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Transcript
I spent 3 full months studying money.
And today, I want to talk about crypto.
For the first time ever, let me explain how crypto works, and why I am interested in this space.
But first, some background.
I am on a 6-month challenge to study money.
How to invest it and grow it!
I am doing this with my friend Yoni, who is the founder of eToro, the largest social investing platform in the world.
If you want to join us, just go to nas.io/money.
Everything I’m learning is available to you there for free!
Before we begin, remember this is very, very risky – crypto, super risky.
Proceed at your own risk.
We are just expressing…
Our opinions.
Okay, are you ready?
Back to the challenge!
Okay!
It took me a long time to really understand crypto.
So let me explain why crypto may be the currency of the future.
See, right now the money that we all use is moving at the speed of a turtle.
It can take up to 3 days to send $100 to your mom via bank wire – 3 days!
And they charge you fees on top of that!
That’s crazy!
When you move money between countries in different currencies, it needs to move, maybe, between 3 different banks, and, when it moves between 3 different banks, it takes 3 days.
That’s it!
And in some developed countries, crazy inflation can eat away the value of your money.
And banks, in extreme cases, can walk away your money during a crisis.
Now that’s even crazier!
Why do banks block the money?
It’s how the system works.
And, even if there is no crisis, banks and traditional financial systems are closed 30% of the year on average because of weekends and holidays.
They’re even closed right now because we’re filming on a Saturday … what?!
Slow money, high fees.
This is the money market of today.
It’s very hard to change the existing banking infrastructure.
Most of it operates on code that has been written 20 and 30 years ago, and it’s all based on the fact that the system settles once a day.
Look, I get it, banks are good.
They’re trusted, regulated and secure, but honestly, in my opinion, banks feel outdated.
[Sigh] We take all of this for granted, but come on guys!
It doesn’t have to be this way.
If money is mail, then crypto is email!
In summary, the potential of crypto is to build a better financial system.
That’s it!
In my opinion, Bitcoin is the equivalent of digital gold, and I think it is a generational asset class and it’s interesting to explore it, to understand it, and to invest in it.
Crypto people believe that you should be able to send money in less than 10 seconds – not 3 days – for a tiny cost, without banks handling your money.
And guess what?
I think it’s working.
Today, my company makes some payments using crypto to Nas.io creators that request it.
It costs us almost $1 to transfer the money instead of $5-10 on average.
And, my favourite part: crypto markets are open 100% of the time, every single day, every single hour.
My father says that crypto is a hype and it’s going to disappear in the next 10 years.
Is he right?
So I don’t think it’s a hype, I think it’s here to stay, that’s my personal belief.
But when you look at crypto as an asset class, your father is right that it is a high-risk asset class that is not necessarily regulated or backed by companies.
By now, I hope you understand the potential of crypto and the risks of crypto.
So why am I still interested in this space?
I think it’s a very interesting new asset class.
My grandfather used to talk to us about investing in gold.
My father invests in the stock market.
And I believe myself and my kids will learn and invest in the crypto markets.
Right now, there are more than 20,000 coins from the Dogecoin to the Bitcoin.
And, just like the stock market, I personally look at the crypto market in 2 big buckets:
Fast and risky coins; slow and steady coins – simple.
Now it’s important to know that all crypto moves fast.
It’s very unpredictable.
But some coins have been around for longer, and therefore they feel more stable.
Right now, the top 2 biggest stable and reliable coins are: Bitcoin and Ethereum.
These 2 alone account for 70% of the crypto market.
The remaining 30% are the 20,000 fast and risky coins, like Solana, or Cardano, or Litecoin.
There are so many of them!
Well, I’m personally a crypto conservative.
I’ve been in crypto since 2011 and I’m a very big believer in Bitcoin and in Ethereum.
Oldest cryptos are my view of sort of value cryptos.
The rest, high-risks, sometimes high-risk is potential high returns, but you need to educate yourself about the risks.
Okay, so why did I invest some of my money in the crypto market?
Well my theory is very simple:
The money we use today, the paper money we all hold, that may not have value forever.
Even this can go up and down and it can lose a lot of value from inflation.
We talked about this 2 months ago!
For me, the crypto market is like…
A hedge.
If something bad happens to the stock market, then my internet crypto money could offer protection for me.
It’s not guaranteed, and if nothing bad happens to the stock market, and my crypto money disappears, then I should be fine as well.
It’s called diversification, and a good portfolio is a diversified portfolio.
Diversify away from cash and into assets, like the stock market, like bonds, like real estate, and yes, that also includes crypto!
Yes!
Crypto is high risk – we know this.
But my personal money portfolio looks something like this:
Very little cash, some stocks, some real estate, some bonds, and yes, some crypto!
And most of my crypto is in slow and steady coins.
Again, this is high-risks, but you have to understand it.
Crypto may not look like real money, but after studying the math and the technology behind it, I believe that it can be used as money.
Just look at history!
Thousands of years ago, we used to pay each other with sea shells, then with flowers, then with tea, then with spices, then with gold coins, then paper, then digital paper, and now with crypto.
In 2024, money is becoming faster, lighter, and better!
That’s why crypto makes sense to me.
See you next month for another video about money.