What the Crypto Shift Means for Your Money, with Tatiana Koffman

28:09It threatened the industry in a really, really big way. And they persecuted also a lot of people as a result. So I think there needs to be some regulatory framework, but it needs to be reasonable so that people can participate. I think at the end of the day, the debate that's simmering underneath that's not talked about as much is the ability for retail to make real profits, right? So we have these accredited investor rules, which require you to have a certain amount of wealth to be able to participate in unique and new innovative opportunities, which leaves regular people who are working really hard for their money and want to invest and also profitable opportunities, they leave them out in the cold.

28:52And cryptocurrency created this new age frontier where they could come in and they could play with meme coins or they can invest in networks at a much, much earlier stage at a seed or startup level. And they were able to create these like 20X returns and 50X returns. I think it's beautiful that a lot of retail investors got those types of opportunities because if you look at that type of investing in the public markets, usually there is a venture capital company. They'll do a C, they'll do series A, B, C, D, E, F, G. Then they'll go into the public markets at a 20 some billion dollar valuation.

29:31And then you as a retail investor can invest. Well, how much upside is there at that point. Sometimes stocks still do okay. If you invested in Apple early on 10, 20 years ago, you still would have done okay. But for the most part, by the time these stocks get to the public markets, you're happy with an 8 % to 10 % return. Right. And that is because early stage investors, VCs and angel investors, do bear a pretty significant amount of risk and many of the projects that they invest in go to zero. And so the conversation is, shouldn't we be allowed to choose the risk that we want to bear? Why do I want to be parentified by my government to tell me what I can and cannot invest in, right?

30:18So that's the debate. How much do we protect investors and how much do we coddle them? I think most investors would rather have the opportunity to choose than to not. Right. If crypto is not regulated as a security, you mentioned earlier that it has a utility value. Would it be regulated? What else would it be regulated as? Would it be more akin to almost what I think of it? I think of it as analogous to a foreign currency in that similar to forex investing with a foreign currency. I mean, you're converting US dollars into an alternate form of currency that lives inside of its own currency ecosystem.

31:03I think currency is a little bit misleading. It's almost, it's more of a crypto token. Because when you're saying currency, my mind all of a sudden goes to money, right? And currency is money of a certain country. And so a lot of these things aren't really currencies, they're tokens. And tokens are used for different things. So Bitcoin is regulated. It's regulated by the CFTC as a commodity. Ethereum is not regulated as a security. It's been debated in government quite a bit. Gensler wanted to call it a security. But I think the utility value for Ethereum is incredibly obvious because there's so many things that are currently being built on Ethereum.

31:44So you basically need to buy Ethereum to build on Ethereum and to create and run things on top of Ethereum. So there is a definite utility case for Ethereum. When it comes to other things, there will be a framework that is created. So some of these things are securities. So there's this new category, RWA tokens, which give you profit from real world assets. And those should be securities and they should be sold on platforms that have a license because you're buying a piece of a business or a piece of a building or a piece of an asset that generates a profit, right? So that is a security. But then other things which are more akin to Ethereum, which you need to operate within a network, should be more of a technology token that you need to code and operate on a network.

32:30Those things should not be securities. So there will be a new framework created where we will have new subdivisions. And I think under this new administration, it's actually really, really exciting. I think they're talking to the CEO of Coinbase and a lot of really incredible leaders in the space on to how to practically regulate these types of different crypto tokens. Will we start seeing crypto as a payment method option in more instances of our day-to-day lives when we're buying coffee, when we're buying a newspaper or a burger? Yeah, so that's a really interesting question. I think personally, we're just going to use stablecoins.

33:12So it is going to be USD-denominated cryptocurrency, which is USDC or USDT. And I think other countries will have their own stable coins to denominate for their currency. And it's actually a very, very useful tool for the government in terms of being able to charge taxes and track certain types of transactions and just make the flow of capital much, much more efficient and much more regulated to the extent that it needs to be regulated. However, when it comes to Bitcoin, Bitcoin on its own doesn't make sense to buy things like a cup of coffee. It's just too expensive. It makes sense through other alternative layers like the Lightning Network.

33:52So if you go to a place like El Salvador, for example, which I've written extensively about, they do have a place called Bitcoin Beach and they do transact in Bitcoin and they do it on the Lightning Network, which is kind of like a layer two on top of Bitcoin that makes it cheaper and faster and much more practical. There will be pockets of the world that will choose to transact that way. I don't know that it's really needed if you have stable coins that sits in your digital wallets. If you look at somewhere like China, for example, they basically transact now through a digital stable coin. So they have the digital Rumbini, which is integrated into WeChat and a lot of their wallets and apps.

34:32They're basically a cashless society now. You can just go and scan. So I see us doing that maybe in a few years, but not necessarily saying, okay, let me go spend my Bitcoin on a coffee. Right, right. I was in China last spring and I was actually shocked by, I was there for two weeks. I did not see a single paper or coin currency at all. Oftentimes when I travel, I like to save a rupee or a bot or I like to save some of those as like souvenirs. Those are collectibles now. Yeah. And in China, I was like, I literally don't know what their currency looks like. Having been here for two weeks, everything was completely digitized.

35:17Isn't it beautiful? It was. I mean, the prospect of losing my phone frightened me because, man, there's no backup. You should always have a backup phone. I think it's beautiful. I think it's also kind of scary for people because it's a privacy concern. So if you're transacting digitally with everything, then people can track your transactions. But my view on that is if you have nothing to hide, who cares? Who cares if the government can see where you bought your coffee that day? It really shouldn't matter. People talk about how Bitcoin is used for all of these illicit activities, but really it's bags of cash that are use for illicit activities.

35:58Most crime takes place with physical cash being dropped off places. And so actually, if you can eliminate the cash out of the system, you can eliminate a lot of crime that way. Right. But I certainly am sympathetic to on principle, you want privacy. And certainly there could be times in the future where perhaps you are gay or lesbian in a country where in a country that has penalties, legal penalties around that, and you might not want somebody knowing that you spent money at a gay bar.

36:35Yeah, the world is a work in progress. Bitcoin in that sense is the private money in that situation. And, you know, I've interviewed a lot of people who've had to run for whatever reason from Lebanon or Ukraine or a lot of these places. And the reason they were able to take any wealth out whatsoever is because they stored some of it in Bitcoin. And in that sense, you can just memorize your seed phrase and you can leave, right? If you can get out versus if you're trying to run with gold bricks or bonds or stocks or transfer something out of your bank account, those things are not feasible. So Bitcoin is free money in that sense.

37:12You said seed phrase. Can you describe what a seed phrase is? Sure. So on the network, on the Bitcoin network, you create a wallet. That wallet will have 24 words that will give you access to it. And they're randomly generated and you write them down somewhere. You put them somewhere safe in a safety deposit box, for example. Usually it's recommended that you split it into at least two parts and hide half somewhere and hide half somewhere else. You can also memorize it. And so in situations of war, people have run with it just basically in their head. And then it's also recommended that you have a cold wallet to pair with it.

37:51That way, day to day, for example, if you have a ledger, you have a pin code on it, and that's much easier to kind of go in and out and transfer things as you need to. And then long-term, if you lose your ledger or you don't have anything with you, then you have your seed phrase memorized or stored somewhere safely to restore that from the network. But then for your regular daily activities, I would keep that on a hot wallet. So Coinbase has a hot wallet. Metamask is an example of a hot wallet. There's several hot wallets out there. There's Lightning Network wallets as well. So you can go and scan those for coffee if you're in El Salvador or something like that.

38:30So it's almost like there's three levels of security here. One is like, this is my long-term wealth. I don't want to touch it. I want it stocked away as far as possible, as safely as possible. That's on your seed phrase. Medium term, I would use a ledger to access that. And then short term, I would keep a certain amount of money on a hot wallet. And that's the least secure, but that's the easiest to transact with. Right. And when you say ledger for that medium term, you're referring to a cold wallet. Yes. So Ledger is a brand. It just happens to be what I use. This is not an ad. It just happens to be what I use it.

39:05But people use Trezor. There's dozens of different brands. So Ledger is one of the ones. Well, I would say Ledger and Trezor are the ones that have been around the longest. Right. It's kind of a USB key looking thing, but it's not quite. Yeah. I have one and I'm terrified of losing it. But the thing is, if you lose it, it's okay. Because if you lose it, as long as you have your seed phrase, You can just open up a brand new one and you can restore that wallet onto a new ledger. Right. Can you talk about what has happened? You know, El Salvador formally recognized Bitcoin as a legal tender a few years ago.

39:41How has that changed the economy there? El Salvador is booming. Like they've had so many warnings from the IMF and the World Bank that they're going to default on their loans and they're going to collapse. And they, you know, the world gave them all these scare tactics and they're just booming. Like they're buying a Bitcoin a day. They've been buying all through the bear market. So their entire treasury is like 3x right now. They repaid all their loans. They created a tax-free tech hub in San Salvador that a lot of people are moving to now. I mean, Bukele, like, I think he just crushed it. He crushed it.

40:17You know, and the president of Argentina is looking to do something similar now in terms of like his innovative policies there. So I think what you're seeing is a lot of the South America and Central America is now saying, okay, we've been at the mercy of the American dollar system for so long and at the mercy of their economic policy and our Federal Reserve and what we said here, they want to be independent and they want the value of their economy to be attached to something else that's not just America. And so this is a way for them to have an alternative because as history has shown, usually their currencies are not so stable.

40:57The Argentinian peso has a very violent history of hyperinflation, right? And so for them, they said, going back to this unit of account, the peso would have never been the unit of account, right? Anyone wealthy in Argentina or in El Salvador is counting their money in dollars, not in pesos. So this gives them an alternative to that. What's happening right now in Dubai? I know you were just there recently. Yeah, so I spent most of COVID in Dubai. Very, very fond of the innovation that's taking place there. Very particular place. So they actually recently legalized payments in cryptocurrencies, which is great.

41:37They have a very robust framework for exchanges. And it's not just Dubai. Dubai is just a part of the UAE. It's UAE more generally. So between Abu Dhabi and Dubai, there's a lot of incredible regulation that's coming out. And you'll see a lot of the companies and exchanges that have moved there. So Binance is now set up there, for example. A lot of people are moving their businesses there because they feel that it's more friendly, especially given how aggressive Gensler has been over here, right? And that's part of the problem. So we're having an incredible brain drain where not only do we have fairly high taxes in this country, but we now have regulation that's really prohibitive to try new things.

42:19And it's not just prohibitive of like you might not be able to run your business. It's prohibitive in a way of you can start a business at the risk of ending up in jail. And that's a pretty scary thing for a lot of people, right? So if they want to build a business in the space, oftentimes they're looking at other places to go to. And so I'm really hopeful that with this new administration, we'll be able to create a workable system. And a lot of those companies will come back and the new companies won't have a reason to leave. I've just asked about Dubai and the UAE more broadly. You mentioned Abu Dhabi.

42:50But Saudi Arabia is trying to emerge as a player. What is the scene in Riyadh? I haven't been to Riyadh. I have a lot of friends there. So I'm really excited to go and visit some time. Saudi is modernizing. It's really, really incredible to see because even five years ago when I was talking to my peers, female executives, and they would go there, they would give me horror stories of how they would have to behave or what they have to wear or who they could sit next to and things like that. And so it's really, really becoming a much more modern place. They're building tech cities. The alcohol restrictions are becoming looser.

43:25Women can start to wear more modern clothing and drive and do all these things, right? If you look at Dubai, Dubai has created an interesting blueprint. Dubai, Abu Dhabi. Abu Dhabi is this kind of demure, classy place. It's modern, as in the women are allowed to do anything that they want to do, but it's demure, right? So cover your shoulders when you're in a mall kind of thing. Dubai is not demure. you know? Dubai is like the Thailand. Yeah. Dubai is like Vegas of the Middle East is what I called it in my book. So, you know, girls walking on the street with bikinis, beach gallops galore, quite the nightlife.

44:03So if you want that experience, you can go to Dubai. But I think Abu Dhabi is still a place where, you know, I can go dress like myself, go for a nice dinner. I'm just like a little bit mindful of like, maybe I'll throw a shoal over my shoulders or something like that, which to me, I think is like a very culturally reasonable request when you're in a foreign country to be respectful of where you are. So I think Saudi is heading hopefully in that Abu Dhabi direction. You know, we don't need it to be heading in the Dubai direction, but in the Abu Dhabi direction where I as a foreign woman can come and have a business meeting and feel comfortable.

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46:45There's a lot of talk about Africa being the continent that is likely to really embrace cryptocurrency adoption. And a big part of that is partially the population of Africa is very young. A huge portion of the population is under 25. And also partially, many are unbanked and have only mobile phones as their primary method of interacting with one another and with the world. What is the cryptocurrency footprint on the continent of Africa so far? Are there any particular nations inside of that that stand out as places where crypto is particularly flourishing? And by contrast, are there any particular places where it's not?

47:30Sure. So I took a little tour of Africa over the last few years. It's been really interesting to see. So I would say Nigeria is the hungriest for this type of innovation. And the reason why is because they really don't have a stable banking system or a stable currency. But unfortunately, there's also a really thick layer of corruption there. It's been really hard for companies to innovate and build in Nigeria, even though the market is hungry for it. A lot of times the young people will come to more of the decentralized marketplaces. So they'll trade on DEXs through DeFi, and we can talk more about that later.

48:07But, you know, places where they can show up anonymously and participate in crypto economies. And for them, it's a lifeline for many of them. It's a way for them to participate in the global marketplace in a way that they couldn't before because those people, they don't have access to the American stock markets. It's like we said earlier, the returns in the stock market aren't always that great versus in crypto. They can start with a very small amount of money. Sometimes they can start with no money because a lot of networks out there will give you airdrops, which is if you're coming on and you're testing something and you're an early adopter, you'll get kind of a gift of a few tokens here and there.

48:49And so they'll start with nothing. Then they'll accumulate all these gift tokens and they'll trade them into something. Then they'll trade them into something else. And lo and behold, the really talented ones have been able to trade nothing to a million dollars or millions of dollars. So for people that they don't have a lot of opportunity domestically, this is a way for them to engage globally, especially for those that are brilliant and talented. And that's really wonderful to see. Kenya has had a more moderate approach. Kenya has a lot of regulation left from colonial times from when it was under Britain.

49:22It has a bit more of a stable system. It's still in Africa, so it still has certain growth aspects to it. However, they have mobile money, so they don't have as much of a need for day-to-day stable transactions. They have M-Pesa for that, but they're innovating and trying to integrate money in other ways. Ethiopia is a really interesting place. Cardano does a lot of work in Ethiopia. Cardano is one of the big players in the cryptocurrency space. And they are actually finding ways for people to make everyday payments in Cardano for things like utilities, which is really neat to see. South Africa has been looking into crypto as well.

50:01I'm unsure what the latest is there, but when I was there maybe four or five years ago, I know the presidential family was very, very involved in the innovation there. And they were throwing conferences and inviting global leaders in the space to come and speak and find ways to innovate in the country. So, again, I think Africa also doesn't want to be beholden to the U.S. and to our currency. So they want to find a different way to engage with the world economically. Over the last few years in particular, unfortunately, Africa is – parts of it are siding with China and Russia because of all of these economic sanctions.

50:40So you have BRICS, which is meant to be an alternative alliance to what we have here as an economic union. And they're talking about creating their own currency. That's unlikely to happen. Yeah. Yeah. I've been reading about that. They're trying to build their own payment rails to create some type of an alternative currency that they're hoping will be the world's new reserve currency or at least an alternative reserve currency. Creating a stable currency is really, really hard. I think people just assume that money is fine everywhere and it's just not creating something that's stable that doesn't hyperinflate away.

51:17It's just incredibly difficult. And so history has shown that unless you back your currency by something like gold, your currency will inflate at various rates. So the currency in America also inflates, but we're trying to keep that to a moderate amount. Although the last few years have been not great for inflation in America. I think we're reporting at 3 % now or somewhere in that neighborhood. 2.6 as of October. Do you feel that it's 2.6 when you go to the grocery store? Do you feel that it's 2.6 when you look at the real estate prices? Do you feel like it's 2.6 when you look at the rest of your monthly bills?

51:53Because I feel like it's much higher than 2.6. Well, 2.6 is the current rate. So if you're driving a vehicle down the road, right, that vehicle was accelerated at 60 miles per hour. Now the vehicle is accelerating at 20 miles per hour. The vehicle has still traveled down the road. So the inflation rate, which is the rate at which that vehicle is traveling, is 2.6. The prices are higher because in previous years, in 2022 and 2023, the inflation rate was higher. And those prices are fixed because we don't live in a deflationary environment. That's a really great explainer. I still don't think it's 2.6.

52:33Even if you're just looking at inflation growth, I don't think it's 2.6. And the way they calculate inflation, a lot of times they'll take out things that are incredibly high because they'll consider that an outlier, but it'll be things that really move the needle for people, like the price of food. So when you take out certain items out of the basket from there, you're not giving people a full calculation. But both core CPI as well as you're talking about the difference between core CPI, which strips out food and fuel versus more broad CPI. But when you look at all of the indicators, CPI, core CPI, PPI, when you look at that whole basket of indicators, we do have a low inflation rate.

53:14I just don't think it's true. I don't think that the reporting that we're getting in terms of CPI and core CPI and PPI, I don't think those numbers are accurate. And I think most Americans would agree. Like if you look at where prices were in 2020 and the inflation rates that have been reported since 2020 and you add those up, where we're at price-wise is much higher. Most people feel like their shelter costs, their food costs, their transportation costs have gone anywhere from 30 to 40 percent. Certainly there is a feeling which is subjective sentiment. But I mean, a major allegation like they're misreporting the data needs to be backed by something.

53:59Yeah, I think when you look at the price of groceries, when you look at the price of rent, when you look at the price of fuel, and then you're looking at what the CPI comes back at, it does not feel aligned. It doesn't feel, but what do you have to back that? Sure. I don't have the numbers to back that for you right now. Yeah. Unless there's some type of evidence. There is no evidence to back that the inflation rate is different than what has been reported. I would gander to think that over the next couple of years, as we start cleaning house in a lot of ways with this new administration and clearing up a lot of the bureaucracy and auditing a lot of the work that's been done over the last four years, we're going to see different reports for different things.

54:42If evidence comes up, I'm happy to look at it. Okay. But there is none as of right now that I'm aware of. But go on, you were talking about BRICS trying to create a new fiat currency, a new payment rail system that would be some alternative to using the US dollar as a global standard. Yeah, so the likelihood of them issuing a new currency that's actually going to be sustainable and do well is slim to none. Exactly. Yeah. So I don't think that's the threat. I think the threat is them figuring out how to trade completely outside of the Western Hemisphere, because obviously we benefit from that business as well.

55:20And so is Africa then accelerating its adoption of cryptocurrency? Is the objective to get away from the U.S. dollar or is that a side effect? The objective is to get out of the U.S. dollar and also just out of the influence of America as the leading superpower. And I think America has sort of walked into that one, right, with the sanctions against Russia and then Russia turned to China. And now Trump also, he wants to tighten trade with China and bring a lot of that, the manufacturing home. And, you know, as you said, there's economic reason for that. But I think the more we do these things, the more it becomes clearer to the other side that they need to be more self-reliant and create their own alliances, which is what they're trying to do.

56:10Do you think that the U.S. dollar will continue to be the world's reserve currency? I think it will continue to be the world's superior currency. It'll be the best out of the choices that we have for the foreseeable future. Reserve currency? I don't know. I think if Bitcoin delivers in the way that we expect it to deliver, if it starts being an asset held in global treasuries, if we do put it into the US reserves, if other countries start to adopt it, then I foresee a future within the next 10 to 20 years, Bitcoin could be the world's reserve currency. and by the way it's really hard to sit here and say i hope this happens or i hope this doesn't happen because as someone living in the u.s i want us to have the dollar as the reserve currency because it gives us so many benefits globally so many economic benefits but it's difficult to continue to imagine for that to be the case down the road many people were scared off of cryptocurrency with the collapse of FTX.

57:24There were sort of three parts to that saga. So there was the collapse of FTX. Prior to that, there was Three Arrows Capital. And prior to that, there was, remind me, there was Luna. Luna. Can you explain what happened? Like that three-part trilogy? Yeah. So Luna was one of these innovative networks that was created. And Luna created and algorithmic stablecoin. Most stablecoins, like I talked about, USDC and USDT are backed one-to-one by the dollar. There's another sort of sect of these stablecoins that are meant to act like the dollar, but they're not actually backed by the dollar. They're usually backed by a basket of things, could be the dollar, Bitcoin, a few other currencies, and then there's a rebalancing algorithm that happens to kind of prop them up.

58:17What ended up happening is someone took a really, really big short on Luna. There was two tokens. There was the actual Luna stablecoin, and then there was Luna, the governance token, and the two of them had to stay in perfect balance. And so someone took a really, really big short on the governance token and then collapsed it. And basically the stablecoin got out of whack and then the stablecoin collapsed. And they were trying to back it up as quickly as they could, but basically the thing didn't survive. And so the algorithm got battle tested and it failed. Why this was particularly significant was because of how much capital was locked up.

58:57I think between the two coins, there was over$30 billion locked up. And there was a bit of a domino effect because if you staked the UST, which was their stable coin, you could earn a very high yield to like 26 % on their platform on Anchor. And so a lot of funds put money into this protocol to earn that yield for their investors. And then some of these funds went a step further and they would actually borrow money from places like Gemini. Gemini Earn got caught up in this. So Gemini Earn would promise, say, an 8 % yield to their investors. They would take the money that people put in and they would lend it to Genesis.

59:45And Genesis would give them a spread on that. And then Genesis would turn around and give that money to Three R's Capital. And then Three R's Capital would put it into anchor and earn 26%. So everyone got paid a nice little spread on billions of dollars until the thing underneath it became worth zero. And so one by one, these companies started to collapse. FTX also had a large holding of Luna and these related assets. And so FTX also had a hole all of a sudden that they didn't expect to have. But FTX actually had a lot of other problems. So, and actually, Sam Beckman-Fried, I know him a little bit personally and not to excuse anything that he did, but I think he got an incredibly raw deal and he's on appeal now.

1:00:36And hopefully, they'll give him a more reasonable sentence because I don't think that he deserves to be in prison for life for what he did. But basically what happened with FTX was they had a hedge fund and a VC fund called Alameda. And Alameda was investing in all kinds of things. And then they said, okay, well, we're trading a bunch of money in Alameda. All of these exchanges aren't that great. Why don't we just build our own? Because we're so good at what we do. And so they created this like pet project, which wasn't supposed to be a big thing. It was supposed to be a pet project for them to trade their own capital called FTX.

1:01:08and then FTX ended up being the best exchange we as traders have ever seen. You know, I run a hedge fund and we trade 24 seven. That was the best exchange, a crypto exchange we have ever seen or really any kind of exchange. It was an incredible exchange and it was an incredibly profitable business. And so he set up a new company for FTX. Then when people started putting money on FTX and trading on it or just using it as kind of a digital bank in a lot of cases, They just assumed that it was perfectly safe because of how well it was backed by celebrities and politicians. Sam did a really great job at donating money to all the right places and paying for the right endorsements.

1:01:50And then in the back, you know, call it, I don't know, youthful mismanagement. You know, there's a debate as to how malicious all of this actually was. he basically took the money out of FTX and gave it to Alameda to make investments, which is fraud, right? That is blanket fraud. So he took money out of one pile, put it in another, didn't report it properly, didn't disclose it to investors. Then he took that money and he invested in a bunch of companies. But here's where it gets really interesting. He invested that money really, really well. So in the bankruptcy proceeding, now we are like two years after the fact of this collapse, and now the bankruptcy proceeding is nearly complete, everyone's getting paid back what they put in.

1:02:39So they're making everyone whole, at least in dollar terms, maybe not in Bitcoin terms, but at least in dollar terms, everyone's going to get their money back. And so now we have this kid who is in prison for life for this mistake that he made that was essentially a victimless crime where a lot of people are getting their money back. So hopefully now that he goes on appeal, he'll be able to get a different type of sentencing that's a little bit more fair to this crime. I've heard people argue though that given that they're not being made whole in Bitcoin terms, had that money remained in Bitcoin at the time in which they invested it, they would have made significant gains in these interim years.

1:03:19And so they've missed out on those gains. It's a fair argument. However, and most times in bankruptcy proceedings, people don't get paid 100 cents on the dollar, even in dollar terms. So I think that this is an incredible outcome for investors. And I will say that those investors that really, really wanted to get out a year ago before the Bitcoin run had the opportunity to do so. So you could have sold your claim in as much as 75 cents on the dollar during those times and reinvested it back. So there were opportunities for people who foresaw this run and wanted to take advantage of it to not miss on all of it.

1:03:58For the average person who is thinking about putting a portion of their portfolio into cryptocurrency, but they're scared off by the FTX collapse and they're scared off by what we know is a recent history of major fraud in this space, how can the average ordinary investor develop that confidence? I think Coinbase is an amazing company. They're very well regulated, very well protected. Brian Armstrong has done an incredible job leading that ship. People have been hacked because they're not careful with their passwords. So I will say that as a caution. If someone calls you and says, oh, we're from Coinbase, we just sent you a verification code.

1:04:38Can you tell us what it is? They're probably trying to hack you. Don't respond to that phone call. Generally, Coinbase itself has not been hacked. Coinbase is also the vault provider for a lot of the ETFs that we have in the space. So they are considered to be a good enough fortress for Wall Street and BlackRock. So I think if you want to keep your Bitcoin on Coinbase, provided you set up your security and your double and triple authentication on it correctly, you should be okay. You also have the alternative of just buying a Bitcoin ETF in your Roth IRA or something like that. If you want to play coins and you really want to go and do the whole meme coin thing and the altcoin thing.

1:05:17You can do some of it on Coinbase or you can do it on some of these decentralized wallets like the one by Coinbase or MetaMask or there's a few other providers, Phantom for Solana. There's a whole slew of them depending on the ecosystem you want to play. Speaking of which, what is a shitcoin? A shitcoin is a small cap coin that doesn't have any inherent value. A concept that I'm really fascinated about this cycle is nihilism. And I think it has to do a lot with this inflation conversation that you and I just had that we're at a small disagreement over. But I think a lot of people feel like they're really, really struggling.

1:05:56And so$500 to them in the savings account does nothing. Even if they invest it, it does nothing. But if they gamble it and they gamble it well, it could change their life. $500 can be the start of something really, really beautiful, especially in the coin space. And it's no different than how people used to go to the casino back in the day or bet on racetracks or all that kind of stuff. So because it's become inherently so much more difficult to save and to invest the traditional way, people have turned to gambling. And they gamble on coins. The hot coins this cycle are meme coins. The idea here is that you create some sort of a brand.

1:06:38So Doge, for example, is one of the most famous meme coins. The brand is a Shiba Inu. And then there's the derivative of that, which is Shiba Inu, which was created on top of Ethereum. We invested recently in a coin in our very, very professional hedge fund. We invested in a Solana meme coin called Department of Government Efficiency, which boomed as soon as Trump won the election and the announcement that Elon was going to run this new efficiency coalition took over. So it's just a way for you to get behind brands that you like. But in that sense, it's no different than saying, okay, I'm going to go buy a Supreme t-shirt for 500 bucks over what it's worth because I like the brand.

1:07:20So it's kind of like that. You get behind a brand and then the price of it goes up and then people sell it when they feel like they want to sell it. Not meant to be serious, you know? Yeah. It's the fun gambling, the Vegas gambling. Yeah. Yeah. And I think that's important to say, like, this is not meant to be serious. You're not supposed to use real life-changing money on this. You're not supposed to like gamble your college fund or your retirement on it. This is just a fun thing. So take the amount that you would take to a casino and have fun with it. And if you win, congratulations. Yeah. So meme coins and coins are sort of the fun Vegas casino gambling side of it.

1:08:00But for ordinary investors who are looking for practical investing advice, what would you say? So I think number one, make sure you have exposure to the Bitcoin asset class, whether it's Bitcoin in cold storage or on Coinbase or through an ETF. There's alternatives that you can also invest through like MicroStrategy, although it's much more volatile. So I would expect maybe 3x volatility on MicroStrategy than I would on regular Bitcoin. So keep that in mind when you're investing. But you must have some exposure as your retirement, as your long-term savings account. And there's ways to automate this where you can send$500 a month from your bank account automatically to Coinbase on a lot of these platforms.

1:08:43And then I would set aside a small amount of capital and come and play in the alternative asset space and see what you like. There's a lot of innovation that's taking place from decentralized infrastructure and finance to AI, and it's all happening in this new financial sphere. And so there's a lot of incredible upside, both if you're playing these assets in the traditional space and in the decentralized space. Excellent. Well, thank you. Where can people find you if they'd like to know more about you and your work? Sure. So my Twitter and Instagram is at Tatiana Kaufman. I also have a weekly newsletter called Myth of Money, and that's on my website, mythofmoney.com.

1:09:25You can subscribe there. And it's a sub stack that comes out every Sunday. And I give you a quick market recap and some investing tips. Great. Thank you so much. Thank you.

1:09:37Thank you, Tatiana. We covered a lot of ground today from big picture developments like Bitcoin ETFs and El Salvador's experience with cryptocurrency to more practical considerations about how regular investors might approach this space. One thing that absolutely fascinates me are Tatiana's insights about how different regions are approaching cryptocurrency. We talked about Dubai's emergence as a crypto hub. We talked about Africa's potential as the next frontier for adoption. We talked about how various developing economies are using crypto to reduce their dependence on the US dollar. She and I are both in absolute agreement that the BRICS countries are not going to be able to develop a cross-payment system.

1:10:24She and I both agree that the probability of that actually happening is very, very, very slim. And now the latest news as of yesterday is that President-elect Trump is threatening to impose 100 % tariffs on the BRICS countries if they continue their attempts to develop this alternative cross -payment rail system, which I think even further reduces the likelihood that the BRICS will be successful in doing so or will even want to continue doing so. So it's an enormously fascinating space. I really appreciate Tatiana's frankness in distinguishing between serious investments versus the meme coins, which she describes as essentially gambling money.

1:11:11And it was also really interesting to get an insider's perspective on the FTX collapse, which I think helps give that saga more context. And although we did disagree about inflation data, I think that that exchange highlighted something important, which is the gap between economic data and lived experience. That gap is something that we need to discuss openly while also maintaining our commitment to evidence-based analysis and first principles thinking. I loved this discussion. I hope you got a lot out of it. please find me on Instagram. Send me a DM. Let me know what you thought or leave a comment under any of my recent Insta posts.

1:11:57I'm there at Paula Pant, P-A-U-L-A P-A-N-T. You can also find Tatiana on Instagram or LinkedIn or X. And her book is The Myth of Money. The links are in the show notes. Thank you so much for tuning in. My name is Paula Pant. This is the Afford Anything Podcast, and I'll meet you in the next episode. Thank you.