Keiser Report: Future of Bitcoin (E1245)

hi I'm Max Keiser this is the Kaiser report Stacy max this is our final episode here in Dublin at Crete Keiser Report and Espanyol conf and we're gonna turn to the second bit of that onstage thing you did with the Hat one of the heads of coinbase you talked to a great investor ja voll and there was a CNN reporter and she had followed up on a point you had made about Bitcoin being a store of value and she was asking what are the biggest hurdles a Bitcoin to maintain itself as a store of it oh my had a good answer to that let's check it out the adoption rate you know that's what we're talking about so company like coin base has brilliantly created an on-ramp people can get into crypto and they opening thousands and thousands of accounts and they are providing that experience I think that in the future the adoption rate will be driven as it has been since 2002 the white paper makes reference to the banking crisis of 2008 I'm the Genesis block and I think that these banking crises will continue in that will drive adoption clearly in the fringe economies like Argentina Venezuela they are mad about Bitcoin because their economies aren't freefall those are peripheral currencies when you have a major currency like the dollar the yen the Euro the pound enter a similar crisis which I believe will happen you'll have then adoption rate in those countries will spike as well as this way does the store of value as a way to preserve wealth because the banking system is completely unsustainable it will not exist as we understand it in ten years time it will not exist central banks are an endangered species I might take a more moderated approach that I think a lot of that could be said to be true are you going for a job like max said coinbase works hand in hand with government so I think one of the big things that's holding back this industry right now is lack of regulatory clarity in the US where coinbase was founded and we operated is a great example that we have for different regulators that all regulate cryptocurrency is something different the IRS says it's digital property FinCEN a Department of Treasury calls it currency the commodities and Futures Trading Commission calls it a commodity and now the SEC is likely calling it a security in the honest answer is that it's a little bit of all because it's a technology that allows different applications and use cases and they all resemble different forms of financial instruments so from our perspective we look at coin bases mission is to help fiat currency enter this ecosystem we have to be the on-ramp we have to work with kind of safe trusted counterparties like banks and and regulatory agencies the lack of clarity and the kind of ad hoc approach not just in the US but internationally look at Europe look at Asia look at parts of Latin America makes it very difficult for businesses to succeed it's ultimately achievable it's just it's gonna be a hard process mock's data points right so coinbase who rightfully has said that they work with governments and they have a great solution in an on-ramp there are industry players that have chosen not to work with governments who have chosen to not interact with regulators or to interact in the least possible way with regulators or to go jurisdiction shopping so they'll go to countries where they their money is welcomed their business is welcomed and so I think there's a dynamic evolving I think that ultimately the regulators in my view and are not really going to be helpful in the development of this industry in a strategic way and that this is a self-regulating new asset class that we don't need those regulators so I think that's that's an issue going forward and obviously that's a bit of a controversial issue and I think and again coinbase is a brilliant company and they do brilliant work but I think that there's there's ongoing tension between Krypt and regulators shell out would you like to be the judge of this debate should we bring the regulator's in early on to make sure they don't come in later and just I and I have been educating regulators people consider that a bit of an oxymoron but for the last few years around the world and I think it's better because I they are going to step in I think the industry showed last year that they weren't very good at self-regulating that's starting to correct but given kind of the the ico scams of last year that really woke up regulators who may have been more quiet on on that front so I I do believe that there's this push and pull though and if you see cases like China which shut down crypto apparently I mean but you go there and there's still a lot of mining and trading happening through other means I don't think you can just shut this down it's like this whack-a-mole you know it's like you whack in one place it's gonna pop up somewhere else better to involve the regulator's in the building process of this well I don't know if the building process necessarily I mean they're not technologists I think we need to educate them on what this is about and the fact that they can't ultimately control this I mean this is decentralized this is global I was in I mean I remember I was in India during the monetization and and the price of Bitcoin was like a thousand and back then the price wasn't that high it was a thousand dollars more in India just because of what Mac said the demand when people stopped trusting their governments and that happens on a regular basis they're going to go to an option like this there's two points one is it's on it's uncontrollable and in a lot of ways the second point is that the regulatory community hasn't really earned our trust you show me a regulator and I'll show you a extremely corrupt organization I mean look at the banking system in the u.s. a bank like Wells Fargo openly steals from millions of customers they get a slap on the wrist JPMorgan hundreds of billions of dollars with the fines for outright no regulators Bernie Madoff was reviewed by the SEC three times they saw nothing wrong these regulators are weak they're captured they're ineffectual they're corrupt you show me a strong regulator and then maybe I'll talk to them but the reason it is created is because there is no strong fair regulator they're all they all stink so that's it thank god bitcoin is here to take the economy pass to corrupt regulators and the factory I can see there's not very many regulators in the in the audience but what about the big player is the big bag they've been rejecting Bitcoin for a long time and then come December last year suddenly they wake up so there has been a lot of cooperation where do we stand on the traditionally big players in the financial market getting into the space I'll answer this from what we're seeing a coin base I think largely the the conversations been around public blockchains like a theorem in Bitcoin and private blockchains and what we saw banks kind of notably did in 20 15 16 and 17 is move forward with private blockchain instances and while we think that's ultimately a good thing I don't think it's gonna be nearly as impactful as open or public block chains like Bitcoin will be for the exact reason the Internet's been far more impactful than in private intranets have been again they can look it's not either/or they're gonna compliment I think that's kind of been the first conversation the second one and the one that we spend a lot of our time thinking about is the institutionalization of this space and that is the large banks the hedge funds the sovereign wealth funds of the world now beginning to move capital into this new asset class but a lot of the work we do at coinbase is building not just the products the qualified custodian the reliable exchanges the prime brokerages but also having the right regulatory licenses so that capital can move into the space so what I see coming from banks right now is maybe a little bit of air being taken out of the room on these private blockchain instances that may still develop but are not going to revolutionize their their work overnight but beginning to look at crypto as a new asset class that ultimately their clients want exposure to yeah I think the key fair is that it's come from the ground up it's clients that have been asking for exposure to this asset class and the banks have kind of been dragged into to it jamie dimon 2017 September called it a fraud and then two weeks ago just hired a head of crypto strategy and and that's happened over and over again you look at Goldman and and so and it's it's because of the demand from their clients it's not a top-down strategy it's bottom-up and that goes with the ethos of what crypto and and blockchain is about Marx I I have an idea what do you think about that but do you think they have something to bring into the space or should they just you might know they know they have really nothing no value to add to this space and which is Financial Times this morning said half banking jobs going to be eliminated came up all the back office ok blockchain versus Bitcoin blockchain is great for banks because they take all those back office jobs of matching trades I was a stock broker for many years and the whole antiquated system of matching trades and clearing trades is unbelievably Byzantine and so this is all going to be done away with with blockchain ok so that's half the bank's gone what about the front office the guys who just sit on there all day and just collect Ron ta like fees for overcharging customers and and doing the various things what about those guys well they will have a war of attrition where more and more of their customers disappear until eventually there's nothing left so how many bookstores are there you know freestanding mom-and-pop bookstores are there you know after Amazon came into the space very few okay and they're just there's there's there's there's no room for them the answer is no yeah that's my short answer right so last one on Bitcoin that the question everyone is burning to ask price in a year in five years where do we stand I kind of want to see it get to that price at which John McAfee says he'll eat his own that was a million dollars million boy so I mean I'd like to see that and I can't have it on my show and I'd love to have him on my show well I think it's gonna get to a million dollars you know I think if you look at the rate of compounding you know it's on it's pretty remarkable it's almost 1% a day and you just follow that compounded rate of return Albert Einstein said the most powerful force in the universe is compound interest hey that's a quote from Albert Einstein so imagine if you're compounding at 1% a day Warren Buffett's compounding at 22% a year ok Charlie Munger but this bitcoin price will be times a thousand the price of the years Charlie Munger gets to when he croaks I mean I think it's it's gonna keep going up I I don't pay as much attention to the price I'm a more interest in surprise destruction yeah I mean it's it's the technology behind it and I think look I think all roads and indications lead to more demand for this as an asset class it's the most secure it's it's it's fixed supply there are a lot of things going for it that I don't see other cryptos necessarily fulfilling that store a value function so I you know I'm a holder hmm Adam so from our perspective coinbase from one of the world's largest exchange operators we tend not to focus on the price and explicitly focus on the process of fair price discovery so we have over 20 million customers that everyday are buying some crypto we have some of the largest market makers and banks I do think in our lifetime we will see this asset class emerge as something that everyone has a bit of exposure to and I do think that if we move ourselves from Western developed countries like the United States and Europe this stuff solve a real problem in more developing economies and I do think in our lifetimes will see a grassroots movement where people of those nations start to move away from their own fiat currency into a decentralized digital currency as a soar wealth oh I shredded that yeah why the Hawaiian lei it's to honor my good friend Charlie Shrem and his wife Courtney from their wedding stay tuned for the second half a whole lot more coming your way welcome back to the Kaiser I'm Max Keiser yes I'm still money comps cars to report comps yes and the great thing about event like this is that you meet interesting people with new projects and sometimes these are things I'm just learning about at the same time you're learning about this stuff and so I want to introduce at this point thomas van der spike hey that's it's thomas van der space now first of all i must say that the reason i plucked you from the crowd is because you have a cold jacket on thank you so deal with that jacket well it's the closest jacket I could find that represents blockchain right right I need to stand out in the crowd starting out now you're on the cars to report ok so you are with bit fair what's you do it bit fair but face three-stage process we're starting who are you fair I am one of the co-founders the company company started in March last year we started building out platforms already bolts going live on the 1st of October it's a trading platform it allows us to buy or short predominantly short out coins for the first time so I can go on then I can take a position on any old Quinn up or down it's a South Africa you're from South oh I'm sorry unfortunately not it's based out in Anguilla we chose Anguilla just because it's much safer Haven to do that Wow talk to me it's not regulated in South Africa it's not unregulated in South Africa we don't know where it's going to go so why incorporates where we aren't sure the political posture toward crypto is unknown at the Salam so you guys figured hey let's go to someplace where we have a little boy transparency clarity and that is Anguilla Anguilla offers a store to act or to act regulates utility tokens so it makes obvious sense to go and regulate or set up in that eristic you know in the conference here may can I call you Thomas yes I understand there is some talk about the regulations and the point being made that if various country the regulations are not friendly decrypt encrypted has the ability to go jurisdiction shopping they can go wherever they are most welcome well your comment on them what do you hide you possess exactly what we did no we don't have the friendly environment in South Africa and we junk shop we set up in another country if I have to buy my text to say to a friendly government I would gladly do that right ok now you're from South Africa do you know ran nooner I do South Africa and I'm from the previous company you met him obviously at the Kryptonite summit in Los Angeles again we catched up to the rumor that before he got into crypto he was a pole dancer at a strip bar fair you were starting to tell us a little bit about it you were saying I allows me the user to take a position long or short on a hundred altcoins yes more about so today we cannot short if I believe that gold silver well is overpriced Apple stocks is overpriced I can go short it I don't have the ability if I do all the old coins I can sell it I can buy it back cheaper and that's where I can profit but I can't go and below me short it if I do not hold it so this is something you wanted to solve in bet fair and obviously we understand the liquidity volatility risks we brokers 15 counterparty risk and we had to find a way to eliminate that so it's a very innovative derivatives vehicle underlying at some option now clearly if we had to introduce options into the crypto trading world it will not work so but fake trades exactly like to see if your future would be you go and there you can buy you can sell but the financial contract is a very innovative options okay you're saying that options don't work in crypto because just on of liquidity or well options options too won't work because crypto traders still train the underlying token itself now in the financial worlds most traders will not trade in the under financial they trading in the derivative of that so just shows how we are far away from maturing the trading market encrypt us now to be able to do this we have to eliminate a broker there's no other way if we have a broker in the middle no one will take on the risk and that is why today we cannot short Quinn's so but fair so get dive into your logic here because that's it going to be a big part of the bit fares value proposition or each would be your logic of how you're approaching all this stuff so you're saying that your statement let's examine it you say you can't have brokers you can't have middlemen you're so you're you're just matching buyers and sellers without deceivers without an official let's say broker in between yes in a lot of ways just like a company that has a similar name call Betfair hundred percents it's a very face statements you know it since the name but fares well is that right so Betfair introduced betting that is getting rid of the middleman as well they're just matching do you to be they're peer-to-peer betting so this is peer-to-peer market making if you want to thin all coins how is it different than let's say shape-shift so in our case we trading in a derivative of the token it gives us some leverage to that so some people like margin trading on leverage some people call it gambling in our case but faced with a model we can go in between up to 1,000 times there is a you don't have an inventory of coins no you do not know pure virtual it's a virtual contract on a virtual coin it's a derivative the underlying financial contract exactly how the financial markets work today just a counterparty risk on surprise no and so do you have capital risks no we don't because every trade on bit face appear to be a matched into a smart contract we call it a smart options contract so by offering that you know the liquidity or the leverage that we offer through but V is not Pier one thousand times but it allows us to hedge your insurer position over time be it 15 minutes be at an hour be at a day be at 7 days up to 1000 times bit max in Hong Kong is our friend they have a hundred to one leverage yes and that's considered to be insane that is insane you guys are going insane to this route square root of insanity yes 100% a thousand percent leverage yes some people need that that's lifting word need are you sure they made it or some people crazy well if you trading all capital risk 1,000 times yes I would agree you're insane you're crazy but if I'm holding 1,000 tokens in a wallet why why can I not just trade on a thousand times leveraged aging my position if you're responsible it's a beautiful vehicle but if you're taking a risk or gambling or speculating then that leverage becomes really dangerous yeah let's be clear about something so in the area of these types of hedging products they can be used to hedge your portfolio as well as to speculate yes so if you have a large portfolio of altcoins you can use bit it's a fair to hedge your position so if you had a large position and litecoin or Manero or max coin I don't know if max coins yet ready I'm bit fair it should be is it fair yet it's not unfair I'm sorry I said a sudden outburst there but if I had a portfolio of all these coins and I wanted not to sell them yes but I wanted to have some hedging protection bit fair how long you guys been up and running so the platform's only launching officially on the 1st of October it's getting alive on the 1st of October how many technology people developers you have working on so we've got a team of 9 on the project more than enough on that project we've build it we're running the final security testings and we've got a statistic Wonderland Minero salad followed by a litecoin sorbet things are tasting testing testing testing yes so I can bring fluffy pony yes I do from my friends he's a South Africa he is so African really what's going on down there are you guys crazy we are one of the biggest such topics on Google it's I think South Africa's number one currently on the train yes the weather we've got political unrest you know we're in emerging markets we are literally a first world country but we're stuck in Africa that's doing knots around yes at the moment really people say crypto suvolte II I said have you seen the South African right no it makes I have Bitcoin like Turkish Liras Africa round we're in the same boat yes what do you think about let me ask you this question yeah the emerging market currencies are in freefall yes against the dollar and large countries like Venezuela Argentina maybe even the South Africa there's a move to crypto yes and they see that as a safe haven play yes hundred pound what you know you're in South Africa and anytime I have someone in South Africa I like to date they are very politically aware because the extended political hotspot for decades yes what what do you think about this as a safe haven for emerging markets why how come you don't see more people in Argentina and Venezuela flocking into crypto maybe we do what ways it so it's still early days once inflation kicks in and the currency loses value on a fiat level they they will go over you know it's the same why Americans in my view sometimes a lot of Americans don't even understand what is happening you know the current system of yet it cannot survive a will not survive it will collapse eventually we'll see these countries fall like dominoes you know we've seen it with some Bob we've seen it in Cyprus Greece Argentina it looks like they're being bailed out now Venezuela is in the same situation one by one these countries will collapse like dominoes and there will be an image dying over into crypto when I face a situation where I can buy the same amount of money that buys a house all of a sudden buys a loaf of bread one year later I'm obviously I have to go into Kryptos I don't I do not have another option what about comparing the product to a bank or because Bank horror offers kind of pair trading and they offer liquidity that's their service yes how do you compare with Bank or how does it from from liquidity is important but it it slightly differs on a derivative layer so in a cryptic strange traditionally liquidity is very important if we're exchanging now in our side liquidity is also important but we are matching trades so today the best way to explain it to most people is that the way we see trading going in to buy and sell something immediately the reason why it's immediate is because it's a secondary market you know if we had to go back in the original way how an exchange had to work everything was RTC based peer-to-peer there's always the one on the ones that is always a lose on the side of the trade you know today because of the secondary market we can do these kind of things we do not have the luxury in altcoins encryptor yet it's extremely volatile and it's not that liquid so this is why platforms like wet face is sitting up now peer-to-peer OTC exchanges but once institutional investors coming to the space we are the leaders we will be the leaders to take on these institutional investors and bring on secondary trading market this is completely opposite of the whole history of finance going back 200 years you're saying that the derivatives which are an outgrowth of equity and contracts that are helping supply some liquidity and hedging techniques that CEM after the introduction of these products you're saying since so those are coming you're gonna introduce the derivatives first and then once the derivatives are launched you're gonna they're gonna add the actual products later the equity products and if you come afterwards our second our second layer of bit phase and exchange it's slightly different to what we experienced as Patrick's finance but Phenix what we've done with the exchanges that we've allowed any crypto enthusiasts and equipped interior paneer to come on to betray and spawn up or launch their own crypto exchange within three minutes how much capital of erased so as to date we've raised 2.1 million dollars we are aiming to do 20 million by the end of September launching on the 1st of October that's heisenberg capital should be in on this that's the max Nastasya venture crypto fund oh you should especially now that there's no nothing to say but we could consider this we like exchanges we like you we like ran we like fluffy pony we like zebras you should come to South Africa more the opportunities right there I'm there all right Thomas Vander spend the spiked fenders bye thanks for coming on the Kaiser report ex thank you so much all right well that's gonna do it for this edition of the Kaiser reports me max guys are in Stacy Herbert Thank You Thomas Vander spy he is the co-founder of bit fare down there and cape town if you want to catch us on Twitter it's Kaiser report until next time bye Oh

40 thoughts on “Keiser Report: Future of Bitcoin (E1245)”

  1. NO REGULATORS in the audience but their in 3 DEEP POCKETS sitting upfront, talking out the side of their navels.

  2. What Adam White forgot to mention was how they front ran the Bcash launch on Coinbase with insider information…. Regulators….joke.

  3. If you don't regulate the exchanges, they could change their policies regularly to suit their positions. In Australia, ACX suspends cash withdrawal for weeks. This is strictly unethical.

  4. Coinbase is working for the government, honeypot. Don’t use them. Don’t mix your bitcoin and your fullz.

  5. The only thing we don't know about the bitcoin scandal is how many of the crypto promoters with go to jail.

  6. Thomas van der Spuy reflection on being South African is too funny “we are a first world country stuck in Africa"

  7. Now a verified Joke of an Investment. The worst Investment of the year according to theNavalear Report released today. Cut in half with no current interest in this Fraud.

  8. All opinions funded by the Russian Government. If you trust the Russian Government, then go ahead and buy bitcoin.

  9. This soundtrack properly explains best what the future of Bitcoin is:
    (spoiler: its going to zero)

  10. Sorry for so many comments my man. Bitfinex has also shorting. But they do need coins. And they have a bug in their update order price and I lost like 14k because of that

  11. Max. Hi. I entered Bitcoin because of you back in 2008 or something like that. Thanks. Coinbase closed my account because I am hanging out in México and I got my first BTC with them back when it costed 44 dollars and I had instant buy since the beginning of time. Simply unfair. Also I could not access my coins during busy times. So no up brakes for me or selling my coins when there where crashes and this is why I think they shot me down. Because they where blocking the contry I was traveling in and so they didn't want to be sued. So stop saying that they are doing a good job because clearly they are not



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