Crypto Will Be The 12th Sector of The S&P! | Bitcoin 2022

[Music] It's pretty chaotic here on the first day because nobody knows where to go. There's 50,000 people showing. The first day probably about 250,000 by the time this is over, and it's really going to be big this year because there's so many institutions interested. This is the first time there's been so much policy proposed; it's going to make crypto really what I think will be the 12th asset of the S&P, the 12 sectors coming up. Yeah, there's so much productivity available with this software because bitcoin's just a software. All of this stuff is soggy, and that's why the world is gathering here to talk about.

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Biden is talking about a wealth tax now and taxing unrealized gains for most entrepreneurs in America. That is an un-American idea, but this plan is D-O-A in my opinion. Not a chance this happens and that's a good thing. At this point, I like gridlock in Washington. We've had enough spending. Let's end it now and let's coast in for the next 36 months with nothing else done; that would be good.

What I think is going to happen in the next 24 months is this new generation of miner, very similar to Bitzero. They are going to go to the public markets, and so you're going to have an option. You can buy a dirty miner on the public exchange or you can buy a clean miner. The only way to own a clean miner right now is you got to go in privately and get a position, but they're all going to tap the public markets. So, you know, Bitcereal is just one of the positions I'm going to buy. Others too, but for me owning the actual miner is no different than owning the miner for gold; you get leverage.

How's the environment in Canada? Way more progressive regulators. So much advanced. I see a lot of businesses, and I try and give good advice. The market's a tough place, and the crypto markets are even tougher. I can't believe that you can have a Democrat sitting beside a Republican working on something together. When's the last time that ever happened? Literally looking at the NFC space as an authentication vehicle for hard assets like watches, which I'm a huge watch collector. I want to own the infrastructure of NFTs, and that is Jordanfree with his NFT.com. I own a big whack of that. I just like what he's doing in terms of providing liquidity to all NFT markets. So for me, it's trying to find those winners, find those innovators, and place bets here and there.

Thank you, and I'll go ahead and get you miked. Perfect. Thanks one for Mr. O'Leary with a headset mic. You know what I want to talk about? I want to talk about bitcoin increasing in value dramatically when institutions start buying it. Why are they not buying it? Because they don't have policy yet. We need policy; that's what I'm going to be talking about. And then it's to the moon, and to celebrate that I'm wearing my Snoopy to the moon. This is a fantastic Omega. You know this little guy? This watch has gone crazy because everybody's talking about going to the moon. Well, we're going to go to the moon, but we need policy. All about policy; hey, regulation's okay when you make money on it.

All right, thank you, everybody. I want to talk about indexing for a moment. Now, many of you know what that is if you're an institution, but let's say you're a very, very wealthy Middle East sovereign fund and you're managing, I don't know, 500 billion dollars, and you don't need any more oil as an investment because you've already got that in the ground. So you go to an indexer like me and say, "Look, give me the S&P less energy, less airlines." And that's what indexers do. So we as an industry get to see fund flows 24/7 every day, and there are billions of dollars out there waiting for policy because for all the excitement about bitcoin, for all the excitement about crypto, for all of the wonderful productivity these products and blockchain and everything that's promised that you're going to be hearing about the next three days, these massive pools of capital, these trillion dollar pools, own this much crypto; this much, practically nothing. It's the purvey of high net worth individuals, hedge funds, and retail investors, and that's okay, but what we're missing is policy.

When we get policy and the regulator regulates, that's not a negative thing. The spigots of capital are going to flood into this sector like you've never seen. And so for those of us that can invest in it now, you're getting ahead of what's going to be a huge wave of interest when policy occurs. I predict in the next 10 years that crypto, blockchain, bitcoin, all of this innovation will be the 12th sector of the S&P. Now, why do I say that? Because bitcoin is not a coin; it's software. Ethereum is software. Avalanche is software. Helium is software. Solana is software. It's all software, and the smartest hands-over keyboards today in the world are developing on the chain and bringing innovation to financial services, which in the end is the largest sector on earth.

Now, what we need is policy. We need government to catch up with us so that we don't lose leadership in America to this very important 12th sector of the economy. There's no question. So, let me give you a quick update because I've been spending a lot of time in Washington in the last three months. A lot of time, and the good news is on a bipartisan basis there are many senators and reps that are thinking about this in a proactive way. So I'm going to give you what I'm calling the five vectors of policy and give you an update of where we're at on this stuff because I've actually read these bills. They're big; a lot of reading, a lot of bedtime reading here, but there's a lot of good innovation occurring.

Let's start with the big daddy bill that's coming out of Cynthia Lemus. She is coming here on Friday to give a keynote. This is a very important milestone to have a senator come here and address this important sector with a bipartisan mandate that signals that regulation is coming, and that is a good thing. That's vector number one. Vector number two, the president himself in his direct order, his executive order, talked about crypto as something that he wouldn't make illegal. That was the most important message in there, but there was also a concern about climate change; we'll get to in a minute. Then there's BlackRock, the Larry Fink mandate that has discussed this sector as well, also a concern about ESG and climate change.

Last night at six o'clock, Bill Hagerty dropped a bill, two pages. I spoke to the senator last night. A two-page bill that would make stablecoins legal. This is a genius piece of legislation. If it's two pages, every senator can read it, and it's very simple. What this says is this: Why is this any different than a money market fund? Why can't we have a simple audit every 30 days with the underlying security inside of it, whether it be USDC or any other stablecoin? And why can't we limit the duration of the asset to 12 months or less? And then why don't we let the market compete to provide stablecoins, which are now way past 100 billion dollars, and allow institutions to put this on their balance sheets? Two-page bill.

[Music] There's a senator that wants to do business. I, of course, applaud this mandate because my own auditor won't let me in my operating company do anything with stablecoin because there's no regulation on it. So maybe the best way to approach this for all of us that are interested in crypto is to pick one pillar of value, and right now I would argue that stablecoins are one of the fastest growing asset classes outside of bitcoin, and help this become policy and law and watch what happens.

And the reason you should care is if it's backed by the US dollar, it will become the reserve currency of the earth; that's what will happen. And why would we want to give that up to any other country? Why would we ever give that innovation up? So let's regulate this, let's get behind this bill and make it happen. And I'm not asking the federal government to write one line of code; that's not their job. Let the free market, let the private sector develop these stablecoin products, and let them compete just like Fidelity competes with their money market fund, like Schwab competes. They're regulated, and everybody uses them when they have a cash balance on their account. Let's do the same thing here. That way we have the innovators coding and we have the government regulating. That's a great outcome. It's coming soon.

Now, let's talk about the minefields in the five vectors of policy. We'll start with the SEC. Now, I don't know if you read these memorandums, but a few weeks ago they started proposing that, in addition to financial audits in all companies that are public in all 11 sectors of the economy, they have a carbon audit. That they get somebody – if you claim that you're carbon neutral, you're going to get audited every quarter. Now, in the bitcoin mining industry, where I'm a participant, the way we get carbon neutral is we buy carbon offsets. The problem with a carbon offset is the tracking error is so huge that no public auditor will sign off on those statements.

You can say you're carbon neutral, but there's nobody going to sign it at the risk of being offside with the SEC. So if the SEC adopts that policy, that's bad for proof of work and it's bad for bitcoin mining because the first pioneers of this in the U.S. were very concerned about being ESG compliant and they went to that market; they went to the offset market.

Two weeks ago in the EU, they tried to ban proof of work because they were so concerned about how much carbon it was doing. Now, here's why bitcoin mining is going to save the world if this policy gets implemented, because it's also in the ESG mandate that Larry think of BlackRock put in place, and it's also mentioned directly deep in the executive order of the president himself. It's a direct swipe at bitcoin mining.

But why is bitcoin mining good for the earth? Because the next generation of bitcoin miners, and some of them are represented right here, are starting to work with energy that does not require carbon: hydroelectricity and nuclear power, wind and solar. The drive to produce bitcoin is so economic in value that they will go ahead and fund the next generation of machines and turbines. Ninety percent of dams built in America in the last 100 years contemplated hydroelectricity but never installed the turbines.

I'll install the turbines. Why? Because it's great economics if I can use that and not be hassled by a carbon audit. This is the future of bitcoin mining. We will be developing power for all communities while we mine coin in an ethical and 100 percent green mandate that we can do with hydroelectricity. This speaks to Montana, it speaks to the Tennessee Valley, upstate New York, Quebec, Canada, northern Norway, all of these places. Georgia has an abundance of unused hydro, and that is the future of bitcoin mining, and it's a good thing. It provides for communities; it provides extra power, and the capital required for this is unlimited.

Now, the beautiful strategy here is when we get policy – this is the Loomis bill right here – and there's lots of good news in this thing. When we make bitcoin an allocation for institutions, which they do not have yet, what I predict will happen? They will put between 50 basis points and 300 basis points into their portfolios. How much money is that? Trillions of dollars. So if you want to see bitcoin appreciate in value, if you're an advocate like I am because it's software and it's a property and maybe it's a currency, you want regulation. You embrace this and you stand back and watch the capital pour into this.

And to celebrate this idea, to the moon, I'm wearing my Snoopy Omega today that has Snoopy going to the moon on it. This watch has gone up 4,000 in value in 24 months because of you. You love Snoopy, you love going to the moon, you love this watch, and so do I. Thank you very, very much.

United Arab Emirates, Brazil, Switzerland – and those are the countries we're going to with Wonderful. We've applied for our licenses in Brazil already; we're about to do that in the United Arab Emirates. We just got back. If you want to get involved with us on a global basis around crypto, that's probably the company to think about: Senator Loomis and Hagerty. The senators here that are bringing policy, and in our universe, they're all proposing regulation, so it may be a way, if you're interested in tying yourself to, um, you know, a global crypto brand that's regulated, not rogue – um, that's what we could talk about. That might make sense.

I would love to talk about that. You know, we can operate the servers out of Canada in the beginning before we set up the data center in Cameroon to be set up overnight, but he's got to grant the license.

All right, live from Bitcoin 2022. Here's what's news. All the politicians are coming here. Mayor Suarez just left the lounge. We've got Senator Lemus; she's basically making a keynote tomorrow. That's never happened! That tells you that's signaling that crypto is becoming policy. Government is going to forge new ideas for this because they realize there's so much productivity. It's kind of like a turning point; you can feel this. You can feel it here. This is real. This is going to become the 12th sector of the economy; there's no question about it.

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