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- [00:00]
Joel
Joel, we've all got different tasks in life that we enjoy doing. For me, that would be closing out the books on our family's personal finances every month.
- [00:08]
Matt
Nerd.
- [00:08]
Joel
But then there are some chores that are more of a pain, and for me, that would be grocery shopping, something I try and avoid if at all possible.
- [00:16]
Matt
Well, that's where Walmart steps in, because their subscriptions help you to stay stocked on the items you use most, whether that's milk and eggs or kitty litter. And cleaning supplies for. Find everything you need for your home at Walmart, in stores, online, and in the app.
- [00:31]
Joel
Asking the right questions can greatly impact your future, especially when it comes to your finances.
- [00:38]
Matt
So if you're looking for a financial advisor you can trust, certified financial planner professionals are committed to acting in your best interest. That's why it's gotta be a CFP. Find your CFP professional@letsmakeaplan.org Hey, everyone.
- [00:54]
Joel
Matt here with Joel from How to Money. Joel, I know you like a good road trip. What's the last one that you've taken?
- [01:01]
Matt
Okay, well, this was a flight, not a drive, but my wife and I just got back from the iHeart Podcast Awards in Austin, Texas. That was a lot of fun. And I knew it was gonna be a hectic trip, so I booked a comfortable Airbnb for us that was very walkable to downtown. It was perfect.
- [01:15]
Joel
Yeah. And nothing worse than, like, spending half your trip stuck in traffic when you're trying to enjoy a new city. Walking, even running around on foot. Like that is the way to do it, man.
- [01:23]
Matt
Agreed. Yeah. And you hit me while I was there, Matt, how brilliant it is to list your own place on Airbnb when you're traveling, especially now that you can team up with a co host who handles everything for you. Find a co host@airbnb.com host. Welcome to how To Money. I'm Joel.
- [01:39]
Joel
I'm Matt.
- [01:40]
Matt
And today we're talking Banking on Bitcoin with Natalie Brun.
- [02:02]
Joel
That's right. So, Joel, when we occasionally talk about Bitcoin, it's typically within the context of investing. And like, even then, our approach is for it to be a relatively small portion of our overall portfolio. Could most folks do without it? We think that that's the case. That's true. Like, don't overly focus on, I would say, what we see as a more alternative investment when you haven't even maxed out conventional retirement accounts. But that is not at all how our guest, Natalie Brunel, how she views Bitcoin. Natalie sees it as this entirely new system of money, a system that is incorruptible and nonpartisan in her words. Bitcoin is egalitarian. It doesn't benefit any race over another. It's the purest expression of freedom and self determination. All of these things sound, like, totally awesome. Yeah. And for over a decade, Natalie was investigative journalist. She is now a predominant figure in the bitcoin space. She's an influential educator. She's host of the Coin Stories podcast, where she dives in deep. And that is exactly what we're hoping to do some today all about bitcoin. So, Natalie, thank you so much for joining us today on the podcast.
- [03:11]
Natalie Brunel
Thank you so much for having me. What a nice introduction.
- [03:13]
Matt
We're glad to have you, Natalie. So much to get to on this one. But first question. What do you like to splurge on? Matt and I splurge on beer, but hey, it's okay. We're saving and investing simultaneously. What is your craft beer equivalent?
- [03:25]
Natalie Brunel
I like to splurge on trips to Italy. I have an Italy obsession. A lot of people don't know that. I actually studied journalism and Italian in college, and I try to find my way back to Italy every single year. I lived there for two years of college. I'm obsessed with Italy and Italian culture. So they can take my money. That country can just take my money.
- [03:45]
Joel
Okay, what is the most underrated city that. That you think. Yeah. Just gets overlooked by most folks who go to Italy.
- [03:51]
Natalie Brunel
Ooh, underrated. That's. That's a tough one. I mean, my favorite city's Florence because that's where I live. So I love Tuscany. And there. There are so many little towns that you can discover and explore there. But I actually think underrated would be the island of Sardinia. A lot of people still haven't been there. It's got the most pristine, tranquil, turquoise water that you'll ever see and not as many tourists. So it still feels a little bit like that raw, rugged Italian that you read about in history books. Yeah, it sounds awesome.
- [04:20]
Matt
Sounds like water I want to swim in.
- [04:22]
Joel
Yes.
- [04:22]
Matt
All right, I'm putting that on list. Natalie, I'm curious. You're a first generation immigrant. Your parents, struggles, they seem to impact the way you think about money even today. What sort of influence has your family history had on you?
- [04:36]
Natalie Brunel
Sure. So I think that so many of our belief systems and our values are shaped very early. And for me, I grew up with a fear of financial insecurity, and I was really determined to succeed because I watched how Difficult it was for my parents to sort of, to sort. To bring our family to this country and to just create what would be like a middle class life here. They just, they struggled so much. It was first very difficult to be able to come. They grew up under communism and they waited every single year to see if they won a visa lottery to be able to come. And once they got here, you know, they didn't know the language. They had to start over. We lived in a tiny apartment. I grew up around people that were much more financially comfortable than us. And once they were finally able to purchase a small townhouse, I went off to college. And a couple years later, the great financial crisis hit and they were suddenly bankrupt and moving into a tiny one bedroom. And I just thought, how the heck can this happen in a country that's supposed to represent the American dream that, you know, it doesn't matter where you come from. If you work hard, you can achieve something. And I felt like the game was rigged. I felt like the rules were in favor of the people at the top. And so I became an investigative reporter honestly, because I wanted to hold the powerful accountable. And I was very much in, like the tax the rich movement. I thought that the way to fix this is for government to reach in and redistribute the wealth and punish the greedy people and give it back to the working class. And I came at this view from a fundamental misunderstanding of how economics works, how, how our money is actually even issued and the broken incentives at the, at the base layer of this system. And, and I didn't learn about any of that until bitcoin. So bitcoin for me was actually a transformative journey of better understanding the entire financial system, what money actually is, and why so many people feel left behind and at a disadvantage, even though, even if they're working harder than ever. And I really think that bitcoin is the best possible solution we have before us.
- [06:48]
Joel
Okay, I feel like you're segueing very nicely into how it is that you became a bitcoin believer because, like, there are plenty of folks out there who graduated into the throes of the Great Recession and, and even would look to the, the government, right? And like, as you peel back the layers and you're like, okay, how did this come about? Like, what caused there to be so many banks who are then willing to lend to underqualified borrowers?
- [07:11]
Matt
A lot of different theses on that too.
- [07:13]
Joel
Yeah, but, but at the same time, I think there's, there's a whole lot of Folks who would say, well, I don't know if bitcoin is necessarily the answer here. How did you kind of come around to essentially believing in Bitcoin?
- [07:24]
Natalie Brunel
Well, I just. I really didn't know what money was. I didn't think about it, and I didn't question something that is a reality for all of us, which is that things get more expensive every single year. At least the things that you need most, right? Like your housing, education, your groceries. And maybe they. They don't go up so significantly that everyone's protesting in the streets or, you know, running around calling out how. How many more dollars each thing costs each year. But if you step back, you zoom out, you notice this trend, everything just climbing up in prices. And I never connected that with the expansion of our money supply. They basically tell you that inflation is necessary. That's what you're sort of taught. Inflation is necessary. It stimulates the economy. If we didn't have inflation, the whole thing would collapse. And it was not until bitcoin that I actually started to question that, why do we have to have a form of money that expands and therefore dilutes everyone who's holding it? And there's a real thing that I think everyone should study, which is the Cantillon effect, that the people who get to issue more of this money and the people who are clicking the strokes of keys that actually expand the monetary units, they benefit the most, and the people around them benefit the most. If you're close to the money printer. So if you're the big banks, if you are the special interest groups that get first access to the money, or the big corporations that get to borrow it, really ridiculously low interest rates, you benefit from those freshly minted dollars. And as you go downstream, us, the working class, we benefit from it the least. And in fact, it disenfranchises a lot of people. It destroys our purchasing power and our savings. And so over the long timeline of this type of activity and manipulation with our money, we see people who can no longer save. They've played by all the rules, they've worked hard, they've saved up, and yet they can't afford retirement or to have family or to help their, you know, to get out of a medical situation that came up. There's something fundamentally broken with that. And that's what I think we need to question. If we're going to have a monetary system that's going to expand continuously and lose value. Well, we need to be able to save in something that doesn't. We need the opposite of that for us to be able to save for the future. And I believe Bitcoin to be the best asset because it is completely decentralized and it is immune to inflation. It is scarce and finite and no one can ever print more of it.
- [09:54]
Matt
Yeah, the, the finite reality of Bitcoin I think is certainly one of the key selling points. I'm curious to dive deeper on inflation for just a second. How real of a problem is inflation in your mind? Because as let's say we've experienced it more viscerally in recent years. But aren't asset prices and incomes typically both going up? Right, so it's prices, but also people, people earn more. So why is inflation such a problem in your mind?
- [10:20]
Natalie Brunel
So I actually think this is the biggest problem facing the working class. And again, I didn't recognize it until bitcoin. So I think we're under this illusion of growth and expansion. They tell you that CPI is 2%. And for the most part CPI is. Because CPI, the consumer price index is. It's a measure that can be highly manipulated. And it has changed. If people actually dig into what goes in the metrics that go into cpi, it has changed drastically over the last few decades. So it accounts for things like, okay, well if a car for example, is getting more expensive. Oh wait, but it has some new technology. You can, you know, your, your music's now more digital or you have a GPS built in. So we're going to negate that inflation because the, the technical components are a little bit better. Oh wait, you know, steak got more expensive. A lot of people are choosing not to even buy steak. They're actually turning to chicken. So we're gonna actually put chicken into the basket instead of steak. So they manipulate the basket to tell you infl percent. Meanwhile, the rate at which the money is actually expanding, if you measure it by M2, which is the kind of agreed upon index for monetary supply, it's actually increasing between 6 and 8% annually. So if you are not getting a raise of 8, 9%, you are actually just keeping up with the rate at which they're expanding the money supply. A lot of people again don't realize that. And so yes, assets have been going up because that's where money tends to go. And who has the majority of assets? Wealthy people. Right? Wealthy people hold the majority of the assets. And so when they manipulate interest rates down, which they did for basically two decades, and when they expand the money supply, the first recipients of that money, they tend to do things like buy back shares of stock they manipulate, essentially real estate. They go into real estate, they buy real estate. So all of this is affecting the very things that the working class can no longer afford because their wages are only going up by about 3.9%. So this is actually something I wrote about, wrote about in my book that's coming out this fall. Bitcoin is for everyone. I wrote about how money supply expansion is moving at a much faster rate than wages, which is why so many people feel like they can never catch up. Because, yes, they're getting a raise, but when you zoom out, again, the money supply is growing much faster than their wages are. And so that's why I think the working class is sitting there going, yeah, why don't you tax the rich? Because they've got all the stuff. We're working harder than ever. We don't have anything and we don't know how to take care of our families. And I think that's why we've become so polarized politically. But it's really two sides of the same coin. It's a broken monetary system and red, blue, left, right. It's not going to fix it until we fix the money.
- [13:16]
Joel
Yeah, I wonder too if that's. It seems like we've seen a divide among classes too, as opposed to just blue versus red. But like you, you're highlighting the problem here of inflation. And practically speaking, though, how are you actually using US Dollars? Right, because you can say that, oh, this is ideally what we'd move towards. And you know, when it comes to like, I guess, bitcoin as an actual currency, but you can't use Bitcoin to actually pay for groceries at the grocery store that you're talking about that are going up in price. Practically speaking, how are you interacting, I guess, with the current financial system as it exists?
- [13:51]
Natalie Brunel
I think this is a great question because there's sort of a debate about whether Bitcoin is a currency or is it an asset? I actually believe that first it will be an asset before it turns into a mainstream currency. And the reason is because it is going up in value and your dollars are losing purchasing power. So most people want to spend their dollars, which are going to continue to get inflated and debased and they want to save in Bitcoin. That makes sense to increasingly merchants, I think, are going to incentivize people to try to spend their Bitcoin, because what do they want? What does everyone want? They want to accumulate Bitcoin. So if you can get people to purchase whatever it may be with Bitcoin, I think we're going to see an increase in that. We're already seeing places like one of the most popular apartment rental companies in Los Angeles, owned by Rick Caruso. They accept bitcoin for rent. More and more companies are starting to say, hey, here's an option. You can pay in bitcoin if you want to. But a lot of especially hardcore bitcoin, they don't want to spend their bitcoin, they want to save it for the future. Because there's only going to be 21 million. You want to race to accumulate as much as you possibly can. But in the future, again, if this does become more of a monetary standard, which I do see a future where it could be, then I think that we will see more and more commerce denominated and paid for in bitcoin. Right now, though, obviously, governments are incentivized to have their fiat currencies be the mediums of exchange. They want to be able to tax people in their fiat currencies and levy that as sort of the medium of exchange. That's accepted by decree. Right? But I think that things are changing because governments have really abused their power over money, which is why bitcoin exists in the first place. And so it's going to be very hard to convince people to save in a form of money that just gets debased and inflated every single year. And that's what I think we're seeing with US Treasuries right now. We're sort of in between a rock and a hard place because we need to keep expanding our debt. That's how the whole system is now underpinned with these US Treasuries. Why would someone hold Treasuries when the real rate of return is negative? Because they keep inflating the money supply far greater than the rate that you're earning in interest. So that's a huge dilemma.
- [16:06]
Matt
And there are historical realities of this happening in countries around the world at different periods of time where the currency becomes so devalued that people are using the currency for toilet paper, wallpaper, because it's more valuable in those ways than it is to spend on stuff. You have to be have a billion dollars essentially in that currency to afford a meal. And so even if you're incredibly rich, the value of the currency gets deflated away. So significant significantly that people are living in poverty. I'm curious though, too. You talk about the haves and have nots under the current system. Is there a possibility for a have and have nots in the Bitcoin system, essentially early adopters versus late adopters. Because I just think about what's happened with the price of bitcoin over the past 10 years. Gosh, it feels like that people who are thinking about getting in now, the price has skyrocketed so significantly. Are they too late?
- [16:55]
Natalie Brunel
They're definitely not too late. It's still very early for all of us in bitcoin. And this is actually one of the things that's most empowering about this piece of technology. We've never had an asset like this whose total addressable market is 8 billion people. So, yes, early adopters, of course, benefit from the earliest massive price swings and appreciation. But think about the early adopters of Amazon stock, right? They're probably living in their nice mansions and have their yachts and all that, but a kid in a developing nation could not have purchased a share of Amazon stock. They can't buy a fraction of a mansion in Miami beach and watch as that appreciates. But they can purchase a fraction of a bitcoin, and I think that again, in the future. It's a system with a finite supply where you have to provide value or expend resources in order to get bitcoin. We've never had really something like that that the whole world can buy it connected through, you know, this digital economy, or work for it or earn it. And so it's going to be a constant, I think, exchange of value around the world in a way we've never seen. This is why I actually think that we're going to enter an era of abundance and prosperity that we haven't seen before. Because at the base layer, we're going to have a form of capital that no one can manipulate and steal from under us. Like inflation is a hidden tax. It just steals from us. Bitcoin does the opposite.
- [18:19]
Matt
It.
- [18:20]
Natalie Brunel
It reinforces the base layer of all of our interactions through commerce, through business, through money, in a way that no one can cheat and manipulate. I think that that will actually usher in the most opportunity for the most amount of people. Will the early adopters have benefited? Sure. But if they're going to want to live and eat and travel and all that, they're going to have to spend their bitcoin eventually because someone's going to say, hey, the only way you can get this is if you pay me in bitcoin. Now we're talking about a world probably, you know, decades from now. I think that the transition will take a long time because dollars are still really entrenched in the whole global system. And Most debt is denominated in dollars and most people transact in dollars. But I think over the long time horizon we will transition into this bitcoin standard because it's better and most people will vote with their money.
- [19:10]
Joel
What do you think about stablecoins? I feel like there are more brokerages and investing firms and I guess they're talking about those. It almost seems like crypto light or bitcoin lite almost where it's just like, okay, you don't want to own the actual thing for a lot of folks.
- [19:26]
Matt
You can't stomach the swings in price.
- [19:28]
Joel
You're brand new to this. And so I guess what are your thoughts about some of these different stablecoins?
- [19:34]
Natalie Brunel
Sure. Well, let's keep it really, really simple. A stablecoin essentially, especially if you're talking about the dollar backed stablecoins, that is a digital dollar. And what is the dollar designed to do? It's designed to inflate and increase in supply. These stablecoin companies, it's been a w ride to watch because some of them are now purchasing more U.S. treasuries than entire countries like Tether. Tether's I think the seventh largest buyer of U.S. treasuries. So they're essentially just printing money because they're sitting on all those Treasuries earning risk free interest and they're growing. And I think that their profits for like 100 people in their entire company almost exceeded Goldman Sachs. So it's wild, right? And obviously US banks and US companies are looking at, at this, saying we want a piece of this action. So that's, that's really one of the priorities. Wall street, the big banks, they want to be able to issue their own stable coins. And the US dollar wants to prioritize or the US Congress and the US Government wants to prioritize this because they want to extend dollar dominance. If you create more demand for the dollar around the world, that benefits us. Especially if these companies are all backing the dollars with Treasuries. What do we need? We need buyers of Treasuries. So I just see, you know, stablecoins as the future. It's a digital version of the do by US Treasuries. And I would never save in a stable coin, right. Because it's just going to continue to get devalued. But I think that it will be an entry point for a lot of people as they start to use this technology and use crypto rails in order to save in bitcoin. So spend your dollars, spend your stablecoins but save in bitcoin.
- [21:07]
Matt
The price of bitcoin can fluctuate wildly. And some people have said that it's essentially akin to when you look at the movements of the stock market. Bitcoin mirrors the S and P in some ways, but more extreme. And so I could see why people who are willing to take greater levels of risk put more money into bitcoin because they're hoping for greater reward. But that also, I think incentivizes people to speculate in bitcoin, especially with intraday movements that can be significant. How do you think about. You're talking about holding bitcoin, holding it for the long haul. And I think that has been a mantra for a lot of people in the bitcoin space. But then there are other people who say, I don't know, I think I want to try to make some money on a day to day basis just kind of speculating on where the price of bitcoin goes. How do you think about that?
- [21:54]
Natalie Brunel
Yeah, so I'm not a day trader. I wish people luck who day trade this asset because it is very volatile. I mean, obviously, you know, people, people can, can gamble at the casino and make a huge amount of money or they can lose a lot. So I don't recommend day trading. I especially don't, do not recommend, recommend using LE because there can be very significant swings that wash people out. So be careful. This is a long term hold strategy for me. I think that if you understand bitcoin, if you've taken the time to really study this asset class and network, then you have a longer time horizon and you don't look at the everyday price swings. I mean, I'm at the point where when bitcoin dips like it has been over the last few weeks, I get excited. I'm like, oh my gosh, more than my target buy orders just got executed because bitcoin dropped. This is an excellent place to just add a little bit more. And I actually celebrate the dips as an opportunity now that obviously for a newcomer is very, very scary. You have to really learn about bitcoin before you can stomach the volatility. And I certainly was not ready to do that at the very beginning. I was extremely skeptical. And when it made price swings, I thought, oh my gosh, any day it's gonna go to zero. But that was coming from my ignorance about what it really was that I was investing in. And nothing does that for you other than just taking the time to study it. So volatility doesn't bother me. In fact, I think that it can really be, as they say, a feature, not a bug in the sense that volatility can increase your Sharpe ratio and actually increase your returns across a portfolio that's very diversified, even if you just add a tiny bit of bitcoin. And you can see that when you look at tools like the Nakamoto portfolio or you look at statistics from. I believe Preston Pysh was the first person to note that if you had just invested 98% cash and 2% Bitcoin over the four year cycle between 2020 and 2024, you would have outperformed the S&P 500 and you would have outperformed some. Isn't that crazy? Yeah. So a little really does go a long way. And I don't think it's going to be a question of, oh, do you own bitcoin in a portfolio five years from now? It's going to be how much do you own? Is it 2% or is it more? In my opinion, it's going to be closer to like, is it 10, 20, 50% of your portfolio?
- [24:07]
Joel
All right, you're getting into like, I guess the practical side of things. Like you've made the best case for it from like a very high level. Why our current system is broken. But Natalie, we've got more questions to get to. We are going talk about more of the pragmatic practical steps when it comes to implementing bitcoin into our portfolios. We'll get to that more right after this.
- [24:30]
Matt
Are you 100% sure you're doing all the smartest things for your money? To be completely honest, I wasn't. And that's coming from someone who has committed their life to personal finance for nearly two decades.
- [24:41]
Joel
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- [25:04]
Matt
Yeah. I personally worked with Katie Song. She's an absolute gem. And the best part is that you can work with Katie or one of the expert certified financial planners on her team. I'm always looking out for great resources to recommend to the how to money community. And I can confidently tell you that Domain Money exceeded my expectations. And for a limited time, they're doing free 30 minute strategy sessions. So start today by booking a free strategy session with one of their experts by going to domainmoney.com howtomoney I am a current client of Domain Money. I received a financial plan as part of the compensation for Domain Money's advertising on the podcast. And therefore I have an incentive to promote Domain Money. All right, we're back. We're still talking about bitcoin with Natalie Brunel, who knows a lot about bitcoin. And Natalie, Matt is ready to take the red pill or whatever color pill.
- [25:55]
Joel
It's orange, Joel.
- [25:56]
Matt
It's orange pill. Orange pill. I should have known that. I should have done that. He's so ready. Let's see if he takes it by the end of this episode.
- [26:02]
Joel
Maybe I've secretly been microdosing the orange pill over the past four years. That's right.
- [26:08]
Matt
All right, I'm curious. So you kind of talked about, just briefly there, how you think about when you buy more bitcoin. And it sounds like you have metrics in place to say that are predetermined instead of on a given day, letting your emotions get ahead of you and saying, all right, I think I'm gonna buy some bitcoin now because dropped 8%. Do you have predetermined measures? How are you. Are you dollar cost averaging into bitcoin? How do you think about when and how much bitcoin you, you know, increasing your holdings?
- [26:37]
Natalie Brunel
I buy bitcoin every single day. I dollar cost average daily cow every day. Yeah. I have a DCA set up for daily buys. It's great because, you know, a lot of the platforms. If you do a dca, there are no fees like I buy on river. No fees if you buy daily, weekly, monthly, whatever. So that's great. And I just figure I'm gonna spend $10 on like a coffee if I walk out the door. Why not put $10 or whatever amount you're comfortable with in bitcoin? And a little way. I also just find ways to earn bitcoin in any way I can. So I accept bitcoin from people that I partner with or my sponsors. I use bitcoin reward credit cards so that I earn bitcoin back instead of like airline miles and hotel points that inflate at 40% a year. I don't know if you knew that, but that's a fact.
- [27:27]
Matt
What's the best bitcoin rewards credit card in your opinion?
- [27:30]
Natalie Brunel
So gemini.com Natalie that's a great one. And also fold. They haven't released theirs yet, but they're coming out with one. But I highly recommend Gemini Eyes because theirs is out right now. But I also do target buys, so I watch macro very closely. If you watch my show, you know, I bring on analysts who are both bullish and bearish on every everything that is happening in the economy. And when there's a great amount of signal that hey, we might crash soon, I create some target buy orders online where I say, okay, if bitcoin drops to 70k, I'm going to purchase this amount of bitcoin. And so those are just sitting there. And while the money's sitting there, I'm actually earning interest in bitcoin on my account. So it's like a win win. And maybe that buy order never gets executed, but recently some of my buy orders were because we crashed down to 70 something thousand.
- [28:19]
Matt
How did you deal with the crypto winter as it were? There were extended downturn in bitcoin values for some people.
- [28:28]
Joel
I think Natalie just kept buying.
- [28:29]
Matt
Joel, were you buying every day? Because some people were saying this might be the end. Is this the time that bitcoin gets unproven? The thesis it gets gets unproven. Were you doubting or were you just buying like normal?
- [28:40]
Natalie Brunel
You know, I said on a recent show that I'm so grateful for that crypto winter because I thought at the time that we were going to sail away to 150, 200k. And it is harder to accumulate when the price per coin is that much. Right. But having an almost 80%, I believe I forgot the total it drew down in that bottom of the bear market. That was actually a gift to those of us who have put in the time and the work. Because y I was buying, I thought that it was gonna go down to 10k and I was gonna load up as much as I possibly could with any savings that I had. Yeah, I was buying all the way down the bear market. And it was kind of one of those first times where I realized that I now understand the age old investment advice that you should buy when there's blood in the streets, you should buy when there's all the fear. And I never really understood that and I was always scared of that paradigm. But because I had put in so much work with bitcoin and I was highly convicted and had sort of the, and the years of studying to back that up, I felt comfortable buying the dip as hard as I possibly could. So I'm very grateful for the crypto winter. I don't think we'll ever see prices below 50,000. I'd be shocked if we did. And yet we're still so early going back to that earlier point of at $100,000 per Bitcoin, which we have retreated from, that's a $2 trillion asset class. That's tiny compared to the other asset classes that we're essentially competing with, which are gold at 20, 20 trillion, equities at 100 trillion, real estate at hundreds of trillions, and bonds at hundreds of trillions. And I think that over time, bitcoin will demonetize these other asset classes. And to what extent, I don't know. But I would feel comfortable projecting that in a few decades we're at 50 trillion market cap, if not 100 trillion.
- [30:34]
Joel
All right. By now, Joel, I'm just thinking about Natalie literally buying daily. So she truly is.
- [30:41]
Matt
That's like averaging to the extreme.
- [30:42]
Joel
She really is microdosing.
- [30:43]
Matt
Yeah.
- [30:44]
Joel
On Bitcoin and well, you mentioned that you're buying. You've got these daily orders set up on River. Like what's the difference when it comes to practically owning bitcoin? You've got different brokerages. I've purchased bitcoin over on Robinhood before. But then you've got folks who talk about cold storage wallets. And if you don't own your have your own wallet, it's not really your bitcoin talk to us about because I think that's a barrier.
- [31:07]
Matt
ETFs are another option for people now too.
- [31:08]
Joel
Sure. Yeah. But I. So you've got all these different ways to get into holding actual bitcoin. But I guess I'm curious specifically between buying bitcoin with a brokerage like Robinhood or in your case, river versus folks who've got like a cold storage wallet.
- [31:23]
Natalie Brunel
Well, the great thing is optionality. I really think that the more ways that people can buy and interact with bitcoin, the better. And then people will choose based on their risk tolerance and things like convenience, unfortunately. Right. So recently the rules were changed and the memo from the SEC was changed so that banks can actually start custodying bitcoin. And we're not there yet, but once the really big banks like Chase and Wells Fargo and all of them start offering bitcoin, I'm pretty sure a lot of people coming in will say, well, why would I go to some small like crypto exchange when I could just buy at my bank? Right now the thing that I think people should just be aware of is it is important to do your homework with Bitcoin because it's unlike any other asset in that it is a bearer instrument that is intended to remove all counterparty risk. So you can actually take self custody of your Bitcoin. You can purchase a coal cold storage wallet or create a multi key situation, a multi sig scheme to basically decentralize and diversify your points of failure or risk so that you don't have one key accessing your Bitcoin. Some people are willing to learn about that process which I really encourage. I don't think it's difficult or technical and others are saying no, I don't want to manage my own keys. I don't want to have to worry about that. I'd rather just keep it at a bank or by exposure to Bitcoin, not really the underlying asset through one of the ETFs. I think this is just a really personal choice and I'm a huge believer in the free market. So I'm not going to dictate to you what's right for you. I think that there's sometimes technology barriers and depending on what age you are, that kind of informs what you're willing to do. But let me just tell you, anyone can take self custody if you don't know how to do it. There are great one on one personalized services that walk you through it like the Bitcoin way. The Bitcoin way had an 82 year old customer recently take self custody of their bitcoin. Like literally anyone could do it. So I recommend it just because then you remove all counterparty risk. You're not trusting a bank, you're not trusting an exchange or an institution. The Bitcoin is fully owned by you, it can never be confiscated. And you can create multiple keys and you know you can have a situation with an estate planner that you will your keys to your children, all of that can be set up. It's just what are you willing to do and how much time are you willing to take to to learn about how to do do it.
- [33:44]
Matt
What's your take on other cryptocurrencies? And there have even been alternative cryptocurrency ETFs announced too, coming down the pike saying hey, we're going to have actually an ETF that offers exposure to a range of crypto because you seem so Bitcoin centric specifically and yet there are hundreds of cryptocurrencies that exist. Thousands, thousands. And some of which are based on memes, jokes, some of which seem like don't have any. They don't seem to be equivalent to Bitcoin in any way form or fashion. How do you think about the whole cryptocurrency space? Bitcoin gets lumped in as a cryptocurrency, but it seems also to be really unique.
- [34:23]
Natalie Brunel
Yes, bitcoin is very special. It is unlike all the rest. And I know that for a newcomer, it might sound like, oh, well, you're just pumping your own bags. I went through that whole journey. So first, let me just say if you're new to the space and you're looking at it and you don't really see the difference. Difference. I was right there with you. In 2017, I bought a bunch of the other tokens. I thought, oh, well, these are cheaper and I could pick up a bunch of these for less than a penny. I was looking at it from kind of a gambling mentality and honestly, just totally speculating. And then it took me years to really wrap my head around bitcoin and how beautiful and technically perfectly engineered the consensus mechanism the mining actually is. It is a commodity, a digital commodity that is backed by energy and math that no one can manipulate or hack or compromise. It is really, really special. We've never had anything like this. And bitcoin is the only thing that could serve as a reserve grade asset or as a new base layer for a monetary system. Whereas everything else I really see as an industry of mainly digital equities. I do not want my money to have a CEO. I think it was totally selfless and amazing that Satoshi Nakamoto walked away from bitcoin, never revealing his or her identity and also never extracting a profit or creating some sort of foundation or trying to market his token. He just created it and sort of gave it to the world to organically succeed or fail. And I think that that's incredible. I mean, he could have. Right? I mean, we could. Satoshi could be someone that tries to have a bitcoin company and a face in front of it and tell you like, you know, what, what the plans are in the future. And that's what we see with a lot of the other tokens. We see founders, we see VCs, we've. We see foundations. And I don't. I don't trust people. The point of bitcoin is I don't have to trust any of these people. I don't have to worry about 10 years from now if one of them decides to change the code or propose something different. None of that risk exists in bitcoin, which makes it truly unique. And I just urge people to be careful with crypto because everything falls against bitcoin. I just urge you to take any token that you're Looking at price it in bitcoin and you will see it just crashing to zero. And that's what I think people should pay more attention to because yes, you can get lucky in the short term, but if you do sell it and buy bitcoin, that's what I think.
- [36:50]
Joel
Joel, doesn't this sound like something that Satoshi would actually say herself?
- [36:55]
Matt
Is it you, Natalie?
- [36:56]
Joel
Well, now you talked about it being perfectly designed. Speak to that. I guess the security aspect of bitcoin, you say that it's perfectly secure, but what about. We're reading a little bit more about the advent of quantum computing and just what some of these computers are capable of, I guess. Does that not concern you at all?
- [37:15]
Natalie Brunel
It does not. I've actually looked into this for the last couple of months because all of a sudden there was a new wave. There's always new fud, right? Fear, uncertainty, doubt. And the latest FUD has been about Quantum is going to break Bitco. Well, I just want people to know that first of all, the SHA 256 hashing algorithm, which brings so much security to Bitcoin, there's going to be a lot that's going to be cracked before that. We are nowhere near the level of being able to crack that. And so these AI tools that are coming out and even Microsoft talking about, oh well, we have something that has like this amount of qubits, da da, da, we're going to be able to accomplish this in terms of computing. I just want people to remember that everything will be cracked before Bitcoin, every banking system.
- [37:58]
Joel
Why not go for the little hanging.
- [37:59]
Natalie Brunel
Fruit first, the nuclear codes, all of your, all of your Internet activity. Right. So everyone is incentivized for that not to happen. And do you think that if Microsoft basically came up with an AI tool that would crack all of its systems, that it would sell it like. No. I mean it's kind of a, it's kind of. It goes to what I always say about the free market, which is that the free market's the best referee because it will, it has like self protection mechanisms in place. We don't need government interference and all the laws that exist because the free market will actually protect itself in many ways, just like nature protects itself. And yes, computing is going to increase and maybe there comes a time many years from now where we have to upgrade everything to quantum resistance. But I will tell you that I'm not worried about Bitcoin compared to everything else that will come before it.
- [38:50]
Matt
So going from something that is like future oriented what about something incredibly simplistic? We were talking to someone recently, Matt and I were, who is a big bitcoin investor. And she mentioned, and I'd never heard of this before, $5 wrench attacks. And that is like the most basic threat. I guess the most simple thing is a dark alley and a wrench in your face where a personal attack on somebody who holds a lot of cryptocurrency. How worried are you about that? How prevalent is that? Almost like someone saying, hey, can I borrow your phone? And then transferring money from your Venmo account to their own account account. How big of a problem is potential violence in, in stealing people's bitcoin stashes?
- [39:36]
Natalie Brunel
So yeah, I actually did a few episodes recently about this because we are seeing an increase and people make themselves out to be targets. Right? Some of the most recent instances where we've seen this are people talking very, very loudly about all the crypto that they hold and then all of a sudden someone tries to literally harm them or kidnap them or threaten them with violence. So it is a reality. So I would urge people first to, first of all, if you're investing in this space, no one's tweeting about their Amazon balance. I just think be a little bit more private and be a little bit more careful about what information you're putting out there because so much of us, our identities and our personal info is already online. So don't add to becoming a potential target number two, create ways to have barriers around your bitcoin. What does that mean? Well, don't have single points of failure. Don't have a situation where even if someone were to take your phone that they could immediately send bitcoin. A lot of the platforms right now, if you were to have a hot wallet, actually create vaults where you have to wait a certain amount of days to withdraw more than say $1,000 of Bitcoin. So like my platform, for example, river creates what they call a force field around your account. And if you're trying to transfer all of a sudden, out of nowhere, tens of thousands of dollars dollars, that's going to be a flag to them that hey, this might be something nefarious going on. And we're not going to allow that bitcoin to move until we verify that this is actually Natalie sending it. So, so a lot of the companies are creating, you know, options like that and tools like that. And then again going back to multi sig. Multi key custody. If you take bitcoin into self custody and you create a multi key scenario, there's nothing that the person could do to get your bitcoin. If you have to get another key that's in another state, like they could it but they can't get it, they can't access it. So I just think you need to do your homework in terms of being able to decentralize, distribute any points of risk and then yeah, just be careful what you're posting because there are dangerous, scary people out there that are wanting to take from you and you have to do your best to protect yourself. But it can happen not just for bitcoin, but for a multitude of reasons.
- [41:54]
Joel
Okay, I like how you continue to say do your homework. And so I guess I want to a last note here on I guess practical advice or suggestions like do you have a recommendation on what percentage of individuals investable assets that should be in bitcoin versus the stock market? Especially for a lot of folks out there who are newer to it and we typically are like, you know, we understand that there's a case for it, but be super careful in how much you allot based on what you're saying. I guess I wouldn't be surprised for you to say like you said A second ago, 98% of your overall portfolio could be cash and then like so basically 100% of your actual investable assets are dumped in bitcoin. But I guess I'm curious to hear your thoughts on somebody who is new to bitcoin. What you would recommend from a percentage standpoint.
- [42:44]
Matt
Stock market. Do you still invest in the stock market?
- [42:46]
Natalie Brunel
I think that everyone should be invested in bitcoin. I think it's actually a lot easier in terms of an investment strategy because you just set it and forget it and just keep accumulating. I, I think that over time there will be more tools like you could borrow against your bitcoin. People are going to be taking out, you know, to buy a house. They're going to be using bitcoin as collateral. Like there's going to be a future of services and products that we haven't even envisioned yet, but definitely get off zero. So I think that if you're very, very new and the volatility makes you nervous, or you need to make a really big purchase in the next couple of years, then keep your allocation very small, you know, 1 to 2%, 5%. But as you learn, believe me, your conviction starts to grow. And so yeah, I mean I ended up, I was actually upset that I even still had for a time being gold in my portfolio or some of these stocks because Bitcoin so aggressively outperformed. And you know, if I have this conviction, but I'm not really putting my money where my mouth is, then do I have conviction? So I eventually ended up just shifting a lot of my positions to just being very bitcoin focused in my retirement account. I do own the Bitcoin ecosystem ETFs because that's just, it's just easy to hold in a retirement portfolio as opposed to spot Bitcoin. And then I hold spot bitcoin outside of my retirement accounts in self custody and I'm like a full on bitcoin maxi and I'm super happy about it.
- [44:08]
Matt
That's awesome. All right, we've got a few more questions to get to with you, Natalie, including, well, if government is part of the problem and part of the reason that we need bitcoin, bitcoin, what happens when they enter into bitcoin ownership? We'll talk about that and more right after this. Are you 100% sure you're doing all the smartest things for your money? To be completely honest, I wasn't. And that's coming from someone who has committed their life to personal finance for nearly two decades.
- [44:39]
Joel
That's right. So you looked into a company called Domain Money. Their team of expert certified financial planners get to know what matters the most to you. They analyze every aspect of your financial life. They build you a personalized plan with clear steps to reach each one of your goals. They make it incredibly easy to make money. It's like having your own personal cfo, therapist and money coach all in one.
- [45:02]
Matt
Yeah. I personally worked with Katie Song. She's an absolute gem. And the best part is that you can work with Katie or one of the expert certified financial planners on her team. I'm always looking out for great resources to recommend to the how to Money community. And I can confidently tell you that Domain Money exceeded my expectations. And for a limited time, they're doing free 30 minute strategy sessions. So start today by booking a free strategy session with one of their experts by going to domainmoney.com howtomoney I'm a current client of Domain Money. I received a financial plan as part of the compensation for Domain Money's advertising on the podcast. And therefore I have an incentive to promote Domain Money.
- [45:42]
Joel
We're back from the break again, speaking with Natalie Brunel. And Natalie, as Joel alluded to before the break, let's talk about government policy. Because Donald Trump, he seems to be the first president to actually embrace crypto. At least I don't know, at least publicly, he announced the creation of the strategic, not just bitcoin reserve, but also crypto reserve. So I'm kind of curious as to if you think that he's wasting his time and effort with some of the other cryptos.
- [46:08]
Matt
We don't need xrp.
- [46:10]
Joel
But how will that impact Bitcoin specifically? Specifically than I guess just crypto space as a whole?
- [46:16]
Natalie Brunel
Well, let me just clarify something first. We have a strategic bitcoin reserve, and that bitcoin is pledged not to be sold. And I think we're going to start adding to it in the next year or so. Whereas the digital assets stockpile does have crypto that was seized through civil forfeiture, but that can be sold. So what the government is saying is don't sell your bitcoin, but maybe sell the other digital assets down the road. So I wouldn't be surprised if the government actually sold a lot of those other digital assets that are in the stockpile. And we're going to definitely be focusing on a strategic bitcoin reserve. A lot of people maybe don't realize, but we have strategic reserves for other assets and commodities. We have a strategic oil reserve. People might be familiar with that. We have a strategic cheese reserve. We have a strategic, obviously gold. But I think what we need is a strategic bitcoin reserve because it is important for the government to recognize this technology as one that can help us address some of our many financial issues. Issues. We are a nation $36 trillion in debt. We need to keep up the demand for the U.S. treasuries, which we talked about earlier, which is why they're so in favor of stablecoins and anything that will extend dollar dominance. But what will actually help us grow or get out of debt? We need an asset that appreciates rapidly, that is here to stay, which we know bitcoin is, and that is finite and cannot be hacked or manipulated or inflated. So that's bitcoin. I mean, I really do believe. I had Senator Cynthia Lummis on my show. I'm releasing it this week, and she's talked about how we could cut our debt in half if we pass the Bitcoin act and start strategically accumulating Bitcoin, because bitcoin is growing faster than any other asset, and it will allow us to outpace this debt that we keep accumulating. And that's what I think we need in order to be able to grow and maybe focus on. On sort of revitalizing the American dream that seems lost. The thing that brought my parents Here this nation was so strong and prosperous because of its economic power. It was the creditor nation. It made so many amazing things that it exported around the world. And now we're just highly financialized and all we export is our dollars and basically we just go into debt. And so I think that there's a better America ahead. I, I think the bitcoin age is ahead of us. And I think that if America embraces it first, we will be at a strategic advantage. I'm so excited to see that this administration is embracing Bitcoin. Even if not all the politicians fully understand bitcoin yet, which they don't. But I think this is a starting point. I think we will be a leader and we will set a standard for the rest of the world.
- [49:01]
Matt
Looking to the future, I don't want to hear price predictions or anything like that. I can get those on CNBC or really any financial website so and so predicts bitcoin to a million in a year and a half or something like that. That happens all the time. But when it comes to the way bitcoin interacts with our everyday lives, even people who haven't or have been really slow adopters of bitcoin, what's that going to look like? I think the thing I'm particularly curious about, you talk about bitcoin and that's one of the existential questions. Is it an investable asset asset or is it a currency? And you think it's an asset that will transition into a currency. What's that look like? How does that shake out? What's the future for bitcoin?
- [49:39]
Natalie Brunel
I think it's going to take a long time. My goal is to just help people learn about Bitcoin so that they start saving in it. Because I do think it's the most powerful and empowering savings technology. So I think that people will increasingly save in Bitcoin. There are going to be more and more tools and services to allow you to do that. I think that companies will come out with killer apps that make interacting with bitcoin on a day to day basis a little bit easier and that will facilitate more of the medium of exchange aspect to Bitcoin. So people do start spending it more for their business activities. But I just see a long time horizon where we slowly shift away from underpinning the entire system with sovereign debt and one nation's currency. And we start underpinning it with things that no one can control. Control. And a lot of people would think that we're retransitioning back to gold, which I can understand. If you don't understand bitcoin, then you might think gold is the next best solution. I would be in that camp if bitcoin didn't exist. But because bitcoin exists, I think it's going to eventually move into a system underpinned by Bitcoin as the capital, as the pristine collateral, as the savings technology, and as the way eventually people do spend their money.
- [50:54]
Joel
Very cool. Natalie Brunel making a great case for Bitcoin. And Natalie, you mentioned your book that comes out later this year, Bitcoin for Everyone. Do you have a scheduled publisher release date for that?
- [51:05]
Natalie Brunel
I'm so excited. Yes. You can already pre order it on Amazon, Barnes and Noble, all the bookstores. It's coming out in October or November. And I'm so excited because it is the book that I wish that I had starting my journey. It explains the problem that currently exists and why bitcoin is, in my opinion, the best solution and why everyone should buy at least a little bit of bitcoin.
- [51:26]
Joel
Nice.
- [51:26]
Matt
Awesome. We look forward to checking it out when it comes out. Natalie, thank you so much for joining us today on the show. We really appreciate it.
- [51:32]
Natalie Brunel
Thank you.
- [51:33]
Joel
Okay, Joel, I feel like after that conversation, did you just get orange pilled? Because, because we always hit stop on the recording with the guest from the interview and you know, we have a few words, thank them for coming on, and then you and I end up talking for like 15 minutes and we probably just talked for about 30 minutes and you just got pretty fired up before I resumed the recording here for to come back and present some takeaways. But what do you want to share with us?
- [51:57]
Matt
Okay, so my big takeaway is that everyone should read more about economics so they should understand our economic system, how it works and really the history of economics too. And like, sorry, big homework assignment, people, but I've just finished reading two incredible books by Thomas Sowell, Basic Economics and Applied Economics. And I think why I'm recommending that is because I feel like this conversation with Natalie, a whole lot of the why behind business Bitcoin comes down to the flaws in our current economic system and the way the people in charge of the levers of power have handled our system of money.
- [52:35]
Joel
And Joel, everyone's putting you in their, their box of conspiracy theorists as you say this. It's not just, just letting you know.
- [52:41]
Matt
It'S truly not conspiracy. It's just the literal fact. I mean, we've, we've noticed it with just even artificially low interest rates what happens when the government does, does print more money and the inflation that causes and the pain that causes typically on the even lower end of the socioeconomic spectrum. Do I think bitcoin is the full on solution? I don't know. I am down to own some bitcoin. I am probably down to own more. I feel like Natalie explained it really well. But I do think my big takeaway is just that to understand bitcoin, even to feel like this conversation is accessible, I think people need even more of a fundamental mental economic education and that's, that's sorely lacking in this country. So yeah, Thomas Sowell read Thomas Sowell.
- [53:23]
Joel
That'll help you out a lot. So my big takeaway will be less onerous for those who are like, yeah, dude, I'm not gonna do that. Which is, yeah, they're like, like they.
- [53:33]
Matt
See the thickness of the book I just read. They're like, that's ridiculous.
- [53:35]
Joel
No, thank you, I'm not reading it. I've got a life to live. So on that note, my big takeaway is going to be when I asked her about what percentage of your overall portfolio should be dedicated to Bitcoin and should, she said, it's just good to get off zero. And I interpreted that as it's better to have some than to have none. And I think even if you're thinking, well, dude, I'm not going to completely understand how the world works, how the Fed's manipulating money, fiat currency, or nudging the economy in certain directions. Well, you also don't have to completely understand that to diversify a little bit to hedge your bets. And there's a part of me that feels that that's what the US government is doing. The ability to set up, to set up a strategic reserve points to the fact that you don't really know what the future holds. And do you want to double down on a system that you're not totally sure of, or do you want to perhaps quietly start having a strategic reserve when it comes to something like bitcoin? I think it's smart not only for countries, but obviously for individuals as well. I don't know if that's going to change how much I'm currently holding. But for those out there who have had their interest piqued, I think there are some very easy ways, ways to.
- [54:40]
Matt
Check it out if we wanted to. And I'm not changing a rule of thumb yet, but I think we've always said something like up to 5% of your portfolio, but maybe kind of what you're hinting at is it should probably be something up to 5% of your portfolio. But up until now it's been like you don't need any, but if you want to, you can. And so maybe it's like, I don't know, maybe you should have a little bit.
- [54:58]
Joel
Have something.
- [54:59]
Matt
Yeah.
- [54:59]
Joel
And I think it'll get you thinking about it. And I think that that can be the beginning of a helpful process of learning of what it's all about.
- [55:06]
Matt
No doubt. All right.
- [55:07]
Joel
We got long winded before when we weren't recording, so we'll try to save, save all of our listeners from that. But our beer that you and I enjoyed today was a Stash ipa. Looks like this is Independence Brewing Company out of Austin. Is that right?
- [55:20]
Matt
Texas? Yeah.
- [55:21]
Joel
This is one of the beers that you picked up while you were there in Austin for the iHeart Podcast Awards. What were your thoughts on this beer?
- [55:28]
Matt
I liked it. It was a little dank, a little grapefruit, mildly bitter. So sometimes the hyper west coast style IPAs can just be like too bitter, too hard for me to endure. This one was like. And maybe it's because it's in the middle of the country. It was like it was mid bitter, which I can appreciate. So I like this one.
- [55:44]
Joel
Yep. Had the dank going on, but with like a little bit of fruit. Like not a specific fruit that they, you know, forced into it, but just tasted great. Nice and bright, juicy. Glad that you and I got to enjoy it and share it today on the episode. That's going to be it for this episode. You can find show notes up on the website@howtomoney.com and we'll make sure to link to the pre order to Natalie's book. And we didn't even know that she's coming out with a book later this year, so I'm glad we got to catch her early. So, buddy, until next time.
- [56:08]
Matt
Best friends out.
- [56:09]
Joel
Best friends out. Joel, we've all got different tasks in life that we enjoy doing. For me, that would be closing out the books on our family's personal finances every month.
- [56:32]
Matt
Nerd.
- [56:33]
Joel
But then there are some chores that are more of a pain, and for me, that would be grocery shopping, something I try and avoid if at all possible.
- [56:41]
Matt
Well, that's where Walmart steps in because their subscriptions help you to stay stocked on the items you use most, whether that's milk and eggs or kitty litter and cleaning supplies. Find everything you need for your home at Walmart, in stores, online and in the app, even if you're a money whiz, it can still be helpful to have some professional backup and advice. I talk about personal finance every day of my life and I was still able to get massive value chatting with a CFP from Domain Money. They analyze every aspect of your financial life and help you build a personalized plan with clear steps to reach each one of your goals.
- [57:19]
Joel
That's right, and for a limited time they're doing free 30 minute strategy sessions. So start today by booking a free strategy session with one of their experts by going to domainmoney.com how to money.
- [57:31]
Matt
I am a current client of Domain Money. I received a financial plan as part of the compensation for Domain Money's advertising on the podcast and therefore I have an incentive to promote Domain Money in.
- [57:42]
Natalie Brunel
A world of economic uncertainty and workplace transformation. Learn to lead by example from visionary C Suite executives like Shannon Schuyler of PwC and Will Pearson of iHeartMedia. The good teacher explains the great teacher. Teacher inspires. Don't always leave your team to do the work that's been the most important part of how to lead by example. Listen to Leading by Example executives making an impact on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts.