You get long bitcoin amazing, You're not worried about the US dollar basically destroying
itself, and you have a better value and opportunity for shareholders to see that
you're committed to maintaining your treasury and not allowing it to basically be destroyed by
inflation. So you know, micro Strategy has been doing this for I don't
know how many years, and people are paying them a premium for it.
Why on earth wouldn't other companies do that as well. It's just it's a
completely sensible way of managing your treasure. This content is brought to you by
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more. If you'd like to learn more about bitco, please visit bitgo dot
com link in the description. Welcome to the Thinking Crypto Podcast. I'm your
host Tony Edward, and with me today is Russell Starr, who is the
head of Capital Markets and the former CEO at DeFi Technologies. Russell, great
to have you, Ony, I'm really excited to be on and thanks a
lot for the invite. I'm really looking forward to this. So Russell,
we got big news around DeFi Technologies this week with the company adopting bitcoin as
a treasury strategy, and I have a lot of questions around that, and
I'm sure many folks want to hear the details there. But before we get
there, tell us about yourself, where you're from, where'd you grow up,
and your professional background book Borner, raised and so true Canadian, ended
up in Toronto. Just my academic background. I have a master's and econometrics.
I started, I finished an MBA, started a PhD in econometrics,
always wanted to get into finance. So I'm kind of like the trad fi
guy on this team, really really strong crypto team. And then sort of
me on the trad fire side, and I really just got tired of being
an institutional salesperson, institutional trader. I'd helped start a firm that's now pretty
big called Echelon, and I was looking more to help really interesting companies grow.
And I often jokingly say that I kind of bought my way into this
company. So the CEO, the current CEO, his name is Olivier Lucy
Newton. He created Hive blockchain, and the other founder created a company called
xbt Provider, which is actually the first ever Bitcoin et P in the world,
and it's now known as coin Shares. And you know, I was
kind of a gold guy. I was looking at how fiat currencies are just
being destroyed by governments, and so gold up until the advent of bitcoin was
kind of the only way to look at that. And then when I found
BEFI with the team the concept of literally wrapping these crypto protocols in traditional equity
rappers, so that you know, mom and pop, grandma, aunt and
uncle, all these people who are really honestly terrified of trying to buy these
tokens on these unregulated exchanges. This company basically eliminates that and gives you the
ability to buy. Well, now we have twenty three ETPs listed in Europe.
So just love the concept of building companies and love this new ecosystem whose
entire goal And again I never want to put words in the founders of Ethereum,
Bitcoin, Salan or whatever, but really the goal is to destabilize traditional
capital markets. I love that it's incredible, and to protect investors from destruction
of FIA for sure. So you know, you mentioned you're a trad FI
guy and where along the journey did you discover bitcoin and what was your aha
moment? So it Honestly, I had a lot of buddies who were like,
you know, I bought some bitcoin at one hundred bucks or three thousand
or whatever, and I made fifty grand or a million bucks, And I
never really took it seriously, Honestly, I was. I was working with
and helping a gold company at the time, you know, and everybody would
joke, you know, how do you buy your partner or your wife or
your girlfriend or whomever a bitcoin necklace? Like, there's there's nothing tangible about
it. But as I watched more and more capital flows go into it,
I was like, look, I'm a little bit terrified of these unregulated exchanges,
and and let's be honest, that's where a lot of the frauds have
occurred. It hasn't been the bitcoin squad or ethereum squad. It's more that
they are bad actors. There's always going to be bad actors when there's as
much money at play as this. But this company had, like I said,
that sort of different perspective of you know, let's let's wrap bitcoin in
an ETP, let's wrap thetheroeum in an et P, and let's make it
available to the masses. And that's literally what Johan did with XBT Provider.
It's literally what all he did with with Hive. You know he was he
was trying to give people the ability to get long ethereum at the time in
a traditional equity vehicle. And we all know ethereums are Sorry. Hive has
become like a you know, one of the best and biggest out there.
Now, let's talk about DeFi technologies for those who don't know, tell us
about the history, the services, who you work with and so forth.
Yeah, So, like I said, and I think it would have been
twenty twenty twenty twenty one, I was pitched this as an idea. The
stock was only like eight nine, ten eleven cents, and it really hadn't
even started what it was, what it was meant or wanted to do,
which was ultimately to basically wrap almost everything in a traditional equity wrapper. And
I just bought, you know, millions of shares. It did really well.
Ultimately I stepped in and was the CEO all e though as a founder
or Yohan, they were the logical guys to be CEOs. So when when
it was time for them to take it, takeover, obviously that was that
was a natural step. But I just like I was saying, I struggled
with the concept of just being long bitcoin. I struggled with the concept of
just being long ethereum. Not being said, I was probably wrong. I
probably would have made a lot of money if I'd just gone long bitcoin had
gone long ethereum. But just in my mind, I was like, if
I'm going to actually believe in this ecosystem, and I really do believe in
it now, Like I actually think, as you move forward, you know
two three, five ten percent of the global goldflow is going to go into
this is a sector. But as I did more research, you know,
this is growing two times faster than the Internet. It's going to destabilize the
way we do traditional banking like that Now, whenever I send a wire through
my bank, I'm like, guys are taking like three thousand bucks. They
literally you're just pushing a button. And so the more it's it's almost a
counterintuitive thought process. But the more I watch the SEC battle crypto as an
ecosystem in the US, the more I believed in it because the only reason
they're doing it is because they're terrified of what it's going to do to the
US dollar, and they're terrified of what it's going to do to the traditional
banking system. And to me, that's a really appealing investment pieces. But
I hope I answered your question and that's how I got to hear and like
I said, the two partners, the people who run this company or created
this company in twenty seventeen, they're Crypto royalty, right. Ali's well known,
Johan's very well known. And when you dig into investment piecs for any
company, you want management to be very very credible. Ours is, and
you want the investment pieces to be very very robust. Ours is, Like
we're only trading at three times profits and if you look at what, you
know, the average on the S and P is the average S and P
earnings multiple is twenty and we're trading at three. So even if you just
look at it from that perspective, you have a great investment pieces. And
that's why I've basically it's the only crypto asset that I'm invested in, and
I own a lot of it, and I own a lot of it because
really, truly we should be at twenty times earnings. That's typical, and
really truly this company is giving you a diversified way of playing not just Bitcoin
or ethereum, but you know, XRP, ton cooin, chain link.
If you go look at all of the products we have, and you know,
I think by the end of twenty twenty five, we'll probably have between
sixty or eighty ETPs that all fall under the umbrella of DeFi. And that's
the other investment pieces. You know, How do you know what the next
Solanta is going to be? I don't know what it is. Do you
know what it is? You know, when we bought Pomp's research company,
Reflexivity, they have a really good idea of what it's going to be.
But i'd rather be exposed to all of the potential winners through one company,
and that's what you have with DeFi. So you guys mainly have ETPs,
which you know in the United States we call them et apps. Are they
spot or are they futures or do you have both all spot all spot.
You know, it's funny if you look at when Gensler was challenging Grayscale application
to become an ETF, the judge was like, hang on, you guys
are allowing a futures ETF, but why why aren't you allowing a spot ETF.
I mean really, if I mean the future's ETF is just a derivative
on top of another derivative, I'd way rather play from an investment thesis the
spot spot exposure. But when you look at it from a hedging perspective,
you may want to look at the futures, but I don't want to get
into all that sort of complicated trading strategies. Sure, so I remember Canada
being one of the first countries to launch spot. Uh, well, you
guys call it ETPs, and then of course the United States recently, and
then Hong Kong joined the party in London, Thailand, so it seems like
there's game theory playing out here. You know, with Canada being one of
the first countries, was there interests in the Canadian ETPs after the US ETF's
got approved. So that's a really good question. All answer it the way
I typically answer it. The Canadian and the US regulators are out to lunch.
Basically, you have the rest of the world, especially Europe. Like
part of the reason we're in Europe is because Europe has embraced crypto as a
potential, you know, world class opportunity. When you look at why Canada
and the US are so anti crypto, and they really are anti crypto,
like they make your life a nightmare from an audit perspective, from a regulatory
perspective, it's actually it's actually more difficult to be a crypto entity in Canada
or the US than it is a cannabis entity. That's how crazy it is.
So so I think they're missing out on the investment pieces. And you
know, let's be honest, Canada just just basically follows what the US is
doing. And you're now seeing government in the US recognize that they're losing.
They're losing a major opportunity to be a world leader in the crypto ecosystem,
and they're giving that ball and that opportunity to the rest of the world.
So our investment thesis was, look, what Canada does do well is it
does launch risk assets well. So whether it's junior natural resource companies, junior,
you know, it's it's kind of known for that. As as as
a global exchange, you can you can, you can list in Canada and
do well, but ultimately your your your next step or the biggest goal is
going to be either to get on a more relevant global exchange and typically that's
like the ny s C than ASDAK. That's what you know, sort of
let's call it the baby companies do to become teenagers or adults. So that's
ultimately one of our goals and we've press released that. And you know,
once the stock gets to two US, which I'm very confident it will and
quite higher than that, just because that that revenue and earnings multiple is so
low and and you know, always funds and reader looking for those those divergences
in valuation because that's how we make money in this game. But no,
we we ultimately want and will be in Canada more and will be in the
US more, but we're not going to do it until the regulatory authorities really
join the rest of the world with embracing Honestly, if you can think about
it sort of as a as a more of a of a challenging discourse,
can you imagine what would have happened to the Internet as it was trying to
grow if the US basically said now we don't want that. Like that's kind
of the way this is going. And the difference I guess between the Internet
and crypto is is crypto is so destabilizing from a from a US dollar perspective,
and so it's more of a government it's more of a political political challenge,
I guess is the best way to put it, than actually a regulatory
challenge. So so yeah, it was more we have a great chance to
list something all these Canadian I'm Canadian, Johan's Swedish. So that's why a
lot of our products have had a start and trade a lot in the Nordic
growth market. But no, Canada and the US really they need to join
the global party and be more relevant and be be leaders and embrace this rather
than continuously put challenges and hurdles in front of companies such as ourselves to grow,
Yeah, for sure, and hopefully they can get that sorted out soon.
Here in the United States, we're seeing some movement with cryptoregulation bills where
you've had the Democrats start to side with the Republicans to get it done.
It still has to go through the Senate, still has to make it to
the President, and you know, it may happen till twenty twenty five,
but there's at least some momentum, there's some life, some activity happening here.
Well, yeah, I mean you just look. I mean, basically,
they had a bill which they they the bip It was a bi artisan
bill where the Senate and House all embraced it and wanted the big banks to
be able to custody these assets. And then of course Biden vetos it,
probably because he doesn't know anything about it, that's my guess. Probably had
some advisors saying, oh, this is bad for the US dollar. But
yeah, but this like the way often what I say to investors is because
there's a lot of people who still like if you look at Morgan Stanley,
they won't let their clients buy the bitcoin ETF and they won't let their clients
buy a company like ours, it's still backwards. It doesn't make any sense,
Like shouldn't you be embracing something that's going to help people make money and
help people avoid inflation? Right, Like a lot of people who are long
US exchanges don't understand how much they have to make on an annual basis just
to avoid basically what's happening due to inflation to the US dollar. You kind
of have to make another ten to twelve percent every year on your portfolio to
avoid basically you're the US dollar and the Canadian dollar and all of the printing
of the money destroying value. Now, speaking of destroying value and trying to
outpace inflation, Hi Technologies adopted a bitcoin treasury strategy, which is pretty incredible.
We're seeing that trend amongst companies, not just in the United States but
globally. Tell us about this, why and how are you executing that?
So? So why to me is pretty obvious, you know, like when
you I'm trying to remember the quote, but someone was basically saying, you
know, you know, don't invest in bitcoin, you know it's it's going
to de stable. It was probably Gensler. I'm just guessing you know,
we don't want you to invest in bitcoin because it's bad, it's risky,
and I'm in my mind, like I have a master's in econometrics, started
my PhD. I'm like, you, guys, this all backwards, like
inflation and printing of your money supply that is destroying the US dollar. Bitcoin
is actually could be a savior. Like you're looking at what some of the
Latin American countries are doing adopting bitcoin as their defacto currency. That's kind of
how we think. So we have basically about fifty one million US on our
balance sheet, just free capital. And if you're looking at a world where
effectively every government is printing dollars to help sustain the economic recovery, you know,
whatever you want, but the definition of the definition of inflation is actually
the printing of money. So if you actually think and look at what's going
on in the US, inflation is absolutely rampant. It's just that government has
chosen to measure it in different ways, but truly from a pure economic perspective.
And so with that amount of money on our balance sheet, we were
like, this doesn't make any sense. The US dollar. The government is
out of control. The debt on a monthly basis, the interest that is
needed to just service the debt is trillions. Right, you're looking at conceivably
the demise of an entire well, the US dollar is being the de facto
like stable currency for settlement of oil, gold, everything like that. Now
you've got the printing of money, you've got inflation, and what better way
to protect your your balance sheet than to buy some bitcoin. And the beauty
of it for us as well is that we have a relationship and a partnership
with Core and the best way you can look at Core people, I recommend
everybody basically google Core dow Do and you'll see kind of their white paper,
their thought process. I simplified and say, they're kind of like a layer
two on bitcoin. But you can generate fifteen sixteen percent yield on your bitcoin
just actually staking it lending it in the bitcoin on the bitcoin ecosystem through Core,
so you get long bitcoin amazing. You're you're not worried about the US
dollar basically destroying itself, and you have a better value and opportunity for shareholders
to see that you're committed to maintaining your treasury and not allowing it to basically
be destroyed by inflation. So you know, micro Strategy has been doing this
for I don't know how many years, and people are paying them a premium
for it. Why on earth wouldn't other companies do that as well? It
just it's a completely sensible way of managing your treasure. Yeah. Absolutely.
Now, in regards to you mentioned you had fifty one million in cash and
reserves. How much of that fifty one million are you allocating to bitcoin?
Is it twenty fifty percent? And what's the buying process? Are you like
buying all at once or you don't cost averaging over time? So we have
one hundred and ten bitcoin as well on top of the fifty one, so
we actually have closer to sixty And I was honestly just discussing the concept of
actually buying substantially more to protect our treasury. We don't really worry about sort
of the dollar cost averaging perspective on that. You know, it's our view,
and I think it's many people's view that post having bitcoin is likely going
a lot higher. I think with your with all of the inflows you're seeing
from the bitcoin ets, that provides a really good base upon which to build
that next ascent, and then you saw today that it looks like inflation is
a little bit more subdued in the US, which which also puts a bit
in bitcoin. So we just bought one hundred and ten I think was last
week. We're looking at allocating more and more and more of that capital.
But what you need to do as a company like ours, And I was
just pitching a very very big retail book this morning. They head close to
a billion in their book, which is substantial. They have nothing in crypto.
They have an allocated one penny, And I was like, look,
you're invested in gold. Great, gold's being on a tear, but I
don't know why you wouldn't look at bitcoin. Bitcoin is stealing a lot of
those gold flows, and if you can you can stake or lend that on
top of it and generate, you know, whether you're using core or just
a simple lending strategy of two to four percent on a lending strategy, you're
actually making money on top of that. So my view is that you're going
to see more and more companies look at that as a solution. But the
other thing that we're looking at, and I mentioned this to you as well,
you know, we're going to do close to one hundred, one hundred
and twenty million US and profits in Q two. Most companies in the US
off of that amount of profits trade at about a two billion dollar market cap.
That's that twenty times earnings. So if you were looking at the entire
SMP, it trades basically at twenty times earnings. We're going to do one
hundred. Let's just simplify. I call it one hundred in Q two and
this is all public information. We've press released it. Off of Q two
alone, we should have a two billion dollar market cap and here we are
sitting at about a five hundred million dollar market cap. So the other thing
we're looking at is we're so cheap, maybe we should be buying our own
our own shares back, and so we actually press release that we might also
be buying our shares back because it just it's a crazy disconnect and that you
know, I always say to people, if everything worked efficiently, none of
us would be doing this because we wouldn't make any money. Everything would be
trading at the price and should be trading it. When you see these valuation
disconnects, that's the opportunity. So you know, we have guys like pomp
who who writes us up pretty regularly. He's a shareholder. We own his
research company. Obviously there's a relationship there. But he's a really smart guy.
And even he's screaming, you know, from the top of the trees
with a megaphone. Guys, you got to get long defive, like at
three times four times. Even if we were at ten times earnings or a
billion market cap, which is a double from here, we'd still have to
double again to get to the S and P average. So so yeah,
we'll add more bitcoin, but we also might be buying our shares back,
just depending on what the cost of capital is. But look, it's a
happy problem to have. Sure, Now, how are you custodying that bitcoin?
And maybe this is along the lines of the ETPs, how would how
would are those respective assets being custodied as well? Yeah, great question.
Just because of the experience obviously that Johan and Allie have in this entire web
three point zero world, we basically only deal with the top three or four
custodians. So you know, that's that's coinbase anchorage, that's fidelity. But
what's happened recently with us because our assets have grown so much we now run
basically our own validators, so we don't even have to send or custody anything.
We just carried on our own validator note, so we've eliminated that as
a risk as a potential risk for the company. But if we were going
to custody, it would be the fidelities the anchorages of the world. And
we also do own I think we own about five percent of a private Swiss
bank that also has all the crypto licenses. We will custody with them as
well, but again it's with the best of the best. We just have
the luxury of not having to do that. Now. Wow, now I
read that there is a subsidiary called Valor Incorporated. Tell us about that subsidiary
and is that handling any of the crypto assets? What's the AUM and things
like that. Yeah, so, so Valor is our ETP provider, So
so that is where we launch all of our ETPs. DeFi owns one hundred
percent of Valor, We own one hundred percent of Reflexivity. We own about
five percent of that Cryptoswiss Bank, which we think is worth substantially more than
we we listed at just because we invested when they only had a billion in
AUM and they have close to three billion. Then we have a venture portfolio
where along with POMP, we'll take small bets on new and upcoming coins like
sci Hashadra, that kind of stuff. And really truly Pomp and Will are
kind of the brain childs behind that. But the vast majority of all of
the revenue we generate comes from Valor, and Valor is where we list all
those ETPs. So, you know, we just we just listed I think
it was hashid Era. We have a core ETP. I think I think
that's going to listed. You know, those are all created listed, All
the ectuses are you know, filed through Valor, and Valor's primary jurisdiction and
source of business right now is Europe. But if you go look through our
historical press releases, you'll see that we're actually looking to expand in the Middle
East. Again. This is this is where it gets crazy, like why
isn't the US embracing this? So here we are. You know, we'd
love to offer all our products to everyone in the US, but until the
US regulators get their heads on straight. Same thing with Canada, what's the
point. So we're going to be opening and passporting all our prospectuses to the
Middle East. We're doing that for Asia, you know. So honestly,
all of that math that I gave you is based off of what we currently
have. But if you were to look at like coinbase or Robinhood, they're
trading at thirty or forty times earnings because they're in high growth mode, you
probably should be strapping a thirty or forty onto our multiple. And again it's
only like three or four right now because we are in growth mode. And
can you imagine we only have twenty three ETPs now, But you know,
if at the end of twenty twenty five we have sixty or seventy, our
au M will be massive. And that's how we generate our revenue and basically
provide upside to shareholders who own dfive. Now you mentioned different all coins that
you guys have, ETP, spoor, ex, ra h bar hit or
are you do you also have like baskets like here's the top ten, YEP
five and things like that. Yeah, yeah, so we have a bunch
of baskets. I think we have seven or eight of them. We have
a bitcoin yield product that gives this one's crazy. Whenever you buy a bitcoin
ETF in the US, you're paying black Rock or Grayscale or whomever has launched
that that ETF, you're paying them between one and two and a half or
three percent. We actually with our Bitcoin yield product, pay you five point
sixty five, so you can get long a bitcoin ETF and be paid a
yield. I think that has the potential to destabilize the entire ETF market.
But yeah, we have basket products. We have a basically for anybody who
believes or wants to hedge out bitcoin exposure. We have a Bitcoin short ETP,
and you'll see more and more creative products, like if you really think
through our mantra. You know our Bitcoin zero we call it Bitcoin zero because
we charge no management please on it, and our Ethereum zero. Those were
kind of the start of this company. But Solana Solana a year and a
half ago only had like ten or twenty million in it. Now it has
close to three or four hundred billion in it. The reason why is Solana
has gone crazy. But often what I say to people is, you know
how and who do you think the next winner is going to be? Is
it Sei, is it ICP? Is it hashid Era? I don't know
the answer, but I can actually get exposure to all of those by owning
defive. So yeah, we'll have basket products. We have two or three
of them right now. We'll have index products. We have one index products
products. So you know, we're like a baby black Rock or a baby
Vanguard. You know, anyone who you know of who has tons of ets
whether it's gold oil, you know, two times gold up, two times
gold down, whatever. We're that just much smaller, growing very very quickly.
And as I often say, you know, take any of those.
Our revenue model is their revenue model on steroids because we average about ten percent
yield, they average about one or two percent year mhm. With regards to
and I think you may have touched on this with the ETPs that are available
in Europe, given that there is being once again the approval in the US,
Hong Kong, London, have you guys started to see a lot of
interest and maybe from institutional investors, wealth managers or who are like, Okay,
we want to get exposure. We see what's the writing on the wall
and what's on the horizon here. Maybe you can tell us who's been engaging
with you guys to try to idect. So yes, ticket size has gone
way up for all of the products we have. And is that an institution.
We can't tell you with one hundred percent certainty, but typically when you're
getting five or ten million dollar orders, it is moving into the institutional realm.
But the reality is and what I again sort of everybody needs to remember
this, And basically the crypto natives such as yourself, like people who really
are intimate with the crypto universe, they often forget that the vast majority of
this world A avoids crypto or B. Even if they're not avoiding it,
they kind of don't know anything about it and they don't even really know how
to get into it. Yeah, and when you have a red later like
the Canadian regulator or the US regulator, who really is making it hard for
anyone to truly embrace this right everywhere else in the world they are, it
creates another level of uncertainty. So once the Bitcoin ETF was approved, that
basically validated our business model. And you've seen our stock do very well,
you've seen our assets grow, but we're only like I don't even know if
we're an inning one. We might only be in the first pitch of the
first inning in terms of where this ecosystem can go. Because remember growing two
times faster than the Internet. But when you're growing two times faster than the
Internet and call it ninety or ninety five percent of the population still hasn't or
doesn't or won't get exposure to it, you got a long way to go.
And so that's why I'm so excited about DeFi. It's why I'm so
excited about about the ecosystem because you know, you're seeing the likes of Goldman
Sacks and JP Morgan and senators and congress people. You're seeing them realize,
hang on a second, my constituents actually want this. Why are we fighting
it? Like like, why do we have an SEC chairman who who basically
will take a losing battle to the Supreme Court over and over and over again.
Why are we doing this? We're all we're doing is basically, you
know, we're putting We're standing up like a little tiny gull in front of
a steamroller and hoping that the doll is going to stop the steamroller. If
if Crypto was going to go down, it would have gone down with FTX
Alameda three, Aero's capital. It didn't, and so that's that for me,
is sort of vindication for this ecosystem and quite frankly, a really big
sort of warning shot across everyone's bow. People need to get exposure to this.
And the next leg to that is what you're also seeing is you're seeing
funds who are getting exposure to it and who have taken the risk if you
want to call it that, to buy an ETF or get long bitcoin or
SLANNA or whatever. They're vastly outperforming all of the other portfolios. And so
if you actually want to keep up with some of these funds and some of
these portfolios that are just you know, they're almost vertical, because yeah,
you've seen bitcoin, you do pretty well, but we're really just hovering around
the previous all time high. Where's that next leg you look at? Listen
to Kathy would I don't know if I espouse her, you know, one
point five million dollar price on bitcoin. But it's theoretically possible, yeah,
right, if if you had the world commit ten percent of their capital to
crypto, crypto prices would be up tenfold, twenty fold. And so that's
what the potential opportunity is. And that's why you know, it's funny all
my trad five Brett brethren who are like now I'm going to buy gold or
I'm going to stick to or whatever. They're missing out on what made maybe
one of the most exciting trade opportunities stints the Internet. And that's what I
think people need to realize, and that's what the trad five people really need
to realize. There are people becoming millionaires, one hundred millionaires, billionaires because
they're they're looking, they're learning, and they understand the potential application to destabilize
not just governments destroying their currencies, but also the banking system. Right like
I mentioned it, like could you imagine if you could send a wire by
pushing a button? That would be amazing. That's what this is going to
do. Absolutely, And you know, as you're saying that, where there's
some folks who are still on the fence so or you know that they're not
maybe living up to their fuciary responsibility of making the greatest return or preserving as
much of their purchasing power of cash on their balance sheet and so forth.
But but eventually I feel like they're all going to capitulate and jump in maybe
yeah, because like, look what you guys are doing buying bitcoin, putting
on your balance sheet, and then you have these ETPs and ETFs now available
globally. Those who are paying attention and like, wait a minute, you
know I need to get exposure. You're going to do well. And then
the laggards, I don't know, maybe they're going to lose market share,
lose clients, things like that. Well, you know it's fine. I
You know, for a long time in the crypto winner, people were just
tearing me to shreds because when DeFi last was trading at like three four bucks,
I would often say to people, Look, can you imagine if you
went back twenty thirty years and you had a chance to take five grand or
ten grand and buy Microsoft, Amazon, and Apple. You'd be retired and
your yacht would be like the size of a football field, Like that's how
much money you would make. But the reality is that if you just look
at Amazon or even Microsoft, these these were guys with dream working out of
garages, right, Like, oh my gosh, are you really going to
pitch me some guy who's in his dad's garage trying to shit me packages?
That was Amazon, right. I'm not saying that every opportunity in this ecosystem
is going to be an Amazon. But what I am saying is that's what
the potential upside is. You could look back five ten years from now,
and again there's always risk associated with any investment, but you could look back
five or ten years from now and be like, wow, I watched that
podcast. I should have bought I should a bought DeFi Or you can be
a really smart, sensible, savvy investor and go hang on a second.
This is trading at three or four times profits. Everything else is trading at
twenty, and they're concert trading at like thirty or forty. I'm going to
buy ten thousand shares for fifty thousand or one hundred thousand, you know,
whatever your appetite is. And again no guarante. But if this ecosystem is
going to do what I think it's going to do, and you think it's
going to do, in it and look, my firm belief is we are
there and it's going to happen. You have life changing wealth opportunities to invest
in right now, and that to me is really exciting. And yeah,
you can buy a copper company, a gold company, or you know,
buy some Amazon or Nvidia. Amazing companies, they're all amazing. But this,
this ecosystem, I think has the opportunity to provide people one hundred beggars
thousand bag or beggars. And honestly, I think DeFi given how much money
we're making, like this isn't a pie in the sky company hoping to make
money. It only costs US ten million bucks to run this company. So
when I said one hundred million in Q two, our profits are basically ninety
million dollars. So if we made one hundred and fifty for the year,
one hundred and forty million in profit, that's staggering. And again like it's
a four hundred million US market cap making one hundred and twenty or one hundred
and fifty million, and if we keep on growing, those numbers are going
to be a thing of the past. So it's it's it's fascinating. It's
like psychology, risk and opportunity all you know in one basket, and to
me, that's a really exciting investment. Pieces. Now, what's on your
By the way, this is recorded to all edit make the edits again,
Yeah all good, Yeah good. What's on the roadmap? What's on the
remainder of your roadmap for it this year, So more products, and I
can't really tell you exactly which ones they're going to be until we press released
them, but you're going to We're at twenty three products now. We'll finish
the year probably minimum thirty, maybe thirty five. The reason I'm confident about
that is when when you know, Crypto Winter and Tara Luna and FTX were
happening, the regulators were like, I'm not sure. Now they've seen how
stable of these products are, how much money they can make as an exchange
off of them, So are trying to turn around a new product is really
only about four weeks now, whereas before it could be like three months,
So a lot more new products. We've got a ton of cash on our
balance sheet, and we do see some really appealing M and A opportunities,
So who knows, you could see us and bark on something interesting. You
know, one of my big worries is when you're only trading at three or
four times profits and you've got these big, big players like Blackrock, Fidelity,
Coin based, robin It, you know, all of them are going
to start seeing the amount of money we make they could pay us, you
know, three hundred percent premium, it would still be a take under.
Like that's how perplexing our valuation is right now. So so who knows whether
someone takes a run at us, that would be amazing. And for the
record, that's not on the table. Nothing's happened. I just you know,
I'm a I'm a tradi fi guy, and when you see that much
money trading at that little multiple, it becomes appetizing. We've trust released,
We're expanding into the Middle East, that's going to be huge. We're expanding
into Asia, We're launching our products on the London Stock Exchange. They've started
to embrace ETPs in the crypto space. Hopefully the US government, like you've
got basically Trump's now embracing crypto. Whether Trump wins or not, You've got
the Congress and the Senate really becoming more supportive of this. And to me,
it's only a matter of time before Bidener, whoever comes in, has
to do an about face. So there's a ton of amazing stuff that could
happen. It's just our job to create as much value for our investors,
launch as many of these products as we can, really try to take the
world by storm, and then ultimately gravitate some of these products to Canada and
the US once the regulators get their heads screwed on straight. I'll look to
get your thoughts on tokenization and are you guys playing with tokenization? Really good
question. Look, it is something that will be a part or a piece
of the future. It's not something that we're aggressively moving into. I think
there's still still a few hurdles or challenges in front of it. But but
don't be surprised if you you don't see us launch a token type E t
P. Absolutely we're looking at doing an AI type e t P as well,
because you know, if you really spend some time looking at at DeFi
and what it's, what it is at its core. So the single biggest
trend in the world right now from a capital market perspective is et s,
the et application of everything, So whether it's gold, oil, baskets,
indexes, you know, everybody's moving towards that. And then one of the
other biggest trends in the world is crypto, and within crypto is obviously tokenization.
We hurdle both of those and so you know, would you do you
want to be a market leader in tokenization? I don't think so. I
think you'd rather be the second or the third player, wait and see what
happens and then create create an ATP on it. But yes, I do
do think ultimately, you know, people are going to buy houses like a
they'll tokenize a house, it will go on to a chain, you won't
need a realtor, and you'll be able to buy a house or a car
or whatever. I really do think that's a trend and somewhere where we're going.
I just don't know if we want to be at the forefront of it,
because it really truly what are we're We're a fintech company who's embraced crypto
and ETFs. Yeah, that absolutely makes sense. And a lot of these
things you're still going through trial and error to figure out what's you know,
lawg what what has staying power, and what you know people will use.
But yeah, that absolutely makes sense. I know we're coming up on time,
so I have some wrap up questions here for you. First, if
you could create your own metaverse, what would the theme be. I'm a
sports lover, so it'd be some sort of a of a of a you
know, a world series of like NFL hockey baseball, Like, I think
that would be super cool. So so that would be my metaverse focus.
I don't know if it's what other people would do, but I think that
would be super cool. And you you know you've seen concerts in the metaverse,
Yeah, I think. I think world sporting events would be really cool.
I would love that. I'm a big sports fan, so like,
if I can't travel to a game or something, if I can exactly on
my Oculus and get that full immersive experience exactly, wouldn't that be cool?
That'd be amazing. Rapid fire questions favorite food, sushi, favorite musician or
band. I'm gonna get roasted for this. I'm I'm a little bit old
school, but I loved Hall and Oates and led Zeppelin, so people can
laugh at me. But my newer ones would be probably Tama Paula and Coldplay.
Man. I got Hall and Oates, I got love Zeppelin on my
playlist. I listened to everything. But you can't, I mean, how
can you hate on those bands? You know? Well, it's just maybe
I look, I'm I'm one of the most uncool people in the world,
and that probably didn't help me out. So favorite movie I love done too.
I mean, like like historical, like world class movies. I probably
have to say, Butch Cassidy, I'm a sundance kid with Robert Redford and
Paul Newman. But of the newer genre, Dune one and Dune two were
incredible. I can't wait for doing it, like like the finale. That
was an epic movie. I haven't seen two as yet. I've seen one.
It's Oh, you gotta go. It's incredible. Yeah, I check
it out. Favorite book, Ain Rand fountain Head. It's a little bit
older again, but it's a really cool one. If I look, if
I was gonna have to pick a newer one, and this is so weird
for a guy who's like a like a finance guy. But I love the
Sarah J. Moss fantasy books, throwing Glass or rosen Thorns like any of
those those type I find fascinating, Like Doune anyhow, I gave you more
than one. But and when you're not working at DeFi Technologies, what are
you doing for fun? Working out? And I adore fishing. I just
got back from a fishing trip. Nice Russell, pleasure chatting with you.
Excited about the future updates around DeFi Technologies, I love the Bitcoin treasury strategy.
We'll have to have you back on. Thank you so much for joining
me, thank you very much for having us, love love doing this,
and absolutely you would come back anytime.