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So Bitcoin is free and open. It's for the people by the people to where no one controls it. And it is verify and then trust versus just putting the full faith and trust into a government entity to do whatever they feel like is right. Welcome to the Stay Wealthy Podcast. I'm your host, Taylor Schulte. And today we're going down the Bitcoin rabbit hole with friend and fellow financial planner, Isaiah Douglas. Isaiah Douglas
Isaiah is wildly knowledgeable and passionate about Bitcoin. He's also very optimistic about its future. And because I still have more questions than answers, I brought him on the show to share his perspective and to challenge my thinking. I asked him questions like, why should we trust that 10 years of Bitcoin data is sufficient?
Is Bitcoin a speculative investment? What's the actual utility of Bitcoin and more? So if you're still trying to figure out if this asset class is going to pop like the dot-com bubble, or if it belongs in your long-term investment portfolio, today's episode is for you. For all the links and resources mentioned, including links to five of Isaiah's favorite Bitcoin resources, head over to youstaywealthy.com forward slash 107.
So like I mentioned where I want to start this earlier this year, I made a comment on the podcast and I recently shared the same comment with you, which was,
I'm getting frustrated. I have been getting frustrated with the Bitcoin crowd using 10 years of return data, which is kind of essentially all we have, to suggest that Bitcoin should be part of a diversified portfolio based on how well it's performed over those 10 years. And I made the point on the podcast that not only is 10 years to me a very short time period compared to 100 plus years of stock market data, but
you could literally cherry pick another speculative risky investment like Tesla stock, for example, and make a similar argument. And some of these firms who you and I both know, and they're run by people I have a lot of respect for, and I would call friends,
are going as far as creating these interactive pages on their websites and showing how great a diversified portfolio's return would have been if you had 5% allocated to Bitcoin or 10% allocated to Bitcoin. And I don't know, I'm just really struggling with all this. And I honestly kind of find it a bit deceptive. And so I just want to start our conversation off and kind of continue where we left off during our last conversation to just kind of get your thoughts on this and just have an open conversation about it.
Absolutely. And I think it's a fair criticism in a way, but I think let's dive head into that. So the one thing that I shared in the last conversation is, so the unique thing about Bitcoin is it trades 365, 24 seven every day, all day, all the time. It has a greater uptime than Amazon, Facebook, and Google. So, I mean, it's like 99 point, you know, it goes out forever. Right. So it's basically been live trading and it has accrued value.
And it isn't the same as like a Tesla or a company because there's no CEO, there's no marketing team, there's no nothing, right? It just lives and breathes is out there. And it's something that was created from an anonymous source. But if you look at the amount of hours that it has been live and trading, in two years, it'll be more than the S&P 500 because it doesn't have the same market hours and have the weekends lopped off. So I do think, you know, you can look at the years and
and say that there's not as much length there, but from the amount of time that it's traded, that still is there. The other thing I would ask is you can say 100 years of data for the stock market, but how different is trading today versus what it was even in the early 90s? So different, so different. So to me, it's really hard to make those comparisons. And there's a lot of things that have changed
in the underlying foundation of the way markets are. There wasn't high frequency trading. So are we now going to say, well, we can only go back to this date. There wasn't ETFs. How do you actually then say the market has this much history? We can then say, look at the amount of money creation that's happened or the different things that have adjusted and changed in the market. So that to me would be
The feedback that I would have, I don't think there's a perfect answer. And I think that's a valid criticism that it doesn't have the same history, but it is a trillion dollar market cap at this point as far as how much value is stored. So I think there's enough value accrued there that you can start to really take this seriously. And you're starting to see that with institutions and institutions.
companies starting to get involved, which I do think changes the dynamic from a retail speculation where you could say that was early on in 2015, 16, 17 to where today it's a very different asset.
Someone on Twitter responded to a comment that I made that, okay, great. And I appreciate your point about it trading 24-7, but pushing that aside, somebody had made this comment that, okay, sure, 100 years of stock market data, that's great. That's certainly more than 10 years of data on Bitcoin. But
still it doesn't really mean anything because we don't know what the next 100 years is going to look like. And so you can only rely so much on this data. I still feel like data is helpful and history has a weird way of repeating itself. So I feel like that 100 years of US stock market data that we have is influential and dependable when building a portfolio. I'm curious if
Do you find Bitcoin's 10-year return data, do you find that data as reliable as 100 years of stock market data? Do you look at those the same or do you have your own question marks around, geez, yeah, this only is 10 years old and there's a lot of moving parts here. And I don't know, this is more maybe speculative than something like the tried and true US stock market.
I just think there's been so many changes that it's hard to use 100 years of data from the stock market in the US and say that, yep, it's tried and true. We can go back and look at this historically because of so many changes that are there. So I look at the Bitcoin data that's out there. And again, I agree, we have mutual friends and people that will show it in a diversified asset allocation. I get that question a lot, like, how does it fit? And I think we can touch on that later on. But
I view the data as it's a free and open market and it's allowed to do whatever it needs to do. There's no halting of trading. So when you think about back to March and April of 2020, how many times did the market open and then they halted trading because it hit the trigger, right? Bitcoin, it sank 50% and it survived, but there's no one to stop it. So to me, it's more free and open.
than the US stock market where it's allowed to do whatever it wants. And if it needed and could go to zero, it could. I don't think at this point that Bitcoin could go to zero. There is enough faith, enough money, enough people that are backing it. And there's so much talent flowing to this space and so many businesses being built on it. I mean, Bitcoin is one and we can get into kind of why and structurally, what is it and why does it matter? But
No, I look at the data as it's ever changing and evolving. Do I think Bitcoin is going to have 200% annualized returns for the next 10 or 20 years? Would I model that? Heck no.
No, I think that's unfair because you can make a lot of financial plans look really good if you have an allocation to something that has 200% annualized returns. The same way that you could say, hey, well, if I would have bought Amazon or if I would have bought Netflix or Tesla at the beginning of my financial plan, I'm like, no. So I do think that's deceptive and I don't think that's the right way to look at it. So I think you have to bring a dose of reality and try to think about it in a different way. Yeah. Yeah.
I want to circle back. I have some more questions around all of this, but I think first, maybe let's just back up and let's just make sure that our audience, our listeners here, just understand what Bitcoin is. And I always say, I want to explain things in plain English as simply as possible. So if there's somebody out there that still doesn't quite understand what Bitcoin is, they're a little confused. Can you just kind of break down what is Bitcoin? Why is this thing important? And then we'll kind of get back to some more digging here.
The simple answer is Bitcoin is a better money. That's it. Now, the more complex answer, the more nuanced answer is that it's something that is non-sovereign. So it's not anything that a government created. It has a hard cap. So it's a limited supply. So it's a scarce asset. It's purely digital. It's a store of value and it's an insurance policy against monetary and fiscal issues.
policy mistakes of central banks around the world. And that's something from Travis Kling, who's in the space. So I do have to give credit where credit's due, but I love that definition. And the other definition I'll give you is from Lynn Alden and her piece, The Three Reasons I'm Investing in Bitcoin. She put it out in April of 2020. And she goes, although it has no industrial use, it is scarce, durable, portable, divisible, verifiable, storable, fungible, saleable, and recognized across borders. Therefore, it has all the properties of money
Although like all potential money, it needs to have sustained demand to have value. And that's where I would go into and say, what is money? And I think if you dig into that and really dig into it, you find out that Bitcoin makes sense in that space. And then also, if you understand the digital world that we're in and the network effects of the big winners that we've seen, so Google, Apple, Amazon, YouTube, they're all network effects. Facebook, the same way.
Bitcoin is no different. It has the network effect and digital money makes sense that that's the next step as everything else is digital in our lives. So that would be my definition of it. So what is the utility of it then? You mentioned store of value. I think I heard you mention something about using it as a currency, spending and transacting. We've heard people call it the new digital gold. What's your opinion here? What is the utility or maybe just the main utility of Bitcoin?
And I think Bitcoin will change and evolve. That's natural. I think today it is a store of value. That's the way I would describe it. The digital gold narrative, I think makes sense. Some people will argue that it doesn't, but to say that it's a currency that we're going to use it for transactions in the United States, it's tough to say that just because of the way that the tax treatment is. And so when you spend it, you're paying tax on that. That's not the case in other parts of the world. And I think that's a key element in Bitcoin adoption is we are so spoiled as Americans to think,
well, shoot, our currency is fine. We live in the United States, but there's plenty of places around the world, Argentina, El Salvador, Venezuela, Turkey, where they use Bitcoin as currency and the way that they interact day to day. And I think for us, again, being spoiled in the United States with a stable currency, it's a store of value. It's a place where you can put the energy and the output that you have. So Taylor, you and I both being
you know, financial planners and someone that's a financial advisor, like it's still work, right? To meet with clients and do all the different things that we do. And I work with, you know, dentists and veterinarians, but you know, they go out and do a lot of work as well. And that takes a toll on your body. And so what money is, is just a storage of that energy. So when you go out and you expend that energy and you bust your hump and you have a 60, 70, 80 hour work week,
You want a money that you can store the value that you created and not lose purchasing power. Today, if you put your money and store it in the US dollar, you are signing up to lose about 6% a year. Now, if we continue on the path that we have with the money creation that we had in 2020, the devaluation of the M2 money supply was 24%. So you're basically signing up to lose basically half of your money over a 10-year period. That's not something I want. And if we believe in freedom...
in the United States, then we should have the freedom to choose a money that does a better job and Bitcoin's a better money. Can you explain that in a little bit more detail and maybe try to do it simply where you're coming up with losing 6% of the value of your dollar every year? So the way that I would describe holding US dollars in a bank account, so this is not investing, this is just holding it in your checking or savings account, the M2 money supply. So this is something that Federal Reserve used to put out. They've stopped publishing it
as of earlier this year, for some reason. But the M2 money supply has grown on average 5.85% since 1980. In 2020, it grew by 24%. So that is basically adding more money to the system. So the existing dollars that are in existence are devalued because we're creating more and more money. So if anyone's looked to buy a home, like the easiest example, what are home prices doing right now?
Skyrocketed. Yeah, exactly. So when you add all this money into the system, it makes everything worth more, but your dollars don't go as far. That's all I'm describing is basically your money is not keeping up with its purchasing bear. So when you use the term store of value, when we're talking about Bitcoin, I can't help but think, here we have, let's just call it an asset class being Bitcoin.
it has had, you know, drops of 50%, 85%. Like how do you call it a store of value when it can literally, the value can literally be cut in half, you know, forget about 6% a year, but this thing could drop, you know, by 80% tomorrow. So how do you think about it being a store of value when it is a volatile asset class? There are a lot of unknowns and it could get chopped in half pretty quickly. Yeah. And again, that's, that's a fair criticism. So, so
Again, we talked about it having, you know, 10 years. So it basically became live in January of 2009. So, you know, it's an emerging store of value. But as I said earlier, it has annualized 200%. So the volatility is a feature, not a bug. And if you understand that and you aren't using it for your, hey, I need to pay bills next week, all my money's in Bitcoin. I think that's irresponsible.
That's not a wise decision. But if you're thinking about storing your value for five years, why would I not want to store it in Bitcoin and want to store it in something where I'm guaranteed? I'm signing up to guarantee that I'm losing money. So that's the way that I would try to frame it and explain to someone is if you think about the way that the network is structured and some of the, again, going back to the supply constraint, each four years, there's a cycle in Bitcoin where the
Not to get into all the technology we can, but there's basically a limited supply that gets cut in half as far as how much comes onto the market. And from that standpoint, when more demand comes in, where more people are interested. So, you know, we wouldn't have had this podcast four years ago talking about Bitcoin because no one would listen. Today, there's a lot more people that are listening and interested.
The only way to reflect that interest in a scarce asset is for the price to increase. So people will see, hey, Bitcoin was up 100% to start 2021 in the first quarter. Well, it's because there's more interest. It's a scarce supply. You can't go create more. We can't go issue more shares. So yes, it is a store of value. I mean, you can talk about the volatility of being able to lose 50, 80%. That does happen. It has happened. We don't know if it'll happen in the future. Very well could.
But to see your purchasing power go up by that amount, I don't think that's what's going to happen in the future forever. But right now, as it's an emerging store value, it absolutely has been able to protect your purchasing power. Going back to the home piece, you've seen home prices go up through the roof. If I held US dollars or I held Bitcoin over the past couple of years, which one has helped me retain the ability to buy the same house? It's not been the US dollar. So I think you can make a case that it's still a store value.
It's just what's your timeframe with it? Sure. And it sounds like you feel like five years is a timeframe, at least for you and yourself and your financial plan. Do you imagine a situation where that timeframe is shortened, where you can trust holding on to Bitcoin for a one month or one week period, knowing that you could use that to pay your bills or will that never be the case? I think it will. I don't have...
I don't have a good answer on when that happens, but again, it's a trillion dollars now. So if you think about Bitcoin just in the worth of the network, it's about half of what Apple is. Apple's about 2 trillion. So it's not that massive as of today. Gold's market cap is about 11 trillion. So I think it has to get closer probably to where gold is, 10, 11 trillion before you're going to start to see that dampening of the volatility. But again, I would go back to, I think anyone would sign up for
an asset that has the power to appreciate and protect purchasing power like Bitcoin, knowing what we know now, right? Like we probably all wish we would have bought Bitcoin earlier for those that have, or maybe those that are thinking about it. It's like, well, shoot, I wish I would have done it before. And so many people think they've missed the boat and it's still not that large. So again, think about it. It's not even as big as some of the biggest companies in the United States.
So you brought up gold again, and I had a question there around gold and it being called digital gold. And I struggle to understand this comparison from this point of view, which is gold throughout its history. And Jeremy Siegel has one of my favorite charts illustrating this gold adjusted for inflation, right? The real return of gold over time is, has underperformed just cash in the bank. So digital gold hasn't really done its job as a store of value. We both know that it can be volatile as well.
So is this where you think Bitcoin is different than gold and it shouldn't be called digital gold because it is a better store of value and better keeps pace with inflation? Or might we have the same issue here with Bitcoin and gold in terms of returns adjusted for inflation being really, really low?
Don't necessarily know the Siegel chart. So I'm not going to necessarily disagree with the information that's there because again, he's a super smart guy. When I think about gold, I mean, it's been used as money for the longest period of time than anything else. So I think that's part of why the digital gold narrative sticks to Bitcoin. I don't think it's the best narrative. I think it's one that's easy for people to understand. So if we rewind, I guess, back to Roman times,
you know, an ounce of gold bought a nice tunic, right? In the 60s, it bought a nice suit. And today, an ounce of gold buys a nice suit. So it's retained purchasing power. So I think that still matters. And I think that is still a good analogy for what Bitcoin can do is where if you're buying something that you need in that time, that you can then still purchase that. So if I held, you know, US dollar, right?
The purchasing power that it's going to have fast forward 50 years is not going to be nearly the same as it has been. So to give a good example, the original monopoly money, I think it was 1935 is worth more. So the monopoly money that you would have had in the game is worth more than if you would have held that us dollar the entire time, because the monopoly money is a collector's item now. So,
the oldest fiat currency in the world. And fiat, I think is a term that people throw around in the Bitcoin space. And I've had other advisors be like, that word drives me nuts. But fiat just means, so for those to think about fiat money, means it does not have intrinsic value and does not have any use. It is valued only because the government maintains its value or because parties engaging in exchange agree it has value. So again, the network effect. So the US dollar is the
reserve currency of the world. I just saw a chart earlier today that about 50% of the transactions in the world are run in US dollars. So we have been blessed and fortunate as US citizens to have the most stable currency in the world. Yet with that, the US dollar since early 1900s has lost about 95% of its purchasing power. So it's not great. It's not a good store value.
Let's circle back to your comment about taxes because I want to make sure everybody is clear on this. And I had shared a tweet with you ahead of this from Coindesk announcing that PayPal is starting to let its US consumers use their cryptocurrency holdings.
to pay at millions of their online merchants around the world. And our good friend Tyrone Ross said, this is huge news for those looking for a way to create taxable events with every purchase using cryptocurrency. So talk to us a little bit more about using crypto or let's just stick on Bitcoin here using Bitcoin.
Bitcoin to spend and transact and why that's a tax problem to pay attention to. Yeah. Just the way that Bitcoin's viewed from the federal government is that, you know, it's property, right? So it is taxed at capital gains treatment. So using it is, is a challenge. And that's why I made the note earlier in the discussion that
It's not a currency today in the current environment that we have in the United States, but it is in other places around the world. So if you think about it, trying to utilize it to buy the cup of coffee or do whatever, that's going to be a nightmare for your CPA to calculate all that stuff. So it doesn't work for that today. Now, could laws change? Could that adjust? Yes.
I would love to see that. So that's why you'll see a lot of people talk in the Bitcoin space about just they call hodl or hold on for dear life, but just, you know, buy it, maintain it, hold it the same way that you're not necessarily using your Apple stock to go and buy your cup of coffee. Like you're using that to,
Again, maintain purchasing power and invest for the future so that you have dollars to spend on whatever it is that you want. You're not going to Starbucks to buy your cup of coffee and saying, hey, here's a fractional piece of my Apple stock. That's the way that I've tried to explain to people is think about the same way. And until something changes and maybe nothing ever does change, it doesn't make sense to use from a transaction piece. Yeah. I like that analogy. Yeah.
So if you think about Bitcoin here and you've compared it to Apple stock in that example, you mentioned that Bitcoin is a store of value in your opinion. Is it fair to say that Bitcoin is an investment? Would you call it an investment like you would call a mutual fund or an ETF or a stock in your portfolio? Would you refer to it as an investment? And also second to that, would you call it a speculative investment?
You've heard me say this before. I don't think Bitcoin is speculation at this point for a lot of reasons because Bitcoin is one at this point. There's 3,000 cryptocurrencies and I think that's where people get tripped up a lot. Bitcoin is 65% of that. It has the clear use case. There's a lot of properties that make Bitcoin unique that you can't copy it. It has the network effect, so it's one. So I don't view it as speculation.
personally. I think when positioning it to someone that's coming on board and maybe not comfortable with it, it can be volatile, right? So you need to understand why it has volatility and why it does certain things. And by no means am I saying that Isaiah has this figured out and I know when things happen. I'm not going to be like, hey, here's my newsletter and Bitcoin's going to go up tomorrow, but then it's going to crash in two weeks. I don't know any of that, but
you know, understanding like what's happening behind the scenes and the adoption cycle and wave that's there. So I don't view it as speculation, whether it's an investment store of value, it's my preferred way to save. The way that I look at Bitcoin is it's making saving great again.
You don't have to take money that you would prefer to set aside for future purchases and have to put at risk the same way. And I know that sounds crazy when we just talked about, hey, it has 50% drops or 80% drops.
But I look at it as a savings technology because it is money. That's the way that I personally view it. This is money. And this is something that I can store the value that I create in and it will maintain its purchasing power and hopefully grow that because it is a scarce asset.
I want you to talk more about that because I'm still struggling there, again, calling it a store of value and using it as a savings mechanism. And maybe I'll just use a simple example and say, my wife and I, we want to buy a new house in five years. And so we're putting money away in a high yield savings account, putting money away, putting money away, knowing that in five years, that money will be there. It will be safe. It's accessible. It's liquid.
On the flip side, if I'm instead putting it into Bitcoin, I don't know, like for me right now, I'd say, I don't know. I don't know where Bitcoin is going to be in five years. It could be four and a half years and we're ready to put a down payment on my house. And we're going through one of those 80% events. And now, you know, this money that I saved up is cut in half or more. So I don't just share more about how you think about that or maybe where I'm going wrong in my thinking. Again, I think.
Each individual is going to have their own kind of path and journey as far as how they grapple with what Bitcoin is and how it interacts. But just the way that the protocol, so the code, the way that Bitcoin is created is 88.5% of all Bitcoin that are ever be created are already out in the marketplace. And you are seeing a demand growth for Bitcoin right now, whether it's, again, Goldman Sachs, Morgan Stanley, Bitcoin.
MicroStrategy, Tesla, like all kinds of different large institutions are starting to be very interested in Bitcoin. There are currently in the marketplace more buyers than sellers. So there's more companies that are buying Bitcoin than what there are
available that are being created. So new Bitcoin coming onto the market. And again, not to get into all the technical stuff, it's important to understand that. But I don't think this is the right format. I don't think I'm the right guy to get super, super technical. But just understand that what Bitcoin does is it allows for there to be a truly scarce asset where you can audit the supply. So I can go on Amazon, it's been $250, have the parts, download the free and open software,
of Bitcoin core and audit every single transaction since 2009. And I can ensure that I have the Bitcoin that I own. And that to me is really powerful where you and your wife, Taylor, don't know when the federal government's going to pass another round of stimulus, when they're going to print another 2.2 trillion, another 3 trillion. And the money that you're saving up in your high yield savings account, I don't know what you're making on your high yield savings account, but it's probably not keeping up with inflation.
When you look at the devaluation of the dollar. So I think it's absolutely more risky to hold dollars because you're guaranteeing that you're losing your purchasing power. When you see all these assets around, you go up in value, go up in value, go up in value versus something where people are starting to wake up to. There is something about scarcity and something that is all built on consensus. So Bitcoin is free and open. It's for the people by the people.
to where no one controls it and it is verify and then trust versus just putting the full faith and trust into a government entity to do whatever they feel like is right, regardless of political affiliation or what you think. So to me, I would much rather have the free, open, auditable, known quantity that is Bitcoin. I can know exactly what's going on. I know that there's four-year cycles. I know that the adoption wave right now is huge.
I can read that. I can see that. I can look at the information that's out there versus not knowing what's going to happen in the stock market or the bond market or all these other places. I don't know what the price of Bitcoin necessarily is going to be, but I can have confidence in the network itself, the consensus in the way that it's structured. And again, I know that's easy for me just because I've spent more time doing that versus someone that's newer and hearing this and saying, well, yeah, that sounds great, but how do I know that?
Is it fair to say, I'm just trying to really understand where Isaiah stands on this. Is it fair to say that
you know, aside from cash that you need, let's say in the next six months to pay your mortgage and put food on the table, you know, you have that six months of cash, it's readily available. Everything above and beyond that you would prefer, or maybe you already do hold in Bitcoin. Is that fair to say? Is that true? I wish it was true. So there is something that does not allow that. My wife has come around on Bitcoin, but she's not quite there as much as I am, candidly. And so we sold our house in August of 2020.
And I've kind of just been taking a sidestep to wait to purchase kind of our forever home. And there's a portion of those funds that are set aside that have been put in Bitcoin and were when the close of that sale happened. But there is probably more cash than what I would like. And we have that discussion a lot. We just had that discussion last night around, I was like, I just don't feel comfortable. I feel more uncomfortable holding more cash today just because of the amount of devaluation and how quickly...
We continue to want to just create more money for a variety of reasons, whether that's you agree with it or not. It is punishing savers. That's exactly what it's doing. And when you are being able to create all that, all that extra money, what you were actually encouraging is people to take on debt because your debt is getting cheaper and cheaper over time.
And so I think there's some unique things that you can do and look at to have an arbitrage opportunity with that. It's probably more than what we need to get into today, but I think there's a lot of interesting stuff that you can do when you can borrow at really low rates.
I know we're not here giving advice, right? I'll make the disclaimer that this podcast is for informational purposes only. But in your opinion, should everyone own a percentage of Bitcoin? Should they have a certain percentage allocation to Bitcoin? It may be second to that. Do you find that it's important that they first, before they even consider adding Bitcoin to their portfolio and using it the way you've described, should they?
Should they nail down the financial planning basics, make sure they have a plan in place, make sure that they don't have debt above and beyond maybe a home mortgage or something responsible there? Should everyone have an allocation to Bitcoin? If so, what percentage does that look like? And are there other things they should tackle first before exploring that? I am a firm, firm believer as much as I love Bitcoin and like the investing aspect of what we do, like having a plan and knowing where you're going obviously comes first for me.
I think every single person should own Bitcoin. And the reason being is even if you think it's the wildest, craziest thing that you maybe don't have a full grasp on, the news flow and if you dig into it, the adoption that's there is quite powerful. So what if this thing really does take off?
you would think you'd want a little bit and you can own a little bit. And if it goes to zero, which is the worst case scenario, right? You know what your loss is. So, hey, I'm going to put in whatever amount is, let's say 1% of whatever you would put aside for your investing. So let's call it, I'm going to put in $10,000 and you can buy a fractional piece of Bitcoin. I think that's something that a lot of people don't understand. That is one of those things that you think like, duh, but you don't have to buy a whole Bitcoin, right? You can own a fractional
piece of a Bitcoin, which is called a Satoshi or a SAT. So you can have SATs that are there, but you know, if it goes to zero, okay, cool. But what if it continues to go up like it has before? Would that dramatically change? And I can give an example. I had a client, one of the first people that was interested, 69 years old. So we made a 2% allocation in 2020 when the price was significantly less than where it is right now.
That 2% allocation has grown quite a bit. And we knew and went through, hey, this is not going to blow up your financial plan if it goes to zero. We did talk about it as a speculation because that's how I wanted to position it to him for the situation that he was at. He was comfortable and he had additional funds that was like, hey, if this works and you think that it's going to do what it's going to do. And we talked about everything we've talked about today. Great.
But it also could have gone the other way, right? But the amount of money that put in was not going to change or damage his plan. So I think it's super important to not put yourself in a situation where it is, hey, we're putting this all on black or red. And if it works, great. I'm in a fantastic spot. But if it doesn't work, oh, okay, this isn't, I'm screwed, right? Like that's not helpful. And I think that's the important part of having someone that understands it.
and can help you protect yourself from something that you might not need to do. Because sometimes you don't need to take the risk. But I think there's a risk in having a 0% allocation, especially if you are fully funded. My financial plan is locked. Well, what if we see the devaluation of the dollar? And what if Bitcoin does start to eat into a lot of these different stores of value, whether it's real estate, stock market, all these other things, and it goes up in value? Are you going to be comfortable just continuing to say,
I don't want to own it. I think it's tulips. I think it's speculation. And we can talk about if Bitcoin only just comes to the same size as gold, it's over half a million dollars per Bitcoin. Is that helpful? Could you do something with that? Could you donate it? Could you set up other things to make your life better or the lives of others? Sure. And you could own one Bitcoin as we're recording this. It's $58,000 today. So there's some interesting...
Interesting thing. So yeah, I think every single person should own it. And I've gotten flack from some advisors and people that I respect in the industry that laugh at that. But a small allocation is not going to hurt a 65-year-old business owner or a 50-year-old business owner. They can take that risk and carve out 1%, 2%, 3%, 4% and not be hurt by it.
Yeah, I think there's two things there in response. One is, to me, it sounds very similar to our recommendation with what we call cowboy and cowgirl accounts, which is to take no more than 5% of your investable assets and
put it into a fun play account that we call a cowboy or cowgirl account and go and invest in these speculative assets, knowing that if they go to zero, your retirement plan is not going to be jeopardized. And that's where you can go and buy your Teslas and Amazons or Bitcoin or whatever else. And like you said, Hey, if it, you know, has a year like it had last year, we saw a Tesla up 600%. Like it could either change your life or change somebody else's life. You know, if it turns into a donation of some sort, but,
On the flip side, it could all go to zero as well. So again, that's why I kind of circle back to just throwing it in that speculative bucket. And some people are okay speculating on 5% or less, and some people aren't, which goes to my second point. And I've shared this before on the podcast too, when trying to make a decision like this,
Whether it's, it could be as simple as buying a house. It could be investing in the stock market or Bitcoin, which is to play this game with yourself, which is what's worse, right? What's worse that you don't invest in Bitcoin and Bitcoin goes to doubles or triples from here. Is that going to hurt more than if you bought Bitcoin today?
and it got cut in half or it went to zero. Like what's going to hurt more there and kind of play through that scenario in your head. And, you know, maybe you're in the position where you're like, I'm not going to have FOMO. You know, Bitcoin could go to $500,000 and I don't care.
But it would really hurt if I bought one Bitcoin and it went to zero. That would crush me. I would lose sleep. My wife or husband would hate me. So again, it just circles back to the way I think about it. And especially with our clients is it goes in that cowboy or cowgirl account, which means it's a speculative type of investment. Do you think...
the path that we're on and just the dollar. So let's just think about the way that we've had, you know, this monetary creation. So MMT, right? Like, do you think that it's sustainable? I think that's the question people have to ask. If you get to the root of what is money, and if you think that this is sustainable, then you don't need Bitcoin. I think the biggest risk to Bitcoin is a federal government that's responsible, that actually manages itself responsible. If you think the federal government's responsible, then you don't need Bitcoin.
But if you look at the debt to GDP in the United States, it's over 130%. 51 out of 52 countries that have ever hit that have defaulted. So if you think that we're going to be the special case and the other, if you're wondering what's the one country that hasn't, it's Japan, which is still going. So again, Japan had the biggest, wildest speculation stock market run up in the late 80s, early 90s. It's basically been dead money for 30 years.
So could that happen here? And I know everyone's like, oh, well, the US is the best place to invest all these other things. And you have that home country bias. Absolutely could happen here.
absolutely can happen here. And I think that's important to also weigh some of those other things that are out there and not just what is Bitcoin, but what's the alternative. Yeah. No, I appreciate that. And that kind of segues nicely into my next question, which is what you've mentioned the worst case for Bitcoin a couple of times here, worst case it going to zero. What is that worst case? Maybe talk more about the federal government being responsible. Is that the worst case? And maybe just share a little bit more about what that means if so.
Yeah, that to me is what I think would be a worst case scenario for Bitcoin. And I, to me, seeing what we've seen, and again, who cares what political party you believe in and all that, it didn't matter who got elected. We were going to come on this path of we're going to create more money. Like, didn't matter. Republican, Democrat, that was kind of the playbook that was there. A lot of the pushback
I hear when I have people talking about Bitcoin and thinking like, well, I don't want to allocate because the government will ban it. We've already kind of talked about it's too volatile, right? They'll make more of it. It'll boil the ocean. So it's using up too much energy. It has no intrinsic value, quantum computing, and it's used by drug dealers and criminals. The one that I hear the most is that the governments will ban it. And I just saw someone that I, again, super respect on Twitter today or yesterday. Yeah.
And he's definitely in the kind of the macro. So like big picture investing type of world and brilliant guy. I've read a ton of his stuff, listened to all his podcast. Like he's just fantastic. And he was just like, well, if you don't think Bitcoin can't be banned, then you just need to Google Tiananmen Square. And you know, there's your answer. I was like, that's such a terrible, terrible pushback. But if you want to actually look at the facts, right? Like I think that's important. Let's come back to what the facts say. Is the government going to ban it? No, the entrenchment's too high.
So you have a US Senator, Kathy Loomis from Wyoming who ran as a Bitcoiner. She's on the Senate Banking Committee. Warren Davidson, US Congressman, Ohio 8th District, ran as a Bitcoiner, is a Bitcoiner, pro-Bitcoin. Last year, the OCC, so the Officer of the Comptroller of Currency, Brian Brooks, he's no longer there. He stepped down with the change of the administration, helped set banking regulations for federal banks to work and interact with crypto.
Avanti is the first Bitcoin banking charter there in Wyoming. Kentucky passed a house bill 230 that is directly targeting Bitcoin miners to come do business in the state because they know how much money is being made there. They're waiving the sales tax on electricity so that they can attract those Bitcoin miners. You have Miami. I don't know if people have been following this story. Miami. So Mayor Suarez. Miami is going full Bitcoin. They're trying to attract the California folks, right? The people leaving Silicon Valley.
They are going to support and hold Bitcoin as a treasury reserve asset. At least they want to, that's in the works. And they're going to allow tax payments in Bitcoin and they want to pay their people in Bitcoin. Visa has come out and announced a Bitcoin and crypto banking roadmap to the 70 million customers that they have. Morgan Stanley came out and announced that its big clients can now have access to Bitcoin. Goldman Sachs came out this week and said the same thing.
The news flow and the entrenchment of people that are close to those in power are owning Bitcoin today. It will not get banned. Will it get regulated? Will they try to do certain things to make it harder with maybe like know your customer rules or anti-money laundering or different things like that to make it more regulated? Absolutely. I think that will be the way that Bitcoin is probably trying to be more regulated in the United States. But-
It's not going to get an outright ban. I do not see a world where that happens because then you have other countries in the world that maybe aren't as pro-USA, that all they have to do is stand up and say, you know what? All these Bitcoin people that are having these businesses that have all this capital and this wealth, come to our country, set up shop here, and we're going to make it advantageous to run your businesses here. You'll start to see this gamify happen.
system play out across the world. I think we'll see that. And there was an interview on Real Vision from the CEO of NYDig, which has been one of the companies helping micro strategies and Tesla and others add Bitcoin to their balance sheet, said that they had a sovereign wealth fund inquire recently this year to add Bitcoin to their balance sheet, to start buying Bitcoin for a sovereign wealth fund. So a country is looking at buying Bitcoin today. That's wild.
So now that you've convinced all of us that we should put all of our money in Bitcoin and there's a very little chance of this going to zero and getting banned. I'm kidding. But really, if somebody is interested in adding some exposure to Bitcoin and buying some, where do you suggest people buy Bitcoin? And then maybe even more than that, you and I have talked a little bit about this, but are there any places that you suggest people stay away from if they're interested in buying Bitcoin? Yeah. Yeah.
I think it's important to probably have two different sources for buying Bitcoin. And the reason that I say that is we've seen the place that I buy Bitcoin today, the main source that I dollar cost average is called Swan Bitcoin. And there's been other places as well that actually legitimately had liquidity issues where they didn't have enough Bitcoin to sell with the demand. And I think we'll see that more and more, especially given that it is a scarce asset. So I think you need to have more than one place that you can have access because they're going to have different relationships to basically go out to these
over the counter or OTC desks to go have Bitcoin to sell. So Swan, the reason I like Swan is it's Bitcoin only. And we didn't even get into why only Bitcoin and not other cryptocurrencies a little bit, but there's some rationale for that. And I think it makes it easy where you're not getting distracted and hit up on Polkadot or this other random stuff that you should buy and getting emailed. I think you just need to focus on Bitcoin. So I like Bitcoin only companies.
And Swan makes it easy where it's a, you know, kind of set it and forget it. And they encourage you to take self custody, which again, we didn't necessarily get in today, but there's a lot of different ways that you can hold Bitcoin, which is you can trust a third party, which is kind of what most people are used to, or you can actually hold it yourself. So think about, I'll use the gold example. You could hold it in your own digital safe where you hold the key. I think that's important because then you don't have to trust anyone else.
as far as how you hold that Bitcoin. But you can, you can certainly trust another institution to do that. And I think there's going to be more good options for that. And there are. Coinbase is the big name in the space. They're going to go public soon. It's fine. I mean, I don't have any negative to say. BlockFi is one that people have used. They like BlockFi for...
The ability to hold it there and earn yield. I think it's important to understand what happens if you hold Bitcoin or other crypto assets there. What are they doing behind the scenes to earn that yield? I have some money with BlockFi, so I'm not necessarily going to say negative things about them, but I just think it's important to understand the risks involved if you're ever trusting a third party. But yeah, I think I like Swan. I like Gemini, BlockFi. Cash App is an easy one if you're kind of younger and like that. Just make sure, I think it's important if you want to buy Bitcoin that you can actually
take self-custody. So that's the issue I have with like PayPal. We talked about earlier, it has to stay within the PayPal ecosystem. You can't actually take the Bitcoin off of PayPal's internal network. So to me, that's more of an IOU or just something where you only have the price appreciation. You don't actually get the asset itself. And I think we'll see a whole world of
develop. And we are seeing this now where you can actually use your Bitcoin as collateral. So again, going back to the idea of how can I use my Bitcoin, not pay taxes, but then still have access to capital to have a home purchase or invest in different things. That's absolutely out there. It's happening right now. And so the ecosystem around Bitcoin is rapidly evolving and there's a lot of money moving into space, building great businesses. So I think we're going to be really spoiled for options here in the next three, four or five years.
Really quick, I think I heard you mention Swan and self-custody in the same sentence. So if you use Swan to buy Bitcoin, which I did based on your recommendation, I used your referral code. If I buy Bitcoin through Swan, am I self-custodying through them? How does that work? Because it appears that Swan is holding my Bitcoin. Yes. So Swan and others will encourage you to take self-custody. So that would be setting up kind of your own, they call it a wallet.
And then you would move it. But yeah, so like Swan, they're like the front end, but everything's held at prime trust. So that's where the actual Bitcoin is held is held in cold storage, which real quick cold storage just means it's offline and they have to warm it up or bring it online to be able to move it. Or if you have it in a hot wallet or something that's hot, it basically means that it's, it's easily accessible, which does expose it to more risks. So I just think it's important to understand in most, whether it's Coinbase, Gemini, BlockFi, all those, they're holding stuff in cold storage.
So it's more or less just looking at what are you paying to buy it? I think that's important. What are the fees? Because if you're buying Bitcoin, why pay more? I think that's important. And then what's kind of the ethos of the company and what else is that company doing and are there risks associated with it? But yeah, I like something simple where I buy Bitcoin every day. I buy a little bit amount every day. It makes it easy. So I know each day I'm owning a little bit more Bitcoin than I owned the day before. So that's kind of the way that I do it.
Yeah, you had mentioned dollar cost averaging a little bit ago. Is that your primary strategy in buying Bitcoin? Any case for making lump sum investments? How do you think about that? I think initially, if you say, hey, I'm going to have an allocation of a certain percentage, you want to lump sum to get there. And then from there, if you want to continue to add to it, you certainly can. And I think DCA is a great strategy for it.
What we've seen historically, and again, you know, all the disclaimers around it, you have a small allocation. A lot of times will grow to where you have more of a situation of you need to probably trim it if it does grow to be too big. And that's, you know, a whole nother kind of conversation of how much percentage of allocation or how much risk associated with your portfolio you're comfortable with if it does go up a lot in value. Got it.
Well, we talked about keeping this conversation to 30 minutes and we've gone way over. I want to make sure I get you out of here on time. I just want to kind of ask one final open-ended question. Is there anything more that you want to share about Bitcoin or correct any misconceptions or just anything that you want to leave our audience with today?
Yep. So you're listening to this podcast and it has a great name, which is called Stay Wealthy. And that's exactly what I think Bitcoin does, right? It allows you to take the blood, sweat and tears that you've expended in whatever it is that you do from a day-to-day work. And it allows you to store that value so that you have that purchasing power in the future to do what you want.
If you're a big fan of buying and holding and not trading and trying to get too cute, again, Bitcoin works. It's great. Buy it, hold it, and it goes up in value. So to me, it aligns so much with people that have the view of, you know, I am a bogo head. I want to keep things simple, you know, kind of this KISS method. Add Bitcoin. It's an asset that's better money. It's digital in nature, and it allows for...
so many different options for you to do something. And it does compliment the traditional 60-40 portfolio or whatever that you're probably doing already. So to me, that is what I would like to leave you with. And just think about that it's not necessarily a get rich scheme. I think a lot of people look at Bitcoin as that. And that's what it brings people into. Bitcoin is designed to tap into some of the kind of innate human
features that we have where you get excited because you see the price go up and you get that FOMO or that greed. And you come in and you learn like, Ooh, what actually is money? How does this all work? And you start to understand why Bitcoin is powerful. So that's all I'll leave you with. And I would just encourage you. There's tons of great resources and Taylor, I can share those with you as links. If you have more questions, there's people that are doing some great educational work in the space. So there's no excuse to not get educated and dig in. And then you can make the decision that's best for you and your family.
Yeah, please. Definitely. I'll follow up with you and get those links. I'll be sure to share everything in the show notes with everybody. What a lot of our listeners might not know, or they might wrongfully assume that Isaiah is some crypto nerd in a basement here, but I know Isaiah is a financial planner, just like myself, you know, day to day. And you work primarily with dentists and veterinarians. And I want to highlight that because as our industry grows,
turns into a profession and starts to resemble more of the medical field or the legal field where we're starting to carve out these specializations, like you working with dentists and veterinarians. We work with people over age 50 that have tax issues in retirement, want to lower their tax bill in retirement. So we're seeing financial planners get more and more specialized, which I absolutely love. So maybe just share a little bit about what you guys do for dentists and vets really quick and where someone can learn more about you if they're interested in your services.
Absolutely. Yeah, I appreciate it. And I love it too. I think it's great that people are trying to get more specialized. And again, for me, I have three passions, right? Serving those that are veterinarians, dentists, and people that are interested in Bitcoin, right? Because I do think it's that important to chat, which is why we were able to connect and get to do this. But yeah, thinking about...
dentists and veterinarians, there's a lot of overlap and a lot of commonality between the two. So you think about someone that has gone to medical school that is still not rolled up into kind of the bigger healthcare system. A lot of times it's private practice owners, although there's a lot of corporate consolidation in both, but there's a lot of similarities in the challenges and the life cycles. So that's really what we do from new grad and associates.
Then you move into kind of that business owner mid-career. And then as you transition into retirement, how do you take that big asset? So a lot of clients that we have are business owners and a lot of their net worth is tied up in that business. So how do you transition that business into assets that you can live on into the future? So that's what we do. Talk a lot about just the business of dentistry and veterinary medicine. It's an awesome field with great people.
And if you're curious to learn more, you can go to vinceyourwealth.com. You can follow me on LinkedIn. If you want the unfiltered straight from the horse's mouth, follow me on Twitter. That's kind of where I probably share and most transparent on Bitcoin topics. And there's a lot of good stuff there too. So I appreciate the opportunity. And I think this was a great conversation. And Taylor, you ask a lot of good questions. I think most people are curious about and hopefully it was helpful. Yeah, absolutely. I love it. I'll be sure to share links to everything in the show notes.
And Isaiah, thanks so much for putting up with all my questions and letting me drill deeper into some of the stuff that's just been on my mind. So thank you for your time. Thank you for the information. And we may have to do a round two here since this time just flew by, but thank you very much again. A hundred percent. Thank you. This podcast is for informational and entertainment purposes only, and should not be relied upon as a basis for investment decisions. This podcast is not engaged in rendering legal, financial, or other professional services.