7investing and CryptoEQ in September 2022: Ethereum's Merge, Reddit Has NFTs, and Blackrock & Coinbase Strike a Deal - 7investing

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7investing and CryptoEQ in September 2022: Ethereum’s Merge, Reddit Has NFTs, and Blackrock & Coinbase Strike a Deal

In this month's "Collision Course", the teams discuss the upcoming Ethereum merge, some unexpected new regulations, and how cryptocurrencies are gaining favor in the institutional market.

September 13, 2022

– By Samantha Bailey

7investing and CryptoEQ recently announced a partnership, to help investors get a better consolidated view of the opportunities in both equities and in cryptocurrencies. 7investing provides its top seven stock market recommendations every month, while CryptoEQ provides its top-rated cryptocurrencies.

The two companies are now joining forces and publishing a monthly Collision Course conversation, where they discuss important recent developments and the impact they’ll have on both equities and crypto.

This month, our teams dive into Ethereum’s upcoming merge, which will convert it from using a Proof of Work mechanism to one that is based upon Proof of Stake. This change appears to have broad-based support from the cryptocurrency investing community, though because the mining will require significantly less computation it might reduce the future demand for processors sold by NVIDIA (Nasdaq: NVDA) and others that have traditionally been used for that mining.

The teams also checked in on Biden’s executive order on cryptocurrencies from March of this year. A closer look reveals that the White House could potentially have an option to ban Bitcoin mining altogether within the country. While this is unlikely (the US has actually been quite supportive of the evolution of its cryptocurrency industry), it’s important for investors to keep an eye on regulatory developments that are impacting this space.

Reddit is now allowing collectible avatars to be purchased on its site and then sold using the OpenSea NFT marketplace. We believe this is a “markety” story, though it also shows how crypto is being embraced by websites who generate significant traffic volumes. And finally, the teams discussed discussed the recent partnership between Coinbase (Nasdaq: COIN) and Blackrock (NYSE: BLK), which is enabling institutions and wealth managers to branch out into cryptocurrency assets as a risk mitigation or portfolio management strategy.
We’ve made this month’s Collision Course conversation free for everyone! We always publish each of our video conversations — and also the complete transcripts —  for 7investing subscribers as monthly Advisor Updates. CryptoEQ publishes a written recap of the conversations in their monthly subscriber email newsletter, which you can subscribe for using this link.

Publicly-traded companies mentioned in this conversation include Blackrock, Coinbase, and NVIDIA. Cryptocurrencies mentioned include Bitcoin and Ethereum. 7investing or CryptoEQ’s advisors may have positions in the stocks or cryptocurrencies of the companies that were mentioned.

Transcript

Simon Erickson  00:00

Okay, hello everyone and welcome to our September Collision Course, between 7investing and CryptoEQ. A reminder if you’re new to the program, the collision is between equities and cryptocurrencies, which are finding more and more similarities and more and more developments that we want to talk about as investors.

 

Simon Erickson  00:17

I’m 7investing founder and CEO Simon Erickson, I’m joined by CryptoEQ partner Rayven Moore. As always Rayven, very nice to have you on the show here today.

 

Rayven Moore  00:26

Thank you. I’m happy to be here.

 

Simon Erickson  00:28

We also have another special guest. One of our 7investing lead advisors, Krzysztof Piekarski, is also going to be joining us for this and several future shows as well. Krzysztof, welcome to the program. Nice to have you here.

 

Simon Erickson  00:39

We’re gonna jump right in, we’ve got a lot to talk about. We’re going to be talking about the Biden administration’s crypto executive orders, some updates on that. We’re going to be talking about a development with BlackRock (NYSE: BLK) and Coinbase (NASDAQ: COIN). We’re gonna be talking about some fun developments in NFT’s.

 

Simon Erickson  00:53

But Rayven, the first story I think we should jump into is Etherium. Because there’s a big development right with Etherium switching from a proof of work to a proof of stake mechanism. Tell us first of all what that means and how this is going to be so impactful.

 

Rayven Moore  01:08

Okay, yeah, so the merge is probably one of the biggest events in cryptocurrencies since the Bitcoin was invented. So the Etherium merge is scheduled for September 15th, which is this week. Etherium is going to be switching from the proof of work consensus mechanism to proof of stake consensus mechanism. And what that looks like is the new Etherium that are minted, currently it’s being created through energy output of the miners. Once the merge happens, Etherium will switch to proof of stake and the new coins will go to whoever has a stake in the network. So the proof of stake will go to, the more Etherium you have, you will earn the new Etherium that’s being issued in a proof of stake model. And so that’s a fundamental difference. And it’ll have different trade offs about the security and the governance of that network going forward.

 

Simon Erickson  02:11

Is this a controversial change Rayven? You said it’s the biggest deal since the formation of Bitcoin and crypto. I mean, like you said, I can see that a lot of people have voiced frustrations, if we can call it that, about proof of work and all the energy that it’s requiring over time. But it’s not like proof of stake is a perfect mechanism, either, right?

 

Rayven Moore  02:30

Yeah. So there’s been a lot of ESG narrative going on in the news these days, and moving from proof of work to proof of stake will lower the energy output of Etherium by over 99%. And it’ll be much more green, much more cleaner, much more energy friendly. And so that is one of the best, good things that are going, that’s going for the proof of stake model. But on that there’s always a trade off. So the trade off is the control of the network will kind of be in the hands of the people who have the most Etherium. And so It’ll kind of be up for more capture, or it will be less secure.

 

Rayven Moore  03:16

But those are trade offs that I think the team at Etherium has considered rightfully, and they’ve made the decision to go forward with this. Other things to consider with the Etherium merge are the miners. So the people who have currently spent a lot of their money to buy these computers to mine Etherium. Once the merge goes through, their computers are going to be worthless, effectively for that use. So the question is, what are those guys going to do? Are they going to mind some other cryptocurrency? Are they going to sell those machines to the people who want to do games? Or are they going to use those chips for something else, for some other purpose? So I think that’ll be interesting. And that might also have some effects on the graphics card market, secondary graphics card market, which could also affect the video and also other companies in that sector.

 

Simon Erickson  04:06

I think that’s our takeaway for the equity side of this right? And NVIDIA (NASDAQ: NVDA) sells the graphics processing units, the GPUs. A lot of miners have been using those for mining Etherium and Bitcoin and other things. They don’t need to do that anymore, as you mentioned, because it’s now a proof of stake. Is that demand for NVIDIA’s processors absent in the market? Krzysztof, it’s certainly something we need to be thinking about because that’s been, perhaps a driver of demand in a couple of years past.

 

Simon Erickson  04:35

Rayven, one more question I had for you on this one was how does the crypto currency investing community think about this change? Has it been generally accepted and positive and optimistic about it? Or is there a lot of concern and hesitation and frustration or somewhere in the middle of those?

 

Rayven Moore  04:53

I think the vast majority of people are positive about this change. A lot of people are very excited that Etherium is moving to proof of stake. The only people who seem to be pointing out that this might not be the best thing to do are like the Bitcoin community, who will after this change be the only proof of work cryptocurrency available. So. And then there’s also the opportunity in this upgrade for, people have been discussing, what if the miners decide to fork Etherium and say, We want to keep proof of work intact and lead. Then there will be two. Etherium could then split into two. Which is, hopefully it’s a far off, and that outcome does not happen. Because that would be very confusing and a lot of uncertainty there with that outcome.

 

Simon Erickson  05:55

Well, speaking of uncertainty, there is some more uncertainty that’s been introduced by the Biden administration here. We did see that they had an executive order earlier this year. I think it was March or April, that they were kind of trying to firm up some of the regulations, how they’re going to regulate spot prices, how the commodities future trading commission, CFTC, was going to, who was going to kind of have jurisdiction over crypto? This was tied to, or tokenized, to other regulated products, like stocks or things like that. Who was going to actually make the decision on a lot of this? A lot of this is kind of still up in the air Rayven. But as you pointed out, there was actually an announcement yesterday, that caught a lot of people off guard that the White House might have some controls, people didn’t realize that they might enforce. What’s going on here with this development?

 

Rayven Moore  06:41

Okay. So yesterday, the Biden administration put out a paper that said they would be willing to limit or eliminate Bitcoin mining, for reasons of pollution, energy consumption, and other things like that. So this caught a lot of people off guard. This is a huge, important thing for cryptocurrency and for Bitcoin specifically. So it’s very interesting to see them put out this kind of warning shot, if you want to call it that.

 

Rayven Moore  07:23

But we do know that the current administration in the White House is very focused on ESG, and being green, and moving towards that goal. So I think that this fits the narrative of ESG, is that proof of work uses energy. Therefore, energy consumption is bad. But that’s not the take that I have on it. I actually believe that Bitcoin mining is good for the electrical grid. And we can see that happening here in the state of Texas, where Bitcoin mining increases the demand load for our energy grid, such that it basically funds the improvements to the grid so that we don’t have, issues like the Texas winter storm in the future because we’re able to raise our power supply and our infrastructure based on the demand from Bitcoin miners. So it’s just interesting to see the politics at play here.

 

Simon Erickson  08:33

Interesting is the right word. You know, we have to always be mindful of anything political in any way. But we are seeing an impact, lots of industries at a higher level, right? We just saw California is trying to phase out internal combustion engines for electric vehicles within the next decade. But of course, then at the same time, they’re having power brownouts and other issues that might be further complicated. This seems like another hot topic.

 

Simon Erickson  09:00

You know, when you’re talking about power, you’re talking about ESG. We’re talking about all the things that are involved with that proof of work. But just to even have that on the table. That’s a big statement to even have the hammer that could come down on this. We saw China do this a year ago, right. And there was certainly repercussions in China from basically banning Bitcoin mining. Do you think that the US would would actually do something like this Rayven? Or is this just something that’s a note that people are catching the attention of knowing that they have the ability if they want it?

 

Rayven Moore  09:30

Well, here’s the thing about the United States government is that there are multiple checks and balances. And the government is run by the people. So if there are people, and there will be people that disagree with this, then they will be there will be challenges immediately, to any any kind of law. If Congress, I think Congress would need to write it, I don’t think it would go through. But if the president tries to do an executive order, then I definitely know that there will be lawsuits left and right from Bitcoin miners to fight for their rights to use energy and for productive use.

 

Rayven Moore  10:06

So I think that this was kind of published in order to kind of read the room and check the temperature on what would the, how would the press take it? What would the backlash be? So this is an election year. So we’ll see how people are feeling. People will vote and that that’s their say in the government and you just have to participate in the process. That’s something that crypto people haven’t been doing as much over the last few years. But I think that it’s going to become more and more important to protect the industry that’s being created here. Crypto individuals, crypto people, people care, they’re going to have to start participating in the process and letting their needs to be known.

 

Simon Erickson  10:56

I think that’s a great way to put it, because almost when you say the word regulations, there’s this negative connotation with it right? Regulations is going to stifle innovation, it’s going to slow down innovation in the industry. But maybe that’s not the case, maybe regulations, at least if the government is supportive of listening to what the people want. It’s just setting the bar that everyone’s going to abide by. And you know now what’s out of bounds, what is acceptable. And maybe that is also, in a positive light, going to support innovators to say, okay, regulations are in place, I can know how I’m supposed to proceed in this new industry that’s going on out there.

 

Rayven Moore  11:32

Definitely. And I think regulations can be very good, they can be very helpful. And they can help to separate the people who are trying to take advantage of others, and the people who are actually trying to build and innovate. And so when there are no regulations, there’s this gray area where the people who are trying to do the right thing are also lumped in with the people who are trying to scam and defraud others. But when we have clear definitions, and we have the rules of the road, then the people who are doing the right thing can then point out to people who are not doing the right thing. And then we can have, we can have growth. We can have, we can have certainty, so that we can operate in a way that is clear and like every other industry.

 

Simon Erickson  12:22

Krzysztof, did you want to chime in before we move to the next topic. Any thoughts on this one?

 

Krzysztof Piekarski  12:26

Yeah, I think you’ve got, well you guys already summarized it pretty well. But when I was there at Consensus and I saw the two senators and Congress person talking about regulation and to me it felt like it was a move in the supportive direction. That yes, people do want something, it can’t be the Wild West forever with people losing their fortunes. And so this executive order seems like it’s just starting to create a knot between the multiple factions of government and I have no idea how it gets untangled.

 

Simon Erickson  13:02

Speaking of Austin-based conferences on cryptocurrencies you just mentioned Consensus Krzysztof. Rayven, I think you were just recently at the Bit Block Boom conference up in in Austin. Any fun takeaways or any read on what’s being talked about right now? Can you tell us kind of about what the conversations steered. Which way the conversation’s steering out there right now?

 

Rayven Moore  13:22

Definitely. So Bit Block Boom was an amazing conference. It was a smaller conference than the Bitcoin Miami conference and others like that. But this was a Bitcoin maximalist focused conference. And kind of the key talking points there were Bitcoin mining. A lot of people were Bitcoin miners were there. So there were miners. There were, the newest industry, I think, coming around Bitcoin mining is now insurance products catered to those miners.

 

Rayven Moore  13:53

So it looks like property insurance, casualty insurance, and even things like business interruption insurance, based on the hash rate are now being developed as well. So that entire insurance market could then make Bitcoin mining more investable. Less risky. It’ll de-risk the space.

 

Rayven Moore  14:16

Others so, Bitcoin mining was a key. Lightning was a key. So that’s a scalability, a speed and privacy layer that’s on Bitcoin. So Bitcoin mining, Bitcoin lightning, and then there are some other software’s that I thought were very, very interesting. One of them was a bookkeeping software that connects to QuickBooks. So if you’re a merchant, and you’re selling things for Bitcoin, then you can integrate this software and then it’ll bring all the data over to your QuickBooks for your business.

 

Rayven Moore  14:51

Another thing I saw was some mining software to regulate the equipment just so that the output is maximized to the tee. So these miners are trying to get peak performance from their machines and get the peak useful life out of these very expensive machines. So I think mining and lightning were kind of the key. The key things there at the Bit Block Boom conference.

 

Simon Erickson  15:17

Yeah, perfect. Krzysztof would you’d like to chime in too? I know Consensus was a couple of months ago, but you do live in Austin got to attend that conference. And you kind of key takeaways that you had from that one.

 

Krzysztof Piekarski  15:28

Key takeaways. I’m not sure I had much to contribute, because so much of the breakout stuff is technical and way beyond my paygrade. But one thing that I try to pay attention to is always at the very high level of stuff. And a question, going to a conference, there’s so much energy and there’s so much optimism and there’s so many shops set up. And sometimes I can’t tell the authentic from the gimmicky and what not.

 

Krzysztof Piekarski  15:59

And so what I’m always left with is this question about the seasonality of the industries. In other words, I know in the AI world, there’s the AI winter, and then AI spring. Where in the AI winter you have the scientists saying this can’t be done. You know, it’s just an impossible task. And then spring comes along. And you see the new upgrades and the new updates and the new progress. And people begin being optimistic, saying no AI is coming, AI is coming.

 

Krzysztof Piekarski  16:35

And I think, I don’t know to what extent it’s a useful analogy for the crypto world. We’re in a crypto winter, I guess price wise. But I always wonder, especially as someone like Rayven. Even in the pessimistic time is the overall feeling, like no, crypto is gonna make it or was it just a really exuberant fad? You know, and of course, in a conference like that everyone’s like, rah, rah, rah, but I’m not good enough to tell. So Rayven, how do you feel? I guess it’s like, I’m gonna punt this to you. In the depths of winter how do you feel right now?

 

Rayven Moore  17:14

Well, I feel like I’m in a perpetrual spring. But it’s also very good to read the room and see how everybody else is feeling. So right now, there’s a lot less people in the room. Everybody’s left the room. But the people who are still here are the people that are building and innovating and are building the products that will bring the next wave of, I don’t know, the guys who are only here when the weather’s nice. I don’t know what you would call those people, fairweather fans, or what have you. The people building things now are going to build the stuff that are going to bring in the next cohort.

 

Rayven Moore  17:53

And as you were saying, you don’t know who’s real and who is more marketing and more gimmicky. I think that is the big challenge in crypto, because it’s so new, is so nascent, that you have to be skeptical of most everything. You have to be skeptical of all of the projects. And you also have to, don’t trust, but verify. If somebody’s telling you that this thing can make large amounts of APY, then you have to consider Okay, so how are they making this money? Where is this money coming from? And I think that is the big question that you always have to keep asking yourself is where is this coming from? How is this? How does this have value?

 

Rayven Moore  18:37

And if you can think through that from first principles, I think that is kind of the best way to approach this market. And the people building right now and that are still enthusiastic. I think these are the people that will in the long run, be very happy that they stuck around and continue to participate and learn, and network and grow. Because it’s a very tight knit community. I think crypto is very small. And so the people that are working, are all getting to know each other because they’re all helping each other build this market.

 

Krzysztof Piekarski  19:20

And I think I’d say from an investing standpoint, when you can’t tell the difference between one or the other, immediately run to the credentials of the leaders making the stuff. Like really learn about the people. Because character can’t be deceived for too long. You know, and so when you have really intelligent lifelong scholars and engineers and developers working on a project, you could probably intuit they’re not in it for the cheap gimmick. And likewise, when that’s absent, be careful.

 

Rayven Moore  19:59

Yeah definitely, I definitely agree with that. And then another thing I would argue is that even if that person has an immaculate record, if they have more control than, if they’re able to exert control over the protocol itself, that is another red flag. Like if a change needs to be made, and they can just push it through willy nilly, like it was very easy to make that change, then that’s another red flag.

 

Rayven Moore  20:31

For example, this Etherium merge has been, they’ve been working towards this for multiple years. So it’s not a very simple change, a very complex change. And this group of people needed to do this have been working on it for months and months and months, over two years now. That being said, how large and distributed and diverse is that group, right? So you always have the trade offs. How competent is the group? How much control do they assert? Can they put over the whole thing itself?

 

Simon Erickson  21:05

Rayven, I want to spot you up with one of each here. I’ve got one long term sustainable, awesome story. That’ll be our final story here. But before we get to that, I’ve got one that maybe falls on the line of the markety, skeptical. I don’t know if this is real, or if this is to stay like Krzysztof just mentioned. But I did want to at least talk about it, that Reddit is now allowing collectible avatars to be purchased on its platform. They are created and sold over the OpenSea platform. Again, these are non fungible tokens, NFT’s. But you can buy them on the Reddit avatar store page for between $5 and $50. A lot of them are being sold for a lot more than that. Is there anything to this? I mean, Reddit gets a lot of traffic as a website Rayven, is there anything to the story? Or is this just more marketing?

 

Rayven Moore  21:51

I think this is just a really fun way to participate in Reddit. You know, a lot of people love Reddit, I use Reddit a lot. And I think this is just a cool way to kind of show that you’re like a super cool Reddit user by buying a limited edition or one of one avatar. It’s like, it’s like swag, you know? You have a piece of swag. I have this, no one else can have it. So that’s how I look at it. It is marketing. It’s for fun. So I wouldn’t look at this as an investment. I wouldn’t go try to buy a bunch of them to get the rare one to resell it and make a bunch of money. I’m sure someone will be able to. But to me that’s not as much investing. This is more collecting and like trading cards, video games type.

 

Simon Erickson  22:45

Krzysztof I have a trivia question for you. Most of the NFT’s sold for these avatars, like we said, are purchased or sold for between $5 and $50. The most expensive NFT sold on the Reddit platform so far is the Mouths #12 avatar. It was sold in a polygon bridge Etherium on September 3. What was the value dollar of that avatar Krzysztof to the nearest US dollar?

 

Krzysztof Piekarski  23:13

This is the top value?

 

Simon Erickson  23:16

Most expensive so far of the avatars that are sold on Reddit NFT’s. Just launched within this last month.

 

Krzysztof Piekarski  23:25

What was the average range?

 

Simon Erickson  23:27

$5 to $50 is the average for most of them

 

Rayven Moore  23:29

Yeah

 

Krzysztof Piekarski  23:33

I’m gonna say $14,000

 

Simon Erickson  23:38

A good guess. Rayven, would you like to guess on this too? There’s no way to tell what the number is here.

 

Rayven Moore  23:44

I’ll guess, I’m gonna guess $250k

 

Simon Erickson  23:46

It’s it’s actually $333. Only $300 bucks, guys. I mean, no need for $150,000 for a custom avatar.

 

Simon Erickson  23:59

Reddit NFT’s is just a fun story, like we said, just to follow along.

 

Simon Erickson  24:02

But Rayven let’s talk about the more serious one here. The one that’s actually, I think, really is building something cool. Is the integration of Blackrock with Coinbase. Right. So Blackrock has got $10 trillion of assets under management right now. A lot of it is ETFs a lot of his retirement funds, things like this. Coinbase is quickly becoming one of the most popular cryptocurrency exchanges right now. And the integration is that Blackrock’s Aladdin clients, which is the platform for their institutional investors, or portfolio managers, will now get access to buying or selling cryptocurrencies, including Bitcoin, through their Coinbase Prime platform. Coinbase Prime has 13,000 clients and again, this is mostly institutional clients that have access for more than 300 different cryptocurrency assets.

 

Simon Erickson  24:28

The way that I think of this Rayven, I would love to hear your opinion on this, but just to have the first opinion on it.  Is these are two very, very large platforms, right? Financial services platforms that are now figuring this out together. And you and I have chatted on several of these Collision Course calls in the past about how are institutions going to embrace crypto? We know that if you’ve got a retirement account you’ve got to deal with risk management. You don’t want to have everything to go up and down in cycles, because people are counting on retirement income or whatnot.

 

Simon Erickson  25:27

Now we’ve got a potentially new asset class with Bitcoin or the larger buckets of cryptocurrencies that can minimize some of that volatility, hedge some of the volatility of some of the other asset classes, we’ve always talked about. Whether that’s stocks or bonds or real estate or anything else like that. And so I think that this is a portfolio management tool. It’s a risk management tool that seems like it’s been embraced, or at least of interest for institutional clients. And now there’s a way to actually make trades and actually do the analysis between this partnership with BlackRock and with Coinbase that we’ve seen.

 

Rayven Moore  26:04

Yeah, I think this is huge. We’ve been saying for many, many years, the institutions are coming. And now they’re kind of here. And so now we can see it’s not as rah-rah as we would have expected it to be. But what we talked about just the conversation prior. The people building during the bear market are the people that are going to enjoy the fruit when it is springtime. So during the bear market, we can see big boys like Blackrock coming in, setting up their exchange and getting their institutional clients ready to go. So I mean, this is the signal. Like, watch what they’re doing, not what they’re saying, while they have the US government, the White House saying, Oh, we might ban it, look at what the people with the money you’re doing. Right?

 

Rayven Moore  26:50

So they’re setting up the accounts for their institutional clients, for the people that they care about the most the clients with a lot of money, they’re helping them set up exposure to Bitcoin. And I believe that Bitcoin belongs in your portfolio. I believe it has a spot in everyone’s portfolio and how much Bitcoin as a percentage is up to the individual. But I do think that there’s an argument to have some exposure to Bitcoin in everyone’s portfolio.

 

Simon Erickson  27:22

Yeah, I think so. I think that’s spot on Rayven. Krzysztof to bring this over to the equity side of it. We like winner-take-most markets. We like, where if you are the big dog in the industry, you capture the lion’s share of the profits. And it seems like from an equities perspective, Coinbase, which is a publicly traded company, has certainly become one of the more popular platforms right now. They’ve established trust and they’ve got a lot of people believing that they are one of the most secure platforms for buying or selling. That is, of course, important when you’re charging fees directly tied to trading, which has been Coinbase’s M-O, and business model for the past several years. But now you start seeing them unlocking optionality of new things like staking. Or subscriptions that could be tied to things in the future. And now they’ve got an enterprise presence, and now they’ve got an institutional presence. It’s like there’s advantages beyond just the trading volumes themselves and the dollars and cents that they derive from those of being one of the larger and more integrated platforms. And to me, this partnership with Blackrock is is perfect example of that.

 

Simon Erickson  28:31

Rayven or Krzysztof, any other thoughts on this story? You know, we could tie it all together unless you guys have any other final thoughts on this one?

 

Krzysztof Piekarski  28:38

Well, I guess I have a question for Rayven. And that’s based on what you just spoke about Simon, maybe the skeptical part of me wants to ask about “not your wallet, not your crypto” piece of this. Because the way you were describing Coinbase, yes, there is a lot of trust being built up in all these ways and “not your wallet, not your crypto”. So how do we, how do we negotiate that tight pass?

 

Rayven Moore  29:10

Nah, you let other people do with their money what they will. They can trust Coinbase with their funds, but personally, I would encourage every holder, every owner of a cryptocurrency to hold their own private keys. So that’s completely self sovereign, that you are the only person that has access to your funds. We’ve seen an entire slew of companies over the last few months. What do they do? They stop withdrawals, so that you have what feels like it’s your money. They tell you, oh yeah, you have your Bitcoin here. But then they get into financial problems, then it’s their Bitcoin.

 

Rayven Moore  29:52

So to avoid any issues whatsoever, do not keep your crypto digital assets on an exchange. You want to definitely have your own private wallet. You want your own hardware wallet, something that is safe and secure. And you don’t have to worry about a Celsius stopping withdrawals or a Voyager stopping withdrawals and keeping funds. I’m helping a friend of mine with her taxes and she had some money on some exchange where she shouldn’t and that that money is no longer accessible. So you want to hold your own keys. Self custody. Self custody is the most important part of investing in Bitcoin and cryptocurrency.

 

Simon Erickson  30:37

And now Rayven, I want to take the complete opposite approach from what I just said. Which is that we’ve seen large companies that have been the trailblazers, got the users, became the most trusted or familiar name in their industry. Then come back and be kind of like the pheromone emitting, attractor of regulators in the future, right? Facebook (NASDAQ: META), Mark Zuckerberg, perfect example of a company that was a trailblazer and then kind of came back and now is getting a lot of scrutiny from from the regulators.

 

Simon Erickson  31:07

Do you think that Coinbase being the early trailblazer in crypto, at least as a crypto exchange? Is it benefiting from being first and having a large user base? Or is it really going to be at the crosshairs of a lot of pain that others are gonna learn from here?

 

Rayven Moore  31:22

I think you get both. So it’s a double edged sword. So yeah, you get the biggest target on your back. But you do have a large amount of the market share. So there’s a risk associated with that. And I think that the thing about regulators is, there’s two sides to them. So even if one side likes you, you could then be targeted by the other side, because of that fact. So in this new and emerging industry, I think everybody just has to look out for their own self interest first and foremost.

 

Rayven Moore  32:04

So as the user and as the individual, you’ve got to watch out for your own self interest, which means securing your private keys and making sure your investment will be there. Whether or not Coinbase is shut down tomorrow, that should not be a catastrophic loss event for a cryptocurrency investor or Bitcoin holder or anyone like that. You have to assume worst case scenario and always be prepared for that. As if, if it happened tomorrow, would that ruin me? And if that’s the case, then you need to do something different with your self custody of your assets.

 

Simon Erickson  32:45

Great point. Thanks very much Rayven.

 

Simon Erickson  32:47

For everyone who’s listening and all of this show is new. This has been our Collision Course with CryptoEQ. We at 7investing, we always wanted to go out and search for a partner that really knew what they were talking about, with cryptocurrencies.

 

Simon Erickson  33:00

We talked a lot about Bitcoin and Etherium. But CryptoEQ is actually looking at a whole bunch of different crypto assets. I know that you guys are publishing core reports for your paying subscribers. So anyone who wants to follow along with them it’s www.cryptoeq.io is their website.

 

Simon Erickson  33:15

And if you want to follow along with our stock market recommendations, www.7investing.com

 

Simon Erickson  33:21

Rayven and Krzysztof, this one was a lot of fun. Thanks, guys. I really appreciate you being part of the show this month.

 

Rayven Moore  33:26

Thank you, Simon. It’s great to be here.

 

Simon Erickson  33:30

Yeah, thanks, special guest Krzysztof, I hope to have you back for a couple more shows in the future. We certainly have a lot of fun with these Collision Courses.

 

Simon Erickson  33:36

We’ll be back again next month in October with more to talk about the collision between equities and cryptocurrencies.

 

Simon Erickson  33:43

Until that time, my name is Simon Erickson. We are here to empower you to invest in your future. We are 7investing. Have a great week.

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