I know with certainty and I’ll make a statement now and I’ve said it before that within a decade crypto and blockchain technology will be the 12th sector of the S P right. Now there’s 11 sectors. It will become the 12th. The only decision any of us investors have to make now is how much should I allocate to crypto now. How should I deploy it, how much diversification should I have, so in my head the big event is going to be a policy on crypto? It will open the floodgates to capital from pension and sovereignty which we don’t have people talk about Bitcoin 800 billion that’s nothing. That’s nothing in financial services. It’s not even a pimple, it’s nothing. I mean. There’s some high-net-worth individuals, some hedge funds and a few retail investors but Bitcoin is a nothing burger in financial services.
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However, the potential would be that we do provide regulation and all of a sudden in a sovereign fund where they might put one percent allocation but that sovereign fund is a hundred billion dollars that’s a small sovereign fund. I’m investing ahead of that. I’m making the assumption. If I`m buying in 35 to 40 000 I’ll see this at 150 250 000 one day when it gets allocated and indexed because if an indexer says I’m putting one percent allocation. If the coin drops 20 which is very volatile they buy back up to one percent. So, you have a bid, they’re the bid, they’re the market all the time 24/7. They’re in the market, we don’t have that right now, so who makes up the population of attendees and here I can point to institutions that I index for that are walking around baseball.
My bats put their hats on because they don’t want to be seen. But, they’re here to learn and government officials from multiple countries. So, this tells you the tone is towards policy and that’s why there’s a big buzz out there. I think the best strategy right now is not to bet the farm on a token or a coin. I like the analogy from the gold rush way back hundreds of years ago. When you would have done better owning the picks and shovels and the jeans people wore than to try and pick a hole in the ground and mine it. So, I’m looking for opportunities. I’m a shareholder in FTX. I have to disclose that I’m also a paid spokesperson for SAM, happy to do that, but I also find companies like immutable holdings that are doing nft.com that’s infrastructure another one called wonderful that’s buying all the regulated exchanges to service banks like in countries like Canada bit zero. We talked about it being a private company but I’m 100% behind that for sustainable mining and working with them in all these different states and different countries. It’s a very collaborative way of working. A good example is Ryan Ftx’s CEO. He introduced me to the government in Georgia and I’m way down the rabbit hole in Georgia now buying assets in their country.
Even though it’s right beside Russia, I have an opinion that I think Russians are pretty busy right now in Ukraine and not doing so well. So, I think at the end of the day I’m not that worried about Georgia because it’s a very entrepreneurial place and I don’t think it’s of much interest to them. I wouldn’t have known about it unless you know this collaboration existed with other CEOs that are working on this stuff. I’m intrigued. I think infrastructure is the play buying owning a piece of exchanges. You’re agnostic to the price of the coin. It doesn’t matter if it goes up or down, you still get paid so that is what I’m sort of focusing on now. I do have a big portfolio of 32 other tokens and positions such as Solana, Hbar Helium, and Avalanche like all this stuff. It’s all software.
There’s no coin, it’s just software, so I’m investing in software developers, it’s a use case. Let me walk you through my thinking on it when you’re an indexer you’re constantly creating indices in multiple markets. So, let’s take Europe, so we have an index that is 50 European stocks that are very popular. So, what we try and do is find the best balance sheets and Europe is basically made up of Switzerland. So, the Swiss-Franc-Europe itself. Germany and France. So, that’s the euro as a currency and then the London stock exchange which is in British pounds now. Let’s say you’re putting out a hundred-million-dollar index just to start that you just see it in the next 100 million dollars. I have to take the hundred million us dollars allocated into three different currencies through an FX exchange where I get clipped basis points. No value whatsoever zero value buy the stocks on the native exchanges manage their positions usually a mandate like that is no more than five percent anyone stock. So, if it doubles in price you gotta sell half of it to go back from that Swiss Franc back into us dollars to get clipped again – no value. Whatsoeve,r I mean it is such a waste of capital for everybody. It’s useless friction now think ahead to crypto. Let’s just talk about payment systems.
Let’s just talk about USDC, just one there’s many opportunities to do stable coins. But, if we could get an agreement amongst regulators. Let’s say the toomey bill which I`m proud to be involved with and the Hagrid bill same thing just focus on stable coins just one thing because the largest market on Earth is currency trading. It’s trillions of dollars and it’s incredibly inefficient, so their proposal is very simple. Let’s audit these stable coins every 30 days, agree to an audit and also agree that any asset that’s backing the coin is no more than 12 months in duration, a very simple mandate I get. Everybody gets it now the risk here is if one coin agrees to under that mandate and gets licensed the others. It’s going to be one of these situations. I won’t mention any names but the king may not have any clothes right and that’s going to be ugly.
However, if we can get the legislation through I could potentially only use one payment system for all of the stocks that I’m buying in all these different currencies, and all of a sudden the efficiency of that the billions in savings. It’s at our fingertips does matter, but it takes leadership, it takes leadership at the state level. It takes vision and leadership and encouraging policy and you can see the difference between those advanced pro-business states. It’s not just around political partisanship. It’s about individual governors and senators who ran businesses once that actually understand payroll and they understand how important it is to attract capital now. I’m working with investors in the United Arab Emirates for two reasons.
One, they’re also very advanced in their thinking on Carbon neutrality, but they have something else no other country has including us access to semiconductors with great foresight decades ago. They took on equity positions in semiconductor manufacturing, so when bit zero goes to a place like North Dakota not only can they bring unlimited capital. They have unlimited semiconductors, so they’re able to build. We got the machines for Norway in two years. We got it in 14 days, so we’re able to do that now and so I’m very much around this initiative and I want to support other companies that are doing the same thing. But, right now the most advanced that I can find is bit zero. There’s nobody else that they’ve proven the model in Norway. It’s there and it’s running and it’s working with the community, so we’re able to take the Norwegian team and bring them to any state and say here’s how it works, here’s the footprint of how this works. That’s very motivating to see something that’s already been proven to you.
This article is a transcription of a video made by Jamie Tree
Original video: https://youtu.be/hTWRDPjMCeQ