John Deaton (4:42)

Yeah.

Eric Adams (4:42)

First describing this asset as a safe haven, it was time to take notice. I, I think all of Wall street took notice. The question was, is it going to act like that when you talk about these, you know, big macro political events?

John Deaton (4:59)

Sure.

Eric Adams (5:00)

And, and I think that, listen, I was prepared for bitcoin. I don't know, you know, you're more smart on, on the, on the fundamentals and the technical side, but I was fully prepared for bitcoin to go under 90.

John Deaton (5:15)

Yeah.

Eric Adams (5:16)

With, with this kind of oil spiking up like that, people are going to sell off assets, that they risk assets. But the question to you is, do you think we can declare bitcoin a risk off asset at this point?

John Deaton (5:33)

You know, I, I don't. Bitcoin is so unique that it, that it often does something that we're, we're not ready for, that we weren't prepared for. So there, there are so many pundits on both sides of the aisle. Right. So you have the Peter Shifts of the world that's, you know, anti bitcoin, if for no other reason to garner attention and show his own gold products. You know, that thinks that bitcoin is, is not a risk off asset. There are a lot of folks that, that still believe in the cypherpunk, you know, value associated with bitcoin, that it is a risk off asset. What I do think it is is an alpha asset that is very, very different than other assets and, and equities. The reason why I say that is because, you know, when you really get down to the core of what Bitcoin is in its value, you can move paper around associated with currencies, you can move paper around associated with equities, you can even move paper around associated with debt. But at its core, Bitcoin is not necessarily paper. It can be moved peer to peer in a meaningful way. And that particular foundation of its ethos makes it a different asset. Even in moments like this, even as Bitcoin is financialized. Right when Larry Fink is talking about it ad nauseam. Right when very. Larry Fink is the chief evangelist. Evangelist. And as Jack Mahlers said at the Bitcoin conference, you know, Bitcoin cmo, that still doesn't change that core value associated with Bitcoin that it is somewhat disinterested in, you know, being, let's call it an equity like entity. So in my mind, I think even though it, it reacts and acts at times in the same way that markets do, there are other moments where it's fairly disconnected, right? There's been moments over the last, let's call it three months where markets have been down significantly and Bitcoin has been up. There's been other moments where bitcoin has been down where markets have been up. So there are, there, there is a core difference and what Bitcoin is and how it acts and reacts to headlines and moments in the market. I think that will continue to be the case. I think in the best of times. It's a risk on asset and is a 3-5x upside version of risk on. And in moments, as it's related to geopolitical concerns, it can be a, it can be a risk off asset. Price action is different, right? Price action is different. There's a, there's use case and then there's price action. But again, as I said earlier, the way that bitcoin is a harbinger of human emotion and people's quote unquote, flight to quality. If flight to quality was a, let's call it a 1990s CNBC trope that they would use associated with movement out of equities and into, you know, debt obligations, Treasuries and the like. So flight to quality, moving out of, you know, when markets were down, where was money moving to? Was it moving to bond markets? Was it moving to Treasuries? I think Bitcoin is an opportunity to take that particular narrative over Time. That's the narrative that Larry Fink has been talking about. That's the narrative that Paul Tudor Jones has been talking about, that there is a flight to quality associated with bitcoin. So risk on or risk off? I think maybe there's a, there's an adjustment to that narrative that I think has more to do with flight to quality. And I think that that's, that's where, that's where we're at for the next couple of years. That no matter what happens politically, no matter what happens in terms of, you know, nation states, no matter what happens. And here's the thing with, with headlines, we never know what's coming next, right? We never know what's coming next. There's always something coming next, by the way, in terms of headlines. There's always something coming next and, you know, pan out a little bit. And bitcoin is generally always higher. So risk off, risk on. It's as unique asset as has ever existed. And as I've said so many times over the past year or so, every dip is for buying. Right. So risk on, a risk off. It seems to be a flight to quality.

Eric Adams (10:27)

I'm officially, I'm officially no longer a. Okay, I bought the dip. Yeah, I tweeted about it in response to one of your posts yesterday where you said that your arch public customers bought the dip around 99. And yeah, the Algos, you guys helped me set up, you know, listen, the other thing. And yesterday's a perfect example, man. Hey, I was busy with my family in town, but you know, when you're, when you're talking about bombing Iran.

John Deaton (11:07)

Yeah.

Eric Adams (11:08)

You know, I'm a Marine, I'm an American. I don't start thinking about trading. You know, maybe I'm not, you know, maybe I should be more greedy or something. I don't know. But I certainly didn't think, oh, let me capitalize and start trading. You get immersed on what's happening in the news. And so, you know, I think yesterday was a perfect example where my algos bought the dip. A couple of them, you know.

John Deaton (11:37)

Yeah.

Eric Adams (11:37)

I think I posted at 9. 98 and change and, and 99 and change and, and XRP was like a dollar 94.96. But, you know, I was literally worried. Are we, is this, is this going to be a quick event? What's this going to mean? Is Israel gonna, you know, what's going on? You just, you're just immersed in, in what's happening in the world and you don't have to worry about trading. So you know, it's no longer a bad trader.

John Deaton (12:13)

Yeah, it's an extraordinary position to be in when, listen, you're right, bombing Iran is a headline that, you know, if you're 25 years or older, gets your attention, right? It gets your attention. You, like you're looking around thinking, all right, where is this going? Where is this headed? This is, It's a serious headline, right? It's a serious headline. And so, you know, just as a human, you're not thinking about, should I get in front of my computer in my home office and begin to trade these headlines? Because if you're not, if you're not a professional trader, you just, even professional traders, the ability to do that in the midst of emotional turmoil and headlines that are really big headlines, those are tough decisions to make. And so to your point, when those decisions are made for you, it's, it's, it's a pretty, the pretty unique thing. And we saw that ad nauseam yesterday. All the conversations that we were having were conversations that were, I'll give you a story. We had a customer, you know, likes to text and, and you know, in the midst of that, they were thrilled that, you know, they caught the dip at, you know, high 98, you know, low 99s, but also added, yeah, I think, you know, where we're at, we'll probably go down to 92, you know, as per your thoughts, right? And if that customer would have acted on their thought process, their emotions, here's where I think we go. One, they probably would not have bought the dip at 99. They probably would have waited. So they would have missed, they probably did not think that we were going back to 105 or 106 essentially in 24 hours. So they would have completely missed the opportunity to buy under 100k. They would have completely missed the opportunity to, oh, by the way, sell a little bit of that position at 105, which actually happened as well for all of our customers. It's, you know, removing emotion and allowing the volatility associated with a flight to quality asset to be done for you is an extraordinary experience. Right? It's just an extraordinary experience. Once you experience, you're like, I can't ever do it any other way than this. Like, this is, this is truly remarkable stuff.

Eric Adams (14:50)

I would never, would have never bought the dip because I, I prepared myself emotionally because I think the, the best word to use is emotion. And you use it a lot, as you should, is I've been here before. People are going to sell. This is going to, you Know, be prepared. This could hit, you know, low 90s, high 80s. And there's just no way that I, as a trader would have, if I was at my computer, would have said, okay, 98, five. That's the number. I wouldn't have done it. And, and it sprung back so fast.

John Deaton (15:31)

Yeah.

Eric Adams (15:31)

That it's another example. And I, I could go back and we could look at other headlines of how many times, you know, Bitcoin dipped 5% or 4%. And, and because you're, is this going to be a 20? Is this going to be another time of retracement? Is the unknown. You. You don't know. And so it really does. It's a phenomenal thing. It's, it's, it's, you know, a, I was relieved that it looks like we're not going to be in a, you know. Right. It looks like there may actually be a chance for peace.

John Deaton (16:10)

Yeah.

Eric Adams (16:11)

When Iran reacted the way they did. And on top of that. So I'm thankful for that. And now, of course, I'm smiling because I'm a genius and I bought the dip.

John Deaton (16:21)

Well, markets, Markets make fools of us. All right? So there was conversation yesterday that Iran had shut down the Strait of her moves, or whatever you call it. Okay. So gas prices are going to go up and literally the exact opposite happened. Right. Like, nobody cares about the Strait of whatever in Iran, gas prices went down by 11% yesterday instead of going up by 11%. And there was a lot of smart people that said, and smart political people, smart economic people that said, yeah, we're going to have, we're going to feel the effects of, you know, the, you know, the economic effects associated with this action. And again, in real time, markets make fools of us all. So we had gas prices, actually, oil prices, go down significantly in that moment as opposed to go up. Here's a quick pivot that I want to get to because this is important. You know, Scott puts out a newsletter every day and part, a part of his newsletter is really illuminating, associated with where we're at with crypto today versus where we were a year ago, three years ago, five years ago. So I'm just going to read one paragraph. It'll probably blow your mind. So where are we at with crypto right now? Well, Yesterday at the NASDAQ, VanEck rang the bell and they just happened to have a big old pudgy penguin standing there with them. Now, what the pudgy penguin was there for, I don't know, maybe it made it more interesting and people were, you know, Wanted to click on their being at the Nasdaq more because there was a funny looking, you know, pudgy Penguin there. That being said, here's what's happened in traditional finance over the past, let's call it 16 months. BlackRock and their spot Bitcoin ETF, which is the most successful launch of an ETF in the history of ETFs. That in and of itself is a mouthful. JP Morgan has launched a deposit token on Coinbase's base network. By the way, has Coinbase ever launched anything on J.P. morgan's network or on their bank? No, they haven't. J.P. morgan needs Coinbase for this. Fidelity offers Bitcoin and Ethereum in retirement plans and Fidelity has been mining Bitcoin since 2014. Franklin Templeton tokenized a U S Treasury fund. Goldman Sachs has a digital asset platform and trades crypto derivatives. Citadel securities along with Fidelity and Charles Schwab launched edX Markets crypto exchange built for institutions. Nasdaq built a crypto custody solution. Schwab offers crypto exposure through index products. Visa is settling USDC on Ethereum and Solana. And by the way, those are just maybe a third of the headlines over the past year. Think about that for a minute. BlackRock, JP Morgan, Fidelity, Franklin Templeton, Goldman Sachs, Citadel, Schwab, Visa, Nasdaq. I mean that blows your mind, doesn't it, John?

Eric Adams (19:43)

It's what mass adoption looks like. You know, we, we've heard for years that, you know, that, that famous Tim Draper scene with Gary Gensler on stage where, you know, he said at first they laugh at you and then they, then they try to ignore you. Then they, they get their regulators to sue you and try to stop you. And then when you defeat all that, they then adopt you basically and adopt the technology and the disruption takes place. And I think we're seeing that. I mean three years ago I was at consensus and it was right around, I think a couple months after the FTX Sam Bankman freed debacle and it was just doom and gloomy and you would have never been able to predict. I mean, I still believe that Bitcoin and the asset class was going to survive. But you could have never envisioned, in my opinion at least I could never envisioned that in just three years you would be reading what you just read. Yeah, that to that level of mass adoption, you know, you keep hearing this phrase flip the switch. And I think, I think the, the switch has been flipped. And that's why I, I, I don't think anybody, she should be surprised that not Just with, just with Bitcoin. But you see Wall street adopting these altcoins with the ETFs, the people, the copycats, I call them, you know, the sailor copycats. But not just with bitcoin. You've got companies putting XRP on as a Treasury asset, Ethereum as a Treasury asset. I think I read one yesterday. Solana.

John Deaton (21:38)

So.

Eric Adams (21:40)

You know, Wall Street's here, there's no doubt about it.

John Deaton (21:45)

So not only is Wall street here, but they're, they're, they're here for a reason, right? So Wall street doesn't show up just because they believe in decentralized philosophies, right? That, that they believe that, you know, more folks should have access to more services, blah, blah, blah. They're here to make money, right? They're here to make money. And so to that end, you know, I, I look at everything that I, that I just talked about from Scott's newsletter and I think to myself, what else is coming? Because Wall street likes to make money. And at the core of their move into Bitcoin, Ethereum, Solana, others is the opportunity to charge premiums associated with goods and services like that is the nature of how Wall street works. And ever since, here's a little history lesson for everybody out there. Ever since the great financial crisis, there were dramatic shifts forced on Wall street and the banking industry that dramatically adjusted the way that they make money. So before 2008, the profit center is associated with the JP Morgans of the world, the Goldman Sachs of the world, the Morgan Stanley's of the world were their investment banking divisions, right? They created product, they took that product and then they sold it to both institutional and retail clients. That's the nature of investment banking. They create debt products, they create mortgage based products, they create equity based products. Investment banks created product out of the heaps of relationships and, and whatnot that they have at their disposal. And then they would sell them to their quote unquote clients. They, that dramatically changed. So all of that was not only democratized, but the ability to charge premiums associated with those products, the ability to ramp up risk with those products was effectively regulated out of existence. And so there was huge shifts in the money center portions of these institutions. It shifted to wealth management. So instead of creating product investment banking portions of these organizations got much smaller. They didn't have the opportunity to create meaningful product and charge premiums because it was almost outlawed. For all intents and purposes, their regulators would not allow them to take meaningful risk. So what happened is the geese quote unquote that were laying the golden eggs shifted big time and into wealth management. So JP Morgan ramped up their private bank and relationship banking stuff and wealth management, Morgan Stanley did the same. So huge shifts in the percentages of where their profits came from. It used to be that 80% of profits at Morgan Stanley were investment banking related and 20% were effectively wealth management. That shifted and now it's like 70, 30 where 70% of the profits associated with Morgan Stanley come from their wealth management business. So now we enter a space where crypto gives these banks another opportunity to create product. Well, they now have a huge, huge swath of wealth management clients that are worth 10 million, 25 million, $50 million $100 million that they can then sell these products to. And they finally have their hands on a product, Bitcoin, Ethereum, Solana and others that they can charge a premium for because it's an unknown new product, it's an unknown new product category. And the pricing, and the pricing adjustments and changes haven't been pressured to the downside yet. So we have two to three years where that's going to happen. Meaning that these organizations are going to create product very, very quickly. So are you going to see bit bonds? Yes, that's going to happen. Are you going to see products associated with mortgages? Yes, that's going to happen. Are you going to see options and futures and products that are 2x long this, 3x long that you're going to see all of those things happen in the space associated with a JP Morgan, a Morgan Stanley, a ubs, a Bank of America. All of that will come to the masses. What does that mean? That means that there's enormous liquidity that will continue to pour into the space. The base layer associated with all of these products. All you have to do is follow the money and, and where has an enormous amount of asset inflows gone to? They've gone to Bitcoin ETFs. Right? That, that's absolutely true. BlackRock has gone completely all in on crypto. Obviously their, their IBIT product is the biggest and most successful product they've ever launched. But at the same time their Biddle portfolio B U I D L, you know, has a cluster of other cryptos that they have built into a portfolio that's gone from 500 million to almost 4 billion today. So they're creating a base layer by which other products can have, you know, let's just call it, you know, the ability to price. And we're going to see an explosion on Wall street associated with Crypto related products. You know the Bloomberg guys have said that you know, 95 certainty that over the next few months all of the pending, you know, altcoin ETFs are going to be approved. Solana, XRP others. I, I, I, I think there's going to be some, some value to those. I think there's going to be some meaningful implos to those because some of those communities are really, really strong. But I think over time we'll end up with additional debt based product associated with crypto and I think we'll end up with you know, the QQQ or the S P500 of crypto and, and that will be the, the rise of you know, an ETF product that, that we'll see. Isn't it interesting John that we've been in a place where you know, you remember you know the, the, because your opponent in the last election her, her rise happened because of the whole Wall street movement and the whole we are the 99 movement and anti anti Wall street movement. She she came to, to power through that process. Isn't it interesting how different the landscape is now associated with politics and Wall Street? Talk a little bit about that and what that looks like sounds like view feels like.

Eric Adams (29:10)

Well, a lot of it has to do with age. I mean Elizabeth Warren, I mean I, I think it was Scott who interviewed Hagerty. Yeah. The Senator and the, the level of, I think he said that when they put the Genius act on in committee that within the hour, within, within four hours Elizabeth Warren and her team had 80amendments trying to basically you know kill or, or make it a, a shell of, of itself. And I think that that is, you know when I was running against her I said that and I stand by it that Elizabeth Warren is the number one. America's number one bank lobbyist.

John Deaton (30:00)

Yeah.

Eric Adams (30:01)

In the world. And, and I think that that proved it. But you are seeing really it comes down to me is, is age that one crypto certainly made a difference in the election that got these people's attention. There's no doubt about it. It got Democrats attention. It helped certain Democrats like Adam Schiff the fair shake acted. But, but a lot of it comes down to a generational dividend. You know you've still got senators like the other senator in Massachusetts is Ed Markey. You know Ed Markey when he first went to Washington it was 1978. And you know I happen to be nine years old at the time and he's someone who voted against the Genius act just like Elizabeth Warren. And when you look at the younger Democrats, the Richie Torres for example, or someone like that, they're more on, on page with, with seeing this revolution and seeing the technology and seeing the innovation. And so the landscape has changed remarkably now with that said, we have to hope that we get not just the Genius act, that seems to be a done deal according to David Sachs. That seems to be going, it's going to get through the House quickly and be on president's desk before the August recess. That's what people are saying. You know, the question really is can we get the structures, market structures bill done as well? And I certainly hope so because there are some consumer protections in there, bankruptcy protections and things of that nature that need to get done. And that was another concern I had with this Iran's conflict.

John Deaton (31:50)

Yeah.

Eric Adams (31:51)

If we got in a prolonged event, all the oxygen in the world in Washington would be going to the Middle east and legislation domestically might, might stall out. And if we have, if we have peace and we get that market structure built, then we have fundamental change. You know, the biggest threat still is that if the, if the Genius act gets passed and that's it and we get nothing else, the midterms come around. If the Senate flips, you have Elizabeth Warren as the banking chairwoman in the Senate.

John Deaton (32:33)

Yeah.

Eric Adams (32:33)

If the president in 2028 is a Democratic President, you know, are we going to go back to an anti war and, and I don't think so because once Wall street engages in this mass adoption that you and I are talking about, that changes it, that changes the game because then it's, it's be. Crypto has become part of the financial infrastructure in the United States and then you, it's going to be much more difficult to go back to an anti crypto kind of approach.

John Deaton (33:08)

Well, it, it. So that's a really great point. And, and here let's put some numbers behind that. Why did J.P. morgan choose to build their internal, you know, their internal almost tokenized movement of money? You can make the case that it's their version of a stable coin, but they, they built it on, on base. Right. Why did they choose to do that? They choose, they chose to do that. You know, I had a little bit of an argument with somebody on Twitter about it. Well, you know, JP Morgan has 85 million customers and Coinbase has supposedly. But how many users are active on a daily basis or on a monthly basis? You know, with JP Morgan, monthly basis it's, you know, 60 million or whatever. With, with Coinbase it's 10 million or 15 million or whatever. The Numbers are that the, the case they were trying to make is that Coinbase has fewer active users than JP Morgan. I said, you're making the case for me. Essentially what JP Morgan is trying to do is they're trying to somewhat quietly get access to Coinbase's user base, right? Like you don't become the, effectively the biggest bank and biggest brand in banking in the world over the past 200 years and have a bunch of stupid people in the room. That's just not a reality. Whatever you think of J.P. morgan as an institution, good or bad, they run a reasonable business, right? And so the idea that JP Morgan is just willy nilly deciding to build a tokenized type of asset on base is, is not something that, that isn't well thought out. Of course it's well thought out. They want access to the fact that Coinbase ultimately does have a larger user base than JP Morgan. Think about that for a second. And people listening to this stream, think about that for a second. Coinbase has 120 million customers globally, right? And JP Morgan, the biggest bank on the planet, okay, has 86 million customers. They have fewer customers than Coinbase. That's, that's an eye opener, right? That is an eye opener for people. Bank of America, which is, you know, again, One of the three biggest banks in the United States, right behind JP Morgan, has 62 million users in their user base. And they are not a global organization. So Coinbase has, you know, significantly more customers than bank of America, significantly more customers than JP Morgan. That is a remarkable truth. And it's the reason why JP Morgan says, let's build something on Coinbase, as opposed to Coinbase saying, maybe we should build something on J.P. morgan. Right? The flow of customers, the flow of assets is not leaving Coinbase and going to JP Morgan. The data has told JP Morgan there's a trickle of assets that we should be aware of and probably a bit concerned about that's leaving JP Morgan and going to Coinbase, or else they would not be building anything on Coinbase and trying to partner up and stem that particular tide. Do those numbers are those, those numbers resonate with you, John?

Eric Adams (36:55)

Of course they do. Listen, I remember I met with Coinbase because I, when I ran for office, one of the things I said to my team is like, I have to be able to accept crypto for donations. And, and we got to make it happen. And so we contacted Coinbase and we used Coinbase is their, their platform for people to donate in crypto. And then talking to their team in Massachusetts. And this Was in this would be March of 2024, they had 800000 customers in Massachusetts alone, which you know, shocked me because that's, that's one out of seven basically. And that was then and now it would certainly, probably be over a million. Which means that you're talking about a seventh of the population. When you reduce that to adults, then you're, then you're talking a very significant, you know, maybe one out of three, one out of four adults is a Coinbase customer. In Massachusetts, which isn't the biggest state. Seven million people live there. But, but that was shocking to me. And, and so when you take the fact that they had 800000 last year and then the people that had exposure to Bitcoin independently or the ETFs, then you're probably talking about just in the state I live a million and a half.

John Deaton (38:22)

Yeah.

Eric Adams (38:22)

Of the 7 million people have exposure to this asset class. And so I, I think what you just described of the, the, the biggest, most well known bank in the world going to Coinbase and building on their infrastructure tells you everything you need to know about inflows, where the capital is going to go.

John Deaton (38:49)

100, 100.

Eric Adams (38:51)

You know, I think, I think, I think Coinbase now has got to be considered a blue chip stock.

John Deaton (38:57)

Yeah, no doubt about it.

Eric Adams (39:00)

Ideas of what's a blue chip stock.

John Deaton (39:02)

You know, well, we, we, we only have a couple minutes left because Scott is in New York City. Today is going to be streaming with New York City's mayor, Mayor Adams. And so Scott's everywhere, man. Yeah man, he's everywhere. So, so we got to jump here in one minute but I want to, you know, again, everybody get involved with Arch Public. John is involved with Arch Public. I wanted to quickly pull this up and show people, you know, what gets done with Arch Public and do it quickly. I don't know if it's showing up there, but you know, John put a post up yesterday and again he just shows off the executions that happen in his account. So 99 and 98 XRP at 194 and, and 196, they're all dramatically higher, let's call it 36 hours later. It is a, the ability to, to harness the volatility associated with crypto markets to your benefit using our institutional tools is, is, is simply a, you know, a benefit to what you're trying to get accomplished. So thanks John for being here. Thanks everybody for being here. We're going to cut to Melker at the Scott, the, the, the mayor Adams show and have a great day, everybody.

Eric Adams (40:37)

Thank you.

John Deaton (40:38)

You bet.

Interviewer (40:42)

In Brownsville. To being the mayor of New York City.

Scott Melker (40:46)

Born in Brownsville. You know, I used to think that every night you're supposed to sleep in a different place because we didn't have permanent houses. So we would go from cousins to out to aunties to what have you. Moving over. Eventually, mom saved up enough money to move to South Jamaica, Queens. And from there, that was a real stabilized community. You know, low income, but it was stable. I suffered from dyslexia, undiagnosed. So I used to think that I was a dumb student. I walk in the classroom every day, they have dumb student on the back of the chair. And, you know, kids are cute, but they can be cruel, you know, and if I. If I read that day, they will mimic me throughout the entire day. And it was until I got into college that I heard a young girl listening to a. A documentary on dyslexia that when I heard it, I realized I was not dumb. I was dyslexic. And I went from the D list to being on the dean, dean list throughout my entire career. And then I went into law enforcement, State senate, first person of color to be the bar president of Brooklyn and now the mayor of the city of New York, second mayor of color after my mentor David Dinkins was the mayor.

Interviewer (42:03)

So somewhere along that path, you found crypto and bitcoin, which is obviously what we're here to talk about about today. Maybe you could tell us why you first got interested in it when you first heard about it. What the story is behind that.

Scott Melker (42:13)

Well, the role of the mayor, particularly in the city as large as New York, is that you must be substantive and symbolic. And the substance is, of course, bringing down crime, educating children, building housing, all that good stuff. But the symbolism is just as important. We're witnessing an evolution and how we're paying for goods and services, and New York needs to lead the way. This is the financial capital of the globe, and we must be part of that evolution. And while I was on the campaign trail, I had the opportunity to meet Brock Pierce, who talked about bitcoin and how this new form of change, exchange for goods and goods and services, is something we need to embrace. I started to do my reading, and I was blown away of how important and how innovative this industry is and how we moved it out of New York. We. We criminalized, we targeted so many investors, were under investigation. We just really turned against an entire industry. And I said no to that. So when I became mayor, I took my first three paychecks in bitcoin and still have them to. Until today.

Interviewer (43:28)

Question. That was my next question. You still holding?

Scott Melker (43:30)

And people laughed at me, but I say, who's laughing now?

Interviewer (43:33)

That was my next question for the audience. How many of you had people sell you were crazy when you first told them that you were into bitcoin and crypto? Show of hands. I'm surprised. Wow. Most of you must have gotten in last year or something, because when I got it in 2016, it was like that. And I remember you saying, I'm taking my first three paychecks in bitcoin and Ethereum, I believe.

Scott Melker (43:51)

Yes, exactly.

Interviewer (43:52)

We forget that part. At the last conference we were at, you're not allowed to say Ethereum on stage.

Eric Adams (43:56)

You can only say Bitcoin Here.

Interviewer (43:57)

We can say Ethereum, but. And you're still holding it today. So obviously, it was also a contentious time in the city and in the state for the crypto industry, as you said. Interestingly, today is primary day.

Scott Melker (44:10)

Yes.

Interviewer (44:11)

One of your likely opponents is former Governor Cuomo, the man behind the bit license.

Scott Melker (44:16)

Yeah, no, so true. His superintendent of finance, which was interesting. He. He just sort of dismantled and destroyed the industry and then went out and joined a company. His former superintendent joined a company that basically benefited from the destruction of the industry. And clearly, this is the only industry. When you do an analysis of the history of this country, this is the only industry. When there was an intentional action to make sure this industry does not grow in New York specifically. And we have to turn that around. And so I thought the actions of the former governor, they were wrong. I think they were misguided, and it just pushed this industry into the shadows. And many people left the city. A lot of people went to other countries because they did not want to go through that level of harassment. And we've harassed the hell out of this industry. And so he pushed it out of New York State. I'm in Brooklyn today to say I'm welcoming it back. In New York City, we need to be the bitcoin capital of the entire globe.

Interviewer (45:27)

So how do you accomplish that when you obviously have cities around the world that have wooed the industry? Dubai, Singapore, Hong Kong, of course, even cities in the United States. How do you bring the industry back, and how do you, at the city level, fight what's happening at the state level? Because I would imagine that you're. You can only do so much in the city.

Scott Melker (45:45)

Well, I think there's a number of things that we could do. Number one, we're going to create a digital asset council where we're going to bring in those leaders from across the globe and be a part of this council so that we can navigate how do we start building from the ground up. And I believe the community folks who are here in this room realize their power. You know, these laws that are made on the state level. We need a strong advocacy group to go to Albany, walk the halls of Albany, speak with the elect, the local electors, the state senators, the assembly persons and the governor's office to explain this industry because many people don't understand the industry. And third, we need to build out the pipeline. We're introducing this into our school system where our young people are going to start embracing what blockchain represents and how the technology is important for data protection, protection of our records. We're going to explain bitcoin, cryptocurrency and the whole universe. And then we're going to put into practice practical practices like just as I am getting my paycheck in bitcoins, we're also going to show how you could pay your local of utility bills, how you could play paid summers if you have those and other ways that you can pay for city services. And lastly, there's a real investment for those. This is an international city. You know, here in Brooklyn, 40% of the people speak a language other than the English at home. When I was in Puebla, Mexico or Ecuador or other parts, they're sending money back to their family members. And by sending that money back, the amount of money they're paying to all of these top companies, they're losing billions of dollars. So once people see the financial benefits and how it impacts them in their pockets, they're going to push the legislation forward in a real way.

Interviewer (47:46)

I mean, we've obviously seen a huge sea change at the national level, at the federal level for how this industry is viewed, how the asset class is is viewed. Does that give you tailwinds in the city? Have you noticed a change being mayor of New York City since things have changed so much on the national level, on what you can speak about, what you can likely put push through, what you can propose because it seems wildly politically unpopular to be anti crypto at this point?

Scott Melker (48:11)

Yeah, no, without a doubt. And you look, I think in the first 120 days, the number of bills that went through the federal level to deal with this issue is extremely impressive. And now you're seeing cities picking up in states picking up the same energy. And it's difficult now to see what we witnessed before where There were, it was real harassment on those. If you were in this industries. And I, I'm pretty sure folks in this room could all give you horror stories of what they went through and being fearful that watching your investment evaporate overnight based on just the harassment that this industry experienced. And when you think about it, we went from paying for goods and services using seashells, then we evolved to go to coins and the paper dollars, to credit card, to other forms of paying for goods and services. Now you know, my son doesn't, he doesn't even use credit cards. He said, dad, just cash at me. So the evolution has always been there. People have gotten in the way of that evolution. And there's always been folks like the people in this room that were willing to push and say that we're going to not be afraid of change. Change is fearful. People enjoy inertia. They want to have things remain the same. And there are many financial industries that realize that this is freedom to be able to manage your, your assets and the capacity that we're doing.

Interviewer (49:44)

And this is the global financial capital of the world. You would have to imagine that the biggest crypto companies one day are on Wall street next to the Goldman Sachs and the JP Morgans and the BlackRock's who have obviously adopted our asset class.

Scott Melker (49:58)

And many left. Many left. They fled because it was unfair. I never thought I would be quoting Arnold Schwarzenegger. But they'll be back.

Interviewer (50:09)

Yes, they will. And are they coming back? So talk about, obviously you had a summit last month, right? So this is something that's actively in the works right now discussing with the industry, the policies that you just articulated, are they starting to come back? Are those meetings changing?

Scott Melker (50:26)

Good energy. We had about 2, 300 people at Gracie Mansion where we had our crypto summit and some great speakers that came in to look at what we were doing with Nick Spano, who was a real giant in this industry of what Nick did years ago before he had to leave. So the energy was great at Gracie Mansion. And you're seeing a lot of companies are realizing that there's a possibility here in the city and we're going to make it as easy as possible for them to come back and really open the industries right here.

Interviewer (51:02)

Yeah. And obviously this industry is now starting to build the full breadth of financial services that we see with legacy companies in Vegas. You kind of made waves by talking about a bit bond.

Scott Melker (51:14)

Yes.

Interviewer (51:15)

Maybe we can dive into what the bit bond would look like, why that's important and how that would work in New York City.

Scott Melker (51:21)

No, we, we, we have a great deal of. Thank you very much. We have a great deal of instrument financial instruments that allow those who are investing everything from tax free bonds to other bonds. We want to examine how do we have a bit bond here to allow those who want to use bitcoins to do that same level of investment. Our team is examining now my omb, my budget director to see the formation of that. The current controller is against it, but we think there are ways we can do it to circumvent him because it's going to take a lot of creativity to bring other people forward in this direction. Again, the lack of education and understanding of what this universe looks like is making it fearful for people to move forward. Because what we have done, we have identified those cases where there was some form of fraud or abuse as though we don't have fraud and abuse abuse in stocks and currency and credit. But we've highlight any misstep and we use it as a way of saying, see, this is why the industry should not grow. We have to move past that. And so what we want to do here in the city is to examine the potentiality of a bit bit bond and also continue to expand the industry here in the city. At the same time.

Interviewer (52:57)

What's the timeline for something like that in your mind? It seems like now is the time to strike because there's got to move.

Scott Melker (53:03)

Quickly, got to move. What iron is hot. We, you know, we got, as you stated, there's a lot of support on the national level and so the opportunities are here. But I cannot say it enough. A lot of the movement that we're going to be able to do is going to come from audiences like this. You are going to drive this, the energy and how fast we can move. When you have an executive such as the mayor of the city who's embracing it, the executive must meet those who are in the industry on the grassroots level and together we can make it happen. It's not going to be just if the mayor is advocating for it, it's going to be the mayor and the combination of those who are in the industry. That's how change happens in cities and in this country. It comes from the combination of the leader on the top being embraced by those who are on the grassroots level. So it's imperative. We saw it in this last presidential race, the bitcoin, the, the community of the crypto community was extremely present. They had an agenda, they wanted to push this agenda forward and they were very present. They need to do that. Across the entire country to make sure that their voices are heard.

Interviewer (54:21)

They talk about that grassroots groundswell from the industry itself. What about from the people of New York? Because I, I know that they still don't have access that almost every other state does. A lot of our favorite exchanges, a lot of our favorite platforms, decentralized finance, New York, still you can go and be blocked from signing up to the most simple thing. So how can the people really help push that agenda and not just the industry and the money that's behind it?

Scott Melker (54:49)

Right. And if you think about it, people need to identify how does this helps me. So we have a large Caribbean, South America, Central America population, as I was sharing, that's sending money back to their home country, you know, to support their family members. If once they identify how much money they're saving by sending money using bitcoins, that's going to be the grassroots and on the ground efforts. We have to expand the knowledge of this industry. For far too long it has been a niche industry where only a few understood the benefits of it. Now that we're going into our schools, we're teaching our children of this entire industry and we're going to, I'm bringing together all of my council generals so that they can encourage their residents of their countries that are here on the benefits of it. The more we do education on the bottom, that's going to build the groundswell. And we have not done that. But those of us who are in the industry, many people sit in the room and they feel uncomfortable by engaging in the conversation because no one wants to feel dumb and they feel as though I don't know what they're talking about. It's too complicated for us. We're now bringing together pastors, clergy, leaders, faith leaders, rabbis. We're going to start a real conversation on how this benefits everyday working class people in the city and beyond.

Interviewer (56:21)

Obviously the bit bond or just holding bitcoin, you outlined a number of ways that the technology could be utilized to better to benefit systems in the city. If someone pays their taxes or their, you know, their parking tickets and all those things in bitcoin, does that mean that we can get the city to hold it?

Scott Melker (56:38)

That's, we would love to do that, you know, but it's also using the, this whole, this whole technology blockchains. There's no reason we cannot have our birth certificates, our death certificates, our liens. It is so much easier to use this technology of even blockchain that we have not embraced at the level that we should be embracing. And that's our goal of showing how this technology moves us forward.

Interviewer (57:04)

So, so what other things can the industry people here specifically do to help support these efforts?

Scott Melker (57:10)

First of all, feel empowered. This is a very sophisticated, knowledgeable industry. They should know who the state senator is. They should know who their assembly person is. If they're here in New York or outside of the city, you still should know that. They should know who the congressional person is. That's the starting point. And then they should communicate with them, let them know how important this industry is, how it can grow. We're talking about jobs, we're talking about building economy. They shouldn't be silenced. This industry has existed in the shadows for too long. The national government is embracing the concept and understanding of it. Now the local cities are doing so as well. All of these male organizations, you have the, the, the National Mayor's association, you have the local mayors association, you have the local cities and counties. This industry, just as they understand how to make the right investment in bitcoins, they should understand how to make the right investment in politics. A lot of people who are in industries of this magnitude or in business, the attitude is, well, I'm just going to run my business and I'm going to get into politics. Politics is going to be in your business if you like it or not. And we saw that 10 years ago when the former governor and his, the, his head of our financial entity, how they made the determination of dealing with our bid licenses, it destroyed the industry. So if we're not in politics, politics is going to be in us.

Interviewer (58:49)

I know we only got a couple minutes left. Let's live in a perfect world. We get rid of the bit license, you get basically all the regulatory and legislative clarity that you want. You can do whatever you want. What does this industry in New York City look like by the end of your next term?

Scott Melker (59:06)

Clearly, we're going to see a real evolution in the next few years. One or two years, we're going to see a real evolution. We have a governor's race coming up and this entire industry should be involved in that race to put your platforms. When people run for office, they put, they hear the platforms of the advocates and advocates do things. Everything from housing advocacy to healthcare to education advocacy. This needs to be on the agenda for the upcoming gubernatorial, state and local elected racist for Albany. If this is on the agenda, it will engage in a conversation that will help my role here in the city. We have to get rid of the bit licenses. If we don't get rid of the bit licenses, it's going to be, in a way, of the real growth of this industry. And I think it's. This is the moment to do so. There's a door that's open, and we need to take advantage of that. If we accomplish that task, a very clear mission, we accomplish that task, we're going to see this industry take off in the financial capital of the globe.

Interviewer (60:18)

Well, thank you so much for everything you've done for this city and for our industry. And everybody, please, a huge round of applause for the bitcoin mayor of New York City, Eric Adams.

Scott Melker (60:30)

Thank you.

Interviewer (60:32)

Please welcome.

Scott Melker (60:34)

Let's do.

John Deaton (60:47)

That'S dope.