Do the homework! Plus, two new “Crypto to Know”
26th October 2021 |
Firstly, a little apology. Sam Volkering’s Crypto Network is coming a day later than normal due to a family emergency I had to take care of on Monday.
All is well, but it just completely destroyed my Monday.
Nonetheless, while the little Volkerings had a ‘mare of a Monday, it wasn’t all bad. Luckily (and unbeknown to them) they each stacked some more sats on Monday as well.
What do I mean by that?
Well it’s a little something I do for my kids that I reckon everyone should do for theirs.
Scaramucci’s billion-dollar play
My professional experience goes back to the days as an independent financial adviser. I would sit one-on-one with clients, much like yourself, and walk them through the fundamentals of sound wealth creation and protection strategies.
We would talk about savings, bad debt, debt reduction, budgets, planning, goals, investments, insurances, portfolio construction – a whole range of topics.
But of course the one that I always relished was the wealth-creation strategies. The only problem was that in many conversations we’d talk about things like stocks, shares, managed funds, ETFs, all the gamut of options… but I was always fighting with one hand tied behind my back.
We weren’t able to recommend specific stocks. We certainly weren’t recommending crypto then – although I was already neck deep in bitcoin. It was all funds and funds of funds… not exactly my idea of really helping people build real financially freeing wealth.
So I got out of that financial advice world and got into financial publishing, which (long story short) brings me in front of you each week.
I come from the world of “traditional” finance (TradFi). Now for all the flaws that TradFi has, there’s also some good bits that we should always remember to implement even when it comes to a crypto investment strategy.
A case in point is the power of long-term investing, asset building and consistent goal setting.
Therein lies the power of stacking sats when it comes to bitcoin, or any crypto that you believe is going to deliver that level of crypto wealth we all aim for.
The thing about it that’s exciting is that we are still relatively early in the space when it comes to those who know about crypto and those who actually do anything about it.
Most people still don’t actually hold any or have even started to think about getting something as straightforward as bitcoin. I don’t blame anyone for not doing it yet: clearly there’s a gap in knowledge we have yet to fill.
But for me, not holding something even as fundamental as bitcoin is akin to not holding any stocks or shares. How do you expect to build wealth without some exposure to asset classes that could (over time) deliver financial returns?
Yes, there’s risk, as there is in stocks, as there is in holding cash. But everyone needs to balance that risk with a long-term investment strategy.
When it comes to my boys, I want to set them up for life before they even really start it. So I’ve got an 18 year time horizon in mind for them, where they get an allocation of bitcoin each when they’re 18 to do with as they please.
Until that point, I’m stacking sats for them. Sats or “satoshis” are the smallest unit of a bitcoin. 100 million satoshis equals one “whole” bitcoin. That means the boys will regularly get sats added to their stash, the wallets to be handed over in about 16.5 and 17.6 years respectively.
What will bitcoin be worth then? I don’t know. I’m pretty confident in saying that it won’t be zero. I’m more confident that it’ll be closer to $1 million… maybe more by then.
I say that because of the patterns we continue to see in the adoption of bitcoin.
For example, consider what happened just yesterday. Former White House communications director and former Goldman Sachs investment banker Anthony Scaramucci was talking about bitcoin on CNBC Middle East. He had this to say:
“I’m an investor in this because I see the properties, the technical properties, associated with it. Ultimately this is a delayering mechanism for the society… it’s a ledger defined by math… where no politician or policy maker can corrupt it or add supply to it. I think it is a fascinating thing. I think it’ll have a big position in the global economy over the next decade.”
He went on to say,
“Do the homework on bitcoin, understand what it is… anybody that does the homework end up investing.”
“Have a small piece of it in your portfolio. The more you learn about it you’ll start thinking and acting like Michael Saylor you’ll be like I don’t own enough of this and how do I find ways to own more.”
Scaramucci also explained that his position in bitcoin was now worth over $1 billion.
That’s right. One billion dollars.
He of course is not the only one with a massive position in bitcoin. But he is still early. In the full interview clip which you can see here he reels off some of the world’s biggest investors and uber-wealthy-elites that still think bitcoin is worthless.
The question you need to think about is, when everyone comes around to realising the potential of bitcoin as a financial tool to be free from the controls of centralised powers, how well positioned will you be?
A whole bitcoin may be out of the reach of most people. At around $62,000 not many people have that kind of disposable funds to throw at it. But that doesn’t mean you can’t own bitcoin. You can own sats, fractions of bitcoin, building up your holdings… stacking sats.
You don’t have to lump it all in at once, you don’t have to think about what could have been if you’d been there at $10, $100, $1,000, $10,000 or even $50,000. You just look at it now, “do the homework” and think about how you’re going to build your crypto wealth over the next ten years.
This rule can apply to any crypto position you’ve got. You can add tiny amounts if that’s all you can afford, but with a long view in mind, maybe the tiny amount today is the game changer for you tomorrow?
We’re just suggesting that, we’ve been consistently right about bitcoin over the last ten years. We’ve been right about the adoption, its acceptance, the changing of people’s perceptions of what it is, how it works, what it can do. We’ve said it’s the perfect anti-authority tool for financial freedom against centralised control. We’ve said that small countries will use it as an opportunity to lift the living standards of their people. We’ve said that it would hit $50,000.
We’ve also said that it could soar to $1 million.
I don’t expect we’ll be wrong.
We are on the cusp of something huge, and the ripple effects will be felt from all corners of the crypto ecosystem both in decentralised financial tools, like bitcoin, but also in TradFi too.
TradFi pumping and the gift that keep on giving
Just one more example will highlight how all this could play out over the longer term.
Yesterday, Mastercard announced that it would be partnering with Bakkt Inc (NASDAQ:BKKT) to enable merchants worldwide to accept crypto and integrate it into their products.
This was great news for crypto all round. However, it was Bakkt, the publicly listed crypto company, that was up over 200% in the day’s trading. This is the kind of knock-on effect crypto can have. While there is a plethora of opportunity directly in crypto, there are also plenty in the TradFi markets too, which you shouldn’t ignore either.
It’s why in Frontier Tech Investor we deliver this Crypto Network publication to you, and also why a focus of ours in Frontier Tech Investor is to deliver TradFi-listed stocks that we also think will benefit long term from the crypto revolution.
Either way, crypto, non-crypto, a bit of both, you cannot and should not ignore the opportunity and ensure that friends, family, anyone you meet knows about it too.
Just one more example of how I’m playing my part in this… for Christmas this year instead of giving all our friends a token gift of Quality Street, a bottle of booze or some crappy secret Santa throwaway, I’m giving them sats.
Yes, you read that correctly. I’m giving bitcoin away.
I’ve bought a bunch of Opendime bitcoin USB wallets, loaded them up with some sats and giving everyone the gift that (I hope) keeps on giving. If anything it might not make them a millionaire, but it might just be enough to get them more interested in it all.
Crypto to Know
Below is our “Crypto to Know” list where you’ll find several cryptos that we think you should be taking the time to learn and understand.
They each form an important part of the burgeoning crypto ecosystem.
Several of these cryptos are doing very different things to others.
What’s key is to learn that every crypto has its own use cases, its own guiding principles, and its own particular potential.
Each crypto is to be judged and assessed on its own merits.
Our aim here is to help you understand these cryptos and the wider crypto world.
These aren’t specific recommendations but a guide to help you learn and build your confidence in operating in this space.
We will add more names to this list over time. However, if you’re new to the world of crypto, these are the names where we think you should start your education and learning.
We’ve also added links to each one.
The links are to what we believe, in each case, is the best resource for learning about that crypto.
Two new additions!
There’s a couple more additions to this list that are worth checking out and learning some more about.
In the interest of keeping our list tight and concise, we’re dropping off a couple too. That doesn’t mean you should stop learning about them, and understanding how they work. However, if we were to boil down the crypto landscape into a succinct starting point to learn and explore, then this list of ten would be where we think is best.
With that, we’re dropping Uniswap and 1inch off the list, and replacing them with Solana and Secret Network.
Solana is a layer one blockchain (its own standalone blockchain) with a focus on fast transactions, low cost and a user-friendly platform which enables developers to build and experiment with decentralised applications.
It’s also exploding in popularity – with new projects building on Solana all the time, everything from play-to-earn gaming to non-fungible tokens (NFTs), decentralised finance (DeFi), privacy protocols – everything and anything.
Some even suggest it may become bigger than Ethereum.
Will it? I don’t know, that’s quite a high-water mark to reach. But… it’s fast growing, and exciting and easy to use, so it’s worth learning more about and exploring as one of our Crypto to Know.
The best starting point is to read up on Solana with as much of its documentation as you can, starting with the very simple, “What is Solana?”.
Secret Network is another layer one blockchain, with a very distinct approach to its development and around delivering privacy and shielded transactions to decentralised networks.
The issues around privacy and protection of data have never been more important than they are today. With companies like Google pervasive in all aspects of the digital world, Facebook looking to focus on and dive deeper into the “metaverse” and the governments wanting to issue central bank-backed digital currencies, it seems all everyone wants is information and data about you.
But it doesn’t have to be that way. Secret Network enables developers to build out new decentralised applications that put your privacy and security first and foremost. Secret DeFi, secret NFTs, secret messaging and communications privacy and protection for everything you do online.
It’s a fascinating approach and a fascinating project, and another you should really get to know.
The best place to start with Secret Network is its website and the simple “Learn” information they present, which you can find here.
“Crypto to Know” watchlist
- Bitcoin – bitcoin.it/wiki/Main_Page
- Ethereum – ethereum.org/en/what-is-ethereum
- IOTA – docs.iota.org
- Tezos – https://tezos.com/learn/getting-started/
- Filecoin – docs.filecoin.io
- Cosmos – v1.cosmos.network/intro
- Binance – binance.com/en/about & research.binance.com/en/projects/bnb
- FTX – ftx.com & help.ftx.com/hc/en-us
- Solana – https://docs.solana.com/introduction
- Secret Network – https://scrt.network/about/about-secret-network
Sam Volkering
Editor, Sam Volkering’s Crypto Network
