THIS Will Get Bitcoin To 100K - The Future of Crypto | SALT 2021

Okay, we're right now in New York City. Why? The SALT conference starts in about an hour. This conference is all about crypto, but some of the panels at this year's conference are all about what is the regulator going to do? Where are we going with Bitcoin? What's happening with land and all these protocols that have been blocked so far by regulators?

Yet at the same time, the opportunity is, if regulators allow cryptocurrencies and allow all these new protocols around different coins and stablecoins, etc., the potential is explosive. There's at least a trillion dollars' worth of buying waiting just to go into Bitcoin alone if the regulator would approve an ETF, which they haven't done yet.

The world has come to New York to talk about cryptocurrencies and the future of payment systems and decentralized finance. Who doesn't want to be here? Plus, it's a party!

Last but not least, we have Kevin O'Leary, who is, many of you probably already know, the co-host of Shark Tank but also has become a recent convert into the cryptocurrency space. He is the primary investor in a platform called WonderFi, which aims to bring DeFi to the masses.

So, really, a fantastic panel as a bit of a cultural icon yourself. What brought you to crypto? It seems that this wasn't something you were always bought in on. What changed your mind, and what makes you excited about this space?

"You know, I was a very vocal non-advocate back in 2017 because I’m forced to live in a world—I service pension funds and institutions with indexing. We are 100% compliant 100% of the time. My first purchase was not in our operating company; I just bought some Ethereum and some Bitcoin in a wallet myself back in 2017. One day I just talked about it on television, on business press, and my compliance officer called me up while I was still in the green room saying, 'Are you out of your mind?'

Are you out of your mind? You know we cannot have this dialogue because we're going to get a call, and sure enough, we did. What's changed is the regulatory environment. Because I don't have the option to be non-compliant, I don't even have that at all.

But slowly and surely, in other jurisdictions—first Switzerland, Germany, France, Australia, England, Canada—which has allowed ETFs now with Ethereum and Bitcoin. So I changed when the regulator changed, and I'm very interested in crypto now as an asset class.”

And in my world, let’s say you’re running a billion-dollar mandate, which is a typical mutual fund or ETF or whatever. Generally, if you're compliant with your own compliance department, there are 11 sectors in the S&P, for example. You're allowed to go up to 20 in any one sector and up to 5 in any one name. That's generally how it works.

I argue today that crypto is the 12th sector of the S&P. That's what it is. It doesn't mean I have to have everything in Bitcoin, and I don’t want to have everything in Bitcoin. I want to have a portfolio of crypto, coin, chain, you know, tokens, whatever is compliant.

And what's going to happen here and what we need to do and why I'm so happy we have these dialogues in these conferences, think about the typical institution. Every night at 4:01, they mark to market every position they have. The internal compliance department sees it—how much leverage is used, what the positions are, is it within mandate, not over five percent, whatever it is.

Then their external auditors come in on a weekly or quarterly or annual basis and sign those auditing statements. Then they issue that report to the regulator. We don't have that infrastructure in crypto right now.

On this stage, there are two guys trying to do it—Sam at FTX and Jeremy here with Circle. I'm definitely involved with both of them because I want to be getting that, but it took me months just to get my first purchase done on Circle, with my own compliance department barking at me like a dog saying, 'No, no, no, we can't do this,' and I'm saying, 'We've got to do it. We've got to get there. We have to figure it out.'

And my auditor and the regulator reports we have put out, and it's working. Same with Sam! I want to build a portfolio on FTX, you know, because it's big enough that I can be compliant. I'm saying to everybody on this, if we solve this, there are trillions of dollars coming into this in the 12th sector of the S&P. That's what it's going to be, so that's our job. We've got to solve for compliance.

It's boring, but it really matters. Somehow, over the last, I don't know, two years, the popular press positioned the crypto community as an adversary to regulators globally, and that's simply not true, and it's very stupid because probably some large percentage of the constituency in this room is somehow tied to financial institutions one way or another.

And we have not even tapped—it's so nascent—there are so many institutions that don’t even play in this space, although they want to. The primary reason is their compliance departments and the tone of that relationship between the crypto community and the regulator.

Every week we hear another case of somebody in a position of power, let’s call it that—that's running a large crypto company striking out at the regulator. Really bad idea! Like there is zero upside in that because the regulator wants to solve for this because this—and I’ll say it again—is going to be the 12th sector of the S&P. There’s no question about it; it’s not going away and the demand is huge.

The tone should be that of accommodating their concerns. I’ll give you a case study—this NFT investment I’m making in watches. Is it a security, or is it a piece of art? I can’t go forward till it’s resolved. I can’t just throw it out there and start trading it all over the place not knowing that outcome.

And so, I’m willing to reach out as an advocate to that one little sliver of NFTs and say to the regulator, 'Give me guidance. Let’s work together.' And if it is a security, tell me. I’m good—I’m good with it. I will treat it that way. I’m not fighting you on it. Just give me the rules so I can play football. You can’t play football without the rules, and that’s where we’re at here.

And the upside to solving this problem is trillions of dollars of assets that will pour into this. You want to see Bitcoin at a hundred thousand dollars? You gotta let the regulator determine what terms they’ll allow it to go into an ETF. It’s that simple.

Look what happened in Canada—they got a billion dollars demand in a matter of hours in just the first Bitcoin product, and it wasn’t even institutional; it was just simply retail saying, 'Oh, it must be safe. I can buy it and put it in my account online,' and the regulator said it’s okay.

So my thing is, as a community, we have to form a lobby voice and say, 'We are here to serve and protect just like you are. Give us the rules so we can go back and play football.’ That’s simple.

So, what is your prediction for where we will be 10 years from now? It’s going to change everything. Let me tell you one of the reasons, and I'll make it short and sweet. Let’s say a traditional mandate, such as, 'I want to go long Europe.'

I’m going to buy 50 stocks. I have to buy Swiss Francs, Euro-based stocks, and British Pounds because I want to trade them on their domestic exchanges. In between me and that transaction is what's called the bane of the earth—the FX trader, the currency trader—who clips me every time I buy and sell, adds zero value, and sucks friction out of the system and has my entire adult life as I’ve traded in Europe.

I can’t wait until we solve this problem and give them a new career shining shoes because they add no value whatsoever. This is where DeFi can take us on just one use case, but it’s a multi-billion dollar one.

And I want to be alive to have a regulator domestically allow me a payment system to a Swiss Franc back and forth if I want to trade it 50 times a day with zero FX traders. That’s my mission in life—to help them find a real job.

People ask me all the time what’s my opinion on taxation of crypto and should it be legal tender. Let’s regulate it because there’s so much pent-up demand to buy it once the regulators approve it. I don’t care if it gets taxed; that’s okay.

If it has to be a currency where you make money, you pay tax. In most jurisdictions, that happens with multiple asset classes. Why shouldn’t it happen with crypto? We don’t have the compliance platform yet to actually do the reporting you need for that, but that's coming too.

So the answer is let’s regulate it. Let’s get it approved by regulators and all the different jurisdictions around the world. And yes, if you profit from it, and that's the jurisdiction that taxes you, pay your taxes!

What are you whining about? You just made money! What about Bitcoin ETFs? That’s still something that has not been approved in the United States. I know you’re a big ETF guy. Do you see that going through eventually in the United States?

And this goes to our earlier conversation about regulation. It’s been slow in the United States. I don’t see it getting resolved. I don’t see the first ETF coming until we have the regulatory environment to approve it.

And also we’ve solved the SG issue. So the answer is no time soon. People that are thinking it’s coming this year are wildly optimistic; it won’t. People think it’s coming next year—also too optimistic.

I’m thinking go to the Canadian exchange, which you can do; it’s compliant in Canada. But I think the real opportunity, and another trillion dollars with the buying, would be when we get a U.S.-based ETF for both Ethereum, maybe another chain in an ETF.

I’m a huge fan of the team; we just recently took it public a couple of weeks ago. Investors are very happy with outcomes, and it’s just the beginning, and I’m proud to be here representing them.

Love it! A shout-out to Honey by the way, Jamie! You know, I’m an investor; I’m up about sixty-one point two percent, but who's counting?

[Applause] 2021, the real business is done right now. Schmoozing, this is where you get stuff done. I love the panels; I participate in all of them. But you want to get deals done right now, right here.

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