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20 PLANNING MATTERS RADIO - CRYPTO & GOLD - COINBASE IPO GUEST JOSEPH GISSY

Planning Matters Radio / Peter Richon
The Truth Network Radio
May 4, 2021 11:58 am

20 PLANNING MATTERS RADIO - CRYPTO & GOLD - COINBASE IPO GUEST JOSEPH GISSY

Planning Matters Radio / Peter Richon

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May 4, 2021 11:58 am

In this episode Peter Richon welcomes guest Joseph Gissy to discuss the recent COIN, CoinBase direct listing and on the place of Cryptocurrency and Gold in a portfolio and how to invest.

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We want you to plan for success. Welcome to Planning Matters Radio. And welcome into Planning Matters Radio. I am Peter Rochon, founder at Rochon Planning. Happy to be joined by Joseph Gissi on today's program. He is the founder CEO of Strategy Marketplace and has formed a tactical robo advisory and a turnkey asset management platform. Now, today, going to be talking about some recent news with the IPO of Coinbase. And you're pretty well versed with the cryptos and digital currencies, right, Joseph? Pretty well versed. That's a good way of introducing that.

Maybe a little bit of an understatement there? Well, it's just, you know, to me, it's funny because I was probably part of the skeptical advisory community early on, and I slowly kept dipping my toe into it. And I remember at one point, this had to be around 2013, 2014, I turned to my now wife, I go, Should I mine Bitcoin? Like this? I don't think the stuff's got to go away. It seems good.

Should I try this stuff? And, you know, then we kind of talked ourselves out of it. So, you know, fast forward to where we are today. And it's crazy that cryptocurrency is now mainstream as of yesterday, right?

Yeah. Now, the financial industry has been a little slower to adopt. And I think that that's because in its infancy, a lot of the cryptocurrency marketplace was actually purposefully under the radar, so to speak, and not trackable or traceable.

Well, in order to legitimize that, we've got to be able to tax it. So more and more, right, the government and the financial institutions as a result have been adopting cryptocurrencies and actually giving investors a number of different ways to invest. The IPO of Coinbase, simply the most recent.

Yeah. You know, it's really interesting. I ended up talking to some of the VPs at Coinbase a while back because I was trying to integrate them with some stuff that we do. And what's hard for the adaption of it, like you said, with the institutions and the advisory community as a whole, was that this idea that people were throwing away a hard drive and lost, you know, a million dollars of Bitcoin or ten thousand dollars of Bitcoin or whatever that amount was, that it could be literally on a computer system and vanish or, you know, people used it for CD business transactions early on.

So that was kind of, you know, seen, you know, in a negative spotlight. And what's even more interesting about it is that what Coinbase did, they actually legitimate legitimized themselves as a bank. And I was reading some early interviews that they did and they put security at the forefront. And as you know, as a financial advisor, it's the same thing as like recommending an alternative asset. You want to know that it's still secure because ultimately you're responsible for your client's portfolio.

You're responsible for their investments. You don't want to put your client's money at risk in something that's not that secure. Well, well, now they've kind of, you know, I'm not going to say that security is 100 percent gone because it's not even 100 percent gone with traditional banks. But Coinbase has managed to do some layering of their security protocols that can make sure that your money is a little more secure than, you know, some of the other crypto custodians or platforms that were out there in the past. Now, let me ask you a question that as an advisor, I get asked by my clients, where is the proper place for cryptocurrency as part of the average investor's portfolio and how does it compare to gold?

Great question. Now, early on in the Coinbase, CEOs will tell you that they were positioning themselves as the alternative to gold. And actually, a lot of the data suggests that people have pulled back from gold recently. A lot of cash has been sitting aside and not even in the markets until basically the rally the last couple of days. And they've been kind of going to crypto. I mean, crypto, when it started in 2012, was about 50 million dollars of currency out there. It was trading at six dollars per Bitcoin.

And Bitcoin was the only coin out there. Now you're talking about two trillion dollars of assets, 56 million users across the U.S. And, you know, now lending institutions and banks and everybody getting into it. But to your question, where do you put it inside an investment portfolio and what do clients do with it as maybe a gold alternative? Look, I never tell a client to put 100 percent of their money in gold. If we want to invest in gold, let's carve off a little piece and let's put it over here. And, you know, tolerance of every investor is different. People could say, oh, take 10 percent, you know, and carve out or maybe 10 percent for crypto. Well, I mean, you know, it's hard to say if you have a younger investor who has a little more time horizon, who doesn't care as much about volatility or doesn't affect their market reactions as much. Maybe they could have a little higher position in cryptocurrency because it can be very volatile. I think a good introductory step for people if they don't want to invest directly into Bitcoin. Coinbase is a perfect offering because now you're betting on the bank, you're betting on the actual casino, if you will. They're the ones, they're the platform that all currencies are trading on. And they're the first of many. They're, you know, the Uber of the ride share program, right there.

I can go on with, you know, but they're the first ones to really break that barrier. So that might be a good, you know, position for now until others start coming to market. But, you know, depending upon your age, depending upon your risk tolerance, maybe start with a little sliver. Is it going to replace gold? No. Will it be a good alternative? Time will tell.

Nobody really has that crystal ball if that's going to be a good alternative or not. But two trillion dollars that's in this market space says that it's going to be around for a long, for the long term and is it going to replace, you know, other currencies around the world? I mean, in a form, it's a digital currency. It is a currency.

We don't know. Yeah. I've made the comment, well, what's the new gold standard? Gold is the new gold standard. But crypto has taken a spot as that store of value, that reserve space. And once upon a time, the largest ETF by volume was GLD, the gold ETF. And now we're seeing all kinds of ETFs proliferate and maybe some money moving away from gold into crypto because people view it as a store of value in a different way than gold. Not necessarily the same. And I know that we're not here to talk about gold, but I think that the comparison has been made.

And therefore, when talking about crypto, having that conversation and mentioning that there is a comparison there is appropriate. Now, we are here visiting on April 15th. The IPO for Coinbase was yesterday, April 14th. The announced opening price was 250 dollars.

You really couldn't get in at 250. Almost immediately after the bell, prices were significantly higher. Prices came down during the day. It peaked and then fell a little bit.

And you mentioned that Coinbase was the first and that there could be others coming into this space. There's been a lot of talk and conjecture about where the price of Coinbase ultimately is going to go. Is it going to go much higher? Is it going to go much lower? Where do you see that? And how could those other players stepping into this space affect it?

Yes, I mean, that's kind of the question on everybody's mind. And, you know, first and foremost, it's going to be a little more volatile than other ETFs, other stocks, stocks in this case, in the market anyways, just because it's somewhat closely tied to the volatility of the currencies of which it has. There are some big players out there. Gemini is one of them.

Bitwise is another player out there. They're eventually going to go public. You know, it's not a matter of if, it's kind of a matter of when. I think there's still room to grow in this category.

Again, we're already from 50 million, just less than 10 years ago to two trillion dollars in assets. So I don't think this is going to be the cap of Coinbase. I think it's going to continue to rise. I'm personally, I don't like buying on IPO days or days when things just come out.

I've told a couple of my buddies and clients, go, hey, let's wait, you know, maybe a couple of days till next week. Let's see where the price is. If that price, you know, dips down pretty low, then maybe we'll get some positions into it. But I do see it for the long term going up because, again, you're betting on the bank, you're betting on the platform. And even when others come out, yeah, that does pull a little bit of the price back. But this is just the beginning of, you know, I don't know if you were going to go here or not, but they didn't do an IPO.

They did a direct listing. That's significant in itself because their revenue is so high and has basically almost 10 X what they did this time last year. So the fact that they have that much capital, the fact that they have human capital, a big force behind them, they are going to continue to get creative and they're just starting to touch the institutional side of the business. So I only see it going up from this point. Now, does that speak to the number of new investors in the Bitcoin space or the cryptocurrency space, the the influx of new users?

And does the revenue and the profitability possibly speak to the transactional costs that Coinbase does assess when when buying or selling a cryptocurrency? Yeah, I mean, there there are tons, tons of more people entering the space. I actually think it's really good for the younger millennial investors because this is actually getting them excited about investing. They've been sitting on the sidelines for so long because they saw the dot com bubble happen in the early 2000s. They saw the market crash of 2008. Then they started entering the job market right after the market crash.

And it was a brutal world for them. And so they didn't even have money to really invest in the markets. And so they've they've really just started to to grow families and invest in buying homes and all that stuff right now. And I think what's really interesting about crypto, it's it's it's bringing more people into the fold. And we're seeing that with the numbers. But it's not only the newer generation, you also have the people who are established, who are also looking at, you know what, because, you know, when things are in the news and when things are exciting and people are saying, well, this is like the new Internet, you know, I mean, that's going to drive some more users and adaptability, you know, from that standpoint. So the only thing that's that will change and we're seeing this with some of the major custodians, like your TD Ameritrade, your Charles Schwab's and Fidelity's, they're all fighting over trading costs.

So we'll probably see the costs go down. But as these companies, as Coinbase gets on the institutional side, where they're starting to get the mainstream firms, the RIA firms, the broker dealer firms, you know, the banks on board, that's going to keep driving that profitability up. And that's how banks do it now. They have those institutional clients.

They don't make money. Well, they make money all around, but they're not, you know, when they have a free commission, free trades, you know, as Charles Schwab and TD and all these guys have now, I think eventually you're going to see Coinbase and other custodial partners like that go down the road where fees are going to get compressed. Now, Bitcoin is sort of the originator and the one that is most commonly talked about. But there's a proliferation of different crypto currencies out there now, anything from Ethereum to Litecoin to Ripple and many that you've probably never heard of. Elon Musk is certainly making the name for the Dogecoin or the doggy coin, whatever you want to call it there, as well as those on Reddit forums and Twitter talking about that on the Robinhood platform. So comparing investing in the cryptos themselves, which a lot of people really look at kind of speculative gambling and maybe don't feel comfortable enough to know what they're doing there versus the more traditional ability now with Coinbase being listed where we can invest in something that is more traditional stock market investing.

Yeah, you know, here's what I've told a few friends and clients about. I go, look, if you want to invest directly, I'll tell you exactly how I did it. I put some money into Coinbase. I took 50 percent of that money. I put it into Bitcoin. I took the other 50 percent and I spaced it out over the next top five crypto currencies. And I created myself a mini portfolio by diversifying against the cryptos.

Right. The biggest one being Bitcoin. Obviously, most of the other crypto currencies are kind of tied to the Bitcoin volatility, but it's a long term play. I said, if you're going to do it, add some money to it, hold on to it and hold on your seats because it's going to be a wild ride because we've seen the volatility of the market with Bitcoin thus far. All it's going to take is some bad legislation or some type of regulation or some something that's going to happen where you'll see a big spike and a big drop, you know, kind of come down. And that will be a temporary blimp, you know, and then it will go back up because the beauty of what they've created with cryptocurrency is, you know, it can't really be regulated by any one government.

That was kind of the, you know, the appeal to it early on. And I don't know if you know this, but this isn't the first time, you know, digital currency has been introduced. This digital currency was actually introduced, I want to say the early 90s.

It might have my timeframe off that. But what they tried to do off the bat was they tried to say it's the new credit card. They went to regulators right off the bat and then they got shut down where Bitcoin and all the cryptocurrencies today said, we're not worried about the regulators. We're completely decentralized and we can create this whole banking system without you. And now the regulators are scrambling saying, how do we become a part of this? Yeah, sort of trying to catch up and figure out how they can be traced, tracked and taxed, right?

Basically, that's what they're trying to do. Well, Joseph, I appreciate you joining me on the program, kind of a historic launch and a milestone in the world of crypto and crypto investing with the launch of the Coinbase ability to invest. We appreciate the time. Now, again, you formed a tactical robo advisory and that is strategy marketplace. You've got some turnkey asset management platforms. When I hear turnkey, tactical doesn't always necessarily correlate. It's like turnkey.

I said it and forget it. But you've got a robo that does have the tactical aspect to it. Talk about what that means and what advantage that can provide to investors.

Yeah. So, I mean, this is why I'm also interested in cryptocurrency so much, because me personally, I don't buy into the buy and hold methodology because after dealing with clients for so many years, you kind of realize that people really don't like riding the market wave. I mean, they love the market highs, but when there's a pullback like we just experienced with the coronavirus last year in February and March and the market loses 30, 35% in less than five weeks, people's stomachs begin to churn. And so, since I've been in the business since 2010, I was kind of under this mentorship of tactical money management.

And our firm has a couple of great strategists that we worked with. And what that means is that it uses math-based algorithms, it uses momentum, a lot of different indicators. And when the markets start turning, some of their triggers and indicators kick in and it can pull people out of the market. And sometimes that goes to cash. Sometimes that goes to gold, like you said.

We haven't gone to crypto yet within those algorithms, but it doesn't mean we're not looking into it. And then when the markets go the other way and they come back in, we tend to get in a little sooner. So, it's really about risk management. And that's really what we do with tactical. So, the reason we put this platform together is because where we're at is as far as a history, as far as where we're at in this, we're still in this bull market, even though we had that blimp with coronavirus.

We have this economy that's just going crazy, but there are inflation fears and there's fears that prices are going to get out of control. And so, you need to kind of hedge your portfolio and having a tactical strategy, and it could be a portion of the portfolio, it doesn't have to be the whole thing, but having a tactical strategy to help you, to help mitigate some of that risk in the market, that's why we built this platform. And it's turnkey for the advisor community because we have a lot of resources for them to help onboard clients easily, to make paperwork streamlined, and to get them into an auto investment platform without them having to worry about what strategies to put them in. It's made for them. It's created with the AI.

That's what it does. All right. He is Joseph Gissi. Did I say that right? Joseph Gissi? You said it correct. All right.

Founder, CEO of Strategy Marketplace here, talking a little bit about Coinbase among some other tactics and strategies that you may want to consider for your financial progress and process. And Joseph, we appreciate the time. Thank you for being here and joining me on Planning Matters Radio. Oh, thank you for having me.

I appreciate it. This has been Planning Matters Radio. The content of this radio show is provided for informational purposes only and is not a solicitation or recommendation of any investment strategy. You are encouraged to seek investment, tax, or legal advice from an independent professional advisor. Any investments and or investment strategies mentioned involve risk, including the possible loss principle. Advisory services offered through Brooks own capital management, a registered investment advisor, fiduciary duty extends solely to investment advisory advice and does not extend to other activities such as insurance or broker dealer services. Advisory clients are charged a quarterly fee for assets under management while insurance products pay a commission, which may result in a conflict of interest regarding compensation.
Whisper: medium.en / 2023-11-22 10:56:32 / 2023-11-22 11:04:19 / 8

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