Crypto Funds Explained (In-Depth)

Hey guys, welcome back to the show. Today we're gonna talk about crypto funds, cryptocurrencies. We've got Lincoln Archibald on the show today.

Hey guys.

We're gonna be talking about our thoughts on cryptocurrency. We've got a few people in our mastermind program that actually have launched cryptocurrency funds in the millions of dollars right now, and they're exploiting this market. We wanna walk you through, number one, our thoughts on crypto. You know, why not? Crypto, you've seen probably everywhere. People are transacting with it. Bitcoin, you have Litecoin, Ethereum, all these different coins. We'll go through that. And then we wanna talk about how to actually start a fund. So if you currently are trading Bitcoin or crypto or whatever it is, you're doing well and want to raise money from investors or scale your trading, that's what we'll talk about too. How to actually set up a crypto fund, how to get started with actually very little experience without crazy licenses and stuff. We actually, we're the, that's what we do. We talk, we're the experts I guess you'd say on launching and scaling funds for people, private equity hedge funds, venture capital. Let's get into it.

So I drew this graph here because I think it's really telling of where, you know, the cryptocurrency market's at and where it's headed, right? In the crypto coin space, there's actually 7,000 different types of cryptocurrencies, right? Bridger named a couple. And the market cap of all of those cryptocurrencies combined is $320 billion.

Currently.

Bitcoin is probably the most famous, and it has a market cap of $160 billion. billion, right? So like half of that. But to kind of put it in perspective, the market cap of gold is $8 trillion. So this isn't drawn to scale. This would be— this is like $1 trillion. So it'd be like 8 times the size of that, right? But there's some, there's some interesting, you know, things to understand about Bitcoin and its utility use and gold.

Yeah, I mean, you look throughout history, right? We've always had some type of currency, medium of exchange, right? And a lot of people think about let's call it Bitcoin, as, yeah, it's like a stock, right? It'll go up and down, I can make money. Also though, its primary use is to trade like money. Currently, I think PayPal now accepts Bitcoin.

It just, yeah.

And you can go, a lot of countries are starting to accept it. It's becoming more and more currency. We're not gonna dive into blockchain, how that all works, which maybe we'll talk about in a minute. It's pretty cool how the system behind it's decentralized. But currently, this is how the US dollar, for instance, works. The Fed can just wake up on a Friday morning and they can do a ton of different things to make more money, right?

That's right.

Print as much money as they as they want, and theoretically interest rates only go up two percent a year. Right President Obama he put in about two trillion dollars took about eighteen months to put two trillion dollars in the markets. President Obama spent more money than any other president all the other presidents previous combined. President Obama spent in his eight years since 2007-2008 inflation there tell us is at two percent. Right, they tell us inflation is at 2%, like it always is, right? Are you serious? Like, do you think we're— and then President Trump has gone even further. They've done— he did $2 trillion in 8 weeks.

Yeah.

Okay, that he's put into the markets. And oh yeah, inflation should be coming, but they keep that inflation at 2%. I personally, this is us getting a little bit deeper in the weeds for today's topic. I think inflation's manipulated. 2% inflation, they keep changing how they calculate inflation. For instance, They will say, oh well, a car in 1978 was, you know, was $5,000 a car, and now cars are $30,000 a car on average. Obvious inflation, but they go, no, no, no, cars today have like computers in them and they have advanced driving, so that's— they're different, right? Those types of assets are different. They are changing the categories for what they count as inflation, right?

Yeah, inflationary asset.

The reason why I think they are manipulating it and just keeping it— it's always 2% no matter what— for a few reasons. Number one, if they came out and said, actual inflation is 7% or 8%, which a lot of economists think, Social Security checks now all have to go up 7% or 8% every year. Bankrupting the US government even more, right? Puts them in a deeper hole. It is one reason they could potentially be manipulating that number. But the reason I bring this up, a lot of people use— gold has always been, you know, we went off the gold standard with Nixon.

1971.

1971, we went off the gold standard. And that was, you know, gold backed the US dollar. Every dollar printed by the US was backed by a bar of gold in Fort Knox, right? Not so anymore. Currency is digital. Just to give you an example, when you deposit a dollar into a checking account at a bank, I think currently, and they keep changing this a little bit, you can— the bank can lend out 16 times the amount you deposited at that bank. Where does that 16— you know, so if you deposit a million dollars, the bank just made up $15 or $16 million that they can deploy in loans, right?

Yeah.

It's not like they printed more cash. They literally just on a computer just made $16 million of cash.

Crazy. I think where Bridger's going with this is why it's important is to understand, you know, what gold and what cryptocurrency actually do, right? So they are a hedge against inflation theoretically, right? We're not— this isn't investing advice. We're not telling you to buy gold or buy crypto. We're just, you know, sharing our thoughts about it. But a lot of people will have gold or cryptocurrency in their portfolios in case the US dollar debases, right? If the US dollar, let's say, You know what? The U.S. dollar really is inflating at a rapid rate. We're just not recording it that way, and basically it's going to become useless. You know, in Zimbabwe, right? Several trillion dollars equates to only a couple U.S. dollars, right?

Venezuela has also had hyperinflation.

Yeah, so it can be very damaging and it can be a huge debacle for an economy, right? If hyperinflation kicks in. So the reason people talk about gold versus crypto is because they they see them as this hedge against the U.S. dollar. This is kind of opinions of my own, but. But the reason that I'm actually a little more pro-crypto than gold is because I think about the transactionary use, the utility use of it. Yeah, gold has value, but if you try and buy a gold bar today, it will take weeks until you can actually get it. And you don't go to the store and give them gold and they give you a can of milk, right? But you can go to Chevron now, or like as Bridger said, PayPal, and you can use Bitcoin. It has a perceived and understood value.

So yeah, your argument is you can actually use it, right? Gold, and most people, this is, it's usually not physical gold. You'll buy on the stock market, it's called GLD. They say that it's backed by, it's just an—

It's an index.

It's an index of gold, right? It just came out, JP Morgan, one of their top trading desks was manipulating the price of silver for the last decade. They got fined like $100 million, something like that. So they were manipulating it, for example, it could have been SLV, I'm not sure which one they were manipulating, but silver, is an index that you can buy and sell silver. They were manipulating that price. So actually, a lot of people right now, back to your point, gold, a lot of people, um, think bullion, gold bullion, like physical gold, actually is more valuable than gold that trades on the stock market, the current price of GLD, because this number could be manipulated a little bit.

That's right. Well, and you know, a point on that, so I have a funny story. Uh, you know, a little more than a year ago, I was at JP Morgan and I asked this trader He was trading. He was one of the lead traders on a desk. Trades trillions of dollars a day sometimes. Okay, very legitimate, right?

Trillions with a T? With a T. Wow.

Yeah.

Okay.

Yeah, usually in the billions, but I remember him bragging about days when he traded trillions.

Yeah, a couple days.

Wow. I said, "What do you think about crypto?" And he said, "It's the worst thing ever. Like I would never have it in my portfolio. I would never recommend it to anybody. Like it's garbage. It's trash." And then not months. Later, JP Morgan actually switched their, you know, outlook on gold and said, hey, do you know what, actually we think this could be viable. And, you know, now we're actually allocating, you know, we're buying some of it and we're allocating it to our clients. So sometimes the smartest person in the room doesn't know what they're talking about. Okay, just, just food for thought.

Yeah, we've teased this a little bit too. If you're— now you're probably watching this, probably already know about crypto, you know about Bitcoin, you know about gold. If you want to start a fund, we'll come back to this too. We'll go back and forth a little bit. If you want to start a fund for crypto, first off, you can do it. Okay? So a lot of people ask us, hey Bridger, can I do a fund for crypto? Yes. Okay? There are lots of people launching funds for cryptocurrency. So what essentially, let me, I'll get on the whiteboard again. Essentially what a fund is, most basic terms, a fund is a pool of money. This is a pool of money investors or limited partners will put money into that pool. Okay? Ta-da! And this entity right here, so you have investors right here, limited partners. This is called your limited, I'm getting a little technical here. You guys ready? Get your maybe paper and pen out.

Limited partner.

This limited partnership is an entity. Investors, or LPs, can put money into this entity, okay? You, over here, are called the general partner, okay? And you, as the general partner, have all discretionary rights over this limited partnership. You can decide if you wanna buy or sell today, whatever. These limited partners are pretty much trusting you to run there. Now, we've got other videos, this entire channel is dedicated to how to do this, okay? We talk about this, so I'm gonna go quick. You guys have probably seen our other videos.

Mm-hmm.

But your general partnership could say, hey, we're gonna go buy a ton of crypto, and we're going to buy some of the Bitcoin, and we're going to buy something else, right? And you can decide if you're going to sell or buy today, whatever. When those assets make money, they come back here, and you split those returns between yourself and your investors. And we walk through that in other videos, how that split works.

Mm-hmm.

But this is an amazing way to scale. If you're a good trader, and this is what the best traders of all time have done, they eventually end up running A fund. And this structure is how 99% of all funds are structured. Use this general partner limited partnership structure and they scale through a fund. If you're trading right now, $20,000 in your account, think of what you could do with $200,000 or $2 million or $20 million or $200 million, right? That's what a fund allows you to do.

You know, if you think you know how to trade Bitcoin or whatever, any sort of cryptocurrency, you know, a lot of people will go to something called TokenBox. This is similar to like We'll provide the link below, but it's like a collective too where you can just sign up to be a trader, people can invest with you, but you're not a legit fund. You're just trading and they're going to take a lot of money. It's not as scalable as the fund model is. That's why we preach and teach this amazing GPLP structure that allows you to grow exponentially.

We have another video with incubator funds as well. You can set this up on an incubator scale, so it's very small. You can start an incubator fund for anywhere from $800 to maybe $4,000 at the max. You can get this whole thing set up under an incubator fund. We got another video, maybe we'll tag that somewhere on here. I don't know where it'll pop up, but an incubator fund. If you're doing a full fund, typically a lawyer will charge you like $30 grand. We help people do it for a lot cheaper. Probably most of our students, what, it's probably $5,000 to $12,000? Yeah, $5,000 to $10,000. Somewhere around there. Inside of our mastermind program, stuff like that. But you can do this. That's what we're saying. If you're good at your trading or whatever, or you have a friend that's good, Scaling through a fund is an incredible way to scale.

Regardless of your thoughts on crypto, you might you might think it's a scam like this guy J.P. Morgan. The reality is that it's becoming more and more of a utility use, right? It's becoming more and more common, right? People are recognizing and perceiving value in it, and that's why we're talking about it, right? Because it is a viable way to start a fund.

Yeah, which is interesting, right? The crypto game back to what we were talking about before a little bit. The crypto game of You know, bitcoins—there's only like 22 million bitcoins. It's this finite amount. They can't print more of them. You can't create more bitcoins, which is cool. It gives it intrinsic. It gives it value, right? It's protected from inflation. And so, the argument for Bitcoin is: well, if you know, if we start using it as an exchange, there's there's value in it, and people can use it. Now, the counter side of that though: do you really think the U.S. government, the Federal Reserve, the most powerful people on the planet, are going to allow Bitcoin to debunk the US dollar.

I mean, in 2020, that, you know, Facebook came out with Libra currencies, right? And they said no way, right? I, I think it's gonna be a war.

Yeah, it's gonna be a war for currency. We probably won't see it, but they're gonna have it behind closed doors, I think.

Typically, you know, we've seen that regulation— the public sector is a little late in regulating the private sector, right? We see that over and over again. I think it's gonna be the same way for crypto. There's bound to be some sort of regulations. There already is, right? They're trying to classify what is crypto because, I mean, is it a security or is it a commodity? If it's a commodity, it's regulated through the CFTC, and if it's a security, then you're going to have to register it with the SEC. So there's all these different things.

Currently right now though, it's a commodity.

Well, I think like 3 of them.

Is Bitcoin a commodity?

Yep, yep, it is.

Which means it's exempt from a lot of— yes, it's not a security. So people without a securities license can buy— you can do a lot. It opens up a whole door to what you can do.

You know, that's what we do in the masterminds. We help people understand this, right? And we talk them through the structuring and developing of an actual fund.

So I think though, with crypto, back to that argument with the US. So now another thing the US government is doing right now is— and they've announced plans to Make their own cryptocurrency.

Yeah.

And take away physical dollars. So that's scary in itself. They can track every transaction that happens around the world. Like, so if you pay your, you know, cleaning lady or, you know, a guy that mows your lawn, whoever, you pay him with cash, that's not happening anymore. You have to— it's almost like Venmo. You have to use— theoretically, right? You have to use their cryptocurrency. So they can track every drug exchange. Yeah. Any illegal purchases and stuff, they track every transaction over you.

Well, do you realize that the US government actually required, back in, I think, the 1930s, that everyone sell their gold back to the US government?

Gold bullion.

Yeah.

Physical gold.

Physical gold, because they wanted it to protect and back all their excess printing. And so it was mandated that you had to sell your gold. So who knows?

Maybe there's a mandate. They've done it before. They did it 70 years ago.

Yeah, maybe there's a mandate that—

You have to go exchange your dollars in, your physical dollars, and they're gonna be worthless by a certain date.

Or your crypto coins, who knows, man?

I mean, these are the most powerful people on the planet. So that's my only bearish mentality towards crypto.

Yeah.

Is the US government could just put the kibosh on it.

Yeah.

And say, hey, you know what, it's not allowed in the United States.

Yeah.

Crypto— now crypto falls to zero pretty much. And it'll obviously happen internationally and stuff like that. If the US doesn't back it, I mean, right, that's a lot of dollars. It's a lot of momentum. China has mentioned they want to come out with a cryptocurrency for Chinese dollars. Other countries are there. Everyone's kind of prepping for this because It is so powerful to know every transaction that happens in an economy. Very powerful. And that's my one rebuttal to crypto. I think, anyways—

Who knows, man?

We don't know. That's the thing. But gold, you know, you listen to Peter Schiff online. I don't know if you listen to Peter Schiff. He's very strong on gold. He's like, economically, gold has to go up, right? Like, gold has to. It's been sitting.

That's what he says, right?

It's been sitting though. Like, gold had a sell-off last week or whatever. It was like, are you serious? Who's selling gold right now? People are selling gold. Bitcoin's had this great run. You know, we saw this run, what, 2 years ago? 2 and a half years ago? They had this great run to like $19,000, then it fell off because, you know, you had some big players. And I, at least reading, I don't really know, right? I'm reading reports and stuff. Who actually knows what's going on in this world? Reading reports though, that when it was at $19,000, all these billionaire people, like the Winklevoss twins, you know, from The Social Network, the guys that created Facebook, Zuckerberg? They were the first cryptocurrency billionaires. And I heard that they sold at that peak, $19,000, and that was the big crash.

But you know, you read whatever, right? Well, you know, just a comment. I just want to comment on that. The thing about coins or whatever, a business that has a smaller market cap, you can control and manipulate the market, right? That's why initial regulations came out, right? Because if you own enough of it, you can literally move the markets by selling stakes. And so there's a lot of conspiracies around that.

Yeah, because the market cap, right, you said it's $160 billion?

Yeah.

That's bigger.

Yeah.

But still, it's not $8 trillion.

That's right now.

It's right now, right? You know, a big player moving in that space, a lot of, you know, they can definitely shift that price. And so crypto, and everyone says this, it's volatile, right? It's volatile, which is really good for some people and really bad for others, right? It's, you know, the one thing you don't want in a market is just, you know, being at, you know, a flat line. Nobody's making money. If it's volatile, at least, you know, things are, people are making and losing money. So—

But let us know your thoughts below. We'd love to, you know, get some feedback from you guys, what you think about crypto funds and cryptocurrency in general and where it's going.

And we'll put like right now, I don't know if boxes at the end will come up, but we have other videos if you want to actually structure a crypto fund. We kind of went over it a little bit today. We have a 1-hour free training. We've got a whole— we've got a bunch of videos on YouTube that walk through the structuring of a fund. If that's something you're interested in, go click around. You can follow it. We have a lot of videos that go on different topics of how you can start from like a small incubator fund all the way up to a full-scale, like, you're a, you know, deca-billion-dollar fund. We go through the whole thing. We have mentors, other people that come on with us as well. I started a fund 3 and a half years ago. We've got over, what, 600 members in our mastermind launching funds. A couple of our students just launched a $100 million fund in the last 6 months. I mean, we've had some cool things happen. And so this is what we do. We talk about funds, and crypto funds is a pretty cool space to be in. Thank you guys. We'll see you next episode. Bye.