Unchained - Mike Novogratz on Why Bitcoin, "a Big FU to the System," Needs Institutions - Ep.98

Episode Date: December 18, 2018

Mike Novogratz, founder and CEO of Galaxy Digital Holdings, describes the company's services and products, why it's launching a credit offering, and why he pivoted from his original intention to launch a crypto hedge fund and then pivoted again from working with ICOs to serving institutional players. He talks about why, if he had the chance to go public again, he wouldn't do it, why Galaxy's stock fell so precipitously one day that trading was halted, and why he thinks the SEC has made it clear the ICO markets are closed. He also talks about why, on the way to democratizing finance, the crypto markets need to "take a step back" and start with institutions, why decentralization is important, and why he thinks the launch of Bakkt is the most important news in the crypto space this year. Plus, Mike surmises as to how consumers will start using crypto, but believes it won’t replace fiat in the Western world. Thank you to our sponsors! Microsoft: aka.ms/unchained CipherTrace: https://ciphertrace.com/unchained Episode links: Galaxy Digital: https://www.galaxydigital.io Galaxy Digital's losses so far this year: https://www.bloomberg.com/news/articles/2018-11-28/novogratz-s-crypto-trading-desk-lost-136-million-in-nine-months https://www.bloomberg.com/news/articles/2018-07-26/novogratz-s-galaxy-digital-sees-134-million-loss-on-crypto-drop Unchained episode about security tokens: http://unchainedpodcast.co/harbor-and-trusttoken-on-why-they-dont-mind-being-unsexy-ep77 Unchained interview with Philip Rosedale of High Fidelity: http://unchainedpodcast.co/why-its-so-hard-to-keep-stablecoins-stable Unconfirmed episode with Tom Jessop of Fidelity Digital Assets: http://unconfirmed.libsyn.com/fidelity-digital-asset-services-tom-jessop-on-why-its-serving-institutional-clients-first-ep043 Unchained podcast with Arthur Hayes of Bitmex: http://unchainedpodcast.co/arthur-hayes-of-bitmex-on-why-countries-will-turn-to-digital-cash-ep63 Learn more about your ad choices. Visit megaphone.fm/adchoices

Hi everyone. Laura here. A quick note before we dive into today's show. The 100th episode of Unchained is coming up. I know, hard to believe. Side note for those of you keeping score at home, included in the count where special recordings from conferences. For the 100th episode, I want to hear from you. Send me a voicemail or an audio recording telling us your name, where you're from, and anything else you'd like to say related to the show. Whether it's what you've learned from, your favorite moment or guest, how you listen, or whatever else you like to say. Then finish it off with a prediction about what will happen in the crypto space in 2019. You can easily record a message on the voice members app of your smartphone or using an app on your computer.

If you do that, email your file to Laura Shin Podcast at gmail.com with the subject line 100. Again, that email address is Laura, L-A-U-R-A, Shin-S-H-I-N podcast at gmail.com, and use the subject line 100. Or you can call and leave me a voice message at 9-17-675-4882. That's a U.S. number, so my international fans should use country code one. Again, that number is 917-675-4882. As a reminder, tell us your name, where you're from, and whatever you'd like to say about the show, and then round it out with a crypto prediction for 2019. The deadline for these submissions is Thursday, December 20th.

I look forward to having you guys take over the show. Hi, everyone. Welcome to Unchained. You're no high resource for all things crypto. I'm your host, Laura Shin. If you've been enjoying Unchanged, pop in iTunes to give us a top reading or review. That helps other listeners find the show. Do you have an idea for a blockchain app but are worried about the time and cost it will take to develop? The folks at Azure have you covered.

The new Azure Blockchain Dev Kit is a free download that gives you the tools needed to get your first app running in less than 30 minutes. Learn more at AKA.m.m. slash Unchained or by following them on Twitter, At MSFT, blockchain. Within months, cryptocurrency anti-money laundering regulations go global. Are you ready? Avoid stiff penalties or blacklisting by deploying effective anti-money laundering tools for exchanges and crypto businesses, the same tools used by regulators. CypherTrace is securing the crypto economy. My guest today is Mike Novigratz, founder and CEO of Galaxy Digital Holdings. Welcome, Mike.

Hey, Ler. How are you? You've described Galaxy Digital as a merchant bank for digital assets and blockchain technology. What does that mean? Well, when we started it, it came out of my family office. My family office had made a lot of investments in the space, and I was a natural-born speculator and decided that there was a big opportunity. We had built a brand to try to be what I'll call a credentializer in the space. And so a merchant bank invests its own money.

We have an investment banking group which is trying to raise capital and give advice to companies in around the space. We decided to build an OTC trading business that does both voice trading, electronic market making and arbitrage, and an asset management business where we raise money from outside investors to invest in the space. And so, you know, I talked about trying to build the Goldman Sachs of crypto. it's not the exact same thing. Olman's as an investment bank. You know, a merchant bank means you're using your own capital to invest in projects you raise money for as well.

And in a space as early as ours, it's hard to see you being a banker if you're not going to invest as well. And why don't we then talk more in depth about Galaxy's main products and services? When did you walk through all four of them and why you chose no focus in those areas? So, you know, the kind of reason to do that. exist as a merchant bank is to be a banker, is to reach out to the bigger players in the space and players outside of the space and provide advice. And that advice is how to think about accessing capital markets. You know, last year it was all ICOs this year. I think you're going to see

security coin offerings. You're going to see normal, just straightforward capital raises, private capital raises. You're going to see IPOs. And so to try to be part of that process. It's also merger advice. I think you'll see a consolidation in some parts of the industry, especially with this massive sell-off. Our best business and the business that's, I think, the most fun is direct investing, right? We have a venture business, both early and late state venture. We run a fund for EOS blockchain where we invest in projects that use EOS as part of their ecosystem. We give credit. You know, we've made credit investments, and we're going to raise a credit fund. We buy equities in companies in and around the space. And so that business

has done real well this year, which is interesting in a crummy year. The privates are actually up on the year. Our coin investing and our kind of core holdings and our ICO coins have not done well this year. You know, I think the average ICO is down 95% and, you know, the broad markets down close to 90%. We actually did quite well for the first half of the way down. I said this at a conference call. The funny math of a market down 84% is it's down 60% and then another 60%. And so you could literally have been genius for the first down 60% and lost nothing and then lose a lot in the last 60. You know, commodity traders get that because commodities are the only things that move as dramatically as crypto has.

But in general, you know, we have three businesses, this asset management business, the trading business, and the investment banking business. And then we have like a book. So think of it like a hedge fund, which is half venture and half coins. Now it's a lot less than half coins because the coins have gone down and the venture stuff and the credit stuff haven't. And on that business, you know, as of our last, you know, earnings, you know, we, you know, We were down less than 30% with the market down a heck of a lot more.

And so, well, it feels terrible because when we first went public, our stock traded at 2.3 times book. Now our book has gone down, and our multiple has gone way down. Our stock trades below book, which doesn't make so much sense to me other than we're in illiquid markets and people are scared about crypto. But we feel pretty good here. I wish I hadn't lost as much money. You could have hedged better and hedged longer. but we have a vibrant, diversified book, and we have the history of businesses, banking. You know, the trading business, banking I talked about, we just brought a guy named Ian Taylor from Goldman Sachs.

He's going to be great. And we're putting together a team. And I think there's going to be big opportunities. There's going to be big opportunities in, you know, security coins. And that really is going to be looking at the private placement market. The private placement market globally is a couple trillion dollars, three trillion dollars. it's a huge market and tokenizing it. And some of the things are going to feel really mundane, tokenizing a triple net lease portfolio.

What does that mean? It means sourcing this portfolio and finding a buyer and then a year and one day later tokenizing it. What's the token worth? It's a call on liquidity. It's a call on that at one point we're going to tokenize lots of assets. And so some of the early movers are doing it, even if it's the same price they would have just done a private placement at. And I think that's going to be not nearly as sexy as the utility token world, but it's going to be a big business. You know, the trading business was interesting.

I thought that was going to be a business that was our leading business this year. And it was harder to stand up than I had hoped for a bunch of reasons. It's a bare market and people are less aggressive in bare markets. Getting the regulatory framework right took us longer, getting the technology. built internally to really be able to move coins around as adeptly as we want to took a while. And onboarding clients took a while. But right now, we literally have a graph. We do more trades every day than the day before.

And for the last two and a half months, our business is starting to take off. And so hopefully, you know, when the markets do come back, and markets always come back, we'll be well poised to turn that into a profitable business. And then asset management is managing other people's money. We raised about $450 million this year. That was a big fund from EOS, from Block 1 to manage money in their space. We have a index product with Bloomberg called the Galaxy Bloomberg Crypto Index. That's been more challenging.

Raising an index fund in a bare market from institutions is not easy. The bright news is we're starting to see interest calls from a lot of of these. We've probably spoken to over 400 institutions. And so you're, you're fertilizing the ground for when the time they decide it's time to come into the space. Hopefully they remember you. You've helped teach them and guide them. I don't expect that to be a huge surge in the short run, but I think you're going to see some nibbling at least. And then I would guess by March or April, once the fidelity platform and the backed platform has started to, you know, feel some vibrancy, you're going to see that business and that index pickup. We're in that same asset

management. We're raising a credit fund right now. We think credit's an interesting. Especially there was lots of equity that came into the crypto space and not so much credit. A lot of reasons people don't understand how to give credit. We've got a team that had a credit background and a crypto background. And so I see this as lending money to companies that are well collateralized at, you know, low low double-digit returns. And if they were not crypto companies, they'd be borrowing money at LIBOR plus 500, not LIBOR plus 1100.

And so it feels to me like a 600 basis point arbitrage by being involved in the crypto space. We'll see if that plays out. We've started conversations with a lot of people. We hope to close a fund in the first quarter. So that's exciting. And so that's it. Three businesses that hopefully will make money next year

or break even. and then a book that hopefully grows. Yeah, let's talk about more. Let's talk more about that new direction with the credit. That's interesting to me. Why do you feel like there's a demand for that? And who do you see as potentially being clients? Well, so on the demand side, there's plenty, right?

So all the mining companies want to borrow money. And they have collateral to put up, both the coins they have, the equipment they have, the company, franchise value, if there is any. And lots of other companies in and around the space. So wealthy individuals have wanted to put. borrow money against their crypto holdings. Now, their crypto holdings are a lot smaller than they used to be. And some of the bigger companies have wanted to borrow.

And so there's almost unlimited demand. Where are the investors going to be? I actually think the investors are going to be traditional credit investors. And that's who we're really talking to that see this as a diversified credit bet. And it's a way of getting into crypto without having owned the coins because it's fiat lending. And so, you know, we're talking to big institutions. credit investors. Oh, that's interesting.

And we hope, you know, listen, like I said, early conversations look great. You never know until you actually close and print the ticket. But we're hoping to have a first quarter close. Right. Well, I wonder if in that world they're seeing their traditional investments kind of drying up because I think that area is very saturated. Well, what's making it a little more difficult is credit spreads are widening and traditional.

Like, if you had done this three months ago, it would have felt a bit of an easier lift because credit spreads were tight. You're starting to see, you know, the whole world's getting nervous, right? Stocks are down again last week, this week, next week, where we feel like we're in a bare market in equities and a bare market in credit. Global growth is slowing. And so the Fiat world is feeling less secure. And so that makes raising money for anything new more difficult.

More difficult in credit, more difficult just in crypto. People when they're making money are more willing to take new risk. and when they're losing money, they're like, well, I'll wait. Not an easy environment, but not one without some good vibration. Yeah, I just want to make a comment about what you were saying about the security token stuff because I did one episode on security tokens, and the title was something like, why Harbor and Trust Token, who were the two that I featured, don't care if they're not sexy or something like that. Because, like, exactly, I agree with you that it's something that will happen.

It just makes a lot of sense, but is it going to be super exciting and something? sexy, probably not. However, if you talk to Josh Stein, which I'm sure you've done, like, he's, like, incredibly excited about it. And his enthusiasm just radiates from him. All right. So, on your way to the galaxy of today, you've had a few pivots. First, you were going to start as a hedge fund, and then you decided on this merchant thing. So why, why that pivot? You know, I got really nervous at the end of last year that markets were way, way too frothy. And hedge fund investors, you know, Everyone investor in this space expects some kind of bias, I think, towards the long side. That's why they were coming into crypto, and I was bearish.

And so the markets were moving so fast. It just didn't feel like it was going to be a smart idea to raise capital for people in a hedge fund. And it's not that easy to get short. We actually were able to get short at times, a decent size. But this is not a spectacular liquid market on the short side. it begs the question why do we raise public capital you know i actually went in raising public capital for two reasons one the canadian capital markets were open and i seen what happened in the cannabis space that they were forward-looking markets that they were fun new projects it's the only market

in the world where you can take a startup company and raise venture capital on a public exchange uh which we did on the Canadian venture market I thought I could hedge uh and we did hedge the first you know, 50, 60% down relatively well. We'd come out unscathed in lots of ways. We didn't do as well in the second 60%. But with hindsight, you know, you always underestimate how painful bear markets can be. And so, listen, if I had anticipated down 95% market and no liquidity in the Canadian capital markets, I probably wouldn't have gone public. Oh, wow. You know, it's been a, only because we now have a public stock that trades with very little liquidity, trades at a discount to book, and that creates almost like an anxiety meter for investors and for employees that doesn't need

to be there, right? We're well capitalized. We've got plenty of money. We've, you know, our book was $390 million last reporting. We've got asset management revenue. And so like I tell my employees, there's no reason to feel anxiety. Let's just put our heads down and go about building. a business. I am constructive on the security token market. I am constructive on Bitcoin as a store of value. I'm constructive that Web 3.0 is going to get built, not as fast as everyone wants, but there is great technology. And I actually think you'll see some of the real first projects in virtual world space, in gaming and virtual space. We invested in a company high fidelity. I think it's going to be awesome. Yeah, Philip was on my show. He's awesome. He's great. Yeah. Yeah.

But I wanted to ask about the stock situation because I saw that there was that one day when it just dropped precipitously and they stopped trading. What happened? You know, we're on the Canadian venture market and there's not a lot of liquidity. There's a buyer strike for crypto up there right now. And so that day it dropped literally on $200,000 worth of volume. And so it doesn't take a lot to move it up or down. There are very funny rules. There are rules up in the Canadian markets about what a company can do to buy their own stock,

what an individual can do to buy their own stock that are not as, it makes it more difficult for, say, me to come in and just buy all my own stock because I only owe more than 25% of the company. And so we're studying them where we had, you know, senior employees started buying stock, you know, to kind of, you know, listen, I can't promote our stock one way or the other because we're a U.S. company that's listed in Canada. But I would say that for us, what we need to do is build a good company and tell a good story.

And when liquidity comes back to the market, we want to be the stock that people are willing to them buy. I can't control the price, you know, when there's not a lot of buyers and not a lot of sellers. But it sounds like you're almost, I don't know, it almost sounded like you were saying that you were rethinking that decision? You know, life doesn't allow you to rethink decisions in some ways, right?

We did it. We're living with it. If I knew what I knew now, maybe I would have made a different decision. but I didn't know it then. You know, and so it's a little bit like being married. Oh, boy. Okay, let's go back to crypto.

So later, I was talking about pivots. I asked you about fivots. You had a second pivot, which was initially we were doing kind of more the blockchain consulting and ICO advisory work, and now you're pivoting more toward institutional. So why that pivot? Well, listen, the regulators made it really clear that the ICO markets are closed. certainly in the U.S. And we live here in the U.S.

And when you talk to the regulators, and I have, I don't know if they're closed forever. But regulators' job is to protect the little guy. And the little guy got manhandled the second half of last year. He just did. And the regulators didn't do a great job protecting them

and the little guy lost a whole lot of money. And I think the rules are pretty clear. If you're going to sell tokens to customers, is they need to be registered. You know, they either have, be a qualified buyer or quib, or, you know, there are different levels of net worth and investment assets for different levels of clearance. But distributing to retail is not going to happen, certainly in the U.S. There's some hacks you can distribute to Cyprus if you've KYC'd properly.

But my read of regulators globally is they don't want retail distribution. of untried new securities, period. And so for a while, this is going to be a more regulated market. It's ironic that crypto started as this people's revolution, democratizing finance. We're taking a step back. The whole market's going to take a step back. And I actually do believe, you know, platforms like the ones you were talking about it, that actually at times will reach retail distribution or broader distribution,

electronically, we'll have their day. I just don't think for the next couple of years. And so, foking an institution, folks are being able to sell tokenized product to people that are legally allowed to buy it seem to be a smarter idea. Yeah, I actually, so I wanted this, this is perfect for where I wanted to go next. But we're going to talk about what you were saying about taking that step back and all that. Because I wanted to hear about how you even like got into Bitcoin and why you kind of initially thought there was something to it. You know, I initially got in because a buddy called me up.

My partner, Pete Brigger, at Fortress, was a friend of Wences Casares. And he said, I met Wences. This guy is so charismatic. And he's telling me I got to buy Bitcoin money. And you ever heard of Bitcoin? And I hadn't. And so I Googled it. I'd been the currency trader my whole life, a big portion of my life and a speculator.

And so it took me about 15 minutes of Internet searching to say, hey, this is going to work for really simple reasons. Just purely speculative. Was your immediate reaction that it was going to work? Yes. You were one of the few sources that didn't say that you immediately dismissed it. No, as a speculative, as I didn't want to work for real, but it was going to be a great speculative asset. Because this was 2012, and so we were in the middle of the European financial crisis. We'd had the major financial crisis, 08-09, and now it's the second financial crisis.

Europe's blowing up. You've got quantitative easing going all over the place. You've got people worried that fiat's going to get debased, you know, that we're going to have hyperinflis. how wrong they were. But at that point, that was a big worry. And so there were this group of people that were very worried about the financial system. Then you had another group of libertarians and anarchists and live off the grid people and cypher punks. And they all these constituencies and the Chinese had started buying and Chinese love gambling. They love gambling like nothing I've ever seen. And I was like, and the technology sounded really cool. Like here's this new to cool

technology. And so it was great, great speculative bubbles happened around stories that you can get your arms around. And it was a great story to get your arms around. It was an FU to the system. Like, we don't trust J.P. Morgan. We don't trust the Fed. We don't trust Bank of England. And so let's do this new thing we can trust. And so I literally bet with my partner. And then we debated should we do this at Fortress or not do it at Fortress. And we ended up calling Dan Moorhead, who had been a classmate of mine in college and a good friend. At Pinterra. At Pantara. And Pantara had been a macro hedge fund that had gone silent. And so he was sitting on the sidelines trying to figure out what he was going to do next in his life. And I was like, Dan, have you heard of Bitcoin? He was like, no. I was like, do some homework on it. Call me back in a couple weeks. Two weeks later, he called me back.

He said, this is going to change the whole world. And so he gets a lot of credit in that he was so bullish that after his two weeks of study, we partnered up Fortress and Pantera and me, Pete and Dan. and Dan put a lot of money into it, which kind of shamed Pete and I to putting more more money into it. And so, like, we made a lot of money, partly because, you know, we probably would have put X in, and Dan put about three times that we were thinking, and so we matched them. And so that's how I got into it originally. And, you know, we had decided at Fortress not to be public about it. Fortress was a real asset manager.

We had 50, 60 billion of assets under management and thought that publicity might not be what we know. needed. Wait, and I was right. You would put Fortress's money in? No, we'd put our own money into it at that point. We later put Fortress's money into it, a small amount. And I, you know, shot my mouth off at some conference, not knowing the press was there. When I was asked about frontier currencies, I was like, I'll forget frontier currencies. You've won a frontier currency. You've got to buy Bitcoin. And I gave the six reasons to buy Bitcoin. And the next day, I was on the cover of the FT. Only time I was on the cover of the FT, and Fortress and Overgrad says Bitcoin going to a thousand and it was at 200 at the time and it did go to a thousand so i at least felt smart about

that but that made me a bitcoin guy and every time i went on tv to talk macro they'd ask me about bitcoin and i got invited to speak at places and so i kind of became an accidental spokesman which was a little terrifying because it took about 15 times of like reading through to try to actually understand how the damn thing worked yes but i finally got it yeah well and okay so And so I love what you said before about how we're taking the step back because it is where I want to go next. But so why did you think or why do you think decentralization is so important? You know, listen, I don't think we're going to decentralize the whole world. I really don't.

I think there are parts of the world where decentralization makes sense where peer-to-peer, you know, relationship makes a lot of sense. My biggest reason is privacy. You know, we have a world. where 10 years ago we didn't have to worry about it so much because we didn't have AI. What AI has done in the last two, three years is staggering and what it's going to do in the next 10 years is staggering. And so I think about DNA all the time. But, you know, I did 23 in me. I licked the stick.

I gave, you know, set it in and found where my ancestors came from. And now my DNA is on somebody's database with my name on it and everything else. And if you look at how much hacking is going on, the internet. That doesn't make you feel so good. They've already sold that DNA to some research companies. I got nothing for that other than my, you know, results. Even that 10 years ago didn't make that much of a difference because what you do about DNA. We looked at a company a couple of months ago where they take embryos from test tube, you know, from in vitro fertilization, and they now can run the DNA of the embryo against a database of 500.

thousand genomes with full data on those genomes. It comes from the UK Health Department and health services. So it's a real database. With 98% accuracy, he can now predict the height of that embryo within a centimeter, the IQ within 10 points. Forget eye color and all the simple stuff. Height and IQ. That didn't exist five years ago. Just like China, who now has all your spending data if you live in China. That goes all through a clearinghouse. They can run AI on that spending data and give you a social responsibility score. You couldn't have done it 10 years ago.

If I had all your spending data, it would take me a month just to go figure out what kind of contact you buy. But they can do it instantly now. And so having some firewall between our personal data and these big silos that can use it for good or bad reason, to me is wildly essential. It's what gets me the most excited about putting so much my energy into this space. I might be wrong.

It might be too late. Like, we might have lost the privacy war. I certainly think in China they have. And it makes the Chinese involvement in blockchain so confusing. Like, you've got Xi Jinping who wants to be an emperor who's already said I'm going to have multiple terms

if I decide to. And he's got this apparatus which feels really totalitarian. Yet the local governments keep investing in the blockchain stuff. Well, but maybe they want to control those blockchains. Maybe to them it is a better database. Yeah. I mean, that certainly could be it.

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But the core purpose of the blockchain was not to have to trust some siloed individual government group of data. And so we'll see. I mean, it's a fascinating experiment. I do think, I mean, even Uber, which is an amazing company, right? Uber multiple times got fined by the government for illegally using the data they collect. Oh, yeah. It was really chilling, finding out what they were doing with it. Yeah.

And so, you know, I kind of enjoy my privacy. And I think society is better off having privacy. Listen, we have a president like Trump, like, you know, whoever would have thought a rational America, you'd have had Donald Trump as president. And he's got access to everything. And so he just never know who's going to be in charge. And so giving the people in charge that much power isn't so good. So you probably can figure out where I'm going with this because you were here. I mean, you're so passionately talking about the need for this for decentralization and privacy.

And yet, Galaxy is focusing on these institutional clients that sort of further that model of, you know, this central gatekeeper. So why are you serving this group? Listen, so if you want to rebuild the architecture, right? If you want Web 3.0, you're not going to do it on the $200 billion of market cap that exists today or less than that, right? It's a multi-trillion dollar capital markets project to rebuild the architecture of the world. And that money is in institutional hands. And so you need fidelity. you need BlackRock at one point to shift capital into these projects.

And so I don't think it's going to be this overnight snap. We have a new world. I think you're going to see a gradual shifting of projects. I don't think crypto as a currency is going to be first-level stuff because governments don't want it to be. Governments want to control their own currency. But I don't think governments care if a decentralized Uber can disqualized. can disrupt the ride-sharing business, or if medical records are far better kept

in both privacy and efficiency on some tokenized database, or if tradable digital items, if me and you, like I used to trade baseball cars or trading, you know, game parts or any other digital good or tickets could put onto the blockchain. And so there's so much to happen within the rules that already exist. And I think confidence comes from that working.

Right now we don't have a workable blockchain with workable projects that have great user interface and user experience. Like that, hopefully we get some of that in 2019 and then by 2020 we actually start. I'm really focused on wax, you know, because you got one of the world's best CEOs there. He's a tough son of a gun. He is sharp as hell. in William Quigley, they are going to drop their wax blockchain, you know, sometime in the first quarter or end of the first quarter. They are already doing tons of transactions on their test net.

They're real transactions, people buying and selling, you know, low-priced skins. It's a huge business, their early adapters. And so we'll have one of the first blockchains, a guy who understands user experience, where real transactions are going to happen at in scale. and I'm focused on it because I want to see how the tokens trade, right? This whole utility token model of staking and we haven't seen it really played out for real. All the last year's price movement was speculative. It was we're all a version of Bitcoin, right? We're all somehow store of value.

You can't have, there's 118 elements on the periodic table. Only one is store of value. The rest have to have a use, right? You don't buy aluminum per store of value. You buy it to fucking make shit with. And so I actually think Bitcoin can be like gold and just be valuable because it is. I think everything else needs a use case. And it's one of the reasons I think Bitcoin's outperformed everything.

And even in these use cases, they have to have both a use case, but then rational people have to understand what drives token price. not just it's the next Bitcoin. Right. Light coin is the next Bitcoin or Neo is the next ether. And so we're in this process. It's a painful process for people that owned a lot of ether and any of the other coins. What's promising is there's still really vibrant communities. If you were at the DevCon in Prague, people left, you know, shockingly bullish and excited.

And when I talk to my friend Joe Lubin at Consensus, he's as bullish on the underlying. I mean, he's frustrated at the price of ether. and they're doing some of their own restructuring. But when you talk to them about what's happening underneath, as bullish as he's been, we're seeing other projects that are really cool. It's just going to take a while for blockchain's to be fast enough and for projects to get use case on and then for people to start trusting it. Why I'm investing a lot in what I'll call the digital world space,

the virtual world if it's second, you know, if it's high fidelity or we made a gaming, gaming investment, mythical games, wax, is that most of those transfers of value and if you think about blockchain and secured value transfer

are small notional amount dollars, not all but most. And so you're probably more willing to trust trading opskins across a platform that might or might not be as decentralized as you want, it might be as secure as you want,

than you are higher value items. And so it's a perfect, place in a lot of ways for this thing to start. Yeah. Yeah, I've been asked where I think it's going to take off and gaming is one area just because those people are already used to digital assets, you know, and they're used to pouring money into so-called virtual goods. So in that regard, like, I think it's like a ripe community. So we're going to take a pause to hear from our fabulous sponsors. Within months, cryptocurrency anti-money laundering regulations go global. Are you ready? Avoid stiff penalties or blacklisting by deploying effective anti-money laundering tools for exchanges and

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To learn more about the dev kit and how to get started, visit aka.m.m.S. slash unchained. Or follow them on Twitter at MSFT blockchain. I'm speaking with Mike Novogratz of Galaxy Digital. You're no stranger to both success and failure. As far as I can tell, your two biggest experiences of failure happen for very different reasons. Let's start with your history at Goldman Sachs. Can you tell the story what happened there? What lessons you learned and how that experience affects how you plan to run galaxy? Sure. Listen, I had a great career at Goldman Sachs and it's a really neat firm to work at in that

it's kind of a cult and they do an amazing job of hiring the best and the brightest and convincing them that like life at Goldman is really what it's all about. And so when you leave, there's something, there's like a transition period where you're like, wow, There are actually other firms that are also pretty cool. But the cool part is there's a level of excellence that everyone strives to. Listen, my exit of Goldman Sachs wasn't gracious. And it was personal, you know, personal stuff. And a lot of that was learning to deal with stress, being disconnected from stress,

moving in a million miles an hour and then blowing off steam. and thinking that was normal. And so it started a process for me, which is still ongoing, of kind of sorting who you are. And I get to talk at college every once in a while. I'm always like, hey, in my life there's only two missions for people.

A, everyone on this planet is screwed up to some degree, right? You know, you're all, you all feel like you're not enough somewhere deep down. And it's all your parents' fault, no matter how good and how hard they try. And you're... Hope your parents aren't listening. Your job is to sort your shit out, is to understand who you are and to kind of let go with that and realize your parents do the best they can.

And that's not their fault anymore. It's on you. And that process can be therapy. It can be ayahuasca for some people or psilocybin. It can be long walks. It can be meditation. There's tons of modalities. It can be a Tony Robbins seminar.

What I've committed myself to, and I'm almost always there, is at least a week a year to invest in yourself. Just yourself. Not your kids, not your family, not your team, not your company. Yourself. Who is Laura Shen? Figure herself out. And then it allows you to be much more helpful to walk each other home. And so for me, Goldman Sachs, you know, the embarrassment of being the rising star and then just being gone was painful. The gift was it started that process of how did that happen? Of sorting myself out. You know, then when I left Fortress, It was different reasons. Performance, frustration, lots of different reasons. But you had this, and even in 2008, when Fortress really, you know, we went public at 2007, we had this amazing year. We were these rich guys and full of the headiness of, you know, being on the Forbes list. And, you know, that was weird for a middle class kid. And then it was, we screwed up 08 for lots of reasons.

And went from rock stars to roadies. while I stayed at Fortress and it'd exit it was the same dig down and figure out what the hell's I thought I'd solved a lot of those issues and it was the same issues of feeling fraudulent how did I screw this up and how do you get through that? It's the same way

you get through it by understanding who you are and where those triggers are coming from and so when I left Fortress luckily it was a lot quicker transition I literally I went off to India and I was like well why am I anchor because what happens off when you leave somewhere poorly you just keep playing that story

over in your head. If I'd only sold that Ethereum, my 1100, my life would be so. If I'd only sold it, well, you didn't. And it was your decision not to. And suffering about it doesn't help you. It doesn't help your kids. There's nothing productive. And so if you can sit there and look and quiet yourself and realize all this suffering is just self-centric ego. It's just, it's so selfish if you think about it. People are like, you can't say that. He's suffering. I was like, he's full of himself, right? It's this self-centric thought. I had friends in India that literally just sat me down. I was ready to leave there. You're not ready. Stay another week. And at one point I looked and I was like, yeah, they're dead right. And that was very liberating.

So I came back. I was like, what's next? And the one thing that I was, I've always been lucky, very lucky. I had invested in a movie. The movie won Sundance. And it was, even I didn't make that much money on the movie winning Sundance. And I had a really small, other than writing a check, I did nothing else for the movie. I was the check writer. But I bet on the right horse. and it was a win. And getting one win when you're down, your shoulders puff up a little bit, your chest puffed up,

you start walking with a swagger, and it kind of changes things. And so I always tell people, just get a small win, then you'll get another win. But that was my both exits. Well, what I wanted to ask you about the fortress experience

was I wonder if there are lessons from that that you might apply to the way that you manage this space as the crypto markets develop. Like, what do you feel like you might have learned from working at Fortress in the financial crisis and the bets you made versus how you think that that one of the things that was really important at Fortress in 08, Wes Edens, who was my partner, who's quite an entrepreneur, would say, you know what, in the worst environment, you've got to be

really careful the decisions you make because if we fell off of a boat and we were in freezing water and the boat's moving, if you swim this way, we might all get back in the boat, but if we swim in the wrong angle, we all might drown. And so you've got to be really present and conscious of the decisions you're making in crises, and you've got to survive. Like survival is key. Life gets better. You know, 08, in the heart of 08, it felt like, it's the end of the world. It wasn't the end of the world. It was the end of a crisis. And those who survived it came back. They learned from the case. They came back. Markets came back. Businesses came back. The same thing here in crypto. It's,

set up your business, capitalize it so you can survive the nuclear winter that we're in, it's not going to last forever. This is not, this is not tulips. Bitcoin is real. Web 3.0 is going to get built.

They will be decentralized systems. There will be a security coin market. And Chinese people will always still love to gamble. Like those are some truisms that I know are true. Timing, who knows? You know, I have my own bets on timing. But and so you got to make hard decisions sometimes to survive, but the big lesson from 08 and from Fortress experience is survive.

You know, Mark Winkleman, who was one of the gurus of Goldman Sachs when I was there, they used to call him Kaiser Soze. He was so tough. He was a Dutchman. He co-ran the division with Lloyd Blank Fine. And then with John Corzine, really a awesome businessman. I remember him saying, in a bull market, even a weak pair of hands is worth something. In a bear market, fire them all. You know, he said, you know, like in a bull market, every person on the floor is contributing because it's easy.

In a bare market, go to get down to the guys that really are good and use that opportunity to sharpen the sword and to, you know, get, fire the people that weren't great and to really recruit the people that are now getable that are really great. And so I think that's, you know, listen, we're in the heart of a bare market right now, an ugly one. And so it's prepare your company to come out of it. It's not going to last forever. So earlier you kind of talked about how the issues with regulators have maybe put a chill, I guess, on the ICO market. And I have heard, I don't remember where I got this.

It might have been through an interview or something that you did where you kind of, you seem to apply that you've been reaching out to regulators to help structure. someone that were also which regulators and what are you advocating? We have been working through different trade groups. Originally we weren't talking because we were going through our own public, you know, listing, but we spent a lot of time with Canadian regulators doing that. I've spoken to a few myself, and our lawyers have. You know, we're an investor in Templum. They're with the regulators all the time.

I talk to Joe. And so I think it's pretty clear to me where they're going, which is, guys, smells like securities, feels like securities, act like big boys. You know what the rules. The rules are the same as the rules for other broker dealers. And Bitcoin and Ethereum, we're going to say, okay, they're not securities. That's a win. A lot of these other protocols that feel decentralized, they're going to end up doing the same. This is my gut. They're going to do the same thing with. There's probably a process where that year that they allowed the ICO market to go on with, before the rules were clear, most things got launched probably looked and smelled like a security, even if they're not securities anymore. And I think over time, you'll see some people pay fines and get the, okay, you should have known better. Here's your fine. Now you're security. Now you're a utility token. And so we're watching that space. I don't think the SEC has this mission to smush this industry. I think they want to go after things that look fraudulent and really egregious.

and they want to slap some hands, people who should have known better. But I think they want this industry to succeed. I also read the Financial Times reported that someone said that your advisory business had been subpoenaed by U.S. regulators. We were, well, let me, when I was a family office, we have been in contact with regulators, not about ourselves, about other investments. A lot of the ICOs that got done, Well, I shouldn't say a lot. A few of the ICOs that got done got subpoenaed. And anyone who had invested in those ICOs was asked to fill out forms as almost witness. So it would be really clear that we weren't under investigation. But we've participated at times when asked to.

When I was looking at website, at first I was surprised because I saw you at offices in both New York and New Jersey. But then I think I figured out why that is because you were telling this story about trying to buy ether and about how you were trying to buy it here in New York. But it was difficult because the bit license, I guess, required you to use a regulated exchange. And so you ended up doing it, New Jersey. Is that why you have these two offices so close to each other? While we were getting our regulatory framework set up, we didn't want to take any risks. of like doing something when we didn't have an office. So we actually, yes, we we we Because of the bit license. We're still in the process of getting all our licensing and.

So what is your take on the bit license? I'm so curious, since you had to do that. I don't think it makes sense relative to a national business and a global business. And that in some ways, this stuff should get regulated at a, at a national level. And so I think the bit license is probably more onerous than it needs to be. And earlier you obviously described all the different activities you're doing, but one thing I wanted to ask was there's this new trend of investors in networks doing generalized mining or mining 2.0. Is that something that you were thinking about doing, you know, like offering services on that network to seed activity? We've got, we haven't done it yet. We do have one small little

group looking at it right now. Okay. Earlier when the act was announced and you participated in as an investor in that. You called it the most important news in crypto this year. Why? You know, Jeff Sprecker, who's the CEO of ICE, is one of the best CEOs in the world. And if you look at the people that came in on that deal, either as partners or as investors, from Starbucks to Boston Consulting Group, Boston Consulting Group is one of the largest consulting groups for retail. Think McDonald's, think Starbucks, thing. And so to think about being able to walk into Starbucks and buy and sell Bitcoin, just the consciousness that it does for the Bitcoin community. And when I think of that whole project, it's also going to give a, so you first of all, you're going to have retail that are being able to

participate in buy and sell, and he's going to be a payment. Fact is going to be a payment system, right? The people that should be nervous about Back are MasterCard and Visa. Right. And why do you think that when it hasn't really taken off yet for like coin based commerce or bit pay rather? You know, I think when you're going to see it in Starbucks and you're going to see it, I don't know what's Microsoft in other places. But I think Microsoft already allowed you to pay with Bitcoin. What? Microsoft already allowed people to pay with Bitcoin previously.

I get it. I just, I still think there's a consciousness thing. These guys are investing. They want a partner. The second piece of it is the custody piece. And it's it's a clearinghouse and a custody. I can't tell you how many calls I would get from during the boom from retail, from a second level brokers. So not Goldman Sachs and Merrill Lynch, but the next level down. Hey, they all want to participate buying and selling, but they didn't want to set up the custody and everything else. And so everyone wanted a clearinghouse and Bax can have a clearinghouse. And so these one day, you know, one day futures and then they're going to have cold storage custody.

And so it's going to make it much easier for lots of second-tier brokers to buy and sell coins. Again, it would have helped if it was done last year when all this was, because I think if you had gotten people hooked into the game earlier, they'd be more willing to participate later. But I think all of this architecture just allows institutions to slowly move into the space. Yeah. I mean, I guess what you were talking about, that consumer piece, I just wonder how that's going to happen. Because right now when I use my credit card, I get like points and I can use it to, you know, buy tickets. Yeah, but so it might not be, it might not just be Bitcoin. There might be Starbucks coin and stable coin.

And at one point, your digital asset wallet, right, you're going to have your tickets to the U2 concert that are there that are, you know, blockchain-based tickets. You're going to have. Yeah, I would do that. because buying secondary tickets is terrible. You're going to have, but you're going to be able to, maybe it's Starbucks points and they're going to, you're going to trade Starbucks coin and buy your Starbucks or Starbucks coin.

And he's going to, and that exchange is going to sit in the middle. Oh, I see what you're saying. So he's starting with Bitcoin, back to starting with Bitcoin. But my guess is, and I'm,

you know, we own 1% or something. And so it's, I'm not going to drive that decision. But knowing, knowing how Jeff thinks, he's not doing this to be a Bitcoin exchange. It's going to be whatever coins these guys want to trade, whatever tokens these guys want to trade, he'll be the liquidity provider.

And companies don't want to take Bitcoin risk or ether risk or stable coin risk. So they're going to instantly transact with this exchange. What does that look like? It looks like a payment system. And so instead of using MasterCard and paying the processing fee, he's going to drive fees much lower. It's literally like the Trojan horse way to go after payments. So it's sort of like getting the merchants hooked because it'll be cheaper for them. And then the merchants will try to push the consumers to use it.

Is that the thinking? Because I just feel like from the consumer perspective, like there's almost no reason why somebody in the U.S., at least, you know, I mean, other geographies are maybe a difference rate. But at least in the U.S., there's very little reason why somebody wouldn't just use their credit card. Do you know what I'm saying? Or use their Apple pay or something else. Exactly. This is going to be a cheaper version of all that in time. Right, but it's cheaper for the merchants.

Yes. Right. So then that's why I'm wondering, how do you get the consumer to adopt it? That's a good question. I'm sure there'll be advertising. I'm sure there'll be something, right? I mean, it's not going to just happen. But I think there's also, when I asked about why Microsoft get it,

and they said, listen, our users are young, and they're going to continue to remain young. And young people, the crypto revolution is a young person's revolution. And so I think their senses, as that spirit grows, they'll have more users over time. Yeah, well, we'll see. So none of these companies, unlike a lot of the crypto companies that had 12-month or a 24-month horizon, Abby Johnson from Fidelity is not starting this crypto business with a 12- or 24-month horizon. Oh, yeah. Right?

She sees hedge funds being tokenized and real estate being tokenized. And where are you going to store it all? Where are you going to custody it? Oh, at her place. Right, right. And so if that $3 trillion private place market gets custodied or some portion of it, it needs to get, I mean, it gets tokenized. It needs to get custodied somewhere. Right.

And so I think both from payments and from custody and from exchange, both those organizations are making long-term bets. Yeah, and I don't want to make it sound like I don't think things will go this direction. I do. It's just that question of how, because we've been through this before in 2014 where all these retailers signed up to take on Bitcoin. Bitcoin is the wrong coin for retail. Because the whole idea of store of values, you're hoping it goes up. Why should I be spending my Bitcoin on? But back to starting with Bitcoin.

It's got the brand recognition. That's why they're starting with Bitcoin. But I think if you ask, and I don't want to speak for Jeff Brecker or anyone at back, but my guess is if you ask those guys, they probably think there's a stable coin in the future or a loyalty coin that becomes the transaction mechanism. Right, right. So I don't, unless we have a dollar crisis, unless we have a financial crisis that makes 08 look small, where LIBOR blows up, where not the stock market going down, that's not a financial crisis. Financial crisis is where we lose faith in the banks.

Yeah. Crypto is not going to replace Fiat in the Western world. It just isn't. And so it can be the payment rails and it can create new social networks. works that disrupt existing ones. We talk about decentralized, ride sharing, or wherever. But we're still going to think our net worth in dollars. What does your house cost?

What are you worth? You think in dollars. You don't think in Bitcoin. We're a long way from that transition. And that transition is only going to happen out of sheer crises. And I don't see sheer crises, right? The banks are in really good shape. They learn from 08.

So they have a heck of a lot less risk and a heck of a lot more capital. and so could we have a financial crisis, of course. Governments have borrowed up the hilt, and we've got political instability everywhere. And so there could be, but I think it's a low probability. Yeah, well, keep talking in this realm, because this was actually my next question for you, because your hedge fund at Fortress was a macro hedge fund.

So I'm just curious to know, like, what macro trends you think could affect the development of the crypto space in the coming years. Yeah, and so I think if we got a real demonstration, stating financial crises, crypto would take off. And you can kind of see that, you know, crypto picks up in Venezuela when Venezuela blows up or in Zimbabwe when Zimbabwe blows up. I don't in general think that's happening. So because of it, I think stable coins are going to become more and more useful. Now, right now, Tether dominates the stable coin market.

And most of Tether is Asian. And it's, I'm guessing, used for people that don't want to put their money back into crypto because they don't want the authorities to see their money. They don't want to pay tax. They want some privacy with their with their crypto gains. But I do think there'll be a market for what I'll call Catch Me if you can stable coins and there'll be a market for regulated stable coins. And I think you'll see probably in the regulated markets, people use regulated stable coins in time because it's pretty convenient. And what about other macro trends? like I don't know, there's a lot of stuff I feel like going on politically and not just in the U.S. but also even globally with China.

Listen, listen, I think we're in a trade war with China and it's not just a trade war. It's going to be a cold war. And it's going to be fought over technology transfer. And so I think it's really bearish for tech. But does that make it more bullish for crypto or bearish for crypto too? I don't know yet. Right now everything's a little correlated because people just are nervous. In the long run, it's theoretically it should be bullish for crypto.

But so here's some statistics that are shocking. I just found out 25% of basically of all venture money has come from China. A rounds, B rounds, right? The Chinese family offices and institutions have funded in a lot of ways part of this tech boom. They made lots of money on it, right? If it's the venture funds in Silicon Valley of the projects themselves. the Trump administration doesn't like that. And so forget just the trade war.

The next war coming is them fighting. And why? China has really big ambitions to be the world superpower. And, you know, they're going to be a larger economy than the U.S. soon. Yeah. And I think there had been, you know, 30 years of administrations that bought into the fact that a strong China is actually good for the U.S., right? a healthy economy, more customers.

I remember when I was in Goldman Sachs, we sat with Zurongi, who was one of the architects of the China Miracle, one of the giants. He was actually a physical giant and a mental giant. And we were talking about financial companies in WTO, the first round. And he was like, oh, no, we can't compete against Goldman Sachs. You guys are too good, you know, and it'll take, you know, five years at least. Okay, it's been 20 cents or 15 cents, and they're still not opening up their markets. But he said, we'll let Kodak in because we can real quickly see what they're doing and do it better.

And what was interesting was that we all agreed. Remember, China had a low per capita income. It was a rural to, you know, place. I first went in 94. It was, you know, Shanghai didn't look like Shanghai today. And so the mindset was it's fair that China has a little extra room to catch up. what happened was no one ever changed the rules. And so because they kind of worked for everybody. They worked for the global elite because Chinese labor was cheap. They worked for China because they

were booming. And it wasn't until Trump really said, wait a minute, these rules are no fair. It's kind of one thing I think that Trump hit on something that's bipartisan that people say, it's no fair China is stealing our IP. It's no fields of rules are, you know, they're strong enough country now. They don't deserve special rules. Maybe they deserve special rules 20 years ago because they were a growing country, but now they're a strong enough country, and our middle class has gotten the crap beat out of it. And so there's that process, and then there's a process of going one step further where I think the Trump administration's at, which is, let's see if we can slow China down so they don't become a superpower. How do we sabotage them, in essence?

And so it wouldn't shock me if H-1B visas are almost impossible to get for Chinese. You know, there's 500 Chinese nationals educated at Harvard. Like, I think that's a great thing. I'm not sure everyone in the Trump administration thinks that's a great thing. And so I could see this getting really ugly. And you know, you saw the Huawei heiress or executive. CFO, yeah. He was arrested. That's an aggressive, aggressive move.

Yeah. But just to take it back to crypto, like how do you think these things will affect the crypto? Or is it just like too unrelated? No, I think it's, listen, if China is, if China is consistent, They're going to fight back. And they'll want their own crypto market in some ways, right? It's why when they were pushing Neo to be their version of Ethereum at one point. So I haven't given enough thought.

It's negative tech. I know that. Does that mean it's negative crypto or a bizarre way does that become positive crypto? I think it's probably negative. I don't think crypto can exist outside of the regulatory framework. It can exist in a small scale. And there will be privacy coins and there will be, and you can make lots of money in what I call the Catch Me If You Can Network. There's some companies that are brilliant doing it.

Actually, some of the best companies in terms of profitability are outside of the regulated network. Catch Me if you can. BitFinex. Bitmex. Right. Brilliant company, you know, Bitmex. But broader revolution, you're going to have to play within the regulatory sandbox. Yeah.

I saw Arthur recently. I told him, I thought he was the happiest man at crypto. He is the happiest man in crypto. He's got the best business in crypto. Yeah. Yeah. I mean, he really is living it up. Yeah. Okay. So we're, we're almost out of time, but we're soon heading into 2019. What predictions do you have for the upcoming year for crypto? I've been yelled at for my last few predictions, so I should be careful. Listen, I, to be honest, I thought $6,000 would hold because it held so long.

And it didn't feel like there were sellers. and then we had this fork fiasco. And I think that's... Wait, you're talking about what exactly, the Bitcoin Cash? Cash fork. Wait, the original fork? No, the recent one, yeah. And I think that just exposed the immaturity still in the community,

the moving around hash power. People said, wait a minute, can one guy actually impact the Bitcoin hash rate? And so I think, you know, Craig Wright and his gang did a lot of damage to the short-term credibility of the experiment. And that came in the same week where the SEC said, we're going to find small fines on these two ICOs. Oh, but other way, if anyone wants to sue them, feel free. And that scared the shit out of people. And so people, I think, you know, the fear quotient went up.

We went through technical levels, and then you started a liquidation. And the thing about a liquidation is you never know where they end. Like I look at the chart and think 3,000 should hold. And I think we're a 3,000, 6,000 Bitcoin range. and then we will break up over maybe I don't know in the second half of the second quarter or you know April or something who knows but I but it's a hard

you know it's like picking tops and picking bottoms are hard we are in a liquidation and it's coming at a time when global markets are also in risk reduction and so the correlation is not the way you want it to be but I don't think the experiment is in crises

3,000 to 6,000 I don't I think it's painful for some people and there's a lot of, oh, God, I wish I had. And if I don't need sold and, you know, maybe I've got to go back to work. And, you know, there's a lot of genius traders that are no longer genius traders. And wait, just to go back to what you were saying about, how you thought that there might be a, what's the word I'm looking for, a positive correlation between de-risking in both markets. a lot of people say like, oh, if the traditional financial markets aren't doing well, then people will flee to things like crypto, but you don't think so. I don't.

I think, like I said, if the banks come under attack, I change my mind. Then I think crypto would be a great safe haven. But right now, there's not enough correlation in between, like, people with big portfolios don't have big portfolios of crypto, big portfolios of stocks. They're very few. And so they're kind of separate markets, but psychology is there's no new risk takers. We were waiting here for institutions. It was like waiting for Godot.

They're going to come. The herd is coming. People are going to throw eggs at me if I say it again. The herd is coming. It just takes longer than we all hoped. And so as we were waiting here, anything that slows the herd's risk-taking capacity down is not good. No one wants to take new risk when they're getting the crap beat out of them and they're old for us. Right.

And so it just slows things down. And that's why the markets are trading more correlated than they necessarily theoretically should be. be. And then so when I asked you about predictions, you kind of started with price predictions, but do you want to say anything else about how you think the space will develop or the technology? I do. I think you're going to see, listen, DFINITY, hash grab, telegram. They haven't even launched their blockchain yet. And so there are great projects out there that are, you know, pre-launch, Oasis, cosmos, you know, a lot of cool projects. We're working on a really cool protocol project. I can't talk about yet. And so I do think the computer science piece is going to move forward.

And I don't think it gets there by the end of 19. But I do think you're going to start seeing, like I said, watch the wax blockchain. Eos is going to have a lot of projects built on it. So they're kind of faster, more central or less decentralized blockchains. I don't want to get an argument about what's centralization or not decentralization. But the blockchains that are built for speed, I think, are going to have an interesting 2019. I think you're going to see the first surge of, security coin offerings. And by 2020, it's a big market. And so it's going to be, you know, we had the

the Regis Hotel, the St. Regis Hotel. There's this one that, that Mike Ova did here in New York, a $30 million building. By middle of the next year, be like, wait a minute, there is a security coin market. And it's pretty cool. And I think Bitcoin will be more institutionalized. You'll see institutions is buying Bitcoin by the middle of the year. It's just part of their portfolio. And so I think those are three pretty cool things that should happen in 2019. All right. And then 2020, I think, we're back to full Tarzan.

Well, we'll have you back on the show and we'll see how well your predictions held up. Excellent. So where can people learn more about you and Galaxy? We have a website, galaxydigital.io. I have been in 1,512 articles this year. so I don't think anyone needs to learn anything more about me. I just got that list from a PR person. That's amazing.

They counted. We have gotten a lot of publicity, mostly good, not all, and a lot of profile. So sometimes I think I need less. Yeah. Well, the New Yorker one was probably. By the way, my favorite, we spoke about this before is that you called yourself the forest go of Bitcoin. But I told you, I told my mom I was the forest gum of Bitcoin.

So I guess years for now, we'll see. Which one of us can claim that mantle? All right. Well, thanks for coming on Unchained. Laura, thanks so much. Take care. Thanks so much for joining us today. To learn more about Mike and Galaxy, check out the show notes inside your podcast player.

New episodes of Unchained come out every Tuesday. If you haven't already, rate review, and subscribe on Apple Podcasts. If you liked this episode, share it with your friends on Facebook, Twitter, or LinkedIn. If you're not yet subscribed to my other podcast, Unconfirmed, I highly recommend you. Check it out and subscribe now. Unchained is produced by me, Laura Shin, with help from Rayling Gallipali, fractal recording, Jenny Josephson, Corinne Fife, and Daniel Nuss. Thanks for listening.