#1377 Alex Thorn | Bitcoin Is Taking Over Wall Street

Alex Thorn is the Head of Firmwide Research at Galaxy Digital. In this conversation, we talk about bitcoin, bitcoin mining, ETFs, regulation, politics, global adoption, potential problems, token unlocks, Galaxy Digital, and more. ======================= CrossFi is the Apple Pay for Crypto. For the first time in history, anyone with a web 3 wallet like Metamask can spend crypto through a physical or virtual visa cards anywhere in the world where Visa is accepted. Be one of the first to get your hands on a CrossFi card and a prize pool of $3 Million Dollars by joining and participating in their testnet today: ⁠⁠⁠https://xfi.foundation/users⁠⁠⁠ ======================= Buy and sell cryptocurrency in a tax-advantaged crypto IRA with iTrustCapital. Enjoy 24/7 access, lowest fees in the industry, and tax benefits for your retirement. Open and fund an account today at ⁠⁠https://www.itrustcapital.com/pomp⁠⁠ to receive a $100 USD funding bonus. ======================= Pomp writes a daily letter to over 265,000+ investors about business, technology, and finance. He breaks down complex topics into easy-to-understand language while sharing opinions on various aspects of each industry. You can subscribe at https://pomp.substack.com/ ======================= View 10k+ open startup jobs: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://dreamstartupjob.com/⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Enroll in my Crypto Academy: https://www.thecryptoacademy.io/

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. Many of you know me as Pomp. You're listening to the Pomp Podcast, which is my effort to find the most interesting people in the world and sit with them for hours while I ask questions in an effort to learn. So it would mean the world to me if you would subscribe to the show on your favorite audio platform, watch episodes on YouTube, and tell your friends and family about the podcast. My goal is to help millions learn from the world's most interesting people. So let's get into today's episode. What's up guys? Bang, bang. Man, do I have a treat for you today. We have Alex Thorne, Head of Firmwide Research at Galaxy, here to join the podcast. In this conversation, we talk about Bitcoin, we talk about Bitcoin mining, we talk about the ETFs, the Ethereum

• 0:43Anthony Pompliano?

  ETF, what's going on in the regulatory world, talk a little bit about politics, go around the world to different nation-states, and then we get into some of the problems that might be on the horizon, including tons of unlocks of tokens that are coming, could be as much as $80 billion that could hurt your bags. So you better tune into this. And then we talk about Galaxy, what they're doing, the different funds that they've been launching, what it's like to work with Mike Novogratz, and much, much more. I think you guys will really enjoy this conversation. So here is my episode with Alex Thorne.

• 1:11Speaker 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.

• 1:35Anthony Pompliano?

  Today's episode is brought to you by CrossFi. CrossFi is the Apple Pay for crypto. For the first time in history, anyone with a Web3 wallet like MetaMask can spend crypto through a physical or virtual Visa card anywhere in the world where Visa is accepted. No more exchanges or middlemen. Just link your wallet, get your card, and start spending today. CrossFi card transactions have already been successfully processed in New York, Los Angeles, London, Dubai, China, Japan, and over 20 other countries. Be one of the first to get your hands on a CrossFi card and a prize pool of up to $3 million by joining and participating in their testnet today. You can go to xfi.foundation users. Again, that's xfi.foundation users. Go check it out today.

• 2:21Anthony Pompliano?

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• 3:02Anthony Pompliano?

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• 3:43Anthony Pompliano?

  All right, guys. We've got an incredible conversation today, but I thought a great place to start is Bitcoin is American values?

• 3:49Speaker 02

  I think they-

• 3:50Anthony Pompliano?

  Just codified?

• 3:51Speaker 02

  Well, not only that, but I think that the features of the Bitcoin protocol, that they perpetuate values that are highly American. Think about self-sovereignty, free markets, capitalism, private property, right? I mean Bitcoin is digital private property. It's sort of the first ever instantiation of digital scarcity. These are things that we believe in in America. We believe in private property. It underpins our entire legal system, our entire markets. It's not just that we have the best capital markets because, you know, the Wall Street is, you know, good at trading. It's because of our private property laws. It's because you can credibly invest in America with a belief that it can't be arbitrarily taken from you.

• 4:31Speaker 02

  That's a legal system thing. Bitcoin really enforces that, frankly, in a much stronger way. But yeah, I think the whole argument about Bitcoin, in my mind, is one of individual freedom of ownership, of sovereignty. These are like, America's like, one of the only countries in the world that, at its core, truly believes in these things. So I think there's a lot of overlap.

• 4:54Anthony Pompliano?

  Now, does that mean that America is more likely to embrace it because we already understand the ideals and values? Or is it a thing where self-sovereignty is an American value, but the people in charge actually say, wait a second, if you guys are gonna have self-sovereignty, if you're gonna have the ability to not be censored or seized, etc., we don't like that.

• 5:12Speaker 02

  Yeah.

• 5:12Anthony Pompliano?

  And so does it almost counter, you know, balance?

• 5:15Speaker 02

  There's definitely a tension. You know, we don't have a, our government at any given moment isn't perfectly defending or supporting the, you know, the core values of the American Revolution, or the Bill of Rights, or the Constitution, as I think they should be. But what I would say is, look, we have pole position to lead on Bitcoin in America. We already do lead on it. Got the most hash rate, we got the most investment, all the biggest ETFs are here. I would venture to say we have the biggest cohort of intellectual mindshare in the Bitcoin world in the United States. So we really just shouldn't screw that up. Whether or not we are gonna screw it up, I think this still remains to be seen. Part of the reason that I have this as one of my hobby horses is trying to convince policymakers

• 5:56Speaker 02

  that you can be pro-America and pro-Bitcoin, that you don't have to, that a vote for Bitcoin is not inherently anti-American or anti-dollar. I think that's also part of the unease that you hear.

• 6:07Anthony Pompliano?

  Do people think that, though? Are there people who think a vote for Bitcoin is anti-American?

• 6:11Speaker 02

  I mean, I saw Hillary Clinton say that Bitcoin threatens the dollar. I think President Trump, when he was president, at one point said, "I am not a fan of Bitcoin or cryptocurrencies because I like the dollar." I think that's easing. I think people understand that, for example, for electrical grids, Bitcoin mining, large flexible loads are very useful and helpful. So wait, maybe that's not bad for money. Maybe it's, look, it's really good at not being seized, but it's not super private. It's not trivial in some cases to trace, right? So maybe it isn't great for crime. Like, I think the dam is breaking on that. But, you know, there are plenty of people who still think that. Some of our most articulate critics take Congressman Brad Sherman. He has this down as a hot, he absolutely says that it's anti-dollar and that thus it must be killed.

• 6:55Anthony Pompliano?

  But I think that Trump, as an example... People are like, oh, he's flip flopping. He's pandering. He's doing all this stuff. I almost look at it as just like, no, this is the natural progression that every Bitcoiner goes through. You start off, it's like, this is stupid. This is a scam. This is for crime. This is not going to work. Then it's like, okay, well, maybe I kind of sort of see this one possible use case, but everything else is stupid. And like, fast forward five years, and then you're like, I own Bitcoin. And, you know, here's all the good things about it. And so should we actually expect not that the politicians are dumb, or the politicians are, you know, kind of intentionally, you know, lying to us or anything like that. But instead, like, they just started looking at it in the last five years. And so now we're getting to the point where you're going to see them start changing their mind,

• 7:37Anthony Pompliano?

  because it takes about, you know, five years to get up to speed on it, learn, get familiar with it, talk to a bunch of people, and then finally it makes sense.

• 7:45Speaker 02

  I think that's a possibility. I agree. I don't think everybody who didn't like it or doesn't like it is inherently against it. Obviously, President Trump, I think he has had, he's, you know, changed his mind. I think there's no doubt that it's political as well. It'll be, you know, the extent to which there's a delta between his campaign words and if he's reelected, his policies remains to be seen. But I think it's reasonable. You do, everybody has to go through their own thing. I think it helps, you know, five years ago, when he said that, there weren't the biggest asset managers in the world with ETFs. The most loud research on Bitcoin mining said that it was going to consume all of the world's electricity by like 2022. Obviously, that did not happen. So like, there's been a maturation of how to think about Bitcoin,

• 8:29Speaker 02

  of data on Bitcoin, of the types of players that are involved in Bitcoin, that I think also makes it easier.

• 8:35Anthony Pompliano?

  Now, as Bitcoin continues to be successful in a bottoms up manner, we now are seeing corporations and balance sheets, we're seeing the financial institutions show up. Is it also something where like the messenger changes now? Nick Carter and I recently talked about the fact that like Larry Fink's a way better messenger than any of us, right? And so Larry Fink says Bitcoin's a flight to quality, like, who cares what the Bitcoiners say, right? Because to a politician, Larry Fink saying that is exponentially more important for a whole host of reasons. And so have we kind of, now we can knock on the nation state doors because we have the financial organizations that are going to like do the bidding for us?

• 9:12Speaker 02

  Yeah, it's like, you know, walk or crawl, walk, run. I think it, also the game theory too now, right? I mean, the second BlackRock was kind of late to that game, right? Everybody else that ended up getting a Bitcoin ETF had already filed before. And then they showed up and everybody, of course, was like, we gotta, now we all have to do it again. What do they know, right? They're doing it, we've got to do it. And then you start seeing like, you know, the same thing could be said for a nation state. I think the game theory is pretty simple. Like, you might not care, but if the United States adopts a national Bitcoin strategy, every ally and foe is going to also adopt one, right? So this, this starts, you know, if it's just El Salvador today, and then maybe a couple of other smaller dominos fall. But like, eventually, like, they just, it's pure competition. It doesn't matter if it's a national gravel strategy, right? People have to adopt it.

• 9:57Speaker 02

  So I think you're absolutely right. And, you know, right, if it's just Michael Saylor, um, you know, he's like a Bitcoin guy. You might be like, oh, he's that crazy Bitcoin CEO guy. That's not as convincing as Larry Fink. And it's, but if it's, and then Jack Dorsey, you're like, well, he does, did build two companies that are really, really successful. And then you're like, okay, well, wait, if it starts to be like, you know, additional non-Bitcoin zealots.

• 10:20Anthony Pompliano?

  Michael Dell now.

• 10:21Speaker 02

  Michael Dell, exactly.

• 10:22Anthony Pompliano?

  Is rumored to potentially be one.

• 10:23Speaker 02

  I mean, he retweeted about, uh, he retweeted Michael Saylor, right? And so he, he must be interested in Bitcoin. So I agree, the messengers help a lot. I mean, look, you had to do it all, though. You had to have, um, you know, Antonopoulos by himself in that room in 2012. We've seen this video that always goes around of, of Andreas Antonopoulos explaining Bitcoin to like one person in a giant empty auditorium. Like, you had to do that. It's just, I think it's natural, it's part of Bitcoin's inevitability. And, and like, I really don't know a lot of people who really understand it. I almost know almost nobody who really understands Bitcoin that also hates it.

• 10:58Anthony Pompliano?

  Mm hmm. Now, when we go and we look at whoever wins this presidential election, we got Trump and Biden both running as of right now. What should they do? Right? In terms of being supportive to Bitcoin, Bitcoin mining, the crypto industry, you know, you get to be president for a day. What would you do?

• 11:14Speaker 02

  Oh, man. If I had that type of god power, I don't, I don't think it, the president really doesn't have god powers. But let's just say that they did. I mean, you would want, um, Specific clarity at the regulatory agencies, I think in my mind, one of the most important is a clear definition of what is a digital commodity versus what is a digital security. Just start there would be a huge boon that lets businesses build in crypto and know like who their regulator is, when and why. But also like, I mean overhaul things about

• 11:47Speaker 02

  guidance about when somebody is custodial versus non custodial. So things like non custodial software developers should never be respond like they can't be responsible for the actions of their users. Right? Like whether that's a multi custody or self custody wallet provider or a smart contract that doesn't have any admin keys, right? Or a privacy preserving wallet that has no custody of the users like funds, right? I think that's pretty much the end boss core question is like, you know, I would, I would look at rules to very specifically codify that developers of those tools are can never be, you know, bank secrecy act, money transmitters, things like that.

• 12:30Speaker 02

  That's the bill that Elizabeth Warren has been proposing that damel the digital asset money laundering act or anti money laundering act. That classifies like software developers like Bitcoin core developers as having to register with FinCEN and the and comply with the bank secrecy act. They don't have any ability to do that. That's insane. So whatever you need to do to prevent that from happening to me, that's the actual end boss. Everything else is sort of like regulatory clarity. As long as people can write and ship code and give it away for free on the internet and anyone can run it like that's that's the core of what needs to be protected. They haven't really come after that much, but that plus like, yeah, general regulatory clarity on like who owns what you can't have

• 13:11Speaker 02

  the CFTC saying that ether is a commodity and the S E chair of the SEC refusing to confirm or deny whether or not it is like that's insane.

• 13:19Anthony Pompliano?

  We talk a lot about the United States internationally. What's the next country you think to buy?

• 13:24Speaker 02

  Oh, man, like the next El Salvador?

• 13:27Anthony Pompliano?

  Either buy Bitcoin, they can mine Bitcoin, maybe they just become like very supportive of Bitcoin.

• 13:32Speaker 02

  Yeah, well, I think there's some Middle Eastern countries that have some pretty sizable activities, particularly on the Bitcoin mining side, and think of some energy wealthy countries.

• 13:43Anthony Pompliano?

  And they're public about it.

• 13:45Speaker 02

  Yeah, and then there's some, there's also some like South Central Asian countries that have large amounts of hydroelectric that mine. I think mining, especially in a lot of countries, have nationalized energy infrastructure. Well, I mean, if you have like piles of renewable energy like rivers, which you can't turn off when you don't need, like you should just put something on it. That's why you dam them. That's why you generate electricity. All of that, I would say, then I start to think about the high inflation countries, right? So Argentina, Lebanon, Turkey. Now, this is tricky because it's a similar question about the dollar versus Bitcoin, like would the Turkish lira, does the Turkish government want to defend the Turkish lira rather than create an exit valve? Probably, but to me,

• 14:30Speaker 02

  it's pretty straightforward. Like, they're not the world's reserve currency, so they don't have the special benefits that the US does with its dollar. So maybe it makes sense. Certainly, we've seen uptick in usage by citizens in countries like that. I also think, in general, if you think of sort of non-aligned countries, countries that aren't like, you know, definitively in the geopolitical camp of the US and the West, or Russia and China, right? Some could make a lot of sense there. Countries that have gold reserves, I think you would see serious interest. I mean, I think of Bitcoin kind of as gold with wings. It's, I mean, you ever try to send somebody any gold? It's basically impossible,

• 15:11Speaker 02

  right? The value to weight ratio is totally askew. So geopolitically neutral countries, countries with inflation, countries with high energy, I think this is where you look, and I think you will start to see it.

• 15:24Anthony Pompliano?

  And should we expect central banks or nation states to start to buy this for price exposure? Like, hey, Bitcoin's going to go up, so I want to own some? Or is it more of like a defensive tool? You know, right now, you see China buying a lot of gold. Obviously, the United States kind of reaction to the Russian invasion of Ukraine. A lot of countries probably say, hey, wait a second, you can like, just like, take my assets. How do you think about, you know, offense versus defense as to why some of these countries may participate?

• 15:48Speaker 02

  I think sovereign wealth funds and affiliated funds are probably looking at price exposure primarily, but also uncensorability and, you know, wanting to, you could probably hold that inside your borders. That's pretty strong. Yeah, central banks or national reserve asset kind of thing is an interesting question. National countries in their reserves often have commodities. They have gold, they have oil. We have a strategic national oil reserve, right? In the United States, you could imagine it's reasonable to have Bitcoin. I would think more for use in international trade. The reality is the dollar is the most widely used fiat currency.

• 16:29Speaker 02

  But I would venture to say that Bitcoin is accessible in more nations than the dollar. It is truly global. It's obviously not nearly as big or liquid, but it's, it's, it's there. It's everywhere, whereas the dollar is not literally everywhere. And you could imagine, I think, in a world that becomes more fractured geopolitically. I think it's pretty fair to say we're in a relatively multipolar world today.

• 16:56Speaker 02

  I think it probably continues in that direction. And so you'd probably want something that's more neutral in general, available. It doesn't mean that it won't be the dollar, it won't be the renminbi, it won't be the, you know, some other fiat currency too. And I don't think they go away, but I also think it should be this way. I don't think it's right that humanity is doomed to oscillate between one Fiat currency printed out of thin air by one nation to the next every time there's a war. Like, we should be able to level up as a species. It's kind of like the game Civilization. I feel like, you know, we really don't have a chance at becoming an interplanetary species until we figure it out how to have money that's not in control of some bank in New York City.

• 17:36Anthony Pompliano?

  Well, also, how do you just get the money to another planet? Probably is a difficulty too.

• 17:41Speaker 02

  Do you really think they're gonna be like calling down Elon, the, you know, Elon Town? Or, you know, Moskville on, in Mars? Like, when they need some cash, they're really gonna call down to the New York Fed?

• 17:52Anthony Pompliano?

  Well, uh, did you see the blowback that he got? He basically was like, uh, we're gonna come up with the laws on Mars. And they were like, no, we can't let the billionaires get it, whatever. And I just remember being like, well, if you want to make the laws, like, you got there first. Yeah, get beat them there, right? Like, that's been the, uh, way the world's worked for thousands of years, right? If you get there first, you lay claim to the land, uh, you can make the rules.

• 18:15Speaker 02

  It's so true. If you think of like, what's that phrase they always say? Like, uh, born too late to explore the earth and too early to explore the stars? But, you know, at least I've got meme coins on Solana.

• 18:25Speaker 02

  No, I mean, yeah, when the, when they land, it's interesting. I don't know. I think it's, it's reasonable for everyone to think one way or another. Um, if you, you know, Christopher Columbus was sailing, what, at the time, under the mandate of the Spanish, I think, right? Um, he'd gone to everyone for money, and I guess only they sent it. I mean, so technically, he was claiming it for Spain, I'm not sure. But of course, that all got super messy and eventually, and it was quite lawless. So, I, I don't know. I think it's reasonable for whatever existing national powers or, or powers at all to say, no, like, you know, Elon goes, like, he's going for NASA. Technically, they're his ships and, but, I mean, like, so we get to claim, but, I mean, no matter what they, whether they say that or not, it's gonna be law of whoever's there. I mean, I don't think you can expect, there's a good show, um, what's that show on, uh,

• 19:10Speaker 02

  on Apple TV about this, basically? An alternate history of if the Soviets had landed on the moon first, and then it goes all the way forward through Mars. And this, the whole thing happens where it's like, there's a, technically, there's a, an American and a, and a Russian and a, like, even a North Korean in this future, like, enclave on Mars. And like, they all follow their national things, but like, sometimes they don't. And it's like.

• 19:29Anthony Pompliano?

  Yeah, you gotta figure it out, right?

• 19:30Speaker 02

  It's the frontier.

• 19:32Anthony Pompliano?

  Is there a rate of return that Bitcoin could breach to the downside that would make it unattractive? So, one of the reasons you said earlier, gold with wings, Bitcoin is digital gold, but it goes up, you know, whatever the these things are, the compound annual growth rate has been very high.

• 19:48Speaker 02

  Yeah, it has like a

• 19:48Anthony Pompliano?

  Fifty to 100% depending on bull or bear market, you know, when you look.

• 19:53Anthony Pompliano?

  If it only went up 20% a year, would some people not be interested? 15, 10, 5, 30? Like, what is the the down, you know, side kind of breach point where it no longer has wings or is gold but goes up? And people would say, actually, it may not be worth the upside, you know, for the risk that I'm taking.

• 20:13Speaker 02

  Yeah, I mean, that will for sure. I think there is. If you think about like investing, you know, if it's below the risk free rate, you know, that you get on T-bills, then I would say it's like anything that's lower than that, it wouldn't be good. I don't know what the number is. I think, obviously, if it, I think, just I happen to have looked. I mean, you can pick the starting point for a compound annual growth rate at any point, but I just recently, like yesterday, pulled the five-year rolling, and it was like 52%. That's great. 52% annualized like CAGR over five years is an incredible return, right? But, you know, if you

• 20:49Anthony Pompliano?

  Beat every hedge fund?

• 20:50Speaker 02

  Yeah, I mean, and honestly, I think it beat basically every crypto hedge fund. We have a database vision track at Galaxy Research that something like 300-plus crypto hedge funds provide performance information to, and literally a tiny handful have beaten Bitcoin in the like since 23 started.

• 21:04Anthony Pompliano?

  What percent do you think it is?

• 21:06Speaker 02

  I think it's less than 10%.

• 21:08Anthony Pompliano?

  Less than 10% of crypto hedge funds beat Bitcoin?

• 21:10Speaker 02

  Yes, since since like the start of last year, which makes sense. I mean, a lot of, well, Bitcoins up like from 16.5 to start 2023 to, you know, we're correcting here a little bit, but that to 73,000, like, that's a crazy return that. So, look, but to your

• 21:29Anthony Pompliano?

  What about over a longer period of time?

• 21:31Speaker 02

  I don't know how much I could guess. I would say.

• 21:35Anthony Pompliano?

  Maybe like 30% of.

• 21:36Speaker 02

  Yeah, I would not. I would say not more than half. Definitely not. I mean, it's tough. You're going up against the big boss here. And.

• 21:42Anthony Pompliano?

  Which I think maybe what's interesting about that is if you go to the public markets, definitely nowhere near 50% of the hedge funds beat the S and P every year. Right. So maybe there are five, 10% max, right? But probably closer to 5% or less.

• 21:56Speaker 02

  Yeah.

• 21:56Anthony Pompliano?

  In crypto, actually, there may be a higher percentage that beat Bitcoin because they're investing in a new universe. There's more, you know, opportunity, whatever. But you would expect over time that actually the crypto hedge fund landscape will look similar to the stock landscape. Because Bitcoin will continue to be that kind of that S and P. And these hedge funds will have a hard time beating it year after year.

• 22:16Speaker 02

  I think that's right. I think also you're going to see more mainstreaming of blockchain rails, like a crypto hedge fund may end up starting to looking like a normal fund anyway. If you get treasuries on chain or equities on chain, I mean, I, this is, people have talked about this forever. It's like the, you know, remember like in 16, it was like blockchain, not Bitcoin. The DTCC wrote this great paper about how they should be disinformationated by the blockchain, how stocks should be on the blockchain. It's a great ledger. So anyway, that, that also I think is finally starting to happen slowly, not like, you know, not at single name equities, but you're seeing some fixed income securities. You're seeing some real estate actually trade on chain now. So

• 22:55Speaker 02

  I just mean for another reason that they could also start looking like normal hedge funds. But yeah, I think it's power law in the scheme of things, right? It's going to be. I don't think any of the big crypto hedge funds beat Bitcoin. So the, if we look by numbers, like count of funds that did saying 10%, I bet like 5% or less of the total crypto hedge fund AUM actually outperformed Bitcoin. Yeah. The question is too, is that the index on crypto? I mean, I think it is. I think it's the prize asset, but. I think there's a case to be made that it's something else that like if even ether could be that on crypto because it has the applications that make up the broader ecosystems. Then again, Bitcoin may yet get those applications too.

• 23:40Anthony Pompliano?

  Um, let's talk about altcoin market. Uh, one of the things that I think now people are trying to warm up to is this idea that, uh, man, there's a lot of locked tokens that are going to quickly not be locked tokens, which would insinuate that some percentage of them are going to get sold. And so there's kind of this like wall of selling in the altcoin market that is on the way. And, you know, I've looked at some of these coins. There's like 80% of the coins are still locked and are not going to be locked over the next 12 to 18 months. And so is it that simple? Like coins get unlocked, everyone sells, prices go down, you know, let's go home and go back to kind of the large caps?

• 24:17Speaker 02

  Yeah, it could be. It could be that simple. I think, um, we did some research and found there's 80 billion of unlocking token supply between now and the end of 2026. So the next two and a half years. Um, it's in the entire crypto hedge fund market, like I was saying, is 20 billion AUM as of the end of March, according to our data. That's the entire market of funds that buy liquid cryptos. Um, so there's four times that AUM coming or that supply coming on as so I don't know who buys that. I think who is there to buy that wave? Well, the other thing would be like retail mania, but let's face it. I don't think retail is really here yet in crypto at all in this cycle. I mean, maybe buying Bitcoin ETFs. I

• 25:02Speaker 02

  think most of the Bitcoin ETF flow in the end, or the plurality was probably people buying it in their IRAs and 401k brokerage windows and like on platforms. Advisors aren't even really here yet. So I don't think that was really them. Some of the independent advisors, sure. So, but that's again, Bitcoin, not the same, right? I think the, the performance of the ether ETFs when they launch, which I think is probably in the next like week or so, week or two, um, will maybe tell us, give us more information about this. But again, that probably even further, um, stratifies the market between, okay, now it's like

• 25:37Speaker 02

  Coin and Ether, you could buy these in an ETF for financial exposure to crypto. Do you really need more than that? It probably gives you 80% of the narratives in crypto. Maybe not all the upside, certainly, but I think most people will start to just buy those two. That further, you know, holds back demand to buy the alts. So I don't know, I think it's a pretty unprecedented wave. I don't think people realize how much token supply, future token supply was created in 21 and 22. And, you know, think about it, if you like bought, if you're an investor or VC and you did a simple agreement for future tokens in 21, you might've had a three-year lockup. Well, that's now, right?

• 26:20Speaker 02

  So I think it's, it's, it's pretty bad. I mean, I think that's a huge amount of dilution and supply for the market to absorb. And just based on the current market, I don't see like where the, that, where that 80 billion is going to get bought. I don't think it's at these prices.

• 26:35Anthony Pompliano?

  Is there anything that the founders, foundations, or kind of participants in these markets can do to lessen the blow of these unlocking tokens?

• 26:44Speaker 02

  So I was thinking about, okay, what do we do in general? You've got the supply and demand side. So the supply side is your question. I mean, you could see you either stop the unlocks or change the tokens, right? And on the other side, you, you increase the size of the crypto hedge fund market. Well, we can work on that. I mean, we're in that market, right? So it's helping people raise, it's raising its cap intro, it's all that type of stuff on the buy side. On the, on the demand, on the supply side, yeah, you could see maybe like took some token mergers. You could maybe see some DAOs or foundations, depending on what the situation is, like literally rework some of their, rework some of their token economics. You could see the maybe buy back tokens.

• 27:29Speaker 02

  To be clear, like there's plenty of issues with doing that, like that's tricky. But I mean, that's the type of stuff we're talking about. Depending on how these unlocks actually exist, they may be immutable and can actually like not deliver. You may be contractually obligated to deliver, right? So it's maybe thinking creatively. I think this is something they should be thinking about because no matter how good your app is or your protocol is, like if you designed the economics such that the token is going to be like effectively down only for potentially to all of the supply is absorbed, like you're not going to have a good time. I think it also raises questions about how to organize these types of token sales in the first place. And I don't blame necessarily the protocols, projects, remember for, I mean,

• 28:14Speaker 02

  we've got this, it's this, what they call the low float, high F D V problem, right? Where it's like partly, it's kind of like water on pavement, right? The I C O is highly egalitarian, but very few disclosures. And so plenty of scams went through that way. But the projects that did actually survive, think of like Ethereum, Cardano, Tezos, highly distributed token supply. So actually they look much better, but you know, those were thought to be illegal securities offerings or unregistered securities offerings. So they went this private transitioning to first private and then maybe selling. So like the simple agreements, the protocols that launched like 20, 21, 22, they all have

• 28:54Speaker 02

  much less dispersed supply, much more highly concentrated, which is bad, right? For those assets and hard to solve. Again, that's reaction to the regulatory setup. Similarly, I think if we had a different way to do different types of sales or distributions that was regulatorily compliant and obviously safe for consumers and all that, you might think of something different where, for example, like the foundation or the team, they only get one token for every one token that's airdropped to the user. And so like more users equal more airdrops, like the, and then the team only gets funded as usage actually grows up. Cause the other problem here, Anthony, is that a lot of the projects

• 29:39Speaker 02

  suck, right? So like, why should they have? Most. Yeah, most, right? So why should they have a giant treasury? And a bunch of millions of dollars or 100 millions of dollars when their their project failed or their company is bad, right? Somehow, we want to try to figure out if you're going to do tokens as sales and things going forward, or as these assets that are tied to projects, which is a neutral term. I mean, we could say companies, I think, for a lot of them. Then obviously, the value of the token, the full market value, should be somewhat tied to the success or failure of the thing, right? So thinking about ways to do that, I think one way that like, right, you can, if every new

• 30:21Speaker 02

  time a user onboards, they get airdropped a token, then like, then one for one, maybe token and founding, not this like predetermined schedule where the investors get all of this locked for a period and the foundation gets this and the team, the contribution, like that, that ends up with a bunch of people with with tokens that, whose value is totally disconnected from the success or failure of the project.

• 30:42Anthony Pompliano?

  I don't want to say who it is, but somebody recently came in here and we're meeting and they said to me, you know what? I think that actually a token M and A is going to pick up. And we see a huge opportunity to go and basically create a token.

• 30:57Speaker 02

  Yeah.

• 30:57Anthony Pompliano?

  And then use that to acquire the IP, the product, the user base, token holder base, et cetera, of these other tokens. And so we'll just give them some of our token, we'll take all their tokens, we'll burn them, we'll then get their users, whatever. Is that going to happen?

• 31:12Speaker 02

  I mean, that's one of the things I'm talking about when we say, like, on the cell supply side, right? I said, talk to DAOs, you talk to redesign tokenomics, I think mergers is possible. I don't know if it's like, I haven't thought about whether the way you do that is by creating a new token, raising for that, and then using that. You could do that, you could, you could buy the DAO by influence with the DAO or buy up the tokens, like, so like a, like a hostile takeover, basically, you could do that for some of them. If the DAOs truly do control the thing, a lot of the DAOs are, you know, decentralized in name only, they're, they're like snapshot votes only. You could, I think you could also, just in general, I think, straight up merging some would be a solution here. Does everything need a token? I mean, obviously, the answer is no.

• 31:55Anthony Pompliano?

  Yeah.

• 31:56Speaker 02

  We know why a lot of them want one, some of them do, some of them have good reasons for existing, many don't. Should collapse some of those together.

• 32:03Anthony Pompliano?

  I think that makes sense. The Ether ETF looks like it's going to be approved in the next two weeks or so. How much money is going to flow into these things?

• 32:11Speaker 02

  Yeah, we just sent our version of this report. We did this report for Bitcoin in October. I think we talked about this and we did, um, we said 15 billion in year one, 14.5 billion in year one would take us to $75,000 Bitcoin. Well, we basically, we're now at 15 in Bitcoin, but 14.5 did take us to 73.9. Um, and so that for Bitcoin,

• 32:35Anthony Pompliano?

  That's pretty good. That's pretty good analysis.

• 32:37Speaker 02

  Although here's where we were wrong. We, we got to 14.5, totally not why we thought. We said that that was the advisors would drive that. We got there without them. They're not here yet. So actually that's bullish, thankfully. So it makes us small. We won't finish the year with 14.5. We'll end up being lower. But yes, we, we

• 32:51Anthony Pompliano?

  We think we'll be lower than

• 32:52Speaker 02

  I'm saying, sorry, well, well, we will have been well low in our predictions. So we'll be much higher.

• 32:56Anthony Pompliano?

  Yeah.

• 32:57Speaker 02

  I don't know how high.

• 32:58Anthony Pompliano?

  In the amount that went into the ETF.

• 32:59Speaker 02

  Yeah, the net inflows into the Bitcoin ETFs in year one will be much more than the 14.5 we predicted. But that 14.5, we were right about the, the volume, uh, then flows to the spot price. So looking at the Ether ones, we take it, we didn't take the same approach. Instead, we said, I think this is what most people are now doing. I've seen a couple. Bitwise published one, um, Bernstein published one, um, the Bloomberg guys have some estimates. We're all kind of like now taking the empirical data we have from the Bitcoin ETFs and saying like, okay, how much less will it be? We all agree that it will be less at a minimum, just because it's proportionally market cap less. You know, it's Ether's market caps, maybe a third of Bitcoin. So you think even if it's just as successful, a third is what it should be. Um, we, we take

• 33:42Speaker 02

  it, so we did some work. We come around to say it'll be about 30% of the Bitcoin flows over the first five months. If we compare the two, which puts it up

• 33:50Anthony Pompliano?

  You think ETH is going to get 30%?

• 33:53Speaker 02

  Yeah. So this puts us at the high end of what people have said. I've heard 10.

• 33:55Anthony Pompliano?

  That sounds fucking insane.

• 33:56Speaker 02

  I've heard 10. Look, here's the thing. We, it's a naive assumption. It's purely market cap weighted, right? There are plenty of reasons why it should be less. We get this.

• 34:04Anthony Pompliano?

  Yeah.

• 34:05Speaker 02

  One, I'll list some of them and we list them. We just choose not, I can't really quantify them.

• 34:09Anthony Pompliano?

  Yeah, yeah, yeah.

• 34:09Speaker 02

  So we choose not to just like arbitrarily be like, and start with 30, but like cut it in half. Like it could be half for sure. Um, no staking means that the, anyone in these ETFs is effectively getting like a 370 or 400 bit additional fee. Um, no marketing, right? I mean, There's GBDC ads all over the world in every airport. I haven't seen a single ETH ad, right? Because nobody thought this was gonna happen. Not a four-month drumbeat of like bullish telling the world that this was gonna happen, right? Different time in the market too. I mean, Bitcoin ETFs came online like right when we were like, we're back, like felt aggressive, uplifting, right? Now we're kind of like in chop, chop sideways for months, right?

• 34:51Speaker 02

  So plenty of reasons why it should also more, in my mind, more complicated narrative.

• 34:56Anthony Pompliano?

  Yeah, I think the narrative is the biggest problem.

• 34:57Speaker 02

  Yeah, I don't know what it is.

• 34:58Anthony Pompliano?

  One of the greatest mistakes that the people in the Ethereum community made, in my personal opinion, is they tried to do the ultrasound money stuff. And instead, they should have just said Bitcoin is trying to be a sound money currency. We are trying to be something else, which is where it really started, right? And we're going to be the best general computer in the world. And here's all the use cases and all these things that you can do on top of it. We're laser focused on this use case. And I think that they would be much further ahead than they are now. But when you start to try to have three, four, or five different narratives, if I talk to people in the institutional world today, and I'm like, you know, what is Ethereum? They actually will tell me different things. With Bitcoin, I don't get that. Bitcoin, actually, like, the Bitcoin community is now trying to add new narratives with like

• 35:43Anthony Pompliano?

  L2s and like all this kind of stuff. But really, everyone agrees. It's like, it's store value.

• 35:47Speaker 02

  Yeah.

• 35:47Anthony Pompliano?

  And it's such a strong like meme or narrative that it works. Ethereum, they kind of like go back to the presentation deck, right? Like rework it, get the designers in there.

• 35:55Speaker 02

  Yeah, I've heard, I've heard internet bond, which is their ultrasound money idea, because it has a, you know, risk-free rate from the staking rewards. I've heard World Computer was the original, which I like. That made sense to me. I call it, by the way, a general purpose blockchain, meaning, you know, not Bitcoin, basically, something you can write arbitrary code on. That's, nobody knows what that means if I use that to sell it, right? If they say, and then you hear, recently, I've heard the App Store, Bitcoin's a little gold, but Ethereum's the App Store. I'm like, I don't know what that means either, right? I mean, so I agree. I mean, look, to be clear, like, the 30% is just we're saying this is the market cap weighted. The real juice in our report is that we actually, whatever it is, we think the

• 36:36Speaker 02

  Correlation between inflows and like net inflows and ether price appreciation will be higher because there's so ether will be more price sensitive to the ETFs because there's much more inner or locked supply on ETH than there is on Bitcoin. Sure, there's plenty of inactive supply, but that doesn't mean it's like stuck, right? Like on Bitcoin. On ether, a third of it's staking right now, right? So like that definitely doesn't get unstaked and put in the ETFs because they don't get the staking rewards, right? There's another giant chunk that's in DeFi, right? It's collateral sticky, right? So I think it's actually less liquid from a supply standpoint, probably on a net basis

• 37:16Speaker 02

  than Bitcoin. So there's it, whatever the flows are, could have a bigger impact, again, up or down theoretically. Like, I mean, there's a big chunk of ETH that's probably coming out, right? If GBDC is any indication. So as high as 30%. I mean, the other thing, too, there's plenty of reasons, but I also, we were so blown away. Like I said, our entire estimate for inflows was that advisors are the ones who need this product. You can, you and I can buy on Coinbase or

• 37:43Anthony Pompliano?

  No, it's all retail.

• 37:44Speaker 02

  River.com, right? They didn't even come yet. So there was all, most of this was probably 20% of it was hedge funds and 80% of it was retail on like Fidelity, Schwab, TD, whatever, E-Trade, right? So I just don't want to like mid curve this. I think it's

• 37:59Anthony Pompliano?

  I think that's boomer flows, by the way.

• 38:01Speaker 02

  Yeah, maybe.

• 38:01Anthony Pompliano?

  Right? It's a, oh, finally, my kid's been buying this on Coinbase, but now I don't have to go sign up for a Coinbase account.

• 38:08Speaker 02

  Or like mid, you know, people even our age, like millennials who've been working for a while, maybe they have it, you know, they, even if they, we already own like Bitcoin or crypto, whatever you like, like, you know, I already own Bitcoin, but like, I've been working for 15 years. Like I have a 401k that I could never put Bitcoin in and now I can. There's a lot of money out there that I think that relates to. So I'm just saying, like, I actually think also sentiment has turned so bearish on the net inflow predictions for the ether ETFs. For good reason. I listed some of them. I agree with all of those. I personally, I would, if I wanted to buy ETH, I would try to buy it and put it somewhere that's staking it. Like I would not do that. But I just think, I think people are, maybe they're just going to be surprised at the upside.

• 38:51Anthony Pompliano?

  What number for inflows in the first month or five months or whatever, you would say this product failed?

• 38:58Speaker 02

  Oh, man.

• 38:59Anthony Pompliano?

  It's not gonna be zero.

• 39:00Speaker 02

  No, I don't think so. Well, I don't know. If he's gonna probably unwind half of it.

• 39:05Anthony Pompliano?

  But let's just say that if a billion dollars net inflow.

• 39:09Speaker 02

  I think that's that's positive in one month or in five.

• 39:12Anthony Pompliano?

  In a month or for six months, whatever.

• 39:14Speaker 02

  Yeah, I mean, I think that would be.

• 39:16Anthony Pompliano?

  Compared to Bitcoin's 14 billion.

• 39:18Speaker 02

  Yeah, so they, I mean, yeah, I mean, God, that's tricky. I think I think less than market cap weighted is reasonable. So like, you know, less than a third of 14, you know, so four or five. I think like less than five can be seen as a disappointment because it's underperforming on a weighted basis. I don't think that's really fair because as we said, like these ETFs, think about like Bitcoin is a store of value. So storing it in an ETF, it's not as crazy a thing to do as taking this thing that powers all these apps, the App Store, and then just like not using it. It's like buying AWS credits and putting them in a vault and not using them on AWS. Like that's stupid. So it's it's a net worse product than the Bitcoin ETFs compared to the underlying. So it should be lower.

• 40:01Speaker 02

  I don't know. I'll pick a number, 2 billion, less than two in a few months. I think is is not a success.

• 40:07Anthony Pompliano?

  Yeah, that's kind of where.

• 40:08Speaker 02

  The bar is pretty low for success, though, to this point. I think nobody, it's now, now you're looking at effectively unsophisticated crypto investors who want ETH exposure. If you're sophisticated, you would stake, you would try to stake, right? And you can do that at like retail broke, retail exchanges. It's not like hard to stake ETH. So you're really looking at like capital that simply can't, right?

• 40:32Anthony Pompliano?

  What's going on with the Bitcoin L2s? I know that there's a lot of excitement. There's a lot of energy.

• 40:37Speaker 02

  Yeah.

• 40:37Anthony Pompliano?

  There's a lot of apps. It seems like every day somebody is pitching me Twitter DM, email, text, stopping me in the street, right? With I'm building this thing, whatever. Do any of them work?

• 40:50Speaker 02

  I don't think any of them have really launched yet, these new ones. You have some code from some of them. There are some that I would know the teams at that are that are good.

• 41:00Speaker 02

  You know, I think the real thing that's strange is there's two big questions. One, who needs these? What's the market for this? Right? Do we think that Bitcoin store value people are like gonna jump it? You know, they didn't do the token trading or lend and borrow in the Ethereum world just because it was Ethereum related. But the second, it's like Bitcoin adjacent or affiliated, they're gonna go in. I don't think so at scale. So I think you're mostly competing with the other. It lets part of a new part of the Bitcoin ecosystem compete with Ethereum and Solana. And that is interesting to me. So long as it doesn't, you know, screw up what makes the core of Bitcoin's value prop. And I don't think it will, but that's something that's reasonable to wonder if it will and be vigilant.

• 41:44Speaker 02

  The other question is, how are the rollups gonna pay for the Bitcoin block space? It's expensive to post to Bitcoin, right? We're talking about using Bitcoin as a DA layer, a data availability layer. It's the most expensive block space often. Sometimes ETH is slightly more expensive for sure. They, plenty of times it has been, it hasn't been recently, but they've altered the blockchain on Ether, particularly with proto Dang starting, to make sure that it's not too expensive with all of the L2 posting going on there. We Bitcoiners have not done that, right? So, you know, we're doing some research on this. But if you think that one or two, they each have to post maybe 200 to 400 kilobytes per block. There's about 4,000 kilobytes total available per block.

• 42:27Speaker 02

  Now you got, say, three post 400. Now that's 1.2 megabytes taken up in every single block. That's only like two or three of them. That's gonna cause fees to be expensive on Bitcoin L1 for everyone, but also for them. It's the sequencers in a rollup, collect the fees from their users, use that to pay for posting their data to Bitcoin or to the DA layer. How much usage are they gonna need to generate the revenue to pay to post? How many of them can generate enough revenue to post? I think it's two or three, not 65. We think there's 65 trying to launch.

• 43:04Anthony Pompliano?

  So it's an interesting question of like, at what point is Bitcoin successful? Right now, I would say that it's got product market fit as a store value. There's a lot of people who really wanted to be a medium of exchange. Questionable whether it has actually achieved product market fit there and worked. I would argue probably not actually, which may surprise people, but it's trying. And there's at least a light at the end of the tunnel. You're like, okay, a couple of things gotta go right. And like, there's a world. Unit of account obviously would be another big one. And then this like settlement layer for all these L2s, et cetera.

• 43:40Speaker 02

  Yeah.

• 43:40Anthony Pompliano?

  If Bitcoin only becomes a global store of value and it occupies one to 5% of people's portfolio globally, is Bitcoin successful? Or do you need these other use cases for it to kind of achieve, you know, a degree of success where like the Bitcoin community would be like, you know, we did it. We did it, Joe.

• 43:58Speaker 02

  That is a tough question. I, I think it doesn't need them. I think purely a digital gold asset would be a real achievement because you're still able then to take your wealth out of a perpetually depreciating, inflating fiat system and store it in a digital scarce commodity, right? That is global, can be sent, stored, whatever, and has those properties. That's if it doesn't become money in the medium of exchange sense. If it doesn't become, if we don't achieve what some people call hyper Bitcoinization, I think the idea is it's hyperinflation, except it's the Bitcoinification process. I don't think it needs that to be successful.

• 44:40Anthony Pompliano?

  Do we want that to happen? Right? I mean, like, like there's this world where people used to ask me like, what happens if the power goes out?

• 44:47Speaker 02

  Yeah.

• 44:47Anthony Pompliano?

  Right? I'm like, dude, you're not going to want Bitcoin. You're going to want a gun.

• 44:51Speaker 02

  Yeah, you're not going to want dollars either.

• 44:53Anthony Pompliano?

  You want a gun to protect yourself and your family.

• 44:55Speaker 02

  Yeah.

• 44:56Anthony Pompliano?

  If it is like full on anarchy, there's no power in the United States.

• 44:59Speaker 02

  Yeah.

• 45:00Anthony Pompliano?

  Like, I hope you know how to make food out in the woods.

• 45:02Speaker 02

  It's always, it's always some, somebody that like their whole bank, their whole like financial life is operated through a fintech neo bank that says that. You're like, you're not going to have any money either, bro.

• 45:11Anthony Pompliano?

  Yeah. So I think that's like one, but like, on the other hand, it is this weird world of like, hyperinflation is not fun.

• 45:20Speaker 02

  No.

• 45:20Anthony Pompliano?

  I've talked to people who've lived through it. They're like, I know one guy who literally said, I went to work one day and I calculated, I was making 30 cents a month.

• 45:33Anthony Pompliano?

  I stopped going to work.

• 45:34Speaker 02

  Yeah.

• 45:34Anthony Pompliano?

  Right? And he's like, and all of my colleagues thought that basically I was like not fulfilling my duty of like going to work every day. And he was like, do you understand they're not paying you?

• 45:44Speaker 02

  Yeah.

• 45:44Anthony Pompliano?

  Right? Like, we think we're getting paid. We're not getting paid anymore. Why are you going to work and not getting paid? And so this like hyperinflation narrative, which like, it sounds cool that Bitcoin's price, you know, hyperinflates. But it only happens in a world that like, again, maybe I'm completely oblivious to some scenario, but it kind of sounds like there's just carnage everywhere. And that's not a world that we want.

• 46:09Speaker 02

  Yeah, we don't want it to hyper Bitcoinize, right? Or hyper, we want it to be slow and steady adoption. I do think we should, the world, I do think the world would be a better place if governments had more checks on their monetary policy and, you know, being tied.

• 46:24Anthony Pompliano?

  It's just grind up.

• 46:25Speaker 02

  Yeah, that's what we hope for.

• 46:27Anthony Pompliano?

  Yeah.

• 46:27Speaker 02

  Bitcoin. Yeah, you don't want to wake up tomorrow and have Bitcoin gone from 61K to $1 million per coin. That is a scary world. That's a very scary world. We'd like to, slow and steady wins the race. I think that will ultimately happen. We don't want to see those big, that means like collapse of governments and stuff that would lead to some jump like that. But I think there is a world where governments and in the case of our, you know, our Federal Reserve is not part of the government, but the Federal Reserve, our central bank, is constrained by physical reality to some degree when they print money. I don't think that necessarily everyone's going to be spending Bitcoin. But I do see a world where a scarce

• 47:09Speaker 02

  digital asset, Bitcoin, could be the underlying reserve or a portion of it, somewhat akin to what Helfenney suggested with his Bitcoin Banks post, which was more of a free banking idea that banks would issue their own paper, but it would be backed to some degree or not by Bitcoin. And that would help determine the face value of that paper. I think the era of just unchecked fiat currencies, like it just doesn't, I think they are pretty much guaranteed to fail forever. So like, it's just, look, we can go through this for another, you know, 500 or 1,000 years. For all we know, we will. I hope we don't. I hope Bitcoin is something that gets us out of that. You know, wouldn't the French have loved to own Bitcoin? Wouldn't they have loved to own the British pound? Wouldn't the British have loved to own the dollar? If they knew, right?

• 47:53Speaker 02

  I'm pretty sure every fiat currency in history has been dethroned from the world reserve status and every

• 48:02Speaker 02

  fiat currency has basically inflated to to, you know, effectively zero compared to where it started. So like, there's gotta be some break in that chain. And I think Bitcoin could be that, but it doesn't mean that like, we don't want to get it too quickly. And I think part of this would be a national Bitcoin strategy, like just hold some, hold some. The US government has been selling Bitcoin for like 15 years, right? Or 10 years, we should say, right? Tim Draper famously bought all that, some of the silver Bitcoin.

• 48:30Anthony Pompliano?

  30,000 or something.

• 48:31Speaker 02

  I think I just thought one of our analysts said that they're moving coins on on chain right now, the US government, right? So, you know, I don't, I'm not, I'm gonna do them the favor of not calculating how much money they would have if they just kept that Bitcoin. But I think that's part of the way you start to do it in a more like orderly fashion. To me, every world reserve currency is destined to fail. You'd have to believe in the end of history to believe that that's not going to be true. So you may as well, like, shouldn't you hedge?

• 48:59Anthony Pompliano?

  Yeah, no brainer.

• 49:00Speaker 02

  Yeah, I hope we get there.

• 49:02Anthony Pompliano?

  What, um, what are you guys doing at Galaxy? Galaxy is this like monolithic, you know, Death Star down in, uh,

• 49:11Speaker 02

  you know, our, well, I'm not gonna say what it is, but our wifi password is, or for guests, is, is a Star Wars reference. And it's called Galaxy because Novogratz love Star Wars. There's plenty of Star Wars art all over there. So yeah, I don't think of us as the Death Star. Like hopefully we're on the good side. Well, I guess in that one, the empire is bad and the terrorists are good in Star Wars, right? Whichever side we're on, I hope it's the winning one.

• 49:34Anthony Pompliano?

  So what are you guys doing?

• 49:35Speaker 02

  Well, I mean, we, we are just here, like, still, right? I mean, I, when I started, like, I, I thought of like, DCG and Galaxy is the big competitors to each other, like, that they had, both had trading and derivatives and lending and asset management and mining in some way and venture. Now, I think that I think we stand clearly above them now, given what's happened at Genesis and and the rest of DCG's sort of world. But I mean, we're, I think we're the biggest derivatives shop now. We're the we're a CFTC swap dealer, which you only get to, you're required to do when you hit a certain amount of volume. I don't know if there are any others. So that's a volume based. So I think we're the biggest. We didn't blow up. We just announced, I think,

• 50:18Speaker 02

  some interesting new partnerships. We, yeah, I don't know. We're just out here cruising, dude. It feels like

• 50:24Anthony Pompliano?

  One of the partnerships.

• 50:25Speaker 02

  So we just announced we're partnering with State Street to launch managed ETFs that include exposure to Bitcoin underneath. So it would be equities, right? But you have these ETFs now. So also those. So that's partners with Invesco, partners with State Street, like, you know, working with basically some of the biggest asset managers in the world. It's like, we're, it feels to me, it was a fidelity for 12 years before I came to Galaxy, like, and I love fidelity, I still do. And I use fidelity, by the way, for all of my tradfi stuff. But they didn't feel like the center. When I'm standing on the floor in Galaxy with my research team and the trading teams there, there are many centers, thankfully,

• 51:09Speaker 02

  in crypto. It's a decentralized global, you know, market in addition to movement. But it feels like one of the, one of the true centers of what's going on. And so we, I don't know. Yeah, we're here and we're cooking, dude.

• 51:21Anthony Pompliano?

  What's it like working with Mike Novogratz?

• 51:22Speaker 02

  It's great. I mean, Mike is a brilliant trader. I think Stan Druckenmiller, in a Bloomberg piece about Mike a year ago, said, look, Mike's had his ups and downs, but, you know, this is a volatile market and he's still here. You can't be a trader for 20 years and survive without being good. But he's also, he is downtown Bitcoin Mike. That's how I think of him. Like, he is the Bitcoin guy in Lower Manhattan, like, has been for a while. And dude, he's a funny guy. He's got great sense of fashion that you can both cheer on and, you know, ogle.

• 51:58Anthony Pompliano?

  Ridicule.

• 51:59Speaker 02

  And ridicule. Yeah, he's fun, man. It's a fun, it's a fun place, you know?

• 52:03Anthony Pompliano?

  What is the biggest thing that people don't know about Galaxy that if they understood, they would get a sense of the culture, the team?

• 52:11Speaker 02

  Um, it's a young company. It's, I'm probably in like the top like decile of people there age wise. And I'm, you know, thirty eight. So, um, and everyone there from the people who work on, you know, crypto VC or like trading cryptos to the people in our back and middle office, right? HR and, and marketing and finance, like they all love crypto. Like this is a company of people that came from traditional businesses, traditional finance to work on crypto. This isn't like, this is a, a real, um, it's a real thing for, for us, right?

• 52:50Speaker 02

  Like we, same, same with me. Like, you know, I, I didn't, I can't go back to the, I did legal and compliance before I was into Bitcoin. I'm not going back to that, right? Like we're all in. So, um, and so are our employees.

• 53:06Anthony Pompliano?

  Looking forward, um, I think people believe we're in a bull market. Seems to be that way.

• 53:13Anthony Pompliano?

  What are the big milestones you think we'll have hit before the end of this bull market?

• 53:17Speaker 02

  Oh, yeah. Um, I'm a little bleak for the next couple of months. It's summer, volumes low. There's not a lot on the calendar, but I think the election's a major catalyst, one way or the other, potentially. I think before this cycle's over, I want to see Bitcoin in like at least the $200,000 range, just straight up like that. It doesn't feel, you know, I think it's reasonable to say-

• 53:37Anthony Pompliano?

  You think it's possible?

• 53:38Speaker 02

  Yeah, I do. I think it is possible.

• 53:40Anthony Pompliano?

  I don't think we're going to get there.

• 53:41Speaker 02

  Well-

• 53:42Anthony Pompliano?

  Because the volatility gets so-

• 53:43Speaker 02

  It's possible.

• 53:45Anthony Pompliano?

  It's possible. Yeah, it's definitely possible.

• 53:46Speaker 02

  We may not. I mean, I, I fear that we won't. I fear that like the diminishing returns of these cycles. But I also hope that we can stop talking about cycles one day. Shouldn't, you know, I've seen this chart. I can't even figure out how people make this chart. I was talking about the global liquidity cycle.

• 54:02Anthony Pompliano?

  The four-year one?

• 54:03Speaker 02

  Yeah.

• 54:04Anthony Pompliano?

  Lines up with the halving that also lines up with every other four years.

• 54:06Speaker 02

  Everything. Yeah. Turns out it's like the Fibonacci number. I guess four years, every four years, the elections and- I would like Bitcoin to become more widely held and stable. So we don't have to like go through these ridiculous like situations. There's no reason that it should like, I mean, it's actually insane that it went from 69 to 16, five to 69. Like it should just like that. You should just hold right through that and never even know. You wouldn't even know. Didn't know FTX collapsed. Didn't know, you know, BlockFi collapsed. Didn't know that Luna collapsed. You wouldn't even know. You shouldn't have to know. Like Bitcoin is not really related to the volatility that we've been seeing. And it should become more widely held and more stable. So like, I'm not sure if cycle,

• 54:46Speaker 02

  I now will cycles exist? I mean, I'm not gonna bet. I'm not gonna say this is the last cycle. I don't know. But I would like to see Bitcoin higher. I would like to see, I would like to see some equities, some publicly traded equities get on the blockchain, you know, like legally. I think that's like, I mean, I have been hearing about tokenization for literally 10 years. We were looking at it once. I think when I first talked to you, we were both looking at something. There was all those companies and some of them have done well. There's secure ties and Republic and that are still here. But it was, remember there was like, there was like dozens of these platforms for doing this. And we were joking, there was more of these token issuance platforms than there were token issuances. We're still kind of there, like RWA quote unquote. There's

• 55:29Speaker 02

  a decent amount. It's a trend, no doubt. But that's mostly just like opportunistic tradFi yields trying to serve crypto money that wants tradFi yield on chain. It's not like, no one in like, in like, public boardrooms or in on Wall Street. It's like, oh, man, we need an AMM for this. They're all well served by the current financial system, right? I'd like to see somebody come up with like a, you know, a true 10x experience. It's better because I believe public blockchains are better ledgers for ownership of assets than anything we've ever seen. So like, why should it be like, like, where is my Apple stock? Where is it? I don't know. Is that fidelity? No, it's not. It's it's not there. It's fidelity has a claim on it apparent in my name. I mean,

• 56:12Speaker 02

  and there's there's legal structures like protecting me here, but and regulatory rules about how that has to be stored.

• 56:19Anthony Pompliano?

  Yeah, we don't want people to hold the stock certificate on their phone.

• 56:22Speaker 02

  Not necessarily.

• 56:23Anthony Pompliano?

  Like a bearer asset.

• 56:24Speaker 02

  But I'd like us to be able to know directly, like think about things like short locate or blue sheet reporting. There's all this stuff you have to do. That's literally just like send a CSV to FINRA or like, or like, how do we know they did the short locate? Often they don't. They're required by rule, but like, can't prove it. Like you could, they should be using in their infrastructure, this stuff. I'd like to see that that happen. I don't know. I'm making up a bunch of things now, but there's a couple of good ones.

• 56:48Anthony Pompliano?

  I think it's a great list. Where where can we send for people to find you on Twitter? And then also, where can we send them to listen to the podcast, which?

• 56:56Speaker 02

  Oh, yeah. Galaxy Brands.

• 56:57Anthony Pompliano?

  With you start with a freestyle.

• 57:00Speaker 02

  Yeah. Galaxy Brands, great podcast, galaxybrains.io or just Google Galaxy Brains. I'm intangible coins on Twitter and you can read all our stuff that's public galaxy.com/research.

• 57:10Anthony Pompliano?

  You guys do a fantastic job. So I appreciate you putting it all out there. I like to take your chart sometime and put them in the letter that I write. And then I give you a little hyperlink and I say, look how smart they are.

• 57:19Speaker 02

  There you go. I appreciate that.

• 57:21Anthony Pompliano?

  All right. We'll do it again in the future.

• 57:22Speaker 02

  All right. Thank you, my friend.