The FTX Collapse Is An Expensive Ad For Bitcoin

The most important point to be made here is the collapse of FTX and FTT represents a corrupt

crypto bank collapse fueled by an inflationary Fiat cryptocurrency. As Gary Gunsler has said,

the vast majority of all the cryptos are unregistered securities. They're trading on unregulated

exchanges. Proof of stake tokens are backed by nothing, which is why FTT could be printed into

the $8 billion zone. This is simply a very expensive lesson for the crypto ecosystem and the

difference between crypto and bitcoin. Michael, we've just recently seen bitcoin come off of

its 52-week low, but it's also winter low in terms of the price action here. With that in mind,

do you believe that crypto whales are looking at the price right now and still seeing some type of

opportunity and what type of concentration among bitcoin ownership? Do you think even at these

lows, which are still amid a washout and some of the confidence for other investors in crypto,

what does that mean in terms of the concentration of ownership going forward?

I think it's another event that's massively distributing more bitcoin all around the world.

I think there's a massive amount of accumulation of bitcoin right now. The BTC is moving from

weak hands to strong hands. I think this is one of those annealing events two and a half years ago

in March of 2020. We saw a similar circumstance with bitcoin trading in the $4,000 range.

If you look at the volumes of bitcoin trading today versus then they're up by a factor of 5 to 10

X. So there's extraordinary institutional interest and investor interest in the asset class.

I think that this is going to be really helpful for bitcoin because this is an educational moment

and people are realizing the benefits of buying a crypto asset that's backed by the world's most

most powerful computing network and by 10 gigawatts of energy and the difference between that and

the 20,000 other cryptos that are in essence backed by nothing and they're just like other fiat currencies.

So Michael let's pick up on that point. I mean it sounds like you're saying there's going to be

real divergence here between the likes of a bitcoin or an ether versus some of these other digital

tokens. What does that shake down look like and ultimately how many of those tokens survive?

Well I think this crash accelerates regulatory intervention. I mean in fact in a sense right

SBF is like the Jordan Bellfort of the crypto era instead of the wolf of wall street.

I'll make a movie called The King of crypto. This is going to bring in the SEC, the CFTC at a much

greater rate and the future of the entire industry is digital assets trading on registered digital

assets trading on regulated exchanges. So to the extent that there's something good in the crypto

industry the good stuff is a digital exchange that trades 24, 7, 365 trading on 8 billion

Android and iPhones. Digital currency available to Argentinians and Lebanese and people all are

all through Africa and Asia that are blocked from the US financial system. The ability to issue

tokens if you're a creator and monetize your brand and the ability to deliver digital securities that

trade 24, 7, 365 at the speed of light friction free outside of the traditional banking system which

is in essence a monopoly on assets. So those are the good things. The problem is those have been

pursued by the crypto industry in an unethical unstable technically irresponsible fashion.

And this is just highlighting the fact that a good idea pursued in an unethical irresponsible

fashion is a bad idea. I think that the regulators have it right. The idea is you should be able to

register your digital asset. If you have a stable coin you should register it with the SEC. If you

have a security you should register it. If you want your crypto token to be designated a commodity

and an asset without an issuer you ought to have a registration process. And if you want to run a

digital exchange that trades all these tokens you should be a regulated transparent exchange that's

trustworthy. And I think the regulators get it. I think the politicians get it. I think it's been a

very expensive process going through Terra and Luna and Celsius and three arrows and now FTX is

collapse. But at this point I don't think there's anybody in the Western world that doesn't understand

the risks of allowing people to promote unregistered securities on unregulated exchanges.

And so what's going to happen? You're going to see a massive shakeout. 99% of these air tokens

are going to go away. They're literally the penny stocks of our error. The joke of course is penny

stocks used to trade for a nickel. Whereas some of these dog coins are trading for fractions of a penny.

They're not even penny stocks. At one point they created a token which was 0.00001

percent so that you couldn't even read the price of the token on an eight significant digit

display on a crypto exchange. So that stuff's got to go. And what needs to replace it is ethically

sound, technically sound, economically sound, digital assets. The industry needs to grow up.

Michael, as a statesman in this industry, those words comparing SBF to Jordan Buford,

and that's some big words here. So is there another way to look at it in that view SBF as a corrupt

player in this industry? And he needs to be made an example of putting jail for what he has done to

the space. He was using counterfeit money and stolen money to lobby against all the virtues in

the industry, against proof of work, against Bitcoin. He was working to corrupt regulations, corrupt

the political process. When you have actors that use corrupt counterfeit stolen money in order

to undermine the industry, it's not good for anybody. And so, yeah, I think that people need to

decipher this. FTX generated an FTT token, if you trade your own token on your own exchange with

wash trading with leverage, you can park the price at any number you want. So you want to make a

billion dollars, you jack the price by three bucks by wash trading with yourself. Then you generate

a billion dollars of collateral, then you look for a bank that loan you money against the collateral.

Of course, nobody in the right mind should be loaning money against an air token that you

manipulated yourself. But of course, Sam happened to be the CEO of a bank that made loans. So he

applied for a loan from his own bank and he granted it to himself. And then he took real assets

like Bitcoin from his honest customers. And then he re-ipothecated him, traded him, lost him.

And so this is just an egregious ethical lapse and it can't go on. These exchanges cannot

continue to be unregistered, unregulated offshore.