Interview Series - What is all this talk about Cryptocurrency?
Hey guys,
Normally we talk about Airbnb and Real Estate Investing, but lately, the Real Estate markets have been inflated and I don’t feel confident telling my readers to invest in homes outside of the Midwest or on select hard-to-find deals, which makes it trickier for the general public. In an interest of sharing options that are available to everyone, I plan to share new investment spaces as I personally learn and get into them - so without further ado, I present the world of Cryptocurrency.
I know, I know, I bet a lot of you are thinking, “What? Isn’t that black market money or just an investment bubble?“ Actually no. Cryptocurrency is being called the Internet 2.0 and we are still in the early stages with a lot of exciting cutting edge technology behind it.
Tech such as, a decentralized place to store and share documents, such as birth records. Did you know 2.6 billion people do not have any document proving their births? This makes it awfully difficult to get an ID, a bank account, travel or get a job.
Another cool company in the space is working towards global credit ratings. Did you know that the US measures credit standing on debt? So if you never had a credit card then you might not be able to buy a car, house, or rent an apartment. Some other countries measure credit standing by religious affiliation and political beliefs, radical huh? Can Bloom revolutionize credit into something universally accepted?
So in essence, Cryptocurrency is opening up the global space to share documents, send money, and crowdfund companies like never before. With nothing more than an internet connection and a cell phone, it promises to give access and connect the rest of the world to the more than 2.5 billion people who are currently without bank accounts. Giving them access to near instant money and digital goods transfers; allowing them to receive money from family members, pay for goods, or receive microloans to start a business. Welcome to the future my friends!
If you have never heard about Cryptocurrency and want an easy to understand, thorough introduction, check out this intro episode from the Podcast Unchained, by Forbes.
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Today I have an exciting interview, with my new friend Shane Staats, a crypto investor and consultant in Boulder, Colorado. A friend of mine who recently got into day trading Cryptocurrency, put us together and we spent a good 45mins geeking out in preparation for sharing with all of you. Whether you are interested in educating yourself to invest on your own, or paying for a more hands off approach, we’ve got something for you. Read ahead!
ZM: Shane thank you for joining me. I am really looking forward to sharing this leading edge investment space with my readers. Can you tell me about how you first heard of Cryptocurrency, what your initial impression of it was, and what got you to finally take the leap?
SS: It’s great to be here with you, Zeona! I’m very excited to share what I know with your readers. The Crypto world is very complicated as it’s a whole new paradigm that many people are not used to talking about. So the more we discuss the better!
I first heard about Bitcoin in August of 2013 when Bitcoin was at $100 (today it’s at $17,000) while attending Burning Man. The camp I was staying in was offering workshops and talks about it that I quickly shrugged off thinking that a made up digital currency was a get rich quick scheme and likely a sham. I have a background in Finance and Economics which in retrospect had held me back from understanding something as revolutionary as Blockchains and Bitcoin. For the next several years I kept myself busy as a Futures Trader and had a list of alternative investing ideas to research, Cryptocurrency being one of them. As soon as my futures trading started to wind down I used my time to research Cryptocurrency and I quickly saw the genius behind Bitcoin, the Blockchain, and how they would revolutionize the many ways we cooperate with each other. I was fully committed and spent that week learning all I could, and then learning how and which Cryptocurrencies to invest into. There are several things I did not like about Bitcoin, so much of my early investing was into Ethereum and Dash (which as of today have made higher returns than Bitcoin).
ZM: How long have you been in investing in the Crypto space and what made you want to start offering your services to the public?
SS: It’s been a bit shy of a year which is short compared to the 9 years Bitcoin has been around, and yet since I have been studying alternative investing for upwards of two decades and have a background in tech, I was able to catch on quickly. Despite the fact that my full time job now revolves mainly around the world of Cryptocurrency, I continually experience Crypto as a rabbit hole that goes deeper and deeper.
Initially sharing my knowledge with whomever would listen, I quickly discovered the challenges people face when it comes to investing into crypto, how confusing it can be and how challenging it can be to explain. Yet the hunger for crypto was there- people wanted to learn how to invest into cryptocurrencies and I really enjoyed teaching them how. It was natural for me to start offering this as a service in order to help people and also provide a stable business for myself. The more I teach the more I know. There’s been a compounding experience in that this has been tremendously beneficial to my clients and myself as well as the world.
ZM: What is your general Investment approach?
SS: First I’d like to say that while I do have approaches, there are infinite approaches that can lead to positive investing in this space. So mine is neither right or wrong nor do we know what will happen until it happens. This is the nature of investing into the future.
Also I really believe that it’s most helpful to focus on the “end in mind” and work backwards. I believe Crypto will change the world in many countless ways. One of my beliefs is that in the next 10 years or so there will be a mass adoption of Cryptocurrency and the average person will carry several coins in their phones. What can I do to increase my chances of investing into those coins today that will be used tomorrow?
In regards to that and investing in general, here are some of my beliefs:
The short term does not matter. All the time people think and get stressed about the short term fluctuations takes away from their capacity to think big and long term, which is where the profits lie. Investing is about making money. Using my time wisely is investing also and therefore using my time to create the most benefit is incredibly important to me. For this reason (as well as several others) I am not a day trader and do not recommend it to my clients.
No one knows the future. So I moderately diversify into the top 10-20 coins based on market capitalization and volume. Ignoring the ponzi coins of course, yes they do exist! For an early stage investor investing in Bitcoin, Ethereum and Litecoin on Coinbase is a fine simple diversification strategy.
I have the time to extensively research new coins, which are called ICO’s. I own 50 of these coins in diverse industries and invest risky money into these startups based on a long list of criteria. Note: to invest into ICO’s you really need to believe they will grow just as fast if not faster than Bitcoin and Ethereum otherwise it does not make sense to do so.
Originally I invested 5% of my assets into crypto. I recommend only investing 1-10% of assets for clients depending on their situation, age, experience, knowledge of crypto etc...
Getting emotional support for clear financial decisions is key. Therapy, coaching sessions, group processing, etc. I’ve learned that making financial decisions from a scared or emotionally charged state is never good. Getting grounded prior to making large financial decisions has made me more money than anything in life so far. Who would have known.
Learning is more important than mistakes. I keep a list of mistakes at hand so I can learn from them and see them coming in the future. A $20K mistake can turn into a million dollar gain down the line.
ZM: What makes you excited about cryptocurrency as a new asset class? Where do you think it’s going from here?
SS: I am very excited that this new asset class is the first that is decentralized. We don’t need middlemen, banks, auditors, government officials, corporations, etc. This is totally revolutionary and reduces the concentration and abuse of power in the world.
Whether we know it or not, money is just a story. Sea shells used to be the currency in Africa- a good story for moving value but a better story was to use coins and then a still better story were bill's (fiat currency). I see cryptocurrency as the newest and best story of money created.
Where I see it going from here is that it will eventually take over other paper fiat currencies, which makes me feel both excited and worried. Excited because currently the U.S. dollar is a worldwide reserve currency and I still would rather hold a Crypto coin than a dollar. So what happens when and if many people think like me? I would not be surprised if Crypto coins end up having a trillion dollar market cap in 5-10 years.
ZM: Mike Novogratz famously turned 500K to 250 million on early investing in Etherium, and in a recent interview with CNBC Fast Money, said he believes Bitcoin (which is currently valued at around 17K) has the potential to go to 40K by the end of 2018. What are you thoughts on this?
SS: Short term price guessing is just guessing. There is always someone with the right guess. It’s a game that is distracting so I don’t talk or think about cryptocurrency in that way. If you think long term with mass adoption of coins, the price will likely be tremendously higher than they are now based on many factors. I don’t need to know if that’s 10 times or 100 times higher, I just need to know how that compares to other investment options and I currently don’t know of anything that is more interesting or has higher potential gains.
Bitcoin prices mostly relate to daily transaction volumes. If next month we see twice as much money being transacted a day most likely Bitcoin prices will be up 2 times.
ZM: A lot of people talk about Cryptocurrency being a bubble, which I disagree with in the long term, as I hear more about Investment firms like Fidelity (who manages $2 Trillion), experimenting with Bitcoin mining, and CME Group (managing $68 Billion) launching a futures product next week. The Cryptocurrency market is valued at about $489 Billion, with all this new investment interest from large firms and the general public, I think it has a lot of room to grow. What are your thoughts?
SS: It is a bubble in some sense but that doesn’t mean it’s not valuable or helpful for society. Every few months the bubble bursts and then grows to higher prices again. This is the nature of a world wide investment product that is hard to value and many people who invest don’t really understand this, which is why people often get scared and sell.
Bear in mind that real estate and tech stocks have had bubbles too but we still live in houses and use the Internet. I think the same will happen with Crypto- huge price swings but no matter what people will quickly start to use it and that will not change.
Most people’s fears are “am I buying at the top of the bubble?” I don’t want to be that person. So I examine and get support for any fears and emotions that come up. I explore them and see what my fears need. Maybe they need more information, more time to process, expert advice, etc.
ZM: It seems as though one of the tricky pieces of investing in Cryptocurrency is storing your key or “wallet”. What do you recommend for people just starting out?
SS: Most people can start investing with Coinbase and keep their coins there or use their vault account options. They have never been hacked and are the most reputable exchange in the world.
That being said it’s not 100% safe and hacks are always a possibility. Once you are no longer comfortable with your coins being on an exchange you can transfer them to cold storage. This may be when your coin(s) reach $1000 in value or $100,000 and is largely based on your level of comfort and how you feel about your money.
The Ledger Nano S is my favorite storage device as it’s the most secure, most used and supports the most types of coins. Once you use this though you are really becoming your own bank and own security guard. So store your backup phrase wisely!
ZM: What are your favorite resources: websites, podcasts, books, etc for people looking to learn more?
SS: For daily news I really like Coindesk.com. They don’t overload you with articles, they are professionally written and have minimal marketing or biases.
For following experts on Twitter:
Naval https://twitter.com/naval
https://twitter.com/VitalikButerin
-Andreas M. Antonopoulos: Ignoring most chatter or noise, hype.
-Hash power has been a recent really good set of interviews.
ZM: What advice or strategies would you give to someone wanting to branch out on their own and invest in Cryptocurrency?
SS: First off, you’ll want to decide how much time you want to spend in learning to invest, and learning about Cryptocurrency. Those are two separate yet intertwined topics. As I said this is a deep rabbit hole so I highly recommend getting an understanding of what you want to commit to. 5 hours a week researching about this world or 1? And once you get a good feel of the knowledge part then the challenge can become how to invest in what you know? That is certainly a lifelong topic. Be honest here as you may not be into investing and if so, that’s okay- don’t waste your time here and instead find an adviser or asset manager you trust.
The dark side of Crypto world is that it’s fraught with theft, fraud, hype, money addiction highs and misleading information preying on those who do not know enough to make educated decisions. So go slow and listen to your gut! And if you feel like you’re doing this to just get rich... even if you do get rich you may just end up losing it all as you’re probably not cultivating wise investing skills. Emotional support here is worth it’s weight in Crypto :)
ZM: What services can you offer to my readers if they are wanting to get started, but would like a little more guidance?
SS: If your readers want to get a jump start on their investing into this space I am happy to talk to them. It can take a long time to understand this world so the value I offer is to quickly guide new investors through a lot of tedious decisions and logistics. I offer support with everything Crypto from “Where do I start?, how much should I invest? and what coins should I invest into?” to how to store coins safely, education about Blockchain, investing theory etc.
For many people an hour or two of my time is enough and for others who want to get more involved I can train and shadow them for more complicated decisions and transactions.
I also offer money therapy sessions in person or online to help people learn about their money blocks and to move through them in a way that feels good and clear. We have so much baggage around money from our histories, our families and our culture that it is really worth examining. My therapeutic background is in Core Energetics and Radical Aliveness, body-based therapies help move stuck energy and to process deep emotions.
And finally when it comes to being more conscious of our inflow and outflows of money I really believe in budgeting. It sounds terribly boring and tedious but it can be fun and very rewarding. My wife and I spend 10 minutes a week going over our budget and this has increased our income, reduced expenses and helped us appreciate this finite and important resource.
I charge $300/hour for Crypto Consulting and $100/hour for Coaching around releasing psychological blocks/behaviors around Money and Learning to Budget.
ZM: How can my readers get a hold of you?
SS: I can be reached at shane@cryptoconsultant.tech and can offer your readers free 15 minute intro sessions to explore if working together is a right fit for us. Your readers can also check out my website at www.cryptoconsultant.tech
ZM: Thanks so much for dedicating the time to talk with us and share your wisdom!
SS: You’re very welcome, Zeona! Happy to share my wisdom.
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If you’ve read this far, thanks for sticking with us through this long meaty interview. I thoroughly enjoyed it.
I just wanted to include some of my fave Crypto resources that were not mentioned:
Youtube Channels/Podcasts
-Crypto Bobby: Daily videos on latest news, movements in market, he also shares his portfolio. Crypto Happy Hours - live Q&As a new times a week.
-CoinMastery - Daily videos on strategy, movements in market.
-Unchained - High level biweekly podcasts on crypto regulations and different companies and their coins. Took me awhile in this space to understand some of the tech they describe.
Book
-Digital Gold - Nathaniel Popper. Easy to read book on the history and major players in Bitcoin.
Websites
-OnChainFX: not a good mobile view, but excellent desktop. Shows current prices, charts, flags scam coins, etc. Customizable view.
-Cointracking.info: free tracking of transactions, important for taxes
Exchanges
-Coinbase/Gdax - Coinbase has a really easy to use interface, gdax is the sister site - same login/less fees.
-Binance - place to buy alt coins (aside from Etherium, Litecoin)
-Bittrek - place to buy alt coins
*This blog post is not meant to be investment advice, all readers acknowledge that there are risks in any investment vehicle and they are responsible for the choices they make.
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