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, Onramp's Head of Global Macro Strategy, and Rich Kerr, Onramp's 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. Well, good morning, everybody and welcome to another wake up call. I'm Rich Kerr and joined with Mark Connors. And today's special guest is Matt Gallaher, who's with Vista Investments out of Richmond IN. So welcome, Matt. Glad to have you today. Thanks Rich. Thanks for having me. Awesome. So Mark, lots of stuff going on over the course of the past week and this week as well. We had a second presidential candidate assassination attempt that was these are these are becoming all too familiar. Unfortunately. We had ACPI print. We've got all sorts of central bank decisioning coming this week. So we've got the US FOMC on what, Wednesday, Thursday? We have Norway, we have Bank of England, we have Brazil all meeting to discuss their interest rate policy and and points of view on their economy. But I think at the very back end of the week, of course one thing that everybody will be paying attention to is Japan, Bank of Japan will be meeting as well. So not for a loss of any, you know, topics to discuss here. I'm kind of curious what what are the things that you're keying on? Thanks for that, Rich and Matt, really looking forward to riffing with you learning more about your business and and what it took to bring in Bitcoin because all the data from last week and you know, we can go back over one year, three years or whatever time frame and all roads do point to rolling on a Bitcoin opportunity for clients. So on the data last week, I think the CPI goes to the miss most misunderstood and mischaracterized metric out there. It's it's almost as if people are looking at the temperature in Celsius and calling it Fahrenheit. Like it's just, it's just wrong, wrong value. CPI showed a 2 1/2 percent print. So like that's fine, 2 1/2%. Most people's wages are indexed even a little higher than that, so they think wages are keeping up. But housing or shelter, which is 1/3 of the index was up 5.2% and transportation costs up 7%. But if you owned your own car, your gas price was lower. Good for you. But not everyone owns their house, not everyone owns their own car. And again, the people who don't own stuff get hurt. So that coupled with credit card defaults being the highest in over 1213 years and sticky rates. So you know, Rich, you just mentioned it, rates may be coming lower, but not for someone with a credit card. They're still going to be paying 2225%. It's only people who have a house that can refinance as rates go lower as they've been able to do over the last year. So definitely a case of the haves and have nots. So that was more the economic front on markets. We saw equities language, they haven't ever since China posted that lower growth number. Equities have for the last 2-3 months stagnated. And the tech numbers, the tech companies are languishing as Fidelity's head of macro put out trimmer. He loves the charts, he's good at him. He shows the other 493 names are finally catching up to the Magnificent 7. You know, that's good news for them, but your portfolio hasn't moved. So it's just a sort of this cycling rich. And what's happening as all this is ruminating and rates may go down and equities of cycling gold punches to an all time high 2614, up 26% on the year. And it's Jackson Millik who runs our institutional side said here at Onramp. It's the first time we've seen this far, this deep into a year where both Bitcoin and gold are leading our leaders in the asset class clubhouse. Bitcoin up some 43% on the year. So we'll leave it with the fact that responses to stagnating growth are going to be more money printing, doesn't matter about the price, it's all about adding more money and deficit spending. So that's I think where we'll kick off to you guys or from my perch as the head of global macro, that's the lever that every country is going to pull rich at these meetings. Bank of Japan later this week, they already pulled it. They bought trillions of JG BS, I'm sorry, billions of JG BS in response to August's mess where they gave the wrong messaging. So that's, that's where we are. And it's one reason why I'm so happy that you've got Matt here. And before you pivot to him, maybe talk about the letter he wrote that posted because that really is the wake up call Matt in the letter posted so. Yeah, maybe I'll tee it up for our guests who haven't had a chance to to read this. Matt, we are are are absolutely delighted to have you on the show. I think largely because Vista has in my mind been a pioneer in many respects around the way that they've embraced Bitcoin. You guys move towards Bitcoin with your clients. I, I think several years ago, if I'm not mistaken, and, and, and have really started figuring out how to integrate this unique digital asset into your portfolios and your planning for your clients. And, and kudos to you, one, for having the vision and then two, for not just taking your differentiation and saying, we're just going to keep it and keep it quiet. And when you know, but you're actually, you know, you actually produce this. I don't know what I want to call it. It's a, it's a, it's a letter, an opinion letter to the financial advisory community and other registered investment advisors like Vista and, and it's titled financial advisors. It's time to study Bitcoin. So it's a beautiful open letter that you penned, I think in the month of June of this year, if I'm not mistaken, towards the end of June, basically describing your path to Bitcoin as a firm and as an individual as well. And more importantly, there's some really elegant things that you did with this, with this open letter. I think you gave your story and your clients stories a little bit of color in integrated your learning path, right touching on, you know, people like Safedeen amuse and, and the Bitcoin standard and Lin Lin Alden and broken money and, and, and I think Pritzker's book as well. And I, you know, I think in many respects, you've given your template to, you know, how to unlock Bitcoin and, and start thinking about what it means for your clients and more importantly for your firm and, and how to differentiate in the marketplace. And, and here you sit in 2024 and I speak to a lot of registered investment advisors and financial advisors that are in wire houses and they're all trying to figure things out. You at Vista, you guys have done that. You've taken a really interesting pathway to integrating Bitcoin into your wealth management offering. And I'd love to just pull that thread a little bit. You know, how did you get there? You know, maybe help the the audience understand. How did you guys come to this point? And then more importantly, you know, what were some of the things that you had to go through as a firm in order to to fully get there? Because change doesn't come easy. There are difficult decisions and steps that have to happen along the way. And so I'd love to hear that. Yes. Well, thanks for having me again. And I go through a sum in that open letter where kind of tell the story. But before I came here to Vista, I was a financial advisor through a bank channel at a much larger firm and through sheer luck ended up making a job change in March of 2020. My first day at Vista was actually March 23rd I believe, which was the day Indiana shut down for the pandemic. And looking back, that was all relatively lucky because I described in the letter that in 2017 I told clients that Bitcoin was digital Beanie Babies, essentially purely speculative, not a suitable long term investment or store of value. And I had tried to look into it back then because that's when clients first started asking me about it. Bitcoin had a massive price run up that year, so it was in the mainstream financial news. But with all the other stuff going on in crypto and, you know, the blockchain buzzword and taken off and all these Icos were coming out, I couldn't see through all that to see the signal that was Bitcoin. And I kind of just conceptualized it all as the same thing. And that's what I told clients. Then the price went down later in the following year. I interpreted that as me being correct, and I didn't really pay a whole lot of attention to Bitcoin for the next couple of years. But then Fast forward, I left the bank, I joined Vista, pandemic happened, the world shut down, and something made me notice that Bitcoin wasn't dead yet. And I just got this feeling that if I'm going to continue dismissing this, I need to at least read a book about it. And fortunately for me, by that time, a lot of good Bitcoin books had been written about it. So the first one I ordered was The Bitcoin Standard by Safedina Moose. And before I was even done reading that, I remember I read it in a single sitting on a Saturday. But I I was about halfway through and I started sweating because I realized I was wrong. And this thing is there's something here. So I fell down the proverbial Bitcoin rabbit hole and it became a bit of an obsession. Over the next couple of years, I read something like 40 Bitcoin books or books on related topics to Bitcoin. And I'm very grateful to the team here because when I started talking with our managing partner, Brett Guiley about this Bitcoin thing, he was very open and receptive to it. And we all, number one, came to the conclusion that if this is what it appears to be, it will be the most important financial innovation that we will see in our careers. And it is our fiduciary duty to educate clients about it and to be able to offer it to them in a variety of ways. So we quickly hit a couple of brick walls and trying to do that. And the last three years has included a lot of changes to our firm. We call it solving the Bitcoin Rubik's Cube to be able to offer it in a comprehensive wealth management offering. But in a among other things, we had to separate from the RAA we were a part of and start our own here in Richmond, IN. We had to hire external compliance, we had to find E&O insurance that covers Bitcoin explicitly, and we had to change broker dealers because the our previous one would not even allow us to talk about Bitcoin. So, you know, among all those different changes, we've now finally been able to just a few months ago offer a division of Vista Investment Partners called Orange Horizon Wealth. And the purpose of that is to offer Bitcoin focused wealth management and advisory solutions. So we haven't even fully publicly launched that yet, the website still getting finished up and everything. But after about three years, we're able to offer Bitcoin, educate about Bitcoin, and do the things in Bitcoin that we want to as wealth managers. Yeah, I mean, what you're describing is a lot of work, right, a lot of thoughtfulness, you know, really kind of coalescing around what is the strategy and then going through and, and tactically rebuilding the infrastructure to be able to support this offering and delivery mechanism for for clients. And you know, here here's here's what I'm struck by, right? And, and those who follow the show quite a bit understand that I pay attention to broader patterns and themes. And, and I always look at the various actors that are coming into the Bitcoin space, right? Nation states, El Salvador has laid out a template, right? In fact, there was big El Salvador news breaking over the weekend where I believe that they are not going to, you know, tap into the IMF to extend their debt, their and, you know, their country's debt in order to fund their, you know, the operations of government. And so I thought, wow, OK, they're just continuing to show the template for the world to be able to embrace a Bitcoin standard. The same could be said about MicroStrategy and what they're doing on the corporate level and, and with treasury reserve assets and, and, and, and things on that nature. You know, for, for a company, they set the template and they said, hey, here's how to do it right. And all of a sudden you see Sembler come in and then you start seeing other companies around the globe start slowly matriculating in. And right now we're seeing a a ton of small businesses that are, are being drawn to integrate Bitcoin into the corporate treasury asset space. And now here you've got people like Vista, right, which are joining our show. It's an an RIA that has adopted Bitcoin has thought deeply about what the asset is about the need in the marketplace to bring this forward, right. I always say the RAA is the great disruptor in traditional finance. So this is, you know, the disruptor embracing the next disruptor versus running from it or ignoring it. You're actually leaning into it and and you're sharing with the audience. You know that to get to the place that Vista has, it hasn't been an easy Rd. It's taken a lot of education, a lot of coalescing around what this is and what you wish to bring forward and developing a cohesive strategy. And then it becomes an exercise of saying, OK, now we're in. Now we have our ideas and we know what our philosophy is, but how do we bring it to life? And that starts connecting to the compliance side and the Eno side and, you know, integration into portfolio management side of the equation to bring it to life for clients and show them the value that you're adding. I love the story. So Vista is in many respects, you know the the embracer of this technology and and laying out a template to say, hey, others can follow this. So kudos to you all. At Onramp, 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. On Ramp 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 on rampbitcoin.com. Thank you. And that, I would say is a big goal of ours, you know, in being the 1st or you know, one of the first to do this. Like we have an embracing Bitcoin. Now that we've done it, we want to help other advisors follow in our footsteps because I've talked to dozens of financial advisors over the last several years who were in the same position we were in three years ago where they see Bitcoin, The light bulb went off, but they can't do anything about it because their firm won't allow them to or their business partners or whatever the case is. They're just not able to embrace Bitcoin and help their clients with it the way that they would like to. So through our journey, you know, I mentioned when, when, when you see it first, you know, we, we decided we can't not offer this to clients. We can't not educate clients about this, but as we continue down this path, in addition to being the most important financial innovation we believe we'll see in our career, we started to get a very firm conviction that embracing Bitcoin is also the best business opportunity that we would see in our career. Tell us more about that. Well, there's. We picked up 35 more listeners when we talked about that one, guys on the business side, just want to let you know. So keep going well. Let's let's dig into it then. The first one is our, you know, for Vista investment partners for our existing clients. We're still Vista and we're not trying to drag those clients kicking and screaming into Bitcoin, but we are educating them about it now and helping them get off 0 when they're ready. But our main strategy for growth moving forward is helping Bitcoiners who also own traditional financial assets. And we have found that there is a very motivated niche of wealth management clientele for whom that is the number one thing they're looking for is a financial advisor with a deep understanding of Bitcoin. And often times they don't even need our help with the Bitcoin piece of it. They're already clients of, you know, Swan or Unchained or another Bitcoin company. They don't need our help necessarily with that, but it's very important to them that the person managing and advising on their non Bitcoin assets sees the world the same way that they do and has an understanding of Bitcoin the same way that they do. So I would say that's the first opportunity where that may describe probably less than 1% of you know, all potential RIA clients, but that's enough to keep us busy for a couple of decades. So, so that's the first one. The second one is now that we've done it, now that we've solved the Bitcoin Rubik's Cube and gone through, you know all that pain and friction and all the changes. We believe we've created one of if not the most attractive RA in the country for other financial advisors to plug their businesses into and empower themselves to grow their practices with Bitcoin the way that we plan to. So that that's the other opportunity is. Yeah, it which I think is really important. So for listeners who are joining in, you know it in the industry we often call it the join initiative. You know, there are, you know, advisors that come out of the wire houses every single day and launch their own business. And some people are prepared to do that. But it takes enormous, enormous thinking and planning and architecting to and just a ton of sweat equity and fear of losing clients to be able to launch an an independent registered investment advisor. It's, it's a daunting task and not everybody wants to run payroll and not everyone wants to, to manage people and staff and not everybody wants to pick tech stacks and, and all of those types of things. And and So what what what Matt and Brett over at Vista are talking about, they're they're architecting a way for advisors to easily plug into their firm with traditional assets, but also have exposure to Bitcoin in a way that is above and beyond simply just allocating to an ETF. You're actually giving spot exposure and securing the ownership assurances of the Bitcoin for your clients and providing ongoing education to support their, their learning and understanding of why it's in the portfolio and how it connects to their overall wealth management picture. And so, you know, plugging in advisors is a very, very common thing in the industry. Oftentimes a lot of wirehouse folks that I'm talking with are they, they feel that they're stuck, Matt. They, they feel like, OK, well, my hands are tied. I have a point of view around Bitcoin. There's not much I can do until, you know, our firm approves the ability for me to solicit on this asset or maybe they've approved the solicitation, but with conditions and that doesn't feel right to them. And so right now it's a pivot point for a lot of these firms that I'm speaking with are not firms, excuse me, individual advisors that are stuck inside of traditional financial services firms that can't do what they wish to do. In fact, I'm talking to Rias that are stuck inside of an RIAA that can't do what they want to do outside their RIAA. And so it really becomes quite an interesting dilemma. And maybe this is one of the first ways that Bitcoin, you know, incentivizes the broader RA community to come to it, which is I don't want to lose all of my advisors who have developed a thesis around it. And our investment committee won't allow us to do something. That being said, you guys are starting to turn that key and, and be able to say, OK, if you like our, our, you know, the people that live inside of our firm and our culture and our point of view and the way that we serve clients. And if you have like investment philosophy and want to be liberated in terms of the way that you work with Bitcoin and your and your clients, you don't have to start your own business. You can, you can potentially come in, improve your economic situation, improve your wealth management offering and capabilities and integrate Bitcoin inside of inside of our firm. So, you know, kind of tucking in and not going through all of the brain damage that may come with with launching an independent offer. Yeah, I've a framework that I've that I use when, you know, tough business decisions or when you find yourself in conditions that you find intolerable. Framework that I think used to think through it is you either forget it, you fix it or you fire it. And for the Bitcoin question for advisors who are stuck in a firm that does not enable them to do what they want with Bitcoin, option one would be to, well, forget about it. Can't do anything. That's too bad. I'll just keep doing what I was doing. But like I said before, if, if you see Bitcoin the way I do, when you believe that it is what I believe it is, as a financial advisor, you can't really just forget about it and just sit back and watch it do what it's going to do over the next decade or two and and let that, you know, just pass you by. So I, I really don't know any advisors who have chosen option one, forget it. Option 2, fix it. You talk to your firm leadership, you try to orange pill everyone and you try to, in some of these cases, steer these massive firms away from what they've been doing that's been so successful and toward this new scary thing that they don't really understand the, the risk reward opportunity of. I know quite a few advisors who are trying to do that, but they understand that even if they're successful, it's going to take 5 to 10 years to be able to get to the point where they're able to do what they want. And so unfortunately, a lot of advisors are in the third option. If you can't forget about it or fix it, you fire it and you make a change. And for advisors who are trying to think through how to do that, I have conversations all the time with those advisors. Some of them will never join us. Some of them will never partner with us in any official capacity. But I feel their pain and I'm always happy to talk with those advisors to as they're thinking through this and trying to figure out how to get this done. Yeah. So it's one of the reasons why I love the registered investment advisor community as a whole. It are you competitors to one another? Sure. You're all going for the same type of client. You're all trying to position your value proposition to stand uniquely in the space. And but at the end of the day, you also have a very altruistic nature in the sense that you say, hey, look, I'm willing to share. I want you to be successful because if the RIAA industry is thriving, all, all boats lift and you know, with that rising tide. And so, you know, I find that it's probably one of the most collegial groups I've ever worked with in terms of sharing of best practices and ideas that will allow the other to be successful. And, and you know that that in my mind is a, is a show of strength, of great strength that you believe in your competencies. You believe that you know that, that you can continue to win even though you're enlightening others. And that's kind of the gist of, of that open letter that you wrote to the advisor community. In many respects, it's saying, hey, look, we can all win here. And but most importantly, it's those clients that we serve, you know, that when and you know, I say this often inside of on ramp, you know, I keep saying that it's the RIA is going to is going to unlock, you know, and and a a ridiculous level of individual investors to come to Bitcoin. And the question just comes down to, you know, the readiness of every single RIAA. You know, there's a common statement inside of the Bitcoin world that we all get Bitcoin at the price that we deserve. And I like to tell advisors, you know, what price do your clients deserve, right? What price do your clients deserve? And it matters to develop a thesis around this because the last thing that you want is for another 15 year track record to post that's similar to the 15 year track record that we've just seen juxtaposed against a debasing currency, you know, that has 111 years track record of pure debasement. And so when you think about those things, it's it's just striking, Mark, I'm sorry. Totally, man, it's like so rich. We're we're, you know, we're working together more when we're starting to just have this mind, Jedi mind connection because that's I was just teeing up a chart from Matt's report and I was going to show it to you. Just, you know, the whole picture says 1000. Let's. Matt's like, which chart's he going with? I think I know. So here we go. So I'm, I'm usually a bar chart guy where bitcoins 60% return over the last 10 years. And you know, it's, it's multiples three times more than the equity market, more than bond sponsor, you know, and then 50% in the last five years. But this gives a perspective so everyone can say, yeah, I remember Bitcoin in 2017. I didn't buy it. I didn't buy it in 19. I bought it in 20. But how, how long do you have to go? As Rich said, because everything I started the conversation with when, when you know, Rich mentioned about the calendar of events, every financial nail is going to be hit with the debasement or printing hammer. That's what's going to happen. And Bitcoin fills that void. It's it's an odd concept. We can talk about it, but I'll, I'll just throw out. This is why you'd want to go in and I don't know, Maddie or Rich, if you've heard, you know, the FUD or fear, uncertainty and doubt that people have thrown at Bitcoin like it's a bubble, you know, and then, you know, we all know that the Tulip bubble was what, three years, 3 1/2 years? the.com bubble was 4 Max five years if you have you want to measure it. So unless I'm adding up wrong, this is on 15 years. Really, if you want to go back to 2011, you know, 10-15 years of, of returns. So I'll push it back to you, Matt, since it's your chart and I'm going to stop presenting. This is our, that was our, that was our first venture into screen sharing here on our wake up call. We're very proud of it. But as we look at clothes, Rich, I don't know if there's anything that that you and Matt want to talk about. I might just say, you know, tee up a close and then let give Matt final words here. You know, Matt, when when you were kind enough to agree to join us, I couldn't have been more excited because I think you're a firm that has in the United States that has stepped through this process. It can be done. It doesn't have some challenges. Yes. Are there thought leaders in the space? Yes. There are people like us here at On Ramp that are willing to talk to you and help you kind of think through how to enter the space. You know, there are things that you can do that, you know, separate and differentiate yourself in the marketplace. You know, in terms of growth strategies, Matt just gave you a beautiful growth strategy, not only just being able to solve client dilemmas. And I think that that's really what it's borne out with Vista is they want to solve client problems and they're good at it. But now they're, now they're actually saying we can solve problems for other advisors as well. And everybody can win. The advisor can win, Vista can win, the clients of those advisors can win because of Vista. And, and so those are just a few, right? I could sit down and rattle off 456 different ways that people can grow with Bitcoin as an advisory firm and succeed by the disruptor, embracing the the new disruptor and and to Matt's, Matt's earlier, you know, statement, you know, you can you can forget it, right? What fix it or fire it. And, and I like that a lot, you know, and I think that Vista has really taken a step forward for the industry and aren't you're actually sharing pathways to be successful and embrace a new disruptor and remain a disruptor yourself. And so thank you so much for joining us today and any closing thoughts for our audience, Matt? Yeah, thanks for having me. I'll just say if anyone hasn't read the open letter again, it's called Financial Advisors. It's time to study Bitcoin. It was published on Swan Bitcoins blog. It has my e-mail address, my contact information in that letter. I'm always happy to chat with any advisor or any financial professional who's struggling to do something similar to what we've done. So if there is anyone for whom we can be helpful, please feel free to reach out. Happy to talk. Yeah, that's awesome. We thank everybody for joining us today. Next week, we will have another special guest, and if you pay attention to your LinkedIn, you'll get a chance to see that. But Matt, thank you so much for joining us, and everybody have a wonderful week. 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 onrampbitcoin.com/contact to schedule a consultation with one of our private Client Advisors.
Transcript source: fountain