#563: Kevin O’Leary on Investing in Bitcoin and Crypto

Kevin O’Leary is a Canadian businessman, author, politician, and television personality. He is a Shark on ABC’s hit show Shark Tank and has had numerous previous business successes, including when he sold The Learning Company to Mattel for $4.2 billion in 1999. In this conversation, we discuss bitcoin, gold, risk management, institutional investors, DeFi, yield farming, regulatory environment, ESG mining, energy consumption, and Kevin’s portfolio. ======================= Choice is a new self-directed IRA product that I'm really excited about. If you are listening to this, you are likely part of the 7.1 million bitcoin owners who have retirement accounts with dollars in them, but not bitcoin. I was in that situation too. Now you can actually buy real Bitcoin in your retirement account. I'm talking about owning your private keys and using tax-advantaged dollars to do it too. Absolute game changer. https://www.retirewithchoice.com/pomp ======================= Gemini is a regulated cryptocurrency exchange, wallet, and custodian that makes it simple and secure to buy bitcoin, ether, and other cryptocurrencies: https://www.gemini.com/ =======================

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

• 0:00Anthony Pompliano?

  What's up everyone, this is Anthony Pompliano. Most of you know me as Pomp. You're listening to the Pomp Podcast, simply the best podcast out there. Now let's kick this thing off. Kevin O'Leary is a Canadian businessman, author, politician, and television personality. He's a shark on ABC's hit show Shark Tank. He's had numerous previous business successes, including when he sold The Learning Company to Mattel for $4.2 billion in 1999. In this conversation, we discuss Bitcoin, gold, risk management, institutional investors, DeFi, yield farming, regulatory environment, ESG mining, energy consumption, and Kevin's personal portfolio. I really enjoyed this conversation, and I hope you do as well. Before

• 0:43Anthony Pompliano?

  we get into this episode, though, I want to quickly talk about our sponsors. First up is BlockFi. BlockFi provides financial products for crypto investors. Those products include high-yield interest accounts, US dollar loans against your crypto collateral, and a no-fee cryptocurrency trading platform. They're also coming out with a new Bitcoin Rewards credit card. It's a normal credit card that when you swipe, you get Bitcoin back rather than cash back or airline miles. To start earning today, visit blockfi.com/pomp. Again, blockfi.com/pomp. Next up is Choice. Choice is rebuilding the way you approach retirement, which starts with making it simple to include Bitcoin and other cryptocurrencies

• 1:25Anthony Pompliano?

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• 2:10Anthony Pompliano?

  /pomp retire with choice.com slash pomp. Last but not least are my friends over at Gemini. Gemini is a leading regulated cryptocurrency exchange, a wallet and a custodian that makes it simple and secure to buy Bitcoin, Ether and over 30 other cryptocurrencies. They offer industry-leading security, insurance and uptime. Gemini is the go-to trusted platform for beginner and sophisticated investors alike. You can open a free account in under three minutes at Gemini.com slash pomp and get $20 of Bitcoin after you trade $100 or more within 30 days. Again, open a free account in under three minutes at Gemini.com slash pomp and get $20 of Bitcoin after you trade your first $100 or more within 30 days.

• 2:55Anthony Pompliano?

  Go to Gemini.com slash pomp. All right, let's get into this episode with Kevin. I hope you enjoy this one.

• 3:00Speaker 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.

• 3:29Anthony Pompliano?

  All right, guys. Bang, bang. Kevin is here in person. How long has it been since you've done one of these in person?

• 3:35Speaker 02

  It's been a while. I mean, we're, you know, Miami's kind of fully open here, so here we are.

• 3:40Anthony Pompliano?

  All right. Where do you live? Are you living in Miami now?

• 3:42Speaker 02

  I am. I live right on the beach, right on Collins Avenue. I love it. I love the bohemian lifestyle. I walked everywhere. I eat dinner every night. I just love the place.

• 3:51Anthony Pompliano?

  I've seen you multiple times riding your bicycle. We've gone to dinner. You've ridden the Mr. Wonderful bike there.

• 3:57Speaker 02

  Yeah.

• 3:58Anthony Pompliano?

  Did you recover it? Somebody stole it?

• 3:59Speaker 02

  So it got stolen in a big, big operation. They stole over 100 bikes that night in Vespas.

• 4:06Anthony Pompliano?

  Oh, so this was not a targeted crime?

• 4:09Speaker 02

  Well, I found out later and I offered a $25,000 reward, not for the bike, you know? I wanted to catch the guy that did it. So they're an organized crime organization and they put it in a truck and they put the truck on a barge in the river and they took maybe 250 bikes that night off the streets of Miami.

• 4:25Anthony Pompliano?

  And what do they do with them?

• 4:26Speaker 02

  They apparently sell them, they take them offshore. They, they put it on a ship and just, so my Mr. Wonderful is in some South American country right now. And Viva Lo, the bike company that made it for me, I saw it on social media and said, "Let's do another one even crazier." So I was there last week designing the craziest Miami bike you've ever seen. It's pink, it's red, it's black.

• 4:47Anthony Pompliano?

  You don't have it, though.

• 4:47Speaker 02

  It's going to, when you see it, I'm going to be Mr. Wonderful à la Miami.

• 4:54Anthony Pompliano?

  All right. I feel like you've done a great job. Shark Tank, all the social media, CNBC, etc. You built this massive audience.

• 5:03Speaker 02

  Yeah.

• 5:04Anthony Pompliano?

  How do you think about that stuff versus like the investing activity? Do you still spend a lot of time investing? Or is it more so now, you've got the investments you've got, you've made those investments, and now it's more of the media focus and kind of the content?

• 5:16Speaker 02

  I think a new model is emerging, and you're actually part of this new model. And let me explain the way I see it over the last 24 months. So let's take a company that is trading, MindMed. When I got approached with that company here in Miami, at the Soho Club, second floor, it was a bunch of crypto guys three years ago. One guy there named JR Rand said, "Look, I'm a kryptonian. However, I also have a great interest in psychedelics as medicine." And I said, "You're crazy. Those are illegal drugs. LSD is illegal, Schedule I narcotics, same as cannabis, psilocybin, all of this stuff." He said, "No, no, I'm going to go to the FDA, pharma company, and do clinical trials. There's no recreational use of this." And, you know, I want 3 million bucks. And I said, "You know, it's too crazy,

• 5:59Speaker 02

  but I'm gonna..." My guy Alex, who does, runs Old Air Ventures, he's got a team. We'll do due diligence on it. It's intriguing enough. That was three years ago. Alex worked on it for about two months, and he really went to town on it and did a lot of research with his guys. And the way my deal with Alex works, to give you an idea of how this works, I probably told you this.

• 6:19Anthony Pompliano?

  I already know, but go ahead.

• 6:20Speaker 02

  Okay, so when we do an investment, you know, I'm the bank. I lend him 15%, so his you-know-whats are on the line. He borrows money from me and invests beside me. He gets his own stock, but he owes me the dough. 15%, so that I know our interests are aligned. This is the first time in history on MindMed where he came back to me and said, "I'm taking your 15% and I'm tripling it with my own dough." And I went, "What? Why?" And he laid out his case. We ended up investing. That went from a 20 million valuation that we bought in at to now 1.7 billion. So it's my biggest winner in years. But those are the kind of investments. And how did that story happen?

• 7:01Speaker 02

  This is where social media intersected with the story of MindMed. It got into the Rolling Stone. It was in, you know, all the news magazines. It was in the popular press. It was all over social media because I was talking about it along with all the other advocates. And the story built into a giant company that has over 300,000 shareholders. So my new model, Pom, is this. You want me to get involved in your business, all right? I want a proprietary position. I don't care what your last round was at. I want to be a founder. So you're going to give up the stock, but then I'm going to turn on my machine. And if you have a story of merit, I will explain it to other shareholders and hopefully we'll build this business together using all the tools the new world has. Shows like this,

• 7:42Speaker 02

  social media, Yahoo Finance, Benzinga, CNBC, CNN, ABC. That's how companies get to be known. Not just for shareholders. Tell their product story. Why should you care about microdosing LSD? Because it works, or at least it potentially can. And it's going through clinical trials. And it can solve for, you know, addiction, opioid addiction, anxiety, alcoholism, all these things.

• 8:08Anthony Pompliano?

  Is there a specific type of company that this works for, more so than other types of companies? Like, does it have to have some inherent story behind it and some interest? And that's really what you're trying to underwrite just as much as the actual investment itself?

• 8:19Speaker 02

  It's a great question, but the truth is, every company has to be able to tell their story in the best light. I don't care if it's really sophisticated technology. I mean, it's much better when it's a consumer good or service. But right now, the reason crypto is of such interest globally is the story was told by guys like you for years. And it slowly emerged as a story of, you know, store of wealth, if you want to call it that, or currency, if you want to call it that, whatever it was. It's the fact that investing has become democratized by the Robin Hoods, by the Reddit crowd. Buy all the news channels, buy the cable channels. Business is part of everyday news every day. And so if you can get a following that is interested in your investment philosophy. I invest sustainably, ethically. That's what I do. That's where I came from. That's all I do.

• 9:02Speaker 02

  And people that are interested in that follow, they don't have to invest with me. They don't have to, they can bet against me. But at least they hear these companies' stories. So my argument is that the value I have to a company now is the ability to take its story and blow it up. And then investors will make their own individual decisions. But that's very hard to get to that place, and it's taken me a long time, as it has taken you. And I want to use that power wisely.

• 9:30Anthony Pompliano?

  When you think about public markets versus private markets, how much of this is better suited for public markets? Where there's liquid stock price, there are shareholders, people can make decisions every day to buy, sell, hold, whatever. Versus the private market where there's not so much access for some investors, right? There's not that liquid kind of daily stock price. And maybe the impact is more around like helping the business build in terms of getting customers or driving, you know, consumers to check it out or whatever. Is it either or, or can this work across both public and private markets?

• 10:01Speaker 02

  It's both, and the most powerful platform to tie these together is equity. You know, crowdfunding now, where you can tell a consumer of a product or service that you can become a shareholder at the same time. I'm very intrigued by that. I have a relationship with StartEngine now, one of the largest crowdfunding platforms in the world. So when a company has a hundred thousand customers that have tried its product, it's still private. We can go to the customers and say, look, you love our product, you love our service, now we're going public, you can buy our shares. You can buy them online. You can put $200 or $2,000 or $20,000 into the company that you've been supporting now for five years. And that's, this is again, another digital, you know, crossroads of equity and funding and debt to the consumer.

• 10:44Speaker 02

  Which doesn't have the same issue around timing like a private equity firm does, or a venture capital firm. Where after seven years, they turn into a pumpkin, and they want a pref share, and they want this, and they want all these special rights. I'm not into that anymore. I'd rather do, you want to raise 50 million, let's do it in equity crowdfunding, where everybody owns the same share, all the interests are aligned, there's no time bomb. People can buy and sell their stock anytime they want. And so for me, it again goes to the platform. What I try and do with my companies that are private is get them customer acquisition costs, get theirs down. And I use my platforms to talk about their products and services. I try to get people to try the products. But you know, at the end of the day, I feel a responsibility.

• 11:26Speaker 02

  I don't endorse products I don't use personally. I think that's bullshit. And I think people can smell bullshit a mile away, so I never do that. You know, I do things that I use, I like, or I invest in, and I tell my story. And you can either agree or disagree. But at least I get that mega bullhorn to get out there and talk about it.

• 11:44Anthony Pompliano?

  Yeah. When you think about your career, building up the media side, there's a lot of people who listen, who they're very interested in this. And more so founders are interested in this as well. So one of the big secrets in venture capital right now is almost on a daily basis. I have a founder that comes to me and says, how do I build my Twitter following? How do I build Facebook? How do I build Instagram? You know, should I create an email newsletter? Like, what should I do so that I have the same power? Maybe it's at a smaller scale, but I can talk directly to an audience that's in my vertical or in my industry, and I think that there's a lot of kind of value that can accrue there. What are the things that you did that you're like, these were the big inflection points? Right? Obviously Shark Tank probably was a big one. But are there other things that you're like, this is how I built this massive platform

• 12:26Anthony Pompliano?

  and kind of made a name for yourself, where people were willing to at least listen and hear you out?

• 12:31Speaker 02

  What I found worked as these, you know, it's a, it's a complex question, because I get the same question all the time. How can I get a million followers? Well, it's not that easy. I mean, there's people that try and sell you services to do it. There's all kinds of consultants that try and do it for you. They want you to pay them 15 grand a month. All that stuff happens. But the truth is that social media is, is the great democratizer of people that are good storytellers. Because if you have interesting information that may assist somebody, or they may find interesting... They will tell another about it. They will send that link to somebody else. And that actually, that organic growth occurred pretty quickly for me.

• 13:14Speaker 02

  It started, you know, fifty thousand, a hundred thousand, two hundred thousand, then a million, and then another million. And I never changed. I mean, I like to have fun on social media. You know, I'll play guitar with my pajamas on on Saturday. I'm happy to do that. People who play guitar like to do that, you know, just share it. I talk about stocks, I talk about bonds, I get very, very serious about issues around politics. I just lay it out there, and it's all true, and I don't bullshit, and I think that's what worked for me. But I'm very happy to be in different verticals. You know, I can talk about watches with anybody in the world now. I have a massive watch collection. I used to be a shareholder in Fender. I can play guitar. I have Chef Wonderful, is a multimillion dollar business now. My wine business is now the largest direct consumer in the country.

• 13:58Anthony Pompliano?

  Really?

• 13:59Speaker 02

  Yep, yep. We just did five point one million in twenty hours on QVC last week. That's an all time record. So these are different verticals that interest me, and there's different constituents that come into your universe around those interests. I got a huge following of people that like wine.

• 14:14Anthony Pompliano?

  Tell me more about the wine business. I don't know anything about this.

• 14:16Speaker 02

  Yeah, so, you know, here's something interesting that I learned. I grew up with a Swiss stepfather, who's really taught me in my teenage years how to, you know, the difference between Bordeaux and Burgundy and DRC, and the Italian wines and all the varietals. And I became interested. And over in Europe, you know, wine is just part of family. It's not about getting drunk over there. They just drink it, you know, maybe one glass or two glasses, it's not a big deal. So kids drink it watered down, whatever. And so I became pretty proficient at the different varietals. I always was interested in why, you know, I'm a collector of wine and an investor. I buy wine futures with a group in Boston. We invest millions of dollars in wine. And we try and guess which varietals, like this year's gonna be terrible because it snowed just last week in France. It actually snowed. It's unprecedented.

• 15:01Speaker 02

  And the point is, when you get knowledgeable about it, you get, it's kind of sucked into that lifestyle. So I started a wine business in California, where I blended it and I sold it. And I was losing money like everybody else, like a lot of money. Everybody goes into it romantically, and I'll joke, if you want to be a millionaire, start as a billionaire in the wine business, because you lose a ton of money. And then I met this woman through Shark Tank named Annette Alvarez. She was the wine buyer for Costco. The largest buyer of wine in the world is Costco. People don't understand that. All the global wines, they are the largest seller of wines as well. And she said, Kevin, I was trying to sell her a Shark Tank deal of single-serve wines.

• 15:46Speaker 02

  Nobody could ever reach her. She was impossible to get to. And I asked one of the guys in my office to go to the dark web and hack her cell number, which I had in 10 minutes. And I called it. And I left a message and I said, listen, I'm the guy on Shark Tank. If you're a Shark Tank fan, I don't know, you saw that deal last night. A single-serve wine deal Kevin and I went into and I'd love you to Costco to.

• 16:10Anthony Pompliano?

  The Coppola wine or whatever.

• 16:11Speaker 02

  It was. It was the, yeah, and there was another one called Zips as well. And so I left the message and I thought, well, maybe she'll call me back. 10 minutes later, I was up at our lake house, the phone rang. It said, this is Annette Alvarez. I got your message. You were rude to Barbara last night on Shark Tank. I went, what? What? She said, no, you were really rude to her. And I said, I gotta tell you something, Annette. The only reason Barbara gets to Shark Tank on time is I buy her new broom every year. And she didn't think that was a funny joke.

• 16:42Anthony Pompliano?

  So you're over two with Annette Alvarez.

• 16:43Speaker 02

  Yeah, I know. I thought she'd like that, but she didn't. And anyways, we got into a conversation. She said, I'm on my way to Hawaii for our annual holiday with my husband. I'll be at John Wayne Airport at 1 o'clock on Saturday. It was Thursday night. And if you want to fly here to meet me, you can bring your wife because I want to meet your wife too. I said, why? She said, I just do. And I want to see her real person. And I said, Linda, we're going to John Wayne. And we flew there. I got an hour of her time and she told me this. She said, look, you want to sell wine with me? I'm the largest buyer on earth. The only reason you get this hour with me is I'm a huge Shark Tank fan. I have some questions about the show. I'd like to meet you. It's great. But here's what you need to know about the wine business. 97% of wine sold in America is sold for under $14 a bottle.

• 17:28Speaker 02

  97%. People don't understand that. That's all of the wine, Pom. That's basically the stuff you buy for 60 bucks, you're in the 3%. In order for you to make money, you're gonna have to be able to ship me 150,000 cases a day. If I order a cab from you, I need 150,000 cases. That's just my stocking order. The next day, I meet another 100,000. You can't do that. You don't have the capabilities. You don't have the logistics. You can't even understand how much juice that is. If you want to pull that off, I'm gonna give you the name of a guy named Pat Roney. He owns 19 vineyards and he makes our Kirkland wine. He is our logistics guy. He can ship me 2 million cases. You form a wine company with him, you go 50/50 partnership, then I know you have the logistics skills then? Then I'll give you an order and it'll blow your socks off how much wine we can buy from you.

• 18:12Speaker 02

  I go to see Pat and Pat says,

• 18:16Speaker 02

  "I know you're coming and that called me. We're interested. Let's form a relationship." We fought for six months on the terms of it. It ended up being 50/50.

• 18:26Speaker 02

  It has been wildly successful. Because she was right. The minute we dropped our price point between 11 and 14, we started selling, you know, hundreds of thousands of cases. And last week, I broke a record, never been done before on QVC. We sold $5.125 million worth of wine in 21 hours. That means we have to ship a quarter of a million cases in two days. We can do it. But that's a business that's very profitable now. In fact, a SPAC took over that company. I'm now a shareholder in Vintage Wine Estates and it's gonna trade on the NASDAQ June 6th.

• 19:00Anthony Pompliano?

  Wow. And so you also do direct to consumer as well, or it's just all sold through?

• 19:05Speaker 02

  Absolutely. Launching a new site. It'll be announced next week, so I'm a little early on it here, called Shop Mr. Wonderful. And it's going to have not only all my wines, but all my Shark Tank products. So a massive play direct to consumer as a result of the pandemic. Organized by a great digital team, a lot of work going into this. It's like extending the voice, Pom, as we talked about at the beginning of the show. You know, what do I do with this voice? These are products I invested in, I use, wines I make, my wife blends the whites, I do the reds. This is our family stuff. Try it. It's a very, it's an honest pitch. If you don't like the wines, ship it back. I mean, you know, you can send it back if you want, but when it comes to wine, I've got your back. Nobody makes wine like I do.

• 19:44Anthony Pompliano?

  Yeah. Crypto. I think when we First met, uh, three years ago, maybe now.

• 19:49Speaker 02

  Yeah.

• 19:50Anthony Pompliano?

  Uh, CNBC set. I didn't know very much about you, other than, hello, this guy on Shark Tank.

• 19:54Speaker 02

  Yeah.

• 19:55Anthony Pompliano?

  Uh, I don't think you knew anything about me. And I told you that 50% of my net worth in Bitcoin.

• 19:59Speaker 02

  I thought you were fucking crazy.

• 20:01Anthony Pompliano?

  And, uh, well, that's a, a nice way of putting it because I think on the segment, what you said was, I forbid you. I forbid you.

• 20:09Speaker 02

  I remember we were on the set of Squawk Box.

• 20:12Anthony Pompliano?

  Yes.

• 20:12Speaker 02

  And I thought, who is this idiot?

• 20:13Anthony Pompliano?

  Yes.

• 20:14Speaker 02

  Why would he put so much into one thing?

• 20:15Anthony Pompliano?

  And, uh, and you didn't realize that, uh, I think I was playing a game with you and you were playing a game with me because, uh, right before the segment started, uh, they were at commercial and we were all talking or whatever. And, uh, I was just kind of jabbing you a little bit, trying to get you to, to be excited. And then you, you said to me right before, so you said, how much, you know, do you have in this? I said, 50%. The lights and cameras turn on and that was the first thing you fired across.

• 20:40Speaker 02

  Well, I mean, those, that was then, and, but in 2017, I had nibbled in, I'd start buying some Bitcoin and some, um, you know, Ethereum at that time and a couple of other, I think the US, uh, I can't remember when I bought my stable coins, but you know what happened to me? Cause I'm in a highly regulated industry with, with, you know, all my indexing and all these financial services companies that I'm invested in. So I'm really regulated by the regulators and I started talking about crypto and whoa, what a negative response back then. You remember? It was, it was.

• 21:14Anthony Pompliano?

  Especially 2018, when it had dropped from 20,000 Bitcoin price to $3,200.

• 21:18Speaker 02

  So I got my wings clipped pretty, pretty hard by lawyers in Washington saying, you gotta stop. I mean, you're, you're, you're a heavily regulated guy and you're out there on TV talking about Bitcoin. Forget it.

• 21:28Anthony Pompliano?

  What, and you talk about it as much as you want or not, but like, I think a lot of people think, uh, Elon tweets something or there's somebody who is really bullish, who all of a sudden is a little bit more bearish and, uh, they call the tap on the shoulder, right? The, the like, hey, knock it off type thing.

• 21:42Speaker 02

  Yeah.

• 21:42Anthony Pompliano?

  Is that like a? You know, goes through the back door conversations, and somebody just says, hey, you know, you should chill with that, or is that like something that is kind of more stated, right? In terms of-

• 21:54Speaker 02

  No, the way it works is, I have to be compliant as per the compliance officers that work in these companies. Every single word I say, including this podcast, is going to be reviewed by compliance. And these are organizations I have to be compliant with, because they have to be- they're telling the regulators that we are compliant, and they have to make sure, that's their job. And so I started getting calls from lots of them in different companies, saying, "You're way offside, and you've got to stop." And I did. And I, you know, what happened, though, it was only eight months ago, when the Swiss regulator, the French regulator, the German, New Zealand, Britain, Switzerland, and Canada, they started putting ETFs out.

• 22:38Speaker 02

  The regulators had gone 360 or 180, whatever you call it, right? And I said, "Well, wait a second. I'm an investor in those jurisdictions. I have investments in all those jurisdictions. I'm a global investor. I have investments in all those currencies. I am going to buy some Bitcoin as I can in those jurisdictions. We don't have it here yet the same way, but it's coming, I would assume." And obviously, the regulators have lifted their curtain, or made it easier to do that. And so I started growing my position to 3%. I'm a five in the operating company. So we have 5% in gold, for example. I said, "Let's go crypto to 3." And we started buying coins, and we started buying Ether, and we started, you know, investing in a few other things.

• 23:22Speaker 02

  And then I started getting calls, and I think I've talked to you about this. I service institutional clients and sovereign funds. And they saw me on CNBC talking about my 3% weighting, and the phone lit up. It went nuts. And what was it about? It was about ESG. It was about this issue around sustainability, and saying, "Where'd your coin come from?" "But they were mined in China." I said, "Well, who cares? It's all fungible coin. Bitcoin's a Bitcoin. It's awarded, it's a coin." They said, "Well, you're supporting coal-burning miners."

• 23:55Speaker 02

  You know, this issue I predicted would explode, and I think I've been right on that thing, but it hasn't changed my interest in going long Bitcoin for a bunch of reasons, because I've gotten a lot more sophisticated now. What interests me the most right now is DeFi. I think it's where the puck is going, and I'll tell you why. So now I've got a large amount of capital tied up, 3% weighting in the operating companies, a lot of capital, and it's not yielding anything, right? So why don't, so I said to my guys, let's get into some DeFi and take a portion of the assets and wrap it into the Ethereum chain, and let's start making some interest. Let's start looking at different ways that we can loan our assets out and start making four, five, six, seven, eight. You and I

• 24:38Speaker 02

  have talked about this. I have gotten way down that rabbit hole, and I'm way deep into that now.

• 24:44Anthony Pompliano?

  What's up, guys? Bang, bang. I hope you're enjoying this conversation. But before we go any further, I want to quickly tell you about today's sponsor, BlockFi. BlockFi's got four different financial products for crypto investors. You can deposit crypto and earn up to 8.6% APY in an interest-bearing account. You can deposit crypto and take out a US dollar loan against your crypto collateral. You can use their cryptocurrency exchange and have no trading fees, or you can get a new Bitcoin Rewards credit card. It's a normal credit card that when you swipe, you get Bitcoin back rather than cash back or airline miles. I'm an investor in the business and a very happy user. I think you will be too when you go to blockfi.com/pomp. Again, blockfi.com/pomp. Go check it out and let me know what you think. All right, let's get back into this conversation. I hope you enjoy it.

• 25:28Anthony Pompliano?

  So let's stop for a second, just so people understand where we are. So you've got 3% of operating company assets, right, in crypto. You've got 5% in gold. First question is, why still 5% gold, 3% crypto? I think a lot of people who've kind of gone down the rabbit hole of crypto either invert that, right, so it's 5% crypto, 3% gold, or like literally have gotten rid of the gold. So why still have more gold than crypto right now?

• 25:54Speaker 02

  You know, that, it's a great question, and we've had that discussion internally every, we do our meetings every Monday at 10 o'clock. We review the portfolio, changes, etc. I know there's Be a change there soon because it comes up every Monday now.

• 26:07Anthony Pompliano?

  Okay.

• 26:07Speaker 02

  Because we can't make any interest off gold and we now are starting to get yield and starting to make money. And the weird thing, as you well know, we've had tremendous volatility on Bitcoin this last 10 days. That actually enhances DeFi. It makes it better. I'm making way more on my contracts now. And so, you know, I said to the guys, look, um, and this is, you know, Brad, this is, I haven't even told anybody this story. It's just unique. It's on your podcast because it's so new.

• 26:35Anthony Pompliano?

  You only bring me the good stories.

• 26:36Speaker 02

  Well, you know, we talk about a lot of stuff. So I said to the guys on my crypto team, look, um, this DeFi stuff is really complicated. It is not easy. You know, we've got the Metamask format. We've got all of these other platforms, all the stuff we have to do, these contracts. This is crazy complicated, but there must be millions of people that have a little bit of coin that want to make some four or five, six percent on it. Why don't you go find me a company, a team that I can invest in, that will do a commercialized DeFi? And I mean, not, not corporate, so that somebody that has a wallet that's got maybe, you know, 20 grand or 10 or $5,000 in it, could easily do what I'm doing that takes a staff of four people.

• 27:21Anthony Pompliano?

  You're basically talking about more user friendly, better user experience, an easy way, hey, I elect, I want to do this. And rather than me actually have to go in and do it myself, I can use this service to accomplish this.

• 27:34Speaker 02

  Yeah. And so they came up with this team. Again, it's in a different jurisdiction because it's Canada, which is very open these days. A Vancouver team that one of my crypto guys introduced me to, Ben is the, uh, you know, and he's got a great, almost 20 people there doing this. That they're all ex bankers. They understand the whole format. They're, they're, they're deep, deep, deep into the algorithms and all the code they're writing. And they said, look, we're, we're looking to raise some money here. Um, uh, do you want to be an investor? And I said, yeah, I'll, I'll take this on. I'll, I'll, uh, but I want to buy a third of the company. I want to be a significant shareholder. And we negotiated for a while because you're going to be, you're going to do two things for me. I'm going to help your company, but I'm going to give you a ton of capital. And you're going to manage it according to the way I want to manage it.

• 28:18Speaker 02

  And you're going to produce things that I want because I know if I want them, others are going to want them like tax returns. I want to press a button, get a tax return. I don't, I want to be compliant, right? Nobody does that yet. I don't want to have to sit there with an accountant, figure out all my trades I want it automatically produced. He's working on that. His team is working on that. So we put, um, we put a significant round together for them, a $20 million round. Um, I'm the lead on that thing and uh, uh, I think it's going to be a great company. We haven't even announced it yet. It's, uh, it's called DeFi Ventures. Um, I'm going to rename it to WonderFi because it's, it's going to be my, my vehicle. And um, I think it's just the beginning, you know, some great things to come and uh,

• 28:58Anthony Pompliano?

  So when you go into DeFi, what exactly are you guys doing? You're taking Bitcoin that you own and Ether and earning interest.

• 29:05Speaker 02

  Here's what I want, Paul, okay? I'm, I'm a, I'm an investor, so there must be many other investors like me. I've made my decision to three to 5% allocation. Probably as you, as you've snuck out of me, I'm going to be moving it up because you're right, gold's not doing anything for me.

• 29:18Anthony Pompliano?

  Well, three plus five is eight, not five, so you could get rid of all the gold.

• 29:23Speaker 02

  It could get to 10.

• 29:24Anthony Pompliano?

  Okay, alright.

• 29:24Speaker 02

  But you know, we're bound by certain covenants, just how we manage the operating company.

• 29:28Anthony Pompliano?

  10 I feel like is on the upper bound of most conservative investors, right? So it still fits within the kind of bands, if you will. If you're a conservative investor, most of your focus is outside of crypto.

• 29:38Speaker 02

  Yeah.

• 29:39Anthony Pompliano?

  One to 10% is kind of the band.

• 29:41Speaker 02

  10's up there, Paul.

• 29:42Anthony Pompliano?

  5% is up there.

• 29:43Speaker 02

  For an institutional investor, 10 is up there.

• 29:45Anthony Pompliano?

  Yeah, of course.

• 29:45Speaker 02

  Right now, that number for the big guys is 3%. They're happy and they, they want Bitcoin. They haven't gotten past that yet. Bitcoin is the property, the digital asset they want, um, and they want it.

• 29:58Anthony Pompliano?

  It's a store of value.

• 29:59Speaker 02

  Store of value, and you've been right on that, can't deny that, okay? It's a, it's a volatile.

• 30:05Anthony Pompliano?

  We might have to roll the tape back there.

• 30:06Speaker 02

  You may have to erase that. But my, my whole point is the, the, it, it has inherent volatility, but imagine, so here's my thoughts about DeFi. Okay, I've got the vol. I know I'm going to be up, up and down 38% a year. That's what it's been historically, right? So we're, we're seeing that. We've had a crazy vol right here.

• 30:23Anthony Pompliano?

  We're literally recording this on a day that it's been down 40% in a month.

• 30:27Speaker 02

  Okay, so, so let's say, in my case, my DeFi company, of which I'm a large shareholder now, I say to the guys, "Look, let's put a bunch of crypto on our balance sheet, alright? I'm gonna own a third of that balance sheet, or whatever I own of the balance sheet. I want you to loan that out and get me between a 4.5% and an 8% yield. Now, of course, I have to mark-to-market the change in value, because it's going up and down, but I'm kind of agnostic, because I'm owning it as property. I don't really care, because it's an allocation. Let's say it's 5%. It's gonna stay at 5, I'll change it every quarter, adding or taking away from it, but I want you to loan it out there. So the whole operation, the DeFi operation, is to start doing these contracts for me on an AI basis,

• 31:12Speaker 02

  so it can go look to the market, see what the spreads are on all these different opportunities. I don't want to get too complicated with it.

• 31:17Anthony Pompliano?

  It's basically yield farming. What you guys are gonna do is yield farming.

• 31:19Speaker 02

  And then, others that are interested like I am in taking their asset, and imagine if I could, over these years, had a 5% yield on my gold? That would have been incredible. Well, I can on my crypto. So that's really what I'm doing in DeFi, and I think I've got the best team in North America. Everybody says that, but I'm backing this team, because I've done a lot of due diligence on them. And I think, you know, in the next few months, that will become part of our portfolio with a yield metric to it.

• 31:48Anthony Pompliano?

  Because what you're basically saying is, you're gonna keep the assets denominated in the asset, right? So, let's say, just for easy things, you have 100 ETH. You put that in, you want 8%. So now you're gonna end the year with 108 ETH.

• 32:03Speaker 02

  Staying in ETH.

• 32:03Anthony Pompliano?

  Regardless of, did the price go up or down?

• 32:06Speaker 02

  I might go back to fiat to just pay some expenses, but I'm gonna stay in ETH on that balance sheet. And you, as a shareholder, go with me in the share price as my assets grow.

• 32:15Anthony Pompliano?

  Do you think that, because this is a really important piece, that I think the traditional world hasn't woken up to yet? It sounds like you're now getting there, is, once you leave fiat into crypto, you don't go back?

• 32:27Speaker 02

  I don't want to go back.

• 32:28Anthony Pompliano?

  Okay.

• 32:29Speaker 02

  Why would I?

• 32:29Anthony Pompliano?

  Well, I don't know. You tell me. How do you think about it? Right? So you've got 100% of your assets. You said, I'm gonna take three. I'm gonna put it into crypto.

• 32:36Speaker 02

  Yeah.

• 32:37Anthony Pompliano?

  Maybe that goes up, maybe it doesn't, whatever. But let's just say it's three to 5%, whatever the allocation is. Once you put that into crypto, why are you not going back into?

• 32:43Speaker 02

  Well, the reason I would come back out, let's say, let's say our covenant is a max on 10, which at most institutions, that is max arena.

• 32:50Anthony Pompliano?

  Okay. All right. So 10 is the max allocation.

• 32:52Speaker 02

  Because, because if you're going, you know, you basically, if you have LPs, or you have other shareholders, or you have other constituents, you've told them you have a covenant of diversification, and it might be 10%, whatever it is. But it's not much higher than that. So when you get to 12% at the end of a quarter in your crypto, you're gonna trim back to fiat. You're gonna go back to 10%. Or maybe, you know, and then you just sit in the weeds waiting for correction, and you buy back up to 10%. I, you know, I've been buying, like.

• 33:19Anthony Pompliano?

  You bought the dip.

• 33:20Speaker 02

  Well, it's, it's, it's not really a dip. It's maintaining the 3% weighting, right?

• 33:24Anthony Pompliano?

  Yeah. No, but I'm saying the dip in the price.

• 33:26Speaker 02

  Yeah, I know, I know. But to me, it's okay. We're 2.4, and we said we're a 3. Buy up to 3. Because we've had a correction. You can't call that, that's a correction. We just had.

• 33:35Anthony Pompliano?

  Well, I mean, look, in 2017, there was what, 6 over 30%, I think, right? There was 2 40% drawdown. So it doesn't feel good, right?

• 33:42Speaker 02

  No, nobody likes it.

• 33:43Anthony Pompliano?

  When the asset draws down, but it's not atypical for the kind of historical bull runs.

• 33:48Speaker 02

  Right.

• 33:49Anthony Pompliano?

  Right? Which, again, if you tell in the traditional world, hey, there's gonna be 2 40% drawdowns, but you're gonna go up 20X in a year. They're like, I'm out. I'm out of this.

• 33:58Speaker 02

  But, but in this case, you end up with more coin after that correction. And then you're out loaning it out, and you're getting your, and with that volatility, you just got 200 basis points more yield. People don't understand vol is good for yield. It's not good for your stomach.

• 34:12Anthony Pompliano?

  Yep.

• 34:12Speaker 02

  But it actually helps you mine yield from your crypto. And so when you understand those smart contracts and how it's being loaned out, and I'm getting way more sophisticated. So I look at it now with my team saying, okay, you know, you could even put leverage on this if you want, which we don't. But I think that's a crazy chicken move, but you could really goose your yields.

• 34:32Anthony Pompliano?

  Why are you only targeting 4.5% to 8%? Some of these can pay 20% or 30%.

• 34:37Speaker 02

  What's your duration? What duration?

• 34:39Anthony Pompliano?

  I'm asking you, right? Is it just you're saying, hey, I want to be able to earn the four and a half to eight percent forever? And the 20 to 30% is only there for a couple of weeks or a couple of months. Like, how do you think about yield versus duration?

• 34:49Speaker 02

  So what we don't have is a long history of what that curve on duration looks like. You just don't have it. We're all pioneers in this. And because I'm a bond guy, I've been a bond guy for decades. And so what I look at is duration and quality. You don't, you can't work with that yet. We don't know. So I said, look, let's keep our contracts short. Let's understand the change in the deltas. Let's understand, you know, how inefficient the market is when there's a lot of volatility. Let's just gather our own data. Keep our powder dry. Let's only loan out 50% of our positions until we understand how it works. And I should also disclose, I'm working with some of the larger corporate DeFi guys. I've opened accounts to manage some of my company's balance sheets. I'm putting up to 5% of our fiat currency into a strategy like this on our balance sheets.

• 35:35Speaker 02

  I don't talk about that too much, but I'm letting you know. I'm saying, guys, we're in, let's have an operating company that's sitting with, you know, $30 million in cash. Let's put million and a half into this strategy. We'll open an account. You'll understand how it works. You're the treasury. Let me show you how it works, how I'm doing it. Let's disclose to, if they're private, we just have to disclose to our LPs what we're doing. I haven't anybody said to me, no, I don't want that. Everybody wants to learn. So instead of making nothing on our cash, which we're basically under inflation, we're losing money on our cash. You know, we're picking up, we're doing better than four and a half. That was a few weeks ago when coin was very stable. Now, like today, you can get seven, eight, nine, as you know. So it's not impossible. And so I think it's

• 36:17Anthony Pompliano?

  Why only put 5% of the company's assets? Why not do more if it's just yield? You're not taking the price risk necessarily in terms of, that's the goal.

• 36:24Speaker 02

  Because the compliance departments are all in that.

• 36:30Speaker 02

  Let's tiptoe in. You know the concern. It really is a 3% number right now. There are some at 5%. But here's the thing that everybody should understand, because I live in this world. The potential is huge. You've got less than 1% of global corporations even thinking about crypto right now. So as time passes and they see examples of what I'm doing and others are doing, and they start to tiptoe in, you're talking about billions of dollars that are sitting on balance sheets making nothing. And so it's going to become, that's good and bad news, because the more money goes into that, the less yield you're going to be making.

• 37:10Speaker 02

  There's going to be a lot of competition. And so, but right now, I'm tiptoeing through the tulips, you know, almost double-digit yields. I think it comes down, commence it with the volatility. So here's the thing you understand, I don't want to get too complicated. But let's say when you put a lot of Bitcoin on your balance sheet, you're going to have vol, you're going to have volatility. The criticism of Tesla, we've been watching, they showed on CNBC today, all the balance sheets that have, you know, crypto on it, they're all down. Because people think, oh, woe is me, they've got crypto, it's going to affect their balance sheet. It does, but at the same time, they're loaning it out. If they're smart, and they're bringing in yield that they never used to make on their cash. So over time, when people understand this, it'll offset it.

• 37:48Anthony Pompliano?

  I think people, when they hear this, are going to be very surprised to hear that you're buying the dip, you're getting into DeFi, you're earning yield, right? Those are various fairly sophisticated strategies compared to just buy Bitcoin, right? Or, hey, I want to buy a mining stock, for example. Because you're getting more and more in the weeds, right? And I feel over the last like two years, maybe, it went from, hey, I probably shouldn't talk that much about this, to, okay, maybe there's something interesting, to 3% now, like, hey, let's start going further and further into the weeds. Where does this go, like 10 years from now? Like, if you just fast forward and you say, okay, hold on a second, like, there's a bunch of stuff that has to get built and get there. Eventually, is it just 100% of corporate balance sheets are, you know, in digital assets?

• 38:29Anthony Pompliano?

  And so there's digital dollars, but also Bitcoin, Ether, whatever, there's yield, there's like a true decentralized financial system that gets built here, kind of right out underneath of Wall Street? Or is there coexistence? Like, just like, where are we going, I guess?

• 38:44Speaker 02

  I guess what's happening is the money is looking for the most frictionless way.

• 38:50Speaker 02

  To actually be productive. And so the reason DeFi is so interesting, instead of paying those crazy 200 basis to 2% fees that these wallets are charging, I don't need those guys for anything. Maybe I need a ramp to put my fiat into Ether or whatever, but after that, I don't need them. And I can go and do this for a fraction of those costs on a decentralized basis. What got me into this was, we're always trying to find a place for our cash. Like when we haven't found an investment, we want some kind of yield on our cash. And right now, we have a lot of cash because we sold a lot of commercial real estate during, just before the pandemic and during it, because I'm worried about what happens to all that office tower space. I'm not sure everybody's coming back the way they think. So, one of

• 39:33Speaker 02

  the guys that works with Alex that runs Ollie Ventures was one of our interns, Heavy Crypto, Eric's his name, I'm not gonna tell you his second name, so nobody bugs him, but he came to me and said, "Listen, you got a ton of cash here. Why don't we start a fund, a structured product, that does exactly what we've been talking about?" And I said, "Why is it gonna be structured product?" He said, "Because in the jurisdiction we're gonna put the fund, we're gonna invest the cash, they allow this. We don't allow it here in the US yet, but there's other jurisdictions like Switzerland and everywhere else. And you just report your gains to the IRS, as you said, to any other asset." And he worked on it. He went way down the rabbit hole on it. And he's still working on it. It may still come to pass, but in the meantime, I said to him, "Eric, why don't you and Alex go find me

• 40:17Speaker 02

  a company that's doing this already? I don't need to have a fund. I got the cash. Let's just buy the company and put our cash on the balance sheet. If we're a large enough shareholder, we won't care." And, which is what we did. And he, so he found the company. He introduced me to these guys in Vancouver, you know, DeFi Ventures. And I met the CEO and the whole team, and I went, "Wow." And I showed other investors the team and said, "Hey, guys, do you wanna come in with me? Put this deal together." And that's, that's actually how it happened. And along the way, you know, I ran into guys you know, Josh Richards, his partner, Animal Ventures, all those guys. We all looked at it together and said, "This is cool. So we're partners on it. I think it's great." I mean, and he, you know, Josh

• 41:00Speaker 02

  is like some phenom, you know, Gen Z guy that wants to be part of this. And so I said, "Okay."

• 41:07Anthony Pompliano?

  Who's better at picking stocks, you or Josh?

• 41:10Speaker 02

  We did it with wine the other day and he shouldn't even be drinking. He's only 19, but I met his parents online. He's a great cool kid and you know Griff, his partner and Michael Gruen and all those guys, we have fun together and I actually introduced him to the crew at CNBC and I said, "You gotta get this guy on as the Gen Z guy. Like you're the crypto guy. I'm the institutional guy. He should be the Gen Z guy."

• 41:34Anthony Pompliano?

  He's very smart.

• 41:35Speaker 02

  I like him and I said, "You know, you want to come into a couple of deals with me? Let's work together and find some stuff." And he's been backed by some heavy hitters, you know.

• 41:42Anthony Pompliano?

  Yeah, oh yeah, I know the whole story. I think part of what's so fascinating is you have a lot of different worlds that collide, right? So you've got wine, you've got watches, you've got Shark Tank, you've got commercial real estate, you've got your traditional kind of businesses and investing, venture capital, and then you've also got crypto.

• 42:01Speaker 02

  Yeah.

• 42:02Anthony Pompliano?

  And when all that comes together, is it fair just to say like you're just looking for the best opportunities?

• 42:06Speaker 02

  You would be right, but you know, I'm like you. I want to enjoy what I'm doing. I want to get up in the day and say, "Everything that Nancy's plotted for this day, including being here with you, I want to do it. I don't want to do stuff. I don't have to do anything, but I want to do stuff and I love working with entrepreneurs. I just, I like finding people and saying, "Look, don't do that because I've been there before. It's a mistake. Do this, or I can help you here. I can help you here and let me come along for the ride and let me bring in shareholders that invest beside me and let's do stuff together." I have a community of entrepreneurs that enjoy, like you know, I work all day and all night and I love what I do and I get up and play the guitar in the middle of the night. I was wailing out on the balcony the other day at like 2:00 in the morning. I know they're pissed at me on the beach,

• 42:50Speaker 02

  but it was just fun for a couple of minutes.

• 42:52Anthony Pompliano?

  Yeah, you just enjoyed it.

• 42:53Speaker 02

  I enjoyed it and so that kind of, you know, it's like live your life as if there won't be another tomorrow and try and make some money because it's expensive.

• 43:01Anthony Pompliano?

  Can I ask you a somewhat personal question?

• 43:03Speaker 02

  Sure.

• 43:04Anthony Pompliano?

  I've never asked you this before. Do you have like a number in mind that you would eventually say, you know what? I've had my fun, but like I am now rich enough where like I want to walk away. Is there a milestone? Or is it literally you're gonna die working and you'll just never retire? You'll never stop the game?

• 43:21Speaker 02

  I'm not, I'm not working for money anymore. I don't need anymore. I don't want to lose what I've got. Um, and there's always another watch to buy. And so, you know, every, the, the reason I do deals is in my world, you have to do a deal to buy a watch. So you remember what deal that watch was from. And that's the collection. So I'm always doing deals to buy watches. That's basically the way I look at it. So I got a, you know, a massive watch collection now. And that community is a very interesting global community. I've met some of the biggest collectors in the world, some of the princes in the Middle East. I'm friends with them now because, you know, we were on WhatsApp talking about different watches. It's a great community to be associated with. And when we find a rare piece, uh, you know, everybody gets excited about it and it's just, I don't know. It's, it's just interesting. I enjoy it.

• 44:05Anthony Pompliano?

  So what is it? Why are you doing it? Is it literally just to get a watch?

• 44:09Speaker 02

  Yeah, you know, it's a good question.

• 44:11Anthony Pompliano?

  You enjoy it. I, I, I know you well enough at this point now. I know you enjoy this stuff.

• 44:15Speaker 02

  I do, but I'll tell you why I do it. I tried the other way. I took, on, on my first big score, the sale of a learning company was, is a 4.2 billion dollar transaction, including the debt. There were 10 of us as founders. We had all started in with, in middle class or, you know, no money. And, and we'd worked together for, you know, I don't know, 12 years or something. And then that was a massive liquidity. And I remember when we closed, we were in Cambridge and we're sitting around a table just like this, 10 of us, you know, having lunch. Uh, we, we ordered in some lunch to talk and we'd closed the deal. So now we were funded and, and I said to everybody, what, what's everybody gonna do? I mean, like, you know, we're, we're, they bought our company, they don't need us. What are we gonna do?

• 45:00Speaker 02

  And, um,

• 45:01Anthony Pompliano?

  How old are you at this point?

• 45:02Speaker 02

  I think I was, uh, 30, maybe,

• 45:07Anthony Pompliano?

  Early 30s?

• 45:08Speaker 02

  Maybe 29.

• 45:09Anthony Pompliano?

  Okay. All right. So around 30.

• 45:10Speaker 02

  Yeah, around 30.

• 45:11Anthony Pompliano?

  All right.

• 45:11Speaker 02

  And, um, I said, you know, I'm gonna take, I'm gonna take, uh, some time off. I'm gonna go to every beach on earth. I just want to go to every beach on earth, including those ones in Cambodia, Vietnam, Thailand, you know, these incredible beaches, the northern part of Cyprus, all these legendary beaches. And I did. It took me three years. And at the end of it, I was bored out of my fucking mind. I mean, I just said, this sucks. It was depressing. This is it. This is all I do is go to beaches and sit there and get drunk. It's just boring. And I got back in the game. I mean, I just got, and I started doing deals like crazy, and I put my capital to work. I became an investor, not an operator. I made some great scores. I made some catastrophic failures. I lost millions, I made millions, and then I got

• 45:55Speaker 02

  in the groove. And I figured out what is it I'm good at. And, you know, and then the Shark Tank thing came along, and that became a huge platform. Then the CNBC thing came along. And it kind of just morphed into this, you know, like, you know, people know exactly, I'm pretty transparent. Not everybody likes me. They think I tell the truth too much about, you know, business. I think it's good. But anyways, it is what it is at this point. So I'm kind of riding the wave, looking for opportunities.

• 46:22Anthony Pompliano?

  Shark Tank got renewed?

• 46:23Speaker 02

  Yes, just got announced 13 seasons. I mean, you know, nobody can believe what happened there. Like, nobody. Nobody. I have another show I taped at Telemundo here in Miami, which will be announced this week. I'm excited about it, but you know, the network wants to keep it a secret till maybe next week. I don't know when. But Telemundo is a, I'll tell you, I'd never been to that studio before. It is the most modern studio in the world. It's completely digital. The whole thing is wired digitally. Even the signs are all digital. They can change anything. Temperature in one part of the room. It's massive. When J Lo rehearsed for her Super Bowl act, she did it in a soundstage there. The size of a football field.

• 47:08Anthony Pompliano?

  Wow.

• 47:08Speaker 02

  And I was taping right beside that one. And I walked and looked at it and went, this place has its own weather zone. It's so big. The ceilings were so high.

• 47:16Anthony Pompliano?

  Yeah.

• 47:16Speaker 02

  And it's just north of the airport. It's a massive facility.

• 47:19Anthony Pompliano?

  Yeah. Shark Tank, 13th season versus the first time you went on, does it still just as exciting? Is it still just as fun? Or is it different now?

• 47:30Speaker 02

  Well, a few things have changed. First of all, venture capitalists have now figured out that They get to a hundred million eyeballs for free. So you've got all of these VC-backed deals, like with fifty million valuations, a hundred million valuations. And my attitude about that is, I don't give a shit what your valuation is. If you want me as an investor, I'm carving my own deal. And you don't have to take it, but it's gonna be, that makes me get a special position because I add way more value than your VC does. Nobody knows who your venture capitalist is. They don't know the brand, but who cares? They're all the same. And they all want preference shares and all this stuff. And I'm not saying they're bad people. I love venture capitalists, but I don't need them. I can raise my own money for my firms in my own way. And I don't like preference shares.

• 48:14Speaker 02

  I don't like shares that are sitting above me and have rights I don't have. That just pisses me off. So I don't use that stuff. So we get a lot of those companies now, Paul. We get all these companies that say, if only we could get on Shark Tank, right? So we get, they have to weed a lot of those out because they're just gold diggers. Then we get some really interesting stuff on direct-to-consumer. Like, there's a trend emerging in America. Let's just take the food group, for example. Low sodium, low sugar, low cal, totally healthy, like really eclectic verticals where people, you know, that really care about health will make a different kind of coffee or a different kind of peanut butter.

• 48:56Speaker 02

  And what I find, what I see happen on those deals is when they hit the airwaves, you sell five million dollars' worth of it in one hour.

• 49:04Anthony Pompliano?

  Yeah.

• 49:05Speaker 02

  A lot of people are into that health thing. So that's a big change because in the old days, we just have pizza sauce and, you know, just hot sauce and more sauce. And, you know, now it's sauce with no sodium, totally fresh, no preservatives, all that kind of stuff. And things like that. And really, they come in knowing which shark they want. They know us so well now. I want to deal with, you know, Damon in clothing, or, you know, I want to do a financial thing with Kevin, or whatever it is. And anything in the wedding industry, that's me, I love love.

• 49:38Anthony Pompliano?

  I want to leave with the best story from Shark Tank that you've ever told me, which is your best investment, which is the potatoes.

• 49:45Speaker 02

  Yes.

• 49:45Anthony Pompliano?

  Tell us the story and what happened since you did this deal.

• 49:50Speaker 02

  Yeah, so it's called Potato Parcel and it's a company-

• 49:56Anthony Pompliano?

  I'm imagining Damon being here right now and just laughing his head off.

• 49:59Speaker 02

  And he did, he did.

• 50:02Speaker 02

  This guy comes on and he says, "I take a potato, a real potato, and you send me your image digitally and I imprint your face on the potato. And then I ship it to somebody for you in the US mail. And then they put the potato with little toothpicks in a little thing of water and the potato grows right through your face. And it takes months to do it and crazy stuff happens, right? I said, "That's really, really stupid." I mean, that is incredibly stupid and what a stupid business this is. And he said, "Well, what is it you care about in business? Sales, right?" And I said, "Of course, but nobody would buy that crap." And they said, "Oh, yeah? Look at this."

• 50:43Speaker 02

  He had like 30% growth a month and he was really good at SEO. He was really good on digital, really good on social. He was telling the story. And I was sitting there thinking, "I'm never going to invest in this thing. It's so stupid." And I said to him, "Well, how about I get a chunk of Akhadi, but I want a royalty? I want a..."

• 51:02Anthony Pompliano?

  But hold on, you'd already seen one example of something stupid make money, right? That's an important part of this story.

• 51:06Speaker 02

  Well, it's true. I saw "I want to draw a cat for you", which was the stupidest, most stupid thing I'd ever seen.

• 51:12Anthony Pompliano?

  Which one's dumber? Potato Head or "I want to draw a cat"?

• 51:14Speaker 02

  Draw a cat for you. Incredibly stupid. You pay a guy to draw a cat and then he mails it to you. And Cuban invested in that and made a fortune. I thought that is the stupidest, stupid-

• 51:24Anthony Pompliano?

  Because he had the song, right? He like had some stupid little song.

• 51:27Speaker 02

  He danced like a cat and it was like, so I thought, "It's such a piece of trash. What a stupid idea." And it did a ton and really, really high margins because this guy would just sit down and draw a cat and he had other cat drawers.

• 51:39Speaker 02

  So dumb. So when I saw the potato parcel, I said, there's room in my portfolio for potato parcel company. Now, remember on Shark Tank, you calculate, you're putting out capital. So you really want the internal rate of return on that capital. In, in, in really Naas at Venture Investing, it's return of capital, not return on capital you care about. That thing aired and I got my money back in like 45 minutes. And so it has the highest return ever for me and a shark. Everything, because I had a dollar royalty on every potato and I own, I can't remember what percentage, I forget what I owned of the company. But that thing has, has just spun cash. And I got calls from CEOs of major corporations

• 52:20Speaker 02

  saying, listen, I want to buy 1,500 potatoes for my sales force globally and ship them. And I want a discount. And I say, no way. There's no discount. I'm the only kid in town for. Monopoly on faces. Nobody else puts a face on a potato the way we can. Plus, our new gift box pump. We get a premium gift box with a beautiful little label on it and a gift package with your face and the potato. And it comes to your door and you're just thrilled to death. We are pumping those out by the hundreds of thousands. And there's no discount. I mean, this is the El Supremo potato. So there, it just shows you with the right social media

• 53:00Speaker 02

  platform, what you can do. And, and, and these are real entrepreneurs, a real business. It's not a bullshit business. So it's made money. It bought a watch, I'll tell you that.

• 53:10Anthony Pompliano?

  I'm proud of you because three years ago, when I went on the CNBC set and you hit me with, you were forbidden, you're not at 50% yet. But you're at three, maybe five, maybe you can get you to 10. You're headed in the right direction.

• 53:26Speaker 02

  We are, and I think we could eventually get, we may, we may abandon our gold position, which is significant. We pay, the way we own gold is we own the GLD for rebalancing, even though it's, it's more expensive, it's very liquid. But we also store gold and pay for the storage. So it costs us money to hold an asset that has no yield. And that's the argument that, that the committee makes about the gold position we. We've got saying, think about this, it's reversed interest. If gold stays flat, it costs us to own it. Why don't we just allocate 200 basis points of the gold portfolio, just sell down our GLDs, go to Fiat and then just buy in, you know,

• 54:03Anthony Pompliano?

  Bitcoin.

• 54:04Speaker 02

  Yeah, or you know, whatever you can, you don't have to just buy Bitcoin, but buy a portfolio of different crypto, you know, crypto assets and then do the contracts. And I'm, I'm opening up to it because proof is in the pudding. And so it's just, and you, and the weird thing is, and you said it earlier, you don't want to go back to Fiat. And so you're saying to yourself, I'm going to live with more and more of all, because you are, as you build up that asset. But you feel a lot better about getting yield off it. All of a sudden it's working for you while you're sleeping as opposed to, most people think they just own Bitcoin in their wallet, pay their ridiculous fees to their wallet, which they don't have to.

• 54:44Speaker 02

  I mean, people are going to figure this stuff out. They're going to start to see DeFi can be a lot cheaper, less, less friction. You can still be compliant. I don't want to break any laws. I want to be compliant because I got a lot of other assets. And that's why I want this version of what we're doing in Vancouver with the, you know, the DeFi ventures guys. I want that to be compliant to the point where I just press a button and get my tax return. You know?

• 55:08Anthony Pompliano?

  That's how it works.

• 55:08Speaker 02

  Yeah, I mean, it can. So I'm very excited. I mean, obviously you've been riding the wave a lot longer than I have, but, but I'm caught up pretty damn fast.

• 55:15Anthony Pompliano?

  You're, you're coming along. We just got to get you to stop. The other thing you said one time was crypto garbage. Not garbage, garbage, which is a little bit above garbage.

• 55:23Speaker 02

  No, but I liked it and it's now legendary out there and everybody nails me to the wall on that thing.

• 55:29Anthony Pompliano?

  They say it?

• 55:29Speaker 02

  They say, they say, you're the guy that called it garbage.

• 55:36Anthony Pompliano?

  All right, ladies and gentlemen, my friend Kevin O'Leary, thank you so much.

• 55:38Speaker 02

  I really enjoyed it. The time flies when I'm talking with you, Bob. That's terrific. Take care, everybody.