Bankless - Mike Novogratz: Bitcoin’s Escape Velocity, Bond Market Crisis, Crypto x AI, & the Genius Act

Episode Date: June 2, 2025

Mike Novogratz returns to Bankless to unpack Bitcoin’s surge to new all-time highs and what it means in a world grappling with fiscal uncertainty. We dive into the unfolding bond market crisis, why the Genius Act marks a new chapter for stablecoins, the tokenization of traditional finance, and how Galaxy is uniquely positioned at the crossroads of crypto and AI. This is a front-row seat to the changing macro tides and crypto’s place in the new financial order. ------ 📣SPOTIFY PREMIUM RSS FEED | USE CODE: SPOTIFY24 https://bankless.cc/spotify-premium ------ BANKLESS SPONSOR TOOLS: 🪙FRAX | SELF SUFFICIENT DeFi https://bankless.cc/Frax 🦄UNISWAP | SWAP ON UNICHAIN https://bankless.cc/unichain 🛞MANTLE | MODULAR LAYER 2 NETWORK https://bankless.cc/Mantle 🌐SELF | PROVE YOUR SELF https://bankless.cc/Self 🟠BINANCE | THE WORLDS #1 CRYPTO EXCHANGE https://bankless.cc/binance ------ TIMESTAMPS 0:00 Intro 0:18 Bitcoin Hitting All-Time High 1:57 Trump’s Tariffs' Effect on Bitcoin 5:56 Liz Truss Moment 2.0? 7:33 US Liz Truss’s Effect 8:49 Bitcoin, Gold, and the US Dollar 12:11 BTC as a New World Asset 15:29 Treasuries in Decline 18:05 Galaxy Going Public 21:26 The Genius Act 24:32 Anti-Crypto Army Gone? 27:03 US Consumer Crypto Market 31:22 Tokenizing Galaxy Assets on ETH 34:08 A Roadmap From SEC in the Future? 36:53 Year of Crypto IPOs? 38:30 TradFi Fades, Crypto Rises 39:46 The Terra Luna Case 44:05 Future of Galaxy and Crypto 50:48 Building and Scaling Data Centers 55:18 Closing & Disclaimers ------ RESOURCES Mike Novogratz https://x.com/novogratz Galaxy Digital https://www.galaxy.com/ Tokenization & RWAs (Galaxy Report) https://www.galaxy.com/research/insights/tokenization-and-the-future-of-finance/ ------ Not financial or tax advice. See our investment disclosures here: https://www.bankless.com/disclosures⁠

We still got a bull run coming, right? It's not over yet for crypto. Bull run is just starting today. You got price targets? I mean, listen, we need this finish this week over 10750, you know, 1-7-500. If Sunday night we're at 108, 108, 109, you're going to be at 130 before you can bat an eye. Mike Novogratz, Bitcoin just hit an all-time high at the time of recording. We're at 109,900 as the all-time high price of Bitcoin.

Price might vary by the time listeners get this episode. But can we just like celebrate that for a minute? All time highs don't happen very often. How are you feeling about that? Listen, I think from the time Larry Fink bought Bitcoin, up until then, we were all pushing this snowball up the hill. Yeah. And then it got to the top of the hill, and it stayed there for a while.

And now it started to roll downhill. And that snowball is adoption. It's the community orange pilling and pulling more people into the community. And Larry was like the big cahuna to orange pill. But now you've got sovereign wealth funds. you've got retail equity investors coming through all these micro strategy and micro strategy you look alike products you've got normal retail you've got normal institutions it just feels like we are at escape velocity listen we're going to have to close above and stay above 106 107

for three four days but that'll open up 130 130 150 and then you're in price discovery and so why is it happening a adoption and be you know you look at what's going on in D.C., we're not going to have a 3% budget deficit this year. We're going to have a higher than last year budget deficit, which was not in anyone's bingo card, right? You know, I love Scott Besson. I think he's doing a good job, but he was promising us 3%. I think I have a bet with pump 3% above.

He owes me 1,000 push-ups, and 3% below I owe him 1,000. And so I got I better start working out. Mike, can you just place us into context, right? Because, you know, Bitcoin high, all-time highs, they happen because of reasons. And you identified some of the local reasons, the news event cycles that are happening right now. It's no coincidence to me that the all-time high is happening right on the backs of the positive Senate vote towards the Genius Act. But there's also, you know, just downstream of just four or five weeks ago, Trump announced the Tariff Day, the Liberation Day tariffs. And so that is ensuing.

There's just a bunch of context that's happening around this Bitcoin all-time high. So read into that context for me. Well, listen, the dollar as the reserve currency is under stress. It's hard to go around and tell the whole world they lied, cheat, and stole on you, and that they should come and kiss your ass or be your 51st state and have them say, hey, let's keep more dollars. Right? And so we are debasing our dollar both in our brand, but also as an economic lever.

And so when the dollar is selling off, other assets get more valid. valuable by definition. And so you've got part short dollar in this. You've got part real worry about fiscal stability globally, right? Look at the Japanese long bond. It's on a free fall. Our long bond took out, you know, 5% today. And so when people start losing faith in G10 bond markets, they got to put their money somewhere. And so gold, silver, you know, broadly equities often, but commodities and now Bitcoin is digital gold, all fulfilling that role. Okay, so where do you think this ends? It's interesting.

We just had Arthur Hayes on the podcast. He was giving us some forecasts, right? And his take is basically like the Trump administration has pushed tariffs about as far as they can. And they're kind of like backtracking. But their next maneuver is going to be to continue to erode treasuries as the World Reserve asset, like almost intentionally. No, absolutely not intentionally. You don't think intentionally. No.

Okay. What's your take? And Arthur is a lot smarter than I am. But I have been in this treasury market for 35 years. I know Scott Bessent well. You do not erode the confidence in the largest bond market in the world when you owe $35 trillion. That would mean like the definition of insanity. But Arthur's take is they kind of have to if they're going to fix the trade imbalance, right?

And like capital controls might be the next thing. And then yields will increase. but the way that Besson gets out of that is basically he calls Powell and we get quantitative easing, you know, V2. The Fed is staying so far away from this. I mean, just look at every Powell press conference. He does not want to go in and have to support the market. You're not going to see Bessent might use his authority to go buy long bonds,

but Powell's not coming in to say I'm buying long bonds because it's not his role, right? Like this is self-inflicted by this administration, and I think you're going to see a bit of a Mexican standoff. If Powell thinks stability is at risk, if he thinks inflation is at risk and or jobs, he'll move. But he's got that dual mandate and a little bit of market stability. And so, like, we'll see. If the bond market's in free fall, I'm sure there'll be plenty of meetings

and they'll try to come up with something. But roughly, when the UK it happened, right, Liz Trust was gone. Yeah. Right? And so we don't have a parliamentary system where you can throw out the president, but we have a system where you can change the bill he's working on, right? You can change the tariff negotiation. Like, no president in the history of America has beaten the bond market.

The bond market is the 600-pound gorilla king of the ring. Well, I mean, do you think we get some kind of Liz trust moment? Do you think that could be heading towards that bond market? Today feels a little bit like one. Right? What's happening today? Long bonds have sold off. There was an auction that didn't go well.

As soon as that thing didn't go well, bonds sold off another 6, 7 percent, took equities from up on the day to down on the day, took Bitcoin from up on the day to flat. The markets are nervous. I'm the macro neophyte here. I'm going to need help understanding what the Liz Trust moment means. Ah, okay. Yeah. When Liz Trust's government got elected, they came back.

out with a really radical idea to help transform the British economy. And the bond market said, no, no, no, no, no. We will punish you. And she was out of a job literally in three weeks. Like yield spiked, basically, right? Yeah. And like that kind of yield spiked and she lost her job. Yeah, it's almost like it was like it was back up.

Exactly. If the bond market, they used to call them the bond market vigilantes. If you're doing something wrong and no one wants to lend you money, you got to change what you're doing. because our whole government is based on borrowing money. And we've had the largest, you know, debt in the history of the world. It accelerated a tremendous amount during Trump won and Biden won, right? We had bad debt before Trump won, but then it was already expanding and then COVID happened.

And both parties were like, oh, it's a party. Now, they had to do something, right, in a pandemic, but they did a lot more than they needed to. and now we're suffering from it. Let's say we get a continuation of this, right? The bond sell-off, you know, yields increase. We get sort of the U.S.'s version of a Liz Trust moment. What happens? You're going to have to see more fiscal hawkishness, right?

And so this package that they put out, we're cutting taxes on tips, cutting taxes on overtime, not raising taxes on anyone, and spending more on the military, the market's saying, no, spend less. So fiscal reforms, spend less? I think you've got to tighten fiscal. The Fed's in an awkward position because, you know, if you're should,

they're not going to raise rates, but this becomes inflationary. Like, when the market is selling off, it's telling you you're worried about inflationary impulse, right? You might change the tariff. Like, tariffs are short-term inflationary. There's absolutely no way around it. There are long-term, probably deflationary if they slow the economy, but short-term, they're inflationary. They are literally tax hikes.

And so it's a very tricky mix. Your job as the Treasury Secretary, and quite frankly, your job as the President, is to instill confidence in American markets. And when the markets are falling like this, they're saying we're getting less confident, right? When the dollar falls, it's saying we're getting less confident. Mike, is Bitcoin an all-time high day today, as you identified, we're already $3,000 off that, I think because of the Treasury market that you were citing. It's been gold all-time high season for the last, like, quarter or so. I'm wondering, do you think this is the same story and Bitcoin is just lagging? Are these, is there you selling two different stories?

Listen, they're cousins. They're kissing cousins. Well, gold is going higher because as central banks diversified, they're buying a lot of gold. And they're taking big chunks of gold off the market. That's mostly the brick central banks. They trust, they would have less money in the United States than they used to. And that's logical. And so you don't have central banks buying Bitcoin yet.

Right? You have some sovereign wealth funds dabbling in it, right? Abu Dhabi said they bought over 500 million bucks worth, so that's not a dabble. That's a bite. But not trillion-dollar reserves like you have in gold. So your take then, Mike, is that the Trump administration is not intentionally eroding your treasuries as the World Reserve asset. But that may be happening despite whatever their intent is, right? Or actually, maybe I want to ask you about that. Yeah, so there's always been a really hard balancing act. Bob Ruben, when he was Secretary of Treasury, I believe in the strong dollar.

I think Scott Besson would say I believe in the strong dollar, but cyclically, they'd like the dollar to weaken. Yeah. Right? And so how do you talk out of both sides of your mouth and actually be authentic, right? It's being honest. It's like, hey, cyclically, we're a little too strong, but broadly we believe in the strong dollar. Listen, when the dollar weakens me and you as Americans get poorer. Our trip to Europe costs more.

Our Italian couch costs more. Our Mercedes cost more. Therefore, we're poorer. Yeah, but isn't the argument, though, that, you know, when you talk about we're poor, right, it's all the people that can go to Europe and, you know, like buy fancy couches and such, right? Isn't the argument for a weaker dollar that, hey, like, we lost U.S. manufacturing this country. In order to get it back, we have to rebalance our trade deficit with the rest of the world. And because you have things like the Triffin dilemma, right, you can't be the global reserve asset.

and then also have high dollar and expect U.S. manufacturing to stay in America. It's going to be just exported on the strong dollar. Yeah, listen, Trump is admirably trying to bring some manufacturing back, and we will bring some back. But it is the definition of insanity to think you're going to take 30 years of building supply chains overseas and snap your fingers and have them come back.

Just period of story. Like, some of the stuff you can't even get, right? It's like, oh, I want to mine lithium here. Well, it's not here. It's over in other places, right? It's in Argentina and Chile and supply chains, you know, that are labor intensive. 30% is not enough. Think about this to be in the top 1% of the world income earners.

It's about 60, 55K, right? That's our per capita. That's our median income. That means the median worker at America is a one percenter in the rest of the world. That's a big wage gap difference. And so, I don't know. 30% difference between a Vietnamese cost and an American. Still not enough to move tennis shoe manufacturing back here to America until you can do it all robotically.

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Each trade is automatically routed through Uniswap X, V2, V3, and V4, so you get the most efficient swap without even thinking about it. Whether you're swapping, on-ramping, off-ramping, or bridging Uniswop's web app and wallet gives you the tools to unlock DeFi's full potential on Ethereum, base, arbitram unichain, and more. Use Uniswap's web app and wallet for a more efficient way to use The reason why the treasuries as the World Reserve Asset is such an important question, I think, at this juncture, we can kind of see at the edges maybe it's fraying is because that has basically been the last decade of the crypto trade, right? We're watching sort of crypto emerge, Bitcoin in particular as a new World Reserve asset. That's the entire thesis. And so if treasuries are eroding, like what's after treasuries as a world reserve asset? Do you think this is the decade? If you looked at history, it would be the RIMB. Yeah. Like you, you know, we've been the reserve asset a long time. Roughly people keep that title 80 years and we pushed our 80.

You're the reserve currency of the world when you control the seas, period. He who has the strongest Navy is the reserve currency. Traditionally. Now, the seas might not be as important anymore because we can transport shit all, lots of different ways. But if you provide safety and security to the world, if you have a legal system of the world trusts, you become the reserve currency. And so we spend 3.5% of GDP out of military. It used to be 5% when most countries spent a half a percent to one and a half. So it wasn't free to be the reserve currency, but it had huge benefits. And the Trump administration doesn't see that as clearly, right?

Getting out of NATO, or by definition, weakening NATO, some of the economic agreements, you know, the global network that got created after World War II, we are retreating from. I don't know, I don't know if you've ever read Russell Napier, his take on this. He's like a Scottish monetary historian. His take is basically as the U.S. reserves as the treasuries erodes as world reserve asset. What could take its place is basically not fully the REMB, but we'll have kind of two blocks, right? So we'll have treasuries and sort of the U.S. and allies kind of block, and they still primarily use that as their reserve asset. And then we'll also have REMB in the kind of Chinese block.

But in the Chinese block, they'll probably back the REMMB with gold. Because historically, you know, China does not, it, REMB is not used as a store of value. I mean, people do payments in REMB, but they're not going to store their value in it. What do you think of that idea, that we could bifurcate into kind of few assets? I think you're going to see Bricks issue a stable coin that's semi-backed by gold. Stable coin, interesting. Backed by gold? Yep.

Not fully backed by gold, but having some part of gold. gold in the reserves. That I think you're going to say. It's just a, it's a guess. I don't think a country that's big and powerful doesn't back their currency by anything. Now, they could say, hey, we have reserves. We're a wealthy country. And so that's by definition. You could say everything is backed by the assets of your country, the taxpaying ability, the tax, are the tax collecting ability. But every country should be AAA in its own currency, right? You can print as much of it is you want. You got to default on local currency debt. Are you going to lend money across border, i.e. are you going to store money in that currency? You're getting paid enough for it.

And the only one that would have a chance right now would be the remem and be. I don't think it's going to be, right? They haven't done enough to get people to trust them. And so I don't think the dollar loses its reserve currency, but I think it loses its luster and it allows other people to say, you know, I don't trust the dollar as much. Therefore, give me some Bitcoin goal. I've been talking Bitcoin and goal. I've been talking Bitcoin and for four years now. I got my own podcast more than that. I got my own podcast, and I got gold coins.

We give everyone a gold coin, and I started giving them away at 1,600. I was like, don't you dare sell these gold coins. It's going to be worth $3,000 one day's safe. Now I'm like, it's going to be worth $10,000. Now I've got to change where the gold is hidden because one of your docks your gold. Steal the 50 ounces of gold in my drawer. But yeah, I think that narrative is pretty strong right now.

I'm like, I want to turn to more domestic concerns. And I mean that inside of our own stock market, but also with your company, Galaxy. So recently on May 16th, Galaxy was listed on the NASDAQ. Congratulations about that. Rumor is it took you over 1,300 days to get that over the hump when it just should have taken 90. Tell us about that journey. Was that frustrating that it took so goddamn long? It took us a little longer to get ready than we thought,

and we missed the window with Jay Clayton and the old Trump administration was in power. And Coinbase got through and a few miners got through. And then we ran into the hard no hand of Gary Gensler and his SEC. How hard did you try or did you just know, like, oh, he's never going to allow us through the great? I am on record thinking I thought Gensler would be a great SEC chair for crypto. Yeah, I think we are too. He is wickedly smart. He seemed to be embracing it.

And he about faced it. And I have to believe there's something to do with Elizabeth Warren, who was his Sherpa. And a small cadre that said, let's focus on all the bad things and not the good things about crypto. And you want to focus on the bad things about anything you can. Right. And there were plenty of bad things about crypto. We had lots of scans, scams and scandals. And so, listen, Sam Bankman-Fried probably set us back 18 months to two years, getting people to trust us.

It's really ironic because most of us got into crypto because this was going from having to trust in government to trusting cryptography, right? Blockchains are trust machines. But a lot of us miss the concept that you've got to first teach people to trust the trust machine. It just sounds like hocus pocus and scams. And so I'm happy to say we now are at a point where both Republicans and Democrats, not all of them, but enough of them get it. Like I'm really proud that Senator Warner and Senator Gallegos kept the center together on this genius bill. They had a big flang from the left, right? Because Elizabeth Warren, even though she had retreated a little bit, once she saw the Trump family getting engaged, she had her entry, you know, angle.

She was like, there it goes again. Crypto being used to enrich these people. That's not fair. Let's sabotage all the crypto. And these guys fought back. And it's not easy to do in a world as polarized as this. It is shockingly optimistic that in a Congress as polarized as this one is, we had bipartisan cooperation on the stable coin bill.

And I think it's going to be a lot harder on the market structure bill, not because of left-right divide. because of inter-crypto divide, right? Should Coinbase be able to both custody, have a broker-dealer, and run an exchange? Can't do that in Trade Five, but is it okay in crypto? Well, if you're coin-based, you say yes, and if you're not one of those,

your Coin-based competitor, you say no. And so everyone starts pushing their own agenda, and there's a lot more at stake in the market structure bill than I think there has been in the Stablecoin bill. Okay, so there's like two bills Congress is batting around that would be like crypto crypto bills. The first is the Genius Act that the Staplegoin bill is broadly done. Right, right. And the second is the market structure.

So the Genius Act, let's talk about that for a minute. I'd love your take on like what's going on there. So just earlier this week at the time of recording, there was a vote in the Senate. I believe it won majority. It's 60 something senators. We're up to 69 senators. Okay, 69 senators. It was 67, but a couple guys join on.

Joy Don Sings. Yes, and they voted yes, but they voted yes to actually hear the bill. So there's multiple rounds of voting that this bill is going to need. We got overwhelming support that the bill can be put up for vote, basically. That vote has not yet happened. That's going to happen sometime after Memorial Day, I believe. And is it like your expectation that we've got the votes? It's going to pass?

It's done with the, it would take a really surprising lightning bolt from somewhere we're not seeing to sink it. It is broadly done. So it's done. You can 99% and it's in the can. It's done 99%. And that's good that it's coming from the Senate because it's hard to get things through the Senate versus the House.

And it has to be kicked back to the House and voted on there, of course, right? And the whole kind of like legislative process that would go through. But the Senate was the hard one. So what's the difference between basically the Senate a year ago and the Senate of today?

I think we're pretty clear on the Republican side. Why we are set up as the crypto industry well is Democrats realized too late in the election, they should have listened to yours truly, at least in this one quote, which I stole from someone else, by the way, whoever gave that quote on Twitter the first time or on X, thank you. But it was, there are more people that own crypto in America than own dogs. And I at least amplified that because I stole credit. I was like, listen, and the Democratic Party had become the party against dogs.

I was like, guys, what are you doing? Crypto is beloved by so many people. Like, it should be a bipartisan technology, not a political weapon. And the Dems got it late, and they tried to scramble, and they were so scared of their own shadows. And Elizabeth Warren had held hostage this party. They got angry at her. Let me tell you, everyone was angry at her by the end. And all of a sudden, you have Bernie Moreno upset, you know, what had done.

been a stalwart, you know, Democratic Center in Ohio. You had Trump raised tremendous amounts of money from the crypto community. The crypto community and the tech community became synonymous almost, and they all shifted to the right. And so if you looked at the aftermath of the election and you sat with Dems, which I did, they all thought, oh, crypto actually might have cost us the election. And so they don't want to make that mistake again. Yeah. The smart people are like, like we want to get crypto off the agenda. We're not probably going to win it. But if we pass these two bills, there's nothing to talk about.

Okay. So are you saying the Democratic Party doesn't hate dogs anymore? I mean, is the anti-crypto army? Are they gone? Yes. Is it over for that? Listen, again, you go to D.C., walk down the block, pick someone out and ask them what a blockchain was and is, and have them explain it.

I'll ask you guys, how many crypto apps do you have on your phone? Oh, God. I'm the wrong person to ask. But your apps only let you buy and sell and price. They don't let you buy tickets. They don't let you take an Uber. They don't let you do anything that the common American would do. And so crypto was a speculative casino for most Americans.

That was it. And so the politicians are like, eh. And we now as an industry need to actually see it live out its potential. We need to see decentralized systems get built. We need to see tokenization of lots of assets. And we're going to see, and I think we are going to see, your bank account and checking account and, you know, equity, you know, brokerage account starts showing up as wallets.

Like, as that transition gets done, we have an industry that provides utility to the American public, right? Right now we all said, oh, how important we are. If I have one more speech about what an important industry we are, like, do something freaking important. Listen, Bitcoin has been wildly important. Check the box, but we're not a Bitcoin industry. We're a digital asset cryptocurrency industry. And other than Bitcoin

and stable coins for offshore people, like, when's the last time you bought something to stable coin? All the time. Do you? Yeah. All right, you guys are junkies. Well, we're buying, to be clear, mostly, but we're buying crypto assets. Yeah, okay. I'm not buying my

grossies now. Capital formation and stable coins is like $9. Yeah, yeah. That's it. So we haven't taken our industry anywhere that most people care about other than gambling or investing. Because they wouldn't let us. I know that. I know that. But this is our great opportunity. We now have blockchains that are fast enough and we have a regulatory environment that is loose enough and is going to be clear enough.

Those are two different things, but very important, right? This new SEC is really welcoming. The old SEC never was even in the office and they were very unwelcome, right? They were persecuting us and prosecuting us. This new SEC is embracing us. And that is going to allow, I think, a outburst of innovation and people trying really cool things. Okay. We want to get your takes on the SEC in a minute, but just to tie off the Genius Act really quick.

Okay. So, like, I haven't gone through the Genius Act with a fine-tooth comb for a couple of reasons. One, it was just like, I wasn't sure it was going to pass, right? And so, like, why do the work until you guys. He's going to call me. I would have told you. Okay, okay. So now we know it's passing. Can you give us the TLDR of like what it does? So we have $250 billion worth of stable coins right now on chain.

Okay. Bessent was talking about the potential for $2 trillion. I saw him give testimony in Congress. What does the Genius Act actually do? And is this opening the floodgates for America's onboarding of the rest of the world into crypto and into dollars? I mean, how big could this get? It could get really big. So, look, we need the payment guys to get engaged, right? So you go to McDonald's right now. We just use this with the Apple Pay. Imagine you can do this with your stable coin, right?

What does that take? It takes Stripe that connects to all these people in Visa, MasterCard. All these payment guys are going to be part of, like, who's going to be the winner of stable coins? I don't know, but I bet you Stripe Visa MasterCard are in the. pot. And so there's an onboarding. Why is this important? Because Besson at everyone else there says 35 trillion we need to fund. We want people that hold their digital money in dollars, not in MNB, quite frankly not on Bitcoin. We would approve that the dollar is worthy of it. And so part of this is to get overseas money, right? You need every overseas dollar you can fund the deficit.

What's exciting is once it's legitimized, real companies can then use it without worth it. about am I going to get in trouble? You know, a lot of the difference between the different bills were how long are you going to give tether to get compliant in the U.S. is it two years, three years, 18 months, right? There was a tether back and forth. And I literally was down there, I was like, guys, club a coin because it doesn't matter. You know, it's going to take a couple years for this thing to kind of get implemented anyway.

And the tether guys are really smart. They will figure out a way if it's two years or if it's three years. But so that was a push. There was a push to keep Facebook an X. and the social media platforms out, I think the banks are scared already. The community banks are petrified. And it's the same reason, rationale

that they don't let Walmart open a bank, right? For years, Walmart said, we should open a bank and then every person in the world is going to bank at Walmart. And so the non-financial players got pushed out of the stable coin game for now. I'm sure meta's not happy. I didn't know that. So if you're meta or X or Big Tech, basically,

You can't play in the stable coin game. No, you can issue your own. Can't issue your own. But you can adopt someone else's. Yes. And so, listen, it's going to still, they're still going to be huge parts of having money move around the system. We've never even seen Internet of Things yet because no corporate companies want to do something unregulated, right? And so now you're going to start even having micro payments at one point in Internet of Things.

And so they also, another one of the big fights was, should we allow an interest very stable coin. And that was a category no from banking, right? And the interest is very bearing stable coin creates a bank run really fast. And the community banks are worried. If there's one thing that could still untrack this bill that I said is 99% is, like, I know the community banks are banging the phones right now because they're worried they're going to lose deposits. And are there going to be workarounds on the interest, right? Can State Street issue a money market fund, which is legal, security, right?

But also it's your staple coin and just tell all their users, keep the money market fun in your wallet. Whenever you want to buy or sell something, we'll do an instant transaction from the one to the other, and then you can buy it. Well, now you have two potential assets that flip back and forth. Feels a lot like interest-bearing. Right? Again, I haven't talked to Stakeshry. I made them up as a hypothetical, and so I don't want people thinking that's a product in the works. Right?

Chad Pasquerel already has a interest-breaking stable coin offshore. And so these are going to be marketing, like, you know, some ways, just like everyone has an ETF, everyone's going to have a stable coin. Where all of these stable coins being tokenized is also like a point of attention here. And I know it's interesting, perhaps slightly ironic, that Galaxy is going live on the NASDAQ. And why do you want to go live on the NASDAQ? Why do you want to trade on the NASDAQ? Because the United States is the capital center of planet Earth.

But also, as we are watching, this unfortunate bond market. Treasury sale today. People are not interested in the United States at the capital center of the world as much as they were. Our bonds are, capital is fleeing the United States. And it's going, it's going elsewhere. One of those places is going is onto the internet, onto perhaps the new epicenter of internet capital markets is where all these stable coins that we're talking about are being tokenized. And that's on the Ethereum layer one. And so if the NASDAQ or if the United States financial epicenter doesn't have that same. grasp as much as it once does. My question to you, Mike, is when are you going to tokenize galaxy assets on Ethereum? As soon as we can. We are working with the SEC right now, to be fair, potentially tokenizing galaxy stock in the near future as at least a first step. I think you're going to start seeing lots of innovation around tokenized equities. Theory to see equity perps. I think you're going to like this new SEC is saying try stuff.

And so people have a lot more courage that they're not going to get prosecuted or persecuted. Yeah. How's it been working with them? Has it been productive? Wildly productive. I mean, it's night and day. You can't compare. And so I think that's going to be the excitement of the second half of the year.

And it might not be until next year where people make any money off of it, right? You got to figure. And it's not even clear where the money's going to get made yet. Like, you know, but it's going to create more activity on blockchains. I was at a dinner last night with 10 really smart and prominent guys in the field. field. And there was a wide-ranging discussion. And you realize why this market structure will is going to be hard. You know, what block change should you be allowed to issue a stable coin on? If it's just my database, is that good enough? Is it how decentralized does it have to be?

I didn't realize I need to look at this, but one of the big multinational European organizations apparently came out with some rules already for themselves that made sense to everyone at the table that I haven't read. But is it, you can pick your, is Tron fine for stable coins, is ripple, does that have to be Ethereum, right? Should the government pick what blockchains a stable coin should be able to run on? Or is it buyer beware? You know, safety, security, all of that stuff brings up a lot of passion. And so I don't think we've fleshed out this all the way yet, but we will.

I was talking to, David and I were talking on our weekly episode last week about, and I told him, hey, David, you know, one thing I'm bullish on, and this will surprise you is I said, I'm bullish on the SEC. Yeah, you know, I'm... And I've not said this over the last, like, four years. Obviously, it's been the complete opposite. And the reason is, it's not just because Gensler's gone, but it actually feels like this new SEC with Hester Purse,

actually getting the ability to kind of accomplish things. And Paul Atkins, the things that they're tweeting, the speeches that I'm reading, they seem like they... Paul Atkins compared typical markets to the fax machine and crypto markets and blockchain to the Internet. And he said, we need to have tokenized security on this new technology of the internet. It almost feels like the SEC, at least in speech, is promoting crypto and like pushing securities

towards it. Now, I don't know the difference between kind of what they're saying and what you're actually seeing in kind of working with them. But do you think it's possible that we have like a complete roadmap from the SEC sometime in the next year or two of how to bring securities and U.S. equities on. chain to blockchains and we're able to do more than just tokenized galaxy, but just like have it an entire marketplace and ecosystem on chain? Yeah.

I, listen, I mean, think about how fast something like hyper liquid grew, right, for perps or uniswap, if uniswap got to the point where it felt like the more business that the owners of the tokens actually got a portion of the business, right? So it felt more security like, like, why would it more liquidity move there to start with? And so I first think you're going to see just liquidity move, right? The moment Apple stock is tokenized, you know, you're going to see liquidity 24 hours a day on Apple. You're going to be able to see people that never had access to buy it, buy it. And so it's going to happen slow for a while, and then it's going to happen fast.

One of the things that no one's done yet, and this I need to say because like every tokenized project so far has a backup. At one point, you get the efficiency gains by not doing it. on a ledger just in case by doing it just on the blockchain. And I don't know when the time for that jump is. I think when that happens, you really see the Cambrian explosion. And to be clear, the thing that's preventing tokenized securities right now is that we need a market structure bill first. And also we need the blessing of the SEC.

We need both of those things. And then you need to know where they're allowed to trade. You know, right now they need to trade things called ATS's, right? Regulated ATSs are like two. Republic crypto owns one, or at least they were buying one. Like you haven't heard of them. The NASDAQ couldn't until they changed the rules. Now, the SEC is already talking about changes rules pretty quickly.

And so we're not there yet, but we're really close. Do you think so, Galaxy having been listed on the NASDAQ, do you think we see more of these this year? Is this kind of the year where we see some crypto IPOs? I think you're going to see a lineup of crypto IPOs. All right. Like, what are some names? I mean, circles been floated out there. What else we got?

Cracken's been floated out there. You know, name a crypto company and they're thinking about it. Do you think like... Just five by the end of the year? 10? Yes. I think at least five more. At least five more by this at the end of this year.

Yeah. Okay. And what... Like... Like, what... Like, what... ...com has been thinking... I mean, like, you know, like lots of companies.

It feels like that that would further legitimize, like, crypto, right? Because then you get Wall Street coverage. They can kind of, like, buy... Right? Even things like Coinbase getting an S&P in the last couple of weeks, that's huge legitimacy for crypto and makes this thing unstoppable. Is that... Is that writing the money?

We are much more legitimized today than we were. And the crypto community hates to hear this. What will really legitimize us is to go from being a casino to be becoming a service provider. Like, again, I want to have crypto apps beyond buying and staking and selling a economic app on my phone. And like in the U.S., we don't even have payments. So you think about what crypto's contributions so far to the common man, it's Bitcoin to store money in or other currencies act like Bitcoin. and stable coins overseas. Cross-border payments are big deal in Latin America with staple coins.

We've invested in three or four venture companies that are making lots of money doing it. So I'm not discounting what's gotten done, but we need the aha moment where everyday Americans say, hey, I got this. And we haven't had it yet. It might be tokenized equities. How about the story with tradfai saturation? So you mentioned earlier when we were talking like, hey, we were trying to roll the snowball uphill, but then Larry Fink comes aboard and like it's basically all, you know, we just get gravity on our side now. Is Tradfai pretty much convinced now the institutions? Are they all in

on crypto? Or like what what additional like gates do we have to go through to convince them that crypto blockchain is the future here? They are a lot more convinced than they were, period. And they go slow. To something, it's not unfair. Like even now our markets aren't big enough to drive like the CEO of Bank of America to worry about it, right? What I think the first thing that will get everyone freaked out about is tokenized stocks. When you start seeing like their babies tokenized and trading and growing, then every asset matters or say, what am I going to do? I got to go from like old school to new school.

But I don't think it's going to be Bitcoin, like Bitcoin, even if it keeps trading, okay, it'll be just like gold. They have gold on their desk. Gold is not a big part of anyone's business, right? Think about it. They all have a gold desk. All right. It's one out of 50 desks.

Right? And so it really has to go broader than just an asset. Mike, there's something that I want to ask about that. I don't think that I've heard be discussed out of a galaxy. That is the settlement in March for the Terra Luna case. Yeah, so the quick news is like there's a $200 million fine for Galaxy for, I believe, I don't know what the legal term is, but it was talking about Luna, in theory, supporting Luna while also selling Luna on the other side of things. And, of course, you have your famous Luna tattoo.

I don't know if you still have the Luna tattoo. I will die with that tattoo. Yeah. Get us into the shoes of Mike Novigratz and inside of the inside of Galaxy during all of this. Like, what were your lessons learned? What was the internal discussions like? Sure. So full disclosure, when you have a settlement with any agency, certainly with the New York AG, but any agency,

you sign a what's called an AOD where you don't admit to what they said or deny. what they said. And so we really don't have that much capacity to talk about this. I would say, when we got a call, it was not a nice call. You're surprised. The city had it happened a long time ago. And it couldn't happen at a worst time in that I saw this new administration offering such clean running ahead of us. I also knew we wanted to go public. We just listed at one point we might or might not raise capital with the kind of bankers that will only bank you if you got a clean bill of health. We've got a data center business with a huge borrowing footprint.

And so what I just thought about it for all the reasons that we're kind of overriding my wrestlers instinct to fight, just made all the sense of the world to put it behind us and move on. And I tell you what, the good thing about being a trader is you're like a goldfish, bad trade, move on. And so I haven't really thought about that. And it was not a small settlement. It was a painful one.

I hadn't thought about it since the, like, two days after. And, you know, I think our mantra is not talk about it, drive on, cost of doing business in New York, and move on in life. Yeah, I think one of the lessons learned for the rest of the crypto industry is like, holy shit, how dangerous are algorithmic stable coins, right? They can get away from you in a hurry. And actually, I imagine something. Well, that's a different conversation. Yeah. There are plenty of ecosystems.

And I've been talking about this in this market structure, but we need to be very careful that we label things. I never thought an algorithmic stable coin, she'd be called a stable coin, right? And then we did, you know, there was a run on the bank and that that's what in part took that ecosystem down. Nomenclature is really important. Think back when Celsius and BlockFi and Voyager were around, I'm sure they had disclosure, but most people thought they were leaving deposits and deposits in everyone's minor guarantee. 100%. Yeah.

Not they were investing in a very levered hedge fund that had an asset liability mismatch. And so what I would love to see come out at D.C. is a much shorter form but punchier disclosure around what the product actually offers. When's the last time you're in disclosure on anything? Never. It's the worst. No, no, it's due. But what about, like, just like on the cigarette label, this might cause cancer, right?

Really simple. This is guaranteed by the government or it's not. Right? you are taking our credit risk or you're not. Like there should be a disclosure for dummies. And in our industry especially, because we have a lot of new people that hadn't been seasoned investors.

We have a lot of hype. And so I know Paul Atkins is all about disclosure. What I would pitch to him if I was sitting here right now is to make it disclosure for dummies. Is any of this part of the Genius Act? Does the Genius Act define a stable coin is, hey, it has to be backed by full reserve, you know, treasury, something like that. It can't be something like Tara Luna.

Yes, it does. I don't have the exact details. I believe it's 40-day in-T bills and or, you know, U.S. dollar deposits at a Fend bank. That'll help. I think that'll help clean up, like, standards and nomenclature for this, right? And it's almost nice we have that back in 2022, like pre some of this legislation. More on Galaxy, you guys are doing some cool things with kind of the convergence, like, between crypto and AI.

So I actually hadn't been following this super closely, but to realize this and prep for the conversation, that you guys purchased a Bitcoin mining facility in Texas as a 160-acre Helios facility in December 2022. And now, Mike, it looks like Galaxy is sort of rigging this to actually serve the AI industry and setting it up for kind of an AI cloud. I'm curious what your plans are with that. And you see more of this in the future of sort of Bitcoin, mine the facilities. You can now think the galaxy is a holding company with two separate businesses that are low.

One is our crypto business, which we've talked about. The other is a data center business. We already have a lease sign and an option on a similar lease that will bring in 14 billion dollars of rent over the next 15 years. That's just on three quarters of the current data center. And so a monstrous business, that's about a $6 billion construction. project on our side and another six to eight billion on Corwee's side filling it with chips and all the equipment. So it's a $14 billion cap-ex project, which will be built in two years in Texas.

I'm having dinner with the contractor tonight. And he sent a nice email. So I really want to make sure you make the dinner because there's other people. I really want to meet you. I was like, dude, you're the most important person of my life. He's a Hail Mary and an Alfather every day that, damn it, you build on time and on cost. And so that's a big business. like this what has been helpful to me to start understanding the scale like if we would build out our full data center which is 800 megawatts now but we think we could get 1.6 billion more so it would be 2.6 gigawatts which would be maybe the largest or one of the three largest data centers in America wow it's in the middle of nowhere right it would be a 70 billion dollar capEx project

think about 70 billion dollars it's the GDP of uruguay to make a to make a big brain And so what it has taught me viscerally is that the bet that Microsoft and Google and Open AI and Tesla and all of them, Amazon are making on an AI future is staggering. And we should start thinking in almost nonlinear terms, which our brains aren't used to, right? Think of the car your parents drove and the car you drove. We're not that different. Not that different. Is it two times better? Maybe.

Maybe. What would it be if it was 400 times better? Spaceship, yeah, yeah. We are going to grow with that kind of asymptotic. Our brains aren't used to 400 times better, right? And so it's a brave new world to be cheeky, right? I'll just like to. And, you know, you've heard those lectures.

When you actually see the money, people are willing to spend a bill, you're like, oh, God, this is real. So it has made it very real for me. And it's a great business. Like, it's a great business because it's predictable. Listen, there's risk to it. We've got to build on time. We've got to deliver.

We've got to write a good data center. But we've become a realtor. And so having lived in the other half of my balance sheet in a 75-vall world for the last, you know, umpteen years, it will be nice to have steady cash flow on one hand. and a crypto business on the other. And the crypto business, it's a good business with lots of options on the future and it become a great business.

Like, we don't know how tokenization is going to play out or where the value in that space is going to come. We just don't yet. We all know, or at least think, Bitcoin's going to go higher, so you own a bunch of Bitcoin. But I would have never done this just to be a gold bucket shop.

Right? For me, the joy of crypto is, Can we create a decentralized revolution? Can we tokenize everything and provide kind of a democracy of finance and money? And we're right there at the starting line there. When it comes to the just future of our two industries, AI and crypto, crypto started in data centers, right? It started with Bitcoin miners who professionalized.

And that was the first big business in crypto. And you're seeing a parallel path with AI? Like the root of it is data centers. It's a weird, it's a weird historical bit of, of luck that. So you think it's luck, not a destiny of the future that our industries are like intertwined in some way or is it just a coincidence? There's going to be part of it is.

Yeah. But the data center thing was luck. That was luck. Like Bitcoin miners had great ambition, as did we. And it used so much electricity, we were the only guys that own giant swaths of electricity. Right? People ask me all the other big data center businesses in this business. They didn't own the electricity.

Like, when I started looking into this, we already have one of the biggest data centers in the world at 800. Like, it's, no one built these giant data centers before. And so it's who had the contracts for the electricity. So you don't think that there's any sort of intertwinement between the capabilities of AI and blockchain tech. There will be. Listen, listen, you know, blockchains are decentralizers and AI is the great centralizer. And so that's got to have a little bit of push-pull, right? authentication. Your AI agents are going to buy your groceries over some rails. I would guess

there are crypto rails. We've invested in our venture business in a bunch of different people that want to be it as rails and use their coin to be the one that transports your stable coin, are their blockchain specifically built for AI. And so I do think you'll see a lot of synergies between AI and the crypto world. I think the data center business, happen because we owned a bunch of electricity. Right? And so I don't want to conflate those two. But it's a beautiful story.

I try to conflate them. And we learn from it. Like when you're around the tenants, right? Who's writing these data centers? Google, Microsoft, Open AI, you know, Tesla. The guys that are building AI, like, it puts you more in that commerce. Not that you're picking up the phone and calling Jeff Bezos and saying, well, you. But it, in alex.

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scale data centers like faster than say China or adversaries? And can we get access to energy at a faster rate? I'm curious because you're doing this. A guy from the U.N. How hard is it to build in the U.S.? Down in Texas, it's not, which is why a lot of these data centers are going to be in Texas. Hook them horns. There was a guy from the UAE who was in their data center business, and he was quoting one of the top three brothers, Sheikh Tanun.

And he said, you know, Einstein said equals MC square, but now E equals I. Energy equals intelligence. The more power, the more brain. And I'm seeing that. Like there is an insatiable demand for power today because that creates the brain. And so who knows how long it lasts? I saw a great interview with Zuckerberg,

who said almost everything he's ever seen in his life, you can see where it goes where the asymptote bends. And he said, in this one, I can't. It just looks like it goes straight up. Doesn't mean it always will, but that was like, you know, Mark's pretty smart guy. and that was his moment of time decision. We see the bull market in this stuff,

at least for the next three to four years. Do you think we can, the U.S. can, his position to stay out of China on this, on both energy and data. I'm the wrong expert to ask. I would never want to short the U.S. You know, we do a lot of dumb things, but we always seem to figure it out.

And I was reading recently, 36% of our Nobel Prizes and the scientists came from immigrants. And so I tweeted that, of course, I got half the mag of people telling me I was a, you know, horrible guy. 50% of the Fortune 500, I'm sorry, 50% of unicorn CEOs were immigrants, 50%. And so as long as we keep the pipeline of smart, as long as I was at Yale's graduation this weekend, my son graduated, shout out not show, as long as we don't try to devastate our great institutes of learning because it becomes politically, you know, convenient, I think we're going to win the ARAs.

Mike, as we close us out, I think you've approaching or you have surpassed a decade in crypto. And certainly a huge moment for you ringing the NASDAQ bell for a crypto company. What's next, man? What's like the next big climb? You know what? I have been one of the most blessed guys in terms of finance. I was a partner when Goldman went public. I helped ring the bell when Fortress went public.

And I rang the bell with Galaxy. So three finance IPOs on my lapel. my wife said don't get greedy listen I think we've got a nice chapter to build here at Galaxy and you know maybe I'll lift my head up in three or four years and I'm 60 I've always thought

I'd worked to 75 so I got 15 years will it all be at Galaxy I don't know but at least the next three or four years I see clear yeah I don't know 15 years it feels like you can do another IPO somewhere you know it's kind of in the back of my head well this has been amazing thank you so much for spending time with us today and, like, very, very excited about this next run of the, of the Bull Run. We still got a Bull Run coming, right? It's not over yet for Crypto.

The Bull Run is just starting today. Yeah? You got price targets? Listen, we need to finish this week over 10750, you know, $1,500. If we do, if Sunday night we're at 108, 109, you're going to be at 130 before you can bat an eye. Mike, I think my first memory of you is first getting into crypto in 2017. hearing you chant the chant, the herd is coming. The herd is coming. How does it feel? I was girly. You were, hey, as promised, it does feel like the herd is here at the gate. Finally. How does that feel? You know, well, we went public at Fortress. It was joyous.

There were five of us, we were the first company where five guys became a billionaire today. Actually, the only company in history, even including up to today, where five guys became a billionaire here today. It was joyful. And Corey got close. I think they had three. This time, I was shocked how emotional I was. Like, I almost cried on CNBC, which I would have shot myself for since I teased the Latin for crying on CNBC. You don't cry in baseball. And I kept thinking why I was so emotional. And I think some of it is, you know, we were looked at as drug dealers at one point. Like, our industry has gone through hell. And forget to 90% down drafts, you know, 2018 and 2022, 90% and 70% and 70%.

Being persecuted and prosecuted, I keep using those two words, going through the thing with the AG. And it just felt very emotional to ring that bell. And that surprised me. You know, I said the herd was coming. I was freaking seven years early. And so it's not vindication. It really isn't. I don't say, oh, I'm vindicated.

It's not the way my body operates. but it did feel good to have made it through the journey. Well, Mike, you rode the herd. I think you led the charge of the herd in a way. And so I think many of us in the crypto industry owe a debt to your confidence and also your leadership. So we are definitely grateful having you among us leading the charge. Yeah, thank you. Guys, thanks a ton.

Thanks a lot, Mike. Bankless Nation, you guys know the deal. Crypto is risky. You can lose what you put in. But nonetheless, we are charging forward into the frontier. It's not for everyone, but we are glad you are with us on the bankless journey. Thanks a lot.