Good afternoon, everyone. This is Therese Byard speaking, and I'm the Corporate Secretary of FRMO Corp. Thank you for joining us today for the company's 2023 second quarter earnings conference call. The statements made on this call apply only as of today. The information on this call should not be construed to be a recommendation to purchase or sell any particular security or investment fund. The opinions referenced on this call today are not intended to be a forecast of future events or a guarantee of future results. It should not be assumed that any of the security transactions referenced today have been or will prove to be profitable, or that future investment decisions will be profitable or will equal or exceed the past performance of the investment. For additional information, you may visit the FRMO Corp website at frmocorp.com. Today's discussion will be led by Murray Stahl, Chairman and Chief Executive Officer, and Steven Bregman, President and Chief Financial Officer. They will review key points related to the 2023 second quarter earnings. A replay of this call will be available on the FRMO Corp. website until the summary transcript is posted. Now I'll turn the discussion over to Mr. Stahl. Okay. Thanks, Therese, and thanks everybody for joining us today. Before I start talking about FRMO, I just wanted to acknowledge the ultimate founder of FRMO was an attorney named Lester Tanner, and he passed away a couple of days ago, and Sunday was his funeral. I just want to acknowledge him. He was just an incredible, unbelievably brilliant and warm human being. We probably wouldn't even have an FRMO Corp. As a matter of fact, I shouldn't say probably. We definitely wouldn't have an FRMO Corporation were it not for his leadership and insight. If we had more time, I would tell you about his just amazing life, which he did amazing things even in retirement. I just wanted to acknowledge him as a human being. He'll be sorely missed. He was a great guy. He's one of a kind, and we're gonna miss him dearly. With that, we're never gonna forget him, and we shouldn't. I'll go into FRMO. As you can see, quarter was pretty good, at least I think so. We had, this is FRMO's itself, shareholder's equity of $224 million, which I believe is a record. We've got plenty of liquidity. We've got $36 million in cash. We have a de minimis, or at least I think it's de minimis amount of debt. That debt incidentally relates to a building, which is the building that houses our investment in HashMaster, one of our various cryptocurrency investments, and more about that later. The thing I wanna focus on for the quarter is the development of our strategy in cryptocurrency. I'll first touch on Horizon, however. Horizon itself has done pretty well. Horizon is for the year closing December 31, 2022, we collected a number of performance fees. We had a fair amount of net incomes. Therefore, that's gonna spill over in the revenue in next quarter of FRMO because you will recall we have our revenue share. There's also some investments in FRMO, and they're very comparable to investments in Horizon. They're gonna have very similar kinds of performance. Expect some good news over there. You'll recall that everything is reported with regard to Horizon with a lag. Our next quarter, which for us is the calendar ending February 28, the Horizon information is gonna be included as of December 31. Just for your edification, I know we've said this many times before, but just to bear that in mind. There's always a lag. Right now, from a Horizon point of view, we're reporting things that are really September thirtieth as if they happened on December thirty-first, because that's the most updated information we had at the time we did these financial statements. They're financial statements for us, let's not forget, as of November thirtieth. Our cryptocurrency strategy, you'll recall we entered cryptocurrency, you might say, gingerly. Did it gingerly, and we were particular in maintaining that posture in the past year. In the past year, other than maybe the last week or so, cryptocurrency led by Bitcoin, basically declined enormously. The cryptocurrency mining machinery declined even more, and there were cryptocurrencies that declined more than Bitcoin. The reason for that is, and we'll cover it later, there are three vectors that really govern the price of cryptocurrency, particularly Bitcoin. You can bid cryptocurrency up, but you have to be very cognizant that it's a function of there's always upcoming halving. The halving that we're gonna have. Halving basically means that the block reward for mining Bitcoin is gonna be cut in half. That's why they call it the halving. That's coming in about 470 days. In the case of Litecoin, I think it's 198 days, if I'm not mistaken. You're always in the world of mining, or you should always be preparing for that. In the prior year, people not only didn't prepare for it, they didn't realize that as we approach the halving, the equipment you use for mining is just worth less money. The idea of bidding up crypto mining equipment is a very bizarre idea, and we did very, very little in the world of investing in crypto. You could say more or less the market is properly discounting the halving, so we're much, much more favorably inclined to crypto. In our cryptocurrency exposure, apart from the crypto we own directly and indirectly in the funds, we have four cryptocurrency investments. I'm gonna just mention them 'cause we don't really highlight these things in the financial statements. One is called ConsenSys Mining. That is the merger and the capital raise of the original HK Cryptocurrency Mining partnerships. We did an offering. That offering is gonna be listed and tradable in the not-too-distant future. I'm guessing, but I'm thinking 60-75 days from now, maybe sooner. ConsenSys Mining, watch for trading, and we own some shares of that. There's Winland, which we used to call Winland Electronics. Now it's called Winland Holding because it's holding a variety of cryptocurrency investments. I'll read all our cryptocurrency figures and our other investment figures in a moment. We own a 7.1% interest in HashMaster. HashMaster is a number of things. HashMaster is a mining repair company, mining equipment repair company. It's also a hosting company for mining, so it's our default mining site. If we don't want to or we cannot, or we find it disadvantageous to be in certain other sites, we can always retreat to HashMaster. We've done that, more than once, when we couldn't get terms that we need. Of course, that company repairs our equipment. Also there's some HashMaster mining for its own account that goes on there. Lastly, we own an investment in Digital Currency Group, which is a long-term investment for us, and since we bought it's done fairly well. Then we have the following investments. Now, I'm gonna mention TPL in a minute, but let's just go through the various cryptocurrency elements. First we'll read, this is reading from a list, obviously. These are the holdings we have, so to speak, implied, meaning our pro rata share via partnerships. We have 596,936 shares of the Bitcoin Investment Trust, GBTC. We have 4,287 Ethereum Classic Investment Trust. ETCG is the symbol of that. We own 27,186 shares of Bitcoin Cash Investment Trust. All these funds are run by Grayscale, which is part of Digital Currency Group. BCHG is the symbol. We own 616 shares of Grayscale or Zcash Investment Trust. ZCSH is the symbol. We own 6,582 shares of the Litecoin Investment Trust. We own 227 coins of Bitcoin Gold. We actually own that directly. That was a fork from the Bitcoin we own directly. Which is owned in the funds. Held directly, we have 139.6 actual Bitcoin, all of which we mined. We also own directly, 7,647 shares of GBTC, the Bitcoin Investment Trust. We own 18 shares of the Ethereum Classic Investment Trust. We own 40 shares of Bitcoin Cash Investment Trust, all directly. 283 shares of the Litecoin Investment Trust. We own 1,763.5 actual Litecoin that we mined. This is in FRMO itself. We own 35 Ethereum that we mined. You can't mine Ethereum anymore because it went to proof-of-stake from proof-of-work. We own 661.7 Ethereum Classic coins. We own 6.7 Bitcoin Cash coins that we mined, and we own 62 Zcash coins that we mined. Now, we own 30.8% as of the last reckoning of Winland, now called Winland Holdings, formerly known as Winland Electronics. What I'm gonna do is I'm gonna read you what Winland owns, and you can multiply by 0.308 and get the right number. This is what Winland owns 'cause I think it's relevant. 63.3 Bitcoin, all of which it mined. 7.4 Bitcoin that we didn't mine, we actually bought it. 14.9 Litecoin that we bought or acquired in various ways. 53.5 Zcash that we acquired in various ways, including purchase. 1 Bitcoin Cash coin. 8.7 Bitcoin Gold, got that out of the fork. 9.4 Ethereum Classic that we actually purchased in the marketplace. Now remember, we own, this is FRMO, 30.8% of Winland. In terms of Texas Pacific Land Trust, which is our biggest investment at the moment, as you well know, we have direct holdings of 7,449 shares and indirect holdings, basically in various funds, everything from PoleStar to HK Hard Assets. We have 52,230, 224 shares. You can add them, you can multiply by price, you can see what it's worth. Those are our investments. Points I wanna make is, maybe it'll be some questions about crypto. There are some seminal events that happened or are in the process of happening in crypto that I think are very, very positive. I'll mention those things, make some comments about Horizon, maybe we can go to the questions and answers. The CBOE, Chicago Board Options Exchange, you will observe, now has a digital asset exchange. It's really important for the future of crypto. There has to be a spot, regulated market for crypto in order for crypto to be an accepted asset class. That's in the process of happening. Obviously, it's gonna start small because it's in test mode, but the regulated exchange, Cboe, already has a digital asset exchange. Before very many months elapse, I personally expect other exchanges to have digital asset exchanges as well. CME, of course, already has Bitcoin futures. The Bank for International Settlements, some number of weeks ago, announced that they are, 'cause they're a quasi-regulator of banks around the world, it is now possible to have 2% of a bank balance sheet to be crypto. There are some pretty big banks in the world. Can you imagine if 2% of one of the bigger banks were crypto? Can you imagine if 2% of a bank were Bitcoin, what that would mean for the price of Bitcoin? That's in process of happening. Now, digital assets mean a lot of different things to a lot of different people. There are already digital assets that need to trade that can trade. I'll give you some examples. Airline miles. A lot of people in this call probably have airline miles. Might not even know they have them. Have airline miles, maybe have no intention to use them. There's no reason that those can't trade on a regulated exchange. There's no reason why they can't trade in the form of being paired with the appropriate cryptocurrency, whatever that happens to be. Loyalty points, coupons, CVS, Walgreens, just as examples. There are many, many retailers that have these things. You may not wish to use them, you may not even know you have them. But on a blockchain, you'd be able to look it up if they were put on a blockchain. They are in the process, all these assets I'm gonna refer to or I've just referred to, are in the process of being put on blockchains, and they will be paired with various cryptocurrencies, and they will be traded on the exchanges. Credits, maybe you subscribe to some service online that you never use. They debit your credit card every month. Maybe somebody wants that service. Maybe you can sell that service to somebody else. That's a digital asset. There is no shortage of digital assets that have yet to be truly digitized in the cryptocurrency in sense of the word. All of that is in process of taking place. Look for or expect really seminal developments in the world of crypto in the not-too-distant future. You might have observed that in Horizon, we have a little ETF that we started called the Horizon Kinetics Blockchain Development ETF. If you look very closely, you'll see a lot of that ETF is publicly traded exchanges, there's a reason for that. We can't introduce cryptocurrency, especially in digital asset sense that I just referenced, without having regulated exchanges. It's a recipe for disaster. The regulated exchanges have to be properly set up to do these things, that takes a lot of doing. It's all in the process of happening. I personally predict, it might sound like an outlandish statement, the day will come when cryptocurrency is going to be the biggest traded assets. The way I would compare it is think back half a century to Chicago Mercantile Exchange. At the time, it was a mere commodities exchange, and as a mere commodity exchange, it traded less commodities than it does right now. For example, Bitcoin is a commodity, and there was no thought of that in the early seventies, 50 years ago. In the event, currency futures, I should say, became tradable. If you go back to The Wall Street Journal of 50 years ago and look up the day that currency futures started trading, because you could always have gone to a bank and exchanged your currency, you could even have done a forward swap at a bank. You didn't technically need a future, but we ended up having futures. If you were to read the op-eds in The Wall Street Journal on the day currency futures started trading in the CME, you were to cross out the word, currency futures and write in the word cryptocurrency, you could publish that article today. Same things people said then, we're saying now. How much bigger is currency futures than commodities? How much bigger is bond futures than currencies? No one thought of bond futures, although they needed it in 50 years ago. Now we have it. Look how big it is. I think, I hope I'm right about this. I'm doing this memory, so forgive me if I misstate it slightly. I don't think I'm going to be very far off. I believe that commodities account for about 7% of the revenue of Chicago Mercantile Exchange. The growth in exchanges would not have been possible without bigger asset classes and new asset classes, and we had them. They were unimaginable 50 years ago. Still, it's hard to imagine cryptocurrency as an asset class being respected and your typical larger institution having a cryptocurrency allocation of varying sizes. In my opinion, it's coming. I think cryptocurrency has an extremely bright future, and I invite your questions on that. I'll just mention one other thing, which is HK Hard Asset. Yes, please go ahead. I would just like to interject a tiny bit of color. You can do it better yourself, but you decided to be efficient with your time, which I think you might need to be with all the questions. But, indeed, at the time, that CME was proposing currency futures, it was actually thought by many responsible people, including policymakers, that number one, it would be illegal. If it wasn't, it should be, because it could actually be dangerous for the entire financial system. It could undermine the sovereignty of nations. That was the kind of discussion or rhetoric that was going on at the time. Yes, that was an argument. Just to give you a little bit more color we have so many questions, so I want to make sure I get to them and deal with all of them. Just to give you a little more color on that point, there are many reasons why they thought it would undermine nations. I'll just give you two. One is you're buying a future, it could be argued, and it was argued at the time, you're betting on the future value of a currency relative to another. If you're betting on the future value of a currency relative to another, which today we don't even think about that's a standard and prudent hedging practice. 50 years ago, they said that was gambling. Of course, 50 years ago, gambling was illegal. Was gambling really illegal or was hedging your currency exposure illegal? Today, I think we can state without equivocation that the authorities effectively, although their intent might have been related to gambling, their intent was different than what actually happened. They didn't want to make prudent hedging of currency exposure illegal, but that's what they did. It was impossible to hedge your currency exposure. For companies like we had in the United States of America, they were branching out internationally. You thought about in the forward-looking sense, the companies are branching out internationally. There's going to be a need to hedge their currency exposure. Couldn't do it without getting yourself arrested. It's amazing, but that's what people said. Then, of course, the idea, remember, this is the early 1970s, the United States was not yet off the gold standard. The idea was no currency should be allowed to float because a nation needs to control the price of its currency. Experience informed us during the 1970s with the inflation, no nation was ever able to truly, really control the value of its currency relative to other currencies, and they basically gave up. Secondly, they gave up pricing their currencies in gold. Currencies no longer had the fixed reference of gold, and they basically gave up on fixed currencies. That change, put yourself in the position of policymakers in that era. To give up fixed currencies in that era, it's a much bigger change, a much bigger sea change, than simply allowing cryptocurrencies today. What we ask for in cryptocurrencies is de minimis relative to what actually happened. It was earth-shattering at the time. Anyway, I was going to mention HK Hard Assets is the last thing, then we'll take the questions. HK Hard Assets, we're building it up. Remember, its purpose is to be, get other investments. Not revealing what the investments are. We're approaching the $4 million mark in money in HK Hard Assets. Who's in HK Hard Assets? FRMO, me, a company called Horizon common some other partners in Horizon. We've just started ourselves, and we'll build it up the way we built HK Hard Assets, designed to benefit from inflation. I think that's happening. Oh, yeah, I forgot one other thing, which I should have said at the beginning. You might know that we and FRMO have an investment in the Mesabi Trust. I didn't know this until a couple of days ago. This is an odd fact about the Mesabi Trust. I'm not really talking about Mesabi Trust in its investment sense. In 1962, the Mesabi Trust was listed. Mesabi Trust is the kind of investment we like. Just collects revenue, doesn't really have any employees. In 1962, to list at New York Stock Exchange was considered to be extraordinarily controversial. I'm reliably informed by people who know about this subject that the SEC had objections to listing such an enterprise on the New York Stock Exchange. You could see it from their point of view, it's not really a business. Of course, it is a business in the way I look at it, and of course it is listed on New York Stock Exchange and has been for more than half a century, and it's now no longer controversial. However, the attorney representing the Mesabi Trust to get it listed was none other than Lester Tanner, the founder of FRMO. A little bit of irony there. It shows you something about the circle of life, how we touch each other in ways that we don't realize. I didn't know that until a couple of days ago. Anyway, I'll leave you with that thought. Unless you have something to add, Steve, could we go to questions? By all means. Okay, Therese, if you could facilitate that. Read the question, and we'll endeavor to give the best answer we can to the subject. It'll be my pleasure. First question: What are the revenues that FRMO receives from its ownership interest in HK LLC revenue stream that is valued on the balance sheet at $10.2 million? Is this figure a straight flow through to FRMO's bottom line, or is it offset by any cost/taxes? Does this figure vary much? Do you wanna answer? There's more, but. Well, let's do that. Let's do it this way. We're getting. I don't remember the number exactly. We're getting a little bit less than 5% of HK's revenue, it varies with HK's revenue. HK's revenue varies in a couple ways. One is sometimes we get performance fees and sometimes we don't get performance fees. It varies, that way. It varies with market value fluctuation of the assets we manage, and of course, it varies with the clientele. There's no tax offset or anything else. What you get is what you get. There's no. We don't take anything out of it. It just is what it is. You apply the pro rata figure to whatever the gross revenue is for that quarter. The fourth quarter, as I said earlier, can be a big quarter with performance fees. This is the fourth quarter for Horizon, or just passed, and we have a respectable amount of performance fees. We'll have an unusually large revenue to report on February 28th, mostly coming from Horizon. There was a question about Hard Assets Alliance. I think they meant Horizon. I think they meant Horizon. Yes. The only thing we get from Hard Assets Alliance is the dividends. It's the biggest investment in Hard Assets Alliance. It's no secret it's TPL. There's some other things in there, but there's no revenue that comes from Hard Assets Alliance. I just took the liberty of interpreting that the question referred to Horizon itself, not Horizon Hard Assets. If there's more, I think now is the time to get to it. Okay, I'll just read the last. Does this figure vary much each year based on performance fees or other factors? I think you just answered that. If so, would it be possible to provide the revenues to FRMO for the past few years and/or what is expected in 2023, 2024? This is obviously a very valuable asset to FRMO, and I would be interested in how Murray and Steve think about its value as it is essentially a royalty stream. Okay, well, let's see. If you want the back numbers, it's easy to get because you look at our financial statements for the various years, and you would divide our revenue by the proration factor, which I think is something like 0.0493 or something like that. Somewhere in the annual report you'll see it. Divide the. If we get $3 million, divide by that number, and that'll give you the Horizon revenue for that time period. That's easy to do. I probably should have memorized the number exactly, but I guess I'm too lazy. I've never memorized it. It's somewhere in this document. If you can't find it, I know it's in this document. If you can't find it, we'll get you the number. It's something like 0.0493 or 0.0495 or something like that. Is there anything I haven't answered in that? Now you want me to do a future forecast. obviously I can't do a future forecast without getting myself in some legal trouble. If you don't mind, I'd rather not get myself in legal trouble. Truth said, I can't know exactly what it's going to be. If I can just tell you this, if cryptocurrency does well, you'll be very happy with the revenues produced by Horizon. Next question. What is the difference between the above item, so that is the participation in the revenue stream, and the investment in Horizon Kinetics LLC that sits on the balance sheet at $14.6 million. Is there income to FRMO that flows through from this investment separate and distinct from the interest in the revenue stream mentioned before? How should one think about the true value within a range of this ownership. Yes. -stake relative to the $14.6 million stated value on the balance sheet? Yes. Basically, there's two components there. The first component is, yes. We own a piece of the profits. Basically we get a distribution that's designed to give us enough capital to pay our taxes. A certain amount of Horizon's other than the tax distribution is reinvested. That number on the balance sheet, the $14 odd million, that doesn't represent our assessment of the value. It basically represents the investments on Horizon's balance sheet. There's a little bit of goodwill there, not a lot of it, so you can decide if that goodwill is merited or not, but it's mostly cash and investments. For the most part, it's a hard book. At some point, we're gonna have to monetize Horizon, and then you'll get to see a real trading value, and you'll know for sure. Right now, I think its number is something like either 4.93 or 4.95. If you take that, let's call it $14.5 million to make it easy, and you divide by 0.0495, which is approximately right. $14,563,000. I'll use a calculator and make it a little precise. Divide by 0.0495, and that's $294,202,000. That's the value. We don't have $242 million in cash and hard assets there. It's not that much. There's some goodwill there, but we've got a lot. I'm not disclosing the number we have right now yet, but as I said, there's not a lot of goodwill there, especially not for an investment management company. In the right market, there'll be some type of monetization event, probably a listing at some point, and you'll get to see what the trading value is, because it's gonna have to happen at some point, just not happening today. It's a sympathy. To answer your question directly, it's separate and distinct from the revenue share. Next question. Regarding Winland, my understanding was that one of the strategies was to grow the mining operations significantly. With the current level of distress in crypto mining, is there any reason why Winland has not acquired additional significant mining assets or made strategic investments like the Argo Blockchain senior notes, which are currently paying and were available at $0.04 on the dollar or less than 4 months of accrued interest? To quote Hillel the Elder, "If not now, when? Well, the answer is very simple, and you can see it quantitatively on what's called the Luxor ASIC, A-S-I-C, Price Index. The prices of machines are collapsing. To go out and acquire machines, there's no reason to do that when the prices are collapsing. If the machine prices are not properly discounting the mining reality and approaching halving, we don't want to buy any machines. The mining business or mining equipment was tremendously overvalued. How overvalued is it? Can we give you something quantitative? That's a rhetorical question. I believe it's implied in the question I just got, so I'll answer it. You'll recall about two and a half years ago, we did a swap with Winland. FRMO bought some equipment, brand new equipment, which we in turn immediately sold to Winland in exchange for shares of Winland. I think we got a pretty good deal relative to price Winland was trading at the time. That equipment, if you look at this price index, that equipment rose in value a lot through November of 2021. If you look at that Luxor ASIC prices and machines proceeded to collapse. When I say collapse, I may be 1% or 2% off. I would say lost from the high point, 86%, 88%, maybe 89% of their value. Something in that range. Okay? If today you wanted to buy the machines that we had sold to Winland two and a half years ago, which by the way, we depreciate over 3 years, and it's been over two and a half years, They're almost fully appreciated machines. You would pay a price today even not radically different than what Winland paid, or what we paid to buy them FRMO more than 2 and a half years ago. It still hasn't discounted reality. We just had to stay away. What we did in FRMO is we were nibbling away when we thought it was appropriate at Winland shares. We've been buying Winland shares, and we thought that was the best use of the capital given what was going on. Based on the price of Winland today, we didn't buy a tremendous number of shares, and Winland itself is not all that liquid. We didn't buy a tremendous number of shares, but the price we got Winland at, so far we made a, I would say, a respectable profit at. That's how, that's what we're doing in investment sense. During the collapse, it just didn't make sense to be very active in this area other than what I just told you, and we weren't very active. In the future, we're getting more constructive and we're probably going to be interested in buying some equipment at some point. But we wanna buy. It's another thing we do. We really weren't interested in buying used equipment that had been used for 3-plus years because it's nearing the end of its useful life. Yes, we could have repaired it and throw some money into it, but I don't know if we'd ultimately break even odds. We didn't wanna do that. Our next move, if we decide it's the right move, we're probably gonna buy some state-of-the-art equipment. Don't forget, we did very maybe a month or 2 ago, we did buy some equipment in ConsenSys Mining, brand new state-of-the-art equipment, which is now functioning and earning a very high rate of return. Remember, when you buy equipment, you always have to be cognizant of the approaching halving. At this stage, we're gonna have to buy some new equipment. At least we think that's the best value. I hope that's thorough enough. Next question. What are management's thoughts on oil royalty businesses making acquisitions right now at the expense of shareholder dilution, for example, as is the case for Sitio Royalties acquiring Brigham Minerals? Okay, well, let's just say that's a very elegantly phrased question. Thank you so much for phrasing it that way. Or let's put it this way. I don't agree that it makes sense to acquire royalty interests for equity like we've done in the transaction that you described. I'll explain why. The royalty, no matter how good the royalty is, the royalty is finite. Sooner or later, so every oil royalty has a decline curve. Sooner or later, it'll produce no oil, even if it's great and lasts a long period of time. The equity is forever. The equity is a perpetuity. Generally speaking, that's one of the reasons. This is generalizable to acquisitions in a lot of businesses. You buy a business, whatever it is. In this case, it's oil royalties, but it could be technology, it could be machinery, it could be even pharmaceuticals. It could be anything. However brilliant... Let's use the example of pharmaceuticals. However brilliant it is, however wonderful it is, the pace of human knowledge and human progress, it continues. Let's say if it's a pharmaceutical, one of two things are gonna happen. Either A, it's gonna go off patent, and you'll get a lot less revenue for it. Or B, which is more likely, in the fullness of time, some company will develop something which is a superior treatment to what currently exists. When you offer stock for someone else's business, the business you buy is gonna have a finite life. The stock you're offering in exchange for that has an infinite life. That's the problem with using equity in acquisitions. Books are written, about in the 1970s, This was very popular, and textbooks are written, case studies are written at major universities about using equity to buy a variety of businesses. The idea was, it was very similar, if you think about it, to what we now call modern portfolio theory. You would use equity to buy a variety of businesses. Every business has its own cyclicality. If you're very clever about it, you'd buy a bunch of businesses where the cyclicality of one will offset the cyclicality of the other, and you will develop a stable earnings and revenue stream. The problem is every business is like a human being. It has a finite life, and the equity has an infinite life. Ultimately, it's not a sensible strategy, and I don't think very highly of it. It's one of the reasons why we don't use equity very much to buy things in FRMO. That's how I feel about that. NextBeing on the board of directors and large shareholder of TPL, would management be able to speak on why Texas Pacific Land Corporation does not publish any kind of quote, proved probable and possible reserve end quote, analysis in their annual reports as other royalty businesses like Brigham, Blackstone, and Viper Energy do. The TPL 10-K does not exactly make clear why these figures are, quote, unavailable, end quote. In March 2022, Bloomberg article noted that the Permian, quote, "The Permian Basin is uniquely positioned to become the world's most important growth engine for oil production." End quote. It seems like making the data public on TPL's reserves should be beneficial for shareholder returns, unless it wouldn't, in which case shareholders should know about this as well. All I can say in the answer to that question is, given my position on the board, number one, given the current circumstances, which if you read the SEC filings, you'll know what the current circumstances are. I'm just not in a position to comment on that particular subject. I just... I normally like to answer every question, but I'm just not at liberty to answer that question in the manner that it's phrased. Unfortunately, I'm gonna have to decline to answer that. Okay. The next question. Could management give us an update on FRMO's MIAX investment now that Miami International Holdings has filed for an IPO? What is the outlook for MIAX's asset classes? How does management think it will gain market share? For example, SPIKES futures appear to trade in a similar manner to VIX, but with the added friction of lower liquidity. Why would traders want to switch to trading with this new instrument? Does MIAX have any pricing power versus other exchanges? Well, let's put it this way. The best way to judge MIAX is just to go on the website and look at the volume. All exchanges, the profitability is really a function of volume. To do more volume, it raises the expenses a little bit, but doesn't raise the expenses a lot. In a really bad market, the volume contracts, and in MIAX case, it actually didn't contract even though last year was a pretty rotten market. The volume contracts, and there's very little you can do to cut expenses because it's so efficient, the margins are just so high. What I can tell you is that in the world of exchanges, we're gonna create just completely new and just amazing, I think that's the best way to talk about it, sets of assets. I'm personally prejudiced. In MIAX, I think they have the best technology it's not objective. I'm just saying it 'cause I happen to like MIAX, I really believe it. In any event, this is just an example of something that MIAX is gonna do. I wanna give you an example of how the exchanges in the future are gonna be different and why I like exchanges so much, I like MIAX in particular. An investment manager will say, "I think the GDP is gonna go up or down by a certain amount, and therefore, I will go long or short the S&P in a certain quantity." The trouble with that is that S&P trade, as logical as it is, and even though the premise upon which it's based might be spot on accurate, is a very idiosyncratic trade. The economy might go up or down as forecasted, but other things happen. The values of currencies rise and fall, interest rates wax and wane, companies' profit margins expand and contract, so you can't simply generalize that a GDP of X will lead to an S&P return of some properly commensurate amount, either positive or negative. In the world of the future, what you will be able to do, you'll be able to do the following. You'll be able to say, "I think the GDP of the United States is gonna rise by 3%," and you'll be able to buy a future that will pay you or some type of instrumentality that will pay you if the GDP does, in point of fact, rise by 3%. If the GDP does not rise by 3% and rises by less than 3% or it actually becomes negative, then you're going to pay someone else. You will know before you do that trade how much exactly you will make or lose if the GDP performs in a certain manner. That's gonna be possible in a blockchain cryptocurrency environment. You're gonna be able to do things that today you really can't do. There are only a handful of big exchanges with licenses. I mentioned today only a tiny subset of the types of products that are possible. There are more products conceivable than all the exchanges with all their technology put together can handle at the moment. It's going to be just an incredible experience. Now, as far as the IPO goes, it's no secret that the IPO market is just... At least until a week or 2 ago, the IPO market was the worst IPO market in a very long period of time. I think in the year 2020, hardly any companies came public. I looked at the list, I don't remember how many were. Weren't very many. It's just a horrible environment to come public. Why come public in a horrible environment? Much more logical to come public in a better environment, which we will have eventually in due course. We just have to be patient. I don't know when there's gonna be an IPO, obviously, but it will happen in due course, and we'll see what the value is. I'm very, very optimistic about the future of MIAX. I hope that addresses what you wanted me to address. Yes. The next question. Could you please talk about the prospects for FRMO's smaller investments like Digital Currency Group, Winland Holdings Corporation, Miami International Holdings, and HM Tech LLC? Okay. MIAX Finance, did that one first. I think I addressed it. I like exchanges in general. I like MIAX Finance in particular. I think the future is bright. I think if you just look at the volume, every day, and it's all publicly available, that's your best indicator. You'll know more or less what's happening by looking at the volume. It's growing, and there are lots of things are possible. Very bright future. Winland Holdings Corporation is evolving into a mining company. It was not prudent in the last 12 months to buy any more mining equipment. It's probably going to soon be prudent to buy some mining equipment, and you're going to see more investment along those lines. What exactly we're going to do and how we're exactly going to do it, I can't say. I don't actually know at the moment how we're gonna go about it, but I think we're coming to a much better period for cryptocurrency. Look for more investment there. Winland, anyway, Winland has prospered. One of the things that Winland is getting, or is in the process of getting right now, Winland invested some number of years ago in, you might recall Mt. Gox, which went bankrupt. There were bankruptcy claims, trade claims for the crypto there, and the bankruptcy is now concluding, and we're going to monetize the trade claims. We'll put that cash to good use, I hope. That's one of the things that's happening. Winland continues to mine and continues to build cryptocurrency. One thing I should say about Winland is, if you think about it, in a way, it's almost like a quasi Bitcoin ETF. When you buy a Bitcoin ETF, if there were a Bitcoin ETF, just remember, unlike a mutual fund or an ETF, Bitcoin has no dividends that you can pay the fees for. What would happen is, if there were a Bitcoin ETF, the operator, whoever it is, would have to, each and every quarter, or probably every month, would have to sell some Bitcoin to pay the fees. Let's just take the abstraction. No one puts money in, no one takes money out of the ETF. There's a certain amount of coin there, and every year, the amount of coin is gonna diminish. In Winland, as you can see, and why we read these statements, every quarter, the amount of coin there increases because we mine it. Which would you rather have? Would you rather have a cryptocurrency investment where the coin diminishes, or would you rather have investment where the coins increase? I believe one day, the day will come when there are Bitcoin ETFs, and there are people gonna understand the distinction between the two classes, and there are people who will go long the mining companies like Winland and go short the cryptocurrency ETFs and lock themselves in a certain return based on how fast we can grow the Bitcoin with mining. That's Winland. HashMaster is actually doing very well. The HashMaster is organized in such way that the different businesses offset one another. For example, hosting for a lot of businesses became problematic, so we ourselves had equipment and hosting companies that were having difficulties. We actually had the ability to send our equipment to HashMaster. We have a greater liberty of action, how we go about mining, how we go about buying electric power. With another mining company, we have to buy electric power on their terms, effectively through them. 'Cause Winland, we control, we can buy electric power on our terms. That's a pretty good thing to have. The repair business was doing less well during the calamity of the equipment price crash. On the other hand, the movement of our equipment to HashMaster was a positive thing. You could say in that sense, it's in equilibrium. During the year, we actually expanded HashMaster. We bought a transformer. What it did is it gave us the ability to draw more power. You know the reason why we wanted to draw more power, and that kinda worked out rather well, I think. During the months when the electric utility was installing a transformer, the crypto was having its carnage, so we weren't any the worse for wear, and now it's pretty good to have that capacity there. The building itself, which is owned by FRMO Corp., I'm told, or let's say I'm reliably informed that we could sell the building. We could sell the building for twice what we paid for it. It's nice to know that. HashMaster is a nice little asset, doing very well. Digital Currency Group, as you've seen, they've had their challenges, obviously, but the core of business is fabulous. What's the core of business? It's a Bitcoin investment trust. You know what the assets under management are. You know what the fees are, and much of that goes right to the bottom line. There are challenges and other aspects of it, as you can read in the journals. You know, we never got involved in lending out crypto or any of that stuff. We don't really believe much in it. In the future, I don't think you're gonna see this sort of activity in general in the cryptocurrency world. It's really something that's best done in banking. The core business of Digital Currency Group, I think it's great. If Bitcoin or the other cryptos rise in value, which I suspect they will, it's gonna be even better. The core remains, I think, fairly robust. Those are the four that I've covered. I think that's complete. Yes. This is a follow-up on questioner 7 from the fiscal year, 2021 second quarter earnings call. Quote, "Instead of revealing it only verbally on the conference call, can you also please begin to list exactly what the exposures are of the major assets that everyone wants to know about? A small table that shows the number of look-through shares of TPL, Bitcoin, mining equipment, Winland shares, et cetera, would be very helpful. If that is not possible for some reason, then my question is, what specifically prevents you from doing this choice? Specific regulations?" End quote. Well, nothing prevents me from doing it since I just read it, and I read it off a table, so I don't see any reason why we can't put the table somewhere. Could you do that, Therese? Could you arrange to have the table put either on the website or someplace appropriate so everyone can see it? I don't think there's a regulatory reason why we can't do it. Could we rely upon you to do that? Yes, I will do that. Okay. I will work with Jay on that. You'll take care of it. We'll take care of that and, hopefully, it'll be up there in due course, and everybody can see it. Okay. Next, why are there no first quarter or third quarter transcripts for the year 2021 and no first quarter transcript for the fiscal year 2022? That actually was just put up. On the FRMO website, they appear to have been skipped over. Okay. Is there any reason- I think I should answer that. I know we have them. Oh, you answered? Okay. Why don't you answer it then. I think I should answer that question. Okay, go ahead. That falls on my broad shoulders. One of the deficits. Well, first of all, I'll simply say, my fault, I should have done it. As happened with this particular cycle, I had that document in front of me on my computer screen for quite some weeks, and other things kept coming up, and I never quite got to it. That's been a bit of a pattern. It's not a pattern that should be repeated. One of the deficits we've had in operationally is we haven't really had the kind of professional at Horizon Kinetics, I'll call it professional, editorial and editing function or layer for the various kinds of public-facing documents and content we produce. I've been on the lookout for qualified people to do that for quite a long time. I've had different experiments with people with different qualifications. It just so happens a contributing reason why this one was actually posted to our website is that in recent weeks, and I mean, it's only in the last 2 or 3 weeks, I've been beginning to work with somebody who I think fits the bill. He's an extremely qualified, very seasoned, professional author and journalist, particularly financial journalist. He's actually started helping me out in recent weeks. He's freed me up to take a look at this kind of thing, and he can do it himself. We've so far been playing around with, kinda like who takes which assignment. If he, if he works out over time, it's early yet and, but if someone like him actually works out on a longer-term basis, I think we'd actually establish a department and a proper style book and so forth for everything we do, and things will work more smoothly. Anyway, I think, I think, I think we're on track for that. Next order of business on this small end of things is to catch up with the prior two or three that have been skipped. Okay. Thanks, Steve. I'm sure we'll get it up in due course. Okay, what's next, Therese? Next is management has mentioned that they, apart from Jay Kesslen, Thérèse Byard, and now for 3 new directors. Are the only employees of FRMO and that management takes no compensation. Could management explain what the costs are in the operating expenses of the income statements as well as what determines the fluctuations in FRMO's operating expenses? Operating expenses were broken down into more detail, detailed lines in annual reports. For example, "employee compensation and benefits," until 2019, where they began to be rolled into a single SG&A expense line. So it is no longer as clear. Well, maybe we should reveal it. Steve and I, we're not taking any money, so we're not getting anything. We own the stock, and if it goes up, we'll make money on it. The expenses primarily are the professional fees of the audit, the accounting, that line of country. That's the primary. That's the primary fees. There's some fees associated with OTC Markets. There's some computer stuff, to the degree that we buy electricity for cryptocurrency. There's that. That's the primary stuff. Directors don't get cash compensation. We give them some options to buy FRMO stock, and sometimes the stock goes up and they exercise it, and sometimes the stock doesn't go up and they expire unexercised. That's what directors get paid. We're not giving cash compensation to directors. Occasionally, we have a legal bill, nothing big. There's a question we need research. Can we do X or should we not do X? We go to an outside law firm. That's an expense, and doesn't always happen. That's some variability. Those are basically the expenses. I don't think I'm missing anything important. Anyway, there you have it. If you need the breakdown, I'm sure we can obtain that for you. Next is, Charlie Munger recently celebrated his 99th birthday this January. Unlike Warren Buffett's permanent capital vehicle, Berkshire, FRMO has not explicated plans for any type of succession. While I'm sure all FRMO shareholders and Horizon clients would wish for current management to remain at the helm of capital allocation for as long as possible, and I recall that in past meetings, management has stated they have no intent on retiring. Could management detail what they see as the most likely outcome for FRMO shareholders once Mr. Stahl and Mr. Bregman are no longer running the show? Any succession plans regarding FRMO management? Well, let's just say this, there are people who could probably do it. Talk to a variety of people. They're not FRMO employees right now, but I'm sure they'd be interested in doing it. It would be someone or some persons that are currently active in the investment management realm and obviously going to be younger than us, and we want to be active in investment management realm. Why don't we want to make them employees of Horizon or something? We want to see what they would do unconstrained by us. If they were our employees, whether we give them total freedom or not, even implicitly, they're going to be operating under our constraints. We don't know what they're gonna do. They got to be running their own show. Maybe a way to do it is, they're running their own show, they're doing whatever they're doing. Maybe when the time came, we would take FRMO, merge it with whatever their enterprise is and how they're going to run the show. They'd be unconstrained by us, other than the fact that we respect what they're doing. They're different people, and maybe that's the way it should be. That's the way I see it happening. I have people in mind. They have to be at least 20 years younger than us, maybe more, if we can get that. Maybe 25 even, we can achieve that. On the other hand, we're not going to let any 25-year-old young people do it because number 1, they're not seasoned. Number 2, we don't have the experience of seeing them operate in the variety of unpleasant investment environments that happen from time to time. Anybody we'd even consider would have to be someone that has, so to speak, their battle scars. It had to be somebody that's been around for at least 20 years in the business. That's basically the plan. In the previous earnings call, management mentioned that Horizon Kinetics was continually buying shares of FRMO. Could management give some detail on the valuation model that they use to look at FRMO to decide when to buy back shares? Well, let's put it this way. Other than restricted periods, we're always buying back shares. We filed one of these programs where we're able to buy back shares every day. We don't have a model that we'll buy back shares in month one, but then the stock went up and we're not gonna buy it. We're not buying back shares at month two. We're constantly buying back shares. I myself personally buy a small number of shares to supplement what Horizon does. Right now it's on the restricted list, so I can't buy it. I think a day or two after this phone call, it comes off the restricted list. I will assure you I will commence buying. We don't have a model, and we don't really need a model. The reason we don't really need it, 'cause FRMO is a company with a lot of optionality, and it's very hard to have a model to embrace that but let's look at it this way. Take any one of the variables. I personally talked a lot about cryptocurrency today, but I'll use it. We have a number of vehicles in cryptocurrency. We could do a lot of different things with them. We'd like to grow them. We actually are in the process of growing them. If cryptocurrency became the biggest of the asset classes, which I personally think that's the outcome, you'll be very happy with the price of FRMO. In the interim, 'cause obviously that's not happening today, little by little, we're growing the cryptocurrency assets, and we're growing the cryptocurrency businesses. It didn't make sense to jump in with both feet, so to speak, for the reasons I mentioned earlier. There was a real valuation problem, or let's put it this way. No, there was more than just a valuation problem. There was tremendous money relative to what cryptocurrency could absorb coming in cryptocurrency and without reckoning the basics of cryptocurrency. You just have to know that if you're in the mining business, 50%, assuming the cryptocurrency price remains the same, which has to be your basic assumption, 50% of your revenue is going away every 4 years. In point of fact, over most of the time, the cryptocurrency is gonna rise, but your equipment's gonna become obsolete. You shouldn't expect a much longer life than 3 years. It turns out that because we have the repair business, we've been able to use certain machinery for more than 3 years. We've been able to pull it off. We had no right to expect that. It just so happened. It's not gonna last for much longer than 3 years. Maybe it'll last 4 years. Maybe it'll even last 4.5 years. Ultimately, it goes away. Even before it goes away, it becomes less profitable. It becomes less profitable because it's less efficient. None of that was reflected in the cryptocurrency environment. Therefore, we had to stay away from investing, much as we are interested in cryptocurrency. That's that. It doesn't mean that in any way we think these things are undervalued. I think we're one of the few companies, if I can promote myself for just a moment. I shouldn't do it, but I will. we were able, and the figures are available to anybody who cares to look at them. we were able to navigate a brutal, what they call a cryptocurrency winter. We were able to navigate that. nobody else seemed to be able to do that, so I'm actually very proud of that. I didn't enjoy the crypto winter, but we were prepared for crypto winter. I think that's personally worth a lot. Anyway, I'm buying, FRMO. take it for whatever it's worth. Do the co-founders of FRMO own basically the same% of ownership of Horizon Kinetics LLC, even though Horizon Kinetics is private, both companies share management and make similar investments? Yes. They're the answer is it's not identical for a whole host of reasons, but it's similar. If you were to see the ownership list of Horizon, it's not radically different than the ownership list of FRMO. As I said, there are a lot of reasons. One of the reasons is I've never sold a share of FRMO. I've only bought. Horizon's a private company. We never bought or sold shares. In FRMO, you're able to do that. I've purchased shares, so my ownership has gone up a little bit. We've done some other types of transactions that have altered the ownership structure a little bit, but not radically. You would recognize the basic shape of the ownership structure if you were to see the shareholder list of Horizon Kinetics. When do you think you'll be able to raise the FRMO listing to the Nasdaq? Well, all I can say is it's mea culpa. It's totally on me. I keep saying I'm gonna do it, and then I just don't have time to do it. I just didn't do it. I'd like to do it. As you can see, I'm involved in a lot of stuff. I can only do so much. I'm doing meetings like this. I'm involved in all sorts of issues you can read about. I write a lot of research reports. I'm doing a lot of stuff. I just don't have time to get to it, but it's a priority with me. I'm gonna do it at some point, and you won't be disappointed. Yahoo Finance reported on November 25, 2022, that in a note to their shareholders, Digital Currency Group founder Barry Silbert attempted to calm investor nerves about the financial health of Digital Currency Group subsidiaries, including Grayscale Investments. My question is, does management have any concerns about the solvency of the Grayscale cryptocurrency funds that FRMO owns? Do you have any concerns over the solvency of Digital Currency Group? Well, with Grayscale, no concerns whatsoever because they're just funds that own a certain amount of cryptocurrency. In the case of Grayscale Bitcoin Trust, it just owns Bitcoin. It's custodied securely, it's segregated. I have no concerns whatsoever. In the case of Digital Currency Group, there is some debt, the debt isn't owed, I think it is, for something like 10 years. This was in the public realm. There were articles that isn't owed for 10 years, all you really need to do is take the fee on the Grayscale Bitcoin Trust, multiply by the AUM, you can figure out what the revenue is. I don't think there's any problem there, at least none that I can see. I'm not really worried about it. In any event, on a cost basis, we don't have a lot of money in Digital Currency Group. The issue is what is it worth right now? There you can get a lot of different numbers. Naturally, we want it to be worth as much as possible. I think the current issues, as controversial as they are, they're not going away tomorrow, but I believe they're in principle solvable. You know, they'll just have to work through them and solve them. That's what happens in crypto winter. It's not just Digital Currency Group, it's every company in crypto, with the exception of us. That's why I promoted myself shamelessly, which I almost never do a little while ago. Lots of companies threw a lot of capital at something that they ought not to have thrown a lot of capital at. We had the complete different strategy. Created a lot of problems for people, and they're not the kind of problems that you can master in a week or a month. There are quite a few of them. You just have to work through them, I guess. We had a completely different methodology. We don't have any issues like that. That's the flip side of when you want to be aggressive. I mean, at the time, I really shouldn't blame people. It made a lot of sense. Let me just go into a little bit detail. Why did it make a lot of sense? Well, two reasons. The first reason is the basic premise of crypto. It could be argued that. Again, this isn't, you know what my strategy is. This is not my strategy. I'm just arguing positively, rhetorically for somebody else's strategy to say, why did it make sense at the time, although it didn't make sense to me. If you believe crypto is going to outperform the dollar, which I believe that too, then it seems like the next logical step should be, well, then why don't you borrow money in dollars, and you'll eventually pay back in depreciated dollars relative to your crypto investments. Makes so much sense, right? Except it's problematic to do the accounting that way. I understand that's the GAAP accounting, and that's what's required. Just because that's required doesn't mean you have to think that way. You can think any way you want. Let's just go through, compare, and contrast the way we look at things. When you buy a cryptocurrency mining machine, it may not be apparent to you don't pay dollars for it. It's priced in dollars, the manufacturers don't want dollars. They want crypto. When you're buying equipment, the relevant question is, I'm buying a certain number of machines, 'cause you're not buying 1, you're buying lots of them. You're buying a certain number of machines. It's costing you a finite amount of crypto. The relevant question is, over the operative life of the machine, are you gonna get more crypto than you paid for the machines? If the answer is yes, which it may not be, if the answer is yes, well, how much more is that going to be? For example, if you paid 100 crypto, 100 Bitcoin, let's say, for a group of machines, to make it sensible, you're gonna have to get over life of machines at least 160, maybe 175 or 180 Bitcoin back. If you can't see that happening, you ought not to invest in the machines. The halving, that's why I refer to the halving. The halving is known in advance. You know how many days you have. The halving is on a date certain. You can calculate, well, do I have enough time to get... I'm just using the number 180 as an example. If you can't see earning 180 crypto over the life of a machine when you paid 100 crypto for the equipment, you have to cease investing. The performance of the dollar in relation to Bitcoin or Bitcoin in relation to dollar is irrelevant. You're raising dollars, you're not paying dollars. That's the mistake everybody made. Why use equity when you can use debt? We don't like the equity for reasons I mentioned earlier, because it's a perpetuity. We don't want to use debt. Debt we don't use as well. We're trying to create all our capital internally, or at least most of it internally, which is another thing people don't want to do. You further complexify the problem. You're bringing investors with their capital, now you're trying to figure out what is the price of Bitcoin in relation to the United States dollar at any point in time. Remember that debt is due on a certain fixed date. That's why they call it fixed income. Even if Bitcoin outperforms dollar. In the fullness of time, how do you know that Bitcoin is going to outperform the dollar during the life of the fixed income liability that you've assumed? You don't really know that, do you? Therefore, it makes more sense to operate entirely in crypto. By the way, my second point is, what's the purpose of crypto? The whole purpose of crypto is to be outside of the dollar fiat currency system. If you want to be outside the dollar fiat currency system, be outside the dollar currency fiat system and calculate everything in Bitcoin. That part of the business, the Bitcoin business, you're operating outside dollar system. Why would I re-enter dollar system to make investments and be subject to the mutability of the dollar, even though I think in the long run, Bitcoin will do better than dollar. I didn't want that. Now you see a difference between their strategy and our strategy. You also further see, if you forget about our strategy for a second, how reasonable all those strategies. Remember, it's the majority of people. I'm not criticizing them. I'm saying that those strategies expostulated the way I just expostulated them, they're entirely reasonable. They're even defensible, but they're embracing a risk that I chose. I have no intention of ever undertaking that risk, and I won't do it, and I didn't do it. You can see why the majority of people felt otherwise, because they treated the currency of Bitcoin as if it were the euro or the yen or some other type of currency. It's not, because those are investments. You can undertake an investment in Europe or Asia or somewhere else, and you can make reasonable assertions, although they might be wrong, about how other currencies will operate because they're all fiat currencies. Bitcoin is not a fiat currency. It operates in accordance with certain strictly defined rules. In a, in a finite time period, you don't really know what's going to happen to crypto, especially if people aren't cognizant of the effect that they're floating having, which they weren't. Anyway, but I'm sympathetic to what people did. I just don't agree with it. It's entirely reasonable. Just because something is reasonable doesn't mean it's right. It's reasonable, it's defensible. It was just the wrong thing to do, and we didn't do it. That's what makes a market, I guess. We do different things. I'll never criticize it on grounds of unreasonability. It was reasonable. All companies did that, and I think they've learned their lesson. It's just gonna take varying amounts of time to work through those problems, and we'll see what happens. What's next? What does management make of how the FTX contagion is affecting Digital Currency Group and its subsidiaries, Genesis and Grayscale, given that FRMOs and Horizon Kinetics funds' main Bitcoin exposure comes from GBTC? Okay. It's not. FTX is not impacting it. FTX is very simple. FTX is just embezzlement. There's a certain amount of money in FTX, whether it's currency or fiat is irrelevant. It's just purloined. FTX is very simple. The problem that you're referring to is what is the discount to net asset value of the Bitcoin Investment Trust? There are people who believe that the liability at Digital Currency Group could theoretically be accelerated, and they'll have to pay for the asset. Their biggest asset is the shares they own at Bitcoin Investment Trust, which in theory, they could be forced to hand over. Theoretically. I don't believe it's likely. If you want to paint the gruesome scenario that some people paint, in relation to FTX, well, there's liability. You have to pay it, and you're going to hand over shares of the Bitcoin Investment Trust, which of course, the people who get it don't want. They'll just throw it on the market, and there won't be enough people to buy it. For that reason, it will trade at a big discount to net asset value. That's basically that scenario. Personally, at this discount to net asset value, I think Bitcoin Investment Trust, GBTC, is a great buy. Just so you know, I personally bought some today. Just so you know. I really did. I'm not going crazy and buying tremendous amounts of it, but I bought some. I don't know how long the discount to NAV is going to last. Chances are it's not going away in a day or two. Eventually there will be Bitcoin ETFs, eventually this is gonna be a Bitcoin ETF, and it's gonna trade at NAV. I believe the Bitcoin some go by what I say. If Bitcoin is going up X%, whatever that number happens to be, and you're buying the Bitcoin Investment Trust at roughly half of net asset value, well, if it traded at net asset value and Bitcoin didn't go up, it just traded at NAV, and you're at 50% of NAV, you're doubling your money. It's 100% rate of return. Bitcoin rises X% and it trades at that net asset value, you can see how robust that return is. I personally think it's a really great investment. Anyway, we have lots of shares of it, and I wouldn't mind having more shares of it. Related. That's it. The next question is related. Does management have any thoughts on the FTX crash and how this may affect Bitcoin and institutional adoption of Bitcoin as a monetary asset going forward? This crash appears to be unique from other previous Bitcoin cryptocurrency-related crashes. For example, Mt. Gox, in that this most recent crash has affected a large number of institutional investors who had stuck their necks out for cryptocurrency. Is this a correct reading of history? Does management, with their unique position in running an asset management business themselves, see any growing once bitten forever shy sentiment among institutional investors regarding cryptocurrency or Bitcoin in particular? Okay, well, a lot of, lot of things I can say about that. Let's just start with this. This was embezzlement. This was fraud. In its own way, even the fact pattern's a little bit different. It's not that dissimilar from Enron. It's not that dissimilar from the Madoff scandal. The Madoff scandal, did that stop people from hiring outside investment advisors? The Enron scandal, did that stop people from buying publicly traded securities? I mean, at the time it was traumatic, but it's basically the, the pledging and looting of client assets. Basically, it's what happened. Had it not been a crypto company, had it been a normal financial advisor, you would have the exact same outcome, and they could have the exact same outcome in dollars. The fact that it had to be crypto had absolutely nothing to do with the ultimate collapse. If they were a money market fund and they were doing nothing other than buying United States treasuries, well, you steal all the money, then you're not gonna get any. It's really that simple. The company, FTX, had a very high ESG rating. I think by the ESG rating companies, it had the highest rating you can get. That's the problem. That's the problem with ESG and the way things are rated. Just because I have no idea as to what degree they complied or did not comply with ESG, and I have no idea how these ratings are compiled, but it had a high ESG rating. You could see why an institution would say, "Well, it has a high ESG rating, it must be okay." Obviously that was not true. Having a high ESG rating is not the same thing as having probity. What they lacked is probity. I don't think this is in any way going to lessen or diminish or delay the growth of cryptocurrency as an asset class, 'cause it has absolutely nothing to do with cryptocurrency. That's not made clear in newspaper articles, whatever, probably because the people don't realize who write them, what actually happened. Basically, it's a case of embezzlement. If you wish to verify what I said, the bankruptcy trustee that was appointed to liquidate FTX testified before the United States Congress, and that testimony is in the public domain. You can read it and everything I just told you, that's where it comes from. It's testimony under oath. It would be really great if the articles referencing this subject could include the appropriate testimony from the bankruptcy trustee, but it didn't, for good or ill. It would be really nice if it did. Maybe at some point, someone will write about that subject. Anyway, that's where we are. I don't think this is a setback for cryptocurrency because it has nothing to do with cryptocurrency. Just so happened this person was involved in cryptocurrency. There are people who steal dollars, and they do it all the time. You don't say, "I'm gonna stop using United States dollar because someone stole all the money in a company that had nothing but dollars in it." I don't think you should reach that conclusion with crypto. I understand in the real world people will reach that conclusion. I don't think in any way this is gonna diminish the progress that's being made in crypto. You can see it if you follow what's happening on Chicago Board Options Exchange, and you'll be seeing other things happening in due course in other publicly traded exchanges. Just have to keep your eye out for that. In a 2021 interview, Murray Stahl gave with the podcast called In the Arena, one of the topics covered was the disintermediating effects that Bitcoin and openly discoverable blockchain transactions would have on society in the context of inverting the many to one individual to Google to advertisers relationship into a one to many individual to advertisers relationship, wherein advertisers directly pay individuals for the right to advertise to them based on their transaction history. Is management currently investing or looking at companies that would be along the path towards facilitating this kind of shifting advertising dynamic. For example, though not at all a recommendation, there is the open source Brave web browser's Basic Attention Token, which seeks to build out a distributed micro/nano payments ledger of crypto tokens minted on proof of user attention given to advertisements. Yeah. Well, I looked at that. I haven't bought that yet. I'm not sure that's the right way to achieve it. There are many, many different approaches to the subject. I'm confident someone's gonna come up with an approach, or I'm confident many people will come up with approaches. My own view is the way it's gonna start, it's going to start with assets that people have, they might not even know that they have. For example, XYZ individual has a subscription, maybe it's a software, maybe it's to an online magazine, whatever. They're not even aware that they're paying $20 a year on their credit card. They don't even look. I believe someone's gonna start mining that data, put it on a blockchain so everyone can look, and they're gonna become cognizant that they have assets. Similar thing is gonna happen to other digital assets. It's gonna start with digital assets. Those digital assets are gonna be monetized. Whoever does that is going to have a great advantage because you've now caught the attention of very large numbers of people, literally tens of millions of people. Yes. After that, it becomes relatively easier, not easy, but easier to persuade those individuals to entrust their data to the blockchain. Then there'll be a database of data, and it won't be gathered by the leading technology companies. It'll just be gathered by the individuals through this mechanism. They'll be able to monetize their data if they feel like monetizing their data, which some people may not wanna do, but a lot of people will monetize their data. It can start with something as simple as do you wish to see an advertisement on a certain subject? Anyway, I believe that's how it's gonna evolve. In my travels, what I've seen the most software development on that's within striking distance of realization is the mining of data and the possible monetization of digital assets. Anything relating to digital assets and its monetization. That's I think is gonna be the first effort, and we'll have to go from there. Murray, I thought to go back to a prior question. It was about the once bitten, twice shy sentiment that might be feared among institutional investors regarding Bitcoin. I understand the reason for the question, but in point of fact, and you gave a couple of factors earlier when you first spoke. You can measure that. You've explicated a number of different factors over time that describe various facets of the cryptocurrency industry and its robustness or lack of robustness. There are all sorts of markers of Bitcoin usage, for instance, such as the number of active wallets or the concentration profile of coins, or the number of Lightning Network channels, or the number of nodes and servers. You can look at institutional changes, whether they're private institutions like a Fidelity or banks that are building robust custody and exchange and pricing systems and platforms, which you don't do that lightly. Central banks too. You could make a list or a table. Actually, I suggested this to somebody, one of our analysts yesterday. You could make a list or table of all these various factors. Say you come up with a dozen factors and track them over time. Maybe you could even make an index of basically it's about acceptance, which you suggested very early on. It's a money, and money is about acceptance. There are different really measures of how broad and deep acceptance is continuing. That has no stops, in fact. It's only getting deeper. That's the way you can, anybody for themselves, can address that. Maybe we'll come up with something of our own if it seems to hold water. Well, true. It's definitely true. It'll be addressed in due course. If you want something, just the quick and dirty of the discount NAV of the Grayscale Bitcoin Trust, it's a measure of sentiment in a way. If you want something very easy to do, that's a thing to do. If you want something a little bit more difficult but not much more difficult, give you a better sense, I would say if you take the single asset, digital currency products, so it's like Coin Investment Trust and the Ethereum Classic Trust and Zcash trusts, the discounts to any of those things and look at them, I think you'll get a pretty good indication of what the sentiment is. We're on the verge of just tremendous things in crypto. I think the industry, quite properly, is saying, "I need to be shown success." They're right. They want to see the success. Most people will wanna see success. Incidentally, you don't need the world to be invested in Bitcoin for this to be incredibly successful. Don't forget the history of New York Stock exchange democratization, meaning the average person started owning stock. That didn't happen until the advent of IRA accounts in the 1980s and beyond that. New York Stock Exchange was founded, I think, in 1797 or something like that. It took almost two centuries to get that. You know, people made a lot of money in New York Stock Exchange without a lot of stock being owned by the average person. You don't need to have everyone, and that's the point I'm trying to make. It's gonna be successful with or without the participation of the vast investment public. It'd be nice to have them. We don't need them. In the process, it's happening even without them. Just something to be cognizant of. Other factors in that, does the average person own bond futures? I think not. Look how big the bond futures market is. Does the average person trade in currency futures? I think not. Look how big the currency market is. Does the average person trade in oil futures? Look how big that market is. By the way, derivatives market, I don't wanna compare Bitcoin derivatives because it's not the right analogy, but derivatives market is bigger than the bond futures market. Derivatives market is hundreds of trillions of dollars. Does the average person trade derivatives? No, they do not. Look how big that market is. I don't think that the necessary condition of success is broad public adoption. Nice to have it. Eventually, I think we'll get it, but I'm not waiting for it personally, and I don't think I need it. Hope that addresses that question. The last question is also related: Are you looking at FTX claims? Do you believe they will have an outcome similar to Mt. Gox claims? Okay. Am I looking at FTX claims? The answer is no, I'll tell you exactly what my reasoning is. Mt. Gox, there was a hack. Some portion of the Bitcoin was stolen, we knew what that was. What the management of Mt. Gox decided to do is. It wasn't every account that was broken into. It's just if you add up everyone's account, X%, whatever it was, of the coins were stolen, most accounts were untouched. Some accounts had no Bitcoin in it. Some accounts lost some of their Bitcoin. Some accounts lost no Bitcoin. Most accounts lost no Bitcoin. Instead of letting just some accounts suffer, what they decided to do in Japan was they decided to socialize the losses, so everyone had the identical outcome in terms of the loss. That's the way it worked there. We knew what we're dealing with. We knew, okay, they socialized the losses. We knew what the losses were. There's gonna be some bankruptcy fees. We'll have to wait a certain amount of time. The bankruptcy claim traded a discount, appropriate large discount to the amount of Bitcoin we were likely to receive. We knew it was gonna be a number of years. This is different, and the reason it's different is we don't know what was there in the first place. We don't know exactly how much was stolen. All we know is most of it. When someone says there's a claim, they're trading at a big discount to its value, well, that might be true, except we don't know what the value is. We don't know what the bankruptcy trustee is gonna be able to recover. Then there's a further complexification because the Bermuda government has made the assertion that some of the claims are going to be, actually seized by the Bermuda government. Now, obviously, the holder is not gonna be very happy with that. That's an issue that's gotta be resolved in court. I don't know how these things can possibly be knowable at this point in time. Therefore, regard to the FTX, I'm not doing anything whatsoever. I'm not active in it. I mean, I look at it because intellectually it's interesting, and there's no harm in looking, but, not doing anything whatsoever. I hope that answers that question. That was our last question for today. Okay. Well, I thank everybody for the questions. I thought they were pretty good, and I enjoyed answering them. If there's something that occurs to you that we didn't cover, that we should have covered, or it's a brand-new question, don't hesitate to contact us 'cause we will get you an answer if we can. Of course, we're gonna reprise this in about 90 days. Thanks so much for joining us today, and thanks for your support. All that remains is just to say good night, and we always stay and answer every question. Hopefully you enjoyed it as much as we did. Thanks so much. Good evening. Good evening.