WEBVTT - What’s Next For Galaxy Digital CEO Mike Novogratz? 0:00:04.080 --> 0:00:07.119 This is Bloomberg Crypto, a daily Bloomberg i Hood podcast 0:00:07.560 --> 0:00:10.600 and Humble Donna hiarch In Today for Stacy Marie Ishmael. 0:00:10.800 --> 0:00:26.640 It's Thursday, February second. The digital asset industry is reeling 0:00:26.680 --> 0:00:29.240 from challenges. Many blame on a handful of so called 0:00:29.520 --> 0:00:34.200 crypto bad actors and wayward CEOs. Of course, we're talking 0:00:34.200 --> 0:00:38.400 about the do Quans, the Alex Maschinskis, the Sioux Zoos, 0:00:38.880 --> 0:00:41.839 and of course the same bank Win Freeds. How could 0:00:41.880 --> 0:00:45.400 we forget? But while some industry leaders say they're upset 0:00:45.440 --> 0:00:48.240 by the allegedly illegal actions of some of their peers, 0:00:48.720 --> 0:00:51.560 they still have hope that the digital asset industry will 0:00:51.600 --> 0:00:56.160 thrive and the crypto market will recover. Mike Novergrats is 0:00:56.280 --> 0:01:00.360 a prime example. He's the CEO of Galaxy Digital, one 0:01:00.400 --> 0:01:03.440 of the top investment firms in crypto. The fifty eight 0:01:03.520 --> 0:01:05.600 year old is known for his ubiquitous presence in the 0:01:05.640 --> 0:01:09.280 crypto sphere and his assertive demeanor, which aligns well with 0:01:09.319 --> 0:01:12.880 many in the crypto crowd. Novograts made it through the 0:01:12.959 --> 0:01:16.720 chaos of but that does not mean he and his 0:01:16.800 --> 0:01:21.119 firm were left unscathed. My colleagues Shannali Basik recently sat 0:01:21.160 --> 0:01:23.600 down with him and she joins us now to discuss 0:01:23.640 --> 0:01:30.479 what's next for him. Shinali, welcome to the show. Hi. 0:01:31.480 --> 0:01:34.720 So maybe just to lay out for listeners who might 0:01:34.760 --> 0:01:37.360 not know who my Canvograts is. Who is he, what's 0:01:37.400 --> 0:01:40.880 his background and how has he become this influential figure 0:01:40.880 --> 0:01:44.039 in the crypto space. So he's a very colorful person 0:01:44.080 --> 0:01:47.640 on Wall Street, on crypto, in the philanthropy world. I've 0:01:47.680 --> 0:01:51.720 covered him myself since he spent time at Goldman Sachs. 0:01:51.920 --> 0:01:54.480 He was an early member of Fortress, which is a 0:01:54.560 --> 0:01:57.800 huge private asset firm, and through his time at Fortress 0:01:57.840 --> 0:02:00.680 he got into bitcoin along with his friend Pete Brigger, 0:02:00.960 --> 0:02:04.279 who is another Fortress founder. And again they got in 0:02:04.280 --> 0:02:07.280 in the early when it comes to bitcoins and made 0:02:07.320 --> 0:02:10.720 a lot of wealth early on. Even after some spectacular 0:02:11.120 --> 0:02:14.400 hiccups on Wall Street, no Regrats remained a billionaire after 0:02:14.440 --> 0:02:17.440 having to shut his fund and Fortress that he had 0:02:17.600 --> 0:02:20.079 really headed up and lost a lot of money. Yet 0:02:20.160 --> 0:02:23.560 so this is his third big act. It is a 0:02:23.680 --> 0:02:27.000 time for redemption. But again, like I said, you know, 0:02:27.000 --> 0:02:29.079 it's funny when you ask him about kind of his 0:02:29.160 --> 0:02:31.880 ups and downs on Wall Street, spectacular ups and downs. 0:02:32.520 --> 0:02:33.680 He says, you know, at the end of the day, 0:02:33.720 --> 0:02:35.639 he's made more money than lost. He's still a billionaire, 0:02:35.639 --> 0:02:37.040 and the same is true for the last couple of 0:02:37.080 --> 0:02:39.880 years in Crypto, and Crypto is known for giving people 0:02:40.160 --> 0:02:44.520 maybe second, third, fourth, whatever tries and comebacks. And we'll 0:02:44.760 --> 0:02:46.600 get to that. But can you tell us a bit 0:02:46.639 --> 0:02:50.240 more about his background? Who is he? Because he's known 0:02:50.320 --> 0:02:52.959 for being a wrestler who went to Princeton. I think 0:02:52.960 --> 0:02:55.560 he was actually roommates with a bunch of other people 0:02:55.600 --> 0:02:57.760 who are well known on Wall Street or in the 0:02:57.840 --> 0:03:00.640 crypto space. So tell us a bit more about the 0:03:00.680 --> 0:03:04.079 man himself. He's known for his wrestling background and it's 0:03:04.120 --> 0:03:06.160 something that still permeates through a lot of what he does. 0:03:06.200 --> 0:03:08.840 He makes wrestling anecdotes a lot of time. He grew 0:03:08.880 --> 0:03:11.560 up in a big family, a military family, and his 0:03:11.639 --> 0:03:15.040 dad also wrestled. Mike himself was a Princeton wrestler. From 0:03:15.080 --> 0:03:17.560 what I understand, he was a close to winning a 0:03:17.600 --> 0:03:21.000 state champion as a ship as well so serious wrestler. 0:03:21.639 --> 0:03:24.520 He also, you know, his whole family is kind of famous. Actually, 0:03:24.639 --> 0:03:28.919 his sister Jacqueline Novergrads is a famous venture capitalist known 0:03:28.919 --> 0:03:32.160 for impact investing. One of his brother's works at a 0:03:32.320 --> 0:03:34.000 one of the biggest hedge funds in the world. So 0:03:34.040 --> 0:03:36.600 the family that kind of grew up with humble roots 0:03:36.680 --> 0:03:40.400 ended up becoming this pretty famous family and investing, and 0:03:40.480 --> 0:03:43.240 like I was saying, in philanthropy and even in political circles. 0:03:43.280 --> 0:03:45.720 He was kind of in a group with Stacy Abrams 0:03:45.840 --> 0:03:48.000 when it came to knocking door to door in Georgia 0:03:48.080 --> 0:03:50.960 during some of the most difficult political fights. He works 0:03:50.960 --> 0:03:53.400 closely with the Robin Hood Foundation also, which works to 0:03:53.400 --> 0:03:56.720 get people out of poverty. So he's very well known, 0:03:56.720 --> 0:03:58.800 like I said on Wall Street, but also you know, 0:03:58.880 --> 0:04:03.240 just not even just himself, coming from this amazingly colorful family. 0:04:04.000 --> 0:04:06.720 And by the way, it was so funny because in December, 0:04:06.720 --> 0:04:08.920 when I was in his office, one of the things 0:04:08.920 --> 0:04:11.160 he had on his desk was a New York Post 0:04:11.200 --> 0:04:14.480 story about his entire family, with a post it note 0:04:14.520 --> 0:04:18.240 on the New York Post story saying from his former 0:04:18.360 --> 0:04:20.680 pr chief saying, thanks for betting on me. So he's 0:04:20.760 --> 0:04:23.680 kind of had this insane influence on kind of just 0:04:23.720 --> 0:04:25.680 a lot of people who have worked for him in 0:04:25.720 --> 0:04:28.680 his life, and even with all the ups and downs 0:04:28.720 --> 0:04:32.480 of the past maybe five six, seven years of his life, 0:04:32.720 --> 0:04:36.040 he's also well known for wild parties or maybe a 0:04:36.160 --> 0:04:39.400 sort of like a party boy demeanor. So what's interesting 0:04:39.600 --> 0:04:43.440 is early, I want to say, seen so around seen. 0:04:43.520 --> 0:04:46.160 Remember he left Wall Street after his hedge fun at 0:04:46.160 --> 0:04:48.279 Fortress kind of blew up. They had to shut it 0:04:48.320 --> 0:04:51.120 down return money, and he spent a lot of years 0:04:51.160 --> 0:04:53.360 investing just through his family office. It was this kind 0:04:53.400 --> 0:04:57.520 of trendy little outfit in like the Soho area of Manhattan, 0:04:58.160 --> 0:05:00.040 and he was investing bit coin, making a ton the 0:05:00.120 --> 0:05:01.640 money off a bitcoin at that time. This is pre 0:05:01.800 --> 0:05:04.920 two thousand seventeen, pre the Mount Cox blow up, and 0:05:05.240 --> 0:05:07.400 he realized he was making so much money for it 0:05:07.440 --> 0:05:09.479 that he should start an investment firm. But he was 0:05:09.520 --> 0:05:12.000 having though was so much of the New York crypto 0:05:12.080 --> 0:05:17.159 community was coalescing inside of Mike Novegrass's family office. Every 0:05:17.200 --> 0:05:20.440 single Wednesday night they would have a party. I used 0:05:20.480 --> 0:05:23.200 to go almost everywhere where the fun. They were fun. 0:05:23.279 --> 0:05:24.919 It was funny about it, as Mike was. Sometimes they 0:05:24.960 --> 0:05:26.839 are sometimes not. And it reminds me a lot of 0:05:26.920 --> 0:05:30.240 last year following him around as well, because there were 0:05:30.279 --> 0:05:32.880 a lot of parties, but it was a stressful year. 0:05:33.200 --> 0:05:36.280 So Mike was actually outside of those parties on the 0:05:36.279 --> 0:05:39.520 phone most of the time. When I was following him 0:05:39.560 --> 0:05:41.799 around last year. He's a He's a blast to be around, 0:05:41.839 --> 0:05:44.880 don't get me wrong. In fact, it was lifestyle choices 0:05:45.040 --> 0:05:47.920 that it led to his departure Goldman many an years 0:05:47.920 --> 0:05:50.480 ago is something that has been why they reported on. 0:05:51.040 --> 0:05:53.520 But get a big bar in his office, a little like, 0:05:53.520 --> 0:05:55.800 you know, one of those kind of bar cards. And 0:05:55.839 --> 0:05:58.200 I was asking about him. I'm not fancy enough to 0:05:58.200 --> 0:06:00.360 know all the fancy liquers. I haven't written down. I'm wire, 0:06:00.360 --> 0:06:02.080 but he had a ton of fancy lackers. I asked him. 0:06:02.080 --> 0:06:03.560 I was like, you know, what is this bar for 0:06:03.680 --> 0:06:05.960 in your office? And he goes, you know, I don't 0:06:05.960 --> 0:06:07.920 really drink in the office. My traders do, though they 0:06:07.960 --> 0:06:11.320 raid my bar routine late. So that's really funny. Let's 0:06:11.360 --> 0:06:14.160 go back to the end of because that's when you 0:06:14.200 --> 0:06:16.560 were meeting with him. So what was going on in crypto? 0:06:16.600 --> 0:06:19.159 What was the mood like when you were sitting down 0:06:19.200 --> 0:06:21.880 with him at his office, Like, what were the things 0:06:21.880 --> 0:06:23.640 that were top of mind for him? What did he 0:06:23.680 --> 0:06:25.440 want to talk about well, one of the first things 0:06:25.480 --> 0:06:28.040 I said as I sat down to him was, this 0:06:28.080 --> 0:06:30.040 is probably one of the hardest stories and went to 0:06:30.120 --> 0:06:32.640 write with you because we haven't had a market this 0:06:32.720 --> 0:06:34.960 toppy in a long time. I think that there's a 0:06:35.000 --> 0:06:39.000 lot of soul searching about his place, about Galaxy's place 0:06:39.440 --> 0:06:43.359 in this industry as so much of a shakeout is happening. 0:06:44.080 --> 0:06:49.040 He sat back with his arms crossed. He's interesting and 0:06:49.080 --> 0:06:51.839 how he answers questions when he's not on TV because 0:06:51.839 --> 0:06:54.599 he waits a second and he thinks, he scratches his 0:06:54.640 --> 0:06:57.000 head and then he tells you what he thinks, and 0:06:57.120 --> 0:06:59.960 he's pretty again for journalists, a bit of a journ 0:07:00.080 --> 0:07:02.720 his dream because he tells you where he thinks he 0:07:02.720 --> 0:07:05.400 could have done something differently, and I think something that 0:07:05.480 --> 0:07:07.320 was important and interesting. We're talking about Luna, we're talking 0:07:07.320 --> 0:07:09.720 about Do Kwan. They weren't invested in all parts of 0:07:09.760 --> 0:07:12.040 the empire. But I asked him as like, would you 0:07:12.040 --> 0:07:14.160 do anything different when it came to your exposure to 0:07:14.240 --> 0:07:16.240 Lunin Do Kwan? And he goes, I only met do twice, 0:07:16.920 --> 0:07:19.239 and he goes, I've got to say, now, I would 0:07:19.240 --> 0:07:23.120 want to meet people much more than that. I wouldn't 0:07:23.120 --> 0:07:24.440 want to have to maybe work out of my office. 0:07:24.440 --> 0:07:27.080 I would have done lunches, dinners, coffee. He's like, He's like, 0:07:27.080 --> 0:07:29.520 I already do that a lot. But he goes, knowing 0:07:29.560 --> 0:07:33.320 somebody more is a big lesson coming out of twenty two. 0:07:33.360 --> 0:07:35.640 So it was a very big lessons learned kind of 0:07:35.720 --> 0:07:37.640 moment at the end of last year. Right, And in 0:07:37.640 --> 0:07:40.000 your story you say that he actually had somebody warn 0:07:40.120 --> 0:07:43.160 him about SPF and f t X. Yeah, I would 0:07:43.760 --> 0:07:46.640 die to know who, because interestingly, do you guys remember 0:07:46.760 --> 0:07:49.720 so there was a Friday that that bankruptcy filing was filed, 0:07:50.520 --> 0:07:54.560 the ft X on the fts bankruptcy, So remember, so 0:07:54.840 --> 0:07:57.920 Mike told me that they actually passed on the ability 0:07:58.000 --> 0:08:00.800 to invest in f t X on the unch around. Why. 0:08:00.800 --> 0:08:02.560 I asked why. It was a due diligence. He goes, 0:08:02.560 --> 0:08:04.520 it's actually just a matter of valuation. We thought it 0:08:04.560 --> 0:08:07.280 was too expensive. They passed on the bench around, but 0:08:07.480 --> 0:08:09.880 it was one of many counterparties for them in the 0:08:09.920 --> 0:08:12.400 scope of digital, a Galaxy Digital. It's not a ton 0:08:12.440 --> 0:08:14.840 of exposure, but they did lose seventy seven million dollars. 0:08:16.920 --> 0:08:20.160 So his friend called him on Monday morning. This is 0:08:20.200 --> 0:08:24.360 the weekend, Like the Monday after that weekend, if you remember, 0:08:24.840 --> 0:08:28.400 uh cz over Finance was tweeting about selling his ft 0:08:28.520 --> 0:08:32.120 T tokens and Sam BigMan Freed was tweeting about their 0:08:32.160 --> 0:08:35.920 own kind of financial health before everything crashed. So the 0:08:35.960 --> 0:08:38.400 Monday morning, Mike Negret's got a call gets a called 0:08:38.440 --> 0:08:40.240 from one of his billionaire friends who got a call 0:08:40.280 --> 0:08:43.400 from Sam. Sam at that point was looking for money 0:08:43.720 --> 0:08:46.000 and it was becoming clear that there was a large 0:08:46.200 --> 0:08:49.360 hole in f tx's balance sheet. That's when Mike started 0:08:49.400 --> 0:08:53.240 selling and reducing his exposure dramatically. Remember the one thing 0:08:53.679 --> 0:08:55.720 and again, like I said, this is really a make 0:08:55.800 --> 0:08:58.120 or break moment for Mike. But the one thing he 0:08:58.200 --> 0:09:00.560 has in the benefit of hindsight that a lot of 0:09:00.559 --> 0:09:03.080 people don't have in crypto, especially if you're say thirty 0:09:03.160 --> 0:09:05.720 years old, like Sam Bigmannfried, the what it's like to 0:09:05.840 --> 0:09:08.760 have lost money in the past is an important lesson 0:09:08.800 --> 0:09:11.040 in risk management. There's a lot of people who trust 0:09:11.080 --> 0:09:13.319 Mike because of how much money he's lost. So he 0:09:13.360 --> 0:09:16.240 started selling, selling, selling, They got it out until the 0:09:16.280 --> 0:09:20.680 exposure was just seventy seven million dollars and yeah, that 0:09:20.679 --> 0:09:23.320 that was that, And you know, I think that's an 0:09:23.360 --> 0:09:26.760 important kind of aspect of markets, this intimacy that people 0:09:26.800 --> 0:09:28.960 have and what's going on and how they find information. 0:09:29.040 --> 0:09:32.400 I think, whether you're Mike or anybody, I think access 0:09:32.400 --> 0:09:35.199 to information in the crypto community, you know, it doesn't 0:09:35.240 --> 0:09:38.200 work the same way as it does in other financial markets. 0:09:38.200 --> 0:09:41.480 Sometimes I can't believe we've gone this far without mentioning 0:09:41.960 --> 0:09:44.600 the headline of your story, which is maybe one of 0:09:44.640 --> 0:09:48.800 the most provocative headlines I've ever seen, at least for Bloomberg. 0:09:48.960 --> 0:09:53.280 So it's Mike Nograds wants to punch disgrace cryptotitans in 0:09:53.320 --> 0:09:58.400 the face. Tell us who who he's angry with? Yeah, 0:09:58.640 --> 0:10:00.760 you know, it's funny. An earlier version of this story, 0:10:00.880 --> 0:10:03.760 my first line was Mike nova Grass is frustrated because 0:10:03.760 --> 0:10:05.040 I asked him. I was trying to get a sense 0:10:05.040 --> 0:10:07.120 of his mindset, and frustrated is the best possible the 0:10:07.160 --> 0:10:09.600 way to put it. And you know, the two people 0:10:09.600 --> 0:10:12.359 who wanted to punch in the face were Barry Silbert 0:10:12.840 --> 0:10:17.560 and who was the Digital Currency Group head, who's a 0:10:17.679 --> 0:10:21.560 unit of Genesis Capital is now going under a bankruptcy process, 0:10:21.679 --> 0:10:25.200 and Sam BigMan freed. You know, you think about last year. 0:10:25.679 --> 0:10:28.760 The whole thing started with Luna Three Arrows, but things 0:10:28.800 --> 0:10:33.280 exacerbated so dramatically with Three Arrows, leading to more issues 0:10:33.320 --> 0:10:36.560 over at Genesis, and then concerns about DCG and Barry 0:10:36.559 --> 0:10:39.480 Silver's handling of the whole situation, and Sam BigMan Freed 0:10:39.480 --> 0:10:41.760 of course, and and ft X is exposure and how 0:10:41.840 --> 0:10:46.000 that got wilder after the Luna collapse as well. And 0:10:46.080 --> 0:10:49.280 so the anger was very very very much directed less 0:10:49.280 --> 0:10:52.280 at Dough and more at Barry and Sam BigMan Freed 0:10:52.840 --> 0:10:54.520 want to punch them in the face. This is where 0:10:54.520 --> 0:10:57.439 I say, you know, as a reporter, you're sitting here, 0:10:57.559 --> 0:10:59.600 we asked the questions, right, so it's kind of like 0:10:59.640 --> 0:11:03.120 I can ever do what Mike's personality is like justice, right, 0:11:03.640 --> 0:11:06.240 But you know, we started this conversation talking about how 0:11:06.280 --> 0:11:08.839 he's a wrestler, and the last line of the story 0:11:08.960 --> 0:11:11.760 kind of talks about how, you know, he's gearing up 0:11:11.760 --> 0:11:14.800 for his next big fight. He's going to fight the 0:11:14.840 --> 0:11:18.520 institutions and the regulators and just really win back trust 0:11:18.640 --> 0:11:22.760 in this industry. Listen the rest of this this malarkey 0:11:22.840 --> 0:11:26.760 that we've had with between Three Arrows and and you know, 0:11:26.880 --> 0:11:29.679 Block five and Celsius and all these companies that were 0:11:29.720 --> 0:11:34.240 either poorly run or fraudulently run. Certainly is hurting the 0:11:34.280 --> 0:11:38.000 overall confidence in crypto. But this too shall pass. They 0:11:38.000 --> 0:11:41.640 will be brushed off into the dustbin of history, and 0:11:42.360 --> 0:11:46.880 the industry itself is going to emerge, having learned lessons, stronger, 0:11:47.200 --> 0:11:49.200 and you're going to see the price take back off, 0:11:49.559 --> 0:11:53.280 which is why his place in this industry is so important. Yes, 0:11:53.320 --> 0:11:55.760 he's lots of money, but I talked to some of 0:11:55.760 --> 0:11:58.920 his billionaire friends as well, who are maybe exposed to 0:11:58.960 --> 0:12:01.440 crypto or maybe thinking about being exposed to crypto. One 0:12:01.480 --> 0:12:03.560 of the most important ones with Stan druck and Miller, 0:12:04.400 --> 0:12:08.440 legendary investor who worked for George Soros, now invest on 0:12:08.440 --> 0:12:10.640 his own at Duquesne. And I asked Danna, was like, 0:12:10.640 --> 0:12:13.520 would you give Mike money after all this? And he said, yeah, 0:12:13.559 --> 0:12:16.040 he consider it. I mean, that's the thing that's interesting 0:12:16.040 --> 0:12:20.200 about all this, Mike, depending on who you are, depending 0:12:20.200 --> 0:12:22.640 on all the losses at Galaxy, even the stop. Remember 0:12:22.679 --> 0:12:25.800 Mike's own wealth. He lost more than three billion dollars 0:12:25.800 --> 0:12:28.560 on paper and a lot of that was Galaxy stock decline. 0:12:29.240 --> 0:12:33.480 So now it's a question of how is he going 0:12:33.559 --> 0:12:37.600 to raise money again and really get back to being 0:12:37.679 --> 0:12:39.680 on I mean he is, I mean they're will in 0:12:39.679 --> 0:12:41.920 this industry. Let's be very clear about this. How is 0:12:41.960 --> 0:12:44.440 he gonna win back trust not just for Galaxy but 0:12:44.480 --> 0:12:47.080 for the industry after what happened last year? And I 0:12:47.120 --> 0:12:51.760 think that that's the pivotal question as Galaxy reorganizes. By 0:12:51.800 --> 0:12:54.640 the way, remember they laid off almost fifteen percent of 0:12:54.679 --> 0:12:57.400 their staff last year. But in a television interview, he 0:12:57.480 --> 0:12:59.120 told me that he actually thinks he'd count is going 0:12:59.160 --> 0:13:02.319 to get back to above where they cut because now 0:13:02.360 --> 0:13:05.160 they're buying the assets out of bankruptcy. So he's trying 0:13:05.200 --> 0:13:07.160 to play offense. And I think that this will be 0:13:07.160 --> 0:13:11.000 a really interesting year coming up more with Bloomberg reporters 0:13:11.000 --> 0:13:14.120 Shinali Bastic on how one of the industry's top CEO 0:13:14.600 --> 0:13:17.040 is still pretty bullish on crypto. We'll be right back 0:13:25.720 --> 0:13:29.120 at the same time. You have this paragraph in the story. 0:13:29.200 --> 0:13:32.240 It says time is short, Galaxy no regards tells you 0:13:32.240 --> 0:13:35.600 can withstand eighteen more months of this pain four years. 0:13:36.600 --> 0:13:40.280 He's doubtful that his employees would be able to roll 0:13:40.360 --> 0:13:43.400 with it for that long. For somebody so like I said, 0:13:43.400 --> 0:13:46.520 I've covered him since there's another little story i'll give 0:13:46.559 --> 0:13:51.240 you about after this, but you know, well, well let 0:13:51.280 --> 0:13:53.080 me answer the question first, because I think that is 0:13:53.080 --> 0:13:55.079 a critical part of the story because at the beginning 0:13:55.080 --> 0:13:57.760 I said this was a matter of Mike's reputation, and 0:13:57.800 --> 0:14:00.839 to the extent Crypto is kind of you know, Mike 0:14:00.920 --> 0:14:03.240 never got like a cat, like the guy's got nine 0:14:03.280 --> 0:14:05.600 lives and he makes it through, right, but you know, 0:14:06.040 --> 0:14:09.680 and Wall Street works that way, you know, but eighteen 0:14:09.760 --> 0:14:13.040 months feels like there's a clock that's taking a little bit. 0:14:13.080 --> 0:14:14.679 He doesn't say he's gonna throw in the towel, he 0:14:14.679 --> 0:14:17.120 doesn't go that far, but he does say it'll be 0:14:17.160 --> 0:14:20.080 hard to keep him employee morale high, Like it's harder. 0:14:20.160 --> 0:14:22.520 It gets really harder after eighteen months to go through 0:14:22.880 --> 0:14:26.520 a market slump. Now back to when he first planned 0:14:26.920 --> 0:14:29.760 to start investing other people's money into Crypto after making 0:14:29.760 --> 0:14:31.840 a lot of money on his own. He had a 0:14:31.880 --> 0:14:33.840 plan to start a hedge fund, and we wrote about 0:14:33.880 --> 0:14:36.080 it here atom I called Eric Shaska wrote about it 0:14:36.560 --> 0:14:39.560 very soon within like immediately, he decided he's not doing 0:14:39.600 --> 0:14:41.920 that anymore because the market conditions were bad. The market 0:14:41.960 --> 0:14:44.600 was crashing. So Mike again, even a bitcoin has been 0:14:44.640 --> 0:14:49.000 through historic ups and downs. The last crasheen Mount cox 0:14:49.440 --> 0:14:51.840 Era lost a lot of money, hundreds of millions of dollars, 0:14:51.880 --> 0:14:55.200 I'm told, and then he turns around and said goes bigger. 0:14:55.440 --> 0:14:57.800 He goes, I am not gonna do hedge fund. I'm 0:14:57.840 --> 0:14:59.840 gonna build a merchant peg. I'm gonna build something that's 0:14:59.840 --> 0:15:02.320 gonn become the Golden Sacks of crypto. Can you imagine 0:15:02.320 --> 0:15:04.920 losing hundreds of millions of dollars, having a plan to 0:15:04.960 --> 0:15:08.520 do something, scraping plan, and then having a bigger plan 0:15:08.600 --> 0:15:11.560 the next day, which, by the way, he's then taking 0:15:11.720 --> 0:15:14.440 public on the Canadian Stock Exchange. He's trying to take 0:15:14.440 --> 0:15:16.400 a public in the United States. There's still a lot 0:15:16.400 --> 0:15:19.000 of concerns that the SEC has about crypto in general. 0:15:19.400 --> 0:15:22.560 But if he gets listed in the US this year, 0:15:23.480 --> 0:15:26.000 what if? What a coup after all that? If you 0:15:26.040 --> 0:15:28.520 think about it, and especially when you think back to 0:15:28.560 --> 0:15:30.880 that initial story where the ambitions were just to have 0:15:30.920 --> 0:15:33.640 a crypto hedge fund. No, he wants to build a 0:15:33.640 --> 0:15:38.440 crypto empire. And as he restructures. One thing that's interesting 0:15:38.480 --> 0:15:42.800 that's happening is they're kind of merging different units, venture 0:15:42.840 --> 0:15:45.280 and asset management units, and it's very possible that they 0:15:45.320 --> 0:15:47.560 go back to market and raise money from third party 0:15:47.600 --> 0:15:51.040 investors again. And that kind of dream about being like 0:15:51.360 --> 0:15:54.680 he's used a few different anecdotes Goldman of Crypto or 0:15:54.800 --> 0:15:57.400 Berkshire Hath the way of crypto to kind of invest 0:15:57.440 --> 0:16:00.440 in all of those fledgling companies. I think it's the 0:16:00.520 --> 0:16:02.240 venture part of it is harder to get a handle 0:16:02.240 --> 0:16:04.120 of because it's not like buying a token that goes 0:16:04.160 --> 0:16:05.800 up and down and you see how it does in 0:16:05.800 --> 0:16:08.960 a year. A venture investment often takes multiple years before 0:16:09.000 --> 0:16:14.600 you see how it actually does in the end. So 0:16:14.760 --> 0:16:18.280 to end on a more positive note, so it's crypto, 0:16:18.480 --> 0:16:21.280 as we mentioned, is known for its second and third 0:16:21.360 --> 0:16:25.880 and fourth comebacks, comeback stories. We even have some recently, 0:16:26.000 --> 0:16:29.360 and then we've had some headlines of um, maybe we 0:16:29.360 --> 0:16:32.320 can call them disgraced crypto people who are trying to 0:16:32.360 --> 0:16:35.000 make a comeback. Still, So can you just talk about 0:16:35.040 --> 0:16:37.920 that aspect and what it is about crypto itself where 0:16:38.160 --> 0:16:42.720 there's this sort of never ending prospect of hope. Listen, 0:16:42.800 --> 0:16:44.440 this is what makes it so fun to cover. I 0:16:44.480 --> 0:16:47.320 think it's the multifaceted angles. If you think about all 0:16:47.360 --> 0:16:52.040 the reasons um Crypto failed last year, a lot of 0:16:52.040 --> 0:16:56.520 it was risk management, a lot of it was Think 0:16:56.560 --> 0:16:58.880 about all of the way these companies were structured with 0:16:58.920 --> 0:17:02.520 the inter company loan, in the double triple quadruple bailouts, 0:17:02.880 --> 0:17:05.320 throwing a lot of bad money after good Think about 0:17:05.359 --> 0:17:08.359 what Mike did in that time. He sold, he largely sold, 0:17:08.760 --> 0:17:11.480 and again he's by now. But it's also become a 0:17:11.520 --> 0:17:14.840 better year already for something like bitcoin. When I talked 0:17:14.880 --> 0:17:18.760 to his other investors as well, the reality for them, 0:17:18.840 --> 0:17:22.760 which is fascinating is that they, like a lot of 0:17:22.760 --> 0:17:25.520 people out there, believe Bitcoin itself hadn't failed in the 0:17:25.560 --> 0:17:28.720 middle of all of that, In the middle of what 0:17:28.840 --> 0:17:33.040 people were worried about being a systemic crash never happened. 0:17:33.640 --> 0:17:37.159 Even the genesis matter now so far is fairly contained. 0:17:37.560 --> 0:17:39.679 Could get worse, could always get worse. But at the 0:17:39.760 --> 0:17:42.960 end of the day, you know, there are a number 0:17:43.000 --> 0:17:47.359 of very influential people in finance, let alone crypto, who 0:17:47.359 --> 0:17:50.040 have become more sold on the story after last year, 0:17:50.480 --> 0:17:53.680 more compelled to buy assets now that they're cheaper, right, 0:17:54.040 --> 0:17:56.240 more than a fourth cheaper than they were at their peak. 0:17:56.880 --> 0:18:00.000 So it all this is such a Pavoli year because 0:18:00.040 --> 0:18:04.080 do people by the story of Bitcoin Crypto. You were 0:18:04.119 --> 0:18:09.480 saying college college friends. Joe Lubin is friends with Mike. 0:18:09.520 --> 0:18:12.160 You went to Princeton with Mike, um Dan Moore head 0:18:12.359 --> 0:18:16.960 over at Pantara, friend of Mike. So you let's see 0:18:16.960 --> 0:18:21.560 how these folks navigate through. They have made it largely 0:18:22.040 --> 0:18:25.320 away from a lot of those big disgraces as you've 0:18:25.320 --> 0:18:29.040 been talking about. But can they win back the hearts 0:18:29.080 --> 0:18:32.240 and minds of the people that are putting money behind 0:18:32.320 --> 0:18:39.240 this industry. We'll see. Thank you, guys, Basonale. That was 0:18:39.240 --> 0:18:42.040 Bloomberg reporter Shonali bask You can find more of her 0:18:42.080 --> 0:18:45.240 work on the Bloomberg terminal and on Bloomberg dot com. 0:18:45.320 --> 0:18:48.240 For more, be sure to check out our twice weekly newsletter, 0:18:48.359 --> 0:18:57.199 Bloomberg Crypto. This is Bloomberg Crypto, a daily podcast from 0:18:57.240 --> 0:19:00.320 Bloomberg and I Heart Radio. For more show from I 0:19:00.359 --> 0:19:03.640 Heart Radio, visit the I Heart Radio app, Apple Podcasts, 0:19:03.800 --> 0:19:07.280 or wherever you get your podcasts. Send us your comments, 0:19:07.359 --> 0:19:10.359 questions or suggestions for the show to Crypto at Bloomberg 0:19:10.400 --> 0:19:17.240 dot net. The supervising producer of Bloomberg Crypto is Vicky Vergelina. 0:19:17.640 --> 0:19:21.320 Our senior producer is Janet Babin. Our producers are Mohammed 0:19:21.320 --> 0:19:24.919 Farouk and Sharon Barriro. Our associate producers are Ty Butler 0:19:25.000 --> 0:19:28.600 and Moses on Them. Desta wonder At is our engineer. 0:19:28.960 --> 0:19:34.000 Original music by Leo Sidrn. I'm Stacy Marie Schmal. We'll 0:19:34.040 --> 0:19:34.760 be back tomorrow.