“The capitalists will sell us the rope with which we will hang them.”
This quote is attributed, apparently falsely, to Lenin. I never understood what it meant… Until recently.
It was on an episode of What Bitcoin Did from last year. Host Peter McCormack interviewed Kevin O’Leary, the famous investor, known from Shark Tank.
It was a great interview and production. And Mr. O’Leary is a great speaker, TV personality and investor. Very articulate. The interview is worth the watch, revealing some hard truths about investing as the manager of a regulated investment company.
At one point, O’Leary revealed how his compliance department did not let him invest in crypto. And between the opinions of the compliance department, the external auditors, and the regulators in the different jurisdictions he is active in, he is hardly allowed to invest in any crypto project.
Next, he highlighted that institutional investors are strictly bound by ESGs: Environmental, Social, and Governance standards. These standards determine that if an investment doesn’t tick the right boxes, a regulated entity is not allowed to invest in it. And Bitcoin doesn’t tick the right boxes.
He then mentions that Larry Fink of Blackrock, the largest shareholder on the planet, forces all the companies he invests in to implement ESG standards as well.
He is right, of course. This is how it works.
He then explains what if we want to get Bitcoin price above 100k – 250k USD, we should subject to these regulations. Only then, “the institutions” can come in to bid up the price.
But why would we want to subject to compliance officers and bureaucrats telling us what we can, and cannot invest in?
Moreover, his compliance department is merely enforcing global standards. Without ever thinking about where they come from. As if they are an act of God.
The institutions aren’t creating these standards, as well. And neither is Larry Fink.
You see, our modern communists realized that you do not have to own the means of production; you just have to control them. You do this through regulations. Control the flow of capital.
O’Leary then reveals his plan to make money by selling Bitcoin to institutional investors; he is going to invest in sustainably mined bitcoin so that institutions can buy them and satisfy their compliance obligations.
As the shrewd business man he adjust to the situation. He serves a need and makes a profit. Seemingly oblivious to the ever increasing number of restrictions on capital that in the long run challenge the foundations of a free society and his ability to make profits at all…
Blinded by greed, he doesn’t see the noose tightening around his neck. No, it as an opportunity!
Accept these regulations on crypto; so that we can be accepted by the institutions. The price of Bitcoin will go to 1 million. The interest is there. Ready to flood into the market.
The industry “needs” regulations. The compliance department told me so.
Forget the principles, or the community. If the institutions allocate just 1% of their portfolio we are talking about one trillion USD flooding into the space.
Who cares about peer-to-peer transactions? It is an asset we never sell until we will be sipping champagne in our penthouses with central park view.
Like a good little pets, in a glass cage…