Yahoo Finance

I'm Julie Hyman at the Future Proof Festival in Huntington Beach, California. Big audience here of registered investment advisors and financial advisors. And of course, increasingly, crypto is a part of their their portfolios. That is why Michael Novogratz is here. He's the CEO of Galaxy Digital. Well-known crypto investor and advocate for quite a while now, in fact. Mike, thanks for being with us.

Thank you.

So I'm actually going to start in the political realm, um, and then we'll sort of get to price action and whatnot. Um, former President Trump has just said he is introducing some sort of new crypto product. Um, it is called World Liberty Financial. It's unclear exactly what it is, but it's sort of just the latest step in his courting of the crypto community. I I'm just curious what you make of this latest announcement.

Yeah, listen, I think first of all, Trump realized, uh, certainly before the Democrats, that there are 80 million crypto holders in America, and a lot of them are single issue voters. And it's a very passionate community. And so like being anti-crypto is a little bit like being anti-dog. It's just not smart politics. And so I think the Democrats are getting there, uh, but Trump got there first. And you know, the speech he gave at the crypto conference in Nashville, Tennessee was kind of a crypto business owner's dream. And so like my my role these days is to get the Democrats to have a rational and smart crypto policy, which I think they will, uh, but we know if the Republicans win, uh, it's it's really going to be, you know, opening the flood gates for crypto. Uh, his project it it seems strange that a candidate running for president would be launching a crypto project.

Is he hedging his bets?

I I think his son, listen, the the Trump family seems to love to, you know, throw their hat in on any business they can. And, uh, what worries me is some of these projects are fly-by-night, uh, and they raise money from retail investors and they don't follow through and and so we'll watch very closely. Uh, I, you know, we're watching, not investing at this point. Um, you know, he's got some credible people around the project. Uh, but one of the criticisms of crypto has been it has been rife for grift and graft, uh, and and fraud. Uh, and so while we've asked for like smart regulation, uh, not overregulation is, you know, so consumers have some protection.

Right.

And so these are the things that worry you. Uh, when people hype something up, price goes up, price goes down. Now listen, it's the same in stocks. I mean, the the Truth Social stock is one of the most bizarrely valued stocks of all time. It's like a meme stock around President Trump. And so he hasn't been able to sell there yet, right? I'm sure if he could have sold stock, he would have sold a lot because he had a spectacular paper paper net worth in that stock. Uh,

He said he's not going to sell when the lock-up ends.

Yeah. And and, you know, listen, if he sold, it would go straight down to almost nothing. And so it's one of those frustrating positions that, you know, in general, in the equity world, you need to build a a company that at least the narrative feels true, that it's going to grow and that the the momentum of growth is going to accelerate, right? The second derivative gets positive and you can you can get to crazy valuation. Uh, in crypto, it's a lot about distribution and building community. And so the more a project is distributed, the more stable it becomes. That's why Bitcoin is such a like the stalwart in our whole ecosystem because it's purely distributed at this point.

Right. Very distributed.

Tons of people own it. And so each of those owners becomes a promoter of it. And so that's that's one of the the unique, uh, parts of crypto that you don't necessarily get in other asset classes.

I want to ask you more about the political side because, uh, I'm curious, as somebody who is, I believe, a lifelong Democrat,

Does it pain you a little bit that the Dems and that the Harris campaign has not been more vocal, assertive about crypto, and are you having conversations with them now? Are you trying to, what are you trying to get them to understand?

Let me say that it was unbelievably painful that the Biden administration was as bad on crypto as they were. Categoric, un-American, unfair. We've had an SEC that literally, uh, has lost many cases in court and just persists at at being very difficult to deal with for crypto.

Do you think that

I think Kamala Harris will pivot. I think she's a practicalist. I think she came from an innovation capital of America, so she sees what innovation does, right? She's from San Francisco or Oakland. Um, so far the campaign has said they will be a pro-crypto candidate. That's all they've said. And I think they would have said a lot more if the campaign wasn't going so well. Like she came in office and had this surge of enthusiasm, surge in the polls, and I think my own guess is they're doing a lot of listening and they're not doing a lot of talking because because it's working.

Is that a mistake, though? Is that too complacent to to sort of take that crypto vote for granted or to not, you know, talk about it?

You know, Sun Tzu, I think crypto's a small piece of the the arsenal for them. I think they're looking at that Sun Tzu quote, when your enemy is self-annihilating himself, just step back and allow him, you know? I mean, the the Trump campaign is making mistake after mistake after mistake, from eating dogs to, you know, the debate performance. Uh, and so I'm hoping from from a crypto perspective that they come out and make some more positive comments. Uh, I know there's a lot of meetings happening, uh, with her advisors, and I think her her future transition team that is going to help shape policy. And quite frankly, there's not that much for the government to do. There is an attitude change, there's a there's a market structure bill, a stable coin bill, a directive to the OCC to allow banks to hold crypto on their balance sheet, and some accounting changes. And then we wouldn't have to be in Washington for the next 10 years.

There's one thing you didn't mention that I want to ask you about. You mentioned Gary Gensler. Do you think Harris needs to remove him as as head of the SEC?

100%. And I think, listen, I think he's at the end of his term. Like, I think, uh, certainly if Trump gets in, there's a different SEC, but if Harris gets in, I I'm 95, 96% certain Gensler won't be there. Uh, no one wants to start a new regime with someone with that much baggage at this point. Uh, and and so we'll see what the SEC does in this interim period, you know, how Gensler does he try to pivot, to act like to he gets some things done so we can say, "Yeah, business as usual," or does he stay as stubborn as he's been on some of these issues? Uh, we'll see.