BITCOIN TRADING BETTER THAN HODLING?? WOLF OF ALL STREETS & JULIAN HOSP (incl german subtitles)

fantastic then we're live here scott i appreciate the time wolf of all streets looking forward to uh me too man our interaction man me too man thank you so much for uh having me on we had a great talk uh last week so it's cool cool to be able to my wife my wife the first thing uh that i told her she was like my goodness that name like that guy has the best name out there how talk to me about it like where did wolf of all streets come from it's a complete joke so uh you know i started getting into crypto when i uh sort of transitioned out of the dj and music world which is where i had spent basically the previous 20 years although i'd obviously been trading and doing markets and other things um and i remember people used to always criticize as you see often on uh in the crypto community you get comments like shut up dj what do you know about bitcoin you know things like that um and i was always one to believe that people god forbid can be good at more than one thing um so jokingly one day i put up the name the wolf of all streets when somebody made that criticism or i said something in a comment and i was like listen you know you can be good at more than one thing nobody can put you in a box nobody should tell you just because you did x that you were expected to be why and so i put it up as sort of a joke it was probably in early 2017 and i was in a bunch of discord groups and stuff and people within a week everyone started calling me wolf instead of scott and i and i kind of was thinking wow this was just a joke i was going to definitely take it down i used to change my name all the time and then it's stuck so here we are men that's really awesome who who who introduced you to to crypto and bitcoin so it was pretty pretty popular early uh in the dj community i think you know for whatever reason i think musicians were interested in it and when i say early i'm talking about 2016 2017 not 2010 or 2012 of course but ahead of the real i think mainstream adoption in 2017 or at least mainstream interest so i had one friend who's actually an entrepreneur and kind of bordering on wall street guy who had told me about it and then i had a a partner djing you we had a project that was signed to time tommy boy records we were working on an album and he got super into bitcoin and got me into it and that's when i i bought some bitcoin he was like there's this thing uh ripple and this other thing ethereum you know what i mean and uh and i went on bit tracks and was super confused by the bitcoin pairs and didn't know what i was doing i traded for years but seeing it denominated in bitcoin was very confusing but luckily you know right when i started doing it everything just went up so i took a few thousand dollars and all of a sudden it was tens of thousands of dollars i took out my initial and some profit and that tens of thousands turned into six figures which and you you know how how it went kind of for everybody at that time so do you see some resemblance of uh probably like the q3 q4 run to what we're seeing right now would you see this and we're recording this like beginning of may so um or would you see this a bit different like draw some comparisons uh we're talking about versus 2017. yup um i i okay well first it should be said that the famous quote about investing uh sir john templeton said the four most dangerous words in in investing or this time it's different this time might be different um but i think this time is different famous last words you know i think that uh in 2017 there was and you would know this better than probably anyone i think there was minimal infrastructure uh to support the retail interest right so you had this sort of two-pronged issue you had retail speculation with people who didn't understand the asset that they were buying right everyone was buying bitcoin because somebody told them they'd be able to sell it for more money not because they knew what bitcoin was or because they believed in the ethos or because they cared about decentralization or privacy they literally were buying it because they saw the number going up and we're fumbling in right and and we did not have any support infrastructurally for that so you couldn't get big money in because it's not like tesla at that time could have bought 1.5 billion worth of bitcoin and thrown it on a ledger right there there was no custody there was no security there were no robust order books there was no um thriving otc market that was reliable um and so i think this time we have the retail interest but that's not the core of it i think we have obviously seen the institutional and big money interests but now they're interested and they have the infrastructure and ability to do it even though it's still clunky i mean when you look at the way that microstrategy had to like buy in 60 000 separate orders or 16 000 whatever it was to accumulate their first tranche of bitcoin that's still not ideal but at least you know they can go to coinbase whatever you think of coinbase they can go to coinbase they can buy their coins coinbase can move it to the custody so that you're not responsible for that massive transaction and then you know that that custody is insured and covered and you don't have to touch your coins so i think uh the infrastructure is exponentially better and will continue to become exponentially better so i think for that reason it's massively different because there's sort of this established floor of institutional and big money that um didn't exist before you know whales easily as we saw could pull the floor right out from under retail in 2017 and there was you know there was no buyer of last resort until three four thousand dollars when the hodlers and whales who had been in from ten bucks were willing to step in and say hey it's still three thousand dollars you know um so i think it's very different in that regard what about i mean even a week ago when we kind of had the tables turned like come on today doge 100 billion close to 100 billion market cap not there probably yet um i don't know if i would have said uh in six months ago doge is gonna be number four scratching number three it's gonna be a 100 billion dollar cap like everyone would have said dude like that's gonna be the peak of the bubble like how does that kind of fit into place at some point between 2016 and 2019 and recently i had doge again because everybody who's ever traded doge again uh ever traded doge in the past those are these cycles right you buy when it comes down between 15 and 25 sats sats we never talked about dollars because it was never above a penny um and you cycle up to 150 or 80 you sell everything you wait for it to come back down you place your bids and we did that again so i sold under a penny on this cycle or right around a penny once again oops 70x later right um but um you know this is what happens when you see and listen i probably i was trying to do the math of my wife there was probably a time when if i had held it through now i would have had like 40 or 50 million dollars worth of dish oops um so but i would have never held it and i know that in retrospect because there's no reason for it to be where it is we all know that it's a joke we don't know it's a meme that's why we love it um we all know that it has no fundamental value it's it's not scarce it's inflationary they can print as much as they want there's no development uh endless reasons why it shouldn't be doing but you can't none of that fights gene simmons and elon musk and snoop dogg you know and and uh robin hood and cuban yeah right yeah whatever it's a love it's become a lovable a lovable joke and i think that um i view it now as an outlier i don't even view it as almost part of the crypto market in a strange way you know just like uh i i don't think you can say that what happened with gamestop is indicative of the entire stock market i don't think you can view what's happening with doge is indicative of everything in crypto or the serious development building that's happening i think it's just become a super fun gamble for people and i think that people who are in crypto understand that they're gambling with dogecoin and they're having fun trading like the time of their lives the problem is the people who don't understand crypto at all who are buying dogecoin for the same reason i was talking about the people bought bitcoin in 2017 number go up right and then you start to hear dogecoin is the future of money future global reserve currency you know and the dallas mavericks are taking it to buy uh you know or to taking it to buy uh hats and jerseys okay well the people who don't understand that this is a joke and you should be trading it not investing in it are going to get absolutely destroyed at some point because even if it continues up they're not going to sell at the right time and they're going to hold it all the way back down just like we've seen before so i view doge a bit as an outlier super unexpected for me obviously as you touched on nothing about this uh was expected in my mind it's an interesting concept about uh doge maybe being completely aside of that of the rest there being that outlier i i mean you can buy it on non-crypto platforms you know it's mostly being traded now in usdt or dollar pairs uh by people who don't quite understand the asset so yeah i just see it as sort of this great outlier and i'm hopeful that it will be it will remain light-hearted and people will um view crypto in a good light and it won't completely crash on people and make them you know use that as further fud and evidence against the issues with crypto because it's so unfair like we've seen speculative bubbles for as long as markets have existed right everybody jokes about tulips and beanie babies and and dot-com bubbles and stuff so i would just hate to see um a doge crash if it happens reflective of the entire crypto environment because we all know that it literally is just a meme yeah uh how would you characterize your investment style are you more of a buy and hold investor you're more uh like a i don't know momentum guy or you are like a day trader how would you characterize your investment style well it's funny because i guess i identify as a trader and a lot of people identify me as a trader um maybe that was a more apt description over the past few years now i never trade because the market's so good why would i um and but my view has always been to be an investor first i believe that at least 70 percent of someone's portfolio and assets should be in long-term investments that they don't check regularly and so there's your overall portfolio right and so you should treat your overall portfolio that way and then you break that down into you know maybe you have an equity portfolio a real estate portfolio and a crypto portfolio and within your crypto portfolio you do the same thing um i always believe that you know when i started that that 70 should effectively just be bitcoin and then you know 15 in cash or stable coins now i favor stable coins because of yield and 15 for trading you know and and understanding that 95 percent of traders fail that investors generally beat the market and traders don't so no matter how god-tier or amazing of a trader you think you are i still think you should only be trading with a very small percentage of your capital 15 20 25 um when the market really heats up but you know first i became a pretty big ethereum bowl over the last couple years um so you know i've added quite a bit of ethereum to that long-term stack probably now like a 70 30 split bitcoin to ethereum and then for me successful trades that go exceptionally well i always scale out of positions like i don't like to just buy all at once or sell all at once but to me that uh doing it slowly eliminates the stress of the decisions like every time i take 10 off the top of a trade it's a little less stressful to manage that position because it's not quite as big and i have that mental edge that i took some profit and i can move my stop-loss up and things like that so i think that eliminating the stress of those huge decisions but as a result if i'm scaling out on the way up whether it's by percentage basis or levels on a chart it doesn't matter how you do it you know each resistance level you take a bit off um you know the last if i've done exceptionally well i mean some of these coins you know we do 100x on a coin right if i've done 100x on a coin the last 15 20 of that bag i'm moving over to the investment side and never thinking about it or touching it again if it goes to zero i've made so much money it doesn't matter but why not hold it if it could do another 100x and i'm playing so to speak with the house's money so that's generally my approach so the investing side now has like dust from all whole lot of positions on top of my larger sort of ethereum and bitcoin holdings and then there's things that i believe in that i have you know smaller percentages of that that in have you ever counter-checked so i'm just i'm i'm on especially on youtube i'm super transparent on my investments because they're so boring right so i i buy yeah i buy like once and then i don't do anything and then uh i don't know two years later i do something again right so it's super easy to kind of be that transparent or explain what's happening and people can all back calculate my returns and so on and my statement has always been that i have never met someone that over those times has actually outperformed those simple kind of buy and hold gains and so i want you i just held my doge if i had just just held my doge that entire time not that i would have but as a as a as a illustration of that it would have made me more money probably than every minute of my life that i've spent banging my head against the wall trying to trade or chart or analyze so why do you trade or why do can you outperform a simple buy and hold strategy and if yes how do you do it i think a few people can and it happens when you identify those rare gems that just go crazy but um you know in my mind it's all about the way that you manage your risk i think most people are looking to like hit home runs when they trade and that's why they lose because it's a gambling mentality i always tell people that my philosophy on trading is to plan your losses uh effectively the only thing that you can control in a trade is how much you lose correct like you have no control over what the asset does after you enter a trade so the only thing you can control is how big your position is versus your stop loss and how much you're willing to lose so if you're really really conservative with the amount that you're willing to lose on a trade and the caveat being you don't change that once you enter the trade that's what kills people they move their stop loss they think it's doing well they add to the position they go off that initial plan if you have a perfectly calculated simple plan where your upside outweighs your downside and you consistently lose small eventually you will hit one of those home runs and make up for all those small losses kind of the same mentality as a poker player who grinds it out at a table protecting your stack you know as they say they're the the two rules of trading one is uh is don't lose money and two is you know c rule number one so protecting your capital is is what you should be concerned with not growing it um and i think that mental switch is what allows people to be profitable but it's so um so uh counterintuitive for most people because you say well if i'm going to trade i need to be winning and then you say i'm going to be a professional trader i need to be trading right most professional traders i know unless they're scalping which a lot of them do like do what you do almost it's like most our time is spent researching and analyzing and talking to people and very little of it is spent actively trading because you know what you're looking for you execute the trade and then you're supposed to step away so unless you're scalping like five minute charts i don't see what you're doing all day for me i could trade two minutes a day you know be profitable do you stop loss today on on on your investments or only on the on the trading side trades trades so i i don't have stop losses on like my bitcoin positions for example because i view it as an investment my cost basis is so much lower than where price is now that uh and i have no intention i you know i view i have i'm not a maximalist by any stretch but i have sort of a maximalist view of the importance of bitcoin as a part of your portfolio so i think that there's a really important differentiation between the price of an asset and the value of an asset you know um so the price of bitcoin is almost irrelevant to me as an investor because no matter what the price is if we get to that time where say which i don't necessarily believe we will but if we get to that time where the dollar hyperinflates the global economy really melts down all these things that bitcoiners have said listen central banks are irresponsible governments are irresponsible i need to have some bitcoin that doesn't matter what the price is i don't care what the price of bitcoin is it could be a thousand dollars or a million dollars when that happens because then is when you're gonna see the true value of bitcoin right so for me mentally it's hard not to obsess over price because it's like everybody likes to see where their net worth stands but if you actually believe that it's a hedge and there's a chance well you hold that hedge regardless of the price right so um so that's a very long way of saying that i believe in these assets um to my very core you know a lot of them specifically bitcoin and ethereum and so i'm just going to hold you know whatever whatever the price is do you some do you think someone like do you think the large institutional investors maybe also michael sailor tesla do you think when they put in their positions or when tesla sold their 10 position do you think they use any kind of technical analysis or do you think they're more like i'm going in my value is so much higher to where the price is right now how how because i think right the average person is always going to look oh where's their support where's their resistance let's kind of time this like that matters that's all that's all like it's super fun and um it's interesting to look at the chart and understand but you're looking at the mentality of other traitors when you look at the chart right you look at a chart support and resistance is only a function of fear and greed or other human emotions where is there going to be so much pain that people are going to panic and sell that's where i want to be buying how do i find that on the chart right and you can tell by where people have had their orders that's all a chart is a chart is a risk management tool and a visualization of human emotion is not a magic you know a magic wand or a crystal ball in my opinion but so i think in the case of tesla and microstrategy i think uh no i don't think that they're using technical analysis i think that uh generally michael saylor is taking a by the dip approach first he got his initial position and then we've seen when there's a dip they add a little bit here and there i don't think the dip has to be to 51 or 52 or 51.5 you know i think that uh okay bitcoin's down 15 i still think it's going up i'm gonna buy who cares if it goes down 25 right um and that's the approach that most investors should take like if someone came to me sit now and said you know like what should i do if i want to get some bitcoin i would say either dollar cost average blindly or just buy some and then buy any dip you know and also that mentally gets you prepared and excited for when price drops you're not looking to sell when price drops you're mentally looking to buy when price drops which is a huge edge on the most of the market but tesla i think tesla bought it it doubled in price they came to quarterly earnings they had no earnings on their cars right they made 400 million dollars uh in q1 and they did it all on energy credits and 110 million dollars on bitcoin so if you were elon musk or an executive at tesla and saw the hey we've made 300 million it's only on credits we're gonna have one thing we made money on this entire quarter and it's not selling cars maybe we should sell a little bitcoin and raise that number up oh and by the way we still have way more dollars worth of bitcoin you have more bitcoin of course i sold some but we and also now we're selling cars with bitcoin which is an accumulation strategy that we didn't have when we initially did this so i think that that's a savvy move that should be applauded and frankly i think that michael saylor is a unicorn like he's going to be a one-of-a-kind nobody's going to be raising billion-dollar convertible notes at zero percent to buy bitcoin and then have you know half the market cap of their entire company in bitcoin that's giga chad level of risk it's incredible we all love him for it that's an inspiration i think tesla is more realistic of what we'll see from companies right when you're running a business and you have a company yes he wants to hold bitcoin on his his treasury but there's also you should understand like we made money great we should sell a little bit help our company more money for research and development more earnings better stock prices it's good for everybody so i think we'll see more companies take more of that approach right add it to their treasury but be flexible with what they do with it which could be on the downside as well i mean i don't think most companies are going to hold an 80 drop on a from their cash reserve so you have to see the flip side michael saylor probably will i think that he would go down with the ship no matter how far it sinks but i don't think that most people are going to put their jobs on the line over bitcoin i mean he had experienced some massive pain in the early 2000s i mean look at the stock chart back then it did minus 99 so he has been through it before so yeah absolutely do you think there is value in technical analysis at all yes i think there's value in technical analysis because otherwise you're just i should say that uh if you don't have a chart and you're trading then you're uh throwing darts blind and if you do have a chart you're trading you're throwing darts with one eye open instead but you're still throwing darts um i think that uh like i said you know it's a visualization of where people are interested in assets and if you treat it as such it's the best risk management tool to justify your moves whether literally like you're doing it because of an ichimoku cloud or rsi or supply and demand sport resistance choose whatever indicator it doesn't matter how you do it if it in your mind justifies a reason to place a stop loss at a certain area where your idea is invalidated even if your idea is stupid at least you have a reason to exit the trade when your idea from your system is invalidated and then if you position if you position yours if you size it correctly then like i said all it does is prevents you from taking those huge losses in my mind it allows you to take those small acceptable losses over and over again until you get lucky and catch one that goes uh massively to the upside because if i didn't have a chart and i just said listen i want to buy tesla or i want to buy bitcoin or i want to buy whatever and i wasn't and i'm trading not as an investor just buy it who cares you never look at a chart and it's important to realize probably over 99 of the people who have accumulated generational wealth and markets have never looked at a chart and arguably have never heard of technical analysis right this is like a super focused like uh thing that's even i even know wall street traders who have never looked at a chart right who trade because they trade on fundamentals they call you know they go on earnings calls and they decide on long-term positions based on value of the company and p ls crazy things like actual data um you know so i i think that um it's a very small aspect but for me for anyone who's trying to find an entry i can't tell you where my idea is invalidated on something i'm buying unless i look at a chart and see it visually so for me that's the best way to find my stop-loss i really think the best reason is to find your stop-loss and to find your take profits and then to step away and actually let it happen without interfering and what are your general ideas there what uh what charts do you generally look at what kind of time frames what are the is it a five minute is it a four hour hourly daily what what are the general things you look at usually the lowest i try to go for actually trading is the four hour so i like the four hour daily weekly monthly like i usually i'll have four like if i have my bitcoin not the ones i share because i when i share uh charts with people i like to have it very uh clean and concise to what i'm trying to show but my actual own charts are sort of these like sloppy you know uh insane things with that with everything going on um so like i like to start on the widest time frame possible if it's a stock that's been around for decades i'm looking at the monthly if it's 4x i'm definitely looking at the monthly right i want to see what the trend has been for a long time uh when we start getting into bitcoin and larger caps i'll start probably on the weekly right because i think monthly gives you an idea of the trend right you the trend is your friend you want to be trading in the direction of the market a monthly candle kind of useless because even if you like look at one hour candles you know that you can see that candle that's signaling reversal and then seven or eight candles later later you see the reversal and it happens i'm not waiting eight months to see what happens with the monthly candle you know um so i think that that's where you kind of determine the macro trend and then you sort of uh zoom in to find the entries and exits in this more more specific so you start in the larger time frames find the trend go down to the next one see kind of what you're looking at by the time you get to the daily you should have a very good idea of the levels that you're interested in and then maybe if you're trying to get really specific you drill into like the four or six hours i like the six hour chart a lot as well which not many people use in crypto but it's very popular in wall street why why do specifics like why six hours yeah it's one of those i think they're somewhat self-fulfilling prophecies you want to be looking at what everybody else is looking at right if you believe that a chart is an indication of what humans are going to do and what decisions are going to make you want to be looking at the same ones so for example i never cared about moving averages i think that they're you know moving average people view it as support and resistance which it does act as but it's based on previous price action it's not telling you what's coming it's an average of all the candles before so i don't i don't like things that are lagging indicators when possible um but then when you see everyone in crypto like on twitter starting to talk about a certain thing everyone all of a sudden like i have no idea i've never heard of a 21 ema or 21 ma in my life in the eight but like everybody started talking about 21 emas so i threw it on my chart because like if i know that everybody's looking for that order i'm going to place my buy right above that line right because like i want to be the smart guy who front runs it and it never gets there because everyone's watching it so i think there's a huge element of and in crypto in legacy markets you don't like there's no i mean i guess there's thin twitter and stock twits whatever but like there's no huge community of people talking about technical analysis publicly that's very unique to twitter and crypto and really cool because i can see what i think most traders are sort of looking at you know um so i i think that most technical indicators are self-fulfilling prophecies if enough people are staring at an area it comes true and then they go look technical technical analysis is amazing i'm like no you're all just placing your orders in the same place right so um you can it's kind of a chicken and an egg scenario but i like to like i said larger time frames i think for much bigger moves and then just kind of zoom in to find the entries and exits what are the platforms you trade on and and how much leverage do you do you use i don't use any leverage anymore um leverage is amazing uh was amazing in the bear market um and leverage why is that well because when you're shorting bitcoin as much as i hate to admit that there were times when i was shorting bitcoin so i'd never do it again it's that the best way to get more bitcoin is to short bitcoin with leverage right like on on the way up when you're using leverage it's sort of about dollars on the way down you actually can make more bitcoin by shorting just the way that the math works and the you know because you're getting paid in the underlying asset you know when you're trading perpetual swaps on these leverage exchanges you're using bitcoin so you're actually a lot of people who believe that bitcoin will go up long term want those periods where it's going down so they can accumulate more by by shorting but um you know when a market is going full fomo like we're seeing right now um you know 4 000 to 65 000 in 13 months it's absurd on the biggest asset that doesn't even include the 100 x's you're seeing in defy coins and stuff in between it's my opinion that you uh when you see a big train coming you step out of the way instead of standing in front of it you know and i think that trading with leverage is just an excuse to lose my bitcoin like why would i even risk the chance of increasing the percentage loss i can take if i can just buy i believe this thing's going to 235 000 on this cycle if i believe it's going to a million dollars i i don't need to take any unnecessary risks in between right i just need to accumulate it so um i support leveraged trading for people i think it's great for people who know how to use it well i think it uh in crypto specifically it eliminates a lot of counterparty risk like if you want to take 100 bitcoin position and you can do that by only holding 10 bitcoin on the platform instead of having 100 bitcoin exposed to a hack i think that that's a meaningful difference and a reason to use 10x leverage and that you know assuming your stop loss was going to be less than 10 below price anyways that's the thing is leverages are relevant depending on where your stop loss is people love to talk about i'm you know i nailed it on 50 x leverage but if your stop loss was less than two percent below your position anyways the leverage is completely irrelevant right your stop-loss is your stop-loss so that so i think you know that's kind of a funny narrative um so i i mean i literally at this point it's hilarious i love uh voyager i don't know if you know them i think in the united states um they're publicly traded on the canadian stock exchange um i know the ceo the he was the ceo of e-trade you know like they're a real company so i trust them i don't like coinbase i'm buying coinbase stock i don't like using coinbase platform though um and so and it's amazing because i'm a trader i mean voyager doesn't even have stop losses but because i'm investing i view it more as investment i'm totally fine with it and because like with cake defy iron yield you know like i hold vgx token which gives me a one percent bonus so i'm getting 10 on my usdc so anytime i do take profit it goes into usdc which then is gaining 10 percent which is incredible 2017 you sold into dollars it was brutal right because you didn't you weren't getting anything out of it you were selling into like dirty fiat you hated it so it was very hard um and you know getting like six and a half percent on my bitcoin while i'm trading and holding it there and all these other assets so um you know i used to i used to use all the foreign platforms and stuff in years past years ago but they slowly kicked americans off i like to remain compliant you know like i i really try not to i pay a lot of taxes and i don't need any red flags you know of uh behavior so the options for me are very very limited so i you know voyager i use binance us for um some altcoins and uh a sprinkling of other places but truly you don't really know so like you you don't have access to like it bitmex like all these like femex all the like so i i i used to use femex quite a bit they sponsor my newsletter um but uh you know i don't need leverage i just don't need leverage that's the bottom line i'm not saying other people don't like my personal position i don't need leverage i trade 4x with leverage you know because you have to because the moves are so small like if i'm trading other things i'll use leverage but you just don't need it on uh in my opinion on crypto and 99.9 percent of people are leveraging their losses not their gains that's what they don't realize you think you're turning your thousand dollars into ten you're just turning your thousand dollars into zero faster what about and i mean crypto is very unique in that regard how much like of those blockchain analysis ideas do you use like do you look at i don't know exchange flows do you look at whale movements do you look at like i don't know like all these kind of blockchain native kind of investment indicators and if yes which ones or yeah so i never used to um i was a purely technical trader um but now you know i have my newsletter which is like uh which comes out from monday to friday and every wednesday i have a partnership with a company called into the block uh which is similar to glass note you know all the on-chain metrics and and they had a really good uh series uh just this wednesday actually yeah oh thank you yeah so they're awesome right right they did one on doge this on all the like six surprising facts about those or something based on online on chain metrics so because i have access to them and they just send me insights regularly i look at it so much more than i used to and it's really compelling you know um it's really compelling and i used to joke there's no fundamentals in this market you just trade it technically but on-chain metrics really are the fundamental replacement for like quarterly earnings on a stock or a company you know what i mean but yeah i think that um i view on-chain metrics for me i i don't know how to use them that well in advance of a trade but i think they're very good for confirming trends and ideas that you have like outflows outweighing inflows is as clear cut of an indication of big money demand as you can get right there's no it's data you can't argue it money is leaving exchanges exchanges are running out of bitcoin to sell that's a very clear cut and that could change so we'll know when that changes right um and so yeah i think outflows inflows are huge uh holder wallets you know how many wallets are being added on a regular basis uh when the big coins move if ever where they move things like that i just think it gives us evidence for our narratives you know like you remember in 2017 everyone was arguing that institutional money was there which it wasn't right and it is this time but we're all institutional money it's here come on there was no evidence of that on chain right so now you can see like when tesla buys 1.5 billion you kind of see that move into coinbase custody you know so i think it just gives us a lot more evidence and fuel um and you know there's really compelling although it's another chicken and egg you know hash rate versus price and we saw that on the big drop recently which you know there's a lot of speculation that china's power went offline hash rate dropped price dropped uh we came to find out actually 10 billion in leverage uh 10 billion in liquidations was probably really the meaning uh you know does hash rate lead price or does price lead hash rate but people are using all these different indicators to really make compelling cases for price do you buy into this idea that i think especially uh dan health from i think kraken uh came up with this entire super cycle idea do you buy into that or are you more like no you know what i don't know 2022 is going to be another crypt of winter or are you more in the middle we're like you know what we're going to see normal hypes normal lows what is your entire kind of uh and i mean no one has a crystal like here no sure sure i have a baseball that counts um and the screaming kid in the background if you can hear him um you know it's really fun to make grand projections but also it doesn't fundamentally alter anything for me it's not a part of my plan it's a it's a fun conversation to have but it doesn't alter my plan i like to if i'm trading i like to trade what's right in front of me and not get caught up in uh moon lambos you know and uh worrying about million dollar bitcoin i think it's gonna go there but it doesn't matter if it does or doesn't to me right now you know so i like to remain realistic and admit that um it's a compelling idea that he has i've talked to him about it as well um i just don't know so i'm not going to make financial decisions based on the assumption that price could never retrace because there's always black swan events and there's always uh unforeseen uh pressure on the market i have no idea what could cause either a 10 or 90 retracement in bitcoin or stocks right i mean i didn't know covert was going to hit and if you if you were counting on that you know you could have made that super cycle argument last january and you'd feel pretty bad if price had gone from 11 to 3 600 in you know a couple weeks um so i think it's a great idea i think it has merit i think that as i kind of touched on before we have this big money floor now um and i think when we see an etf in the united states there's going to be a wall of institutional money that just floods into the space and i think that could send things really parabolic i would be i won't say surprised i would be disappointed if we saw another 80 to 90 percent drawdown on bitcoin at this point right i think it would change my my feeling a bit but uh you know doesn't mean i would be surprised do you think an etf would have such a big impact at that stage i mean my my counter argument on that and i have done a lot of thinking on it as well and a lot of discussions my counter argument is that most institutions have access to institutional bitcoin already um would an etf really change the game that much and if you really think so why i do think so i i i'm not disagreeing with what you're saying about them having access but i think that um the institutions we're talking about now that have access are crypto focused funds certainly um family offices smaller hedge funds um and even wall street banks to some degree the real money certainly in the united states is pensions endowments and then you start talking about sovereign wealth internationally and other things so there's big money now that has uh i would say comfortable and compliant uh tools to to gain access gbtc obviously has been the biggest one for most people they can just buy gbtc and but i think an etf uh gives the credibility for you know these multi-trillion dollar uh funds to gain access and even if they start buying one percent and i think that some of them literally can't right now still like they still probably don't view gpgc as passing compliance especially when we just saw the premium go negative for so long um i just don't think that they have a way and i don't think that uh it fits you know it gets past the risk managers to custody actual bitcoin i just don't think so um so i think that you know did you did you ever uh see the chart of when the gold etf was approved no and how parabolic gold price went after there was an etf it's pretty compelling i don't have it in front of me it's been going around again but yeah because if you've got a trillion dollars and you want to buy bitcoin you won't but you'll buy an etf because you know that it's going to be managed you know that's going to trade at nav you know that it's going to have a very minimal you know premium or cost associated and you know and uh it's a 2 trillion market it's still small uh maybe the etf will wait i think it's coming soon but maybe they'll wait until it's bigger but we're not you know we're only a couple more x's away from being uh the same size as gold and that sounds like oh whatever but yeah we just did over 10x last year 15 of them in in a year you know 15x or something from the bottom so doable obviously with uh robinhood um e-trade i think has it etoro they they offer a lot of copy trading right a lot of this social trading copying someone i don't know is this something i don't know you you would tell people to look into if they find a successful trader or would you be rather someone say look i never touched this i have no idea i kind of trust my own way more than anything else that's a question that i got asked by one of our members people people ask me to copy my trades all the time even the ones i show okay two there's two parts to this to parse it right as an individual i have literally zero problem losing my money at this point in my career i'm an emotional robot about my losses i don't think that's the case if i know that other people could be losing money based on my decision so i had a friend who's a great example who was a you know semi-professional poker player a hedge fund came in he was very successful hedge fund came in said we'll give you x amount of money to trade for us we take a percentage of your profit he became a terrible poker player just garbage because the decisions he would make with his own money without even hesitating when someone else's money was on the line he hesitated and didn't know how to make amen he gave him different tells you know at the table less confidence things and he had to stop right and so i think that you're on a whole other level if you can trade other people's money and sleep at night i i probably couldn't i think you know i think for me i've carved sort of a mentality where i'm totally comfortable with my own losses i don't want to be responsible for other people's money so for me i've never looked at copy trading not even like and that's even obviously a step down for managing people's funds but i think that it would just put me off my mental game even to know that somebody else was making a financial decision directly based on what i do i mean yeah like i have a newsletter i share charts on twitter but anyone who subscribes no i like to i like to i never share like a trade it's more of a setup right like this is what i'm watching if this happens i would be interested in doing this if it fits into your system approach it maybe this way but do it your own way i want to be more educational and set up and never a signal you know what i mean so like for me i'm just not comfortable with it that said there are people who are absolutely incredible traders who don't think about that stuff who can trade other people's money if you can find one of them and copy it great but at the end of the day the only person responsible for your financial decisions is yourself and i think that most people who want to copy trade maybe they want to make money but i think they're pushing responsibility in my mind most people i think who copy other people's actions are basically hedging on blame they're not really doing it about making money because people lie to themselves right it's cognitive dissonance oh i'm going to follow him because he makes so much money but no it's really because i don't want to learn how to do it and if i lose i can say that guy sucks and not me right so i think it depends on the individual if you're very honest with yourself and you understand that if you're copying someone you're throwing money on the you know you're you're it's betting on a horse it's exactly what it is it's going to the horse race and betting on the horse and it may be the fastest horse and it may be the favored horse but no horse wins every time you know um and so what if that you know and importantly like i've talked about my trading system small losses over and over again i expect them right but what if you copy trade someone who and that's their system but you don't know it you're just copyrighting them and they lose their first nine trades right so you're not mentally understanding that their goal is fine i'll lose nine small trades in a row if my next two are good if i if like they're not telling you hey i'm profitable with a 30 hit rate right seven of my ten trades go bad but i make money when three go good out of ten if you don't know that you're gonna panic pretty fast if you lose on your first five or six trades so you know any trading system should be judged over years and thousands of trades and when you copy someone you're going to be judging it immediately on the first three right so i just to me it just doesn't make sense for an individual who actually wants to trade and understand it it just looks like a way to sort of punt responsibility to some degree to someone else and listen if you think that person's incredible and you're willing to stick by them and you understand it i think it could be really great it might make a lot of money oh man good excellent points i agree uh i think all of that adding on to that i think especially right now in these times people can confuse luck for skill how uh do you protect yourself from that so i've always joked that the worst thing that can happen to a traitor is that they do well first right um there's a psychological phenomenon uh that applies to a lot of things in life but applies to trading it's called random reinforcement right and it's the idea that the market basically rewards bad behavior and punishes good behavior but it's all random but you take the information the market is giving you based on your trades and you assume that that that's how the market will always be so just like you said that everyone's a genius in a bull run right everyone's a god-tier trader when things are going good um because you can't miss right it's the same thing you throw darts uh you put a bunch of all coins on on a dart board throw them pick one and you go up and ah i'm an amazing trader i'm a genius right let's take julian for example right you decide you're going to become a professional trader you say i've got this much capital you go you have no idea what you're doing and you're like you just buy ethereum go take a shower you come back ethereum's up 3x oh my god i'm a genius i'm selling whatever so now you're now the market and i used 10x leverage huh i had that as well so now the market has told you that what you just did is how you make money and we all rationally know that's not how you make money you didn't have a plan you don't have a stop loss so you keep doing that until you lose all your money right then julian decides [ __ ] i'm gonna learn how to actually be a trader you get a system in place you study you come back two years later you start small you're doing exceptionally well then you have a losing streak of 10 trades doing exactly what you're planning losing and losing and losing and losing and then you get pissed off you go up 50x leverage and you take some stupid trade you would have never taken and what happens you make fifty thousand dollars in in a day and all of a sudden the market has now told you that your good behavior was punished and you should go back to that bad behavior and you lose it all again because you break your system and that's the problem with markets it's exactly what you described everybody feels like a genius when things are going up and the fact is you're all just lucky and at the end of the day the biggest skill is just to have diamond hands i know it's a meme i know it's a joke but i i you know i had a video go viral while i was talking about this i had mark yusko on my podcast recently if you know who he is uh morgan creek and he said scott you know how many people there are left who uh own amazon stock from the ipo i said no i have no idea he said three people said you know bezos because this is in the 90s right his wife and one other guy and he was like really yeah but think about it it was a book seller you know like at the time it wasn't this company it was a different company it was like so think about that he was like they're the only ones who own ipo stock still and what's the reason and he said we can's you know you made it through because almost everyone sold in the dot-com crash sure almost everyone and then if you made it through that you had to make it through the great recession right and never sell any of your shares and then you had to see amazon 20 years later become what amazon could be which wasn't in the original business plan it's just like doge right you could have never you can't blame those people but the reason is there was this one moment at some point where they all said i don't want to hold this anymore i'm done with it right literally every person that had ever invested in amazon you know and so it's the same thing and i think at the end of the day the the genius comes with the strength of conviction and to be able to weather those moves in between because it's yeah everyone's a genius in a bull market so how do you like how how do you remind yourself on that like how how do you reflect on on on decisions like how there's a few ways my long term all of my like bigger positions are i think we might have talked about this on when we were talking about security on my podcast but i can't access my own coins fast enough to make an impulsive decision um which i think is important like peter brandt uh you know the famous trader peter brandt i talked to him and he told me that he's been trading for 40 or 50 years and he does not uh during trade he he places all of his bids and ass he places all of his orders during off hours when the market's not trading and he turns off his access to trade during the day during trading hours even after 40 years he knows that there's a chance i'm gonna make some stupid decision because i have quick access right i thought that was mind-blowing so i think a making it difficult for yourself making it difficult for you to get in your own way is a huge part so if my coins are sitting in multisig and i have to go to two different cities to to send them to an exchange to sell them well that that's gonna prevent a lot of my uh as i like to say spaghetti hands but you know weak handed decisions you know um so i think that that's a huge part of it and that's you can't do that with your stock really unless you take those those uh steps but um i really you know i like to keep myself that's the thing if i was trading all day every day staring at charts i would make way more bad decisions when i keep myself exceptionally busy we're doing this today i'm recording two more of my own podcasts and then i have an interview with cointelegraph i've already written a newsletter today at 4 30 this morning and i have my kids and my family you know so like i'll be recording for five hours today on top of i'm too busy to go make any stupid decisions i don't even know what bitcoin's doing right now and i like it that way because i want to be zoomed out and i don't want to be obsessing over the smallest moves i've done that in the past it's a losing strategy it's just there's nothing nothing positive in it but for me it was much harder when the money that i had in the market was much more meaningful i think you probably have experienced you get to a certain level of wealth where you just i think there's a natural proclivity to worry about protecting it and not worry about gambling with it right so so you get to a certain point where like okay this is enough like if i just am not an idiot and i maintain and hold on to this i'll be fine and you take them my kids are fine as well yeah so the stress i mean you know how it is man you see these like seven figure in a day two days three days swings and your net worth but it's like vapor net worth anyways and you can obsess over it all day the bottom of the line like at the bottom bottom line if you've done well and you've put enough away i think you can zoom out from the market and not obsess over it but for me it's just i remind myself hey like i want to have bitcoin in 10 years no matter what happens right and i don't want to be buying it in nine years for that tenth year because i was dumb enough to sell it now you know and i don't guilt people into selling like people have real life 99 of people can't afford to hold something and not worry about the price of it because maybe they'll need rent if they lose their job you know so it's a rare to get to that position uh but you know once you're in that position the stress of like the price action becomes a little more easy to to manage so i think i'm just in a fortunate position now where whatever happens with it i know i'm gonna be fine i always like to play that time traveler game which is always uh i ask about uh the time traveler let's say he comes uh beginning of 2022 and uh would tell you hey bitcoin hit this price in 2021 a serum hit this price in 2021 which answers from this time traveler wouldn't surprise you on the upside for this for the end of this year yep within this year so not by the end because i think sometimes very difficult to say yeah yeah at some point this year i would expect we see ten thousand dollar ethereum wow expect is a strong word but it would not surprise me at all to see so if a time traveler comes and says hey east hit 10 000 you would it wouldn't knock you off you're out of your shoes no and um and uh but that could also be in april of 2022 right so but i think that yeah uh and i think uh i would not be surprised if bitcoin was 200 250. it's only 4x yep

that's nothing for bitcoin right the numbers seem so big but i think that those are conservative estimates assuming a bull market right i i can't assume a bull market but assumingable market um what's funny about the question to take in a different direction because i always i've made this joke too i think that most people even if a time traveler came back and said listen bitcoin will be a million dollars in 2030. i think most people would still lose most of their money before it got there true true yeah even with the guarantee because i don't think if you said that for a year right i think most people can like be strong for a year but if i said listen you might have to endure tremendous pain you might not make [ __ ] for the next 10 years because i'm not saying it's going to go it could go there the last day like this it's like but it could be it could be there that i think that most people will get impatient they'll use leverage they'll try to trade or they'll say listen oh my god bitcoin is going to be this much i have to do anything i can to get more of it and they'll trade and they'll trade and they'll trade and they'll trade and they'll trade and they'll lose so i think that even mentally knowing what the price would be in the future i think that people would absolutely blow it before it got there because people just get in their own way me i would say i'm literally like i will live on the street with my children for the next nine years if i have to most people will say you know i gotta trade my i gotta trade like crazy to get more and good point and in two years they'll have none right they won't even have any like eight years before it happens i really i really believe that um i i think it's just it's just human nature so you know i think you should take the mentality is that uh 10 years is great not a long time away you know that's how people have gotten wealth forever you you invest in your 20s for your 60s it's boring it sucks you might not even be here in your 60s but you know putting your money away and letting it work for you is how you make money it's a good story i like that that's really really good yeah what is another one of those narratives or stories where you always like you know that's one example story kind of uh thing that i was trying to tell people because it's so it's such a it's going to hit home like yeah it really kind of uh it's important for the mindset i mean i don't know if i have like an allegory like that that that's kind of my winner i guess um but maybe you know looking back on my own personal experiences which i think is why um i'm able to engage so easily with people about this stuff is because it's not fiction i've made every single mistake that i described to people yeah myself you know and even when i thought i was good it only take that that's the problem and anyone who's traded a long time knows it you can be so good for so long and one bad decision erases years of progress literally one bad decision you know so like never go all in i went all in on a stock tip in like 2012 there's a company a pharmaceutical company called eric's a-r-y-x gives me like ptsd right and and i had like a close friend of the family who was consulting for this pharmaceutical company and they were gonna get fda approval for something it was six bucks buy as much of this stock as you can they're gonna get fd approved it's like a blood thinning medication or something it's gonna change the world i mean i not all in but like i was pretty much all in i could still pay rent but like everything i had i funneled into this you know stock and like six bucks to five bucks to four bucks when's the announcement coming oh it's coming next quarter next quarter of the announcement then the ceo like does an earnings call and this guy's i mean i don't know if he was drunk i don't know if he like his wife beat him up the day before or something but he basically got on there and just like panicked he like panicked on this call he was like we're gonna run out of money we have no runway like whatever the stock went to zero i mean they got de-listed they got de-listed from the ex from the from the nasdaq you know or like this new york stock exchange and i wrote it to zero like i sold my entire position for like hundreds of dollars at like a cent or two cents you know at the very dead bottom so never go all in on something never think you know something that nobody else knows i didn't trade for years i didn't touch the markets for years after that you know um zero to zero you know like this you think it's one thing to see like uh uh low-cap altcoin rug pull but i got rudder pulled on something that was listed on the stock exchange you know like at six bucks it wasn't like it was a penny stock you know um so i think you know just a lesson like even even if you love bitcoin you think it's the future i don't think bitcoin can really go to zero but anything can go to zero shouldn't be all in anything you know you gotta protect your actual life and that's why i say like people guilt people for selling a little bitcoin here and there you don't know what someone's life is like should i really hold my bitcoin instead of like my kids having a healthy dinner tomorrow absolutely not you know so everybody's life is different the all the judgment and we i joke about it more than anyone diamond hands and spaghetti and lettuce hands and stuff it's funny but you know like most people like i said before are not in a position to just hold but you can't you know you should not be all in anything you should have no investment uh should exist at the at the peril of of your actual life you know you need and the only and more importantly than that the only reason to invest in anything bitcoin included is to better your life you know like why do you want to get rich so that you can work more or so that like you could actually have free time to do the things that you want and listen like i sound like a hypocrite when i say that because i just told you how hard i'm working today but i love this stuff i love it i don't know what else i would be doing if i wasn't and in a year maybe i'll be over it and i'll be surfing you know i have no idea but right now it was covered i was stuck inside like this has been just like an amazing cathartic you know like basically therapy for everything that's going on with uh covenant is that i can sit here in front of a screen and have conversations with people like you every single day that like you know and and so i really believe that the only purpose of investing and if you go all in and lose everything you're going to be set back really far from this or or or of any of this is to better your actual life on a day-to-day basis so you should not be taking more risk you know you should not

2021-05-24 18:08

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