Saving with Steve, August 15, 2023
Saving With Steve with Steve Sexton
Guest, Peter Eberle
Episode 143: Increasing Crypto Regulations & The Industry
The Save With Steve Show, hosted by Steve Sexton will help you with ins and outs of money. We talk about financial issues that that could be costing you thousands of dollars and keeping you up at night.
We talk about “money”… tax reduction, saving more, how to spending less and get more, 401k’s, risk management, retirement, and everything under the sun that relates to you having a healthier happier relationship with money.
everyone has their own unique views and needs when it comes to financial success if you'd like to leave your financial woes behind and live a life of Financial Freedom you've come to the right place Welcome To Die saving with Steve show hosted by Steve Sexton the show will help you with the ins and outs of money we talked about financial issues that could be costing you thousands of dollars and keeping you up at night we talked about money tax reduction saving more spending less 401K risk management retirement and everything under the sun that relates to you having a healthier happy relationship with money now your is your host of saving with Steve Steve Sexton having a happier or healthier life with money my name is Steve sex and I want to thank you for joining us and we thank you for sharing it with your friends and family were over 600,000 listeners here in the states and another hundred thousand Overseas Highway<br> preciate your sharing it with your friends and family today we have a very interesting show something that many of you have been asking about for a long time we finally found the right person to talk about it everybody seen the stories about spelled crypto Empires some as a result of mismanagement malfeasance people lost a lot of money and at the beginning of these new industry so this beat is lot of the wild west but when people start losing money they get hurt financially that's when the government regular step in so now that the government Regulators step in the question is what is government regulation and its effects on the broader Market in personal finance now we have Peter Everly he's a President Chief investment officer of Castle funds besides earning an MBA from a prestigious school called Wharton you served as the head of trading on the Pacific exchanges for Goldman Sachs he was a member of the US Equity derivatives management committee Peter is very skilled experience a very complex in this Marketplace and Peter thanks for being here you know<br> we've got thousands of people who really want to understand what's going on and what changes and what they mean so thank you for being part of our show thanks for having me Steve great to be on with you could you just give us a little overview of about one gentleman that they've called his firm a grip Tober more of a Ponzi scheme I'm not asking you to go through all that but there's things that lead Regulators to start doing certain things and I think it's important for audience to understand what those things are and then let's talk a little bit more about the regulations in place out of taxes things like that and then we can go from there if that's okay perfect jumping-off point I mean it's huge fraud that was perpetrated by the same bank been freed with ft x you know it's not the first of its kind that would happen in crypto it was a classic Ponzi scheme now we've seen this before right between Bernie Madoff who was<br> respected individual president of various x stock exchange has himself a pillar of the community everybody thought all the while he was running a huge huge scam rights and that was in the general Securities Market a very highly regulated market he had the regulator's eating out of his hand is centrally right but that that didn't make Stock Investing a bad idea for people it just meant he was a fraudster now we've come to this next broad with ft x and we can deep dive into this but they called themselves and exchange but the way they operated isn't like any exchange that were familiar with whether it's a Commodities exchanges Stock Exchange it's not an exchange right because exchanges don't hold people's money and in this case ft x help people's money held their cryptoassets and actually inflated how much poop do they have because they were shuffling off that crypto to a sister and of the Alameda research a trading firm and<br> pretended everybody's crypto and US dollars were on Exchange what they want they're so once again it's a Ponzi scheme at The Regulators also again love this guy right Congress out of testifying in front of Congress explaining how other people were a systemic risk to the industry and how he was the Savior again they cozied up to the wrong person. It's not surprising that we now have a big push for regulation and if it's well-thought-out regulation than everybody and braces that markets grow when they're trustworthy and if there's doubt of the trustworthiness of an industry big money is just not coming in so yeah I looked at this is a trustpoint the trust point for crypto kind of went out the window with all that stuff cuz there's a few others besides him and there's a few other exchanges that have gone bankrupt because he just aren't generating what they think they should generate when it comes to governor<br> regulations would we be getting to see first of all I think that's important to Define what a traditional exchanged looks like and this is what the SEC filing against coinbase has a lot to do with take a traditional Stock Exchange rights you have your brokerage account it could be with Merrill Lynch and I have my brokerage account with Goldman Sachs right I haven't want to buy some Amazon stock you happen to want to sell some Amazon stock go through our Brokers we send an order down to the trading floor and those orders get matched and then overnight a settlement happens where my broker gives to the clearing firm my money and your broker gives to the clearing from your stock and the switch happens right so all those functions though the exchange is only a place that facilitates this trade they don't handle the money they don't handle the shares it's a place for people to meet to make an exchange of money and shares so we have more<br> the parties acting as agents protecting you and I the customer right my guys are Goldman are going to make sure I get the best price you were guys at Maryland and make sure you get the best price and both of the parties hold our funds or are shares and make sure to secure us and never doesn't exchange have that now when you have ft x or coinbase or these other exchanges they're acting as Brokers more than exchanges they control the exchange but they also control your account my account we have to trust them when they say that they've got your money or your Bitcoin mine are there but we don't really know that because we can't look into their books there are doing these multiple functions that naturally some conflicts arise and potential for fraudulent activities and that is what the SEC really wants to see is it wants to see an exchange act as an exchange<br> broker act as a broker and to be able to look through and see segregated assets right that are not commingled where you can actually tell the difference if it's Steve's assets or Peter's Bitcoin and be able to trace that back and and that the assets are there and doesn't this make sense for all of us doesn't that make us all feel better about trade if we have that transparency yes it definitely would so there's obviously classic signs and one of the things that came out with Bernie Madoff was he obviously made up his own statements for everybody and I was on Meetup associate supposed to meet up and Associates put on Merrill Lynch's are Goldman Sachs paperwork so how can you protect themselves from the Crypt or industry one of the famous sayings in Bitcoin is not your keys not recording right so what that means is<br> Bitcoin is unique from stocks or even cash right now in that we can custody the assets ourselves right if you have a a hardware wallet you can custody your Bitcoin on that Hardware wallet you can't do that with a stock certificate right yeah she has to leave that with a brokerage firm they no longer issue Paper Stock certificates used to be able to custom your own but you can sure you can use a coinbase to facilitate the transaction and then pull your assets off of that exchange as soon as you're done with that so within 30 minutes you should be able to have your assets you could transfer money on do your transaction and then transfer your assets off all within a half an hour ago that you whisk to the in that exchange is very limited and then you hold the keys to your own Bitcoin you custody themselves or you invest with the fund that says the same thing on your behalf rights when we transact we transact<br> primarily over-the-counter because we're big institutional size investment firm that what we do is we actually transact with known third parties where we interact on it was called the over-the-counter market and then we settle that right into a third-party custody account where they assets are segregated they're Offline that are completely safe immune from hacking and we get them off so our on chain to rescue our online risk and counted in seconds because it's offline and individual investors and do the same thing they need some knowledge they need to learn and many investors unfortunately that got hurt and ftxs they didn't deserve to lose by any means it was fraudulent but they also didn't do everything they could to protect themselves out of laziness or out of a lack of knowledge and so people need that now obviously the SEC by getting involved in regulating these exchanges and making them come compliant that will lessen that risk but<br> causes acid house for all cryptocurrencies because why not self custody and not be in someone else's hands this has been great so far. But I have to take a break so a bug stick with us we'll be right back with more shaving is Stephen Peter Everly<br> more expert advice for having a happier relationship with money still to come on the saving with Steve show<br> don't let your financial woes keep you up at night and prevents you from living a life of Financial and personal freedom hi I'm Steve Sexton post of the saving with Steve show where did he talk about the ins-and-outs of money those financial issues that could be costing me thousands of dollars causing stress keeping you up at night we're going to talk about money tax reduction saving more spending your investment risk management retirement and everything is so sweet with you having a healthier happy relationship with money soon as you've ever dreamed of living a life of Financial and personal freedom you owe it to yourself and your family to tune in to the saving with Steve show join me Steve section of the saving with Steve show as we talked about everything under the sun when it comes to money to learn more about the show visit saving with Steve. Us that's saving with Steve. Us saving with Steve. Us will see you soon<br> welcome back to the show that is here to help you achieve your financial goals it's the saving with Steve show now here's your host Steve Sexton play welcome back to the same thing with Steve sure we're talking about the ins-and-outs of money pretty much everything under the Sun and light to you having a happier healthy relationship with money all the replays are available on saving with Steve. UF if you're enjoying the stories of helpful information inside on saving a seat and courage you to subscribe to your YouTube channel are Spotify Channel Apple Channel and check out a few were a few liautaud UK help radio bvs radio talk radio New York City e360 TV in Las Vegas TV network all these networks are dedicated to empowering you to solve problems uplift your spirit live a life of personal and Financial Freedom has been talking about the issues with government regulation on how to fix the crypto Market but now I'd like to really talk about the big appeal behind independent crypto movement<br> you could kind of sure what that is and the pill that people have behind that<br> yeah so we mentioned before you could sell custody this asset which makes it very unique in that sense alone and you know most of the people that we deal with are doing a rather small allocation of their total assets to this asset class because it is highly volatile it hasn't been bought the last two months but historically it's been quite volatile right and so having a 5% allocation if you're very risky as high as 10%. Normally higher than that to this asset class can actually give you great diversification effect with a small allocation and separate diversifier it has an unstable correlations to other assets which gives it more power as diversification now<br> the internet of money is really what Bitcoin for example is mainly speak about Bitcoin because it truly is Head and Shoulders Above the Rest right now in market capitalization and adoption and things like that when you think about when you're hearing about a i and you thinking about machines making decisions some of those decisions that these machines are going to make is Contracting with other data providers other computers for things like that up so you might have a Computing model that needs a certain data set and it's going to have permission to buy that data set up to us women Well it can't transact that in US dollars for example but it might be able to transact that with Bitcoin or etherium or some other cryptocurrency and so there's going to be an option because it is the internet of money and it is digitalized and so you can have these machines be able to spend money with other machines for data I mean is mind-blowing where this could go right LOL<br> other aspect of mass adoption which is hard for people in the United States to really appreciate is how many people in the world do not have a bank account but have a smartphone right there dude populations in South America and Africa and India that do not have a banking relationship yet they might be might be doing a small business they might have a little Fruit Stand somewhere but there's no way they're going to get a credit card acceptance agreement with a bank and their local currency might be so unstable right devaluing all the time that they actually don't even want to transact in that and see what their smartphone they can have the access to digital money but there's Bitcoin ethereum another cryptocurrency and they have instant access to a banking system and that is also in the numbers are astronomical there<br> I know when you look at these foreign countries in Africa and stuff like that with the inflation of the currency would have like I'm going to see a Bitcoin but an electronic currency create stability for their marketplaces well it would because they can instantly convert that to another currency of their choosing whether it's US dollars or the Euro or the Yen so they can get out of that currency which is constantly development ride some in some cases by 100% by others by 20% but that's a significant amount to even though we see volatility and Bitcoin versus the US dollar<br> default route is much lower than their from their currency to bitcoin they're actually getting a less volatile asset and certainly one that is potential to appreciate rather than always depreciate I'm so that worldwide adoptionism is a big part of it to the reason why I asked that question is I was working in South Africa and then late 80s and I went to the Zaire on a weekend and when I left we found out that the ruler that time change the currency from a red strip to Blue script it makes me red strip was worthless than Buu script is where it was so they had cryptocurrency would have been a different story but basically there was a riding and everything because nobody has any money so and it was his way to control things but geez those things would end absolutely Personal Finance in cryptobase assets I know you talking about you know what if your risk tolerance at five or ten per-cent quite frankly I know one person who actually buy crypto with a hundred and they retire<br> and actually got out when I was like 35,000 and he worked on and all that stuff to me not everybody's at way so what's the way people should really look at that this house should be looked at in a personal finance it realm that type of thing right I can't tell no one can tell you where the price of Bitcoin will be in a month from now or six months from now right there are better studies that imply what the Dachshund cycle looks like what it look like by the end of the decade right until you have to have a five-year Horizon otherwise the quick Buck is all about lock right but even as steady and then one of my favorite scenario is really and I'm sure you've spoken at length on this is dollar cost averaging right especially with an asset that so bald I mean you cannot tell me where this will be next month so if I have $20,000 that I want to put towards Bitcoin in the next year<br> I can just say okay I'm going to buy it now and I might regret it in 2 months 3 months or I might not I might be a hero right and then six years it probably doesn't make a difference whether I buy it at the higher the low of this year but if I want to take some of that anxiety away from that then allocate 1500 a month right and just on the 1st of every month on the 10th of every month just go by and it's so easy to buy now whether I mean some of these apps like PayPal let you buy in there and so you can buy small increments and then you're not worried about the timing risk so it's really your building in position over time you're not worried about you get to buy more Bitcoin if it goes down your bile acid that goes up over the course of the year you're comfortable that you didn't panic and buy the top you didn't it just an easier way to get into it so that's one thought is really don't put all your not to jump in with both feet all at once<br> I think that's wonderful cuz you get a better pay a lower cost for what you're getting to be as long as you're not really jumping in and out of it you should have a higher value down the road which is wonderful and that's a great way to look at it now when it comes to taxation on bitcoin it is there what's going on with that yet so there's a couple of unique things there again this obviously affect you if you're trading more than if you're just buying and holding property not Securities for taxation purposes and this gives you actually one very unique Advantage let's say you bought Bitcoin at<br> fifty thousand last year some or 45 thousand last year I didn't end of the year was lower let you choose 25000 as a number you could actually sell it take a tax loss in immediately buy it back so where the stock as you know there's wash sale rule that if you sell a stock at a loss you can't fight back for 30 days otherwise they didn't validate that sales transaction for tax purposes but with property there's no such thing as a wash them so if you do have the ill timing and you have a loss and you want to take a tax loss you can do it and still buy right back in and still have the same position but have to basically Harvest is that tax laws so that's it a great benefits the big thing was through his crypto is that you have to do a really good job record-keeping the new show called exchanges do not issue 1099s so it makes it harder if you're doing<br> lots of transactions in a lot of people that were heavily involved in this decentralized Finance when they were earning heels off these different tokens and they were swapping them for different tokens have gotten themselves into trouble because of lack of record-keeping and then we getting that information together another some great Services out there they're not cheap that will take your your wallet address and we'll track down all your prices and they'll give you all the reporting and I personally use one of those services in our firm uses at an actual auditing firm to do the same thing to track all those expensive so it's very important that you that you disclose all your purchases and sales the IRS does pay coinbase and they do pay these other changes for that information so K in Portland this whole idea that the government doesn't see that they do so<br> why was the I know your client anti-money laundering rules right to stake races of the government so the government has the information you think you're not reporting it if you don't even know there's a checkbox did you do any crypto currency transaction is now on the on the tax form if you don't check that they will eventually catch that and so it's important to be tax compliance even if it cost you a little bit later thank you so much for being with us today and coming to the end of our time this is been wonderful if somebody wants to get in contact with your firm how can they go about doing that castle fun stay calm there's investor inquiry form that they can fill out there and one of our most of my colleagues would follow up with them after information about all of our funds are on the website as well deal with accredited investors only and we're fully regulated where is a commodity pool operator here in the US so we're registered with the National Futures Association<br> turn on the cftc everybody if you're interested in getting contact with Peter sperm is called Castle funds now I'm sorry Castle funds. Calm and again Peter thanks for being with us this has been wonderful very enlightening and I'm really glad you made it easy for everybody understand especially me all right bye bye text everybody I want to thank Peter Everly and Castle Fun for being here if you would like to get in contact with Peter at Castle funds and his associates and talk about this please go to Castle funds.com and you know what you want to stick with us we're right back with some more information here on cygnus t<br> more expert advice for having a happier relationship with money still to come on the saving with Steve show<br> don't let your financial woes keep you up at night and prevent you from living a life of Financial and personal freedom hi I'm Steve Sexton post of the saving with Steve show where did he talk about the ins-and-outs of money those financial issues that could be costing me thousands of dollars causing stress keeping you up at night we're going to talk about money tax reduction saving more spending your investment risk management retirement and everything is so sweet with you having a healthier happy relationship with money soon as you've ever dreamed of living a life of Financial and personal freedom you owe it to yourself and your family to tune in to the saving with Steve show join me Steve section of the saving with Steve show as we talked about everything under the sun when it comes to money to learn more about the show visit saving with Steve. Us that's saving with Steve. Us saving with Steve. Us will see you soon<br> welcome back to the show that is here to help you achieve your financial goals it's the saving with Steve show now here's your host Steve Sexton pull over buddy welcome back to saving with Steve my name is Steve sex and we just had Peter Everly Chief investment officer Council funds was outstanding to Sharon what's going on with the crypto industry everything you need to know about what regulations taxes how you want to look at been investing it in the hole shot so that was outstanding now it's important that we take a look at really what's going on with inflation up on the table you got it right here or showing the June report okay for inflation in basically weerasinghe hate working at 3.3% increase in inflation okay okay but what's really going on if you look at the chart you will see that energy<br> is drop by 16.7%<br> energy Commodities 26% gasoline of all types 26% fuel oil 36% Energy service down .9 utility pipe in gas natural gas 18.6 and you could use cars down 5.2 but everything else is up that means food whether you're buying it at the grocery store eating out that means new vehicles apparel Medical Care Commodities shelter transportation services okay but here's another thing you didn't realize you member when we talked about how all these fuel oil gasoline all that's down significantly will guess what you probably noticed at the pump and just recent days bad your casa gas is going to what 20 30 40 50 60 cents a gallon<br> why did that happen well three months ago OPEC Russia reduce oil production by million barrels a day<br> two months ago they decrease it by another million barrels a day now it's been decreased by two and a half million barrels a day that they're not producing know this is going to supply issue a demand issue you're going to see higher and higher demand for oil anything that's related where there be a pair of packaging toilet paper whatever everything that uses a petroleum product is going to be affected by inflation and as a result you are likely going to see up for the rate increase because of that rate increase your like we going to see higher interest rates on your credit card loans and whole sets so it's that contraction of the community now on top of that we have 180,000 jobs coming in here folks<br> this is an important thing to understand 2021 inflation was up 7.763 and 22 and here we are in 23 Rowdy up three and a half or 3.3 t almost have a 17 18% increase in your cost of living all together it doesn't go down it keeps going up so it's important to take a look at where your budget is<br> how much are spinning how can we do the same things with spending less by changing vendors change the way we look at getting our food where we get our food all those kind of things but most importantly if you're in a pre retirement retirement phase you're likely going to see some issues with the market and this would be a wonderful time now that stocks are where were valued to look at taking some of your games are supposed to you know not selling when your markets down cuz you realized a lot but you also realize the game higher what did get would that be the most important takeaway from today is this if you're looking at retirement is very important that you have a portion of your assets that have a purpose what is that purpose to maintain your lifestyle do you have a sitter doing that<br> also it's important to have assets that have performance that they're going to grow but sometimes that growth has a loss<br> as opposed to a game like we saw in 2022 it would be a shame if you had all of your assets focused on accumulation and growth and the market dropped another 20% what would that do to you and put you in a position if you had a million and 800,000 but if you still had to take out $40,000 to support your lifestyle now you have 760 see what's happening as you start selling timeshares little Lower Valley with makes you handle the lies and eat away your principal and then you got to pay taxes on it the question is how am I ever going to get back to where I was before admitting you might be experiencing that right now so it's very important that you look at that and I just want to share this with you cuz this is really about<br> making sure you get the most out of your money and I want to thank you all here for joining us today on saving and Steve will look forward to seeing you next time stay safe stay healthy<br> thank you for joining us for the saving with Steve show hosted by Steve Sexton to learn more about the show and how to become a guest or sponsor visit saving with Steve. Us that's saving with Steve. Us join us again next time as we continue to talk about everything under the sun that relates to you having a healthier happier relationship with money this has been saving with Steve show hosted by Steve Sexton<br>