Ben Simpson, founder of Collective Shift, a crypto education and research company, shares valuable insights into the volatile world of cryptocurrency. Because the crypto field is filled with misinformation and scams, Ben emphasises the need for comprehensive education and reliable research before making investment decisions. He emphasises the importance of understanding the risks and potential of Bitcoin and other digital assets. He also discusses the regulatory landscape in Australia and the disruptive potential of decentralised finance (DeFi). NB This podcast episode contains general information only and should not be considered financial or investment advice.
If you have any questions, comments, or suggestions, please email us at contact@economicsexplored.com or send a voice message via https://www.speakpipe.com/economicsexplored.
You can listen to the episode via the embedded player below or via podcasting apps including Apple Podcast and Spotify.
What’s covered in EP249
- Introduction. (0:00)
- Crypto market volatility and how to navigate it. (1:40)
- Bitcoin as a digital gold with potential for long-term growth. (6:54)
- Crypto regulation, tax treatment, and education. (12:21)
- Investing in cryptocurrency, avoiding scams, and seeking professional help. (16:44)
- Bitcoin ETFs and investment options in Australia. (21:06)
- Crypto market volatility, correlation with the stock market, and investment strategies. (25:20)
- Crypto investing and decentralised finance with Ben Simpson. (31:03)
Takeaways
- Understanding Crypto Volatility: Cryptocurrency markets, especially Bitcoin, are highly volatile. Investors must be prepared for significant price swings and understand the underlying factors driving these fluctuations.
- Importance of Education: The crypto space is filled with misinformation and scams. Ben emphasises the need for comprehensive education and reliable research before making investment decisions.
- Regulatory Landscape: The regulatory environment for cryptocurrencies, particularly in Australia, is still evolving. While Bitcoin and Ethereum are generally considered safe from a regulatory standpoint, many other cryptocurrencies could face challenges.
- Decentralised Finance (DeFi): DeFi has the potential to disrupt traditional banking by offering financial services without intermediaries. This space is growing and may offer exciting opportunities for investors.
- Safe Investing Strategies: Ben advises new investors to start with Bitcoin and be cautious of lesser-known cryptocurrencies, many of which may lack real value and be risky investments.
Links relevant to the conversation
Collective Shift: https://collectiveshift.io/
Ben’s YouTube channel: https://www.youtube.com/@BenCollectiveShift
Ben and Bergs podcast: https://open.spotify.com/show/5xir3V8fvtmHTAQy2D9dQd
Transcript: Navigating Volatile Crypto Markets & Avoiding Scams w/ Ben Simpson, Collective Shift – EP249
N.B. This is a lightly edited version of a transcript originally created using the AI application otter.ai. It may not be 100 percent accurate, but should be pretty close. If you’d like to quote from it, please check the quoted segment in the recording.
Gene Tunny 00:00
Welcome to the economics explored podcast, a frank and fearless exploration of important economic issues. I’m your host, Gene, Tunny, I’m a professional economist and former Australian Treasury official. The aim of this show is to help you better understand the big economic issues affecting all our lives. We do this by considering the theory evidence and by hearing a wide range of views. I’m delighted that you can join me for this episode. Please check out the show notes for relevant information. Now on to the show. Hello. Thanks for tuning in to the show. In this episode, we sit down with Ben Simpson, the founder of collective shift, a leading crypto education and research company in Australia, Ben shares his wealth of experience in navigating the volatile and often chaotic world of cryptocurrency investing. One of the key takeaways from our conversation is the importance of understanding the inherent volatility of the crypto market. Ben discusses the volatility of crypto markets, explaining why assets like Bitcoin can see dramatic price swings. He also touches on the regulatory landscape in Australia and the importance of having clear guidelines to protect investors. Ben emphasizes the need for comprehensive education and guidance as the crypto space is rife with misinformation and scams that can easily trap unwary investors. Finally, Ben shares his insights on the disruptive potential of decentralized finance. Defi, righto, let’s get into the episode. I hope you enjoy it. Ben Simpson from collective shift, welcome to the program.
Ben Simpson 01:39
Thanks so much, so much for having me. It’s good to be here.
Gene Tunny 01:41
Yes, it’s excellent. Ben, so you’ve been doing some fascinating things with collective shift. Could you tell us a bit about which you’re the founder of? Could you tell us a bit about collective shift, please? What is it that you’re that you’re offering?
Ben Simpson 01:55
Yes, I’ve been full time investing into the crypto space for seven or eight years, and it’s a very messy, chaotic industry, lot of misinformation, lot of bad people in the space. It’s just very difficult to get clarity on what’s going on actually when you invest in crypto. So when I first started out, I personally didn’t really know what what was going on. Took me a lot of time to figure out blockchain and Bitcoin and Ethereum and just all these terminologies and what it all meant. And I started working with someone in the education space to help people with crypto and eventually, I started my own thing about four years ago. And you know what we built now is we’re the largest independent education and research company in Australia. We have over 1000 paying clients around the world that pay us for crypto investment research and sort of advice. And then also we provide research and content to the crypto exchanges here in Australia. So those coin spot, Swift X, those are buy and sell cryptocurrency for like for retail customers, we provide them with some of their content research as well. So yeah, we’ve got a team about 10 full time now here in Australia. And yeah, we’ve been around for about four years. And my my mission is just to help people try and navigate their way through crypto the right way. Because I know I’ve been burned in the past in a space it’s very easy to lose money and be led down the wrong path. So we’re trying to just help people the right way, right?
Gene Tunny 03:19
Okay, and you mentioned that you were concerned about some of the misinformation in the in crypto, what, what type of things we we are you thinking of? It’s just
Ben Simpson 03:29
a lot. So in cryptocurrency, there’s 1000s and 1000s of different cryptocurrencies right now. So like, if you think about the stock market, there’s basically that equivalent in crypto, but a an endless amount of cryptocurrency projects you could buy, and my opinion is 95 to 98% of them are worthless, like they’re just built on, you know, community and, you know, FOMO, and you know, they don’t have a lot of underlying real value. And a lot of people get sucked into these projects, buying them with the hope of making a lot of money because they provide these crazy marketing guarantees and returns and all these sorts of things that people get sucked into and ultimately lose money. So that’s really where we’re trying to help guide people, from an education standpoint, where to invest. And then ultimately, cryptocurrency is extremely volatile, and it can be hard for someone to stomach the risk that comes along with crypto, Bitcoin on its journey from, you know, a few $100 to today, 55, 60,000 US dollars has gone up and down hundreds of times, you know, more than 10% and sometimes it goes down 4050, 60% in a period of days or weeks, which can be very concerning for a lot of people, because you don’t get that in the stock market right. If two or 3% in a day is kind of big in crypto, you could see 1020, 30% moves in a day. So we try and just help people understand why that happens, how to have the mindset and understanding of where the market’s going and not panic and and ultimately, try and, you know, not lose money. Yeah,
Gene Tunny 05:00
gotcha. Okay, there’s a few things I wouldn’t mind following up there. Ben, so, I mean, there’s the issue of, I mean, why does this happen? Why is crypto subject to such wild swings? Why is it so volatile? For one, could we start there, please? Yeah, let’s
Ben Simpson 05:18
start there. So one common thing that some people don’t know is that cryptocurrency trades 24/7 right when the stock market opened, has opened, open and closed times at Monday to Friday, cryptocurrency trades 24/7 and what we saw, you know, in the last few days in Japan, you know, Japan saw one of his worst days since the 1980s in the stock market. Recently, I think it dropped seven or 10% in a day, they hold to trading. You they literally just withdrew the sell button. You can’t sell anymore, right? In cryptocurrency, that that’s not, that’s not a thing. You can’t just hold trading in crypto, right? This is a free market. There’s no one, there’s no intermediary to stop what you’re doing. So it’s a free market. And ultimately, people you know, have emotions they fear, and if they’re going to sell, they’re going to sell. And in cryptocurrency, because the market caps of these projects are relatively small, you get these liquidation events, and what happens is basically these cascading effects of traders get liquidated, whales get liquidated, retail investors then panic, and then you get these huge fluctuations. So there’s a lot of different variables, but ultimately, it’s a free market. No one’s manipulating it from a, you know, intermediary perspective, and if people are scared, they’re going to sell. And it happens pretty quickly, right?
Gene Tunny 06:27
Okay, now, if you’re getting into this market, I mean, if you’re interested in crypto, do you, do you provide some guiding principles, or do you identify red flags. Can you tell us a bit about what new investors should be looking out for?
Ben Simpson 06:45
Yeah, so if I have a new investor that comes to me and wants to figure out how to create an investment portfolio, I really, I really try and recommend that they start off with just Bitcoin. It’s really important to understand that Bitcoin is the biggest, most leading cryptocurrency. It’s the most well known. Then there’s 1000s of other cryptocurrencies after that, right? So it’s important to differentiate Bitcoin from cryptocurrency, because Bitcoin is a cryptocurrency, but bitcoin is its own separate thing, and that’s the way I look at it. So I usually start off by just looking at Bitcoin, and Bitcoin, ultimately, for me, should, or for others, should be looked at as a hedge against, you know, your overall investment portfolio, right? It’s not correlated to stocks or the property market or bonds. It’s ultimately a completely separate asset that is in its own area. And I would probably think even only 1% of your entire net wealth into Bitcoin, I think is a pretty good good idea, just in terms of its risk to reward ratio. So the reward being potentially, if it pulls off what it’s trying to achieve. In terms of the global monetary asset, the price returns are quite or the projections are quite large, where the risk is quite minimal, in a sense of it’s been around for 10 or 12 years. It’s now got its own ETF, which was the one of the largest ETF launches in history. It’s owned by a lot of NASDAQ listed companies. You know, it’s owned by governments on their balance sheet. So, like, the risk of Bitcoin now is far, far, far less than what it has been in the past and where we think it could go. I think everyone should consider it in terms of just, even only a little
Gene Tunny 08:21
bit. Right? Okay, so in terms of where you think it can go. I mean, you, are you thinking Bitcoin to a million? I think was that? Was that Kathy Wood, did she have that prediction? I mean, is that? Is that serious or credible?
Ben Simpson 08:35
I mean, look, you know, who knows is really the answer gene like, you know, who knows where this could go? The biggest thing that I think is the most important thing to understand with Bitcoin is it’s a limited supply asset. There’s only 21 million Bitcoin that ever be created. And the supply and demand economics, as we’ve seen recently, there’s more demand for Bitcoin that there is supply, right? And just basic supply and demand economics is showing us that if you get a lot of people wanting an asset, and there’s very few, there’s very few of it, you know, the price, you know, goes up over time. Do I think you get to a million dollars? I do think you can get there at some stage. Maybe, you know, it’s probably gonna take 1020, 30 years to get there. But for me, Bitcoin compound has been compounding at 60% year over year for the last 10 years. It’s up 75% of the last 12 months. It’s one of the best performing assets on the planet. For me, I think it’s one of the best investments you can own.
Gene Tunny 09:29
Right? Okay, and what’s your what’s your theory or like, Why do you think that there is this underlying value? Because there is a lot of skepticism about cryptocurrency, particularly from economists, and there’s all sorts of concerns about regulatory risk. I mean, you pointed to the fact that, okay, it’s been held. You know, certainly people are investing in it at the moment. But, yeah, I just wonder what’s the story regarding the actual. Use case for it? Is there a use case outside of some illegal transactions? Yeah.
Ben Simpson 10:05
And I think, I think the hardest thing for most people to wrap their head around is that, you know, you can’t touch it, you can’t feel it, you can’t smell it like it’s a completely digital asset, and it doesn’t have free cash flow, right? Warren Buffett hates it. He calls a rat poison square, right? There’s a lot of people that don’t like it, because it’s not, not similar to what’s been around in previous times. If we look at a country like, you know, Venezuela, right? Or, you know Mexico, some of these places, not, maybe not Mexico, but Venezuela, right? We look at some of these places where they’re fiat currency, Argentina, sorry, who was I was looking for their local local currency has inflated so much that it’s basically worthless, right? It just continues to inflate. Because of the government has printed more and more money. So holding something that isn’t controlled by government, something that is inherently deflationary, in a sense that it doesn’t increase its supply. In fact, the circulating supply slows down. People are looking at Bitcoin now as a new digital gold, you know, not to say it’s going to replace gold. Gold is, you know, one of the safest assets on the planet, but this is a new version of gold. I use Bitcoin to pay my employees. If I go and try and pay my overseas staff with my bank account, it gets shut down. Many phone calls from their frauds team. They want to know where it’s going, why it’s going. They take huge conversion rate fees. It takes two weeks to arrive. It’s horrendous. Where I can send bitcoin instantly to anyone in the world with no middleman, and they can receive it, you know, within seconds. And that’s being utilized more and more, from from from businesses in different countries, as well, from a payments level. But ultimately, the the use case for me is it’s a digital gold. It’s an asset that, you know, continues to perform, you know, over time. And I think the best way to look at it is, is that digital gold, you know, analogy, and we’re seeing, you know, companies like micro strategy and NASDAQ, listed company, you know, holding hundreds of 1000s of Bitcoin now in the balance sheet, because if you continue to hold cash, just the the purchasing power of your dollar is doing to devalue. Like, where do you park your cash? What? What asset can you hold that’s going to be a hedge against inflation? You know, a gold has an outbeat. Hasn’t out beaten inflation in the last five years. Like, where do you put your money? And Bitcoin starting to be seen as something that you can park your capital in,
Gene Tunny 12:19
right? Okay. And what do you see is that, are there regulatory risks with Bitcoin and other cryptocurrencies? Central banks are looking at CBDCs, the central bank digital currencies. Is there a risk that there could be a regulatory crackdown on Bitcoin and other cryptocurrencies? Yeah, I
Ben Simpson 12:41
definitely think there’s a risk for some cryptocurrencies. You know, again, important to differentiate Bitcoin different to other cryptocurrencies. The SEC in the US has clearly defined Bitcoin as a commodity, and now they have their own Bitcoin spot ETF, now the Ethereum spot ETF. So the government has approved, and the SEC has approved these financial instruments to buy bitcoin and Ethereum in the US and Australia tends to follow. There’s a Bitcoin ETF in Australia, so it’s from a regulatory framework. Bitcoin and Ethereum really is in a safe category now, but there is a lot of other crypto assets that could, could potentially look like securities, and that sort of plays a bit into some of these exchanges not being able to sell it. But no, the direction we’re going in and what, what we’re seeing now from the US and Australia is that, you know, even Donald Trump, right? Donald Trump, the other day, spoke at the Bitcoin 2024 conference, and wants us to be the hub of crypto. He wants the US to be the center of, you know, cryptocurrency sort of development in the world. So, yeah, I think it’s actually moving towards politically pandering or not politically a good thing for these, these candidates, to be pro crypto, because the reality is, a lot of people own it,
Gene Tunny 13:58
right? Okay, and what’s, what’s the regulatory environment like here in Australia, been seeing some of Senator Andrew Bragg’s commentary, and like he he’s been grilling Treasury public servants at estimates hearings, and it looks like that they’ve been rather slow in in setting up a regulatory environment, would you know what the issues are there? I mean, is what needs to happen with regulation in Australia for crypto? Yeah, I
Ben Simpson 14:29
think that then we’re actually asking for more regulation. Really like, because there’s really not much clarity. Like, and as an educator and someone that wants to help consumers, there is very little regulation. It’s very much in a gray area. You go and talk to lawyers and they give they give you a roundabout answer, but you know, I think the reality is gene that this asset class is so new and so few people truly understand it, that the existing regulation of securities and stocks and assets just doesn’t fit well with crypto, because it’s so unique and it’s so different. But. Many loopholes and so many unknowns and variables. I know there was a paper drawn up about recommendations recently, but, you know, these things move relatively slowly, and it goes through a lot of hands, so I’d love more regulatory clarity. You know, we saw some pretty poor things that happened in the US over the last few years, like FTX, you know, Celsius, these crypto exchanges that were doing nefarious things, you know, ultimately, that had nothing to do with the underlying asset. That wasn’t bitcoins fault, that was people running these exchanges that wanted to defraud customers. That was their fault. And if we had better regulation and overview, perhaps that wouldn’t have happened. So we’re welcoming that. It’s just yeah, these things take time with the politics and government. Unfortunately, yeah. And
Gene Tunny 15:41
what does it mean for the the tax treatment of crypto? So if you make a gain or a profit on your or a capital gain on your crypto, you’re liable for for tax for that. Are you?
Ben Simpson 15:51
Yeah, yeah, just like normal capital gains, like, if you sell Telstra shares for BHB shares, it’s a taxable event. Um, you pay your capital gains. You know, some investors may think that they can get away with it, but reality is, cryptocurrencies are built on a blockchain, and a blockchain is an immutable ledger that anyone can see, yeah, and we’ve seen the ATO now develop software to actually go and track these, these accounts that aren’t paying their tax. All the Australian exchanges have to report on all their users, so, you know, they’re having a real crackdown on that. And as they should, people thinking they get away with it is not, it’s not the right way to think about it. You know, people are paying their capital gains. And, yeah, there’s, there’s a lot of oversight now in that tax space as well. So, yeah, very much similar to the stock stocks. How would you how you pay your tax?
Gene Tunny 16:36
Yeah, gotcha. Okay, interesting with the just going back to the crypto education. I mean, I think that’s so important. Because the concern I have is that the, you know, everyone thinks crypto is a the next big thing. And, I mean, you know, possibly it is and yet, but you have a lot of dumb money go in, and you’ve got or a lot of people who probably shouldn’t be putting all their hard earned savings into into a speculative asset. I mean, maybe, I mean, you’re steering people toward the more established ones, but they’re also, you know, there are 1000s of other crypto currencies out there. So, yeah, if you did, if you did come across a proposal or a new what is it? Is it an ICR initial coin offering? Or, if you’re looking at investing in crypto, what are the sort of things that you should be that that would be a red flag that would set off alarm bells that, because I know I’ve heard this term rug pull. How would you how would you know if you could be a victim of that look?
Ben Simpson 17:40
Unfortunately, it’s very common in the cryptocurrency space. You know, I tend to direct people in only investing into older coins that have been around for a little while, like these. ICOs, initial coin offerings were a big thing back in the day, and unfortunately, a lot of people get sucked into these because they promise return, like anything that promises returns, guarantees percentage returns over a period of time. Has crazy lock up periods where you have to basically give your cryptocurrency and lock it up for a period of time to earn rewards, anything that pays you to bring on other people, like a Ponzi scheme, anything that has crazy marketing on social media. None of these good projects do any of that. And ultimately, a lot of those are probably scams, if any of the projects you’ve invested in does that. So ultimately, focus in the top assets. You know, the top 10, top 20, Bitcoin, Ethereum. Solana, start there before working your way down. The further down the market capitalist you go, the more risky the investments are. And unless you really tapped in to know what you’re doing, it can be very difficult to navigate. You know those investments and rug pulls are common the further you go down. Rug pulls are basically, you know, if you think of standing on a rug and someone pulls a rug underneath you, that’s just really when the founder or the owner, or there’s a there’s a hack of the project, and you lose all your money. So you really do need to be careful.
Gene Tunny 18:56
Gotcha. So if someone comes to you, so would they go to the collective shift side? And then there’s a online course you can do,
Ben Simpson 19:04
yeah. So we there’s basically two tiers. So one is, we just have our platform where you sign up, you log in, you can see all of our token ratings. So we do, you know, token things like morning staff for crypto, that’s what we’re trying to build, token ratings research community. We do live group sessions. They can jump on a live session with me, and I go through the market and how I’m investing. And then we have a higher tier. For those that are a bit more have a bit more capital at play. Usually they’re wanting to invest a quarter of a million plus, or they already have that invest in crypto. That’s where you can work one on one with me. We have private events. We do online sessions, you know, private sort of WhatsApp group, where we can kind of help you out and deliver you more support. And that’s really where we have our team of analysts by your side to give you independent information. And that’s really what people pay us for, because you can go online, you can listen to YouTubers, you can try and figure it all out yourself, but it’s going to take you a heap of time. You won’t know who to trust. Most likely, the person is giving you an information doesn’t really know what they’re talking about, and you can lose a lot of money if you’re not sure what you’re doing. So that’s really where we can come and help.
Gene Tunny 20:10
Yeah. So what takes a heap of time doing the research or getting set up or getting the wallet? I mean, what? What actually takes the time probably
Ben Simpson 20:20
initially, just even researching the space, what coins to buy, when to buy, when to sell, how to store it? Where do you store it? How do you you know? How do you not stuff it up? What are the scams look like this like? As you go further down the rabbit hole, there just becomes this infinite amount of information, and you Google crypto, and you just get a million different opinions and a million different people saying different things. And I think really where the time gets sucked in is the information overload. Did you start reading it like this? Says something? This is something else. Everyone has their own opinions, which right or wrong is, Can? Can just send you down a path of confusion? Yeah, and that’s why we work with a lot of people that come to me and go, Ben, I’ve done this, or I made this mistake. Or, you know, I just need help. I don’t know what to do. Can you help me? That’s kind of where we sort of step in. And can guide you. Okay?
Gene Tunny 21:06
And so this, what would this be? Why a Bitcoin ETF is a is an attractive proposition relative to actually owning Bitcoin yourself. Or,
Ben Simpson 21:17
yeah,
Gene Tunny 21:18
am I thinking, how is that right or yeah,
Ben Simpson 21:21
there’s your two options, right? If you want to go, Yeah, Ben, I want to go buy bitcoin tomorrow. What are my options? Well, number one is, you go, you sign up to a cryptocurrency exchange, you buy bitcoin, so you deposit Australian dollars, you buy bitcoin, and then you need to store it somewhere. You either store it with the cryptocurrency Exchange, or you get a wallet and you store it yourself, right? Yeah, that’s what I do. That’s what I recommend most people do. But that is, ultimately, you have to have some sort of knowledge, right? The other option is, you go to your brokerage account and you go and buy a Bitcoin ETF, and that’s what’s been so big in the US recently. You know, there’s a about 9% of the entire Bitcoin supply is now owned by ETFs. And basically the ETF is where you buy a share and that sits in your portfolio, and then the ETF provider is buying that Bitcoin and storing it on your behalf. So you have to worry about all the storage and custody. Yeah, gotcha.
Gene Tunny 22:13
And did you say there was a there’s a Bitcoin ETF here in Australia,
Ben Simpson 22:17
there is, there is, there’s a couple. I’m not actually sure what the ticker is. I’ll have to maybe send that to you later. Gene, that’s okay, just interested, yeah, but there is one launch recently in Australia. I think it might be ebtc. I don’t know. I have to double check, but, yeah, mono, actually, monochrome. Ibtc, monochrome is one of the first Bitcoin ETF, so you should be able to get that in your brokerage account. Yeah,
Gene Tunny 22:44
but the people you’re who come to you, it sounds like you’re helping them get set up on their own. And it sounds like you’ve got, I mean, you’ve got people who are really, you know, keen to learn, keen to keen to get into crypto. What’s the demographic? I mean, can you Yeah, for
Ben Simpson 23:03
sure, it’s really two types of customers we work with. One is, you know, 50 to 65 that maybe are investing in their SMSF, or they have a large amount of funds that they’ve invested into crypto, and they really want to, wanting to set themselves up for retirement. They need some help just figuring out how to do it. And the other demographic is, you know, 3540 years old, have have a have a family, have a business, have large amounts of investments elsewhere, and they might have 500,000 a million dollars. You know, we’ve got guys right up to 25 million in crypto that have their own businesses and stuff going on, and they need our help and our research and our frameworks to help guide them through the market. Think about exit strategy, risk profile, storage, you know, asset selection, you know, it’s like in it’s your own investment. You know, family office for some people, so they need some independent guidance to help Sure. You know, they don’t stuff it up,
Gene Tunny 24:01
right? And are you, as part of that? Are you providing advice on other investments, on their whole investment portfolio?
Ben Simpson 24:10
No, no, just, just, just cryptocurrency. So we give, we give sort of general frameworks and insights and research and data to help them make they still need to make the decision themselves. You know, we’re again, back to the regulatory piece. You know, we’re going to be first in line to get a cryptocurrency financial license when we can that. That doesn’t exist right now, because crypto isn’t, it isn’t seen as a financial product in Australia. You know, well, commodities aren’t. So, you know, once that becomes available, you know, we’re going to be first in line to get that, but for now, we just give general sort of information, and then people make up their mind from
Gene Tunny 24:46
there. Okay, and so do you have the what is it? The Australian Financial Services licensed, AFSL,
Ben Simpson 24:54
yeah, yeah, that’s what. I mean, we actually can’t get one for crypto, right? Okay, yeah, because it doesn’t fall. Like, cryptocurrencies don’t fall under that framework. So we had a, we had a meeting with, you know, ASIC, a private ruling, you know, while back, and it was just, unfortunately, they can’t provide one, because cryptocurrencies don’t fall under that and that’s where that regulatory discussion is going on. At some stage it should fall under something, yeah, and they will be able to be able to go and get that, yeah,
Gene Tunny 25:20
yeah. Well, it just looks like a real dereliction of duty on the part of our regulators, because you’ve got a lot of people interested in it and investing a lot of money, it sounds like it in it. I mean, if you’ve got people with what was it? 25 million in crypto? Yeah,
Ben Simpson 25:38
wow. And, and, and we, you know, from our business model, Gene, like we, we’re purely independent, right? We charge subscription fees for our information, and that’s it, right? You’ve got others that are charging fees, taking commission on investments, selling investments, getting paid to promote tokens. Like it is the Wild West, what some of these people are doing, right? And that’s completely just unregulated. People just go and do what they want. We don’t do any of that because we’re genuinely trying to help people. But yeah, we’re wanting this to come to the space so people can, you know, be, be more trusting in the information that’s out there? Yeah,
Gene Tunny 26:14
yeah, absolutely. I think that’s, that’s a good, a good strategy. And, yeah, I mean, it sounds like you need some type of license like that. That’d be good if they can develop that, and then, particularly if advice can be provided to people about how this sits within the whole portfolio and what other investment opportunities there are out there for people. Yeah, very good. I’d like to go on before we wrap up, just to you know what’s happened. What’s the state of the market recently? So you mentioned, well, there’s no, I mean, you said there’s no correlation between crypto and other assets. I’d like to talk about that and just understand what you mean there. I mean, because big there was a bit of a sell off, wasn’t there when we had the recent sell off in, you know, the S, P and all that, yep. So, like, how do you think about that? That correlation,
Ben Simpson 27:11
declare, to clarify the price is, is definitely still correlated right now, like, in terms of, like, when the stock market sell offs. You know, there’s definitely correlation with Bitcoin. To clarify in terms of, like, where I think it’ll be in five or 10 years time, I definitely see Bitcoin as a as not being correlated with the stock market. But yeah, what we saw over the last few days with, you know, the recession fears, and then Japan selling off and you know that that that carry trade idea that’s been going on, where people are borrowing money in Japan for zero interest, and, you know, buying assets in the in in in the States, and then Japan increase the interest rates, and all of a sudden everyone gets sort of margin called that found its way into crypto. And then, you know, one of the, one of the fascinating things gene is what happened on the weekend was that if you’ve got a margin call on a weekend where you can’t go and just withdraw hundreds of 1000s of dollars from your account. It takes 123, days from your banking. Yeah, you know, just position, right? Crypto is liquid. 24/7, so people need money, and they’ve got liquidity in crypto. You can go, just pull that out tomorrow, right? You need ten million tomorrow. You can get that within a second, right? If you have those that those assets, if you want to withdraw 10 million out of your brokerage account, oh my goodness, right, you gotta call someone out. They’re going to want to know where it’s going. Why is, why are you doing that? It’s going to take multiple days to to get approval. So what we saw was, people need liquidity. They go to crypto. Crypto sold off. There’s a lot of margin calls. Then what happens is the long, the long, traders in crypto got liquidated. The price just dumped. And then that was on our Monday, and by Tuesday, Japan had sort of in the futures market had corrected. Looks like they’re starting to get the money printers going again. And then crypto sort of bounced. I think bitcoins up 10 or 12% Ethereum is up six or 7% you know, overnight. So it was one of those real technical sell off events. Fundamentally, you know, nothing, nothing wrong with the asset class. But that’s, that’s what I mean with the volatility of crypto, things can happen. You know, you’re down 20% one day and up 10% the next day. Like, it’s pretty, pretty wild.
Gene Tunny 29:15
Yeah, yeah. So you’ve got to be prepared for that, and that’s part of what your your education is. So it’s the Yeah. I should note, we’re recording this on the seventh of August in Australia. And yeah, I’m always loath to talk. I’m always reluctant to talk too much about, you know, what’s happening in the market at the moment, because things can, things can change, and by the time you put about the podcast episode out, things can be completely different. But I thought I’d ask you about that. Yeah, that sounds like, it sounds like you’ve got a good, little, good little business there, and you’re, you’re helping people, because there’s certainly a an interest in in crypto, and I think you’re, it sounds like you’re coming from the you. Right place. Is there anything else? I mean, what sort of what are you focused on at the moment in the crypto market? What, what exciting things are you seeing? Ben,
Ben Simpson 30:10
yeah, that’s good question. Gene, I mean, I primarily focus on just building my portfolio of those, those more blue, blue chip, quote, unquote, Bluetooth assets, Bitcoin, Ethereum. I’m a very big believer in decentralized finance, or Defy. You know the idea where you can take out loans, earn interest on your money without the need of a bank, and then you can buy those underlying tokens that that that support that project, and you can earn the fees and interest from the lenders and the people putting up their capital. So defi is a big place for me. I’m pretty heavily invested into that. A lot of that defi activity is built on Ethereum. I’m a very big believer in Ethereum. And then you’ve got other, you know, different things going on, whether it be web three, gaming, whether it be, you know, different blockchains. There’s a lot going on in the crypto space. Yeah, sometimes I think that, you know, and I talk about this a lot, there’s, there’s a million solutions fighting for about five problems that you know, that actually need to be sold. And I think for a lot of people, you know that follow my content online, it’s a bit of a breath of fresh air, because you listen to a lot of crypto people, and it’s just, you it’s just, it’s up only right? It’s never going down. Everything’s amazing. Well, reality is it’s not. And there’s a lot of crap in the crypto space, and I’m really pretty honest about that and calling it out. So yeah, lots going on. But for me, Bitcoin is just Bitcoin and property. For me, the two assets that really I think are going to be the best performers over the next few
Gene Tunny 31:44
years. You’re talking in Australia or Yeah, but I mean Bitcoin internationally. Oh, sorry,
Ben Simpson 31:49
yeah, Australia for property and then Bitcoin internationally. Yeah, gotcha.
Gene Tunny 31:53
Okay. So where can people follow you? Is the best place to follow you? On YouTube?
Ben Simpson 32:00
Yeah, YouTube, if you like video content, just go to Ben Simpson on YouTube. If you’re on Instagram, I put up in like, shorter form content. I put content up on Instagram. I always have my own crypto podcast called called Ben and Berg’s. If you like podcast, yeah. And then we also do a newsletter as well. So if you like email, you can head over to collective shift. There’s a newsletter button at the top, and we send, like, a weekly, weekly digest of what’s going on. So depending on the medium I’m pretty much on all them, I better
Gene Tunny 32:25
make sure I’ve subscribed to that. I don’t think I have. Sorry about that. That’s it. That sounds like the sort of sort of thing I should subscribe to. And was it Ben and Berg? Did you say Ben and
Ben Simpson 32:35
Berg’s? Yeah, B, E, R, G, s, okay. So we do two episodes a week on crypto and again, it’s really no, no nonsense, no no, no bullshit. Is we’d like to call it just sort of giving you what you need
Gene Tunny 32:49
to know. Oh, that’s good. I like that. Your final question that just occurred to me with this defy with the decentralized finance, how disruptive could that be to the traditional banks. So the big four banks in Australia here, for example. I mean, is this something that they should be they should be concerned about?
Ben Simpson 33:08
Yeah, I don’t think it will ever take over the bank stream like I think the reality is that, you know, you look at the big four banks that are probably the biggest companies in Australia, right? You know, I don’t think a lot of people are going to turn away from this, because you need some level of of skill set with defi, but I believe it’s a it’s a better model where you’re not paying the middle person. You know, look how much money Comm, bank and ANZ are making. Like it’s obscene, right? They make all these fees, and it goes to shareholders. And, you know, I understand business as business, but, you know, with a decentralized model, there is no middleman. You don’t have to pay some person in the middle just because they were there. All that money and value can stay within, you know, a peer to peer environment. And, you know, those things already existing. I can take out a loan tomorrow. I can basically take my bitcoin, and I can go and take a collateralized loan out. So I can go and put up, let’s say, $10,000 a Bitcoin, and I can, I can lend out against that Bitcoin as a collateralized loan, so I don’t have to sell my bitcoin, and I can cash flow it without selling it. And that idea, I think, is only going to continue to grow, where people can stay within the crypto ecosystem and not have to go to banks, to go and to finance different activities, you know, loans, mortgages, whatever it might be. So, yeah, I think it’s very disruptive. How long is it going to take to disrupt? Who knows? But yeah, I like that space
Gene Tunny 34:27
right? And now there’s some good companies here in Australia, or are they mainly in the US doing this? There’s
Ben Simpson 34:33
one or two in Australia. We work with a company called Block earner. They’re not purely defi. They’re more of just a lending company, a pure defi company that I’m invested in, that’s in from Australia, is called maple, Maple finance. Oh, yeah, M, A, P, L, E, and yeah. They’re probably one of the largest defi providers in the space, founded out of Sydney. So yeah, a pretty cool project. And go check out as well.
Gene Tunny 34:59
Good one. Okay. Hey, Ben, it’s been terrific. Anything else before we wrap up? No, that’s it, mate. Thanks
Ben Simpson 35:03
so much for having me. Gene and yeah, if anyone wants some some help, we also do some free, like, just a free 30 minute call. If you’re thinking about getting into crypto or you need some help, you can jump on a call with one of our team, and we can help you out. Just head over to our website, which is just Google collective shift. And yeah, we’ll see what,
Gene Tunny 35:19
how we can help. Yeah, that’s terrific. I mean it, it sounds like, yeah, you’re coming from the right place. And my, my next door neighbor at what? So in in Brisbane, Thomas, he’s well aware of you. So he’s, he gives you the big tick of approval. So, well, I’ll put links in the show notes to you all the to your to your website and to your podcast and YouTube. Ben has been terrific. I’ve really enjoyed the conversation. Thanks,
Ben Simpson 35:46
Gene, thanks for having me. Man, bye.
Credits
Thanks to the show’s sponsor, Gene’s consultancy business, www.adepteconomics.com.au. Full transcripts are available a few days after the episode is first published at www.economicsexplored.com. Economics Explored is available via Apple Podcasts and other podcasting platforms.
