It’s time to talk about Ethereum (Cryptocurrency). Listen in on Spotify or Apple Podcasts!


About Indestructible Wealth: I’m Jack Gibson. I’m your wealth strategist and I’m here to help you make some money. The Indestructible Wealth Podcast is for young entrepreneurs who want to make, keep and grow wealth to enjoy now, and for years to come.

Episode #28 – The Next Trillion Dollar Coin?

Transcription:

Welcome to the Indestructible Wealth Podcast. This is the place where we help young entrepreneurs to make, keep, and grow wealth that you can enjoy now, and for years to come. I’m your host Jack Gibson, a serial entrepreneur, founder of multiple seven and eight figure businesses, and wealth building strategist. Each week I’m going to share my tips, resources and secrets, to help you create a plan and build the life you’ve dreamed of. 

Alright! Excited to be with you guys today. I realized getting back from this little family vacation that I have not yet talked to you guys about a very important topic. I’m 27, 28 podcasts in now and I haven’t talked to you guys about the next trillion-dollar coin probably one of the most valuable financial assets that you can own next to Bitcoin. The next trillion-dollar crypto coin for those of you that are familiar with the cryptocurrency space, you know what I’m talking about? Let’s cover that in just a second, but of course I got to give you a little recap of the family vacation that just got back from last night. Wow. Normally we rent a lake house for a week in the summer go out pontooning, just all kinds of like lake type life stuff that is more chill. This time we elected for the road trip hotel hopping,  went up to Northern Michigan and it was awesome. I really enjoyed it we went to an amusement park called Michigan adventure. It’s got a water parks/regular land rides. It’s got this super cool ride called the thunder Hawk. It’s over in Muskegon, Michigan. It’s like on the west side of Michigan and it’s called a thunder Hawk and damn, that’s a good ride. That is way up there with Cedar point, even better than the Raptor. If you’ve ever been to Cedar point you gotta ride the Raptors, probably like the smoothest best ride at the park I think and a thunder Hawk is Ooh, that’s serious. So it’s very similar to that. 

So anyways, we did that, then the hit, the sleeping bear dunes super like you could go for miles up these dunes really incredible view and then on to Boyne mountain our favorite winter spot where we do skiing, but this time first time we hit it in the summer and we did a mountain biking and hiking and I got to stare at the golf course and not play cause I’m with my kids and then from there we went on to Mackinaw island, took the ferry, did the touristy thing kids went around on the island on their bikes and then bought some fudge and then got bored and came back home. And then that was our trip and it was incredible. If you guys ever want to take the fam up on it? It was a really cool experience. I think Northern Michigan has a lot to offer and beautiful so many things to do. It is an awesome adventure during the summer with your fam. If you’ve got kids that all the parents that have kids like that, where you’re like little 2, 3, 4, 5 age, Kara and I were like driving on the way home and said, they all look fucking miserable. They did not look like they were enjoying themselves. So I think it’s maybe something when your kids just get a little bit older but they’re not too old to where they don’t want to hang out with you. But all told overall I would say great experience in terms of the fam long lines, super short staff everywhere we went. So that part kind of sucks because people just can’t find staff because everybody’s getting unemployment from what I heard, I don’t know that just doesn’t make sense to be that people don’t want to go back to work but I guess if they’re getting paid to not work I don’t know. I can’t call them too much of a system problem right there, but anyways, overall 28 times that my family annoyed me. I counted them. Actually. I lost track. It’s probably much higher than that, but I do always tell them someday I am going to be sitting here bored wishing and reminiscing of how much you kids annoyed me.

 So with that, let’s get into it. One of my favorite investments. And I can’t believe again that I’m this far deep in the podcast and I haven’t really hit on Eth, but I realized as the price is going up, I better start talking I better hit on this and a podcast before the price goes beyond the buy-up to range. That’s Ethereum. Love Ethereum. This is my highest concentration or allocation of my funds in the cryptocurrency space is in Ethereum by far so I don’t know, 50% and they probably will actually because I have a lot of mining equipment which I don’t even know how it fucking works to be honest with you. I just have a really smart guy named Adam that I’ve Partnered with various tech projects over the last few years that knows what he’s doing. So I put up the cash, he put up the knowledge and then he gets a little percent off the top and then I get the Ethereum that’s mined out of that. Somehow the computers solve some type of complex puzzles or I don’t know. I don’t know how it works. Honestly, I just put up the money and I know that I trust him. I know he knows what he’s doing and then I get about one and a half Ethereum comes out of there into my account per month which we’d like it to be more, but it’s not bad.

So yeah definitely over 50% of my total crypto portfolio I believe is in Ethereum maybe not that high, but pretty darn close when you count the crypto mining. So I want to talk to you guys about that. It did pull back quite a bit off its all-time high. I get up to $4,300, went down to $1,700 and then now it’s climbing back up I think as I record I’m right around $2,700 and the guy that I subscribed to and really value his research Teeka Tiwari of the Palm beach group, he believes Etherium will count itself among the world’s most valuable financial assets. No actually here’s what he said let me make that more concrete. Ethereum will likely be more valuable than shares in Facebook, Amazon, apple, Google, and Microsoft. Damn! That’s a bold projection. So that’s why he predicts it will be the next crypto to reach $1,000,000,000,000 I think that it is very probable that it will be the next trillion-dollar coin. Anybody who’s on the doge coin train to a trillion I think you need to re-examine the crack that you are on because that is not happening. Ethereum is going to over the long haul crush doge coin, and that stupid meme coin joke of a cryptocurrency that it is look, I don’t mean to offend anybody that bought those coins, but it just doesn’t have the long-term value and usage that Ethereum has. 

So let’s talk a little bit about it. So you guys can understand what’s happening with the Ethereum and why it’s going to the trillion-dollar mark. The next stage of software development that’s happening or will happen but it really is already happening on the blockchain, not the traditional internet and Ethereum is the world’s most widely used blockchain development platform.  so what that basically means, think about it this way. Microsoft was the world’s most popular PC development platform in the 1990s, and then Google’s Android and Apple’s iOS are the most popular mobile app development platforms today. That means that where they build apps on top of those, they use those platforms to build their apps on top of them. Ethereum is, and will continue to be the go-to platform for blockchain development projects.

 Now today it sits around a $316,000,000,000 market cap. And I believe Teeka believes lots of people believe that Ethereum will more than double over the coming year. So the buy-up recommended price on it right now is up to $5,000. So that means once it hits over $5,000, it’s probably not safe to buy it. Just because you’re just buying it at too high of a price and although we do believe it’s going over to 10,000, probably within the next 12 months, crazy market volatility could happen.   It’s certainly not happened and then you bought into the high. So do believe that we could see each in $40,000 per token, but I think that’s probably several years away. So let’s be aggressively getting as much as we can up to that $5,000 buy-in price. Now when I’ll just be honest, when it started hitting over 4, I was, I stopped buying. I’ve been buying up to about $3,000 consistently adding on. I bought it, it dropped from $4,300 when it dropped back to $2,700, I started buying and then it dropped down to $1,700 and I’m like shit, I wish I would have waited. We don’t know, we don’t have any crystal ball and, I wasn’t really upset. I knew that it was going to climb back up past my buy-in price. I knew that eventually where this coin was and the value long term. So I wasn’t really all that upset. The only part of me was like, man, I could have bought more Eth per my money. But I wasn’t worried about it long-term in terms of losing money. So it was only a short term loss that I took. But overall, I’m way up on Eth because I started buying it back when it was $500 per coin. Of course hindsight 2020 shit. Why didn’t I buy way more coins that back then, but obviously I have a lot of hindsight 2020 past investments that I wish I would’ve gone a little bit more aggressively on. Wow. Think about this. At the time of this recording, Ethereum hosts over 2,500 applications on it, the most of any blockchain there’s 2300 active developers currently working on the Ethereum network, the closest competitor has just 400. This is what creates what’s called a network effect that attracts even more projects to Ethereum. The network effect is think of it in terms of for those of you that remember the fax machine. Anytime anybody asks me to fax them something, I can’t help it. I’ll be sarcastic. I just say yeah let me fire up my flux capacitor and I’ll be happy to fax you over something.   like who’s faxing nowadays? you scan and email things right. But anyways, when there was only one fax machine, there was no value to the fax machine because you couldn’t fax anybody. But then when there were 2 that the value went up as it hit 3, the value went up even more. As soon as everybody had a fax machine. That was the network effect so fax machines became that much more valuable, but then once everybody replaced it they got a scanner and they could scan an email and realize that was more convenient, easier to use and that the scans started to grow in popularity that created a network effect for scanning. This is why Ethereum from their network effect is so strong and that’s why we’re seeing demand skyrocket for the underlying Ethereum crypto. 

Now what’s happening is there’s 2 things that are about to happen that are going to absolutely skyrocket the price of Ethereum. So we’re seeing some major demand as more users compete to use the network. So the number of daily transactions on the network reached a record at 1.7 million last month, and as more users compete to use the network they spend on these transactions, also reached a record at 70 million per day. Although it’s pulled back a little bit, but still not too far off that. So all of this demand is coming at a time when we’re about to see a major reduction in the incoming supply of Ethereum and so basic economics that I actually learned in high school that was valuable when demand increases while supply decreases prices have no option, they will have to go up. So in the coming months, the 2 changes to Ethereum’s code are going to drastically reduce the amount of new Ethereum coming out of the market. The first half, the first change is happening right now as we speak, that’s when that’s the EIP 1559 upgrade. So currently Ethereum fees are based on the amount of traffic on the network. So when traffic is high, the miners, Adam and me, but  I can’t call myself a miner, can charge to process each transaction. The EIP 1559 upgrade is going to burn those transaction fees paid by network users instead of sending them to miners as payment. So this new base fee model will lower fees and speed up transaction times for network users which is a big complaint that people have about Ethereum is that it’s too slow and the fees are too high.

 So last year, 8.4 billion in fees over a year. Now what happens when over 8 billion worth of Eth disappears from circulation, each year, prices are going to go. You guess what? My favorite word is they’re going parabolic. That means explode and we’ve seen similar gains like this during Bitcoin havings. So then that’s not the only supply shock that comesand it’s also transitioning from a proof of work protocol to a proof of stake protocol. Let me try to explain how this works and the proof of work protocol model miners use powerful computers to secure the network. So we’ve got my mining platform. We’ve got 32 GPU’s that are cranking and solving the algorithm code that and whatever it does to create the Eth because it sounds like I really know what I’m talking about when I mine crypto, they solve complex math problems to validate transactions on a block. The first miner who solves the problem earns the block reward Bitcoins is an example of this model, proof of stake miners validate transactions by staking tokens on a block so the network chooses the miner who earns the reward based on the number of coins they own and some other factors. So since the proof of state networks, don’t rely on warehouses full of mining equipment. They’re less expensive to run. So these networks can issue far fewer tokens to reward miners for securing the network. This is the critical part you guys got to stay with me right here under its current proof of work system Ethereum’s inflation rate is currently 4% per year. That’s the amount of new Eth that it’s creating each year to compensate miners. When it switches to the proof of stake model likely by next year it’ll drop to less than 1% per year. Think about this, a 75 reduction in the amount of new Ethereum is going to be coming onto the market. So when you combine the EIP 1559 upgrade with the switch to proof of stake consensus you get a halving like the event that could be absolutely life-changing for Eth holders.

So that’s why Teeka feels comfortable increasing the bio price of Eth in his Palm beach letter portfolio to $5,000 despite its recent pullback all the way down to $1,700 from $4,300. Guys, friends, I like to call you friends because you are my friends. You guys send me great messages on Instagram that just warm my heart. You still get a chance to get on the ground floor of what will become the most valuable financial asset in the entire. Let me just say this. So you really get it the most valuable fucking financial asset in the whole fucking world is this opportunity right now. Right now you guys cannot wait. You guys got to get some Eth exposure. If you don’t have any right now, and if you buy it at $2,700 or $3,000 or wherever it’s at when you listen to this, I’m going to get this posted ASAP.   don’t sweat it. If it drops down to a $2,000 or $1,500 or a $1,000, if something crazy happened. Do not sweat, don’t stare at it. Don’t worry about it. This is a 5 year to 10 year play to where you can really potentially move the needle on your net worth and you got an asset that’s going to be very valuable. Now there’s lots of volatility in crypto. It is. It’s just volatility is the price you pay for outsized gains in this space. You don’t need to risk your current lifestyle for a better one by doing this. So don’t do anything that’s not comfortable for you but take a small allocation and pop it in here. You guys can go to Coinbase, open up an account right there and you can purchase Ethereum and that’s a very easy way to do it and it doesn’t take very long it’s very user-friendly. If you want to though. You can stake it which is essentially your  locking up your Ethereum. If you’re going to hold it for a long time which is what I’m doing then you can stake it and then you can earn more interest payment on it. I like Nexo, nexo.io is where I set up an account and I transferred all my Ethereum into that account. I can earn additional interest on it. That’s working out well. It’s just an easy way to generate an additional stream of passive income while you’re holding it and so I liked that play. I’m gonna dive more into a future podcast very shortly on how to stake your crypto and how to earn interest and passive income on it. Because I think this is a pretty important subject so that while you’re just holding it long-term, then you can continue to generate additional income streams off of that asset class. 

You guys want to follow me on Instagram. I wanted to tell you I’ve got on that particular platform there’s different avenues for me to give you guys more content. So if you go to Instagram it’s indestructible wealth is my username. I’ve got reels that I post out. Those are like short little fun videos. Sometimes I put them in music, sometimes I just talk. I just quick 30 seconds. Bite-sized chunks kind of inspiration and financial education on there and then on my story that’s where you, if you really want to get the behind the scenes, like me with my fam being super goofy, immature, lots of that’s what she says with my wife. Just all kinds of colorful language, probably. I don’t know, maybe even more so than when I do on this podcast. That’s a great way to follow me. I do Q and A’s there as well. So if you have questions, you can ask them right through the story. And then any question too you can ask me in direct message on Instagram I’d be happy. Usually I can answer them there. Sometimes I just take them and answer them too so everybody can benefit. And then post a lot of content on the actual normal feed. And then also IGTV, I’m starting to launch and repurpose a lot of these episodes on IGTV as well as long along with other content too. So hit me up on Instagram and you guys can get some kind of additional indestructible wealth in your life. I know you probably don’t get enough on this particular podcast. 

All right. Hopefully this helps clear it up a little bit more about Ethereum. If you’re still like, don’t understand it if you’re still confused. Look, don’t just buy something because I tell you to, that’s never good. You want to understand what it is you’re getting into. You really want to understand any type of asset that you’re buying and don’t buy anything though that you’re not prepared to hold for at least 5 years. My hold period is always a decade and that’s whether I’m starting a new business like this is a 10 year commitment. If I’m going to buy a crypto I’m holding it for 10 years. If I’m, that’s my plan anyways, unless something really becomes self-evident or changes that I need to pivot but that’s always the plan is that kind of commitment. Stocks I’m holding for, at least 10 years, that’s always the plan, right? Because short term volatility can shake you off of a great asset that you’re going to regret later that you sold off because maybe the price drops suddenly or whatnot. You don’t want to be that type of investor, you want to be a long-term holder. So you do your research, you understand what you’re buying, you put your money in and then you’re prepared to hold it for a decade. That’s the way that you’re really going to make, that’s the way you really get to make long term great returns. 

So go do your research. Do some additional digging. There’s lots of experts on YouTube that you can follow and here we go. Have a great day!

That’s a wrap for this episode on the Indestructible wealth podcast. Before we part ways, I want to help you to take advantage of 2 incredible tax saving strategies that could help you save a lot of money.  All you have to do is leave me a 5 star review – if I’ve earned it – and comment in iTunes, Stitcher, Spotify, or wherever you tune in. After you’ve done that simple step, just email me a screenshot to [email protected] and I’ll send you everything you need to save money on your taxes for years to come.  If you’d like to dive deeper into your own wealth building strategy, check us out at myindestructiblewealth.com and follow along on social media. Also, please share this podcast with anyone who’s looking for guidance on their own wealth building journey. Until next time, remember our mission here is to help you make, keep, and grow wealth you can enjoy now, and for years to come.

 

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