Epic 2-hr Interview on Investing in 2021 and Beyond with Renowned Investment Strategist Lyn Alden

welcome everyone it's angelo robles host of the angelo robles podcast and the founder and ceo at family office association today we have acclaimed investment strategist lynn alden i'm calling it our epic interview on everything investing it's not going to quite be everything but we're going to try obviously it features linold and the founder and ceo at lynn alden investment strategy lynn welcome back to the show thanks for having me back happy to be here great and many of you know and i would recommend listening to our first interview which was december of 2020 so about seven months ago and most of my questions are going to be different although i'm tempted to ask some of the same questions because so much has changed but i think to make it more engaging for the audience you could always go back to it's up on my youtube platform and and watch or listen to it uh lynn is definitely among my favorites i subscribe to her services i really enjoy her deep intellectual approach i do not agree with everything but who does uh so it's interesting to have a good conversation maybe some debate i have a truckload of questions it will be way more than just bitcoin and crypto but it's going to start off that way and on that note why don't we begin lynn did elon musk hurt institutional adoption of bitcoin by saying it's not green i think in a small way possible but i think the the bigger picture for this kind of price action we saw is actually more tied to the gray scale bitcoin trust uh and so for people that are not familiar with it uh you know the grace girl bitcoin trust has you know for a while been one of the only uh you know publicly traded vehicles uh that you can access bitcoin with for investors that prefer to access a brokerage account institutional investors could also use it uh and so in addition to people buying bitcoin through that trust there's also a neutral arbitrage trade there because it wasn't an etf it's still not an etf it trades you know it's like it's kind of like a closed end fund uh and so we can trade at a premium snav or discounts nav for most of its history because it's a rather unique vehicle it traded at a premium to nav and so what people could do was they could you know buy in at nav with these six-month lock-up periods right so you basically the investor would go out get bitcoin give it to grayscale they basically buy into grayscale at nav regardless of what the current market price is relative to nav uh with the caddy opting they have to hold it for six months and so for some people they just were happy to be long that that fund whereas other people did it specifically for the the to collect the premium and so what they would do was they they'd they do that actually get it at nav they'd short an equal amount of bitcoin and so they have a neutral position uh and then after the six-month lock-up period they can sell their gbtc shares they can they can undo their bitcoin short and whatever the premium over nav is they get to collect that and then they can they can do it again they can do it every six months uh and so when that trades done their trades off so they sold their gbtc they ended their bitcoin short but the but bitcoin is not redeemable from that trust so that bitcoin is permanently in the trust now uh and so basically it converted liquid bitcoin from exchanges into illiquid bitcoin and cold storage and so when that was repeated over and over again it was kind of a hotel california for uh bitcoin uh and so that was that was you know a you know gbtc was the largest buyer bitcoin in the second half of 2020 for example that's how big that effect was and it's hard to know exactly what percentage of that was demand for bitcoin versus specifically that neutral arbitrage trade but certainly a component of it was that neutral part and so now with with gbtc having competition from the canadian bitcoin etf from some european exchange traded products uh from easier out you know sky bridge bitcoin fund all these other things that are generally cheaper uh you know grayscale's now got a discount to nav and so that that trade is over there's no more kind of neutral arbitrage trade at least in the long end uh and so basically that biggest buyer is removed from the market and so when we saw that happen back in say january of 2021 bitcoin started to kind of consolidate for a little while kind of made newer highs but the momentum was kind of weaker and then we started to get that elon uh you know uh concerns it kind of impacted a market that was already kind of you know on its on its sideways consolidation and so that kind of you know helped trigger the decline and so i think that played a role but i think the more underlying thing was just a supply and demand balance for bitcoin itself yeah i mean ironically and i'm not making this up my next question after that one i'm looking at it now did the end of the premium in gbtc signal a bear market in bitcoin but you did answer that i am gonna go back and push a little bit on the elon and the green thing ah green thing uh in i mean you would know among institutional investors uh they really look at esg esg score some of this may trickle down more and more to family offices over time and i would say likely will uh it is going to be difficult i think especially now when things are a little rocky to get institutional adoption i mean could bitcoin be green we would need to get in a deep discussion about will there be a hard fork will the community allow it to happen what will happen to existing bitcoin this this may get interesting if i could push you a little bit on the green initiative could you paint a little bit of a bearish scenario to this yeah i think there's there's two separate risks here so one is the how green bitcoin is and then the second one is how how green bitcoin is perceived to be and how that affects its investability and so what i i would kind of separate these two risks because i actually think a lot of the misconceptions i think a lot of the kind of concerns around bitcoin's energy usage are somewhat flawed and so i actually think that the overall energy usage uh is uh you know pretty attractive especially out of this after this recent uh move out of china right so i think it's actually going to improve uh and so if you look at say bitcoin's uh energy usage uh it's something like point one percent of global energy usage uh and the way that bitcoin scales uh it'll basically over time use a smaller and smaller percentage of its market capitalization and energy so even if the market capitalization grows uh that percentage goes down and so the absolute amount can go up but the percentage goes down that's what we've seen over the past 12 years and it's projected out to continue and so i don't really view that too much as a concern but because we are we do we are in a very big wave of esg investing it's a really important part especially for institutional portfolios i do i do view that any any perceptions around uh bitcoin's greenness or lack thereof uh certainly can influence its adoption and so for example you see uh one of the biggest uh new uh north american bitcoin miners marathon uh you know they were trying to for example uh deal with the fact that that you know bitcoin has transactions and some of them uh you know most of them were from uh legitimate sources but you can always have some from illegitimate sources and so they were trying to filter out some of the illegitimate ones to kind of improve its it's say institutional attractiveness now that didn't work out very well they didn't really increase their demand for that and retail investors push back on it and so there are challenges in kind of making the overall ecosystem kind of this neat and tidy package for institutional investors to be able to use uh but overall i think you know it's kind of a separate thing between and say it's it's how how green is perceived to be versus how green it really is and so for example i know a lot of you know miners in the space or financiers that are using bitcoin for example to soak up flared gas right so a gas that would otherwise be burned into the atmosphere is instead being put into bitcoin so that's basically using an energy source that would otherwise be wasted and so there's actually a pretty significant percentage of the energy that's used for bitcoin is increasingly kind of going towards that type of thing in addition to stranded hydroelectric resources and stuff so overall uh you know but because there are still for example coal uh plants being used to mine bitcoin in some areas less so now that it's that it's coming out of china but we still have some for example in in certain say u.s states uh i do think that's overall kind of a public uh perception concern both from institutional investors and from certain politicians like for example elizabeth warren or some of the other ones uh that have used that uh you know specific uh aspect of bitcoin to kind of uh critique it uh i mean i don't want to get into conspiracy theories too much uh but they're maybe it's just coincidence but all the things we're talking about the china factor elon we'll get to kakistan in a second uh and knowing how central banks are it almost made me wonder is there a concerted effort to i'm not going to quite say kill bitcoin i think that's impossible but death by a thousand cuts and limiting its growth if there was a coordinated effort is very much possible i don't know if that's more of a comment or a question but i'd love to hear your general feedback that that's a perception among some in the digital asset space that we've had an unusually high volume of kind of uh government uh pushback against it uh and so uh you know you had some in the u.s some in the uk uh binance for example is being increasingly uh you know uh regulated uh china you know they've had multi it's kind of a joke in the in the digital asset space that china bans bitcoin every year right and it's always like here's the here's the here's the chinese bitcoin ban of the year and it never actually really has teeth yeah i mean it's been the biggest uh uh mining jurisdiction for uh i think at least six years now by far uh but this latest one came from the highest level so far in that in among those bands one of the vice premiers uh and so this one uh we're seeing from the hash rate and we're seeing from all the other evidence on the ground uh that this one actually is effective so a very very large percentage of chinese bitcoin mining is moving they've also gone after some exchanges to basically try to sever it as much as possible from the banking system they're probably trying to reduce competition to their new uh digital yuan right so they have kind of a you know basically mining bitcoin is a is a way to for basically uh you know non-kyc coins from china so it's basically a way that they can put in energy get bitcoin from nothing uh you know not from existing exchanges and they could you know potentially sell it away and so they want to kind of limit some of those access points uh but that's of course china so in the united states in europe it's less extreme we haven't had any sort of major actions to kind of you know cut off bitcoin from the banking system like you've seen in in nigeria or some of these other jurisdictions but you you have kind of like you know like you said death by a thousand cuts bringing up esg concerns uh you know pushing back against all sorts of different you know kind of aspects of it and so i do think that there is kind of a somewhat of a pushback to kind of keep it checked to some extent uh you know because it had this recent parabolic rise for the first time in its history it's kind of a macro asset level right so as bitcoin hit a trillion dollar market cap as the whole space hit over two trillion uh you know that's something that's now on more people's radars and then especially when you have you know corporations getting into it institutions getting into it uh you know it's certainly kind of it hit it's hit the mainstream enough uh that i think that some jurisdictions wanted to keep in check especially ones that are you know have somewhat less property rights that are that are more kind of interesting capital controls or things like that so we've had a little somewhat of a spectrum of pushback across the you know across the globe bitcoin's dominance has fallen from approximately 70 percent to 45 since at least 2017 this was bullish i would say leading into that fourth quarter and 17 can we still have a run of bitcoin to a hundred thousand by the end of the year we're all familiar with plan b and his forecasting uh but that's a pretty wide variance i think he was like 80 000 to like 266 000 or something like that right now it looks like a hundred thousand is going to be really really challenging but what are some of the metrics that you're seeing coupled with some of your opinion yeah so when it comes to plan b's model i find his charts very useful uh but i've never incorporated the actual kind of price targets that he uses right so i i you know i find that their the research is interesting uh and i use it kind of as an option you know one of my observational tools but it's not one of the primary metrics that i use in my own kind of forecasting uh and so uh you know i do think it's possible to hit a hundred thousand either either maybe by the end of this year or next year uh but it's you know there's like you point out there's a massive variance there right so we are starting to see evidence of you know kind of a bottoming formation around bitcoin in the 30 000 range that doesn't mean it necessarily is going to be right but it means that we're seeing kind of more signs that it might be but until we break over the say the 41 000 barrier and kind of stay there for a little bit it remains really in limbo from an intermediate trade perspective under the surface we're seeing some you know that basically the the migrate uh the migration of hash rate is one of the more kind of bullish things under the surface and so i actually think there's a lot of uh you know opportunity in some of the publicly traded bitcoin miners right so so so marathon riot uh you know uh and so if those uh our companies are able to get all the miners that they've they've contracted out into next year uh you know something like for example marathon plans to 5x the number of miners it has between now and the end of of quarter one 2022 uh and so there are a lot of interesting changes like that under the surface we're also seeing i've been covering the lightning network which is the the secondary layer that runs on top of bitcoin for these these faster transactions and we're kind of seeing critical mass there where it's reached level of liquidity and a level of apps that are kind of using it so we're actually getting a kind of a parabolic increase in the usage of lightning and so that's i think long-term bullish for the for the network and so i do think we're seeing a lot of kind of underlying network effect things that are still uh bullish for it uh but it has to get through this period of kind of you know distribution that's happening we have to get you know ongoing kind of regulatory clarity and so i do think that the you know it's a lot riskier than it was say in early 2020 when it was super cheap when it was like you know 7 000 a coin uh but i do think that there's still kind of a lot of multi-year opportunity ahead uh for maybe a small percentage of a portfolio and it could be bitcoin it could be some of the some of the publicly traded miners uh there are also private miners that you know people that can do private capital with uh and so there is a lot of kind of interesting space in there for the for bitcoin dominance the tricky thing about that is it's a rotating uh kind of cast of coins that is always the ones competing with bitcoin's dominance so ethereum has been the big one over the past two cycles but fact you know if you take out ethereum and you kind of look at what else is kind of eating into the market share one of it is stable coins so i actually don't count stable coins in terms of uh bitcoin's dominance because they're more of a tool for people to access digital assets rather than kind of a competing asset that's kind of an extension of fiat currency into the digital asset space and so really i'm looking at things like i mean doge was kind of a you know kind of captured retail intention there for a while even though it's got a lot of fundamental issues uh that you know it kind of took some of the the retail buying pressure that might have otherwise gone into bitcoin and ethereum until they went into doge we also saw an increase in a lot of these kind of really tertiary coins like bitcoin uh cash or ethereum classic some of these kind of derivative coins uh we also see a lot of action among the d5 protocols like unit swap yeah and so uh there is you know the a lot of the when bitcoin's dominance was challenged last time the last cycle like the the 2017-2018 period you know ethereum was one of the big ones but besides then it was mostly different ones uh and so you know a lot of those failed since then except for bitcoin ethereum and a couple others uh and now the ones that are coming up the challenge bitcoin and ethereum are kind of a whole nother set and so when we see bitcoin dominance we have to realize that a big chunk of that is rotating failing being born uh you know there's a lot of churn in that that other percentage that is kind of challenging those two top protocols and so for example the if you look at the bitcoin to ethereum ratio ethereum's gained a lot on bitcoin since the bottom around i think was early you know i think was 2019 when it bottomed uh however it's still below it's it's uh you know 2017 peak for example uh and so there is kind of this this you know uh i think that's a probably better ratio to follow you'd say that the bitcoin and ethereum ratio because you're at least comparing apples to apples you're comparing kind of these two let's say blue chip protocols competing with each other whereas that extra space is this big kind of churning thing with the different there's there's different numbers of coins and then that the coins that kind of make up the largest percentage of that keep rotating over time we did have a question that came in i'm going to keep my opinion to myself on it but it basically was your opinion on tether so tethers tether's challenging because i mean obviously from a regulatory standpoint it's challenging i personally don't hold tether i think there are i mean there are other stable coins that you can use that are better accessed now i think the question that some people have is how tether could be impacting other the prices of other digital assets and so one thing that's important in mind is to separate accumulation volume from trading volume and so tether is not really used for accumulation so people buying bitcoin uh mostly in kind of these regulated exchanges like like coinbase for example uh and then bringing it to their cold storage or you know to fidelity or to nydig whatever the case may be and so that that's kind of accumulation volume uh and then there's trading volume and a lot of that happens in these offshore exchanges like binance for example where tether is used as a unit of account uh and so you know basically they're you know the biggest risk there would be that that say there's there's outright fraud so that tether says you know we actually if they end up having far fewer reserves than they say they do so the biggest kind of surface issue is that their reserves are not pure cash right so that they they have a bunch of different uh uh assets corporate paper things like that and so that they have a they have a non-zero risk in in some of their reserves uh whereas their asset is being treated like dollars and so that that presents risk there the the kind of the the less likely but but you know potentially more severe risk would be that if they somehow don't even have that the reserves they say they do uh and that you know some of that is unbacked if that would ever kind of be if tether users were to doubt the reserves you could have a flood of people kind of trying to pour out a tether and that could cause volatility in the space and it's interesting because you can actually get upward and downward volatility in other assets and so for example when you're trying to when you're trying to get out of tether let's say you had to do it quickly because you're actually it's actually unraveling you know you could your ability to convert to fiat is slow at that point it's limited so you have to get into other digital assets you can get under other stable coins so they might their pegs might trade above their par for a period of time if you want to get into other stable coins you also could ironically get a temporary spike in bitcoin because you're basically getting out of tether and into something that you you know it is you know bitcoin ethereum kind of the blue chips but then after that some of that capital would probably then want to get out of the space and so that whatever spike you got from people getting out of tether would probably subside uh and so that'd be if that ever came out that would be a huge volatility issue i don't see that as impacting the long-term structural case for bitcoin as a network uh as a network effect but it is kind of that always on that radar as a potential you know you could wake up one day just the numbers could be all over the place because you have some news out of tether or something yeah it's a great answer you know completely agree uh the president of the republic of kazakhstan recently made amendments to the country's tax and budget payments code introducing a new tax for cryptocurrency mining operators interesting for those that don't know how a lot of the chinese miners moved to kazakhstan and now they're looking to have some level of controls and taxation i don't know if i could blame them uh but this goes back to my earlier question and i do not want to be mr conspiracy theorist although it's hard not to sometimes you know there appears to be some level of a coordinated effort and that was a word that you didn't use that i used relative to possibly the oppression on some level of bitcoin so you probably answered it already but maybe now that we're throwing in kazakhstan your opinion about that yeah so that's interesting because it it's been it's been interpreted a couple of different ways on one hand there's a slight bullish aspect in the sense that it's kazakhstan formally kind of accepting it right so if something's taxed it means it's acknowledged on the other hand uh and also that taxes is relatively small it's it's a it's a you know a couple fraction of a cent uh per kilowatt hour uh but it's uh but it's more about the kind of the you know the the probability that could be raised in the future right so that this at this level that was added it won't kind of meaningle meaningfully impact mining by two uh you know the profitability by too much uh but now that that precedence in there they're saying okay what if they double it what if they triple it or what if they keep raising it from there it also opens the precedent where uh you know governments are more likely to you know kind of uh carry out certain industries for taxation uh and so for example right now uh you know a bitcoin mining company is already taxed right like any other company they you know they have profit and loss if they're in a profit uh you know whatever they're at the end of the day when they're accounting sorted out they they would you know conceivably tax on it and then you know this kind of law is potentially saying you know we're gonna we're gonna attack certain uses of electricity rather than other uses like we're gonna basically have a government preferred use of electricity and therefore attack certain types of its use more than others uh and so it kind of opens up a precedent that that i think spooks some of the bitcoin miners um especially because you know once they get into a jurisdiction it's very expensive to you know move tens of thousands of miners uh and so they're hoping to stay in that jurisdiction for years and not have to relocate again like they're like they've just done out of china and so i do think overall that you know that could be something we see in more jurisdictions uh if if the esg narrative i think captures more uh kind of uh attention among regulators and policy makers uh and you know one thing you know for my part i'm i'm planning on writing a article on bitcoin's energy usage uh within the month uh to kind of you know look at it from like an engineering perspective right because that you know from what i've seen in media it's often analyzed by people that are not very technical they might not understand the scaling details of how it works and so they see headlines like bitcoin uses more energy than a small country which is is true but then again so does youtube right and so basically it's one of those things where you can you can use kind of certain framing to make anything sound really bad uh but when you actually run the numbers run the scaling it kind of tells a different story and so i think we're gonna we're gonna see this over time we see all for example in the united states we have the bitcoin mining council now and even that was somewhat controversial within the bitcoin community uh but uh basically that's clearly an attempt to try to uh you know have another voice in the conversation uh you know about how this kind of works they're they're basically showing some of their uh transparency right so we actually see for example that among the sample they have which is a very large sample uh you know they're apparently using a higher rate of renewable energy than the general us grid for example uh and so this is something that we'll we'll see kind of different pushbacks one way or the other it's partially tied to politics at the current time uh and so it's going to be a i think a a big deal it's one of the biggest kind of long-term risks for bitcoin from an institutional perspective i think is that esg angle for sure uh a bit of a technical question and maybe again i know you're you're bitcoin you're incredibly fluent on ethereum very quickly you got up to snuff on it what effect will eip 1559 have on ether supply so that should be pretty bullish uh in the intermediate term and so basically what that does so that one of the differences between ethereum and bitcoin is that since inception bitcoins had a very algorithmic monetary policies they basically said that the the new supply of coins is going to cut in half every four years it hasn't changed and it's just kind of this this sound money kind of principle that it goes through ethereum's different because from the beginning they planned more rapid changes to the protocol and so the developers put in difficulty bombs uh and so basically that's kind of like a you know almost like a kind of a mutually short destruction that's embedded into ethereum that forces both miners and developers and users to switch over and do these hard forks every every once in a while uh to kind of keep the development going uh and so you know basically in ethereum the developers have more control so they can change monetary policy more than than they can in bitcoin and so there's actually kind of almost like a central bank of ethereum in the sense that you can actually change monetary policy with with less difficulty than you can in ethereum and so that's been one of the critiques against it uh but you know this latest proposal they want to try to have a somewhat more concrete monetary policy where there's going to be a deflationary component which is that you know some portion of the fees that are sent to to miners will be burned right so to basically be a way to destroy ethereum on the other hand there'll still be a issuance and that issuance will be based on how how how many uh a theorem are being used uh to validate the the network uh over time uh and so you know as as there's kind of a couple steps here so one is doing that that kind of inflationary deflationary protocol then they're trying to shift to proof of stake and so there's kind of a multiple uh steps here but over time you should have a more consistent monetary policy uh with a very low amount of issuance uh you know so one of the long-term questions there is okay so you have now kind of a quantitatively sound monetary policy but then from a qualitative perspective it's it's can that be trusted so will they change it again in the future right so if they changed it before can they change it again uh and so that but that should be kind of bullish in the intermediate term we're also seeing that because eth2 is being rolled out and it you know it's kind of got this unclear deadline for when it's going to happen it's kind of gotten delays over time and so with eth2 staking basically what people are doing is they're taking their ethereum tokens uh and then they're locking them up into this smart contract uh where they're basically earning a yield uh to help kind of you know verify uh and secure the the new kind of eth2 uh beacon chain kind of the the new core block chain and so what that's doing is it's kind of taking liquid liquid ethereum and moving them over into being illiquid ethereum because once they're in that contract they can't come out uh and so they kind of get locked away and so it's almost a similar effect you saw like with grayscale where just you know space is one directional flow of of liquid ether to illiquid ether and so i think you know at least it could be one of those things it's a cell the news event so once it's once the theorem two is kind of rolled out and that ethereum gets unlocked it could ironically you know be a sell the news event where now you get out of your position but at least until then that's a pretty strong upward price pressure for ethereum because you have these you'll have you know ways to convert a liquid uh liquid to illiquid ethereum with eth2 staking and in addition you have um the the the eip-1559 which should be a more uh you know disinflationary monetary policy than ethereum's had in the past and everyone this is going to be a very long-form interview i promise it will be more than just a digital asset ecosystem but there's just so much interest with families getting more active in it and this is some pretty complex stuff we're talking about i felt it would be valuable for many of you but i promise it will be diversified uh related to that at least how i'm gonna ask it will ether reach parity market cap with bitcoin in the next five years and i am going to give you a part two to that will bitcoin be blackberry to ether being the iphone uh so i think the first question is possible and i think the second question is unlikely and the reason for that is that they have two very different use cases so like i said before the the kind of the the main thing about bitcoin is that it's it's out of all the block chains it's kind of the one that achieves sufficient decentralization meaning that it's very very hard to change uh and most of the development happens on the on the extra layers and so you know bitcoin did just do a an update called tap root uh but that'll be the first major update since 2017 segwit uh and it got over 90 consensus so you know in order to update bitcoin it has to be almost unanimous uh and it's more incremental so there's instead of kind of one central development hub it's this very kind of slow update process but that's exactly what you want out of say digital gold uh you want a you want you know you want to know with high certainty what it's going to be like it's also purposely simple by design to maximize security right so it's not touring complete and so overall it has fewer attack services fewer fewer opportunities for bugs uh and and whereas a lot of development can happen for example there's now smart contracts on bitcoin with rsk and stacks 2.0 there's lightning network which makes it faster and kind of more usable in the secondary layer and that's where a lot of the rapid development can happen uh whereas the underlying protocol is kind of like fedwire where it's this is this system that's kind of the foundation the system that's not kind of being rapidly changed it's more for these these large settlement transactions rather than say buying coffee with it whereas ethereum they're trying to do more on the base layer uh and so that comes with technical risk right because you're i've described it as like you're changing the engine while you're driving because you're you're changing over from each one to each two at the same time as you have competitors uh you know cardano solana uh these other uh binance chain although they're you know they're obviously facing some issues now but basically there's a lot of other smart contract platforms and one of the issues there is that you know that that's there's pretty low switching costs for smart contracts uh and so if if there's say one of them gets high fees as you've seen out of ethereum lately then stable coins and other things can spill over onto other smart contract platforms and so for example speaking of tether you know tether in its early days used to run on omni which which ran out of bitcoin uh but then when ethereum was launched ethereum was a better suited blockchain for that purpose and so tethers moved over to primarily running on ethereum uh but when a theorem started to become expensive you started to see tether migrate over to tron of all things and tron's not a you know it's a more centralized uh uh blockchain and so overall you kind of have this kind of shift towards lower fees and more more centralization which which kind of you know it's almost like you're competing on cost which is not a good place to be in uh and so but ethereum still has a very large developer network effect it's got the you know up there with bitcoin it's the top two uh overall kind of uh network effects uh it's got the most transaction volume of any blockchain uh you have uh basically a lot of uh tokens running on top of it so it's got that kind of network factor so basically where you're comparing is a network effect uh two low switching costs tons of competitors uh and so overall i view bitcoin and ethereum as being quite different with different use cases different risk profiles so one of them is the the you know kind of the the purpose is simple foundation uh i think the best analogy is um you know tcpip for the internet right so that's been around since the 1970s we're not we're not we're not radically changing the underlying foundation the way the internet works it's it's literally all you know it's over four decades old i'm pretty sure four decades now at least two decades from now it's not gonna happen it's not gonna having changed much we rapidly change the thing on the top of the surface for for tcpip for the internet right so we're changing the application layer all the time whereas that underlying tech is not rapidly changing so bitcoin uses that model right so there's lots of happening on the surface whereas the foundation is kind of steady whereas the theorem is is you know more kind of trying to be more ambitious on the base layer and do more things in the base layer but then taking more risk by being true and complete uh by being more centralized in terms of development uh and having more more competitors from other smart contract platforms so you know i think that i don't really view them as kind of a one versus the other uh phenomenon but it is possible that you know ethereum's market cap could rival bitcoins in time there is a question that came in from harley harley i'm going to repurpose it a little bit uh to what extent if any did the u.s government's ability to follow the money the bitcoin and the ransomware attack on the gas pipeline from about a month or so ago uh that's how these people get paid i've always argued it's not as anonymous as people think it is or it's pseudo anonymous at the u.s government with its full power and this is a company that the koch brothers own 40 percent of i might add and they're pretty influential if they really really really wanted to find it they could and they did pretty quickly that actually spooked some people uh what's your opinion about that and did that possibly impact bitcoin's price it's possible it did and it's one of those things that can be again viewed bullish or variously depending on because there's a couple of variables there and so there are there are blockchains that are more optimized for privacy like monero and if anything they would get on regulators attention you know pretty fast right because you know that's it's a privacy coin it's kind of made for that purpose now they have to achieve certain you have to have basically less security less verification in order to have those privacy features uh and so bitcoin's base layer is quite trackable and therefore it's actually it's it's pretty bad for for using for crime uh and you know there's there's that firm chain analysis uh they're often employed by law enforcement uh you know for these sorts of purposes they do studies every year they show that a very small percentage of bitcoin's uh transaction volume is is for estimated to be for illicit activity uh and for that reason i mean if you're going to do illegal activity a suitcase full of cash is better in most cases if you're using a digital one then maybe monero or something like that whereas bitcoin is quite trackable now there were some uh false reports there where uh you know not only were they able to track the funds they were able to get the funds back uh and but that's because those funds were you know not transitioned to say a cold storage wallet and so if they were transitioned to a cold storage wallet it'd be almost impossible to get those funds back unless they could track down the people they could uh you know track down that wallet for example whereas apparently those hackers left their coins on on a hosted wallet and so uh that was able to be accessed either from an exchange or from the host provider you can basically do back doors if it if it's kind of hot uh you know it's not cold storage it's hot storage uh and so overall you know that impacted in some ways the narrative a little bit but other hand it showed that if anything regulators you know should have less to fear from bitcoin from that privacy perspective because bitcoin is really not for that purpose it's more about sound money about kind of you know applying software to uh the money system right so we're seeing with lightning network we're seeing with el salvador remittances for example things like that it's less suitable for uh nefarious activity now over time when you when you you know tap root update will make will somewhat improve the privacy a little bit and so over time lightning transactions could become increasingly private uh and so you can almost have like uh us you know parts of the bitcoin network that are almost like monero in the sense that they're much harder to track uh and until recently lighting network had low liquidity so you can only do very small transactions with it but say hypothetically three years from now five years from now as lightning capacity has been going parabolic recently uh and so uh if that becomes increasingly usable and you can do larger transactions with lightning and with tab root they're more private uh you know that could open up again it ironically could make bitcoin better for privacy which could then also bring more regulator heat against it so uh this this i think you're you have a spectrum there between a one hand the kind of the initial like cipher uh punk movement the the kind of the people that founded bitcoin they'd prefer to be as private as possible another hand privacy invites regulatory uh pushback and so i think that there's different blockchains for different purposes and overall the current configuration of bitcoin is not really optimized for privacy and not really optimized for criminal activity even though some of the narrative still focuses on the silk road road days or on on bitcoin's relatively small usage and crime since ethereum is moving to proof of stake you mentioned that earlier will minor extracted value become irrelevant well for ethereum so basically ethereum miners are going to have to shift away from it they they you know they could mine ethereum class that they can do whatever they you know they can repurpose their gpus one difference between bitcoin and ethereum is that bitcoins miners use dedicated equipment asics uh whereas ethereum miners use gpus and so those can be repurposed uh for other other activities uh and so overall uh you know uh uh basically ethereum's gonna transition to vet the validation model right so you use ethereum tokens to verify the ethereum blockchain it's it's it's got that kind of more circular aspect uh whereas you know it's not the minor activity whereas bitcoin is staying with that minor model and so definitely in in the ethereum ecosystem uh it's going to be headwinds for ethereum miners once that eventually rolls out although there's still no clear deadline for when ethereum two is going to be fully implemented with proof of stake true we had a question come in it's coming in from someone who must know a lot about cyber and issues it's pretty deep is the secret network better than monero since downloading tales isn't required for privacy allegedly if you download tales you end up on the nsa watch list yeah it's not something i covered too much i i mostly cover bitcoin first usage as a store value uh for its its effects on payment networks uh i cover ethereum for smart contracts stable coins i cover some ethereum competitors for those reasons uh i think there's a lot of interesting things being developed on those i generally i am not kind of focused on the technical details on privacy as much as as some people uh focus on so i'd have to pretty much pass on that question and i have one coming up that is very much a newer development uh i know little about it but i took some notes on it i'm probably going to mispronounce it the ducats d-u-c-a-t is that something you're familiar with as a wyoming dow uh no i'm not i'm gonna ask the question unless i think it's important for my audience to at least they could say they heard it from my podcast first then we'll get to the next question it was basically going to bring up the american crypto fed dao the acronym is illegally recognized by the state of wyoming as the first decentralized autonomous organization aka down the united states will the ducat was the question which was granted this is an important part granted dow status in wyoming so a stamp of approval from the government become the new tips and inflation and deflation protected by stablecoin with unlimited issuance constrained by algorithms targeting zero inflation and zero deflation very interesting my question was gonna be how is this not gonna get banned i find it interesting things with governments their involvement from central bank digital currencies bitcoin and how they may say one thing but pay less attention to what they say and more attention to what they do uh why don't we save that one to this comes out more fully but i think it's very interesting what's happened and maybe very good by the way i'm just surprised it's there and we'll see how it plays out in the coming months yeah one one thing i would add is that wyoming in the us has been one of the most progressive uh jurisdictions for basically trying to be in hub for this type of activity and so they they've been spearheading say bitcoin banking uh they've been you know basically being the place to bring bitcoin ethereum all these other kind of you know uh places so along with miami that's also been kind of vying for that role lately uh it's one of the handful of hubs that are kind of more on top of that than other place we've also seen for example kentucky has tried to attract miners in some ways uh and so you know a couple of these states or a couple of these cities have have spearheaded that uh and and so uh that is kind of something to keep aware of that you have these somewhat of a jurisdictional arbitrage where some some some places can be more hostile to it other places are saying hey they come here then we'll you know we have cheap energy or we have friendly bitcoin banking uh you know kind of jurisdictions uh stable coin uh allowances you know i think over the there's a couple models here so this there's like the chinese model of say central bank digital currency top down uh trying to push out competitors uh you know some people the united states are kind of uh trying to focus on another direction which is for the u.s to to harness the private sector as much as possible for their monetary policy to basically have a regulated set of stable coin providers or and basically to use that kind of private sector technology as much as possible when relaying their their various policy objectives rather than kind of resorting to that more chinese model of having you know fed coin for example and then you know pushing out other competitors and so i think i think that's that's going to remain an ongoing question for for years i think as we go forward to see what what is allowed by regulators what is not uh there's all you know certain things like binance offshore exchanges or tether those types of things being more frowned upon whereas things like udsc like you know circle uh and some of these say wyoming-based uh you know entities you know because they're going through the more the more kind of uh official process they have a higher chance of being kind of accepted we also saw for example that some of the initial uh coin offerings of 2017 uh they came under regulatory fire for you know un unlicensed selling of securities uh whereas now for example we saw stacks 2.0 uh you know they kind of they saw what happened to those other ones and when they came out with their with their offering they went through the full regulatory process of basically selling securities uh and so i think over time you know as as certain protocols are made example of uh there's been more of a shift to to try to do things above board as much as possible any opinion on the ducats by the way is built on eos do you feel eos as i call it eos is centralized i view it as centralized to a significant degree uh that was one of the popular coins of the 2017 bull run uh it's it's not in the top 10 now last i checked uh it's one of the ones that just lost some of its luster but it's still obviously a functional network it's still used uh heavily in the in the crypto gaming space uh and so overall you know i think one of the risks of most of these blockchains is that they can have the appearance of being more decentralized than they are and so i think when you start say say bitcoin is arguably the most decentralized in terms of not just in terms of node distribution but in terms of say the breakdown of powers between nodes and miners and developers and kind of you know there's really no kind of central bitcoin company they can just change things uh then you get you know ethereum's uh you know i would say less decentralized than bitcoin but say that's still more more sent more decentralized than something like tron or eos so there's certainly a spectrum here of how decentralized these protocols are and as you get out of the say that the top couple coins yeah you generally shift more towards centralization in one way or another it doesn't necessarily mean that the coins are concentrated in the hands of a few but it could mean basically the ability to change the protocol is is easier to do or somewhat more centralized than some of these other protocols do you think that solana could be the next ethereum uh so it's it's it's possible right so they but again they're making sacrifices in order to increase transaction throughput and so one of the one of the challenges of ethereum is that they're you know they're a second generation coin uh trying to make changes while running to be a third generation coin while you know while these other coins are coming out as third generation coins so so uh cardano uh so like these other coins are coming out with these changes in mind that theorem's already kind of shifting to now the problem is if you try to do too much on the base layer uh you make sacrifices so for example uh if you want to run a bitcoin node uh you know this laptop that i'm talking about i could run a bitcoin node on it uh whereas like i could not run a solana you know node on this on this laptop is it's a more kind of uh you know high-end thing it's not really something that that is it's more enterprise-grade you could say uh and so that's the thing is once you get up to coins that are trying to have a lot of throughput on the base layer in terms of how big the blockchain can get how much uh internet how much bandwidth internet you need in order to keep track of all the transactions keep your nodes synced uh you know those become more industrialized and again that is a that is one of the variables of decentralization that that if you have to have a very high bar for being uh you know an operator of that network to be able to verify the supply or to be able to contribute to some way to the blockchain uh you know that centralizes it and so there is kind of a every variable in blockchain space there's always a trade-off and so it kind of matters what that protocol is it is optimizing for and that's again why i kind of separate bitcoin from these others because they're all they're optimizing for different purposes uh and so that's why some of these i don't view as direct competitors whereas for example ethereum and solana uh binance smart chain those are more direct competitors and so things like stable coins or smart contracts can spill over to whatever is cheap uh being highly used uh so it has a network effect and so i think the biggest challenge for celina is they are up against the biggest network effect in the space at least in the smart contract space of ethereum so there's kind of you know older tech but bigger network effect versus newer platform but smaller network effect and i don't know if it's something that you've done some research on but like nfts kind of came from nowhere last november and december are social tokens the next nfts we've seen it yeah we've seen a few rounds of this so you know if anything that the earlier kind of population of nfts was a game called cryptokitties back in 2017 that was kind of the fad of that cycle where you could it's almost like pokemon like you could trade these little little digital cats they were funny looking and it was actually such a big thing that actually clogged up the ethereum block space for a while drove transaction fees up because so many people were trading these cats and so obviously that that faded away uh but we saw the round two happen this past year with with the same kind of the same idea being applied to digital artwork uh and you know i think overall uh you know the market's going to keep trying things until it sticks right which is natural uh and so cryptokitties didn't stick uh you know nfts will you know that's yet to be seen that's that's you know we haven't you know we we certainly hit kind of a bubble phase there cooled off uh it remains to be seen how much that's going to stick the social tokens another thing i don't have a strong perspective there but i do think that you know this when investing in the space basically it's one of those things there's going to be a lot more misses than there are hits uh but some of the hits could be very very big and so it's one of those things where you know the space is it can be scammy it's prone to failure uh but there are a lot of well-meaning projects out there that are trying to apply software to things that previously software's not applied to so i don't have a strong conviction on that but it you know it's something to watch yeah like one of the questions coming up eventually is going to be on asymmetrical trades you can't lose more than what you put in but your upside may be tremendous that would potentially be one if i could call it a sector so keep an eye on it everyone i find it interesting but there will be lots of losers in it so i have no secret tips as to what's going to take off probably rally is one that some people in my audience are familiar with it's intriguing but again make your own decision is the debt ceiling a headwind for the stock market it's certainly going to be a headline risk uh for the next couple months and so at the end of this month uh the the deadline approaches but then they start juggling the books a little bit in order to push the the actual issue out a little bit further uh and it's one of those things where you know i think i think i saw a statistic since 1960 uh it's been raised uh i think it was 29 times on our democrat administration 49 times under republican administrations it's been this thing dozens and dozens of times but in recent decades it's been more politicized and it's one of those challenges where that debt ceiling is all about previous uh kind of obligations rather than future obligations but politicians treat it as kind of a sending a signal about future obligations uh and so i i do think overall that that's a risk i mean it basically can add bond market volatility bond market volatility necessarily spills into equity market volatility uh and so overall i do think that's a you know kind of a curveball to watch as we head into the late summer and early fall because that also can impact things like you know part of the market is is based on this inflation versus deflation question and that's in part tied to stimulus or no stimulus right so if there's going to be infrastructure bills or not uh and so that that is an ongoing question and so debt ceiling debates at least delay infrastructure type of activities uh and so that it has multiple kind of downstream effects uh based on the answer to the question of how long this kind of debt ceiling uh you know events going to go going to take will carbon futures etf and etns continue to outperform the s p i'm pretty bullish on them i so there are people that have covered those pretty uh closely like uh rao powell had a thing on real vision where he he had a guest that was an expert in that space uh so for people that have you know you can recommend i'd recommend that i know mary katusa has been been uh kind of pounding the table on on on that space so there are people that cover that more closely than me but from from my research that you know i do think the thesis is sound and that there is still probably out performance potential in that space and perhaps more importantly it's it's somewhat uncorrelated with some of the other investments out there and so as a small slice of a portfolio is something that's gonna it's more of a political question than an economic question and so it's gonna it's gonna follow its own path are we you mentioned it indirectly a little while ago are we going to have inflation or deflation say short or long term so i think we're going through cycles and so you know right now we're in kind of peak base effects so we have the uh you know the most recent data was compared to the same period from a year ago which was the most dispensational part of last year because that was kind of the heart of the lockdowns uh and especially because obviously inflation data is reported the lag and so when we're talking about may and june data we're talking about may and june data of last year uh and so you know those base effects will start to subside so we could start to see lower headline year of year cpi so we hit 4.99 for may reported in june uh it's unclear if we're going to hit that level again maybe a little bit lower this time because the base effects start to get a little bit harder but there's a couple things to keep in mind one is you know that level of inflation happened even with oil prices still pretty constrained uh and so if you were to you know in the years ahead to get uh you know a genuine shortage in oil that'd be a pretty big uh you know impact inflation another thing is that uh you know rent is is a big part of cpi and rent you know even though it's positive year of year the rate of change has been decreasing uh but if you look over the longer term that tends to follow uh uh you know say the case-shiller uh home price index uh with a lag say a 12 to 18 month lag and so there are signs that looking out a year or a little bit more we could start to see rent turning up so we're actually already starting to see that that year of year change and rents are kind of showing signs of of bottoming a little bit and if that starts to roll up that's another you know potentially upward pressure on inflation we also see that there's wage pressure uh still going through the market now by september when some of these extra benefits were off that might subside it might not it's something that you know certainly an area that i'm keeping my eye on is is some of these these gaps between say job openings versus jobs being filled uh reports from businesses how hard it is to get their the labor they need and so i think basically that you know the inflation they've experienced there's kind of you can separate transitory rate of change terms and transfer in absolute terms meaning that you know a lot of the prices that are being increased they're not going to come back down to where they were so for example when chipotle raises prices four percent that's a that's a new height that's a new watermark for where those prices are they're not coming down now other things like lumber that had more specific bottlenecks you know they that would parabolic it came off really far i i kind of doubt that's going to come back all the way to where it was say in 2019 um uh but you know uh same thing with copper right so copper has been less extreme you know it's off of its of its recent high but i don't think we're going to see it come all the way back down i think basically a lot of this will end up being a stepwise increase in the prices of certain uh goods and services but i do think the rate of change of that those price increases could start to cool out as we get you know back to more normal opening as we you know get past some of these kind of you know big demand shifts that happened uh but the next kind of variables to watch for maybe the next round of inflation could either be energy price constraints from uh you know going back to the esg conversation uh there is less investment in the oil and gas space drillers being more disciplined right so they have less access to capital uh they're also less willing to uh you know dilute themselves they're more focused on shareholder returns and so you know we've been in this period for the past uh say seven years of general over oil abundance uh whereas i think you know as we get further into this decade i think that could get tighter and that could put you know more upward pressure on some of those uh prices and basically some of the you know the market share could shift a little bit more towards the sovereign uh players uh because some of the private sources are kind of you know getting less investment over time and so i think you know looking at wages rents and energy are the next kind of variables for for potentially keeping this inflation story alive longer than than some of the people think in terms of it say going away by the end of the year uh so overall i do think we're going to be an elevated price inflation for a period of time but probably not at this current rate of change we're experiencing now from a combination of base effects uh used car prices going parabolic uh stimulus effects still in play so i think that'll i think that'll cool off to some extent i mean what's your opinion i guess it's meant to be just a little tongue-in-cheek uh are influencers and i could argue elon musk with a tweet is definitely an influencer but more traditionally are they eating the world and how does this affect us as investors i could say that charlie demilio the tick tock star that has like 90 million uh i'm maybe underestimating it followers had more followers than biden or trump had votes uh yeah we're definitely seeing that especially among you know we've seen a lot of coordination over the past year there's wall street bets there's tick tock influencers and so historically you know out of social media uh twitter has kind of been the area for investors whereas you know recently the rise of tick tock investors and you end up with very different audiences so so so the tick tock space is more about the retail space and i think the the longer term risk there is that a lot of that was driven by this the stimulus and so a lot of them had more time on their hands a lot of them got you know cash handouts that they could use to invest in the market and so if you look at say u.s personal income over the past year it was above trend for most of the past year especially you got these spikes when the stimulus checks were sent out and as it starts to wear off uh you know a lot of those uh you know maybe not the influences themselves because a lot of them are very well off now but a lot of the followers of those influencers you know they'd you know are unlikely that keep having that inflow of cash to invest at the same rate that they were over the past year and so i do think that effect could weaken to some extent but but overall we clearly are in this effect of influencers so pretty much whenever you know uh we have we have influences among ceos like elon musk uh part of donald trump's success uh was his his massive uh social media presence uh and so we you know for whatever space you work in having a huge social media following is a big factor and that can move things i mean it's no it's no secret that elon you know if he tweets about a you know dogecoin or dogecoin junior now he's been promoting the price of that thing goes vertical as soon as he tweets it now there is somewhat of a of a diminishing effect so for example you know elon was able to drive the price of dogecoin up but as it kind of started to cool off he couldn't really keep it at that level anymore and so it's so kind of the the subsequent effects got less and less and and so i think over time these these things kind of go in cycles where an influencer is unlikely to be able to kind of persist that level that they have been over say multiple years you kind of you kind of rise the top and you start to kind of cool off and then another batch kind of winds up somewhere else and so it's kind of this rolling thing to be aware of uh and so you have to adjust according so for example hedge fund investors had had to adjust to the fact that there could be coordinated attacks on heavily shorter companies uh over the past year and so i think it's it's one of those things when you look at influencers it's important to get your information from multiple sources so you can see where maybe some of the capital is moving but but be aware that it could be somewhat ephemeral that that you know some of the forces that have made that possible the past year could get you know wear off and say the year ahead for sure and we're about halfway through the interview normally i do some of this at the end but i don't want all of you to check out uh so briefly for 20 seconds i'll say and we're very fortunate to have lynn on and this interview will be up on youtube i'm pretty active maybe not quite as active as i was earlier in the year but hopefully with really special guests so there are deeper dives uh from people like michael saylor to lynn to james altoshear and many many others and other amazing we actually have upcoming this summer a 90 year old lady that we're going to have on who's a very active investor and very active in crypto so stay tuned that's coming up there'll be a lot of fun uh so you could follow us simply on youtube yes on youtube we're family office so don't look up the angelo robles podcast that's technically my podcasting platform that's fine for apple and spotify but on youtube it's family office and i'm surprisingly pretty active on instagram it's our full company name family office association so go and follow on there i'll follow you back i promise uh the super rich that don't adjust in 20 years will their wealth be decimated by investing in the old economy while the cyberpunks and digital asset ecosystem will drive massive returns as the old centralized finance gets upended by d5 decentralized finance there's certainly a risk to that sort of thing if anything you've looked at over the past decade if you were invested say the s p 500 but not the top five stocks you know you had a radically different performance than say investing the full s p 500 or especially if you were concentrating in those areas uh like you know you mentioned michael saylor i mean he he his book the mobile wave uh like nine years ago kind of predicted some of those massive network effects arising from technology reaching a certain point so once we had not only the internet but the ability to you know everybody has smartphones in their pocket you know they can use the internet on the go we had a massive rise in some of these companies uh and so i think it's gonna be similar over the next uh you know uh decade or two where there are going to be areas of disruption and so there is a risk to wealth if it's if it has zero exposure to some of those areas and so i think you know one of the most tangible examples is that you know historically if you look over the long term that you know if you look at treasury uh real real interest rates uh either for t bills or long duration treasuries uh you know most of the past century for example more often than not the rates are positive but there is where they're deeply negative and so the the 40s the 70s and then the 2010s were all very negative real real rates for t bills and then so far you know since the the 20 over the past kind of year and a half into this you know start of this decade even long-duration treasuries are below the inflation rate uh and below the the inflation expectations rate uh so even even taking into account the fact that some of those transfer effects will wear off and so a lot a lot of pools of capital are invested in large amounts of bonds or cash i think that is at risk of being gradually devalued over this longer period like we saw in say the four that say u.s federal debt as a percentage of gdp was this high they kind of have no choice but to you know run inflation hot and keep those yields lower right so it's essentially financial repression uh and so people with that are overweight bonds are kind of vulnerable to that that uh positioning uh at the same time you know that if that forces investors to go out on the risk spectrum and they're they're they they risk getting caught up in bubbles and losing capital that way and so i do think that you know over the next say couple decades it's important to maintain some degree of diversification but to do but to make sure you do have exposure to some of those new areas so certain tech companies uh certain uh things that are happening in the digital asset space i do think it's important to have a non-zero position uh but even some for example or old world things uh that didn't perform well recently like the 2010s were a very bad decade for commodities for the most part but i do think the 2020s are likely shaping up to be better for the commodities you know we saw that uh obviously earlier this year we saw a big rise in commodities we've been cooling off uh because that got you know that got quite heated for a period of time but i do think that going forward there'll still be opportunities in the commodity space they don't think that this overall run is done yet uh and so i think it's you know it's one of those areas where you know you probably don't want to have say pure 60 40 portfolio exposed primarily to you know older older uh industries i do think it's important to have some of these asymmetrical bets embedded in your portfolio to benefit from some of these new areas or for some of these older areas that just haven't seen a lot of you know out performance lately but that you know probably position to be pretty important going forward will the fangs plus microsoft and tesla still be all powerful the way we consider them now looking 10 years out uh but how about blockchain and d5 disruption that i mentioned earlier the rise of anti-aging and biotech let me phrase that's the broad general question probably a part two you have to pick one which fang plus microsoft or tesla is likely to fall off that market dominance first i think i think tesla's overvalued um compared to its fundamentals it's very hardware focused business uh so i think that has some of the the strongest kind of weaknesses at the current time uh netflix is also lagged uh but i do think for example amazon still has a lot of long-term potential at current levels and microsoft is is rather expensive but i think the cloud trend is going to continue for a long period of time so those basically among that access i think the the amazon microsoft facebook side potentially has a longer runway than the rest of that fang group now if you're talking 10 years out i think the shape of that could change somewhat and so for example you could have certain regulatory breakups happen where say let's say facebook is forced to deal uh divest uh instagram and whatsapp uh possibly you see a separation between amazon's cloud business from the retail business right you could see microsoft forced to divest some of its assets uh you could see uh you know basically there's there's a couple different risks there so you could see that you know you could be you could could be one of those things where the market cap of all those is actually bigger than they are now uh but that it's broken into more companies uh so that's that's i think one reasonable possibility of happening uh you know you could have goo alphabets even looking into potentially uh ipointing some of its of its assets right so you could have these companies either voluntarily or involuntary get broken up to some extent uh and so they might not have the same names they have now but i think the overall market capitalization is going to be there uh from these from most of these companies another kind of but on the on the risky side to watch is that a good chunk of these companies you know they they kind of arbitrage the fact that you know we were willing to give up our data for conveniences uh you know basically to have free services that we enjoy we're willing to give up our data and so those companies had access to cheap or free data and and made a lot of profit from it and so when you start to see kind of push back against that you have things like like the brave browser uh you have uh you know some of the some of the digital asset spaces are about monetizing your privacy essentially that you know instead of monetizing things ads you can either donate to websites on a one-time basis to read an article or you can you basically sell your your you know your attention like the things you're using your your data right so it's basically returning power to the user and so if those continue to gain steam especially along with some regulators kind of pushing back against some of this big tech i do think that that there is risk there but you know if i were to guess uh based on how i see things headed i would expect that most of the market capitalization will still be there still be very big 10 years from now and it just might it might just be in in a slightly larger set of companies than the ones we see right now will china surpass the us and when and i guess why well so in terms of um population they have that advantage so they can have a much smaller gdp per capita um and still surpass us in terms of absolute gdp uh and so basically in terms of purchasing power period they're already roughly at where we are now and just in terms of nominal gdp they're not and so they've already passed us for example as being the largest commodity importer uh and and so you know by for the longest time we were by far the largest commodity importer uh and now china is and so for many of us say the company the the places we buy oil from now now china is their biggest customer so so they're certainly increasing their political sway um i think they could eventually surpass us an overall commodity consumption over electricity production and consumption um they i think there's a good chance that by the late 20s they'll pass us in absolute gdp uh now there are other limitations that that make it very hard for them to surpass us in other areas and so for example their geography is inherently constraining uh compared to uh north america and united states in particular right so they have they have much less coastal access uh and they have much you know they're they're reliant on food imports to some extent uh you know if you look at say the size of china it's about the same size united states but a lot you know bigger chunk of china is virtually unusable uh compared to the united states uh and so overall uh you know they have a lot more geographic limitations and so for example i think that their ability to project long-term uh force uh has a as a much longer time frame from until it could reach kind of the status of the united states and say in terms of say blue water navy uh but you know the risk there is that as we get out further and further into the future uh in some ways you know with the with the creation of say hypersonic missiles and with the increasing importance of cyber attacks uh you know that that kind of old school naval strength is is potentially less important over time and so overall i do think that that china is going to eventually surpass this in some areas uh but it's you know i think we're gonna have a world of more regional powers where you know in in the chaos the south china sea area uh they'll have more dominance than they have now uh whereas uh you know their ability to project power far away is still going to be somewhat limited interesting we'll get back to some of that including the cyber part if we have time later everyone always says think for yourself it sounds great it's a question i asked michael saylor but how do you learn or is it you're born with it i would think more learn how do you learn to think for yourself and did college help you so i mean college certainly helped with because my my degree was in electrical engineering so obviously it helped with the with the technical foundation uh but overall i mean mostly learning comes from passion if you're passionate about something it's far easier to learn at a very deep level and so what you know i i've used the example before that when i was younger i tried to learn music i tried to learn how to play guitar and i did have a knack for it and i had trouble getting through like a long practice session and just kind of i wasn't really making progress at a rate that i'd expect and it's because i just didn't have the passion for it so it's like in some ways i wasn't born with it but then also whatever i wasn't born with i also just wasn't able to kind of build momentum on it whereas other things just inherently drew my interest and therefore my ability to learn is by being interested enough to take the time to go deep into spreadsheets or deep into research documents and just kind of start from the ground up and and just kind of you know put in that time commitment to learn something and you know each person has their own learning method so some people are more visual some people are more reading based some people are you know each one has their own kind of uh process uh and so i'm pretty numbers based and so i like to go to the raw data sometimes and look at that i like to you know chart things out use spreadsheets to get an idea of of how something scales uh what are the bottlenecks going to be obviously depends on the topic and so uh that's how gently i learn is by by you know trying to focus on areas that i i'm passionate enough that i can spend days or hours just kind of digging into something in a very deep level and just kind of starting afresh like starting you know reading other sources but then you know taking all those pieces together and then trying to model it or trying to trying to quantify it so that you know you can have different narratives but when you actually see the numbers sometimes you figure out which of the narratives are true or which which percentage of each of them are true in in different contexts and so i generally am numbers based so part of that in terms of what you call passion others may call simply just being curious and that's an important part of it a question we'll stay on that topic a little bit and you did a very technical in terms of did you say electrical engineering yes uh with the technologies we have today i would assume that you could have learned that technical capability remotely on youtube actually if you're a faster learner maybe you could have even done it at two times speed and got it quicker in your own accord i know you got the social interaction in college the independence from parents but in terms of that education which i'm basically asking is education going to be disrupted you probably could have got that technical capability without ever stepping in a classroom i i think so and and you know another example i can use is that you know my master's was in engineering management uh financial modeling that sort of thing and for example at that point i'd already taught myself discount to cash flow analysis and these other you know things like that because i had passion i had access to the internet uh and you know over my younger years i learned all that so the time i actually got to classes where i was applying those engineering economics applying those to sound to cash analysis i was already in a position where i could just i you know if some of my fellow students were having trouble with it i could i could help them out because i already learned it uh previously uh and so i do think that there you know most information can be learned online now it's kind of a big democratizing force for access to information uh and you know certainly if i would say hiring uh uh you know certain types of people it'd be more about their capabilities than say what degree they had i think that's you know that's kind of direction we're heading in in the sense that that that four-year degree is is maybe not as strong as it was in the past and it's now it's more about what you can do uh and you know how you've proven that you can do it whereas before the degree was kind of the proof whereas now it's about you know getting your foot in the door and then getting kind of practical proof in terms of thinking for yourself and again electrical engineering uh your interest in the world of finance what psychology and even philosophy classes help students to think for themselves arguably be more creative than linear learning relative to more mathematical principles part of it depends on what they want to do in their career of course i think i mean obviously understanding logical fallacies and how to avoid them is is important for any field uh where where uh decision making is important uh in addition to just kind of understanding yeah understanding how to think understanding different approaches different say you know in philosophy you learn different foundations of ethics different foundations of how to think uh different just kind of you can think of as platforms and and then you can kind of choose which platform is the most relevant to a certain situation and so obviously you know philosophy gives you a toolbox to draw from uh and a lot of soft skills uh that are you know whether you go into law whether you go into finance uh i do think that those skills uh are important you know in any sort of you know high performing career uh you mentioned doge a meme earlier the um well i mean coin i'll call it the impact of memes for the younger generations especially gen z it gets me in trouble when i say this i'll try to be a little more politically correct it's practically religious zealot like uh which has led partially to the extraordinary growth of doge do you think these things that are meme centric as we know them are kind of here to stay and they are impactful i i think so but i think it's it's you can separate something that is only built on memes versus something that has a solid foundation then is then the information about how it works is spread via memes uh and so what i mean by that is you know there's that old saying like a picture's worth a thousand words and so a meme is essentially a picture often with a small amount of text and it often makes an analogy to a movie or to an existing meme and so it actually conveys a lot of information very quickly uh to people that are familiar with that meme template or too familiar with the with the let's say the movie or the work that it references uh and so kind of like a chart a chart can give you a lot of information very quickly a meme can can display a lot of information very quickly and it could be like an analogy that you're trying to get across in a funny way and so that combination of humor analogy and visual stimulus naturally is that is that way to virally spread information uh and so i do think that that method of sharing information is important and probably going to be here for a very long time now the risk has been something is is has no foundation and it only exists in meme form well that's when it's vulnerable to being ephemeral right so something has no foundation uh like like like for example if you look at the development of bitcoin versus doge bitcoin has a much larger network effect uh much much more developers uh much stronger security model uh you know far more decentralization um if you look at github i mean the the updates that are happening to bitcoin and all those layers on top of it compared to doge was basically you know wasn't really going through any updates for example there's the developer community is pretty much dead the whole thing started as a joke and so you know bitcoin is something that i would say as an example has a strong technological underpinning uh and then especially in some markets like retail users you know say the information about that foundation is spread in meme form uh whereas say doge doesn't really have that foundation and only exists as a meme and so i think that that separating those two is important that that's how i had phrases that is likely here to stay as a way of transmitting information but only about and you know eventually reality kept up catches up to things and that if the foundation is not there eventually the meme ceases to kind of have influence there's a question coming in from a participant like memes are there other techniques that you use to share information interesting research regarding the neurological impact of storytelling as an example yeah so my my preferred foundation for sharing information is very long form articles and so you know anybody from my work knows that i write three thousand five thousand ten thousand word articles that might have 25 charts in them uh and it just kind of i try to like if i'm gonna write about something i try to just like make it kind of the the the kind of the de facto guide uh to that thing that i'm writing about and obviously some topics i'll go into more detail than others and so that's my preferred method but for example let's say i make a chart for an upcoming article all shared on twitter uh and so i you know charts obviously do well on social media they're very you know their visual stimulus and other times i will share a meme just to be kind of to spread humor uh and those actually tend to get the most engagement and again because you're you're harnessing the combination of humor uh with making a point uh and so it's obviously you have to the point you're making has to be true or resonate with people uh but then you make it a funny way it can spread very very far and get a point across because it's almost like instead of you know writing several paragraphs about your point you're basically tapping into like a meme template is already known so people already know there's a lot of information already embedded in there and so the relatively small amount you're changing in order to share an idea means that you're already taking a lot of information and just repackaging it slightly and so it's actually a very efficient way to kind of share information and often when i share charts or memes i'll get you know i'll see the comments i'll get questions and stuff and that ends up being useful for when i make a long-form piece that actually write everything out in kind of that long form strategy because i already see there i already see their questions i already see the comments and that gives me an idea of what people are thinking what they're curious about what misconceptions they have uh and so that actually is it's almost useful for both sharing ideas and for just getting engagement and using that as a as a research tool there is a saying he who holds the gold makes the rules is a new rule he who controls the money supply makes the rule so are the true world leaders the central banks well i think i mean if anything this past two years showed us some of the limitations of monetary policy because it's what's been more impactful over the past two years was the fiscal side and so one of the points i've been making is that you know say qb alone is not very inflationary but qe combined with with the the fiscal stimulus that's a that's a more impactful thing for both the economy uh and for potentially inflationary effects uh and so the 2010s were kind of characterized by less fiscal and more monetary policy but once monetary policy was tapped out brought to the zero bound asset purchases only goes so far they lack a transmission mechanism to get their stimulus to the to everyday person right so the fed can't just decide to give out money to people uh whereas the the treasury can't they can say okay there's an emergency so we're going to either cut taxes or we're going to give unemployment aid we're going to give stimulus checks and and so the central bank's still involved because they're financing it right so we're basically doing deficit monetization either directly or indirectly but really that that kind of division of powers is what we saw that this this past year the fiscal side was was really kind of the the one that really i think had a bigger effect on markets uh and so you know we saw earlier on the pandemic for example when the fed came out with i think they said 500 uh billion in qe they did all this and the market just fell it just ignored what the fed was saying but we started to get news about the cares act coming together for example that's when markets started to rally off of that that kind of crash bottom and so i do think if anything this kind of shows some of the limitations that central banks have at least under the current legal structure now if they have say digital currencies and they can bypass the fiscal root then that that kind of combines some of those some of those divisions of powers together so that'd be a different story but i do think if anything this kind of shows some of the limitations that they have any opinion as to why some very prominent and successful investors bill gates is buying so much farmland so farmland historically has been a good investment um it's i did a chart a little while ago a few months ago showing that if you normalize money supply per capita in the u.s and the price of farmland uh it's almost the same chart uh since like you know the past like say 40 years and so generally farmland is a good inflationary hedge uh not just against cpi inflation but against actual monetary inflation uh and so that the you know the money supply going up on a per capita basis uh while also generally paying out a small dividend uh and so it's never generally a very cheap asset class um uh yeah so you don't get say a high dividend yield like you would with some other industries but that you know that combination of being inflation hedge that kind of pays you to own it so it has a positive carry generally does a similar a similar thing that gold does uh if not better uh and uh just the fact that it's not portable and it's got obviously some differences uh and so you know bill gates made headlines it's interesting because he became one of the largest uh uh farmland owners but he still actually owns a very small percentage of total u.s farmland this is actually a rather distributed market in many ways where even the biggest owner of it doesn't actually own that much of it and so i do think that that is a kind of an interesting long-term opportunity as as kind of a real asset inflation hedge will we kind of mentioned this earlier you had an opinion on amazon and it's aws could i make the argument that blockchain that defy in general decentralization could be a threat to aws's dominance well the funny thing there is that a lot of those decentralized a lot of those blockchains run on aws and so for example a very big percentage of ethereum's running on aws uh and and some of those there's actually like because some of those have you know difficult node requirements uh you see services like infura right for for for ethereum uh a lot of that's based on amazon web services uh and so uh you know you again you have the risk of you can have the appearance of decentralization but then actually when you go down to the core it's actually less decentralized than it looks and so i think that's something we're seeing in some of these blockchains uh and and so i don't view them yet as being anywhere of a threat to something like amazon because of anything they're they're hosting a lot of it now it is you know if it gets more regulatory approval and obviously things like defy can eat into certain financial services like lending uh basically it's applying software to do something that is otherwise a more manual process and so i do think it can eat into certain types of insurance operations certain types of lending operations certain types of yeah exchange operations okay because we have these decentralized exchanges and so to the extent that regulators allow it i think it's a risk now a bearish thing to express is the fact that part of why those services has been so successful is because they're kind of doing regulatory arbitrage and so you know regular regulators have been slow to catch up with some of these right because it's fast moving technology uh and so regular regulators can only move so quickly and so you know a lot of defy usage for example let's say decentralized exchanges a lot of that you know there's i think you know i've seen you know evidence or reports that basically there's not a lot of uh people tracking their taxes for example when they're using those decentralized exchanges whereas if they're on coinbase it's a more regulated environment and you're more likely to get caught if you're not doing your taxes properly and so if you have say let's say hypothetically two exchanges one's highly regulated one's not uh you know and and so people are going to flock that unregulated one to the as long as that's kind of allowed to have that existing where one is being held down by regulations one's not uh but then when regulars finally catch up to that other one then the use case for that other one gets diminished and so for example people during some of these high volatility periods some of these people were paying very very high fees to trade on a decentralized exchange like hundreds and hundreds of dollars in many cases to make a straightforward trade that you could make for much lower cost on something like coinbase uh and it you know it's one of those things where decentralized changes are also supposed to be you know better in those environments where you know say every time there's a volatility event uh you have some of these major uh crypto exchanges uh they they kind of go with liquid right so so they stop working properly but then ironically some of the same things happen on the d5 ones where just there's so much uh transaction fee issue that they get blocked because there's only so much blockchain capacity especially for say things like ethereum and so a lot of the things that they purport to solve uh sometimes they don't solve them and so if anything once regulators kind of catch up with some of them it could kind of keep them in check to some extent because they're they're kind of benefiting from that regulatory arbitrage where their their traditional competitors are more constrained by regulations than they are uh and so they they have you know tax issues and things like that whereas i think as regulars catch up that's a risk so i don't i don't really view them as a huge threat to amazon and still not necessarily to some of their centralized peers have you looked into researched and have an opinion on investing in psychedelics uh so i'm i'm not an expert on that i do think that that is a very undertapped area and there have been some some recent uh you know uh public efforts on that uh and so there are i think really good interviews out there that other people have kind of focused i know mike green interviewed i forget the gentleman's name but he interviewed someone who was heavily involved with bringing one of those companies uh public i believe and so i do think that's a really interesting area to look into i'm just not the right person what percentage of allocation should a family office that hopefully not fomo they've done some research and have a thesis even if it's one sentence should make putting their toe into bitcoin should it be bitcoin and ethereum should it be what i would probably argue bitcoin ethereum and solana uh it's probably too easy to say well a billion dollar family liquid liquid one percent well that's still ten that's ten million dollars that's real money do you think part of it depends on the aum the risk tolerance obviously but they should do something and again the argument that raul paul and others have made is if it goes to nothing you may have a glass of wine and not be happy about it but it's not going to impact you but the asymmetrical opportunity relative to where you're pulling the money from to put it in there may be so much better it simply is worth the trade yeah that's why i view it so my argument since 2020 since early 2020 has been that we're probably at the point where zero is not the right number anymore uh and and so you know since 20 since early 2020 i've been making the case for a non-zero allocation at least to bitcoin uh and and then from there uh i think they can ramp that up depending on their conviction so i think you know one two percent is is kind of the going right now where you know i think i think it's you'd want to not have less than that most likely unless you for whatever reason had a particularly bearish conviction about it uh but then from there depending on how you know knowledgeable you know obviously any pool of capital has to tilt their capital somewhat to what they know more and so uh you know some people are going to be naturally more experienced with equity some people are going to be matching more experience with with with uh say bond markets or commodities or things like that certain regions right so certain jurisdictions they might have more experience with more comfortable with uh and so some degree diversification is important but that you know i also want to tilt to what what your specialties are and so someone who for example for whatever reason has been interested uh and has basically spent the time commitment to learn about the space if if their conviction grows if they're if they become bullish on it then you know upwards of five percent or more uh could be in it uh it because at that point they're making a more conviction bet rather than just a diversification bet so really that that the actual range you have in it could vary greatly depending on the purpose if it's just kind of say you know you own a lot of old world companies you want to hedge that position one or two percent to have that have that exposures useful and then dial that up if you happen to be highly convicted about the space and knowledgeable on it somewhat of a related question we could go down a rabbit hole and make it the remainder of the conversation we won't but spending a minute to 90 seconds on it what are some potential other asymmetrical trades i'm gonna define that to simplify it as being you may lose everything but you're putting in such a small amount that risk is worth a reward because it's probably if it goes up it's not going to be five or ten percent it's going to be noticeable we did mention social tokens which i would put in that camp but most of my audience is not familiar with it and has no knowledge about it and purchasing it on going on blockchain browsers and uniswap is going to be above most people although it's really not that hard you could learn it but what are some ideas or trades that you would have yeah so one i would say is the the public bitcoin miners like marathon uh you know it might be worth uh you know those could be quite asymmetrical if you have another big run-up in some of these these protocols if you go outside of the space i still think longer-term uranium is an interesting play uh where when you have periods of weakness there um i would be i'd be buyers of those peers of weakness because kind of like carbon credits uh you have a rather uncorrelated bet right so so compared to other commodities uranium's kind of less tied to the inflation narrative or the economic cycle and it's more tied to simply uh you know when uh nuclear civil like utilities uh begin their their acquisition cycle to renew their longer term contracts uh and so right now they are pretty low uh you know uh the number of years they have worth of supplies is near their low end and so they're going to have to increase start a contracting cycle uh based on most industry research uh at a time when the price of uranium spot prices below the the cost of production from most new mines other than some of the largest kind of existing mines the cost of bringing new production online is is pretty low and currently there's more uranium demand than there is production but that's being kind of taken care of by the secondary supply sources and so overall i think when you look out five ten years i think having a non-zero position in the uranium sector is useful as a asymmetric uncorrelated bet uh and so that's along with some of the digital assets uh is one of the areas that i've been i've been emphasizing to some unrelated extent that question some questions that are coming in from the our guests our viewers uh do you have an opinion and i would keep it a brief summary on polka dot and cosmos i don't have a strong opinion i've not looked into them too closely um you know again it's one of those situations where each one has trade-offs each one has the risk of low switching costs where things can migrate to newer projects over time uh and each each one percentage-wise has a low survival rate to the next cycle and so the number of tokens from the previous cycle in 2017 that is still like really viable popular products is low obviously ethereum is one of them bitcoins one of them uh rather few others are uh and so just be aware that when you invest in space you know the the ones that become kind of permanent winners have a high multiple but there will be a lot of failures and so i you know there are experts other than me that have that have uh kind of dove like dive into those into individual projects at a closer level than say i would i know for example alex saunders of australia he specializes in kind of sorting through some of these smaller protocols and basically you know providing research for his clients on that area if you had to live lynn outside the u.s where would it be and why i mean that's challenging i mean maybe maybe in the caribbean somewhere um i think i you know i i like the north american continent area right so i think i think you know there are other jurisdictions in the area that i'd i'd like to be in to have access um i think you know probably probably that's what i would go with probably the probably a caribbean type of area maybe a maybe a central american type of area um if i was you know because there are or say south american in certain areas uh because there are some of them some of the more sane jurisdictions there that you have the benefit of it's a cheap place to live you can get a lot of uh you know you can go a lot with your money uh in those places uh while still having you know say attractive atmosphere uh rather stable jurisdiction uh and then still have access to to north america pretty readily we asked variations of this question before and i have relatives that are in college in the world of finance and they kind of ask me this question so i'll kind of turn it a little bit around to you about to enter the world of finance shouldn't college kids be learning a hell of a lot more about the metaverse crypto blockchain nft social tokens they're not going to get it probably even at stanford or mit uh this goes to the value of think for yourself how are you a self learner of youtube a little bit of what i've done and youtube was a part of it in reading uh i'm not sure by the time colleges catch up on that it may be 10 years yeah i think it's one of those things you have to be a self-learner in this environment i mean we have unparalleled access to information that even 20 30 years ago would be much harder to access uh and you know it's one of those things i mean even when i was in college for example uh you know i i did an engineering degree but i also started my first uh say investing website back then uh and ironically now it's it's the investing side that they really took off so it was my self-learning uh that eventually became my primary career career rather than rather than the engineering and so basically you know even if you're in a formal program or you're learning it's important to have your own thing on the side because that's that's your alpha that's your source of you know if you're just in class and you're acing that class you're still capped by what is being taught in that class and you're not differentiating yourself or if you're going out and you're learning something that is maybe ahead of what's being taught in the classroom yeah uh you know that's that's an important place to be and i mean schools are starting to catch up i mean i was invited to a handful of different mba classes where i've given some some kind of one-off lectures uh to some of these programs and i i'm not the only one i know so there's certainly you know other schools doing it with other other people that have kind of uh developed a niche a niche somewhere and so there are you know that is trickling into schools i think but if you're if you're you know if you're trying to get ahead i think it really is important to start studying outside of school as well and and you know you can even go public with it and start developing your own platform uh because that can be helpful for finding jobs that can be helpful for starting your own company uh making contacts in the industry right so so you can you can go out uh not only learn but also share what you learned uh on the side related and of course a fairy tale question but in today's times right now if a lyn alden was 18 years old about to enter college and you had 10 minutes to talk to her again not going back to when you're 18 but you're 18 right now what would be some general probably if you want to include life advice that's fine but more so on on business and purpose and just how things are changing what advice may you have i think it's challenging because a lot of the things i ran into like the downsides were important uh they were both they were kind of like key learning things and so there's actually very little i would i would change just one of those things where if you were to it's one of those jokes where like if you were to change the past like you could change something that seems like you're you're taking away a bad experience and making it a good experience but that could actually end up taking away five good experiences because it didn't lead to certain growth aspects so i'd actually i would i would not want to risk touching anything i'd want to just like leave it as is and let it play out like it has because any even even seemingly positive thing could change that uh but you know in general i think you know i'd i would kind of reiterate that what what i'm doing made sense basically have my own thing on the side from the beginning and be a self-learner be a self-starter and be willing to share publicly you know from the beginning uh because you you learn by teaching right because you know one thing i found is that so one of the benefits of school is that you're forced to complete things right you're tested on it uh you have to get through it and so you can't you know there might be something you don't really want to learn but you have to learn anyway uh and so one thing i found is that if i'm if i'm writing an article about a subject it almost is like the same effect as going through a class where you know if i'm just learning for something and i'm not sharing with anyone there might be parts that are hard or parts that are boring and i just kind of skip them and i just kind of don't go into that part and i kind of focus on what's fun uh whereas if i'm writing something that a hundred thousand people are going to read right then even those boring or or hard parts like if anything i have to spend extra time on this part to really get it uh so that when i share it i'm not sharing enough misinformation i'm not say doing something embarrassing i'm basically laying it out and it's kind of this it's like that's my test at the end of the at the end of the year right so i'm basically going through that kind of external process to force myself into something and so in many ways teaching is important to learning uh because it helps you find your own gap so if anything i would say you know to my younger self like keep doing what you're doing keep keep not only learning things on the side but also trying to share things on the side regardless of how many people are reading it excellent uh market caps of in u.s dollars i guess maybe oil is i think about 100 trillion real estate public stocks are going to be larger i don't know if that much larger uh in five years it's probably going to be too short of a window will bitcoin and ethereum be in that range a much much much larger much much larger market cap than now yeah i mean the the numbers you said i think that's still high for five years from now for bitcoin ethereum but i do think that unless a major tail risk happens that this somehow disrupts them uh like some sort of major draconian crackdown in the us or something so tail risks aside my base case would be that that that that you know the whole digital asset space is multiple trillions the bitcoin is probably multiple trillions uh there's a good chance ethereum will be multiple trillions uh and stable coins uh the the total market cap of stable of coins will be much larger than today uh most likely um i would like to see it in in some of those other other vehicles besides tether uh rather than say you know because there is systemic risk when you start to have any one stable coin being worth a certain amount of money um especially if it's not as if it's if it's if it's say collaterals not as kind of you know rock solid um uh and so i do think that overall space is likely to be much much larger than today on the order of several trillion if you think about it i mean you know we now have individual companies worth over two trillion uh that could conceivably get to three trillion in some cases uh and yet you have say bitcoin which is you know a monetary network that is you know potentially has a higher cap than any of them and even uh kathy woods from ark said he thinks that bitcoin for example is a bigger idea than apple that basically the market cap could be bigger than apple uh in the long run and i think that is certainly possible uh and so i do think that that you know that these are headed you know i think you know i think they're eventually probably gonna get zeros added on to where they are now uh in the longer run i don't know about five years but i do think that they're going to be much higher than they are now in five years yeah i mean that generally when families are maybe a little older a little more conservative ask me and i don't know who the winners are going to be but some of the ones i mentioned earlier i think would likely still be here i said likely there is tail risk uh a concentrated global government significant crackdown where they're coordinated uh so sure there are definitely risks that could happen and who knows what else nuclear war a whole bunch of things that could go wrong but to think that we're going to go from one analog to digital back to analog and these aren't going to progress it's just like it's pretty foolish now yeah in five years is it going to have that market cap and boy that'd be great i'd love it relative to how i've invested now but realistically that may be i don't know decade or longer but it appears to be trending just don't quite know who the winners are going to be in that direction to not admit that i just think it's like having your head in the sand uh a little bit related uh will vitalik buddering founder of ethereum for those that don't know be the richest man in the world in five years i mean i think it's possible um uh i think there's a good chance that jeff bezos could still be the richest man uh at that point or i i know the top few people have been varying a little bit so elon musk briefly had it uh uh you know uh uh bezos has been flirting up there um i do think you know some of these really large bitcoin owners also could be up there like the the winklevoss twins for example if if some of the numbers work out and they you know they go up pretty significantly um so i do think overall uh you know some of these people in the space whether it's vitalik whether some of the the big kind of uh you know owners of exchanges or owners of bitcoin i do think a lot of them will be you know much higher on the forbes list than they are now um i also think if you look out far enough i i think you know the next uh say hundred billion or might be someone we don't know yet that's in the say the bio space right so i think that that you know yes i think yeah i think basically there will be a jeff bezos of bio um and so i think that that's probably another big area to you know be aware of yeah we didn't have enough time today we probably have uh can we have a little bit past four o'clock uh maybe briefly but yeah i gotta wrap it up a little bit after that okay so we'll keep it to 405. uh what asset class for the remainder of this year among the most common eight nine ten that most people would look at do you think would be the best performing so i i try not to do a lot of six-month forecasts because you know my my framework is really more about finding things that are multi-year uh you know good risk reward balances whereas if you're looking at a six-month period you're at that point you're close enough you have to take an account technicals more you have to take into account say political outcomes that could happen one way or another and so there's more kind of those tactical variables um i i do think that some of the you know some of the under this year are looking interesting like some of the healthcare names i think you know they they've been kind of left out of this reflationary cycle so i think as some of that wears off a little bit i think some of the valuations in the healthcare sector are pretty attractive um i do think still that there's upside potential from say bitcoin and the rest of that ecosystem uh you know it's like i said some of the miners i do think that that's going to be a very interesting space um i'm increasingly liking some of the miners here because of that that hash rate migration that's happening um uh and and really beyond that there's certainly going to be some political decision points like debt ceiling or infrastructure bills or the chinese credit cycle right so china's been on like a tightening cycle lately that's been slowing down both chinese domestic economy and as well as it it's impacting global uh you know because we're all interconnected and so there are kind of these political decisions as well as delta variants when you know whatever thing can happen from the virus there's these kind of curveballs that can come that are almost you know very challenging to predict uh and so that's how i play the next six months i'm still remaining quite diversified um i'm still bullish on on on bitcoin and some of the miners uh and i'm also uh just some of the healthcare names i think in fact not even just smaller ones but even some of the blue chip healthcare names have been acquiring some of these uh you know promising therapies uh some of them i think are just too cheap right now and that they have good say five-year perspectives and i don't know if they're going to do well next six months or not but especially with some of the kind of the euphoric aspect wearing off especially among retail investors that may be having less capital i think some of these names that that don't interest help retail investors at all lately like the the blue chip healthcare names i think those could eventually have a period of doing quite well uh what country first develops advanced quantum computing well they have a tremendous and perhaps nefarious edge well i mean if if you were to develop quantum computing stealthily and then deploy it i mean for example people often ask how that would impact bitcoin but for example anything that could break bitcoin you could you could break bank encryption uh and and and and and so basically the entire modern system as constructed uh get down to the foundation of banking would would be potentially impacted security wise by quantum and so we've seen a lot of hacks lately but those are generally these unencrypted things or poorly encrypted things you know we've never seen like a catastrophic banking hack for example their system has been very robust and so if if that were to develop that would obviously change a lot of things now there are still a lot of headwinds for that technology and i mean statistically speaking if anything i mean the ones that have an advantage would be say the americans uh just because it's one of those things sheer numbers right so that the more technology companies you have working on it the greater chance that it's going to be in your jurisdiction right so the chance that it ends up being a small country is low uh so united states uh potentially china uh you know but but so some of these kind of you know more powerful tech uh countries are the ones that are likely to eventually have that technology first why are the gold miners uh uh barrick newmont gold paying dividends instead of reinvesting in gold is this an indication that they are bearish so i i would say no and i think you know an important difference between this gold cycle versus the 2011 gold cycle is that during that whole run up in gold prices gold miners kept acquiring new reserves they kept expanding they kept making acquisitions uh and that's partially what ended that cycle basically there was so much euphoria there's a lot of new supply brought online and they managed to i mean gold went from say 300 an ounce all up to you know 1900 an ounce during that cycle and those gold miners managed to not be profitable through that entire cycle they managed to not really kind of retain free cash flow pay off debts they managed to end up with more debt than they started with and not being free cash flow positive and that's because it was so rapidly redeployed often at uneconomic rates and so now and then of course they had a brutal bear market a lot of those managers got replaced a lot of the weaker ones got acquired and if you look at barrick for example you know they had a ton of debt they they've rapidly you know they paid off a lot of that debt build up cash so their net debt is almost zero they have almost as much cash as debt uh they've radically improved their balance sheet strength they've they've radically improved their free cash flow uh and so basically less they're being far more disciplined with their reinvestment because they've learned from the past cycle where they just dramatically underperformed the price of gold itself uh and so you know if anything i think it's they're they're being far more cautious and you could interpret that as bearish but i i interpret that more so as cautious and kind of appropriately cautious where they're they're finally focusing on being these free cash flow producing companies uh uh you know at current gold prices and so they're not they're not inherently speculative at least some of these gold ones you could you could treat a barrick as a value stock uh rather than treating it as a speculation we're also saying that to some extent in the midstream energy space uh and kind of the north american energy sector broadly where despite these higher oil prices because we have less capital going into the space there's less kind of incentive to keep drilling finding new supply and so they're more focused on being free cash flow positive returning cash flow to shareholders we see the midstream companies i mean that whole model the whole uh nlp model is based on rapid growth and issuing more and more units uh but you know after the blow-up that happened uh you know say with the oil price crash from 2014 2015 shift to being self-financing uh and so you have them increasingly becoming free cash flow positive you even have a couple of them do share do unit buybacks and so you have like enterprise product partners that used to be a net issue of units is now kind of neutral to slightly downward in terms of how many units it has because the the shift is more towards being self-sufficient uh self-financing and returning cash to shareholders and so we're seeing that in a couple different commodity spaces uh seven minutes left before i go into the close i have three questions we'll keep them a little bit lightening quick uh did the dd ipo and potentially canceling of the bite dance ipo make investing in chinese adrs off limits i don't know about off limits but it certainly i think should increase the prudence that investors have to them be careful about position sizes uh and and and have a higher threshold for ones you're willing to invest in uh you know with maybe a lower position size than you otherwise would are interest rates heading back to one percent or let me be shocking three percent or more do you mean the short end or like the ten year uh tenure uh so i think you know it's unclear but i think a general pattern we're going to see is that it's not going to closely follow inflation uh and that most likely the 10 year is going to spend the next several years at least the majority of the next several years below the inflation rate uh because there's collateral shortages there's things like spillover effects where if japan holds their rate zero then some of those buyers come out and they buy u.s treasuries uh you know even if they're not yielding as high as inflation and so i think that that could vary i mean there's obviously different forces that could impact that and so but i think we're probably going to be in a range that is below the inflation rate does money printing actually cause deflation may be slightly reposition outside of asset inflation does money printing cause deflation i would say not not necessarily but there's there's that's one of those really nuanced things because uh you know money printing does not really boost say cpi because it doesn't get out into the public but when you combine that with fiscal spending so if the fiscal authority does some sort of stimulus and then a large portion of the bond issuance for that is is monetized is bought by money printing uh that is inflationary and so we've seen for example in japan you know i think a closer thing to track is not what's happening with base money so so base money can go vertical and that's not necessarily going to tell you almost anything about inflation or deflation instead a close to variable to watch is broad money and so if you look at japan for example japan has had very very slow broad money supply growth over the past 10 years and that's because corporations have de-leveraged at a time when the public sector leveraged up mostly financed by the central bank so they're so their base money their bet their central bank balance sheet went vertical when over 100 of gdp whereas abroad money supply was super slow uh and whereas united states on the other hand we've been seeing a faster broad mind supply growth because our deficits have been bigger uh you know we've had a different phenomenon there and so i would say that that's there's a lot of nuances there but i think investors are are much more profitable if they follow broad money rather than base money last question what would cause the us to lose does it sound like it's going to happen anytime soon but to lose its reserve currency status so the short interest is not much the longer answer is i think we're we're seeing a gradual shift towards multiple like regional reserve currencies so so a handful of currencies that are able to buy oil and other commodities so basically the the you know since the 70s really the united states is really the only only currency you can reliably buy oil with uh from most places other than a couple outlier times like iraq or others that decided to sell in euros but we're starting to see a pretty tangible effect there where russia is now selling their oil in euros uh and so we see uh you know trade between russia and europe is becoming less dollarized and more euro-eyes we're also seeing the trade between russia and china is being detailerized and more euro rised and so not even so partially their own currencies but then also the euro even though neither of those obviously use the euro and so i do think we're seeing a shift towards regional reserve currencies where the dollar's share of global central bank reserves will continue uh will will continue to diminish uh and that we'll see a couple different major currencies like the dollar the euro and probably the venture the digital yuan that are increasingly used to buy oil uh but that not that not that there's a new global zero currency but you have a little bit more of a decentralization or a a dilutive effect so you have maybe top three currencies for sure it looks like eventually inevitable but not anywhere in the short term i do absolutely have some questions in the tank for the next time i think we kept these whatever 40 questions i think only two or three were repetitive from the last time so uh quite the task coming up at new questions but it was a lot of fun for those that would like to and i highly recommend follow you on twitter uh what is your twitter handle uh so i'm at lyndoncontact on twitter and my website is lyndalden.com so again that's lynnaldencontact on twitter and the same for the website where you give away a lot of free newsletters i recommend paying it's cost effective like i am and being a subscriber so i highly highly recommend it is there any other uh information or medium of exchange where people could learn more about you or subscribe to those are the main ones my website and twitter i also have a free newsletter uh so someone just wants to join the free newsletter on my website uh that comes out every six weeks so they can get a taste of that and it's for free yeah i mean i'm like the biggest fan of lynn i think she's great it was an honor again to interview her for the second time look forward to the next time i learned so much i can't wait to go back and watch and listen to so i could uh better absorb and take notes and make some changes or rethink things as i think for myself some decisions in terms of that i'm making uh thank you so much lynn if you have to run right now it's all good i'm going to give a one minute close to wrap things up and we're good but i appreciate your time and again very much look forward to the next time yep thanks for having me bye everyone bye everyone i'm angela robles i'm the host of angelo robles podcast or simply family office on youtube i'm the founder and ceo and family office association a global membership organization dedicated to families of great wealth in their family offices you can learn about us on our website very simply our name familyofficeassociation.com we encourage you to look in the membership and be a part of our special community i'm also very active in social media again as i mentioned earlier we're family office association on instagram and i do some unique things there so we're a little different and you may get some value out of that and i'm a family office as mentioned on youtube on that note enough about that lin was great i look forward to the next time thank you to our live participants much of them members of family office association i appreciate it and look forward again to the next time thank you you

Channel: FamilyOffice

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Keywords: Lyn Alden, financial education, investing, lyn alden schwartzer, lyn alden investment strategy, Ducat, stock market, stablecoin, bitcoin dominance, tax on crypto mining, investing emerging markets, finance, markets, 2021 market outlook, lyn alden bitcoin, investing with inflation, family office, lyn alden contact

Id: xKwH_t_5C_M

Length: 120min 5sec (7205 seconds)

Published: Fri Jul 16 2021