MARIA: WELCOME BACK.
BITCOIN PRICES HAVE BEEN
RALLYING THE LAST FEW WEEKS.
JUMPING 50% IN PRICE IN EARLY
APRIL THE NOW 9,900.
MICHAEL NOVEMBER GRATZ IS A
BITCOIN BELIEVE.
NOW LAUNCHING A KRIT
NOW LAUNCHING A CRIT
NOW LAUNCHING A CRYT
NOW LAUNCHING A CRYPTOCURRENCY
INDEX AND HE'S JOINING ME NOW.
MIKE, GREAT TO SEE YOU AGAIN.
THANK YOU FOR JOINING US.
YOU'VE FOUNDED A NEW CRYPTO
CURRENCY INDEX.
>> INDEED.
WE TEAMED UP WITH BLOOMBERG IN A
PARTNERSHIP.
THE IDEA WAS TO GIVE THE CRYPTO
COMMUNITY A HEDGE PARK TO
COMPETE AGAINST.
I WAS THINKING S&P CAME OUT IN
'62.
THE GS COMMODITY INDEX, THE GSI,
I WAS ON THE TRADING FLOOR WHEN
THAT HAPPENED.
AND THE IDEA WAS -- AT GOLDMAN
SACHS.
THE IDEA WAS TO GIVE
INSTITUTIONAL INVESTORS ACCESS
TO THE NEW ASSET CLASS.
AND WE FELT THIS SAME THING WITH
THE INDEX WITH BLOOMBERG.
GIVE THE FIRST INSTITUTIONAL
QUALITY INDEX THAT WILL SLOWLY
ALLOW REAL INSTITUTIONS, PENSION
FUNDS AND SOUTHERN WEALTH FUNDS,
BIG POOLS OF CAPITAL TO MOVE
INTO THIS EXCITING NEW SPACE.
MARIA: FOR A RETAIL INVESTOR,
FOR EXAMPLE, WHO WANTS TO GET
INVOLVED IN BITCOIN, MAYBE
THEY'RE NOT SURE ABOUT DOING
SPECIFIC INVESTMENT IN BITCOIN
ONLY.
YOU CAN GET INTO THE INDEX AND
HAVE EXPOSURE TO LOTS OF
DIFFERENT BITCOIN.
HOW MANY.
>> THE BIGGEST CRYPTOCURRENCIES.
IT WILL GROW UP TO 15 COINS ONCE
THERE'S ENOUGH VOLUME AND
LIQUIDITY ON THE RIGHT
EXCHANGES.
AND BLOOMBERG ACTUALLY RUNS THE
WHOLE PROCESS.
MARIA: YOU WERE REALLY ONE OF
THE EARLY BELIEVERS.
YOU BOUGHT BITCOIN FIRST AT LIKE
WHAT PRICE?
>> LIKE $96.
MARIA: IT WENT UP TO WHAT?
WHAT WAS THE HIGH?
>> 19,900.
MARIA: THAT'S INCREDIBLE.
DID YOU SELL A LOT OF THAT?
>> I SOLD A LOT ALONG THE WAY.
PART OF IT WAS LITERALLY A YEAR
AGO THIS TIME I GAVE A SPEECH AT
A CONFERENCE -- THERE ARE
CONFERENCES THURSDAY, FRIDAY AND
ALL NEXT WEEK.
THE BIG CONFERENCES CONSENSUS,
THERE'S 7,000 PEOPLE THAT HAVE
PAID $2,000 A SHOT.
MARIA: WOW TO GO TO THE
CONFERENCE.
>> SO I SPOKE AT IT LAST YEAR
AND I GOT OFF OF THE STAGE AND I
LITERALLY GOT MOBBED LIKE I WAS
BRUCE SPRINGSTEEN OR BON JOVI IN
NEW JERSEY AND THAT TO ME WAS A
GREAT SIGN TO START SELLING.
AND IT WAS LIKE 11,000 AT THE
TIME ALL THE WAY UP TO $19,000.
AND IT FELT LIKE WE WERE AT THE
TAIL END OF THE MANIA LAST YEAR.
AND IT WAS.
I THINK THE RETAIL BUBBLE POPPED
IN JANUARY WHEN WE GOT TO 19,000
IN BITCOIN AND THEN 1300 IN E
NEAR YUM.
THEN YOU HAD A 75% CORRECTION
WHICH WAS QUITE PAINFUL.
MARIA: SURE.
WHAT DID YOU SEE WHEN YOU BOUGHT
IT BELOW 100, 96.
WHAT DID YOU SEE THAT MAYBE
OTHERS DIDN'T?
YOU WERE REALLY AN EARLY
BELIEVER.
WHY DID YOU KNOW THAT THERE
WOULD BE PROMISE HERE?
>> YOU KNOW, THE WHOLE CRYPTO
REVOLUTION COMES OUT OF A
BREAKDOWN IN TRUST AND
INSTITUTIONS.
AND IF YOU THINK ABOUT POST '08
AND THEN WE DID THE QUANTITATIVE
EASING.
THE PROCESS TOOK A LONG TIME.
2012 WE HAD THE EUROPEAN
FINANCIAL CRISIS.
IT WAS RIGHT THERE WHEN BITCOIN
WAS KIND OF STARTING TO AT LEAST
BREAK INTO MY ZONE, YOU KNOW,
THE WHITE PAPER WAS WRITTEN IN
2008.
AND IT FELT LIKE THERE ARE
ENOUGH LIBERTARIANS, ENOUGH
PEOPLE THAT THOUGHT INFLATION IS
GOING TO A ZILLION.
I MEAN REMEMBER, REALLY SMART
PEOPLE, PEOPLE LIKE PAUL SINGER
WAS WANTING TO THROW BEN
BERNANKE IN JAIL BECAUSE HE
THOUGHT WE WERE GOING TO HYPER
INFLATE THE WORLD.
SO THERE WAS A REAL SENSE THAT
THIS IS AN ALTERNATIVE FOR CYBER
PUNKS, THE LIBERTARIANS.
MARIA: AND AN ALTERNATIVE FOR
GOLD.
>> IN MY MIND IT'S AN
ALTERNATIVE OF GOLD.
LET ME STORE MY WEALTH
SOMEWHERE.
THE COMPUTER SCIENCE IS REALLY
COOL BUT JUST AS COOL IS THE
TOKEN MECHANISM TO CREATE SOCIAL
NETWORKS.
THESE ARE PEER TO PEER NETWORKS.
WE DON'T HAVE TO TRUST THE
CENTER.
WE CAN TRUST THE NETWORK, THE
CRIP TOLLING INSIDE THE COMPUTER
SCIENCE.
>> WHICH IS WHY BLOCK CHAIN WAS
BELIEVED.
IT'S A STRUCTURE YOU CAN TRUST.
>> BLOCK CHAIN IS A DATABASE.
IT'S A REALLY GOOD DATABASE AND
YOU'RE GOING TO SEE PRIVATE
BLOCK CHAINS ALL OVER THE PLACE.
IT WOULD BE SHOCKING TO ME IF
EVERY CORPORATE TREASURY IN FIVE
OR TEN YEARS DOESN'T HAVE A
BLOCK CHAIN TREASURY.
BECAUSE IT'S SO MUCH MORE
EFFICIENT.
YOU THINK ABOUT MICROSOFT HAS
OFFICES ALL AROUND THE WORLD AND
AT THE END OF THE EACH DAY
MICROSOFT TAIWAN IS GOING TO
EQUAL UP WITH THE SAN FRANCISCO
OFFICE OR THE GERMAN OFFICE.
AND YOU KNOW, THEY'RE WIRING
MONEY ALL OVER THE PLACE USING
THE SWISS SYSTEM.
IN A BLOCK CHAIN DATABASE, THEY
CAN HIT THE ONE BUTTON AND THE
LEDGER JUST -- YOU'RE CUTTING
OUT LOTS OF PEOPLE AND LOTS OF
MISTAKES.
MARIA: WHAT DO WE NEED TO
UNDERSTAND MORE ABOUT BITCOIN DO
YOU THINK?
WILL WE SEE BITCOIN GO BACK TO
THE HIGHS ?
-L.
>> BITCOIN WILL GO BACK TO THE
HIGHS ONCE WE HAVE A CUSTODY
SOLUTION THAT PEOPLE REALLY
TRUST.
WHAT'S INTERESTING IS -- IT'S A
GRAND IRONY IN SOME WAYS.
THE COINS THEMSELVES, WHEN
THEY'RE FLOATING OUT IN THE
ETHER, IF YOU WANT TO THINK
ABOUT IT, ARE REALLY SAFE.
WHAT IS AT RISK IS YOUR PRIVATE
KEY.
SO YOU'VE GOT A KEY WITH LOTS OF
LETTERS AND NUMBERS ON IT.
YOUR ACCESS TO YOUR COINS.
IF YOU LOSE THAT KEY, YOU'VE
LOST YOUR COINS.
SO PROTECTING THOSE PRIVATE KEYS
IS A BIG INDUSTRY.
THERE ARE ALL KINDS OF CUSTODY
SOLUTIONS QUITE FRANKLY THAT ARE
REALLY GOOD.
I FEEL 100% CERTAIN THAT THEY'RE
SAFE THERE.
BUT I ALSO KNOW IF YOU'RE
SITTING IN THE STATE OF
WISCONSIN AND YOU'RE RESPONSIBLE
FOR, YOU KNOW, YOUR STATE'S
PENSION MONEY, YOU'RE PROBABLY
NOT GOING TO RISK YOUR CAREER ON
A COMPANY THAT'S CALLED ZAPPO
JUST YET.
YOU'RE GOING TO FEEL BETTER IF
IT SAYS BANK OF NEW YORK OR
GOLDMAN SACHS.
MARIA: A GOOD ANALOGY.
>> UNTIL WE GET INSTITUTIONAL
CUSTODIANS TO SAY HEY, YOUR KEYS
ARE SAFE.
THE BIG INSTITUTIONS ARE GOING
TO BE MORE RHETT
TO BE MORE REDTT
TO BE MORE RED SANT RB
TO BE MORE RED SANT.RB
MARIA: AND THEY HAVE BEEN.
>> I'VE SEEN LOTS OF PLAYERS
SPENDING TIME AND EVERY TRYING
TO FIGURE OUT HO TO GET INTO THE
BUSINESS.
YOU'RE GOING TO SEE BIG
ANNOUNCEMENTS SAYING WE'LL
CUSTODY THIS STUFF.
MARIA: VERY PIONEERING OF YOU.
BCI IS THE INDEX DESIGNED TO
TRACK THE PERFORMANCE OF THE
LIQUID POSITIONS OF THE CRYPTO
CURRENCY MARKET.
LET ME GET YOUR TAKE ON THE
STOCK MARKET AND THE BROADER
MARKETS OUT THERE.
WHAT'S YOUR TAKE ON WHERE WE ARE
NOW?
>> WE'RE IN A RATE CYCLE WHERE
THE RATES ARE GOING HIGHER AND
THE FED I THINK IS GOING TO
CONTINUE TO PUSH RATES UP
HIGHER.
I DON'T THINK THEY'RE GOING TO
ACCELERATE BUT THEY'RE GOING TO
KEEP MUSHING
KEEP PUSHING THE RATES HIGHER.
WE'VE GOT A PRESIDENT THAT
CREATES LOTS OF INSTABILITY,
GOOD AND BAD.
THERE'S MORE RISK.
RATES ARE GOING HIGHER.
AT THE SAME TIME, A SYNCHRONIZED
GLOBAL RATE SYSTEM.
I THINK THE STOCK MARKET IS
GOING TO STAY VOLATILE BUT GRIND
HIGHER UNLESS, YOU KNOW, LONG,
BECAUSE OUT OF RISK-ADJUSTED
BASIS, IT'S A RISKIER TRADE.
BUT I THINK, YOU KNOW, WE STILL
HAVE ENOUGH MONEY IN THE SYSTEM
THAT WE'RE HEADING HIGHER.
MARIA: AND IT'S A GOOD BACKDROP,
ECONOMY DOING WELL.
>> ECONOMY IS DOING WELL.
MARIA: NORTH KOREA WILLING TO
GIVE UP ITS NUCLEAR AMBITIONS,
WE'RE TOLD.
>> WE'RE TOLD.
MARIA: WE'LL SEE ABOUT THAT.
>> THE EUROPE THAN ECONOMY IS
DOING OKAY, THE JAPANESE ECONOMY
IS DOING OKAY.
THE FIRST TIME I CAN REMEMBER
THAT WE'VE GOT A SYNCHRONIZED
GLOBAL SHIFT TO THE RIGHT.
AND IF WE GET AN INFLATION
NUMBER LIKE YESTERDAY, A LITTLE
LOWER -- BECAUSE THE RISK REALLY
WOULD BE THAT THE FED HAS TO
ACCELERATE AND RATES GO UP AND
FINALLY WE SAY WHAT ARE WE