Hey, hope you’re doing well. In this video, I’m going to give you my overall perspective and expectations for crypto and blockchain right now and into the future. And the reason why this is so important that you listen to this video right now is because we are so deep into the bear market, and oftentimes, that is where people make the worst decisions because they are uneducated and they act emotionally. So, this video is going to help you curve those emotions and hopefully formulate the proper perspective and expectations so that you can make an intelligent decision for yourself and the people that you care about. So, where are we currently at? It’s been absolutely crazy, and trust me, I know.
I’ve been in the investment world for a decade now, I’ve been full-time in crypto since 2017, and professionally, I’ve been full-time since 2019. I’ve been through this, now my third bear market that I’ve actually been through in crypto. I bought Bitcoin back in 2013, sold it in ‘14, watched what happened in’ 15, aka the bear market that I rode the wave in ’17, once again got killed by the bear market in 2018, and now I run multiple funds that are in this industry. We also have education companies, so I’m literally in this industry 24/7, and I’ve been watching this industry grow since all the way back in 2013. So, I have, and it’s really important to watch it happen play by play because when you’re in the moment, you understand how things kind of operate. You can always look back and look at charts and be like, “Oh yeah, I’ll just sell the top and buy the bottom,” that sounds wonderful, but that’s not how it works because there’s a lot of different complexities, and you don’t know everything. And then you see FTX go bankrupt, and BlockFi, and all this stuff happening, you’re like, “what’s going on?”
Okay, and what I want to do is kind of clarify some of that stuff for you, just based on my, you know, previous experience. So, deep into the bear market, we usually see three years of a bull market, one year of a bear market, and it’s likely based on two things. Liquidity from the Federal Reserve. So, are they printing money, lowering rates, or are they hiking rates and decreasing the monetary supply? That’s the question that we need to be asking ourselves. And, I should really say decreasing their balance sheet, and those have significant impacts. But also likely, the halving cycle has a significant impact on Bitcoin and crypto because Bitcoin makes up over 40% of all of the crypto market cap right now. And what you need to understand is where we’re at right now in the bear market. We are at the very bottom of typically where we see the bottom happen. So, we haven’t quite had an 84-86% drawdown.
We’re well into this 70 percentile type of a drawdown, but we are, on a time frame basis, we’re at, or past, actually now past the 12-month mark of where we would typically have a bear market bottom. And there’s a lot of indicators on-chain and technicals that are showing that we are likely at a bottom or very close to it. Now, the question you need to ask yourself is, “What would I care about buying now at 16,000 or 12,000 if I believe that Bitcoin’s going to 200,000 in the future?” Probably not. So, those are the kind of the questions you’d be asking yourself if you want to invest right now or if you want to try to time the perfect bottom in the next, you know, three weeks, if that even ever happens, and yes, the macro landscape is different. It’s always going to be different from the previous macro landscape of the previous bear markets. And what you’ve got to realize is, when you’re talking to everyone, you probably just got home for the holidays.
You were talking to everyone at Thanksgiving and at Christmas, or whatever holiday you may celebrate, and you know a lot of people that aren’t educated, that aren’t in this industry, all they see is the news. They see the fraud and scandal of FTX, they see BlockFi, Celsius, Voyager, all these companies going bankrupt that over leverage and acted irresponsibly. They see 3O’s capital go to zero, they see Alameda go to zero, and what they don’t understand is, most of those, the reason why those things happen, which by the way is very typical of very early stage industries, when you have extreme growth and extreme volatility, it makes it very difficult for businesses to operate in that extreme volatility and extreme growth. Yes, it does bring a lot of new companies into it, but it does clear the bad actors out of that industry as well. So, I’m not surprised whatsoever, and the same thing will happen with a lot of these cryptocurrencies. And a lot of them are unregulated securities, so you’re going to see a lot of them not make it into the next bull market. So, that should be to be expected. And if you understand what happened during the internet bubble, when the internet came out, which by the way, our adoption rates are right on track with where the internet was, the same thing happened during the internet bubble.
A bunch of companies came out, everything that was whatever.com was worth way too much money. Same thing with crypto. All these, you know, the technology and these coins that come out, a lot of them are way overvalued for what they do and what they’re likely to do. And the same thing happened back then, and a lot of those companies went under, and a few of them did extremely well. In fact, if we look, if you’ve watched some of my previous videos, we talked about Amazon, and how Jeff Bezos came in on an interview and said, “yeah, during the bubble, the internet bubble, my shares of Amazon kept going down, but I saw the fundamentals growing, as far as the amount of customers using it, the amount of volume of sales, amount of new products, all that stuff, all that was increasing, but our share price was going down, and I knew that this was a recipe for a really large appreciation in the value of our stock, because the fundamentals were not priced in,” and that is exactly what is happening right now, in my personal opinion, is there is a lot of fundamentals, which is exactly what I’m going to get into right now.
So, if you’re a short-term trader, and you try to time every top, and you’re really worried about your return in the next six months, the next three months, this video isn’t for you, and I will tell you this straight up, because I want to, you know, hopefully foster the right mindset for you. The people that are extremely successful, it doesn’t matter if we’re talking about okay, if we’re talking about their health, if we’re talking about their business, if we’re talking about their investments and relationships, they think and act long term. The shorter your time horizon, the more poor and broke you’re going to be. The longer your time horizon, and the better strategically that you plan for these long-term goals, and if we’re talking about investments appreciation or changes in cycles, changes in the economy, changes in business, changes in technology, the more that you prepare and act, and set yourself up for long-term success, the more success you’re going to have in life. And again, it doesn’t matter if we’re talking about investments, business, relationships, whatever it may be. I can tell you, the people that I talk to, billionaires all time, I talk to ultra-successful people all the time, every week, actually. And I can tell you, the people that are very successful think and act long term.
So, if you’re that type of person that is always worried about the short term, and where the price is going, and blah, blah, like you need to, yes, do I operate to some extent, in my portfolio, on a shorter term basis, absolutely, maybe 10, maybe 20% of my portfolio. But the majority of my portfolio is long term, because I know I’m not smarter than the rest of the market. I can’t time the perfect tops and bottoms, and I’m also going to be on this Earth for decades to come, so I need to plan accordingly, right? Why am I, why are you setting up your portfolio to win over the next 30 days? Why don’t you set up your portfolio to win over the next 5, 10, 20 years, if you think you’re going to be along that line, alive that long? So, those are the questions, and that’s the first thing I want to state, is that you’ve got to start thinking long term. If you’re going to be on this rock for longer than a decade, why don’t you start planning for it?
All right, and when it comes to long-term investing in particular, you need to be making your investments based on fundamentals. And there’s two different areas of fundamentals that I want to talk about, which is, first and foremost, we’ll talk about utility. All right, this is similar to the internet bubble, right? All these companies, we knew, holy crap, pets.com, we can order pet supplies online, wow, that is a big use case. Amazon, we can order books online, holy crap, I can be sitting on my couch, ordering a book, that could be a big deal. Did we know that that was going to evolve? I just ordered Uber Eats, I got food delivered here in 25 minutes, I got a chicken wrap, right? Did we know that we could have groceries, anything that you want delivered directly to you in an instant? Did we know that you’re going to be able to watch this video on YouTube, and be able to consume it, engage with it, like it, share it, all that stuff, no, we didn’t. So, there’s a lot of things that you’re not going to be able to project, but in the early stages of an industry growing, you can see potential, and you can see early stage utility. And there’s a few pieces of utility that I think are really important, and worth noting, and by the way, a lot of crypto, probably 98%, has zero utility, is stupid, and will probably do nothing over the next decade. So, first and foremost, say that there’s over 20,000 coins, most of them are garbage.
There’s a few that I think are going to do very well, and there’s a few use cases that I think are going to be very, very revolutionary to businesses and consumers over the next couple decades. We’ll start with the first one, which is D5 decentralized finance. I think it’s going to be very, very big if we were to just look at all the inefficiencies of the dinosaur banking industry. It is pretty ridiculous. They charge right around 30 billion dollars a year for people to have bank accounts. If you withdraw too much money, you have to pay ten dollars a month to have a bank account. All these little fees that they tack on, they make 30 billion dollars a year. Not to mention all the remittances. Right, so if Pablo comes to the United States from Mexico, he works here, works very hard, and wants to send money back to his family. Why is he dealing with 12 intermediaries and losing 30 percent of the value he’s trying to transfer home to his family? How does that make any sense? It’s 2022, we now have blockchain technology that solves that inefficiency, that removes all of these intermediaries, clipping off three to five percent from a simple transaction.
It also makes it operate way, way, way more efficiently. Why are we in 2022 and I can’t send a wire on the weekends? I’m really confused how that is still a thing. I cannot, and then I’ve got to rush a wire before 4 pm or the wire transfer team can’t market and allow for the wire to go out. I mean it’s pretty ridiculous. Not to mention all the inefficiencies with lending. I think lending is going to be revolutionized. We’re already starting to see that in D5 platforms. We’ve seen exchanges, decentralized exchanges such as uniswap, already have more than a trillion dollars in volume and facilitate hundreds of millions if not billions of dollars in lending as well, because you can borrow from these different D5 platforms, and most of them are secured lending. But that is going to evolve as time goes on. Not to mention payments.
Yes, we have the US dollar, all of these countries, the United States, China, major, major countries, are coming out with their own CBDCs, Central Bank Digital Currencies. They are currencies that operate on a blockchain to make the transfer of value more efficient. But people worry, “Hey man, is that going to remove the use case for crypto?” No, it’s going to further accelerate it, because it shows that the technology is so good that literally the most strong private corporation, which, by the way, the Federal Reserve is a private corporation, is using the technology to further the growth of the economy. So it just goes to show you that, and the whole point of cryptocurrency is to hold your own custody, and to remove counterparty risk. And obviously you have counterparty risk if you’re dealing with a central government, so it actually enhances the use for cryptocurrency in blockchain and just further proves that it is here to stay. And I will also say this as well: if you haven’t been watching every video on my channel, specifically one in June where I talked about how the traditional banking system and payment system is changing, the payment railroads are changing from the Swift system to ISO 222, which is ISO 20022.
Okay, and if you look this up, it’s the transition from the old Swift banking system, which is an absolute dinosaur, over to ISO 222, which is just a new language the banks use to communicate, which, by the way, is already being implemented. It just started last month and is going to be executed on and fully switched into ISO from the Swift system over the next two to three years. And that is going to completely change banking and payments. And also, there are a few blockchains that are already approved, such as Stellar Lumens and Ripple. And there are other blockchains like Cardano and Quant and Algorand and XDC and a few others that are being considered or very, very close to being approved. So it’s going to be absolutely massive for payments. And again, this is not my own personal opinion. This is happening right before your eyes on the use of D5. Okay, other things, store value. What’s really unfair and what a lot of people don’t think about is, here in the United States, we are so lucky that we only have nine percent inflation a year right now, which kind of sounds crazy, but they purposely aim to inflate the value of the dollar, which debases it. It’s a silent tax that erodes your wealth.
All right, and while that sucks and it happens, and that’s just how the 50-year experiment has played out since we’ve got off the gold standard 50 years ago, the crazy thing is: can you imagine working for money, okay? And you’re living in Zimbabwe, and you work for this money, and then next thing you know, you have 300 percent inflation? You can literally have a 280 percent return in the stock market, but you actually lost value because there was 300 percent inflation in the year. And that’s not even a joke. That literally happened last year. So that is exactly what other countries are dealing with. Zimbabwe is absolutely somewhat of an outlier, but there are a lot of other countries that are 150, 120, 80, 70, 50 percent inflation, a lot. And I’m not even just exaggerating. That even G20 countries are having multiple, double-digit, if not triple-digit, inflation.
Rates, which is really sad. Okay, and that is likely not going to get better. Is there any reason why you would just turn around and say, “No, it’s not going to just turn around. It’s going to continue to get worse, because our governments and central banks are addicted to the money printer, because that solves every little issue in the short term, but long term creates a worse and worse problem.” So is there a reason that we would want something that is decentralized and we can actually predict its supply? Probably. It makes sense to have an asset that anyone could invest into from anywhere in the world, and be able to invest into an asset where we know for a hundred percent that there is no central party that is dictating the supply of that asset and we can see the schedule and we can see everything verified on an open public ledger. Would that be potentially valuable? Probably. That’s exactly what’s happening with Bitcoin.
So a lot of people overseas, in other countries, in developing countries, that have ridiculously high inflation rates, where are they to store their wealth? How are they supposed to ever have a decent shot at life and a decent shot at helping their kids be successful if every dollar they work for is getting devalued at an exponential rate? Very sad, and that’s exactly what a lot of you know, specifically Bitcoin is likely to solve. And then also, there are specific other projects that are building the financial infrastructure in these other developing countries so that they have an opportunity. Not to mention all the other things that you can put, you know, titles of houses on top of, you know, the blockchain to actually verify that you know the other countries have issues where, oh, you get a graduate degree, but guess what? You know, that was just printed off the internet on a piece of paper, and now that person that you’re hiring that you think has a master’s degree in biochemistry, they just printed that off the internet and they’re handing that to you, and you can’t verify that because there’s no accountability in their system. And that can all be reversed and put on top of the blockchain and build proper infrastructure for these developing countries that have a lot of those types of issues. There are a lot of things that people in the United States and other developed countries do not think about where this technology is going to be a really, really big deal.
Okay, tokenization. All right, big, big deal. Okay, this is tokenizing regular assets. So the building that I’m in, we could put a bunch of NFTs on this building. Okay, a million different people could own a million different tokens that represent the value of this building, and we could pass through the net operating income through the smart contract to all the token holders without waiting and having all these, you know, accounting departments doing all this nonsense, transferring all the money. Oh, it’s a weekend, we can’t transfer it then. There are so many inefficiencies with, first of all, the decentralized ownership of assets, but also just being able to transact quicker. The World Economic Forum has gotten together, as multiple interviews. You can go look up the World Economic Forum talking about tokenization, many different use cases that they specifically talk about that are likely to happen. And then also, this interview about BlackRock, which all we’re going to talk about in another video, but BlackRock CEO Larry Fink just said that they are the 10 trillion dollar asset manager just said that this industry, we’re likely to see a lot of companies go bankrupt and a lot of cryptocurrencies go to zero. But we believe there’s going to be a massive growth in this industry and specifically, tokenization of assets. And who better to say that than the largest asset manager, BlackRock, with $10 trillion under management? All right, I think it’s $8 trillion because of the dip recently this year, but regardless, they’re the largest asset manager saying that assets are going to be tokenized on top of blockchains.
Okay, so that you know, are you going to listen to your Uncle Jerry at Thanksgiving dinner and talk about how everything is a scam? Or are you going to listen to the people that actually control the world? You let me know below.
Web3. All right, so we started with Web1. You know the Web3 thing still has a lot to play out, all right, and there’s a lot of development and a ton of VC money. I’m talking tens of billions of dollars that are going into Web3 development right now and did last year. Actually, about 5 percent of VC went into the blockchain industry and that was over $30 billion dollars last year, and it’s still going in not at the same rate as last year. But regardless, a lot of that’s going into the Web3 sector within blockchain and crypto.
And what was Web1? Web1 was being able to read information and consume information online so you could go to a website and you could read about XYZ topics. Web2 was Instagram, Snapchat, Facebook, YouTube where you could then consume the information but you could also share the information. So this is like kind of the new creator economy where now you and I can go share information.
Web3 is all of those things, but now you own your own data and content that you’re producing. So now you can consume the information, you can share the information, but instead of Meta and YouTube owning all of your data and controlling all your content and censoring you because they don’t like your beliefs, well now Web3 is coming along where these applications are built on top of public ledgers and public blockchains, and they could be private blockchains, but the whole purpose of Web3 is to give the power back to the users and that is exactly what is being developed right now.
I think that we see a big shift into the future into Web3 and artificial intelligence as well which is a whole different story. And then just the adoption so that’s the first piece. That’s a few use cases within this industry. So when everyone says “well what’s the utility,” you could go show on this video or you can go do further research. And that is a few different sectors again adopt the you know Web3 economy that I just mentioned, tokenization, store value, and D5. Those are four different things. Not to mention you know gaming and all I could go into probably another three or four that are likely to do pretty well, but those are like my top four that I think are like very, very good probability that we see those things being meaningful in business and just in our lives in general.
Okay, the adoption too. So whenever you’re at the bottom of the bear market trying to figure out is this something I want to invest in? Is this something that I believe in? I don’t know, blah, blah, blah. Don’t listen again to your Uncle Jerry at Thanksgiving. Okay, just kidding, you can hear him but don’t listen to him because if they’re not intelligent and they haven’t studied this industry, they don’t, they’re not very good at projecting future technologies, probably they’re not the person you want to listen to. Who do you want to listen to? Not even me, you don’t even want to listen to me. You don’t want to listen to random YouTubers, what you want to do is you want to see where the big money is going? Where are the trillions of dollars going and where are these massive companies? The companies that by the way control the world where are they putting their time, energy, and effort because they are not going to make big moves into an industry if they don’t think that it’s going to grow because that is a significant opportunity cost for their capital, for their resources, for their time, for their energy, the risk of you know of doing things improperly and getting you know massive fines of you know having unregulated securities that they’re investing in or promoting again massive fines.
Right, so they’re not going to be moving into something that they don’t think is going to grow into the future. So the question is, what has been the adoption over the last two years? I’ve talked about this a lot, especially my shorter form content, but it has been insane. And you don’t realize it unless you’ve been in this industry for over five years because in the last two years and specifically the last 12 months all the prices have been going down. Guess what’s been happening, the fundamentals have been growing exponentially and what type of fundamentals am I talking about? The use cases, yep. But more importantly, the adoption. Where is the big money going okay? I could go into this and this is a whole separate video but like for example, we’ve seen like stripe and meta and Nike and Starbucks all partner with you know polygon to release NFTs for their different apps for their consumers for their communities. We’re seeing even the previous president Donald Trump just released a NFT collection that has a use case of like, oh yeah, you can have dinner with him, you can be a part of a membership, you can do right. So we’re actually seeing different types of use cases like that which by the way I think NFTs are going to be huge on a membership and ticket utility basis. And there’s a lot of different use cases that NFTs can have which would be a whole other video but even more importantly, yes those are major companies, billion dollar companies that control information, money, data right, those are all really important. AWS, Amazon Web Services, they’re running ethereum nodes, they’re supporting blockchain developers, they’re hiring blockchain developers. But more importantly, the people that control all the money: BlackRock partners with Coinbase, releases Bitcoin trading to their institutional clients, Citadel, Schwab and Fidelity have over 60 million clients and I think it’s like 14 trillion under management across all three of those companies combined. So like these are massive companies that are making moves into it. And actually, Fidelity just opened up Bitcoin trading to their clients as well I think like a week and a half ago. So like the list goes on and on and on. And this could be a whole other separate video. But we have never seen these things happen in 2018 when the bear market happened. It was a common practice and actually a decent argument to be like hey is this industry ever even going to come back. And that was a big question. Is this actually ever going to be a thing? And we didn’t know, okay, and now we know. I mean yes there’s always a small percentage that an industry goes under. But if you look at all of the money, time, energy, effort from literally the people and companies that control the world and, like I mentioned earlier, the central banks literally creating their own currencies. I mean what other proof do you need that this technology is not going away? It’s pretty unbelievable. And the last thing I’ll say is I mean one of the major things that you would want to see in adoption is you would want to see you know an early stage industry rapidly growing exponentially. There’s a bunch of problems with the bank. You know companies going bankrupt over leveraging funds going under blah blah blah. Right? It’s a lot of nonsense and it does suck and it does you know damage consumer confidence and investor confidence in the short term long term.
The fundamentals of the adoption of the companies and the utility and the use cases that I just talked about will be priced in the long term. That stuff gets priced in. Okay, short term you can, that’s all emotional price action. Okay, but long-term fundamentals get priced in. And the most important thing that I was actually hoping was going to line up was that we see a pretty large bear market, which is 12-13 months into one right now seeing many companies go bankrupt. Which, by the way, every time a company goes bankrupt I’m like up, we’re getting closer to the bottom, let’s buy some more, make the buy limits larger. That’s the way that I think. But retail would probably be like, oh let me sell everything right. So it’s all about your perspective. And this is why it’s so important to watch a video like this to have conviction and understand what’s going on. That was hoping that we would get a big bear market. All right, we would see the utility picking up. We would see adoption not from retail investors that are buying meme coins but from institutions that are making a meaningful commitment into the industry and simultaneously we would see all that happening. And then we would see regulation coming. Regulation’s a really bad thing, isn’t it? No, it’s actually the best possible thing that could happen. Could it have some constraints? Could there be negative things? Is CBDC good, probably not. Is all regulation good, probably not. But if you’re investing into this industry, if you are buying Bitcoin, and you live here in the United States, you’re probably not using it as a way to hedge the 300% inflation. You’re probably using it for price appreciation. So what do you want to happen? You want trillions of dollars to come into the asset? Well, how does trillions of dollars come into the asset class? It doesn’t come in until there is regulatory clarity because guess what, BlackRock, Fidelity, Schwab, all these companies that control the world.
They don’t want to risk losing everything in billions and billions of dollars in fines to potentially have a 10x return. They don’t care about the 10x okay. They want a 1.5x a 2x maybe a 3x, but they want more certainty that this industry is going to be here. And they already have some certainty because obviously they wouldn’t be moving into it. But they also want the regulatory clarity that decreases their biggest risk which is regulation risk, which is coming right now. The White House already said first of all, we already know that Bitcoin is a commodity. And why do you think Fidelity in BlackRock released Bitcoin trading to their clients? They didn’t release Solana trading. They didn’t release Cardano trading. They released Bitcoin trading. Why? Because that is deemed as a commodity, not as an unregistered security. So once we get clarity, is a CFTC or is the SEC taking over this industry and what is the fine line that is going to be drawn or are we going to have a completely new regulatory body? Those are the questions that we’re going to get clarity on. And the White House recently has said that hey, we’re regulating stable coins right now. We’re going to regulate D5 assets and we’re going to regulate NFTs by the summer of 2023. So there’s actually specific deadlines that are laid out in different sectors in the industry that they said they are going to be regulating. Okay, and we’re already seeing those institutions come in and they’re coming in in the safest way and the only way they’re going in is in the way where we already have some clarity and some certainty. So can you imagine when the entire industry has regulatory clarity? What do you think that’s going to do for the total market cap for the prices of whatever assets that you’re holding?
Right, it doesn’t mean everything is going to go up. It doesn’t mean a lot of things aren’t going to go to zero. But the things that have the strong fundamentals, things that you should be doing your research on, things that you know that actually have utility, things that interest the institutions because they provide value to their clients, those are the things that you should be looking at and considering having a piece of your portfolio. Because I don’t think there has ever been a better time in the history of investing. Obviously, I’m not 97 years old, okay. But it’s very very rare for an asset class to come out of zero, just popped out of the soil. We’ve got a brand new asset class that we can invest into that is exponentially growing. That is so rare. And it’s so rare to have this massive bear market with ultimate fud and all the nonsense going on, meanwhile the institutions, utility picking up, regulation coming in. You should be thankful that prices are down this far because all the bear market is doing is giving you more time to do your research and potentially diversify into this industry. Okay, you need to be asking yourself, hey here’s my total investment portfolio, here’s how much risk and how much growth I want to have. And here’s you know maybe I want to allocate three percent, ten percent, twenty fifty percent into this industry. It all depends on your own goals. You have to have self-awareness. You got to understand where we’re at. You need to have a perspective, and more importantly, you need to make sure your actions align with that perspective. Anyway, I hope you got some value from this video. Hopefully, the sun isn’t making my face look like I’m Darth Vader. I may have to put on some sunscreen after this or I’m just going to walk around with half of my face being red and the other half being white as a kite. Thanks so much for watching and I’ll see you here on this next video!
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