Earlier this month, I spent a long weekend in Denver delivering several presentations to attendees at International Living‘s Go Overseas Bootcamp, and the one comment I made that I want to share with those who couldn’t attend is this: Uncle Sam plays the role of a word that rhymes with “pitch.”
Now, I probably should apologize to those in attendance for my language. That analogy just sort of fit the moment, and I blurted it out. But everyone laughed knowingly, so I think we’re good.
Thing is, I wasn’t speaking maliciously or with any degree of anger. I was explaining—a bit colorfully—that when it comes to where cryptocurrencies are headed in America, the government won’t call the shots. At least not in any real sense.
The government’s puppet master is business. And given that business funds politicians, political campaigns, and lobbying efforts, then it’s pretty clear that my assessment in Denver was spot on in crypto terms: Government is business’ “pitch.”
And here’s the point I was making: Crypto is the most inevitable trade in history.
Because crypto is good for business.
SUB
Politicians such as Massachusetts Senator Elizabeth Warren can jabber-jaw negatively about crypto until she’s blue in the face. The Securities and Exchange Commission can pretend it has God-like powers. But the reality is that, because crypto is great for business, business is great for crypto. Thus, there’s really no way the government will ever ban crypto at this point, despite what the negative nellies like to spout about in the mainstream media. (Note: I worked in the mainstream media at the highest level for nearly two decades. I know how reporters think, how their editors think, and I know the vast majority of both have zero exposure to crypto and, thus, really haven’t a clue about the crypto industry, how it functions, or the benefits that Web3/blockchain bring to business and society.)
The most government will ever do is regulate crypto fairly… which is precisely what industry and investors want.
Smart, logical regulation, shaped in large part with input from business writ large and the crypto industry specifically, will immediately reduce crypto volatility. Regulation removes the vacuum of uncertainty, and it defines the guardrails within which crypto can legally operate.
The government might win a battle here and there on where those guardrails are placed. But business has already won the war.
“And why are you so confident, El Jefe?”
I’ll share two examples I offered up in a presentation in Denver to make my case:
Nike
The sneaker giant has already earned nearly $200 million selling digital sneakers in the form of NFTs.
Now, you might rightly be thinking: Who the hell needs a digital sneaker?
That’s a logical question—if you’re a Baby Boomer or GenXer. We grew up with real sneakers that we destroyed running through creeks and ditches and swamps because we weren’t allowed to stay inside all day and play with digital games and smartphones that didn’t even yet exist.
But the generations below the Boomers and the Xers—particularly GenZ—are tech-savvy. They grew up with technology in their hands almost from birth. Today, they’re online nearly 24/7, texting friends, Instagramming every meal and sneeze they experience. And, to the point of today’s dispatch, they’re collecting digital art and representing themselves online as avatars.
Just as they like to dress fly in the real world, they want their digital mini-me draped in the same branded swag so that they look e-fly in the digital world.
Thus, Nike’s nearly $200 million in digital sneaker sales.
But here’s the real story…
NFTs carry the opportunity for businesses to build royalties into the digital contracts that operate NFTs. So, every time a Nike NFT resells—ad infinitum—Nike collects a royalty of 10%.
In Nike’s case, those royalties have amounted to almost $100 million so far.
Let that sink in…
Nike has generated nearly $100 million from a revenue stream that business has never had until now. That’s a revenue stream devoid of any meaningful, offsetting costs.
In short… Free money!
Businesses love free money.
Imagine the New York Yankees—or any professional or collegiate sports team or popular musical group—turning season tickets, or playoff game tickets, into NFTs that then generate royalties when those tickets are resold at 10x to maybe 100x their face value. That’s hundreds of thousands—or millions of dollars—in additional income those teams and musicians could never capture from ticket resellers in the past.
Now they can.
Money Transfer
Before I flew to Denver, I checked a popular money-transfer app just to gauge the cost of wiring $1 million from the U.S. to Europe. That cost: between $4,000 and $5,000, and a transfer time of several hours to a day or so. A big business will probably pay a bit less, but the costs are close enough for this example.
Using the blockchain, that same transaction takes seconds—maybe a couple minutes—and costs fractions of a penny.
Now, my big point: When business can create hundreds of millions of dollars with little to no added costs, and when global business can far more efficiently and cost-effectively move money around the world, does anyone honestly believe government has any shot at banning crypto?
Absolutely not.
Politicians and the mandarins they appoint to various agencies are going to bend the knee to their business overlords.
Granted, it won’t appear that way. As Game of Thrones so adroitly portrayed, it’s the machinations behind the scenes that determine what the hoi polloi see. But make no mistake—those pulling the strings are the real powerbrokers, not the kings and queens and government leaders asserting the proclamations and imposing the rules.
And so it is, then, that crypto—and bitcoin specifically—is the most inevitable trade ever.
Volatility will continue for a while. The SEC will thump its chest like a submissive chimp pretending to challenge the dominant male. Elizabeth Warren will chirp her manufactured anger for the all-important re-election soundbites.
But at the end of the day, crypto will be our future.
You either jump in now… and make your wealth before the next billion consumers join the crypto movement. Or you wait and join with the masses after the easy money has already created millionaires.
I highly recommend the former.