RAOUL PAL: Simon, good to get you on Real
Vision.
If you can give a bit of background about
yourself so people know who you are and then
we can start digging into some things.
SIMON DIXON: Sure, yeah.
My journey in finance and crypto has been
a 20-year journey.
When I started in economics, I started working
in investment banking, worked as a stockbroker,
then a market maker, then in corporate finance,
and then threw in the corporate towel in 2006
and started giving lectures on monetary reform.
I joined a movement called the Monetary Reform
Movement, which was a precursor to the Bitcoin,
started giving some lectures and got myself
invited to the first Bitcoin conference, wrote
a book called, Bank to the Future, Protect
Your Future Before Governments Go Bust, which
was the first published book in the world
to include Bitcoin, and I'm now an investor
in about 100 different companies in the industry
from Coinbase, to Kraken, Bitstamp, BitFenix
and many others, and founded a platform called,
bnktothefuture.com, which allows investors
to invest in the equity of companies in the
Bitcoin and crypto and FinTech industry.
RAOUL PAL: Talk to me about discovering your
journey of discovering Bitcoin and then starting
to think about the space and then we'll move
into the investments that you made and some
of that stuff, but I'd love to know how the
hell you got into it?
SIMON DIXON: It was when I was writing the
book, Bank to the Future, I was really getting
geeky and diving deep into many of the problems
in banking.
I even started reading bank charter papers
for the Bank of England and various other
things.
RAOUL PAL: What were the main problems you
were seeing when you were looking at that?
SIMON DIXON: I summarized it into three main
problems of banking that we were trying to
find a solution for.
The first is that when you deposit your money
with a bank, the bank becomes the legal owner
of your money, which really subjects it to
bail-ins and other things.
The second was that when they become the legal
owner of your money, they can get in the way
of your money, firstly, from you spending
as you choose.
Secondly, they are redirecting the flow of
97% of the entire money supply by where they
choose to issue loans using your deposit as
collateral.
They can actually end up creating bubbles
and property markets, because too simply because
they prefer it as an asset class in terms
of risk reward.
This becomes a problem where they're spending
your money.
Then finally, it was really digging into how
money is actually created and how different
it was taught in economics.
The end conclusion I came to is that in economics,
they were teaching this thing called a multiplier
effect.
Then when I tried to find out how the multiplier
effect actually worked in practicality, it
turned out the banks were just simply creating
as much money as they were willing to lend
and there wasn't much of a fraction, there
wasn't any real reserves to discern the so-called
fractional reserve banking.
It was the realization that because banks
are dictating the flow of money, they are
actually creating a digital currency every
time they issue a loan.
It's a digital representation of the pound,
the Euro or the dollar.
They actually invented digital currencies
so because all money is backed by debt, I
concluded that is actually the largest regulator
Ponzi scheme in history.
Really, that drove me to meet-- I met a guy
called Johnny Bitcoin who attended one of
my conferences, and he actually sold his house
to move into a squat in Old Street in London
with some of the early Bitcoin developers,
and I was so intrigued by it that one of the
persons, one of the activists that was out
there living in a squat organized the first
Bitcoin conference in the world of Prague,
and invited me to speak and from then on,
I realized what these people are creating
was actually- - RAOUL PAL: Which year was
this?
SIMON DIXON: I started writing the book in
2010, and then spoke at the conference in
2011.
Yeah, that was the realization that actually
what these guys are creating, I was very skeptical
about whether it would succeed but I bought
my first Bitcoin which was a physical Bitcoin
and that had five bitcoins on it so $25 or
pounds I think it was at the time and yeah,
I realized that this is money you can earn,
money that you can spend, money that doesn't
reward people for taking on debt and actually
rewards the saver because of its scarcity
and fixed money supply.
I actually saw it as a problem I was trying
to solve, which is how do you create a bank
where you can own your money, spend your money,
and actually have money supply that sounds
money.
That's why it intrigues me and I guess took
it a bit more seriously than your typical
banker at the time.
RAOUL PAL: What did you think of the value?
How are you thinking of Bitcoin at the time?
You were just thinking of it as a transactional
currency.
What was your-- because everyone goes through
the journey that they think they understand
what it is, they grasp onto that.
Then you go through the journey of realizing
you don't know anything about it.
Then you come to the other side figuring out
some of it.
Where did you start with what you thought
it was, and how has that changed?
SIMON DIXON: First of all, this is the technology
for a non-fractional reserve bank.
That was my first understanding because that
was the world that I was living in at the
time.
How do you create a nonfractional reserve
bank?
I was dealing with regulators in the UK, we
were trying to find-- bank to the future,
we were actually trying to create a non-fractional
reserve bank.
At the time, there was no concept of this
challenger bank that came later.
At the time, you had to have-- the regulators
told us, you're going to need 30 million in
reserves just to get started at the Bank of
England.
You're going to need 30 million to build out
your infrastructure.
You're going to have to step down as CEO and
hire somebody that's actually been a CEO of
a bank.
We were very disjointed by the process, so
Bitcoin to me was okay, here's-- RAOUL PAL:
I actually went through the same process in
2010.
Trying to set up a bank both in Singapore
and in the US for the same reasons and I just
gave up because it was just a nightmare to
do.
SIMON DIXON: Oh, that's fascinating.
I didn't know that part of the story.
Yeah, I'd say we-- and I remember the regulators
at the time, they just said, sorry, we just
wouldn't simply give someone like you a banking
license was the word at the time, so yeah,
we found Bitcoin.
We thought it was a non-fractional reserve
bank, we decided to invest in the industry
to try and support it.
At that time, we were the first company in
the industry, Mt. Gox had just been launched.
There was no real price.
It wasn't speculative at that time.
In fact, this is when Mt. Gox had early launched,
and the price during that week crashed from
$30 to $3.
We have a 90% correction in the period of
one day at the time.
Really, there wasn't no one was speculating.
It was really everyone was there in a mission
of us versus the banks and just trying to
create-- or all they were cypherpunks just
really were trying to create censorship resistant
money and that wasn't even a word, that word
came later but words to this effect.
There was no real concept of store of value
or whether this would actually-- whether the
scarcity would make it hard money, that came
a little bit later.
Yeah, the first was for me, non-fractional
reserve bank, the others were a way to circumvent
the banking system and really seeing it as
a way of transacting rather than a way of
actually storing wealth or trying to store
value.
RAOUL PAL: How did your understanding of it
evolve?
How did that lead you to start investing in
some of these startups in the space?
SIMON DIXON: I think the journey-- so firstly,
we started investing in startups because now,
Bitcoin did so well that I wanted to help
other companies and that's when we actually
pivoted BnkToTheFuture which was going to
be a non-fractional reserve bank to being
an online funding platform.
We were lobbying the regulators, the UK regulator
at the time was called the FSA, it's now called
the FCA.
We managed to get some changes, which allowed
for small amounts of investing online.
Those changes allowed us, after about three
years, to allow many of the early crypto companies
to fund through our platform.
We did the seed round for like Kraken, Bitstamp
and ShapeShift, many of these earlier companies,
and because we were actually working, rather
than focusing on fractional reserve banking,
we started focusing on securities laws.
Actually, that was the work that President
Obama picked up in 2012 that actually led
to the JOBS Act and the changing of the 1933
securities laws.
That was really from that three years of work
that we were doing in the UK at the time and
it just worked well, this online investing
concept for securities online.
In terms of the evolution-- and that's what
made me starting to invest.
Bitcoin just made us wealthy enough to want
to do that.
Our whole company didn't need venture capital
because we invested in Bitcoin.
Really, the understanding evolved.
I think when everyone had their story of being
Bitcoin pizza guy, so the more Bitcoin we
spend, the more we realize that in the future,
we just bought 100 million dollar pizza or
something like that, like Bitcoin pizza guy,
and everyone had their stories.
I remember many people who like celebrating
and selling out when they hit $1, $10, $100,
these different milestones, and then really
the rhetoric around, hold on, I'd rather just
spend my money that's going to go down in
value and keep my money that goes up in value.
Then really, the whole focus was around this
is digital gold, this is money that you want
to keep.
This is money that rewards the saver.
This is a wealth transfer for people that
are accessing the traditional financial system,
and it just became a bigger and bigger movement
from there.
RAOUL PAL: Fascinating.
Talk to me a bit about the platform you're
in [?]. Do people invest in individual shares,
or is it like a portfolio?
How does that work?
How do people even-- how did you even get
people to invest in this stuff?
Maybe bring you what the hell this was.
SIMON DIXON: Yeah, it was really-- RAOUL PAL:
It sounds ridiculous.
Why invest in Kraken?
SIMON DIXON: Yeah, the name.
That was a reason not to invest just because
of the name and now, it's a household name
that we just did a funding round of $4 billion.
At the time, there was no venture capitalists
that was willing to invest in the industry.
There was some very early stage ones but companies
like Kraken, they just couldn't secure the
funding because it was such an obscure industry.
The regulations were so uncertain.
You had to pitch Bitcoin then you had to pitch
the company then you had to pitch the regulations
and it was just too many hurdles to overcome.
When we created BnkToTheFuture, the first
license when we were added to the FCA register
was that we were allowed to work with UK companies
only and pool together investments from UK
investors only.
There was no Bitcoin or FinTech companies
really, the peer to peer lending was really
becoming a thing at that time.
Like the early peer to peer lending companies
like Zopa and Funding Circle were coming to
be, so FinTech became this thing, but Bitcoin
was like this obscure niche within a niche
that no one really cared about.
Really, we built a community and it was when
one of the first companies that we funded
through the platform was an investment company
called Bitcoin Capital.
It was myself and Max Keiser, Max Keiser was
the first to actually cover Bitcoin on public
television.
Then that created the-- Max Keiser became
this place where every time you mentioned
it on TV, the price went crazy.
We set up this Bitcoin Capital, and we just
simply pooled together a bunch of money that
we raised through BnkToTheFuture.
We invested one third of it in Bitcoin mining,
and the rest of it, we invested in companies
like Kraken and Bitstamp.
RAOUL PAL: How did you choose those companies?
You're not based in Silicon Valley.
You don't know any of those guys.
Your next market maker, so how the hell did
you figure out who Kraken is and Coinbase
and all this?
SIMON DIXON: Well, because we were so encaptured
after that first Bitcoin conference, it was
very easy within-- nowadays, my full time
job is to try and keep up with this stuff,
and I can't keep up with it.
At the time, within a couple of weeks, you
would be able to know-- you'd know all the
CEOs of all the companies, you'd be able to
communicate with the whole community on the
Bitcoin talk forum.
It was a very small niche community.
It was very easy to get involved with at the
time.
There was only so many people you could know
and there were only a few companies.
Our first strategy was let's just get all
the companies and try and help them.
Our first was BitPay, it was invested in Max
Kaiser's fund.
Where it really kicked off for us, where it
changed from a niche where we were trying
to support the industry was when we invested
in Bitcoin mining at the right time.
We were paying, our investment company was
paying out Bitcoin dividends every single
day, we paid out thousands of Bitcoin to all
of our investors.
Then suddenly, Bitcoin went from its-- after
the Cyprus bail-ins and towards before Mt.
Gox crash where it had its first major bubble
to $1,000 and we were sat on the largest community
of wealthy high net worth investors that made
money through Bitcoin.
We did the same through Ethereum, so a lot
of those Bitcoin people, we created a security
called the Ether Mining Backed Security and
we paid out 10s of thousands of ether to all
of the Bitcoin investors that made money through
Bitcoin.
Then that went to-- this was under $1 at the
time, and it went up to $1400 in its peak.
All community came from creating investment
products, or investors becoming wealthy and
then diversifying into other deals.
Those were just our foundations.
We did the first security token with BitFenix
after the hack in 2016, where you could convert
a token into equity and really, we've just
always been-- because we were dealing with
securities, we weren't circumventing securities
laws.
We were doing everything through equity.
When we explained it to regulators, yeah,
it was a bit edgy.
We were trying to explain Bitcoin, but really,
this is just a security, it's equity.
Therefore, and because we took the proactive
approach of trying to get on the right side
of innovation and the right side of regulations,
and we did it through traditional products,
many of the other companies are trying to
circumvent securities laws by saying a token's
not a security because it's a cryptocurrency,
it's money, and these types of things.
They all got in trouble but we were just plain
vanilla securities, so we're investing in--
RAOUL PAL: What did they think about the mining
then, because that must have been something
that blew their minds.
Because also, you're not only investing the
equity of these companies, but you're also
mining for Bitcoin and ether?
SIMON DIXON: Well, again, we were just raising
money for an investment vehicle, and then
making investments.
One of those investments was in mining.
We just happen to pay-- rather than do like
in structures like cloud mining, which evolved
later, we were just paying out a dividend
every day in Bitcoin through the platform,
because we could automate the technology,
we could pay out real time dividends, and
we could pay every single day and we could
pay in a cryptocurrency.
That was really-- it was a few deals in the
foundational, we started investing and then
on our platform, we allow everyone to co-invest
with us.
When the VCs started coming in, we would get
a company where the VCs-- we'd built relationships
with all the companies in crypto already.
They were just starting to get their VC funding
and then they would allocate some to our platform.
We put together a special structure and our
investors globally-- at this time, we started
working with more and more securities laws
and we were just one step ahead of all the
trends and trying to stay ahead of the compliance,
before our industry got disrupted with ICOs
and all these other things that came later.
RAOUL PAL: Those early investors, including
yourself, how did you deal with the price
swings?
Did you trade a position?
When it goes up to 1000, you bought at nothing,
it's very difficult not to sell.
How did you deal with all of that?
SIMON DIXON: We weren't actually trading for
them or investing in cryptocurrencies, it
was always equity.
When we did things like mining, we were just
paying all of the mining investors-- RAOUL
PAL: You held Bitcoin over that period?
SIMON DIXON: Yeah.
Me as an individual, yeah.
I just, very early on, started to appreciate
because of my belief about money and the problems
with the debt creation and money system.
I took a speculation and I spent it as I went
along.
For me, when someone says to me, do you want
to sell your Bitcoin?
I hear, do you want to buy dollars?
My answer is, I'll buy some dollars or I'll
buy some pounds or I'll buy some euros depending
on where I am, but only the amount that I
need for my living expenses.
I'm not going to save in an asset class that's
going to go down in value, a currency.
For me, Bitcoin was-- we started to really
develop this understanding that this could
be the digital scarcity.
This could actually be a-- RAOUL PAL: How
do you not question that when it falls 90%
three times in a row?
It's very difficult to say it's a store of
value and see it fall 90% and then only again
to recover and go much further.
It's psychologically difficult.
SIMON DIXON: It was very difficult, but the
way that our company was structured as we
always say, because we had a combination of
fiat currencies and crypto so we get a commission
off every investment and many of our investments
were made with Bitcoin.
Other investments were made with dollars,
and we always had enough dollars to never
sell our Bitcoin.
We always saw it as long as we got enough
dollars to meet our operational costs as a
company, and me as an individual, as long
as I've got enough dollars to meet my living
expenses and lifestyle, which was very frugal
in design, then I don't need to sell those
bitcoins.
There were times when it was really scary.
It was very questionable whether it would
succeed but after seeing my $30 Bitcoin crash
to $3 and then my $1,000 Bitcoin crash to
$250 and then my $20,000 Bitcoin crash to
$3,000 I became okay holding until my $100,000
Bitcoin crashes to $30,000.
RAOUL PAL: Where do you think-- before we
dig in more about the space and other stuff,
where do you think Bitcoin's going?
Does your thesis still hold up?
I'm sure it still does.
Therefore, where do you think it goes?
Just in value terms, and then we'll talk about
the [?] terms later.
SIMON DIXON: On my YouTube channel in 2011,
I uploaded a video called the Great Depression
of 2020 which just suddenly emerged because
2020 became a significant year.
I had no idea there was going to be a pandemic,
but we were following the economic trends
and I've still got all the archives from even
that first Bitcoin conference I spoke at.
I'm really glad that I recorded it, uploaded
it to my YouTube channel, had very few views
but now, it's becoming an important archive
of the journey.
The trends that we see again, Bitcoin has
utility for three reasons.
This is what I see it as any scenario where
you need to own your own money and so when
we saw pockets of adoption, like the first
adoption, it was some of the early adoption
was when we had the Cyprus bank bail-ins.
We were able to compare and contrast.
Oh, by the way, did you not know that if your
money's in the bank, you don't actually own
it.
There's this Federal Insurance thing.
RAOUL PAL: That was the lightbulb moment,
I was living in Spain at the time.
I saw the Cyprus bail-ins and that was the
lightbulb moment for Bitcoin for me, for that
reason.
SIMON DIXON: Exactly.
Then the second utility is money that you
can spend without a middle person.
The lightbulb moment for me was when we saw
a perfectly legitimate legal company Wikileaks,
was because of its political exposure, because
governments don't necessarily want them doing
what they do, and because of its impact on
freedom of speech, they were blockaded by
the entire banking system, Bank of America,
Visa, MasterCard, PayPal, but they were able
to transact in Bitcoin.
Any scenario, the second utility is any scenario
whereby you don't want a middle person in
your money.
I believe in law enforcement doing their job
but I don't think that-- we've now hit upon
a time in our day and age ever since 911 whereby
the government have relied upon the financial
system to do all the policing of money laundering.
Now, if you can create a situation where an
individual can spend and you can attach an
immutable record so if you're committing crime
with that, then this immutable record of you
transacting, if they ever attach your identity
to those transactions, is there so for me,
using Bitcoin to commit crime like we've had
all the Twitter hacks and stuff this week,
it's just a really bad idea because we saw
with [?] that eventually, if they can connect
your identity, you don't have any plausible
liability or any of these things because of
that record.
What it does is it takes the middle companies
out from policing.
Now, if you hold Bitcoin at an exchange or
with a counterparty or a custodian, then the
traditional financial system still prevails.
They own that money, they can spend that money
and they can do fractional reserves, as we
saw with Mt. Gox, where they have more Bitcoin
than Bitcoin on deposit.
The second case as people understand and that's
when you can spend your money, you take out
that middle person, and then it goes back
to you being a law abiding system citizen
and law enforcement doing agile.
The third was, I think, the case that we're
seeing right now, which is where for the first
time in a long time, people are actually questioning,
can we really, really print all this money?
Can the Federal Reserve really create this
much money?
If they can, why are we actually even paying
tax?
People are asking these interesting question.
If they could just do that, and it works,
why can't they just do that, and so really
when you have a use case of people realizing,
like you're seeing in countries like with
hyperinflation and various other things, people
are starting to realize, well, there is value
in digital scarcity and gold has traditionally
played that role.
I think gold has a place in everyone's portfolio,
but what do you do when you're in a lockdown
scenario, planes don't work?
Because of gold, you have to store it in Switzerland,
or in Singapore, because it's dangerous to
store it in your own place.
Bitcoin creates an alternative to that whereby
by that point, you want your Bitcoin and so
really these different use cases of owning
your own money, spending your own money in
digital scarcity and at different times in
the last 10 years, things show up that made
people realize that they're important.
We talked about Cyprus bail-ins, there was
demonetization in India where people were
queuing outside and reinvested in Ino coin
and different companies that were doing Bitcoin
in India.
They've quadrupled their volume on the exchange,
just because India decided that they're going
to make certain notes illegal, then you had
to digitize it through the banking system
and you had to queue outside with your life
savings in a cash and gold driven economy,
putting your life at risk and then the bank
running out of notes and all sorts of stuff.
It's these use cases.
Today is another one of those use cases because
I personally believe that we're entering--
we've already started, we won't know whether
it's defined as the great depression or 2020
but I think we're in it.
I think we're headed to a 1944 style monetary
renegotiation, and I think people are going
to realize that the largest central banks
in the world are going to get a seat at that
monetary renegotiation, probably because of
how much gold they have.
I think smaller central banks are actually
going to look at Bitcoin as a play to try
and make a country isometric bet in order
to try and get more power.
I think it's really interesting time that
we're seeing right now.
RAOUL PAL: You remain very bullish on the
Bitcoin price overall, and its utility function
increasing as well?
SIMON DIXON: Yeah.
I think every year, Bitcoin has got more useful.
I do think many of the different use cases
hasn't made it more useful but the same use
cases it started with, more and more people
that need that over time.
I think the utility goes there, and the only
way that they can-- there's only 21 million
Bitcoin, 18.5 of them have already been mined.
The only place to get those Bitcoin is to
pay a higher price for them from people that
need to sell them.
It's digital scarcity.
It's supply and demand.
RAOUL PAL: Talk a little bit about the rest
of the space.
How did you start getting involved in the
rest of the space?
Because the Bitcoin thing is very specific,
you've gone through that journey, you had
a specific problem in mind.
This was the solution you saw, made total
sense.
Then you've been involved in a broader sense
in the space too, in the whole digital asset
space.
Talk me through that journey a bit as well,
because that's interesting.
SIMON DIXON: Firstly, I see Bitcoin-- I haven't
seen anything that competes with Bitcoin.
I still think that nothing competes.
There's only one shot that we have for society
today at achieving digital sound money, and
I think that's Bitcoin, but that doesn't stop
us from having lots of interesting conversations.
One of the conversations that happened in
the early days of Bitcoin was, well, can't
we put assets on the Bitcoin blockchain?
One of the people that was really picking
up that conversation was Vitalik who created
Ethereum.
He was trying to create it was called colored
coins at the time, and we were having this
whole conversation around disrupting stock
markets using assets that exist on top of
Bitcoin.
Vitalik was actually just a journalist for
Bitcoin Magazine.
He couldn't get the changes that he wanted
so he started creating his own project.
It was funded by the Bitcoin community, which
was, essentially you could chuck some of your
bitcoins into this project that he called
Ethereum and they would-- he was trying to
cater for the different use cases.
At the time, it was really thought around
as a decentralized internet.
Later, and where I think it reaches where
it is today, is it firstly it had this boom
where people were creating tokens, and people
thought that they weren't securities so they
were circumventing securities laws.
They're not called down when they realize
that they're securities and the interesting
thing is in 2017, we got disrupted from the
companies that we were funding because no
company in 2017, we had many of the major
companies signed to sell their equity through
our platform.
Then suddenly, we got the call from each and
every one of them.
Sorry, I'm issuing a token.
All of our investors are saying, why would
I want to invest in equity when I can make
10, 100X in 10 minutes in these tokens?
Literally, we got disrupted by the companies
that we were funding.
Then it all went circular.
People started to learn the value of equity
again, and a lot of the-- but yeah, so then
all those tokens came along and people realized,
actually, it doesn't circumvent securities
laws and now, we're getting this whole decentralized
finance space, which is really people searching
for yield and interesting ways by converting
their fear into what's called stablecoins
and that was an interesting one as well because
we were shareholders in BitFenix.
For about two years, the original vision behind
Tether which is the largest stablecoin today
was just to try and make it easier for people
to transact between exchanges.
Once you've onboarded into fiat, you could
then send the digital representation of fiats
and BitFenix and Tether accidentally became
the bank to the entire crypto industry because
these different exchanges came along and they
realized, oh, we don't need banking.
Binance came along and said, hey, we don't
even need banking, we can use Tether.
BitFenix become the bank and suddenly, billions
started coming into these banks and BitFenix
became the bank of all of the crypto to crypto
exchanges.
Then Binance became this huge growth story,
simply because they didn't have to deal with
banking, and they passed it all on to Tether
and so we had these really interesting stories
as a result of that, but prior to that, Tether
was just really, really boring.
No exchange would use it.
RAOUL PAL: What about the discussions people
have about Tether and the fact that it's so
opaque, that nobody knows if it's fully backed
and that stuff?
What's your view on that?
SIMON DIXON: Again, I try to give disclosures
whenever I'm talking about the company, I
am a shareholder of BitFenix.
BitFenix is the management team that creates
BitFenix, the same Tether.
It was created at a time, firstly, it's a
banking problem.
BitFenix and the whole industry, if I could
put one theme of what has held this industry
back, it's been a banking problem, which is
ironic.
Trying to disrupt banking and banking becomes
the thing that has been the most problematic
side of it.
Tether has been-- you can add a few million
in the bank, but once you start having billions
in the bank, you start to get under the radar
of these different banks and then you have
to then move money from one bank to the other.
Then in order to try and transact and meet
people's demands, because you reach the stage
where you can't find the bank that will serve
you, BitFenix and Tether essentially had to
deposit some of their money with what looked
like a payment processing company, you could
call it a shadow bank.
Because of that, when the shadow bank got
in trouble with the government, some of the
money disappeared, it was seized by governments
so you've got money in the banking system
that is seized by governments that is IOUs
on a stable coin.
You have to get pretty innovative at this
stage to try and overcome these problems.
These are all banking problems and later,
other stablecoins came along and they had
the benefit of being launched at a time when
banks understood this, there was more regulatory
structures that you could put in place, but
Bitcoin, it's a challenging thing.
They haven't been able to get that audit done.
I can't comment on it.
I am a shareholder.
I don't have insider information but I know
what's publicly available and they've been
plagued by banking problems.
They've now found a stable banking solution
but they've still got to overcome these challenges.
RAOUL PAL: What are your thoughts on the defi
space?
Because it seems that-- there's some incredible
yields going on but I always assume that with
incredible yields comes risk that people don't
understand.
Because usually, the financial markets arbitrage
it away pretty quickly.
How do you think about this defi space and
where it is currently now?
SIMON DIXON: Yeah, so people often ask me
questions like this.
What do you think of this coin?
What do you think of defi?
What do you think of these things?
I think you said the right word, is risk management.
When I think about building a portfolio or
investing in this industry, you've got Bitcoin
and I see no competition.
Then I've got a bunch of things that I'm willing
to do in order to try and receive greater
returns.
I will take some of those bitcoins, most of
them will be where you had the private key
and there's a counterparty risk, but what
happens if I mess up myself?
I'll have some of them in custody, because
sometimes that might be the backup plan for
you losing your key because you've got to
learn this new methodology of storing wealth.
Then think of it like well, I'll take about
10% of that maybe and I'll be willing to take
counterparty risk by lending it to hedge funds
that are actually putting up a lot of collateral
and they're willing to pay high interest rates
for your Bitcoin and it is collateralized
but there is risk in that.
The risk is counterparty risk, and you need
to factor in these things.
How much of my Bitcoin am I willing to risk
on that?
Then I'll say to myself things like, well,
there's this whole defi space emerging and
it's impossible to keep up.
Every week there's a new thing that you need
to understand but they tend to all be built
upon Ethereum so for me, having some Ethereum
of exposure gives you exposure to all this
stuff.
Then it's moving to different things like
where you can stake it and receive returns
and you can get some returns through defi
at the moment, the yields are incredibly high.
To me, it's going to normalize.
There's no such thing as these really high
yields forever.
At the moment, it's gone from-- I think before
this lockdown, I gave a presentation, there
was about 300 and 50 million locked up in
defi and that was going to a billion just
over this lockdown period.
That's going to norm-- that means that new
fear is entering the ecosystem.
Therefore the opportunity for these higher
yields can only diminish because everything
is risk, you get higher returns because you're
taking higher risk.
Ethereum is infinitely more risky than Bitcoin.
If you believe-- it subscribes things like
complexity theory, and complexity theory states
the more complex something is, the more likely
you are to have these unintended crazy events.
Ethereum has been full of them.
Defi has been full of these crazy, crazy,
unexpected Black Swan events.
That's why you get a higher return because
you've got to stomach it.
For me, investing in this space is about building
many of the lessons from traditional finance
and applying it to the Bitcoin industry.
You might be willing to gamble some of your
money on the next Bitcoin killer, but please
only bet 5% of your Bitcoin.
I've seen far too many people, I knew people
that were there right at the beginning and
some of them were still in debt.
They don't have many bitcoins, even though
they were involved in the highest performing
asset class in the 10 of the last 12 years.
There was two reasons for it.
One, they saw Bitcoin as a currency, so they
had to set it to meet their living expenses,
and they never got ahead of that curve.
That's a very unfortunate thing to be involved
in this and there's many people in that heartbreaking
situation, because they just had to keep sending
a Bitcoin to meet their rent, and they never
got ahead of it so they can never hold it
for long enough.
The other is that they just kept gambling
on these crazy alternatives.
Some people, it worked out, they got incredibly
wealthy.
With hindsight, you would have invested in
a laptop, you would have mined Bitcoin, you
would have taken all of your Bitcoin, you
would have put all of it in the Ethereum ICO,
then you would have taken all of Ethereum,
you put it in a Binance token, and then at
the end of 2018, you would have put it all
in Tether, and then you would have cashed
out and then bought back Bitcoin in $3,000.
Nobody did that.
If you could have done that, then you'd be
a trillionaire and you'd be competing with
Jeff Bezos right now probably.
The reality is it's just-- I will never gamble.
I don't want to be in a position where I end
up with no Bitcoin because I'm trying to gamble
on some Bitcoin killer alternative, but I'm
willing to do a bit of speculation around
that and some of those have turned out to
be very rewarding and added to my Bitcoin
position.
Really, what I advise to people is really
taking a portfolio approach, so traditional
portfolio theory, you put some in stocks and
bonds, stocks are three times riskier than
bonds so you might be overexposed, these types
of things.
RAOUL PAL: Do you use Bitcoin as your reserve
asset, main asset, or do you use stablecoin,
when you think of your portfolio construction
to dampen volatility or whatever?
SIMON DIXON: How I think about the world,
I'm about to create a video series on this,
but the way I think about the world is we
live in a dollar world, if you subscribe to
things like dollar milkshake theory and stuff
like that, then I have a traditional portfolio.
This is as I've got older, you get more risk
adverse.
I turned 40 this year.
I'm not willing to take as many risks as when
I was 30.
I have my traditional bet on what I call my
security which is dollars and dollar denominated
assets, normal portfolio and I have a hedge
against that which I consider gold and then
I have a hedge against that which I consider
Bitcoin.
With my Bitcoin portfolio, I personally believe
that-- I see my dollar portfolio is very risky
because the way that I see it is when we have
a 1944 Bretton Woods style scenario, we play
in politics and we don't know what the politicians
are going to do.
We need to be prepared for inflation, for
deflation, they might be able to re-engineer
the economy into economic growth, or they
might destroy the economy and we decide that
we need to enter into an economic decline
in order to correct some of the mistakes that
have been made in this environment we're in
today.
My Bitcoin portfolio has always significantly
outperformed my dollar and gold portfolio
as long as I've been involved in this industry.
Therefore, I rebalance once a year to make
sure I'm in a position where I just never
have to sell my Bitcoin and I'm covered for
whatever my expenses are in my dollar portfolio
and my security blanket.
Then you have your gold hedge and you have
your Bitcoin hedge, but the Bitcoin hedge,
the interesting thing is even if the world
where you need to own your money, you can't
spend your money and other currencies get
hyperinflated away, even if we don't enter
that world, Bitcoin has still outperformed
just on the speculation.
When I think of Bitcoin, I see it as gold
is a store of value, but Bitcoin's a speculative
store of value.
The speculative store of value means that
it's not a store of value right now, a store
of value is wealth preservation.
Bitcoin makes money and doesn't preserve money
so far, I'm not saying the future equals the
past, but that's what it's done so far.
The reason for that is because the majority
of the world still think that Bitcoin is a
Ponzi scheme, a currency just for drug dealers,
a scam or a get rich quick scheme, but one
by one, every year, thousands, if not 10s
of thousands, if not hundreds of thousands,
if not millions have discovered that it does
more, it's not that.
Once the whole world notice that, it might
be a unit of account, a medium of exchange,
a store of value just like gold.
In the meantime, you get to profit from the
differential in people's perception of what
Bitcoin is, until it becomes what they think
it will become.
At the same time, I'm willing to be wrong,
which is why I still have the dollar portfolio
and the gold portfolio.
RAOUL PAL: Yeah, when I think of it as a world
where it's a really interesting asset, because
I think everybody short calls the entire investment
industry and generally people are short the
upside.
What happens is as the price rises, they will
need to buy back their short position or essentially
invest.
Because currently, it's what?
A $200 billion dollar asset class.
That's nothing.
If it goes up 5X here at a trillion dollar
asset class, well, guess what?
You've now had to suck in all of the asset
management firms, and certainly all the family
offices.
Then it goes up to, let's say, goes to 10
trillion the same as gold.
Well, now you've got sovereign wealth funds,
and you've got-- they all have to buy as the
price rises because the probability of the
eventual outcome goes up with a price.
It's a really fascinating dynamic I find with
Bitcoin, that the more it goes up, the more
likely it is to succeed.
SIMON DIXON: From my perspective, even if
you don't believe in Bitcoin, and I think
everyone needs to still follow the Paul Tudor
Jones approach, which is they still need 1%
or 2% in this and it's irresponsible not doing
that.
It's an interesting thing that happens from
here where if Bitcoin future does equals the
past, or even if it's just a tiny fraction
of the past, we don't need to get another
nine million percent in 10 years.
We could just have something that grows very
nicely, but it would be interesting if Paul
Tudor Jones' hedge fund outperforms all the
other hedge funds from here because of that,
and therefore all the other hedge funds have
to own some Bitcoin just to try and compete
in a market where everyone's comparing their
ROI.
Then somewhat, Bitcoin does become an interesting
benchmark at that point, which is it's a crazy
benchmark to try and beat but it's really
interesting where we go from here.
I think the really interesting bit gets when
we start to enter into a more aggressive currency
wars as we set into more interesting monetary
negotiation.
In 2016, I created a video on how central
banks, their last monetary policy tool that
they have when there's no interest rate, there's
no QE is there's no monetary policy.
The only thing they have left is to actually
attack the banks.
By attacking the banks, they can do this by
issuing a central bank digital currency.
If the banks-- we reached a phase like we
are today, so people are protesting and rioting
in the streets, they're not happy with some
of the actions that are being taken.
If we entered into a phase where we had to
bail out the banks now, I don't think the
government can do that.
I don't think that the civil desire to accept
that comes again.
I don't think they can bail-in because that's
like saying, this is over for our bank.
I don't think at some stage, the credit rating
of the Federal Reserve gets called into question.
I think what central banks are going to do
is they're going to allow the banks to go
bust.
Let's say you have $10,000 at the bank and
your bank has taken excessive risks and a
Black Swan event exposes the systemic risk
in that bank like we saw in 2008, rather than
bailing the bank out, I think the central
bank and let the bank go bust and rather than
use the Federal Deposit Insurance, they can
just say, download this digital wallet and
we will issue you a central bank digital currency
in direct proportion to the deposit that you
lost at that bank.
We'll let that bank go bust, they can auction
off all their debt, and we can let financial
technology companies, we'll release an API.
We don't want to deal with all the customer
service but we're releasing an API where all
these financial technology companies can build
on top of our central bank and they take care
of all the customer service.
Now, that money is not actually deflationary
or inflationary.
In fact, what you're doing is you're replacing
money that was created as a digital currency
at the back backed by debt, and you're replacing
it with debt free money.
The money supply doesn't actually change and
all you're doing is you're de-leveraging the
debt and letting the bank go bust and governments
are actually taking back control of money
creation, which is a function that most people
thought they were performing in the first
place.
I think these are the types of things you're
going to see.
RAOUL PAL: Okay, let's go into that world
a bit.
All money supplies are now controlled by central
banks, through their digital currencies.
It looks like it's heading that way because
I cannot see the Europeans, the UK, or the
Japanese getting out of their banking issues,
just not going away.
It seems like they're going to have to have
a day of reckoning in some way, shape or form.
You either stick it all in a central bank
balance sheet, or as you say, figure out a
different way, which the digital currencies,
Mark Carney's talked about it.
Ben [?] from the ECB have talked about it.
What does that mean?
Does that mean now the government or the central
bank can allocate capital according to where
they think it should go?
What system, what world is that?
Is that a better world or is it a worse world?
SIMON DIXON: It's a better and worse depending
on what perspective you're analyzing.
It's a better world because fiat money is
still very useful.
I'm not one of these Bitcoiners that thinks
I want everyone, the entire banking system
to explode, my grandma, my grandfather, my
father, my mother, my sister to all be reliant
upon these few people that are in some Bitcoin.
That's not a pretty world.
It's not a nice world, and it's not a desirable
outcome.
What we do want is we want choice.
We want a financial system where you can opt
out and we want it competing with an alternative
financial system, so that the traditional
financial system knows that if we don't do
things well, all this money out flows into
Bitcoin.
That's a really desirable outcome.
What governments, I think what central banks
or governments can do, we're not sure if it's
going to be one or the other, is when they
issue the central bank digital currencies,
they're going to be very tempted to combine
the central bank digital currency with other
political agendas.
RAOUL PAL: Because you can give money out
immediately and say, well, it should only
go to hairdressers in Clacton on sea, they
can do anything they want at that point.
SIMON DIXON: Well, the money can be allocated
through a peer to peer lending system, the
government create the money and financial
technology companies, new financial institutions,
new banks distribute the money, but they're
not creating money.
If they have 100% reserves, they're just lending
money that already exists.
The government needs to have enough money
and it would be a lot easier if you had one
money supply called M rather than M0 and M1,
M2, M4, and use interest rates to try and
control how much digital currency is created
at a private bank, and then implement regulations
that they loophole through the investment
bank, and then they create these products
that they've just sell to your pension that
you've been contributing to like we are today.
You could have one money supply called M,
and it would be really easy to charge the
government whether they created inflation
and deflation through M, and the banks can
lend out money that actually exists.
What I think is the problem is a fractional
reserve banking was actually a free market
innovation.
It was private money being created at the
bank.
Now, there's lots of crony capitalism in it
because getting a banking license and an account
with the central bank, as we both experienced,
is virtually impossible.
It's not a true free market and the regulations
and all that stuff make it a crony capitalism
market.
The fractional reserve banking was actually
private money.
It was the private creation of digital money
backed by debt based upon being willing to
lend and enter into loan.
At least then, money was one step removed
from the government.
When you have central banks and banks creating
all the money supply, all the digital currency,
you'll see them tie different policies.
They'll say things like-- again, the model
is China, China's already done this model
with WeChat.
You give us all of your data, to the government,
then we'll let WeChat exist.
It happens in the US, we saw it from the Snowden
revelations, Facebook, you do all this stuff,
but we need a backdoor to all the data.
You'll see the same with central bank digital
currency.
Let's take an example.
Imagine me and you were engaged in commerce.
I'm here on Ireland and you're over there
in Cayman Island.
We're using Zoom or Skype.
Skype is owned by Microsoft.
Imagine if we transact in a central bank digital
currencies, the temptation for the US to try
and integrate automated tax collection into
their central bank digital currency and automated
withholding tax.
I'm an Ireland man and- - well, obviously
Ireland and Cayman Island are different but
let's say we were doing between China and
Europe with America in the middle.
All three of them will want to automate their
tax collection into their central bank digital
currency and we enter into a world whereby
all of them try and take that piece by code,
by artificial intelligence.
You decide that when you're doing that transaction,
and then you have to try and get the money
back, so you start to-- the user experience
of money gets worse, because of these different
government agendas, trying to pay off all
their debts and everything they need to do
in the current world.
Then you exit your house and you decide that
you want to get on a plane, your passport
is connected to the digital wallet.
Now let's say you have a lockdown, and they
force you to download the app in order to
get your helicopter money as a stimulus.
That's how they get the adoption to the central
bank digital currency.
Your bank goes bust, therefore, all of that
deposit, you have to download the app.
In order to get on that plane, you have to
have had your vaccine, your compulsory vaccine
so that they are happy with that.
It's connected to your passport.
Three different governments are trying to
automatically through AI take withholding
tax, and your passport just gets switched
off.
The user experience of these central bank
digital currencies, what we saw from 911 is
anti-money laundering change the user experience,
the relationship that we had with money.
This virus and this pandemic is changing the
relationship we have with privacy, because
we're opting out of that in order to-- those
have been changed to opt out because we want
to get back to normal.
Combine those things, anti-money laundering,
laws changing experience and money, previously,
it's just being something we don't care about
anymore, because there's desperateness of
the situation.
Couple that with a central bank digital currency,
we enter into currency and money that looks
like a communist regime.
We're moving more into a socialist style environment
in capitalist economies.
RAOUL PAL: It's even worse now, Simon.
I worry about the gamification and behavioral
incentives that government-- because behavioral
economics is one of the big breakthroughs
because once you've got big datasets, you
can basically figure out how to manipulate
people.
That's what Facebook is.
They have the ability to manipulate human
emotions via understanding what drives those
emotions.
When you've got a perfect incentive system,
which is, oh, I'll give you some more digital
money if you brush your teeth this morning.
If you do that, which China's doing, China's
using perverse incentives, which don't work
as well as positive behavioral incentives,
but what you end up with is a society at first
that looks great.
Oh, we can stop people destroying the environment
or whatever it may be, but ten before you
know it, different governments, as you say,
just keep changing laws.
Therefore, it's total control of people.
SIMON DIXON: I'm actually okay with that as
long as there's opt in.
What I'm not okay with is if you can't opt
out of that.
That's where I think we have a really, really
scary, scary world.
Why I think Bitcoin is so important is that
it regulates the regulators.
What we have seen is that if Bitcoin can become
something that regulate central banks, by
saying if we do really bad things with the
central bank digital currencies, we can have
capital outflows into Bitcoin and if a country
like someone that's destroyed their currency,
let's say Venezuela or Lithuania, if I were
advising these governments right now, I'd
be saying, take the same asymmetric bet that
we own.
Look, no one's going to accept your currency
for Bitcoin, they're just not.
You've got this useless currency that can't
buy any Bitcoin or can't buy anything in the
international markets.
Dedicate some of your electricity to mining
Bitcoin.
If you can generate your own electricity,
dedicate some of that to mining Bitcoin, generate
a position.
Now at some stage, once you've accumulated
enough that you're hedging some of your dollar
reserves, your Treasury reserves, your gold
that's stored at the Bank of England that
you can't access, you hedge in it with some
Bitcoin and suddenly, you have a game of--
the game theoretical scenario where the countries
are in the worst and worst position and can
utilize Bitcoin to make an asymmetric bet,
just the announcement pumps the price, creates
countrywide FOMO.
In jurisdictions like Japan, there have been--
Japan's in a really interesting scenario because
by all the macroeconomics, Japan's just as
crazy outlier study that people can't quite
understand.
They've invented quantitative easing, they
did all these crazy things that we know today
but Japan has actually-- because it was the
country where Mt. Gox, which was the first
major scamming crypto exchange and they had
other exchanges that have had significant
hacks, they got really ahead of this curve.
Some of their banks, SPI was investing in
Bitcoin mining, invested in many of the companies,
is one of the first banks to invest in this
industry.
The government put together really aggressive
regulations for this industry.
When China decided that they're going to not
allow crypto exchanges to exist, all of that
data went to the South Korean, Japanese, Singapore
exchanges.
They get all the KYC.
They get all the data.
They get all the things that they want and
they've put together a really good regulatory
structure for this industry.
Japan is really ahead of the curve in regulating
this industry.
What I want, what I'm interested in, is that
two-tiered economy.
I'm okay with knowing that fiat money is subject
to all these problems, but I still need it
because it's good for spending but I can't
even opt out.
RAOUL PAL: That's a great idea.
Bitcoin acts as the fiscal monetary policeman
of the world.
You get the chance to vote in or out.
The problem is what happens with the new digital
currency world that it becomes non fungible
with Bitcoin?
There is a risk there that the government
goes, whichever government choose whichever
government says, no, it's non fungible, we'll
ban any transaction that exchanges this for
that.
I guess you just have to just go through a
couple of other hoops to get there to exchange,
spend a euro token for your Japanese token
and then into the cryptocurrency and into
bitcoin?
SIMON DIXON: Well, we've got case studies
for this already.
Gold was made illegal in the US for political
reasons.
The US suck up all that gold.
The other countries, you have these premiums
in the price of gold in other countries when
you're trying to suppress the price.
We got case studies for this stuff.
Now, it's not the same as Bitcoin obviously,
gold's got 5000 years of history and central
banks already all owned it.
It's a different story, which is why this
asymmetric bet exists.
RAOUL PAL: Gold actually also does this in
the current fiat system.
You can opt out and buy gold, we all do it.
If we think there's too much monetary largesse,
we go and buy gold so it works already as
is.
This is just the digital version.
SIMON DIXON: That is the interesting part
of the digital version because the challenge
with gold-- and I'm not here to slack off
gold, I think Bitcoin and gold are both very
important and they do different things.
The challenge with gold is because you can't
store it as easily as Bitcoin in your control,
you have to give it to a custodian.
Therefore, you're subject to the custodian
risk.
That's something that Bitcoin solves.
Therefore you need-- these are the stories
where you're going to want some Bitcoin and
they're hedged against each other but the
scenario where every government around the
world coordinates to make Bitcoin illegal
I think is an opportunity for another country
just to decide that they're going to take
all the jobs, they're going to build the economy--
RAOUL PAL: It's like with genetic engineering,
with all of this stuff.
You see it and suddenly, Israel and Brazil
say no, it's fine.
We'll allow it so that all of the brain drain
goes to those countries, and they can start
developing stuff.
Russia would just open the door immediately
if everyone tried to ban Bitcoin, Russia would
you say, no, sure.
Come and do it here.
SIMON DIXON: We're seeing that already.
It's not a desirable outcome if it suddenly
becomes a tool that sanction countries' use.
We're already starting to see that in the
traditional currency world.
China, Russia, Iran, they're trying to build
their bridges that don't rely on the dollar.
Bitcoin is one of those bridges.
I think that that, yeah, one government might
do.
We've seen this type, we saw this with China.
China decided to ban the exchanges.
The price of Bitcoin went from $3,000 to $20,000
after China banned it.
It may not do what people think it might do
but I see it quite extreme to have global
governments collaborating on making Bitcoin
legal because fortunately, countries compete
and one person making something illegal is
an opportunity for another country.
I see it like-- behind me, you see the Ireland
map.
They were the first country in the world,
the government to actually run a Bitcoin conference
I've spoken in 2014.
Right after that conference, they wanted to
accept taxes in Bitcoin, pay taxes in Bitcoin.
That's a crazy thing but if I were the government,
I don't accept Bitcoin for taxes.
They've got a call from the Bank of England,
saying, no, we don't really want you doing
this.
Now, the Ireland man relies upon the digital
banking system through clearing through the
Bank of England.
The Ireland man already prints its own money.
It's got the Manx pound, it creates a paper
version of the pound.
It's already got the laws to create its own
stablecoin.
They can just create a stablecoin version.
The challenge with that is that Swift is,
if you start doing things like that, then
you get blocked out of the international markets.
That's why other use cases are important to
disrupt Swift and build these different rails.
That's why this industry is so exciting because
you just-- I truly believe that we're alive
in one of the most exciting times in financial
history, which is going to be absolutely petrifying
for some, a ginormous wealth distribution
for others and ignoring this and just is why
the asymmetric opportunity exists, because
so many people find it impossible to believe
that in 10 years, this thing can become statistically
significant in the world.
Every single year, it's become more and more
significant in the world.
It's so anti-fragile.
When the banks try to take over Bitcoin, I
remember as I was paid by Jefferies, a bank
to go around and present to all the fund managers
just after Blythe Masters was presented to
them all, and she created the CDS, the credit
default swap.
She was telling all of the fund managers,
no, forget Bitcoin.
That's a scam.
It's all about blockchain.
The banks then told the whole world, hey,
blockchain.
Forget Bitcoin-- they tried to co-up the words
and popularize blockchain.
We haven't seen much come out-- we haven't
seen anything come out of a banks in the blockchain
space but they all went home after the presentation
and bought Bitcoin individually.
The fact that this ETF doesn't even exist
is encouraging.
Ownership by the individuals are often the
funds rather than it just-- and so the more
and more people that actually started to use
Bitcoin the way it was designed, the better.
RAOUL PAL: Yeah, a ground up movement has
antifragility embedded into it because this
was a retail revolution.
It came from the ground up and not driven
by the top down.
It's not like here's a new product, this ETF,
this is-- oh, we can make stocks trade simply.
This is a really complicated product adopted
by millions of people at a broad level.
I just think it's super interesting.
It's completely the opposite of almost how
any other financial product gets adopted.
SIMON DIXON: Yeah, absolutely.
It's the fact that so many people are skeptical
about it that makes it so interesting.
When you started bringing more and more traditional
people into this Bitcoin industry, that's
why I really appreciate what you guys have
done because I think it's done a real service
for bringing the education to the traditional
people because it is quite unbelievable what
Bitcoin has done in the next 10 years, and
it's really easy to just think that this whole
thing can just end and this is just a bubble.
I'm preparing for that though.
Again, this is about risk management.
It would be a really crying shame if all the
Bitcoin did is created this thing called a
blockchain and allowed banks to commit more
fraud or more crime cheaper through a blockchain.
If that's all that came from this, that would
just be a real crying shame.
To me, it's the exit from the traditional
financial system, that's the real use case.
Things like defi, very, very risky, crazy
hard things to understand but the principle
of taking every single financial product and
replicating it based upon sound money is something
that I think is worth seeing if we can make
happen.
RAOUL PAL: Final question for you.
The thing I can't get my head around is derivatives
on Bitcoin, are we just not reinventing the
financial system all over again, where it
ends up being a levered fractional system?
Sure, not at individual banking level, but
the whole system ends up being massively levered
all over again?
SIMON DIXON: I think it's inevitable.
I don't think we can change that.
I think we see it in the gold market.
You have physical gold and there's all this
paper gold, there's not enough physical gold
backing that paper gold.
I don't think there's a force out there that
can change that happening in Bitcoin but remember,
physical gold is not the same as paper gold
and physical Bitcoin is not the same as paper
Bitcoin.
We will make the same mistakes again.
The industry will do crazy things.
We're already seeing that right now.
I don't think that's going to change but it
still doesn't change the underlying principle
that there's only 21 million Bitcoin despite
how many derivatives or paper Bitcoin or all
these things are.
There's only 21 million into them that you
can own, that you can spend and that the supply
will never change.
RAOUL PAL: Fascinating.
Simon, listen, thank you ever so much for
your time and your thoughts.
Really interesting conversation and let's
see where it goes.
One day, it's going to break this bloody 9200
level, but it's now like the volatility of
2-year notes or something.
It doesn't move right now but sooner or later,
Bitcoin will start moving again.
SIMON DIXON: Yeah, people criticize Bitcoin
when it's in a bubble.
They criticize it when it's crashing, and
they criticize it when it's flat.
That doesn't change.
RAOUL PAL: All right, Simon, thanks ever so
much.
Good to speak to you.
SIMON DIXON: Thanks for having me.
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