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Nelson Minier on Running a Bitcoin OTC Desk

Peter McCormack

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Nelson Minier on Running a Bitcoin OTC Desk - WBD169 Peter McCormack

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Location: New York
Date: Thursday, 14th Nov
Project: Kraken
Role: Head of OTC Sales & Trading

Liquidity is crucial for any tradeable asset. A liquid market means lots of buyers and sellers, making it easy to move in and out of a position without paying a premium or selling at a discounted price. Increased liquidity also means a smaller spread (the gap between the highest bid and the lowest ask).

Bitcoin is the most liquid cryptocurrency by far but compared to traditional stocks, bonds or precious metals, it is still comparatively illiquid. For smaller trades this doesn’t present a significant problem, however, for large traders buying and selling tens, hundreds or even thousands of Bitcoin, this can present a challenge as even $100,000 can move the market significantly, especially during times of low volume.

Large traders have the option of using an over-the-counter service which allows them to place an order which is fulfilled by the OTC desk utilising multiple exchanges or other OTC clients orders to limit the effect that these large trades have on the market.

In this interview, I talk to Nelson Minier. Nelson is a Wall Street veteran who, for the last two years, has been head of Kraken’s OTC desk. We discuss working on Wall Street, how an OTC desk operates, and if institutional investors are buying Bitcoin.

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00:04:50: Introductions and discussing New York
00:08:51: Nelson’s background on Wall Street and learnings he has brought with him into Bitcoin
00:13:25: Touching on Facebook Pay and Libra
00:15:34: Delving into when Nelson discovered Bitcoin and his views on Libertarianism
00:22:53: Discussing Nelson’s departure from Wall Street to heading the OTC desk at Kraken
00:27:49: Exploring how an OTC desk operates and why someone would want to use one
00:32:05: Discussing Kraken’s operation including hedging risk, fixing prices and price premiums
00:38:17: Touching on whether the OTC customers have changed over the years
00:39:52: Discussing Bitcoin scarcity and how the price impacts customer activity
00:43:21: Exploring why Kraken’s OTC desk is a focal point for scammers 
00:47:56: Discussing Nelson’s thoughts on Bitcoin and how Wall Street colleagues react to it
00:53:09: Nelson’s view why we haven’t seen widespread adoption of Bitcoin on Wall Street yet
00:57:57: Delving into how Wall Street could get involved in Bitcoin in the next bull run
01:01:39: Final comments and what’s coming up for Kraken and the OTC desk

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Peter McCormack: Nelson man, great to see you again!

Nelson Minier: Mr McCormack, how are you my man? It's been a while.

Peter McCormack: Yeah, I'm great! Thanks for having me here in the great city of New York.

Nelson Minier: Yeah, this is where it's at.

Peter McCormack: It's a beautiful day. It's cold but sunny, which is nice man.

Nelson Minier: Yeah, that's one of the things about New York, come around December, January, I want to head back to the Caribbean where I'm originally from!

Peter McCormack: I went for a run this morning, ended up on the High Line, because I was thinking, "where am I going to run, because it's just block to block" and I thought I'd go all the way down to the sidewalk by... You know where you can see Jersey?

Nelson Minier: Yeah, so on the Hudson, by the western highway?

Peter McCormack: Yeah, that's it. But I ended up getting to the High Line and taking a run down there.

Nelson Minier: Isn't that awesome?

Peter McCormack: It's amazing what they've done there!

Nelson Minier: Me and my buddies, we used to go down there and hang out and it was a place to go drink some forties and stuff like that. I would have never thought in a thousand years that that's like the coolest neighborhood in all in New York, it used to be a dump!

Peter McCormack: Yeah it's lovely man. But that's happened to all of New York, right? Because when I first came to New York, I came the year after 9/11, so 2002 and I went to Brooklyn with a local, somebody we met and it wasn't the safest place to go to. But Brooklyn is now...

Nelson Minier: Yeah and now Williamsburg too. Those are the two areas that if you look at where the High Line that whole, west side and now in Williamsburg, I mean those are the two places that are shocking.

When I was growing up, I had a girlfriend out there in Williamsburg, by Metropolitan and I remember I used to run to the train station because I was scared! After dinner, where we'd go spend dinner with her family, I would run to this train station and get to the Bronx just because I was scared I was going to get my tail kicked.

Peter McCormack: Well what's happened? Is it just too many people in the city now and they've had to move out? Is it investment?

Nelson Minier: Yeah and I think the whole hipster thing, it's pretty cool to go out there in Brooklyn and kind of be with a lot of ethnic diversity and stuff like that out there. There's a lot of different foods, a lot of cultures over there and I thought it became pretty cool. I didn't think it was going to happen like that, but it's been amazing to see corners that you would never catch yourself dead at after midnight, have got Louis Vuitton stores and you could go shopping there now, it's amazing!

Peter McCormack: And you say the Bronx is the same, because I was up there last night?

Nelson Minier: Yeah, up by Mott Haven. It was bad up there, Mott Haven one time and now it's sort of like the next area that's kind of moving up. Also Staten Island, you're starting to see with the ferry, there's a lot of gentrification that's happening, that's pretty cool.

Peter McCormack: What about up in Harlem? I've never been up there. I haven't even been to Yankee.

Nelson Minier: Yeah, but Harlem's been pretty cool for a while. Harlem is not what the Harlem was, say late 80s. I mean that was the first place to kind of start coming around.

Peter McCormack: And did you spend your entire childhood in the...

Nelson Minier: No, I started in the Bronx, got in a little trouble in high school, the parents ended up moving and we moved up to Connecticut, but I've always had family down here, so I would spend Christmases, Thanksgivings, always around the Bronx and the Bronx area, that's sort of like our home.

Peter McCormack: I think New York's one of those really amazing special cities. This is like my 15th time here. I got engaged here actually. I love the city, it's just got this amazing vibe to it.

Nelson Minier: Yeah, it does, it really does. Even when I go, they used to send me to Dominican Republic for the summers just to hang out and stay out of trouble and it was amazing how quickly you start missing New York when you do that.

Peter McCormack: Did you stay out of trouble in Dominican?

Nelson Minier: No, it's tough to stay out of trouble, I'm still getting in trouble!

Peter McCormack: Well listen man, it's great to see you again. I think last time I saw you was about a year ago, maybe a little over a year ago.

Nelson Minier: Bitcoin was a different price for sure!

Peter McCormack: It was in Vegas, what were we there for?

Nelson Minier: Unconfiscatable, Tone Vays' gig.

Peter McCormack: So was that last February?

Nelson Minier: Yeah, I think so.

Peter McCormack: Or was that this year?

Nelson Minier: No, it wasn't this year.

Peter McCormack: Are you sure? Because he's just announced the next one.

Nelson Minier: I might be mixing them up! Yeah he's been sending emails and I'm getting ready to sign up for it.

Peter McCormack: That would be mad if it was eight months ago, because it feels like a lot's happened!

Nelson Minier: Well a lot has happened for you buddy! Now trying to get in contact to you, I got to talk to your admin's admin to get in touch with you my man!

Peter McCormack: You can message me come on! You can message me. I've just been a noisy bastard on Twitter and getting in fights and stuff like that. But a lot has happened man! Anyway, before we get into that, I tell you what we should do, let's do the backstory, because you told me, when we were in Vegas, you took me for lunch and you gave me the backstory of before you became a Bitcoiner, before you started working for Kraken, you were a Wall Street guy, right?

Nelson Minier: Yeah, I was, was originally an engineer and then I moved over to Wall Street when I saw my buddies, they were kids that I went to engineering school with that... They always used to tell me, "Nellie, you should think about trading, you should think about Wall Street." But I was a guy that grew up around cars, my dad would give us a rubber band and a paper clip, well we think we could fix a Maserati you know?

So always grew up with that and getting my hands dirty. But then I saw some of my buddies working on Wall Street and they were doing so well! They were going from studio apartments uptown, to lofts downtown and I'm like, "wait a minute dude, I used to help you with your homework. What am I doing wrong?" And I thought I was doing great, but they always told me "Nellie, you should think about Wall Street" and they helped me a lot.

I started my career at Bear Stearns and I was very fortunate that I landed in the credit derivatives group because I was an engineer, they put the math guys a little bit in the engineering group and we started off and it was just like an explosion of financial innovation what was going on.

I was sending out term sheets, working and being an assistant to a trader and within a few months, they're like, "dude I can't handle this, here start trading these names" and before you knew it, I was trading and making markets and that's how I started.

Peter McCormack: What was that like when you're... Is it scary when you're first trading?

Nelson Minier: Oh yeah, because you throwing out numbers! Here I am, scrimping money together to buy a sandwich and then all of a sudden you're like 10 million euros, 20 mil of mine and you're throwing all these big numbers around and doing that and you worry! Your P&L swings and you can lose a lot of money pretty quickly. You could make it, but you can equally lose it all!

So you get used to it after time and then it becomes like monopoly money almost, but was it scary to begin with? Hell yeah! And I wanted to impress, it was a new business for me, something I knew and then you're surrounded with these people from great universities and with PhDs and all these things, so you're intimidated. You go in there and it humbles you a lot.

Markets still humble you! But you work hard, you keeping nose to the grindstone and good things happen. I was very fortunate, I feel blessed in a lot of ways because those opportunities, the time at Bear Stearns itself, it was just a great place for entrepreneurs and if you hustled and you got a little lucky, you could do very well.

Peter McCormack: How many years did you work on Wall Street?

Nelson Minier: I worked 20 years on Wall Street and I bounced around a lot, I was a little bit of a mercenary! I went out and wherever the money was, I kind went there. Back then it was like, if you knew credit derivatives, you were a guy that was really wanted and I was in emerging markets too, which was another kind of a unique experience that you had.

So I was well in demand, until my end of my career and they pretty much wanted to push me out the door! But it was a good time because then I found Bitcoin.

Peter McCormack: Okay, 20 years! That's what I did in my previous career. I did 20 years advertising and there was a lot that I've done in advertising that's helped me in my new job, marketing, design, branding and packaging up a product, that's what has really helped me and that's probably why I'm a podcaster, not involved in trading or an exchange, it suits me to package up a product.

What were the key things that you were learning on Wall Street? What are the key lessons that you brought forward when you kind of made the transition into Bitcoin?

Nelson Minier: The volatility, because the thing that really attracted me to Bitcoin, like I had heard of it. I had a kid on the desk that we were trying to keep busy that said, "hey Nellie, you mind if I look at Bitcoin?" I'm like, this kid 50-60 IQ points higher than mine, keeping him busy was just a full time job for me and he says, "let me look at this thing" and it was close to what we were doing, it was kind of a currency, something new and people started talking about it.

He made a presentation on it, we talked about it, we had a good group of people and I was pretty psyched that he came to the same conclusion that I did, that I thought governments weren't going to let this exist, where they're taking too much power away from government and that there's no way this is going to happen. You see what happened with Libra, right? With Libra, they come out a week later and the government's got a gun to Zuckerberg's head saying, "no, you stop this!"

Peter McCormack: Yeah, but have you seen this Facebook Pay thing that's come up this week?

Nelson Minier: No, I didn't see it.

Peter McCormack: So they've announced Facebook Pay. I haven't taken a proper look at it, but it seems to be a way of kind of buying and selling through the Facebook platform, just with dollars and I was looking at that and thinking, "well why do you need Libra now?"

Nelson Minier: Yeah, I think the intention of establishing a stable coin that's not debasable or at least there's some diversification from debasement, I thought was interesting, because if they were going to take a package of assets where they're treasuries and maybe some foreign exchange currencies and maybe some commercial paper or whatever they're going to use in a basket, so that it becomes maybe more stable than the dollar in a sense, because you're not concentrated in this one asset that can get debased.

I thought it would be interesting, but it was obvious and there's a reason why Satoshi got up and disappeared, Zuckerberg can't do that. And to see it happen so quickly! I think when you're looking at it, it shows you how important it was for Satoshi to disappear, because you don't have that guy that you're going to be able to stop. The other thing that it highlighted to me was also like the Trojan horse of Bitcoin is that it's so difficult to understand, that it takes a while for everybody to understand it.

You hear these politicians talking about it and you realize they have no idea what it is and that's good because we get to run a little bit more with adoption. We've got 10 years and they still not awake! This thing is going to take a lot of power from you guys and they're not awake about it. So I think it was a very interesting experiment and we had a lot of internal discussions on it.

Peter McCormack: Dude I'm coming up for three years and I still don't know [Inaudible 15:13].

Nelson Minier: No, forget about it! I mean there's so many facts, neither do I. I can help get started and I've got a bunch of books here in the apartment that I give away, like I give Saifedean's book and I give the Little Bitcoin Book, that's the combination I give now. Read The Standard first, then read the Little Bitcoin because it's going to answer all this stuff, wasting electricity? Okay, well not really, check this out.

Peter McCormack: So when was it that this was happening? Do you remember what year that you guys were first looking at it?

Nelson Minier: Yeah, I would say we were looking at it like 2013 and then I didn't get back into it until late 2015.

Peter McCormack: So you just dismissed it?

Nelson Minier: Yeah, I thought there was no way and I said "come on, governments are going to come after this man! That's where their power is, that's where they go to war, they can just print money! Look at the deficits, we've got trillions of dollars of deficits, that's how they do it, they print more money. There's no way they're going to give up this power. Guys wake up!"

And this kid, that I don't know is probably off building rockets now, but he came to the same conclusions, so I stopped looking at it. But then the volatility came back and I'm staring at Bloomberg and now they're talking about this Bitcoin thing and I'm a volatility junkie, in a sense that, I traded Venezuela and traded Venezuela for a lot of years and that stuff moves, not as much as Bitcoin, but it moves!

So to see that volatility, I think, "okay, well I think I could make some money on this thing." So I started looking at it from the filling my pocket up sense and then I started learning all this other stuff. I was just talking to Trace and I call Bitcoin "the great educator" because for me it opened up all this other stuff! I spent so much time on Wall Street, I had no idea what Australian Economics were.

I had heard about it, but I still don't know for definite and I'm not going to work for the Mises Institute anytime soon! But I learned some of the basics and things like that and you start learning about money and what's going on and how governments take advantage of the situation and Bitcoin damages then, obviously scratching the surface here.

Peter McCormack: Look, I've been arguing all week on Facebook with my friends about socialism because we've got Brexit coming and so we've got another election coming. I've got a lot of friends who are Labour voters, they believe in Jeremy Corbyn, some of them really stand by his social policies and I'm now a Bitcoiner!

I believe in Australian Economics and I'm a bit of a libertarian, so I'm arguing with them and I'm arguing about the things I've learned about, admittedly not things I'm brave enough to take to Twitter yet, it takes me longer to learn these things and my opinions aren't as well rounded, like I say.

Nelson Minier: What, you think you're going to get trolled on Twitter? Come on, that doesn't happen!

Peter McCormack: I troll everyone! But you've got some smart libertarians out there, like an Erik Voorhees, who I can sit and talk to for hours, but I can't defend libertarianism like he can. I can't have the same reasoned debates, but I can see small things that I think are not right.

For example, one of the arguments I was having with one person who was saying, "well look, Jeremy Corbyn wants to bring free higher education in" and I said, "well, I have a problem with this because those who choose not to take free higher education, are being forced to pay for those who do. If you want to do it, it's your choice!"

I kept coming back to the point which was that I'm not right or left, I'm saying what we should be working towards, which is less government and less taxes for all. But I feel like these are the baby level one steps of the all of this.

Nelson Minier: Yeah, but it opens you up to it. One of the things that even working on Wall Street and following bonds, you learn that this monetary policy stuff, like all this money printing, like what should I do to take care of my wealth? Then you say, well New York city apartments.

They're scarce, they're this, they're that, but then you start doing the work. I live in New York city and then you realize, wait a minute, my property taxes keep on going up higher and there's not much I can do about it. I can get up and move, but can I really get up and move with my family here, raising family here, kids going to school and they keep raising them!

Even the parking across the street, when I first moved here, I can park in the street, now if you go one minute over, there's a guy in a parachute that shows up to give you a ticket. It's a new form of tax collection! It's not like they're trying to reduce traffic and do all this stuff. I'm telling you, it's a form of tax collection, the way that's going on.

Peter McCormack: Let me tell you a story! Before I came out, I got a speeding fine. I was caught doing, we have a thing called a dual carriageway, which is like a motorway, but two lanes. It's a 60 mile an hour and I think I was caught doing 71. Yeah, fair enough, I'm over the limit, it comes in the post and I can't argue with it. I go online, I admit fault, I pay the £100 fine, but I missed in the instructions where it said, "oh, you need to send your driving license into us."

So that was an honest mistake. About two months later I get a letter in the post saying that my fine has been refunded and I have a choice of going to court or the court making the decision for me. I was like, well I'm not going to court for this, just make the decision for me and they came back and they gave me a £600 fine! So what's that, almost like $800, just because of the fact that I missed something.

Now in my head, why didn't someone just give me a call and say, "look, you haven't sent your driver's license in" or they've got my email address Nelson, because I paid the fine! Their system can trigger a letter and can trigger the court, so if it can do that, why can't it trigger an email to say "you haven't sent your driver license in, if you don't do it in 30 days, you will go to court." Then it's like, "oh all right fine, I've missed that." I can't argue it, I can't fight it, so there you go, it's another taxation!

Nelson Minier: And Bitcoin, even if it's just a little bit, it gets you a little bit more woke, because maybe in the past you would've said, "you know what, I'm such a dummy. I should've sent the driver's license in, I should've read the fine print." Well then you start thinking about it and Bitcoin gives you that little more boost that says, "wait a minute, what's going on here?

This is more of a scam, than it is them fining me for doing it! Okay, I did something wrong, I pay what it is. But you can't help me with this process? You got this thing where you kind of snuck in this extra £600 on me, that's crazy!

Peter McCormack: Well it's £150 fine for the speeding, which is something they don't want you to do because there's a risk of crashes and life. But then there's a £600 fine for not sending off your driving license?! The disparity is ridiculous, but yeah, I've started to recognize it now and it was something Erik Voorhees said to me, because I can't buy into the fall anarchist libertarian view at the moment.

I think of things like you need property regulations because if you don't have property regulations and a building is built incorrectly and it collapses, people die. I feel like I'm still in that place where the free market might not solve that. Same with food. You package food, prepare food wrong, you might kill someone.

I'm still in that place where I think, "okay, I need little bits like this." But I said to Erik, "I can't picture this world, this anarchist libertarian world", and what he said to me was, "we don't have to. What we have to do is push for less government. Let's just say for one year, next year, let's reduce the government budget by 1% or 5% and let's make progress, because if they do that and stick to that, then they're going to have to change some of their decisions."

That for me, I think is a much more practical and interesting way to look at this. But it also, I don't know if you find this, it puts me in a place where I find it very difficult to vote for either party because I don't want to be in the left class war and I really don't want to be in this kind of like uncaring right position where it's just kind of like "fuck you" to everyone. So I end up stuck, but there isn't a third option.

Nelson Minier: Yeah, you don't have much choice. It's very difficult!

Peter McCormack: All right man anyway, so you discovered Bitcoin, were you pushed to Bitcoin or pulled into Bitcoin? Because you said Bear Sterns were kind of pushing you out a bit?

Nelson Minier: No it wasn't Bear because I was at CS at the time and it was more like... They weren't pushing me out, it was more like the business is shrinking. So the business is shrinking and it became a different business. The Wall Street that is today, is not the Wall Street that it used to be and technology is taking over Wall Street and consequently there's less and less seats.

What happens when you sit in a seat, you're making good money, people in Wall Street make pretty nice money, you're making good money and everybody's fighting for the seats and then all of a sudden another seat goes and it becomes a lot different place. It wasn't like I didn't feel like we were trying to solve problems, moving forward, it was kind of more adversarial, a lot more like stabbing in the back and stuff like that, which I don't like.

I'm not a politician, that's not my style and it was shrinking and I didn't like what was going on. It wasn't the same place, you were spending most of your time worried about regulations or worried that you don't have a rogue trader because if you're running a desk, you're responsible for your desk and you can go to jail, just like everybody else. A guy goes bad on you, you can go to jail too.

Peter McCormack: Really?

Nelson Minier: Yeah! You're a Series 24, you're the desk and you could get connected...

Peter McCormack: For neglect?

Nelson Minier: Neglect and complicity, not following the rules, they put the fear of God in you!

Peter McCormack: Is it really easy to break the rules if you want to?

Nelson Minier: Nah, there's so many rules that you're going to trip over something. The Nick Leeson's of the world and the rogue traders like that, it's pretty difficult to do. But you're still worried, you got to keep an eye on it. At the end, you have to prove every traders trade and so you got a thousand trades, what are you doing? You're not going to check every line! So one day you're going to just close your eyes, cross your fingers and say, "okay, this looks good to me, go with it."

But it just became a different place, it wasn't a fun place to work anymore and this Bitcoin thing came along and I was like, "wow, how can I get into this thing?" I felt very much like moving out of engineering and into Wall Street, I felt alive like trying to do something new, something interesting, something I didn't know that much about, something that I could learn something new. I got to be top five oldest guys at Kraken!

But I feel like young man, I feel like I'm skipping to work all the time, I feel great and it's awesome! It's because of this environment and the youth. I remember the first time I went to go interview in San Fran, I'm wearing this blazer, I got a briefcase, you could probably look at me one look, and I'm not a briefcase guy, but I'm trying to play the role! I've got a couple of things, there's nothing in the briefcase, not even a pencil, right?

You open it up and a moth flies out of the thing! But I'm in there, I'm like, "okay, I've got to look good" and the elevator opens up and this lady comes and greets me. She's got a two full sleeves, she's tatted all up and I obviously looked like a vacuum salesman or a cleaner salesman walking into the place and it was obvious that I'm like, "oh my God, I'm in a different world!" But it's so cool! There are so many interesting people, youth, trying to push this forward. 

There's an ethos around the around the company that we're trying to bring this to everybody, we're trying to bring this to the masses and it's just like so rejuvenating and it's like at a start-up feel, like we're fixing problems all the time, there's something new that's going on. I'm on Slack all day, just because it's exciting! There are issues that we have to solve that require attention and that are cool and moving the space forward, moving the company forward and you're working with a bunch of fun people.

Peter McCormack: So Kraken is the only company you've worked for in the Bitcoin space?

Nelson Minier: It's the only company I interviewed for, the only company that really attracted me, because when I started in 2015, you spent a couple of years looking and following and stuff like that, I taught Kraken was the place to be.

Peter McCormack: Did you go straight into the OTC side?

Nelson Minier: Yeah, absolutely. I met some guys that were on OTC desk and one thing led to another because the OTC business is very similar to the businesses that I ran in the past, where it's 24/7 and running a 24/7 operation is no joke. I got guys trading right now, you see my phone flashing there, those are trades popping up from guys that are trading and whether I'm sleeping or not, there's stuff that's happening.

So running a 24/7 trading operation requires a certain level of expertise and you need to know what you're kind of doing. This has been done before so you don't need to reinvent the wheel. So I brought that with me and that's pretty much all I brought with me, like this organizational scheme to try to run a 24 hour trading operation.

Peter McCormack: All right, well listen look, I've heard about OTC, I obviously know what it is, but I don't really know how it works. It's just this other, probably because I don't have enough Bitcoin to be using it, but it's just this other part of the industry I don't know much about. So teach me about it, let's learn about it. Starting point, just explain to me how OTC works?

Nelson Minier: Sure, so OTC is a 24/7 trading operation and what we do is we target bigger trades. So anything $100,000 or above, you probably want to maybe talk to us or think about us. Why is that?

 Why that is, is because when you come to us and you're going to do a big larger trade, we are hooked up to all the exchanges, we take risk, we are much more efficient in the sense that if you come to us, we're not going to move the market on you because we spread the trade around and we're going to price it much more efficiently, than you would if you were going to an individual exchange to do it.

Peter McCormack: Right, so if I wanted to buy a 100 Bitcoin, that's about a $100,000 and I went via an exchange, am I going to move the market potentially or is it like higher trades than that?

Nelson Minier: Yeah, a 100 Bitcoin is about $800,000, so it's a lot. Yeah, so you would come to us and you say, "hey, I'm looking to buy a 100 Bitcoin, where would you offer it?" We have a trader that would say, "okay, I offer it at this price" and you look and it'd be pretty... The market's become very, very efficient in these last couple of years, so you'd be surprised at how close to the mid-price you're going to get quoted and if you like the price, you say, "okay, done." Then what will happen is... Probably best to take a step back, so how are we structured?

We're structured very much like a foreign exchange desk, 24 hour exchange desk, where we have a group of traders in the Americas, we have a group of traders in Asia and we have a group of traders in European time. So we follow the sun, so as we go through the day, at the end of say 5pm or 6pm in the evening Eastern time, there's a handoff that happens and that handoff means that the Asia traders come in and they pick up and they start dealing with the customers.

Then we go another nine hours and then the European guys come in and they pick up and we keep on going and we keep on handing off from one place to the other. As far as clients themselves, in order for you to be a client, you have to be a Pro account at Kraken, which is what we used to call a Tier 4 account, which is the highest level of KYC/AML and you come to us and depending on who you are, you can do it in a day. but you get verified and then you're allowed to trade. 

There's pretty much few rules that we have. One is that you're a Pro account, the size of the trade matters, obviously you don't want to come to us if you're going to do 1 or 2 Bitcoin, that doesn't make any sense. But if you're doing bigger sizes, you come to us. The name that's used on the account has to be the name that we send proceeds to back and forth. I have to say that because it's amazing how many times we hear, "well I own the company Nellie, why can't I just move from this account to the other?"

I'm like, "dude, I can't help you with that. I can't help you avoid taxes that way, whatever you're trying to do." So the name on the account has to be the same, so that the beneficiary has to be the same as the account that you uploaded on, regardless whether you own the company or not.

Those are pretty much the only rules that we have and then you come to us, we set up a channel, we love WhatsApp and Signal because we feel that those are more secure than the other forms of communication. So that's how things normally are set up.

Peter McCormack: But if I ping you now and I'm like, "I want to buy a 100 Bitcoin", you come back to me with a price and I say, "yeah, okay, do it", from the point of I said yes to actually completing the purchase, how quick is that?

Nelson Minier: Well, it depends. If you're sending a wire...

Peter McCormack: So you need the cash first?

Nelson Minier: Yeah, we always second settle. We always second settle and trust me, the OTC desk, you should see the amount of scammers that we have to deal with. We're at the crosshairs of hackers and scammers and all that stuff.

Peter McCormack: We'll come to the scammers, but say the wire hits you and then how quickly is it completed?

Nelson Minier: Well, if you're set up like on the Send network or something like that, it could be instantaneous. You push a button, you call your bank and say, "I'm going to ship them the money", it shows up...

Peter McCormack: Is that Silvergate?

Nelson Minier: Yeah Silvergate bank.

Peter McCormack: Yeah, I had Alan Lane on, good guy! All right, so the money hits the thing, do you then have to re-quote the price?

Nelson Minier: No, the price is locked. Once we say done to a price, say where is it trading, $8,600...

Peter McCormack: But what if there's like 20, 30 minutes and the price slips?

Nelson Minier: That's fine, you lock in the price, that's another benefit. Your price is locked in and say you lock in the price and you don't have the money, now we have to have that relationship with you already and we trust you and whatever, the first trade is probably going to have to be pre-funded. If I don't know you, you coming out of the street and say, "I want to do this trade", I'm going to say, "whoa, pre fund it."

But if I know you and we've got a relationship together, yeah, the price is locked. Once we say done to a trade, we are committed to that whatever. If the price goes up 30% or down 30%, you're getting that price.

Peter McCormack: Right, but have you already bought the Bitcoin?

Nelson Minier: Well, we'll hedge it, we have positions. The way we're set up, we are principal. What does principal mean instead of agency? Principal means that we take risk. When you come to us, I don't know what you're going to do, but the second I say done to the trade, I assume that risk for you and I will go out and hedge it or we might have a position or we might like the position and we might write it.

I don't believe much in prop in this business because I think that Bitcoin is the... I've traded a lot of volatile stuff, nasty, nasty stuff and Bitcoin is the hardest thing. I can't tell you where the price is going to be the next day, I really can't and anybody that tells you they can is either a God or a liar, because this stuff is hard!

Peter McCormack: But how do you manage that risk then?

Nelson Minier: Well we hedge it on all different exchanges. A lot of times, this has been happening more and more frequently, but you might be coming in to buy 100 Bitcoin and another guy might be coming into sell 80 and you just match and it just happens to be that way. Or we just got hit on some and we're like, "oh right now Peter wants to buy it, boom, we're going to sell it to him." The difference between where we buy and we sell is where we make the money.

Peter McCormack: Is there like a maximum sized trade?

Nelson Minier: Yeah, but also you don't want to move the market. We've had situations where we've had big buyers come in and we're like "listen, you want to do that size, you're probably better off doing it in lots" because the price that we would have to give you in order for us to be comfortable with the risk, at least where we don't get our heads taken off, is probably a price you're not willing to say. You're better off just doing it in chunks.

So we've had trades where we've taken two weeks to execute the entire trade, but we do it for guys coming in to buy. We say, "hey listen, wait till the market drops a little bit. I don't think there's any rush to buy here, the market hasn't been behaving that well. Wait till it drops a little bit, buy the dip" and we'll do that. So we'll buy out 500, 600 a day for them until they build a position where they want to get it to.

Peter McCormack: And what kind of premium are they paying for this?

Nelson Minier: It's very tight, I mean we're within basis points. It depends on the volatility of market, like if you're coming to me and all of a sudden we had one of those days where we're up 15% and the thing is zooming and we're like chasing Bitcoin and we can't find any, that might be a different price and the margins are bigger for that because we don't know where things are going.

But in the most part, with stable markets, it's amazingly tight and the spreads have collapsed in the two years that I've been doing it, the spreads have collapsed.

Peter McCormack: Yeah, I've heard about this, like chasing Bitcoin, can't find any Bitcoin. There's always Bitcoin on an exchange, right?

Nelson Minier: Yeah, but it becomes very thin. Those cell walls that you see all of a sudden disappear and it's amazing how quickly to disappear. A lot of it is because there's bots up there putting prices and all of a sudden these things move and there's fail-safes on these things and all of a sudden you see, "ah okay, I'm going to be able to buy these Bitcoins."

You blink and all of a sudden you're like, "oh my God, there's no Bitcoin out there" and you've got to start chasing. I mean there's always some, but there's a price, right? There's always Bitcoin, there's always a price.

Peter McCormack: Has the kind of customer changed over the years?

Nelson Minier: One of the things where I really thought was going to happen, and maybe because I came from the institutional world, I thought we were going to see a lot more institutions come in and buy through us and that hasn't been the case. 

I think I just made a mistake in the sense that these guys are going to face the Bakkt's of the worlds, the Fidelity's the worlds and where they already have channels set up and once they've gone through the process of understanding Bitcoin, it's not like they're going to be able to put it on their Trezor and say, "yeah, I'm going to own this for this hedge fund and put it on this Trezor."

No hedge fund is set up to take up assets like that and have it lying around, have a couple thousand Bitcoins lying around on Trezors and say, "yeah, that's our position and we're going to do it like that." So I underestimated that.

I even hired a guy that was a friend of mine from Wall Street that knew everybody, he spent a long time on Wall Street, he had very high positions and he had a hard time knocking on doors and trying to get people to come in, because they're not ready already, but also it's the way the custody issues and things that are going to happen.

So for us it's much more of a retail business, but wealthy clients, OGs that have been trading around. So we got guys pulling around a couple of hundred Bitcoins and saying, "Nellie, if it gets to $8,000, I'm going to buy something and then if it goes to $10,000, I'm going to sell them" and they do that all day because they're playing around and trying to increase their [Inaudible 39:49]. Some of them do very well trading stuff around.

Peter McCormack: Are you ever not able to close a position because there's just not the Bitcoin there or you have to go back and say, "look, we can only get you half of what you want."

Nelson Minier: Yeah, everything's has a price. If you come in looking for a thousand, I'm not going to say "I'll sell them to you at $20,000 a coin" when things are trading at $8,600, so there's a balance there and it depends on the market conditions. I can't sit here and give you an estimate, "I can't sell you more than 2,000 coins", well it depends on the market conditions for me to say that.

But most of the time people are reasonable, they understand and they trust us. Once they have a relationship with us and they get us going and stuff like that, they open up a little bit, we start working in bigger, bigger sizes. So you can always find Bitcoin, we've always got a place to sell it and we've always got a place to buy it.

Peter McCormack: I guess with this is that for you guys, it really does bring to the forefront the scarcity of the asset, right?

Nelson Minier: Yes, for sure! We talk about this sometimes when talking about Bitcoin, some of these rallies are not as much like formal rallies per se, it's almost like hodling, because you know how it is when you got your Bitcoin and the thing starts rallying, you start believing the guys that think it's going to $200,000 right away. 

I have a view that it's going to go 2x next year, but I think those pie in the sky numbers are out there, but the weight of the chain is going to push those prices down.

But when you see this thing starts rallying and then you start hearing all those calls that you've heard over the years, you start like Gollum from Lord of the Rings, "my precious!" You start rubbing your Trezors, start carrying them around!

Peter McCormack: Do you get a feeling though for how the market is moving from the OTC desk? Do you get a better impression there?

Nelson Minier: We watch Bitcoin price every second. Do we get a better impression from that? There've been some alt coins, you really can move the market a lot, there's thin markets.

With Bitcoin, there's some depth, but sometimes you'll get a bunch of clients coming in one way and there might be some news out or there's just a feeling that this thing is going higher and the walls are kind of shrinking, sometimes you get that feel. Sometimes you do actually, sitting in OTC for sure. 

Not all the time though, sometimes you're sitting there and the guys are asking me, "Nellie, what's going on?" I'm like, "dude, I have no idea. What are you looking at me for?!"

Peter McCormack: Can you get a flood though? If something happens, do you get a flood of calls? Does your phone just start going crazy?

Nelson Minier: Oh yeah, for sure! When there's volatility in Bitcoin, that's when we're busy. That's the time where all men are on deck.

Peter McCormack: Are you OTC in alt coins as well?

Nelson Minier: Yeah, we will trade anything that's on the exchange. We've done other stuff as well and we've traded like Grin for instance, but for the most part, 99.9% of the stuff that we trade is the same things that Kraken trades.

Peter McCormack: Okay, and how much does Bitcoin dominate it?

Nelson Minier: Oh, it's huge and in this past year it has been increasing. I want to say 8 out of 10 trades are Bitcoin trades.

Peter McCormack: Wow! So that's 8 out of 10 trades, but in terms of values...

Nelson Minier: It's probably 90% plus.

Peter McCormack: Wow! All right man, you also said that you are a focal point for scammers? How much do you have to deal with that?

Nelson Minier: Yeah, well if you take a step back and think about it, we're doing the size, we move a lot of coins and we move a lot of dollars. So for a scammer, that's where they're going to try to hit up and you'd be surprised the ways they do it. We got a bad ass security team, Nick P, he's awesome!

The guy's a stud and his team, some of those guys on his team are even better and I got a lot of respect for those guys. Some of the hiring that they've done has been spectacular. It gets a little crazy sometimes, you see me I'm walking around with three phones and you keep your personal stuff away from the stuff, like Nelson is something else and what I am at Kraken and an exchange is something totally different, there's not even a name.

So we do a very good job with that and we're always aware. Even on my team now, I have guys that worked in the security field and kind of wanted to do OTC trading and we keep a pretty tight ship. I thought coming out of Wall Street, "we're Wall Street, we keep security sorted!" Wall Street are rookies, compared to these guys!

Peter McCormack: Yeah, but you have to be man, as you're a honeypot.

Nelson Minier: Yeah, for sure.

Peter McCormack: So I interviewed Nick a few months back and I think I said to him, "I don't know how you sleep" because...

Nelson Minier: He doesn't!

Peter McCormack: Well I'm just like, if someone gets into this and they steal this, they get away with a lot and there's no getting this back.

Nelson Minier: Yeah, but if you do it right, it's very secure. It's like that meme with the Trezor on top of a stack of gold, it's the math and the math is there. If you're encrypted and you do all those things, you're ok. We're not too far away from the Federal Reserve in New York where they got a lot of gold underneath there and a lot of ways because of the math, a private key is more secure than all the vaults that they have and all the guards they have roaming around that place.

Peter McCormack: Yeah, I'd rather fight a private key than a gun though! Is the sell side the same? Is it just a reverse trade or is there something different involved when somebody wants to sell?

Nelson Minier: It's the same. I'll give you an example and this is a prime example of a client, just before you got here, I had a buddy, somebody we all know, he said, "hey, my dad's looking into selling some Bitcoin", as he's doing something to the house, re-modeling or something like that and he called me, "I'm at the airport, can you take care of him?" And those are the type of people that we kind of specialize in. But he's looking to sell and we took care of him and that's it.

Peter McCormack: How much competition is there?

Nelson Minier: There's a lot!

Peter McCormack: So how do you differentiate yourself, is it just service?

Nelson Minier: For us there's a couple of things that make us a little different. I think we provide very good service, we focus on that and that's our big thing. The other thing is that I think we reached out to a lot more people because we have, I don't know, like 40 account managers globally and they're all aware of OTC.

So if they have big clients that might benefit from OTC services or might need them for one reason or the other, they're telling them, "hey, why don't you go down and talk to the OTC desk" and who's got that? Who's got a sales force of 40 people globally?

I got a sales force, I got two guys, but I also got this other account management group that sends stuff our way to and what they're trying to do is just provide the best service to the client. Okay maybe this trade doesn't make sense for you on this exchange or maybe it does, but they'll tell them to do it on an exchange, don't bother with those guys or they'll say, "listen, this is a trade that you probably want these guys to get their teeth into."

Peter McCormack: Do you have an indication of how much of the market is OTC?

Nelson Minier: There used to be rumors that we did a lot more flow and sometimes on some of the alt coins that might be the case, but I can't imagine that because there's so much volume going through the exchanges now that we're minimal compared to what the exchanges are doing.

I mean there's some days and some coins that we actually do large size and sometimes we'll move the market, I can see it. I can see us like, "uh oh, we got a big size here" and we'll move the market. But for the most part, we're not in the same ballpark as these exchanges. Exchanges are doing a lot of flow!

Peter McCormack: Right okay. All right man, so was it 2015 your joined Kraken?

Nelson Minier: No, I didn't join Kraken till the end of 2017.

Peter McCormack: Right, so you've done coming up to two years.

Nelson Minier: Yep!

Peter McCormack: All right, so you've got two years in the industry, what is the split between Nelson the Bitcoiner and Nelson, the guy works for Kraken. Are you fully in anyway on Bitcoin?

Nelson Minier: Ah yeah man, I'm the crazy maniac! At the end of my Wall Street days, people would see me coming down the desk and they'd be like, "oh, just don't talk to me about Bitcoin!" I was a maniac of it, I got hooked! I got totally, totally hooked in it.

Peter McCormack: Do you still talk to those guys?

Nelson Minier: Yeah, do you know it was funny when I left, people were like, "Nellie, are you going through a midlife crisis man? You want to leave this job? Are you crazy? For Bitcoin, are you nuts? You've got kids to feed, wake up man, what are you doing man? Did you go off and bought a Corvette or something?" I'm like, "no man, this is it, this is the future" and they're like, "hmm, I don't know about that."

And of course, when the Bitcoin price dropped when we were back in Vegas, the amount of texts that I got from my buddies! They genuinely were looking out for me, like "dude, are you okay? This thing looks like it's going to hell man!" And it did at the time. I'm like, "nah, don't worry about it my man, I'm fine. I'm stacking more sats, don't worry about me!"

Peter McCormack: Did you convert any of them?

Nelson Minier: Yeah I have. Some of my best friends I have converted, but it took a while. It's not easy though, it's not easy to convert people into Bitcoin and this is Trojan horse really.

Peter McCormack: Dude I throw it out there, like I put my interviews out there, stick them up on Facebook and I'll get one question every couple of months and it's always the same question, "should I buy some Bitcoin?" I'm like, "just listen to the show, learn about it, maybe buy a bit, hold onto it for 10 years, get a bit as you go", but it doesn't matter what you tell people, they don't buy into it. I don't know why it is such a leap from hearing about it, to believing in it. I think it's just that it is so different, right?

Nelson Minier: It is, and there's a lot of obstacles to it, like explaining it. I found little tricks to explain it, because when you first talk about Bitcoin for instance, here's one example, like "how do I get it? How do I know it's mine?" They start thinking like coins in their head, like this treasure and that they got to go to a bank and pick it up and put it in their pocket. Well Bitcoin is not something that... It's a push system, not a pull system.

So it's something that exists out there and only you can move it. It's not like I'm going to pick up this Bitcoin, put in my pocket and go spend it. No, it sits on a chain and you have an address and only you can move it from that address. But I've learned to use things like that, like pull versus push to try to explain it, for people to start understanding because I see the obstacles, the speed bumps that exist to getting it.

But still, despite all that and besides making people's ears bleed trying to explain it to them, it's still hard. But people start coming around, like my family members a couple of Thanksgivings' ago, they were throwing forks at me and now we're sitting at the table and things are changing, "hey Nellie, how's this Bitcoin thing? I bought myself a couple on Kraken. What do you think about the way the price is going?" And I was like, "wait a minute, you were the same guy last year throwing a fork at me, what's up now?!"

Peter McCormack: Wait 10 years, got to be patient! It's always the saying though, I always say to people, "you got to wait 10 years, just forget the price now." I mean you can't because of your job, but I don't check the price. I only know the price when people put it up on Twitter, I never check anymore. I find it is a lot more healthy for me. I mean you can't though!

Nelson Minier: But even like when I go to a Kraken office, that's one of the first things that I know. When I was first there, they have like CryptoWatch up there and people are not looking at the price, but they have it up and I would stare at the price because that's what I do and people were walking by, and that day, I remember it was a day that we took a long drop and nobody's talking about it

It's like the longer you in this thing, the more certain you become, that is going to be something and you don't worry about what the next 5% are doing.You just don't. We have things that internally, where we get paid in Bitcoin and people just stack their sats nice and easy. They keep working hard, we're all working to bring this thing to the masses and our time preferences have changed, so we're willing to wait, we know what's going to happen.

Peter McCormack: That's what Andreas says! Andreas says that the best way to get Bitcoin is to earn it.

Nelson Minier: Yeah, it's so true!

Peter McCormack: Yeah, that's only just started to click for me. I do it in part, so some of my invoices to my sponsors, I'll get in Bitcoin and I'll keep part of it and that's the last bit of Bitcoin I'm going to sell! Of all the Bitcoin I'm going to sell, that's the last one.

Nelson Minier: But it's like a self-fulfilling prophecies because even my business, like I pride myself in growing this business and we're having all these traders globally working toward providing the infrastructure to take this to the next level.

But at the same time, the guys that I'm working with, every day, shoulder to shoulder, 10 hours a day with, we're working on getting more Bitcoin for ourselves too and it's like a self-fulfilling prophecy.

We're creating this machine to not only create more infrastructure for the general population, but we're creating this machine that creates more Bitcoin, for more hodlers like ourselves. It's pretty cool, it's a great feeling!

Peter McCormack: So what's your feel on Wall Street? We're not far from it here to be honest.

Nelson Minier: I can walk there!

Peter McCormack: Yeah my run, I nearly got down there this morning, but we're not far from Wall Street, there's a lot of Bitcoin in New York, there's a lot of talk about Bitcoin, there's a lot of Bitcoiners here. If we forget about Ben Lawsky's bullshit for a bit.

Nelson Minier: Well the Bitcoin Center was right on Broad Street!

Peter McCormack: Nick Spanos right? I need to talk to him!

Nelson Minier: By the way, a lot of those guys, work at Kraken.

Peter McCormack: I need to talk to Nick, I really do.

Nelson Minier: His office is right up the street. His office is on Prince, I can show you.

Peter McCormack: But why do you think there hasn't been this explosion of adoption by Wall Street? know Bakkt volumes are growing, I know there is the very slow institutional interest, but really there hasn't been the expected explosion. Why?

Nelson Minier: That's a fantastic question and one that I rack my brains with. When I was on Wall Street, I was like, "guys, your guys are missing it" and I was in the inside and I couldn't get it. The thing is though, they talk about intrinsic value and all that... I was with one of the biggest portfolio managers on the planet playing golf and I was trying to convince him on it and he couldn't get over the fact that the intrinsic value, the intrinsic value, he couldn't get over that fact.

But then when I stepped back and look at it, if you're one of these portfolio managers, putting this fake internet money in a portfolio, you think about it, you probably got your CFA, you might've got your MBA, you probably worked as an analyst for decades before getting that sweet gig, becoming a portfolio manager, that thing that you wanted.

Now you got this big place up in Westchester, people listen to you when you talk, you got all this respect and you've earned it, there's no doubt. In order to get that seat, you worked your ass off. But are you going to risk it or are you going to roll the dice with this thing that you can probably become the laughing stock?

I felt it, people thought I was kooky going into this thing. Friends of mine are like, "Hey Nellie, are you sure you know what you're doing? You're not going to put this in a portfolio, that couldn't possibly go to zero and you're not going to risk your reputation by doing it." It takes a maverick, it takes somebody that thinks out of the box to do it.

Peter McCormack: Even by putting 1% of the portfolio in it? It's still risky.

Nelson Minier: Yeah, because these guys are all fighting for a couple of basis points, right? These guys are fighting against ETFs, like the difference between one portfolio manager and another one, unless it's a hedge fund and these guys are just taking big swings, but the difference between the guy managing portfolio at X, Y, Z, big portfolio management firm versus ABC, is a few basis points.

So this thing can make a difference and not only that, but it's the reputation, because can you imagine Bitcoin goes to zero, how many people are like, "wait a minute, you put my pension money into Bitcoin and you lost me 1%, because you put this thing in this crazy internet money! I'm out, I'm taking my money out" And that's what will happen and that's how you get shot.

Peter McCormack: How does that get bridged though?

Nelson Minier: It's the young people that are bringing it. It's those people that are like anti-state and banks, that spent a year at Zuccotti Park, now all of a sudden started getting influence in the world. It's also the quants, the techs, that understand the math, understand what this is, those are the guys that when they start getting influence and power, those are the guys that are going to bring it in because they understand it and they get it.

You take the average age of the person at Kraken, it's decades younger than the average person at a Alliance or a Fidelity, like these big portfolio managers, the guys running the show at those places are decades older than the guys running the show at these places. When we start making that shift and you get this... It's a different ethos, it's a skepticism of banks, of the state and an embrace of technology.

That combination is what's going to bring it and people are going to start saying, "wait a minute, you've got an uncorrelated asset, ridiculous historical returns, that's scarce, you can't make any more of it! Wow, you've got to slap a couple of percentage points in a portfolio on this thing." Those are the guys that are going to bring this, but it's going to take time.

It's also that you go through this process of Bitcoin, like we were talking about, but one part of the process is realizing that this ain't going to happen overnight. I thought, "wow, the light's going to go off on everybody, I better get in fast!" It's not going to happen fast and it's going to take time. It's part of the process of learning, understanding it, embracing it and getting comfortable with it.

Peter McCormack: Well, if you think what happened in 2017. I was end of 2016, early 2017, I also was involved in Bitcoin in 2013, but forgot about it because I lost a shit load! But if you think about it, there was like a hype and Dan Held talks about this, whose now at Kraken actually. He talks about it like the bull runs are like a marketing loop, right? You have a bull run, a bunch of people come in, they discover Bitcoin, some get wrecked, some don't, but some stick around and some don't. 

It's almost like we're waiting for that next one to bring the next round of people in. I guess the fear is from Wall Street that if these people come too late, if they FOMO in, they could screw up like everyone else does. They could come in late, put in those couple of percentage points and could they come in 50k and it drops to 20k, 15k, that's a risk, right?

Nelson Minier: Yeah, absolutely. But they know about things like that. If they understand that, they understand volatility, so a lot of these places would scale in. We're talking, some of these portfolio managers are actually managing billions and billions of dollars, so they're not going to write the check.

The way it works is, you do all the work, you understand an asset, you convince your firm that you're going to add this asset to your portfolio, you don't push a button and all of a sudden you go from zero to 2%. The market probably couldn't take that to begin with and second with scaling in, there's methods that they use to scale in, so it's not going to happen like that.

Peter McCormack: So that's like a Wall Street dollar cost averaging?

Nelson Minier: Yeah exactly!

Peter McCormack: So that's kind of interesting. What's the average age of these portfolio managers? Are these people in their 50s?

Nelson Minier: For sure. 40 plus, I would think some of these guys.

Peter McCormack: So it's almost like, "what's the point of risking the end of my career?"

Nelson Minier: Exactly and you've got that nice Westchester joint, you got the kids, you're saving up for them to go to college and you don't want to rock the boat. So you're just trying to beat the next guy by a couple of basis points.

Peter McCormack: Can you easily be cut out then if you make a big mistake?

Nelson Minier: No, once you got that seat, you're pretty safe, but you got to make a really bonehead move in order to get kicked out of there.

Peter McCormack: And does it affect your bonus?

Nelson Minier: Well a lot of them are performance-based, but we're talking just beating the next guy. You got to beat the S&P index by a certain amount of basis points and you get paid. Mostly they get paid, the most important thing that they get paid up before, is the assets under management.

So they are attracting assets, they're going out, they're selling something, right? They want more assets under management, that's the big number, that's their show off. They wear it like a Sergeant wears stripes on his shoulder, "I managed $70 trillion", whatever, some ridiculous number like that.

Peter McCormack: Do you reckon any of them are doing it though? Or do you know of any of them that are doing it? Is anyone down there?

Nelson Minier: That are doing what?

Peter McCormack: Buying into Bitcoin.

Nelson Minier: I think PA. I think a lot of them are because you're this portfolio manager, you've probably got a team and you've probably got some quants on the team and you got a couple of kids from MIT helping you out, manage your portfolio, making sure your sharp ratios are right and all these other things and the kids' probably convinced them like, "dude, you should put a couple of these in your PA."

Peter McCormack: What's that, like a personal account?

Nelson Minier: Yeah personal account. I'm sure that happens, I'm sure some of them are. But that's the first step, right? If you start putting it in your PA, you start watching the chart and you probably start convincing your friends, you start talking to your boss about it, you start convincing them and they have investment committees. So before you bring in a new asset like this, you're going to have to put it in front of investment committee and now you got even older guys! You got guys rolling in, so you have to convince those guys that this is an asset that you want to put in your portfolio.

Peter McCormack: It's the Trading Places guys, do you remember that film?

Nelson Minier: Yeah, you've got those guys saying, "what?! You want to put Bitcoin in, are you crazy!"

Peter McCormack: All right man, well listen look, what's coming up for you dude? What's coming up with Kraken and the OTC desk?

Nelson Minier: We've got a lot of cool stuff that we are looking at. I think broadening out our product is a big part of it, Kraken is always good things, just came out with the app.

Peter McCormack: Yeah, Kraken Pro!

Nelson Minier: Yeah, there's Kraken Pro 5x margin on there, so a lot of cool stuff man. Jesse's really doing a great job of bringing this company to the next level and the team that he's got, he's got a strategy team now and they're helping him look at where's the next opportunity and they've got a war chest and he's using it, to bring this asset class to the next level.

As far as the OTC desk, we're looking at new products to try to get into. We're not going to be able to just to trade Bitcoin, that's not enough. We've got to do other stuff and we're working on that, slowly but surely.

Peter McCormack: Are you missing Wall Street at all?

Nelson Minier: I miss some of my friends. I still follow some markets and stuff like that. Do I miss the job? Hell no, it was one of the best decisions I ever made in my life. I am so happy and I haven't been this happy in a long time!

Peter McCormack: Why is that? Is it just different environment? Less stress?

Nelson Minier: I feel like it's just all new and it’s different type of stress. This is stress like I'm building something, instead of just doing the same old job.

Peter McCormack: And you feel part of the company?

Nelson Minier: Oh for sure, I'm in!

Peter McCormack: Alright man, well listen, always good to see you man.

Nelson Minier: Dude, you the man, I'm so happy with your success man! I remember before you had three assistants, you know what I mean?

Peter McCormack: I wish! Do you know what, I've got a producer/engineer now and that's been a massive change in that I finish a show, like this will be done, I'll upload it for him, he'll get it all prepped, he'll write my scripts, two days later I record the scripts, that goes up. He does everything else now!

Nelson Minier: What's his name?

Peter McCormack: His name's Danny.

Nelson Minier: Danny make me sound good dude!

Peter McCormack: Danny will make you sound good. He'll cut out the um's and the ah's, but do you know what it's done for me? It means now I can do this other show. I used to be able to do two, three shows a week at max. I can now do five. I do more work because I'm scaling! But yeah, it's been great to get to know you, I consider you a friend now man. Anything you ever need, you know you can reach out to me.

Nelson Minier: Oh, you're the man dude! I'm so happy with what you doing and keep up the good work man, bringing this to the masses man, people are going to wake up for this!

Peter McCormack: Well hope so, I hope they listen to my show!

Nelson Minier: For sure!

Peter McCormack: Take care man!

Nelson Minier: Thanks!

THANKS

A big thanks to my WBD Maximalist Patrons for helping support the show: JP Petit, Logan Shultz, Seb Walhain, Steve Foster, Tony, Gordon Gould, David Burlington, Jesse Powell, Bitcoin Tina, BitHyve and Wiel Menger.

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