Our thoughts on FTX, Sam Bankman-Fried and where to from here for crypto | Coinspot

Bryce: [00:00:15] Welcome to another episode of Equity Mates, a podcast that follows our journey of investing, whether you're an absolute beginner or approaching Warren Buffett status. Our aim is to help break down your barriers from beginning to dividend. My name is Bryce and as always, I'm joined by my equity buddy, Ren. How you going? 

Alec: [00:00:30] I'm very good, Bryce. Good to be here for another episode. And we've got a special guest joining us today. 

Bryce: [00:00:36] A special guest member of the team content producer. Darcy, welcome. 

Darcy: [00:00:41] Thanks for us. Thanks, Ren. Good to be. Here. [00:00:42][1.7]

Alec: [00:00:42] Crypto correspondent there.

Darcy: [00:00:44] Looking forward to this. 

Bryce: [00:00:46] Yes, we've got Darcy on because we are going to be focussing a little bit on what has been going on in the world of cryptocurrency over the last few weeks. 

Alec: [00:00:54] It has been one story dominating every headline when the project's talking about investing. You know there's one story. Yeah. 

Bryce: [00:01:03] So we're going to be covering off what has gone on with FTX, but more importantly, what it means for us as investors, how you can approach investing in cryptocurrency, some of the things to look for and think about when it comes to exchanges and your cryptocurrency balances. And then we'll close out with a crypto focussed book, Bonanza. Bonanza is back. 

Alec: [00:01:24] And Darcy is going to tell us all about cold storage. 

Bryce: [00:01:27] Yes, and it's cold storage. We're not talking. About fridges or freezers. This episode is sponsored by Coin Spot. A big thank you to the guys over at Coin Spot. They are the only Australian cryptocurrency exchange to complete an external statutory financial audit which will make sense as we progress through this episode.

Alec: [00:01:47] Important in a moment like this. 

Bryce: [00:01:48] Very important. But as always, let's start with what we've learnt this week. Crypto related or not, what have you learnt? 

Alec: [00:01:55] Crypto related? 

Bryce: [00:01:56] Well, it doesn't have to be.

Alec: [00:01:57] All you got you that all finds crypto.

Bryce: [00:02:00] Look, I'm looking forward to this episode because it is just a reminder that regulation is important. And in instances like this, it's been surprising to me how cowboy the stories coming out of the crypto FTX's debacle. It's surprising how cowboy it has been out in the Wild West of cryptocurrency. 

Alec: [00:02:22] Is it surprising? 

Bryce: [00:02:23] Yeah, it is. I don't know. I feel like there was a level of these guys being so big that they had their shit sorted, but they didn't. You know, I found that surprising.

Alec: [00:02:35] I'm not. Yeah. Yeah. Okay. Yeah. What about you? 

Darcy: [00:02:38] I tend to agree with the price. I think the second biggest exchange is going down. That just shocked me. Like you think these people are untouchable, but now it really shows anyone can go down in crypto. 

Alec: [00:02:48] Yeah. Holy hell. Oh, boy. That's next. 

Bryce: [00:02:53] So how do they go down? Same. Do it. 

Alec: [00:02:56] Well, no one could dump their tokens.

Bryce: [00:02:57] Yeah, true. 

Alec: [00:02:58] And we'll get to that. Yeah. What have you learnt? 

Darcy: [00:03:01] As I say, learn something new every day. And today I learnt it's Ren's 30th birthday. 

Bryce: [00:03:09] Yes. Happy birthday, Ren. Big 30th and Darcy, the good thing for us is now Ren can stop saying that he's in his twenties. 

Darcy: [00:03:16] Yes. And now I'm. 

Alec: [00:03:17] Officially wishing.

Darcy: [00:03:21] I'm where I live. I left in my twenties. 

Alec: [00:03:23] Oh yeah. Yep. 

Darcy: [00:03:25] It's really young. 

Alec: [00:03:27] People you get engaged by.

Bryce: [00:03:31] Yes. Well happy birthday three. Oh that. Do you feel different now? Don't hang your hat on the fact it's still in your twenties. 

Alec: [00:03:37] No. Okay. To be honest, my age is just catching up with my hairline, so. All right, anyway, let's get back to you. What are crypto related? I think there's a big conversation that is worth paying attention to around centralisation vs decentralisation. We've seen Vitalik come out and say anything centralised is evil, which is ironic because Bitcoin Maxis would say that Etherium is now centralised. So we've seen six crypto exchanges collapse before Mt. Gox is probably the most notable one in people's memory. But this is going to be like the one that sparks an existential crisis in crypto. Does that matter for Bitcoin and Ethereum? Who knows? But outside of crypto what I learnt. So last week on the show I was talking about Jumia. Yeah, the African e-commerce platform has the potential to become the first African super app. That is down a lot. Yeah, well, another potential super app company that I've dabbled in this year. I'm very bullish, so I'm very bullish on the digital decolonisation team. David Halpert we interviewed was maybe what, a year ago? Yeah, he's a good interview if you want to hear about that. But this idea that more local and regional tech companies are going to unseat the Amazons and the Googles of the world, but I'm just sort of bullish on super apps in emerging parts of the world as well. See, limited heard of them? 

Bryce: [00:05:08] Yeah. 

Alec: [00:05:08] So they were up 40% after reporting. Wow. Pretty good. 

Bryce: [00:05:15] Pretty good. Yeah, better than pretty good. 

Alec: [00:05:17] Takes him to only 73% down for the year. What do you call a company that's down 80% and then up 40% in a week.

Bryce: [00:05:26] Say limited. 

Alec: [00:05:27] Down 73%. Wow.

Darcy: [00:05:29] That shows how much growth you need. If it falls 80%, you need to go off about like 500%. 

Alec: [00:05:38] Is that right? Because if you are down 80%, you need to go five X up to 4%. 5%. Well, not as much. 

Bryce: [00:05:46] If you look at the chart for it, for year to date, the 40, the five day chart, the 40% blip looks like Mt. Everest. The year to date chart. You can barely see it.

Alec: [00:05:55] Yeah, yeah, yeah, yeah, yeah. It's tiny. So, yeah. So if you are down 80%, you need to go up 400%. 

Bryce: [00:06:01] Well, it's down to $223. It was at its peak a year ago. 

Alec: [00:06:06] Yeah. 

Bryce: [00:06:06] At the start of the year and now it's 58. Ouch. But hey, but riding that roller coaster. 

Alec: [00:06:12] Oh, boy. Yeah. No, I think, like, these are the companies that I get excited for, you know, when they're down 75%. I love catching, falling on. 

Bryce: [00:06:26] So let's review it. So here's the story of FedEx. In 120 seconds or less, investors have lost billions after FTX filed for bankruptcy. Headliners at 130% of its related entities have also filed for bankruptcy. What happened? Reports came out that one of the world's largest cryptocurrency exchanges was funnelling customer money from it to its second company, Alameda Research. Allegedly, allegedly. It was then making incredibly bad investments using that money. Allegedly, a report was leaked showing that FTX didn't have a lot of real assets. Its major asset was FTT, a token that it created. Binance, another major cryptocurrency exchange, then came out and said, We don't like this. We're going to sell all of our FTT holdings. This created panic in the market and a run on as people tried to withdraw all their funds. FTX couldn't cover the withdrawals. Binance stepped in with a takeover bid for FTX, but after doing some due diligence, it was decided that they were going to withdraw. FTX then couldn't cover it all. They filed for bankruptcy. Authorities are now in the case and bitcoin in this area may have plunged. 

Alec: [00:07:42] That was only like a minute and a half. 

Bryce: [00:07:46] I've got time. 

Alec: [00:07:47] Well, okay. Yeah, well, I mean, that kind of sums it up. Anything major he missed?

Darcy: [00:07:52] I don't think so. Just, you know, there's all sorts of developments happening. So the story changes every day. And Sam Bankman-Fried apparently is fleeing to Argentina or. No.

Alec: [00:08:01] No. So Bryce had this in the dock as well. That's not true. Like it was the world. Yeah, he's still in the Bahamas. Yeah, yeah. I mean, maybe he wants his mansion. Yeah, yeah, yeah. With 12 other people. 

Bryce: [00:08:14] Yeah, yeah. Well, this is what I'm enjoying about it now is all of these, like, little subplots that are coming out and, like, who was. What's been going on? Who's he been living with? Who's been running all these companies? His $40 million penthouse is now up for sale. 

Alec: [00:08:29] Are you going to say the headline that you're most excited about? 

Bryce: [00:08:31] They're all sleeping together. 

Alec: [00:08:33] Yeah. Crisis. I saw that in the office yesterday. I love Price and I've been speaking about how more and more journalism is trading, finance, entertainment and like, this is the story that I think is like a case in point for it. Like Fortune. Fortune is writing an article about Sam Bankman-Fried polygamous relationships. Like, what's that got to do with that, too? Yeah, it's. It's bloody entertaining. Yeah. Finance is becoming more and more just like entertainment. Fortune is becoming the age of finance. Yeah,. 

Darcy: [00:09:05] The. Movies and tacos are going to be in seven. Oh, no, I know. 

Alec: [00:09:08] Yeah, yeah, yeah. There was this tweet about the wait to see Jonah Hill play. Yeah, like me. And as I said. 

Bryce: [00:09:16] Well, there was also news that they were hacked, weren't they? 

Darcy: [00:09:19] Yes. So FTX said they were hacked a little bit suspicious because, you know, all this money came out just before the hack happened. So people like who took that? How did they kind of know but all unconfirmed. 

Alec: [00:09:31] Yeah there was a dodgy there was also something that happened where people started noticing large withdrawals coming from the platform and Sam Bankman-Fried tweeted or tweeted that the Bahamas regulator was telling them they had to withdraw local money. But then people have come out and said, that's not right and asked questions like whether who was withdrawing that money and where it was going. 

Darcy: [00:09:53] But Bahaman regulators themselves said they didn't say that. 

Alec: [00:09:56] So yeah. And so he. 

Bryce: [00:09:59] She said, here's a question. Here's a question. So out of the global financial crisis that collapsed, no one went to jail, from my understanding. Yes. 

Alec: [00:10:10] One person got prosecuted, but it wasn't from a major bank. It was tiny. 

Bryce: [00:10:14] Little slap on the wrist and this one on. Will we see someone go to jail here for criminal financial misconduct? Because it's like a cowboy, no regulation. Authorities are going to come in and and unnecessarily make a start. 

Alec: [00:10:30] I feel like you're both looking at me for it and. 

Bryce: [00:10:33] I'm just putting it out there. Will we see someone go to jail? 

Alec: [00:10:35] I think yes.

Darcy: [00:10:36] I'm going to say no. 

Alec: [00:10:37] I think so. Maybe jail. Who knows? But prosecution, I feel like in some ways crypto is an easier time to prosecute. There's a lot more political goodwill to be gained, a lot more political points to be gained. If you're a state attorney general who's trying to make a political name for themselves in the United States, and it is a game of making a political name for yourself. If you're a state attorney general, prosecuting and jailing Sam Bankman-Fried would be up there with it wouldn't be as high as prosecuting and jailing Donald Trump. But like, that's what Letitia James is doing in New York, making a name for herself with a high profile prosecution. Someone will put their target on Bankman-Fried. Yeah.

Bryce: [00:11:21] Yeah. It'd be like prosecuting Warren Buffett because that's what he was the next Warren Buffett. 

Alec: [00:11:25] Sure, sure.

Bryce: [00:11:28] Anyway, watch out. Maybe there's an ETF in anyone that goes on the front cover of a Fortune magazine. Short. 

Alec: [00:11:34] Yeah, yeah, yeah, yeah, definitely.

Bryce: [00:11:38] Let's keep.

Alec: [00:11:39] Elizabeth high. 

Bryce: [00:11:41] Let's keep moving and bring it back to the investment side of things. Because a lot of these. 

Alec: [00:11:46] Hold on. Hold on. Before we get to the investment side of things, I have a question for you, too. If Binance didn't dump FTT, would this have ever become a problem?

Bryce: [00:11:55] No.

Darcy: [00:11:56] I think eventually, but it clearly accelerated it. Yeah, yeah. I think that would have been found out eventually.

Alec: [00:12:02] Yeah. 

Bryce: [00:12:03] But this is also worth noting when I was doing a bit of research into this and super ironic that in June 2022, SBF himself, Sam Bankman-Fried, had this massive exposé in maybe Fortune or some article one of those. 

Alec: [00:12:19] Trash publication, Finance magazine publications. 

Bryce: [00:12:22] Calling out and saying that a number of crypto exchanges are already secretly insolvent. And I'm just calling them out and positioning himself as the hero coming in and saving all of these and saying that, you know, they're all bad. We're making all these bad investments, saving all these cryptos, but it's for the good of it all. And six months later. 

Alec: [00:12:42] Mr. Insolvency Podcast I was listening to. Joe was speaking about how Alameda borrowed a whole bunch of money and then invested it in crypto ventures, like for equity, like as venture capital. And then when the collapse happened earlier this year, all of those lenders tried to call back that money, but it was illiquid because it was invested in startups. And so then that's when Bankman-Fried started transferring FTT and then they covered those loans with FTT and then it all went from there. But all like to go back to the very fundamentals of taking out loans to invest in VC. That's like dumb finance move. 

Bryce: [00:13:20] 101 Well, I don't know if you've seen videos or interviews with the CEO. What's her name of Alameda? 

Alec: [00:13:27] Caroline. 

Bryce: [00:13:27] Caroline. Super underwhelming. 

Alec: [00:13:30] Yeah, like we don't do risk management. Yeah. 

Bryce: [00:13:34] One of her videos is her saying, I can't think of any bad investment I've ever made.

Alec: [00:13:39] Really? 

Bryce: [00:13:41] Anyway, I. 

Alec: [00:13:41] Take her very humble. 

Bryce: [00:13:43] And speaking of investments, a lot of the world's biggest VCs have been caught up in this. FTX had a valuation at the start of the year of $32 billion that is now up in smoke, as is a lot of the investments made by these super funds. Sequoia Capital, I think had a couple of hundred million in that. That's been written down to zero. 

Alec: [00:14:01] Did you hear the story of how he got Sequoia's money as well? No, it was one Zoom call and he was playing League of Legends the entire time. Yeah, yeah, yeah. Exactly. No, you know, like Google, it's he who pitched Sequoia. They were like, yes, in the meeting. Turns out he was playing League of Legends the whole time in the meeting. What? Yeah, yeah, yeah. I hate this. How can it be easy? Like it's so hard to raise money. Yeah, he's raised 100 anyway.

Bryce: [00:14:32] So SoftBank has been caught up in it. No surprises there. They're one of them. 

Alec: [00:14:35] They might be the worst of the worst. 

Bryce: [00:14:39] Paradigm and global as well have all been called. 

Alec: [00:14:41] A global.

Bryce: [00:14:41] Yeah Tiger. 

Alec: [00:14:42] Global shock.

Bryce: [00:14:44] All writing all writing down their investments to zero. It does happen in the world they say but I'm sure. 

Alec: [00:14:50] But you know. 

Bryce: [00:14:51] Anticipating it to happen this way. 

Alec: [00:14:52] Speaking of shocking years, Tom Brady is having a shock. 

Bryce: [00:14:55] Oh, what happened? 

Alec: [00:14:56] Well, so he's getting divorced because he decided to play another season. So that's started is that he's gone back to play another season and his team kind of sucks. They're five and five now, but like he's having some of the worst. 

Darcy: [00:15:08] Stretches yet that I'm winning the Super Bowl. 

Alec: [00:15:11] Yeah. Yeah, the. 

Bryce: [00:15:12] Buccaneers. 

Alec: [00:15:13] A first time in his career. They lost three. He's lost three games in a row. Wow. Which is crazy too. 

Bryce: [00:15:18] Say something about his career. 

Alec: [00:15:19] Yeah. And now he's lost hundreds of millions of dollars in. Yeah, but the story and I don't know if this is true is that they and Giselle's net worth is about 650 million. And they invested or they had a lot of almost all of that tied up in FTX. 

Bryce: [00:15:36] In the company or they had it sitting in crypto in and they can't get it. 

Alec: [00:15:39] Back. No, they became like FTX investors and like ambassadors, Giselle became. She got a job at FTX. 

Darcy: [00:15:46] Yeah. And same with Steph Curry. There are a couple of other sports stars and I think there's some sort of lawsuit that they've now been caught up in that I saw this morning. 

Alec: [00:15:54] A for spruiking. 

Darcy: [00:15:55] Yeah, for spruiking FTX. 

Alec: [00:15:57] Okay. 

Darcy: [00:15:57] So not a good year for time. 

Alec: [00:15:59] Nor like I was saying,. 

Audio Clip: [00:16:01] It's FTX. It's a safe and easy way to get into crypto. Yeah, I don't think so. And I'm never wrong about this stuff. Never. 

Bryce: [00:16:10] Have you seen the video that's been going around in our Larry David did the FTX commercial. Yeah. And right at the end, it's like, do you trust FTX? Larry David's like, Nah, it is all part of the bigger thing. And now it's like everyone's like Larry. 

Alec: [00:16:24] Right. If you would shorten every advertiser from the 2022 Super Bowl, you would have made a Mott's like Coinbase Carvana, maybe like a whole bunch of those high flying tech stock. Or is it? 

Darcy: [00:16:37] Crypto. 

Alec: [00:16:38] The crypto? Yeah. Yeah. 

Bryce: [00:16:41] Anyway, the important part of the episode is to actually talk about our takeaways, what we've learnt and what you can do about it. And this episode is thanks to Coin Spot, who, as I said, one of the only exchanges or the only Australian cryptocurrency exchange to complete an external statutory financial audit. And we're going to go through some of the other key things to look for in an exchange straight after this ad break. Alright. So key takeaways and what we've learnt from this process. 

Alec: [00:17:08] There's some clear lessons around the exchanges and hindsight is 2020 and up to 3 to 3 weeks ago the US short seller market holders full credit to him. He was ringing the alarm bell for months, but not a lot of people were listening. No one was really that worried about it. So for us to sit here and be like, This is what you should look for, this is what you should know. It's kind of like we didn't know, like everyone else didn't know. But some of the things to look for. Bryce You've mentioned external financial audits a couple of times. Yeah, customer asset ratio. Are they holding the amount of assets 1 to 1? Yeah. The annoying thing is FTX said they did do that, who they regulated by, who they certified by, not casting aspersions on the Bahamas regulatory regime. But I probably would have been more comfortable if they were regulated in Australia. 

Bryce: [00:18:03] Yeah, yeah. Well, for example, coin spot regulated by AUSTRAC, an Australian recognised Australian regulator, certified member of Blockchain Australia. All of this information on the exchanges are on the website of exchanges so it is important to do some due diligence and sort of carefully consider it. 

Alec: [00:18:23] Even something in hindsight like the fact that FTX didn't have a board or the board was like Sam Bankman-Fried and a company lawyer or something like that look into it. But just like basic oversight and corporate governance things as well. 

Bryce: [00:18:36] Yeah, I didn't know that. 

Alec: [00:18:38] Yeah. 

Bryce: [00:18:38] Could call like our board. 

Alec: [00:18:44] And if Tom Brady wants to invest in. 

Bryce: [00:18:48] So there's, there's the exchange but then there is a way that you can I guess, remove risk even further, and that is to take your coins off exchanges completely. And that is known as cold storage. Now, this is something that I don't do. I don't know if you do, Ren.

Alec: [00:19:05] I don't. 

Bryce: [00:19:06] But you do the dossier.

Alec: [00:19:07] Well yeah, actually we might have through Metamask we took it off. An exchange. 

Bryce: [00:19:12] Is madam. I'm not sure. 

Alec: [00:19:14] I don't know. It's called storage. 

Bryce: [00:19:15] My suggestion feels like it's very much on line. 

Alec: [00:19:17] Yeah. Money, warm storage. Anyway, it does. Sorry. Talk us through how you take things off. 

Bryce: [00:19:23] Exchanges, what you do. 

Darcy: [00:19:25] So there's a common phrase in crypto, not your keys, not your coins. And you kind of hear that around, but you think sagas, they aren't going to happen to you until they do. So you kind of got to be prepared for those things. So personally, when I buy crypto on coins bought or another exchange, I almost straight away withdraw it. I send it to my cold storage wallet, which is an app called Nash, and that has these private keys that I get. I get a 12 word Sade phrase that I have to write down and keep to myself and only I can say that only I can log in. So Nash never has access to that private key and they don't have any ownership of the crypto that I send to their platform. 

Alec: [00:20:11] And to contextualise this for people who maybe listen to Hey Mission Andy, that's the 12 word phrase that they lost and now they can't access their crypto. Yeah. So have you written down your 12 word phrase? 

Darcy: [00:20:23] I've got a couple of sizes. I'm not telling you whether. 

Bryce: [00:20:27] It still is in a cloud. It's not because there are. I've seen people with us in space. 

Darcy: [00:20:31] Yeah, correct. So that's another option we can talk about where you withdraw and put it on a ledger or a USB and that literally is sitting beside your bed on a USB. It's not on the internet anymore, but this way is still it's still a form of cold storage, but it's still on a cloud. It's just pretty much unhackable for anyone other than myself. Who? Yeah, unless someone gets my 12 word phrase. 

Bryce: [00:20:56] Is it easy to set up one of these things? One of the reasons I didn't originally do it was because it just felt like something that I couldn't be bothered to do with the setup process. Yeah. 

Alec: [00:21:05] How many people who had money on probably for that time? 

Bryce: [00:21:08] Well, I've sold a lot of my crypto, as you guys know, so it's not something that I'm looking at right now, but I'm interested. 

Darcy: [00:21:15] It's super easy. So it takes half an hour, an hour. 

Bryce: [00:21:19] And so Coinbase, sorry, coin spot, for example, integrates with Nash easily. 

Darcy: [00:21:24] And so you just send your wallet address, you send your crypto to it to the wallet address of your Nash account, and then it's sent there within sort of 5 minutes. It's all there. 

Alec: [00:21:35] Oh, so anyone can send more crypto to your Nashville even if they don't have it. 

Darcy: [00:21:39] So I can accept more crypto from other people. 

Alec: [00:21:42] Yeah. But it's just taking it out. You need the 12 word front. Yes. Oh that's. 

Darcy: [00:21:45] Cool. Yeah. So you can also lock the account. So if I was like, I'm not going to sell for two years, I could lock my account for two years and nothing could ever be sent from it. 

Alec: [00:21:55] Even if you have the 12 word phrase I.

Darcy: [00:21:57] Could unlock it with a couple of. Yeah. 

Bryce: [00:22:00] But it means yeah. 

Darcy: [00:22:02] Someone remains. If there was somehow a way out, they couldn't. They couldn't do anything.

Alec: [00:22:09] Right. Yeah.

Bryce: [00:22:10] Yeah. And is there a fee to it?

Darcy: [00:22:13] No, there's no fee. 

Alec: [00:22:15] Well, how do they make money, then?

Darcy: [00:22:17] That's a good question that I don't know the answer to. So on Nash, you can stake your thing. So there's there's a couple of functions. There's the wallet function where. Which is what I use it for. And then there's functions where you can provide liquidity and, and stake your assets. And that's how they make money. But I choose not to do that. Okay. 

Alec: [00:22:38] Yeah. Right now Nash is just spelt normally Nash and. 

Darcy: [00:22:41] I guess h and. 

Alec: [00:22:43] I assume there's alternatives as well. Like this is, this is just one. 

Darcy: [00:22:48] Yeah. It's not the only one. Yeah. 

Alec: [00:22:49] So I've just googled alternatives to Nash so with zero context but a few other names if you want to search know be coins hub savvy hito wallet block part Gemini SIM Gemini the big. Yeah I.

Darcy: [00:23:04] Think that when they. 

Alec: [00:23:06] Don't look at Gemini, they say that that's the Winklevoss company. Isn't that a Gemini. Yeah. Yeah. No, Gemini is the Winklevoss company. Don't think it went under sway. Yeah. Oh really. Yeah. Well it definitely is heavy for the Winklevoss is then because they were the first crypto billionaires weren't there. Wasn't that the story years ago? 

Bryce: [00:23:25] Yes, that was the story.

Darcy: [00:23:27] First public ones. 

Alec: [00:23:28] Oh you reckon Satoshi. Yeah, probably. Yeah. All right. Anyway, let's keep rolling. So I guess that's how you take it off exchange. Has the story motivated you to do something like that? No. 

Bryce: [00:23:45] As I said, like it sounds a lot easier. Some might look at it. That's good. But like, yeah, I mean, I just have so little in there that I mean, that's a dumb thing to say. Like, I should. I should treat it just like it is cash and it is an asset. So it has opened my eyes to the realism of it though, I guess, which is the main thing. So that's the first thing. It's now for me being like a cage, as D'Arcy said, you think it might happen to you? It could happen. So maybe it is something that I look into, but it's not like I've got 90% of my portfolio sitting.

Darcy: [00:24:17] I guess that lets you invest in crypto what you're willing to lose.

Bryce: [00:24:21] Yeah, exactly. 

Alec: [00:24:21] Yeah, yeah. Yep. 

Bryce: [00:24:23] Yeah, I'll walk the walk. 

Alec: [00:24:25] Well, Bryce has so much money, he doesn't pay me. Things must be nice.

Bryce: [00:24:29] So has it changed yours? 

Alec: [00:24:31] Yeah. I think I'm going to set it up and then I will bet you all the money in the world that I will lose my password. I guarantee you. Can you use the words or is it random? 

Bryce: [00:24:43] Oh, it's random.

Alec: [00:24:44] Yeah. I'm in so much trouble. Well, words. Really? Yeah. 

Bryce: [00:24:48] Oh, that's tough. So surely you give it to other people as. 

Alec: [00:24:53] Well and they'll still make it. 

Bryce: [00:24:54] You trust.

Alec: [00:24:56] Never trust anyone. The decentralised trust. The motto of crypto. 

Darcy: [00:25:00] Yeah. Oh, look after them. 

Alec: [00:25:03] This is a real like hey Michelle, any job set up, where does he just lose that? Yeah. 

Bryce: [00:25:10] So, Darcy, it hasn't changed anything for you, I guess, because you're doing it already. Okay, you go. Yeah. You're going to think about it, Randall. Probably look into it. Oh, seriously? Yeah, I know, Alfred. The team does it for some of his stuff. I don't know if he does it religiously, but he's on cold storage as well. So. 

Alec: [00:25:25] So I guess the other question is how you store Bitcoin and Ethereum. Yeah, it's funny. Like, you know, it was down and then the US had a good inflation print and it bumps up again. And then things just happened so quickly anyway. How are you guys investing in crypto at the moment? 

Bryce: [00:25:41] For me, nothing's changed. I've been taking off every fortnight for the last almost 12 months.

Alec: [00:25:48] Also, when you say you just have nothing in crypto, it's because you lost so much money. I know you dca i.

Bryce: [00:25:54] So what happened was I actually took out I sold most of my bitcoin when probably about eight, eight or nine months ago and used that to put into the stock market. And so I didn't. I still kept it invested but just was like, I just want some more money. The stock markets seemed like a better opportunity for me, but then I was like, I still want to have some exposure to it. I was way too overweight as well. I didn't like it and so reallocated it, but now I'm still investing in it. But I did the maths and it's 4.6% of my fortnightly investments goes towards crypto. 

Alec: [00:26:31] Oh yeah. 

Bryce: [00:26:32] So I feel like that. So yeah. 

Alec: [00:26:33] What about you? 

Darcy: [00:26:34] Does I like that under 5%. 

Alec: [00:26:36] 95.4% of your investments. 

Darcy: [00:26:39] I'm probably where the rise was nine months. 

Alec: [00:26:41] Ago, a little overweight.

Darcy: [00:26:45] But honestly, this saga has made me lose a little bit of faith in crypto. Having said that, I'm still confident in Bitcoin Ethereum long term because FTX itself doesn't actually have anything. You know, Bitcoin hasn't become less safe because of this thing. But it's just been caught up in it. So I am still a DACA ing. But yeah, I think it could be a long way back. 

Alec: [00:27:08] Yeah. The fundamentals of Bitcoin and Ethereum haven't changed. That's true. But crypto relies on continued adoption and a level of trust in the system. And as much as Bitcoin Maxis wants to argue that this is a case for Bitcoin and I hear that argument, it's again like you rely on more people being willing to accept it as a store of value for yeah. 

Bryce: [00:27:32] You need to. 

Alec: [00:27:32] Store. Yeah, yeah, yeah, yeah. Same in every currency like the Turkish lira. People have lost faith in that and people are fleeing the Turkish lira. Yeah, every kind of it's not just cryptocurrencies, it's assets that don't produce cash flow. Yeah. Yeah.

Darcy: [00:27:45] And in the end, you need exchanges to buy bitcoin. So we need trust through trade. 

Alec: [00:27:50] Well, there are decentralised exchanges. Yeah. 

Bryce: [00:27:53] What about Iran? Has it changed anything? How are you approaching crypto? 

Alec: [00:27:55] No. I am a naive, repetitive automated investor when it comes to ETFs and a tiny bit of bitcoin interference. Yeah. Just set and forget I've automated it then goes out of my bank account into my brokerage's centralised brokerages and it buys and I haven't changed and I don't think I will ride it all the way down. Well, there you go. 

Bryce: [00:28:19] Okay, so that's the story for you that's been out. We won't talk about it again. We've covered it a lot over the last sort of ten days or so on the dive. If you want a bit more of a deep dive crypto. 

Alec: [00:28:29] Curious did a specific bonus episode and Canadian Economist did a specific bonus episode on Tracey from Crypto Curious was on the project. I was on Triple J Hack. All of that stuff is available online. We have spoken to death. Yes. Can't wait to talk about next week when some more trashy gossip comes out about San Diego's and free spirit. 

Bryce: [00:28:52] All right. Well, now we've got the crypto themed book Bonanza with an Equity Mates community member, so let's get stuck in. 

Alec: [00:28:59] Okay, so Bryce, here we are, third edition of Ren's book Bonanza. We've got Sam on the line. Sam, thanks for joining us today. Why do you invest in crypto? 

Sam: [00:29:09] No, no, not at all. Not at all. I have been following along with the thing, but just what's been in the papers. 

Alec: [00:29:15] Fair enough. Well, I'm actually looking at the three books that I've got today. None of them are crypto related, so. Well, we'll get to them. The books that you're playing today for today, the first one lived the life you want with the money that you have by Vin Scully. Have you read that one? 

Sam: [00:29:32] No, I haven't. 

Alec: [00:29:33] Second one, the contrarian about Peter Thiel. I write this one not not trying to tip your hand, but this is a good one. Have you read this one? 

Sam: [00:29:44] I haven't. I haven't read it, but yeah, it's sitting on the bookshelf at home. 

Alec: [00:29:48] Oh, okay. All right. Well, then you probably don't need a second copy. And then the third one, the final one from a fellow podcaster, Glenn James, has sorted your money out and got invested. Okay. 

Sam: [00:29:58] No, I haven't read that one either.

Alec: [00:29:59] All right, great. Well, then some new books could be coming your way. The way this works is three questions. If you beat Bryce, you get to choose the book. If Bryce beats you, Bryce chooses the book, let's get into it. First question 12 months ago, the crypto market cap of all of the coins, Bitcoin, Etherium and everything all together was 2.7 trillion USD. What is it today? Is it 400 billion? B, 800 billion C 1.2 trillion or D 1.6 trillion. [00:30:36][36.9]

Sam: [00:30:37] B. 

Alec: [00:30:39] B. Sam is going B. Bryce What are you gonna go? 

Bryce: [00:30:41] Me too, 800 billion. 

Alec: [00:30:42] Now? You're going to go to a different one anyway, so you've nailed it. 800 billion. It's down 70% from 2.7 trillion to 800 billion. Nice. You're on the board. Are we both on the road sevens on the wall? All right. So this next one is themed. Is Bitcoin a good hedge against inflation or is Bitcoin a store of value? So the US dollar has been incredibly strong this year and Bitcoin is down against it. Not surprisingly, over in Turkey they have had a tough year. The lira is down. Turkey's saying 80% inflation. This is a classic case study of is bitcoin a store of value? So I guess the question is yes or no. Sam, I'll direct it to you. Is Bitcoin up or down against the Turkish lira this year? Has Bitcoin held its value essentially? Oh. 

Bryce: [00:31:44] How much were they down? Sorry.

Alec: [00:31:46] I don't have how much the leader is down against the US dollar. I didn't say that. You just said the inflation. The lira is down 44% against the US dollar. 

Sam: [00:31:55] Oh, no, no. 

Alec: [00:31:57] You think bitcoin still? No, Sam, you absolutely nailed it. Bitcoin even against. So currency, like the lira, is down 52% year to date. For context, it's down 65% year to date against the US dollar. So the takeaway here. It hasn't been a store of value. Even in countries where the currency is weak. 

Bryce: [00:32:15] So I didn't get a chance to respond. 

Alec: [00:32:17] No, because Sam got it right. All right. Look, this one. Sam, you've won your choice of book. We're playing just for pride. But, you know, I'll let Bryce answer this first. All right, so I've taken a look at the top 100 coins. So obviously, Bitcoin's number one, ethereum's number two. But I've taken a look at the top 100. I'm going to name five. You tell me which of them is the biggest. 

Bryce: [00:32:44] Oh. 

Alec: [00:32:46] Yeah. Right. We've got stacks, we've got Thorchain, we've got Akash, we've got Zcash and we've got Ape coins. 

Bryce: [00:32:57] I have never heard of any of this. 

Alec: [00:32:59] Yeah, that's the point of the question.

Bryce: [00:33:02] It's an Ape coin, and.

Alec: [00:33:04] You've nailed it. $908 million market cap for 8.8 coins. Wow. Just puts into context how much money there still is in some of these currencies.

Bryce: [00:33:18] Unbelievable. 

Alec: [00:33:19] These assets. Yeah. Yeah. Well, Sam, congratulations. You've beaten Bryce. That's two losses in a row for him. Which book would you like to choose? Peter Thiel. The. The book about Peter Thiel, the contrarian, lived the life you want with the money you have by Vince Scully, or sort your money out and get invested by Glenn James. 

Sam: [00:33:40] I'll go. The first one you showed me. So I think it was the second one. Then you listed your. Yeah, that one. Nice one. All right. 

Alec: [00:33:50] Well, we'll get your address and we'll send that through to you, but thanks for playing. 

Sam: [00:33:54] Cool. Thank you. I really enjoyed it. 

Bryce: [00:33:56] It. Ah, well, it's been a bit of a crypto focussed episode. We have a great guest coming up this Thursday. Kenneth Stanley from the United States and A.I. Research, a pretty fascinating interview. So we can't wait to release that. And then on Friday, we've got John Caulfield from Vaneck to talk about investing in getting exposure to carbon credits. Another pretty interesting investment opportunity. So we unpack that on Friday, plenty coming this week, but then we'll leave it there and pick it up. Pick it up next week and happy birthday. 

Alec: [00:34:27] Sounds good. Thank you.