The Wolf Of All Streets - Wall Street Is Coming For Crypto | Gary Cardone

Episode Date: January 29, 2023

Gary Cardone deeply understands market cycles from a historical perspective. Known for being a disruptor in multiple industries, Gary is fascinated by crypto and knows where to stand to best capitalize on the opportunity. As one of the “adults” in the room, Gary’s point of view and advice is a must listen for investors looking to succeed over the next decade. Gary Cardone: https://twitter.com/garycardone911 ►► JOIN THE FREE WOLF DEN NEWSLETTER https://thewolfden.substack.com/  GET UP TO A $8,000 BONUS IN USDT AND TRADE ALL SPOT PAIRS ON BITGET FOR ZERO FEES! ►► https://thewolfofallstreets.info/bitget   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 podcast: https://apple.co/3FASB2c  #Bitcoin #Crypto #Trading The views and opinions expressed here are solely my own and should in no way be interpreted as financial advice. This video was created for entertainment. Every investment and trading move involves risk. You should conduct your own research when making a decision. I am not a financial advisor. Nothing contained in this video constitutes or shall be construed as an offering of financial instruments or as investment advice or recommendations of an investment strategy or whether or not to "Buy," "Sell," or "Hold" an investment.

In this industry, we love to say short the bankers, long Bitcoin, but not so fast. There are people who believe that we need the big banks and we need the biggest companies in the world to provide us the credibility, infrastructure, and volume required to truly go mainstream. Gary Cardone has a long history of successful companies as an entrepreneur and an energy trader, and he makes exactly that point today. You don't want to miss this. You have this extensive background, energy trader, massive portfolio of companies that you own and have operated and somehow found your way into the

wild west of cryptocurrency how did that happen because you certainly didn't need to do it well uh yeah that's it it's a good question um you know I my training in the energy business on the physical side um was probably the best education I could possibly ever have because this is a market where natural gas and electricity was controlled by utilities. This is in the late mid 80s. You have a regulator who wants to change the way consumers and large users have access to cheap energy or competitive energy. The problem with utilities and monopoly structures is that it removes the noise between supply and demand. When supply and demand actually work,

like I love capital markets if they're not interfered with because it establishes price. I would bet a large sum of money that you have a much greater reduction of people that are losing their coins. I'm not saying bad investments into the FTXs of the world, but literally losing Bitcoin. Why did so many people lose Bitcoin? Because the stuff wasn't priced correctly. At a dollar, nobody cared. At $100,000, I suspect people will put the proper attention on, oh, how do I secure this investment, right?

So it wasn't really valuable to anyone in 2014, enough to provide compliance, regulation, security. All the things that are breaking down in this new market have all happened before in all other markets. It happened in natural gas. It happened in electricity. You had literally the UK power market, the nuclear power industry, which I spent 14 years there went bankrupt.

Not one kilowatt of energy was missed on that market. Not one human being died in the hospital. All that changed was that the Brits sold all their nukes to the Germans. It was a paper trade and every kilowatt exchange. Today we have the most consistent power market in the UK. Those markets were built and developed by guys like me. And once I figured out, oh, wow, in 20 years, you can 50 guys, the guys like Enron and Dynergy, Natural Gas Clearinghouse, Duke, Power, 50 or 60 men, sorry, but that's who was doing it back then, basically went into a market that people die over. You freeze. You're in Gainesville, so we never freeze.

Hopefully not. Hospitals go dark. This happens in third world countries. You now have a market that trades on half-hour paper and and physical and these markets work extremely well and the utilities play a role but they don't play a price role anymore so once you figure out oh wow i can actually get nat gas to trade down to 30 minute cycles um irrespective of price who cares what the price is right prices always come back and work when you actually you know have supply and demand speaking to each other uh that led me into the payments industry a weird set of events because i figured wow why is there so much friction in the credit

card industry they call it fraud it's not fraud it's a plumbing problem because you have too many people in the payment industry not actually doing anything all they're doing is taking and the beauty behind this particular world is that it it is extremely transparent contrary to what a lot of the older people think about bitcoin and crypto uh transparent the the transparency does not necessarily stop criminal activities. Like if I want to be a criminal, I'm going to be a criminal. The question is, did I get caught? And that's some of the stuff that we've been experiencing, right?

Like this last FTX thing, it's a criminal. That was a criminal activity, in my opinion. So these marketplaces, I kind of move into marketplaces that are going through a real serious disruption, either from the regulator or through technology or through commercials. But like, you know, there's pricing power. A good example would be satellite TVs versus Netflix. That's a technology and a price point that just changed everything. Netflix probably wouldn't even be a powerful company today if it was trying to launch today because of interest rates. Right. So. So anyway, I just move from markets to markets. Once a market's fully developed after 15 or 20 years, Scott, I get bored with it. And I was right to leave the natural gas and power industry after 20 years because I predicted if you're a trader, you predict cycles.

I predicted that the following 10 years would not be as lucrative and it wouldn't have the opportunities where my particular skills fit. So I took eight years off when I was 40, retired, got lucky, moved back to the States, studied history and religion for about six or seven years because I found it interesting. I found history to be really, really relevant in building businesses and ran into the right person at the right time. They introduced me to the World Wide Web. And I have this construct or thesis that you know the world wide web to me looks like a a bit of a glass ball where all the market participants are playing supply and demand are playing in this little web and anytime you create transparency like that in any market. Now, gas, power, commodities, currencies, Bitcoin. In this case, it was the retailers. My thesis was once you introduce transparency in the market, one thing always

follows, always commoditization. Transparency is followed by commoditization. Commoditization is followed by constriction or restriction of margin. All the big fat utility margins go away. And everyone's scared of their margins going away, mostly the legacy players. But what happens? Volumes explode. And that's the piece the legacy players forget. Like when the volumes explode, that's when the jp morgan's and the fis's and the margaret stanley's and the goldman sachs they want to come into that space because they know they can get in and they can get out so we now have a world my thesis was that

procter and gamble would not be able to sell diapers at a premium just because of their name. And that has happened. Okay. Like AA batteries have a volatility curve now. Nobody knows about like AA, like two of them. It's a 30% volatility curve over a six month period just by supply and demand of consumers buying batteries on Amazon. So I think you're not paying a premium for Rayovac. You're looking at, hey, how many, can I buy 24 AA batteries? What's the cheapest price? They're all made in the same place. Right. So that's really good for the world, right? Because prices should come down. You shouldn't have to pay a premium just because somebody did a bunch of advertising on the Super Bowl. And they actually were able to monopolize the Super

Bowl because only big players were allowed. Now I can go on the internet and buy $10 worth of advertising or $10 million. I do not have to go in to CNBC and say, okay, I'm going to lock up all my one hour slots at 9am and I'm going to do $10 million with you. It allows guys like you and I to hit the marketplace with competitive prices. And that's where we come into the crypto world because the payment industry has a massive amount of problems in declining credit card transactions. And having your credit card decline just because the provider of that card may not like you anymore. That happened in Russia one year ago. All Visa, all MasterCard, you're not using any of this.

So the sovereign value to me as a bit of a creature who doesn't like being controlled by people I don't even know their name. I didn't vote for him. I like crypto because at least for a small percentage, 3%, 5%, 10%, I have some sovereign, I've managed a bit of my sovereign risk, right? Like, I just want to leave the country now and I'm going to go live on a sailboat and I'm not going to be tied to a currency or a passport that makes me do certain things. So that's kind of how I ended up here. I find it intellectually, it is the most exciting industry I have ever been in, bar none. I've been in five of them, five big ones. I love the youth of the people. I was in Wall Street this whole week. I think companies investing in this space are more serious today than they were a year ago,

and far more serious than they were three years ago. I'm really excited what I saw in New York this week because there are 150-year- old monster institutions that are coming in this space. They've been studying it. They have not stubbed their toe yet. They didn't get involved with some of this bullshit and they're going to launch and they're deploying a monster amount of intellectual capital behind it. Yeah. I mean, BlackRock's here, JP Morgan's here, Fidelity is massively here in the crypto space. You don't get much bigger names than that. They're just sort of quietly evolving. I love the point you made earlier about always wanting to be where there's disruption. You talked about it being

technological disruption, regulatory disruption. I think we've clearly had the technological disruption from crypto, which you described well certainly in the payment space are you concerned about the regulatory disruption that could potentially be coming as a result of all the things that we saw this year no i'm actually worried about there not being regulation like like that's the problem we have like we should not i've been in i've been in three continents, five industries. Everyone always gets worried about regulation. The problem is bad regulation. OK, and we don't have enough time to talk about the bad regulation that's been put in place on the payments industry.

But it's awful. OK, like GDPR and some of these bizarre country zone rules that they forgot. This is the World Wide Web. It's not the European Web. You can't have a set of rules in Europe and then a completely set of rule, different set of rules in America and speak about globalization. Same time. These were like, you're either globalized and you have one set of rules. Would you not love to stop being stopped at websites and having to hit a consent button on a document that you have never read, can't read,

your lawyers can't even understand it. And we're asking 12-year-olds to sign them. So we're teaching them to be little sign them so we're treating teaching them to be little rats in the future which is really sad that's abusive okay what we need is one set of terms and conditions for all merchants it's one little page refund rights chargeback rights whatever your rights are these are the fees come on let be transparent. We do not need 37 page documents. It's stopping commerce. And granted, it might be giving jobs to regulators. But these markets, we're using 200 year old thought processes for the world we live in today. And that has to change. And it's

only going to change because guys like you and my children are actually going to use these tools and they're going to be the ones to drive the future. So I think regulation, we should not be scared of it. We should be embracing it. The problem with the market is there's too many enemies that everybody thinks they're right, sitting on their corners, trying to make their real estate more valuable than the other guy. This market is so vast. Why? Your industry, I'm calling it your industry, it's just some bad actors, I think, in their thought process. This is not a finite universe. This is an infinite universe. We have barely even begun to measure digitally all the exchanges that you and I do. The example I use, Zoom's probably going to hate me. I use the Zoom example. Why do you and I both have an annual membership to Zoom when the truth is I only need 33 minutes today of Zoom? You and I, I would be

happy to pay for my minutes or seconds on Zoom. I would use it better. We'd have less people showing up late to meetings. Right. And we would get to the point. But I think that the look, you use an automobile 4% of the time, 96% of the time it sits in a garage. Is that good utilization? That's got a total waste of energy on this planet. Like you think about all the rubber, all the metal, all the everything that makes up the building that has to hold the car. Now you get to boats. That's less than 1 tenth of 1% usage. So you start thinking about the uberization of almost everything

and in order for that to happen right if you really think we're digitizing as a i call it the digitization of planet earth if you really believe that then we're going to be accounting and measuring and charging for micro moments right. Payment values will come down. That's going to terrify the payment companies, okay? It will not terrify the gaming and gambling companies though, because they're used to microtransactions. They're like, oh yeah, we know what micros do, right? They grow. They do a lot more volume than you think they're going to do. Look, I just don't know many asymmetrical investment strategies you can look at that what you and i are going to go invest with elon on rockets it's out of my category okay

yeah i i i agree with all of that it sounds like your history sort of is you talked about the disruption side but finding massive inefficiencies ahead of the time and then being there when those inefficiencies are armed away and taking advantage of it. You talked about doing it in the payments industry. You talked about doing it in the industry of energy. Now in crypto, there's still these massive opportunities where there are gaping holes that we need infrastructure, price discovery, all of these things. Is that why it's attracted you? And is that what you're focusing on now?

I'm building the tools that people will need when this becomes that high volume market like those others that you've been in. Yes. And I think your observation about the gap, somebody asked me one day, can you define in one sentence what you've done for your lifetime in business? And it's like, find the largest gap you can possibly find in every industry. The credit card payment industry is 60 years old. I did not know anything about it 10 years ago. We have the largest disputes business in the world today. And everyone told me that it was impossible for us to operate inside of Visa, MasterCard, American Express, Camp, and build a real business. And no equity, no outside equity, no outside debt, 300 staff,

a global business, only independent player. Now, how is that possible? We saw this massive gap and we're like, no one is serving this gap. Everyone was making money off of it, but no one was serving it to try to fix the problem. So I say to young people, hey, study market, figure out where the biggest gaps are, and go and build solutions to fill that gap. In the crypto DeFi world, you basically have a brand new industry. However, you're trying to bridge the 20th century with the 21st century. Now, this is where I think you guys go a little off because you get this, hey, I've drank the Kool-Aid. I read the white paper twice. I watched 300 YouTubes, and this is going to transform.

It's going to put these out of business. No, no. Or the Fed. Come on, man. I don't believe any of that for a second, just for the record. Look, we have 20 years here. You want to look for a career? This is a 20-year cycle here. Things that need to be built. The reason we're not seeing as many Goldman Sachs as you're getting ready to see is because the rails have not been built for this business. The guy that trains me when I show up for the training, that poor guy's making 18% a month

doing yield farming. I'm like, dude, you're going to lose all your money. Every month though, he's like, I'm making so much money. Yeah, you are until you don't. Every trader who's ever existed knows that it only takes the one wipeout to erase all those small gains and then it's inevitable to market like this. Yeah, and every professional trader is going to go through that. If you're a pro, you're going to have a couple of bad years. I can share some real scary stories with you. But you need people to actually go through some of those to understand, okay, who are the strong players in this market? One of the things that I got from this past week being in New York was, one, these are monster players that I'm meeting with. Okay.

Like household names, almost to the one, all the senior guys were like, Hey, we wish the, the collateral damage from FTX and these other things would have been more severe. Yeah.

Guys like bigger, bigger dip, bigger dip, bigger opportunity would have been bigger. Get all. Guys like... Bigger dip, bigger dip, bigger opportunity. The dip would have been bigger. Get all the punks out of the way. This is a big boy market here. It's a big boy market where little guys can play, but don't act like you're a big guy.

Like, manage your positions. Don't get greedy. I was with the CFO of NowDig. I'm like, man, why did i ever buy any of that other stuff like because they have a real btc policy right hey we're btc and i'm looking at it now going i got sucked in to drinking the kool-aid i got greedy i needed to buy some of this other stuff i don't even know what it does now i don't have a big position in it, but it detracted from my Bitcoin holding, for sure. If everyone was just investing in BTC right now for the last eight years, our price would be a very different point today.

Of course. Right? Of course. I got to have Avi. I got to have this. I got to have this juice over here. It's like, oh, wow, a million dollars a coin isn't enough for you? Yeah.

I think about that quite often. And I think that the reason that is the case for now is still that we have a limited amount of money in this market in general. So it becomes a washing machine between Bitcoin and all the other coins. I believe that will cease to be a problem when it becomes a more mainstream asset. And that volume that you talk about, that explosion comes in because then there'll be enough to go around. I just think there hasn't been enough money to go around. So in general, the Bitcoin market is affected when these other things appear.

But I view them as completely separate markets. Nobody else does. But I don't think Bitcoin really has competition for the kind of asset that it is. We just need more money in the market in general. I agree with you. And the way I look at it is I've got two daughters, 13 and 15. All of this is really planned for them. I mean, really, like I have an obligation, okay?

They can't invest a dollar in a Bitcoin, but I can do it for them. And that's how I got to know Fardy because it became really clear to me oh wow i'm gonna i'm 64 i'm hoping to live till 96 uh if i hold these coins for another you know say i got 100 btc um when i come to give these coins to these kids one i'm going to be in the ground i better have a histogram over 12 years as to what I did. Because if not, I think in a decade, we're going to have draconian. There won't be anything other than draconian governments that are trying to grab their piece of the pie. And without a histogram, I mean, I know guys with a hundred million dollar Bitcoin position.

They cannot tell you how they got there. And they're going to lose money when it comes to doing the audit. And the audits are coming. I meet with these people. The audits are coming, guys. So button the hatches down, get your shit together, and get a report. I mean, you can't do business this way. It's not sustainable. It's pretty crazy because even when I entered in 2016, which I would say was late, right? We all feel like we were late to the party. The overwhelming sentiment among my friends who are on Wall Street who were telling me about it was Bitcoin and crypto was this tax-free world where you didn't have to worry about

cost basis. Nobody was going to ever know what you did. And by a year later, it was clear that the rules were actually going to be much harder for crypto than other markets. But you didn't really have a way to account for that. I would love for you to talk about Node40. I know it's an enterprise-grade crypto accounting data company, something that a whole lot of people who are Voyager and Celsius and FTX BlockFi creditors right now who don't have access necessarily to their accounting probably wish they had, right? Yeah. Yeah. Well, yeah. See, just on that point. So first off, I like investments in pick and shovel type businesses. And by pick and shovel, I mean, you know, the old story is your average user is probably 30 years old.

So they may not know this, but it was the gold rush. They know it from me because I talk about it all the time. So you're good. So who makes all the money in gold, right? It's the guy selling the axes and the pixels and the wheelbarrows. It may not sound sexy but quite frankly i think accounting and tax and we're not a tax company we're a big data large institutional company that uh is able to consume a lot of information and bifurcated in buckets that are meaningful to the professional

and to the user. And there are different things. Like I'm going through a divorce right now. And, you know, my life has been a little crazy, right? Like, well, it's been very crazy. And there's a lot of different assets. I have no interest in, you know, harming my ex-wife or her position. But when you get a bunch of assets in place and a couple of large businesses, all the professionals get involved. And guess what? None of them know anything about this space. All they know is what they've heard from the jerks at CNBC who have no clue, no clue. And and quite frankly there's a lot of no clueless there's a lot of no clue people on these websites too right just pouncing a bunch of bs out there but of course you know it's easy to go well this guy's got a 20 million dollar crypto position

he's got this he lost a bunch of money and like i was able to take all the documentation of Node 40. It was seven pages long from thousands and thousands of transactions over seven years, over five different or six different platforms. And it gave it to the judge, gave it to all her lawyers, gave it to the forensics. You know what everybody did? They all shut up. Like it to the forensics. You know what everybody did? They all shut up, man. Like, we went to the next conversation. We went to the next conversation, and my lawyers thought I was going to get ripped into pieces.

Now, why? Because they did not understand any of this stuff. They just have a very foggy understanding of crypto when they hear it. BTC, they just hear all the bad stuff um you know showing there's 12 of these guys showing all 12 of these people six of these very conservative lawyers in forensics all looked at me at the end and said hey you've convinced us to go into that this market just seeing the tools see it gave them some real mass like my mass they could understand it went from hey you ever seen a ferrari no i've never seen one well you don't know

what it looks like then like you but when you see one you're like oh that is a ferrari so i think you know we need to do a better job in the industry of educating the user? Because you made a comment and your comment was about the difference between doing digital assets and doing non-digital assets. I actually am not convinced it's that different. No, it shouldn't be. Like you said, it's plumbing and it's infrastructure, but on the surface, you have a cost basis, you transfer things, and you pay taxes accordingly. But it's the accounting for it that's none. And I mean, to your point, I think 2020, 2021, I can't remember, but I had 21,000 taxable transactions to track.

Of course, I was using some sort of software, and that's not because I traded 21,000 times. That's because if you have an order with any size, it can take 270 transactions to fill a single order of your buy versus 270 sellers. And every single one of those, even though they're matched as a single transaction on an exchange, is a taxable transaction that can be micro payment separation in price. Yeah. That's impossible to track. Unless you have software. Unless you have price. Yeah. That's impossible to track. Unless you have software. Yeah. It needs to be built for that. See, I think

the problem is the accounting companies have never had to build software like this because when you buy a house, you buy the whole house. Yep. Right? Think about what's... People talk about NFTs. Most people don't understand what an nft is but when i say hey you know me and scott are gonna buy one-tenth of a picasso

that's what we're talking about okay like i now this the digital world allows you and i for the first time in a thousand years to own a Picasso now. We're no longer having to compete with 30 of the largest families in the world who are just collecting this stuff in museums. You and I are going to be able to buy a Picasso. That's awesome. Now, the question is, how do I account for it? Right. And if you really you understand this because you understand, hey, I had tens of thousands in transactions.

I don't think people I have made so many mistakes not having the proper tools commingling. Right. That's a mistake. Does anyone know their cost basis? I don't think I've met one person in 10 years, six years, that knows their cost basis in every wallet. I mean, it's very difficult because they're not speaking to one another and you've used some third-party tool or one day somebody paid you in Bitcoin as opposed to you actually buying it, right? You did it on five different exchanges. One of your exchanges went defunct.

To people in their defense, it's almost impossible if you've been here long enough to have not been stung in some way where you lost a part of that cost basis. Yeah, or did something to commingle it and you diluted yourself, right? What I call, you know, well, I can't use that term here, but, you know, it basically dilutes your pool. Like I had some $8,000 coins.

I moved them into a $40,000 pool because, you know, check this out. This is- Well, because for security, a lot of people want to consolidate or you move it into multi-sig or something. Now all of those coins are in the same place and fractions of each. Now the problem is you hand that over to your accountant, who by the way, isn't really the person doing your accounting. It's someone underneath them. I transferred some coins from Coinbase to Coinbase Pro because I wanted to save some fees and I commingled some $8,000 coins with $40,000. That was stupid just to save it, what, a dollar? But once I did that, that was a mistake too, that my accountant, the professionals

saw that as a movement. They didn't see it as a transfer. They saw it, that's a liquidation moment and you owe taxes on that. So I would tell all your people, hey, make sure that your professionals around you also have these tools. It's not going to do you any good to have a software package if your accounting firm doesn't understand it. And we're seeing that problem in spades. That's why we serve those institutions. Like we're not, we would handle your account because you're a player, but we want to handle KPMG who's got, you know, 10,000 of these players. They're all getting bigger and bigger by the year.

And there is a lot of data to track in here. You know, like we got a client that's got a billion, does 100 million transactions a month. It's insane. That's not sitting inside of a software. Okay. There's no dashboard for that business. And he's not using us for tax. He's using us for risk management, which when you look at the information that you have inside of all this data, there are a lot of tools to be made available to guys like yourself, like this hub on an app where every one of your exchanges and every coin you own

has a cost base at your fingertips. Yeah. Right. Now, you don't need that every day. You don't. And I don't. You need it at the end of the year. At least at the end of the year.

And I think people don't understand like, hey, just because you've never sold any doesn't mean that you don't need accounting. Like you absolutely need accounting, right? Because you're going to need it. One day you're going to die for sure. 100% of the people that own Bitcoin today are going to die. 50 or so percent are going to get a divorce. So they need to actually have their stuff in order.

I know no one wants to think about this kind of stuff, but it does happen. It will happen, right, to 40% or 50% of the people. 100% of them are hopefully going to pass on BTC, Ether, or something to their families. Whether that family member gets to keep it or not is a big question. You talk about loving to invest in picks and shovels, which I

mentioned is something I talk about all the time. There's no more probably profitable picks and shovels playing crypto than owning an exchange, right? Because you basically own the casino and can offer 100x leverage and you're guaranteed to make profit. Yet still, we saw FTX absolutely explode because of fraud, as you mentioned. But that leaves, in my opinion, a gaping hole in the market for more players after we've seen all these collapses, even in the most simple picks and shovels plays like exchanges. I still don't think we're even at the point in this market where we can efficiently trade these assets. You know, maybe depending on what you mean by efficient, I happen to believe that all markets evolve this way.

That it is the guys that are a little bit more comfortable with gray and dark. This is a great question, like, because I've been in risk management my whole life is I used to have this risk manager who was always on top of me. Hey, your position is too large and probably was. You know, I talked to him yesterday. His name is Glenn Lappard, actually down in Texas. And, you know, how do you know where the question was, how do you know where the edge is? And most people talk about the edge. The only way to know where the edge is, in my opinion, is to go right over. they didn't do wrong um i just think that this is the way markets evolve i mean notice what's happening now because of that and because of luna and because of celsius these were obvious to me there's no such thing as a stable coin dude once you link it to something it's a linked coin that's what it should be called not stable it's nothing stable about any of these coins right hell the us dollar

is barely stable so right so like we're we have a lot of users here why would we use terms like that instead of hey it's linked to another thing um so look we get these players blow up the cool thing about this industry is that nobody saves anybody. There's no too big to fucking fail, right? It's awesome, dude. People get wiped out, go away. And hopefully these people never get jobs ever again in this industry. I have my doubts. I agree with you, but we already see the guys from Three Arrows Capital trying to open another exchange alongside the guy from CoinFlex, who also had to suspend withdrawals at his own exchange. We got it. They can all go do whatever they want in life,

but hopefully it doesn't happen in this industry. Can't let these guys back in. Well, I mean, look, people complain about the Sam guy, but the truth is, I think we all need to look in the mirror. I lost money on FTX. I had stuff on there. Why did I do that? I didn't know anything about that company. I got pulled into the whole herd mentality. And I was with a really, really senior guy. And he was just the other day, very conservative company. He's like, man, I drank Kool-Aid too. So the more we admit though, okay, we were a part of that. Let's start. Hey, we were a part of that. Let's get cleaned up now. And I don't think the cleanup is about like real criminal stuff either. It's just about

basic business logic, tools, accounting, transparency, third parties, able to look in this stuff. You mentioned earlier that you love how young everyone in this industry is, but that has been a bit of an Achilles heel, right? I think it's very clear. And you just had your meetings in New York and we need some adults in the room. It can't be a bunch of 30-year-old billionaires who are playing out their egotistical arguments on Twitter running this industry. I'll admit openly as you did, everyone knows who listens to me. I'm a Voyager creditor, multiple seven figures. I'm one of their largest creditors.

I fell hook, line, and sinker for it as well. Yeah. That is what it is. But don't you think now, well, we're going to get the adults in the room whether we want them or not at this point. You're talking to the biggest institutions. They're coming. They're going to buy this industry up for pennies on the dollar, probably. That is exactly what's going to happen here.

They're going to buy it for pennies on the dollar. That's it. And I really like it. Well, it's a huge opportunity. You just got to hope that we can remain true to the ethos once they own it all but the good news is i think that most of what will be bought up will be sort of the centralized infrastructure that we had before which will have very little effect on d5 and the people who want to use this market the way it was intended well let's talk about that a

little bit because i think that's i mean i would love to advertise node 40 and really make. But I think this is a really, really important thing to talk about is if you believe in the premise that we're bridging between the analog world last three or four hundred years and everything that came with that. OK, like there's a lot. That's why I like to study history. There's a lot to really consider. What does that analog world mean? Centralization, you know, it needed to be that way. Like quit making fun of it. It actually needed to be that way to get us to this point. But you're not going to immediately just jump the chasm and go into deep

eye. These two worlds must exist kind of like together for a while. For instance, there is too much decentralization in the credit card industry when it comes to disputes. There's 13,000 issuing banks hitting buttons. Right. That should not be a decentralized activity where you have a biased player trying to get losses off his books that should be a centralized activity

dude we get one neutral guy he gets paid a fee by everyone to neutralize the industry and make it standard consistent everything's good so I don't believe in this, hey, I'm going to take the purple pill or whatever y'all call it, and then all of a sudden get like life is a new experience. Jeff Booth I think that you're going to have to ease into this. And I think that's what the Jamie Downs of the world is saying. For him, it's like, dude, this is totally illogical, right? The big banks are like, you're not going to do payments on Bitcoin. Now, I think they're wrong long term. But right now... Yeah, you can argue they're right right now. In this world,

JP Morgan's not disappearing in the next five years because of DeFi. JP Morgan's going to do extremely well because of DeFi. Extremely well. I don't think any of these companies are worried about. What they're worried about is their shareholders getting obliterated in freaking events like this. So I don't think they're worried about their core business. They're too smart, man. And they have a lot of capital.

So they'll make their way. They'll buy companies like Node40. They'll buy anything that they can to make this industry a more stable environment they can pivot off of. And they already are, regardless of what he says, regardless of his view on the asset, regardless of he thinks it's a Ponzi scheme. JP Morgan is settling payments on a blockchain. And JP Morgan is trademarking a crypto wallet, and JP Morgan is offering Bitcoin services to their high net worth customers. At the end of the day, they're running a business and they have to keep up or be washed out. Meet the needs of their customer base. At least 3% of their portfolio is going to be

interested in this space, right? And how do you think we make the jump to that true 3%? I think so many people have been washed out this year and that's just a part of the cycle. But we talk about billions of people using crypto. I'd be happy if I was convinced that there were hundreds of thousands of people using this right now, right? So how in the current environment do we make the jump to where we're actually starting to see some real adoption with meaningful numbers where it really has to be on the radar of the JP Morgans or the Goldman Sachs' long term? Not where they're just preparing for it, but where it's flooding in. I don't know. I think it will only happen when you have all the pipes there to do it.

I am so glad. It needs to be low volume today, man. It can't handle the volume. No one can handle the volume, dude. Our fastest and cheapest blockchains that are supposed to scale beyond

the Visa network crash when an NFT project is launched. You can't service a billion people on something that crashes when a single dApp is released or something. Yeah. So, you know, I just don't think markets evolved that way. Markets, like I don't think, my first investment was 2016 in crypto. I bought a chunk of gold. Shouldn't have bought the gold. I mean, I bought gold at $1,100. I bought a chunk of gold.

I shouldn't have bought the gold. I mean, I bought gold at $1,100. I bought BTC at $8,000 and then just left it there. I didn't even think about it for three years. And then I went and read the white paper. I think this is the way people should come in this space. Buy enough BTC that it gets your attention. Like, I will not play dollar poker unless it's with my daughters

because in the game dollar poker games are horrible right like everybody plays every game but i learned a lot about poker and myself when the bet is relevant to hey what gets attention so i bought a little bitcoin not enough to hurt, not enough to like send my whole family to school in the future. But it got me enough to read the white paper. And then I read it and then I invested a little bit more because I like, oh, I love this thesis. And I think if we only looked at Bitcoin as a thesis for guys like you and I who are like, hey, I like the thesis. OK, I like being able to help the world. I like somebody in South Africa

having a Starlink telephone, being able to receive money from me without me having to pay some draconian kingdom a 3% fee for nothing. Like I'm cool paying a 3% fee, but I don't want to not get anything for it. At least sell me some insurance, right? Make sure the money moves. like i'm cool paying a three percent fee but i don't want to not get anything for at least sell me some insurance right make sure the money moves like i don't want to be held responsible

bradley i was on the webcast with bradley the other day he's like he uses atms i'm like dude why would you pay three and a half percent when you could just carry a thousand bucks with you will might lose it like dude if you're scared of losing 10 100 that is the problem with bitcoin of course nobody actually wants to be their own bank they talk about it but it's terrifying for their own money man i would i would jump ahead and say that what we've seen in general is that nobody wants to be responsible for anything. This whole world seems like a place where the easiest thing is to just scapegoat someone, have an alibi, blame someone else for everything, and move on.

And that very much eventually trickles down to the money. Very, very. Who blames themselves for anything? Yeah. Yeah. So I think it's like if we just look at this and level set and realize hey look this is the way all markets evolve the the kennedy family i use the kennedys like their entire empire was built on the back of a criminal operation called alcohol uh whatever

you know bringing alcohol in the united states like You don't say they were criminals today. The oil industry was built in a pretty rough, a lot of people died. The diamond industry, the mining industry, the coal industry, the pot industry, the drug industry has probably killed more people.

If you think about some of these drugs that have been around, Valium and opiates. So I don't see anybody saying that that family, well, they're suing that family, but you know, markets get regulated because they get regulated. People put speeding limits on highways because people go too fast and they have car crashes. They also say, hey, you can't go that slow either. There's two sets of rules on speed limit, right? So I think that this is where we're at. It does not make the market bad. It makes it like a teenager who's like, my kids aren't bad, but they're teenagers.

They're goofy sometimes, man. It does not make them wrong, right? I mean, you remind me of two incredible guests that I've had before. Once CZ from Binance gave the same sort of analogy that you did about cars, which I thought was amazing when we asked him about regulation and how do you operate in all these countries?

And he basically likened it to the automobile. There was a time when cars were slow. They didn't have seatbelts. They didn't require laws. More people got cars. Cars became faster. Cars became more dangerous. And they eventually regulated it as needed be based on the reality of the time, not 100 years ahead of what a car could have been. And then Mark Yusko, who you may know from, who I love, and he said that basically every good investment he's made in his life, he's been on the side of the criminals and it eventually became something else. The internet was porn and Bitcoin was the Silk Road and all of these early technological investments,

exactly like you said, you always had to be on the side of the shady characters to be in early yeah yeah I I think that's right and I like Yusko by the way I think he's very practical um and I I need to think of things in analogies that uh I understand because everyone treats this industry like it's so special it is not special. You have to know what you're doing. You know, there's there's supply and demand economics. Who's running the bloody organizations? You know, your comment on exchanges. See, that's a that's a piece of the business. I would not have an investment. Like, I don't get that. Right. Because the valuations that some of these exchanges have created wow are pretty

spectacular like why would nasdaq need to buy that they'll just build it man like it's not that that's absolutely true like and and we're seeing is it morgan stanley fidelity and now but maybe schwab are all teaming up to build a crypto exchange. Yeah. Yeah. That's going to happen. I think that will happen. But there's an awful lot to do in this space, right? I mean, I think my background in energy, like this is kind of a freaky joke, right? Because I left energy because I thought it was going to be really boring. I think that some of the biggest miners and producers of these coins are going to be the most dirty fossil fuel companies on planet Earth.

OK, and they're going to take the dirtiest energy that's being spewed off into the environment like flared gas, decommissioned nuclear power stations, decommissioned nuclear submarines. That is energy sitting there being produced into the ecosphere and it should be generating coins. Why would you spew a bunch of flared gas in Saudi Arabia into the atmosphere when you could stick a mining facility on it? And one thing all the gas companies know how to do, they know how to mine, pipe and deliver energy. Right. And that is an awesome usage. This is literally energy that's spewing into the environment. Right. And I think it's not going to be solar. Why would you use solar for Bitcoin, right?

There's so much wasted energy on the planet. And the incredible thing about the Bitcoin mining industry is they'll literally just go to the source. This isn't like you just build a company somewhere and then you had to figure out how to get electricity there. You literally go to Texas or you go to the hydroelectric plant or whatever it is, and you use that flared gas to your point right there on site.

That's why this industry is so big in Texas. It's also why the energy debate surrounding Bitcoin is so nonsensical. And that plays into what you were saying. I think the entire view of this industry from, I don't want to say the maybe legislators, regulators, but boomers, really an older generation is just wrong. Yeah. Yeah. Well, and that's, I think that's one of your issues with the younger crowd. I mean, like my investment banker is 52 years old. I always ask everybody, how old are you? And they're like, hey, what? Like if I was interviewing you and you were a woman, I'd I always ask everybody, how old are you? And they're like, hey, what?

Like if I was interviewing you and you were a woman, I'd be like, hey, how old are you? And I ask everyone, I've asked my whole life, because where you are in your life cycle tells me how you view the world. And I see people that are your age that have never, ever been through a depression and never known anyone that's ever been through a depression and never known anyone that's ever been through a depression no grandmothers no stories well if you haven't been through a depression and you own a bunch of companies that are tied to multiples uh you should know what a depression looks like because there'll be a day when we can't sell companies that generate cash, much less selling for 10 times revenue stream. So I just think that we have, like most people don't even know that 44% of the world today will cook water on wood to sterilize the water so they can drink it.

Yep. 44% of the population cooks with wood today. I could make a lot of money betting with a bunch of guys your age. They don't know that number. They think everything's got air conditioning. I'm 46. So I, you know, I at least was old enough to go through the great recession and lose all my money. Yeah.

And make it back. And make it back. That's right. Well, I've done that a few times because i was a trader of course but that is the trick though man right that is the trick the trick is pivot yeah you have to be able to make it back so before i let you go are there any other glaring inefficiencies in this market that you think need to be addressed we should be embracing the big players here and quit treating them like they're the bad guy. I was hoping from this industry that you were more friendly. And it is a very friendly industry. But this viewpoint that JP Morgan's the enemy, that's just not right. We need Goldman Sachs, JP Morgan.

We need big banking. You're not going to get the deal flow if you don't have it. And you're not going to get the credit. I don't want your credit. I want JP Morgan's credit. Okay. Ideally, I just want some credit where I can understand I'm not going to lose money. Somebody's not trading with my coins. But some of that's down to education, quite frankly, Scott, I'm not going to lose money. Somebody's not trading with my coins. But some of that's down to education, quite frankly, Scott, because anybody that thinks in a 0% interest rate environment, you're going to make 8% for doing nothing. I mean, dude, I'll pay you 10%. Okay. Give me $10 million. I'm going to sign a little piece of paper and I'll send you 10% every year. Okay. Until I don't. Yeah, good luck chasing you.

We're seeing it. You know, I don't want to do that. But so I think that if we, I think you have, if I'm investing in this space, I just look around me and just ask, are all the people that I'm doing business with or I'm cooperating with, are they running a best practices business?

As boring as that sounds, I have made a lot of money by being not greedy, being smart, and continuing to roll the bet, continuing to invest in the space that I really believe in. But I don like come and go i don't trade it um so i think that needs to happen in the tools if you have clients that are watching this and they don't know what their cost base is shame on you shame on you for investing one dollar into something and you didn't understand what you were doing what do you you worked too hard for this. And whoever your principals are around you, like they deserve more than that, especially if you're gonna move into a market

that is a wild, wild west market, right? This is a wild, wild west market. This is where we're at. So I think that putting some sub, don't think of this as a one year event. Think of it as a 20 year career. And then you start thinking about things a lot differently. Right. Like, oh, this is a 20 year career. One thing that I like about the Node40 business is that I'm able to meet all the major players in this space and when you can meet with all the major players whether it's goldman kpmg jpmc whoever binance coinbase nidig you start to hear a story about

what the great opportunity is here and the great opportunity here is staggeringly large. Staggering. The largest industry I have ever seen in my life. And the best return on investment I've ever seen. At least thesis, if I don't overtrade my position. And I'm partnering with great people. So if we can help any of your guys, high frequency, big volume traders is what we like, large institutions, accounting firms that serve large players, wealth managers, lawyers that don't want their people in trouble, very wealthy people going through divorces, inheritance, whatever, and they need button down data anyone living in tax-free domiciled environments like puerto rico or cayman not using us is crazy that is you have a 20 orb on taxes and you're not doing really serious accounting dude like come on i i know people with

10 million dollar positions paying someone a100 to their account. Come on, man. Yeah, makes no sense. Why don't you put diesel in your Ferrari? 100% true. Run it on four spark plugs. It's crazy. So love the work you're doing. And if we can help any of you or anybody in your crew, love to do so. 100%. Well, I love your pragmatic view on this industry, realistic.

And once again, I think it's very clear that we need some adults in the room who actually do understand how similar this is. Even though it's disruptive, there are some similar things that you need to do and think about every time you participate in this industry. Gary, thank you so much for your time. Much appreciated. And I'll definitely be sending those guys your way. Thanks, Scott. Appreciate it, man. Have a great weekend.