Making Billions: Crypto Strategies Revealed

Hey, welcome to another episode of Making Billions, I'm your host, Ryan Miller, and today I have my dear friend Lark Davis.

Lark is the founder of weekly crypto newsletter called Wealth Mastery, which combines insider insights and in depth market analysis to offer cryptocurrency investors the very best opportunities to grow their wealth, stay ahead of the curve and avoid costly mistakes. He also boasts a crypto based YouTube channel with over get this, 71 million views.

So what this means is that Lark understands Bitcoin, Ethereum and all things Crypto, and he's about to blow your mind on his opinions on how to beat the market in this asset class.

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[THE GUEST]: Lark is the founder of weekly crypto newsletter called Wealth Mastery.

Transcript

Ryan Miller 
My name is Ryan Miller, and for the past 15 years, I've helped hundreds of people to raise millions of dollars for their funds and for their startups. If you're serious about raising money, launching your business, or taking your life to the next level, this show will give you the answers so that you too can enjoy your pursuit of Making Billions. Let's get into it.

Ryan Miller 
What's the one thing that connects all of the highest power circles in the world? Lately, it's been crypto. Join me in this week's episode where my guests and I chop it up on how to break in, where the market's going and how to de risk your portfolio. All this more coming right now. Let's get into it.

Ryan Miller 
Hey, welcome to another episode of Making Billions, I'm your host, Ryan Miller, and today I have my dear friend Lark Davis. Lark is the founder of weekly crypto newsletter called Wealth Mastery, which combines insider insights and in depth market analysis to offer cryptocurrency investors the very best opportunities to grow their wealth, stay ahead of the curve and avoid costly mistakes. He also boasts a crypto based YouTube channel with over get this, 71 million views. So what this means is that Lark understands Bitcoin, Ethereum and all things crypto, and he's about to blow your mind on his opinions on how to beat the market in this asset class. So Lark, welcome to the show man.

Lark Davis 
Ryan, thanks, thanks for having me on, I'm super excited to be here. Thanks for the generous introduction there, and just a shout out real quick to you and everything you've built as well. I mean, Making Billions is incredible, your community is incredible. It's always great to get to sit down and talk to fellow investors. You know, being someone who's passionate about the investing space, passionate about Bitcoin, but also other investments too, I'm very excited to always talk to investors, and so, yeah, absolutely. Thanks for having me on, I'm very excited to be here and talk to your community and hopefully provide a lot of value.

Ryan Miller 
Yeah, thank you. And you've already provided a lot of value and it's truly the honor is all mine to have amazing guests on my show, and you're certainly one of them with everything you've done in the crypto community. This is a rising asset class, folks. It's not just meant for these technocrats or whatever it is you want to call them. This is really changing the world as much as the internet, some argue, but we really want to drill down and show how do we wrap our arms around this asset class? Because in just a few years, you've seen all Wall Street saying it's garbage, it's junk, it's another tulip craze, and now they're building ETFs and doing all things complete pendulation to the other side. So we really want to understand what is this asset class. How do we make some money off of this thing and more importantly, what's its impact on the global socio economic scale? So let's jump right into it. We've got a lot of beginners. We have family office CEOs, we've got investment bankers, fund managers, all people who are doing private deals. And so I got to ask you, for those starting out, this can seem a little overwhelming to understand it. So I'm wondering if you can unwind and demystify it for a lot of our investors around the world, and really just help us understand two things. Number one, how do beginners win in this sector? And then maybe we'll follow up with how not to lose and blow it up when you're starting in crypto.

Lark Davis 
So welcome to crypto if you're just starting to take attention to this asset class. Get ready to learn a lot, because crypto is similar to other asset classes, but then it's also not similar in a wide variety of ways. We're essentially looking at the new financial layer of the internet, and it used to just be niche nerd money talked about in the far corners of the internet, but now Bitcoin and the wider cryptocurrency industry have reached the highest levels of interest in power globally. Globally. You have to think about this, Larry Fink, CEO of BlackRock, not only launched ETF products, but he's regularly out there preaching the good word of Bitcoin on the new media. We've got even Jamie Diamond, reportedly flipping one of the biggest haters of Bitcoin. Now, apparently on the Bitcoin train, we have major politicians in the USA talking about all kinds of stuff. So you have to understand about where this asset class has come from and gone, too.

Lark Davis 
But as you start to get interested in the crypto space, because you do see all these big names talking about you see it talked about more in the media, the first thing I say to anybody when they come to me and say, hey, Lark, I heard about this crypto thing. Where do I get started? Should I go buy a dog coin? Should I go buy this coin or that coin? My first advice, as always, learn. Learn, learn. Unfortunately, the crypto space every day is like trying to drink from a fire hose. It's an overwhelming amount of information, and there's a lot of noise there. A lot of noise, a lot of BS, a lot of new things popping up that you don't necessarily really even need to pay attention to. A lot of it's just a distraction so you have to start educating yourself on really the tip of the spear here, which is Bitcoin. So that's where you want to start from an education perspective. And you have to learn. And I know that sounds boring, when you just want to throw money in and start making money, everyone else is making money. Gotta throw some money into and get get really excited and throw much money in and see what happens and that's how a lot of people lose it. People lose in the cryptocurrency market. As with any other asset class, people have no idea what Nvidia is, and they hear it in the news, so they go and ape into the top crypto is pretty similar. Wheat gets a lot of media attention when it hits new at high prices, when is when most people pay attention. And most people, of course, don't do any research, run out and buy it at tops, lose money. It's brutal reality for markets.

Lark Davis 
But if you want to start learning about Bitcoin, that's where I want to say you want to start, and you can start learning about Ethereum, and maybe Solana and look, the rabbit hole goes very, very deep in crypto. There's NFTs, there's other layer one blockchains, there's layer two blockchains, there's meme coins, there's AI coins, and down and down and down the rabbit hole goes. But you don't have to get into all that stuff. You need to keep it simple at first, get back to basics and learn the basics of the crypto industry and why it exists in the first place and that's about learning Bitcoin. Look, there's a lot of great resources out there. I'd say, if you want to take The Orange Pill, which is what we say, you know, learning about Bitcoin, if you want to take The Orange Pill, a great place to start is a guy named Michael Saylor. He's the former CEO, actually, now, of MicroStrategy, but he's the one who led their Bitcoin strategy as a company, and he is a great advocate and teacher of Bitcoin. So if you wanna learn about Bitcoin and the value proposition for Bitcoin, then that's a great place to start. Go find one of his interviews and Orange Pill yourself. Let Michael Orange Pill you perhaps, and you can learn about Bitcoin. There's a lot of great podcasts out there, though, also providing fantastic information on what's going on the crypto space. Obviously, I've got a YouTube channel. You can come and join us for a wide variety of crypto related content. Over there on YouTube, check out the newsletter where we're sharing all kinds of weekly insights, key market moving news, all that kind of stuff, and a great podcast that I can recommend to check out, discovering sort of very high level stuff in the space, is the Milk Road Podcast. So they're always doing lots of great, great information over there as well. So that's, that's, that's step one, learn, learn, learn.

Ryan Miller 
I love it, and you've spelled out those and what's the name of your YouTube channel for those people who are looking for it?

Lark Davis 
So it's Lark Davis, just like, just like me. Lark Davis, YouTube channel,

Ryan Miller 
The signature YouTube channel, all right, so you can go to the YouTube channel and subscribe to your newsletter. You can obviously listen to Making Billions. You can listen to, but if you want to concentrate, a dose Milk Road Podcast is one of those. And then you can get on Orange Pill by Michael Saylor. Now, one of the things that we talk about is people want to invest now we're obviously, we're not providing investment advice here. These are just opinions, folks for entertainment purposes only. All right, so the lawyers are happy, but it's really true. We just want to provide advice. But again, folks, please do your research before you do or not do anything. Don't do it off this show. So that being said, I know that there's kind of tier one and tier two categories of investment coins. Maybe you can walk, for those people who are looking to get into it, maybe walk us through a little bit of tier one and tier one and tier two, and which ones that those should look at, and what can they can expect from the different tiers.

Lark Davis 
Caprago, tier 1 to tier 10, even in crypto, because I feel like tier 1 is really just a very tiny select group of coins, Bitcoin, Ethereum, and now probably Solana reaches that tier 1 status as well. These are coins with massive adoption, massive user interest, all kinds of things happening. Two of them have ETFs already in the United States. It's Bitcoin and Ethereum, and a Solana ETF has already been applied for by some companies like FANUC in the USA. So these are the tier one crypto assets, and tier one crypto assets, that's for people who are looking to take less risk in the market. So as we start going down to other tiers, you see a lot more risk starting to come in networks that are up and coming but not proven, or networks that are getting traction but aren't at the same level as either the ones. So if you are looking at a casual investment thesis in crypto, like here, learning about crypto, you're interested in it, you want to get involved in it, but you don't really need to be getting into every coin or going finding things that you might not even have liquidity for. You have to understand this, liquidity dries up real fast when you start getting out of the top five coins. And look, if you're bringing in $100,000 or a million dollars, you can probably pretty easily invest in the top 100 coins. When you start going down the rabbit hole to these very small cap coins, you can't invest more than 20-$30,000 in some of these things without massively moving the market. And you might have liquidity to get on the other angles are so small. So that becomes a real problem when you're starting to talk about size.

Lark Davis 
So if you are a casual investor in the space, in terms of you want access, you want exposure, but you don't want to go too deep, little more passive approach getting those Bitcoin, Ethereum and one day, Solana ETFs is probably going to be enough for a lot of investors who want to add this as that 1, 2, 3, 4, maybe 5% total portfolio exposure to crypto. Now, if you are someone who is open to more risk, a little more adventurous, or you've got a fund that wants to have bigger returns that might be offered by the top coins, and those coins, over time, have proven themselves to offer some pretty spectacular returns, especially compared to index funds and things like this. But there's a lot of great upcoming networks that perhaps are worth paying attention to, and this could be going to tier 2. These are ones that are gaining traction, gaining a lot of public interest, doing a lot of great things. Two names that come to mind here would be the telegram open network. So that's the social media messaging app that's got 900 million global users, or something like that. They also have a blockchain, so that's perhaps worth paying attention to. Or the Avalanche network, these guys just came out with some big news the other day, that 42 million, I think, driver's licenses or car titles, one or the other, are going to be put on the blockchain, their blockchain in the state of California. So that's pretty cool, right? So these guys are out there doing some pretty big stuff, there's a few other networks that probably fit in there. And then you start going further down the list, and you start getting the big defy protocols that have really. Great metrics and cash flow and different things like this one that pops into mind is MakerDAO but that you start getting off way farther down the risk spectrum here. So you don't need to start going that far down straight away. You just, you start losing your mind. There's so many things going on, so try and try and learn about at least what's going on at tier one level first, before you start learning about anything else.

Ryan Miller 
Yeah. And I remember the early days when I was just learning about finance and just started school. I didn't know anything, but I was, I was happy to be there. And one of the things that I've noticed, no matter how little, even if it was 50 bucks as a starving student, when you're invested, it's and it's not a ton, I'm just sharing my story. When I was invested, I started paying attention to the market more, right? You're checking it on your phone. You're like, my 50 bucks is now worth 50 bucks and 50 cents all right, we're now, we're cooking. But either way, it just makes you insanely curious. You're like, why did it go up? Oh, there was a news release. Oh, there was a thing in the market. Oh, interest rates happened. Oh, oil popped or oil tanked, whatever it was, it just makes sure that you're paying attention. And so if, just if I can echo what Lark is saying is, if you're able to throw some decent money into it, I mean, do your homework. But once you're invested, if your objective is to follow what Lark is saying and just learn this sector, one of the best ways is put a very small amount, like almost nothing, stuff you find in your couch cushions, and your goal is just to pay attention to the real movement. So if you're not in the game, then you're not paying attention if you're like me and so I think those tier one coins are great. In my opinion, they seem great, but we want to make sure that at the end of the day you're still paying attention to the markets. Would you agree?

Lark Davis 
Yeah, get a little bit of skin in the game. Is one of the funnest ways to start off. And I'm always telling people, too, you don't have to come in with your entire net worth or your every penny of savings or remortgage your house, and only then, no it can come with 20 bucks, come with 50 bucks, 100 bucks, whatever. Just, just buy that first little bit of Bitcoin. And now you're in. Now you've, you've even though you've broken through, you're not a no coiner anymore. And then you can kind of say, oh, and I've got some bitcoin. Is there my portfolio? Just like you said, you start seeing it, and you start seeing it, and you track it, and you think about it a bit more and learn more about it exactly.

Ryan Miller 
I love that. So making upside is certainly part of Making Billions, but also covering your downside. And so a lot of mistakes can happen when you're just starting out in any industry. And so it's not enough for us to tell you about upside. We also got to give you some cautionary tales to say, hey, there's risks in this sector. And so we don't have a crystal ball, but maybe we have some principles we can share. So if someone's kind of just getting started, like this person, we've been talking about this imaginary person, what's some advice you can give them as far as how not to lose when starting out in crypto investing?

Lark Davis 
Sure. So three big things come to mind. The first is, probably don't need to use any leverage when you're just starting out. Look, leverage is an advanced tool, whether we talk about stocks or crypto, but in crypto, I feel like leverage gets a whole new dimension of crazy, because there's so many things spread across decentralized finance and certain exchanges and how liquidation engines can absolutely just speed up while you're sleeping. Right? At least stock markets are a little more tame in the sense that they're not 24/7, 365, but crypto is, and things can happen real, real fast in the market. And a lot of new people into the market, they're going to use leverage when they shouldn't be, because they don't understand it yet. They're going to use too much leverage, a lot of the big funds and stuff like that. From talking to like the CEO of Bybit, which is one of the big leverage exchanges, he said, you know, the big whales and the big, big institutions and stuff that come and trade with us, they're using, like, two, 3x leverage. Man, they're not using 50x leverage, not using 50x leverage, not using 20x leverage. They're keeping it really mellow. That's more for, you know, regular degenerate gamblers and stuff are like coming in, right? So that's one thing. If you're new to crypto, you don't need to use leverage. Later on, you can use it and if you do use it, keep it low. Guys, keep it low.

Lark Davis 
The second big thing is counterparty risk. If you are getting coins not through Blackrock or Fidelity, right? So blackrock's got the Bitcoin ETF to having a theory, and ETF Fidelity to a couple other big institutional names that I would say are, you know, trustworthy institutions. If you're buying those kind of products through ETFs, you're probably going to be just fine. Okay, they're custodian with Coinbase, everything's most likely going to be absolutely fine with those ETF products. However, if you are buying real coins on an exchange somewhere, you have to understand, exchanges are not banks. A lot of people treat them like banks, but they're not banks, okay? These are marketplaces, wild, bizarres of exotic assets, and you don't want to keep your money there, okay, you go, you buy, you take them out, and then you avoid the counterparty risk. If the exchange get hacked, gets hacked.

Lark Davis 
Now look exchanges in 2024 are not the exchanges of 2021 they're not the exchanges of 2016 they're not the exchanges of 2013 those are all years we've had massive hacks and frauds and all the rest of this stuff happen in the cryptocurrency markets. We had FTX collapse. We've had BitFinex, got hacked for 160,000 Bitcoin. Back in the day, Mt. Gox collapsed and took out a million Bitcoin. Lots of crazy things that happen in the markets over the years. So you want to store your coins yourself, and the best way to do that is getting something like this. This is a hardware wallet. It's physical advice. It's the safest way to store your coins if you're custodying your coins yourself, especially if you have any kind of amount of coins, I'd say, once you get past your 20-50, $100 play money, you want to get one of these. Because if you have any kind of serious money in the market, these are one of the most effective ways to store even millions of dollars with the cryptocurrencies, again, that is if you're not using ETF products. So take your security seriously the crypto space, because of the nature of blockchain assets. Once the money leaves your account, it's gone. There's no chargebacks, there's no claim backs, anything like that. Once it leaves your address, it's gone to the other guy's address, and then they start washing that money through mixers, and before you know, your money's gone okay? So you have to be careful, because in crypto, it is somebody else's full time job to steal your crypto. Fact, there's massive criminal gangs that work within this industry, at the bottom part of the industry, right? But you do need to be aware that they exist out there, so don't trust exchanges and be very careful once you get your money onto your wallet. Okay, so that's that's second thing to be very, very aware of.

Lark Davis 
And the third, I would say, is be comfortable with your own risk parameters. One of the biggest mistakes that I see people making, of course, beyond not taking the time to learn, is that they go immediately to massive risk. So I always say people, look, start with Bitcoin. Start Bitcoin. Buy a little bit Bitcoin. Take it slow. Okay, most people don't want to take it slow. They see the stories people getting rich almost overnight in crypto. Guy puts in 1000 bucks into some meme coin turns into millions. Everybody wants to be that guy. Everybody wants to be the exception to the rule. Chances are you're going to be the rule. You're gonna be the guy who loses 99% on that, not the guy who gains 10,000% that's what happens to most people. So you have to understand what kind of risks you're willing to take, okay? And if you are going to speculate, you can speculate. You can have fun. You can buy silly stuff. Okay, that's fine. Mean, coins are hilarious, some of them, and there's other things that I don't know. Maybe you find a game, you're like, Wow, this game could be really, really big, fine, but understand that that's most likely going to go down massively whatever those coins might be. So be comfortable with understanding your own personal risk levels. For a lot of people, for a lot of people listening, just investing in Bitcoin and Ethereum might even be too much risk. You might be only comfortable with bonds and the S&P 100 and that's fine if that's you understand that. That's you understand you're not a guy who likes taking risk, all good if you're willing to add a bit of spice and variety into your portfolio. For a lot of investors who are passive and don't have time to closely follow the cryptocurrency space, again, just those top tier 1 assets, Bitcoin, Ethereum, Solana are probably enough. But if you want to go farther down the risk spectrum, there's a lot of money to be made in crypto, but there's also a lot of money to be lost in crypto, so keep that speculation side of your crypto portfolio to a minimum, and position sizing is probably one of the best ways to simply control that risk. Don't let it be 50% of your portfolio, 100% of your portfolio, 10% of your portfolio. Maybe, if you know you find a few assets and say, hey, you know what? If this money goes to zero, it's fine. If this money outperforms versus the bigger assets, then I win. So that's something keep in mind.

Ryan Miller 
Awesome. And one of your points was a particular, what's sometimes called a whole cold wallet or hardware wallet. Are there any that you like? Not an endorsement, folks are not being paid by anybody, but just your own opinion. What have you found to be reliable?

Lark Davis 
I've been using Ledger wallets for years, since 2017 I've been in crypto. I've been using these, and they've worked very, very well for me. Since then, there's lots of great brands out there. Ledger's the one that I have enjoyed the products the most, and a lot of competitor products out there that are great too. If you yourself a Trezor wallet, for example, some other brands are also great wallet producers. But I've been using Ledger for years, and I've enjoyed it, so it's been pretty good.

Ryan Miller 
Check the boxes.

Lark Davis 
Yeah, check the boxes, exactly.

Ryan Miller 
Yeah, perfect. Okay, I've also used Ledger as well. So that's great. How to win, how not to lose. Look for some upside, cover your downside. That's the fundamental thing. Now how to do it? This is where we get into it. But now let's, let's really unpack this and start talking about the crypto market as a whole. I'm just curious, what are you seeing out there? What's going on in the crypto market? What are the bright spots, the dark spots, and everything in between.

Lark Davis 
So crypto is a very interesting market, because in a lot of ways, the entirety of the crypto market is a beta to what's really going on in sort of tech stocks and the broader economic markets. You know, if the wider market isn't a risk on attitude, then crypto is doing well. If money printing is going on, there's global liquidity rising, crypto is doing well. However, when those things are not doing well, and people switch to a risk off attitude, when stocks are plummeting. Crypto tends to not do super great, especially tech stocks. We find that we tend to have a stronger correlation towards tech stocks, although this summer, it has not been the case. There's been some crypto specific issues that have kept the crypto prices a bit suppressed. While we've seen things like Nvidia and Apple going crazy, crypto has not really followed along with tech stocks this summer because of various supply unlocks from the German government selling a bunch of Bitcoin, and a bunch of Bitcoin coming from the defunct exchange Mt. Gox was hacked back in 2013 or whatever. So these sort of things have had a bit of an impact and suppressing the market a bit over the summer. But that stuff's clearing out now, and now we're in the post Bitcoin halving world.

Lark Davis 
So real quick, Bitcoin is a proof of work coin. That means there's lots of computers all around the world who are working to secure the blockchain. Every 10 minutes, a new block of data saying who sent what to who is created. Now, in exchange for these computers around the world doing the work, they get a fixed. Reward that's called the block reward, plus whatever fees have been paid in that last 10 minutes. So who Bob sent money to Sally, and he had to pay $1 to do that, the Bitcoin miners get that fee. Now, that block reward has been a very critical part of the wider liquidity flows in the cryptocurrency markets, because Bitcoin makes up half of the cryptocurrency market on a given day approximately, and so major supply changes with Bitcoin have had a dramatic impact across the entire market.

Lark Davis 
So back in want to say April, April-May we had the Bitcoin halving now. What that meant is that before then, every single day, Bitcoin miners received approximately 900 fresh new coins, and they then sell those into the market, because Bitcoin mining is a cash business. After the Bitcoin halving, that was reduced to 450, Bitcoin a day. So that means now Bitcoin miners have a lot less fresh supply they can sell into the market. Now this continual supply dynamic. Every four years this happens. So in four years, that drops from 450 to 225, a day, and four years later, half again and again and again, till 2140 when there's no more block rewards. But we're gonna get  of ourselves, we're not gonna round for them. The important thing to realize is that demand keeps going up for Bitcoin year after year. The number of total addresses keeps going up. The number of people owning more than one Bitcoin, more than 0.1 Bitcoin, more than 0.01 Bitcoin, more than $1 a Bitcoin. All of these metrics continue to rise year after year, and now we have ETFs in the mix, and within six months, Bitcoin ETF products have had about 17, maybe almost $18 billion at this point of total inflows. Bitcoin ETFs have bought more than twice As much Bitcoin as Bitcoin miners produced since the launch of the ETF products, just one demand. So that's just us. ETFs, we're not talking about the newly launched British Exchange Traded products, the Australian ones, the Hong Kong ones. Japan's talking about releasing Bitcoin ETF now. South Korea is talking about launching a Bitcoin ETF. Gannon, Brazil already had Bitcoin ETFs, and that's just ETFs. That's not accounting for Joe Blow, who goes to an exchange and buys a Bitcoin, or half a Bitcoin, 100 bucks a Bitcoin. So demand has been continuing to rise steadily over the years, but the amount of available Bitcoin to buy on markets keeps going down right? So we are at a very interesting point right now, post Bitcoin halving, and traditionally, we've seen about a six month delay from the time of the Bitcoin halving to the time when prices start to appreciate dramatically.

Ryan Miller 
Hmm, brilliant. Now we're in a position where the market's starting to get interesting, right? So I remember the early days, and I was like, wow, mining and all these things. And you'd see, you'd see these YouTube videos of these shacks that used to be called a factory, and they have all these mining things, and they're making millions a day and all this stuff, but we're starting to stabilize a lot of that. Now, one of the things that I found interesting as far as the market, and I'd love to get your opinion on it, is the political side of things. Not that this is a political thing, but the fact in our earlier point was it's starting to get attention in the highest circles of power, right? So this is a very bipartisan thing. Actually has nothing to do with politics. With the fact that it's being brought into politics is also a signal that we've we've definitely turned a corner here. So what are you seeing out there? I know in the US, Trump said that he wanted to buy a bunch of Bitcoin for the Treasury, but there's also some moves on the Treasury currently. What are you seeing out there? I'd love your opinion on that whole side.

Lark Davis 
There's a few big things have been happening recently at the highest political levels globally. And again, just a reminder, Larry Fink, the CEO of most powerful companies world, BlackRock. He's a bitcoiner, okay? Donald Trump, who could be the next president. We're not endorsing any candidates here. Everybody votes whoever they want to, but just we're talking, right? He's one of the he's one of the two guys who's likely to be president, right? It's either him or Kamala, right? So he's a front runner right now he's talking about Bitcoin. He's on the Bitcoin train. His vice president owns Bitcoin, right? Trump himself owns Ethereum and has sold NFTs. So these guys are actually into crypto in a weird way. It's pretty nuts. Jamie Dimon reportedly flipped on Bitcoin now he's pro Bitcoin. Big things happening Russia, which we'll get to in a second. Here's the thing, regardless of your politics, you have to understand that within a very short amount of time, about 14 years, Bitcoin has gone from being totally weird nerd money in the farthest corners of the Internet to literally being a major campaign issue in the United States. The United States, one in five people over the age 18 own crypto. They're a very big and very wealthy, depending on time the market, of course, voting block. In fact, their Super PAC called Fairshake. At last I checked, and I don't know what the current numbers are, last I checked they had, they were the number one by money raised. They are the most well funded Super PAC in the United States right now.

Lark Davis 
So absolutely crazy to see the money that's come in behind crypto in America and on a political level, but also what's being talked about now at a political level, we're talking about all kinds of crazy things, like the United States holding Bitcoin as a reserve asset. So Trump came out and said that he'll keep the Bitcoin that the government currently has. They bought 212,000 Bitcoin they've confiscated from different people over the years. And so he's saying, well, let's just keep saying now we're not gonna buy more, but we'll keep what we've got and just hold it as a strategic reserve asset, which I don't know it's been moved around the US marshals are working with Coinbase to custody and potentially sell it down. Who knows how much is gonna be left? Whether there's a push to sell it before that happens, so that it can't happen, I don't know, but the fact that it's being talked about is absolutely beyond crazy. And if you told me just a few years ago that it was going to happen this fast, that we're going to start seeing major political candidates in the most powerful economy in the world talking about potentially adding Bitcoin as a strategic reserve asset, which I know politicians say a lot of things on the campaign trail. Okay, guys, but it's being talked about that's insanity, and that's going to be the shot heard around the financial world that the United States, the Americans, are talking about adding Bitcoin to their central bank assets. They're going to talk about adding it along with gold and stuff like that.

Lark Davis 
And so what do you do if you're Xi Jinping sitting in China? What do you do if you're Modi sitting in India? What do you do if you're a lot of presidents and leaders around the world going, what's our Bitcoin strategy? Are we going to have Bitcoin as a strategic reserve asset? Should we be stacking this now before the Americans officially announced that they're stacking it, and this creates a wild game theory in terms of demand and price and all that stuff. And we have central banks start stacking Bitcoin. Nobody was bullish enough. Nobody would be crazy. And so that's one massive fact.

Lark Davis 
Another thing I'm gonna talk about, again, major high level political stuff, is Russia. And obviously a lot of people are gonna have some very strong opinions on Russia, but regardless of your opinion of their politics and any other things going on with the war and stuff like that, Russia just announced that they are, they have legalized bitcoin and cryptocurrency more broadly to be allowed to be used by Russian companies for international transactions. Now, in case you're not aware, the number one exports from Russia, oil, gas. So are we talking about seeing Bitcoin being used more broadly, internationally for oil and gas transactions. We might get a bit ahead of ourselves there, but still look at the potential of what's happening here, and other countries will notice too. And how long before those other countries say, hey, wait a second, the Americans are going to start holding it. These guys are starting to accept it for business. Where are we at? Are we accepting it for business? Are we purchasing it or so? Things start to get real crazy, real fast. You start to understand the major political implications of the things that have happened in just the last few weeks.

Ryan Miller 
Wow, brilliant. So there's a lot of stuff, and as we look at any any practitioner of the markets, we tend to say, what is this going to mean? Right? So you look at the publicly traded information, or publicly released information, and there's a whole thing called signaling, right? And so when an insider like a CEO buys a share or sells a share, what does that mean? Does he think the company's going up or going down? And what do we think? So we want to look at a little bit of the tea leaves to try to understand that's exactly what Lark's talking about. Is to say, I'm not saying it is. I'm not saying it isn't. I'm not saying it's political. All's I'm saying is this is happening. Do your research. What do you think it's going to mean? You're going to ask 100 people. They may have 100 different meanings to what is going on in the US Treasury, if they want to move crypto, or there is crypto moving around, or what's going to happen in the next administration, whomever that is, is there a crypto or Bitcoin strategy? You always know you're you're the leader of the market when everyone reacts to you. So if the US is starting to bring starting to bring that up, and everybody's responding to it now, so watch for that. And now we can start to say, oh, okay, so now the cat's out of the bag. We really do know that these leaders are paying attention to it. The first mover who was also the bigger if that's the US, then if we start seeing people start to respond to the US strategy to come out with their own now we're going to start to see some major, major moves in the market. I absolutely love that Lark. I love it.

Ryan Miller 
Now it's not enough to know where the market's going. Just adding on what we're talking about or where it's at, we want to know where it's going and so I'm curious, what are you seeing out there? What are some of the opportunities that you're looking at, just in your own world, not giving advice, financial advice, but just what are you seeing? Where do you think the smart money's going? In your opinion?

Lark Davis 
Well, one thing I want to take a quick moment to note here as well, is to pay attention to sort of the big picture with crypto. You know, all this stuff's very exciting, right? But if you look year after year returns on crypto, and sort of where, like the dollar and stuff have been going, Look, the dollar is continually debasing. It's losing more and more value over time. So, you know, it's, it's a sinking ship. It's a slowly sinking ship but like all fiat currencies, it's a sinking ship. So long term time frames for stuff like Bitcoin have played out very, very well.

Lark Davis 
But if we, like, dig down, really, more specifically, into some of the big crypto niches, there's a lot of very exciting places where you can start getting involved. You know, again, you can just keep it simple. Just do the Bitcoin. Just say, hey, you know what I'm getting out of? Getting out of Fiat. We're going into Bitcoin, dollars of sanctionship Gold, kind of boring. Yeah, nice, but kind of boring Bitcoin. The numbers prove it. The returns have been crazy over the years, and if that probably going to have diminishing returns. But even if that continues with diminishing returns, is going to outperform most other major asset classes, including gold, including SB 500.

Lark Davis 
But if you want to look where the crypto market is going in terms of opportunities, there's so many exciting things happening in the cryptocurrency market. We've seen the rise of all kinds of new networks happening, and one network in particular that I think if you want to go beyond sort of the big three cryptos and start finding some new opportunities, finding things that are going to take you farther on the risk spectrum, higher risk, higher reward, potential stuff, right, then one thing to look into is Coinbase. Now we're not talking just about the coin based stock. Now, I do hold coin based stocks, and I'm very excited about the potential for the coin based stock as we see the crypto market cycles playing out. However, Coinbase, they've launched their own layer on top of the Ethereum blockchains that's called base. Now, base has been going absolutely nuts because Coinbase has about 120 million registered users, and their intention is to bring a lot of those people on chain in a place where they can speculate on meme coins and do whatever, right? And the statistics for this have been absolutely crazy. We've seen the total value on chain go from half a billion at the start of the year to almost 2 billion. Now we've seen huge volumes of daily transactions happening. Hundreds of billions of dollars have been transferred in value just this year alone, we've seen daily addresses. So that's new people creating accounts. Daily address is not a perfect metric. It doesn't necessarily represent one person. You can have one person who creates 10 addresses, but still, that's been clocking in at over 100,000 a day, basically for months now. So we're seeing huge adoption going on here.

Lark Davis 
And I've personally got two big bets in this ecosystem. So there's no token or cryptocurrency represents the base chain. The best proxy directly for that to bet on the success of that's actually going to be the Coinbase stock, because all the money that the Coinbase layer two base network makes goes back to Coinbase the company. Okay, so every time someone makes a transaction, they get that money it goes to the Coinbase company, which benefits the Coinbase stock. But if you're looking for those higher risk bets within the Coinbase based ecosystem, too, that I've bet on. One is a meme coin called Brett. So this is just a meme coins, a fun picture community based around it, right? It's worth over a billion dollars, because that's the craziness of meme coins these days, but it's one of the biggest coins on the base network. And the other is called aerodrome finance, which is the biggest exchange on the base network. So those are my two sort of big bets within base. That base is going to take off, and that Coinbase will bring a lot more people on chain to rise the price of those assets. But again, you don't need to go down the rabbit hole for everything. But if you are going to go farther down the rabbit hole, I would recommend looking into the base network, because there's some exciting stuff happening over there. And I think the thesis around Coinbase, pumping this up can be really something to watch out for.

Ryan Miller 
All right, so Brett and Aerodrome Finance, are some good things that you're paying attention to. And then the layer two technology within Coinbase is another area where we think there's going to be some value that's going to be unlocked. I love it. So you know, as we round third base, let's talk about anyone listening to show called Making Billions, you're looking for the edge now in your experience, and you're very experienced in this sector. If there are people who maybe they don't want to be all in, like you, but maybe they want to add that to their portfolio, as well as really just wrap their arms around this new asset place. So people in high finance, we want to understand it. And so what would you advise people who are, who are entering this space, regardless of it's their first time, or they're coming out of Wall Street. Whatever it is, what competitive edge can you give people from our time together?

Lark Davis 
Sure, one thing I'd like to mention about crypto. It's a wildly volatile asset class, and I believe that this asset class is going to go on to be worth 10s of trillions of dollars, probably sometime the 2030s maybe we get 10 trillion sooner than that, but 10s of trillions of dollars sometime in the 20-30s. You literally have Blackrock out here talking about tokenizing everything and bringing it all on chain. So there's money out there, and it's coming to the cryptocurrency industry. That being said, long term, super bullish on the entirety of the cryptocurrency market, especially the top assets. However, however we run in wildly volatile, wildly speculative cycles, where we go from absolute carnage to insane euphoria, massive Bubble Pop, speculation mode. Because of that, because of the nature of new assets coming to the market all the time, this is a market where it becomes very, very important to aggressively take profits, especially to start going that speculation stuff.

Lark Davis 
Now look, if you're into Bitcoin, you're in a Bitcoin, you're into Ethereum, you're in a Solana, and you're happy to ride these assets down between 60 to 80% in the next bear market. You don't mind, because you're thinking, I don't I don't care where it is in 2024 I want to know where it's going to be in 2034 fine. Sit back, relax. Okay. But if you're playing with a lot of this stuff, a lot of these coins, taking profits and getting your money back becomes absolutely, an absolute necessity. A lot of the stuff are startups. A lot of these things, their success is not guaranteed. Many of these networks are only a couple years old. You have to think about that. They're only a few years old, and who the winners are going to be by 2034 far from certain. Far from certain and I've often speculated that, for example, for smart contract networks. The theory of the smart contract network allows you to build other stuff on top of it, whether that be exchanges or stable coins or games or whatever. Okay, there's probably 100 of those, maybe more. It's crazy.

Lark Davis 
The reality is that, much like the mobile phone market, this is my thesis, much like the mobile phone market, we're gonna see four or five of those probably dominate with 90% plus of the total users volume, all that kind of stuff. And even amongst those four or five, probably the top three are going to capture the lion's share of that. So the odds are against you when you're getting into these speculative bets that you're going to be successful between cycles. And we go back to 2021 or 2017 where we had all these hot coins that were the new paradigm of money for a short amount of time before they weren't. So if you're investing in this market, you have to understand the wildly speculative and bubble like nature of it, and take profits aggressively, at least get your principal back on these things when they do move up, so that at the very least, you playing with house money. Okay, that's that's a nice way to think about it. And as you see things starting to crazy, you got to take money off the table, because chances are, if you're outside of those top few coins, your chances for long term survival of your asset are pretty low. Because again, a lot of the stuff startups, a lot of the stuff is prove yet to prove themselves in a massive way, and you have to understand that.

Ryan Miller 
So learn to take your money off table and play with the house's money. I love it. What else? Maybe another one that you can give. You've already given so much value, but maybe if we can get one more out of you, what would you tell people, as far as you know, how to really just approach this with some common sense. What would you say?

Lark Davis 
Yeah, so I can, I can talk about my portfolio. Now my portfolio is perhaps a little bit more speculative in some terms, because I work in this industry full time. 24/7, I'm here all the time, and I have the time to pay attention to all this sort of intricacies and niches. And to be honest, you know, sometimes I feel like I do too much. That being said when you think about how you're going to allocate yourself to crypto, and this is, this is something important to keep in mind when you think about how you're going to allocate yourself to crypto, first, take your whole investing portfolio, real estate, your stocks, your bonds, metals, whatever you got, okay? And think about, okay, what percent do I want to risk into crypto overall? Now, there's been some great studies that compared to 60:40 portfolio versus a 60:39 1% Bitcoin allocation, or a 60:37 3% Bitcoin allocation. And unsurprisingly, any amount of bitcoin in a 6040 portfolio dramatically outperformed versus the people who just had the 60:40 portfolio.

Lark Davis 
Now we have the big asset managers out here saying that 5% allocation to crypto, that's the new number. This is not me saying. This is BlackRock, this is Fidelity, right? These guys are saying 5% is the new number, right? That's what you should have allocated crypto. Some of these guys, some of the more, the smaller firms with a little bit more edge, they're saying, No, it's gonna be 10% right? 10% that's you gotta allocate. I don't know what the number is gonna be for you. You have to make that decision, whether that's for you personally or running a fund, or whatever it might be. But ignoring this asset class has been a losing bet since its inception. That's a fact. That's a fact. People who have got in early, funds, who got in early family offices, got in early, all that kind of stuff, they have had outsized returns due to investing in an asset that's still at an exponential price discovery phase. The entirety of cryptocurrency is worth $2 trillion today. Nvidia went up more than Ethereum is worth today just one day of trading. So it gives you a perspective of how early it still is relatively in this market.

Lark Davis 
Now, if you are considering, okay, let's say I'm gonna do the 5% like Blackrock saying, well, then what's your 5% look like? Now, for me, I've kind of largely mimic the overall state of crypto. So the entire cryptocurrency market class, about 50% of that is Bitcoin, about 20% of that value wise is Ethereum, and then I've got about a third of my money in dollar coins. But that is because, again, that's not necessarily what I'd recommend for the casual investor. That's me as somebody who's here 24/7 always thinking about crypto, and that's my that's my thing. If you're the guy who's coming in and saying, hey, you know what, I want to be in crypto. I want to be invested. I want to take, take advantage of this opportunity. We're gonna put 5% of our money into crypto, right, with a long time frame, because we gotta have the long time frame. Okay, gotta have lunch, especially for the big ones. Anyways, okay, we're gonna put in, let's say, 60% Bitcoin, 30% Ethereum, and maybe 10% in Solana, or a couple other altcoins. Maybe you've researched and going, you know what? Telegram, Open Network, man, that thing's got legs. The social media, whatever, blah, blah, blah, we're gonna put 2% of our money in there. So you gotta think about your total portfolio now, right? So you've got 5% of your total portfolio in crypto, most of that is in the safer assets that are probably not going anywhere, and that you can probably pretty comfortably hold if you're ready for the crazy volatility they can pretty comfortably hold for 10 years plus, okay, and then you've taken a little bit of that money for speculation. If that money goes to zero, your overall portfolio returns probably aren't going to be affected almost at all if those do have outsized performance, it can actually really help juice up your total portfolio returns. So that's kind of the what a lot of investors want with crypto. They want those outsized returns versus other asset classes. But you have to understand that you are taking more risks when you start going beyond those top things, which is why I always say, You know what? If you're going to have the altcoin stuff, don't go 100% into these more speculative assets, because they're just gonna lose 5% of your total investing portfolio. Likely take it slow, dial down the risk, and if you get the right coins, then you get rewarded anyway. If you get the wrong coins, it's not gonna affect you so much.

Ryan Miller 
Brilliant. So I have a common sense allocation. I love it. So as we wrap things up, Lark. Is there anything else? Any closing remarks? Anything at all that you'd like our fans to know?

Lark Davis 
Cryptocurrency is, is a fun asset class, and it's an asset class that has captured the imaginations of a lot of people. But that being said, we've only so far captured the imaginations of around 4 to 500 million people, totally globally, who have interacted with own some kind of crypto assets, and those numbers might be a bit bigger now we've seen some, for example, mini games on the telegram network taking off and getting 100 million users. So we probably have higher user numbers now. But the projection so crypto as an asset class, Bitcoin, specifically, it's been growing in adoption faster than the internet, okay, faster than mobile phones. It's one of the fastest growing adoption technologies of all time, so not quite chat GPT levels, again, 100 million users in a week, or whatever, you know. But we're doing really, really good, and the current projection is that we're going to have probably about 3 billion people, maybe up to 4 billion people by the year 2030, translation, basically everyone's going to be using crypto in some way or another.

Lark Davis 
Remember that story we shared earlier about the avalanche blockchain. They've now got all the car titles in California. 42 million cars on the blockchain. It's going to be everywhere. It's going to be everywhere. Everything you can imagine is going to be tokenized, brought into the cryptocurrency markets in one way or another. It's going to be using Blockchain technology. Again, this is the settlement layer of the of the internet. This is the verification level of the internet. It's going to be massive. And we're still early enough, if you're listening to this conversation right now. It's still early enough that you can take advantage of that. You're not super, super early, sorry to tell you, but you're not super late either. You're kind of somewhere in the middle right now. And so the meat of the move could still be ahead of us for crypto by the mid 2030s it's probably going to be like investing in index funds, but between now and then, a lot of crazy stuff's going to happen. So it's a great time to be paying attention.

Ryan Miller 
I love it. So just to summarize everything, Lark and I spoke about, you know, those final things is, just learn to unwind your principle from those positions and just play with the house's money so you've de risked it. And the other, the second thing that Lark and I talked about is just have a common sense allocation. You can follow Larks, but maybe scale back a little bit. Instead of 30% in alts, maybe go to 10. You do these things, and you too will be well on your way in your pursuit of Making Billions.

Ryan Miller 
Wow, what a show, I hope you enjoyed this episode as much as I did. Now, if you haven't done so already, be sure to leave a comment and review on new ideas and guests you want me to bring on for future episodes. Plus, why don't you head over to YouTube and see extra takes while you get to know our guests even better, and make sure to come back for our next episode, where we dive even deeper into the people, the process and the perspectives of both investors and founders. Until then, my friends, stay hungry, focus on your goals and keep grinding towards your dream of Making Billions.