Why I’m Bullish | Mike Novogratz

and so I think for our industry why I'm so bullish is I think they're both going to commit they want these voters my dog thing resonated I it got dreed all over the place no there are 55 million dog owners in America and they're 85 million crypto owners that's a crazy stat we are a political force welcome to bankas where we explore the frontier of Internet money and internet Finance this is Ryan Chan Adams I got a solo episode for you today David is out I'm here to help you become more

bankless the question today why is Mike novogratz bullish Mike of course probably needs no introduction for longtime Bank list listeners and crypto natives but for those that are newer Mike is a fund manager he was early to bitcoin he was very exceedingly early one of the earliest to ethereum and he's since built an entire digital asset Empire it's called Galaxy digital and he spent the last 10 years of his life so that's an entire decade evangelizing crypto to wall at times they thought he was crazy at times he was a prophetic in

a good way and more recently he's been spending some of that time in DC it's always a treat to hear from Mike and this is actually his first time on the bank list podcast after all these years a few things we talk about the progress of crypto why Larry thinkink of Black Rock pivoted the impact of the ETFs why KLA Harris will pivot Pro crypto if Trump will make Bitcoin a reserve asset and what that would mean keeping crypto bipart Artisan or at least nonpartisan why he's bullish the macro environment in general and finally his advice for

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positively contribute to network growth users holding fuel points automatically qualify for future network rewards join Fuel and contribute towards shaping the future of ethereum rollups bankle station Mike novogratz is the founder and CEO of crypto Investment Company it's called Galaxy digital he's always brought I would say some big Trad investing energy to crypto he was a president of Fortress he spent some time in Goldman Sachs but I think he's pretty unique among his colleagues in that he saw crypto just about before everyone else on on Wall Street Mike great to have you on Bank list how you doing I'm

doing all right busy week yeah I it's been a busy week it's been a busy year I uh want to start with this question with respect to like where we are in the trajectory of crypto because I feel like you've played a pretty key role in in preaching let's let's call it the good word of crypto to traditional investors um I don't know how you're feeling these days 2024 are you feeling still feeling like a profit in the wilderness like evangelizing to people who thought you were crazy like how does it feel this time around in some ways I I I almost feel like you know my mission are my

contribution is is is getting long in the tooth yeah that you know how many times can I hear the same baldheaded guy tell the Bitcoin story or tell the Prospect and the promise of crypto um we're at the launching pad you know I started this EXP the herd is coming and I was about five years six years seven years too early they're here you know we've had the first ETF with Bitcoin now we've got the ethereum ETF uh we have a huge change of heart around the politics of crypto I mean this Bitcoin Nashville conference is

going to be electric uh Donald Trump is the great opportunist who says hey they're 10 million single issue voters I want them yeah and so there is rumor he is going to announce a strategic reserve for Bitcoin uh I think that would make the price go significantly higher what like who would have thought in the wildest dreams uh and all of a sudden you know listen I don't know if he would I haven't seen a speech I know Kennedy is

speaking before him he's very Pro crypto it's an All-Star lineup out there I know Cynthia lumus is giving a speech and there's potential that she's going to prop something in her bill and so you could see this build on it uh um and I would I could I would also tell you that the Democrat Democratic presumptive nominee kamla Harris and her people are saying wait a minute I can't not be you know she's from San Francisco she understands the benefit of tech and in terms of growth and so I am very certain the Dems are going to make a big pivot

on saying hey the B Administration was wrong on this uh let's dump Gary gendler uh let's be Tech and Innovation forward and so all of a sudden we've got two parties they're going to start fighting over us Paras and it's pretty freaking exciting and so you know it'll be interesting you could do a second podcast next week to see if all this plays out but it's got the market really excited and I think listen if Trump announces it it's a GameChanger prices

are a lot higher you know then there's a call it a 45 55% chance he wins right now or call it 50/50 and then if he wins does he follow through probably 80% but if he follows through there's probably an 80% chance other Banks central banks and reserves start buying it and all of a sudden what we thought was kind of fun to talk about 500,000 600,000 700,000 crypto actually is in the realm of possibility and you know 700,000 crypto is gold it's roughly the

market cap of gold uh right 14 trillion something around there maybe go a little higher now because gold price went up but like that seemed like fantasy and now there is a it's not base case but it's a possibility and so that's pretty freaking exciting it's crazy and how quickly it's all happened and I I do want to get back to politics and in the 2024 election because that seems to be be a catalyst but what you're just talking about is there's the potential this episode will will go out on Monday of next week Mike we're recording this

on a Wednesday the 24th so it goes out uh on Monday the 29th going to look prophetic or foolish exactly which is the perfect place to be that's the line you want to like kind of like balance I I think so prophetic and foolish which is maybe maybe that's a summary of your crypto evangelism but it's been more prophetic than it has been foolish and like I want to ask so we're talking about the potential of a major um political like potentially the next president of the United States uh announcing a strategic Bitcoin Reserve

okay that's what you were just talking about and you were talking about how bullish that would be okay so coming back to that but like when you said the herd was coming like back in 2017 I I recall you you you saying that uh is that what you meant do you think the herd would actually be central banks because I I got the impression you were more talking about like whales and trafi and like insti I was talking about the black rocks yeah listen I think the single most important thing that's happened to crypto in the last two years is Larry think being orange pilled and you know it wasn't just one person one

person let it it was a collection of people uh but they weren't pill just like every other person that's ever boughten Bitcoin every single person that has boughten Bitcoin has been convinced to join this community of light-minded people to take some of their hard-earned wealth and trust it in this technology and Community it's not just the technology right we could have Adam's coin we could hack the you know Fork the Bitcoin blockchain and call it Adam's coin and maybe your mother and your uncle would store some wealth there I don't think so I don't even think they

believe in Adam's honestly social construct of it's people selling the story to each other and so that's what's so unique about this it is a it is an active community and the only way it grows is that people in the community figure out how they should contribute listen there are ton of free riters I used to think I should put a tip jar on my Twitter because I'm out there preaching yeah you know I don't get paid extra to preach right I own Bitcoin Bitcoin goes

higher I make money uh if if I didn't preach I'd still own Bitcoin and so I always think it's essential for people to figure out how they can participate in that Community again they're Free Riders but most people you could be core developers you could be or you could orange pull one person but that's that's what this phenomena has been I I gotta say the Larry think pivot on crypto has kind of caught me by surprise both how fast it's it's happened and if if you're pointing to that as kind of a lynchpin

I'd be curious to dig into that how do you think like how did that happen how did he get orange pilled like what was it I like you know I a group of people sat with him people that had a lot of his respect from other things they've done in life sat with him and said Larry you're not thinking about this right let me explain to you why this is important and what gets people in trafi to understand is what some something that I think Satoshi must have seen it's not in the white paper but he must have seen it

right post 08 what came out of' 08 in the reaction was a move to populism right what was the reaction in ' 08 it was bail out the hedge fund guys bail out the insurance companies and oh we're GNA have a lot of people lose their houses and so if you're a little guy you're like this system is no fair that's the beginning of saying screw this screw the system screw the system and satoshi's paper was a screw the system paper uh and it's like we don't trust the system popping populism is

coming so what does populism end up being in political terms it means I'm going to spend more and I'm going to spend more and I'm going to spend more Donald Trump was the first populist president we've had in my lifetime right we had neoliberal politics George Bush Bill Clinton their policies were really damn similar Donald Trump was like spend it and then Joe Biden came in and kind of hijacked by the progressives he's like I got to spend more I got to get people pay off medical debt pay off college debt

right and so we've had this Reckless spending since 2016 there's no end in sight and so when you're Larry think you say if you're going to see dollar after dollar after dollar printed it's going to debase the dollar and let me buy something like gold or silver Bitcoin is just digital gold and I've always believed we should keep this the story that simple it's not going to be payments it's not going to be just digital gold we're not going to buy our

tennis shoes in Bitcoin right because we think it's going higher who's going to buy your tennis shoes in something you think is going higher but if it's it's a place that average Americans and average Sudanese people and average Egyptian people can take some of their hard-earned wealth and store it and feel like it's safe because they trust this code and they trust this community it's not just the code it's the community that participates in the code and I think that's you know one guy told him that he brought in experts and and Larry met with a lot of smart people including people at his own firm and said I get it

and he's also very good at reading the you know reading the the the tea leaves you know hey if this is going to be important Black Rock needs to participate and so all of a sudden they they help credential eyesee right my hope with Galaxy was always that we'd be a credentialer uh that we'd pick the right projects that people would trust us and that would bring people into these ecosystems what do you mean by that credential eyes just give legitimacy give legitimacy yeah okay so listen I have I have bet on some projects that

have sucked uh and that you know does not do good things for my reputation and I've been on some projects that have been great sure and that does better things right I bought ethereum at one uh a little bit lucky uh a little bit you know it's not buying things it's cheap it's knowing when to sell them and when not to sell them that makes you the money and but that was the whole reason we set this company up because you know I was already old and I was already wealthy so I said when I go back to work I want to be able to contribute to a

community so I thought I had something to add uh I want to work with young people a lot of young people in the space and I want to learn new stuff and it's an unbelievably diverse field and so if you're not curious you shouldn't be in the crypto field it it seems like part of what you're describing with Larry think and all of the kind of the other investors and now even presidential uh nominees kind of you coming over into the the crypto Camp it seems to be a Tipping Point we just hit this Tipping Point it's not just any it's not just one thing it's a Confluence of factors that have allowed us to achieve it when

you look at 2017 when he used to say the hurt is coming to now 2024 we are like I guess seven seven years later on that Journey what is different about crypto yeah we've hit this this Tipping Point there's more legitimacy in what other ways is it different from 2017 like do we now have the infrastructure necessary like were there some was there some building that's that's occurred some but so the big you know catalytic change was Co because Co created the political

situation to pump trillions of dollars into the economy trillions of dollars and that allowed the story of oh [ __ ] we're going to debase the currency to take hold globally and so without covid we are you know we're trading 6,000 you know uh like I don't know what we're trading we're trading a lot lower and the and the energy didn't come into the space Co brought the energy into the space I I would not have gotten into this if it was just about Bitcoin if it

was just hey we're gonna create an alternative to Gold a digital gold that's just a lot better for a lot of reasons I was always drawn to the space because this idea that really Valic right uh hey we can not just put money on this blockchains but we can put smart contracts and then we can put anything on and and so I always think Satoshi and vitalic as my two Heroes of this space like I don't know who Satoshi is I know who vitalic is and I think he's he's just awesome the way he's held himself the way he's comported himself uh my

favorite guy in the whole Space um I don't know him well I've met him a few times but I just watch him and I'm like dude that guy is so wise and so young but he really gave this idea you know Joe lubin's my friend I was a college roommate I went to his company and I was like how can we use this technology to really revolutionize and make the world fairer how can we connect people around the music space to cut out the midlan ticketing Finance all these different areas and that is starting to happen it

hasn't happened yet right it's happening in a great way in payments right verise of stable coins we're investing a bunch of different payment you know companies cross B payment stuff um that's I think really exciting and and there's some test cases around tokenization uh we tokenize a violin we're working on again a stable coin it really hasn't happen in MH yet and the rest of defi has been a crypto ecosystem play What's really exciting in the next

few years we now have blockchains that are fast enough trusted enough stable enough that you're going to start seeing real world use cases built on them but it's hard right if in 10 years time it's Bitcoin and a casino we will all made a lot of money I won't feel nearly as good about myself I'd be like oh my God I spent the last chapter of my life building a casino uh like so for me for this revolution to really be fulfilling you've got to see blockchainbased ticketing you've got to

say blockchainbased Finance you've got to say blockchainbased music uh right giving the power back to the people having peer-to-peer uh relationships and it's all about this community and so that part is is is Plumbing right it's getting the plumbing right it's having the blockchains uh more robust uh you know it's funny blockchains are trust machines but you've got to teach people how to trust the trust machine it's actually it's it's a it's kind of a a

messed up concept right van Jones once won a big prize from Jeff Bezos in uh and he said I got to spend this money what can I do and he thought what about blockchainbased voting and I thought about it I was like dude start with the American Idol right like no one's going to trust blockchains on on voting yet even though me and you might show them a math that that's that's a better system so you got to you got to bring people into the space where they can understand it and trust it and at one point all of it disappears into the back of the TV right

and so that Journey for all of these other protocols and all of these apps that people are working on it's literally in the first inning right bitcoin's in the in the sixth inning right it's it's it's just hit the main you know the majors it's it's on its way right bitcoin's a finished product nothing has to change for it to be an awesome product uh it's got a role in every portfolio in the world uh but when's the last time you

bought something on a blockchain like a right you know we don't even in the US we don't we don't use blockchainbased payments because [ __ ] Apple pay works like a gem right but if we lived in you know Venezuela or you know some parts of Africa we'd be sending each other tether on Tron yeah so a lot of this Tipping Point I guess it you know has to do with uh with narratives narratives being understood and then also like uh use cases and I think you're right like Bitcoin from a the network perspective

and a narrative perspective is kind of there it's reached sort of saturation points fully understood it's like more of a a finished product uh ethereum is a little different and everything that comes Downstream of ethereum as well I think Mike one prism maybe to look at this and talk about this is uh through the lens of ETFs because I have noticed that that trafi is getting a bit more bullish on crypto as it has products to sell okay Larry think swung bullish on crypto after we had the ey shares black Black Rock Bitcoin ETF didn't he and now

he's now he's gotten ethereum ETF and so I I'm curious as to like what uh when trafy has products to sell do they generally get more more bullish like validate that for me or or tell me that that's BS Ryan it's a great Insight great listen even in my own company you know we have always been great investors or at least very good investors both in Venture and and in and and macro and owning tokens and selling when they go high and buying when they go low but our trading desk didn't have much to offer people for a while yeah right and so and

so you're like oh damn it this business is hard and now we're the biggest derivative players in the space you know when we participated in the FDX restructuring you know we were a big player in buying FDX at a discount and bringing customers in that way and it's amazing how the faces light up of the salesman when they have something to sell and so it's a 100% you get more Enthusiast enthusiastic when you start making money and the industry is at the point where it's big enough that people are making money not just by owning the

underlying but by bringing people into the tent by acting with them by lending against it uh and so you need people to make money and feel utility uh both feel utility oh this is great to use it and make money doing it to create energy and and of you know and so I think the next big thing to happen is post this election no matter who wins you're going to get some version of an infrastructure you know a market structure bill passed fit 21 volume three and and I'm praying

and I'm thinking you're going to get new Direction at the OC uh and the and and the remnants of choke point 2.0 gets wiped off the the table and all of a sudden Goldman Sachs and City Bank and Morgan Stanley and Jeff all start saying hey go hire me some of those guys that work at Galaxy uh you know the head hunters calling and they're building these desks then you'll actually see a lot more activity and so I'm I'm like I I think about it 2 a I'm like [ __ ] the competition is going to

get so much harder uh but good it's going to driveing so many more people because those organizations that get more charged up and they're bringing their giant institutions with them and as much as I think Galaxy's a world-class company most clients would rather deal with Goldman than Galaxy they trust it it's be balance sheet they you know I mean it's just that's human nature and so I want the Giants to participate uh because I realized it just willing a lot of energy to our space the space why is energy important

like Bitcoin drives everything because it pushes money into other places it's the other places that need to get built out so they can fulfill their Destiny right I want blockchainbased ticketing my favorite Story of All of crypto it's like 2015 I got a call from Adam Clayton the bass player of YouTu I thought it was a prank call I thought it was my brother pranking me and he's like dude I listen to your podcast come to the concert no way I so I go out I literally go out out to freaking the metal lands with a buddy go backstage I me Bono The Edge you know and he's like oh we played

your freaking podcast on our Jet right out here and I was talking about the idea of blockchainbased ticketing in nfts in 2015 they they weren't called nfts you know the real breakthrough of Satoshi was that he was the first person to put private property on the internet before Satoshi there was no private property right you could control copy paste uh and so having uniqueness actually is private property and so I was like oh you're going to have tickets you'll be able to have these tickets and

you'll be able to throw them from the stage to the guy who's sitting in the top row He he'll catch them on his phone and he'll come down and get the front row seats because they hated empty front row seats and I'm giving them all this Jaz baz and they're all excited and it's eight years later and we don't have blockchain based ticketing and so I'm not going to be happy until we have projects that actually get to scale why don't we have it because Ticket Master doesn't want it and it's hard to beat the incumbents we

don't have we don't have blockchainbased right share because Uber doesn't want it and so how does a community compete against you know a giant right why Facebook still dominates and Tik Tok dominates social we don't have we don't have distributed social we don't have right decentralized social and so in lots of the verticals we've gotten smoked the question is in five years as this place gets more energy as bitcoin price goes

up and drives money into the whole space and Goldman gets involved and more and more people bring more and more people in do these projects finally get enough critical mass and funding to take on the the incumbents yeah I think I think one way that that uh maybe we can get more traction with the incumbents is the Playbook that that Bitcoin has uh used which is basically give them a product to sell once they have a product to sell Bitcoin is not competitive with uh black rock or or these other asset issuers if they can issue an ETF and maybe we can

do something similar with the ticket masters of the world maybe there's a way to tokenize their their ticketing that kind of thing and like coming back to kind of like trad's interest in uh in crypto which is really taking uh like a positive turn this year I mean the Bitcoin ETF my perception of it from the outside looking in it wasn't just like a product that launched it was like the Beatles of ETF products like this is what ETF people tell me that this is not like a minor launch this was the greatest launch in history yes so think

about this like I talked about a lot this a lot in 2017 in that great first bubble right in the history of the world we had never had a global specula of mania right we had the NASDAQ bubble that was a US based Tech bubble Mr Mr wat naabi in Japan or Mr Mrs seik in you know Northern India they weren't participating right in the railroad bubble it was a u based bubble in the Tulip bubble it was a you know based in

Amsterdam crypto was the first Global product you have Japanese bonds British bonds European bonds us bonds Mexican bonds we had Bitcoin it was a global product we went from you know they're 330 million Americans they're 8.2 billion people and so the global nature of this space for a crypto junkie feels normal it ain't

normal right tell me what the fifth biggest stock in the Korean stock market is you got no clue no idea right uh the Koreans know right but you can tell me what the top four cryptocur currencies are probably the top 10 and so we don't want to underestimate how important that is and so for the US why Bitcoin ETF was so important as well it was the first time the government said you have our blessing Gary Ganser said it with with pepper in his mouth and you know a gun

in his back he didn't want to say it but he was forced to say it and you know a lot of credit goes to the grayscale guys they did a lot of things wrong but in this case they did something right where they went on that that lawsuit said what are you guys talking about can't say there's a future not you know like makes no sense and you know that cost money to do those lawsuits and so I tipped my hat to that that team uh but it's the first time the US government said crypto's good we got your blessing that's that's my Pope thing nice and that was really important

and you know we're gonna see we're gonna see now less than two years later by the time by the time it's all said and done two years post that that ETF launch the us is going to be all in on bitcoin all all on all in on crypto we'll have good regulation we'll have rules and we'll have you know I remember I was talking to a trafi guy who had a major major job and he went uh to a big crypto company and he said he called me after about

three months he said dude I'm seeing these people I used to talk to all the time and I I I show up and they look at me like I'm a criminal and you know he ran a big business uh and I was like yeah Welcome to our world right like we were treated like Paras in lots of ways I mean maybe me a little less because I'm such a loudmouth uh but all of a sudden the time is you know the government has said no no this is a good industry and I think there's going to be an unbelievable unleashing of energy the

moment this stuff gets codified the moment we pass a law the moment you say you you see Gary gens are not at the SEC the moment frivolous lawsuits aren't be being and listen I'm not saying crypto wasn't guilty of a lot of [ __ ] it still is guilty of a lot of [ __ ] I literally have up to 10 to 15 imposters a week between Facebook Tik Tok you know LinkedIn and all these things people trying to scam and fish money from you know that never happened

to me as a macro guy 0.0 times uh and so yeah you know the crypto world has been full of you know Shady deals I I looked at one one tweet I had from a few years back that was like oh my goodness you know Do Kwan and and uh and Sam bankman freed are be coming the next czs uh like unbelievably Innovative unbelievably charismatic unbeli all three of the guys go to jail and that doesn't happen in Trad

five very often is what you're telling me and so you know we we deserve some of this banking we got as an industry uh but what feels good is that most of that's behind us and we're getting a clean bill of health from the government soon and I think you know the next the next five years are going to be a lot more fun than the last five I think what's needed in crypto is going to change when you said how you doing I said well I'm a Storyteller uh and I think storytelling