Bitcoin just flashed a signal that could trigger a 25% rally. That, of course, is the golden cross between the 50 and 200 MA—things that we frankly don't take very seriously around here. You know that we're going to get into a much deeper conversation about the fundamentals of the market, where it stands, and what news is driving it. And we have a very special guest today to do that with us. We got Mike Belshe here from BitGo. Stick around. This one's going to be great. Let's go.
Right before we went on, we had some smooth jazz randomly come on, and I think it might have been this amazing tranquil background. But we couldn't figure out why we were having smooth jazz playing. Good morning, everybody. I hope you're all doing wonderful today. I'm going to bring on Mike right now. How are you, man?
Good morning, Scott. How are you?
I'm doing great. So, you know, you said I was wearing an OKX shirt. You got to get me a BitGo shirt. We could do the BitGo offices back here on the LED screen.
Fantastic. I will give you a pitch.
That would be cool. That would be cool. So, listen, let's start, I guess, with the market generally. I think you've probably been here for more cycles than most. People were wondering what the catalyst would be to get us out of the doldrums of summer and the bottom of this quote-unquote bear market that we were in. And here we are, you know, up in the upper 70s again, big move a couple weeks ago. Having seen this before, what do you make of it?
Well, in your intro, you said the something cross with the something moving average, whatever, and then you said we don't really pay much attention to it. Look, I think people that have been in Bitcoin for a long time got into this for, I think, a pretty long-term view. And the fundamentals of Bitcoin, I think, have never been stronger, regardless of where the price may be today. What we're looking at with the US debt, with the bond market globally, what's happening, look, it's kind of inevitable that Bitcoin's going to go up in price—not so much because Bitcoin has to do anything, but because the dollar continues to slide downward. It doesn't really matter which politicians are in charge; none of them have the strength or power to change the direction. So two things happen at once, right? Number one, the dollar goes down, which causes the price to go up by itself. And then number two, more people learn about Bitcoin, start deploying Bitcoin, and start utilizing it. So those things are both happening just like they have been for a long time, and the beat goes on. It was pretty clear that the catalyst, at least in the short term, was the Treasury deciding that they're going to do double the buybacks, even though it was small. I think the amount was a rounding error, right? I don't think that's what sent it. I think it's the signal that the Treasury is going to intervene in the bond market.
That's what Bitcoin is built for, right? So I always find it funny that when you're sitting at 64 and you tell everybody that Bitcoin is an asset that's a part of the debasement trade or it's a hedge, they laugh at you. But then all of a sudden it goes up 25% and the same narrative that existed two hours before all of a sudden is invoked.
Milton Friedman's got this right. There's one cause of inflation: it's government spending. There's no tinkering with the market that's going to undo the effects of overspending. So there's only one way out of this, and we either do it early when it's less painful or we do it late when it's incredibly painful. And, you know, all signs point to it's going to happen very late. In the meantime, look, people need to have assets. We do have a real problem, I think, in many countries. It's here in the United States, although I'm in Canada right now, I guess. But this K-shaped economy, what is it about, right? We've got people that can't afford assets. Maybe they can't get a house. If you're not in assets and you're holding your value in cash, you may not have that much of it. You're doubly in trouble. A, you don't have very much. And then B, you're in the one asset which only goes down. You need to get to that asset side of things. We need to help people. This is, of course, what Bitcoin is about—allowing you to get your money onto something that's going to be an asset that appreciates rather than one that deflates.
Yeah, what blows my mind is Bessent had this comment a year ago about being laser-focused on paying down the debt. These were in the DOGE days, in this brief moment when it seemed like the government was going to take some sort of accountability. Then a year later, $40 trillion isn't really a big deal and we're going to grow ourselves out of this increasing debt, right? So they've given up as well, if they ever hadn't, right? But I think we're at the point where everybody has accepted that the debt is going to run away and that the only way is growing out, which I don't think anybody really realistically thinks is possible—maybe in nominal terms.
Well, the purse strings are held by Congress, right? Congress has got to make a decision that they actually want to start doing something about this. The fraud has been identified. I think increasingly Americans are aware that there's one part of the government that just says, "Keep giving us more taxes," but yet we can see that it just goes to waste. Whether you want to call it waste, abuse, whatever, it all fits together. Scott Bessent can't fix that. Congress has got to do something.
Yeah. So I want to talk more specifically about what you're doing, having been through all these cycles again. I think BitGo started as a custodian. You and I had a great conversation about this, I think in Miami. But clearly, your business has evolved tremendously since. You had a big piece of news that I want to bring up here: "BitGo acquires NYDIG's institutional trading business, expanding derivatives and financing capabilities—not just a custodian." So how do you frame what you're doing now, and then this news specifically?
Well, I'd like to say we haven't been a custodian for quite a long time. I mean, we do operate a custodian; we do that as part of our business, but it's a means to an end rather than the end. Some of our competitors and others want to pigeonhole you over there, but the financial services that we've been building at BitGo for some time have been far beyond just custody. We do more trade—you can see we're a Fortune 500 company based on volume, that's all in trade revenue that we generate, etc. Anyway, look, I've been tremendously impressed with the team over there for many years. They focused on Bitcoin and a super-echelon type of client a long, long time ago. They built a world-class team that does derivatives and special products—all of the financial things that you would expect when you're looking for that white-glove service. And they've done that better than anybody. So really, really proud to be able to bring them into the BitGo fold. They're going to augment our existing Prime team, hitting another level of client, and hopefully help us carry forward on our route towards prime brokerage.
You said you've been impressed with their team. A lot of them now work for you, right?
That's part of why we did this, right? Pete Janney is the main guy that leads kind of all of that coming over here. He's a fantastic leader. But we're bringing people over from all the different functional areas of the company, and yeah, excited to have him on board.
So we're at this point, obviously, where I think everybody is converging on being everything, like the idea of the everything apps. All the institutions and TradFi are trying to add crypto; all the crypto companies are trying to add TradFi. Everybody's tokenizing in the middle. Where do you fit into that picture, and how do you see that evolving? Because I think everybody has now come to the acceptance that everything will be tokenized and on blockchain rails.
I think this has not really been under debate for a while. The one last unlock we had to have was the regulatory climate, which would allow us to figure out how to pull these together. We had Larry Fink saying a couple of years ago, "Every asset, every fund..."—I don't have the quote quite right, but he said everything's going to be tokenized. And he wasn't alone, right? These are the traditional leaders of our financial markets saying, "Of course this is going to happen." What happened in the last 18 months is now the regulators are like, "Okay, let's get serious. Let's figure this out." We got the GENIUS Act, clarity—we'll see what happens next week. Even if clarity doesn't happen, from the CFTC to the SEC to the OCC, all of those regulators are working hard to figure out what rulemaking is going to be appropriate. So with those two things, yes, equities are coming out. I think there's five or six different models now; there were zero just 18 months ago. So, yes, all of this is moving on-chain. I think it's going to be faster than people expect. Robinhood obviously good news, too.
Robinhood also good news too, with their chain.
There was a story—I have it somewhere pulled up. This happened, I think, yesterday, but Robinhood effectively had a memecoin that was somewhat loosely attached to an actual NASDAQ company, and the NASDAQ company went up 350%. I got to find it; it's crazy. Just to show you how much power the Robinhood chain has, because it's obviously attached to Robinhood where meme stock nuts go crazy. But yeah, "Memecoin shenanigans spill into NASDAQ as micro-cap mushroom seller Farmies surges 350%." It should show you how much we're converging here.
That's right. Also, did you, I guess, pump your penis with Hims stock?
Oh, you didn't see that one?
Well, I know Hims is like cheap Viagra. It's like Ro or one of those, right? Yeah, and hair-growing products and stuff.
There's some stuff about... I mean, it's so comical, you can't really write it any better. Memes have always impressed with their creativity and what they can figure out. But we now have digital rails. You got programmable money. You got programmable assets. Some people might say, "Hey, these are jokers," etc. Back up—this is what happens when you have innovation. All of a sudden, new types of products emerge, and sometimes, yes, it can be overlapping with entertainment. But I think this is incredibly exciting times. You couldn't do this a couple years ago, and yet here we are figuring this out.
Yeah. I mean, now I'm looking through it as you were talking about it: Robinhood has become the largest issuer of tokenized stocks by holder count just two months after launching Robinhood chain, according to Token Terminal data. That's pretty astounding. Two months.
That's what happens when you have programmable money. And this is all right now outside the US, right? So imagine what happens when those tokens are available inside the US. By the way, we demoed that at our earnings call just a month and a half ago: tokenized entitlements. Entitlements is an abstract word—you don't need to know about it, but basically, it's the way that you can have true ownership in the US. So you can build equities into the foundation of finance and use them. You'll get your stock splits, you'll get your dividends—of course, those will be paid in stablecoins—you got your voting rights, etc. Once you have that, then you can perfect the security. Now you can start to use these in other financial products. The offshore components, which are the early birds—which is what Robinhood's doing today—those are all right, but I think they will get superseded by a new set of tokens that will have true ownership and better capabilities for the investor.
Yeah, it seems we're still working through what tokenized stocks will look like, or at least the early iterations, as you kind of mentioned. Some don't have any voting rights at all; they're effectively just exposure to price action and not really to the underlying. And some, you get the full dividends and voting rights and all the underlying power of owning the actual shares.
Yeah, look, I think that's right. With the SEC not having commented just two years ago, there was nothing happening at all. Some people started to push some things outside the US. Exchanges, their clients tend to want just the price exposure, so just the trading capability is what they've pushed first. The harder, more advanced thing is getting full ownership with all of the rights, the entitlement capabilities. That's coming, I think, this year. It's going to come from BitGo; it's going to come from DTCC. So it's happening fast, too.
I'd spoken with Carlos at Securitize months ago about the DTCC news when they got the no-action and sort of announced that they were going to be doing quadrillions of volume and bringing it on-chain. And he sort of poo-pooed the idea of what the DTCC was doing as simply changing their own plumbing and not really being the true version of this that we would look to. It's an interesting nuance. Kind of goes back to there's a lot of ways to skin this cat when it comes to tokenization. And maybe for people who hold crypto or who are excited about it, the DTCC tokenizing things and putting it into their own system isn't actually that exciting.
Look, I think people undervalue distribution channels. DTCC holds—I don't have the number quite right—99.2% or 99.5% of the tradable stocks in the United States today. So them participating is incredibly valuable. For one, it says, "Look, we're on the right track." Even the guys that are winning the entire game believe that this is the right path forward. Number two, things are going to continue to go through flux as we innovate, as we figure out which patterns work and which ones don't work as well. And then number three, look, there's small companies—I say small companies, we're not really that small, we're public-listed and all that—like BitGo, and then you've got the traditional firms that have been around for 50-plus years like DTCC. Some of those are going to move faster; some are going to move slower. All of this leads to innovation, competition, better for investors. So I think it's great that they're in. We'll see what happens. And look, they want to win it, too, so I wouldn't count them out. They hold all the stocks today; they've got a huge advantage. Now we'll see what happens next.
Yeah. You mentioned before that we'll get some clarity on CLARITY, no pun intended, maybe in the coming months. But the one thing that we definitely have is GENIUS, and the world is moving forward on stablecoins. We've got kind of these competitive approaches, I think, now from different institutions. This is one of the big news stories. I did discuss it here; would love your take. Obviously, these banks are banding together to launch a stablecoin. This is two days ago this news came out: 21 of the largest financial institutions. It was 10, I think, at the end of the year, and they were saying they might do it. Now it's 21, and they're definitely doing it by the end of 2026. They're going to launch a stablecoin. This is Citibank, Wells Fargo, Goldman Sachs—the largest banks on the planet. And this comes on the heels of the news about OpenUSD, which is basically all the fintechs coming together to launch their own stablecoin. And two weeks ago, the community and regional bank associations in every state launching their own stablecoins. So this is happening.
Scott, this is stuff we've been talking about for the last year of how many stablecoins are going to explode. Look, if you want to talk about who can get things done, usually technology companies move a little bit faster. Kind of the younger generation moves a little bit faster. The older generation of companies, the stalwarts on Wall Street, move a little bit slower. The only thing that moves slower than those guys is a consortium of 20 of them. So I'm highly skeptical of a consortium of 20-plus banks being able to spell their names, much less launch a stablecoin. So I'm skeptical of that one. I think it's great in that it's completely validating for the space, but I wouldn't lose any sleep over whether they can succeed or not.
What was actually hidden in that news when I read it more deeply yesterday was that they announced it will happen on public blockchains and not on a private blockchain. They haven't announced who yet, but they have come to the conclusion, even as the largest institutions, not to create this as a Goldman coin behind a walled garden and on some private network that they create. So I would say that that actually is maybe the major signal there: that they've capitulated and said, "We'll do this on Ethereum or Solana or whatever it's going to be, or all of them."
Well, look, money is at the end of the day a bit of a communication mechanism for humans, right? It connects us. You walk into McDonald's, if you've got dollars and they say, "Hey, it's going to be $10," you pay. If they said it's going to be 10 euros and you don't have euros, you're like, "What am I going to do?" Right? So you tend to have kind of a coin that works. Now, with stablecoins, because they're programmatic, they're easy to convert. We're certainly going through a competitive round right now where lots of different stablecoins are emerging, each of different strengths and stability. If they can get something together, the technology is relatively simple. So it really comes down to: can that group of institutions agree on how it is that they want to take it to market and how they're going to kind of deal with the future? If they can do that, it has a chance. Like I said, they've got huge distribution channels. Once we have a programmable form of a stablecoin dollar that is standardized or heavily used, it actually turns out to be also better for digital assets because now we've just got a nice streamlined view, everything can go digital. It's probably good if they can succeed, even though I'm skeptical about consortiums in general.
Yeah, I think OpenUSD is dead in the water, and I think this one's probably dead in the water as well, but we'll see. When is the last time that two people, 21 people, individuals could come together on anything, much less competing companies, right? It's kind of like I always laugh off the idea of BRICS competing with the United States. It's like, how do you get six dictators together to act in the common interest instead of in their own self-interest?
Well, the other problem with stablecoins still unresolved is yield. Of course, there will be yield. That is happening regardless of what's currently in GENIUS, etc. The banking industry is worried about this. Personally, I don't think they need to worry about it as much, but they like their business the way it is. It's highly profitable. Banks have never been more profitable in America than they are right now, so they don't want to change anything. But for regular everyday Americans that are getting zero interest because the banks are giving it to their corporate friends instead of providing the risk-free rate to their retail clients, there's going to be a yield that comes out, and this is going to allow us to start redefining banking. I think technology is going to finally give us progress in an industry that frankly hasn't been able to evolve for 100 years.
I saw a story two days ago, and it immediately made me think of you: "OpenAI says Astra AI model as its first crosses critical cybersecurity capability." Apparently, the AIs are all leaving their sandboxes and they're going to kill us all; we're going full Skynet, as you know, right? But it made me think of your recent challenge: "Steal 100 Bitcoin. BitGo CEO challenges Claude to hack $6.3 million wallet." So listen, you've been at the security game for a very long time, and you basically seemingly had enough of these narratives and put your money where your mouth is, so to speak. So maybe talk about what you did here and why.
Well, don't forget the Bitcoin is worth $7.7 million at this point.
As far as I know, the Bitcoin's still there. I'm pretty sure I'd get a lot of loud noises if it were not. Look, I think there's a combination of AI is advancing. In terms of cybersecurity, we have to be looking at it in huge detail. Everybody's got to be using it for defenses right now. If you're not, you got to get on it. Good news: it's going to give us better defenses than we've ever had before. The second thing that's happening is this theatrics within the AI companies. Look, as a regulated company—and we're regulated here in the US as an OCC-chartered national bank, regulated by similar trust companies at seven different places around the globe—I think it would be terrible if AI in the US were handicapped by regulation today. It's just too early. If you can't pinpoint the problem that you're solving, then you can't regulate it. All it will do is it'll create slowness in America, it'll put American firms behind, it'll make us so we have fewer defenses. We won't be able to use the best models, which I guarantee you the hackers in North Korea will have access to. So I think any form of regulation on AI today, anything that slows it down at all, is a problem for America, and I'm highly against it. In terms of these sandboxes, look, I don't know why OpenAI can't build a sandbox that contains their own bot. I think it means that OpenAI has a problem. A sandbox is not hard to build; I think they ought to be able to build one. I think it's pure theatrics.
Yes. I mean, that's what you called Anthropic out on effectively, right? Yeah, I feel like they sell a hell of a lot more subscriptions when they talk about how powerful and dangerous their models are.
Look, people are scared of it. It's kind of an American phenomenon. I think you've seen this: in China, the polls are coming out that they're really excited and optimistic about what's coming with AI. And for some reason, America is so worried about it. We're worried about our jobs and the economy and all these other things. A lot of this is marketing that's happening across the board from Anthropic and OpenAI.
Yeah, I'm looking: 53% of Americans worry that AI could replace their jobs. Gen Z anxiety is climbing. Those feeling excited about AI dropped to 22%, while anger or negativity rose to 31%. Meanwhile, robots are having sprinting races in China.
They're not very good at it. I think it comes back to the K-shaped economy, especially for the younger generation. They do not have the wealth. They're not advancing the way their parents did. The American dream is hard for everybody to see right now. So you combine a little bit of uncertainty about your future with AI, and it's going to eat your job, along with the existing offshoring that's happened over the last 20 years. And yeah, of course, there's worry about it here in America. But I think it's really rooted back to the money. And you know, there's that saying: "Fix the money, fix the world." Maybe that's the Kraken motto; I forgot exactly, but it's a good phrase. And I think that's the real issue, it's not AI.
Yeah. I'm 49 years old, and I'm not exactly the most tech-savvy human being on the planet, but it's made my life so much better. And Grok bot does so much, it's just incredible. It really is a meaningful difference in my workflow and my life. It shocks me that a younger generation that should be so native to this is so against it.
