We need to talk about crypto

29:56But that happened once with the internet the dot bubble really and maybe there's been like little bubbles throughout that tech bubbles magnificent seven recently these kind of things 30 yeah yeah but with bitcoin so there's this predictability around the harbing which is this idea that it's got built into it that the supply the miners can pull out of the ecosystem or the the blockchain halves every four-ish years or whatever

30:22the when does that get priced in it's to the point of now that we have massive institutional adoption, we have ETFs in America, and we have a lot of money in there. We can see that if you track the halving, so how much does Bitcoin go up after each of these periods? It diminishes each time. So 15 times, seven times, three times, one day it's not going to drop. And what I'm saying, you know, people go, the crash is inevitable. And I'm sitting here now and people are going, it's going to go crazy after the halving. Maybe it's priced in and in the stock market, if we learn from the stock market. And I think what crypto investors fail to do is learn from the stock market because it's all learned from history yeah like what i'm saying is there's an asset class there that's basically done everything that crypto has done in you know these wild swings and all of the pump and dumps and all of the stuff that was regulated out of it it tends to calm down over time yeah and you know how much of that how could that be possible like i mean with the introduction of bitcoin etfs i reckon bitcoin volatility will fall yeah dramatically okay if you look at gold volatility before there were gold ETFs, gold volatility was about, so volatility is like how much an asset price tends to move around its mean, around its average.

31:32I think that the volatility of Bitcoin prices will drop with the introduction of ETFs. But I think, you know, if you look at it, it's been dropping steadily over time since Bitcoin got a reference rate in 2016. So a reference rate is a single source of truth price that someone can point to and say, So it's the same everywhere in the world. That's the price of Bitcoin. You know, it's not 3.567, you know, it's like exactly three or whatever. And that's, you know, six years ago, I think it's taken a little bit more time than I expected for Bitcoin's volatility to calm down. Thank God. Because I don't want it to calm down.

32:12Bring on another little crash, I'll load up a bit more. I mean, it does follow a logarithmic curve, you know. As you say, like six times after the first, sorry, 10 times after the first halving, six times after the next halving, four times after the next one after that. Yeah, it'll get to a point where there's so much money sloshing around in it. And if there is that much trust that it won't move down dramatically because people have been like, we've been here so many times, you know, we know. And if it's going on to balance sheets of businesses and stuff, they're not going to go, we'll see you later.

32:42like every time it drops 5%. I mean, there's so much regulatory stuff to do around Bitcoin. Like, can banks hold it? Okay, so the biggest custodian bank in the world, Bank of New York Mellon, started custodian Bitcoin in like 2020. So it's not very long ago, you know. And people like, you know, you can't have, in this country, like even professional investors haven't been able to invest in like single asset ETPs, which are like exchange traded product. So that's just an asset that trades on a national stock exchange like the Deutsche Bursa in Germany or London Stock Exchange in London. So the access to this asset has just not been there, you know, for the average institution or the average professional investor or even high net worth investors.

33:29But like 80 % of high net worth investors want to hold crypto through a financial institution because they're not unshaven, like Reddit obsessed cyberpunks, you know. And they don't trust exchanges and... They don't trust exchanges. I don't trust many exchanges. And the concept of them putting on a ledger, like it's so foreign to them. If they've got millions in, like with advisors and in banks, they're like, why do I want to carry like all this money on a little hard drive? It's like having your wages under your mattress, isn't it? Yeah, I mean, and I don't want to be my own bank because I'm stupid.

33:58And like my dog would eat it or like it'd fall down the side of the sofa or like I'd lose it. And it's like, oh, there's 30 grand. Well, where's it gone? That was the promise of crypto. It's like self-sovereignty, self-sovereignty of assets. But like most people see that as like a bug and not a feature. Yeah, the banking system is useful in a lot of ways. It is, you know, and we outsource that risk to them. We outsource that, you know. It gives you a lot of peace of mind in the sense of - You don't have to think a bit, but you might be getting screwed over. Yeah, but imagine the days when you carried a bag of gold coins on your waist and every highwayman was just jumping up and robbing you constantly.

34:35Like the banking system removed that. And yeah, they're highwaymen and they're robbing you in a different kind of way. I get it. And I know that the system is not perfect, but it's certainly removed a lot of stress around, will my money be there tomorrow? Yeah. So let's talk. I think the most interesting, the conversation I want to have with you today in the most detail is. Last time we recorded, Tomei, and you were having some real dramas with your accountant. So how's that been going, mate? They're sacked. So drama sorted. They're a big corporate firm. They didn't really reply to my emails very quickly, like took a week or two at times.

35:10And they charged me way too much. I mean, I've got pretty simple taxes and they were charging me thousands. They saved me some money, but yeah, I had to move on. Slow and expensive. Pretty much, yeah. This is one of the reasons that we're really happy to be partnering with TaxApp. It's a tech platform that makes self-assessment simple. Whether you're self-employed like me, a freelancer or a director like Damo, big dog. Instead of sending endless emails, bills and spreadsheets to your accountant, you just connect your bank, answer a few questions that are only relevant to you, and your tax return can be ready in as little as 15 minutes.

35:39TaxApp is really easy to use and it's HMRC recognised software, so it's safe, secure and legit. The price is also decent, so if you're self-employed with one income stream it's just£89 as a one-off fee, no big accountancy fees and we also have a discount code of course. If you need to file a self-assessment this year, give TaxApp a try. We've left a link in the description and use the code MONEY10 for 10 % off your first tax filing. That code is MONEY, M-O-N-E-Y 1-0. so mr carolet i hear you are a salesman elite salesman yes one of the best they say i've got a little bit of experience in the game yeah i could say i've done a few deals uh bill a bill what what would your compliance team say about you they will say that i am always nagging them and that um essentially i just have i have beef with compliance i love the team compliance slows down all my deals because every time i get to the finish line they've got to check documents kyc GDPR and it's just a nightmare it slows the deal down by like two three weeks it's always on both sides as well isn't it sometimes it can be blocked on the other side exactly well that's where today's sponsor can help indeed Vanta helps companies of all sizes get secure and compliant fast and they stay that way they do it by automating compliance with over 35 security and privacy frameworks like SOC 2 ISO 27001 and HIPAA yeah all of them and this saves businesses so much time and money According to a recent IDC study, Vanta customers save over half a million dollars a year in costs.

37:07Not bad. And they also help you complete security questionnaires up to five times faster, which is great because everybody hates filling out forms. If you're a business that needs to prove security and compliance, visit Vanta.com forward slash making money to sign up for a completely free demo today. That's Vanta.com forward slash making money. There's a link in the description though, so you can just click that. you get people that are like all in crypto it's going to change the world it's it's going to it you know if you're not in it you're an idiot enjoy being poor when lambo and then on the other end of it you've got like stupid kids don't know what they're on about um you know it's tulips whatever yeah i mean oh sorry i don't mean to be ageist okay i'm just talking about the people in my comments this is this is just general reflection what i'm interested in is the person in the middle that's like, I'm not really sure.

37:59It looks okay. Like maybe I'd like a little bit. So can you just first of all, give us a background on your history around the ETC market, was it, that you were in? Yeah, sure. So I was, for the last three years, I was head of research at ETC Group, which is, they run the largest Bitcoin fund in Europe. So that's about 1.5 billion of assets under management there. I'm out of there now. I'm doing my own thing, writing. But while I was there, I was researching what is the effects of a small amount of Bitcoin and a small amount of Ethereum in a classic 60-40 portfolio. So a classic portfolio would be 60 % equities, stocks and shares, and 40 % government bonds, 60-40.

38:41And if you take 2 % out of the stocks and shares and 2 % out of the bonds, then what you find is with either Bitcoin or Ethereum, your returns are effectively doubled over the last seven years. Yeah. I know that was private research, but you linked some other research and it showed from 7 % to 14%. And if you had Ethereum, it was like 16%. Correct. Yeah, correct. Which is a significant jump over a lifetime. That's going to make millions of pounds. Exactly that. Exactly that. I'm just listening back to this and I want to clarify that these are the returns in a rebalanced portfolio. What that means is the cryptocurrency would be sold if it became more than 4 % of the portfolio until it is back at 4%.

39:25If you want to read more about this research, we've linked it in the newsletter for you. You're not even suffering max, like a huge amount of drawdown. So I mean, I see max drawdown is just max pain. Like you don't want to turn around one day and think you've got a hundred grand in the bank. And because you've over-invested in a risky asset class, now it's like 43. It's like, oh dear. Yeah, the amount, when you say max drawdown, you mean the amount of volatility or the amount of swings, the amount that you could log on one day and how much it's dropped. And I think what people do is they look at Bitcoin and go, it drops 70 % in a day.

39:58I don't want that. What they don't realize is 70 % of 1 % of your portfolio is what you're basically saying. Exactly that. Yeah, yeah. So it's just about, I mean, let's say, I mean, professional investors do not buy single things. They allocate to asset classes. And I mean, I don't know the last time an asset class was created, but it certainly wasn't in my lifetime. And so I think you just have to, even if you don't believe in it, it's going up. It has belief, it has faith. I think you would be wise to probably allocate a very small percentage of your overall portfolio to Bitcoin or Ethereum.

40:38So just to flesh that out, let's say, what was the percentage you said there? 4%. So 2 % of each. So if you had a million quid, you'd put 20 grand into Bitcoin, 20 grand into Ethereum. Correct. You'd still have 960 ,000 pounds in stocks and bonds. Yeah. And that would have doubled your returns over the last 10 to 15 years. In that little bracket. Yeah, that's pretty crazy, right? It's not bad. But then, you know, if it does crash to nothing, then what? You've lost 20 grand. Yeah, you've lost not much. I mean, for me, it's like, you know, 100 grand, I'll put two grand in Ethereum, two grand in Bitcoin, you know?

41:12Yeah. 100 grand, I'll put like 50 grand in Ethereum, 50 grand in Bitcoin. Just like my mate. And I want to talk to Sean. Sean, you're trading. Take some profits, please. Please take some profits. Yes, take some profits. Shout out, watch your mate. Your brother who watches his show. My brother-in-law, Ian. Oh, yeah. Shout out, Ian. Thanks for watching. Keep watching. does he invest in crypto as well or no he's been cornered by me too many times that's the problem isn't it it is because you get obsessed by this man like I'm a nerd you're a nerd for some people it's for Ian it's Star Wars for me it's Star Trek and crypto for my little I'm obsessed with June why do you think people in crypto are so passionate because mine's basketball and crypto and I will talk to anyone about it I'm that guy at the parties and everyone's having a good time I'm like guys are you investing in Ethereum and I'll go off and I'll always find some person who will talk to me, but like why are crypto people so enthusiastic?

42:04I mean, for one thing, it's, as I said before, it's a weird smashing together of lots of really complex technologies. And if you love maths or you love like, you know, I mean, I will never be a cryptographer because I haven't got another 50 years to do like 10 PhDs to figure out how it works. But like it's intricate detail. For some people, you know, they've seen other friends of theirs who are not any smarter than them, like get stupid rich, you know? But to me, if you're - Lucky though. 100%. And luck doesn't mean it's something to good investment, right? No, it absolutely doesn't. And also like, I think if you are buying meme coins at any point, you know, you don't need me to tell you what to buy.

42:45You need like counseling for your gambling addiction. Yeah. You know? You seen that guy, he's like a, he's one of the red pill kind of people. And he controlled 1 % of pancake swaps, whole like supply, like the whole supply of PancakeSwap when it was 20 million and it shot up to 2 billion. So the guy made a shitload of cash really quick. And now he sits there telling everyone how to get rich. And I'm like, you're a degenerate gambler, mate. You put 2 million quid into PancakeSwap. Like you rolled the dice. It's like someone walking out of a casino going, I just landed, I put a million quid on 27 and that's just landed.

43:19Now I know how to gamble. It's that kind of - Yeah, that's right. And you might get lucky, you know, but you might also - Survivorship bias. You might put your life savings into something that you don't understand. If you don't understand crypto, don't buy it. Why would you invest in something you don't understand? You don't have any idea what it does. And you don't know if it makes any money. And it probably doesn't. Like, okay, so I own, other than Ethereum, I own six stocks. And I do about 18 months or two years worth of research in the background. because if it's not, you know, I'm going to miss like the early bloom of it.

43:55But like, if it's not there after two years, I don't want to own it, you know, because I'm trying to think about 20 year investments, 30 year investments. But like, that's the level of research I think you need to go into a single asset, especially if it's going to be a significant part of your portfolio. Would you call one to 2 % significant or could someone just pick that up as like a broad? I would say, I mean, it depends upon your risk appetite. Right. Some people have to be a bit more adventurous. Some people are young and, you know, they've got time on their side. They can be a bit more adventurous than if you're sort of approaching retirement.

44:27I probably, you know, probably wouldn't. I would say for the average investor, one, three, five percent would be the max. So you said you did this research, four percent holding to crypto reduced, you know, almost a doubling in the returns of a 60-40 portfolio. but you have 25 % exposure to just Ethereum. Why don't you follow the research? I'm more of a conviction investor than that. I mean, the research is for kind of like the average professional who maybe doesn't know a lot about crypto and is not willing to tolerate the kind of volatility that having more than 4 % out of their 60-40 portfolio.

45:09I mean, I don't own any government bonds because I don't believe that that's a risk-free investment. um i'm more a conviction investor in ethereum me personally it does introduce much more risk and much more volatility to my portfolio but i'm willing to contain that yeah yeah i mean i don't see volatility as risk in my eyes i just think it's part of the ride you know risk and reward okay i've got another question it's just a selfish one sure what's your exit like ladder look like in terms of selling along the way? I mean, I try and keep it at that max 25 % level. You know, I try and sell it down to 20.

45:47Like, I just basically take profits on the way up and DCA backing on the way down. Beautiful. Yeah, it's horrible though when you cut, say you take 5 % out and then it doubles in price. It's awful. You feel like you're taking, you're stealing profits from your future self. It's true. But I mean, but trust me, it feels much worse when you lose 80 % of your value. You'll never, you'll never forget the day. I don't. When like it went up to a hundred grand from like a quid and then you never sold. And it went back down to a pound because you've been shoving it in everyone's faces the whole time saying, I'm a genius.

46:26I'm going to be a millionaire. And now what are you? The worst thing I had a whole, a whole like six to eight months to sell. Didn't sell. So obviously sort of a little bit when on holiday, but didn't sell like the bag. Yeah. I just held it till now. When I was working full time, there was this lad who was like an admin and he was probably on like 20 grand a year and he bought a load of NFTs for like a few quid and each went to 12 grand. So he had like 10 of these things and he was like, I'm just going to hold them because I'm going to be rich. I was like, mate, you have won. Sell. You have done the thing.

46:51You went from a quid to 12 grand. Like that is the movement. And it's surprising to me that people like 100X something and go, I'm not rich yet. So you've done the thing. To be honest, man, it's not surprising to me because again, that's human OS, right? you get something that you think is going to make you rich, you get rich and then you want more. And you're thinking, I'm not going to just pay off my mortgage, I'll pay off my mum's mortgage. You know, like I want to be able to help my future generations and help my brother out and help my sister out. Do you know what I mean? It's not a surprise to me, but if you do get there, please take some profit.

47:24Yeah, yeah. But don't invest in altcoins. It's not an investment, it's gambling, but my opinion. So, you know, the research focuses on, it's called a Sharpe ratio, isn't it? That's correct. This is this idea of what can you introduce to a portfolio that produces return without increasing the risk too much. That's right. And this is this point around, and I think this is who I want to speak to, the normal person sitting there going, should I buy this? This 1 % to 2 % might just juice your portfolio a bit. But now we're sitting at all-time highs, you know. And for those people, what's the best way for them to buy?

47:57If they go, yeah, okay, 1%, 2%, I'll get my head around that. I'll build it up so I've got a few grand in whatever. When do I buy it? Do I wait now to the crash? Do I buy it every month? Do I? I mean, I'm not giving you financial advice because I'm not a financial advisor. Please do. That's what we're here for. We'll turn it into a real address. We keep asking everyone and no one's giving it us. We're going to sit here. The SWAT team from the FCA is going to break down. I would DCA. Yeah. I would buy, I would put, if you want to buy some crypto and I think, you know, the London Stock Exchange has just maybe in the last couple of days said that you now can buy these single asset ETPs in Bitcoin and Ethereum.

48:35I don't know when they're going to list them yet, but that's going to trade on the main market, I think maybe by Q3. It'll be like dominoes, aren't they, around the world? Now they've seen all the inflows into the ETFs in America and the amount of money they're making. I think the ETF inflows outpaced gold inflows. These are the records that gold used to hold. Yeah, so the dollar cost average then is just, I buy a bit every month. It's the same, I mean, anyone listening to this is probably doing the same with an index fund, a global index fund. So you're just saying, okay, a few quid, I'll do that.

49:01But how do they do that in a safe way? because first of all exchanges are dodgy as hell and they're expensive and in the UK we can't yet buy these ETFs or not easily you might be able to backdoor it into America somehow but yeah I mean I personally I buy on Coinbase yes I was going to say it but I didn't want to shout them out that's what I know that's what I do you know that's what I've always done full disclaimer I also own stock in Coinbase okay but yeah I've always bought Coinbase because I just thought better the safest most of the world they're the ones that I trust and I know I get shouted at by one section by not holding my own keys.

49:37You know, not your keys, not your coins, but I'm lazy. Do you do it in a Coinbase wallet? Yeah. You've got a Coinbase wallet. How safe do you think a Coinbase wallet is? So just for people to understand, there's Coinbase exchange and then there's Coinbase wallet, which is, they don't hold the keys to that, but it's on your phone, right? Yeah. How secure do I think it is? I mean, it's relatively secure. I can't speak to the security of it, to be honest with you. Do you know a$5 wrench attack? you heard of that no a five dollar wrench attack is where someone hits you over the head with a wrench until you give them your crypto so this is so the only reason I say this is because my mate he's a doctor and he's got another mate who's a doctor funny that so they he said he was walking around London at night and some and four like lads jumped him and he could get your phone out and they were punching him in the face he put his phone to his face went on went on to his coinbase wallet flung all the crypto out of it so this is the kind of this is in terms of safety, this is what I'm thinking about.

50:34For the record, I have no crypto. Do not come in. I don't have a phone. I don't have a phone. I have no crypto. I have no ledgers. I'm not happy for Bitcoin conversations. I do not know anything about crypto. So I think about this often in terms of, you know, laziness and... Yeah, that's true. I mean, look, you know, it's something that we all tend towards. Like, even people who've been in crypto for a long time, they don't self-custody. like I was thinking in the FTX crash like I think Larry Sermak who's the head of research at the block he had quite a lot of money in there and quite a lot of you know respectable sort of like people who I follow like also had quite a lot of money just held on the exchange should I take some out stick it on a pen drive and stick it in a safe somewhere along with like you know property deeds and a 45 handgun maybe I dream of that I've told you this before I want you know gold bars few different dossiers moleskin and then just some like...

51:29Research, deep research. That's what I'm saying. Scarce value currency. Things you could use in the end of the world, mind. End of the world insurance. Yeah. And then, but like, no, seriously, safe deposit box maybe with insurance. But then how does the insurance work? If this thing's doubling every few years in price. Yeah, and do you trust the insurer? Yeah. You know, do they have the, are they the gate to you getting your keys? Are they the gate to you getting your value stuff, you know, in the future?

52:00Right, I'm just watching this back and I'm not really happy with how the conversation around exchanges here has framed the risks. I just want to be crystal clear that there is plenty of risk with carrying or storing your crypto on an exchange. They do go down. They have gone down. FTX is a prime example of that. And they don't have the same levels of protections that you would get in a bank. For example, the financial services compensation scheme. So, you know, think hard about where you want to store your crypto. The guest here is saying, you know, I'm lazy with it and I know I understand the risks.

52:30Just do some research and think about it because, you know, exchanges aren't perfect, but neither are hardware wallets either. You know, there's risks there as well. So again, this space is fraught with risk. And the main point is there isn't any protection to cover your butt if things go wrong. So yeah, let's get back on with the episode.

52:51The ETF are good, aren't they, in a way? that you can wrap them in a tax advantage account. You can stick them in an ISA, man. Please put it in an ISA, please. Yeah, but it's, you know, I've seen you talk about the ISA stuff and they're basically saying that you might not even be able to hold fractional shares inside of an ISA at the minute, let alone Bitcoin. I mean, the thing is like, the UK is trying to put itself forward as a crypto hub and yet it's just not regulated fast enough. It's so behind. It's so behind. I mean, okay, so maybe there might be a bit of something good coming in future with, I think there's a couple of press groups, a couple of lobby groups are now starting to get the message that like, this might be an important technology and people want to hold it.

53:31So maybe you should try and regulate so people can hold it in the safest and most tax advantage way, please. I think your points around the innovative finance ISO were good in terms of that's where it should sit. Stocks and shares ISO, I mean, it could sit within stocks and shares if it's an ETF and it's tradable on a broker. That's great. But I can see why the regulator would be like it's not native to an ISA this it's not it's not stocks and shares it's not bonds it shouldn't automatically get places. That's one of the things isn't it it's like where does this asset class is it an asset class where does it sit it's not is it currency well sometimes it is but on other blockchains it isn't it's just like an incentive mechanism is it equity sometimes it is but it's not really is it is it commodity yeah you know sometimes it is but it's not really like you know and it's not debt is it so what is it it's not a lot of crypto and a lot of they just don't sit in the in an easy to understand bucket for a lot of people so i understand what you're saying and like you know bitcoin and ethereum versus the governance protocol omh or whatever like they're very different things and it's it's not you know it's not you can't just say oh crypto in an isa but you can't just also say oh just bitcoin in an isa yeah i mean to be honest with you i wouldn't even put i don't think you know there could be so many categories for it you know i don't see bitcoin and ethereum even in the same asset class really like you know well exactly so then you've got a whole load of rules that are going to need to come in place and just from the perspective of a government again if you're saying this thing's going to you know keep going up in price for a long time well then that's a good place to generate a lot of tax revenue from capital gains so probably we'll wait until that's happened before we allow you to tax wrap it i will i I wanted to say one thing on where to buy and store your crypto, because we were saying Coinbase is really good, and I agree it's really good, but my friend had all his crypto savings in FTX, like Bitcoin, Ethereum, Solana, everything, like thousands he'd been building over years, lost it all.

55:25So even though Coinbase is kind of like the blue chip - It's good until it isn't. It's good until, like no one thought, I was about to buy some FTX, but until it crashes, it's the blue chip standard. So although Coinbase is really good, I have some on Coinbase, some on Binance, and then some on a ledger, than someone like other crypto exchanges. So the chances of all six exchanges and me losing my ledger. I like that redundancy, man. And some in Revolut because Revolut let you buy crypto. So I've got some in my Revolut. So at least that one's kind of the safest because it's in my bank. But like, yeah, it's better to risk to put it on a couple of exchanges.

55:58Once you get over like a few thousand pounds worth of crypto, you don't want to have it all in on one exchange, even if it's Coinbase, which is the best. They could disappear. That is right for people like me and you who may be a little bit overexposed to crypto at large, but for the average person, hopefully they will buy it as an ETP if they can. Yeah, get an ETF or an ETP, and then you know that there's none of that drama. I personally, I'm going to get hated for this. I wouldn't touch Binance. I don't trust that thing at all. The way it's domiciled, the way it positions itself, the owner's tax dodgy as hell.

56:36Why do you base yourself offshore? or, you know, I want companies that face into regulation and say, we're right here, you can come and look. Yeah. Binance do not do that. Yeah. Trust good at every opportunity. They have a huge selection of coins, which is why I got into them. Did they even have - When I was a degenerate and I was just buying lots of different coins, but now, yeah, you don't - But like you said that you pay 350 and you list, like you pay 350 ,000 and they'll plonk you on the exchange. Yeah. Whereas Coinbase seemed to be a bit more selective. Yeah. I mean, that's true. I mean, Binance just had such a massive advantage because it would list anything.

57:09Yeah. You know, it would list anything. Like with maybe not doing the KYC, like know your customer, anti-money laundering checks that it probably should have. Definitely. I don't really trust Binance, to be honest. But a lot of exchanges do that. Like I worked at one in Singapore, like worked at a couple and a lot of them kind of bypass. No, not OKX. CoinStore, I worked in Singapore, really good exchange. But I worked at other exchanges that weren't quite as reputable. And essentially they kind of, they skip, like you said, a lot of KYC, know your customer. They say, we don't accept money from these countries, but then if someone offers you enough, they tend to accept it.

57:44So it's kind of like very gray area for the exchanges. So I agree. I also wouldn't really trust many of them very much because they all, even Binance, he just got done for money. He was advising customers on how to get around the KYC. So they were messaging clients saying, buy through this and see instead to sky regulation. You see the messages between him and his staff, like bro, literally money laundering. Yeah. Yeah, he's... All of that argument of like, it's only used for crime. I'd say Binance is 90 % of that in terms of they were moving money for some shady characters. Yeah, that's true.

58:17I mean, in the overall grand scheme of things, like I think Chainalysis does a... You know Chainalysis? Yeah. The blockchain forensics. They do a really good crypto crime report every year. And I think like in terms of the overall flows, it's something like 0.1%, which is... The dollar's the best thing for laundering money in the world. I mean, anonymous... You talk about anonymous hand-to-hand payments. Cash. yeah that's still the leading way to cash yeah like if you okay so for example if you were to go on the dark web you know uh maybe up to about 2015 if you wanted to buy something that wasn't technically legal in your state or um they would demand bitcoin but because bitcoin is transparent and because um chain analysis elliptic which is based in london another blockchain forensics lot doj like law enforcement have been following bitcoin for so long people won't accept it anymore so now that a lot of people that might have missed out on bitcoin or ethereum they want to get into altcoins and altcoin season so these are alternative coins um other coins other coins like you say bitcoin ethereum everything else everything else exactly so everything is an altcoin technically as well isn't it technically technically it is there's a lot of bitcoiners that would say ethereum is the first altcoin but yeah yeah that's true the strongest blue chip altcoin the only blue chip altcoin obviously you don't want to encourage people to get into altcoins but do you yourself ever get into altcoins?

59:32Have you invested in altcoins? In the last two, so this is my third bull market. In the last two, I did and I lost a load of money because if it went up, I got greedy and I bought more and I never sold and I was left holding the bag at the end of it. And this time round, I'm going to do it properly. DCN to Ethereum, never sell. Or sell, take profits on the way up. In general, again, if you don't know what you're buying, I wouldn't buy it. I can't stress that enough because you don't know where it's going. You don't know where it's come from. You don't know when it's going, you know, like you don't know how liquid it is.

1:00:09You know, are you going to be able to get your money out at the other end? And again, just don't invest in anything you don't understand. You know, you say that you don't invest in stuff you don't understand, but you've said you've studied Ethereum extensively for years and you still don't understand it. I mean, it's not that I don't understand it totally. Like, you know, I said I'm never going to be a cryptographer. like you know i'm never going to be a mathematician um i think i understand the basic value proposition that's that is enough for me um i think not investing in something you don't understand don't understand it's like do you know the name of it you may know the price of it but you don't know what it does yeah and you don't know how it makes money more specifically and you don't know does it put out more in token incentives than it makes in revenue if it's a blockchain.

1:01:01Simple stuff like that. Yeah. It's like, I understand how Alphabet makes money. I understand that it's, you know, traditionally speaking, it might be slightly undervalued compared to the other Magnificent Seven. I know the ad market, I know this, but I don't know how they code their software. Do you know what I mean? And this is probably what you're saying. You understand how the business makes money, the potential of the business. You don't necessarily understand the underlying technology. That's correct. Like, you know, I don't really understand how electricity works. But I can still turn on and off a light, you know.

1:01:32I can still invest in renewable energy businesses because I kind of understand how they make money, right? Yeah. Yeah, I've not played it as smart. Like I had mates who, in every ballroom, I have a mate who comes forward, who becomes the crypto expert at the lads group and he's talking and he's like, you know, he's laser-eyed and he's doing all these chart analysis and all of this. And he's doing okay and then he disappears and says, oh no, it's all a scam because you've been bad. Chart analysis, when you're doing technical analysis, is basically like astrology. You can draw any line on any chart.

1:02:00It doesn't matter. But I've just consistently bought the whole time and I've done really well off the back of that. And it's the same approach that I have to my stock portfolio of I don't really know what's going to happen. You've got an investing philosophy, right? You're looking at the long term and you're trying to use your noggin when everyone is going crazy. I buy a bit more when it goes down and I buy a bit less when it goes super high. And, you know, I do, I do, I am weak as well. That is great, but that's against human nature. And that's something that you have to learn to do, not something that you do instinctively.

1:02:31Yeah, but I think index fund investors are well placed to use that. And I think a lot of people, you know, they beat down the indexes and they say, oh, you know, you're boring and enjoy your 9%. I'm going to go get 400 % on my pancake flips. Well, yeah, you might do that, but can you get your money out? Exactly. And are you going to sell? Because I mean, nobody, nobody can time the market. No. And you might sell the top, you might sell the bottom. Whereas the indexes are good at just showing up every month and buying in. And I think that's a good skill. Yeah, and they don't have massive amounts of stress in their life.

1:03:02But do you think there's a lot of emotion in crypto? If my friend calls me and says, dude, I just made like seven grand and I only put in 200 pounds in Dogecoin, then it kind of makes you go, oh, maybe I should buy some Dogecoin. Yeah, sell that. That's how the market goes because people are like, oh, he made money, he made money, he doesn't know, he's not smarter than me. I'll just listen to what he said and then they end up buying at the wrong time. though are they they're not investing they're trading and chasing around narratives you know like they invest it's this point of i have a portfolio i have two to four percent that i put into crypto every month and if it moonshots it'll do great things for my overall portfolio if it goes to zero then that's fine but if i it's much easier to listen to the other guy than to listen to the sensible guy because the sensible guy is boring not exciting um but you just end up with this like herd behavior, you know, herd mentality is like, oh, that guy's gone massive.

1:03:53He doesn't know any more than me. In fact, I think he's stupider than I am. Exactly. You know, so like - I lent him 50 quid last month and now he's just made 20 grand. I better do that too. Yeah. So usually the boring way is the way that you actually make money and chasing the returns and buying WIF coins is the way that you lose money. WIF coins, I like that. Yeah. I think it's a good idea to treat crypto as an investment and not as just gambling or trying to get rich quick and that's that's the people who normally get hurt the ones who are trying to get rich quick that's the problem is don't do their research people put people get very emotional people get very greedy um and greed it's not a term of disrespect it's fear and greed man you know that's just how markets work um and they over invest and they get themselves in trouble the problem is people see this is like being stupid and getting it wrong it doesn't mean you're not going to make a crap ton of money if you get lucky but you might be one out of 10 ,000 people and it's a lottery ticket at the end of the day or you're you know scooting around on the back end of a betting website betting on Lithuanian basketball at 2am I've been there Division 4 Lithuanian basketball at 2am actually I'll have you know who's the best who's the messier that you who is it you know those matches are crazy because like Turkish football division for my friend.

1:05:13You're sure you're rigged. They're all rigged. So you'll see like a 12-0. My friend's like, dude, bet on over four goals. I'm like, really? And then it'll be 12-0. And sometimes Betfair will pull the whole market because they realize that there's some like match fixing going on. It's crazy. It's the same with the altcoins in the low levels. When the market caps are tiny, like one guy can influence it and you get an influence. Yeah, and you also don't know if he's pre-mined. You know, you don't know the people like, so for our cryptocurrency that we're going to launch together, we're going to make it fair and equitable.

1:05:40And we're going to like not do any pre-mines so that we don't own any of the supply before we put it on the market. That would be my idea, if I was to do a crypto. But in the small altcoins, you've got no idea who's behind it. So it was SafeMoon. It was a load of crap. So many people were like, it's going to the moon, it's going to the moon. I told you they were a scam when you came out. They all got the word safe in your crypto. Yeah, they're all going to prison. Safe and moon. He's like, I'm bringing a client on and they're called SafeMoon. I was like, mate, those guys are chances. They took me out to Marlabo and to some fancy hotel.

1:06:08Nice guys, nice guys. Had a lot of money. sign them up they've been indicted they've got gunners mate they've been going to prison for a long time don't indict me guys, they were just my client and if you looked at it, they copy and pasted the code off something else, it was a joke but the amount of hopium around that was staggering there is, and I mean the thing we were not really mentioning as well is like crypto is something that's born on the internet and like it thrives a lot of the community thrives on memes you know and what is a meme like it was coined in 1976 by rich dawkins like it's mimetic it's a self-perpetual self-perpetuating idea you know um there's lots of irony you know there's lots of reddit like there's lots of uh other websites that i don't really want to mention like you know it's um this is how it kind of creates this community around the idea of community and culture and gets you to hold on to something that maybe but you don't really know what it is.

1:07:08But because of other people that you know and like and a thought that you're in it, then you're kind of in it too. That is so wild. I never can't believe you said that. I actually got into crypto because of some memes. Like in lockdown, there was a meme and it was like, we were all sitting down on COVID. And there was a meme and it was a dad talking to his daughter and his son. And then his daughter's like, daddy, what did you do in like the pandemic? And then the dad goes, I bought loads of Bitcoin. And then the son goes, fucking legend. And that meme got, I was like, I want to tell my kids this one day.

1:07:34And that literally just had me - You see how silly that is. But that's got me deep in, got my crypto bags full and got me buying, buying. Don't do that, guys. But yeah, the culture, yeah, the meme, it really got me. And I still picture that meme. I'm like, yeah, one day I'm gonna tell my son, here's your like 50 Ethereum. Your daddy's a legend. And so like, it's kind of, it all ties in and you keep seeing crypto memes, like people that bought at the bottom, people that bought, you know, so it's like, it's self-perpetuating. Yeah, self-perpetuating. Yeah, and I think like, you know, Now that we have like Bitcoin and Ethereum ETPs that people can buy and it's becoming regulated and Bitcoin ETFs in America, you know, like people who got into crypto earlier when they were saying, oh, it's criminals, fanatics, lunatics.

1:08:20It's like, well, maybe just because the central bank doesn't like it doesn't mean I shouldn't be interested in it. You know, kind of trusting those. Porn was the first thing on the internet. And that became a big deal. Any new technology. Kodak. Porn. Next thing. Yeah, yeah. Come Rocket. Come Rocket. Crypto. One of my clients as well. No, it's actually crypto. You've never heard of Come Rocket? You've never heard of Come Rocket? Of course I have. I was just saying, their coins are called Cummies. They're tokens. That's the name of the token. It's called Cummies. I'm not making this up. I know the founder.

1:08:52She's a legend. Oh my God. Cummies to the moon, mate. Cummies to the moon. Everyone buys some Cum Rocket. You're, you're, don't. Stop saying that. Stop saying that. Shit, man. I'm clearly joking, guys. We're sat here, we're talking about, you know, I don't know, like the debt crisis. And he's like, yeah, but I told you to buy Bitcoin last year. You know, every fucking episode. We give him a little bit of leash. Okay, we'll have a crypto episode. He sits here saying, buy commies. Do you know why? Because I got traumatized by the bull run, by everyone telling me I was stupid and that crypto is a scam and it's all gone away.

1:09:23And I'm like, now's a great time to buy. Oh, look at all you crypto boys, you're all broke now. That's another great meme, man. If you see the line, it's a line that goes like this and it says bubble dead, bubble dead, bubble dead. Do you know what I mean? It's always a scam and it's gone. How many times Bitcoin's died? It's a website that tracks the amount of times. JP Morgan and people were saying Bitcoin's dead, it's over. And then they're buying more. I mean, JP Morgan, Morgan Stanley, they've got a history of trading against their public statements. Yeah, yeah, yeah. So, okay, let's end it on this then.

1:09:54I can, you know, with everything that's happened to say Bitcoin and the landscape itself, you know, we've had all the scams, you've had everything. And it seems to be more legitimate today than it ever has been in terms of there's been mainstream adoption. We can actually, you know, that's another meme. The mainstream money's coming. Well, it's coming now. It's here. I could say that I think it's far more likely that Bitcoin hits a million than it hits zero, you know, at this point. But have you got a price prediction on Bitcoin or Ethereum? Let's say five years, 10 years and 30 years.

1:10:28My first answer is no. because, you know, no one can see the future and asking people to make predictions is like pulling numbers out of your ass. Yeah. And that's what, you know, investment bank analysts who follow stocks do. Yeah. You know, they put price targets on things without telling you how long they think it's going to be until that hits that price. Yeah. But I suppose, you know, there is some - Or they might say that they think that that's the fair value now. So some price targets are like, my target is this, because I think that's what it should be worth right now. Sure. Yeah. So what do you think of you?

1:10:59I know on your DCF model, you said that you think it's three times. So you think Ethereum at 10K is? Ethereum at 10K in five years is reasonable, I think. Yeah. Bitcoin, 120 to 150. In five years. Quite conservative. It is conservative. I mean, I prefer to be conservative than like, it's going to a million and like, you know, let's just go out and buy gold Lumbo boys and like go around the neighborhood and, you know. But when it does, we'll do that. We'll definitely do that. What do you think in 30 years? Who knows? Too far out. Who knows? I mean, you know, we could all get hit by a comet within that timeframe.

1:11:35That's too long for me to predict. Big massive cum rocket hits the planet.

1:11:43If you want a bullet point summary of this episode, you can sign up to our newsletter using the link in the description. And don't forget to subscribe to the podcast and leave us a review. It really makes a difference and lets us know that we're doing a good job. And remember, this is not financial advice. Like we say a lot on the podcast, investments can fall and rise. In fact, it's almost a guarantee. Remember, past performance is no guarantee of future results. So your money is at risk with investing. Also, remember other fees may apply. I'm Damo. I'm T. This episode was recorded by Jack Hobbs.

1:12:15Music is by Felix Taylor. It was produced and edited by Ruth Edwards. Johnny Hunter is in charge of marketing. And it's all brought together by Will Stollerman.