Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: Galaxy Digital and its founder Mike Novograts have been a
Speaker 2: major force in the push by crypto into mainstream finance.
Speaker 2: Digital asset treasuries dats are the latest example, with an
Speaker 2: astounding eighty five and counting announced this year. They've raised
Speaker 2: billions from investors everywhere from the US to the Gulf
Speaker 2: to Asia. Galaxy among the top investors over the past
Speaker 2: six months. It's helped lead fundraising round for Forward Industries
Speaker 2: one point six billion dollars Solana Treasury. It's the largest
Speaker 2: for that token. Forward share surged on the news, up
Speaker 2: now more than five hundred percent so far this year.
Speaker 3: Let's bring in.
Speaker 2: Galaxy Digital founder and CEO, Mike Novagrats, who's going to
Speaker 2: be hanging out with us for quite a bit of
Speaker 2: time during the show. Mike, Always appreciate your time. Always
Speaker 2: good to see you. We're going to talk about Solana
Speaker 2: in just a minute. First, though, I just want to
Speaker 2: get your commentary on what's happened in the last forty
Speaker 2: eight hours with the selloff and the volatility that we
Speaker 2: have seen. How do you explain it?
Speaker 4: Yeah, listen, there are a few things that happened.
Speaker 3: One.
Speaker 1: Crypto had a pretty awesome few months, right. I mean,
Speaker 1: Ethereum went up almost three x, Solana went up a ton,
Speaker 1: and so market's at one point get a little bit long,
Speaker 1: and it takes just a little bit for people to
Speaker 1: get nervous and some of the leverage to come out.
Speaker 1: We saw what it looked like some big Chinese mining selling.
Speaker 1: You also had you know Arthur Hayes, who's one of
Speaker 1: the real thought leaders around crypto. He put out a
Speaker 1: pretty bearish commentary around hyper Liquid. Hyper Liquid is the
Speaker 1: only token in the top ten that didn't exist a
Speaker 1: few years ago. Right. It's a decentralized version of binance,
Speaker 1: if you want to think about it. And it's a
Speaker 1: pretty spectacular story with the amount of growth it had.
Speaker 1: And Arthur said, hey, wait a minute, I think it's
Speaker 1: gone too far. The founders are going to sell, and
Speaker 1: so hyper liquid really got hit the hardest, and that
Speaker 1: I think kind of hit some of the overall element
Speaker 1: in the market. And so I think this is just
Speaker 1: a pullback. You know, Crypto has been kind of soft.
Speaker 1: Bitcoin's been kind of soft because a lot of the
Speaker 1: action moved away from bitcoin. But if you had told
Speaker 1: someone four months ago that you're going to be nervous
Speaker 1: with bitcoin at one twelve, they would have a big
Speaker 1: grin on their face, right, And so you have to
Speaker 1: keep things in context. We're still up significantly on the
Speaker 1: year of both bitcoin Ethan and solon them.
Speaker 5: Speaking of keeping things in context, a lot of people
Speaker 5: have been saying that crypto price movement can foretel stock
Speaker 5: prices as well. More broadly, you know, it's like a
Speaker 5: leading asset class.
Speaker 6: Do you subscribe to that? Do you believe that?
Speaker 4: Ah, I'm not sure.
Speaker 1: Listen, I think sometimes it feels leading and sometimes it
Speaker 1: feels lagging. We are in a euphoric moment in stocks,
Speaker 1: and there is a lot of excitement all around this
Speaker 1: AI theme.
Speaker 4: AI is powerful. It is going to change the way
Speaker 4: we do things.
Speaker 1: I was literally just in a meeting with my management
Speaker 1: team talking about aiad galaxy, and every single C suite
Speaker 1: in the world is having that same conversation, and so
Speaker 1: that creates bubble like excitement. And we've got valuations in
Speaker 1: the in the NASDAC and the S and P as
Speaker 1: high as we see them, and so it's a really
Speaker 1: hard market because it's got husu momentum and excitement around
Speaker 1: a real story. But it's got valuations that get you
Speaker 1: really nervous. And the interconnectivity of the video, open ai oracle,
Speaker 1: the vendor financing, you know, web that gets you nervous,
Speaker 1: like valuation creating more valuation. And so I think you've
Speaker 1: got a market that's that's nervous. That doesn't mean it's
Speaker 1: not going to go a lot higher. Right The last
Speaker 1: the last leg of great markets always surprises people and
Speaker 1: how powerful it can be.
Speaker 4: And I'm not saying this is the last leg, but
Speaker 4: it very well could be.
Speaker 2: So if you're looking at that in terms of the
Speaker 2: equity market right now, how does that translate over to
Speaker 2: the way you're thinking about crypto and where we could
Speaker 2: be in the cycle when it comes to crypto right now,
Speaker 2: and not every token is created equally. I know you
Speaker 2: love Ether and Solana, and you know you're traditionally going
Speaker 2: back to bitcoin, but what does it mean for crypto?
Speaker 1: Well, listen, crypto traditionally has traded with four year cycles,
Speaker 1: and that would be ending in December, right halfway between
Speaker 1: the having is usually where our peaks have been. And
Speaker 1: you know the end of twenty seventeen, if you had
Speaker 1: sold everything in December, you look pretty smart. And the
Speaker 1: end of twenty twenty one, if you'd sold everything in December,
Speaker 1: you look pretty smart. And now here we are October
Speaker 1: of twenty twenty five, at all time highs at almost
Speaker 1: every token, and you're wondering should you sell everything in December?
Speaker 4: Listen? What could be different? And I think probably is different.
Speaker 1: We have gotten one piece of legislation out of the
Speaker 1: US called the Genius Act stable coin legislation. In an
Speaker 1: all likelihood, sometime in mid October mid.
Speaker 4: November, we're going to get.
Speaker 1: The second piece of legislation, which will help define what
Speaker 1: a security and what a commodity is and a lot
Speaker 1: of other rules around crypto in America.
Speaker 4: That's a big deal.
Speaker 1: With those two bookends of legislation, it's going to unleash
Speaker 1: a tremendous amount of new participation, new participation in crypto.
Speaker 4: I mean, think about it.
Speaker 1: You can't use stable coins on your iPhone yet, there's
Speaker 1: almost zero chance in the next few years you will
Speaker 1: be able to use stable coins on your iPhone or
Speaker 1: on your Samsung Galaxy phone or in almost any social
Speaker 1: media app. You couldn't before because they weren't necessarily legal.
Speaker 4: Now they are. Yeah, and once the.
Speaker 1: US government puts its improper tour on this industry, which
Speaker 1: it has, we have the most crypto friendly sec one
Speaker 1: could imagine. Yeah, you know, you're going to have this
Speaker 1: new wave of participation and so we might not be
Speaker 1: in the traditional cycle.
Speaker 2: Well, this week, Brera Holding says it will be renamed
Speaker 2: Soulmate to become a Solana based digital asset treasury following
Speaker 2: a three hundred million dollar fundraise. It's newly named CEO,
Speaker 2: Marco Sentori, joins us now along with Galaxy Digital's Mike Novograts.
Speaker 2: Marco's formerly worked at Pantera and Kraken. Good to have
Speaker 2: you on the program. Another digital asset treasury company. I
Speaker 2: was shocked to see an Olga Krieff's article today actually
Speaker 2: about Mike Novograts and other Princeton folks, that there have
Speaker 2: been eighty five digital asset treasury companies just this year.
Speaker 3: Why another one listen to. First of all, thank you
Speaker 3: for having me.
Speaker 7: Second of all, you've got to stop looking at treasury
Speaker 7: companies as trades.
Speaker 3: These things are notes.
Speaker 7: There are going to be as many treasury companies as
Speaker 7: there are coin accumulation strategies over the next twenty years.
Speaker 7: This is not a fad, it's not a trend, it's
Speaker 7: not going away. This is a replacement for the traditional
Speaker 7: foundation model. So historically, what digital asset innovators have had
Speaker 7: to do is sequester all of their new coins. They're
Speaker 7: newly created coins in these not for profit corporations or
Speaker 7: nonprofits in the Caymans, in Switzerland, and basically these companies
Speaker 7: have watched their treasury go down into the right over time.
Speaker 3: That is clearly an inefficient model.
Speaker 7: We think treasury companies are going to take the place
Speaker 7: of these foundations over time. They have access to the
Speaker 7: capital markets, they can be more dynamic, they can generate revenue,
Speaker 7: and they can still steward the ecosystems that they're supposed
Speaker 7: to steward. So you can't look at this thing like
Speaker 7: a trade. You have to look at it as an evolution.
Speaker 5: Having said that, and your company is rebranding itself as Soul,
Speaker 5: which really shows that you're betting on that particular coin.
Speaker 5: Can you explain why you've said walste will be building
Speaker 5: on Solana and not ethereum, what's the basis for that view?
Speaker 7: Well, I'm a big Solona believer. Everybody at Soul made
Speaker 7: it's a big Salona believer. Bitcoin is special. Bitcoin was
Speaker 7: and remains and I think for a very long time
Speaker 7: will be special. It's a new monetary system, a new
Speaker 7: kind of money. Then Ethereum came on the scene, and
Speaker 7: Ethereum said, you know what, there's actually more we can
Speaker 7: do with these blockchains. We can do more than just
Speaker 7: move value around. We can create smart contracts, they can
Speaker 7: be composable, they can be decentralized, they can be hardened
Speaker 7: against attack and interference. But then it didn't scale, it
Speaker 7: didn't go anywhere. Ethereum still can only handle a small
Speaker 7: number of transactions per second at the base layer, and
Speaker 7: instead it chips off the large numbers of transactions, all
Speaker 7: the high throughput, highly performance transactions to these second layer
Speaker 7: servers where it's really just somebody else's computer, and sacrifices
Speaker 7: so many of the values that made decentralized technology valuable.
Speaker 3: Solana doesn't do that. Solana doesn't have to do that.
Speaker 7: It can scale to hundreds of thousands of transactions per
Speaker 7: second at the base layer, at that foundational layer that
Speaker 7: made all of those promises about financial services and what
Speaker 7: financial services could do with blockchains. So when I discovered Solana.
Speaker 7: I wasn't as early as the party as some I'll
Speaker 7: tell you that, but it was a light bulb moment
Speaker 7: that went off.
Speaker 3: This is clearly the future.
Speaker 7: This is what sophisticated high throughput transactions are going to
Speaker 7: run on in the future.
Speaker 5: Mike. I want to bring you into the conversation because
Speaker 5: Tim mentioned they're about eighty five companies that are involved
Speaker 5: in dahs, and you've said that you don't think all
Speaker 5: these dhs will be successful. But if you get critical mass,
Speaker 5: enhance yield on the underlying token, and build the ecosystem,
Speaker 5: I think they're net positives for crypto. These are public
Speaker 5: companies that will be around for a long time.
Speaker 6: Mike. What will determine success and longevity?
Speaker 1: Listen, I think you're going to need scale, right because
Speaker 1: scale begets scale, and so you know, you think of
Speaker 1: something like micro strategy, which came out first, and now
Speaker 1: strategy it's got scale, and you know it will it will.
Speaker 4: Probably What do these companies do?
Speaker 1: They bring energy into the ecosystem in lots of ways.
Speaker 4: And what I.
Speaker 1: Was a little wrong on early on, and then it
Speaker 1: dawned on me, was the access to capital through the
Speaker 1: equity infrastructure is so much greater than it was through
Speaker 1: the crypto infrastructure. Right, crypto' is a twelve year old business,
Speaker 1: and equities have been.
Speaker 4: Around for a long long time.
Speaker 1: That the wonderful thing about these data center company, of
Speaker 1: these treasury companies is they've brought in so much more
Speaker 1: capital at a quick pace.
Speaker 4: And that capital is what will build this industry.
Speaker 1: And so I think in each of these buckets, like
Speaker 1: I love the fact that that Marco is doing another
Speaker 1: Salona company because it's also based in a different part
Speaker 1: of the world. It's going to attack a different set
Speaker 1: of new investors. You know, we're you know, foreign Industries
Speaker 1: is a very US focused investor base and company, but
Speaker 1: it's a global technology and so in some ways, the
Speaker 1: more of the merrier, I think, in order to survive,
Speaker 1: you're you're going to have to prove to the investors
Speaker 1: that you bring value. Right, Like listen, if we all
Speaker 1: trade to nav it's hard to it's hard to raise
Speaker 1: a lot more capital. And so you've got to do
Speaker 1: something that allows you to think, hey, on our one
Speaker 1: point six billion dollars of Solana, just through staking and
Speaker 1: other things, if we can get that yield from seven
Speaker 1: to ten percent you're making one hundred and sixty million
Speaker 1: dollars a year in dividends, and you can use that
Speaker 1: one hundred and sixty million dollars a year to do
Speaker 1: other cool stuff with You can use that leverage to
Speaker 1: maybe get a good deal on getting free free equity
Speaker 1: in a program that's building on top of the blockchain.
Speaker 4: And so you're gonna have to be creative.
Speaker 1: We partnered and forward with Jump Capital and multi coin.
Speaker 1: Jump is probably the premier builder of architecture, of financial
Speaker 1: market architecture on blockchains and certainly on the Salona blockchain.
Speaker 1: And so to me that's just thrilling. Right, there are
Speaker 1: four companies in the world I think that can coind
Speaker 1: of Pete with Jump right, like frequency trading, and so
Speaker 1: they see the Salona blockchain as what will be the.
Speaker 4: Foundation for capital markets in America.
Speaker 1: And when you have the new head of the SEC,
Speaker 1: Paul Ack and saying I want everything to move on, Shane,
Speaker 1: that's a big deal.
Speaker 4: I mean, it's a stunning Dear.
Speaker 2: We're going to talk more about the regulatory environment in
Speaker 2: just a moment. In the meantime, I do want to
Speaker 2: thank soulmate CEO Marco Santori for joining us on set.
Speaker 2: Mike nograts is sticking with us now.
Speaker 8: I'm committed to this company because they did everything they
Speaker 8: could to try and cancel us. They did everything they could,
Speaker 8: I'm talking about traditional finance to put us out of business.
Speaker 8: I was the guy that was getting hundreds of letters
Speaker 8: from the big banks, Capital One, JP, Morgan, you know,
Speaker 8: I mean all of them, Bank of America. I saw
Speaker 8: Moyhand was just on trying to take away accounts for
Speaker 8: for golf courses, for hotels, for residential buildings, for doing
Speaker 8: absolutely nothing wrong. And it drove me into crypto because
Speaker 8: I realized that there was nothing that couldn't be done
Speaker 8: in crypto better, faster, cheaper, more transparently, and it's amazing industry.
Speaker 5: That was Eric Trump speaking to us last week. We're
Speaker 5: back with Galaxy Digital founder and CEO Mike Novogratz.
Speaker 6: Mike, the White.
Speaker 5: House, as we know, has ushered in this new era
Speaker 5: for crypto in terms of regulation and of course in
Speaker 5: terms of this friendly stance toward growing the industry. Are
Speaker 5: you comfortable with the First family being this act of
Speaker 5: so active in this industry. Some make the argument that
Speaker 5: there's an inherent conflict of interest. There.
Speaker 1: Listen what I've said before, and I'll say again, as
Speaker 1: long as the Trump family and their associates by the rules,
Speaker 1: I'm completely fine by it.
Speaker 4: And you know, the one thing.
Speaker 1: About this new SEC is they're all about disclosure and
Speaker 1: you know people, and it's a little bit of a
Speaker 1: buyer beware SEC.
Speaker 4: And I would guess if you read.
Speaker 1: Through most of the the different protocols the Trump guys
Speaker 1: that have participated in it's everything they do is pretty
Speaker 1: well disclosed, and so I don't think there should be
Speaker 1: any mystery around, you know, what they're doing.
Speaker 4: Listen, if they break the rule, if I break the rule,
Speaker 4: we should get in trouble. But I don't think you
Speaker 4: can you can prevent.
Speaker 1: The children of people in power from participating in business.
Speaker 1: I do think it's an issue in politics right The
Speaker 1: Democrats are going to make a big deal about what
Speaker 1: they perceive as grift, that the president shouldn't be doing this,
Speaker 1: and that that has a potential to slow down the
Speaker 1: market structure bill. The far left will push. I think
Speaker 1: the optimistic news is is there's enough Democrats.
Speaker 4: Right, you know, and you can think about guys.
Speaker 1: Like Mark Warner, Ruman, Diego's our own New York Senator
Speaker 1: Kristian Jildebrand that see the value in crypto, that see
Speaker 1: the political value in being seen as pro technology, pro innovation,
Speaker 1: that market structure will get passed, and we'll probably get
Speaker 1: passed with a lot more than ten Democratic votes.
Speaker 2: So it sounds funny we spoke I just want to
Speaker 2: jump in because there'red a ton of time. But we
Speaker 2: spoke to Dan moorehead last week, and he made the
Speaker 2: point of saying that it really seems like this is
Speaker 2: important to voters. I push back a little bit on that,
Speaker 2: because we saw in the last election a year ago
Speaker 2: that even the pro crypto candidates weren't being messaged in
Speaker 2: a way that even mentioned cryptocurrency in a lot of cases.
Speaker 2: Do you think that Democrats now are getting the message
Speaker 2: if you think that they have to be on board
Speaker 2: with this type of asset, I do.
Speaker 1: I think Democrats a lot of them think, oh shit,
Speaker 1: crypto swayed the election Trump's way. Why were we so
Speaker 1: dumb not to like you think that the election. I
Speaker 1: think crypto had a big deal. If it had the
Speaker 1: big deal in the election in the Ohio.
Speaker 2: Senate, but was that crypto or was that just the
Speaker 2: messaging around Bernie Moreno, I think.
Speaker 4: It was crypto. It was the money that crypto brought.
Speaker 1: Crypto was the crypto pack was the single largest donor
Speaker 1: to the Trump campaign.
Speaker 2: But they didn't message around crypto. They message around the border.
Speaker 2: They message around other issues that seemed to resonate more
Speaker 2: with voters.
Speaker 4: They listen. There were eighty million crypto owners in America.
Speaker 1: A lot of them are single issue voters who care
Speaker 1: a lot about this issury that more people own crypto.
Speaker 4: Than owned dogs.
Speaker 1: You know, can you imagine being the party that said,
Speaker 1: I don't like dogs, I don't care about like like.
Speaker 1: It was so dumb for Democrats to be anti crypto.
Speaker 1: It turned people off. It was It wasn't the only thing,
Speaker 1: but it was a pile on effect of all those
Speaker 1: issues that swayed young men. I mean, young men voted
Speaker 1: for Trump much more than they did in any press election.
Speaker 4: And young men are the crypto people.
Speaker 3: Yeah, yeah, go ahead, No.
Speaker 5: No, no, I think that's a good point, and it's
Speaker 5: something that's a distinguishing factor.
Speaker 6: We only have about a minute left. I'm just wondering.
Speaker 5: As we wrap up our conversation here. It's been a
Speaker 5: banner year for crypto overall? What is next on your
Speaker 5: to do list?
Speaker 4: Mike, listen.
Speaker 1: I think any cryptocurrency company has to be looking on
Speaker 1: Shane to figure out how do we move more of
Speaker 1: our business on Shane. How do we bring on Shane
Speaker 1: access to our traditional customers. Right when the head of
Speaker 1: the SEC says we think markets should move on Shane,
Speaker 1: we should listen. And so we spend a lot of
Speaker 1: time here figuring out that exact question. We are building,
Speaker 1: we're investing. You look at our stocks, it's gone from
Speaker 1: the lower left to the upper right in a pretty
Speaker 1: good line. So we feel good about you know, we're
Speaker 1: having a great core order in a great year, and
Speaker 1: so it's a whole different, different feeling here than it
Speaker 1: was twelve months ago.
Speaker 2: Hey, Mike, we only have ten seconds. You're known for
Speaker 2: that Luna tattoo that you got a few years ago.
Speaker 2: Did you get the Solana the sole tattoo?
Speaker 3: Yet?
Speaker 1: All my tattoos are are going to be kept hidden
Speaker 1: for a long time.
Speaker 2: Yeah, we'll keep talking about him as long as you
Speaker 2: keep coming on. We appreciate it.
Speaker 5: Mike Murrats, founder and CEO of Galaxy Digital, really appreciate
Speaker 5: your joining us for the entirety of bloomber Crypto,