Crypto Assets - What Percentage Should They Take Up In Your Investment Portfolio?

How To Approach Crypto Assets

Welcome back to The Long Run Show. We are going to talk about hot topic cryptocurrencies, or as I sometimes refer to them as crypto assets.

Hosted By:

Austin Willson

Michael O'Connor

NOT FINANCIAL ADVICE

The Information Contained on this Podcast is not intended as, and shall not be understood or construed as, financial advice

Unedited Transcript:

Welcome back to the long run show. We are back here this week. We are going to talk about hot topic cryptocurrencies, or as I sometimes refer to them as crypto assets. Ah, yes, this is, uh, quite the topic quite.

I'm very interested to hear. What your opinions are you a little behind the scenes? Austin here has said that his opinions have changed regarding crypto in the last few weeks, three months, or it has been modified. I would say they've been, they've gone from being decently. Uh, sure. Two more fluid at this point.

So we can flush that out a little bit, but, um, I will say right off the bat here, as we just kinda introduce the topic of cryptocurrencies, Mike was, uh, was my. True introduction to cryptocurrencies. I would say, um, he actually was, was the first one to kind of get me into actually buying cryptocurrencies and, and trading and all that stuff.

Um, so that that's, I, I gotta give you some props there, Mike, but, uh, I thank you. You're welcome. Um, but I had obviously heard of cryptocurrencies before. Didn't really think much of them, again, probably like most people until early 2021 and was like, what is going on with these? I probably should look into this a little more seriously.

Um, so that was kind of my personal introduction to them, but cryptocurrencies in the long run, I don't, this is where my opinion is becoming more fluid. Um, and I'm interested to see, um, you as the. Expert out of the two of us, what your thoughts are. Um, as far as the long term outlook for cryptocurrencies, it seems like.

If we had had this conversation six months ago would be very different than the conversation we're going to have today, especially in light of just recent news. I mean, you've got China completely banning cryptocurrencies entirely from their country. Uh, you've got the U S who said we're not going to ban.

But we're probably going to regulate them and, or at least stable coins in the very near, near, near future. And they're also exploring, sounds like, um, some plans to create their own U S D um, so that could get old coin Powell coins. Um, so that could get, that could get kind of interesting. So, um, really, I just want to ask, actually ask you to kind of get.

Uh, maybe just a brief overview, which is good luck, even a brief of just cryptocurrencies or crypto assets. Do you prefer one term in the other? You can, you can answer that question in there too, but, um, just so everyone is aware, like the innovation that, that brings to the table. Why is, why is this, why is this a thing in 2021?

Sure that that's a great question. And to tackle the first thing that you said right off the bat, I find it interesting that you use the word crypto assets. Um, and I think that that is a very, a very financial industry kind of term to use for it. Whereas I think most of the people who are on the development side of actually developing on blockchains and stuff say either cryptocurrencies are just crypto or something.

Um, cause I think a lot, most, I think a lot of people who. Deep in the trenches of the, of the actual, like the blockchain industry, don't considering it don't consider it the law, um, an asset as much as a project. And I think that's one of the defining points of cryptocurrency. So diverges, it does divert.

So I mean the whole thing with the whole thing with Bitcoin, you have a distributed ledger. You have, um, you know, instantly verifiable, very, very secure, uh, easily. Pretty pretty darn, uh, impossible to know who's doing what it's a very, it's a very, I mean the whole word decentralized it's it's not, yeah, it's not verifiable by any one person.

They can't take over the whole thing. They can't steal money. Um, it very innovative in terms of, yeah, there's no, there's no, at the end of the day, there's no bank that has the record of your finances. And if they get. You know, theoretically, you could get all your money wiped out and that's the FDA to bail you out in that situation.

But at the end of the day, it's a way to provide a, I think it's just a way to exchange and store. Some sort of value and I mean, that's changed very rapidly since Bitcoin's beginning to now hovering somewhere between 45 and 55,000 per, um, per coin. You know, the store of value has the amount of value per Bitcoin has changed, but ultimately the, the goal is to provide that kind of, that kind of seamless financial ecosystem.

And I think that's the key point of cryptocurrencies is that their projects at the end of the day, they're they're, um, They're meant to be these sorts of entities that have goals, uh, they intend to achieve and once achieved then oftentimes they'll, it depends. It is a lot of defy right now. It's already achieved a lot of their goals and they're moving on.

To more and more, I think a great example of that. Not to get too into the weeds right now, but some great examples of that are coins like cosmos, which is essentially a blockchain of blockchains. It's, it's an inter op it's an interoperable cloud system of, of blockchains and interconnections. And it's meant to make a.

Uh, the cosmos of the blockchain that you can connect an Ethereum blockchain to an algorithm, blockchain via causes all sorts of crazy stuff. Um, and I think they're, they're a great example. Algorithm is another great example of a project that, uh, you know, he's creating these very efficient, smart contracts and applications for a variety of industries.

And they're, they're really aggressively expanding, which is great to see. Um, I think they view themselves. Less like a completely decentralized Bitcoin, everything. I mean, it is pretty, relatively centralized in terms of the, um, the project owners and their goals and everything. I think it's, it's cool to see the variety, uh, and the cryptocurrency sphere, but I think you're getting more to your point of, you know, what is, what is the longterm outlook, uh, cryptocurrencies as a whole.

I think one thing that we've seen in the past, just in the past year, there've been a lot of new coins that pop up and suddenly become popular, like a doge coin or something like that. There's a lot of hype coins and a lot of hype going around. And I think there's going to be like a great culling in the next year where the reckoning, um, where I think a lot of the coins that are either actually completely useless or.

Maybe just aren't picked for store values like Bitcoin at the end of the day is meant as you know, that kind of store of value as that decentralized exchange system. Um, but you know, apart from lightning network coming up in an Ethereum, I would argue does it better. And I would argue that algorithm does it even better than senior, but that's a whole, another one of the topic we get really deep, but I don't want to do that.

Um, but I think that there's going to be a lot less cryptos out there even. Um, but I think it'll also concentrate the value where I think Bitcoin's price will be higher. I think theory's price will be higher and the algorithms price will be much higher. I think cosmos is prices will be much higher chain link, you know, the list the list goes on for the solid ones.

Um, and it's been interesting to see because there are some that really correlate the opposite of the rest of the crypto sphere. Like one example is file coin file coin has. Usually done very well. And, um, like Bitcoin and Ethereum crash, you can almost always see follow file coin going up 10, 20% maybe. I mean, that's, that's from what I've seen, maybe I've missed some crazy corrections.

I think the big correction, it definitely felt a lot as well, but the, I think there's a miss miss thought on a lot of people that all cryptocurrencies are the same or they're all correlated to each other. And it's, it's very different from that. There is. Very different projects and very different applications that a lot of people are working on.

I think one thing that I never realized until I got into the weeds of a specifically algorithm is that there are enormous numbers of developers. Who are developing these apps? Uh, I mean, it's by far the largest numbers on the theorem, but there are a lot of algorithm developers out there and it's, it's, uh, I think we're going to see a calling of coins.

I think we're going to be less and less coins, but I think there'll be more and more developers, more and more applications. And the prices are going to be going higher on probably 15 or so coins. Interesting. Okay. So you're kind of like bullish on what you mean. You're you're bullish on the innovation, I guess, but you're kind of bearish on the overall market, almost like as a whole, you think there's going to be a big, big reckoning, which is going to concentrate value, but you've got to make sure you're in the, the cryptos that are, that are concentrating that value and in the long run, right?

Yeah, I would, I would agree with that. I would say that making sure that you're in the cryptos that are legitimate or viable or providing real world innovation and solutions. Um, this is paramount, right? So how do you so-so, you know, I actually read the Bitcoin white paper way back when, and. The, in my view, it's been interesting to see the evolution as you get Bloomberg and CNBC and Fox business, all quoting Ethereum and Bitcoin tickers on their, on their, a little ticker tape at the bottom of the screen.

You get those prices rolling. It's been interesting to see it go mainstream, but, um, it has changed it somewhat, right? So like Bitcoin, in my initial understanding, I read the white paper. It didn't really Dawn on me until someone mentioned this recently, but in the white paper, they never like Satoshi Nakamoto, whoever he is.

I think it's DARPA. I agree, but we're not going to, I am convinced that DARPA Satoshi, so that's another, that's a whole another conversation on the internet and all that crazy conspiracy theory longer. Yeah. I really wouldn't like that. We probably will get our tinfoil hats on, but anyways, regardless of who, you know, Nakamoto is.

The interesting thing is in that white paper, it never really mentions like, um, a digital gold sort of thing. It never really mentioned like, Hey, this is meant to be an asset. Um, that is going to appreciate a lot and value because it's going to be scarce. It really is just like this, this whole cash. I mean, that's, that's the biggest word.

That's the most used word in that white paper is this is a digital cash. It's a peer-to-peer cash system. Um, It, you mentioned this earlier, but like there's the lightning network, which is making Bitcoins, blockchain work a little bit faster, but it doesn't seem like Bitcoin really achieved that. It does.

It was the first mover. So it does get, you know, it gets props for that, which may be why it has continued to hold value, but it's almost changed. So like originally the idea was okay, it's, it's going to be a store or it's going to be a cash, you know, a transfer of value system. Digital cash system. Um, that's secure and decentralized and all this, but now it's turned into, oh, it's digital gold as a store of value.

Um, and I wonder if there's any problem with that change if that's just a natural evolution as it's gone on, or if there's a fundamental problem. Everyone thinks it's a store of value, but it really isn't. And it's really not meant to be. And will we see that when you, when you're talking about the great reckoning, will we see that be a problem for Bitcoin?

Um, or is it just supplanted itself as the first mover in a ginormous market? And therefore won't be unseated. That's a, that's a great point. At least in my opinion, I think what's going to happen is Bitcoin will be, I think it already is solidified as kind of in the public idea of this digital gold. And I think it's not going to change.

I don't think it'll change from that. So I think it, I think it will always have some amount of inherent value. Just, just on psychology, just on how people feel about it, how it's kind of become normal. I think what will change, however, is the relation of Bitcoin to. Coins, especially the coins that are successful.

Like let's say the, the remaining 10 or 15 after the great coloring or whatever, you know, I don't think, I don't think all the other coins are just going to go to zero, but I think that you'll see concentration. Um, and I think what's going to happen is I think coins like cosmos or taser or file coin algorithm, those kinds of coins.

I think they're going to become more like. In that people will be trading them based on the innovation that's going on rather than the, rather than because Bitcoin is going up, these other things are going up. So I think what you're going to see is a decoupling of the correlation between the price of Bitcoin and the prices of Ethereum algorithm, the whole host of whichever.

Coins and systems are the most prevalent. I think you will see them decoupled in terms of their price from Bitcoin. I think Bitcoin will fill a certain role and will fill that role. Well, I mean, it does well, it it's, it's, it's, it's a good decentralized system for just exchanging money around the world.

And I think it fills that role well, but I think what you will see is that other coins will be. You know, making whatever percent returns and it won't necessarily be because Bitcoin goes up and I think if Bitcoin goes down, maybe these other ones will still go up cause they're still innovating and people will recognize that.

So I think you'll see a kind of shift of, I think Bitcoin will remain kind of this store of value, but I think that a lot of the other coins will become more speculative and more in more invention oriented and more innovation oriented and more honestly like stocks. Interesting. So that's why, I mean, that's kind of what I see happening as well.

I see them being, and I like how you said projects, like they're based around a project, um, which is why I kind of refer to them as crypto assets. I think it makes more sense. But the asset thing, uh, you can just call them cryptos. That's fine. Um, even though it's really kind of a lazy way to name it, but currency, it doesn't necessarily seem to catch all of the, uh, potential that is there within the space, right.

For, for different applications and use cases. Um, so. It, it, that's why I referred to it as crypto assets, but it was interesting. You made the delineation earlier and I want to kind of go back and get your thought on this of the difference between, okay. That's kind of a finance thing to say, um, versus, oh, the developers and the people actually building the, the blockchains and yeah.

Building out the structures behind these tokens and coins. Um, they refer to them as projects and they're referred to them as the token of the project or the cryptocurrency of that project. That's solving them solve X problem or create a meme, whatever it be. Um, so why do you think. Why do you think there's that delineation, you know, or is that, is that a good thing?

Is that just because it's such a new space and it hasn't been securitized, so to say, um, or, or should it stay that way? Should it stay, um, on financed? I think that. A unrealistic expectation for it to stay on, on financed or untarnished by the hands of the bankers eventually. But what are your thoughts on that?

Yeah, I think that the, because right now we're still, I mean, it's still a very early. Right. It's still really early on. If we're talking, even just in like the history of cell phones, for instance, we're still in the, the, you see it in like a 1990s or eighties show, and they've got this massive brick in their hand, or it's a car phone, so it's big enough to fit in the car, but you can't carry it around.

Uh, I feel like that's where we are right now with cryptocurrency. And I think that, I think as, as we continue on that delineation, we'll probably start to coalesce and be less, uh, Less noticeable. I think it just, it as an example, and I know I talk about algorithm literally all the time. I was dinner time, literally all the time.

It's huge. I mean, huge algorithm from originally from Boston. So big Al grand fan they're out there in Boston. Um, but I, I really, uh, approach algorithm as if it already was a stock. The staking bonus is almost like a dividend interest. Um, I consider that almost like a dividend year, you're holding this. So you're getting part of the, the system's profits.

You know, you're getting part of what the value creation is going on. Um, you're investing in this project, you're investing in this, uh, this idea that with the hope that it will continue innovating and continue growing. Um, and I think. The financial world is starting to catch on to that. I think it's taken a little while.

Sure. But I mean for good reason. And I think, you know, there's been a lot of just in the last 10, 20 years, there's been a lot of financial hardships for a lot of people through the 2008 crisis. I mean, if you look at cryptocurrencies right after 2008, Um, you'd probably be very jaded to me like, okay, this is, this is just a mortgage back security, or it sounds in some ways it sounds magical and too good to be true that you can have this decentralized system that is doing all these amazing things.

And, and it's pretty incredible when you dig into the technology. So I think, I think it's a good thing. I don't think it's a bad thing that the financial sector has approached with caution. Uh, I think that's good. And I think. I think what that has allowed for very intense, uh, market conditions in the cryptocurrency world, where you have very intense competition between coins.

And I think it's allowed for a lot of innovation. And I think what we'll see similar to the.com. Bubble bursting is after that, you know, you have Microsoft and apple and sun and Oracle and all these, these giants of today, you know, back then it's it was a bloodbath. And I think part of that was reminiscent of the crash in, um, may, June.

I honestly don't even remember. I don't remember which month it was, but pretty recently, um, it, it was reminiscent of that, but I think, I think, like I said earlier, I think there's going to be a large. Calling we're not necessarily Bitcoin or Ethereum are going to drop and singing about, but I think a lot of, uh, small coins that are, you know, maybe questionable, et cetera, um, or maybe very real and very viable and performing good things, but maybe they're getting beaten out by some of the larger coins or innovative, innovating faster and more.

I think you'll see that being called out. And I think what will happen is after that, I think you'll see even more tie-in from the financial community. I think once something like that happens where there's almost this, cause I think part of the problem too, with branching, from like you're saying the development environment, the people who are in the trenches all the way to the financial sector, Is that there's so much volatility and there's so much like what's the new coin.

There's so much hype around new projects and what's the new thing, um, which you see. Sure. I mean, in new companies and IPOs and venture capital in the financial sector, but not to the same degree. And I think that spooks a lot of people, especially people who are deep in the financial sector. So I think once this kind of.

Uh, crypto 15 or some sort of, you know, some sort of easy, it was like an se S and P 500 of crypto. Right. Um, that's, that's like, well-known, I think it'll be more familiar and more comfortable for the financial sector to embrace and to kind of bridge that gap. Interesting. But I want to hear your thoughts on all that.

Yeah, so, I mean, I, I had kind of pegged, um, I'd kind of pegged the. Crypto. Um, my, my thoughts on crypto into kind of two different things or three different categories, I guess like the, the kind of you got doge coin and all these crazy meme coins, it's like, okay, well we know there's not actually, it doesn't seem like there's correct me if I'm wrong because I could be wrong on this, but it doesn't seem like there's any real value innovation going on there.

It just seems like it's capitalizing on. Essentially and enemy. Um, and so that that's kind of one category in my head and then the other category was okay. Well, there's also going to be some, some form of. Kind of, uh, uh, again, digital gold Bitcoin sort of thing, um, where there's kind of this category of, okay, that's a fixed amount.

Um, the supply is fixed for instance, Bitcoin, you know, it's, it's, there's only X amount of them. And then the havings come each, you know, every, I forget this every six years or something like that anyways, so that we can, we can know the supply and track that out and therefore you can get. You only have to deal with the demand side of the equation and you can guess where the price is going to go.

And it's pretty much on the up. Right? So as long as people believe it has value, it has value. And I don't really have a problem with that because our entire financial system is a fee yet. Exactly. So I don't really have problem with, with, uh, oh, it's just all based on psychology. Now, some people do and they're like, What's the point and I'm like, what's the point of the $20 bill in your pocket?

You just believe it has value and therefore you can use it at the taco stand. Um, so the, the that's kind of one set is this store of value thing. But as I've looked into it a little bit further, um, I have kind of seen. Okay. So then there's the Ethereum side, which is more applicable. Like there's, there's more applications for Ethereum.

There's a ton of coins that are built on Ethereum. Um, and then you've got things like algorithms, which are solving specific problems in the transaction rates are just crazy. Like. The just amazingly fast, uh, transaction rates. So those seem more viable for the cash system. That Nakamoto kind of envisioned in his Bitcoin white paper, which is odd to me.

And after recognizing that, uh, last month, I kind of recognize the disconnect there had me going back to Bitcoin and these like quote-unquote store of value, coins, and reconsidering, whether that is necessarily true because. The the, the us dollar has changed over time. And so, you know, maybe that's the same, the same way that Bitcoin is going, where it was invented for one thing, but it's actually going to do a different thing.

Um, but gold has always just kind of been a store of value. It's never been. Useful. It's not a very good metal, as far as building things. It's, it's pretty, pretty squishy. So it doesn't really work very well. Um, it, you know, yes, it could be a conductor, but we found out that silver works really well for that.

So we have silver. So gold is always kind of been this, this quote unquote store of value, just because people think it's valuable, it's valuable type thing. Um, and I feel like that consistency has. It is a very big positive to its long-term staying power. So that's my, my one concern, a little bit of a bearish concern for things like Bitcoin that are trying to be a digital store of value.

Um, but I can definitely see the value and, and innovation in, um, things. You know, TSOs or cosmos or algorithm or Ethereum that are more of a, more of almost like a protocol, kind of like email back in the day and less of less of, oh, we're just making a token to make a token kind of a thing. Um, and, and what I, what I can't quite wrap my head around is when you're fighting.

Uh, share of a company, right? If we under the stock market and using that as the analogy, because we've got to have a reference point, if you're doing that, you're buying future revenue, right? Well, in this world of crypto you're, well, I don't quite understand what you're buying when you buy the token.

Right. And it's different each time, which I think leads to some of the confusion on the part of the consumer. Right. I would say I'm very, you know, just, just barely educated about cryptos. I'm practically a retail investor. Right? I have no institutional investor here in, in crypto. I don't know what I'm doing, but that's a kind of spooks me is, okay, what am I actually buying here?

Even if I can understand, oh, there's a problem there. They're solving it this way. It sounds like it could definitely solve that problem. I still don't get what I'm buying. By the token or exchange for the token. However you wanna phrase that, um, because it's a currency or an asset, you see what I mean? So that's what confused me, right.

Is, is what am I actually buying? Um, and so I've become. Maybe a little less bullish than I was. Uh, but it's still very, very much a fluid kind of, I'm still figuring out my thesis as I'm, as I'm seeing things, um, develop. And I think you're right. I think there's going to be some sort of large correction, um, Obviously that's going to consolidate things.

It always does. Um, what do you think is going to be the catalyst? Obviously you can't predict the future. I understand that you're not clairvoyant, but do you know that for sure? Well, I dunno, you're Irish, so you're pretty grounded. The, the, so, you know, I'm not expecting you to perfectly predict the future, but in your mind, what, what could be some catalysts for a large correction?

Hmm, that's a good one. Um, that's tough. I could see, I could see something like, um, you know, perhaps first quarter of next year fed raises rates or something along those lines, or is a harsh tapering. I could see that starting it because, uh, we'll see. I'm sure a lot of people will get spooked or whatever.

Uh, I think there'll be an overcorrection in the stock market, but I think what, what might end up happening is. Um, and we've seen, you know, especially mid medium cap stocks, some, some large cap stocks seem pretty correlated to cryptocurrency or sorry. Cryptocurrency are pretty correlated to stocks. Um, so I think if we see some sort of significant trend in the overall markets, that could be the start of something.

Um, now that wasn't necessarily the case in the most recent, um, correction drop incident, whatever, whatever you want to call it. Um, but I think that. It's becoming closer to what I think. I think the most recent correction was more of just psychology and consumer sentiment. And I think that the next one will probably be more tied towards the financial markets.

Gotcha. So I, that, that's my prediction. I think, I think it'll be more tied towards global financial markets, the fed, um, some sort of event, honestly, here. Here's the thing. What is pretty surprising? I mean, I was expecting a much bigger reaction to the Chinese ban on cryptocurrency. So it was I, so I think that's really impressive how resilient the cryptocurrency market has been to that.

Um, that's been a saga. I mean, it's been, they've been cracking down consistently. Just the, just when miners had to leave, I was amazed. It didn't get hit more. So I think it's, that shows that I think crypto is more tied to the broad financial market. Than individual events regarding crypto. Um, which I think is, I think it's a sign of maturity in the market that it's, I get more of that direction.

Yeah. Well, you just hit on an interesting, interesting point, which I, I didn't quite realize until the less, you know, actually I think it was today. I had the realization that it seems. The, um, overall crypto market is very much tied to like Fang stocks and especially, especially the big indices, you know, think S and P NASDAQ Dow.

Um, they seem to be very correlated, which did not seem to be the case in, in the past. It seemed to be like, it was, it seemed to me that it was a kind of a poor man's alt or the, the normal person's alternative, uh, investment and, and kind of this uncorrelated asset. But. Odd that that has become more correlated, especially because it doesn't seem like many of these companies have a tie.

I mean, Facebook tried to launch their own crypto and it didn't work. Like they couldn't do it. They were not allowed. Yeah. Right. So it's not like they have any direct tie to. The cryptocurrency markets in, in any sort of substantial way. W what do you think's driving that? Because I can't put my finger on.

I just noticed that trend and trend recently. I think it's, uh, I think it's psychology because I think the big three of the bleeding edge of technology right now is quantum compute, Bula, quantum computing, blockchain, and artificial intelligence. And I think that a lot of people just kind of. What's going on at the very edge of technology right now into tech in general.

So I think, I think a lot of sentiment will just kind of naturally bundle like, oh, and how has Amazon and Google and Microsoft doing, um, that's tech and most people's minds. And so I, my guess would be that there is a, there is a psychological factor going on of bundling the things that are at the forefront of that realm together.

So I think that that cryptocurrency is, um, in that sector. Gotcha. Okay. Okay. Yeah. I mean, that makes sense. It's, it's always, we always want to identify earlier with, with stocks and cryptos. We want to compare to something we know, and we also want to, uh, We want to associate things. So there's always a bias there to associate things that actually shouldn't be associated.

Right. Um, which is a good thing to, to check yourself when you're looking at a trade or investment, you want to, to check that bias and other ones, um, you know, at the door or at least know that you have the bias going in because sometimes it's impossible. Behind. Yeah. You just have to know that it's there and, you know, trade around it or invest around it.

So I'm kind of an actionable, I'm going to lean on here on you here for some, some portfolio takeaways, some, some actionable items. Um, as far as what are you doing with your portfolio? Um, I, I was. Kind of dollar cost averaging in I've since just kind of stopped because I might, my focus is elsewhere on individual companies personally.

I don't have the time for cryptos right now. Um, but should people be waiting till the great calling or the great reckoning to, to buy in the dip or, or is it one of those things where it's so early on that it doesn't even matter? As long as you get in, now, it doesn't even matter what the great reckoning looks like.

Um, you just need to be picking innovative, worthwhile coins, you know, what, what are, what is the portfolio takeaway here? Sure. I think for me, one of the things that got me solidly into cryptocurrency now, and I'll tie this in, um, was the waste staking. Um, so let's say, let's say you're staking a, I believe cosmos has a seven or I think it's seven, 8%.

So somewhere around 7% staking bonus on cracking, like for just a completely random example. The key is, is that it's not paid in dollars like a dividend. Um, it's essentially like a drip. It's essentially a. Self reinvesting and you're getting paid in more cosmos, same thing with an algorithm staking or, you know, most, I think almost every, if not all staking bonuses are paid in the cryptocurrency itself.

So I think the key is, yeah, I would say get in now, especially in the ones that have solid staking bonuses right now. I think it's huge that it's the bonus is not the dollars. The percentage bonus is not on the dollars. It's on the actual underlying asset. I think that that just doesn't happen for most investments.

I don't know of any other, I don't know of any other way where you can get more of the underlying thing. That's building the value passively automatically. I just, I just don't know and correct me if I'm wrong. Can't think of anything else that, that does that. Um, the closest thing is just auto reinvesting dividends, but that's not.

There because once you get the dividend, it's already appreciated exactly dividends. Exactly. Exactly. So it's, it's the built in appreciation exactly. Like it's the substance inside yourself that is, um, boosting. So I am huge on getting into staking bonuses. I'm I'm not as hardcore as Austin makes me, I don't, I don't participate in staking pools and pancakes swap.

There are some really wild things you can do out. Um, with crypto, there are some ways to get some really ridiculous yield if you want to dive in. Um, I would just be ready to put a lot of hours into it, but yeah, you can make a, uh, a significant amount of money if you're willing to put the time into a lot of research and, um, a lot of active stuff.

There are some crazy projects out there because there's so much volatility in so much liquidity in the market. There are some amazing percentages you can get on record. Like bank account style things and all sorts of stuff. So if you really want to get into it, definitely check that stuff out. But for myself, and I'd say for probably the, the most, uh, most investors who were interested in cryptocurrency, I would just recommend, um, getting some into staking currencies.

Cause I think the currencies that will survive, I think most of them, well, I think a lot of the currencies that will survive have staking bonuses. Like Tezos like cosmos, like algorithms, um, And I think that's a great way to just get started, because what you can do is you can just put however much money you want into a handful of coins and just let them sit there and steak, and you just don't have to worry about it.

If in 10 years, the individual coin is worth way more money. You not only made all the money on the initial, but you've made money that, that you've been building up that portfolio of those individual coins. So if you're willing to ride out in the long run, you're willing to ride out price fluctuate. The underlying value of each individual thing, doesn't matter, you're actually building more of those things so that, you know, hopefully, uh, after if the great culling does occur and, uh, the ones that you are ownership in survive, you know, hopefully after that you're going to be doing well.

And I mean, you're, you're creating more of that thing with that thing. So especially. Yeah, I think that's just huge to be, to be staking, to be passively building up the, the number of individual coins that you have. Um, I think. It's a really incredible opportunity. So I would recommend for the average investor to get into staking, uh, most of the big exchanges have it on different coins.

I know cracking has, um, I think like six or six or eight coins, you can stake. Coinbase has a bunch as well. Um, Binance has a bunch, so definitely check out all the exchanges. Um, definitely do your due diligence on that. And, um, Yeah, I would, I would personally recommend staking. I absolutely love the methodology to it because you're making, it's kind of like a dividend that you're making, you're making money by facilitating, uh, the system itself.

And the system is rewarding you with more of itself, which I think is just really powerful and really under underrated right now. And I think, yeah, yeah, that's a good takeaway. I mean, it's, it's, uh, it's, everybody's dream is passive income, right? So if you can. Passively generating more assets without having to invest more capital that's, that's quite the unique, and I'm sure there's a break even point to right.

Of, of where you would stake enough that if it went down X percent, it doesn't matter at that point you have you've broken even. So, yeah, that's a great, a great point. Any final thoughts on, I guess this is a really, really tough question for a final thought on, but any, um, Principles that you use when you're looking and evaluating a staking a coin.

Cause we just narrowed it down from the whole crypto universe to staking coins, but there's a lot of stake in coins. So what do you look at when you're, when you're just trying to make sure that it's not something that's going to disappear, you're going to lose everything. Yeah, I would, I would do the due diligence.

Read the white paper. Um, look into the website. I think a really powerful thing is to look into the development community. So go into, you know, the, the, the forums read what's going on. If it's really active and thriving, that's a great sign, at least in my opinion. I think that's a great sign. If there, there are lots of people who are champions of this who are developing projects and doing cool stuff with it.

I think that's a phenomenal sign. Cause that usually means it's good to work with innovating and there's growing numbers of people getting involved. I think that's a great sign. So I think, I think even let's say you let's say you're, um, completely new to cryptos and you're like, you know what? I like what I like, what that sounds like.

I want to buy a couple of staking cryptos, definitely still do the due diligence. Um, and still really dive deep as if they weren't sticking. Because I think at the end of the day, uh, It's similar to investing in that you really shouldn't be doing it if you don't have the money. Um, don't, don't be going into crypto thinking.

You're going to get rich overnight. Some people have, but, but, uh, don't do not go into it expecting that. And I think at least for me, really focusing on the long run as the show is the long run for crypto gives me a sense of, uh, security and. Uh, I think enables me to really focus on what's going on in the cryptocurrency itself and the value that is creating rather than just the hype, rather than who's talking about it, rather than who's tweeting about it, et cetera, which again, you can make, you can make a lot of money, uh, just following that stuff, but that's for the short run shit, which doesn't exist.

This is a long run show. Well, you heard it here, folks. I mean, that's a great, a great couple of takeaways there, staking, and then focusing on, on the long run within that. So I appreciate that, Michael. You got it. Awesome. And, uh, yeah, folks, if you would drop a review five stars, if you thought it was great, one star.

It actually just don't leave that. Just, just move on. Don't leave a one star review, just five stars. Um, if you thought this is great, we would love to have you review it and hopefully you'll tune in next week. Uh, for the next episode of the long-run show, this is Austin Wilson and he is, and Michael O'Connor that's correct.

And this has been the long run show. We'll see you next time. Bye-bye.

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