E66: Swissborg CPO: How to Time the Crypto Market Top

29:22Or actually when you have your entire mind, I mean, obviously here we're going to talk about business, but when you put all your mind and soul and energy on one business, then you end up meeting all the right people in the right sequence for some reason, karma, whatever. Like they're basically being sent to you. And it's only because you're full onto that thing, right? Meeting the right people in the right sequence. That's exactly what I experienced. Like sometimes Kevin, I was on the train. I'd bump into a guy. His business cards would fly on the ground and I would see where he's working from.

29:55I'm like, that is the person that I talked about last week to a friend that I had to meet. Like, how can that happen, right? I mean, some people say, oh, how do you prove it? I mean, there's already like science showing that there are certain, you know, wavelengths or energy levels or frequencies that will connect you to through CT scans and MRIs, right? But as we improve science, we'll be able to see this, that there is an energy levels that you cannot just explain.

30:27There's another book that you love. It's called The Seven Habits of Highly Effective People. What a gem. Why? What a gem. You know, the whole multidimensional thing we're talking about earlier. So there's one of the principles of the highly effective people is the win-win principle. And I think that, for example, why is Bitcoin so good? It's because it's a multidimensional win-win. It's a win for the miners. It's a win for the investors. It's the win for those transacting. So many people are a part of that incentive economy, right? And so going back to the multidimensional thing, that is to me one of the superpowers.

31:06And what I love about that book is it teaches you first, there's three core steps in life. You're dependent on something when you're still beginning. Then you become independent as you can do things by yourself. but then you become interdependent as in the team needs you, you need the team and you can bring in better results than just by yourself. And that book is, it's a gem just from start to finish. It's so powerful when it comes to bringing a specific framework to how you act. And I think Think and Grow Rich and then Seven Habits follow each other really, really well from the mindset to the specific principles and actions you apply to your life.

31:51Why do you think there is so many people who don't understand this win-win concept, which is so important? Or win-win or win-win-win, right? Yeah, I think it's, as we were talking about, it's difficult to shift your perspective, right? Where do you think it comes from? From a place of survival? I need to take instead of giving and thinking more long-term? or because for me, I don't understand it. I don't understand how you cannot, because if you want the thing to happen, which is what everybody wants, right? You need to understand what is the most probable way that this thing is going to happen.

32:32Probably it's where everybody is happy, which means everybody is winning. So let's just take a step back and think differently about the situation to make it to win for everyone. Obviously it requires a lower ego or no ego and but why do so many for example let's take a very practical example to not go too deep into the the non-practical kind of theories LinkedIn my god every day you receive so many messages of like all these random people who are asking for things and I'm like if you were giving something even what like just I would answer like but what how can you just ask? I don't know you.

33:18Like, it's rude, right? It's not a win-win. Like, there's zero win for me and you're the one coming to me. So, like, right? And in business deals, it's the same. Like, if you think long-term, it's how is there a win for both? Because, like, we're going to grow together, you know? Or co-founders, when you start a company, who has, you know, how much shares, all that stuff? I mean, obviously it should be linked to what people bring to the table because there might be some people with much more experience or much more resources, etc. But like the win-win concept is so important and there's so many people who don't understand it.

34:00And I don't understand why. As you said, the in-mail are the requests on LinkedIn. They start with I, me, we. I, me, we. not we as in you and I, we as in our company. So already those pronouns don't make any sense, right? If you really want something to happen, it should be you, we as in together, right? So already when I see those pronouns, I immediately delete. I'm like, okay, this person hasn't done any research or is not trying to think about my perspective and what I want. So I think that's a really important point. And to be very honest, to go really extreme, Kevin, you know, the whole like win-win concept.

34:40As a matter of fact, when I was talking about being a super connector, I'm very comfortable with lose-win because I believe in the law of reciprocity, which comes from a book from Robert Cialdini called Influence. So once again, you're planting seeds, right? Because some people, they'll feel obliged to give back eventually. So the whole concept of, you know, crush the competition, you know, negotiate, twist their arm. I don't believe in that at all. It's very short-termist, right? So I don't mind the lose-win. On the contrary, many of the negotiation books out there, lose-win is very important, very successful tactic that I use for influencers.

35:19But also the number two thing that they don't talk about in negotiation books is having someone to lobby between the two teams. And lobbying is critical because all this sensitive information when you're just party A, party B, there's conflict. But if there are two guys on the side who are getting some of the more sensitive messages across, negotiations become much easier. Right. It's basically impossible for the thing not to work. I have this example actually with some, one of my businesses. There's this guy, I mean, he's basically selling, he's selling for us and we're kind of like white labeling our solutions to his client.

36:01And he's, I talked to the client, but he's the guy who's taking care of all the sales. So it's always going through him. And he knows the client perfectly well. And I also understand what they want. But like, because we go through him, there's always going to be this, this is a bit too high. Oh, this is good. Oh, it's impossible not for it to work, right? So this is an extremely interesting, actually a super interesting concept, which is almost a mediator, right? Yeah, it's a mediator, exactly. Like how do you make, how do you, I mean, except if someone is of bad faith, when there's a conflict or a deal or something that needs to be happening, except if one of the parties is of bad faith, then everybody should hope or aim for this thing to be a success.

36:47How do you increase the chances of success? Thinking win-win is one. The other one is having a mediator or someone in between who knows both, understands both, and kind of like communicate. It's true. It makes the whole difference. The mediator is actually even better than lobbyist because, as you said, Lobbyist almost sounds like someone has interest at heart of someone else. Yeah, mediator is a great term, I think. And just like when you have marriage counsel, right? You do counseling with somebody. There's always a mediator right there to kind of bring everything as close as possible to the center.

37:24Absolutely. I was thinking about divorces when you talk about that, right? Divorce, yeah. Because the way or conflict resolution in general between businesses or between a husband and a wife is you can go much cheaper. And also you can even find solutions through mediators. It's actually in law. there is a person called mediator that is a lawyer, but then you're not required to go to court and spend much more money and go public and all that stuff. Exactly. So absolutely. You talked about I'm willing to do a lose-win and it's the entire concept of bringing value. And you said the reciprocity, right?

38:03Yeah. It's the whole game. It's the whole game. Of course. I'll give you so much, motherfucker, that you have at some point, if you are a good person, you will have to give me something. You will have to because you will feel bad. You're like, why is this person giving me all that stuff, right? And in sales or networking is the absolute most important skills to understand. It really is. What is a great salesperson? What is a great salesperson? A great salesperson, that's a very good question, deep question as well. I think it's someone who can really shift their mind and perspective and that is there to create value.

38:48I think it's very important. So a salesperson will do, there are many ways of seeing this, but I think a salesperson will first identify major problems. So we'll see there's this person or this company has a major problem. and will provide a solution that will bring ROI, but will also help with ROE, return on effort. So maybe make a process easier, faster, more efficient, but then give you very easy measurables and deliverables. And that's on the logical side of the brain, but then on the emotional side of the brain is someone who comes across with great principles, values, someone you appreciate working with, that you respect and that's someone that I think is really just trying to create value for someone else or their company and believes they can do so.

39:44And that's, I mean, it's very simple, but I think those are kind of the core pillars. Absolutely.

39:56There's another book that you like a lot. how to win friends and influence people. Yeah, that's amazing. Because if we go back to thinking grow rich, right, we're talking about the mindset. We go to seven habits. We're talking about the habits, how you apply that to your daily life. But then you go to how to win friends and influence people. You're talking about interaction, finally. Now that I can, I know myself and I know what to do. I have to do it. I have to dance with a partner, right? So how do we influence people? So many takeaways, but one that really marked me was talking about why the Italian mobsters and mafia do what they do.

40:43So you go from the guy who's super ethical to guys who would kill anyone besides, you know, a wife or a child. And they were really explaining why we do what we do. And please do read the book for those watching out there. But one of the key takeaways for you is what we do every day in life is to feel important, to feel included. So even the guy who's a part of a mafia, who's going to run down and burn a local restaurant because it's not paying the taxes, who will, you know, bury a guy deep in the ocean just because things didn't go well. when they're walking down the streets and their limousine with tinted glass with tinted mirrors they feel important because the way people look at them oh you know they these guys are strong they're scary but they feel important and whether you're doing it in an ethically right way or wrong still everyone wants to feel important so that's his takeaway so if you can make someone feel important.

41:48And that can be into so many actionable items, not to be too theoretical, but for example, if I praise you, maybe I should praise your amazing podcast in front of other amazing people. And that will make you feel important. I said, listen, Kevin is running this podcast. I've been on 50 podcasts and this is the top three without a single ounce of a doubt. That will make you feel important. So anything you can do to make people feel important is a great way to making friends. So the idea here is if you make people feel important because you understand that, that's then how you can develop influence.

42:29Yeah. And rely masses towards a cause or a goal that you have. Exactly. Because you understand that everyone needs a sense of belonging. Exactly. The sense of belonging, that's exactly it. And Kevin, an extreme example, right? So there's one chapter on empathic listening, you know, really listening, not just with the brain, but also with the heart and feeling how they feel, right? And I remember, this is a very extreme example. I met this very powerful guy in Tokyo. He was running one of the biggest public TV channels, right? And I swear, Kevin, I was just asking him questions based on a topic that he was interested in, that I didn't necessarily know a lot about, but I just wanted to make him talk more about what he loved.

43:26And the deeper we went, the more his body language opened, the more his eyes would bulge out, the more he would get excited and use hand gestures, even being Japanese where, you know, body language is kind of controlled. and guess what at the end of that conversation i'd spoken maybe one or two percent of the time so it was a monologue and you know what he said he said alex that was one of the greatest conversations i've had in a long time it was not a conversation it was a monologue he gave me his business card where there are lots like people literally lining up to get his business card he gave me this card, he said, let's grab lunch next week.

44:05So I understood that, you know, really listening to people and, you know, getting them to talk. It is definitely not a dialogue. Being a therapist. Yeah, exactly. Which is what we're doing here, right? So because we're talking about books, I want to mention one that I really love that we talked about yesterday also, which is probably my favorite book from Tony Robbins, Money Master the Game. Ah, great book. And the reason why is I think everyone should understand the basics of investing. And Tony Robbins did an amazing job, even though he's not, I mean, he's probably an investor, obviously, with a net worth of probably half a billion.

44:45So he probably needs to invest, at least understand the basics of investing to know who should I give my money to, right? But one thing he did, it's very similar to what I think was Napoleon Hill did, right? Which is going to interview the biggest people. Yes. Right. So Tony Robbins did the same after the great financial crisis. He said, I'm going to talk to Ray Dalio. Ray Dalio, yeah. And all these guys. He was the first one to get such a long interview, right? Exactly. I'm going to talk to Ray Dalio. I'm going to talk to John Bogle from Vanguard and a bunch of other guys who are basically master at investing.

45:25Yeah. And I will simplify everything for all the millennial generation because 2008, right, millennials are, they should understand that they should start investing as early as possible. And they should also understand that investing is not complicated. it's made complicated by the entire system who needs fees right

45:54and I find it amazing to be honest because I realize oh man first why don't we learn that at school I don't know maybe because school is not as useful as you said but second I can take control of my finance and my future if I understand that And in a nutshell, it just says you need to buy ETFs, which are low cost, diversified funds, where you buy just the ticker or the fund, and then you're exposed to tens or hundreds of different companies. So basically, it's diversified already. If one of the companies dies, it's just replaced by another. You're not at risk. And second, he explained that if you just buy that, which we call buying the market, right?

46:41The average of the market, you're going to outperform 96 % of the active money managers. So who are overcharging people to underperform, which makes no sense again. And then he explained one key concept for people who want to reach financial freedom, which is, there's a chapter, it's called, What's Your Number? And it just explains you, you need to understand what's your number. What does that mean? How much do you need every month to live? Depending on where you want to live, if you have a family and so on and so forth. Maybe it's 5k a month, maybe 2k a month, maybe 10k a month. And then this number, knowing this number will help you reverse engineer year, what's the amount of wealth that you need to acquire in order to be financially free, right?

47:36For example, if it's, let's say 10K a month, you need to divide that number by, it's the rule of 4 % rule, right? And then it gives you an amount that, you know, 10K a month would be 120K a year. And then how much, how much, so 120K a year is going to be 4 % of a certain number. Yeah. that's the number I need to achieve. And then I can do all the financial planning and understand, you know, investing and do a compound interest on an Excel spreadsheet to basically know, based on what I'm earning today, what I can invest, or what I'm able to save and invest, I can reach that number within that many years.

48:18And basically I know more or less when I'm going to be there. It's not rocket science, right? And like, for me, it was a big game changer, understanding and kind of like, also then going out there and talking to my parents, were very educated, did really well in life, but are Swiss and trust the bankers. And telling them, hey, the banker is kind of screwing you. I mean, on one side, he's doing your service because you were very busy at your job, right? But on the other side, you could probably do it yourself and do much better and seeing their reaction. Kevin, you're 23 years old. What are you talking about?

48:56Also in Switzerland, you don't question the bankers, the suits, the lawyers, right? And yeah, so for me, they told me the day you make a million dollars or a million Swiss franc, you can come back to us and we'll listen to you. So then I was like, how do I make a million dollars as quickly as possible? And then I understood, oh, I need to understand this investing thing. And then I realized, oh, crypto is compounding on steroids, right? which compounded interest is one of the key chapters of the book too. Yeah, absolutely. And so if you understand that timeless principle of investing, then you understand crypto, you realize it's the same but on steroids.

49:36So why would I not go and have a look there and do something there? That is so powerful because literally we're just talking about the industrial revolutions. Right now, we're entering the financial revolution where, as you said, some people were controlling that power, the power of wealth, but now it's coming back into our hands. And I think if you want to be financially free, it will almost never happen through a salary. Never. It will never happen. Yeah. Naval Ravikant, I don't know if you listen to the podcast, how to get rich without being lucky. Just three hours and a half of like a masterclass on entrepreneurship.

50:22And he says the only way to get rich, to retire, to build wealth is to own a piece of a business. Yeah. Whether you build it yourself or you invest. Invest. Yeah, absolutely. That's what creates wealth. Either you co-founded a business and you have an exit, right? Or an IPO, or you invest in other businesses if you don't want to do it yourself. That's the only true way to be financially free. And I'd love to share some things to complement what you're saying and taking it back to the very first steps for those who are not investing out there, start tomorrow, right? Literally timing is perfect right now.

50:54But also just calculate. Let's say you're earning 3 ,000 euros a month. Let's try to save 300 of that euros, 10 % of your monthly income. If you can put that on the side and you can lock it up for two, three years without touching it, take that 300 euros or 200 euros and stack it, Literally like a piggy bank, right? So that is the first step of creating disposable income to invest, right? As you were saying. And then once you do that, the second part, as you said, that number, what's the magic number, I think is so important. Setting a goal and understanding it. Because, you know, in the seven habits, Stephen Covey talks about start with the end in mind.

51:38So what's the end goal? And then you try to figure out how to get there, right? So you set that goal, but also program your mindset because you're going to go through difficult times. I literally, so even when I try to buy the market at a low, Kevin, when I'm about to transact, I already program myself saying, it's going to go lower. I'm going to lose money. I'm going to lose money within the next, maybe even today, I'll be in the red. And tomorrow I'm going to be the red. And in one month I'm going to be in the red, right? So programming your mind to go through some sort of suffering and understanding the long-term mindset.

52:20And then, as you said, you compound over time. And actually becoming a millionaire is not that difficult. I mean, with roughly 10K in disposable income to invest, within three cycles of a crypto market, you'll become a millionaire within three cycles. So that's, let's say, three to four years. Within 12 years, you're a millionaire. So your assumption is? that you can multiply your 10k by, so by 10x would be two cycles. So would that be four? 100x, yeah. Over the average cycle, you'll do like a 10x, but then you compound that, right? So let's say you go from 10k to 100k, but then the market goes back down.

53:07Your 100k goes to, let's say, 40k. Okay. And then the 40k to another 10x, you reach close to half a million. And then the half million goes back to 200K and then 200K, another 10X. Then you're at$2 million within three cycles. And cycle is three to four years, right? So it's not that crazy, right? It's not crazy. The problem is, I mean, that's one of the things that brought me into crypto. I was like, I could invest in S &P 500 for 30 years or I could do it in, not like people think in one month or three months, but maybe in five to 10 years, right? I mean, then I realized it can happen much faster and much more crazy than you thought.

53:46And I'm being conservative, by the way. Absolutely. You can do better than that, right? But the problem is, you say, hey, look, you have 10K, you can become a millionaire with crypto within three cycles. But who wants to wait three cycles? That's the whole problem, right? The whole problem is your psychology is going to kill you as an investor. It's the biggest problem. You have these market cycles and you have people who do just dumb things because they're impatient and they want everything faster. And because you want everything faster, you make mistakes and then you lose everything. Yeah, so true.

54:27Let's start with the cycles, right? And let's take crypto because we're doing crypto stuff here. Why do we have cycles in investing? Yeah, it's a very good question. Why do we have cycles? I think that the cycles are essentially a combination of emotions on a chart with other cycles that are directly correlated. It could be economic cycles, geopolitical, political. And there's so many, because they're all intertwined in some ways, you can never just have happy times as we talked about before the yin and yang. And then, of course, there's also specific businesses, hedge funds that have an agenda.

55:12They need to make money, right? They're targets. So all of that combined is just like us in life, just like the seasonal cycles from summer to winter to spring to autumn. Like everything is cyclical in life. So maybe as a key kind of learning takeaway for people who are listening to this. because you know there is this four year cycle in crypto I mean at least if we look at the past but anyone who is kind of new to crypto kind of been there a bit but not really deep into it is going to say how can you know how can you be so confident it's going to go back up it's dead right last year it's dead no no don't worry four year cycle is a thing then you can listen to Raoul Pal talking about liquidity cycles, which is like a, it's a macro thing.

56:04It's not crypto, but it kind of karma, whatever, like the force, the universe makes that everything kind of matches at the same time, which is amazing for us because we know, you never know what's going to happen. But like, you're like, hey, usually there's this four-year cycle with this Bitcoin halving. Maybe since the beginning it's not the Bitcoin halving, but it's the liquidity cycle that makes a difference. But at the end of the day, who cares as long as if I have four or five different reasons for markets to go up, liquidity cycles, Fed having to cut rates, money printing because banks blowing up because the interest rates are too high, Bitcoin halving, Bitcoin ETF.

56:51You start to have all these combinations of factors that just make it a no-brainer for it to go up because he went up in the past with less factors, right? And so that's probably the key takeaway here is you need to understand that there is different forces that could all go against the market, go in different directions, but you also have these key moments every couple of years where everything is perfectly aligned. And this was the case in COVID, actually, COVID March crash, like Bitcoin having right after. Crazy money printing, closing everything down. And then you had Bitcoin lagging actually.

57:33People saying, hey, it crashed like crazy to 3.5K from 12K. It should be like digital gold. So therefore it's shit, right? It's not working as digital gold. And so then that's where you have your conviction. You say, hey, everything is aligned. Yeah. And even if for the next two months it's kind of not moving much, I know everything is aligned for it to go crazy. And then what happens? It goes crazy. It goes crazy. And now it's the same happening again, right? This year. And so probably the most important thing is to understand is obviously cycles, fear and greed. But then you have like bigger, much bigger forces that are not crypto related, that are macro related.

58:12And you also have the elections this year, right? US elections. And what happens during US elections? Stock market needs to go up because, right? That's one of the great ways for them to prove that they're worth being a president, right? Is to increase, to lower the unemployment rate, to grow the GDP, to get the economy back on track, to help people make money, right? So yeah, absolutely. That's a huge factor. So everything is lined up. Everything is lined up. For a beautiful year. And still we're early. I think, you know, people need to understand when you have these adoption cycles, right? Just like VC investments, the earlier you get in, of course, the more risk you're taking, but the higher the returns.

58:52And we still haven't really crossed the chasm. We're still not mainstream. People are aware, but do they hold it? Do they use it? No. Absolutely. So I think, as you said, this is probably the easiest cycle to make money psychologically because there's just fundamentally everything is being aligned. And I'm not talking just the ETFs, but everything, all metrics are looking good. Probably the key word here is a consensus. If something is not consensus, it's a good thing because there's money to be made. The day something is consensus... it's less interesting. But then if you look at, again, crypto and then larger picture, you could have something that became consensus in crypto, but because crypto is not consensus yet, it's still an amazing play.

59:49For example, I'm thinking about Solana here. Solana was completely non-consensus one year ago, and then it became pretty much consensus. I mean, maybe two or three days ago, there was another outage, but it's kind of a consensus trade in crypto now. This thing is going to, I mean, already started to do amazing return, probably 10x since the bottom even more. But it's going to continue, right? It's kind of like the darling of the layer ones for this cycle at least. So most people who don't understand these different layers of crypto kind of bigger picture macro, they might say, ah, Solana is over.

1:00:26I would argue, no, it's not over because it became consensus in crypto, but crypto is absolutely not a consensus trade amongst the macro world yet, right? which were you probably at your good spot in terms of, as you said, feeling almost like safe in something that's still going to do like a really great return. Yeah. And whenever you hear the death of Solana, the death of Bitcoin, buy. That's as simple as that because, you know, the best investors will do the opposite of what the majority will do. It's very simple, right? Simple to understand, very difficult to put into practice because emotions interfere.

1:01:06But as you said, when Solana, the death of Solana post FTX, all that crap, our CTO was saying technologically, this is flawless, fundamentally, community-wise, numbers on chain, all make sense. He went all in. And literally Cyrus, my brother, was talking about Solana when it was around$10, as you said. So one tenth of now. So you would have done more than 10x, as you said. Because once again, you have to play against the emotions. So the death of something is usually a very good sign. If you know fundamentally strong, just go opposite direction of the tides. Absolutely. So we call contrarian investing.

1:01:43Contrarian investing. Exactly. How can someone, because you say it's very difficult. How can someone become a great investor, which by definition is a contrarian investor? Yeah. So the two core emotions, as you know very well, Kevin, is fear and greed. Right? The fear side to me is very easy to fight. Because usually it's when the markets are reaching all-time lows. And the reason why is you can check all the data. You have years of data compiled to bring the rational mind to believe this is the right bed. So you have so much to look at historically. You have so many on-chain factors to verify, to reassure that emotion.

1:02:31promotion but the the greed side of things is very complicated because you're entering new territories with no data and you're thinking wait a minute i did a 5x i hit my goal but maybe i should wait for a 7x or i hit my 7x goal but maybe i should go for a 10 and that devil that's just on your shoulder saying not yeah not now not now we can make more money and because you have no data to look at, you just get wrecked, right? It's a classic meme of it's a classic meme of I just need another 2x. I just need another 3x, right? Absolutely. Which most people who are in crypto say and that's a really great learning actually.

1:03:16They say, the day you reach your goal that is a life-changing amount get the fuck out. And then the meme is like, yeah, but I just need another 2x, right? And so one key thing that I learned the hard way in 2022, probably I'm not the only one, is that understanding these cycles again. What is a crypto cycle? It's basically leverage. People starting to have some hope and then the hope gives place to excitement. And then obviously people only have a certain amount of money to invest. So they will say, how can I invest more? Or, oh, I can, I don't know, borrow some money against my house or sell my house for that.

1:03:59Or maybe leverage myself on crypto itself. And the same, this is just for the investor side. But then you have the same on the investing side. Where is the money coming from? Probably some debt somewhere, right? Because we know the entire fiat-based system is debt-based, right? So you basically have a pile of leverage piling up. Last cycle, it was, I mean, you are in the middle of it. It was crypto lending, right? Celsius, BlockFi, FTX, where they would promise us that everything was over collateralized, but it was not true. It was basically not over collateralized. So it was money given to these hedge funds that were having long short strategy, which basically means you're taking leverage even without wanting taking leverage as a retail user who just wants the 5 % or 4 % interest rate, right?

1:04:51so leverage piles up until it doesn't anymore, right? And when leverage piles up, everybody becomes rich on paper. And someone out there who is much smarter than all of us realizes there is a lot of value created on paper and that value can be realized if it's realized before everybody sells. So they will see that and they will come and start to break some things here and there to take the money out, breaking the Luna peg, the Luna stablecoin peg, shorting Luna, and so on and so forth. Even with Celsius, it was breaking the SCE peg, right? And then these smart people, very smart people, might be crypto people, probably outside of crypto, they know how, because money is not made or lost, it's just transferring from one place to another.

1:05:45So they know how to take the money made on paper by me, Kevin, or by you, Alex, and put it in your pocket, right? And that's a... And no matter... The most important thing is, if you don't realize this money in cash, in a house or whatever, someone somewhere will take it away from you at some point. except if it's a Bitcoin or an ETH in a cold wallet. Fine, right? But someone will take it from you at some point. And because there's just people who are much smarter than us in this game, right? 100%. And it's probably the, you need to, I mean, probably you need to have gone through the pain of losing a lot of money to understand, maybe I don't want that to happen again, right?

1:06:35Yeah. And then say, the day I reach my goals, I'm out. and maybe that's a way to fight this freaking greed that is a killer. When you sell, we have to sell. It's so painful. It's so painful. It's so painful. And you see it going up still. You're like, oh my God. The same as when you say, oh, when I buy, I know it's probably going to go down 30%. When you sell, you probably know it's going to go up. It's going to go up more, right? That's a really good point. the problem is one is more painful than the other. Yes. Because one, you are in the market. So you're like, I'm down 20 or 30%, but I trust that it's going to go up in the future.

1:07:17The other one is you're not in the market. So you have the freaking FOMO. Yeah. It kills you. To go back in and buy, right? That's a really good point. I hadn't thought about it from the other way. As in it kills you to see, it kills even more to see potential gains you could have made, right? Yeah. Yeah. It's so true. It's so true. What are some of the red flags to watch for to start selling your crypto? Oh, my favorite question. My favorite question. And the reason why I say this, Kevin, is because me in the first altcoin cycle from 2016 to 2018, I got wrecked city. Have you seen the movie Dumb Money, by the way?

1:07:54No. So I highly recommend for those who are out there, especially if you're new to investing. This movie literally portrays everything we're talking about in a fun comedy drama type style. And do you remember the GameStop issue? I remember the GameStop. Robinhood and WallStreetBets. I remember the GameStop story, which was, there was guys shorting the market, right? And then we have like the community online. Diamond hands. Exactly. Do you remember that? Destroying, I think one hedge fund like would have blown up if there was not like the ACC or some government organism that came and said, hey, Webinar, you shut down this and so on.

1:08:40People can't buy anymore. Like something crazy, right? Exactly. The buy button wasn't working. Only the sell button was working. Anyways, a complete scam. Once again, Wall Street trying to steal from retail because they didn't think the community would have enough power to go against their shorts, right? Beautiful story. Everyone should watch that movie out there. But first altcoin cycle from 2016 to 2017, 2018, I was a part of the dumb money. Like literally, as you said, not only I didn't sell, but every time we'd retrace, I'd buy more and catch the falling knife, you know, the hundreds of times.

1:09:13Of course. But so that was literally, but three cycles later, three altcoin cycles later, which is the only, they've only been, there have only been three altcoin cycles. I can confidently share a few signals, which I think are the deadly signals. Number one is the news, the media, right? If the media is starting to show Bitcoin every day or Ethereum every day, new all-time-I, new all-time-I, new all-time-I, and that from that source, then all of a sudden your family, friends, taxi driver are starting to ask you, oh my God, should I buy Bitcoin? people out of the blue who've never been following fintech, let alone crypto and Bitcoin.

1:10:00That's a huge flag. That's a huge flag, especially if you have old friends from, you know, a city in France or Switzerland asking you, oh, I'm thinking about getting all in. That's usually when the late majority come in, that's a massive signal. The second signal is excess of capital. So money is flowing into projects with zero fundamentals, garbage, right? So let's say I remember in the first cycle, there was a coin called DentaCoin, which is supposed to have your dental x-rays on chain, which maybe now could work, but it was back then an absolute crazy idea. There was also another project in the third altcoin cycle, which was printing 100 % APY per day.

1:10:49in terms of coins, that type of euphoria. And that coin was literally over$1 billion valuation. So when you see too much capital flowing into the system, and you see too many projects with zero fundamentals and pure speculation at a unicorn status, those are signals where you need to get out ASAP. So crazy valuations, excess capital, and just people wanting to get in the late majority, I think are some of the deadly sins of the end of a post-cycle. What's a crazy valuation? Because I could argue that, I think I read two days ago, I don't know the exact numbers anymore, but probably it was something like, hey, last cycle, there was 50 projects with more than a billion market cap.

1:11:39I'm inventing the number. I don't know if it's like 100 or 30 or whatever. Probably this cycle, there's going to be 10 times more, right? So the notion of what's a crazy valuation changes with time because first the industry matters. Also, there's more and more money printing, which is the reason why Bitcoin goes up and everything goes up, right? So what's a crazy valuation? I mean, one thing you could do, I'm just like grinsoming out loud, but you can't stop me, right? A very simple heuristic, which we talked about with Alex VanEvick from Nansen. I realized like the really smartest people in crypto, they have very simple heuristic and assumptions, which is forget about cash flow and all that stuff that people try to come and assign value to a project based on cash flow generating.

1:12:35It's more, hey, Bitcoin was 69K. previous all-time high was 20k that's a 3x ish right probably next one 2x ETH 1.4k 1.4k 1400 then 4.8k like and then you just start to look at okay, 4.8K probably does a 2X, still kind of safe-ish, maybe a bit less to be conservative. And therefore, what's the market cap of ETH? What's the market cap of Solana? Ah, let's say 10 times less. Ah, so probably it's going to go up higher, maybe by a factor of, you know, if one does 2X, maybe the other does 6X or whatever. And just like very simple heuristics like that. Yes. And that helps you determine what's a crazy valuation or not.

1:13:41Yes. And where the risk, when is it starting to become too risky? And maybe as a complement to that and to the notion of controlling investing, something I learned is where you make the meat of your return in a fairly safe fashion is between the bottom, which you will never catch, and the previous all-time high. anything that's above the previous all-time high it's starting to get very risky much more risk right so Solana being down at$8 or$10 you like previous all-time high 25x if you think the thing's not going to die probably a good time to buy if it goes back to previous all-time high 25x then it becomes 50x at 500 2x from previous all-time high starting to be very risky right and the reason I say risky Key means when do you want to get the fuck out of the crypto ecosystem to not have this other key player take everything from you?

1:14:42Yeah. Because when everything blows up, everything blows up. Yeah. That's the kind of approach, at least my approach. And that's the best approach. So like, because we talked about like the signals, right, that are dangerous, that are telling you it's time. But those are more like feeling, right? It's not very concrete in terms of numbers. You're bringing in very important numbers. And if you want to have specific numbers, and I agree with you 100%, I use three core metrics. Number one is total market capitalization. Where are we going as an industry itself to the next level? So, for example, if we peaked at$3 trillion in the last cycle, and this cycle on a conservative scale will probably be at$6 trillion, as you said, 2x.

1:15:28And some people are forecasting up to$10 trillion, right? Yeah. And then that's really important. Those numbers are really important because if you understood the mindset, which we talked about earlier, and your risk appetite, then you can easily make profits. If you're very sensitive and you have very low risk tolerance, get out of$6 trillion. If you're like me, I'm willing to play a little, bet a little more, I'll get out maybe$7,$8,$9 trillion. Can see the little devil there saying, don't sell. But last cycle I did relatively well. And then the second metric, so total market capitalization, then you have the single asset, all-time high capitalization, as you're saying, where was Solana specifically on each asset.

1:16:12And the third one is how long the cycle, which you also touched upon, how long the cycle. And the problem with the Wyckoff cycle of the four stages, right, which you can literally compare to winter, spring, summer, autumn, fall, very easy to break it down to four categories. They're very difficult to measure. But one thing that we do know is in the euphoria stages, we're talking about the markup stages where we go parabolic, right? It's anywhere between six to 12 months, three cycles. So what I would say is, okay, we talked about total market capitalization, specific token, all-time high market capitalization.

1:16:54But then the third part is how long will the euphoria stages be? Time component. So you look at what, Bitcoin halving plus nine to 12 months? Exactly. And then you say, I'd rather be out early than late, right? Yeah. So if I haven't reached my price targets or my objectives, but the time component is kind of like reached, Yeah. I should start to de-risk, right? Exactly. Even if there is not all the craziest sign yet of people going mad and everywhere, right? Yeah, exactly. So as you said, you know, once you start seeing double digit gains, Kevin, like almost on a weekly basis, right? And you're seeing the charts literally go parabolic.

1:17:36You're like, oh my God, if I'm conservative, let it go six months. If I'm a little more of a risk taker, nine, 12 months, you're playing with fire. So again, it's understanding oneself and then connecting that to the cycles. And that's the key to success, I think. So this is the framework for investing for this crypto cycle. Let's talk about Crypto Alpha. Yes. What projects are you really interested in? You mentioned the first one is Eigenlayer. Yes. Why do you think Eigenlayer is such an amazing project? Now, I do want to put a risk disclaimer. I do think that we're going to enter DeFi bubble 2.0 with the whole restaking things.

1:18:16There are too many projects. It's all over the place. LSD is all over the place. I was about to say, last cycle was a lending. This one, obviously, liquid staking derivative and restaking is going to create the next bubble because people just leverage themselves on their ETH, for example. 100%. And so many, I mean, there are projects that are absolutely pivoting. They're changing their whole business model to fit this narrative because they know it's the next bubble. But the beautiful thing about bubble bursts is that some amazing innovation comes out. And I think Eigenlayer will be amongst those most innovative.

1:18:50Because if you really want to bring the old money, the boomers' money, the TradFi money into DeFi, you have to have something that you do not have in their world, right? So let's say RWA, I'm super excited about it because you can have real world assets on chain, but you already have that off-chain, right? So maybe it'll open up accessibility, it'll democratize things, make it easier, make it more transparent, all the tools that blockchain does. But when it comes to the restaking collective, you're building something that has not been done before ever in finance because you're using money markets or lending and that collateral that you're using for one particular product or market, you can take it out and restake it elsewhere to compound your interest.

1:19:43And it's not just about compounding interest. It's about adding security to multiple networks. So the whole proof of stake concept is beautiful, right? I prefer proof of stake than high yield accounts, than bond markets, because there's no risk. Besides slashing, which we can talk about later, the risks are minimum. Very few funds have been lost on any proof of stake layer if you choose the right chain. So all of a sudden you're compounding that. And plus now, Eigenlayer, it's not just about leveraging your collateral to earn interest. They also have insurance mechanisms coming in place. You have the audits and all the security side of things where you will be able to play with risk as well.

1:20:26If you're conservative and you want to stake here and restake there, you can do it in a more conservative way rather than going degen and using maybe some products or setups that are riskier. So it's not just leveraged debt. I think it's very, very powerful. And imagine you can get relatively low risk, maybe 8%, 9 % on your ETH instead of 4 % or 5 % on Lido. Isn't that beautiful?

1:20:54Absolutely. Another one that you love is Avalanche. Yes. The Avalanche Ecosystem. Why? Avalanche is amazing, I think, in terms of investment because everyone's happy in their ecosystem. So when I do the value investor, Benjamin Graham, which we talked about, a boring book, but very useful, is to just talk to people on how they feel. I talk to the miners. They're very happy. I talk to, you know, the GoGoPool guys, LST. They're very happy. I talked to some of the top games in the industry building on Avalanche. They are very happy. And everyone seems to be very happy, which is just like Warren Buffett going to the office and talking to employees and management to see how healthy the ecosystem is, right?

1:21:39And then just in terms of asymmetrical returns in the top 10 by assets for all layers 0, 1, 2, it is fundamentally the strongest chain in terms of daily revenues. and the FDV, the fully dialed valuation relative to Solana, has more alpha, I believe, when it comes to fundamentally versus market cap. So I think it's a smart investment. And I've been saying that since, you know, AVAX was under$30 online. You also love gaming. And one project that caught your attention there is Creta, which is a gaming ecosystem token. Yeah. Why? Kreta is, so gaming, we saw the bubble in the previous cycle, right?

1:22:28But gaming, obviously, fundamentally, there's so many metrics. I'll give you one that's crazy. You know, Fortnite? Yep. This battle royale style where everyone fight to kill each other. They hit a record of nearly 50 million concurrent users at the same time, right? And that is more than all exchanges, MetaMask, on-chain, off-chain wallets combined at the same time. So a single game is bigger than the entire crypto industry in terms of people using the network simultaneously. But on top of that, Kevin, the adoption that's going to come through gaming is going to be absolutely amazing. I mean, we have an industry that's going to be worth, you know, six, seven hundred billion dollars combined, more than movies, TV and music all combined.

1:23:25And there's a real need. There's so many use cases that I just think that once one company like Creta, which is building a gaming ecosystem token with people from Japan, Korea, combining efforts that have been building games for 25, 30 years. I think that the vision is big and you know what's going to happen. Well, nowadays gaming, you have servers, right? You have to log into specific servers and there's a limit of 100 players on each server. So you have to scale through servers and it costs you a lot of money to run these servers, AWS, Google, iCloud, all that stuff. There's going to be something, there's going to be protocols that are going to be built without servers.

1:24:10serverless protocols, where your costs of running so many players simultaneously are going to drop significantly. And then all the worlds, rather than having up to a thousand players on one server, imagine having millions of people online in this metaverse world, you know, where you can literally go from traveling from one world, fantasy world, to a magical world, to an anime world, to a hyper-realistic world. Can you imagine that? Literally your character online, the Kevin, the virtual Kevin of you transforms and goes through worlds that you cannot experience in our own reality. That's crazy.

1:24:54I think a great way to end this podcast is to talk about something that you love to think about and also that you guys at SwissBorg are taking part in, which is the future of investing. What does the future of investing look like to you? That's a very good question. And I love to, let's talk about three different dimensions. And the first one is VC capital. Second one, thanks to you yesterday while we were smoking shisha, social capital, which I think is a very nice term to frame it, right? and then the third one i would say is some sort of it's related to social capital but it's a invisible form of currency which does not involve actual money it's capital in the sense of how much value bring society and i'll try to clarify this it's going to be difficult to explain but So what I've been noticing, Kevin, and we've been talking about this since the very first minutes of the show, is that we're going through a financial revolution, right?

1:26:06Where we're taking back the power. People now are becoming more and more educated. The financial IQ or financial intelligence is growing to become financially free. now something beautiful about the ICO era which we were born out of was that it was fair play level playing ground for all but unfortunately we went back to giving that money to the VCs and that is probably one of the biggest solutions other than micro payments for you know countries that are developing that's probably one of the biggest problems we need to solve because that There's a lot of wealth that's being created for seven to eight people behind their boardroom while this could go through the community.

1:26:53And it will be broken. And the reason why I'm saying VC capital will eventually become irrelevant, not just because you cannot have LPs going through a middleman and then investing on their behalf just to grow wealth within that 0.1 % of the world. But the community needs to be able to be a part of it. And that's what SwissBorg is launching, what we call Alpha, where we are negotiating. We're trying to reason co-founders that, hey, dude, instead of having like 14, 15 VC logos, which bring you very little users, they're bringing you capital. Why don't you have just your top three, four favorite VCs?

1:27:32Because maybe they'll help you get listed. They'll help you get capital for future rounds. But even that, I think, will be done on chain to the community in the future. Give some to the community. the best investor in the world is an investor that is also your user, right? So open that up. And it's probably more likely this best investor, your user, to not dump on you because they believe in the project or they're, let's say they're, I don't want to talk kind of negatively about the users, but they're almost more naive, which is an advantage for the person raising money because if the person is more naive, they're probably, they have a less cold approach to investing and dumping.

1:28:17The VC business is to make money. Yeah. I buy, I sell, I dump. That's the problem right there. Exactly. And you have timelines on top of that. Absolutely. Whereas the person who is a user will probably buy into your project and your narrative in an easier fashion because they're more naive. Because they also want to make money. Let's be honest. Like everybody who is investing wants to make money. but it's probably easier to get them to buy into your narrative and to support you, which is what you've done amazingly well at SwissBorg, right? And therefore, they're not going to dump on you or much fewer of them, which is going to make a massive, which is a win-win.

1:28:57And it's the thing we talked about before, like how do you make the situation a win? It's a win-win. You want more money. I mean, it's kind of a win-win-win. You want more money as a business to develop your business. You want the users. And then they want to be able to invest in something they could never invest in, right? That's 100 % right because VCs is highly concentrated money, which as you say, very often is exit liquidity, right? It's like, hey, you peasants, take this at a lower price, right? And making money off us buying in those times. And I think there's a very clear example of why social capital phenomenon, community driven investment is growing.

1:29:38And that's the KOLs, the YouTubers, right? So a lot of these guys are replacing the Warren Buffetts, are replacing all these guys on CNBC, on Bloomberg. The new generations are looking at their favorite YouTuber and almost seeing them as the financial advisor of tomorrow. and what's happening here is if you guys out there don't have lots of wealth right it's very hard to do what you're doing Kevin by the way like becoming a podcaster YouTuber is really it's a full time job it's maybe a seven day work week but I think as we're saying Kevin not only we need to take away that wealth from the VCs democratize that through the community for those who can invest but also create that third layer of social capital which is if you don't have a lot of money how can you bring value to a project?

1:30:29And for example, growing your own community, whether it's Twitch, YouTube, doesn't matter, right? Whether it's a private Telegram group chat, you can create that community. All of a sudden, you will be able to prove to these projects that, hey, listen, I'll bring you more value than most of the VCs that you have there. Why? Because we have ethical people with wealth, with great distribution or communication power that will help you scale your company. And these people can relate to me because they feel closer to me than to Warren Buffett, right? That's why, and it doesn't necessarily make sense, right?

1:31:07Like probably you should listen to Larry Fink, who is like an expert at managing trillions of dollars. But for some reason, people follow their favorite influencer or because they can relate, right? And therefore, this person has some sort of influence on what if he or she is backing a project or associated to that project, therefore the people who believe in him or her will also back that project. And it creates this very new way of investing. Absolutely. And if we can get that, and as the market matures, people no longer call us dumb money, right? Because we will eventually become smarter money.

1:31:49It's just that's how life should be. You know, if Bitcoin is about removing the banks, then investing, we need to remove the VCs eventually. And it has to be a meritocratic model that will help you. So it can be just, hey, look, I mean, SwissBorg Alpha is amazing for that. Everyone can invest. But this is not enough, right? Because you're giving the chance to everyone who are not really contributing with anything other than money. And it's not enough today to just vote with your money. it's, hey, what sort of other value can you bring? And in today's world, it's basically social capital and influence, right?

1:32:25And in crypto, it's even more the case. It's even easier to get associated to the best project very early on when you have built this social capital. Absolutely. That's the future. You create the future, basically. You create it together. Yeah. And even like, you know, Frentech, right? Which was a crazy concept, but there are a lot of learnings from that, right? Because even let's take the perspective of the company that's raising or maybe the individual that's raising. You know, imagine, and I use this example a lot. Do you like Justin Bieber? Yeah. Yeah. I think Justin Bieber has an amazing voice.

1:33:02And I tell everyone he's a great musician and he has an amazing voice. The music that he's done is because it's a machine to make music, to make money. And you need to target what people like. But like he's an amazing musician and he's an amazing singer. I love to listen to him doing acoustic music and singing. Acoustic. Well, that's the point. So imagine you saw Justin Bieber when he was a kid in Toronto or Vancouver. He was based in Vancouver, sorry. And he was playing acoustic on the streets and he just uploaded a video. And you're like, wow, this kid is gorgeous. He has great charisma and he has a very unique voice.

1:33:37And he could just say, hey, guys, I'm going to print my tokens. You know, I have 100 million tokens. If you want to donate, I'll give you my token. if you believe in my career and I want to become a famous pop star. That direct, socially driven type of investment is super exciting. Social tokens, basically. Yeah. The social tokens, which is, hey, you can help me out and participate in my future success if I become successful because you believed in me early. Yeah, exactly. And then whatever album sales he does, maybe we'll give back to you, you know, based on rev share programs. I think that that's where the future should go eventually.

1:34:14Amazing. That was an amazing conversation. Likewise. Thanks to you. Thank you so much for doing that, man. Thanks to you, my friend.