SIMON BROWN: I’m chatting now with Sean Sanders – he is of course from Revix. Sean, I appreciate your time. You sent a note last night around some topics to chat about: ‘China bans crypto again,’ to which I add: ‘And crypto is just uninterested, as Bitcoin heads for new all-time highs.’
SEAN SANDERS: Crypto’s a weird space. I guess that’s probably the takeaway from that. But thanks very much for having me on, Simon. Bitcoin’s up 30% in October and that’s a big run. That’s 14 days, and the catalyst behind that, number one, is that Chinese ban, which may seem counter-intuitive. But I believe what happened is that the Chinese ban actually prompted the US to come out and take a stance. The US came out – that’s the SEC [Securities and Exchange Commission], their main regulator – to say that they’re not going to be banning cryptocurrencies. That provided a big stamp of approval for the market.
And then couple that with the second main factor driving this rally, and that’s this optimism around this Bitcoin ETF [exchange-traded fund]. We all know that there’s lots of money sitting in pension funds, endowments and all those big other institutional investors, but they can’t come to the likes of a Revix, can’t [go] to the likes of a Coinbase; that’s out of their mandate.
So there’s a lot of money potentially sitting on the sidelines. Should a Bitcoin ETF be accepted within the next month or so, that could move into the crypto space, and that’s why you’ve seen this massive rally.
SIMON BROWN: It seems almost certain. We will always eventually be getting a crypto ETF. This time it seems, as you say, it’s probably going to happen before the end of the year.
Bitcoin’s obviously the big one. It’s trading a couple of thousand dollars below those April all-time highs. But running my eye down the list of cryptos, [I see] a kind of moving in unison. Solana, which we have spoken about, Ripple, Ethereum – there is a general swell just around the crypto space and [it’s] moving higher.
SEAN SANDERS: Oh yes. The rest of the crypto market, sort of the altcoin market, if you can call it that. That’s every cryptocurrency that’s not Bitcoin. That market has run really hard this year. If you’re not paying attention to that market, you’re missing quite a lot of growth. It’s probably where there’s the most innovation happening in the space – the likes of Solana, the likes of Polkadot, Uniswap. These are really interesting projects. Now they’ve got hundreds of thousands of users actually engaging with these different applications and protocols.
If you take a step back two years, no one was really doing anything other than speculating in the crypto space. Right now you can go onto the likes of Uniswap and you can trade kind of like a decentralised JSE, with absolutely no third-party company that sits between you and another party to make a trade.
Now, don’t get me wrong; regulation is going to hit the space really hard, and I think there actually needs to be some more regulatory oversight. I’ve been quite outspoken about this over the last few months. But the innovation that’s happening here is completely unprecedented. As a sort of a finance nerd myself – and Simon I’m sure you can relate to this – the DeFi [decentralised finance] world is also super-exciting. When you start going down that rabbit hole, you just don’t stop.
SIMON BROWN: And you have continued the trend, that of mentioning a crypto I’ve never heard of every time we chat – Uniswap was the one today. If we run this forward, I don’t know, three years, five years, what we’re seeing is [that] Bitcoin’s become a bit of the granddaddy – and I know you always talk about that. Actually it’s becoming less of the overall crypto market space as we get these new cryptos. We are going to see those alts starting to mature – the Solanas, the Polkadots and the like. I imagine a new range of altcoins coming through in the years ahead.
SEAN SANDERS: That’s exactly what I think would happen. You are now looking through the top 10 cryptocurrencies; only six cryptocurrencies within the top 10 were in existence three years ago. That’s how fast this space emerges – the likes of, as I mentioned, Uniswap, the likes of Solana. These cryptocurrencies are more like technology than currencies. So I think there’s this big misnomer space when people start talking about ‘currencies’; people have this preconceived idea of what money is, and what money can do.
Cryptocurrency completely destroys that idea. These are ultimately programmes that act or have money-like functionality. So think about an app on your phone – you can do a lot of different things with that app on your phone. You could potentially be sending money to someone, you could be creating a loan, you could be doing all these different things. Currently, if you think about a rand, a rand can be used to pay for something. So there’s this sort of contrast and this evolution of this idea of money that needs to occur.
But if you look forward like I said, I think there’s going to be a lot more regulation in this space, which is going to be good – I think in most part. That’s the first big sort of statement from my side.
I think the second thing to look at is going to be the growth of some of these DeFi applications. I mentioned Uniswap – it’s incredible what they’re doing. What that protocol has done is absolutely remarkable. If you start looking at the likes of Luna, which is another cryptocurrency that I’m going to mention, which you’ve probably heard [of] before, a lot of these projects are fascinating in what they’re trying to achieve, and they’re all trying to do something slightly different. So that’s I think really the big opportunity here – to sort of try and pick that next Bitcoin. Or don’t try to pick the next Bitcoin, rather buy into some sort of market product like what we offer, like some sort of index fund, and take a punt at the growth in this market over the next five or 10 years.
SIMON BROWN: I don’t know how we pick the next one. I do like that basket. That brings me to a last question. We chatted at the beginning of the month. Revix has released a proof-of-reserve document; in essence that says that if my coins are sitting with Revix, the auditors have said yes, they are there. A couple of folks asked me, “Does this include your baskets at the same time?”
SEAN SANDERS: Yes. That was actually the first full end-to-end audit that was conducted globally. Maybe I’m just feeling sorry for myself, but we spent a lot of time, quite a few late nights actually, sitting with the auditors and getting all of that in line. That includes every single asset on the Revix platform, whether it is the rands that you’ve deposited, the USDC or the USD coins that are on our platform – all the assets inside of our crypto bundles, absolutely everything.
As we’ve said before as well, we believe that has to become the standard without regulation in the space. Without an FSCA [Financial Sector Conduct Authority] licence, without the mandate to actually get semi-annual or annual audits, you have to sort of step up as a crypto platform and prove to your customers that that’s what you do.
SIMON BROWN: In essence, the industry is going to have to drive that forward – because, no disrespect to the regulators, they’re often a little bit behind in innovation.
Sean Sanders from Revix, I appreciate your time this morning.
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