How Much To Invest In Crypto

How much to invest in crypto? So we're in a very interesting market. We're in a recession, high interest rates, inflation, and bank potential collapses. Crypto markets have been volatile. So I brought the smartest man that I know, Kelly Korshik, to talk about how much should you put in crypto. And I'm going to ask him some questions about the federal new digital dollar that you hear is going on. How is this all going to work out? Get a pen and paper. We have a lot to talk about today. So as you think about the crypto market, the banking, what's going on in the economy, I have a very world-leading expert in just the economy and money banking. We're gonna have that conversation, but specifically, we're going to target the conversation on crypto and what should you be doing. It's been extremely volatile. Some of you have made a lot of money and some of you have lost almost all of it. So interesting, you know, Kelly, as I bring you back to our YouTube channel and have this conversation, how many people like lost their wallets, have no idea even how to get their money. It's interesting. So specifically today, let's talk about three things. Let's talk about, you know, considering your risk tolerance and what is that as you get into crypto, for those of you that are investing. Let's talk about diversification and where that's going. And not only starting small, but what should they be doing, given that a lot of these, you know, these cryptos and these coins and NFTs have fallen completely down. So Kelly, welcome back. Good to be here, Laurel. So talk about the crypto just in general, and then let's go into, you know, the consideration of the risk and where we are in the market. Well, I think most people probably realize now that Bitcoin, which is, of course, the Cadillac of cryptocurrencies, has crawled its way this year from 17,000 to 30,000. We're up about 70% on the year. All cryptos have not participated in the same way, however. When I think of cryptocurrencies, especially in an emerging market like this is, I only think of Bitcoin. I do not extend beyond that. I am a believer in cryptocurrency, but I'm a believer in the cryptocurrency that has the greatest probability of surviving all attempts by central governments to attack it and central banks as well. My personal opinion of crypto is that it should probably be in everybody's portfolio, including people that are in retirement. However, it shouldn't be really no more than 5% of your total portfolio. If it truly is the gem that we believe it to be, and it is something that will go from 30,000 maybe to one half of a million dollars one day, then it will definitely serve its purpose as a portfolio stabilizer, as well as a profit center, even with as little as a 5% investment of your total net worth, liquid net worth, let me be specific. So if you have $100,000, no more than $5,000 into crypto. That $5,000, however, can go a long way. As we've learned, in general, it doesn't completely behave just like the stock market or bond market. I feel there is a future to cryptocurrencies, and you should have some investment in it. Gold would be something similar, precious metals, but I specifically look at gold, not silver. I look at silver more as a commodity, something that is used in industry, similar to platinum or palladium, but I do think of gold as a true precious metal. Now, yes, we can't walk around with it in our pockets, even if it's a Krugerrand, it's too heavy. However, if I was to own gold, I wouldn't go to the stock market. I would be a Krugerrand owner, and by the way, I am. Krugerrands have the advantage of that they're priced close to market, and we all recognize what they are, and they're smaller. It's not like a brick of gold. And I would represent, I would think that no more than a 5% additional investment of your portfolio can be moved into things like this. So thus, 5% gold, 5% crypto of $100, $5 in each. Think of it this way, and never beyond that. It's not supposed to go beyond that. Interesting. So that's a little of the diversification as far as reducing risk tolerance and just risk. So many people really diversified into a lot of coins. I mean, what is it, the FTX? I mean, it's completely gone. There's a lot that have just completely fallen down. I mean, what would you, again, opinions, but what would you be doing if you were some of those people? You'd liquidate it? I mean, you've already liquidated, you just take the loss? Yes. No, I would frankly, I'm not a believer in the derivatives of these products. So for example, I'm not a believer in a product that is paying you, for example, an interest rate in the form of Bitcoin. So for example, I like Bitcoin and I've been pretty positive on that to get to 30,000 over the last two months. And it, by the way, did get to 30,000 just recently, but the derivatives of these things are what has enamored people. So for example, there's a lot of apps out there that if you put some Bitcoin in, they'll have a nice, pretty app that'll show you that you're making more and more Bitcoin in interest because they lend out the Bitcoin. I am not sanguine about the long-term aspects of those things, really being able to pay you back the, even the original Bitcoin that you put into it. I feel there's a lot of bad actors in this space. We saw it with FTX. We saw it with some other companies. We've seen the way companies like Coinbase and Binance, their stock prices have gone way down. We've seen this. I think that kind of is a telltale thing that we're still in the emerging parts of this industry. And that doesn't mean it won't continue to emerge. It just means that the strongest players are the ones you want to participate in. The strongest players, we all know what they are. They still remain Bitcoin, Ethereum, maybe Litecoin. But Dogecoin, and remember this, and remember all these apps that were behind the Bitcoin that you can transfer your Bitcoin into and then reinvest it to get paid in more Bitcoin. When the FTX collapse occurred, so did they. All of a sudden, when you see yourself making interest in something that you can't really measure, I'm really not sure it's really there. And so I would encourage people that have these kind of outside accounts to kind of wean yourself off of them slowly. Try to recover the money you've received to be there and get it back into Bitcoin. I think Bitcoin is a strong example. If it's just in a wallet and it's in a company you understand, like a Binance or a Coinbase, that you will probably find that those things really will appreciate in value over time. And they do represent a long-term play in many people's portfolios. I wouldn't encourage everybody to do this, but I do think everybody could do this and feel some level of comfort that they have some of their assets in a product that nobody quite understands. And by the way, folks, Warren Buffett, I'm not his greatest fan, but I will say this. He always said to invest in what you know. And when we think of cryptocurrencies, what is the first cryptocurrency that comes to mind? Bitcoin. That's the one to be in. Absolutely. Those of you that are enjoying this channel, again, I want you to subscribe, number one, click that notification button. So every day, five days a week, you are getting a eight to 12 minute video popping into your phone and then watch it. Share it with five or 10 other people, especially these conversations around banking, the economy, and your investments as we move through this recession, this interest rate, inflationary time. Kelly, before we wrap, talk a little bit about the federal, the digital dollar that we hear about. Do you see it coming anytime soon? Just give us a little update on what you're hearing and knowing. Very good question. Through the years, we've heard of other companies like JPMorgan trying to come out with their own digital currency. We saw Facebook presenting its digital currency. Now we have the Federal Reserve trying to say that they will create a digital asset as well. It's interesting that all of these companies are doing it. What they've all caught on to, the fact that cryptocurrencies are kind of here to stay and people like them, especially a younger generation. But that aside, older generations have started to embrace these things too. Generally, the reason these were embraced was because of a distrust, a deep distrust of central banks. Remember, Bitcoin was a product of the 2008 and 2009 financial crisis when the banks did fail abysmally, and that this currency was created to be able to counter that. It was a centralized currency and it had no allegiance to any sovereignty, no allegiance to America or European countries or China. It was made by a person that made it available to everybody. So we all, in a way, own a piece of this particular kind of cryptocurrency. And the first one, of course, was Bitcoin. My feeling is that these banks and now the central government or the Federal Reserve have decided to say, we're going to create a digital currency. And the reason they're doing that is to say, hey, we will create a safe digital currency that will fiat though against our own currency, which is the US dollar. That means they're going to try to keep it consistent with the dollar. So anything ownership in that is no better or no worse than a dollar. There is no real upside in it. It's just more created for convenience. That is not an asset class. Whereas Bitcoin, which is decentralized, has no allegiance to sovereigns, is an asset class. This is an attempt, I think, by an older generation to regularize what they feel is a threat to what they have grown up with. That actually would include me. However, I feel I've embraced it in a different way, feeling that there are long-term values of a central currency that has nothing to do with any sovereign. So I'm against ownership of any of these digital currencies created by sovereigns, and I feel that they will ultimately fail because they're missing the fundamental fact that it was the real desire for these products, along with the possible possibility of price appreciation, is the fact that it has nothing to do with the central banks. So thus, I feel these are just exercises in futility by a bunch of older people that feel they're trying to protect younger people, and it's no more than that. Great insight, Kelly. It's great to have you with us again today. Those of you who have any questions, go to asklaurel.com, A-S-K-L-O-R-A-L, and make a request, ask any question. If there's a comment or some sort of topic that you want me to talk about, put it over there and I'll get back to me where they're 24-7 answering your questions. Kelly, thank you again, and the rest of you will be back tomorrow. My pleasure.