The Capitalist Investor - Episode 74

Where is the crypto market right now? Should you buy Bitcoin, Ethereum, Dogecoin, and other crypto? The crypto craze is forging ahead at record speeds, so we’re revisiting the topic. In this episode of The Capitalist Investor, we cover where the crypto market is, a strategy you can use to begin buying it, and talk about the popular options available today. Check it out!

Outline of This Episode

  • [0:30] The crypto conversation
  • [6:13] Where is the market right now?
  • [13:56] The dollar cost average strategy
  • [17:45] Bitcoin + Ethereum
  • [23:07] Speculative crypto

Where is the crypto market right now?

The crypto market just passed $2 trillion for the first time, about doubling over this year. Coinbase became a direct listing a couple of weeks ago and came out at $350 a share, settling around $300. It’s all created buzz around crypto. I have heard of two NFL players—within the last week or so—who are even taking paychecks in bitcoin.

Trevor Lawrence just inked a deal with Blockfolio to become the face of Bitcoin and got paid in Bitcoin. More companies are endorsing it and more are accepting it as payment. Tesla is even now accepting Bitcoin as payment, which caused Bitcoin to go up 20–30% in a 24-hour timeframe. The crypto market is continuing to explode. So if you don’t have any yet, how do you buy them?

Derek’s dollar-cost average strategy

We aren’t pounding that you need to buy crypto but we admit we are bullish on crypto. 7–8% of my personal assets are in crypto. Derek is at less than 1% in his portfolio (which is what we recommend for those close to retirement). My current allocation is 70% Bitcoin and 30% Ethereum. I own a couple of grand worth of the “crappy” coins. My goal is to be 50/50 by the end of the year by buying in to balance it out.

Derek is shooting for 3–4% by the end of the year. At the beginning of 2021, he realized he was missing out. He wanted a strategy where he wouldn’t lay awake at night if the price cut got in half. But he wanted to get to a substantial position. He didn’t want to dump in a large amount at a time, so he decided to put in a specified amount of dollars every month (toward Bitcoin and Ethereum). He’s set 18 months to get to his 3–4% position. This is a great strategy if you’re just getting started with crypto.

Bitcoin, Ethereum, and Dogecoin

Bitcoin is trading at about $55,000 right now, up 600% year over year. We own Bitcoin as a currency alternative. It’s not a store of value, it’s a risk-on play. You have to think of it accordingly. But if Amazon started accepting Bitcoin as payment, it could quadruple in 24 hours.

Ethereum is around $2,700 at the time of recording (up 1,300%). Ethereum’s technology is better than Bitcoin but you don’t see as many vendors or merchants utilizing it as a currency option. Ethereum is great because of the NFT craze.

There are hundreds of different coins you can buy and all seem to do something different. Dogecoin was made up as a joke and somehow took off. There’s no limit to the amount that can be produced, which makes zero sense. Because of this, I’m out. It’s too speculative.

Why buying crypto is a smooth move

Another positive fact is that interest rates are close to zero. Buying crypto can be a great way to diversify money sitting in a bank account. Secondly, what if the dollar starts to lose its reserve status? The ultimate goal is for digital currencies to replace the need for government-backed currency. We recommend you do some research on Bitcoin and Ethereum and if you’re interested, set a timeline for buying into them to reach a certain percentage in your portfolio.

What are the rest of our thoughts on buying Crypto? What about lesser-known or meme coins? Listen to hear our take!

Resources & People Mentioned

Connect with Derek Gabrielsen

Connect With Mark Tepper

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Show Notes by

Keep Listening to The Capitalist Investor:
Episode 5:
What We Consider A Smart Investment Strategy, Ep #5
Episode 22:
Play Ball! Why America Needs Sports, Ep #22
Episode 37:
What’s Next for Your Investments? Ep #37
Episode 53:
All Aboard the Bitcoin Bandwagon, Ep #53
Episode 69:
11 Stimmy Stocks That Could Benefit, Ep #69
Episode 6:
Why Investing In IPOs Is Not A Good Idea, Ep #6
Episode 21:
Kickin’ It With Kenny Polcari, Ep #21
Episode 38:
The 5 Keys to Retiring Early, Ep #38