Frank Holmes U.S. Global Investors Inc. (NASDAQ:GROW) Flips to Cryptocurrency: Mines and Money



prink homes so I have many many slides and so I want you all to pay attention because there's an exam at the end but I want to walk through my journey of 20 lines of product in the blockchain technology world which is a transformational piece of technology and the discovery what bitcoin is and Bitcoin to me is what email is to the Internet bitcoin is to blockchain is how people are discovering the significance of blockchain so in this journey I learn about ICS and I learned for my son and my godson who at the age of 28 had made twenty million dollars trading icos and it was really quite impressed with this whole world how fast it was going so in that journey I went to New York City to what's called consensus and wait now is a conference in New York City Culkin is their second part for this year of consensus and it would be packed by an audience of half the age and probably five times more this is blockchain ico and this is what things are going and I want to try to for you to understand that it's demographics that there are more Millennials than there are baby boomers and that Millennials have a thing called an app called tinder and that's an immediate dating immediate and they do not have the patience to wait two days to open up a brokerage account or a bank account they can open up an app that allows them to move five thousand dollars in five minutes to buy Bitcoin and they can do this at coinbase so this world is changing and I was as amazed to see the numbers that was going into crowdfunding and that's outside of the regulatory world so I believe it's demographics I believe it's suffocating regulations has created this dark pool there's gone into crowdfunding this outside of the normal realm of what people look for money today and here it is so much bigger than I ever thought and so on that journey of research it was calculated that 50 billion dollars was raised last year in different forms of crowdfunding I was that an angel investing where we'll go up and they have ten slides one page document they raise ten million dollars for their patents and at the at the back of the room of the lawyers and accountants papering the documentation very different than the costs of risks of having $500,000 in a prospectus during Iran and shopping around looking for money it is reversed itself and is to try to understand that this idea of the ICO this year there's been over 2,000 new i ce o–'s initial coin offerings not IPOs and that's very profound and significant in the formation of capital it happens outside of this room it happens outside of the regulatory world that I met a young person two weeks ago in London II and in Hong Kong was originally from London and he has a patent on his own is a model that looks at all credit investors and the different rules in each country and he's able to raise 200 million dollars by not touching anyone that's retail they only could be accredited and he launched the the funding for the largest exchange in America raised 200 million dollars of the 5% fee going in and going out nothing in this room nothing it's a complete different world so I hope that you walk and listen here I've got two videos for you to watch I spend four hours to help you understand blockchain in one minute and Bitcoin in one minute and explain to you crypto mining which is a company which I'm the chairman of and I put five million dollars into and within three days that five million had gone to thirty million dollar valuation and we had institutions coming in to make substantial investments in too high and today it's almost a big indoor market cap and to give you an idea in this cryptocurrency world where can you raise seventy five million dollars and six months later you'll have free cash flow or twenty five million it's it's unheard of and it's a basically how can this success be what thrives it hopefully everyone in this room can get a an appreciation for this big change so the IPO market is sleeping there's 50% less public companies in America there are more indices then there are public companies there's a seventy-five percent drop in I POS the average IPO in 1996 was eighty million dollars now has to be three hundred million dollars to deal with the cost and the structure and the regulatory and all the pre clearances etc it's such a prohibitive transaction and this this sort of pushes out and creates what's called dark pools of capital outside the regulatory world and it to me is very significant of where money is going so what is it ICO it's an initial point offering and can it be the solution for a lot of junior mining companies well there is something happening I was talking to Rick wheel last week in Vancouver and in three weeks there was 550 people to this presentation on cryptocurrency took three weeks of marketing it's unheard of why what was the interest and what he was saying in know today was that most of his new investors are coming from the Silicon Valley area and those are what's called in the music world the great crossover can you turn around and take industry from country and western music over to rock and roll rock or water and Country and Western you create much greater economic pie and so what you're seeing is that that my my godson who would own trace thirty million dollars in three days in three days and it was only accepting theorem and the etherium coins were then cleansed and put into into cash US dollars which then invest in new I cos three days and then who spends the $600,000 on the prospectus and documentation that's how that market is changing so how do you turn around there there is money and there is bitcoins in a theorem out there that will make that transformation because it's happening in the capital markets today so money flows towards most respect if they say well there's also this this Millennials are adventuresome investors just like we are in junior mining a junior exploration or a junior technology and they're look at icos and the new idea of a coin and right now you have a battle in the u.s. between the sec who wants to make all them into securities to regulate because they're basically remember I said earlier that there's 50% less public companies and there's a seventy five percent drop in IPOs we're too as regulators so you had to find something else to regulate and that shift is taken it's important to recognize that happens with FINRA it doesn't matter where it over here in Europe it's the same thing so with that you have the CME and they're interested in calling it a commodity or a currency and you have another AUC they would like to call it an asset and the IRS has deemed it to be an asset so they can tax it so it's recognizing that you have this the debate going on but it doesn't matter because you have had three billion dollars go into creating 2,000 new coins and the numbers are staggering because Genesis mining who is the largest private company in the world that allow you to go mining on the cloud we started four years ago with no money from anyone but three guys to our mathematicians and today there's a big in five in revenue and they have 50,000 new accounts today coming in a coin based out of San Francisco has 50,000 in fact they show you a slide a hundred thousand new accounts in one day so there is something that's happening in those capital markets and there's a new drive for growth and opportunity and they also find that there's more by Bitcoin than there is to go and buy gold on online Google searches a little back there so what is blockchain technology can you start the video please well have you ever wondered whether your ballot is actually counted if you're not someone online how did another who they say they are made by coffee that's labeled fair trade what makes you so certain of its origin to be sure really sure about any of those questions you made a system where records could be stored facts could be verified by anyone and security is guaranteed that way no one could cheat the system by editing records because everyone using the system would be watching systems like this are on the horizon and the software that powers them is called a blockchain blockchains store information across a network of personal computers making them not just decentralized but distributed this means no central company or person owns yet everyone can use it and help run it this is important because it means it's difficult for any one person to take down the network or corrupt it the people who run the system use their computer to hold bundles of records submitted by others known as blocks in a chronological chain the blockchain uses a form of math called cryptography to ensure that records can't be counterfeited or changed by anyone else you've probably heard of the block chains first killer app a form of digital cash called Bitcoin that you can send to anyone even a complete stranger bitcoin is different from credit cards PayPal or other ways to send money because there isn't a bank or financial middleman involved instead people from all over the world help move the digital money by validating others Bitcoin transactions with their personal computers earning a small fee in the process Bitcoin Rises the blockchain by tracking records of ownership over this digital cash so only one person can be the owner at a time and the cash can't be spent twice like counterfeit money in the physical world can the Bitcoin is just the beginning for block chains in the future block chains that manage and verify online data could enable us to launch companies that are entirely run by algorithms making self-driving cars safer helped us protect our online identities and even track the billions of devices on the internet of things these innovations will change our lives forever and it's all just beginning so financial institutions of fire filed 2,700 patents interesting at Fidelity who's such a leader in this space it has 2,000 employees that are dedicated all the employees at fidelity have access to have bitcoins and have a wallet fidelity has always prided themselves and being leaders in innovation and technology to stay competitive it was a rush talker for me to go this conference in in New York and consensus to have the CEO of fidelity give a speech to a cryptocurrency and doesn't speak of investment conferences but seriously speaking about their leadership and where they see blockchain going and the significance of it so now why why is Bitcoin $10,000 and some are sayings going to $40,000 there's there's two laws you can look them up Metcalfe's law and the other ones called reads law Metcalfe was a person that basically noticed that is more people use a cable service or mobile service that the value goes up geometrically that's exponentially so as we have 50,000 people a day coming in to mine for coins and you have 50,000 people coming in a data by Bitcoin aetherium therefore you're going to have an exponential increase in the underlying currency and right now there's only about 10 10 million bitcoins that are out there in the marketplace and you have 50,000 people a day coming in to try to buy them so what do you think that's going to do and it's going up geometrically and that explains it that's cheaper than an ounce of gold to get one tenth of an ounce of gold or one thirtieth of an ounce of gold is very expensive but when it comes to Bitcoin in theory I'm you get fractals and you could take this your if your phone your smartphone and pay for anything you want this is the big revolution that's taking place and it's amazing to see how many financial institutions are moving in fact when I was launching my going you gold equities where I mentioned yesterday smart baby ETF the New York Stock Exchange inform me that they had invested in point-based in 2015 the valuation was seventy-five million two weeks ago was valued at 1.7 billion they found out that USAA up the street which is the largest military insurance company in the world they had also invested in coin base and coin basis now today you can open an account a coin base and it will show up at your investment account at fidelity or it will show up at USAA when I discover this in May I says something else is bigger is happening and what is Bitcoin bitcoin is the first decentralized digital currency bitcoins are digital coins you can send through the internet compared to other alternatives bitcoins have a number of advantages bitcoins are transferred directly from person to person via the net without going through a bank or clearinghouse this means that the fees are much lower you can use them in every country your account cannot be frozen and there are no prerequisites or arbitrary limits let's look at how it works several currency exchanges exist where you can buy and sell bitcoins for dollars euros and more your bitcoins are kept in your digital wallet on your computer or mobile device sending bitcoins is as simple as sending an email and you could purchase anything with Bitcoin the Bitcoin network is secured by individuals called miners miners are rewarded newly generated bitcoins for verifying transactions after transactions are verified they are recorded in a transparent public ledger the Bitcoin opens up a whole new platform for innovation the software is completely open source and anyone can review the code bitcoin is changing finance the same way the web changed publishing when everyone has access to a global market great ideas flourish bitcoins are a great way for businesses to minimize transaction fees it doesn't cost anything to start accepting them it's easy to set up there are no chargebacks and you'll get additional business from the Bitcoin economy so the Bitcoin economy is growing rapidly and you can see here this is an other part of fidelity is the spoke of the conference Abigail Johnson who was a remarkable leader and especially when it comes to technology and with that you to me was shocked me that so many friends never saw this article it some said they read The Wall Street Journal and they glazed over that this is something big and phenomenal is happening but you can turn around and use Bitcoin today to buy a Tesla Dell computer saw bucks Microsoft and it goes on Bloomberg services a lot of people don't realize that how easy it is functional is to use Bitcoin and aetherium so here's the accounts if you want to have an if you have an account at USAA or you have an account of fidelity and your wallet will show up there's your assets besides your mutual funds or ETFs or your stocks and bonds etc there is your investments in Bitcoin or aetherium so one of the biggest Bitcoin which I mentioned earlier is open to a hundred thousand accounts on one day that means a lot of publicity and then use the book there's website it's so simple and they tell you the dollar value all day long in these currencies trade 24/7 and that's why the New York Stock Exchange was worried because everyone will get their public company listed on these exchanges that you won't have to worry that trades 24/7 and then a couple of weeks ago he was a home sale in Dallas leaders in Houston and it was four to five million dollars and that was the transaction was done with bitcoins so resumes the Swiss Army knife off the blockchain technology we can mine any party that's happening on the blockchain to take anything that's coming up in the future so in order to participate you need GPUs and you're doing this massive market my name is Stefan changing I'm the CTO representing Jesus mining and Iceland expanding operation when the network started everything was about doing this type of calculation processing of your computer but sooner somebody found out actually graphic cards are better in doing these kinds of operations they're more efficient which means they can do more transactions or more calculations business power and that's the reason why we are grading also many GPUs GPS means graphics cards ammonia is basically a computer but it stripped down to million in terms of computing and opportunity not seen in terms of my so there's the CEO he good at TEDx and watch Merkel strain to give his 80 minute presentation wonderful humble person he's 28 years old he's a billionaire like there's other two partners each of them and they have these incredible margins of how they function that he runs his whole company and I've traveled with him now on a smartphone 800 people so we started this company when I found that Genesis would be the partner they own 30% of the company and so that made it very easy to put up the money and put up capital to go on as a chairman and to be in this sort of blockchain because I clearly launched a product I went to the OSC I went to the SEC trying to launch something in this space and all it was is like driving down a cul-de-sac and so fortunately I've been doing this research and Frank Giustra calls me said why young guys have this opportunity do you know anything about it and this is where luck comes in the tacit knowledge and explicit knowledge this thing is it the explicit lines are trying to learn something the tacit knowledge have been to these conferences like you're all here today and we're the to me the libertarians are the ones that dominate this this whole new breakthrough in technology and it's understanding that nice at okay I'm in and I was the first major institutional investor three days later the stock tweeted from 30 cents to 350 dollar $52 and then immediately had institutions coming in and fidelity became the largest shareholder institutionally because the CEO has had everyone only employees embraced blockchain technology and understand how Bitcoin aetherium work so that's the competitive bands that Fedeli enjoys so with that the global financial it is high-seas mounting risk reliance on intermediaries and grinding friction new technology has emerged to resolve some of the tensions in this legacy system blockchain protocols like Bitcoin etherium and other crypto currencies offer a secure way to transact without the need for middlemen those who understand the potential of these technologies are creating new business platforms and winning first mover advantages until now the complexity of crypto currencies has deterred traditional investors from gaining exposure to blockchains potential hi one of the first crypto companies to list on a major Stock Exchange offers direct exposure to the crypto economy and its huge growth opportunities like precious metals cryptocurrencies are also mined requiring high performance computing and massive amounts of energy miners provide the computational power necessary to verify the complex encryption and safety methods that blockchain networks require in exchange for rewards paid in cryptocurrency hive will provide this at industrial scales by combining the ingenuity of Genesis mining one of the world's most successful crypto mining companies with the capital markets expertise a few are a group a prominent merchant bank behind some of the largest metal mining companies Hyde's goal is to build a global leader in crypto mining and establish a solid platform to launch other related businesses hive provides shareholders exposure to both cash flow from an operating crypto mining business as well as a growing portfolio of crypto currencies generated from mining activities pyv is uniquely positioned to accelerate the development of this explosive sector and to create long-lasting shareholder value blockchain listed as hot on the tsx V so what drives my my thought process there's this valuations and it's store overvalued if you're a value investor hive is but so is Tesla lets us test out trades that six times cash flow per share sorry sales per share General Motors is point six whenever you have to enjoy a first mover advantage then you get these incredible valuations and the last time I had this feeling was Silver Wheaton was the creation of Silver Wheaton which for thirty million dollars three million dollars of thirty million dollars at three hundred million dollars in today's Silver Wheaton enjoys the highest revenue per employee of a public company in the world i you get whether there's something unique and special and i think that this world blockchain anyone's involved with it if you have old mines that you have cheap and accusing energy then this is an opportunity to participate in the mining of these currencies thank you very much ladies and gentlemen and happy investing

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