Galaxy Digital Inc. (GLXY) Earnings Call Transcript & Summary

All right. Welcome back, everyone. We are super pleased to have Mike Novogratz, CEO of Galaxy Digital, with us today. Mike has certainly had an incredibly interesting and successful career, actually, multiple careers. And we're honored to have you with us here today, Mike, for a discussion. Thanks so much for being here.

Thank you.

I thought what we'd do is maybe have you give a higher-level kind of overview of Galaxy first. I wanted to get into some sort of blockchain and crypto more general industry questions. But maybe Galaxy is a publicly-traded diversified cryptocurrency company trading on the Canadian exchange, I think. But it doesn't -- you guys don't fit one aspect of crypto and blockchain. Maybe it would be helpful to start out giving a high-level sense of what the company encompasses, what the mission is, that type of thing.

Sure. And first of all, thanks for having me here. Listen, when we started Galaxy in February of 2018, my idea was to build a public sector company that allowed people to make the blockchain crypto vet, and so that meant using our own capital to invest in the ecosystem. So we've invested probably over 100 different companies in new protocols, new tokens and infrastructure-like exchanges and custody, all across the ecosystem in the metaverse, in NFTs, we've used our own capital to invest. We have a portfolio of those companies, and we trade those tokens, but we also decided to build businesses in each of the kind of traditional almost investment banking businesses. And so we have a sales and trading business where institutional customers and buyers sell tokens. We've bought BitGo, the second largest custodian. So we'll have a custodian wallet business. We have an asset management business, which is over $2 billion in AUM and growing fast, about to announce some big partnerships where we manage other people's money, mostly institutional. We have an investment banking business, where we're giving banking device to customers. We have a growing mining business, where we use our own capital to mine, but also do mining finance, derivatives for miners. And so the idea is to kind of be all things in the ecosystem and give the public sector -- the public equity investor a simple way of just play in the space. We should be correlated with growth of GDP in the space. And hopefully, we do a lot better than that. What's interesting to me is, 18 months ago, we had been investing and investing and kind of building up relationship and infrastructure, but there was no institutional business. And the pace of which we've seen institutional adoption in the last 18 months is literally breathtaking. I'm getting 4 or 5 e-mails a day from either finance people or corporate people, asking for help. Who do we hire? How do we get in? And so one of our challenges at Galaxy, we'll be 500 employees, I think, probably by February 1 when the merger closes, is how do we keep up with the massive growth that we're seeing. You got to hire the best talent. You got to stay on the cutting edge. You got to integrate them into your firm, but I've never run as fast as I'm running right now.

That's amazing. With that out of the way, and we're going to get into some of your specific product offerings and maybe the synergies between them later, but I wanted to start off with kind of an almost impossibly broad, higher-level question. If you compare blockchain technology and crypto to other past sort of seminal technological shifts or advances, where do you rank order? How transformative will it be...

It's a great question.

In the context of history?

So listen, the Internet in our lifetimes is by far the biggest transformation. And what do the Internet do? It took the value of information and pancaked it, right? If I want to figure out the GDP of Kenya, I used to have to get in my car, drive to the library, get an Encyclopedia Britannica that was 3 years old and figure out what it is. Now I can Google it in a second, and I know it's 95.1 billion. And so information became broadly free, and that had all kinds of implications for society. Unfortunately, in some ways, the idea that it democratize things was true and untrue. Most of the value accreted in these giant silos, Google, Facebook, where people had sold access to that information, sold it for free for your data or sold in other models for some money. But what the blockchain does and what Web3, the crypto revolution does, and I think it's important because it was really only in the last 2 months that the market realized that this wasn't just a Bitcoin story, right? That this wasn't just a story of traffic at central banks, and we need a hard asset and Bitcoin is the digital goal, it's been the hard asset of the future. That's still a really important story. But the bigger story is that blockchain technology, that's the Satoshi's white paper, allows you the best value in individually unique digital objects. And so web3 is the Internet of value. And you're seeing an explosion right now in NFTs, right, digital art. You couldn't have digital art before Bitcoin because, again, when I think about Bitcoin to make it simple for people, it was the first digital signature you could encounter. Before Satoshi's white paper, anything online, we would just control copy paste. Hey, I just made a -- 500 of the Bitcoin goes to the moon digital shirts. But once we created that capacity to have digital uniqueness, digital scarcity, it changes everything. And so now we've got this ecosystem, this growing peer-to-peer ecosystem where we can ship value from one person to another with no middleman, and that's radical. And so artists, musicians, anyone with an IP are all looking and say, "How do I look at my business model?" Community can get monetized. We never can monetize community before. Culture can get monetized. And so we're literally -- someone asked me, "What inning are we?" And I was like, "Think about going to a NASCAR race. And there's the green flag and you're running the cars before the race, and then the checkered flag comes out to start the race. Like the checkered flag just came out. The race just started last week, right? We haven't missed anything. It literally started last week, like Web3 is now a thing. It wasn't a thing 6 months ago. It was being built. People are talking about it, but we now have critical mass. And the same we, Walmart and Amazon, put up sign, help-wanted signs for crypto engineers and for crypto expertise. Visa has gone on and bought an NFT and has really publicly committed to Web3 and both for payments, right? They're doing a huge amount in -- with crypto payments. Well, they bought NFT. And I spoke to the senior guy at Visa that ran the small project and he said, "We think digital goods is going to be our biggest growth area." Right now, you use a Visa 0.9x a day, the average family has one, to buy something from Walmart or Amazon or wherever, a restaurant. They think in the future, you're going to be buying 10 digital goods a day. 10. So they think they have 10x growth in [ suedes ]. And so one of the biggest payment company in the world, if you think about Visa, or processing companies, a $500 billion market cap says, "Hey, we think this is the future." People have to listen. And so I think we hit the critical mass point where every single company is saying, "How do I play in this?" As an investor, if you're not invested into Web3, it's late not investing in the Internet in the early 2000s. You just can't be in that position.

And do you think that we have a crystallized and clearer view of what the kind of -- the next kind of chapter of growth in the space will look like? In other words, do we have a view that it's NFTs, it's layer 1s and layer 2s and we've got it all sort of sorted out? Or is this something where we have yet to kind of catch a glimpse of what the killer app might sort of be that takes it over the hump? Or are we sort of -- can we see it or not?

I think NFTs were the first big test case, the use case where people now understand this is the future. Will the NFT prices that are being paid hold up? Most won't, right? There's a bubble in kind of individual specific pricing. But the idea of value transfer, uniqueness in the digital world is here, and it's being stamped here. It corresponds with the growth of this thing we call the metaverse, right, with more and more people working and living in this gamified world of VR and AR and computers and phones. And so it beautifully corresponds to the growth of that. I originally thought payments would be the first killer app. I still think payments will be really important, right? China is coming out with their crypto renminbi. I think it's a scary project because it's so centralized. Remember, a blockchain of one validator is a really scary thing because you have a programmable money that one guy could control. Well, a blockchain of 3 validators will scare the hell out on me as well because they could be buddies and they will wink, wink, nod, nod. And so what we're going to see play out in the next few years, is this battle of level 1s. Ethereum, by far, the dominant platform with the most developers, the most use case, the most intellectual capital on it, but very slow because it's very decentralized. Decentralized is good, it makes it safe. No one can screw with it. If we're going to literally build the infrastructure of the future on top of it, we want it really safe and secure. But people are antsy, and so you've got blockchains like Solana.

Solana or -- yes. Right.

Just blown up. It's blown up because you've got Sam Bankman-Fried behind it and he's a boy wonder. You've got good investors. It's really freaking fast. And so if you're a developer, you could build your game or protocol on Solana, it's very easy, right? Solana is not nearly as decentralized. There's going to be a debate amongst consumers that even care, right? Is it safe enough? Do they even understand it? And regulators, are we going to let the future of finance and commerce be built on something that may be isn't as decentralized as we want? And so those are questions that I think are going to play out. And I just pointed those, too. There's Luna. We've got a big investment in this token Luna. It's working in Korea. It's one of the first protocols where we'll stop payments in Korea. Now 9% of payments are happening over the Luna blockchain. So it's not like a sandbox anymore. We're out of the sandbox. We're operating in the real economy. And so -- but it's another blockchain that's less decentralized. And so how that web of computer power, really authenticating computer power fits together? You probably need an IQ a lot higher than mine to figure out, but I think we'll all watch and opine on as it plays out over the next few years.

Well, that's a good segue to a question on the regulatory environment. As equity investors are used to kind of looking at the regulatory structure and thinking this is something that can really control the destiny of an industry, I think, what fascinates me about blockchain is that it's a tricky thing to regulate candidly. But I just was wondering if you had any view on what you think -- maybe we're limited here to just the U.S. What do you think is going to happen here in the U.S. with all these competing agencies that seem to be sort of trying to figure out what to do with this regulated by enforcement or whatever?

It is complicated because you've got Bitcoin, which, in lots of ways, is a report card on how the Fed and Treasury you're doing, right? If we have prudent monitoring in fiscal, prudent -- voted on by this wild group of -- a wide ranging group of investors, people don't need hard assets like gold or real estate or a Bitcoin, and it will perform less well. If we continue to buy $120 billion of securities a month when the economy seems pretty darn strong, the Bitcoin adoption curve is going to keep going. But so that doesn't worry regulators much because it's gold, right? It's digital gold. It's not competing with the dollar at this point. It's people using it as a hedge versus a slow debasement of the dollar, right? What most likely we're having to slow debasement of the dollar? There is some possibility, though, I wouldn't bet on it, that we have a much faster debasement of the dollar, i.e., you can be of that as [indiscernible] like no one should root for that, right? You'd have a breakdown of civil society at that plane. And so that's not really the bet Bitcoin people are making. They're making the bet that there's going to be a slow debasement. So regulators can be okay with that. The moment people start saying, money, central banks get nervous as heck. This is going to be the new money we're going to replace. And so I think our language is very important on how we communicate with regulators, how they understand them. The regulators are way behind in their understanding of the crypto space. That's their fault. But more importantly, it's our communities' fault for not having done a better job of educating both regulators and politicians. The good news is regulators are 2 steps ahead of the politicians. The politicians are literally on step 1. And regulators, the younger people, at most of these organizations, get it, and they're coming up the curve quick. And so I'm hopeful that we get some clarity and hopeful that we get good regulation. No one wants to regulate a new industry out of business, right? This is Web3. And the moment people understand it, the progressives who hate crypto will be like, "Wait a minute, this is really progressive." It'd piss out the rent tasker. It allows artists to actually make money instead of a gallery making all the money. It allows young people to instantly get in business. And if their stuff is supported by the community as it appreciates in price, they get to participate alongside of that appreciation as opposed to, well, my god, I sold my genius work for $11 because I was broke, and now it's worth $1 million and I got none of." And so it's really a progressive movement on the one hand, and it's a libertarian movement on the other. And that's what makes the politics of it so confusing, right? Most people would say crypto's libertarian is freedom, Bitcoin is freedom. But when you really think about what we're doing in Web3, it's really progressive.

Maybe it's time to shift over a little bit to Galaxy specifically, and I think everybody is interested in tracking this kind of institutional adoption. You just mentioned some real signs on the ground that the wave is kind of maybe here or will soon be here. So what are institutions kind of -- when they ask you questions, what are they trying to -- what problems can you help them solve? What are they looking to solve in order to get involved?

Sure. So there's a wide range of institutions, right? Just in our trading desk, we already trade with over 600 different institutional counterparts. So that group wants to be able to buy a whole Bitcoin Ethereum or other tokens, right? So you're giving them liquidity, you're giving them custody, you're giving them market information on what's happening and why. Similar to, quite frankly, a foreign exchange business. You're providing derivative option, hedging and structure, new structures. Family offices might like those more so than others. The way I look at it is, I've been on a journey of first investing in Bitcoin and then understanding what Ethereum was and using my own money first and then Galaxy's own money to understand the ecosystem. And we are translating those lessons to our customers in real time. So our customers in the investment banking business, our customers in the asset management business and the sales and trading business. A lot of our learnings comes from our venture investments, right? We've got guys here in our interactive business. So interactive would be metaverse, Richard Kim and Sam Englebardt, right? We had -- the only outside managed funds in the venture space we had were in this space. We had a $300 million fund that's been invested. We've just raised another $325 million fund. So that's investing in things like gaming companies, mythical games or the big -- a lot of this generative art in NFT is being done on one platform that we bought 20% of our blocks. And so it's through those investments and those relationships that I've met all the NFT artists and these protocols and then can understand where that market is going and to translate that to our hedge fund than we [indiscernible]. And so very similar to a classic investment bank, it's can you build an ecosystem where you are a go-to partner for people because you're bringing them value-added knowledge, and I think that's what we're trying to do here. And we're starting to see the fruits of that really pan out. It took a while because, first, you have customers and then you have to have salespeople that come up the curve. And people always go up the curve faster when they're doing business, right? So 2 years ago, we were banging a lot of phones and people were listening and there were no tickets being written, and now we're seeing that the wild acceleration in each of our business lines. And so I think this next 12 months will probably be the most exciting 12 months in our company's history. It may be our company's history ever because it just feels like the checkered flag just went in.

And do you see -- I wanted to ask about your perception of where the larger traditional financial institutions, say, like a Goldman or a JPMorgan or a Barclays. Are there -- everybody seems to be dipping their toes in the water, trying to figure out how to operate this stuff. Do you see the competitive environment for that side of your business intensifying? Or how do you look at that?

Yes. We see them, all those potential partners. Most of the big investment banks are on stage 1, which is let me create a product that I can give to my wealth management clients, and we are a great partner in that business. We partner with Morgan Stanley. We partner with lots of people to deliver that product. They're all looking at how do I become a competitor, how do I end up trading. Because what's going to happen is as the U.S. and Europe move to stable coins, right, either a Central Bank issued digital currency or a stable point, roughly the same thing with big nuance differences. How can you be a foreign exchange desk doing a euro trade, a dollar versus euro trade when some of it's in traditional and some of it in stable point, you're going to have to be able to offer both. And so I think in a relatively short period of time, all investment banks will have to have a crypto trading business because it's literally part of foreign exchange forgetting all the other sides of crypto. And so there's a big lending business now in crypto, right? Defy lending, lending against margin lending, mining lending. Well, if you're a traditional bank, if you're Bank of America or if you're Barclays, lending is kind of your thing. And so my guess is we have a head start, we hopefully have an intellectual capital moat. But by no means do I think it's a thick moat. I think we've got, again, a 3- to 4-year head start, which I hope -- I'm constantly living in fear of the rest of competition coming. Because these banks are so big, because Barclays is so big, because they have the Fed regulating them and the regulators are still slow with clarity, I think, it could be a few years more that we get a chance to really build out our business and our relationships before Goldman Sachs is a competitor.

And switching gears a little bit. In your asset management business, I've read that you've reached about $2 billion in AUM and announced some pretty significant partnerships. Maybe you can talk about that slice of your business, your strategy there to continue kind of growing and differentiating.

Yes. We had a strategy really which was let's partner with big distributors of products and let's help build that product and deliver our intellectual capital through their giant sales forces. Like I said earlier, we're going to announce a couple of big partnerships in the next few weeks. We're, at this point, a 250-person firm going to 500. You look at the distribution sales forces of some of the big ETF providers, they got 1,000 salesmen. And so we're going to not compete head on, we're going to compete -- we're collaborate with partners on that. We think our value add is really understanding the space. We work with Bloomberg on creating indices for the liquid tokens. We're moving into creating indices for equities, and so, I think, it's a good strategy. It took a long time to build, and we're starting to hockey stick. And so I would be disappointed if our AUM doesn't grow substantially in the next 12 months, right? It took us 3 years to get to $2 billion. I would certainly hope it takes us less than a year to get to $4 billion. It's just the pace of adoption is picking up to such degree. We're roughly $4.5 trillion -- I'm sorry, $2.5 trillion of GDP in the space of total value in the crypto space. That's on a global -- what's global net worth right now? I think $440 trillion, something like that. It might be even higher in the spot market. It goes up every day. And so think about that, that's about 40, 45 basis points of global net worth. Like it would be crazy if crypto and Web3 isn't 2% to 3% of global net worth in the next couple of years, which is a 5 to 6x jump. And so it's not going to be the same 9x jump we just had in the last 18 months, but I think you still could have 3x every 18 months for a while, 4x and 2x or 1x just like any growth curve, but we're still very early in the expansion of wallet share, of mindset share.

Mike, I'm going to hop around and talk about a couple of the different parts of your business because it's so fascinating the way you guys cover the gamut. But before I do that, I wanted to ask, how would you describe the kind of synergies between all the various parts? I mean there's a big -- another big question, but like I understand the value proposition for the investor of getting an investment in more holistic kind of blockchain crypto asset. But what about the synergies? What do you unlock?

Yes. So let me just use one example in venture. So it's clear right now, money is not the differentiating part of why someone makes a decision to accept investors in their new ventures, right? The hottest venture everyone's fighting like crazy to get in. There's great competition that we have in this space, right, [ ASICs, EZ ], Paradigm, Polychain, Pantera, all big and very credible venture businesses that we're competing with. And so what do we offer? We offer them pay. Take our money as partners, make us partners. We have BitGo, the second biggest custodian and the largest wallet provider in the world that can make sure your protocol gets built into their wallet, which powers exchanges all over the world. That's a huge win for any new venture. We have an electronic exchange market-making business. We can market-make your token. Everyone wants liquidity in their token. We can stake on your token through our lending business depending on what type token, that's usually the biggest advantage. We can promote it through our sales and trading and research department. I can promote it through the perch I have on social media and real media or old school media, whatever you call it. And so our value prop to the on-venture fund -- the on-venture founders is pretty strong. Now what does that do for us? It's like a flywheel that we're benefiting and making money all around the ecosystem. And so if it's 1INCH or Luna protocol or whatever one, it also -- as you're invested, your whole firm ends up -- a few of us, most is getting more knowledge of what's that ecosystem. How does it work? Our value to most of our sales and trading clients is helping them come up the curve, right? When I was a salesmans at Goldman Sachs, way back, I always thought my job was to make the guys, I talked to, sound smarter. And that really is the job of our workforce here. We brought a guy named Mike Daffey, in Goldman Sachs. He had been 20 years under management committee. He had been the Chairman of Global Markets. But more importantly, he's probably the best client guy on Wall Street in the last 20 years. And I brought him in to be Chairman of the Board even though it was -- I'm the largest shareholder and I founded the company because I wanted our customers to know that we are client-first right? That this was not a family office anymore. We are a client-first focused merchant bank for the 21st century. And I think Michael is going to help a ton. He started literally 3 days ago, both as our Chairman but also as a Senior Adviser. So he's picking up the phones and calling his old relationships, setting up meetings. And so very exciting to have him on board. But that's the synergies you hope to see, and a lot of it is getting that flywheel going.

That goes a long way to answering another question that I frequently get asked by investors, which is, why buy kind of a derivative crypto investment as opposed to investing directly in the asset class itself?

Well, we have 2 reasons for that. One is public shareholder investors can't get access for venture. Now some of your clients, I'm sure, can put money in the venture funds, but there's no public sector way to do that, public equity way other than Galaxy. But two is the infrastructure, like the stable earning business from BitGo and our trading business and our derivatives business, our asset management business is growing like this. And so you're looking for a growth equity, like, listen, if I didn't have a strong confidence that the GDP of the space was going to go from $2.5 trillion to something much higher, I wouldn't be banging my fist to tell people that our stock is cheap, right? Part of the bet anyone makes in the space this early is still macro, right, that there is going to be adoption and a lot of adoption. But given the firm belief in where this Web3 is going, it's hard to see the businesses we're building with our small advantage of 3 years of, like I said, learning, not growing at an accelerating rate.

That makes a ton of sense. So when did you make the decision to dip your toes into mining? That's kind of -- that's an interesting move. Maybe tell us about that a little bit.

Yes. Part of it was situational. We had -- I had done mining in 2016, '17, and it wasn't a great experience for me. The markets were moving so fast. You would have been better off just buying Bitcoin and Ethereum. And Amanda Fabiano called us, she was leading Fidelity and she was such an expert in the space. And we thought, you know what, let's do the same thing. We're doing in venture. Let's use our own money, invest in proprietary mining. We now mine Bitcoins at less than $10,000 a point in the trading at $45,000. So that's a pretty good business. But her relationships with the whole mining community or solid gold for us to then say, "Hey, we can service you as lenders, as bankers, as derivative salespeople." And so you think about what a foreign exchange company did, you would go to all the corporates to help them hedge their FX. So a Bitcoin mining operation, a derivative operation, your biggest customer base are your miners. And so it was the same mindset. We were lucky that Amanda was available. We are going to pour a lot more money into the proprietary side, building out a much bigger mining operation. But I really think in the long run, the more valuable piece of that business is the customer franchise. And a lot of miners, just like a lot of gold miners and oil rigors, didn't come from a finance background, and so there's an educational process for them. Hey, you can sell calls and buy puts. You can do structured notes. We'll lend you against that. And so that business, like any business, is one of relationship and then education and then execution. But I'm really excited about it.

Yes, that's fantastic. Another interesting example of like you're saying between all these disparate parts of your business, which seemed to be quite strong. What about the international opportunity? How would you characterize -- I guess, first of all, do you have any plans to kind of move things to a more international footing? And how is the opportunity different -- there's another big question, opportunity different in Europe versus the U.S. or Asia versus the U.S.?

I think it's large in both places. We are very focused on building out Europe first and Asia soon after. We've got a good team in Europe already and have just started really a hiring ditch to pretty much build out what we're doing in the U.S. and Europe. There's not as much venture activity in Europe, but there's plenty. Israel is a hotspot. Berlin is a hotspot. Switzerland is a hotspot. And so we will look to both build and potentially buy with Aqua hires to build out our European footprint. Mike Daffey, who is our Board Chair and a Senior Adviser, is going to work out of Europe for the next 18 months, which helps lots of energy in his side. And so very excited. In Asia, we're still looking for -- we just hired a great COO. We're looking for the right team. We already have offices in Hong Kong and in Tokyo. And so Asia will come -- probably comes a little after Europe. But this is a global market. What investors have to understand, and it makes it complicated for regulators, we don't have a global bond market. You had a U.S. bond market, you got to bond market, you've got a Canadian bond market, you had a JGB market, you got credit markets in different areas. When you trade on compound, lend on compound, it's one market, globally. And so for the first time, we're seeing global markets. And so when you think about the TAM of that space, it's a lot bigger than people intuitively think. And so getting it right, betting on the right protocols, using the right protocols, connecting your clients with the right protocols, I think, is a big, big opportunity.

And talk to us about the BitGo acquisition. That was pretty high profile, and you've already touched on it in terms of some of the custodial services it offers. But maybe rewind back to that, those comments, and sort of talk a little bit more about how it fits into your broader strategy.

Shame on me. When I originally started this institutional business, I thought like in most asset classes, people would want you to custody elsewhere, right? You don't -- if I buy my bonds at Barclays, I don't custody with Barclays. I probably custody with State Street or somewhere. And maybe in the long run, crypto gets there, but it's not there now. So every hedge fund, every family office, it's complicated enough how to buy Bitcoin. They want to buy Bitcoin and keep it with, and so we realized we were short custody. And BitGo was the second largest custody. And I really got along well with Mike Belshe, the CEO there. But almost more important than the custody and wallet piece was I had invested in crypto, right? I had talked about it, we had sold it, we had traded it, we played with it, but we had never built. And with BitGo, we get, I don't know what the number is, up to 75 blockchain engineers who get to build on chain. The future of all of this stuff is going to slowly migrate to on chain, and so we want to be able to build on chain. And so we're going to be hiring more and more engineers, not less and less. The good thing about having a Deputy CEO who's a technologist is, his whole IT has done that, right? I haven't been a plumber. And so we're marrying in lots of ways the storytelling and risk assessment and risk understanding of the Wall Street firm with the technology understanding and the scalability in the platform of a tech firm. And so it's -- in some ways, Silicon Valley meets Wall Street. I pray and come back in 2 years and tell you what a great marriage. We're going to work really hard to make sure it's a good marriage, but that's the idea.

I get it. Okay. We only have about 2 or 3 minutes left. I wanted to actually end on kind of more of an industry question. This is something, again, Mike, you brought up at the beginning of the conversation, something I'm personally curious about. You have this sort of race between Ethereum and these sort of Ethereum killers. You mentioned Solana. Cardano is one that's made a big splash by having finally getting smart contracts after interestingly trading at a very rich valuation without any seeming functionality for quite some time. How do you see that horse race playing out? Do you see a future of multiple chains? Or do you see a situation where Ethereum will make the changes that it needs to, to its protocol in order to keep its spot on the top of the mountain?

I have a pretty diversified bet, and so let me tell you first how I bet on it. I've got a big Ethereum bet, and then I probably have an equal bet if I add up all the other level 1s. So call it 50% of Ethereum, 50% rest the level 1s. I don't think anybody is smart enough to know how this plays out. Are we going to have cross chain? Listen, in stable coins, it's pretty simple. If I was issuing a stable coin tomorrow like de novo coin back by the dollar, it would be on every one of the blockchains goes, why not, right? But on other things, that's not that order to make any economic sense. So where NFT is going to live in the long run? Right now, the minting fees, the gas fees on NFTs, on Ethereum are just too expensive to make high transaction businesses make any sense. But there are lots of level 2 solutions or side chains. You need a PhD to understand between the site chain and level 2, but these are more centralized blockchains that get hashed into the main blockchains. We're invested in immutable. It's doing great. There's a chain coming up soon from consensus called Palm, which I assume will do great. There are plenty of really good and useful level 2 chains that will plug into Ethereum. So it will be the -- if you think about it, the bridge between now and when Ethereum gets much, much faster. That's still my gut where this goes. But I have to say Solana and what FDX has done with it this year, right, it's up 138x on the year, right? Stunning. There are developers that I'm talking to, there are founders that are thinking -- I mean, I've actually just built on that because it's now in a critical mass. I don't want to get my numbers wrong. I think it's got 36 validators. Is that decentralized enough? We'll see. No regulators have talked about -- Gary Gensler has talked about decentralization in terms of is it a security or not, but not a decentralization in terms of do I want that to be the infrastructure layer that we allow all these businesses and hence consumers to operate them. It's a really complicated question. I remember delegated proof of state versus proof of state versus -- this is where the -- I think, the market will tell over time. I do think in the short run, just like in football, speed kills. So people have lack of patience. And so if these level 2s are going to do well, and I think places like Luna and Solana are going to continue to build. It's also can you get critical mass. One last thing and I'll shut up. There's an alternative thing going on at the same time. And Cardano's the perfect example of it, right? So if you'd asked me 18 months ago, I would have said, Bitcoin is a store of value. It just needs to be Bitcoin. It doesn't have to do anything to have value. But on the periodic table of elements, right, there are 114 elements, only gold has that spot. The other 113 need to be used to have value. So I used to give this space. So the other 13, you should belong the ones that are used more. Look at developer uses, look at transactions. And if that graph is going up at an accelerating rate, right, positive second derivative of use would be max long. What I missed is in this world of 0 rates, in this world of vulcanization of trust, in this world of a decentralization, a lot of these tokens represent something more than what their use case is, right? It's like my identity. And so if I go out and you can go on my freaking Twitter and laugh and make the same comment you made about Cardano. I can't believe it's got an $80 billion market cap because they don't want to really seem to use it, I just don't understand it. I have got hundreds and hundreds and hundreds of attacks by Cardano Twitter followers. It's like telling a Man U fan that Man U sucks or going to an Eagle's game with the Giant's jersey on. These ecosystems are unbelievably rabid. They're passionate. They -- it's like an anti-vaxxer. You can't tell an anti-vaxxer they're wrong, right? It's -- they have personalized this stuff. And so what we're seeing -- when you look at GameStop up again 10% today or whatever it's up, if it's GameStop or AMC or Cardano or Doge, you're seeing these ecosystems, which don't make sense to us as rational investors because they don't really have a proper use case. But there's an identity to them, and there's a viral nature of the Internet that they can create. I mean XRP is another one. They can create these fan bases, investor bases that have more than economic decision in it, right, have identity in it. And so it makes it really hard to short anything. I love shorting because that's how I get longer, the stuff I like, and there's not a rationality to it. And so I've learned my lesson that the moment that community gets really big, you're going to short it. Every time it sells, I'll take the profits because they are much more resilient than we thought. Could you imagine that GameStop become -- GameStop is a crypto at this point, there's no link to its profitability. And so who knows about Cardano. I mean I don't see any developers building on it, none of our institutional clients buy it. But it's the third biggest [indiscernible]

Mike, I really wish we can continue this conversation because I think this is where it gets quite fascinating with Bitcoin. To your point, it's a new form of the network organization of humanity, which, is as you said, there's odd layer to it, which is -- transcends the financial and everything, gets very sort of deep. But unfortunately, we're out of time. But what a great pleasure it was to spend some time with you. Thanks so much for sharing your insights with us.

You as well.

Appreciate it.

Thanks so much.

Cheers. Thank you. Thank you.