The Pomp Podcast - #1507 Mike Novogratz | Did Trump Make Bitcoin Crash?

Episode Date: March 17, 2025

Mike Novogratz is the Founder & CEO of Galaxy Digital. This conversation was recorded at Bitcoin Investor Week in New York. In this conversation we discuss the current bitcoin narrative, sovereign wealth funds interest in bitcoin, what the future of crypto looks like, Trump’s impact on bitcoin, Galaxy,  and why Wall Street is embracing bitcoin.=======================Bitwise is one of the largest and fastest-growing crypto asset managers. As of December 31, 2021, the company managed over $1.3 billion across an expanding suite of investment solutions, which include the world's largest crypto index fund and other innovative products spanning Bitcoin, Ethereum, DeFi, and crypto equities. Whether you’re an individual, advisor, or institution, Bitwise provides intelligent access to crypto with your unique circumstances in mind. Visit www.bitwiseinvestments.com to learn more. Certain of the Bitwise investment products may be subject to the extreme risks associated with investing in crypto assets. Visit www.bitwiseinvestments.com/disclosures/ to learn more.=======================The future is being built today and the future of currency isn’t dollars, euros, pounds, or yen, it’s crypto. And Gemini thinks that’s a great thing. Because a future where money is decentralized, inclusive, and globally accessible, that’s a future that we are anxious to be a part of. Go where dollars won’t. With Gemini. =======================Pomp writes a daily letter to over 265,000+ investors about business, technology, and finance. He breaks down complex topics into easy-to-understand language while sharing opinions on various aspects of each industry. You can subscribe at https://pomp.substack.com/=======================View 10k+ open startup jobs:⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://dreamstartupjob.com/⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Enroll in my Crypto Academy: https://www.thecryptoacademy.io/

What's up, everyone? This is Anthony Pompliano. Many of you know me as Pomp. You're listening to the Pomp Podcast, which is my effort to find the most interesting people in the world and sit with them for hours while I ask questions in an effort to learn. So it would mean the world to me if you would subscribe to the show on your favorite audio platform, watch episodes on YouTube, and tell your friends and family about the podcast. My goal is to help millions learn from the world's most interesting people. So let's get into today's episode. 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. It's no secret that Bitcoin ETFs have taken Wall Street by storm. With over $35 billion in assets in just one year, it's become the most successful ETF launch in history. My partner Bitwise is the first and only Bitcoin ETF provider to openly publish its Bitcoin wallet addresses, allowing anyone to verify the fund's holdings. I believe this level of transparency is exactly the kind of innovation that only crypto makes possible. Bitwise is also the only ETF issuer that is a crypto specialist asset manager, meaning their team solely focuses on Bitcoin and they have the research, education

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with crypto before you invest. Today's episode is brought to you by Gemini. The future is being built today and the future of currency isn't dollars, euros, pounds, or yen. It's crypto. And Gemini thinks that's a great thing. Because a future where money is decentralized, inclusive, and globally accessible, that's a future that we are anxious to be a part of.

Gemini teamed up with futurists, technologists, and designers like award-winning artist Matt Griffin, known for his illustrations for Dune, to craft a vision of the future with crypto at its core. The creative theme, Go Where Dollars Won't, emphasizes exploration, growth, and the crypto market's limitless potential. Whether it's going on that Martian safari to capture an unforgettable photo of a herd of woolly mammoths grazing the red planet or using Bitcoin to pay for your Lyft pass

to go strata skiing down the mountain peak of a breathtaking comet. Whatever adventures we'll be living, one thing is for sure, in a future this fantastic, the limits of traditional currency simply cannot keep up. Financial innovation will usher in this new frontier

and so go where dollars won't with Gemini. Go check them out at gemini.com slash go where dollars won't. again go check it out at gemini.com slash go where dollars won't all right before you were a bitcoiner you were a currency trader macro uh we'll call you analyst trader whatever you want to have you think you just think about macro markets all the time what the hell is going on well first of all bitcoin is a part of a macro market right that's why we why i got into it and you know crypto in general is all about narrative uh right it's not the technology technology is

pretty cool but we could fork the bitcoin blockchain and call it the novo chain and it probably wouldn't have a lot of value and so it's not the technology it's the social construct that social construct i think it has value you think it has value comes from narrative right the narrative has been governments can't stop spending money they're going to depreciate their currencies incessantly it's happened from time immemorial therefore we need a hard asset like gold and this is gold for a digital age so like that's bitcoin's narrative it should stay its narrative it's a great narrative and you know so we've just gone from 107 to 77.9 painfully last night at like two in the morning um and so it feels kind of shitty but i would tell you the

One thing I've learned in whatever the 15 years I've been following this stuff for, not 15 years, I'm cheating there. Yeah, 13, no, 11, 11 years, 12. Is that- Seven, 19. There was a great song by Chumbawamba. I don't know if you know it.

I get knocked down, but I get up again. Ain't no one's gonna hold me down, I get knocked down. Oh, Danny boy. That song? Yes. The Bitcoin community takes its pain and what gives it its resilience are guys like Jack Maulers and Wences Casares and all of the, and now Larry Fink, all of these orange pillars who are out there convincing people that this social construct that, hey, you

should take some of your hard-earned wealth and store it in this community. You have to trust in this community of weirdos. The community gives its value, the blockchain itself gives it its constitution, right? Satoshi's white paper gives it its constitution. And so you know what you're betting on. There's something really magical about that. Why does Bitcoin dominance keep growing? because it's got the strongest, oldest, and most diverse community. Why is it hard for NuCoins to

get any momentum? Because it's really hard to create community. It's really hard to create energy that brings everyone in. We were investors, and we still are investors, in Celestia. And we say, oh my God, Celestia is going to be the best blockchain. It's a modular blockchain, and it starts off with a hype but it's really hard like if i walk down the street and grab 10 people zero would know what celestia is but eight would know what bitcoin is and ford really understand it uh and so how does how do these other ecosystems get mind share it's hard it it's kind of weird that the top four coins are the first four coins that were launched they got their communities earlier.

And they've been working. I was talking to Brad Garlinghouse. He was like, I don't even know where half this XRP army comes from. But they are unbelievably passionate. And lots of crypto people will make all these, you know, derogatory statements about why XRP is not as good as Bitcoin. Those people don't care. They're storing their wealth in that narrative.

And so I do think it's the way I've always looked at this space. I think we're in an interesting macro I'll get to your question that was a long freaking answer I'm already halfway through my time one question listen what's happening now

you're doing great well if you think about what happened Donald Trump becomes the president he's going to be a bitcoin president he's got a cabinet of bitcoiners he makes pro-crypto comments rumors of the Saudis

in Abu Dhabi buying, now it's, you know, they've publicly said yes. So, the Mideast is buying. Everything is good. Like, how much better could it get? I was at the inauguration. There was a crypto ball. And not only was there a crypto ball, it was the party to be at. Everyone in D.C. wanted to go and went to the crypto ball. Like, market tops often come from that kind of exuberance, right that's what creates a market top then there's often a symbolic gesture right aol buys time warner top of the the nasdaq in march of of 2020 right how this this new internet company buying one of the biggest media companies on earth it seemed insane it was insane uh but that what do we have we had trump coin launched and instantly it went to 60 billion dollars of value

That's what market tops look like. They often come with champagne, fireworks, and an orgasm. And after all that, you fall asleep. And all the energy leaves the market. And so we've had a painful correction in crypto for a bunch of reasons. There's political uncertainty. It's hard to keep up with Donald Trump. I don't know if it's planned or not planned, but it's happening.

and so the markets can't deal with tariffs, no tariffs, up, down, sideways and so you're seeing a deleveraging and Bitcoin's still a risk asset, crypto's a risk asset, so that's washing it out. You have this idea that we might miraculously cut government spending.

I'll believe it when I see it. I will pray for it, but I'll believe it when I see it because you need to both cut government spending and raise taxes and we seem to be able to do the other thing. Me and him have a thousand push-up bet that he can balance the budget in these four years,

one year. The last president to do that was the great Bill Clinton and I don't think Donald Trump will come close. I'd actually give you 2%. I just think, and it's not all their fault. We have a structural problem. And so, but if you start believing, and listen, I think the Secretary of Treasury,

Scott Besson is as good as a man that you could have in that spot. He's a macro guy. He understands the plumbing. We are all blessed that he's our Secretary of Treasury. I pray he lasts his four years. Even with that, it's going to be brutally hard. If he does his job and we take debt to GDP from 130 back towards 100, if Anthony's right and I'm doing 1,000 push-ups on video, there could be AI involved. If all that happens, Bitcoin's going to be lower, not higher, right? If we really become the store of value in the dollar again, if we regain faith that this country can balance its checkbook, you know, the Bitcoin narrative is a lot less important. And so, same thing with gold, right? Gold prices won't go from $3,000 to $10,000 if we have a balanced budget. They'll

be back at $2,000. And so there's a macro piece to this. Right now, you know, and then I'll stop, this was the unwinding of a bubble. The Trump coin was important in that people woke up and said, wait, is there infinite supply in this shit? If he can create one and Melania creates it, everyone can create one, and Kanye is going to create one. And every one of these protocols want to sell discounted tokens. And all of a sudden, you see a wave of supply. And yes, there's new demand, but there's not that much new demand. Matter of fact, I got to give a shout out to Larry Fink, because it felt like we were all drowning this morning. and Larry threw one of those life rafts

by BlackRock announcing they're going to put one and a half percent in portfolios. That's a huge deal. And so I do think, again, we're a resilient crowd. I think the broad direction's heading in the right way. But if there's one thing to learn, and we should all just learn it painfully, this is not a straight line.

I don't know how much you can talk about it, but you've been very involved in a number of conversations, both here in the United States of people who became orange-pilled, but probably more importantly, there's a lot of conversations that have been happening in the Middle East. And I think that people, somehow the Middle Eastern investors, the sovereign wealth funds, they have become the pinnacle of what people think kind of smart money or institutional money is doing. You see that when Abu Dhabi's sovereign wealth fund comes out and says, hey, they own the ETF. There's an immense, you know, kind of a slew of headlines and people just immediately, oh, the sovereign wealth funds are here. What are a lot of those conversations like? And can

you share any kind of insights of how some of these countries are thinking? Yeah, I think it was really, really simple. As much as I'd like to think it was my, you know, flowery articulation of why Bitcoin was important. It wasn't. It was the moment Donald Trump stood on stage in Nashville and say, we are going to be a Bitcoin country. We're going to be a crypto country it flipped in their minds and they were like if the u.s is gonna do if bitcoin's important to the united states it's important to us that's actually a direct quote from the head of the largest sovereign wealth fund in the mid-east uh and sure enough good to his word they bought 500 million dollars and and i think listen are we going to get a strategic reserve

or a stockpile or a sovereign wealth fund that has crypto in it, I don't know. I know there's a lot of people in D.C. that want it for self-interested reasons and maybe for strategic reasons. I don't think there'll be a strategic reserve, right? The dollar is backed up by the fiercest Army, Navy, Air Force in the history of this planet.

That's what gives the dollar its value. And to say, well, we need something else too actually diminishes that story. Remember, the currency is a narrative just like Bitcoin is a narrative. But I don't think it's impossible for our government to say, we think this is important. We're going to have a strategic stockpile. Words matter. And that's getting kicked around. Why is that important? Again, we put something in our sovereign wealth fund. Everyone else does too. And so I think that process could really be helpful. It's not essential, but the networking of these crypto ecosystems just takes

time, right? And so what do you mean? 300 million people that probably have bought or sold a Bitcoin at one point of their life, and there are eight and a half billion people on the planet? Let's talk about Galaxy. You've been working on this now for quite a while. I know that you would like to come to the United States. I also know that you at times have been very frustrated that the stock was trading at or below book value, but you all have significantly expanded, I think, not just your ambition, but also your operations. So talk a little bit how you think about the business today and kind of how it is positioned given the backdrop of both macro and the political see change yeah listen we the door slammed shut right after coinbase got public and we were stuck

on the other side and have been literally for four years back and forth with the sec um that's all changed and i think you will see a whole bunch of crypto companies uh file you know after you know in in april everyone's got to get their year-end earnings done in that process. And I think the SEC will approve most. And so, you're going to see a wrath of IPOs probably starting in June. And hopefully, we will be leading that pack. So, that's exciting. Why is it a big deal? All the liquidity in the world is with the NASDAQ. We have a stock that trades in Canada, and companies half our size would trade 100 to 150 times more volume per day. And so I just sat there angry or jealous, I should say, watching these companies tap

the capital markets and be able to use that currency for acquisitions or for strategic purposes, where we've funded our company mostly through trading profits and then a couple converts. You guys are doing mining, a number of other different things. Talk about kind of the different business lines. Yeah, so our company is changing pretty quickly. we still have a big institutional sales and trading business derivatives lending spot otc trading um that's our biggest and kind of most stable business uh we got into staking 18 months

ago we're the second biggest validator in solana we have a really fast-growing staking business that works especially if you can then write derivatives on on you know when we put the whole piece together, market making as a service, staking, derivatives, trading. And so that piece is really working. We have an investment banking business, a growing asset management business. Our Bitcoin mining business is morphing. And stay tuned, but we are barreling down the path, and this is public. We had a non-binding term sheet signed, and hopefully, knock on wood, that becomes a binding term sheet very soon, to be a data center provider for AI.

And the beauty of that is, how does that work for those of you who hadn't followed it? You're lucky enough, smart enough to own power. The big six, you know, AI, you know, OpenAI, Microsoft, Google, Amazon, Meta, they need power and they need it now. and they need it next year and the following year. By 2033, there's lots of projects

that the country's going to have a lot of power, but there's not a lot of power now. And so some of these crypto miners, including ourselves, have power now. And you enter a long-term lease, 20-year lease. You take that lease, you get the financing from traditional banks. You then build out a data center

at about $13 million a megawatt. And so if it's an 800 megawatt data center, you can do the math, right? It's over 10 billion of CapEx. And in the long run, you end up having a triple net lease real estate asset that cash flows. And so why is that important to a company like Galaxy? Well, it's just a great business to start. But having lived in a business where, you know, your staking revenue, if you were a Solana validator just got cut in half from the inauguration.

All of our fees, fee income, broadly is tied to the underlying asset. And so everyone in this room who runs a business is so much happier Bitcoin at 100 than Bitcoin at 60. Or Bitcoin at 200. Or Solana at 200 versus 120. And so that volatility gets tough to live with. right hire them fire them you know how do you how do you business plan and so having a a much more stable real estate business you know cash flow business I think is a perfect yin and yang when we look at bitcoin and its kind of infiltration into wall street the obvious

area was the etfs we got that approved man does wall street like to get creative man do they like to create financial products, what are the things that you think will come to Bitcoin but are not yet here? Are there principle-protected notes? Are there all these types of things? I think that's the next thing you're going to see. As the derivative market gets deeper, you're going to see people launching through these private bank principle-protected notes. I think there's already a principle-protected ETF. That just makes it easier. Give up half the upside and get some downside protection. What's going to take a while is for Wall Street and the broader population to move beyond

Bitcoin. You have a whole world of what we call crypto people, or degens, that if I talk about wormhole or pith, they know what I'm talking about. But again, I don't need to ask 10 people on the streets of New York. I could ask 1,000 and no one would know what wormhole or pith is, right? And so how we go from Bitcoin to Solana and Ethereum and down for broad distribution is going to be very difficult. Do you think those other assets are accretive to Bitcoin because as the pie grows, more capital will make its way to Bitcoin because the pie is growing? Or do you think that it's a zero-sum game for the capital coming into the market?

Kind of halfway in between. I think you can break crypto into four buckets. There's digital gold. Bitcoin stole that space. It does a great job in that space. Every time people want to use Bitcoin for payments, I want to kick them in the gonads because I'm like, stop, right? Don't mess with my narrative. It's a good narrative. Don't confuse it, right? That's what gets people in. We're not going to buy shoes or Coca-Colas with Bitcoin. You might use their rails, but probably not because they're not nearly as fast and easy as some of these new L2s. So that's one. Then there's stable coins, which we think is a booming business.

And you're going to get stable coin legislation probably in the next three months. Then you're going to see that really start to accelerate. So that's another business. Then there's real world assets or the tokenization of stuff. a tremendous amount of money is being put into that every trade fire organization has got their own group thinking about we once they tokenize stocks we can't not be part of it to me that's a plumbing operation it's regulatory and financial market plumbing it is going to happen i think it's going to happen slowly and then quickly but it hasn't happened yet and then the fourth big bucket which drew a ton of people into crypto

is this idea of decentralization, Web3. Is it going to be built on Ethereum or Solana or some combination of these ecosystems with bridges, right? All these L1s and L2s are broadly Microsoft Excel databases that get shared. And how are we going to, in a world, build decentralized ecosystems on top of those things? and that's where crypto has been the most disappointing

while there's lots of great assets that people trade and it's important they trade right i want to shout out to like all the you know by bit and binance and all the big asian exchanges that create the liquidity for these tokens to trade on but they've really created the infrastructure for a casino. And there's unbelievable amounts of gambling that goes on, right? From sports betting to betting on crypto to meme coins to stocks. We have a gambling culture. And so all those tokens go up and they go down and they get talked about and their stories get talked about. But there's not a whole lot of utility from them yet. And I think in the next few years, we need to see some utility we need to when i look at this phone that's ringing uh that happened last year yeah

two for two i i need to be able to say hey there's a zero knowledge uh proof driver's license uh or or there's something i'm using in a decentralized world i've got decentralized tickets i've got decentralized something right now none of us use web3 unless we were like nft people or and so i think for ethereum and all these other things to really accelerate utility has to be part of their narrative uh and it's always been the story it's we've got to start seeing some wins is trump good or bad for bitcoin in the sense that he says a lot of pro bitcoin comments they launched trump coin then there's talk of She's a Bitcoin reserve.

It didn't happen on day one. The Trump administration is categorically good for the crypto industry. Categorically. And sometimes you got to take the good with the bad. I was at the vice president's ball and the crypto ball first. So you saw lots of the crypto illuminati, the business leaders. And I mean, it was the turd in the punch bowl as soon as that thing got launched. Everyone looked at themselves.

It was like, oh, that just didn't happen. you know the the the group collectively and many people in this room have worked so hard over the last eight years to finally get across the finish line and that made it feel a little foolish and listen we have a you know i don't get to determine who who participates in this industry, nor do you, right? We have a very eclectic group of people in this industry. And sometimes to more conservative institutional people, it all looks weird, right? People screaming. And now listen, now we have the head of Doge with the chainsaw, so maybe that's going to get normalized. But we're a hard act to often sell to people. And Trump coined a

Melania coin and going to 60 billion and then, you know, Argentina being rugged and even the word rugged, all of that stuff. Uh, what does resonate when you, I mean, you talk to these people all day, right? So like, what is the talk track right now that resonates when all of the other stuff is going on when even the, you know, very hardcore kind of crypto stuff is, uh, is happening? What is the narrative or the talking points that you found have been most effective with wall street listen with washington was and i made a little pithy quote there are more people that own crypto than own dogs and the democratic party seemed to be the party that hated dogs like it's just stupid politics people care about crypto so damn it figure it out and learn it

the republicans got engaged in crypto not because they loved crypto because they realized there's a are real politic to this thing. There are a lot of single issue voters. Young people care about this. Listen, what young people have done is creating a new input to investing. Like we never had this idea of community as one of the inputs to valuation, right? We now have it. And I don't know if it will last. I think it will because there's a lot of young people and old people are getting older and they're, they're, they're leaving the planet. Young people have more young people. Right. And so, but like we saw it with Tesla for a while, right? Tesla was like the first meme stock. And then you had GameStop and a few others. But that's all a crypto. It's I'm

willing to put my money into this community because I want to. Don't tell me what the valuation is. Don't, ah, shut the hell, like, so there's a momentum piece to that, but there's something about community. It's why I hate to use the word tattoos because it's been a thorn in my side, but why there's so many people with crypto tattoos and crypto passion and Bitcoin t-shirts. I mean, think about what a great company Oracle is. Have you ever seen anyone with an Oracle or a Sun Microsystems t-shirt or a tattoo. Hey, I got an Oracle tattoo, right? Think of your favorite stocks. Have you ever even thought about like going to a, you know, an Apple meetup? But you go to the Apple store to buy cool products, but you don't meet a bunch of friends at a bar to talk

Apple. And so there's something that's very powerful about community in a world where people are longing for a community and that might be a permanent addition to investing it's too early to tell but it certainly might be last question you're going to leave the tattoo you're going to get it covered up you know the one thing in life you can't regret mistakes and and things you do in life and so uh no i won't cover it up mike novogratz everybody Thank you.