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An individual investor, also known as a retail client, is a client organisation or individual who cannot be deemed both a Qualified Investor and a Qualified Client, pursuant to the requirements of the Israeli Securities Law 1968 (the ‘Securities Law’) and the Law for the Regulation of Advice, Investment Marketing and Investment Portfolio Management 1995 (the ‘Advice Law’), respectively. A Qualified Investor is defined under the Securities Law as.

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What does the future hold for digital assets? Together with Bloomberg, we’ve convened a group of leading crypto voices to predict what’s next.

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We’re watching a generational shift of interest in finance. From the future of DeFi, whether the dollar will be replaced as the world’s reserve asset, what signals institutional investors want from US regulators before jumping into the space, and more.

What does the future hold for digital assets?
Bullish &#8212; one of the fastest-growing crypto exchanges &#8212; and Bloomberg Media Studios have brought together some of the sharpest minds in the digital assets ecosystem to predict what&#8217;s next. I&#8217;m your host, Angie Lau, co-founder of Forkast News, covering all things blockchain.
Our guests today are Tim Draper, a venture capitalist who has backed such legendary startups as Baidu, Skype, Tesla and SpaceX. He&#8217;s invested in more than 50 crypto companies. We have Tom Farley, the incoming CEO of Bullish. Tom was the second-youngest person to head the New York Stock Exchange. We also have Michael Novogratz, founder and CEO of Galaxy Digital, a financial services and investment management firm that spans the digital assets ecosystem. In fact, Mike&#8217;s a former partner as well at Goldman Sachs. Raoul Pal, co-founder and CEO of Real Vision Group, a financial media platform. He famously invested half his personal portfolio in Bitcoin in 2020. We&#8217;ve got Anthony Pompliano whom everyone calls Pomp. He is the CEO of Pomp Investments and produces a podcast and daily newsletter about finance and Bitcoin. And, of course, Kristin Smith, executive director of the Blockchain Association, which educates lawmakers and regulators about cryptocurrencies. Welcome everyone.
Tom, I&#8217;m curious from your perspective, what do you think is the most important development in crypto right now?
I&#8217;ll point out it&#8217;s just the people taking back the power. I&#8217;ve been around these asset classes where it was like the birthright of sophisticated Wall Street fat cats to get all the revenue from things like stock lending or market making, and continually, the development you see in crypto is it&#8217;s the people that are taking all of those revenues, all of those lines of business. It&#8217;s a far more sophisticated yield-bearing asset class for a much greater number of people than is traditional equities or even foreign exchange.
Tim, what do you think?
It&#8217;s like we&#8217;re taking an anthropological leap forward where we have a currency now that can be accepted globally, that&#8217;s transparent, cross border, it keeps perfect track of where the money goes. It&#8217;s accepted everywhere, except maybe China. And it has this ability to move people beyond borders.
Pomp, what are your thoughts?
Yeah, I think what we&#8217;re watching is definitely a generational shift in interest in finance. And what&#8217;s unique about this is that the retail or the individuals actually front-ran Wall Street and the institutions. And so those institutions are being forced to play catch-up. But I think what we&#8217;ve seen is that most of the institutions only come in once the individuals that make up the institutions start to participate. And so if you go across, whether it&#8217;s hedge funds, large financial banks, or other types of organizations, inside of those organizations, they make the decision to start allocating, whether it&#8217;s to Bitcoin, or other cryptocurrencies, once their leadership team starts to actually personally allocate.
Raoul, what do you think?
All I have is conversations almost on a daily basis with the world&#8217;s largest institutions, family offices, sovereign wealth funds, and they&#8217;re all coming into the space. Exactly as Pomp said, it&#8217;s coming from the individuals. It&#8217;s usually the crazy 24-year-old who&#8217;s been there and has been harassing their boss and it moves up the organization to the investment committee and then they have to figure it out. I see institutional adoption as far as the eye can see, and those remain most of my conversations, because individuals are already in.
Mike, you talk to institutional investors a lot and you&#8217;ve pushed a lot of the market into this space. What is the main reason they give you for adopting crypto or not adopting crypto?
Listen, I think a lot of institutions got criticized for being slow. But the reality was our markets weren&#8217;t big enough for institutions even 18 months ago. It&#8217;s only in the last 18 months that crypto has hit critical mass, and now institutions are coming in, and they&#8217;re gonna come in slowly. There&#8217;s still a lot of regulatory uncertainty. The US has been not good at making things clear: what&#8217;s a token, what&#8217;s a security, what&#8217;s not a security? What&#8217;s happening is even the Biden Administration has shifted from kind of anti-crypto to at least neutral because they&#8217;re hearing from other constituencies, &#8220;Don&#8217;t screw with my crypto.&#8221;
I wanna pick this up with Kristen here. I mean, this is your backyard.
Well, I do think institutions wanna see more certainty around regulation. There is an emerging political power within the crypto community, and that has caught the attention of Washington. It&#8217;s caught the attention of Congress. It&#8217;s caught the attention of the White House. It&#8217;s caught the attention of the regulators. And right now, if you&#8217;re in Washington and you&#8217;re not thinking constructively about good crypto policy, you&#8217;re probably on the wrong side of history.
Kristen, to that point, who do you think is going to be the ruling agency for the US digital assets market?
Well, I think there are gonna be a lot of agencies at play. If you are dealing with stable coins that have reserves held in a bank, there might be a role for banking regulators. If you&#8217;re dealing with tax policy, you&#8217;re gonna have the IRS. If you&#8217;re dealing with concerns around illicit finance, you&#8217;re gonna have the Treasury Department and the various agencies within Treasury that work on these issues. But I do think there is a big open question when you look at who&#8217;s gonna regulate the markets. And today, it&#8217;s not clear whether the SEC or the CFTC has any authority in that space. But there&#8217;s a robust debate going on about where the best home might be, and that&#8217;s something that I&#8217;m starting to see Congress engage in. And so I think that this is something that will be sorted out in the years ahead.
Tom, where do you find liquidity in the crypto markets?
The AMM innovations &#8212; automated market makers or liquidity pools in DeFi &#8212; don&#8217;t get talked about enough. And they&#8217;re innovative both because they allow people to earn an expected positive return on their digital assets, greater than if they kept &#8217;em on their proverbial mattress. But also because these liquidity pools provide such amazing liquidity. They allow people to come and transact in a way that&#8217;s just very cheap, very, very efficient. This was, frankly, the reason why I left kind of the old equities world and went full time into crypto. I was so excited about liquidity pools. At Bullish, what we&#8217;ve done is taken those liquidity pools and put them in a central exchange wrapper. And not because we don&#8217;t have tremendous respect for DeFi and the innovation going on there, but our mantra was no gas fees, no miner front-running, no rug pulls, that sort of thing. And we really found there 
was only one way to do it. So we think automated market makers, whether it be DeFi or traditional exchanges, are already bringing a lot more liquidity, and they&#8217;re only gonna bring more liquidity, and they&#8217;re gonna earn returns for the masses as they do it.
How do investors think about the risk that is associated with crypto yield products?
In digital assets, nearly everyone is saying, &#8220;Okay, I just bought some Bitcoin,&#8221; or, &#8220;I just bought some Ethereum.&#8221; or, &#8220;I just bought some other digital asset. What can I do to earn a return?&#8221; And they can deposit it with a liquidity pool, which is the approach that we&#8217;re taking in Bullish. My only advice is that the investors understand the risks. They understand the institution that&#8217;s making them the loan, providing the yield. Where is it stored? What are their rights? If they can get over that, then I think this is great. It&#8217;s a much, much higher level of sophistication and reward for the everyday participant than other asset classes.
Pomp, question for you about the all-powerful US dollar. Do you think it has a future as a world reserve currency?
If you look at the 150-plus currencies in the world, it&#8217;s not number one versus the number one digital decentralized currency. Instead, what ends up happening is you&#8217;re gonna knock off the bottom 50, the bottom 75 currencies, and the dollar and Bitcoin will both strengthen together.
Raoul, what do you think? What&#8217;s the future of the US dollar?
The dollar clearly is still the most useful currency in the world to own in anything that you do, and that&#8217;s not going away. And as Pomp said, it&#8217;s everything by the wayside, anybody mistreats their currency, over time tends to lose out. Currency overall is being mistreated by all of the G4 central banks because they print money and that debases your currency over time. And that is probably, in the long run, the reason why digital assets become supreme.
Mike, final question for you: What&#8217;s the future of crypto?
What&#8217;s unique about crypto in lots of ways is it&#8217;s not just tokenizing money. Bitcoin is a decentralized gold or decentralized money. In the long run, we&#8217;re gonna tokenize all kinds of things. And so you gotta bring liquidity to places that never had liquidity. Crypto turns capitalism upside down a little bit in that capitalism believed in the primacy of the individual at its core. Where crypto, it is all about the community. Bitcoin has value because 150 million people declare it has value and they participate in that community. And so, in some ways, crypto is a radical experiment in stakeholder capitalism.
Thank you all for joining. It&#8217;s been great.

We’re watching a generational shift of interest in finance. From the future of DeFi, whether the dollar will be replaced as the world’s reserve asset, what signals institutional investors want from US regulators before jumping into the space, and more.

Bullish on Crypto

DeFi offers fascinating opportunities, but it also has some real-world challenges.

What do you think is happening in the blockchain industry right now?
I tend to think a lot of the DeFi stuff &#8211;I usually use the terminology &#8220;automated finance,&#8221; which is just all of these machines, all of this code &#8212; is going to continue to accelerate how quickly the transactions are done on a global basis. The trend is just way too strong. There&#8217;s too much intellectual capital and financial capital pouring into the space.
I think DeFi has some incredible things going for it but it also has some real-world challenges. I just don&#8217;t think, in particular in countries where rule of law is important, that it&#8217;s gonna be okay and sufficient to be transacting with bad actors. And there&#8217;s a lot of people working on how to solve that but there isn&#8217;t yet a solution for that.
Is there gonna be a solution to that first or are we gonna have sort of some blow up here where DeFi gets shut off in many areas of the world?
I think in the long run, DeFi wins. DeFi wins because it&#8217;s a better system. It&#8217;s composable, it&#8217;s transparent. It&#8217;s atomically settled. It&#8217;s cheaper because you&#8217;re just code, you&#8217;re not all these people and this legacy infrastructure.
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DeFi offers fascinating opportunities, but it also has some real-world challenges.

The future of DeFi

Over the next 50 years, we are going to see a monetary revolution.

What do you think is the future of the US dollar as world reserve currency? What we are watching is actually not the competition between the US dollar and Bitcoin. I think actually what you&#8217;re watching is most of the people adopting Bitcoin as a reserve asset, they may not be able to get access to dollars for whatever reason. And so instead, I&#8217;ll opt into Bitcoin. I only need an internet connection to do that.
Over the next 50 years, you are absolutely gonna see a monetary revolution. But what you&#8217;re gonna see in the short to medium term is the strongest fiat currencies will hold on for much longer than we probably admit.
I want to disagree a little bit with what Pomp was saying. The moment that I can buy my food, my clothing, and my shelter in Bitcoin will be the moment I don&#8217;t really want to hold onto a government currency. Anyone who still doesn&#8217;t have a Bitcoin wallet is going to see that cataclysmic event and be left on the wrong side of it.

Over the next 50 years, we are going to see a monetary revolution.

The death of the dollar?

What happens now that crypto has hit critical mass?

Mike, you talk to institutional investors a lot and you&#8217;ve pushed a lot of the market into this space. What is the main reason they give you for adopting crypto or not adopting crypto?
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Listen, I think a lot of institutions got criticized for being slow, but the reality was our markets weren&#8217;t big enough for institutions even 18 months ago, right? It&#8217;s only in the last 18 months that crypto has hit critical mass. And now, institutions are coming in, and they&#8217;re gonna come in slowly. There&#8217;s still a lot of regulatory uncertainty, right? The US has been not good at making things clear: what&#8217;s a token, what&#8217;s a security, what&#8217;s not a security.
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Kristin, to that point, who do you think is going to be the ruling agency for US digital assets markets?
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Today, it&#8217;s not clear whether the SEC or the CFTC has any authority in that space, but there&#8217;s a robust debate going on about where the best home might be.

What happens now that crypto has hit critical mass?