What if Warren Buffet Did Crypto? | European Blockchain Convention

foreign [Music] well um anyway my name is Kate um probably more well known as Kate go stack and indeed today I'm gonna be speaking about Warren Buffett and how his investment methodology could be potentially applied to crypto what would Warren Buffett say about crypto but to begin with I'd like to ask you guys who is here with us from FDX or Luna maybe three hours Capital anyone can you raise your hands please wow okay well interestingly those companies were considered a ravishing success a year ago as far as I remember they're not here with us now unfortunately the thing is we all make mistakes but we are all here today because we did some things right so congrats everyone I think there's a great indication for our industry and obviously for our careers that we've been at the right place at the right time so let's talk a little bit about the evolution of crypto within the last um three years or so think it's important to know that 2021 has been an interesting year of free money pump and dump schemes and unrealizable dreams of endless returns no wonder 2022 has been a year of Retribution with about 10 crypto unicorns going bust taking billions of customers money with them and of course looking at the chart looking at the candle of the market today we can clearly see that the market is recovering we are hopefully entering the era of Regulation solid projects and real technological innovation digital assets like any other Assets in the world can be approached with two types of mentality the gambling mentality and investment mentality investment and building mentality Warren Buffett and his Berkshire Hathaway holding is definitely approaching their investments from the second perspective with the second mindset it's quite interesting to look at what Warren Buffett is doing and what exactly is his investment strategy it can be summarized basically in three key points value investing contrarian investing and long-term investing value investing obviously means picking assets whose current trading value is below the book value or intrinsic value contrarian means buy when others are selling sell when the crowd is buying and my favorite one the long-term investing where Buffett is saying don't even think about buying a stock for 10 minutes if you are not willing to hold it for 10 years this type of investing is probably not that common today it's more of a traditional investing but nevertheless let's see what Warren Buffett would be saying about our industry and investing in our industry well Warren Buffett is not exactly a big fan of Bitcoin why well first of all he says that this asset is not productive it does not generate anything also Warren is saying that bitcoin's value is mainly coming from the optimism that someone else down the line will be willing to pay more for your Bitcoin than you pay today to be fair Warren is quite right about some things about Bitcoin saying that the technology has failed to be wildly worldwide recognized and used as payments equally no one has sold the volatility of crypto just yet and to be fair Bitcoin did not result in much more even distribution of value around the world it's worth noting that some of the biggest Holdings in war war in Buffett's portfolio are actively investing in crypto by the way Apple that constitutes 36 percent of his overall Holdings are currently accepting stable coins through crypto app Coca-Cola has partnered with a crypto Exchange in 2022 Qatar games to release their exclusive nfts so I'd like to talk actually about whether Bitcoin and crypto has any value at all apart from optimism well I would argue that yes cryptocurrency has produced huge amount of value throughout the world there is nothing like International crypto payment there is just a crypto transfer it's much faster and usually much cheaper than traditional Fiat transfers smart contracts help to eliminate the third parties and Clearing Houses reducing the value the cost of transactions further people in politically unstable countries have been investing in Bitcoin for over a decade starting all the way with Venezuela to Ukraine and Russia this day because of the major war going on in the continent equally you can become a shareholder of a project you're interested in without the needs to go through VC a lot of kyc processes and filling out various applications proving that you are very sophisticated Institutional Investor so it can be actually true that one day we will be looking at Fiat the same way we are looking at seashells right now money is evolving technology is evolving and the distribution and popularity of Bitcoin with this this 15 years only shows that we are definitely on to something big and if you look at Statistics over 90 percent of crypto holders are the youngest Generations Millennials and gen Z the people who are defining the future so what are they older people saying about Bitcoin the uh Warren Buffett's colleagues well they are quite skeptical about Bitcoin to be fair however both George Soros and Ray dalio are allocating a considerable percentage of their wealth into Bitcoin while saying that it is very fast taking the Golden's market share it's worth noting that Bitcoin is not prone to inflation because of its scarcity by Design it's absolutely not hackable no matter how many people try to hack it and as wuentes casares once famously said it is first time in 5000 years that we have something better than gold and it is significantly better Bitcoin is more divisible more durable more storable and easier to transport it could definitely be true that we are on to a new type of value around the world by the way these guys would have absolutely no issue short in Bitcoin maybe some of you know what George Soros has done to pound and some other interesting asset classes however they do not do that interestingly enough Warren Buffett doesn't short Bitcoin either and he famously said that no one in the world is short on bitcoin long term even though he he says he does not understand Bitcoin okay well I think we keep talking about the gold here yeah well um coming back to Gold can something that actually more durable and easier to transport be considered seriously as a new store of value worldwide according to George Soros and Ray dalio is very likely so if we take this mindset into account and talk about the value investing that Warren Buffett Advocates we would actually see that Bitcoin today is Trading well to date it went up probably about 42 43 times below its potential intrinsic value as a store as a store of value how easy it is to find an asset that is 43 times underpriced I'm sure everyone here is quite smart so you probably know some assets but I think this one is quite interesting and quite obvious and before you tell me that I'm absolutely crazy and it's outrageous to think that Bitcoin can be considered a new currency or a new store of value let's look at some other ones throughout history it's worth noting that gold has been designated as a store of value and a medium of exchange 6 000 years ago and eventually has acquired the enhanced authentic value equally people are very happy to invest in diamonds and present it as the token of appreciation and their love however diamonds are not scarce at all if you research this American dollar has been created as a representation of America's gold and silver Reserves today it's been used by the FED to control the economy according to Warren Buffett's investment strategy we have picked an industry and we started CeX has started 10 years ago invest inventing the first Bitcoin specialized mining chip in the world and Mining about three percent of currently circulating Bitcoin since then we have grown to about 6 million customers across 194 geographies and we have seen that customers in Trad Phi and crypto have quite similar types of problems it is very frustrating to be looking for the best price across the market throughout different exchanges your crypto just as your Fiat is prone to inflation also can you actually trust the person the institution you leave your money with for custody I guess we all know FTX here right and can you afford their lifestyle you want while keeping your money locked to generate the yield I think all these issues are quite frustrating across different Industries that's why we've been working and innovating for 10 years to solve all of these problems and present our customers with solutions that can deal with this last but not the least it's worth noting that Bitcoin constitutes a very small portion of various other worldwide assets this asset has not been touched by institutions largely yet and only 28 percent of Institutions are interested currently to invest so the opportunities here for those who are interested for those who want it Warren Buffett does not do crypto today but if he did he would be doing it with someone who understands it I'm looking forward to talking to you later on learning about your businesses and seeing how we can build this industry together thank you [Applause]