CRYPTO News Update of the Market; How to manage your portfolio ---------------------------------------------------------------- Get the insider info on crypto investing! Join the INNER CIRCLE: https://www.boroncap.com/cryptoinnercircle Text “info” to (817)771-0615 or email info@boroncap.com for more information on investing in our crypto hedge fund ---------------------------------------------------------------- Regulation is a good thing. The US is recognizing and legitimizing Bitcoin by regulating it. It provides comfort to investors. But what are the pros and cons of regulating Bitcoin? Learn more about the impacts of the executive order in regulating Bitcoin and how you can take advantage of its growth. Join our weekly live show to learn more about Crypto!
KEY TAKEAWAYS:
00:00 Intro
01:03 President Biden's news about the Executive Order in regulating Bitcoin
02:50 Restricted use of Bitcoin
03:13 How to reduce risk in Bitcoin?
03:53 Importance of regulating Bitcoin
05:40 Is regulating Bitcoin the right move for the US?
05:53 What are the impacts of regulating Bitcoin?
06:30 Is regulating Bitcoin a win?
09:35 What is the perceived negative implication of Bitcoin regulation?
10:31 Exploring the US Central Bank Digital Currency (CBDC)
11:30 Will CBDC impacts Bitcoin negatively?
13:20 Benefit of Bitcoin portfolio allocation
14:00 Typical Portfolio Strategy
15:00 Conservative Portfolio Strategy
15:40 Moderate Portfolio Strategy
16:16 BTC+Crypto 10 Portfolio Strategy
16:46 Importance of having a diversified Bitcoin portfolio
17:44 Impact of consistently allocating investment in Bitcoin
19:00 What can you do if you're an accredited investor?
#bitcoin #boroncapital #thesolomoninvestor
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Get the insider info on crypto investing!
Join the INNER CIRCLE: https://www.boroncap.com/cryptoinnercircle
Text “info” to (817)771-0615 or email info@boroncap.com
for more information on investing in our crypto hedge fund
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*Other Episodes of The Solomon Investor Show CRYPTO ADDITION*
"Crypto Volatility is just Opportunity" -here is HOW to USE the Opportunity
https://youtu.be/cyomRHxueBs
How to Secure your Crypto in 7 Steps
https://youtu.be/kWt680Ns0Ms
U.S. has $3.6 Billion in Bitcoin!? Russia makes BTC Legal and Inflation soaring
https://youtu.be/bXsgi2Nc64A
CRYPTO State of the Market; What you need to know today
https://youtu.be/hgiQg4VQwwQ
Don't be a Part of the "Wait and See Group" - Start Investing in Crypto Now
https://youtu.be/pWpDKoMBCJk
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Sweet All right, perfect. We are live What's going on everybody Happy St. Patrick's Day. Me and Mr. Jeff Olson second ger in the House wanted to come after guys today. There's a lot of stuff happening in crypto right now. And as always want to bring you guys timely news of different major global shifts, different executive orders, what different countries are doing, and how those shifts economically are impacting this market. And then also, we're going to be covering towards the end of the show, considerations of how to potentially prepare and balance your portfolio. So different considerations, Jeff's gonna break down some of those for us. So first, let's get into some of the news. A lot of things happening over the last week. Jeff, I think that be good. Throwing it over to you, I really want to talk about the new executive order that just came out from President Biden in the White House and love to kind of break that down back and forth with you and share with the good people what's going on?
1:13
Yeah, so the executive order, and honestly, just regulation in general has been a big question mark for a lot of people, which is, presents a lot of risks when we talk to potential investors that that typically comes up is like, hey, what's the regulation risk? What can we expect? And we finally have some clarity we've we've heard from the SEC say, hey, Bitcoin is a non security, but they haven't really mentioned too much about other coins in which there's about 20,000. Now. And now we have some clarity of where the United States wants to take regulation. So overall, the executive order that was last week was a really big deal, because it was actually positive sentiment from the President of the United States, he pretty much said that they want to be which when they the United States wants to be the leader in digital assets and blockchain technology, which is a huge deal, because a lot of people were worried about them saying, hey, we want nothing to do with this, because of XY and Z, like some, you know, trying to ban minors, they've banned a lot of different cryptocurrencies Russia said, Hey, we want to actually treat cryptocurrencies as a currency, which is more positive. So we've seen different ends of the spectrum. And obviously, the global power, which is the United States is incredibly important to the market and the growth of the overall industry. And overall, that sentiment from that that executive order was very, very positive, do anything that, you know, that maybe brought some concerns to some people in the crypto space that aren't really used to, you know, traditional finance and regulation was the fact that he pretty much just said, Hey, we're gonna do everything in our power to limit illicit use of cryptocurrency, which is absolutely, I mean, that's, that should be expected. So there's a few like, ways to look at it, you can, you know, it depends on your investment portfolio and thesis and your objectives and things. But if you're, if you're trying to reduce risk, you can just stay with buying Bitcoin, okay? If you want to have a little bit more risk, but don't want to also expose yourself to some sectors within crypto, that's going to be heavy, they're heavily regulated, like privacy coins, that's probably a good idea to stay away from from some of that. So what's important from here on out is to kind of keep your, your finger on the pulse to see, okay, what sectors within crypto are they potentially going to pursue against, you know, others like which one's going to become a problem and which ones not, let's avoid the ones that are going to become a problem, because that will have a significant impact on the price. But I've talked about a little bit this week about how important this is. Regulation is super important because it brings clarity and allows public companies and institutions and large large amounts of capital to come in. If we want this market cap to be over 10 trillion, and even close to 100 trillion, there has got to be some type of regulatory clarity. And this son is something that needs to desperately happen. That also somewhat of the of the problem is them trying to paint all of you know, the crypto space and digital asset space into securities laws, which is, you know, they're they're dinosaur laws. And it's really difficult to paint a brand new asset class into an old set of laws. So I do believe they're going to have to reconstruct how the laws are written, and they're probably going to have to create new laws just for digital assets. But yeah, Zach, I want to hear your opinion as well. We actually haven't talked about too much about what you thought of the executive order and regulation. I'm curious if you even agree on me, agree with me on on that point that is kind of more of a positive thing than a negative
5:00
Yeah, so just to kind of touch touching, you hit a ton of really good points. So let's love to boil a couple of those down. So for the, for all these, all of you listening, you know, we're speaking on this on a regular basis. And a lot of questions I get asked, still to this day is the idea of, you know, well, what's gonna happen when they tax it? And I'm like, well, just so you guys know, Kryptos already taxed, you know, what's gonna happen when these regulations come? Or what if the government bans it or tries to outlawed or do this and do this, and those are concerns that people still have. So like those, I think those of us that are in the industry, I have for a very long time. And obviously, Jeff has, as well have believed that it would be the right move for the US and other countries to align with cryptocurrencies, rather than try to fight them. Right. How do you how do you benefit from and I think that it was a natural progression. So what we're seeing here is we are seeing the US recognizing, number one, this industry, that is here to stay, I think it legitimizes and brings validation to so many people around the world when the number one global power is coming out and saying we support this, and are not going to fight it but also want to lead in it. So that from a sentiment perspective, I think that's extremely powerful for the long term sentiment, and when sentiment changes that that, that gives comfort and peace to so many people who have maybe been on the fence or have been uncertain about whether or not they wanted to participate. Okay, so from my perspective, it was a it was a win, not an if and now that that when happened, we have more clarity, and we can see we will see continued adoption expansion with inside this market. And I think now we know that the timeline has moved forward with that, and it has great positive benefits moving forward. So sentiment, I think is kind of the first thing to, to grab a hold of, I think is extremely positive for the market as a whole. Second, Jeff mentioned, you know, regulation being a good thing, so us as operators in the space. And if you're just manage your own portfolio, you know, you may look at a little bit different, but we have to manage money in a fund where other investors are involved. And so we've always operated with the sentiment of being prepared for the worst. And we've operated, you know, in alignment with what happens if this regulation changes that regulation change, and we've been in preparation for it. Now that we have a better idea of what's going to happen, this does open up the market to so much more money and many more investors, Jeff mentioned big money coming into this space. And there has been an extremely high interest from the highest levels of institution, the big money, the family offices, and these people that could put massive backing into this market. And it's been extremely difficult and still is to this day extremely difficult for them to gain access. And now, as more regulation comes on, you will see a more streamlined process for bigger money to gain access into these markets, in which case, that means there'll be a greater demand and extremely increased demand for these assets, which we know when demand increases, and the supply isn't necessarily growing with demand, we're going to see a supply and demand deficit, which should in turn be extremely favorable for all of those of you out there that are currently holding, you know, these quality assets that will be adopted. And I do say the quality assets that will be adopted, because Jeff mentioned, there's 20,000 Now, and a lot of those a massive number are not quality. But we're not going to obviously don't have time to break down every single coin and be, you know, take forever and obviously have no interest to to us or probably to you. So yeah, I would say it's extremely favorable. I think the fact that the US is coming on board, I think that it validates it brings it forward. And I think that I think that we're going to see bigger money coming in at larger amounts in the near future. You know, I think a couple, you know, a month or so ago, I was saying that it was probably going to be 18 months to 24 months before we able before institutions were able to access it at the levels that I think they want to. And, you know, with this new movement forward, I think that timeline is going to hold true. And we're gonna see that expedite and more money coming into it, which is great for everybody that's invested now.
9:18
Mm hmm. Yeah, this is one of the quotes that we were kind of alluding to the United States must maintain technological leadership in this rapidly growing space and supporting innovation while mitigating risk for consumers businesses and broader financial system and the climate. And then this was like the perceived negative part where they talked about mitigating the illicit finance and national security risks posed by illicit use of digital assets, which is today. I mean, it should be expected. Right. And then I'd say the last thing and then yeah, Biden clearly outlines that the administration does doesn't want to push crypto abroad. Instead, they want to protect the regime. In the superiority of the dollar, if you guys aren't aware to when China banned mining, they were the largest country that was mining crypto. Now the United States is the largest. And I think that is extremely important if you care about the United States, still holding that, that, you know, global power and that first place within the economy, it's, it's absolutely necessary to for them to be leading the blockchain and digital asset space. 100%. I'd say the last thing to then this, this is something we've talked to a few people that that don't really understand what is happening really is there's over eight countries that are creating CBDCs right now, and the United States is highly considering one, they've already said they're going to release one, which is a central bank digital currency. So the difference between this and the USA, you're probably thinking, well, the dollar is kind of already digital. And it kind of is because think about what how many times you actually touch $1 bill when you're going to buy something like pretty much never now. So a lot of it is digitized. But the problem is, is built on the old payment railways. So what they're doing now is they're building new digital dollar on on new financial rail razors, which are way more efficient and effective, so that you could actually send a quote unquote, wire through the blockchain, and someone can get it very, very quickly. Instead of if I send a wire at 4pm. On Friday, we're not getting it until Monday at 9:30am. You know, there's a bunch of issues with the traditional financial system that blockchain is going to impact and revolutionize. And that's exactly what the government is starting to do with CBDCs. Now people say, Oh, my gosh, that's gonna kill Bitcoin. It's like, no, that's the exact opposite of Bitcoin, because people use Bitcoin, because they want something as decentralized. A cbdc is the definition of a centralized currency. So it really has no impact. It the only impact you would have is like, you know, if you really care about USDC Oh, no, there there goes your 0% return when you hold USDC there. So
12:10
yeah, I would note on that, Jeff, you know, for everybody listening, I think that, you know, ultimately, whether you're in favor of CBD, C's or not central bank, back digital currencies, I think that there is a net positive for the crypto community. Because once the entire world or at least all, you know, users of the dollar, fully understand how to utilize blockchain fully understand how to operate on this type of network, it will increase the knowledge, awareness and education of every single person as it pertains to Bitcoin and other cryptocurrencies, which in turn, makes it much more natural path for adoption. Right? So then it's just going to be a decision of where do you want to operate, but everyone will know how to operate when everybody understands how to operate, people will be able to make their decisions, much simpler. And I think you'll have more people learning this side of the market, which in turn brings more adoption. So I think I think we could find some positives out of that as well.
13:14
Totally. And one of the last questions want to address is just kind of like portfolio allocation. So we talked to a lot of, you know, traditional investors that are, maybe they're very, very heavily involved in real estate, maybe they're heavily involved with their brokerage accounts, and, you know, different, you know, the Schwab or chase or whatever, they're very traditional, they are starting to understand that how crypto maybe could fit into their portfolio, but they don't actually understand the benefit from it. Right? A lot of them, I could talk about utility all day on, you know, what the utility of crypto is and where it's heading in the future and how it's going to impact business and all these different industries. But from an investor standpoint, and asset allocation standpoint, I want to show you guys this, which is just the last five years of performance. So in the top corner, we're looking at a typical portfolio, which is a 6040 portfolio, which means this is like a traditional very traditional portfolio 60% stocks 40% bonds, okay, the compounded annual growth rate is 11% and an annualized volatility of 7%. And then a Sharpe ratio is 116% and the maximum drawdown is 21.6%. So, the 21.6% is that's just the maximum amount that it's that it's that the account will go down by if we head into like a bearish time where the acid starts to sell off. So you want a lower drawdown, you want a higher Sharpe ratio, which also like it shows you pretty much expected return factoring in risk as well. So you want a higher Sharpe ratio. And then you want obviously a higher growth rates or higher compounded annual growth rate. And you can see that then if you go to conservative Okay, let's try 58% stocks, 40% bonds, and 2% Bitcoin. That's what this middle one is, you can see the compounded annual growth rate went up to 13 and a half percent, the Sharpe ratio went up to 144%. And the drawdown actually went down by point one, because the assets are uncorrelated. So when you're developing a proper portfolio and you and you believe in the modern portfolio theory, which you want the highest expected return, you want to assets that are uncorrelated in a portfolio, then you want to see a smaller drawdown at a higher compounded annual growth rate. Now, let's go to moderate, we've got a 55% stocks, 45% bonds, and 5% Bitcoin now. So we haven't even touched any other coin, but with just 5% Bitcoin, we are now at a 17.39% return, that is pretty ridiculous of an impact just 5% Bitcoin in the portfolio brings it up to almost 17 and a half percent, then you'll see that the drawdown ox also came down by point 3%, as well. So all around better and the Sharpe ratio is now at 160%. And then you'll see at the very end, the last one, which is Bitcoin and some of the top 10 all coins, if you hold the top 10 all coins, and you allocate 5% of the portfolio to Bitcoin 5% of the top 10 all coins. And then you also you know put 58% in stocks and 40 40%. In bonds, you'll see the return the compounded annual growth rate is 24.34%. And the drawdown is only 21%. And also the Sharpe ratio is 176%. So a lot of people, there's multiple studies that we've talked about multiple times I've been talking about this since 2019, is adding a little bit of even if you're not even comfortable with Bitcoin, if you're trying to understand this whole thing and how it even works, the data is here, the data shows that it's really important to have in a well diversified portfolio, because it actually decreases the volatility in the draw downs, believe it or not, everyone thinks oh, if I bought crypto and I'm gonna have massive draw downs and massive volatility, all the data shows that actually, you have less draw downs, and then your return is much higher, over a longer period of time. Yeah, if you buy it today, and you and you freak out next week, and you sell it on a low because the price went down. That's a different story. But when you hold on to it long term, at least the data shows that it's really important to have in your portfolio.
17:34
Yeah, this is super helpful. Jeff, I appreciate you walking through this. And, you know, there's so many people out there that, like you said, they're still just wondering what to do. And this is great for anybody who is at that crossroads where you feel like well, you understand it's a legitimate industry, you understand that going anywhere, but you just haven't fully spent the time to dive in and you're processing what you might do to allocate. I mean, you could start at a smaller percentage. And the data here shows that a small percentage allocation, just shift can significantly impact you know, your bottom line. And, you know, this, again, is is very conservative. You know, I mean, I'll tell you for Jeff and I both, it's not it's not 5045, and five, your The more time you spend in this market. I mean, honestly, just the more you fall in love with it. But for anybody watching, we wanted to give you guys some some real tangible data, as far as consideration. So if you're processing, you know that you want to make a change, you want to make some allocation and are considering here's some of the data that can help you, you know, process what you might want to do with your portfolio. Obviously, we're not saying this is what you should do is not financial advice. This is simply data to show what what has happened over the last five years as far as performance now. Yeah,
19:01
I would say one of the one of the difficult parts is people say, Okay, well, the top the top 10 all coins like, Okay, what happens when one leaves the top 10 One joins the top 10 might switch and that in my holding this? Like, how do I know what because things in crypto can change so quickly? And that's exactly why our business is so valuable because that's exactly what we do we actively manage some of the top all coins against Bitcoin, we're actively managing that on a daily basis. And we've been able to consistently outperform over long periods of time. So, um, if you do have interest in your accredited investor, there's some information below this video as well.
19:41
Yeah, yeah, you just go down on the show notes. Yeah. Good point. That is what we do. We manage hedge funds in this space. And, you know, help investors gain access to a diversified portfolio what we would call an actively managed index so that investors can gain exposure put their money to work. and continue to grow with us. So appreciate you bringing that up. But yeah, I appreciate everybody tuning in. I think that's all we got for today, Jeff, anything else?
20:10
Nope.
20:11
I'm all set. Well, other than that, hey, like and subscribe. We appreciate you guys tuning in. We appreciate your time. We know your time is the most valuable thing and so we appreciate you sharing it with us. We'll see you guys next week. same bat time, same bat place. Which is why we're going blank 530 Eastern every Thursday. We'll talk to you guys soon. Thanks.