The Wolf Of All Streets - Bitcoin Will Hit $250,000 | Tim Draper Is Still Bullish On BTC

Episode Date: May 24, 2022

What countries and businesses will be successful in the future? According to legendary investor Tim Draper, it will be those who prioritize trust and freedom. A huge proponent of Bitcoin and decentralization, Tim joined me for an incredible conversation on The Wolf of All Streets. We discussed why Bitcoin is turning the world upside down, how government adoption plays a role, the future of Crypto, price predictions, and the power of DAOs. Tim has founded thirty Draper venture funds, Draper University, Bizworld, and two statewide initiatives to improve governance and education. This is a conversation you don’t want to miss. JOIN THE FREE WOLF DEN NEWSLETTER 📩 https://www.getrevue.co/profile/TheWolfDen THANK YOU TO OUR SPONSORS ►► Have you ever had your exchange go completely offline during days of high volatility? Of course you have. We've all been through it. Those days are no longer with Bullish. Bullish is a new breed of digital asset exchange that empowers users to trade with deep and predictable liquidity across highly variable market conditions. They also have incredible automated market-making and industry-leading security. I can't get enough of this platform, and it's fully regulated. Sign up here: https://thewolfofallstreets.info/bullish/podcast EPISODE LINKS Tim Draper: https://twitter.com/TimDraper Production & Marketing Team: https://penname.co/ FOLLOW SCOTT MELKER • Twitter: https://twitter.com/scottmelker • Facebook: https://www.facebook.com/wolfofallstreets • Web: https://www.thewolfofallstreets.io • Spotify: https://spoti.fi/30N5FDe • Apple Podcasts: https://apple.co/3FASB2c

I can't believe that I can ask for a toothbrush and an apple and the thing shows up in two hours. And that's Amazon. And I thank Jeff Bezos every day that I use Amazon to just say, hey, way to go. You know, look what you did. Get richer. It's the best. But if he had set up a Dow, he wouldn't have that politics of envy because as a customer, I would also get some of that token. And it would be like having everybody be a shareholder of Amazon, his customers, his suppliers, his employees, him and and his community. And so I think DAOs are a solution to a lot of the schadenfreude, the politics of envy that we're seeing today, because everyone will benefit from a successful DAO. This podcast is sponsored by Vauld. Please stay tuned for more information

on this amazing company later in the episode. Trust and freedom are the two key attributes that will determine which governments and companies are successful in the future. Not my words, but those of legendary investor, Tim Draper. Tim and I just had a sprawling conversation discussing Bitcoin, government adoption, the future of crypto, price predictions for Bitcoin in the not so distant future. You guys don't want to miss

what he had to say. So how's everything going? I heard you 30 years of Draper Associates. So Joe Vizzotti is a friend of mine from Lunar Crush. He told me I had to congratulate you on 30 years. 30 years? Has it been 30 years? Actually, it's been longer than that. Okay, so congratulations on more than 30 years. And then he joked that you and I have at least two co-investments, which is Bitcoin and Lunar Crush. Oh, terrific.

Yeah. Yeah, that Lunar Crush is exciting. And Bitcoin, oh, my God, are we recording? Yeah, we just go. But I love that Central African Republic has joined El Salvador. And actually, you know, Japan was really the first one to take to accept Bitcoin as a national currency. But these other two, they are looking at it as ways of pulling their people out of poverty and to create trust and freedom in their countries. And so Bitcoin's going to really transform the world and sort of turn the world upside down. The poorest will become the richest,

or I'm not sure how that, what the term is in the Bible, but it looks like the poorest countries are going to become the rich countries because they have nothing to lose, and they are looking at, um, sorry, there's a, um, they are, they're looking and saying, you know, our people don't trust our currency. You know, our people are trying to make a, um, you know, a living out there. And if you don't have a currency you can trust, why not adopt Bitcoin? And boy, that is, it's certainly changing El Salvador. El Salvador with that bond issue is making it so that they don't have to be completely beholden to the IMF. And that's pretty exciting. That changes the whole nature.

I mean, IMF's debt has kept a lot of these people, a lot of the poorest countries in check, in poverty for a long, long time. And now there's this amazing opportunity for countries to accept Bitcoin. Entrepreneurs will go there. They'll build an economy. Their economy will thrive because they'll have currency they can trust. Their people will be free because they won't be at the mercy of a government that just prints money. And so I think this is just the second or third domino to fall. But of course, you know, I'm sure Malta kind of accepts Bitcoin everywhere. And I'm pretty sure Switzerland does. But having the country say, we're going to take taxes in Bitcoin,

we're going to make it accepted currency everywhere around our country, that pushes entrepreneurs to go there. I know OpenNode was one of the first country companies that moved to El Salvador and started to create their own economy allowed retailers to easily accept Bitcoin. And I'm sure OpenNode is on their way to the Central African Republic today.

Yeah, it's interesting. It took 10 months, basically, from El Salvador accepting Bitcoin as legal tender last June to now see another domino fall. I think there was this expectation that they were going to come over and over and over again. But then you saw how much pushback there was from the United States, the IMF, as you mentioned, the World Bank. I mean, this is extremely bold going in the face of these massive legacy structures that, as you said, basically intentionally offer predatory loans to keep these countries permanently down. So it really is a big deal to go from one to two. Oh, yeah, absolutely. And I suspect, well, that was 10 months. I suspect that five months to the next country to start to accept Bitcoin and maybe two and

a half months to the country after that so that these countries will get more and more emboldened as time goes on. They know it's good for their people. And so clearly the best leaders are going to be accepting Bitcoin. The dictators are the ones who are tied to geographic controls or people controls. because they do a lot of self-aggrandizement at the mercy of their people. So their people suffer, but they become really strong relatively. But the best leaders are the ones who allow their people freedom. And with that freedom, those people become wealthy.

Yeah, and they finally have a way to opt out. Right. The freer a country is, the wealthier nations by simply accepting and adopting a Bitcoin standard. Yeah, I think countries are in a competition for us now. They're in a competition for the great entrepreneurs, the money, the citizens of the world, the businesses of the world. And those businesses are attracted to places who have lower taxes, lower regulation, more ease of moving money in and out of that country, fewer restrictions on trade. And the businesses of the world are malleable.

They can move from country to country. And in fact, we've even created the Draper Innovation Index, one of our nonprofits, and they are showing how different countries are moving up or down based on how attractive they are for entrepreneurs, how attractive they are for businesses to move to them. And the US has been number one for many, many years, but they're being challenged. Singapore and Switzerland are very close. And then some of these very poor countries like El Salvador, and now it looks like Central African Republic, are moving way up because accepting Bitcoin is proof that that country is looking for trust and freedom. And trust and freedom are where all this great economies, all the great economies are built on trust and freedom. All you need to do is go to Korea. And there was a dividing line between North and South Korea. South Korea or North Korea was Marxist, Leninist, central control, government control, government regulation, high taxes, high government authority. And South Korea was freedom, freedom of speech, freedom of trade, open borders, democracy.

And what's happened 70 years later is the average South Korean makes 460 times what the average North Korean makes. And that's when accounting for purchasing power. And the average South Korean is four inches taller than the average North Korean. North Koreans are starving. And China has now gone to central control. I don't understand why they have totally missed why they grew the way they did. And that central control is destroying their entire food chain. I mean, their supply chain's getting destroyed, but their food, they're not feeding their people. And the way to feed your

people is to set them free. It's not to control them and lock them up. I don't get it. I feel so badly for all those Chinese. Yeah. I mean, you talk about trust and freedom and how the United States has always been the leader for entrepreneurship and innovation. It seems like there's some cracks in that facade. I don't think your average American person trusts their government, feels particularly free at the moment. And I don't think your average entrepreneur feels very welcome here, especially in the cryptocurrency industry. High taxes, major restrictions, lack of regulatory clarity. It's already happening, right? Why would you even attempt to build here? Well, it's pretty, there's a big irony here that these two companies, FTX and Crypto.com,

have taken over the branding of two of the major U.S. sports facilities, and neither one operates in the U.S. It's unbelievable. Right. People don't realize FTX U.S. is basically a subsidiary and separate company. FTX itself cannot. Well, CFTC and the SEC argue about who's going to regulate and who's going to be tougher on cryptocurrencies, they are really destroying the opportunity for the US to be the leader in cryptocurrencies. That is a shame because Bitcoin creates so many interesting opportunities. I can imagine a time when I can raise a fund completely in Bitcoin. I can invest it completely in Bitcoin. I can be taxed completely in Bitcoin. I pay my, I invest in my companies all in Bitcoin. The companies then pay their suppliers and employees all in Bitcoin. And it's all on a smart contract and a closed loop. And if I can do that, then the whole thing can be done on the blockchain.

I need no accounting, no auditing, no bookkeeping, no transfer agent. It's all done right there. That can happen in a country that allows that to happen. But the U.S. is very slow to let anything happen. And I think they're doing just the opposite of what they did with the internet. The internet, they let it rip. And they said, let's just see how it goes. But in the case of a lot of crypto, they've come slamming down on some of these crypto

entrepreneurs before they even got going. And that really hurts. Not having that ability to build something first in your own country really hurts because then you start seeing these entrepreneurs moving out. And then we don't have the trust and freedom that we had for the last 200 years. Right. And listen, you've been early investing since those internet days, right? What's the difference? Why are they treating this so differently

than that was treated in the 80s and 90s and early 2000s? Is it because it's money? I mean, is it the reason is because it's the money and they don't view it as the technology in the same way you just described that loop? Well, in the US, I., I think the U.S. has benefited a lot by having a strong dollar that the world uses or many, many countries of the world use.

And they feel like they don't want to lose that. And Bitcoin's just better money. And they're clinging to the past. And think about who's in office. The average senator is something like 73, 74 years old. They are not really anxious to allow for any changes that are going to mess with the current system. And, and I think, I think age has something to do with I think we had a much younger Congress and, and a younger president, Bill Clinton was fairly young president. And he said, let's let this internet thing

roll. And that made a big difference to the internet. And now I think we've just got, and I can say this stuff because I'm pretty old. I think we just have too old a government that's stuck in their ways. And they're not realizing that anybody below 35 years old would rather have a Bitcoin than $38,000. And everyone who's 50 and older would rather, except for me, would rather have the dollars than the Bitcoin. And they don't, I think the younger people are seeing this incredible value to having a better currency. And the older people are not seeing that. They're just saying, oh, the dollar has been good all this time. Let's just hold on to the dollar and whatever else. So I am very concerned being from America. I'm very concerned from US. I know in South America, they say, what do you mean America? That's right. Which one?

Guys, I have a serious question for you. How much interest are you earning in your bank account? Is it 0.00001% or something similar? We all know by now that there's a better way in crypto, but you want to be using the best platform possible, and that is Vauld. I have been using it myself now for quite a while, earning the highest interest rates in the industry. 12.68% on stable coins, 6.7% on ETH and Bitcoin and earning yield on a ton of other assets. But it's so much more than that, guys. They have a robust exchange. You can swap your coins and they have the amazing automatic investment plan where you can dollar cost average or more importantly, buy the dip automatically. We know that when the dip actually comes, nobody buys it

because they're scared. Well, you can automate that process now with Vauld. Guys, this platform is absolutely incredible. It does everything. They're backed by Pantera and Coinbase Ventures. You really can't ask for anything more. And if you use the link right down below, you get a 40% kickback on trading fees, 5% commission on interest payouts, and 5% commission on loan interest. Guys, sign up right now at thewolfofallstreets.info slash VAULD. That's V-A-U-L-D. Do it now. Seriously. But from being from the United States, it's tough because, you know, I raised my kids to be free and trusting and trustworthy and thinking free speech, free, you know, free markets, all of it, freedom.

And now I'm slowly but surely seeing these old people clamping down on our freedoms. And when they start saying, you can't do this, or we can't have people doing this, or take money away from that guy, or do this, it's an angry government, instead of one that is on the side of business and on the side of progress and growing the economy, allowing the economy to grow, allowing the thousand flowers to bloom or whatever, that attitude is so much more powerful that allowing people to be free is so much more powerful than the attitude of we have to have more rules or we have to have tighten up on this or make them pay more taxes or whatever.

Those things are, you know, short term gain, long term lose. What you described is so interesting because it's sort of everyone's life cycle, right? We all mock our parents for not liking any of our things, and then we become the parents and we start making fun of the music that the kids are listening to now. And it's sort of the same thing. Normal for an individual, but highly problematic with the government, as you said. If the government remained being those younger people, it wouldn't be such a problem. But you also said everyone in my generation,

except for me, right? So you obviously have been able to buck that. And a few others, there are a few others. Of course, but the idea, you and a few others have been able to sort of buck that trend. And you've always been that way, right? Looking at your investing career,

what has allowed you to maintain that sort of, I guess, naturally contrarian view and to be self-aware enough to not fall into the trap that I just described? So it's, I wouldn't say it's contrarian so much as a vision toward the future, because I meet with a bunch of entrepreneurs. I mean, for a while there, I think was like eight entrepreneurs a day. And I every one of them gave me a view of what the future looked like. And so I started, even though I don't really know what's going on right now, I have a pretty good view of what five to 10 years forward is going to look like. And so I'm always projecting out five to 10 years, I'm not thinking of what it was like, I'm not a, you know, I read history, but I'm not a historian. I am really always thinking of what's the future going to look like. And so I get, you know, I'll get nervous when I see a government working against the best interest of these visionary entrepreneurs.

I get excited when a government starts saying, hey, we want to attract these entrepreneurs. And I'm always sort of thinking, well, what's next? And I think that is partly just because that's my job. And so my job has allowed me to always be projecting into the future. And I think that may be why I'm a big believer in Bitcoin and cryptocurrencies and DeFi and NFTs and board apes and you name it. I love it because it is where the future lies. And so I'm always focused on where that future lies. I'm excited about like more digitized medicine. I'm excited about new forms of governance where people are operating in, you know, people are calling it Web 3.0.

I just said this new decentralized world that world that used to be tied to these geographic borders, and now potentially governance can be managed up there in cyberspace, or a big part of governance can. Well, it's interesting. It's one thing to be early, which you described in looking five to 10 years ahead. It's a whole other thing to be early and right, right? Which most people are not. And the third thing, it's another thing to be early, right, and actually hold those investments through that entire time, right? There are so many people who were right about Bitcoin in 2009, 2010, but sold when it was $1,000 because it was $1,000 and they had gotten it for almost nothing. So that combination, I think, is extremely rare. Well, that's a luxury once I've made enough money to sort of keep the wheels on the bus. I do have the luxury to hold on. Sometimes people need to sell. They need that $1,000 so that they can go, you know, whatever it is, you know, pay for groceries. But, and boy, people are having trouble getting groceries in China.

So I feel very sad for them. And that's because of that government control. It gets in the way. You got to let people be free um the uh so uh yeah i've been able to hold on i most of the investment mistakes i've made were in selling too soon you know trusting myself to uh myself to make those early investments and hold on to those early investments, but then when the world catches on for me to let it go. Where I did hold on to all my Bitcoin, I let go of my Tesla stock way early. So did I. If it's of any consequence,

what's the position? I made a big mistake there. And the reason I did was I was thinking everybody's going to be using Uber. Nobody's going to want to buy any new cars. That was my concept. But then you might be proven correct eventually, by the way. That doesn't mean you were wrong. It just means you were a little early. For the moment, I am. Because the pandemic showed up and everybody wanted their own car

and nobody wanted to go Uber anymore. But then I also didn't expect Elon to be moving that whole business into the energy field. And, and there were so many, so many aspects to it that I just missed. And I probably should have kept better tabs and relationship with Elon as I move forward. But you know, I got to run my business too. Well, apparently he's going to buy Twitter or that might, by the time this comes out, he may have already bought Twitter because as I'm

reporting this, this is the day they're negotiating it. You were an early investor in Twitter. So what do you make of that? I think it's fantastic. Anything Elon touches, what he does beautifully turns to gold. And the reason is, he, he gives direction to a company. And that direction is usually very visionary, and then attracts the best people in the world to go do it. And then he sets them free. He trusts them and he sets them free. And so he did that with SpaceX. He said, hey, we're going to Mars. He attracted all the best entrepreneurs, all the best engineers in the world, because they're going, hey, how are we going to get to Mars? And they're all thinking about it. Then they all join him. And then he says, OK, this is what we want, a rocket to take people to Mars and back. And so let's get going on it. And every once in a while, he'll say, OK, well, first, we're going

to land on the space station. Or first, we're going to have a rocket that just lands back where it started. And then we're going to have one land on the space station. Or first, we're going to have a rocket that just lands back where it started. And then we're going to have one land on the space station. And then we're going to, you know, little by little, he's going to get us all there. But it's trust and freedom again. And so the people who work at Twitter are going to be trusted and set free to do great things. And he will make that company an amazing, amazing success. And hey, he's, he's a believer in free speech. So I think that's, I mean, when you, when you, Jack Dorsey set off to build that business so that people could speak, so that people were free to speak. And then slowly but surely, the political forces cramped down on him and made it so that they were starting to regulate what people said or gauge their ranking on how much they believed in this or that that that um speech

control that muting of society is incredibly unhealthy uh you lose the benefit of a debate i mean if if you get into a debate both both parties learn something and you come out with an outcome that's better. But if you don't allow that debate to happen, everybody walks off a cliff together. And so you're way better off with free speech. I know Jack Dorsey believed in free speech, and I know Elon Musk believes in free speech. So I think that's going to be very good and very healthy for Twitter. You talk about being five, 10 years ahead. That's like 100 years in crypto, right? What do you think that the next big thing in crypto will be? I mean, we talked about all the

ways it's being stifled sort of here, but we have NF you know, NFTs, Metaverse, DeFi, play to earn. Now we have exercise to earn, right? I mean, all these things that kind of we didn't necessarily expect coming. So for you, what's the next big thing that you're excited about? Well, what I've noticed is generally technologies are first taken, uptaken by consumers, and then they move to the enterprise. So I think you'll start seeing NFTs go from consumer to enterprise, where now your diploma and your driver's license and your employment history and your medical records and all that stuff will go on to an NFT and that'll be sort of a new direction for NFTs. DeFi will go from the consumer

speculating, moving up and down to the institution, moving money around and so there'll be more of that i think um yeah play to earn it's i mean that's definitely the consumer the consumer is going play to earn well eventually you might start seeing daos that um are created that now this is something that our government is just never going to get around to understanding, but a DAO can solve all these social problems. You could have a DAO that benefits shareholders or the DAO owners, benefits customers who get the token for buying the product, benefits suppliers for supplying to that enterprise, benefits employees for being a part of that enterprise operates. And you would have, you would lose all this politics of envy where people are mad at Jeff Bezos for making so much money. I mean, I can't believe that I can ask for a toothbrush and an apple and the thing shows up in two hours. And that's Amazon. And I thank Jeff Bezos every day that I use Amazon to just say, hey, way to go.

You know, look what you did. Get richer. It's the best. But if he had set up a DAO, he wouldn't have that politics of envy because as a customer, I would also get some of that token. And it would be like having everybody be a shareholder of Amazon, his customers,freude, the politics of envy that we're seeing today, because everyone will benefit from a successful DAO. And that could really change things.

So yeah, I think a lot of this stuff that's happened in the consumer world is going to move to the enterprise world. And we're going to see some really interesting, fun things happen. I also think that, you know, I always say that, that when I invest, I'm always looking for industries that are monopolies or oligopolies and have gotten lazy so that the service they provide is not worth the money we pay, but we're stuck paying them. And so whenever that's there, and that was, you know, I mean, you can imagine which ones that we like going after. It's the banks and the insurance companies and whatever else. Well, now government is one of those. They're providing bad service at a high cost. They're going to have to compete. They're going to have to improve. They're going to have

to be accountable to their citizens or we will move. We'll move to the Central African Republic. We'll move to El Salvador. We'll move to Japan. We'll move to a country that is encouraging that freedom and a country that trusts its citizens. So this is really going to, I mean, boy, the next 10 years, I can imagine the next five years are going to be very brutal, whether it's through war or through, you know, inflation, governments that don't trust their people or governments that that are old or controlling, and they're going to be having their big last roar of the dying lion. And then you're going to see the battles going to come with these governments that are from little countries that sort of say, hey, I want my people to win. So the good governments are going to be rising. The bad governments are going to be falling. And if the bad governments don't shape up and become more free and more trusting,

they are going to see the good governments rise economically for the next 40 years and pass them. It's interesting what you described with the governments, the DAOs, basically all of the things you're excited about, about the future. It's all about aligning incentives, right? Everybody just has an incentive to win and there's really no incentive to attack the system or violate it. That's the beautiful thing about Bitcoin, right? Being a bad actor just doesn't pay. Right. It doesn't pay off. It's a bad idea. If you destroy, you know, even if you 51% attack the Bitcoin network, which won't happen, it would be worth nothing. And you would basically

hack it. And you would have taken your 51% to zero. Yeah. Incentives are aligned. I mean, you said, do you think Bitcoin can hit 250,000 by the end of this year? Do you think that that's still a possibility? Yeah. By the end of this year or early next year has been my, I hedged it a little bit about three years ago. You're allowed to get a couple months here. It's okay. Because I didn't know how quickly things like OpenNode and Cryptio would permeate the system.

But once they do, then it's going to really be the floodgates will open. And one thing that will possibly likely happen, and I don't know exactly when, is that the women will start using Bitcoin. And it was one in 14 Bitcoin holders that was a woman, and now it's something like one in six. And I think it'll eventually be even. And the way it's going to be even is women control about 80% of retail spending. And retailers haven't yet realized that they can save

2%. And they usually run on very thin margins. So that might like double their profits. They can save 2% just by accepting Bitcoin, instead of taking a bank issued credit card. Right. And that can change everything. instead of taking a bank-issued credit card. Right, credit card. And that can change everything. And all of a sudden, all the women will have Bitcoin wallets and they will be buying things with Bitcoin. And you're going to see a Bitcoin price that'll just blow right through my $250,000 estimate.

Right. I think it's going much, much higher down the road. You talk about five to 10 years. We're not talking about $250,000 anymore. No. I'll be very disappointed if we're not seeing seven-figure Bitcoin in the next five, 10 years. But I guess that'll be a topic for our next podcast before we revisit it. So Tim, thank you so much for your time. I really, truly appreciate it. Again, congratulations on more than 30 years and everything that you've accomplished and for presenting this vision for us of what's possible. Terrific, Scott. Thanks for having me on the show. Happy to do it whenever you think it's worth it to bring me back. When we hit 250 in three months, right?

Okay. Well, three, now it's like nine to 12. I'm just moving it up to summer. I'm moving the prediction up to summer so that we can talk sooner. Thank you, Tim. Terrific. Good talking with you.

Thank you so much for listening to this episode. If you haven't already left a rating or a review on Apple Podcasts or Spotify, please do that now. Spotify just added ratings, so please go ahead and click that five star. I'll see you guys next time.