Is Cryptocurrency a Scam or Here to Stay?

February 11, 2022

It’s likely you’re seeing cryptocurrency everywhere. Overnight millionaires. Teens making more money than their parents.

People talking about how you’re not going to make it (NGMI) if you don’t know about crypto. It can feel overwhelming.

A lot of people are asking: Is cryptocurrency a scam or here to stay?

You might even have a little fear or missing out (FOMO). What do they know that I don’t? Should I be investing in cryptocurrency? What’s the best cryptocurrency? Or maybe you’re on the other side of the fence and think crypto is a scam and will soon go to $0. People need a place to ask questions without feeling dumb. They should be able to talk with their advisor about these topics and have educated responses.

Watch Here:

Show Notes:

Onramp Academy
Cryptoassets Book
Jerome Powell & Digital Currency
$BTCUSD Chart – “Bitcoin Chart: Koyfin Stock price graph for $BTCUSD 01/1/17 to 1/31/22. Fund Flows, Rolling 5 Year. Retrieved from Koyfin database”

Full transcript:

SPEAKERS

Anthony Saffer & Alex Okugawa

Anthony Saffer 0:00

Is cryptocurrency a scam or here to stay? Today we’re gonna discuss why we think it’s here for the long haul.

All right so today we’re talking about cryptocurrency is it a scam? Or is it here to stay for the long haul please like and subscribe so Alex we see teenagers making millions of dollars in some cases making more than their parents. Yeah, and it’s a complex subject tell us about cryptocurrency and why we might think it’s here to stay well before we

Alex Okugawa 0:30

even get into that I think we need to take a step back and look at the landscape because I see in most cases two camps of people in one camp I would call them like Bitcoin Maxis or cryptocurrency enthusiast that they go all-in right it’s almost like their entire net worth is in cryptocurrency. It’s all they talk about if you go on Twitter, you’ll see it and then you have the other side in this this other side is adamantly against cryptocurrency to say it’s a scam, everything should go to zero. It’s a Ponzi scheme. And there are good arguments to be honest, for both sides, I think we’re we tend to stand is probably more in the middle, you shouldn’t be putting your entire net worth into cryptocurrency. But you probably also should not be ignoring this important area.

Anthony Saffer 1:19

Right? So not a lot of people know about bitcoin and cryptocurrency and it is a complex subject. We did have fed Fed Chairman Jerome Powell, he talked about it last summer and even talked about a digital currency for the United States.

Alex Okugawa 1:31

Yeah, now this stuff is coming up. But again, so getting back to your point, is it a scam? Or is it here to say, we’re here to stay? I think at the end of the day, this is here to stay? And here’s why. So let’s pull up a chart here in the past five years, right, so what we’re looking at is a chart of the price of Bitcoin over the past five years. What you’re gonna see in the bottom part here in the red, is that Bitcoin has seen an 80% decline from its highs in 2018, a 50% decline in 2021. And we’re currently in a 50 ish percent decline right now. Yet now look at the blue part of the top. That’s the price history of Bitcoin over the past five years, we see it continue to come back. Now, I’ll be honest, I was one of these people before I started to educate myself in the area of cryptocurrency, maybe specifically Bitcoin, something that kind of mocked, you know, these price dips, you know, all these people that are all into it? Oh, look, you know, it’s dropping 80% 50%. See, I told you so kind of behavior. And I realized that was probably wrong, again, probably not the best thing to go all in, but starting to learn about it understand what this space is, in my opinion, is really important. So what

Anthony Saffer 2:48

you’re saying is this, this idea that it hasn’t been killed, despite these big drawdowns, and then the technology continues to improve, and people are working through that as a sign that hey, it might be here to stay.

Alex Okugawa 3:00

Yeah. And I think there are a lot of people that know way more about cryptocurrency than we do. So they’d point to specific technical things like the use cases, proof of work on how the blockchain works. Again, beyond getting into those details, if you just look at the nature of this beast, and how it keeps getting cut in half, or even 80%, drawdowns, and it continues to come back. To me, that’s a very strong sign of just resilience. And this thing is here to stay for the long run. Yeah, so

Anthony Saffer 3:28

People, even if people are unsure, there are a lot of traditional financial principles that we can apply here.

Alex Okugawa 3:32

Absolutely, yeah. So again, to your point, one of the traditional finance principles we can look at is just don’t over-allocate to this, right. You want to right size, your position the same way you would in a traditional portfolio, being aware of taxes, right, a lot of people don’t realize that at this point, the IRS is treating cryptocurrency as property. So you don’t have to worry about things like wash sale rules that you do with traditional investments, like stocks and bonds, so you can harvest losses and immediately buy back again, a lot of people don’t know about these things. So using these traditional finance principles can help them better navigate the crypto, how do I invest? How do I allocate wisely?

Anthony Saffer 4:12

Right? So it’s important to have an open dialogue really be learning about the space, and even people that are involved in Bitcoin in this every day. They’re you know, presenting a balanced approach, and having that open communication helps us to learn as we move forward here.

Alex Okugawa 4:27

So there’s his name is Tyrone Ross. He’s the CEO of on-ramp and what he likes to say is educate before you allocate and I think this is important right now. And this one last point here. I think advisors need to tread lightly in this area, but you can’t ignore it and I don’t feel like it is a wise thing to do like, like clients should not feel dumb, asking their advisor about this stuff, because there’s probably a lot of clients out there who maybe have cryptocurrency but they’re not going to talk to their advisor about it and not get wise counsel, because they’re afraid if they bring that up. They’re going to get mocked or It’ll be dismissed. Oh, I’m not even talking to you about cryptocurrency right now we’d love to know what you think about cryptocurrency is it a scam? Or is it here to stay? Leave your comments below and if you have any ideas for future videos, please let us know if you enjoyed this content. Please like and subscribe for more. Thanks for watching.

This does not constitute an investment recommendation. Investing involves risk. Past performance is no guarantee of future results. Consult your financial advisor for what is appropriate for you. See our website at onedegreeadvisors.com for full disclosures.