Long-time listeners are familiar with Frank Holmes, CEO of U.S. Global Investors and executive chairman of Hive Blockchain Technologies.
Frank recently returned from the Miami Bitcoin 2021 conference. Today, he shares why he’s as excited as ever about crypto. We discuss the ongoing debate over regulation within the crypto community… And Frank explains why he believes the world is big enough for both bitcoin and gold…
Frank also shares how Hive is leading the way in the environmental, social, and governance (ESG) movement… and why clean coins will fetch a premium in the market. [16:25]
Then, Daniel and I discuss the latest volatility in crypto… I explain my thesis that bitcoin is near a bottom… and we debate the impact of retail investors on meme stocks… [54:48]
Wall Street Unplugged | 777
Bitcoin's bottom is near
Announcer: Wall Street Unplugged looks beyond the regular headlines heard on mainstream financial media to bring you unscripted interviews and breaking commentary direct from Wall Street, right to you on main street.
Frank Curzio: It’s going up here, it’s June 9th. I’m Frank Curzio, host of the Wall Street Unplugged podcast, where I break the headlines and tell you what’s really moving these markets. I want to start off by saying I am wearing my Utah Jazz jersey, given to me by my buddy, Chris. I guess it’s a new thing here, if you watch a Curzio Research YouTube page, that people are sending me jerseys, I have a Penn State shirt. So, if you have your favorite team, want me to wear it, want me to mention your name, feel free. I always wear jerseys all the time. Don’t get expensive ones. It’s just a joke, a running joke. But the jersey he bought me two weeks ago is Donovan Mitchell. I don’t know if you saw the game. Most people on the East Coast don’t watch the Utah games because they go off at 10:00 PM and end at 1:00 AM.
Frank Curzio: Donovan Mitchell, 45 points, unbelievable form of 32 in the second half they were down by 13. This guy is an absolute superstar. It is exciting to watch. I know some people hate the NBA because of political reasons going on, but this year’s playoffs with the Nets, everything is cool. So anyway, wearing their jersey out of respect and Chris, thank you for getting me the right jersey at the perfect time because he had an MVP like game. He should have been MVP actually this year, very, very close. Djokovic won it, good for him.
Frank Curzio: Anyway, I want to say this, this I’ve been mentioning. My adventures in buying a car, since my lease was up and I just finally bought a car this weekend, it’s a 2021 Denali. So, my wife and I took the whole weekend to go to about 10 different dealerships and we really got lucky. Went to one in Jacksonville, GMC. They just happened to get in three new Denali’s. Three different colors and they came in the night before. So, they weren’t listed on the website or anything. And man, did I get banged out. The amount of fees that they charge right now, and you’re paying sticker, it’s incredible, right? Man, these guys just making a fortunate, probably an extra $1,500 in fees. And you can’t say, hey man, F- you, I’m not going to do it because you’re not going to get a car. And my lease was up.
Frank Curzio: You guys know, we’re talking about this. Just look at dealerships, talking about the inside scoop, what’s going on in the auto industry. There’s no inventory anywhere. They give me a delivery fee of $750. And I asked and said, delivery fee, what’s that for? And he said, well, it’s delivery of the vehicle and cleaning and getting the car ready, prepping. And I said, you’re not delivering it to anyone. I’m here. I’m at the dealership. You’re not delivering to my house.
Frank Curzio: I didn’t get it from someplace else. I came here, it was here when I bought it and cleaning, it’s a brand new car. And he was like, I know, I know, it’s the dealership. I said, okay, just tell me, it’s like an F- you fee. I mean, I’d have more respect for you, just be honest. But for me, I hate shit like that or companies that are not upfront with their customers. I mean, there’s nothing worse than buying something only to realize a day later, what you bought was a piece of garbage, or the service you were promised was all BS. For example, gone the whole weekend, most of the weekend, with my wife trying to get a car, it’s never really fun, right? The whole process and everything. And we didn’t spend time with the kids for the week because we were looking for a car.
Frank Curzio: So, Sunday afternoon, we decided to go to Adventure Landing in Jacksonville. Just my wife and two kids, and that’s a waterpark. My daughters love that stuff, I like it too. They’re 10 and 13, and we have annual passes, so it’s cool. We’re able to go late in the afternoon and has a wave pool, slides. Went there late afternoon, it wasn’t really that crowded. So, you can get on all the rides. It’s a lot of fun, and we’re at the waterpark for about three hours and inside they have an arcade. And when you say arcade, you think Dave & Buster’s. I mean, similar to Dave & Buster’s, where you play, you get tickets and you get prizes, except almost every single game was broken and it must have 35 games, and 25 were broken. They’re all on, it’s not like the shut off and broken. No, you put your money in and get… I mean, they’re so old these machines, they actually distribute physical tickets, which you have to carry around after each game you play.
Frank Curzio: You go to Dave & Buster’s, it automatically gets loaded on your card. You’re not carrying stuff all day. I mean, think of winning 200 tickets. It’s like carrying a garbage bag full of paper around with you. And they have four machines that put the tickets in, and they suck the tickets in, and they spit out a ticket, and tell you how much it is. And then, it’s cool because if you have too many tickets, but they have four of those machines, three of those four machines were broken. They have four bowling lanes, the small ones, the pins with the strings attached. But they did have, video and stuff like that. Pretty cool lanes, none of them worked, nothing. People going up there and say, hey, it doesn’t work. Sorry, it doesn’t work.
Frank Curzio: I mean, I told my kids after three hours of spending lots of time with them and hanging out and about to go home, we’re all hungry, they’re like, can we play some games, play arcade games. And I told them, I said, look, we’ve been doing this for four years. And in the last three, none of these games work, none of them, they just take your money, and you have to go to the guy, and someone will print out tickets. And I’m telling them, I say, listen, let’s not do this. And they’re like, no, no, please. I said, okay, okay. You put 20 bucks in a machine, get tokens, right off the bat, first two machines, they take money and the games don’t work. Another one, my daughter won 40 tickets, and they didn’t come out of the machine. And I hate telling, I mean, when you say I told you so, it’s never a good thing, but I told you so, it’s just nobody wants to ever hear that.
Frank Curzio: It’s kind of saying, hey, you were an idiot and you should have listened to me. I mean, that’s the way you should, but I didn’t want to say I told you so because I like when my daughters make their own mistakes. The only problem is they made this mistake three times. So now, I’m really pissed off, and it wasn’t the 20 bucks. I’m just like, I’m pissed because what the, and I won’t curse here, but why even keep that arcade part open when you have 20-year-old games that don’t work, don’t distribute tickets, you don’t have them shut off. You have them on, not only that, the $20 got us 2000 tickets, sounds like a lot, 2000 tickets, you go up there, get a prize. It was enough for a number two pencil and a stick of gum.
Frank Curzio: Those are the prizes, but that’s a shitty business, shitty operations. And for me, I can never ever run a business like that and sleep at night where my sole purpose is to F- the customer. You guys know I own a phone store, which does very, very well for us. My small town, not hands-on, but we sell the best parts. We could sell shitty parts and fix your screen, and you’re going to be back in two months and complaining. But we sell very, very good parts, which means it’s going to be a little bit more expensive, but you get amazing service.
Frank Curzio: And that’s what we provide. Everyone in town loves us and always comes back because we don’t bullshit them. Anyway, sorry I went off a little bit there, getting back to the car. I mean, just tell me that you’re screwing me with a crazy fee and be honest. Oh, here’s a fee, here’s a fee, it was $1,500 in fees. But if you’re buying a car, even if you ever bought a car, I mean, you always get screwed. You’ll always get screwed no matter what, there’s not one person alive that bought a car at dealerships admit I just got over on these guys. No way, no way, no way. You got F’d, and you didn’t even know it. Your payment for that new car, you’re like, oh, it’s $300 a month. It’s awesome, it’s easily affordable. I get the best of that salesman.
Frank Curzio: Yeah. That interest rates probably 6%. And that loans for like 97 months. So, a $50,000 car he just bought turned out to be $150,000. You get screwed all the time. No matter what, you’re going to get screwed. Then you go on at the end and they’re upselling you on everything saying, it’s only going to add a dollar or two to your payment, $2 to your payment. And when you pay cash, you really throw them for a loop, because I paid cash for the car and I said you know what, let me see your financing terms. If they’re really, really low, then I’ll finance, maybe half of it. They’re like, you have to do it for 48 months minimum. I said, what are you talking about? 48… Right away, the guy’s like, you know what, let’s do 72 months, put half down. I said, no, no, no.
Frank Curzio: I said, I’m not doing 72 months. I said, what’s the shortest timeframe? If I can do it for two years, fine. At maybe a one and a half, 2% rate. Nope. You got to do 48 months. I’m like, it’s just funny. I just could picture how many people get screwed during that process. And once they put out the 72 months and it’s $300 a payment now, they’re adding special features, roadside assistance, which has anyone ever called roadside assistance ever in history? In history? Have you ever, your car was messed up and you call roadside assistance. No, you call a family member. You have a phone, you have a cell phone. You don’t need OnStar, all this stuff. They’re like, it’s $2 extra, you don’t understand, it’s thousands and thousands of dollars over the life of the loan.
Frank Curzio: But you always get screwed, seriously. But that $50,000 car could probably cost $150,000. I could’ve bought… I don’t know if you’ve bought a Lamborghini, maybe one with a Dogecoin meme on the hood. We’ll talk about that Bitcoin conference later. But the car industry right now, guys, I mean, if you’re getting a car, you’re really, really going to get screwed. And there’s nothing you can do about it. There’s just no supply. You’re going to have to pay sticker. And if you don’t, if you’re like, I’m out of here, that car’s gone. At one dealership we went to, they said they usually have 350 new cars on the lot. These are big places we went to, it’s on average. They only had 20 and had no idea when more are coming in. And the ones that they’re able to see coming in a week ahead, are already sold before they even get to the lot. And people are driving, this is what these guys are telling me, driving hundreds of miles, Philly, DC, North Carolina, we’re in Florida, to get a car it’s in inventory. And even to get used cars, because there’s nothing out there because of the chip shortage.
Frank Curzio: But this is from almost every dealer. This isn’t like, oh, well I went to one Chipotle and it wasn’t crowded. No, no. I mean, I’ve been looking for two months, two months, I probably went to 20, 25 dealerships calling everybody, CarMax, AutoNation, AutoTrader everything. Couldn’t get anything. We got lucky. There was just a couple new cars in a lot. I mean, this is how lucky we got. So, the Denali we bought, GMC is the dealership. We were there for four hours, which is normal when buying a new car or any car. And we got there around two. So, it was around 4:30, and my wife and I only had breakfast, so we were starving. I told them that, just talking and going over the story, doing a sales pitch. I said, listen, I’m going to be honest with you.
Frank Curzio: If we don’t eat, or if I don’t eat, I’m going to kill you guys. I said, I’m being honest with you. I said, I’m just impatient, I want to get out of there. We’re buying the car, paying cash, you just want to get out of there, right? Because we’ve been looking for cars for such a long time and we’re both starving. And the salesman was really cool. And he’s like, listen, just go, go get something to eat. We’ll take care of the paperwork. We’ll do everything. And then when you come back, it’ll almost be done. So, we left at 04:30, we got back at 05:30, there were three Denali’s on the lot and all brand new, all different colors. We got the black one. It’s really, really nice. And we were the first to look at all three. Basically just came in.
Frank Curzio: By the time we came back from dinner, those other two, all three of those cars were outside. We bought one of them. An hour later they were gone. They were gone, they was sold off. That’s how quick they went. So, they probably got there at 11 o’clock. I mean, they shipped in the night before, they cleaned them up, put them out there outside. We saw all three of them, we were choosing which one we want. We said, okay, let’s do the black. And then all three of them were gone. Again this is like four and a half, five hours. All of them are gone, immediately.
Frank Curzio: And I talked to the man, I said, have you ever seen anything like this before? He said no, and I’ve been doing this for 20 years and never saw a mark like this, where there’s no inventory and everyone has to pay sticker price. There’s no discounts. There’s no incentives. They don’t need it. Because if you say no, you’re gone. That car’s gone. You’re not going to get it. You can’t wait. So, affording GM, the manufacturers, those volume numbers for cars are going to be low. And I say, maybe shorts. Again you want to wait because they both had tremendous momentum. A new week high, guys, I never short stocks, not even short, but even buy puts on them. What with stocks at 52-week highs. You don’t want to guess. You want to see a little bit of that trend breaking down, but you know what, these guys may make up the difference if they’re charging extra $1,500 for everything that goes off that lot.
Frank Curzio: And there’s nothing you could do. I mean, these are massive fees being passed onto the customer, which I’m sure if they filter down to Ford and GM, that’s great. I don’t know the structure of dealerships. I don’t know how the compensation and incentive packages work for dealerships. I’m not too sure, but holy cow, the demand for cars is absolutely insane. And plants for Ford, GM, most places are still idle due to chip shortage. There’s nothing coming in yet. Still, this is the third month, third month. A lot of these plants have idled. That’s great news for CarMax told you, AutoNation, Sonic, I mean, these are companies that actually pull back off their highs a little bit, but margins are going to absolutely surge because prices are through the roof. They’re charging extra fees.
Frank Curzio: And those are the names I just mentioned that focus on used cars, which used car prices through the roof because there’s no new cars and people want to buy a car. And people who bought a new car two years ago, this is how crazy the market is. If you bought a new car two years ago, it’s getting close to the same price. You could get rid of that car for almost the same price you paid for it two years ago. And what is it like 10, 15% of a car, brand new car, you’ll lose right when you drive it off the lot. That’s how much the premiums are right now. Well you could sell this car almost for what you bought it for two years ago. That’s how strong demand is, it’s insane.
Frank Curzio: What’s also insane is the Bitcoin conference in Miami this past week. Wasn’t in attendance. Was about to go. I’m glad it didn’t go. It’s really, really, really crowded, but it was a hundred percent focused on Bitcoin. Again, we have a Crypto Intelligence newsletter, great contacts, great ideas in that newsletter. Lot going on with Bitcoin and stuff like that, we’ll cover later. But that conference was sold out, and this isn’t the money show or some mining conferences you go to where you might have to pay a hundred or $200, or sometimes you get in free. Merit offered that you can get it for free. If you come through Curzio Research at his conferences, where he partnered up with Cambridge and stuff, I mean, these are guys that paid an absolute fortune. They paid $600 on average.
Frank Curzio: Some people pay as much as 1200 to $1,500 to get in. All big names were there. Crazy. Emailed so many stores from my contacts and you know what? I got a special interview lined up with one of the superstars at the conference. The person who managed to get booed when he suggested this crazy idea on his panel, which included the CEOs of the top crypto mining companies, including Riot and Marathon. And this panel was hosted by the infamous, his words, not mine, Kevin O’Leary, who I do like a lot. Today’s guest is Frank Holmes, executive chairman of Hive Technologies, big player in mining operations for crypto. Also CEO and chief investment officer of US Global Investors. But he’s here to give you the inside scoop of what took place at the biggest Bitcoin event ever. He’s going to tell you why he was booed and why the audience then began cheering for him. Pretty well placed. Tough crowd over there, but fantastic, fantastic stuff.
Frank Curzio: And I want you to pay close attention because there’s a big trend going on. And if it happens, Bitcoin’s going to explode, and I’ll break that down after the interview, but just have that theme in your head when you listen to this because a fantastic interview. And let’s get to my interview with Frank right now. Frank Holmes, thanks so much coming back on Wall Street Unplugged. How’s it going, buddy?
Frank Holmes: It’s great to be with you.
Frank Curzio: Well, I’m glad you came on. And you weren’t around three months ago, but this was important because I wanted to get somebody on that was actually at the Bitcoin conference. I was going to attend it, very busy on my end and I’m glad because I have some great sources there to tell me all about it. I want to hear from you, someone who was at a panel, spoke at a panel. We’ll go over that in a little bit, but how was the atmosphere? How was the sentiment? Remember, we’re going into Bitcoin where it’s down 40%, 50% from its real top just a couple months ago, is still tremendously over the past six months. But how is sediment? What did you see there? How was it? I mean, we’re talking about a conference where people paid a lot of money and those numbers were pretty insane in terms of how many people showed up.
Frank Holmes: Well, it was insane and the energy was electrifying. There’s some real important data points to recognize. The center where this was hosted was not beside any hotel. It was 14-minute Uber drive if there was no traffic to your hotel. So, when you went into this sort of area, it was outside and inside and you listened to Deadmau5 music, boom, boom, boom, boom, so loud. So, it was hard to hear if you’re outside in the heat, and inside it was really cool, but you had 12,000 people spend $600 a ticket. The whale day was 14,000 ticket, except if you paid at the door of the event, it was 21,000 and those $600 tickets went for $1,200 at the gate. So, it was unbelievable that that many people would go that far away from a convention, noble benches convention center and hotel convention center.
Frank Holmes: And you and I have spoken at MoneyShow, which is always a spectacular event in Orlando with Kim Gifford’s show. I think the max like 8,000, but it’s free. And it’s right beside the hotel and the convention. These are diehards. These are real committed Bitcoin enthusiasts. Ron Paul’s spoke, and he’s in his eighties. And he was like a Michael Jackson performance, but Michael Saylor seemed to be the biggest theme of believers, that they announced a $400 million financing of notes to buy more Bitcoin. So, it was electrifying.
Frank Curzio: Now it’s crazy because we see the holders where they’re just, hollers, whatever you want to call them, that are holding this asset forever. And they say, they’re going to hold it forever. But I see Michael Saylor, what he’s doing, where he’s taking out debt buying Bitcoin. I think it’s such a big name in the industry because what everyone wants is to see more institutional adoption, it’s going to be great for every person who owns Bitcoin because that’s where the real money is coming in. You’re talking trillions, right? So compared to, there is a lot of money to in this industry, and we can get to your panel next, but it seems like every time I heard somebody mentioned more regulation or which institutions need to see, because they have a fiduciary responsibility to invest accordingly for their clients.
Frank Curzio: It seems like the Bitcoin, the crowd got pissed off at that. Could you explain that theory? Because we all want institutional adoption. They all love Michael Saylor, but yet, when everyone puts more regulation into this or just regulation to make sure your money is going to be safe, it’s not going to be hacked. It seems like they don’t want that. I don’t know what they want actually, if that’s the truth. Maybe you could explain it to us.
Frank Holmes: There is an audience of hardcore zealots that I call them and then they show up in Democratic party. They show up in the Republican party and they show up in Libertarian party. And so there is a small group of very vocal opinionated libertarians that are there. That’s just what is part of the ecosystem. More important is that there’s lots of very smart people that attended this event. Many billionaires from Silicon Valley, flew in. Scouting out looking at opportunities, understanding what’s going on, down to young college kids that made some quick money buying on their PayPal account. And all of a sudden they made thousands of dollars in the past year. So, I think that there’s something big that’s happening, the real regulation and the concern is when you have, I think more concerned is G7 announces a minimum tax on corporations, which is basically a creep, it’s going to get higher and higher and that will stifle innovation and that will stifle research and development.
Frank Holmes: So, corporations don’t go from one state to the other or from one country to the other, that’s socialism. And that’s only bodes well for the real intellectual that looks at gold as an asset class and silver, in particular today at this event, the new digital investor that says, this is what Bitcoin is to protect you against. I understand that very much so, I can appreciate and respect that. But if Bitcoin is being used for nefarious activities or for buying dirt bombs or for human trafficking or for a hardcore drug movement, etcetera, that’s just bad, it’s just bad to be with. And that was the big concern coming out of El Salvador. It was great to hear what country’s going to do it, but look at the country, what are their policies for that country? And so I think, I hope that it’s not for a cesspool of nefarious activities. I really hope it’s legitimate to create jobs, education. So, we’ll see how that unfolds.
Frank Curzio: Yeah. I was talking to one of my analysts, Daniel Creech, who’s a Bitcoin fan as well and crypto fan. You mentioned gold, right? And when we were younger, we listened to libertarians, tell you how the structure of dollar, you need to own gold. And a lot of people, even to that day, we see people that still own gold. It’s the only thing they’ll own. And I get it, that’s us. But the younger generation right now that you’re seeing is, it’s the same thesis, for gold, pretty much the same reason why they’re buying gold, they’re buying Bitcoin for. They don’t believe, same reason, but the excitement around Bitcoin and the potential gains that they’ve seen, even though it’s come off. I mean, again, these kids are out. Most people like to be told a better story than make money on their investment, which is crazy.
Frank Curzio: But I guess, how do you, is that a real negative for gold? Because how do you get the younger generation to really believe in gold when it’s all the… Everything’s digital now, Bitcoin is the option that they’re learning about that they see everywhere on TikTok, their social media accounts on Instagram or whatever Facebook, Twitter. Is that a bad thing for gold? I mean, where’s the excitement there? And it seems like it’s almost a dying breed, which again, I’m very invested in gold. I have lots of investments in gold, but just want to get your thoughts to have someone who owns both of these asset classes.
Frank Holmes: Well, gold is much more liquid. Actually gold is a lot less volatile. Gold is less than the S&P. We look at the one day volatility for gold it’s plus or minus 1%, 70% of the time, the S&P is now 2%. Crypto and Tesla are all riding around 6% daily volatility. So, I think if you’re running a diversified portfolio, gold has been a better asset class to manage that. And I think that gold is both central banks. I don’t think central banks over night with the G20 are going to all of a sudden jump into Bitcoin as being a core reserve, but we are seeing a big trend. But we do know historically in the past 21 years, gold has outperformed the S&P 500, 250%. Having a 10% weighting has just been wise if you’re managing a diversified portfolio.
Frank Holmes: And I think that more and more institutions have been buying into gold as a liquid diversifier that’s over-performed the market. It’s a new breed, when it comes to crypto. I think one of the big differences is millennials, especially boys that have been playing the game, and they’ve been very good at it, like athletes. They’ve been rewarded in digital money, the use of the concept of digital money. And so, Bitcoin comes along as a form of digital money and a store of wealth. And I think that it’s more appealing and attractive to them, where the big gold buying demand really is love. It’s the great love trade. I’ve characterized that as… And it comes from China and India and the Middle East. It’s much more important that you can wear your gold. There, you get gold gifts. You get it if you’re a born in the year of a bull. Then this year, you’re going to get a little gold bull in wedding season.
Frank Holmes: People have acted before they were poor. They rent their gold for big, looking like a huge wedding, but gold is very important part of 6,000-5,000 years of evening culture that I don’t think is going to be wiped out. And you need electricity for Bitcoin to work. So, I think there are benefits of both them. So, I’ve always advocated at 10% weighting, and gold is prudent and wise. It rebalances once a year, and 2% in crypto. It’s just you need to be wise. Now, you’re going to really speculate on these new tokens and new coins, et cetera. That’s a complete different casino type of game, but understanding the architecture and the beauty of Bitcoin, it is literally a Rodin piece of sculpture, it’s so unique and special. And then Ethereum is a smart contract, which is the backbone for the growth of DeFi. It’s like the internet of things.
Frank Holmes: It’s the backbone for stable coin that JP Morgan launches. It is now the growth for NFTs. You all need to have Ethereum as the platform. So, I remain very bullish, and that’s why HIVE Blockchain Technology is the only crypto company mining, both. I mentioned that this conference that I believe in ESG when we launched it. Now, some of these other crypto companies started mining and followed our path, but they didn’t care if it was cold, they didn’t care where it was from. And now, they’ve had a backlash over that.
Frank Holmes: It’s hurt HIVE, for it doesn’t make sense for us because we’ve always had this pure green energy. And I think that this bodes well for our future. And I believe that if you HODL a green mine coin that has never gone into crypto spaces has never been involved in any of the various activities is what they call a virgin coin. In 10 years, it’s going to be like owning an Andy Warhol original piece of art. There’s only 21 million coins that are going to be out and you’re going to have a premier, like you have the Babe Ruth card going on NFT, worth millions of dollars. That’s what I think is going to happen. So, we might need Ethereum classics. We sell a piece of electrical bills, and we bank our big point in Ethereum.
Frank Curzio: Now you brought it up, so I’m going to go there because this is great. So, you spoke at, on a panel, at the Bitcoin conference, it was mining as a public company all-star lineup, you had Kevin O’Leary, hosting the event as moderator, you had Jason Les, who’s a CEO of Riot. Then, you had Fred Thiel of CEO of Marathon Digital, and then the most important guest and popular guest, best-looking guest on that panel, was yourself, Frank Holmes. And you mentioned what you just mentioned to me, that there should be separate coins in terms of how you’re mining it. If you mine it ESG related or, just green, it should be a little different from every other Bitcoin or whatever. And you were getting booed on stage. Talk about that. That was the only time you got booed. I thought it was out of playful fun and everything. But talk about that.
Frank Holmes: Well, the diehards actually I found out afterwards, thought I was Hive Software company. Like, they’re just oblivious. Like, these are fanatics. So, it was entertaining. I smiled at the booing; they weren’t actually listening. And then Kevin said, “You mean to say that you’re going to have a coin that is green, and it’s going to be different pricing mechanism.” And Jason said, “It doesn’t matter.” He can’t get a different price. Well, I believe what I believe. So, O’Leary called it a Frank Coin, and then everyone started cheering, cheering. Frank Coin, chanting Frank, Frank Coin. And a Frank Coin is what I do believe, but it has the signature. It’s only mined green. It’s a virgin coin, and you hold it ,and in 10 years, I believe it’s going to be much more valuable.
Frank Curzio: Yeah.
Frank Curzio: And if that happens to come true and come to fruition, I’m going to take full credit for the Frank Coin, just to let you know.
Frank Holmes: I love it.
Frank Curzio: When you’re on a panel is listening and they talked about ESG and stuff and how important it is, which we’ll get to really in-depth of HIVE technologies a mining company. But also the bigger theme was institutions. And Kevin O’Leary understood that you understood that. We touched on a little bit before I want to get more into it because just the reaction from the crowd, do they want more regulation? It’s like, not really, but yet you need it for institutions. You can see from Kevin O’Leary, who’s a person who talks to institutions. You could see from you as a fund manager person to talk to institutions. Again, we mentioned a little bit before, but I’d like to get an answer from you. What are you seeing in terms of institutions coming to you and asking you about HIVE? Because, I know that you used to have institutional coverage on HIVE. I’m not too sure if you have it now, is it tough to get into it?
Frank Holmes: Fantastic. A piece of research,
Frank Curzio: So go there with the institutions. I wanted to get to that because I know I’m hearing, even on our end from our security token, where institutions are inquiring, but they want to see more of the regulation. But if that doesn’t come to the industry, it’s going to be more and more difficult for these institutions to come in.
Frank Holmes: Well, what was really interesting for me was afterwards finding out the people that were yelling were confused. And this guy was in that whole crypto ecology system they have, and was going to report to them that we are buying what we’re doing. But more important is, I had hedge fund managers, and I had a pension fund manager, approach me afterwards, thanking me and said that they’re going to sell those other stocks they own, and they’re buying high because they really didn’t understand how dedicated and committed we are to this space of an ESG strategy.
Frank Holmes: Like, I explained that in Sweden, we go from 20 megawatts to one in 15 seconds, when everyone is putting on their toasters and turning on their heaters in the morning or at dinner time, and we help the overall system and less Capita expenditure, there’s no harm to anyone. So, there was a strong sustainability for us being that community that, that community calls us and says, “Guess what? We have another 10 megawatts for you.” And there’s a scramble to try to get this green energy and bill giving us because we’re good corporate citizens, and it’s not costing us a whole lot of money. It’s really not a regulation. Frank, it’s a higher standard of care. That’s really what it is. I look at certain things could be really regulatory and a burden to it. But this is more about when you have an ESG strategy, is that you just really trying to show a higher standard of care.
Frank Curzio: Definitely makes sense. And let’s get into HIVE because you are a mining company and explain to someone who doesn’t understand crypto just real briefly, exactly what you do. Because people said, “We’re buying cryptocurrencies,” but what exactly does that mean? Your green initiative was put in place before we saw the massive push to ESG today with the new administration. Now, every single presentation you even on the stock side, every presentation has three, four, five pages. The quarterlies, they’re dedicated to what they’re doing. ESG, you were well ahead of this. This was a big theme of yours before ESG was a big deal. Talk about that, how it relates to HIVE. Explain your company to someone who wants to learn about it, for the first time.
Frank Holmes: So, the big word is shareholders rights. And then it became stakeholders rights. A lot of this is sort of the socialist mindset comes out of it. Europe. It goes to England and comes to Canada, comes to the U.S., And it gets sort of filtered out to the degree, but there was a big push. And what happened with this whole thesis was really being pushed in places like Norway without a trillion dollar pension fund from which they made off of oil, by the way. And then they said, we’re not going to own any more oil stocks because that’s where we made our money and we’re going to be green only. The Europeans are going to raise the bonds of 1.7 trillion. $1 trillion is green only, infrastructure spending. So, there’s a big push. They turn around and call out BlackRock and say, “You’ve got to be ESG, or we’re going to yank our trillion dollars of a view to take care of.”
Frank Holmes: So, all of a sudden, they scramble to be ESG compliant and then CalPERS jumps on it. And so now we have this sort of thing growing, which we saw as fund managers happening about over seven years ago, we know for the mining industry, especially Canadian gold mining companies were way ahead of the curve and they didn’t call it ESG, but they call it about being sustainable. And they always found like in Mexico, they increase the tax on gold mining and silver mining companies. Why? Because Canadian mining companies were much better at clean water for the local people. They funded education much better than any politician. There was no corruption with that. So it’s interesting to watch how it’s evolving, but we’re sensitive as fund managers. Remember, I started HIVE blockchain technology because I couldn’t launch an ETF. Bitcoin ETF. Because I recognized that the SCC, rightfully so were worried.
Frank Holmes: Some hacker gets paid in Bitcoin and shows up in a New York stock exchange ETF. So, that’s why they’ve delayed this whole process. So, I took this knowledge and was a co-founder with launching the HIVE blockchain. It was an incredible wild run, from zero to massive hero back to zero. Then now at hero again. We’ve weathered through all the storms, and we had institutions give us a 2017, $200 million. Fidelity was the biggest player giving us a hundred million dollars. And it was a very simple thesis, green energy only. Iceland, we started with, then going to Sweden. Now, we’ve purchased in Quebec, and now, we’re in New Brunswick. We believe it is going to become very important long-term. We mine Ethereum and Bitcoin. For simplicity for your listeners, every 10 minutes, it’s a jump ball. I know you love this metaphor: Hockey players drop puck every 10 minutes.
Frank Holmes: Theirs is, run to get that puck or ball and the fastest computers get it, they get a piece of it. So, if you do have slow technology, then you’re not going to get anything. Your just not going to get a piece of the pie. As more people get faster technology, you get a smaller piece of the pie and they call that hashing difficulty. Basketball would be, Dennis Rodman, he may not be the tallest guy, but had a high vertical jump, and he had the longest arms. So, he got a lot of the jump balls. It’s in every 10 minutes, it’s extremely competitive to get there. So you always have to be upgrading your technology to get a piece of that pie.
Frank Holmes: Today, that pie is only 6.25 coins. What do you mean by that? Well, if we get a piece of the pie to validate the blockchain, that this is an uncorrupted coin, and we get a piece of that, then we get rewarded and share 6.25 coins.
Frank Holmes: A year ago, it was 12.5. Five years ago, it was 25 coins. So every four years, it has started out at 50 coins reward, went to 25, went to 12 and a half. It’s now 6.25. And that will happen again in three years from now. So, the supply is shrinking to the maximum amount of suppliers, 21 million coins. And if you get enough people believing that this represents value, and there’s only 21 million coins, Metcalfe’s law suggests it grows exponentially and that’s, what’s been driving it. PayPal, last year, allowed anyone to buy a fraction of a Bitcoin. You can’t buy an ETF on PayPal. You can’t buy a stock, but you can buy a Bitcoin, and you can turn around and sell it. And you can turn around with that and go to Best Buy or Amazon and buy a new TV. So, it created this huge adoption process.
Frank Holmes: What we’ve seen now is this past correction from the top is really quiet. There’s no big selling. The volumes have all just contracted. And this correction is basically what we call quiet trading. There’s no big panic dumping. Even with Elon Musk, all people do is pull back their bids and wait until this settles. And I think this is really interesting and sets it up for the next big leg. We were up two standard deviations over 20, that trading day, 60 trading days, and one year trading going back two months ago, see how it’s looking in March. And now we correct it back that we’re down one standard deviation. So, we’re getting to that sweet spot if your trader that some catalysts will take place. And we’ll give you that next week up leg. You’re going to get these virgin coins. If you have fast computers, you’re there every 10 minutes as a player.
Frank Curzio: I know you’re going to love this next question, because real quick, before we get back into HIVE, just explain deviations and why that’s a big deal. As a comparison and how it’s, two X higher, one X lower now. Just explain that and why that’s such a big deal because that is fascinating.
Frank Holmes: Well, thank you, Frank. Sometimes, I just speak, because I’m so used to talking about it. It’s important that I clarify it. Everyone has their own DNA and every asset class has its own DNA of volatility. And that DNA of volatility is nice because it’s just mathematical. So, you can turn around and do a calculation and approximation with a 70% accuracy that over one day, 20 rolling days, 60 rolling days, 12 months, whatever time period you want. What is that in a volatility? So, what’s interesting is that the gold has a DNA volatility plus or minus 1% 70% of the time. So, when do you want to buy gold when it’s down two or 3% of the day? Because mathematically lots of your favor, it will revert back up to the mean. Anytime gold is up 3%, 4% in a day, odds favor the following day it falls because it’s up too much against its normal volatility, but the S&P is 2%.
Frank Holmes: So, it was more volatile than gold, but most of those talking heads on television will tell you gold was more volatile than the S&P, not true. Now, when we come to crypto, that’s another story. That daily volatility of Bitcoin, Ethereum is six times what gold is. 6%. And it’s more like Tesla. It’s a non-event for Tesla to go up 6%, all 6% is what happens, 70% of the time. So, you as an investor, early investor or trader, it’s always helpful to respect the DNA of volatility of that asset class. And I write about it all the time. I publish every quarter when I publish about times earnings, and I publish the low U.S. Global’s earnings. I always say, remember this DNA of volatility and then slightly changes over time because of new factors. But basically, it’s important to recognize that crypto is six times greater than gold.
Frank Curzio: That’s great. I really love how you explain that. I mean, because the importance of it, that’s why I said, “Just get a little more detail into that.” Because sometimes, when we get math here and stuff, but you show the importance of why that is, and just the comparison to the S&P 500 and Tesla is awesome. Talk about HIVE itself.
Frank Holmes: Just to add that most lawsuits against public companies and brokers is because of volatility. They immediately go to look for flaws or something else. And if you educate people about this DNA of volatility for things, there’s no fraud, it’s different asset classes have this volatility. It’s easier to stomach. There’s not manipulation of the markets. Its new industries, new breakthrough exploration companies. They all have an R&D companies, biotech have higher volatility.
Frank Curzio: Makes sense. So, getting back to HIVE here, one of the things that people say are the negatives, right? I always like when you know the negatives up front for a company, they are usually factored in. But they say it’s not as easy to scale because you mentioned like the technology behind it, you have to buy the best computers to mine this, usually Antminers. We know there’s a trip shortage. Really impacting the auto industry, even technology companies as well, having trouble. You also have to find electricity that’s cheap, which is not easy to do, so you have to be in the right areas. And then, like you mentioned earlier, mining gets more difficult over time. Plus, you’re looking at an industry where, margins are pretty heavily dependent on the underlying commodity.
Frank Curzio: So, how do you deal with all of that now that you’ve been through this process? Because HIVE, thank you so much. I’m an early investor, thanks to you in this company where you’ve been around for a while. This isn’t like, hey, let’s take advantage of crypto, just like people take advantage of Cobalt when it’s hot or whatever, you’ve been in this for a while. So, I know you’ve seen this. How do you address those risks? Or, how do you limit those risks? Because those are still concerns for a lot of investors out there.
Frank Holmes: Well, first of all, understand the great biblical story of Joseph and the Pharaoh. The Pharaoh was having all these dreams and there’s tremendous of props and everything’s doing well. And then there’s, for seven years. And then it’s a disaster for seven years. And Joseph says, “It’s simple. Save enough each year for the seven years, they’re going to have this drought.” That’s what it’s telling you, you need to have reserves. So, having cash and having position, it’s just sort of prudent to how.
Frank Holmes: I think that that’s something I’ve learned from managing gold funds, because gold fund ball until these green and gold, and we get these incredible bull markets and we get these bear cycles, these cold winter cycles, and you have to have reserves to be able to weather the storm. I think with crypto, a big part is cheap electricity. You have to make sure that you have inexpensive electricity in safe jurisdictions. I think that helps you weather the downdrafts. In Sweden, our cost of electricity is like 1.7 cents. And we were able to hedge it for a year. So, it’s inexpensive, there’s a surplus of hydroelectricity in that whole region. That’s why Google and Facebook are there. And so, it’s finding those sweet spots so that you can weather the downdrafts.
Frank Curzio: I’m looking at your website here, bringing it up, just showing everyone, if you go to HIVE, guys, just the overview of your different operations here, which is really cool. Just showing pictures and stuff. That makes a lot of sense. Getting back to the point where you have about this, probably more than three, but I know three who are on your panel and Merit as well, is it hard to secure those machines right now? And are you guys in a perfect place for this? Because that seems to be a huge advantage if you’re able to do that. And I think that the market, from what I’m hearing over the last month, opening up a little bit more, but it was really tight there for a while. Where some, if you would order some of these machines, you’re looking at six months or even more of actually getting them.
Frank Holmes: Oh, and such as that, you paid, you have to give half the money upfront and they still don’t deliver them on time. You know, that’s a really frustrating part. We had this time last year with BitPain, and then, we’ve made it on all our press releases. We talk about this chip. The difficulties this last year on logistics. What we had to do with all of our GPU chips is basically, expand the memory card from four gigabytes to eight. The file they call it, Dag file for Ethereum, it grew so big that you need more memory. We saw just delays and disappointments of sending over our cards, upgrading them, paying the difference and getting it back on time. And so with that, I don’t think it’s going away for a while. Some of the great businesses have been cargo jets.
Frank Holmes: I mean, these jets are doing phenomenally well. They fell less than the airlines industry, the bottom, because it’s the only place to move things around. And now they’re booming. And the same thing happened with ships because the UN pass, all these green energy on what type of oil could be used for these ships. So, half the ships really can’t move products around the world. So, you have technology shutdowns, you have shipping. The guys making all that money right now, or cargo airlines and cargo but shipping business. So, I think that’s just something that there’s always someone that wins in this, but for us, we use other suppliers. We’ve been very vocal about the concerns we have for it, but we’re getting our equipment. It’s more than I would like. I think that the shutdown in China is a flip-flop. They shut it all down. So, all of a sudden there’s more chips being able to be sent over here.
Frank Holmes: And then, all of a sudden, China’s just going to open up again. It’s just so corrupt. The policy’s over there, the process for disclosure, it’s annoying, it’s frustrating, but we seem to weather through it. And we’re having access to other chip providers, both from a mining Bitcoin to Ethereum and the big cap expend, we’ve spent over a hundred million dollars now on chips being delivered to upgrade. And then, we’re going to now expand all their Ethereum platforms is probably spend another a hundred million dollars over the next year. But as a company, our run rate exploded to a peak. We were doing 180 million, we’re doing Exahash of Ethereum mining, which made us the most profitable crypto company at the end of December. Our numbers, we don’t know for our year-end, which is March yet, but I look at the other comparable numbers and I think we made more than other people.
Frank Holmes: So, I’m very tickled about being in that position. We’ll see as all the numbers come out, but I think it’s our focus is, we bought a lot of other equipment. We’ll have it delivered by the end of August. If all the equipment shows up in time, Frank, please, please let us show up in time to hash of Bitcoin mining. This is all public. This is as long as it shows up on it. By Christmas time, Bitcoin money should be up to about three, lower but three Exahash. Our Ethereum should be well over the equivalent of an Exahash. So, I think that run rate where today, we’d probably be doing over $300 million and making 200 million.
Frank Curzio: Wow. That’s incredible.
Frank Curzio: That’s really great stuff. So, okay. Last question here. What was the craziest thing?
Frank Holmes: Frank. I get peppered by this every day. Squeezed, et cetera, when are we going to get listed in the U.S.? We’ve been public. We have filed. We have filed to get listed in the U.S. And it is just a process. It’s just a matter time here. We will be listed on NASDAQ, and hopefully, we will get to demonstrate what we did last year as the best performing crypto mining company. And the most profitable for shareholders would let us to be the best performing crypto stock.
Frank Curzio: Yeah. And I don’t see it being held up because you have other companies, I think. Are they on the Nasdaq? I don’t even know if MARA is actually on the Nasdaq. I think RIOT is though. But anyway, that should be a pretty simple process. I know you guys meet all the qualifications.
Frank Curzio: Now, last question here. What was the craziest thing or something that surprised you at the Bitcoin conference? Because I saw pictures. People sent me some crazy stuff all over the place. I know Paris Hilton was there. You had Tony Hawk, and, again, from Tony Hawk to Ron Paul, right? It doesn’t get more… Especially a guy looks at deviation, stuff like that. Anyway, it just doesn’t make sense. But what was some of the craziest things that you saw there?
Frank Holmes: Well, Ron Paul is my hero. Guy’s in his eighties and he’s up there on the stage like Michael Jackson, moonwalking, talking. It was incredible that this guy could carry an audience, and he was able to cross three generations of ages. He was phenomenal. So, I was so impressed with him. I’m 66, and four weeks ago I ran the Austin Half Marathon. I finished, but I was really impressed with this guy, how he told his libertarian story.
Frank Holmes: But I think the speakers, I think that… I spent time, quality time with Michael Saylor. He’s very focused on his vision. He explained very well that he wants to use… He cannot grow his business faster. The money supply is growing. So, he’s going to use his P&L and Bitcoin as a process. So, I tip my hat to him. And he clearly had the most interest in the crowd where I was sitting, and I was about 15 rows back center ice. And it was just Michael Saylor talking, get ready, and everyone’s jumping and enthusiastic. And that impressed me.
Frank Holmes: And then when you walk around and you noticed billionaire hedge fund managers, billionaire Silicone Valley, venture capital managers, high-profile people, in addition to celebrities going out and walking around and telling their story, that was impressive. It had the whole spectrum of diehards to new learning enthusiasts.
Frank Holmes: And I think PayPal probably really helped. There was a where you could buy art. And I bid on something, and I was the high bid, $6,000. I thought I’d go to 10, maybe 20, because an incredible piece of art, the detail of the sculpture piece. It went for 100,000.
Frank Curzio: 100,000.
Frank Holmes: When I said this is spectacular, I would have paid up for it, not 100, but I said, well, some guy with bitcoins paid for it. It was another bid. He bought his Bitcoin 10 years ago and all of a sudden he crystallized it. They would only accept Bitcoin to buy this art. They’re the new things that I saw and mainstream CNBC wasn’t there, Bloomberg TV wasn’t there. The biggest cryptobit in the world, and they weren’t there. But streaming, new streaming podcasters like yourself, video streamers, et cetera, they were there. And the media section was large that you just go from desk to desk doing interviews of what your vision is.
Frank Curzio: Yeah. That sounds like a lot of fun. It sounds really, really cool. So, Frank, I love when you come on. One of the ways that people get in touch with you, and I’ll bring this up, is by going to your website, U.S. Global Investors. And Frank Talk is a blog that you have that you write about pretty much anything. You’re looking at gold metals, copper, you can talk about Bitcoin and stuff like that. But if anyone wants to get in touch with you, learn more, outside of going to usfunds.com, how could they do that?
Frank Holmes: Yeah, go to usfunds.com and sign up for Frank Talk. Investor Alert comes out weekly. There’s about 100,000 readers in 80 countries. But we talk about crypto, we talk about gold, luxury goods. This time last year I launched a luxury, only luxury goods fund in America and everyone went, “What are you, crazy? What are you, nuts? Luxury goods?” Guess what, they far outperformed the S75. The richest man in the world last week was LVMH. So, I’m a contrarian type of guy. Gold was a contrarian and I have my thesis, luxury goods, I have my thesis, and Bitcoining theory, I have my thesis. And I’m sticking to it.
Frank Holmes: So, just go to usfunds.com, sign up for Frank Talk. And if you have any ideas that we can improve on it, our YouTube is growing. We have lots of educational videos, only two-minute videos on Metcalfe’s law, why Ethereum has been growing, outperforming Bitcoin. That’s who you want to go to.
Frank Curzio: Awesome. Great, great stuff. Frank, as always, love having you on, my friend. Just a great, great guest. Always educate, always gets ideas from you and someone who… Very, very good friend invited me to so many different things. We’ve been on lots of trips together. So, I just really appreciate you coming on, buddy.
Frank Holmes: Well, thank you for your support and encouragement, my friend.
Frank Curzio: All right. I’ll talk soon.
Frank Curzio: Great stuff from Frank. He’s just very smart, data-driven analyst. By the way, guys, next week going to have another fantastic analyst on. He was on a year ago, we got some of the highest views from that podcast. Excited to have him back on, so definitely make sure you tune in next week. Lots of ideas he’s going to share, lots of research. You’ll listen to Frank talk about standard deviations, so I wanted to explain it in detail, if people don’t understand that. A lot of his analysis is based on algos, but also fundamentals. It’s not just system-based decisions. A lot has to do with throwing fundamentals into that system and coming up with something that works.
Frank Curzio: But I just love picking his mind, love his energy. He’s a guy that helped me get on New York Stock Exchange a few years ago for GoGold. It was awesome. I was actually at the top of the… Just ringing the bell, where they only allow, I think, 12 people up there or something. And we rang the closing bell, and the opening bell was Blue Apron, which had 500 people there. So, it was pretty cool. And I’m glad only like 11 people from his office in Texas showed up because I was able to actually go on that stage. What a great time. We had a really, really great time.
Frank Curzio: But again, I just love his energy. I hope all of you, and I really mean this, I really hope all of you love what you do that much to the point where Frank… When you’re over 60, you’re still motivated, right? He’s still having fun. He’s smiling, he’s enjoying. Because Frank could retire whenever he wants. He’s done well over his career. He never will because he loves what he does.
Frank Curzio: Before the interview, I said I want you to focus on one thing. When it comes to Bitcoin, this is an amazing conference because you had institutions there, and you need institutions and Wall Street to work with crypto. And it’s been very, very difficult. Even my industry in security tokens is not easy, but now, you’re seeing it merge a little bit.
Frank Curzio: And I want to bring in Daniel Creech, senior research analyst at Curzio Research, to talk more about this. In the Miami conference… A lot going on with Bitcoin, a lot of volatility, a lot of news out there. And what’s going on, buddy? How’s everything?
Daniel Creech: Frank, it’s wonderful. It’s always good here on the island. Two quick things first. So, @FrankCurzio on Twitter, that’s @FrankCurzio, the small picture is you at the GoGold, right? That’s you in the suit? That’s what you’re referring to with Frank.
Frank Curzio: Yes. I’m using that picture, yep.
Daniel Creech: Yeah, so that’s cool. And number two, hopefully, you open with this. What are you wearing? I’m going to need sunglasses in this studio. Look at that jersey he’s got.
Frank Curzio: This is great. So yeah, the jersey I mentioned earlier. This is like the yellow, red, and it’s… Listen, Donovan Mitchell. I don’t know if you follow the NBA.
Daniel Creech: I don’t. I don’t know who that is.
Frank Curzio: Last night, you should have, because it’s making me look like a superstar because he scored 45 points. They were down by 13 at half, at home, Utah. If you watch a game, one of the greatest places to watch a game ever.
Daniel Creech: Who were they playing?
Frank Curzio: They beat the Clippers. And they didn’t have a very, very good key player, Conley, point guard, he sat out. This was a late decision for hamstring or whatever. So, they were kind of projected to lose that game because Clippers came off just winning a seven, Game 7 series. They were down 0-2, and it looked like they were going to get blown out. And this guy came out and just went nuts and scored 35 points in the second half. And it was just very, very exciting. And that’s the jersey I have on. So, nobody can say it’s like… The timing couldn’t have been better, man. The timing couldn’t have been better.
Daniel Creech: I have to say if it didn’t say Utah on the back, I would have no idea whose team that is.
Frank Curzio: All the jerseys are like that.
Daniel Creech: I would have guessed Phoenix Suns or something like that. I get it, maybe it looks like a sunset or a sunrise.
Frank Curzio: Well isn’t Phoenix Suns… They have Valley on it or something? They have something like that.
Daniel Creech: I don’t know what their current one is.
Frank Curzio: Yeah, I kind of like this jersey a lot. I don’t know, I like it.
Daniel Creech: Anyway, it cracked me up. I saw it and I was like, who? I don’t even know who that is.
Frank Curzio: Chris, thank you so much. He’s a subscriber to everything. And he goes a lot of conferences. We’ve spoken a lot. And he said, “I saw that.”
Daniel Creech: Let’s not start a trend here though, people. Don’t be sending… He’s a jersey, jersey buff as it is. Let’s not start sending all kinds of stuff here.
Frank Curzio: I love it. I’ll mention your name on the podcast, and I’ll wear it. I love it. What I really, really hate is I never do anymore, Daniel, is I buy the names or I buy a jersey with a current player’s name on it. Because I probably have like 30 jerseys that were all on another team. So, I’m not going to get a Trevor Lawrence because I live here in Jacksonville, and I know I’m an Eagles fan, you guys know I’m an Eagles fan. But I did buy a Bortles jersey because I had season tickets and that turned out to be a waste because he’s gone now. But it’s like two years and they’re gone. I’m like, come on, are you kidding me? So, I’m hoping that Donovan Mitchell stays on Utah, which he should for a while because they got a good shot to win it all with the Nets. But it’s pretty cool.
Frank Curzio: And yes. Send me those jerseys. I’ll mention your name. I’ll mention your company, whatever I like. I think it’s pretty cool that I do that. It just personalizes podcasts a little bit.
Frank Curzio: Now, let’s get to Bitcoin, Daniel. Because you have some strong opinions, and you also saw a lot of the conference. It was broadcasted. Great. I love the way it was broadcasted. It’s very simple. You don’t have to click like 25 links. It’s one link. You can see everything, and it’s just cut up of all the panels and all the speeches and everything. Pretty crazy. But what was your takeaway just from listening to the speeches? Because I know you follow a lot. You have context there as well.
Daniel Creech: Yeah, it was cool. And for everybody, it’s still up on YouTube. I was actually skimming through some of it today. This morning early, they were broadcasting both days. I think each day was about eight hours. And like you said, they did an amazing job logistics on stage. We hear that it was kind of a shit show on the crowd side, getting around Miami-
Frank Curzio: Long lines, I heard there were really long lines, yeah.
Daniel Creech: And getting in. And that’s a bummer. There were several times during different panels where the guests or the speakers would reference the crowd. And they were saying anywhere between 10,000 and 12,000 people in the room. I didn’t really see an overview of the room, but I take their word for it. But we talked about last week, how they were expecting over 50,000 people at the conference in general. So, of course, you’re going to have logistic issues there, but as far as the way they ran it, it was brilliant. You just had some upbeat music, MC come out, introduce the next panel.
Daniel Creech: And Frank, we talked about this real quick, and I’m not going to put words in your mouth, but I felt like you were kind of turned off about how it was only going to be about Bitcoin. And I thought that was a really good point. But I have to say, if I had to use one word to describe this conference, it would be authentic. Because you have the likes of Jack Dorsey, Twitter and Square CEO and a huge fan of Bitcoin who… Man, was it last year? Or it might’ve been in 2018, but he came out and said, “Hey, I’m buying X amount of Bitcoin every month just because I believe in it.” Well, obviously he’s a billionaire anyway, so he doesn’t need it. But it’s amazing.
Daniel Creech: Ron Paul was a speaker there. Michael Saylor, Frank Holmes, as you mentioned. But what I thought was so authentic about it is, while it was only about Bitcoin, in the sense, it wasn’t everybody on the same page. You would literally have a panel go out there and give their opinion. Next panel would come on, “Hey, what that guy just says, bullshit.” And you have to respect that. I mean, at least I do. I think you should respect that because some of these people think Bitcoin is going to replace the US dollar. It’s going to replace the Fed. Now think about that.
Daniel Creech: Let me ruin that real quick. You don’t ruin the Fed with technology. That would take a war and an army. So, I’m not saying Bitcoin won’t get an army at some point, but that’s not how you tackle the top. But a lot of people don’t… They said, no, they don’t need to replace the Fed. It just needs to keep doing what it’s doing. It gives everybody hope. That is the big takeaway. This is a global story. Whether you like or want to invest in it or not, that’s fine.
Daniel Creech: But the stats they give on El Salvador, which is a good segue, because we can get into them making history. But when you talk about the people that are unbanked, that don’t even have the option to have a banking system, depending on where you live in the world. And then on top of that, you’re subject to government controls and inflation and your currency going through the roof or down the toilet overnight basically. When that’s your normal, an internet connection is hope for you. And I buy into that. That doesn’t mean that it’s going higher or lower. It means that this is a lot more than just money, and that’s pretty cool to me. And I thought the conference did an excellent job getting that point across.
Frank Curzio: Yeah. And when I say, it’s Bitcoin, for me, I go to conferences because I like to look for new ideas. I like to just network and stuff, and it would’ve been a good time to network, but I know it was really, really crazy there. And we just officially got our financials audited, which took a very long process and yeah, the week was kind of crazy for me. Just the amount of emails that I got in were incredible. And when I say it’s only Bitcoin, one of the biggest things within Bitcoin I thought is, outside of the idiot that came on stage and ruined one of the panels and stripped off his clothes, he was wearing a shirt with a Dogecoin meme on it. And he’s like, “Yeah.” It’s like, man, you really want to take this seriously, guys. That’s not a way to do it. And Mike Keiser saying, “Fuck Elon,” and going crazy-
Daniel Creech: That even shocked me. That caught me by surprise. That was funny.
Frank Curzio: Yeah. Michael Saylor was a huge rock star. There were so many people which we already knew, but just massive, massive fan. But I don’t know if I get that though. I don’t know if I get why they love Michael Saylor. I get it because he’s buying Bitcoin, but you have to realize it’s not really him who’s buying it. He’s an institutional investor. And he’s an institutional investor investing through his company MicroStrategy. Yes, if you ask him what’s hot, what would he say?
Frank Curzio: They want more institutions involved, right? I would think that they want more institutions involved. But yet, that requires a little bit more regulation. Not totally regulated, but it does require what you need to know, where your money is, you’re not going to lose it, you’re just not going to get taken, right? These are institutions that operate with a fiduciary responsibility for their clients, and they manage trillions and trillions and trillions and trillions of dollars, okay? If you say you want more institutional ownership, they boo you. But yet, they were cheering Michael Saylor, who’s an institution.
Frank Curzio: And I have to say this for all the Bitcoin diehards out there. Okay, I’m a Wall Street guy. This is where I grew up. 25 years. Worked on Wall Street. I’m also a crypto guy. Established the first type of security token and trades on a foreign exchange that’s available to retail investors. I understand both industries. And I always understood that in order for this to work, you’re going to have to merge. There’s a reason why Bitcoin surged. Bitcoin surged because it wasn’t a whole bunch of more retail investors wanting to get in. It’s because Twitter, PayPal, you saw all the news, MicroStrategy. Like, wow, this is really getting adopted by institutions.
Frank Curzio: And if you want to see the price go higher, if you want it to go and the target’s out there, 300,000, 500,000, it’s not going to get there without institutional support. I know you might think I’m full of shit. You might be like, “No way, we’re strong.” You’re not, you’re not. It’s not. You just don’t have that big of a market. To put in perspective, anyone that thinks otherwise just doesn’t understand math. And right now it’s a $650 billion market cap for Bitcoin. $650 billion market cap. That’s huge. The Nasdaq, which is filled with America’s biggest technology companies to trillion dollar companies has a combined market cap of 13 trillion. You need to get institutions in here. Like, international brokers just announced that they’re going to start trading crypto this summer. It is the summer, isn’t it? Yeah. They said this summer.
Daniel Creech: Yeah, officially.
Frank Curzio: So, I don’t know what that means. Does that mean tomorrow? Does that mean end of summer? I don’t know. But it’s this summer. But they just announced it, which is great news. But you need that because that’s where the volume comes in, that’s where even more liquidity, that’s when this market really, really explodes.
Frank Curzio: And that’s the thing I didn’t get, Daniel. Because they’re so quick to say, “We love Michael Saylor, Michael Saylor.” There was times when you talked about institutions, and there were a lot of institutions there, by the way. It seems like they’re totally against that and say, “No, no, no, no, no. We don’t want Wall Street.” They still hate Wall Street and those institutions, but you need both of them. You need to merge this. And it’s coming, and you see it a little bit. That’s why we’re seeing this move, again to pull back a little bit.
Frank Curzio: But that’s one of the things I don’t understand. I don’t get. And for all the Bitcoins out there and even Wall Street, you want to explain it to me? Fine, but why boo the institutions knowing that in order for them to come in, you need a little bit more regulation, just a little bit. Not freaking, we’re going to come to your house no worry. But it’s got to trade like your average brokerage firm, where you’re getting statements, the IRS knows if you have capital gains taxes, there’s no bullshit, no black market. You’re not going to get hacked, and then things gone forever where you have insurance on this thing, which you have through brokerage firms. That’s really important.
Daniel Creech: Yeah, absolutely. And I think what is so amazing to me about Bitcoin… And I haven’t come to the light or seen the light. I’ve been a fan for a while. Obviously, I wish I would’ve bought more as it’s going up. But what Bitcoin does on a number of different topics that I think is… I think it deserves a lot more credit than what it gets. It makes you have a conversation. So, just like with you, it makes you have a conversation about institutionals and why you need this big money Wall Street, and a blend of regulation and kind of total just, “Hey, if you screw up, you’re on your own,” this individuality. It also, Frank, here’s why I think I’ve figured this out. I think I know why gold bugs are so pissed off at Bitcoin: Because they’ve really gotten their thunder stolen on an important topic.
Daniel Creech: And I’m not talking about price. I don’t care if an ounce of gold is more or less than Bitcoin, for the sake of argument. What Bitcoin does… Do you know how many times… I wish I could print out a transcript of everybody there, Frank, but the over-under on the words “inflation” and “the Federal Reserve” has got to be 50 to 100. Well, that’s too big. That’s too broad. Let’s say 50. So, gold bugs, and what I mean by gold bugs is… In this day and age, Frank, you’re allowed to make up things and new definitions of everything between men and women and anything else you want, so I’m going to now. When I say “gold bug,” I mean the people that are bullish on gold, no matter what, and it’s gold only. So, they’re the types that, “Hey, the world isn’t big enough for gold and anything else, it should just be gold. That’s the only store of value. That’s the only sound money.” That’s fine. I’ll concede that to move on.
Daniel Creech: What is the gold bugs’ biggest enemy? The Federal Reserve. And they are dying to get people to look and say, “Hey, check this out. Look at what goes on and look at what a silly fraud BS institution printing money. This is terrible for everybody.” They pound the table trying to get you to pay attention to that. And a lot of people, “Hey, yeah. That makes sense. Yeah, paper money. Not backed… Okay.” But then you come along with Bitcoin, and people were like, “Wait a minute. What’s the Fed do?” And if you’re a gold bug, you’ve been preaching this 20 some years, at least. At least since the seventies, so longer than that.
Daniel Creech: And now, Bitcoin is stealing your thunder. It is making people question how the system works, who the system benefits, and who’s in charge. And I think that Bitcoin has brought that conversation into the light better than gold has. And I think that’s hilarious, but I-
Frank Curzio: Why do you think that?
Daniel Creech: Because now you have a movement where you have all demographics and all age groups. So everybody, from your teenagers and 20-year-olds, up to… How old do you think? Well, Frank Holmes is in his sixties, you said?
Frank Curzio: Yeah.
Daniel Creech: I didn’t know that. Not that that’s old.
Frank Curzio: He’s-
Daniel Creech: He looks well. He looks good for 60.
Frank Curzio: Yeah, he looks good. He’s a good guy. Yeah he’s good-
Daniel Creech: Anyway, but my point is, so you have teenagers to 60-year-olds. Hell, how old is Ron Paul? He’s got to be eighties.
Frank Curzio: I didn’t see his speech. Frank sent it to me. I didn’t get to… He said you had to see him on stage. He was fantastic. He’s like a young guy going crazy.
Daniel Creech: He was. I didn’t see it all, but if you know anything about Ron Paul, you know he’s going to talk about freedom, and he’s going to work Bitcoin into how that works with freedom.
Daniel Creech: So, you have this age span of teenagers to 80-year-olds. You have all kinds of people from every color and walk and way of life. And they’re all talking about inflation. Is it good or bad? Who does it benefit? They’re all talking about the power of the dollar, the store of value. I know you like to push back on that because it fluctuates 30% in a week. How in the hell can that be valuable? But I just—
Frank Curzio: That’s Michael Saylor’s… It’s a store of… I don’t get that store of value. I just don’t. Store of value is-
Daniel Creech: But the fact that everybody can turn to that and start questioning that, the fact that all walks of life and all demographics are talking about the Fed, inflation, interest rates, and what it means for economies, I think is a great thing, overall. Of course, you’re going to have people that agree to disagree. You’re going to have people on both fringes. But man, I got to tip my cap to Bitcoin because I think it does a better job at bringing into the fore-light or the spotlight than gold has.
Daniel Creech: And again, I think the world is big. I’m a lazy investor. The world is easily big enough for both. Have exposure to both. You have a tailwind for both assets. But yeah, I think the conversation is amazing, and that’s only going to grow. And I think that’s really, really powerful for everyone.
Frank Curzio: It’s tough for the younger generation who’s growing up in digital to really look at gold as a better option than Bitcoin. But the biggest thing here, Daniel, of everything that you said, there’s one thing that Bitcoin has that gold will probably never have, is the massive volatility and the greed factor of people that they could actually be… Most people, even when I take polls online, and again, it’s not like I have a massive presence on Twitter or anything, but you’re looking at… A lot of these people aren’t holding it for a store of value. A lot of these people holding Bitcoin because they want to get filthy rich. Okay? And you have that greed factor. When you’re seeing this thing go up tremendously, and it’s in the news every single day…
Frank Curzio: And yet what do you have with gold? Okay, well we’re going to put a stake in the ground here, and then we’re going to drill. And we got all these junior miners who never, ever have plans of developing these things, and we’re going to try to sell them to the majors, and they’re not going to produce for 12, 13 years, just on the stock side, right? If you buy in the actual bitcoin, and you’re buying gold as a currency, it doesn’t have the fluctuations. It doesn’t have the excitement. People don’t want to buy…
Frank Curzio: It’s funny because these Bitcoins people are buy and hold forever. And so are the gold bugs. But if you saw Bitcoin going up like 1% or down 1% and traded like gold, you wouldn’t really be seeing this many people in it. And that’s why you’re looking at the WallStreetBets crowd and the Reddit crowd. What’s going to be the next name, right? So, everybody wants to know. Now, it’s Wendy’s that’s taken off all of a sudden. It’s Clover, it’s-
Daniel Creech: It wasn’t just because Wendy’s started breakfast? That’s not why it went up like 20 some percent the other day?
Frank Curzio: Oh, no.
Daniel Creech: I’m sorry, go on. I’m kidding.
Frank Curzio: It’s just funny though. So for me, the greed factor, the volatility, and the fact I think that they have something or they feel like they have something to their own, right? Because I think everybody, I really believe this deep down, a lot of people are going to disagree with this. But deep down by yourself, look in the mirror. You all want to be in the in-crowd. You all want to be connected, where you’re at Goldman Sachs at the top, where you’re getting stuff. Or at Andreessen Horowitz, where you’re investing in, they’re investing in cryptos and they’re getting them for like five cents. Or you’re at SPACs, which they’re buying for a dollar, and you’re buying them at 10, and they go up to 15, and they don’t even care if it crashes to eight because they’re making a fortune. You want to be in that crowd.
Frank Curzio: I feel like it’s very, very difficult. It took me a long time to actually be associated with that crowd. 25 years I’ve been doing it. I still don’t have full access, but I have a lot of access to a lot of cool things and deals, especially through Curzio One.
Frank Curzio: But Bitcoin is something that they could say, “It’s ours. This is us.”
Daniel Creech: Yeah.
Frank Curzio: You know what I mean? There’s something to be said for that, but the similarities are just… It’s amazing similarities. I mean, they both hate the Fed. They’re just using this because they don’t believe in fiat. They’re both buy and hold forever crowd, and they both believe in the same thesis, but yet a lot of these people still hate each other, and I don’t know what’s going to turn gold around. I think gold’s going to go a lot higher. There’s money to be made, but I don’t know if we’ll ever see the Reddit crowd get into gold. I don’t know if we would ever see that. I really don’t think we would see that. I could be wrong, but I don’t think we’ll see that.
Daniel Creech: Yeah. I mean, if they’re driven by a price fluctuation, and I’m not saying I know what they’re driven by, but it could easily happen because you can move junior miners. Hell, Frank, you can get them to go up 500% in a week if you get enough people behind it, low volume. You don’t even need high short interest for all you guys out there. You just need a small float. So, if you can do that, hell, if making money is the goal here, they could easily push stocks like that around, but that remains to be seen.
Daniel Creech: I would caution on saying they never will because, again, everybody likes volatility. Everybody likes to see something you buy go up several hundred percent right away. Hell, that’s like a lottery ticket. But we’ll see. I hope everybody listening out there… Just don’t think that you have to take one or the other. Just gain exposure to both. Like I said, huge tailwinds from inflation pressures and the Federal Reserve and governments all over the world to really help these assets go higher, and have fun. Pick your sides, whatever, but just have exposure to both, I guess is the big takeaway.
Frank Curzio: Especially have exposure to gold right now because gold… If you really own Bitcoin as a store value, which I don’t get… All right? Store value is something you keep it there, you know it’s not going to lose its value. It just fluctuates too much. I’m not saying it’s not an alternative currency, you can’t use it for other things it’s an alternative to fiat. I’m not saying… There’s different reasons of buying it, but gold right now, if I explain it to you, and I’m not a gold bug, I’ve been granted access to a lot of amazing people, spoken at a lot of mining conferences, right now is one of the greatest times to own gold that I’ve ever seen, only because the Fed are just totally oblivious to what’s going on in the world, where we have inflation absolutely everywhere.
Frank Curzio: So, inflation is at 25-year high. Core inflation’s at a 25-year high. Okay? We all see inflation. We all know it. The Fed says there’s no inflation. We have GDP growing at 7%. We have the markets at all-time highs, prices at all-time highs, commodities in your all-time highs. We’re seeing everyone raise prices across the board. We’ve seen inflation, just a total inflation in every market, but the Fed’s keeping rates at zero, and easy policy. We have 9.3 million jobs that are available, and what is it, 9.2 million people who are on unemployment. So, our unemployment rate is zero. So, you hit all your targets that you needed to hit, but yet, they’re keeping this policy in it.
Frank Curzio: So, what does that mean? It means that right now the real interest rate, and all that means is your account for inflation, and now that inflation’s going higher, if you subtract that from just the real… Which is zero, which is already zero, we’ve had negative real interest rates for a while, and that’s a big point for gold, for you to own gold, because why are you going to store money in gold when you could store it in your checking account or someplace else and earn a high interest? But now interest rates are zero, and they’ve been zero for a while, but now that you’ve seen inflation go up, the real interest rate is trading at its lowest level since ’70s, and the Fed’s going to maintain this policy for a while, which means gold is a fantastic, fantastic option, and you’re going to see more institutions go into it. You’re going to see prices go up. You’re going to see more projects get developed.
Frank Curzio: I see a price of 2,500 because right now, just based on… You talk to any gold bug, they mention the real interest rate, not that that’s the end all. You have to look at the dollar as well because we had negative real interest rates since the credit crisis, and we saw what? From 2011 to 2012, gold did great, and then all gold stocks especially got smoked for three or four years, and now they’ve come back, but right now the conditions have never been better for gold, and I think you’re going to see money flow into it, so it’s a good time. But again, I just don’t see the WallStreetBets crowd flowing into that, and it’s a shame because I think they could make a lot of money off of it if they just didn’t have this wall in front of them and saying, “I don’t give a shit.”
Frank Curzio: It’s like a religion. It’s like, if you’re a Democrat, and you have a Democrat and a Republican, no matter what they say, they’re not going to switch sides. There’s nothing you could say. There’s nothing you could say, a Democrat could say to a Republican, a Republican could say to a Democrat that’s going to be like, “Oh, yeah. That makes sense. Okay. I’m going to be a Democrat. I’m going to switch.” No. There’s nothing you can do, but this is about money, and if you want to make money, gold is really a good option right now, and I think Bitcoin at these levels… I mean, hold it at 30 with a lot of bullshit news.
Frank Curzio: I mean, what was some of the news that was out this week, Daniel? I mean, it wasn’t just Salvador and… That’s all over CNBC now, but we saw some positive interactive brokers coming out, and we’ve seen that that hack, where the people worried, wow, how easily the government got the money back, maybe this isn’t decentralized, no, it is decentralized. We found out that they got money back, whatever. So, it removed the overhang from Bitcoin going from 38,000 to 30,000 on the news stories, which really don’t exist. It makes me think we’re pretty close to the bottom, and you’re seeing that thank you with Bitcoin up 10%.
Daniel Creech: Yeah. I don’t want to act like we know the exact workings behind it because we don’t have all the data and stuff, so why did Bitcoin drop 10% the other day? I don’t know, but to your point, it did seem like the media was pushing this narrative that… So, we talked about this a few weeks ago. The Colonial Pipeline got hacked. Basically, half of the oil and fuel for the East Coast was down for a few days. We even saw shortages here in North Florida because people were silly, but that’s okay. We’re over that. This all came back to in the media because Colonial paid ransom, and now the Department of Justice did a press announcement or press briefing and said, “Hey, we’ve gotten the majority of this back.”
Daniel Creech: So, immediately, you saw headlines about how they hacked somebody’s wallet. Okay? That’s the big thing. Bitcoin is transparency, but it’s supposed to be unhackable, and what actually came to find out is, and this is on Zero Hedge, and for all you listeners, if you’re not checking Zero Hedge amongst your other websites, you should be, but basically, the DOJ, Department of Justice, had a subpoena for an exchange in Northern California, Frank. That’s the United States of America for all you out there listening, Northern California. These brilliant cybersecurity guys apparently hacked Colonial Pipeline and then put their Bitcoin in a… It’d be like going on Coinbase, opening an account on Coinbase, buying some crypto, and leaving it there. If you don’t think the IRS or anybody else can go to Coinbase and say, “Hey, give me your list,” you’re going to be in for a shocker someday.
Daniel Creech: So, if that’s the reason why, which it very much looks like, that Bitcoin was selling off, if you believe in Bitcoin, you ought to be buying Bitcoin hand over fist that these levels, because if that pushed it down 10%, that’s a nonevent. That’s not even accurate, to say that they hacked a wallet or anything like that. So, you have to be more bullish on that, in my opinion, if you got caught up in the emotions behind that. The other cool thing real quick is MicroStrategy, they filed for a $400 million offering earlier this week because Bitcoin was going down. They’re raising more bonds to buy Bitcoin today. He talks about that a lot onstage, so I encourage you to go watch it on the YouTube replay. What happened when Bitcoin dropped, Frank? What did MicroStrategy do? They bumped the offering from 400 million to 500 million. That takes balls, right or wrong, depending on what happens. I have to appreciate that.
Frank Curzio: I don’t know if they actually bumped it. I mean, what happened-
Daniel Creech: Well, I guess, like you say, everything gets oversubscribed.
Frank Curzio: Yeah.
Daniel Creech: Yeah, yeah.
Frank Curzio: I mean, you get oversubscribed, and then even when they announce an offering, they say, “It could take up to an extra allotment.” So, if you have a good offering and it’s an interest rate, it has nothing to do with Bitcoin. If you have a good offering, they don’t think MicroStrategy’s going out of business, so you can get a good interest rate.
Daniel Creech: Absolutely.
Frank Curzio: They could raise as much money as they want. It’s not necessarily people agreeing like, “Hey. Okay. I want you to buy more Bitcoin.” It’s their balance sheet, and it is coming down a little bit. They’re still up overall on a cost basis, but I’m not too sure if it had that reflection where, oh, they’re raising even more, but it’s good for them because now I think he’s putting the whole thing into Bitcoin, I’m pretty sure that whole offering, and it’s even more now, but I got to tell you that I just think really think, and this last point, there is a big push by some very big, big institutions and investors to push Bitcoin lower. I mean, just the shitty news that’s been coming out. Okay. If you’re going to push it lower, it’s overvalued. It’s whatever you think. Governments are going to come in.
Frank Curzio: I think the China news is total bullshit because China was never going to adopt them. 2017 that they just regulated, they said no one can trade on crypto exchanges anymore. I mean, everybody knew that. I mean, China is not factored in. So, everyone’s like, “Well, China, the biggest market.” They weren’t effecting it. Okay? They’re not the biggest market. They had biggest growth market, lots of people. However, when it comes to cryptos, no, there’s other big markets. Then you see this hack news, which again was bullshit. It’s just people who were saying that, “Wow, this isn’t decentralized, maybe,” and Bitcoin people who are really diehards were like, “Are you kidding me?” and it turned out that that was a BS story, but there’s a big push someplace from someone or some institutions to really push it lower, and I think they’re done.
Frank Curzio: I mean, what’s the bearish case now that hasn’t been mentioned on Bitcoin? I mean, here, you have the Coinbase IPO, and everybody’s excited, and I get it, and you had to have 55,000, 60,000, but now, here, you look at a Bitcoin conference where you had a lot of institutions, a lot of them are asking questions, they want to invest in this, I don’t know. It feels like a bottom. I said that to you yesterday. It feels like we’re closing in on the bottom when two weeks ago, even a week, a conference like this might signal a top. But just with this BS news that’s coming out, if it’s real, then it makes sense, fine, but these are made up stories trying to push the price of Bitcoin down, and it’s working for a little bit because there’s a lot of leverage in the market, but I think you’re really going to see it come back here.
Daniel Creech: Yeah, that wouldn’t surprise me. I’m still waiting on… With massive volatility… So, we’ve talked about this in the past. This is good for Galaxy Digital and Coinbase and stuff like that with the volatility. I’m still waiting on a big name to come out and say… Carl Icahn has flirted with it. There was articles about him putting up to a billion-and-a-half, $1.5 billion into crypto-related assets. Ray Dalio has admitted he owns it personally. We’re waiting for Bridgewater, excuse me, the fund he controls. The easiest thing, Frank, would be if you’re trying to come out of somebody’s most amazing shadow, and I’m going Warren Buffett here, wouldn’t it be awesome to see Berkshire Hathaway just hit at the new managers that are going to take over after Buffett/Munger-
Frank Curzio: It’ll never happen.
Daniel Creech: I know, but still, it’s fun.
Frank Curzio: Yeah. Those guys are too fundamentally-
Daniel Creech: Let me dream, Frank. Quit shooting my dreams down right away, okay?
Frank Curzio: Yeah. Just too fundamentally-driven, but what you’re going to see is these guy load up on Bitcoin before they mention it. Right?
Daniel Creech: Well, absolutely.
Frank Curzio: So, that’s typical.
Daniel Creech: But that’s what I’m waiting on. I think the short term, I think it’s bullish. I agree with you on the fact that there’s a lot of negative news, and it’s holding 30,000. I was actually surprised it didn’t go back to its old high of 20,000, just because anybody can pick a number out of the hat and draw lines on a chart, but I do want to see who’s the big name coming out that is going to really move the market, whether it’s a new CEO converting some of their balance sheet to it, or a hedge fund guy like Carl Icahn, or somebody of that nature. But somebody out there is taking advantage of this and going to make a lot of money, and there’s still a lot of excitement going on in the space, and it will going forward.
Frank Curzio: The last thing I wanted to talk about here just very, very quickly, because it’s in the news and going crazy, is the WallStreetBets thing, and I think everyone’s looking for what’s going to be the next name, and getting on whatever, how many, 10, 12, 15, whatever it is now, how many people on WallStreetBets, which is the Reddit blog, and all these guys get together. But everyone’s really searching for, okay, what’s going to be the next one, and I wanted to mention a site for you guys because, and this was brought up by my nephew, who is a Millennial, or… Yeah. I guess he’s a Millennial, or X Gen. Right? What is it? What is it called?
Erica Santillo: Gen Z.
Frank Curzio: Gen V?
Erica Santillo: Z.
Frank Curzio: Yeah. Okay, Gen Z. Yeah. I get them mixed up, so I got to get corrected sometimes. Thank you, Erica. So, he’s the one that follows blogs, looks at all of this stuff. I mean, these people, that’s all they do. It’s the YouTube generation. It’s cool, but it’s called swaggystocks.com, and it’s kind of a crappy website the way it’s laid out, but it tracks real-time sentiment and WallStreetBets and sentiment trends, and it does it all through algos, and it’s really cool because I looked at it two days ago, and I’ll bring up a picture here if you’re on our YouTube, and it had Wendy’s on there. So, basically, it’s tracking the amount of posts, the amount of mentions, the amount of everything, and then also just ticker sentiment, what they’re seeing the most on WallStreetBets, which Culver’s on there, obviously, Clean Energy.
Frank Curzio: You’re seeing a lot of these names, GameStop, obviously, the Teslas, Tilray, Wendy’s, all these names. And you see that they have all the charts and figures and stuff, but I thought this was pretty cool to gauge it, and also, you’re looking for companies that have high short ratios because the people who take short positions are usually institutions, and they consider that Wall Street. When you see that, if you get enough people to buy and push this thing up, they’re short. In order to get out of position, they have to buy it back, and as it goes higher, their losses are unlimited because they can go to… They shorted it at 10, and go to 20, 50, 100, a million. So, it’s unlimited, where it could just wipe you out. So, it’s forcing them to cover, which is why you saw GameStop go through the roof, AMC go through the roof, because all the shorts got destroyed.
Frank Curzio: So, looking at the short positions too and having that, but SwaggyStocks is kind of interesting. I like throwing out some sites, and I’m just checking it out and looking at it, and also just running screens and short sight and everything because, look, a lot of this is BS. A lot of this is a pump and dump, Daniel. We’re seeing it, but it’s not even like a pump and dump. I’m not even dumping it. It’s more like pumping it and then holding on forever, I guess. That’s a trend. But where you’re seeing gains of 200%, 300%, 400% in weeks, one, you could just say, “Wow, those guys are idiots,” or two, you could say, “Okay. What do I need to do to try to get involved in that?” and this is… Some of these were doing Curzio Research, but just looking at different blogs, different ways that you could look at this, it’s getting to the point where you’re seeing a lot of institutions even do that because these moves are major, major.
Frank Curzio: What is AMC, a $30 billion company? I mean, you’re talking about… Dogecoin went to $90 billion. This isn’t like, oh… When you see those kinds of numbers, believe me, institutions are going to get in. They need a piece of the pie. That’s how they make their money. But that was a cool site to mention, and Daniel, I know you’ve been talking a lot about this too, but it’s just… I don’t know if this is going to stop anytime soon. I guess this is the norm and the SEC’s not going to do anything because it’s pure manipulation. It’s everybody buy a stock, forcing this. It’s crazy.
Frank Curzio: If I did it on my end and bought a huge position, and then promote it everyplace in the world and said, “This thing’s going to go through the roof,” and it went higher, and I sold it, the SEC’s going to knock on my door. You do it through this, and I just SEC has fallen asleep at the wheel here. How long could thing continue where this is 100% manipulation, which is fine? Everybody’s making money. That’s cool, except for the short sellers, but there’s got to be some kind of crackdown on this. Right?
Daniel Creech: Well, I hope not. We don’t need more regulation to crack things down on this, in my opinion. Yeah, it is crazy, but there’s a lot of things that are crazy, so I don’t think that-
Frank Curzio: I can’t wait until you short a stock, Daniel, that you got big money shorting it, and the WallStreetBets crowd comes in pushes it up.
Daniel Creech: Well, I would buy a put. That way, you’d only lose 100%. I’m a little nervous about going to short stock. What’s amazing is that you can draw… Okay. So, you have to skip the first step. This goes back to Bitcoin. Why does all this happen? Why is this even allowed to go on, and why does all this volatility happen? It’s because the Fed is printing way too much money, and volatility, or liquidity is sloshing around. So, you’re going to have a spillover and goofiness happen. But you already have goofiness in Wall Street. You already have scammers and pump-and-dumpers and all that. What I think people need to pay attention to, especially on the Reddits, is they got to get familiar with the disclaimer, Frank, because you can put anything in a disclaimer.
Daniel Creech: As long as you say, “Hey, we’re along these funds, or we may benefit if the price goes up,” or blah, blah, blah, blah, blah, you’re good, and I think that’ll be the ultimate lesson. I don’t look at it as such a negative. It’s Vegas. I mean, you can gamble on damn near anything you want to. So, if you want to buy AMC because you think you’re sticking it to the man, hey, have at it. If you lose money and you start complaining, nobody wants to hear it, it’ll be interesting to see how it… Can it continue on? Of course, it can because there’s… Even though liquidity is coming down, there’s still a ton of liquidity. So, it goes back to a point you always drive home. You got to be able to adapt.
Daniel Creech: So, if you’re a longer-term investor, the great thing about this is the world is big enough for everything. So, if you want to fund… I’ll give you a couple boring picks if you want just to prove a point, but my point is you don’t have to pay attention to these meme stocks. You don’t have to get involved in these. If you want to, great, and then learn how to adapt. Like Frank said, check blogs. Run screens on the most short stocks. Go on back to… Why is not Zero Hedge advertising with us yet? I talk about them all the time.
Frank Curzio: Yeah, you love that place.
Daniel Creech: I do.
Frank Curzio: If they came and said they’d offer you half this salary to work for them, you’d leave.
Daniel Creech: No way. No way. No. Nice try.
Frank Curzio: You’d be like, “Sorry, man. I’m out of here. I’m out of here.” Find out who that guy really is.
Daniel Creech: But the other day, they ran a great screen and just showed the most shorted stocks, and now Clover Health, I think it’s Clover Health, CLOV, it’s been up, I think, 50% in the last couple days, and that was one on their list. So, if you want to trade, if you want to participate, just keep the simple fundamental rules. Don’t put in more than you can afford to lose. Treat it like Vegas. Have fun with it. Yeah. I mean, I’m sorry. I can’t really answer your question. I’m going to be on the fence, Frank. I know that sucks, but it can continue on very long, but it’s not a big deal to me. It’s really not.
Frank Curzio: You know what? It’s not that I see anything wrong with it. It’s just, it’s got to be a level playing field, because on our part of the industry, there’s people that believe insider trading should be legal. Look, if you have access to information that other people don’t, it’s because maybe you’re doing the homework or whatever. I’m not talking about politicians and making a big announcement within a regulated industry and stuff like that, but there is a lot of people, smart investors that believe, hey, insider trading should be okay. If that’s the case, do it across the board.
Daniel Creech: Yeah.
Frank Curzio: But the manipulation has taken place on one end, and the fact that… I mean, short sale has been doing this for a while, but even on a long end, it’s either this is the new way of doing business, or you got to regulate it, and I hate regulation as well, more regulation. So, that’s where I am too. It’s not so much, what do these guys do? These guys are crazy. It’s I know if I do that on my end, if you do that as a money manager, really, they’re not allowed to pump their companies and go on different places and stuff like that. I’m talking about market their stock. They can’t say, “We think our stock is really cheap right now. You should buy it right now.” They can’t say that. So, it should be level, I guess, and that kind of makes sense for me, but you got to pay attention, guys. These gains are amazing, and Daniel, I want to thank you for coming in, always discussing the latest issues on the markets, and we’d love to hear from you. My email’s firstname.lastname@example.org. Daniel?
Daniel Creech: Daniel@curzioresearch.com.
Frank Curzio: Okay, cool. And Zero Hedge, man, we could get a lot of those.
Daniel Creech: Zero Hedge.
Frank Curzio: Anyway, okay. Thank you so much, Dan, for coming on. Guys, if you’re not on the list, you’re going to get a special offer for a Curzio Venture Opportunities newsletter, and that’s my baby. That’s my signature product. We launched it. It’s about small caps. We launched Curzio Research on that product. I think it was late 2016, small caps. I take pride in that. That’s what I’ve done at TheStreet.com. I’ve done that at Stansberry. I’ve done it all the way through most of my career, even when I worked for my dad at FXC. So, I take pride in it because the amount of work that needs to go into this newsletter is incredible, because most stocks you know out there that you see on TV have coverage, institutional coverage, and it’s very easy to find out what’s going on with the name. They mention it on TV.
Frank Curzio: These are names where I’m the only research analyst on some of these things, so everyone’s looking at my research. So, in order for me to get that research, I’m visiting facilities. I’m traveling around the world. I’m talking to my contacts, and just using that deep network to find these ideas, these hidden gems that nobody’s talking about, and getting in them before mainstream media, and we’ve done a fantastic job. I’ve done a fantastic job with my career. My performance is great in this newsletter, and we don’t offer discounts too often on this thing, but we are offering it just for people on our file right now, so it’s a 40% discount if you’re interested, and the only reason why I’m urging you if you’re looking to come in to come in is because there’s one stock that I really, really like.
Frank Curzio: I like a lot of stocks in the portfolio that are buys, but there’s one name that I just think is incredibly undervalued. They changed their business model so the company got hit a little bit, but they’re focusing and becoming a major player in two trillion-dollar markets, and I don’t want to give too much away. It’s a stock that I’m sure you haven’t heard of. It’s an amazing name. You’re starting to see a little institutional money flow into it, and I think there’s incredible, incredible upside, and that’s the experience I want you to have when you subscribe to this newsletter. If I’m recommending, “You got to buy this stock base,” and it goes down, you’re not going to subscribe to any of my products, and you’re going to be pissed off.
Frank Curzio: So, when I see something that I really, really like, that I think there’s such a major disconnect, that could make not only money in the short term and long-term, I want to give it to you. That’s my job, to make you money. If I don’t make you money, you cancel your subscription. I don’t get paid by any companies to recommend them. So, Curzio Venture Opportunities and 40% discount on it, if you’re on our email list you’re going to get an email in the next couple days, and if you’re not only our email list you can go to Curzio Research and get on it. That’s our free email list where we have a couple free newsletters and stuff like that, research, really, really cool. We don’t bombard you with hundreds and thousands of emails, which a lot of people do, but we do send you offer from time to time and discounts, and in order to receive it, you have to be on our email list. We’re not sending it outside, so just the Curzio Research members, you guys, our crew, our little clan here and stuff like that.
Frank Curzio: Again, we don’t really offer too much at this discount, the 40% discount for Curzio Venture Opportunities. Okay, guys. So, that’s it for me. Have a great week. Thank you so much for your support. I know I say that every week. I know I always say I truly, truly, truly mean it. I’m just amazed how many people listen to this podcast. It’s awesome. I love giving it all for you, trying to make you guys as much money as possible, level the playing field. This way, we all have access to the same information at the same time, and just so thankful for all you guys listening, and also emailing in. Even with the criticisms and everything, again, our listeners are great. Email us and let us know what you want, even guests and stuff like that. We’re here for you at email@example.com. And as always, I’ll see you guys in seven days. Take care.
Announcer: Wall Street Unplugged is produced by Curzio Research, one of the most respected financial media companies in the industry. The information presented on Wall Street Unplugged is the opinion of its host and guests. You should not base your investment decisions solely on this broadcast. Remember, it’s your money, your responsibility.
- Guest: Frank Holmes, executive chairman of Hive Blockchain Technologie [16:25]
- Educational: The latest volatility in crypto… Bitcoin is near a bottom… Retail investors and meme stocks… [54:48]