The world is changing fast and to keep up you need local knowledge with global context.
The recent surge in the price of Bitcoin, which has more than doubled this year, comes as no surprise to our long-time tech guru, former Google executive, and tech entrepreneur, Stafford Masie. In this fascinating interview, he explains why some of the world’s biggest investment names have converted to becoming ‘Bitcoin Maximalists’ – those who believe the coin is far superior to all other cryptocurrencies. He suggests that period of advantage for retail investors is quickly closing and goes so far as to argue that, given its high-risk socio-political implications, it is irresponsible for those living in South Africa not to own Bitcoin. He spoke to Alec Hogg, editor of BizNews.
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Relevant timestamps from the interview
- 00:06 – Introductions
- 00:44 – Stafford Masie on Bitcoins sudden surge and if there’s more to come
- 07:01 – The ignorance of Bitcoin detractors and why this is still the case
- 12:51 – His reaction to the BHI Ponzi scheme
- 17:18 – Bitcoin volatility
- 20:41 – Watch the Bitcoin ETF
- 22:18 – Conclusions
Edited transcript of the Interview between Alec Hogg and Stafford Masie
Alec Hogg: “It’s been a while since Stafford Masie and I caught up. We are, of course, going to be on the stage at the BizNews conference in March next year. 28 keynote speakers. Stafford will be one of them. We’ll be blown away, as always, by what he’s going to be telling us there. But today we want to talk about Bitcoin. I asked if he could explain to us what’s been going on. Bitcoin is rocketing. It’s the Bitcoin bullet nowadays. Why, and is this the end of another surge or is there more to come? Staff, good to be talking with you. Let’s just start with the conference. It’s just around the corner really. It’s hard to think that we’re in November and in March we’re going to be getting together just before the election. It seems a few months thereafter. But we’re going to be talking again, as we seem to do at every single conference, about stuff that’s changing all our horizons. I guess that’s happening in your world, in the whole world of technology all the time.”
Stafford Masie: “Yeah, if you take a look at the last couple of conferences that I have presented, I think the last three, I have, I told you so, and I told you so, and I really, really told you so. I think the last one was AI, because AI had really broken forth, I think, in the November-December time period last year. I got on stage and I said, ‘Hey, folks, it’s here.’ I’ve always spoken about AI, but it’s here. I kind of gave the framework around AI and I spoke about OpenAI and where it should go. You can see what’s happened with it. That’s extraordinary, the stock impact that it’s had, the macroeconomic impact it’s had. It’s been interesting to watch. From day one, the first time I got up, I spoke about Bitcoin. I told everyone it was fire, it was the wheel, and it’s Bitcoin, right? I continue saying that over and over and over. You know, we can’t get a better fire, you can’t get a better wheel, and you can’t get a better asset. You can’t reinvent this thing. This thing is just so beautiful. And if you start understanding it, I think as we watch the price and when it goes down, then the interest in the WhatsApp group tapers off. People don’t ask me about it. As soon as the price pops up, that group starts asking, ‘What’s going on? Where are things going?’ And I get pulled into conversations like this. Should I be investing right now? Is this thing real now?
I think what Bitcoin’s done over the last 24 to 36 months, it’s gone through its legitimacy period. I think that question around, ‘Is it going to go away? Is it real? Is this like a cypherpunk thing?’ I think we’ve gone through that period right now, and I think we’re still kind of in that. I think we’ll really see the bedding down that’s happening. I think the substrate of what this thing needs is truly being in place. I think the breakthrough moment for this as an asset class, as a piece of technology, will be 2024 onwards, irrespective of what’s happening right now. I still feel we’re in that period of, ‘Is this thing legitimate?’ But I think when people like Larry Fink get up from BlackRock, from calling this really negative about it just three years ago to today, saying it is the asset that he deems as the flight to quality, for somebody like that to say it, for fidelity to publish out a paper that they did, which I shared with the group this afternoon in the business community. I mean, that paper legitimizes Bitcoin and talks about why Bitcoin is different from crypto and all these other altcoins that are out there. It positions it very clearly and it encourages the investors to take a look at that.
Then you’ve got the spot ETF noise that’s happening, and you’ve got the FASB noise, the fair accounting standards board coming out and saying, ‘Hey, we’re going to put rules in place.’ They voted to put free accounting rules in place for Bitcoin, which makes it a legitimate asset on your balance sheet. So you can account for it. If it goes down, you account for it. When it goes up, you can account for it without having to sell it. It’s an incredible time to be in that ‘I told you so’ moment because we went from cypherpunks, people that, before the exchanges existed, they were cypherpunks. The only way you earned Bitcoin was when you mined Bitcoin and you earned Bitcoin. It was an earning model. And then the exchanges came along and they kind of latched onto this and they created fiat on-ramps and off-ramps where you could take your money and buy Bitcoin or you could cash out your Bitcoin for whatever currency you have. I think that cypherpunk world, then we moved into the exchange world, it was still the domain of the few, right?
Then we had organisations buying it. The first move was MicroStrategy buying hundreds of millions of dollars, and then Tesla got in. It was interesting to watch how big money was starting to pour in. We called it whales. Then the big problem that we had there was people were worried about a couple of things. Number one, the exchanges were getting hacked, and people were questioning Bitcoin. Bitcoin got hacked. No, no, it’s not Bitcoin. The exchange got hacked. They were holding the keys, but not Bitcoin itself. And people actually like to kind of get that phrasing in their head. Then we had corporations entering, and then the big question was, are these whales going to move the price? Can like three or four people do something to Bitcoin and then move it and influence it? It was the question of: are the whales an issue for Bitcoin? We jumped over that. So now we have more institutional or retail investment than we have institutional individual whale investment. So we had to get through that, and then, you know, after that period of time, it was, ‘Okay, where is this thing going? Is this thing going to be around?’ And I think it’s celebrated its 15th birthday this week, which is incredible. It’s never been hacked. It’s never gone down. It’s the world’s largest computer. It is the only… It’s now recognized finally by Larry Fink.” “Juran Timmer came out today, the guy from Fidelity. He’s one of the key macro strategists, and he’s calling it exponential gold. Larry Fink’s saying, flight to quality. The guy called Mohammed Al-Arian, the investor, the Bloomberg professor guy, says it’s a flight to safety. I mean, this is insane. If you took just a year ago, if you had told me Larry Fink was going to come out and say Bitcoin is a flight to quality, out of love. And that’s happening today, yeah.”
Alec Hogg: “But, but Stafford, why are so many people who fancy themselves as pundits – I’m talking about commentators, and quite a few of them here in South Africa – still saying there’s a lot of rubbish, it’s a scam, when, you know, without being unfair to them, if I put their intellect next to yours, they’re kind of worlds apart. Now, someone as smart as you gets it, someone who’s not so smart, but has got a big platform says, ‘No, this is rubbish. And it’s a scam.’ Just how, how would, is that arrogance or is it ignorance or the ignorance of arrogance, perhaps, or is it just because they haven’t had their eyes opened?”
Stafford Masie: “Well, take a look at the BlackRock journey. Look at the BlackRock journey. When they came out, they thought this was a complete scheme. They thought this was a pyramid scheme. The words that they were giving it were quite extraordinary. And then they kind of looked at it. Then they went through the path that I see everyone goes through. They go through like, ‘Is this legitimate? Is this just rubbish?’ And then they play around with it. They start to do the homework. And when you do the homework on Bitcoin, Bitcoin is not just a speculative asset class. Bitcoin is the world’s first digital commodity. We’ve never had a digital commodity in the history of humanity ever. I mean, think about that for a second. So it’s going to take a while for people to get the digital aspect of this, right? So this limited supply, there’s 21 million, the math behind it. So I like the fact that it is taking time for certain individuals to get there because I don’t want it to happen all at once. Because I think if it happens all at once, I think it will be a mess and I think it will break. I just love the way it’s doing it year by year. We see this, but people do the homework. So they look at it and they keep looking at it and they keep looking at it. And the more and more you go down the Bitcoin rabbit hole, the more and more you start understanding, wait a minute. Now, people that I speak to, investment analysts, I speak to hedge fund managers, and they pull me into the rooms behind closed doors. And I’ve been doing a lot of that over the last two, three months, where they pull me in at very reputable financial organisations in South Africa.
And they ask me, ‘What the hell is this? Tell us a little bit more about it.’ So we’re getting there. It takes education to get Bitcoin. It took me two years. Took me two years as a technologist to truly frame this in my head. And remember, I came from, at the time, building a company that was very deep into the bank fabric. I built a little device that plugged into a phone that took a card and did a card clearance over a mobile phone. I mean, that business… I was deeply enveloped in the annals of fiat, you know, working with banks and their systems, etc. And then Bitcoin came along and I had a very skeuomorphic view of it. My first view of it was this is rubbish. No way. It doesn’t work. But I just started playing with it and started reading more about it and grabbing. I think what people need to do with Bitcoin right now is understand it. Don’t run to go buy it. Don’t run because the price is going up. Understand it. Get the literature. Look at the white paper. Comprehend it. Put it into ChatGPT and ask ChatGPT to explain it to you as though you were a 10-year-old. Really get your mind and then take a step back and then take a look at the macro factors around it. It’s something that’s been around for 15 years. 93% of the supply has been mined. It’s never been hacked. It’s never gone down. And it’s now being recognised by the leading financial operators in the world, not in a skeuomorphic way.
Because what people do when they come into Bitcoin, they get it and then they immediately put it to altcoins. So they go to all the different coins that are out there. And then they kind of get hurt on that. And then they say, ‘OK, but wait a minute, we become blockchain believers.’ So they talk about blockchain all the time. And then they realise that, no, that’s even rubbish. There’s only one. And there’s only one. There is no other. There is only one Bitcoin. Everything else is a copy of what Bitcoin is. And its legitimacy. Why? It works the way it does and the magic behind it. And once you get it, it is extraordinary what happens to you. You become a fanatic. You can’t sleep. You can’t stop thinking about it because, and when you take a look at all the macro factors around you right now in South Africa, I think it is irresponsible for South Africa not to understand. I think it’s irresponsible considering the political situation. If you take a look at the budget that we just heard about this week, there are a lot of issues in the fiat world. There are a lot of issues in the traditional economic world. And I think on a global basis, there’s massive issues. I mean, Japan, I think today just issued an announcement they’re going to institute $110 billion stimulus into the economy. The United States has printed more dollars in the last 36 months that have ever been in existence. I think in 24 months, they printed 80% of all the dollars that were in existence in the last three years. This is great. There’s no IPOs. There’s no M&As. People are realising something is systematically wrong. In our global monetary policy and the way our currencies work. And you know what’s beautiful about Bitcoin, Alec? It makes the guy in the street understand what money is. That’s what I love. Forget the institutional investor. I love what it does for the guy in the street. It makes you realise this is where money is, this is where it’s coming from, and to understand it better.”
Alec Hogg: “Now we’ve just had here in South Africa, this BHI Ponzi scheme. And it’s starting to envelop. We heard today as well from the billions that have been invested. It’s a hard word to say, but certainly given to this Ponzi operator who’s sitting in jail, who’s admitted everything. There is 4 million Rand left in the net bank account. 4 million. That’s it. That’s all that’s there. So people are looking at this and they’re saying, well, you know, at some point in time, those in the financial, the private clients at RMB, they would have their little group amongst themselves. And this was their secret. Because. This guy was able to give them 12% a year, and he was a day trader, but he day traded in a particular way. It was something like a cult. We knew how it worked. We knew, and it worked for a long time, years, actually decades, until it didn’t, which is the way that Ponzi schemes operate. And I’m sure now, given that experience, people who’ve been burnt there are saying, ‘Oh my goodness. No, I don’t understand this Bitcoin. I want nothing to do with it. It could be another Ponzi scheme, et cetera. How do you answer that?'”
Stafford Masie: “So where do you go? So now you’ve done this Ponzi scheme, the guys nailed you, where are you going to put your money? Where are you going to put your money today? Real estate? Or really? Bonds? Really? Treasuries? Really? You’re going to buy equity in business? Really? I think you know my view around tech stocks, and we can go crazy, but even there, such as Adela could come out tomorrow and say something shocking. We could find out something about Microsoft that we never knew. So the risk is there. Bitcoin, it’s open. You can go look at the source code, look at the math. It is transparent. It has never been brought down. It speaks for itself. Bitcoin is not something that somebody needs to explain to you. There’s no intermediary. There’s no third party. It is what it is. Go look at it. See how the math works. And because of everything you experience in the traditional markets, because governments can debase a currency, because banks can suddenly shut down and tell you that you can only draw 200 grand a day from year on end, because title deeds in a deeds office can just be removed, because a CEO can suddenly do something silly and completely debase the value of a stock.
Keep going. And if you start unpacking bonds, the real estate, take every single asset class in the world, if it’s fiat-based, there is no flight to safety right now. That’s why Larry Fink says Bitcoin is a flight to quality. That’s why this Timmer guy comes out saying it’s exponential gold. That’s why Mohammed Al-Aryan says it’s a flight to safety. Why? Why are the leading economic minds in the entire world saying this about Bitcoin? So that’s my answer to the folks that just got done in. Do the work. The beauty of Bitcoin is you can become sovereign. The beauty of Bitcoin is you can take your assets and you can hold it in your hand. You can store it in your head as long as you remember your pass phrase. You can flee a country with everything that you have as long as it’s Bitcoin, with the clothes on your body and all the capital in your head, and you can get on the plane and you can leave. Can’t do that with gold.
You can be stopped with any other piece of metal. A title deed can be taken away. A bond can be manipulated by a government. A forex. I mean, there is nothing in the world today that you can go to better than Bitcoin. I don’t know. You explain that to me. So you just came out of this Ponzi, and this guy has just done you in. OK, so now where are you going to put your money here after? An investor that’s just been done about Ponzi is exactly the person that should now take a step back and go read books like Broken Money by Lynn Alden. Go read the Bitcoin Standard by Safety. Read these books. Get to understand money and then through that you’ll understand why Bitcoin is so beautiful because it gives you that power. It dis-intermediates you from the system. It gives you sovereignty. It gives you the ability to hold your assets in your hand without any government having the ability to take it away from you. And even if it’s by gunpoint and they shot you, there’s no incentive to shoot a person when all their money’s in their head. Because then it’s lost forever.”
Alec Hogg: “Hmm. But Stafford, when I have a look at the way Bitcoin has performed and you just take a, take a five-year picture, which I’m looking at right now, it’s come a long way from around 20,000 at the beginning of the year. We’re sitting at $35,000 today per Bitcoin. That is a sharp, almost a, well, 75% increase. What’s caused that? And is that one of those surges, a bit of volatility, a surge to be followed by a trough thereafter? Or how are you reading it?”
Stafford Masie: “So first of all, let’s talk about volatility, right? If you talk volatility, don’t look at Bitcoin and then wrap it in that volatility blanket. A lot of people do that. I would do the same with the markets. I’ll do that with currencies. I could do that with a lot of things in the world right now. Real estate portfolios, there’s a lot of volatility. I think, you know, I love it when people talk about Bitcoin and then they would bring this volatility word into the sentence. I think that’s a misnomer. That’s a stereotype that we need to break. I think that Bitcoin has a trend. And there’s a clear trend and it’s been influenced by a lot of other things. So Bitcoin gets influenced by other altcoins and something happens in that altcoin world and it will impact Bitcoin. Something happens with Silicon Valley Bank, it will impact Bitcoin. Something happens with SPF and this big trial and FTX and all that noise that we’ve spoken about you and I before and that will affect Bitcoin. But what we see happening, it keeps shedding its skin. It keeps shedding that skin and it keeps shedding it and then suddenly we’re now seeing it detaching.
And it is detaching away and it’s becoming this like risk flight asset. It’s where people are going. It feels very much like gold when gold had its first ETF noise. You know, it kind of had that volatility, but then over the long run, people understood that this is what it is. It’s you that you can depend on it. And these are the attributes of it. I think it’s the same thing. I mean, since August, 2020, it’s up 162% versus the S&P 500. If I take a look at the NASDAQ versus that, the NASDAQ is up 18%, Bitcoin is up 147%. Gold, since 2020, is down 3%, negative 3%, Bitcoin is up 147%. Silver down almost 20%. Bonds, so since 2020 up until today. Now I will say this, if you are a trader, don’t touch Bitcoin. Okay, or touch Bitcoin, but I am not a trader. I don’t understand trading. I burnt myself.
And I don’t think it’s a trading asset. I think it’s an investing asset. I think it’s a savings asset. I think it’s like gold. I think it’s better than gold. I think it outstrips gold in every aspect. The only thing gold has on it is history, that it’s been around longer. But other than that, every attribute of gold but quenches stories, performance, the attributes around what you can do with it, its speed, it’s the time ratio aspect that beats gold. But if you’re going to trade Bitcoin and be a trader, but if you’re an investor, if you’re looking at where to put your pension money or where to put your savings, I can’t think of a better place in the world right now from a quality and a safety perspective. And that comes from the top investor in the entire world. So if you, and for me, savings is something that you put something somewhere and you’re not going to touch it for five years or less. Right? So you cannot go near it for five years or more. You cannot touch it and that’s Bitcoin. So if you’re looking to put your money anywhere for five years or more, I don’t know of any other asset class in the world where you can put it safely, with sovereignty, with control, and predictability.”
Alec Hogg: “Stafford, thanks for updating us and giving the Bitcoin minimalist some more ammunition. Just to remind you that if you’re a Business Premium subscriber, there is a special Bitcoin channel on WhatsApp that you can join, and Stafford is a member there. Yep.”
Stafford Masie: “By the way, Alex, before we jump in, just the last thing I want to say. Watch the Bitcoin ETF when this spot ETF is finally issued to BlackRock and all the others that are in line. I think this is amazing. And I’ll tell you why it’s amazing. It’s amazing because right now people with more money than you and I ever have cannot buy Bitcoin, which is astonishing. Think about it. Microsoft cannot buy Bitcoin. Right? I mean, they can’t really account for it.
The biggest sovereign wealth funds can’t buy Bitcoin. BlackRock has trillions of dollars, fidelity, trillions of dollars. That money can’t flow into Bitcoin today. You and I can buy Bitcoin, but that money, the richest entities in the world, can’t buy an asset that you and I can buy today. But that 200 lane superhighway is about to open up. When that spot ETF opens up, I mean, billions will flow into Bitcoin, conservatively speaking, because suddenly the barrier to entry will be gone, and spot ETFs give all the governance control, etc. It’s an instantaneous way to acquire this asset. So it’s going to be very interesting when this occurs how much money will start flowing into Bitcoin. But I think it will transition and it’s going to be interesting. But the word that I want to say to everyone out there: there’s never been a better time to get it as an individual. It’s never been easier because the biggest entities in the world that could buy it, can’t buy it right now. You can. And again, this is not investment advice in any way or form. It’s in my personal opinion.”
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