Transcript+
Thank you for joining us today. We're excited to bring you a brand new show from the On Ramp Media umbrella. Wake Up Call is a weekly show that will be streamed live on LinkedIn every Monday morning. To catch the premiere of each episode, follow On Ramps LinkedIn page and add Wake Up Call events to your calendar. After the live premiere on LinkedIn, we will distribute each episode across On Ramp Media's podcast channels and YouTube page. Wake Up Call aims to educate financial professionals on the merits of the Bitcoin investment thesis, how this asset represents both a threat to legacy financial service businesses and an opportunity to differentiate oneselves and retain and attract new clients. Hosted by Mark Connors on Ramps, Head of Global Macro Strategy and Rich Kerr on Ramps, President of Managed Wealth, this show seeks to provide financial professionals the wake up call they need, prompt them to have an open mind with respect to Bitcoin, rethink their prior assumptions, become more educated on the topic, and learn from others who are already farther down this path. Mark and Rich bring a combined 60 plus years of experience across traditional markets and financial services and will share their unique perspectives and how their peers and colleagues can approach the realm of Bitcoin. Wake Up Call will feature guests from various backgrounds and industries will also share their own journeys to Bitcoin and how others can get up to speed. Now time for the show. All right. Well, I think we're live, Mark. This week we are joined on the wake up call with Sandra Reed, who's the CEO of Lions Wealth Management and Corey Round, who is the Senior Director of Derivatives Trading at Lions Wealth Management. So we're delighted to have both of you joining Mark and I today. But you know, first before we kind of dive in with you guys, we always like to just kind of recap of, you know, the past week and some of the fun things that have been happening. And Mark, I think this is the first week that we haven't had on wake up call, something really monumental kind of unfold, whether it be the Japanese, you know, you know, unwind of the carry trade or, you know, you know, a change in a presidential candidate or even an assassination attempt. I think we've always started off with something a little bit wild. This week we get a chance to, you know, just kind of reflect and breathe a little bit. So that's kind of nice. Rich, It's almost like the risk gods know it's the second-half of August and they said enough, man, you know, no more, as you said, no more Godzilla in Tokyo, no more people on rooftops, no more Irish exits of presidential candidates. Let's just have an easy one where we can talk about is it pork roll or tail or ham? If you're from New Jersey, you know, let's have some simple topics. And for this conversation, I think, you know, we, we kind of eased into the lighter aspect of that Rich, when we when we, when we introduce that picture of the of the Turkish pistoleri that went viral over the past week. Yeah, yeah, that was that was pretty amazing. In fact, I was kind of chuckling this morning because the first thing that I did is I opened up my LinkedIn feed and and saw the picture of that gentleman just kind of staring down and no, no get UPS, no pomp and circumstance. Just a guy with a his hand in his pocket and the gun going down, you know, staring at his target. I thought that was pretty amazing. And and for 51 year old to win a silver medal, I think it's it's it was pretty awesome. And it's so I enjoyed that. It is and as we as we look to, you know, sort of not sort of to glean the insights from Cory and Sander, who have, you know, done their own investment Olympics. You know, this guy Youssef, the back story is pretty cool. He's he's a Turkish and if you haven't seen it, just look up 10M pistol silver champion and he's been in the Olympics since O 8 and Rich and I were talking for the call. I'm like, wait a minute. And we didn't, as I wrote this, I wrote a sub stack on the guy because I think the story is so fascinating. And he's been the Olympic since O 8. That's how long bitcoins been around. So this guy's been around that long. No one knew about him yet. He has been operating at a level of a level of, what do you want to call it, achievement, where he's relying on his own internal game, no contraption on his eye, no headphones, and he's just cranking. And in fact, he did win silver, not gold. But he's also got a little bit of cheek in him. He said to the Serbian team, yeah, I'm lending you the gold because in four years I'm going to get it. So I wouldn't want that guy chasing me. I'll tell you for four years I wouldn't sleep very well. So we'll we'll open up to you guys about how this dude played the long game. He's more than twice the age of his 24 year old shooting partner, 10 to 12 years older than the gold medal team, and yet he's bringing it. So on that note, how does Bitcoin and and Lions well fit into that playing long game? Well, I mean, Corey, Corey can talk more about the time frame as far as he's been following crypto and Bitcoin. I mean, whenever, if that's when it started, that's when Corey got into it. And you know, as I mentioned to you guys, he's, he had a mining operation and for whatever decade it was, you know, we especially when crypto was kind of more hot and new, I'm not sure which phase of, of the cycle it was four or five years ago. You know, every single client conversation we had ended with, you know, hey, can I ask you about Bitcoin or can I ask you about crypto? So we, we, we actually had been trying to solve for, you know, bringing that to our clients for a long time. And I don't let Corey tell the story. It's much, much more involved with crypto than than mine. But you know, it's, it's not, it's not easy to explain to people over over 35 in some cases, or 50, whatever number you want to pick. But yeah, I mean, we've been in it for the long game and, and we we finally had a window open, I mean, really a year and a half ago to bring to bring a separately managed account to advisors and our clients that was at least a little bit easier to handle and, and less do it yourselfer than than everything else. And, and, and, you know, core Corey's like, you know, I've been telling him for years to me, you know, then all of a sudden we're like the early birds, the, the, the first, first, whatever, whatever you call it first, like Gatorade, we're the 1st. Movers, yeah. Yeah, first movers, that's it. So it's kind of like, you know, and people are asking me questions like, listen, I don't know that much about crypto, but we're bringing a product that we think, you know, advisors and clients that that don't want to do the cold storage, the wallet, the tokens, you know, you know, want, want some help. And also, if you think about bringing crypto to the investment market as an asset class, you know, every most advisors want to keep it pretty simple. So we thought an index would be the best way to go. But as far as the insurance and outs, Corey, you should tell your story about like, you know, I, I joke if if Corey turns his camera around, he's got computer parts in his office. And you know, I joke that he's like Sanford and sons. You know, he can fix computers and he just walks by my computer starts working better. So, but you know, he he's AI guess a tinkerer. We're both from Maine, ironically. But so Corey can fix, fix your car and your computer, but he but, and he also can do a mine crypto mining. So, Corey, tell me your story. So I originally got into it around 2010, just trading it, just trading Bitcoin. Didn't really know much about it at the time just was kind of dabbling got out of it and I just didn't really pay much attention. Got back in around 2012 and then slowly I started getting into mining and, you know, in in that group, it's like Discord and you know, you have all these different servers that you're on. And I ended up running a Discord group with another gentleman and we grew it, you know, pretty large couple 1000 people and we would just all discuss mining and, you know, how to fork a coin and, you know, so we forked off Manero and and made our own little coin for fun. And then just building out, you know, learning the operational side of, you know, how to how to make this, you know, cryptocurrency work and and be a business. So I as soon as I kind of figured it all out, you know, you're making money with the mining and it's you have to constantly keep up with hardware and keep up with all the different coins and, you know, mining different, you know, the the crap coins basically and then converting them, you know, into Bitcoin or Ethereum. So that kind of, you know, really jump started my education into it and the functionality of it and the use cases that are there for cryptocurrency in general, more so blockchain, which which leads us to I started coming to work and saying, Hey, you know, we, we've got to get something going because this is going to be the future. And you know, we, we were really early. We didn't even know we didn't know how to do it. You know, how do you we we started looking at the rules and how can we even offer this as a manager? How can we, you know, because then it's like the clients start calling in and saying, how do I do this? Can you buy it for me? It's like, no, I, I can't buy it on your behalf yet. You've got to open a wallet. You've got a, you know, all of the, the barriers to entry for, you know, I, I hate to say unsophisticated, but just, you know, in that, in that section, it's, you have to be pretty technically, you know, attuned to, you know, how all these wallets work and passwords that you can't ever lose and you know, where it goes on and on. So that, that barrier was huge. And, and we wanted to try to offer, you know, a product as soon as we could, which we ended up doing and, you know, saunter. Saunter had some friends in the industry already and we, we linked up with them and that was a coin desk and then we went to their, you know, we, we brought out our product with Coindesk off the index that they've created. And you know, with Bitcoin being, you know, the base layer of all of crypto, right? I mean everything has originated from Bitcoin. So, you know, if, if you focus on 203 hundred different coins, you know, it's, it's just a lot. It waters it down and it just keeps coming back to where do you want to be? You know, you want to be in Bitcoin. So that's where we've we've focused as Bitcoin, etherium and, and a few small ones. And that's, that's what led us into the, the index to give, you know, to offer something. And obviously now you have spot ETF's and you know where we where we are. Going, why don't you frame the size of the market for people? Because you just mentioned crap coins. You mentioned you know entry points and then you said you know you mentioned Bitcoin in theorem just gives. Me the, the overall, I mean the mark, the market cap is I, I think we're approaching what a trillion dollar market cap for everything combined. I think, I think, yeah, 2.2 trillion, yeah, everything, yeah. Yeah. So it's, it's really not a, a small thing anymore like it once was. It's it's, it's been adopted and now it's with, with Black Rock and the and the different ETFs that are out there. It's becoming more of an everyday, you know, piece of a portfolio that most people have at any age depending on their advisor and, and who they're with. But we've, we've started people with a, you know, 5% allocation in our standard asset mix. And you're seeing that, you know, all around the world now that you have to have this asset class in your portfolios. And, you know, I don't want to compare it straight to gold, but you know, it has it, it acts somewhat like gold, especially we've seen with you, you brought up the the politics earlier where, you know, we haven't had anything happen in the last week and it's been pretty stable. But based on any news that comes out, you have, you know, Bitcoin go up or down depending on the candidates that, you know, one candidate wants to adopt it more. The others, you know, maybe, maybe not. So yeah, it's it's prevalent and it's an everyday thing now. Even two years ago, it wasn't wasn't so much like this. Yeah, it's interesting. You know, one of the things that that I have found in my Bitcoin journey, which, you know, I'm not surrounded by a ton of Bitcoin people, to be honest with you. And that's not a typical I would imagine, you know, when I talk to other people that are in the Bitcoin space. But, but that being said, people are aware of Bitcoin and you know, I think over the last, you know, when I first started kind of coming into a more serious awareness of Bitcoin, I would say it was really 2017. And then I started doing my work in 2019. But the story was always a, you know, the, the speculative growth nature of, of, of Bitcoin. And I find it absolutely fascinating that, you know, that that's flipped a little bit in the last couple years. People are being drawn to Bitcoin to, to the point you just made Cory, which is it's digital gold. That message is really starting to permeate in circles that I run with. And so there people are asking questions about Bitcoin less because of the explosive growth that it's seen, but more so around the preservation of, of assets, the store of value, you know, capabilities of Bitcoin, the ability to, you know, potentially, you know, hedge away some of the the inflationary risks and other risks that live inside of the market. I'm curious, either Sander or or Corey, you know, what are you, what are you hearing, you know, from your clients in your wealth management practice or prospective clients and how they're trying to solve the puzzle? I. Mean, you know, the way you know, I was poor election is way ahead of me that and all of this for it still lived for a long time. But like one thing that one of the light bulb moments I had as far as that goes is and it's I guess NFT would be your best example of it. But the blockchain kind of gives ownership to something on the Internet. Like in other words, if you put in a video on the Internet, it's gone right? It's everybody owns it. So to me, what helped me understand like the concept is the coding of blockchain and then the coding of Bitcoin, you actually can own something. And so that kind of was the Eureka moment for me. And you know, I don't, I don't think people necessarily understand Bitcoin or crypto any more than they did five years ago, But I think they, they do understand that they, they do need to have a portion of it in their portfolio. And everyone has that the whole Country Club FOMO thing where the, the one young person or whatever that happens to buy it, like they drive a Ferrari and it's all because of crypto. And the older people are like, wait a minute, I want, I want some of that. So I don't think the ownership or, you know, the, the understanding of crypto is that much better. But but being able to deliver it to, to folks that are, you know, not necessarily do it yourself for investors has come a long way. And and, you know, BlackRock, especially good or bad, as, as you know, brought it, brought it to the forefront. I mean, I think they got 20 billion, you know, the first couple weeks is kind of crazy. But anyway, that's my two cents on that. It's, it's, I think, I think where, where we, you know, go forward is the differentiation between indexes and, and ETFs or owning the outright coins, you know, the direct, the direct ownership still making that easier for people. And, and then, you know, making it easier for people to, to, to directly invest in and to actively trade it versus just passively own it like in an ETF. So those are the two, I think that's kind of what's left over here in the business from, from a from a money manager point of view. So Sam, are you? Go ahead. Go ahead, Corey. You got it. I was going to say, you know, one thing I've discussed with clients, you know, as as part of education is just history, right? If we, if we go back to the gold rush, you know, and, and you look back, it's like who got rich during that period? And it, it, it wasn't necessarily the, the people mining, it was the people selling, you know, selling the deeds and selling the equipment. And, and I think that's where you've seen an explosion just in the market in general, which happened years ago with AMD and NVIDIA, even though they, they didn't exactly declare how much of their business was being supported by mining activities when Etherium was, you know, proof of work instead of proof of stake. And you know, it, it, it branches out and you have many companies now like micro strategy, you know, you've got these companies that own large, large sums, you know, Tesla and these different companies that now have this huge piece as a part of their assets and, and their businesses in general. So, you know, for the people that that still don't fully understand it fully, haven't fully adopted it, there's ways to arbitrarily own it out there, you know, and that is a part of, you know, and that breaks us into the AI thing too and why some of these tech companies have have moved as much as possible. But you are seeing that and if you look historical, just that you know, the gold rush and how that played out, it can kind of give you a little bit of a a preview in a way to how this all will play out over time. Especially when you have the black rocks and you have the big, you know, the big diggers come in right that are that are pulling out and owning. One of the things you know, that's still going to keep Bitcoin interesting is, you know, the the hardcore crypto fans and people, the original award to them was the decentralization, the, you know, not being tied to the government, not being tied and controlled by someone. So when you have these black Black Rock ETF, you know, companies now that own, you know, majorities of what's even out there now with with a finite coin, you know, it's going to make things interesting in general, just on that side of it with the hardcore crypto enthusiasts on how they're going to treat Bitcoin and Ethereum. Now. That's another aspect that I think people aren't really looking too much at because they're so excited that it's so obtainable now. But that brings us back back into a centralized, you know, aspect that that people are trying to stay away from. So that's something I'm I'm kind of looking, looking at. And seeing if that's going to stunt the growth of Bitcoin in Etherium now, not as attractive maybe because of that to some crowds, but then it's attractive to people that haven't been able to obtain it because of the difficulties of, you know, again, that barrier to entry. Yeah. You know, it's, that's a really, really interesting thread there, Corey, that you're pulling on it. You know, it's, it's my belief, you know, that that ultimately everybody bends the knee, right? They're all going to, everybody's going to come into Bitcoin. You mentioned corporations, obviously nation states with what's going on in El Salvador and other, other states that are, you know, a nation states that are, are considering Bitcoin. And, and, and then you have the major, you know, asset management places, Fidelity, BlackRock as a couple just off the top of my head. I love the fact that they came to Bitcoin. I love it, right? Because what, what ultimately happens is is you get people that get exposure to it. It's an easy button for advisors, but it's also an easy button for end clients to be able to get exposure. And to me, I think that that's a winning proposition no matter what. But but ultimately, I think, you know, Bitcoin is such a curious asset, you know, in the way that, you know, at least my exploration of it and others that I've talked to, you know, you, you have to go through a, you know, staging of your learning. And you know, and I think the easy button with the ETFs is is fantastic. But as people start to recognize, you know, you know, the monetary properties of Bitcoin, you know, the scarcity aspects, the fact that ETF's, right, you don't own Bitcoin, you own shares and BlackRock owns that Bitcoin. And you know, they're all sitting on Coinbase or, you know what, 9 out of 11 of the ETF providers. And so it's really quite a fascinating story. And that opens up the other risks, right? You know, custodial risks and, and counterparty risks and things on that nature that people will Start learning about and understanding. But my, my belief is this, and I'm curious of, of your thoughts on it because you were kind of pulling on the thread. My belief is that, that it's an easy access, it's stage 1. But as people start recognizing the growth potential or the store value potential or the scarcity aspects or whatever it might be that that, you know, intrigues them, they're going to go down a little bit of a rabbit hole and they're going to say, what is this? Why is it behaving very differently in My Portfolio than everything else? And, and, and ultimately they're going to say, wait a second, you know, I'd like to, I'd like to own that that asset. I'd like to be the one to have the, you know, the control of that asset, not delegate the control completely away to somebody else. And so, you know, my belief is that, you know, that's stage one and stage two is learning and stage 3 is further understanding of custodial implications and how do you secure a digital asset. And, and then ultimately, you know, the, the end client makes a decision, you know, to potentially stage out of an ETF and into something that is more attractive to them and that is more empowering to them as an individual. And so that being said, I think the investment, the registered investment advisor in particular has a foundational role in creating those access points for those clients. Not everybody is looking for the easy button in you know how they, how they control an asset. A lot of people are are sophisticated enough or will educate themselves to get to a place of sophistication to say I actually want this asset. I see it as a long duration generate generational asset and I want it for my family. So I think that there'll be this kind of conversion down the road. So to me it's like Access one, Education 2, conversion 3. Yeah, that, that's a great point, Rich. And, and that was so when when Sonter and I finally figured out a way, you know, to to offer something to our clients. My big thing to him was we got a the client has to own, they have to have their own wallet. So that's something that we made possible for our clients where they can actually custody their own wallet if they want to pull it out. If they don't want to work with us anymore, they can pull it out and they can send it to whatever wallet they want, but they maintain the ownership of that wallet and you know, it's properly handled, you know, stored properly done by by our partners. But that was one thing that we said we have to offer that because, you know, at least from my background, they're in it. Nobody would want it in the future, I thought. And when I discussed it with Saundra, he agreed. It's like, like you're saying they're people that get educated. They're going to start realizing why it's important to own it yourself and not have someone else in control of it. Corey and son, I'm going to jump in here going right back to my man in the pistolary from Turkey about how he played the long game and he had the he had the he had the skill that he kept basically inside. It didn't show you guys saw the opportunity, which wasn't manifest about owning it. You did the hard work. And Sandra, this is when I first met you. Andy Baer from Coindesk introduced us. Awesome guy. I mentioned it because he's also a Triadfi refugee and he saw it and you and and Corey had done something that is still going to provide even more yield than the what your fund Saunders up over 100% since you guys kicked it off. Yeah, I mean a little like. Any any any thank you notes Christmas cards. 100 cards for people. We got lucky there. And, and remember also, I mean, I agree with Corbett, but we also didn't really have a lot of there was nowhere else to go. You either do spot futures or on the coin and we we set it up to on the coin and the, the, the story that I tell that I think is kind of funny at that moment was so, so again, I knew nothing about crypto. Corey knows how to know about crypto. We go to this consensus and watch the index. And if you think of all these, you know, really smart people that that have either built their own coins or or their own venture capital programs, whatever it might be, and we're at with this conference and and and people were like, are you D Gen. I said, well, yeah, I'm pretty degenerate. Of course I know what they've meant. It's like, what do you mean? Just kidding? So, you know, it's kind of like it's like when Darth Vader meets Luke and the tunnel kind of thing. You know, the young and the old is you know what they kind of are like. What do you what are you guys doing? And it's like, well, if, if, if we're going to bring this to it, first of all, if you're going to make money as a crypto person, like you got to figure out a way to make money. And, and a lot of those roads lead back to asset management, right? Like, how do we get, how do we get crypto in portfolios? And so anyway, so we met these people that, you know, they've, they've come. It's kind of like, how did Mark Zuckerberg finally monetize Facebook? Well, it wasn't it wasn't free, you know, friends and likes and pictures. He basically started selling people's privacy, right? Or their information. So that's how he monetize Facebook. It's like, well, how am I going to monetize all this effort that I put into, to whatever it is that I created in crypto And the roads LED back to to how do we get these into people's portfolios so we can charge a fee, right? And how do we monetize crypto? And then here comes the old investment guy who who knows that path. So, so you know, we it definitely. And at this point, owning the coins is the only way to go because the only other way to go is the ETF, right? So we're, we own the raw coins and I think that we'll have an advantage and I think it'll also have an advantage to, to not being in the ETF in that right now, you know, we don't know. So they launched all sorts of ETFs, like gold ETF, corn ETF, it's done a million times, but no one's seen a crypto ETF, right? So what if there are problems? Like what if they can't get the Bitcoin or those computer glitch? So in a weird way, we're safer. What if they oversell? They oversell more than is there, you know. Right. So, so there's where as we know if we own our coins, we're good. And but what, what was interesting also at the time, which is I think a little bit opportunity loss for us is if you think about everybody that can do it yourself in the crypto space, that if they, they've done it right, like they own, open their own crypto account, the Coinbase, they own the crypto. So you get to people more my age. It's like, well, now I want to have in my IRA like what I call advise business. And, and, and it's something Mark and I worked on, you know, in a way like the, like the Scott, like with the, the Canadian ETF is how, how do we get this into advise money, which is 4 O 1K business, ERISA business tax, you know, taxable accounts, Iras, things like that. And that even now, I mean, Bitcoin solved for that. I don't know if you can put them in in Iras yet, but that that's such a massive world of money that that still really hasn't been accessed in in a way with with raw coins like so we still have a a rock coin advantage, I guess. But BlackRock certainly kind of destroyed some people's businesses because, you know, if you can click and buy an ETF in your IRA account, it it it wipes that opportunity out. It is and. And Sonder, I think you still do have an advantage like. If we think. Where Bitcoin is going, it's it's averaged 60% annualized over the last 10 years and still 50% over the last five years. And if it goes where we think it's going to go back to what Conor was saying about and you about owning, you know, the value of the Internet, which is a very different proposition, owning the raw asset through wallets like you're doing, preserves of value that's still incubating in this asset class. I mean, people who are still calling it a Ponzi scheme. You know, the Tulip craze was three, 3 1/2 years. That's it. This thing's been around 15 years with 45 years of technology behind it and the.com bubble again, 3 1/2 four years. So, so that ship sailed. As you see, people are coming in and the alpha and I'm, you know, I'm pumping up your own book here, but ours too, the alpha is really in owning it correctly because if you allow your clients to own it, maybe they can borrow against it in a secure level 1 manner over time and never have to yield it. I'm not saying you can do it safely now, but the technology is evolving where you just don't know. And and the last thing I'll say here on this is Corey, I agree with you. The picks and shovels were sold early and often, not always to the to the benefit of the of the minor necessarily Sam Bankman freed, you know, at the forefront of that. But the difference is versus gold then versus this asset is imagine if there was a gold rush right when Nixon broke the peg because gold was only worth a dollar then. But imagine if there was a gold rush when you have people forgiving debt, adding to, you know, Jenny Ellen saying, hey, listen, this is the same level of interest we've always paid. It's like, Janet, man, you're not reading the same financials. We are. And so gold is up for a reason. So it I think this is where it's a gold rush where yes, people like you and I and and rich and on ramp we're we're making sure people are smart owning it correctly, but just own the asset folks, because it's going to out outstrip the dollar by a lot. At on Ramp we. Believe that Bitcoin is the most important asset of the 21st century. The hard part is securing it right? There are shortcomings with keeping your coins on an exchange, but also with setting up your own self custody arrangement. Onramp solves for these concerns. Our multi institution custody solution maximizes security and minimizes counterparty risk, ensuring that your Bitcoin remains securely in your possession and provides built in inheritance planning to ensure your family is protected as well. Onramp provides peace. Of mind for your Bitcoin journey, whether for your whole stack or for part of it as a compliment to your existing self custody set up. For more information, check us out at onrampbitcoin.com. I mean the, the the. Kind of we talked about this before. I mean, I think the next sort of step for for people like us that, you know, advisors is if you can own now Bitcoin through an ETF that the problem is it fluctuates a lot and you know, let's say you put grandma in it, 60 in it and it let's say it goes to 20 temporarily, whatever it is. So I think sort of a tactical approach would be kind of the next type of type of concept we we would roll out just because it is very volatile. And if it's going to go into IRA's important K plans, I think that if there's a way to tampen the volatility a little bit that that would be the value added business. I mean, if you can own it for 10 years, I think Mark, you're totally right. Just sit, sit on it and own it. But but we've seen people bail out of volatile asset classes at usually the absolute worst time every time. So, you know, if there's some sort of way to actively manage, because it looks like passive is taken now that's that's kind of would be the next step for for lions as far as an offering goes to to to folks, because, you know, we we want to and our index is not really it. It has five, you know, coins in it and it's rebalanced pretty frequently. So it's not necessarily passive, but I think a more proactive with defensive perhaps, you know, offering would be what we roll out next. You know, for people that don't want to have it go from, you know, to sixty to 10 and just have a reason to get out of it at some point and and re enter, of course, to get back in. You know, it's interesting. I. I I I've always been. Fascinated by? Bitcoin cycles, right? You know, you look at the epoch and, and you know each, you know each pocket it's got, you know, few up years, what three up years, one down year, three up years, one down year, right. And so it really is a, you know, an asset that you want to own for, you know, at least five years, but something that really resonated with me and I can't recall. Off the top of. My head I just blanked, but somebody had somebody had said, you know, Bitcoin is volatility is is, is not a a bug, it's a feature. And, and in many respects, I think it you know, this is where I think, you know, registered investment advisors in particular can really help clients understand, you know, this is a this is an asset that you, you you you want to own, you want to own. And when, when it gives you those opportunities, you know, like the past week, right, when it dropped down to what under dropped under 50 for just a, you know, a brief second, you know, that that's where you just want to go in and, and add more dollars to, to that asset and continue to continue to, you know, change your basis in in the positive. And so in my mind, you know, I think it's helping clients understand, you know, the behavioral finance components of this, right? One, it's a very long duration asset. Two, it is something that is generational. 3 it gives you opportunities to, to enter and, or if you're like Michael Saylor, I guess, you know, he says, I'll just keep buying the top forever, you know, because it's, it's always going to go up because of the scarcity components. But that being said, you know, I think it's the beautiful thing is looking at the behavioral finance components of, of Bitcoin and, and thinking through, OK, well, what do we all want our clients to be? We want them to take a motion out of the out of their investment decision, right. We want them to have a low time preference and, and really look at, at the fundamentals and, and the quality of the asset that they're, that they're purchasing and how it fits into their overall portfolio. And and so, you know, there's a lot of coaching, a lot of counseling that has to happen that brings our clients, you know, our end clients along and, and helps them understand the nature of the asset. But you know that that's that's my kind of take is that ultimately, you know, there's a couple things you can do, right. You can trade the asset or and have a developed strategy around it, or you can have, you know, a totally different conversation with your client and get them energized around the the duration long duration components and rich when you and I. Decided to have when you and I decided up chlorine and Sonderon to your point, it's because they not only were early, but Sandra, you've been and Corey been having active strategies because you know, the passive game is in the hands of the, you know, two basis point midgets, you know, over at the large asset managers. So back to your point about tactically trading, is there an I agree and we've talked a little bit about the evidence is there that you can rent Bitcoin and monetize the volatility like no one else. And that's you. We're going to have your back on for that white paper that we've done in that you've shown evidence on. Is there an analog in your experience about being able to bring a tactically traded vehicle that clients are like, great, that's a great way to to own technology or a great way to own emerging markets or another asset class or debt? Yeah, I mean we. We after the, the crash of O 8:00 we, we brought a tactical manager to market as a sub advisor to us and they, they end up raising, you know, I think $16 billion because they actually missed that they, they, they tactically exited the, the crash of O8. There are I think +2 and O 8. So, and, and we had clients with large stock positions that didn't want to hedge. So it was pretty painful time for us. So the two ways to go about hedging is develop either momentum or or you know some sort of relative strength almost like an algorithm to get in and out. I'm not sure I want to do that. And then the other kind of strategy that we employed for one of our bigger programs, we call it yield is, is is almost an always on cashless collar where you know, we we own the the long position, but but it's constantly colored that the CBOE has a product called CLL, it's the S&P, you know, it's 95% put 110 call sole call by put just because. It is so volatile that that, you know, as an advisor, what you don't want to have happen is you own an asset class, you know, let's say 5% of your entire book and it blows up and you lose clients because of that small asset class or that exposure. So, you know, you can look pretty bad if, if, if, if let's say Bitcoin does go up from 60 to 10, that that puts your whole book at risk, even if you own it through an ETF. So, you know, to, to come up with something that's that gives either always on defense or a way momentum way out to me, it's something that we're actually, we're looking at. We talked to Coinbase about or coin desk about, you know, doing an index along those lines, like a trend following index. So we're it's I kind of wanted to let the BlackRock dust settle before we launch another product because it's time consuming. But now, now that that's kind of happened, I think we can kind of go back and look at a product like that. Yeah. And there's. A, there's even more value to, you know, on the, at least on some advisors, you know, if, if you look at standard, just dividend reinvestment on a lot of different companies in the S&P, we've seen studies on, you know, if you had a, bought a share of Walmart 30 years ago and just done dividend reinvestment, Well, you know, if you have an advisor that's forward thinking and, and doing things like we do, it's like, well, if you're scared to jump into the market and your portfolio's yielding 3% a year, just put the 3% in into Bitcoin. Or, you know, if you already have crypto assets, let them stake and dollar cost average in, you know, and if you look at if you had a dollar cost averaged into Bitcoin over the last 10 years using let's say your S&P type portfolio that you've had yielded 2 1/2 to 3 1/2 percent over the years. And you the last 10 years, you put the two and a half, 3 1/2 just into Bitcoin in your portfolio or pulled it out into a wallet. You know, because guys like us are saying, Hey, you should check this other asset class out and put a little of your money there. You know, you, you almost have a free allocation into that volatile market without an advisor to tell you these things though, and, and come up with these, you know, that's just a simple strategy that that we've discussed with people like, Hey, you just want to kind of put your toes in, in the water, you know, without even being tactical, you know, you're just long term strategic with that. And, and I, you know, it's just not something that you're going to read in the forum or read on Reddit or you know, that's something we're an advisor's going to say. Look at these things historically, kind of like with the gold rush, you got to look at history and and how things repeat themselves. And with the whole staking thing, you can, you know, a lot of a lot of different places let you stake your Ethereum and your Bitcoin. You dollar cost average in if you'd have done that over the last 10 years, you're sitting, you know, you're sitting pretty. But if no one tells you that, you don't know you have those tools. That's where the value of an advisor comes in, because it's like, why do I need an advisor? I can buy it for free myself, you know, or I can pay a nickel, you know, per thousand to BlackRock. Well, these are some of the ways that an advisor can actually help you, you know, better yourself and and lower some of that volatility. Yeah. No doubt about it. Oh, I'm sorry, Mark, just one, one thought right. The reality and I think you hit on it earlier, Corey and and Sonder, you both kind of described right, 90% of investors haven't really fully adopted, you know, a cryptocurrency thesis. They haven't done the work. They don't know how to access it. Yeah, you can get an app, but is it a trustworthy app? And you know, it's an intimidating process I think for for a lot of people to enter. And I do think that advisors have a very meaningful role to play in, in saying, hey, wait a second, there is a way to do this. And, and I'd compliment you both because you clearly took your fiduciary status, you know, an extra step, right? You said, look, it's important that the end client has the fundamental ownership assurances, right? Whether whether they want to be our client or they don't want to be our client, they have the ability to off offload and, and actually take take custody of this in their own, you know, segregated wallet. And, and in and the fact that you guys have have recognized that and instilled that into the, the product that you have produced, that's really exceptional in my mind. And I think it's really important, you know, for all advisors who are listening to the call today to be thinking about the ownership assurances component. And, and you know, you've heard my, my, my point of view on this. And I know that, you know, we all somewhat share this, which is that this is an asset you want to own, you want those ownership assurances. So you better be able to have a way to to exit it. If I buy the ETF I'm going to have in my trust account and I ultimately want to take possession of my Bitcoin, well, I'm going to have to have a capital gain most likely that I'm going to have to take and and then position myself into it. But if they own a a, a, a, a productized solution in which the client has the ability to take in kind the distribution, then that's a non taxable event in, you know, obviously check with your accountant. There's my disclaimer, but but that's a non taxable event to be able to take take that ownership of that of that asset, regardless of whether or not you want to maintain the relationship that you have that brought you into the into the product. And so I commend you guys for creating those, those those offshoots to be able to thinking through what is the right way to access this and why is, you know, the lions coin desk large cap index, you know, product a a solid product in order for people to, you know, enter into the into the solution. And we've done the same, you know, with on ramp and and with our Bitcoin trust is, is thinking through ownership assurances, custodial implications and then ultimate, you know, what is in the best interest of our clients. And and so, you know, I think we're a blank mind there. And I just want to commend you guys for really thinking through the fiduciary components of it. I know we're kind of at time here. Any closing thoughts from the group? Yes, Andre, which actually it. A little light bulb and which is kind of funny because some of our clients are very organized and some are not. But one thing is as a fiduciary is we have to have records of everything, right for years. And so in a way, you know, especially for someone that's like timid about having a wallet, you know, maybe we have a client lose a password or they, they can't find the paperwork because, because we're, you know, so regulated. We, we have all that because we have to, but also, you know, as a service to our clients, if, if it's three years later and they can't find the password, we have it because we're required to have it. So it's in a way, we're a good back up plan for that sort of raw ownership that you're talking about, in addition to, you know, Corey's expertise and, and, and with an index that has, you know, the theory and Bitcoin Salerna. So you know, it's, it's sort of a, a solid index and we have sort of a, a Plan B backup in case our clients lose their password, which, which I'd like to say doesn't happen too often, but it actually happens a lot. So just the record keeping aspect of of being an SEC registered vessel advisor, you know, is a is a is a nice backup plan for people that want to own crypto is is how I'd close. Yeah, no doubt. Well, I, I just want to thank our two guests once again, Sandra Reed, who's the CEO of Lions Wealth Management and Corey Round, Senior Director of Trading and Derivatives at at Lions Wealth Management. You guys are, you know, really, and, and I know you know it, we kind of joke about it, right? It's a 15 year track record. But you had the courage to kind of, you know, one, recognize the opportunity to to think through the fiduciary implications and all of the compliance and legal and all of these things that you had to go through. And you were early and, and, and rewarded and rewarded for for being early. I think. And, and, and, and here's the thing, I would leave with any registered investment advisor or financial professional that might be listening in today, it's still early. It's still very early. And the end while, yes, and as we're sitting here recording live, you know, Bitcoin is at 60,000. You may feel like, OK, I've missed an opportunity here. Well, the reality is the circumstances in, in, in that make Bitcoin, you know, and, and other currencies special is that that you've got essentially, you know, an ongoing debasement of, of, of your currencies. And, and so how do you, how do you think about, you know, that risk inside of all of your clients portfolios and, and solving on those puzzles and those unique client needs? And so it's still early. We have 100 and what 10 year track record of debasement. I'm sure that that's not going to break anytime soon. That's a that's a track record that's well established, I would say, Mark. But that being said, if you're looking for some help, you know, there are people out there that are interested in being a thought partner with you to, to figure out what is the right way to approach this. And it might be an ETF and it might be, you know, a Lion's coin desk large cap, you know, index approach. Or it might be something a little bit different like multi institutional custody, multi jurisdictional custody that on ramp brings to the table to differentiate how you add value to your client experience. But we're delighted to have you both Corey and Sonder, thank you so much for taking the time and sharing a little bit about your journey and we'd love to have you back. I know Mark said there's some other things that he's wanting to pick your brain and, and dial in. So maybe there's a chance down the road that we can all reconnect and, and have a deeper conversation that adds value to our to our community. Thanks for having us. Thanks. Definitely. Thank you. Appreciate. That gents, enjoy the rest. Of August you. Too. Take care. Thanks. Thanks for. Listening to this. Week's episode of the show. If you found the information valuable, please share the episode with a friend or leave a rating on your favorite podcast app. All the links we discussed in today's show will be in the show notes inside your podcast app. Before we finish, a quick reminder that On Rat Media is for informational and entertainment purposes only, and nothing should be construed as investment or legal advice. Regardless of where you are on your Bitcoin journey, we'd love to hear from you. Visit on rampbitcoin.com/contact to schedule a consultation with one of our private Client advisors.
Transcript source: fountain