Sam Callahan, the director of bitcoin strategy and research at OranjeBTC, joins host Gemma Allen on theCUBE's Crypto Trailblazer Series at the New York Stock Exchange in collaboration with NYSE Wired. The session explores key aspects and adoption of Bitcoin within Latin America, highlighting OranjeBTC's mission to accelerate Bitcoin uptake across the region.
Callahan shares their extensive expertise in cryptocurrency, emphasizing Bitcoin's role as a pivotal technological breakthrough. They provide insights into the challenges and opportunities within the Latin American market, addressing historical financial volatility and the shift towards digital assets as stable investment options. Gemma Allen of theCUBE offers a comprehensive overview of crypto strategies and development with valuable input from theCUBE Research.
Key takeaways from the discussion underscore Bitcoin’s expanding role in financial resilience, with Callahan outlining actionable steps by OranjeBTC to educate and advocate for Bitcoin adoption in Brazil. They also discuss the transformative potential of cryptocurrencies, the nuances of financial regulations, and broader implications of emerging technologies such as quantum computing on crypto ecosystems, according to theCUBE analysts and Callahan.
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Sam Callahan, OranjeBTC
In this insightful episode of the Crypto Trailblazers series hosted by theCUBE, Mike Cagney of Figure Markets sits down with analysts from theCUBE Research to discuss groundbreaking advancements in blockchain technology and their implications for the finance sector. This video is part of the NYSE Wired digital event, aimed at bridging the gap between Silicon Valley and Wall Street by integrating technology and finance.
Cagney, an eminent figure in fintech, shares expertise on the transformative role of blockchain in financial markets during this interview. Conducted by seasoned analysts at theCUBE, the discussion delves into Figure’s innovative contributions, including their blockchain-native loan origination and securitization process. He outlines how Figure leverages blockchain to achieve cost reductions, enhanced security and improved liquidity in financial transactions.
Key takeaways from the interview highlight insights on the evolution of the Web3 ecosystem, such as the emergence of stablecoins as pivotal to transaction processes and the rise of decentralized finance (DeFi). Oltsik states these developments signify a shift towards democratizing finance, wherein truth and transparency are foundational. The conversation concludes with a look at Figure’s pioneering efforts in creating a new financial marketplace utilizing blockchain technology.
#CryptoTrailblazers #FigureMarkets #BlockchainInnovation #Web3 #NYEWired #BlockchainFinance #DecentralizedFinance #Fintech #Stablecoins
Find more SiliconANGLE news and analysis https://siliconangle.com/.
Follow theCUBE's wall-to-wall event coverage https://siliconangle.com/events/
Learn about the latest theCUBE events https://www.thecube.net/
00:00 - Intro
00:05 - Emerging Innovations in Financial Technology and Market Dynamics
02:45 - Key Elements in Financial Ecosystem Dynamics
06:20 - Blockchain: Truth and Transformation
09:39 - Shaping the Future: Innovations in Financial Markets and Stablecoin Integration
13:15 - Enabling the Future: Navigating Disruptions in Banking and Lending
16:51 - Exploring Opportunities and Building Confidence in the Blockchain Ecosystem
>> Welcome back to The Cube. I'm Gemma Allen here at our studio at the New York Stock Exchange. This is our Crypto Trailblazer Series, partnering with NYSE Wired. And today I am joined by Sam Callahan, Director of Strategy and Research at OranjeBTC. Welcome to The Cube, Sam.
Sam Callahan
>> Thanks for having me.
Gemma Allen
>> So let's start with the easy question. You are a loyalist on Bitcoin. Why Bitcoin?
Sam Callahan
>> Look, I think Bitcoin is probably the most important technological breakthrough of the 21st century. And it's because it solves a very important problem. We can't save in our currencies today, so all Fiat currencies have the same problem where the money supply gets expanded and it loses purchasing power over time. And so it's why people have to save in real estate and stocks and gold and now Bitcoin since 2009, because the money doesn't provide that store value function anymore. And so Bitcoin solves that because it's digital scarcity, so it's the first time we've ever had a digital good that is provably scarce. You can see it online. Anybody can go in with a computer and check there will only be a 21 million Bitcoin ever. And so when you have a finite scarce asset like that, that's also digital, and so you can send it to anyone anywhere in the world, peer to peer. That's a breakthrough. And so whereas the internet allowed for the free flow of information, Bitcoin allows for the free flow of value over the internet.
Gemma Allen
>> And OranjeBTC, largest Bitcoin treasury in Latin America by, as we say in Ireland, a country mile, right? You guys are definitely in the charge. Talk to me a little bit about the market and LATAM for Bitcoin and for crypto generally, right? It's obviously a fascinating macroeconomic market, a lot of volatility, a lot of historical financial trauma, as we both know. Talk to me about, I guess, the fit and the through line for Bitcoin in the region.
Sam Callahan
>> Yeah, so OranjeBTC's mission is to accelerate Bitcoin adoption in Brazil and then Latin America more broadly. And we like to say that it's a region that needs Bitcoin the most and it's because of the widespread currency debasement and instability that they've had there. And so it's a really resilient people, especially in Brazil. So they went through a really bad hyperinflationary event in the late '80s and early '90s and they've really built themselves up since then. It's pretty remarkable what they've done. That hyperinflation event was worse than Zimbabwe. Everyone hears about Zimbabwe and the trillion dollar thing. It was actually almost worse in Brazil and this was only 30 years ago. And they built themselves up because they're very resilient people and then they're very innovative. And so you see actually even today large, very high adoption rates for digital assets broadly. Chainalysis puts out a report every year that looks at the adoption index of everywhere around the world. Brazil's the only one, any country that was top five in every single subject. So that's like Stablecoin, DeFi, Bitcoin. They were top five in all of them. And so you see a very forward thinking society there, very innovative and very progressive when it comes to adopting these technologies. And combined that with the macro picture of having suffering from currency debasement and instability in the past, capital controls, all of these things lead to environment that makes Bitcoin an asset that can't be printed, that is censorship resistant. It's permissionless, so nobody can tell you not to use it if you want. It's really attractive alternative for people in that environment, in that region.
Gemma Allen
>> And I guess what I find really interesting about a region like Brazil and digital assets and the decentralization of finance generally, I spent a chunk of time in Brazil back in like 2011. It's obviously a very unequal country, right? There is huge wealth disparity.
Sam Callahan
>> Yeah.
Gemma Allen
>> And a lot of what you guys are doing is around education, it's around cultural realignment. How do you do that in a market that has had such divisive challenges structurally in the past? How do you reach people to really demonstrate the value of Bitcoin?
Sam Callahan
>> Yeah, so that is our challenge, actually. It's our focus as well as just educating the market about what Bitcoin is, why is it useful for really everybody, because everybody suffers from currency debasement. But really what you said is true, there's been a lot of inequality there. There's also a low financial literacy and so we have basically a lot of different strategies in place of how we're going to go about this, whether that's written research, in depth research reports. We've already published two in the last six weeks in terms of Bitcoin 101 as well as what our business model is and why we're doing it in Brazil. But also, so for instance, one of our board members, Fernando Olrich, he wrote the first book on Bitcoin in Portuguese in 2013. He has about a million YouTube followers. And so having that platform to use as a resource and use his voice and his reputation as an expert in Bitcoin in that local community is really important. It's just really multimedia strategies across podcast scenes, short YouTube videos, social media, in depth research reports, doing conversations like this just to educate the market about, hey, this is an asset that's useful. And I think you've seen like the tide really turn over the last 12 to 18 months in the US. I'd say Brazil in terms of their understanding in Bitcoin is a couple of years behind the United States and so that's our job. And that's why there's an opportunity as well because since there's not a lot of understanding of it, there isn't a lot of infrastructure that's been built. There's not a lot of initiatives in terms of lobbying, in terms of regulations. That's where OranjeBTC can really step up as a leader and provide better access to Bitcoin, better educational materials for Bitcoin, better financial services, so like custody, payments across the entire spectrum for Bitcoin services on Bitcoin rails in that region. So it's ...
Gemma Allen
>> And tell me a little bit about where you are seeing very fast adoption and use cases, right? I know, for example, there's very high remittance in LATAM because people send money home. It's a very young digital native population, one of the youngest populations in the world. Are there specific spaces where you're seeing Bitcoin and cryptocurrency generally as having just a fast adoption?
Sam Callahan
>> Yeah, so the remittances are definitely a part of the story there. A lot of the adoption lately has been in Bitcoin and then stablecoins. And so I think it's related to what I said before in terms of the instability of the currency there, where they search for alternatives, anything that's kind of more stable. So the dollar is relatively more stable than every other Fiat currency and so there's a lot of demand for dollars. And then Bitcoin for any kind of long-term savings as well, it's the same story. And so you see a lot of the flows in terms of digital asset adoption is US stablecoin adoption and then plus Bitcoin. So that's the most traction that's being gained in terms of the adoption there.
Gemma Allen
>> When we think about the macro picture, you said there's been a lot of changes here in the US in the last 18 months and there's certainly, I guess, a belief that the US will lead and the rest of the world will follow in time.
Sam Callahan
>> Yeah.
Gemma Allen
>> Regulation, I'm sure, will filter through to other regions. We've seen some very interesting legislative suggested or proposed changes around the GENIUS Act and the CLARITY Act and how those are coming into effect. At a macro level, what do you think has been truly the biggest game changer in the last two years? And how do you also reconcile the broader narrative around crypto, which can face a lot of skepticism, right? There's some distrust, to how that relates to Bitcoin, right? Is it a case that you guys or Bitcoin gets carried along with the narrative, whatever it may be?
Sam Callahan
>> Yeah, so let's start with the first question there in terms of the regulations. The last two years, so I recently wrote a paper and I talked about major milestones in Bitcoin adoption from 2009 to 2024. And I had to do an entirely separate timeline for 2025 because there's been so many milestones that have happened. I mean, we've seen a complete pivot in 180 from the SEC rescinding SAB 121, the OCC allowing banks to hold it on their balance sheet as principle, the FDIC clearing supervisory, the Fed doing the same thing, removing these more restrictive guidance rules for banks. So we've seen just like the floodgates open up wide. We're also seeing like wider institutional adoption as well, like BlackRock's ETF, the most profitable ETF in the entire firm after two years. It just shows how much pent-up demand there is. I mean, we just saw Vanguard pivot as well this week after saying, "Hey, we're never going to do this."
Eventually they respond to client demand. And so you have these trends of institutional adoption, regulatory clarity that will percolate throughout the entire world because US is the leader. It's the financial system. In terms of Brazil, I mean, Brazil's actually been very progressive and embraced Bitcoin as well, I mean, almost in some ways earlier than the United States because they were the first one to accept a spot Bitcoin ETF back in I think 2019. Recently there was even a bill, it's still early, but they also proposed a strategic Bitcoin reserve. And so the United States did the executive order where they created the strategic Bitcoin reserve and so other countries are already following suit. And so I think it always just kind of like starts there. US is the leader and then they almost have to follow if they want to be a part of it. They're like, "Okay, if the United States is adopting this technology, there has to be something to this and it has to be something real." You don't really hear arguments anymore like, "This is a bubble, this is a tulip bubble, this is going away, it's the MySpace to Facebook." Those conversations aren't really happening anymore because they're recognizing that this thing's here to stay.
Gemma Allen
>> And in terms of all coins generally and the big sell offs and the October 10th event and those very like significant events, which are led by I think a mixture of narratives, do you think that there is, I guess, a risk that Bitcoin is kind of an OG, very much a different kind of asset class that technology play that some of the other large crypto players are kind of leading with? Gets swept up in a narrative of just changing skepticism, bullish mentality. It seems to swing. It's like the Irish weather in terms of the crypto space, right?
Sam Callahan
>> Yeah, it's volatile. And unfortunately, I think Bitcoin does get conflated with the rest of the cryptocurrency broader ecosystem. There's so many of them nowadays, but Bitcoin has been number one the entire time. And I think you need to ask yourself why that is because Bitcoin has certain characteristics that aren't replicable by other cryptocurrency that allows it to preserve its wealth over long periods of time. And so you brought up the October 10th liquidation event, so $20 billion was wiped out. Huge deleveraging event. And so you saw headlines like Bitcoin suffers this, whatever, but it was actually all of those liquidations happened in the other cryptocurrencies because they're not very liquid. And so you saw cryptocurrencies, like some of the top 25, go from down 99%, so that shows you that it's a very thin traded market. Bitcoin is very, very liquid. That's one of the biggest differences. It's a very liquid asset that it's not just propped up by market makers. It has tens of billions of dollars of daily trading volume and that's completely unmatched by every other cryptocurrency. And so Bitcoin is different. Bitcoin has a different value proposition, different underlying technology. It's meant to be a long term reserve asset. Plus it's a censorship resistant, decentralized, permissionless. It doesn't have an issuer. There's no company backing it. There's no VC money behind it. It grew organically and so they call it the immaculate conception because there was nothing else before it. Cryptocurrencies didn't exist before Bitcoin, so it had a price of ... Well, there was no price in the beginning. They call it magic internet money in the beginning, so it didn't really have a price. You can't replicate that as another cryptocurrency.
Gemma Allen
>> So let's talk about where it all began for a second, which is developers, right? The grassroots of this cultural movement is developer led. There is certainly some narratives, too, right now around energy arbitration and I think some misconceptions as to how Bitcoin miners impact energy as a whole and how hyperscalers and the kind of collision of intent that's perhaps there or not there. And also quantum computing and what that will mean for blockchain and for Bitcoin and then the whole space. Talk to me about your thoughts on those two things.
Sam Callahan
>> Well, I think there's a lot of misconceptions around Bitcoin's energy use. I think it's a combination of not really understanding the energy industry and then also Bitcoin mining. But over time, I think it's been clear that Bitcoin miners are actually very helpful for the energy industry. It makes it more efficient and it makes stranded energy sources more profitable. And so if you're really passionate about renewables, for instance, renewables are really expensive to build out and they're usually done in remote areas, so for instance, West Texas and the wind. It's hard to, while you're building out those projects, to make that energy like profitable, but Bitcoin miners are very mobile. You can just drop them anywhere, turn them on, and suddenly while you're building out these renewable projects, now you have some profitability going on because it's mining Bitcoin. So it actually will kind of make those more economically viable to build out those structures. So that's one way. And so Bitcoin miners, I explained to you earlier, they're like the dung beetle. They'll eat all the energy that nobody wants or nobody can access, stranded energy, wasted energy. They want cheap, low cost energy because it's very important for their profit margins. And so they'll go where anybody else doesn't want to go. And so a good example of this, too, is there's a lot of surplus energy out there. So hydro in Bhutan, for instance, so Bhutan made headlines because they used government resources to start mining Bitcoin because they had built out this huge hydro and they have all this surplus. They had nothing to do with it and they're like, "Okay, well, let's build out some mining and see how this goes." They've been doing it and now it makes up 40% of their GDP. And so you see that everywhere in the world where you have all this surplus energy that's just getting wasted. And so they're like, "What do we do with this?" Well, Bitcoin miners, as I said, are so mobile and they want to go to where the cheapest energy is. And so overall, it just makes the entire energy industry more efficient, right? You're not wasting any of these energies and now you're making more profitables, too. The only other thing I'll add is that Bitcoin miners are very unique because they're very flexible in terms of turning on and off. And so when you have a grid, you want to keep it very stable. And so when you have periods of really high demand, you can get a lot of instability there. And a lot of the times the usage of the grid is from hospitals or large data centers like AI, but they're not as flexible. They can't turn off without having a lot of damage to their business or patients not having energy. That's a problem, but Bitcoin miners can. And so when you have that flexible load in a grid, it allows them to be very ... The grid operator can point to them and say, "Hey, we need you to turn off. We have a lot of demand." Bitcoin miners go, "Okay," and they turn off. And then when they need to, they turn back on. And that's really useful for grid operators like ERCOT, for instance, in Texas. And so I think there's a lot of misconceptions around Bitcoin mining in general, but I think that's kind of in the rear view mirror. I think the truth has kind of come out. There's a lot of misinformation and headlines about it like three or four years ago, but now it seems like people are starting to understand that they're pretty useful. And then to answer your second question around quantum computing, there's a lot of concern I think right now in the market. Hey, this is going to break Bitcoin. There's a couple of things there. First off is that it's worth thinking about if there's a potential tail risk that something would happen like that. But the technology, there's still a lot of question marks in terms of like will it ever get there? Will quantum ever be able to do this? And then when you're talking about if quantum does get to the point where it can break public key cryptography, which underlines Bitcoin, but it also underlines everything, our banking infrastructure, payment infrastructure. You'd have a lot of problems if quantum can do that and I don't think they would even necessarily go for Bitcoin first. They'd probably go for these other ones. And then Bitcoin's very anti-fragile and what I mean by that is that it is very flexible. And when there's an attack, there's a path forward. We already know a roadmap where we could upgrade Bitcoin to make it so called quantum resistant, but we don't want them to do an upgrade that's unnecessary. And we want to be very thoughtful in terms of any upgrade to a protocol because when you upgrade a protocol it brings maybe unforeseen risks. And so with quantum, there is a roadmap to protect Bitcoin, first off. And it's like people think that it would just break it, but it's a little bit more nuanced where it would just kind of certain addresses would be vulnerable and we can make changes if we want to. So the quantum story is one of, I think, a lot of concern, but far off concern.
Gemma Allen
>> I think if we get to that point, too, we're going to have a lot of other problems as well, right? If we have quantum computers, hacking blockchains, the world as we know it is going to be so significantly different across the board. It seems to me that the risk index is just so huge, right?
Sam Callahan
>> Yeah, and I think it's far off. And the other thing, when I say it's anti-fragile, so Bitcoin has this weird way of like when there's an attack, it actually grows stronger afterwards from it. So one of the biggest pieces of worry years ago was that China was going to ban Bitcoin and then it happened. China banned Bitcoin mining in 2021, sold off initially. It was like, "Oh, my gosh, the worst happened. China banned Bitcoin," but what happened was all the miners left China and then became more distributed across the globe, which is better for the security of the network if it's not centralized in any jurisdiction. And actually, a lot of the miners went to the United States where there's better property rights. And so Bitcoin, everyone was worried about a China ban, but afterwards Bitcoin actually was stronger for it. And so it has this way of doing that. So if Quantum came and did something, I think Bitcoin would not only overcome it, but actually be stronger coming out of it.
Gemma Allen
>> Yeah. Challenges create opportunity, right? For sure.
Sam Callahan
>> Yeah.
Gemma Allen
>> So I know we're coming close on time, but I really want to ask you about some of the traditional TradFi meets DeFi narratives and concerns that are playing out in the larger market here right now, like the micro strategy debacle. When does it become a technology company versus just like a clear Bitcoin fund?
Sam Callahan
>> Got it.
Gemma Allen
>> What are your thoughts on that? Where do you think that line is drawn and how do you see that playing out from a regulatory perspective here? What are the concerns?
Sam Callahan
>> Yeah. I mean, you said it's a debacle, but I think it's, again, it's just kind of like misunderstanding the business model for strategy because they're actually an incredibly well capitalized company. Very, very robust, resilient capital structure. Their Bitcoin holdings could pay off their dividends for 74 years if Bitcoin returns 0% a year. And they also now have $1.4 billion worth of cash. And so they're in very low debt levels. I mean, compared to other traditional companies, they're very, very low leverage. And so they're actually a pretty stable company, but what you're referring to is MSCI came out and they said, "Hey, this is more of like a passive fund. If any company owns more than 50% of their digital assets, they shouldn't be included in our indices because they're more of a passive fund."
And I completely reject that. They are an operating company. They're not a passive fund. They issue Bitcoin backed securities, which a passive fund can't do. They raise capital. They have a software business, so they are an operating company. And I think MSCI is basically discriminated against a certain reserve asset. It's the company's choice to decide if they want to put Bitcoin on their balance sheet. And I think there's a fundamental misunderstanding or just disagreement of whether that just adds risk or reduces risk. And so companies like Strategy or Tether made headlines as well, they allocate portion of the reserves to Bitcoin because they want to preserve wealth over the long term. They believe that Bitcoin is very prudent reserve asset to use to hedge against currency debasement. Whereas S&P Global or MSCI is saying that's more risky and you guys are acting like a passive fund, but this is just one index provider, MSCI. Other index providers, if they adopt this proposal, which I hope they don't, if they do, it doesn't mean that the other ones will. And so we saw this actually play out with BlackRock and Vanguard, like I mentioned. So BlackRock embraced Bitcoin. They now have one of the most successful ETF of all time, almost $100 billion in two years. And their clients benefited from the price appreciation and the access that they provided. Vanguard, due to line of the sentence, said, "Hey, we're not going to do this. This doesn't fit into our goals. We don't believe it's a retirement asset." But they had to pivot now this week and say like, "Okay, we're going to do this." And so the same thing will happen with MSCI if they decide to go down this route where if other funds embrace it and other index providers have Bitcoin exposure in their funds, they'll outperform MSCI funds. And so there's a game theory and then eventually MSCI will say, "Well, our funds are underperforming the ones with Bitcoin exposure, like strategy and these other Bitcoin treasury companies." And I think you'll see the same thing, that they'll eventually have to bend the knee. But I hope they never get there because I don't think their reasoning is really accurate, I think.
Gemma Allen
>> Well, Sam, you're a true advocate, that's for sure. And a champion for cryptocurrency generally on the Bitcoin cause, so great to have you on The Cube. Close us out. Tell us quick, short 20 seconds. What's ahead for you and the team at Orange BTC? What should we be watching for it?
Sam Callahan
>> Well, OranjeBTC, again, we're listed on the Brazilian Stock Exchange. And so we're going to continue to build out our Bitcoin treasury, so accumulate Bitcoin via raising capital that's accretive for our shareholders as well as educating the market. So that's our two focuses right now. And in the future, as we build out our Bitcoin treasury, as we educate the market, we plan to build a full fledged Bitcoin hub full of Bitcoin financial services and different Bitcoin backed financial products. So keep an eye on us. Again, we're OranjeBTC and thank you so much for having me.
Gemma Allen
>> Well, Godspeed. We'll be watching from the sidelines. Thanks so much for being on.
Sam Callahan
>> Thanks.
Gemma Allen
>> I'm Gemma Allen here with The Cube studio at the NYSE. This is our Crypto Trailblazer Series in partnership with NYSE Wired. Thanks so much for joining.
>> Welcome back to The Cube. I'm Gemma Allen here at our studio at the New York Stock Exchange. This is our Crypto Trailblazer Series, partnering with NYSE Wired. And today I am joined by Sam Callahan, Director of Strategy and Research at OranjeBTC. Welcome to The Cube, Sam.
Sam Callahan
>> Thanks for having me.
Gemma Allen
>> So let's start with the easy question. You are a loyalist on Bitcoin. Why Bitcoin?
Sam Callahan
>> Look, I think Bitcoin is probably the most important technological breakthrough of the 21st century. And it's because it solves a very important problem. We can't save in our currencies today, so all Fiat currencies have the same problem where the money supply gets expanded and it loses purchasing power over time. And so it's why people have to save in real estate and stocks and gold and now Bitcoin since 2009, because the money doesn't provide that store value function anymore. And so Bitcoin solves that because it's digital scarcity, so it's the first time we've ever had a digital good that is provably scarce. You can see it online. Anybody can go in with a computer and check there will only be a 21 million Bitcoin ever. And so when you have a finite scarce asset like that, that's also digital, and so you can send it to anyone anywhere in the world, peer to peer. That's a breakthrough. And so whereas the internet allowed for the free flow of information, Bitcoin allows for the free flow of value over the internet.
Gemma Allen
>> And OranjeBTC, largest Bitcoin treasury in Latin America by, as we say in Ireland, a country mile, right? You guys are definitely in the charge. Talk to me a little bit about the market and LATAM for Bitcoin and for crypto generally, right? It's obviously a fascinating macroeconomic market, a lot of volatility, a lot of historical financial trauma, as we both know. Talk to me about, I guess, the fit and the through line for Bitcoin in the region.
Sam Callahan
>> Yeah, so OranjeBTC's mission is to accelerate Bitcoin adoption in Brazil and then Latin America more broadly. And we like to say that it's a region that needs Bitcoin the most and it's because of the widespread currency debasement and instability that they've had there. And so it's a really resilient people, especially in Brazil. So they went through a really bad hyperinflationary event in the late '80s and early '90s and they've really built themselves up since then. It's pretty remarkable what they've done. That hyperinflation event was worse than Zimbabwe. Everyone hears about Zimbabwe and the trillion dollar thing. It was actually almost worse in Brazil and this was only 30 years ago. And they built themselves up because they're very resilient people and then they're very innovative. And so you see actually even today large, very high adoption rates for digital assets broadly. Chainalysis puts out a report every year that looks at the adoption index of everywhere around the world. Brazil's the only one, any country that was top five in every single subject. So that's like Stablecoin, DeFi, Bitcoin. They were top five in all of them. And so you see a very forward thinking society there, very innovative and very progressive when it comes to adopting these technologies. And combined that with the macro picture of having suffering from currency debasement and instability in the past, capital controls, all of these things lead to environment that makes Bitcoin an asset that can't be printed, that is censorship resistant. It's permissionless, so nobody can tell you not to use it if you want. It's really attractive alternative for people in that environment, in that region.
Gemma Allen
>> And I guess what I find really interesting about a region like Brazil and digital assets and the decentralization of finance generally, I spent a chunk of time in Brazil back in like 2011. It's obviously a very unequal country, right? There is huge wealth disparity.
Sam Callahan
>> Yeah.
Gemma Allen
>> And a lot of what you guys are doing is around education, it's around cultural realignment. How do you do that in a market that has had such divisive challenges structurally in the past? How do you reach people to really demonstrate the value of Bitcoin?
Sam Callahan
>> Yeah, so that is our challenge, actually. It's our focus as well as just educating the market about what Bitcoin is, why is it useful for really everybody, because everybody suffers from currency debasement. But really what you said is true, there's been a lot of inequality there. There's also a low financial literacy and so we have basically a lot of different strategies in place of how we're going to go about this, whether that's written research, in depth research reports. We've already published two in the last six weeks in terms of Bitcoin 101 as well as what our business model is and why we're doing it in Brazil. But also, so for instance, one of our board members, Fernando Olrich, he wrote the first book on Bitcoin in Portuguese in 2013. He has about a million YouTube followers. And so having that platform to use as a resource and use his voice and his reputation as an expert in Bitcoin in that local community is really important. It's just really multimedia strategies across podcast scenes, short YouTube videos, social media, in depth research reports, doing conversations like this just to educate the market about, hey, this is an asset that's useful. And I think you've seen like the tide really turn over the last 12 to 18 months in the US. I'd say Brazil in terms of their understanding in Bitcoin is a couple of years behind the United States and so that's our job. And that's why there's an opportunity as well because since there's not a lot of understanding of it, there isn't a lot of infrastructure that's been built. There's not a lot of initiatives in terms of lobbying, in terms of regulations. That's where OranjeBTC can really step up as a leader and provide better access to Bitcoin, better educational materials for Bitcoin, better financial services, so like custody, payments across the entire spectrum for Bitcoin services on Bitcoin rails in that region. So it's ...
Gemma Allen
>> And tell me a little bit about where you are seeing very fast adoption and use cases, right? I know, for example, there's very high remittance in LATAM because people send money home. It's a very young digital native population, one of the youngest populations in the world. Are there specific spaces where you're seeing Bitcoin and cryptocurrency generally as having just a fast adoption?
Sam Callahan
>> Yeah, so the remittances are definitely a part of the story there. A lot of the adoption lately has been in Bitcoin and then stablecoins. And so I think it's related to what I said before in terms of the instability of the currency there, where they search for alternatives, anything that's kind of more stable. So the dollar is relatively more stable than every other Fiat currency and so there's a lot of demand for dollars. And then Bitcoin for any kind of long-term savings as well, it's the same story. And so you see a lot of the flows in terms of digital asset adoption is US stablecoin adoption and then plus Bitcoin. So that's the most traction that's being gained in terms of the adoption there.
Gemma Allen
>> When we think about the macro picture, you said there's been a lot of changes here in the US in the last 18 months and there's certainly, I guess, a belief that the US will lead and the rest of the world will follow in time.
Sam Callahan
>> Yeah.
Gemma Allen
>> Regulation, I'm sure, will filter through to other regions. We've seen some very interesting legislative suggested or proposed changes around the GENIUS Act and the CLARITY Act and how those are coming into effect. At a macro level, what do you think has been truly the biggest game changer in the last two years? And how do you also reconcile the broader narrative around crypto, which can face a lot of skepticism, right? There's some distrust, to how that relates to Bitcoin, right? Is it a case that you guys or Bitcoin gets carried along with the narrative, whatever it may be?
Sam Callahan
>> Yeah, so let's start with the first question there in terms of the regulations. The last two years, so I recently wrote a paper and I talked about major milestones in Bitcoin adoption from 2009 to 2024. And I had to do an entirely separate timeline for 2025 because there's been so many milestones that have happened. I mean, we've seen a complete pivot in 180 from the SEC rescinding SAB 121, the OCC allowing banks to hold it on their balance sheet as principle, the FDIC clearing supervisory, the Fed doing the same thing, removing these more restrictive guidance rules for banks. So we've seen just like the floodgates open up wide. We're also seeing like wider institutional adoption as well, like BlackRock's ETF, the most profitable ETF in the entire firm after two years. It just shows how much pent-up demand there is. I mean, we just saw Vanguard pivot as well this week after saying, "Hey, we're never going to do this."
Eventually they respond to client demand. And so you have these trends of institutional adoption, regulatory clarity that will percolate throughout the entire world because US is the leader. It's the financial system. In terms of Brazil, I mean, Brazil's actually been very progressive and embraced Bitcoin as well, I mean, almost in some ways earlier than the United States because they were the first one to accept a spot Bitcoin ETF back in I think 2019. Recently there was even a bill, it's still early, but they also proposed a strategic Bitcoin reserve. And so the United States did the executive order where they created the strategic Bitcoin reserve and so other countries are already following suit. And so I think it always just kind of like starts there. US is the leader and then they almost have to follow if they want to be a part of it. They're like, "Okay, if the United States is adopting this technology, there has to be something to this and it has to be something real." You don't really hear arguments anymore like, "This is a bubble, this is a tulip bubble, this is going away, it's the MySpace to Facebook." Those conversations aren't really happening anymore because they're recognizing that this thing's here to stay.
Gemma Allen
>> And in terms of all coins generally and the big sell offs and the October 10th event and those very like significant events, which are led by I think a mixture of narratives, do you think that there is, I guess, a risk that Bitcoin is kind of an OG, very much a different kind of asset class that technology play that some of the other large crypto players are kind of leading with? Gets swept up in a narrative of just changing skepticism, bullish mentality. It seems to swing. It's like the Irish weather in terms of the crypto space, right?
Sam Callahan
>> Yeah, it's volatile. And unfortunately, I think Bitcoin does get conflated with the rest of the cryptocurrency broader ecosystem. There's so many of them nowadays, but Bitcoin has been number one the entire time. And I think you need to ask yourself why that is because Bitcoin has certain characteristics that aren't replicable by other cryptocurrency that allows it to preserve its wealth over long periods of time. And so you brought up the October 10th liquidation event, so $20 billion was wiped out. Huge deleveraging event. And so you saw headlines like Bitcoin suffers this, whatever, but it was actually all of those liquidations happened in the other cryptocurrencies because they're not very liquid. And so you saw cryptocurrencies, like some of the top 25, go from down 99%, so that shows you that it's a very thin traded market. Bitcoin is very, very liquid. That's one of the biggest differences. It's a very liquid asset that it's not just propped up by market makers. It has tens of billions of dollars of daily trading volume and that's completely unmatched by every other cryptocurrency. And so Bitcoin is different. Bitcoin has a different value proposition, different underlying technology. It's meant to be a long term reserve asset. Plus it's a censorship resistant, decentralized, permissionless. It doesn't have an issuer. There's no company backing it. There's no VC money behind it. It grew organically and so they call it the immaculate conception because there was nothing else before it. Cryptocurrencies didn't exist before Bitcoin, so it had a price of ... Well, there was no price in the beginning. They call it magic internet money in the beginning, so it didn't really have a price. You can't replicate that as another cryptocurrency.
Gemma Allen
>> So let's talk about where it all began for a second, which is developers, right? The grassroots of this cultural movement is developer led. There is certainly some narratives, too, right now around energy arbitration and I think some misconceptions as to how Bitcoin miners impact energy as a whole and how hyperscalers and the kind of collision of intent that's perhaps there or not there. And also quantum computing and what that will mean for blockchain and for Bitcoin and then the whole space. Talk to me about your thoughts on those two things.
Sam Callahan
>> Well, I think there's a lot of misconceptions around Bitcoin's energy use. I think it's a combination of not really understanding the energy industry and then also Bitcoin mining. But over time, I think it's been clear that Bitcoin miners are actually very helpful for the energy industry. It makes it more efficient and it makes stranded energy sources more profitable. And so if you're really passionate about renewables, for instance, renewables are really expensive to build out and they're usually done in remote areas, so for instance, West Texas and the wind. It's hard to, while you're building out those projects, to make that energy like profitable, but Bitcoin miners are very mobile. You can just drop them anywhere, turn them on, and suddenly while you're building out these renewable projects, now you have some profitability going on because it's mining Bitcoin. So it actually will kind of make those more economically viable to build out those structures. So that's one way. And so Bitcoin miners, I explained to you earlier, they're like the dung beetle. They'll eat all the energy that nobody wants or nobody can access, stranded energy, wasted energy. They want cheap, low cost energy because it's very important for their profit margins. And so they'll go where anybody else doesn't want to go. And so a good example of this, too, is there's a lot of surplus energy out there. So hydro in Bhutan, for instance, so Bhutan made headlines because they used government resources to start mining Bitcoin because they had built out this huge hydro and they have all this surplus. They had nothing to do with it and they're like, "Okay, well, let's build out some mining and see how this goes." They've been doing it and now it makes up 40% of their GDP. And so you see that everywhere in the world where you have all this surplus energy that's just getting wasted. And so they're like, "What do we do with this?" Well, Bitcoin miners, as I said, are so mobile and they want to go to where the cheapest energy is. And so overall, it just makes the entire energy industry more efficient, right? You're not wasting any of these energies and now you're making more profitables, too. The only other thing I'll add is that Bitcoin miners are very unique because they're very flexible in terms of turning on and off. And so when you have a grid, you want to keep it very stable. And so when you have periods of really high demand, you can get a lot of instability there. And a lot of the times the usage of the grid is from hospitals or large data centers like AI, but they're not as flexible. They can't turn off without having a lot of damage to their business or patients not having energy. That's a problem, but Bitcoin miners can. And so when you have that flexible load in a grid, it allows them to be very ... The grid operator can point to them and say, "Hey, we need you to turn off. We have a lot of demand." Bitcoin miners go, "Okay," and they turn off. And then when they need to, they turn back on. And that's really useful for grid operators like ERCOT, for instance, in Texas. And so I think there's a lot of misconceptions around Bitcoin mining in general, but I think that's kind of in the rear view mirror. I think the truth has kind of come out. There's a lot of misinformation and headlines about it like three or four years ago, but now it seems like people are starting to understand that they're pretty useful. And then to answer your second question around quantum computing, there's a lot of concern I think right now in the market. Hey, this is going to break Bitcoin. There's a couple of things there. First off is that it's worth thinking about if there's a potential tail risk that something would happen like that. But the technology, there's still a lot of question marks in terms of like will it ever get there? Will quantum ever be able to do this? And then when you're talking about if quantum does get to the point where it can break public key cryptography, which underlines Bitcoin, but it also underlines everything, our banking infrastructure, payment infrastructure. You'd have a lot of problems if quantum can do that and I don't think they would even necessarily go for Bitcoin first. They'd probably go for these other ones. And then Bitcoin's very anti-fragile and what I mean by that is that it is very flexible. And when there's an attack, there's a path forward. We already know a roadmap where we could upgrade Bitcoin to make it so called quantum resistant, but we don't want them to do an upgrade that's unnecessary. And we want to be very thoughtful in terms of any upgrade to a protocol because when you upgrade a protocol it brings maybe unforeseen risks. And so with quantum, there is a roadmap to protect Bitcoin, first off. And it's like people think that it would just break it, but it's a little bit more nuanced where it would just kind of certain addresses would be vulnerable and we can make changes if we want to. So the quantum story is one of, I think, a lot of concern, but far off concern.
Gemma Allen
>> I think if we get to that point, too, we're going to have a lot of other problems as well, right? If we have quantum computers, hacking blockchains, the world as we know it is going to be so significantly different across the board. It seems to me that the risk index is just so huge, right?
Sam Callahan
>> Yeah, and I think it's far off. And the other thing, when I say it's anti-fragile, so Bitcoin has this weird way of like when there's an attack, it actually grows stronger afterwards from it. So one of the biggest pieces of worry years ago was that China was going to ban Bitcoin and then it happened. China banned Bitcoin mining in 2021, sold off initially. It was like, "Oh, my gosh, the worst happened. China banned Bitcoin," but what happened was all the miners left China and then became more distributed across the globe, which is better for the security of the network if it's not centralized in any jurisdiction. And actually, a lot of the miners went to the United States where there's better property rights. And so Bitcoin, everyone was worried about a China ban, but afterwards Bitcoin actually was stronger for it. And so it has this way of doing that. So if Quantum came and did something, I think Bitcoin would not only overcome it, but actually be stronger coming out of it.
Gemma Allen
>> Yeah. Challenges create opportunity, right? For sure.
Sam Callahan
>> Yeah.
Gemma Allen
>> So I know we're coming close on time, but I really want to ask you about some of the traditional TradFi meets DeFi narratives and concerns that are playing out in the larger market here right now, like the micro strategy debacle. When does it become a technology company versus just like a clear Bitcoin fund?
Sam Callahan
>> Got it.
Gemma Allen
>> What are your thoughts on that? Where do you think that line is drawn and how do you see that playing out from a regulatory perspective here? What are the concerns?
Sam Callahan
>> Yeah. I mean, you said it's a debacle, but I think it's, again, it's just kind of like misunderstanding the business model for strategy because they're actually an incredibly well capitalized company. Very, very robust, resilient capital structure. Their Bitcoin holdings could pay off their dividends for 74 years if Bitcoin returns 0% a year. And they also now have $1.4 billion worth of cash. And so they're in very low debt levels. I mean, compared to other traditional companies, they're very, very low leverage. And so they're actually a pretty stable company, but what you're referring to is MSCI came out and they said, "Hey, this is more of like a passive fund. If any company owns more than 50% of their digital assets, they shouldn't be included in our indices because they're more of a passive fund."
And I completely reject that. They are an operating company. They're not a passive fund. They issue Bitcoin backed securities, which a passive fund can't do. They raise capital. They have a software business, so they are an operating company. And I think MSCI is basically discriminated against a certain reserve asset. It's the company's choice to decide if they want to put Bitcoin on their balance sheet. And I think there's a fundamental misunderstanding or just disagreement of whether that just adds risk or reduces risk. And so companies like Strategy or Tether made headlines as well, they allocate portion of the reserves to Bitcoin because they want to preserve wealth over the long term. They believe that Bitcoin is very prudent reserve asset to use to hedge against currency debasement. Whereas S&P Global or MSCI is saying that's more risky and you guys are acting like a passive fund, but this is just one index provider, MSCI. Other index providers, if they adopt this proposal, which I hope they don't, if they do, it doesn't mean that the other ones will. And so we saw this actually play out with BlackRock and Vanguard, like I mentioned. So BlackRock embraced Bitcoin. They now have one of the most successful ETF of all time, almost $100 billion in two years. And their clients benefited from the price appreciation and the access that they provided. Vanguard, due to line of the sentence, said, "Hey, we're not going to do this. This doesn't fit into our goals. We don't believe it's a retirement asset." But they had to pivot now this week and say like, "Okay, we're going to do this." And so the same thing will happen with MSCI if they decide to go down this route where if other funds embrace it and other index providers have Bitcoin exposure in their funds, they'll outperform MSCI funds. And so there's a game theory and then eventually MSCI will say, "Well, our funds are underperforming the ones with Bitcoin exposure, like strategy and these other Bitcoin treasury companies." And I think you'll see the same thing, that they'll eventually have to bend the knee. But I hope they never get there because I don't think their reasoning is really accurate, I think.
Gemma Allen
>> Well, Sam, you're a true advocate, that's for sure. And a champion for cryptocurrency generally on the Bitcoin cause, so great to have you on The Cube. Close us out. Tell us quick, short 20 seconds. What's ahead for you and the team at Orange BTC? What should we be watching for it?
Sam Callahan
>> Well, OranjeBTC, again, we're listed on the Brazilian Stock Exchange. And so we're going to continue to build out our Bitcoin treasury, so accumulate Bitcoin via raising capital that's accretive for our shareholders as well as educating the market. So that's our two focuses right now. And in the future, as we build out our Bitcoin treasury, as we educate the market, we plan to build a full fledged Bitcoin hub full of Bitcoin financial services and different Bitcoin backed financial products. So keep an eye on us. Again, we're OranjeBTC and thank you so much for having me.
Gemma Allen
>> Well, Godspeed. We'll be watching from the sidelines. Thanks so much for being on.
Sam Callahan
>> Thanks.
Gemma Allen
>> I'm Gemma Allen here with The Cube studio at the NYSE. This is our Crypto Trailblazer Series in partnership with NYSE Wired. Thanks so much for joining.
Gemma Allen