178. Crypto Market Reality Check

When people come into crypto, they hear about this 10x20x100x. You can get it in a day or two. It's quite rare and you have to put in a lot of effort and you have to have a lot of bets in order for one of those to come true. Choosing the next Unicorn don't over allocate to hyper risk things because you're probably going to lose it. You're trading off your peace of mind. You probably won't sleep well. It'll consume you. Is that really worth it for a minuscule chance of a return?

Welcome back to another episode of the Ben and Bergs Podcast. I'm Ben, your favorite high school dropout and founder of Collective Shift and alongside me as Bergs, your favorite MBA and CEO of Collective Shift. Join us as we bring you world class crypto research and strategies to help you dominate this crypto bull market as well as a behind the scenes view of us scanning a fully remote subscription research business here in Australia. And if you like the podcast, we'd love for you to share it with a friend. Leave us a rating or a review. It's how we grow the podcast coming to you each and every week completely free. No ads, no commissions, no advertising, no affiliates. Give you the beans on what's going on in crypto. Now today we are talking about, about the market because Bergs, it is boring as batshit right now. There is not much going on. We've been ranging sideways for about six months really. You know, you take away the Japan carriage rate sort of dump, we've just been going up 30%, down 30% over the last six months. And really this is not, not a lot to say. I mean really the biggest thing, the biggest trend that's happening right now is just bitcoin dominance is continuing to grow. So bitcoin dominance is nearly at three year highs, meaning that altcoins have continued to be squeezed. So if you look at the year to date returns on crypto, the story to date is that Bitcoin is up 34.7 year to date and others, which is the total market cap of the other top 125 cryptocurrencies excluding Bitcoin down 11.7%. So Bitcoin is outperforming most of the other top 125 coins by 45% over the last nine months. Bergs and you know, this August, September period historically for crypto and the stock market is the worst across average returns in the year. And we're sort of right in the thick of it right now. So there's not a lot going on.

Isn't it an odd period in time where there's not much happening? We're kind of range bound, even stability, if you like. The thing we were not used to in crypto. And people are getting really bored. They're kind of losing their minds. They're starting to hate on crypto. They're starting to try and spark off like weird narratives and conspiracy theories and really it's just the market. It's not doing much at the moment. It's fine, execute against your strategy. It's the hardest thing to do. I bought some bitcoin again yesterday and it's hard to do these things when you don't have that excitement and that push and why aren't we there yet? Very, very difficult.

Yeah, there hasn't been a lot of like, you know, excitement, as you said, bergs or FOMO or Euphoria. And there's literally no retail, you know, around right now. I think the Coinbase charts were. Coinbase app rankings is down to like the number 500 where in March, I think it was the 12th or 13th top downloaded app. So it just goes to show there's very little retail interest, not a lot of excitement. But for bitcoin holders, if you're just holding Bitcoin, you're up 110, 112 in the last 12 months. It's crazy. People get so fixated on just these like, you know, the altcoins where like really, if you look and step back, bitcoin continues to grow.

You have to own the king. And Ben, during this week we ended up discontinuing, continuing our Discord server and for a number of reasons and you know, we're focusing on, on other areas. But do you remember when we had it and it's like 20, 21 peak kind of NFT bull market. We have to have it. Everyone's quitting their jobs, everyone's in Discord. Their front screen is discord. You load that up first, see what's happening, what's the next drop, what's the next mint? And you authenticate with your NFTs. And it was just amazing. And, and then think about that euphoria and how basically we're all just going to the moon. And compared to what everyone's thinking about now and think about the bitcoin price back then, it peaked at like what, 20k? Something like that, whatever it was. And look at it now. Oh, sorry, not 20k, like 60, something like at the end of that bull.

Market 60, 68, 69.

Exactly. And we're very close to that now and we don't even have that anywhere near that kind of euphoria. There's nothing that's pulling us in. The latest thing we have to look at, I have to buy this, I have to load up my news first thing in the morning to see what's amazing to buy so I can make a 10x in a day. Not even close, mate.

Yeah, the most, the most exciting thing is when a rate cut's going to come down and, and the US election like, oh my goodness, it's like everything's.

On pause, isn't it for the US election.

It is. And I think this gives us so much uncertainty. I think the reality is like long term, you know, the election impact on crypto, like I, I think long term it's not going to make a, you know, a lot of difference. I think both parties were sort of, you know, pandering to crypto over the last few months but over, over the recent period need to have even discussed crypto in the, you know, the, yeah. In the debates or any of the sort of recent policies. So yeah, I think for me anyway, I think the reality is like short term, I think like it's probably not going to be great if, if Harris gets elected just because I don't think the market will love it because I think the market was really, you know, probably buying into the fact that Trump was going to walk in when Biden was still around. If, if Trump wins, I think pro crypto and his policy commitments, I think it's going to be, you know, really accelerating how much adoption and how much excitement there'll be around crypto. But again, if we're looking multi year ahead, I really don't think it's going to have much of an impact. Like if we're looking long term, that's.

The key markets are very, they're always forward looking and generally short term. And if you zoom out to multiple years, doesn't para matter? It's fine. Excuse me. It won't matter who gets elected. Right. It won't matter if there's a rate cut in the next quarter quarter and the fundamentals line up for crypto, long term you're absolutely fine, but it's very hard to do. And if you're thinking short term and you're trying to guess who will be elected, when will rate cut come, when will something happen? Very, very difficult. Right. And you kind of have to take that long term view and things become a lot simpler. Because you simply just don't know and you won't get that market certainty.

Yeah. And with this market uncertainty. I was just speaking to a new Platinum member yesterday on our strategy session. He was looking to put in, I think he was looking to put in another $300,000 and was just thinking about the strategy and where he's going to deploy that for me at the moment I'll just be focusing on the, on the top dog bitcoin. Like yes, you could go down to ethos, Solana, but you know, even right now, like I've got a huge position in eth, but you know, if you've got short term goals, I, I'm not looking at this as a short term play. I think over the next few years it's going to outperform. But if you're looking short term, I think I'd just be focusing on bitcoin. Like even Solana. Yes, I like Solana but they've got a lot of VC unlocks coming in early next year. Still some headwinds in terms of, you know, riskier investments. Like the market is not even, look, look at the stock market. The NASDAQ had one of the worst weeks on record a couple of weeks ago. In, you know, in two or three years while stock market is going down and the tech and tech stocks are selling off, Bitcoin will be impacted negatively. And then the further down the list you go, that's going to be hurt even more. So if you want to protect your capital, I'd just be focusing on bitcoin again. I probably wouldn't be lump summing. I'd probably be dollar cost averaging like Berg is doing at the moment. I've been dollar cost averaging in bitcoin. I'd be doing that right up and through the US election depending on the outcome because it's gonna be a lot of volatility. I think trying to time the market in the short term now is a bit of, a.

Bit of a wild guess. I don't think anyone really knows. So I think just DCA right now, not focusing on alts, especially while the dominance is so high is probably the best way to go.

If I think back on my investing, Even the last six months, 80 plus percent would be Bitcoin purchases. The rest would be, you know, a dodgy old coin here and there and then some eighth to do things like, you know, Eigen layer and a few other things that I want to experiment with. And I firmly believe that this is the thing you're going to need. You don't know who's going to win the US election. But what you do know is how much debt they have. That debt is increasing. And I believe the interest payments on that debt are a trillion per quarter, something like close to that. It's ridiculous. And they're just able to service that debt and pay off a small amount of the principal. If it goes up. I can't remember was a very small percent. They will only be able to pay that interest. So they won't be able to pay off any of the principal. There's no.

Any of the principal.

Yeah, yeah, yeah. There's no plan to pay off that debt. Right. Like. Well, especially from Harris. Right. It's just. Or a real plan.

Yeah.

People are generally greedy and entitled and they want yesterday to be. Or today to be like yesterday, which would be like tomorrow. Same kind of thing. You don't want to go through hard times. That's what we know is going to play out. Right. And if you do pay that off, there's going to be significant increases in tax. Things are going to get tougher. There's going to be, you know, economic constriction and tightening. We know money is going to be printed. There's this beautiful thing where it's like, oh, if aliens landed on Earth tomorrow, what would you do? Fire up the money printers. Because that's the only thing the government does.

Right.

And this is why bitcoin is a beautiful hedge against that, because of bitcoin's monetary policy. And I just keep looking at that and that is like the glaringly obvious thing. This big shining light where I'm like, okay, this really makes sense for the way that I'm investing, which is why I've put a significant amount of money in bitcoin over the last 612 months. Yeah.

And I think it's a good reality check for all of us that got a little bit excited with altcoins. And everyone's thinking that they're going to get 10-20x returns this cycle. And we've been, you know, I get people that call up wanting to sign up for collective shift going. I've been promised 20x returns. I just want to make sure I'm going to get 20x returns with you guys. I said, mate, I'll guarantee one thing. I'm going to guarantee that you will not get 20x returns if you come to us. Because that's absolutely nonsense. Like, people have got these crazy expectations because of prior returns for some people in the market. And they barrel into altcoins. They listen to people, YouTubers that have all these coins, you end up with a massive bag of altcoins, which are probably down 30 or 40 or 50 or 60% right now. And you're panicking, you're worrying, you're angry, you're upset, and then you step back and you go, well, okay, if I have just bought bitcoin a year ago, I bought a hundred thousand dollars of Bitcoin, I'd have $230,000 now, but yet I bought a hundred thousand dollars of shit and I'm down like 20%. So I've actually got $80,000. That's the difference. We're talking here. Like we need to, I think just take this a moment, everyone, Benneberg's listeners, to take a moment, realize that, you know, crypto is risky, right? Regardless, and the further down the list you go, the more risky you get. There are tens of thousands more coins this cycle than previous cycles. And there is less capital and less retail investors right now. That equals that. You will not get the returns that you were probably previously expecting at this time in the market. So rather than chasing these crazy returns, why not sit it in the greatest asset of all time, which is compounding at 40 to 60% year over year for the last 10 years, and, and live a happy life. Now, I'm not saying that I'm throwing the towns for old coins because I own altcoins and I'm very bullish on them, but I'm not getting upset and throwing in the towel and getting angry because I haven't made these great returns because the market is the market and it will not do that until the time comes. So for now, rather than betting against the market, go with it and just stack bitcoin and live a happy life.

And that's because your portfolio is well balanced. That's why you're not stressed. You still want the upside of those altcoins, but it's not going to be the majority of your portfolio. And when people come into crypto, they hear about this 10x20x100x, you can get it in a day or two. That may be true, but it's quite rare and you have to put in a lot of effort and you have to have a lot of bets in order for one of those to come true. Same like VC investing, choosing the next unicorn. And if you think about it, you know, property would generally return like, I don't know, 5 to 7% per year. Shares will be 10, 15, 15% if you're lucky, per year. If you're getting above 15% per year in crypto. That's an incredible return. You're beating the majority of people. Like you said bitcoin was like 40% CAGR, which is insane. Like that is already amazing. Get a big chunk of that, enjoy it and then start to go towards altcoins with a smaller portion of your portfolio and chase those higher risk things that may pay off over a longer timeframe.

Yeah, and wait for the trend to reverse before start starting to chase. I think that's a big thing. I think. Yeah. Don't fight the trend. Wait until the money comes in and then you can start to follow. Because otherwise you get yourself in this situation when you, your portfolio is going down, you're getting worried, getting stressed. You just don't need to be like that. So stay patient. August and September are historically the worst months on average in terms of returns. On average in these two months, Bitcoin averages 1% growth in August and a 5% decrease in September. But historically Q4 is the favorite time for Bitcoin. So Q4 calendar year on average Bitcoin has returned 88% over the last 10 years in Q4. And even greater, the year of the Bitcoin halving. Q4 is the greatest quarter of all quarters, if that makes sense. So hopefully we start to see a bit of a run up heading in the election. Get some rates come down, we get the money printers going and we're really going to hopefully thrive in Q4.

Exactly. And do yourself a favor, do a calculation like Ben saying with 40% CAGR. Just put that into Excel, add 40% a year. A year. A year. A year and see what returns you get. And you don't need to start with much money with those kind of returns. They're going to be phenomenal. They are historical returns. And these are a lot of projections that people are coming out with. Like even you know, Michael Saylor.

Who'S like ark Invest, those people, they're all coming out with these huge numbers between 20 to 40% and if you could just buy one thing and invest in that, amazing. And like you said Ben, like don't over allocate to hyper risky things because what are you actually trading off? You're trading off your capital, you're probably going to lose it. Especially if you're trading, you're trading off your peace of mind. You probably won't sleep well, it'll consume you. You'll be on the computer all day. Is that really worth it for a minuscule chance of a return? Whereas if you Just project out a few more years and it's more certain. Why would you not take that option and sleep well at night?

Let's wrap it up there. Great points, Burks. Great point to end. Hopefully you enjoyed this episode, folks. If you liked it, we'd love for you to share it with a friend, send it to a family member, someone else that's in crypto that needs this reality check, bit of calming. Anyone that's stressed in your life that's in crypto, send this episode. It's how we grow the podcast. It's how we continue driving value and growing the Ben and Bergs Podcast. Now, if you're a big fan of Ben and Bergs, or maybe you're a little fan, we will be live in November in Sydney at the Australian Crypto Convention. Ben and Bergs will be live. That is right. You heard it here live on stage in person on Saturday the 23rd and Sunday the 24th of November. The exact time of our live podcast hasn't been announced yet. We'll share it with you guys once we know, but we will be in Sydney. If you are a Collective Shift fan, you can use the Collective Shift coupon code in the checkout. Just use the word collective shift or one word to get a discount on your tickets. I think they're like 70 or 80 bucks. You get some discounts off that. We'd love to see you in person. Come and say g'. Day. Come and hang out with us. It's going to be an epic time and yeah, we'd love to see you all in person.

It's going to be sick. Come down, have a beer, ask some questions. Roast Ben. It's going to be great.

All roast bags. We'll see.

We'll see. We're both going to Copper, mate. We've got no chance.

Thanks, guys. We'll see you on the next episode.

See championship.