A Wiser Retirement®

312. Is Crypto Right for You?

• Wiser Wealth Management • Episode 312

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In this episode of A Wiser Retirement® Podcast, Casey Smith sat down with Robert Swarthout, Founder & CEO of Teton Crypto Capital, to revisit the cryptocurrency questions they first tackled in 2020 and how the answers have evolved over time. Their answers are here to help you find out, does crypto belong in your portfolio?

Related Podcast Episodes: 

Ep 14. Are Digital Currencies Right For You?

Ep 306. Crypto in Your 401(k)? The Future of Retirement Investing

Other Links:

Teton Crypto Capital

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This podcast was produced by Wiser Wealth Management. Thanks for listening!

SPEAKER_04:

A recent JP Morgan study shows that 17% of you personal investors are investing in crypto while 35% of institutions are investing in crypto. Do you think crypto is right for you? Do you think it's a scam? Do you think that it's in a bubble? Do you even understand what crypto is? Stay tuned. Learn more. Let's talk about crypto. Welcome to a wiser retirement podcast. Are you curious if cryptocurrency is right for you? I'm Casey Smith. Today I'm joined by Robert Swarthout, founder, CEO, portfolio manager of Teton Crypto Capital. Each week we bring you practical advice on retirement, investing, and planning for your financial future. Don't forget to subscribe to the podcast wherever you're listening. Let's get started. Hey Robert. Hey, how's it going? Welcome back. Yeah. So this is kind of like a retro, you know, it's kind of like the big wide paisley ties. Yes. From a long time ago.

SPEAKER_02:

Yeah.

SPEAKER_04:

They they're coming back.

SPEAKER_02:

Oh boy.

SPEAKER_04:

I don't I don't know if that's true or not, but but I was I saw a paisley tie, except it wasn't wide, it was skinny. Things never come back quite the same. Correct. Uh, including podcasts. So we did a topic just like this in episode 14. Long, long ago. That was long, long ago. We I don't know. Did we have mask on back then? That was 2020.

SPEAKER_02:

We probably weren't following protocol. We probably did, yes. Um, but yes, it was uh that was the fall of 2020. Long, you know, it seems like yesterday, but also seems like forever forever ago.

SPEAKER_04:

So that's right. So uh just like style, uh how we answer questions uh could be totally different five years later. Yep, because we've grown and learned things.

unknown:

Yeah.

SPEAKER_02:

So especially when you're talking about technology. Technology, obviously, you know, next week could have a different answer.

SPEAKER_04:

So yeah, absolutely. Um so let's let's go back and answer the questions again from 2020 about crypto. Sounds good. So since 2020, Wiser Wealth Management, our firm, uh we've introduced cryptocurrencies into portfolios as an option. You built a whole company that invests in cryptocurrencies, right?

SPEAKER_02:

Yes.

SPEAKER_04:

So we've we both have come we both have come a long way in five years.

SPEAKER_02:

Yeah, you know, when we talked the first time, it was something that I was doing personally, it was and I was curious about. Um, you know, like you mentioned, I've started a fund that does that as investing, and then obviously as as it became, I guess, um as your investment team got more comfortable with having it in portfolios gave clients the option, which is really cool. So yeah, absolutely. And you're I guess a year and a half into that journey or something like that. Yes, awesome.

SPEAKER_04:

So the so the the adoption rate at Wiser has been around 20%. So the JDP Morgan report says 17% as of early 2025, 17% of personal investors are in crypto. Um those in my experience, the people who under 30, 100% in. Yep. And the people with I'd say two and a half million dollars or more in liquid assets, no matter what their age, right? 100% in. Right. But there's a huge gap in the middle.

SPEAKER_02:

Yeah. So, you know, when you said the 17%, you know, one thing that came to mind was it'd be interesting to know the numbers if you back out the percentage of the population that just doesn't have savings, right? They don't, they can't take that$500 emergency hit. Um, like what does it turn into 50% that 17%? I don't it'd be interesting to know the numbers. Um, but but that but it it still is a low number, um, nonetheless. Um, so it's uh but I but I would say in my experience running my fund, it is definitely the crowd that is the older crowd um that has that dis um uh more discretionary um money for investments. And you know, it's at some level, I wouldn't say it's an investment that you should expect it could go to zero, yeah, but it it definitely is on the the riskiest end of all um investing, you probably will likely be doing.

SPEAKER_04:

So well, before we get into our uh retro questions here, um I the only thing I would I would push back on that is it is risky, or it's volatile. I would say that's volatile is a better word, yeah. You you have a higher chance of loaning money to your brother-in-law and never seeing that money come back ever again than I think you do losing money and Bitcoin.

SPEAKER_02:

Like it's not going to zero. I think the zero case is off the table at this point. Absolutely. Yeah.

SPEAKER_04:

Uh I mean we have real uses. There, there are real transactions happening around us every day that that involve cryptocurrency. The problem is that as everyday people, we don't we don't really see that yet.

SPEAKER_02:

Yeah. And you know, this may answer one of the questions we're going to go through, but like, you know, the the economic slash monetary system in the US works pretty well. Like our debit cards work each day, our credit cards work each day. There's countries around the world where that's not the case where crypto actually may be more meaningful for it, like on a on a transaction basis to a retail person.

SPEAKER_04:

Um which is a great segue. Yeah. Uh what is crypto, what does crypto really mean?

SPEAKER_02:

And what is the context of personal investing? Yeah. I mean, uh functionally it's internet money. I think people have used heard that in maybe the negative context, but I think it's a it's a right answer. It's it's money that runs on a blockchain. A blockchain is just a database at the end of the day, very, very simply. And that there's there's a lot of math involved about making sure that the balances are all the same, and there's different ways to set up blockchains, but fundamentally they're all um, you know, e each thing is linked together, literally, why they call it a chain. Um and you can kind of go back in history and kind of see the changes over time.

SPEAKER_04:

So you think about another currency that has nothing to do with a government. Right. With the advantages of that. I mean, since 2020, we've seen a tremendous amount of new uh uh federal deficit. Um starting to uh decline again with lower lower interest rates. Um you know, I I don't know that that anybody says, okay, the dollar's not going to exist in 20 years. But but what if the dollar struggled? I think uh a Bitcoin type investment is a great addition to a portfolio.

SPEAKER_02:

Yeah. I you know, I I I forget if I've mentioned this in the other podcasts with you, but like um one thing I've said on my podcast is that I believe that the stable coin market, and we'll talk about stable coins here in a minute, probably, but like the stablecoin market is likely to be such a big buyer of treasuries over the next call it five to ten years that it may save the dollar's place as a reserve currency for a period of time that otherwise it wouldn't have been.

SPEAKER_04:

I I didn't believe that initially, but I definitely believe that now.

SPEAKER_02:

Yeah, it's it's like how quickly that's changed. It's like two years ago, we were talking about stable coins, but not like we're talking about them these days. Yeah.

SPEAKER_04:

And you need do we even need Japan and China buying US treasuries at that point because the stable coins would be in such such demand.

SPEAKER_02:

Right. And there's like a massive vacuum. It's just like sucking up treasuries.

SPEAKER_04:

And that has all to do with the Genius Act.

SPEAKER_02:

Yeah, that definitely cement uh cemented it. If you want to have a dollar-backed stable coin that is um eligible to be used in the United States um with you know, basically citizens, um, it has to be backed by certain things, cash or cash equivalents. Obviously, treasuries fit fits in that bucket.

SPEAKER_04:

So think about the last five years since we originally aired this. How has crypto changed so much?

SPEAKER_02:

I would say the big change, I mean, in you know, not to be negative, is it we talked about a lot of negative things that were on crypto five years ago. Yeah, even as much right. Well, that was even before SPF. I mean, FD's true. He was aspiring at that point. That's true. Um, but but in this case, you know, we talked even as recently as two years ago um in 2023 about the negative side of crypto um and the negative things that revolved around crypto. That's I wouldn't say crypto's not perfect. Um, nothing is perfect, but I think the those negative headlines are largely, you know, not not an issue anymore. If anything, the negativity around crypto may be, oh, it's down 10% today from from time to time, right? Um if you if you watch the volatility day to day, which I advise not to do. Uh no, it'll drive you crazy.

SPEAKER_04:

I have a uh I've talked about this before, but there's a tidbit, it's called tidbitty. It's a little box and it has little lights, yeah. And you can put all kinds of apps on there. Uh, but one of them is the Bitcoin price along with like the airport weather and things like that. And I passed by my office like five days ago and I glanced up, and then and after the Falcon score, I think it posted Bitcoin price, Bitcoin 122,000.

SPEAKER_02:

I was like, oh wow.

SPEAKER_04:

It literally, I was getting in my car this morning, I passed by the office, I looked to my right and it flashes and it said 102.

SPEAKER_02:

And I was like, oh yes, crypto. You know, we we jokingly say in the space that October is generally October. Um, I put that in a newsletter that I wrote earlier this month, and I'm like, why do I do these things to myself? Because like it has been nothing but volatility on the downside this month. Right. Um, and there's been some shenanigans um that happened with um, you know, the day that Trump was tweeting about uh potentially putting um more uh tariffs back on China. Um there was some basically front running of that news with some Bitcoin shorts, somebody made a couple hundred million dollars. Like there's nothing technically illegal um about that right now because we don't have regulations defining that it should be illegal. Right. Hopefully soon we have regulations to define something like that is illegal because that that needs to stop. Yeah, um, it's frustrating being in the space and seeing that happen because yeah, it was a good day for whoever that person was, but like it came at the expense of a lot of other people. Um, so yeah, it's uh that that's the kind of negativity we talk about today. But otherwise, it's generally great news, especially since the election. It has been up into the right for all intents and purposes since November.

SPEAKER_04:

Well, it's what something that Trump campaigned on was to bring legitimacy and regulation to campaign on and he's you know seemingly following through so far, too.

SPEAKER_02:

So yeah.

SPEAKER_04:

Yeah. So what um you think about things that evolved the last five years. Uh, I don't feel like I hear as much about meme coins as as as I used to. I I could be disconnected from that, actually. Yeah, but I I feel maybe it's because I only talked to you about this, but more about utility and purpose behind each coin where I don't see a whole lot of doge and I don't mean so I would say it it probab you probably are correct because you're hearing it from my lens.

SPEAKER_02:

Um I I tend to ignore a lot of that. There's people out there that are definitely um in meme points. Heck, there is a doge ETF. If you wanted to go buy Doge right now, you could do it in clients' portfolio since you're all ETFs.

SPEAKER_04:

Oh, yeah.

SPEAKER_02:

So probably not something that I would see you guys doing. Um I didn't realize they launched that. So you a doge ETF. A doge ETF that's horrible. So I used to admittedly, I used to hate um uh meme coins. I was like, they're a distraction, they're bad luck for the space, all the things. Right. I not that I invest in them or I find them interesting, but I've I've come around to view them as it's pop culture, and it's a way that a generation that it finds it interesting to buy into pop culture. And in some ways, it's no different than the 1995 beanie babies, or it's no different than buying baseball cards or what whatever it is for that generation.

SPEAKER_04:

I know that was in your retirement portfolio.

SPEAKER_02:

Correct. So that may maybe this is bled into the wrong area of life. Um, but it I would imagine that it's if you looked at the overlap of who's buying that ETF, it's gotta be the Robin Hood portfolios. Um, because that's probably skews very young. Um, that that group.

SPEAKER_04:

So yeah, anyways, because there's no that I and if you're still learning about cryptos, that there's no utility behind a doge coin.

SPEAKER_02:

Right. It is there's no purpose. I wouldn't even I mean it's a form of gambling in the sense that you're buying something that could go up or down. Um, but there's it's not used for anything outside of you just like the there's so many like of those tokens out there, it makes you feel rich if you look at the number of them that you might buy. It's like almost like monopoly money at some level.

SPEAKER_04:

You're hoping that it just jumps up. It's like these penny sucks.

SPEAKER_02:

Whether it's any of any of the small altcoins, whether it's the meme coins or not, when they're like less than a penny apiece, when you look at a on a per token basis, or even a fraction of a penny, the whole game that people play mentally there is, oh my gosh, if one of those zeros go away, or two of those zeros go away, right? I mean, I get it, it's a 10 extra 100 extra. And like, you know, Bitcoin worked because it was the first and it had a crowd around it. A lot of these others have crowds around them, but they're not first. And you have to understand that. I mean, there's in my opinion, there's at least 20,000 cryptos. Some measure there's millions. Most of them are just absolute trash because we could sit here and make a coin in five minutes. We could launch it, but doesn't mean it's worth anything. It's all about marketing, right? And that's the pump and dump nature of crypto. See, that's the pop culture one again, right?

SPEAKER_04:

It's almost it's it's it's it's like the the gold coin on late night TV, and you could buy it for four payments of$19.99.

SPEAKER_02:

Sure. I mean, I think I guess old timers at least at least they get a coin. That they get something for it. Yeah. I mean, the SEC did come out, I want to say back in late spring, early summer, and said that meme coins are not securities because they are more they're more akin to um collectibles. Is it was the definition.

SPEAKER_04:

So that's this is almost like an NFT, but right, absolutely.

SPEAKER_02:

So they're saying NFTs likely are not um securities. NFTs can kind of blur the line in some cases because some of them can have a cash flow mechanism to them. So that starts being a little bit different. Um the SEC, I don't think, has uh given any sort of ruling on that piece, but um yeah, it's it's so they basically immediately clear the like the Trump coin, the the Dogecoin, all those things kind of like so you you're starting to see some celebrities launch meme coins of themselves. But you think about that it's a money grab.

SPEAKER_04:

You you buy uh oh totally. It might be a transfer of wealth from those who don't have any people who do. Right, absolutely. But you you think about baseball cards, the old the collectibles of old. You have something to show for you have something to throw in your addict or whatever. In this case, uh and maybe I'm just totally disconnected from this, but is someone walking out going, hey dude, check out all my coins that I got, and you know, I mean, how does that you just say that you have it or you have these coins, or yeah, I melee, I don't think I can answer that question.

SPEAKER_02:

Maybe you should ask Owen your son.

SPEAKER_04:

Um he's not buying any of this stuff.

SPEAKER_02:

Um, or you know, I I think it's a there's a there's a generational group of people, and I don't know ex I don't know if it's the young millennials or what it is, but um but but there's definitely a group that um has gravitated toward me and partially it's because it's the the the chance of I might get rich off this like there there's no doubt that there's an element of that whether that's 10% of it or that's 90% of it, I don't know.

SPEAKER_04:

Um but so it's like the new version of multi-level marketing.

SPEAKER_02:

Yeah, I you know I often describe crypto in general, but especially the meme coins as like buying a long dated option. Like it these just functionally don't have expiration dates. That's the only difference. Yeah, um, they they can be highly changed in price by you know, if say Elon Musk started tweeting about Doge again, I guarantee you that is gonna be up crazy in a short period of time. Right because now Doge is gonna be every in everything Elon does. Obviously, not gonna be the case, but like um that's what people believe.

SPEAKER_04:

So well, okay, so that stuff still exists from five years ago, I guess. Uh, but hopefully investors are becoming a little smarter in understanding the utility behind uh cryptos. I I feel like the over the last five years, um, speaking of utility, that we've understood maybe the purpose more. And we have clarity from well, only in the last uh nine months do we have clarity on on uh stable coins. Stable coins. The most basic of basic but but no XRP. I mean, we got clarity on that eventually.

SPEAKER_02:

Yeah, through a ruling, but uh there's still plenty of work that Congress needs to do. They first they need to get back to work, get out of this um uh shutdown that they're in, and then they can get back to working on the um uh the Clarity Act is what they're calling it, basically bringing the rules of the road for crypto um into into law so we have regulations around that. Um, that would be a massive value unlocked. It may not be like the next day, but over time, that's how a lot of builders will be able to have the confidence to be able to be able to build in the United States the biggest economy in the world.

SPEAKER_04:

So I'm gonna I'm gonna give you a list. This is impromptu.

SPEAKER_02:

Okay.

SPEAKER_04:

All right. This is the top 10 cryptocurrencies by market cap because I I'm excited about an ETF coming out the whole detail. Yeah, an index, absolutely. All right. So I'm gonna go down this list. Okay, and you cannot tell me what they're for.

SPEAKER_02:

Oh boy, okay.

SPEAKER_04:

But you can only do it in like three or four sentences.

SPEAKER_02:

This is this is a challenge, okay?

SPEAKER_04:

So so Bitcoin.

SPEAKER_02:

Um, digital gold.

SPEAKER_04:

Okay. Yeah. Because we're not really transacting in Bitcoin, no one buys things in Bitcoin, right? Correct.

SPEAKER_02:

Transactions take up to 10 minutes and they can be three or four dollars. I mean, the fun that that is not what crypto is made for.

SPEAKER_04:

Okay.

SPEAKER_02:

Yeah.

SPEAKER_04:

Ethereum.

SPEAKER_02:

Um, the jack of all trades internet computer. So it currently a lot of DeFi runs on Ethereum, um, but I think long term, the the shortcomings of it not being fast and other things is what's going to end up eating it alive.

SPEAKER_04:

Uh, so maybe not a good long-term hold there.

SPEAKER_02:

I correct. I, you know, I I understand I'm on the outside when I say this. I think 10 years from now, Ethereum is not in the top 10.

unknown:

Interesting.

SPEAKER_02:

I think Bitcoin's not in the top five. I think, I think utility tokens are gonna be that massive. Granted, I'm very much that's the hat that I wear. I get it. Right? That's that's the fund that you're that's the fund that I run, all transparency. But like I think that's that is the world we're going towards, is in my opinion. Tether. Tether's a stable coin, so that's uh that's UST.

SPEAKER_04:

Yep.

SPEAKER_02:

Uh BMB. That's the Binance um coin. Um, so whether that's a security or not, you might have to squint and say yes or no. Um, but at the end of the day, it is um there's some DeFi that happens on that. It's a faster chain. You know, it does does it work long term in the US? I don't know. There's some questions I think unanswered there. Long term, I think it's international.

SPEAKER_04:

XRP?

SPEAKER_02:

Um, you know, made for payments, Ripple uses it. Um, we've talked a lot about that in other podcasts, but it's um, you know, it's it's purpose built to have fast transactions that are cheap.

SPEAKER_04:

$2.46 a share for that. Now I remember it was 19 cents.

SPEAKER_02:

Yes. It's been an it's begun been a fun last year.

SPEAKER_04:

Uh Solana.

SPEAKER_02:

Solana is basically almost like a version two of Ethereum in some sense. Um, some people say. So it is a um network that does DeFi, it's faster transactions. There's there's a whole community around it. It was um a network built and funded by VCs, so that's a bit of a twist that these others don't necessarily have. Yeah. Um, you know, Solana, they all have communities. Um, these communities like to do infighting amongst other communities, almost like little tribes. Um, but Solana is um one that I personally am not a big fan of.

SPEAKER_01:

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SPEAKER_04:

Is Solana gonna be a competitor with Ethereum or XRP?

SPEAKER_02:

Are they gonna be able to all work separately in the so where you start really slicing these things up is Ethereum can do smart contracts, Solana can do smart contracts, extra XRP does not currently. Um, so they they compete at that level, Solana and Ethereum. Um, and probably some other ones on the list we're gonna talk about will also have smart contracts too. You know, it's just all about what they attract. Solana is actually over the last year, like the Trump meme coin was launched on Solana. So like it wasn't on Ethereum. So there's those pluses and minuses, um, you know, and it's just preference at that point.

SPEAKER_04:

Uh I'll have a follow-up question to that, to that answer. Yeah. So is it like Betamax versus uh VHS here? Or is it a world where both live? Because you're talking about two different systems, two different totally systems. Um or is it kind of like websites? Some are built on WordPress, some are built on whatever.

SPEAKER_02:

Yeah, I would say it's almost you might use the analogy. Some websites run on Amazon Web Services, some run a Google Cloud, some want to run a Microsoft Cloud. Yeah. I think that may be a better analogy. Um, because they're very similar technologies, but but underneath the hood, they can be built totally differently. Yeah. Um yeah, I think I leave it there.

SPEAKER_04:

So number seven, easy. Uh USDC.

SPEAKER_02:

So the the second biggest stable coin circle. They went public this last summer. Yeah. Um, and we've I think we talked about that a couple episodes ago.

SPEAKER_04:

I haven't, I don't know how to follow this one. Uh uh TRX.

SPEAKER_02:

TRX. Um, yes, I I follow that one so little that I probably can't quite give much of an answer there. So I believe that one is that Tron? No, or no, TRX is a TRON, Tron. Tron. Okay, yeah. So the TRX is the shorter version of saying Tron. Um yeah, it's just another network. At one point, um, they may have been privacy focused. Some of these chains have done some morphing where you can't tell who's doing transactions. I don't want to be quoted on that one because I might be wrong on Tron, but yeah.

SPEAKER_04:

It's only 32 cents.

SPEAKER_02:

Well, price doesn't matter because it's all about no different than a stock. It's about with the float, how many tokens are you? Um that that's what makes market cap.

SPEAKER_04:

Oh, that's true. Yeah. 30 uh 30 billion. Yeah. Yeah.

SPEAKER_02:

So Bitcoin only has 21 million, but has a higher price that gets it at a high market cap, right? It has um really high price with a decently high number of tokens. XRP has a hundred billion tokens, right? It's you know trading at um 240, 247. Um, but anyways, it kind of gets in the weeds. So it depends upon the the float outstanding.

SPEAKER_04:

So well, then there's Doge after that, we've we which we've already talked about.

SPEAKER_02:

Total meme coin, yep.

SPEAKER_04:

And then number 10 is um Cardano.

SPEAKER_02:

Yep. Uh ADA. Yep. So that's another one that um is got some smart contract capability. Um, so it's you know, early on with the internet, there was all these websites popping up that were trying to sell books and do different things. I think we're kind of in that stage of crypto right now. You see a lot of them trying to target the same thing or similar things. I think over time you see a little bit of consolidation. Um, we don't have 20,000 of these things 10 years from now that are actively like important. Um not that we have 20,000 that are there's a hundred on the market cap list. And that's just the top hundred.

SPEAKER_04:

Yeah, that's just the top hundred. And you can keep going, you could keep going down and down and down. But that's interesting that you have a meme coin in your top 10.

SPEAKER_02:

Yeah. Um that just shows how big the community is around it. Um and you know, I would the last thing I would say about market cap is I view it as a risk scale. If you look at all of crypto, Bitcoin number one, all the way down to whatever is at 20,000. As you get further down that market cap, the risk goes higher, higher and higher and higher.

SPEAKER_04:

Exponentially probably like large cap, make cap, small caps.

SPEAKER_02:

Right. Um, but there's regulation around stocks.

SPEAKER_04:

Right.

SPEAKER_02:

Um we could literally start the wiser coin again in five minutes, and we can make a hundred billion of them. We're worth zero.

SPEAKER_04:

We will do that after our we launch our merch store.

SPEAKER_02:

There we go. Um, but we can make them, they're worth zero. You all you need to do is sell one to me for ten dollars, and all of a sudden it's 10 times your your float, and all of a sudden that's what your market cap is in crypto. Makes no sense because there's no liquidity to necessarily support that. Yeah, yeah. So liquidity is supreme. Um, and that's not what these market cap rankings do a great job of um illustrating.

SPEAKER_04:

So yeah, it'll be interesting to see how these new ETFs, how they sort, because I could totally see some of these dropping out and others are rising to the top. And how often are you is it quarterly? You reset. Um I'm sure all those answers are all in the offering. Offering paper uh no.

SPEAKER_02:

Bitwise is um supposedly they have a draft, it hasn't been approved, but doing, I think it's a top 10 or top 15 index um of crypto. And it's uh my guess is it's everything the top 10 or 15 minus stable coins. Um sometimes you see them. Um there's an index now, I think it was a grayscale product trust that was converted to it's the top five. It doesn't have stable coins, and I think it it also emits like the Binance coin, if I'm not mistaken. I'd have to look that up to be certain. But um, so you see some of that stuff. So it's like it's kind of like the top 20 minus a few things. Yeah. Um to yeah.

SPEAKER_04:

So if you think about how how does this compare, this is a good segue. How does this compare to traditional assets like stocks and bonds? We we literally just compare Kitrats to that. Right. Yes. So in its own world, in its own cryptocurrency world, you have less risk, which would be Bitcoin, you have greater risk, which would be the bottom of that list of a hundred, right? Uh then you I would say then you have meme coins. Well, I guess the least risk would be stable coin. Well, there's no reason to invest in a stable coin, but but but how much upward movement are you gonna have in a stable coin in price?

SPEAKER_02:

In theory, zero because it's supposed to be one to one. Correct. If there's a deep pegging, it's only going down, it's not all of a sudden becoming worth more. Yeah.

SPEAKER_04:

So you wouldn't buy a stablecoin because you want it to double in price. That doesn't make sense.

SPEAKER_02:

So so the analogy that I've been using lately around why you would actually hold a stable coin is if you want to have cash, quote literally and air quotes, in a um crypto wallet that you can transact with. Yeah. So you know what you're paying is not going to be worth more or less tomorrow. That's the risk with crypto.

SPEAKER_04:

Like if you were to use So you you convert your Bitcoin, which is volatile in price, yeah, to a stable coin, which is pegged to the US dollar.

SPEAKER_02:

Correct. So you want to go buy coffee or whatever you want to do.

SPEAKER_04:

It's like selling your stock and buying a money market fund.

SPEAKER_02:

Except money market funds, you there's a yield. Um, there's no yield on stable coin. Good point. But yes, very similar. I mean, it's literally like going to cash, um, like dollars in your bank account, I think is the fair equivalent.

SPEAKER_04:

So let's let's uh let's die, let's take that one one step further. So forget about buying crypto.

SPEAKER_02:

Yep.

SPEAKER_04:

I want to buy the company that owns stable coin because they're getting my yield.

SPEAKER_02:

By law, by law, but the Genius Act requires they cannot pay the yield that they're getting or a portion of it to the holders of the stablecoin. None of those are publicly traded yet. Well, the stable circles. That's that's literally their business. So has their performance been? Um, I haven't their stock really popped. Um, I don't think that it stays that high. They they were at like a crazy like multiple, like um 200 something X at one point. Oh wow. Um I think it's come down to earth recently, but um after the Genius Act? Well, no, they they launched after um the Genius Act was a thing. Um tried to find it real quick. But the their stock price is so their ticker is C R C L. They're at 134 in change. Um, but since the last six months, they are pop. Yeah, I mean they they IPO'd, I want to say, at$33, if I'm not mistaken, or price there. Within a week, they were at$260. It has since traded down. It's kind of plateaued the last month and a half.

SPEAKER_04:

Um, I was just looking at the one day price. Sorry.

SPEAKER_02:

Yeah.

SPEAKER_04:

The one day looks great. Uh the five year not so good.

SPEAKER_02:

Yeah, I mean, they've been out for less than six months. They lay.

SPEAKER_04:

So they're at 132 a share and they were uh let's say at one in the 140s. Yeah. So not not not as much upper movement as you would think.

SPEAKER_02:

So so these bits this is an interesting business to watch over time.

SPEAKER_04:

So but the treasure yield's coming down.

SPEAKER_02:

Correct. So that means so the their margins are gonna get squeezed. Yeah. So circles, not to get fully in the weeds on them, but like roughly 50% of their revenue is contractually obligated. Um, assume 50% of their profit is contractually obligated to go to Coinbase because Coinbase was a huge supporter of them early on. Okay. Put them on the exchange. So half the half the business doesn't really even go to the shareholders, it goes directly to Coinbase, right? Right. Um, and then as the Fed lowers rates, um the the yield that they're gonna be getting is even less. You start to see compression. I is Circle an independent business long term? I don't think so. I think they're gonna get swallowed up by someone else. Um heck ripple tried to buy the the week before they went public, so yeah, um still up 95% year to date. Yes. I mean they that that first week pop really helps that number. Interesting.

SPEAKER_04:

So not endorsing that purchase whatsoever. But I just I just want to go down that rabbit hole for a second. The stable coins if you own a stablecoin, you're not getting the yield like you would in the money market. It's then who who are the companies that are getting the yield? Because those those might be good companies to have in a portfolio at some point.

SPEAKER_02:

So I mean this is the only way you can get exposure to a company that has that. Yeah. PayPal has a very small business in this, but nothing that moves in the needle for them. Right. Um, and then the other one, the big ones, tether is not publicly traded. They're out of the canons or something like that.

SPEAKER_04:

So um it's its own asset class. I guess they answer the question of how does it compare to stocks and bonds. So you have stocks, you have bonds, and then now you have cryptocurrency, right? Uh, and then you have commodities, uh, which would be a separate, a separate category.

SPEAKER_02:

So, like five years ago, I don't think anyone was trying to convince anybody that crypto should be part of a um model portfolio. That was not a conversation. Right. But now I think that's in the discussion.

SPEAKER_04:

Um with only 17%, supposedly, that that have it in their portfolios. I I will say the ones that have had it added it to their portfolios here have seen a two and a half percent increase in rate of return over the portfolio time period. Right. It doesn't mean that it'll stay that way. Um it has been more volatile. I've on on big crypto down days, I see it in the portfolios that have it. But on the up days, I also see it. And there's been a lot more up days and down days. Yeah, but I I firmly believe that everybody is going to be using and touching crypto in the future, even if they don't know it.

SPEAKER_02:

Right.

SPEAKER_04:

And it's gonna be a f ingrained into the fabric of things.

SPEAKER_02:

Yeah. I mean, it's definitely the plumbing behind the scenes. You may end up using crypto as part of transacting. You don't even realize it, and you don't need to know. It's not like you don't need to know how the internet works to go use a website. That is exactly the analogy here. Um But I think that, you know, at least in my opinion, if if crypto is not in your portfolio, you're actually betting against it at this point. Um Correct. And probably not to your advantage long term.

SPEAKER_04:

So yeah, I, you know, we we had an opt-in. And like I said, we've had more and more people opt in now, uh, even in in review meetings, to say, hey, go ahead and add the crypto allocation. It's only one and a half to five percent allocation, depending on your risk tolerance.

SPEAKER_02:

Yep.

SPEAKER_04:

Uh, but I I, you know, I went to Andrew a couple weeks ago and I said, you know, we we allow people to opt in, but maybe we need to switch it to where they opt out.

SPEAKER_02:

Right, especially as you're bringing on new clients. I mean, that you just like put them down the right path.

SPEAKER_04:

This is just what we do. And if you have a problem with it, then you can opt out of it. Yeah. But but maybe default needs to be opt in. We do have a lot of passive clients that that uh don't read emails and and just say, hey, they're they're just trusting you. I mean, it's trusting us, right? Absolutely. But I feel like at the time it was such a radical move that people need the option.

SPEAKER_02:

Yeah, I mean, you were definitely on the leading edge of that. Um, and I'm sure you did all your due diligence and all the good things. But like absolutely.

SPEAKER_04:

Um, also one of the first companies to use all ETF portfolios back in 2004. Right. Uh, and I and when I looked at it, I was like, okay, this is the future. I'm not gonna give the people an option to use a mutual fund or an ETF. Like like mutual funds costing them so much money and capital gains tax and fees that the ETF just makes total sense.

SPEAKER_02:

Yeah.

SPEAKER_04:

Where this was this felt a little different.

SPEAKER_02:

Different. And you know, also it it really changed the game from a fee perspective. So the access to ETFs. So if you only want to buy Bitcoin or Ethereum, you should admittedly probably think about doing it in a brokerage account via ETFs because the fees on those are like 20 basis points, yeah, 30 basis points.

SPEAKER_04:

Right.

SPEAKER_02:

If you go to Coinbase to buy the same exact thing, not ETF, but Bitcoin or Ethereum, you're gonna be paying one or so a hundred basis points or 150 basis points. Yeah. That that is different. Yeah. Um expensive. And like over the turn long term of your compounding money, that actually may be a noticeable number.

SPEAKER_04:

So what are ways to gain exposure without directly buying coins? We just talked about that. Um, ETFs. Yep. That's that that would be the best way to do it. There, there are a um, I don't know, I think there were what over a hundred proposals.

SPEAKER_02:

Oh, there's um, there's for again the SEC is currently not operating. Um, but there's yeah, I think it's over 100 ETF products. So it's gonna be individual spot tokens. Yeah. Um, and then there's some of these mixed products. There's 2x long, 2x short, all the different variants that you hot sauce products that people love these days. So don't do those. Yes, correct. Um, but yeah, it's a um one thing that we haven't talked about is the SEC recently um provided guidance on how to streamline the process for um spot crypto products to be publicly traded, uh ETFs. So instead of doing the full 1940 40s act, 41 act, whatever it is, um, which is sounds more strenuous and arduous, um, they basically came out and gave guidance that said if a spot token, so XRP, Ethereum, whatever, has six months of futures coverage on Coinbase, this is your path, and it's like the fast lane. It's it's you know, 10 items or less at the grocery store. That's the path. Um and so you're starting to see some of those happen. I think those that want to do that now, even on hold, again, we're in the middle of a shutdown. Hopefully sometime soon we figure out this mess out, but like it would allow um a lot more of these products to come to come online, even the Bitwise index.

SPEAKER_04:

So uh what who shouldn't invest in cryptocurrency?

SPEAKER_02:

Well, I believe if you don't have a um uh this is more financial planning, if you don't have a reserve fund for a rainy day, um crypto may not be, or any investing for that matter, may not be the best. I would say any investing. Yes.

SPEAKER_04:

Uh typically, yeah. Order of operation is yeah, you've got$20,000 your Amex card, you probably shouldn't be investing in crypto.

SPEAKER_02:

Yeah, credit card debt. Um crypto could have high returns, but it probably needs to take care of that debt because obviously that's more important. Yes, yeah.

SPEAKER_04:

So debt elimination, uh, emergency reserve, and then you start investing. Uh, one thing that we we had a podcast on recently, uh it's crypto inside your your 401k. Can't really do that. There's not a crypto mutual fund right now. Uh probably won't be, if I had to guess. Correct. So the the really the only way to do that would be to sign on to your brokerage link and and invest in Bitcoin um ETFs, ETFs in in that space, which is not a horrible idea. Unfortunately, I see people who do that execute it very poorly, and that they have too much of percentage. Um, it starts doing really well, then they're gonna sell it. Or in the or it does really, really bad and they sell it. Just take three percent of your balance, move it over there, and then put it in there and leave it, and then once a year maybe add a little more to it in order to keep it at three percent. But but I I I just I you can um uh our platform for 401k plans runs through betterment, and I know that we can get it there.

SPEAKER_02:

I would um the the only twist on what you said there that I would change is I I'm not a big fan of people going and just buying a token or a ETF. Yeah. I I can't wait for these index products to get out there because it is no different than stock picking and it is not easy. Right. Um, so like once you know, you you can go buy the um the grayscale top five index now or wait for the bit bitwise, or there's a bunch of these coming. You wait six months and you'll have options. Um, I I think that is what I would steer people towards if they're going through like a brokerage link or something. So then like they don't have to actively manage a crypto portfolio because that's really what you're asking them to do.

SPEAKER_04:

Yeah, right now, but there's only a couple of you.

SPEAKER_02:

Right, you only have options, yeah. Yeah.

SPEAKER_04:

Yeah, I would agree with that. I I would just say don't do it at all inside for uh retirement accounts until you have the right fund available. Yeah.

SPEAKER_02:

But you know, it's not happening tomorrow. But um, I was reading last week that um Vanguard um is starting to do some education internally around crypto, which is like if there was the the big like holdout here, right? They're the holdout for everything, and it doesn't matter even if they say yes tomorrow, then the trustees of all these 401k plans have to approve it. But again, we have to make that first major step for it to even be an option. So yeah, absolutely. You know, so there's money to be made, they will eventually do it. Um it's they may just take a while to get there.

SPEAKER_04:

So the final question is where do we see crypto in the next five years? So in 2030, when we say we did a podcast 10 years ago.

SPEAKER_02:

Yeah. Absolutely. Um the these whole things like looking out more than a year, three years, are tough. Um, but I would say we certainly have regulation in place. I think we have that by the end of the year. That that allows the um uh this this space to really start blossoming. I think if you think back to as it try to use analogy here, if you think back to when the internet was there, you only could read stuff and then you were able to buy things with a credit card on the internet. That was the big value unlock for e-commerce. This is going to be the big value unlock for crypto when the when regulation can come along and like allow things to happen. Um and again, I think that, you know, this is my lens, but I think that crypto first takes over from a business perspective, all the plumbing behind the scenes for cross-border payments and all the things around business. Um, and it means that there's value. It could be like using a blockchain to do inventory management and all sorts of things that crypto is trying to solve for. Um, we'll see that happening. And it's gonna be like it doesn't happen, doesn't happen the next day. You look around and it's everywhere. That we're that's the kind of moment I think that we're working towards in five years. I think um it's certainly achievable, all that stuff in five years.

SPEAKER_04:

So I I see that the uh institutions have led the way here. Um if you have 35% of institutional investment, these are forward-thinking people. Right. And uh we we see a lot of things come as they started in direct indexing, started institutions first, now it's come down to individuals. Um I I think that's very uh telling to me. And and and um even in corporations themselves have have have bought into this. Right. And I think you can't you can't exact what I tell clients is you can't see exactly what this looks like in 10 years, but you know you need to be a part of it.

SPEAKER_02:

Correct. I mean it's a massive wave. Again, there's so much stuff trying to be figured out now. Like it's about betting on the big wave, in my opinion, versus trying to bet on the individual like I don't know, things that happen around it, right? You're just trying to ride the wave because it's it'll be great.

SPEAKER_04:

There still could be some major pricing pullbacks along the way.

SPEAKER_02:

Almost guaranteed.

SPEAKER_04:

But but again, that's why we're saying, hey, you're not putting 50% of your money in this, you're putting one to three percent, right? Uh five percent on the top end, but but most investors will be probably around two and a half to three and a half percent. If it goes to zero, it doesn't really derail your portfolio at all. Right. But but where the positive side is huge, right?

SPEAKER_02:

Huge. Absolutely. And it's um, you know, humans are great at trying to predict things, they're terrible at trying to predict how things compound exponentially. And these these are one of the markets where I think even us, we we are underestimating in many ways the power of what we we will experience over the next five years.

SPEAKER_04:

So well, Robert, uh uh thank you for coming back and rehashing five years ago. Five years ago, yeah. It's fun. It uh you know, we've been doing this podcast. This is episode 312. Uh, that's a lot of podcasts to cover. We we typically have thrown in uh at least once a month a cryptocurrency uh focus along the way, and that's partially to get our listeners comfortable with um the future and in and what it's gonna look like, and uh to be a little more educated, and you've helped help to certainly do that. Um thanks for listening to this episode. If you're interested in learning more about wiser wealth management or want to schedule a consultation to meet with one of our fiduciary financial advisors, you can do so by going to wiserinvestor.com. You can also reach out to Robert at Teton Crypto Capital, which is linked in our website, or you can email him at Robert at Toncrypto Capital.com. And if you're a wiser client and hey, you should have opted in for the cryptos, you just realized that, should just shoot your advisor an email and let's uh let's get uh that added to your portfolio. Uh the good news is that uh we're not getting uh paid any more or less to crypto to your portfolio. Being a feeling firm, we have we have nothing to sell. Uh just just the process. Uh thanks for listening, and we'll see you guys again next week.

SPEAKER_00:

Thanks for listening to a wiser retirement podcast. We hope you enjoyed today's episode. Make sure to subscribe wherever you're listening. That way you don't miss any new episodes. We'd also appreciate if you could leave a rating and review. If you have any questions about anything that was discussed today, head to wiserinvestor.com and reach out. This podcast is strictly for informational purposes only and is not to be considered as investment advice or solicitation to buy or sell any financial products, securities, digital assets, or any other investment vehicles or a basis to make any financial decisions. Wiser Wealth Management Incorporated is a registered investor advisor with the SEC. The host and or guest may personally own securities, digital assets, or other investment vehicles mentioned on this podcast. Neither the host nor guests of the show are compensated for their participation, and no referral fees are paid to or received by any host or guest for clients, listeners, or similar interests. Investments involve risk, and unless otherwise stated are not guaranteed. Be sure to first consult with a qualified financial advisor, tax professional, insurance professional, andor legal professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.