the way that, the way that we look at the world of, of investments, we primarily invest in alternative investments. So even our exposure into traditional assets, such as, you know, equities or fixed income even, we're doing those through various trading strategies. So for example, we run a, we run a long short equity. Excuse me, a long short equity. It's a long short equity fund, but it's primarily options based called our SOHO fund. And that fund has generated double digit returns for the past, you know, six year track record, I believe, at this point. We've not marketed that fund outside investors as of yet, but we're about to start marketing

• 22:12Speaker 01

  that strategy this year. So, but what's interesting is, you know, we look at primarily alternatives as our entire portfolio. So for exposure to things like whether it's equities or options or, or fixed income, we wrap those in various trading strategies. And so we're not just taking a portion of our capital, you know, and the old adage is kind of 60, 40, right? Stocks and bond portfolio. But we don't just take capital and allocate it into the equity markets and say, okay, we want to be in, you know, the S and P 500 or gain exposure through ETFs or what have

• 22:56Speaker 01

  you and, and place, you know, 50% or 60% of our portfolio in a long only type scenario. Whatever portion we're going to allocate to equities, we're doing that through various trading strategies. Whatever amount we're putting to work in fixed income, then we're going to do that through some sort of fixed income arbitrage type strategy. So for us, really the, our entire perspective is alternative investments. We invest in real estate. We invest in venture capital, private equity, obviously blockchain technology, cryptocurrencies. We invest in cannabis. So whole host of, you know, a broad range of, of investments, film, media, education, healthcare.

• 23:41Speaker 01

  We run a healthcare and medical device venture capital fund. Our business is really kind of centered around investing in and backing investment teams. And so that's sort of the genesis. And so we look out at the spectrum of here are the different asset classes that we want to participate in. Here are the different sectors that we want to participate in and that we will partner with a team that manages that particular vertical.

• 24:05Anthony Pompliano?

  Got it. Uh, let's talk about cannabis. Uh, people, every time I talk about it on here, people go crazy. They love it. Uh, it, it is the, uh, I, I like to, uh, when I get in Ubers and Lifts, uh, I'll always ask the Uber and Lyft driver, say, man, if I gave you a thousand dollars, where would you invest it? Just cause they, they just have such a different perspective. Yeah. They just have such a different perspective than, you know, people who work at investment firms, etc. These are, you know, what quote unquote everyday people who don't think about finance all day long, right? So they just always have really interesting things. Sometimes it's stocks, it's whatever. Number one answer though is, man, the weed companies are gonna blow up, right? And, uh, and, and, you know, it's a thing where I think most people generally feel like, hey, if, when all this becomes legalized, there's going to be a big boom, right? I think blockchain and crypto has kind of reached that inevitability as well.

• 24:51Anthony Pompliano?

  But what are you guys seeing in the cannabis space in terms of kind of where, um, capital's flowing? Where entrepreneurs really trying to build? And what do you think is interesting there?

• 24:59Speaker 01

  Yeah, absolutely. So, um, so we are, uh, we've been investing in the blockchain, uh, blockchain and crypto space, uh, since 2014. And, uh, and also in the cannabis space since 2014. So, uh, so we've had a number of years to really kind of evaluate and, and sort of,

• 25:19Speaker 01

  sit on the, sort of the leading edge of, of these two burgeoning sectors, uh, new asset classes, if you will. And, uh, and we see tremendous growth on both sides. Uh, on the cannabis side, one of the things that we're, uh, doing is we're constructing, uh, a new fun product that'll be a combination of, um, blockchain, crypto, uh, artificial intelligence and cannabis. Uh, so those three themes are rolled up. Uh, obviously can't discuss the, uh, exact dynamics of all of that at this stage, but, but those elements together, we believe, uh, create significant alpha in that space. So yeah, we believe wholeheartedly when you talk about, you know, global legalization, uh, when you talk about.

• 26:01Speaker 01

  The different areas that cannabis and hemp can affect and impact. It's really quite staggering when you think about. And for me, I've never been one to really like the THC side and smoking marijuana and so forth. It's just not my thing. But to each his own. It's like saying, okay, well, I don't drink beer, but beer should be illegal. So I've always been a proponent for if people are going to do these things, it needs to be legalized. If you drink three beers, you know exactly how you're going to feel. If you have a glass of bourbon, you know what that's going to do to you, how it's going to affect you.

• 26:43Speaker 01

  Legalizing cannabis, I think, is certainly something that's needed for that element alone on the recreational side. On the medical side, that to me is an area that's, there are tremendous, tremendous areas where I think there's staggering upside in the medicinal side, cannabis-based medicines, essentially. And this really hits close to home for me. Interestingly enough, about five months ago, our two-and-a-half-year-old son started having seizures. And that was something that's, it was a complete shock to the system, completely healthy kid,

• 27:24Speaker 01

  no genetic markers in either of our families, myself or my wife, that would have led to this. So just one of those things, random happenstance. And it's actually gotten, it's gotten pretty bad over the last number of months. He's been hospitalized. We stayed in the hospital for 10 days at one point, racked up a whole lot of medical bills in the process. But it's one of those things where you begin to see what something like this could yield, right, in terms of its benefits and its impact. So there's all sorts of stories about how CBD helps Parkinson's patients and epileptic

• 28:09Speaker 01

  patients and other conditions as well. And so we're right on the cusp now. We've kind of gone through a lot of traditional medications. We had to we had to wean him off of one or two meds to get to the point now where we can begin to implement CBD for him. So we're excited about that and looking forward to what those results are.

• 28:31Anthony Pompliano?

  I think a lot of people hear about, so this is like a very specific use case that a lot of people talk about because it's probably the most obvious one, right? Where it's a young kid, bunch of other medicines don't work. It's usually some kind of epileptic or seizure-based, you know, side effects to whatever is going on in their body. And I don't think people actually understand when they say, oh, medicinal marijuana can solve the problem, right? It's not like the two and a half year old smoking a blunt. Let's all, you know, let's make sure we're all on the same page here, right?

• 29:03Speaker 01

  Just for the record, we do not have bongs in our house.

• 29:06Anthony Pompliano?

  Exactly, right. So like, maybe walk through, you know, as much as you can in terms of like, is this more like the kids are eating a piece of food that has the CBD in it? Is it something that they're like, like, I know there's like a wax or something that they're like putting like inside of their mouth or just like, how are they actually consuming, especially for a young kid?

• 29:23Speaker 01

  Absolutely.

• 29:23Anthony Pompliano?

  You know, two, two and a half.

• 29:24Speaker 01

  Two and a half year old, yeah, almost three year old. So, so what we

• 29:28Anthony Pompliano?

  He'll tell you that he's three, right? He'll be like, I'm three in two months.

• 29:31Speaker 01

  I'm three and a half. So, yeah, we have teenage daughters do's and they're and they're always on the next stage, right?

• 29:38Anthony Pompliano?

  Yep.

• 29:39Speaker 01

  But, but, you know, in, in, in his case, what we're, what we're using is the teacher form, sort of the droplets. And what we do is we mix that with, you know, whether it's Jell-O or pudding or ice cream or whatever. So he doesn't even really realize that, you know, that he's, that he's taking this oil, essentially. It's just an oil droplet.

• 30:01Anthony Pompliano?

  Yep.

• 30:01Speaker 01

  And so that's what, that's what we're starting to use now. But we literally just began this. So we don't have, you know, enough results at this point.

• 30:08Anthony Pompliano?

  Yeah.

• 30:08Speaker 01

  But it is, it is looking promising. So.

• 30:11Anthony Pompliano?

  And it's just interesting because again, I think that there's the negative, you know, the drug on or the war on drugs, right? And like, you know, you see all over television, et cetera. It's everything from the heroin, the cocaine, the marijuana, et cetera. And I think that there's a lot of negative connotation because of, you know, that whole thing. And then also the after effects, right? So people can literally walk down the street and they see a guy smoking a blunt. They see somebody shooting up, you know, they do all stuff. All of a sudden you're talking about, no, no, we're talking about oil and I have a dropper and I'm putting it in my kid's ice cream.

• 30:44Speaker 01

  Right.

• 30:44Anthony Pompliano?

  Right? And it actually can improve their life.

• 30:47Speaker 01

  Exactly.

• 30:48Anthony Pompliano?

  I think a lot of people, the negative connotations very quickly, they, oh, wait a minute, this is very different than what I thought it was.

• 30:52Speaker 01

  Absolutely. Completely, completely different. And there are two different dynamics. I mean, there are a lot of different aspects of the cannabis space that have different nuances. There are things called sativa. There are things, you know, there's THC versus CBD. So the, probably the simplest way to describe the world of cannabis is you have THC and you have CBD, all right? And technically their, their chemical composition is almost identical. There's one atom that's a different marker that's, that's sort of in a different location, if you will.

• 31:37Speaker 01

  And it creates a completely different effect. So the THC is sort of the psychedelic side. That's the, that's the component of cannabis that makes people high. The CBD has sort of the healing effects and you have markers in your brain where these things bind to different areas of your brain.

• 31:55Anthony Pompliano?

  Okay.

• 31:57Speaker 01

  And so for the CBD, it has the, a lot of the medicinal effects.

• 32:02Anthony Pompliano?

  Got it. And this is why people are putting it in like cream to like rub on your knees.

• 32:06Speaker 01

  Right.

• 32:07Anthony Pompliano?

  Right?

• 32:07Speaker 01

  I have some in my bag. Did I mention, did I mention I blew my knee out? So, so yeah, so that's helpful. It has an anti-inflammatory effect, so it definitely helps. But, but you know, what's really fascinating is when you research the history of cannabis is you really begin to realize that way back when, right? In the, whether it was 1800s, early 1900s.

• 32:35Speaker 01

  These products were actually utilized for things like seizures. Back before you had modern medicine. And as things roll forward, there was a bit of a conflict on whether it was considered a gateway drug. There's a theory that because of hemp could be used for industrial fabrics and things of that nature. It was having a negative impact on different manufacturing companies and they lobbied to essentially have the government classify it as a drug. So you have on the one side, you know, poppy plants where, you know, different, you know, different medications are derived from, you know, from those, those types of plants.

• 33:19Speaker 01

  These medications are derived from, from the, the, the other plant, if you will. And, uh, but what's interesting is the plant and the medicines that have been supported by the FDA and so forth, they all have tremendous side effects. And so that's why for us, we're working as quickly as we can to wean our son off of some of these medications because they can have long-term side effects. And, um, you know, whereas there, at this stage, there are no known side effects from cannabis. As a matter of fact, um, you know, there, I watched one piece a while back that talked

• 33:58Speaker 01

  about, um, uh, that talked about, um, uh, cannabis being used as a way to sort of wean drug users off of hard drugs. So, you know, most folks look at those drugs as sort of a gateway into bad drugs. And I've said that for years as well. So I'm not pointing the finger at the rest of society, but, um, and, and it could in certain circumstances. You have a kid that starts smoking weed in high school and Of course. affects the development of his frontal lobe, makes bad judgment, um, judgment calls and then gets into harder drugs and it kind of goes from there. But when you also have, uh, people who are addicted to harder drugs, it seems like CBD

• 34:42Speaker 01

  can be a gateway out of those drugs. So there are, yeah, so there are really a lot of fascinating studies going on. And what's amazing about this space is that you now have numerous universities and research centers, Cal Berkeley, UCLA, as a matter of fact, Jeff Chin, Dr. Jeff Chin is on the board of one of our, of one of our companies and he's one of the directors of research at UCLA. So, you know, again, we're, there are a lot of things that we have in the works there. We're beginning to invest heavily in the cannabis space, private equity and other areas. And like I said, just kind of leveraging the best and brightest of sort of blockchain,

• 35:27Speaker 01

  crypto, AI, and leveraging those things to make good decisions in the cannabis space. But I do think that there are just tremendous benefits. But I, you know, like I said, the, one of the most interesting things that I found in our research of the last couple of years is how much of a focal point this particular medication was way back when, and then it was just shut down and taken away from society. And then, you know, you also have conspiracy theorists about, you know, well, this was a, this was used as a, as a drug and as a way to sort of, you know, leverage this as

• 36:09Speaker 01

  a way to put people in prison, whether they were white or black or whatever race. But this was an easy way for, essentially for, for the police to sort of, you know, put people in jail for whatever reason.

• 36:20Anthony Pompliano?

  Absolutely.

• 36:21Speaker 01

  And, and now, you know, what happens there, right? So now, you know, you go through the pardon process and get a lot of people out of jail who shouldn't, probably shouldn't have been there in the first place.

• 36:30Anthony Pompliano?

  I've talked a bunch on here about, you know, decriminalization of marijuana specifically, but, but drugs in a more broader sense, the impact it would have on prison population, right? And we've actually seen now, I looked at the numbers recently, I think it's 22. States, I think, I think it's states, have decriminalized possession of marijuana. So if you're a drug dealer, right, you're actually going to distribute it for with intent to sell. I think still crime, but if you

• 37:00Speaker 01

  They do it based on, based on total volume or total weight.

• 37:03Anthony Pompliano?

  Yes, I forget all the criteria, but basically if you're walking down the street and you, you know, you've got enough weed that you're going to smoke yourself, right, but you're not going to kind of bother anybody.

• 37:11Speaker 01

  They'll give you a hall pass.

• 37:12Anthony Pompliano?

  The, well, the police can still arrest you, right, because it is technically still illegal. But when they bring you and the district attorney is supposed to enforce or, or actually charge you, the district attorneys are now saying, we're not going to do that, right? And so what it does is it disincentivizes the police from ever making the arrest, because they know that there's going to be no charges brought, right? So it's kind of a waste of their time and resources to do that. And, and I think again, it's just this inevitability. At some point, we will get full federal kind of legalization. There's probably starts with some kind of medicinal, you know, CBD or marijuana, or whatever it is first. And then you get into the recreational side. But, but it's the thing that just shocks me is like alcohol is a drug, right? And, and again, I'm with you in that, like,

• 37:55Speaker 01

  Prohibition, right?

• 37:56Anthony Pompliano?

  I'm not a proponent of this stuff because I want to go smoke a bunch of weed, right? Like, I actually don't care, but the idea that I can literally walk across the street and drink until I kill myself, right? And no one's going to say anything. Yeah, and no one's going to say anything to me, but you can't smoke a plant that grows in the ground?

• 38:13Speaker 01

  Right.

• 38:13Anthony Pompliano?

  Craziness, right? And so, uh, let, let's switch gears here and go to, to crypto. What, uh, tell me about the first time that you ever saw Bitcoin crypto, et cetera. What was your reaction?

• 38:24Speaker 01

  It was interesting. So it was back in 2012, 2013 timeline. We, uh, we were running a couple of option strategies at, at the time. And, um, and one of our traders, um, mentioned Bitcoin. And I'd heard it, you know, just tangentially, you know, in, in passing. But, you know, that was the first time it was sort of presented to me. And, uh, and, you know, he kind of talked to me about, you know, I've got these servers in my basement and then, you know,

• 38:54Anthony Pompliano?

  It's always the story like you have way wide. The money just gets printed? Okay.

• 39:01Speaker 01

  I'm confused, how does this work? So, you know, it was an interesting educational experience, but it just, the whole thing was, you know, was just a mind bender, right? And, you know, what can this be used for and what are, you know, what are the applications? What, you know, and what are the risks? What, you know, what are the, what are the outliers? And, you know, to me, I kind of ultimately kind of concluded that, you know, this was something that could be used for drug smuggling or terrorism.

• 39:31Anthony Pompliano?

  Money laundering.

• 39:32Speaker 01

  And all of those things. And then also just the server in the basement thing really kind of killed it. And what was also interesting was, you know, he came back about three months later and fortunately our option strategy was doing well, but about three months later, we talked about the Bitcoin topic again. And he, he, he shared with me that his basement flooded and he lost his server. So he kind of had to start over. So I was like, yeah, that's, that makes sense.

• 40:01Anthony Pompliano?

  A little different then.

• 40:02Speaker 01

  Right, absolutely. Thank God for, you know, institutional custodians now.

• 40:05Anthony Pompliano?

  Absolutely. What, um, how do you see crypto, you know, as you're talking to investors kind of in this global asset allocation, right? So they're, you know, obviously the Harvards of the world who have $40 billion are in a very different position than kind of the individual. But at the same time, many of them are saying, I have some pool of capital that I need to invest. I'm trying to hit some rate of return. Crypto looks very different. It seems to be non-correlated by a lot of different metrics. It's got kind of a nascent metric return. But how do you think about it in a portfolio and, you know, really when people go to get exposure from the liquid market to maybe venture capital and the different investment opportunities within crypto?

• 40:46Speaker 01

  Yeah, I mean, needless to say, look at the equity markets. They've been on a tear. It's the longest bull run in history, I believe, if not close to it. Fascinating, you know, looking at what's transpired in those markets, you know, but, you know, conventional wisdom tells you that you could be seeing a top or a double top here. You know, you look at the, the oil markets, they, they plummeted in back in October, I believe, gold markets, January. So, you know, when you're, when you're working on, again, kind of that, your, your asset allocation model and thinking about where should I have some capital deployed and where should I have the majority of my capital deployed and so forth.

• 41:28Speaker 01

  I don't I don't know that you can make a broad statement about asset allocation because I agree with you. I think, you know, it definitely differs for for each person, each institution and different circumstances. What type of liabilities? What is their lifestyle? What are their retirement goals? How old they are and so forth? So obviously, we don't give investment advice. But but what I can say is, you know, the way that when you look at the world of assets, you look at the stock market, I don't know how much longer the stock market is going to continue to run up the way that it's been on a tear. So I think at some point that definitely flattens a little bit. And and if you're limited in

• 42:09Speaker 01

  terms of, you know, things like real estate, there's, you know, there's discussions about where the real estate market business cycle is at this at this stage, you know, is is real estate at a top. You have, you know, pretty insane valuations. Venture capital, you look at the Vision Fund, $100 billion Vision Fund. Andreessen Horowitz recently, you know, changed announced the change of their business model, moving a little bit away from from venture because of that reason. That asset class is so crowded and valuations are spiraling, kind of out of control. So in a world of inflated valuations across

• 42:50Speaker 01

  the board, when you look at areas such as blockchain and crypto, and especially crypto right now, where it went to a quote unquote bubble scenario, which, which, you know, I personally believe in the long term, you know, thesis of of crypto. And we I'm happy to share more about kind of our our general idea of the market as a whole. But but in terms of asset classes, I definitely believe that, you know, A, I believe that the crypto markets are consolidating and beginning to change and go in the right direction currently. I definitely believe it's an asset class that, you know, individuals as well as institutional investors need to have exposure to. It is very real. I mean, think about it. You've

• 43:34Speaker 01

  got JP Morgan having now entered into the space in a major way. I think one of our analysts said that, you know, something to the effect of they have more blockchain employees or something than any other organization out there at this stage. They're announcing their stablecoin to be deployed. That's going to have a major impact on clearing and settlement. It's one of the huge bottlenecks in institutional investing. You have, you know, Cambridge Associates that, you know, announcing to their institutional clients, they manage like 300 billion in assets.

• 44:07Anthony Pompliano?

  Yep.

• 44:08Speaker 01

  They're, they're steering their clients towards at least considering cryptocurrency. You have, you know, the ICE exchange and the New York Stock Exchange, obviously rolling out the backed exchange now for crypto. But what's, you know, you know, the backed exchange is going to have a phenomenal impact on, on the crypto space because you're talking about physically delivered Bitcoin futures contracts. That is a massive shift and, and backed by one of the largest exchanges in the world.

• 44:41Anthony Pompliano?

  It was a big shift from five years ago when you couldn't even really buy Bitcoin, right? Like, many people would have struggled to do that.

• 44:46Speaker 01

  Absolutely.

• 44:47Anthony Pompliano?

  On, on the exchanges that exist.

• 44:48Speaker 01

  Absolutely. So, you know, so this, the, the world of technology is growing exponentially. And so, and when you have these market participants, these large institutions that are, that are beginning to get involved in the space in such a major way, it's, it's staggering where this can go. I really believe that we're in the, you know, second inning in, in this industry. You know, so, so think about this as a concept. You know, the ICE and the NICE are obviously involved in the space now. Packed launches here sometime in 2019. So now you have physically delivered Bitcoin futures contracts. That in and of itself creates an enormous demand on those underlying products. And of course, they'll go from Bitcoin futures

• 45:30Speaker 01

  to Ethereum futures to whatever else, right? But over and above that, what about the digitalization of, of, of traditional assets? Right? So now you have the, the ICE and the NICE that are, you know, seeing the power of digitalization of instruments and, and, and, and, and assets. And so.

• 45:52Speaker 01

  You know, it shouldn't be a long period of time before you see, you know, the digitalization of stocks and options and other instruments and creating true digital instruments across different asset classes. I know you're starting to see, you know, STOs and so forth of, you know, real estate projects and so forth. And that's, you know, that's another fascinating aspect of the, of the, of the space as a whole. And to me, has always been one of our underlying themes in the space is, is just the, you know, the, the impact that this technology has on capital markets as a whole. Right? So, you know, we run a healthcare medical device venture capital fund. We closed the fund

• 46:35Speaker 01

  a few years ago. And, you know, we think, you know, a couple of the companies will probably get bought out by, you know, big med tech, med tech companies and so, and so forth. You know, but, you know, we invested in those businesses, I guess, probably four or five years ago. I don't recall the exact year that we, we deployed that fund. But that's, you know, that's how venture capitalists used to invest. But now, if you invest in an illiquid instrument, and you have some type of a digital instrument that can be publicly traded, that venture capitalist can now take risk off the table at, at some point in time. So whether that's six months or 12 months, you know, and needless to say, you may not necessarily want to take all of your capital back, right? You made this

• 47:20Speaker 01

  investment for a long term, because you have a long-term perspective about this company. But at the end of the day, if the valuation ticks up in this business, in that traded instrument, and you can claw back, if you make, you know, make a million dollar investment, and perhaps the valuation goes up by 30% or 50% or whatever the number is, you take a little bit of profit off the table and claw back some risk. And that's helpful to your shareholders. So, so that change in capital markets, I think, is very real. I think that's one of the, one of the biggest.

• 47:53Speaker 01

  That's one of the biggest themes, I think, that's out there in the background that a lot of people aren't looking at.

• 47:58Anthony Pompliano?

  Yeah, it's the change of capital markets and also it's like the automation of finance, right? It's like these two trends that are colliding right at crypto, blockchain, Wall Street, etc. And what you're talking about really is over time, every asset, for the most part, right? Dover generalization, but for the most part, has become more liquid, right? So there's, you know, real estate used to be really, really illiquid. And then we've created all these products to add liquidity to that asset, right? Same thing with stocks, right?

• 48:27Speaker 01

  And I think those are functions of, you know, population growth. It's function of more, a larger investor community, larger institutional investor community creates more, more opportunities for liquidity in those things.

• 48:39Anthony Pompliano?

  New geographies want to come online, right? Frankly, you get more banks that are all sitting around or kind of financial institutions that are all sitting around saying, hey, how can we create instruments that do certain things? Hedging also. And I think that all you're just seeing with blockchain and crypto is it's about access, it's about liquidity, etc. But ultimately it does come back to just because you have an asset and you now quote unquote tokenize it, doesn't mean that necessarily there's gonna be liquidity.

• 49:02Speaker 01

  Absolutely.

• 49:03Anthony Pompliano?

  Right? The asset sales gotta be good.

• 49:04Speaker 01

  Hundred percent.

• 49:05Anthony Pompliano?

  You can't.

• 49:06Speaker 01

  You still have to have a real investment opportunity.

• 49:07Anthony Pompliano?

  Yeah, you can't put a gun to investors' heads and you have to buy this, right? Like, because you can, doesn't mean that they will, right?

• 49:14Speaker 01

  You can't force them to come to the market.

• 49:15Anthony Pompliano?

  And I think that there's, you know, there's a lot of people in kind of the, you know, security token, tokenization, whatever you wanna call it, space that are kind of learning that. And for us, at least, we've seen the biggest opportunities more in the automation, right? So how do you take a lot of the existing investment opportunities? And where are the areas or opportunities for automation within it where there's a digitally native asset, right? Or there's digitally native accounting out with a blockchain, right? Like, that type of stuff is, it's probably less sexy. It's a little bit less revolutionary.

• 49:45Speaker 01

  Talking about areas like DeFi and where you have.

• 49:47Anthony Pompliano?

  Yeah, I think all, I think all those pieces of it, right? Like, basically where like software is replacing products or services that previously were human-led, right? And so, you know, I use automation as kind of a broad term there. Could be, you know, things like Maker CDPs, right? Super interesting. Is it gonna work? No clue, right? And there are some days where it looks, oh, this is really attractive. And there are some days where, you know, I've checked and I'm like, ah, that looks like people are about to get smoked, right? And so I think that, again, it's, the market is maturing, it's gonna take a lot of time for this stuff to happen.

• 50:18Speaker 01

  Absolutely.

• 50:19Anthony Pompliano?

  But you do see. Early data points.

• 50:22Speaker 01

  Right.

• 50:22Anthony Pompliano?

  Right?

• 50:23Speaker 01

  Yeah, for sure.

• 50:23Anthony Pompliano?

  And as that kind of matures, it goes from a couple of, you know, few and far between data points to, okay, there's many and often, right? To eventually, it's just, it's here.

• 50:33Speaker 01

  Right.

• 50:33Anthony Pompliano?

  Right? And I think that transition's gonna happen.

• 50:35Speaker 01

  Absolutely. And I think that's why the community effect is so important. I mean, anything that helps to promulgate the, the community of, of blockchain technology, the community of cryptocurrency. I mean, think about the, the, you know, just in order of magnitude, what, you know, decentralized currency, um, how that impacts the world as a whole, right? Uh, uh, digital stores of value, uh, those are staggering. I mean, you know, think about days gone by when you couldn't walk through an airport with more than $10,000 in cash in your pocket.

• 51:03Anthony Pompliano?

  Yep.

• 51:03Speaker 01

  Right? But now.

• 51:04Anthony Pompliano?

  Different time now.

• 51:05Speaker 01

  Now you have your, your code in your head and, and, uh, or on your phone or, or in your computer or, or wherever, under your couch or wherever you keep it. But, um, and, um, you know, and, and you can, you can transfer value and, and so forth instantaneously and, and take it with you essentially wherever you go. So I think, um, you know, I think it's definitely the dawn of a new day. I think the community aspect of, uh, of, of, you know, the involvement of the retail investor, I think is critical. And, and obviously a lot of retail investors got hammered in 2018. Uh, so, you know, brutal, you know, bear market, obviously in the crypto space. But I think a lot of those people, uh, will come back. I think they, and I think it's, I think it's a necessity.

• 51:47Speaker 01

  Uh, but I think the way that they come back is through the institutional participation. When you have, uh, when you have the backed exchange, uh, bringing more institutional participants by virtue of the futures contracts. Um, the, uh, the CME futures contract seems to have, you know, much more volume now. Um, not quite sure why the CBOE, uh, kind of stepped out, uh, seemed to be bad timing there, but, uh, you know, now you have the backwardation on the, on the futures curve that, that really is a huge, huge bullish signal as, as well. But I think you have, you know, so many different, uh, elements going on in the institutional community, uh, that ultimately brings the retail investor back. You've got the VanEck, uh, Solidex ETF that, you know, in my opinion, you know, I read some of the, you know, some of the reports, it, that absolutely.

• 52:31Speaker 01

  should get approved in my, in my opinion.

• 52:33Anthony Pompliano?

  Yep. Well, both of them, right? So, uh, bitwise and also the, the Van Eck one. I mean, look, they're, they're both chipping away, right? And, uh, I'm very interested to see, will they approve both of them at the same time? Or will they approve one and not the other, which?

• 52:47Speaker 01

  In fairness, seemingly they should do it at the same time, but I, but I think the, the important thing there, the important catalyst there is, is again, building the community. That allows the retail investor to park, you know, Bitcoin in their, essentially in their IRA, right? You know, they can, you know, use their Schwab account, their fidelity account and, and buy the instrument as opposed to having wallets and storage and exchange accounts and all the stuff that, you know, that, that you deal with in the, in the trading arena for those, for those assets currently. And you think, you know, look at, you know, you're talking about just ICOs and, you know, digital security offerings and so forth. You know, a lot of those, a lot of those technologies that were developed, I mean, now you have almost 3,000, you know, blockchain projects, right?

• 53:32Anthony Pompliano?

  Yeah.

• 53:34Speaker 01

  And those will continue to proliferate, but, but at the end of the day, one of the things that you have to have around every one of those concepts, even if it's a brilliant concept, you have to have community, right? And so, you know, especially when you're talking about, you know, the elements of a utility token, right? So, uh, you know, those, you know, things like, you know, we, uh, disclaimer, we put a little bit of money to work in Telegram, for example, but think about the logic, you think about, you know, XYZ ICO project that, that launches, and even when they launch their main net and they might have 100,000 users, it's just not enough of a community, even with brilliant technology.

• 54:11Anthony Pompliano?

  Network effects, right? Basically, we now know and have seen enough technology companies have been built on the backs of these network effects that if you can drive a significant amount of people in a highly engaged way to be tied in to this community or to this network, there's incredible opportunity for value creation, right? And, uh, everyone does it in different way. I, I think, um, whether it's Telegram or Facebook, many of these folks were focused on other business models. And then when they saw this, it's like, oh, wait a minute, this may be a better business model, right? And, and look, the, the company that, um, uh, we've got a relationship to, I've just blown away by how forward thinking they are, is, uh, kicking, uh, with their kin token, very similar to what Telegram's doing. It sounds like what Facebook's gonna try to do something similarly,

• 54:56Anthony Pompliano?

  where you've got a bunch of users. You create a token that is going to be used as a currency within your ecosystem. And each one of them has a little bit different kind of variations of some, you know, Facebook's rumored to do this with backed by a conglomerate of foreign currencies. I don't even think Telegram's claimed that they're going to back it by anything. And so it's just, look, the experimentation is important, right? We should be encouraging, everyone should try.

• 55:23Speaker 01

  Absolutely.

• 55:23Anthony Pompliano?

  Right? And by the way, let's say 90% of you fail. Well, we need to figure out what the right one is, right? I was like, what is the model moving forward? And I don't think that we yet have that outside of Bitcoin, right? And then, you know, I'm kind of in the camp of if Bitcoin is successful, sound money on a global basis, do people want other forms of currency that aren't just sound money, right? What I mean by that is, you know, I always talk about Starbucks points in their mobile app, right? Amazon AWS credits, gift cards, all these things that we that we use every day. Nobody runs around and says like, oh, like that's a shit coin, right? Like the Starbucks points actually like, you know, a bunch of people are using it right now.

• 56:08Anthony Pompliano?

  Agreed that it's not the soundest form of money, right? And all this stuff. And so it's more of like

• 56:13Speaker 01

  It's worth a cup of coffee every now and then, right?

• 56:14Anthony Pompliano?

  Yeah. And they use it for gamification and incentivization, right? And so like, it's understanding that a currency can fit different, you know, ways that you use it. I think we're going to see the same thing with digital securities, right? Kind of all of it online. But again, sound money is the most important thing because that's kind of the foundation of which everything is built. And then these companies are going to figure out kind of variations of it that fit their specific needs, you know, from there, right? And I think that we should be encouraging it all.

• 56:42Speaker 01

  Yeah, absolutely. You have to encourage innovation. I think, you know, anything that can be done with, you know, think about you've got guys like Mike Novak, you have, you know, Tim Draper, a lot of sort of industry champions that have really began to to get involved in the space. And those types of incredible influencers have a, you know, there's a ripple effect that occurs there, right? So it doesn't just, doesn't just impact their involvement and their constituents and their investors. It affects the rest of the market, the rest of the globe, really, for market participants. So all of those things are great steps in the right direction.

• 57:22Anthony Pompliano?

  Absolutely, I completely agree. Before we wrap up, I always ask a rapid fire set of questions. What is your most controversial thought in crypto? What's the one thing you believe that you think the most amount of other people would disagree with you on?

• 57:34Speaker 01

  That's a tough question, controversial thought. I think you stunned me. Let me think.

• 57:49Speaker 01

  Yeah, I gotta tap out on that one, man. You got one?

• 57:50Anthony Pompliano?

  All right, that's fine. You don't have to answer any of them. What do you think the most important company in crypto is?

• 57:55Speaker 01

  You know, what's interesting in the world of crypto is that, you know, companies are really sort of, you know, decentralized platforms, if you will, right? So you don't think of Bitcoin as a company, but I think Bitcoin, far and away, is definitely...

• 58:15Anthony Pompliano?

  That's a great answer.

• 58:16Speaker 01

  Definitely the most important. I also think, you know, on the tails of that, you know, the institutions that I mentioned, the ICE exchange and IC and BACT and, you know, even JP Morgan, you know, turning their perspective from fraud to, you know, one of the most largest blockchain proponents in the space. Those things are impactful, right? You know, we talked about the ETFs a moment ago. Having those types of institutional products with institutional custody behind it with, you know, insurance policies and so forth, sort of the institutionalization. And I saw this in the hedge fund space, you

• 58:58Speaker 01

  know, in the, you know, as I kind of began my career in the early to mid 90s and, you know, you had sort of this, what was considered at that time, a cottage industry was the hedge fund space and it became more institutionalized over time. And I think that's what we're seeing. But what's fascinating about the blockchain and crypto space is all of those things are happening at an incredibly rapid pace.

• 59:22Anthony Pompliano?

  Oh, for sure. What one regulation would you change or improve if you could?

• 59:27Speaker 01

  Definitely the US tax code. Okay, why? I just, I just think that in the modern world, a flat tax across the board is just simply makes sense. You, you know, if you make X dollars, you're going to pay Y in taxes. You don't have to deal with this complex tax code, all of the deductions and all of those sorts of things. You know, if you make $25,000 a year, if the tax rate is 10%, you're going to pay $2,500 in taxes, right? So I just think that is an evolutionary process that really we need as a, as a country.

• 1:00:10Speaker 01

  And you, you certainly don't want to get into hyperinflation. You have areas like France and Venezuela, you know, where your, your tax rate and, and, you know, the devaluation of currencies and so forth, which again, go back to, you know, the logic for, you know, Bitcoin and blockchain and crypto and so forth, where you have those decentralized stores of value and, and, and forms of currency. And I, and I know we're kind of wrapping up, but I was just going to mention that, you know, those are some of the themes that, that we saw early on, I think, and one of the reasons that, that we were so successful in this space. We really saw the different, you know, really sort of bifurcation across, you know, what could be considered sort of a store of value?

• 1:00:53Speaker 01

  What could be considered a, a use of currency, if you will? And if you're using something as a, as a currency, it needs to have a stability mechanism. And so we always saw things like Bitcoin as a store of value. We also saw Ethereum as more of a platform. Now, you know, now you have other areas or other applications that, you know, are potentially better than, than, better than Ethereum, but Ethereum has such a lead in the space. They have so many developers on the, on the program, it's like 200 plus developers working on the, on the platform. So, you know, so those different themes I think are critical as participants begin to, to explore the space. Make sure that you don't just.

• 1:01:38Speaker 01

  Look at blockchain and crypto as Bitcoin only. Obviously merits and tremendous value there. I think, you know, 21 million Bitcoins to be mined. I think it's at, you know, close to 18 million have been mined already. So you're coming up to the tail end on that. But, but I think the point is, is you really have to analyze the space, looking at different areas of value propositions.

• 1:02:02Anthony Pompliano?

  Yeah, it's just like any market, right? There's not just one size fits all. There's very different things in there. What's the most important book you've ever read?

• 1:02:07Speaker 01

  Um, being a Christian, I'd say the Bible for sure. Just the global impact that the message of Christ has had in, you know, the last 2,000 years is pervasive.

• 1:02:19Anthony Pompliano?

  It's gotta be the most read book of all time, right? I mean, I don't know what the numbers are, but it's gotta be probably one of the most popular in terms of sales, in terms of reading, etc.

• 1:02:27Speaker 01

  It has to be. It has to be. And the other thing that, you know, when you think about the collection of all of those writings and the fact that they've been kind of put together and then saved over time and, and, and, and, and some of the, you know, some of the different scriptures that you read are, you know, it's incredible, the level of wisdom that those statements have and the impact that they could have on your, your life today, right? And certain principles that you can live by and just, you know, some of which are kind of common sense, right? But, but I just, it, it astounds me that, that that work has been preserved, you know, for so many years and that again, from there

• 1:03:06Speaker 01

  is, you know, it's, it's been so widely read and, and adopted by, by many people. In terms of, you know, business books, um, you know, it's kind of an old school book, Good to Great, by Collins. Yeah. I really love that one. I mean, it just talks about, and I, I think for, you know, entrepreneurs, it's something that we strive for, right? To kind of continuously build a great company. You know, so.

• 1:03:31Speaker 01

  You know, one of the things that I learned through, and you've learned this as well through playing college football, you know, just team building, right? And it really kind of cuts to the, cuts to the heart of that, right? You gotta get the right people on the bus. And, and, you know, just in your experience, right? You started out as a safety and then, you know, before you know it, you're, you're spinning it, you know, you're, you're, you're playing quarterback. So, um, you know, but if you're a great athlete, you can get moved around to different positions. And, and I think, you know, the business world, especially in a, in such a rapidly evolving space, like blockchain and crypto and cannabis and all the things that we're involved in, you have to have, um, you know, the right people on the team. So I, I really love that book, I think.

• 1:04:11Anthony Pompliano?

  I think it's a classic for a reason, right?

• 1:04:14Speaker 01

  Yeah, no doubt, no doubt about it.

• 1:04:16Anthony Pompliano?

  All right. Uh, before we end, I will let you ask me a question, but first we talk about aliens.

• 1:04:21Speaker 01

  Yes.

• 1:04:22Anthony Pompliano?

  Um, believer, non-believer, real, not real?

• 1:04:25Speaker 01

  You know, um, my perspective on that is really all over the place.

• 1:04:30Anthony Pompliano?

  Okay.

• 1:04:31Speaker 01

  And I'll, and I'll, I'll tell you why. Um, uh, first of all, when I was probably nine, 10 years old, me and a, a couple of buddies, and this is straight out of the, um, what was the, the movie Sandlot? It's like me and a couple of buddies are hanging out at one of my buddy's house down the street and, um, and I swear to God, we saw, you know, what it looked like, and it could have been a governmental, you know.

• 1:04:54Anthony Pompliano?

  Yep.

• 1:04:55Speaker 01

  Project, right? But what looked like a, a spaceship, right?

• 1:04:59Anthony Pompliano?

  You were the first person to say they saw an alien? Yes.

• 1:05:02Speaker 01

  Well, I didn't see the alien, but I saw, I saw what looked like a spaceship.

• 1:05:05Anthony Pompliano?

  A UFO, right? Unidentified flying object.

• 1:05:08Speaker 01

  And it was, it was unidentified for us, but you know, yeah, chances are it was probably, you know, some sort of a secret governmental, you know.

• 1:05:15Anthony Pompliano?

  Of course.

• 1:05:16Speaker 01

  Ship of sorts, um, you know, which is, you know, you look at where.

• 1:05:21Anthony Pompliano?

  But still, as a kid, probably freaked out a little bit, right?

• 1:05:22Speaker 01

  As a kid, we were just, man, we were just blown away. Uh, and then the other thing is just, you know, as you grow up and you research and, and learn and so forth, and you have your perspectives that, you know, part of which comes from your religious background and, and your educational background and science. And I think that all of this is, there's kind of a confluence for me.

• 1:05:43Speaker 01

  But looking at the expanse of the universe, the expanse of, you know, first of all, you start out with, you know, the solar system, the galaxy, right, the universe, and is there a multiverse, right? So it just kind of, there's a huge continuum there. So, you know, I don't know what to think. I mean, but what it's fun to talk about. But, but what, what is interesting is you have Titans in the, in the world of business who see opportunities for space exploration. And, and you have researchers that are finding planets that could potentially carry life as well. So do you ultimately get to a point where, you know, we could

• 1:06:27Speaker 01

  travel from, you know, this blue planet to another blue planet? So I don't know whether there are aliens out there or not. But what I will say is, I think that interplanetary travel, I think, is going to be something that can be helpful for mankind over time.

• 1:06:42Anthony Pompliano?

  Yeah, it is, it is wild to think that in less than 20 years, right, I think SpaceX was started in 2001. In less than 20 years, we have seen us go from there's basically no damn way in hell, we're getting to Mars, to that's probably gonna happen in my lifetime.

• 1:07:01Speaker 01

  Absolutely.

• 1:07:02Anthony Pompliano?

  Right? It was, it was pretty wild. All right. What, what one question you have for me?

• 1:07:07Speaker 01

  Question for you, I would say, if you fast forward three to five years.

• 1:07:14Anthony Pompliano?

  Okay.

• 1:07:15Speaker 01

  Where do you see the world of blockchain, digital assets, cryptocurrencies, et cetera?

• 1:07:20Anthony Pompliano?

  I think it is more of the same. And what I mean by that is, you're gonna continue to see smart people come into the space. You're gonna continue to see really innovative companies being built that are attacking the incumbents. I think you'll can just continue to see like the trend of automated finance happening. I do think that three years, maybe is early, but five probably makes sense in terms of like, really, really good user experiences, right? So not just the technology works, but like, is usable by a mass consumer, which I think drives, you know, incredible adoption, all this kind of stuff. I think that next three to five years will have had another bull market, like we saw in 17, probably

• 1:08:04Anthony Pompliano?

  bigger, which would be pretty crazy. And then

• 1:08:11Anthony Pompliano?

  I'm paying attention to non crypto markets, right? Like what happens in traditional assets and with the macro economy. I read something today that I think it was somebody wrote an op ed in Bloomberg. Don't call me on that, but I think that's where it was. What they said was in the last two recessions, basically there has been interest rate cuts of over 500 basis points. Right? Well, the interest rate is at not above 500 basis points right now. So unless they're going to go negative interest rates, they don't have that tool in their toolbox anymore. Right? And so he was just talking through like, actually, we may not have all of the things that previously were at our disposal to fight recessions in the past.

• 1:08:55Anthony Pompliano?

  And so if that happens, you know, not only one, is that true, right? So there's debate there, but then two is if it is true, then what does that mean? Right? Does that mean that if we get into a recession, it's like a spiral, you know, death spiral and, and we can't get out of it. Right? Probably not, but does that mean that it's just going to be a deeper, tougher recession than maybe the last two? Right? That'd be pretty scary. Does that mean that people will look to leave kind of traditional assets, get more into alternatives? Or maybe even Bitcoin as like a global reserve currency? All these questions that are there, I don't think anyone actually can say with confidence, hey, I have the answers. But what I do think is that there's likely in the next five years, you know, there's going to be some impact.

• 1:09:37Speaker 01

  Play themselves out.

• 1:09:37Anthony Pompliano?

  Yeah, it's just like the odds that will continue in this massive bull market, right? Traditional assets for another five years. On the math tells us that's unlikely, right? Like, like there's a return back to the average, right? And so, yeah, and, and so we'll see. I just think all of that's like really, really interesting. And so it's you get this like weird trend and I can't remember. I'm going to give credit to Travis Kling at Ikigai, but I don't know if it was actually him who said this or not. But it was basically something to the effect of like, if you had to guess right now and you had to write the script for how Bitcoin gains global mass adoption on, you know, on a global scale. We're watching it play out, right?

• 1:10:20Anthony Pompliano?

  Like we're watching the macro market be a little bloated, right? We're seeing they may not have all the tools to, you know, to respond to some kind of economic crisis. Crypto continues to be built with really smart people solving the problems that are necessary for scalability, security, et cetera. And then like humans who lead the non crypto world are just doing dumb shit. Like they like they continue to commit crimes. They continue to, you know, do things that expose people data or money or, you know, all of this stuff. And it's just like, I actually think crypto's greatest ally and Bitcoin's greatest ally is just time.

• 1:10:59Speaker 01

  Challenging, challenging circumstances, I think.

• 1:11:01Anthony Pompliano?

  Just let, let it all play out.

• 1:11:03Speaker 01

  Proves the case, right?

• 1:11:04Anthony Pompliano?

  So, so I think, you know, it's a long winded way of just saying like, I, I think we're heading in the right direction.

• 1:11:09Speaker 01

  Yeah.

• 1:11:09Anthony Pompliano?

  But, but it's, uh, it's not just what's going on in the industry. It's also what's going on in other industries that'll probably force people to take this more seriously. And, you know, I mean, look, in, we're 2019 right now. If, uh, over the next two years, you see public equities fall, you know, double digits, 20 plus percent, let's say. Which I think is possible, right? And I'm not saying it's gonna happen, but it's possible. And then you got Bitcoin and other cryptos like double or triple in value, which is again, possible. I'm not saying it's gonna happen, but possible. I think you'd have a lot of public market investors being like, I probably should be looking at this thing, right?

• 1:11:46Speaker 01

  Yeah.

• 1:11:46Anthony Pompliano?

  Um, and it's funny how like capitalistic incentives matter.

• 1:11:50Speaker 01

  Right. Yeah. I, I think that, uh, the more you have adoption across the institutional landscape that makes the road easier for the retail investor.

• 1:12:01Anthony Pompliano?

  Yeah.

• 1:12:01Speaker 01

  I think that's when we begin to get into those things. And, and hopefully those things, uh, play themselves out before we have some sort of major correction. Because then those investors don't have a flight to quality, right?

• 1:12:11Anthony Pompliano?

  Yep.

• 1:12:11Speaker 01

  If, if Bitcoin ultimately is that store of value and some of these other crypto assets and cryptocurrencies are areas where they can generate out, um, alpha and returns for their own portfolio and so forth. When, when other asset classes are failing. You know, hopefully the, uh, hopefully the government gets it right and gets those things approved.

• 1:12:30Anthony Pompliano?

  I can only hope and so can you.

• 1:12:32Speaker 01

  Absolutely.

• 1:12:33Anthony Pompliano?

  Absolutely. All right. Thank you so much for doing this. I really appreciate it. This is a ton of fun and we'll have to do it again in the future.

• 1:12:38Speaker 01

  Awesome. We'll catch up soon.

• 1:12:39Anthony Pompliano?

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• 1:13:24Anthony Pompliano?

  favor and rate, review and subscribe. To review, simply go to the Off the Chain homepage, scroll down until you see the five blank stars. Taking 15 seconds to fill those stars in and leave a quick review goes a long way in helping us take the entire crypto ecosystem to the top of the charts. I appreciate you listening and see you next time on Off the Chain.