The Pomp Podcast - #456: Eddie van der Walt on Gold and Bitcoin

Episode Date: December 21, 2020

Eddie van der Walt is a financial journalist at Bloomberg based in London, with a background in covering commodity markets, an awareness of currencies and expertise in precious metals trading. He previously was a Bitcoin skeptic, but recently converted to a Bitcoin believer. In this conversation, we discuss the macroeconomy, gold, bitcoin, market structure, what changed his mind about the digital currency, and a 2021 outlook. ======================= Choice is a new self-directed IRA product that I'm really excited about. If you are listening to this, you are likely part of the 7.1 million bitcoin owners who have retirement accounts with dollars in them, but not bitcoin. I was in that situation too. Now you can actually buy real Bitcoin in your retirement account. I'm talking about owning your private keys and using tax-advantaged dollars to do it too. Absolute game changer. https://www.retirewithchoice.com/pomp ======================= Want to sell your wonderful internet business? Tiny partners with founders to give them quick, straightforward exits that protect their team and culture. We’ll make an offer within a week, close the deal within a month, and keep your business operating for the long term. Get in touch at tinycapital.com, and we’ll let you know within a couple of days. https://www.tinycapital.com/

What's up, everyone? This is Anthony Pompliano. Most of you know me as Pomp. You're listening to the Pomp Podcast, simply the best podcast out there. Let's kick this thing off. Eddie VanderWalt is a financial journalist at Bloomberg based in London with a background in covering commodity markets, an awareness of currencies, and expertise in precious metals trading. He previously was a Bitcoin skeptic, but recently converted to a Bitcoin believer. In this conversation, we discussed the macro economy, gold, Bitcoin, market structure, what changed his mind about the digital currency, and a 2021 outlook. I really enjoyed this conversation with Ed, and I hope you do as well. Before we get into this episode, though, I want to quickly talk about our sponsors.

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term. You can get in touch at tinycapital.com and they'll let you know within a couple of days their level of interest. The folks at Tiny, they've been founders. They are founders. They know the things you're dealing with. They speak your language and they understand what you would be concerned about when you do a transaction. They've designed it so that it's painless and also it's a win-win for you and them. I can't recommend them enough. Go to tinycapital.com. Again, tinycapital.com if you are looking to sell your wonderful internet business. All right, let's get into this episode with Eddie. I hope you guys enjoy this one. Anthony Pompliano is a partner at Morgan Creek Digital. All opinions expressed by Pomp or his

guests on this podcast are solely their opinions and do not reflect the opinions of Morgan Creek Digital or Morgan Creek Capital Management. You should not treat any opinion expressed by Pomp as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his opinion this podcast is for informational purposes only all right guys bang bang i've got ed here with me thank you so much for doing this sir hey man thank you for having me on i'm so excited this is uh this thing is an institution on the on the uh on twitter everybody knows about these podcasts people were saying you know they can't believe you that you're having me on i was looking at your guests earlier you've got such high quality

of guests that you get on here i'm hoping i don't lower the conversation too much you're doing just fine. Let's jump right into your background. For those that don't know, kind of where did you grow up? What did you do before you got to Bloomberg? So, man, I grew up in South Africa. You can hear by the accent. I grew up a stone's throw away from the South African gold fields in Central South Africa. And I came, I mean, I kind of took the scenic route into financial reporting. I was a photographer, so quite literally the scenic route. That's what I trained as. But I very quickly learned that i was into news photography and what i wanted to do was financial news because financial news in a sense is the realist news that there is right because i i know a lot of people

don't get that um and they will roll their eyes when i say that but when you talk about finance when you talk about markets at the bottom of all of it is a number and that number is real right sometimes we get the number right and sometimes we get the number wrong and but there is there is a there is a mathematical undertone to the whole of markets and and that's what attracted me to it so that's how i sort of stumbled my way um into into finance financial journalism absolutely and when you first started what were you covering were you covering uh kind of all commodities markets how did you think about kind of your focus at the beginning yeah so let me talk a little bit about the creation to that so um i was a i was a reporter through 2000 i was i was covering i was

covering uh or rather i was a photographer covering um in fact i was covering celebrities and i was covering uh i was doing paparazzi work at that time right i was chasing kate moss on a moped um and then you know but i was trying i was all the while trying to make this progression into financial journalism and basically what happened is pre-2008 this is something that people forget pre-2008 around about 2006 we had this massive run up in oil prices right well, prices went to $100, $120 a barrel, something like that. And you could see the world economy being squeezed by that. Now, everybody talks about 2008, and we talk about the collapse of the housing market and all of those bubbles in the US. And I think those things

were important. But before that, the thing that triggered the collapse was a squeeze in consumer demand as a result of pressure on world prices. So that got me into commodities markets. So I was really interested in this space. And I got really lucky. Just after 2008, I started writing a blog on gold. And I got an invite onto, or I joined a company called the Bullion Desk. And they covered purely gold and you know my south african background helped a little bit on that and you know i'm a little bit um anti-establishment anyway right so so interested in this sort of in you know in in the underpinnings of the gold market um and yeah that got me that got me my break into there and then from there on out to bloomberg where i am now um and i covered i've

covered gold there now for about 12 years um but i also cover broader financial markets Got it. And so you recently had this kind of mental shift, I'll call it, you may describe it some other way, where I don't think necessarily you were anti Bitcoin, but you just weren't as big of a believer in Bitcoin and kind of the future prospects of it. But that sounds like that shifted a little bit. So kind of talk us through like, well, how did you think about Bitcoin previously? And then what drove this changing of your mind? Yeah. So I think it was my roots. I started hearing about Bitcoin about 2012, because we had the first run up. Bitcoin was just approaching the gold price. And everybody was talking, is Bitcoin going to overtake gold? So that sort of brought it onto the front pages of financial newspapers for the first time, which brought it into my attention. And then I had a very close Irish friend who was working in the office. And the guy was talking about, you know, putting all of his pension money into Bitcoin. And I was a skeptic. I mean,

look, but at that stage, if you weren't a little bit skeptical, I think you were irresponsible, because it was an asset class that was vibrant, interesting. Nobody knew what it was. But you know, we've seen some interesting, you know, the South Sea bubble and all sorts of interesting schemes in the past. So at that stage, you are a little bit cautious about it. So I remember if people asked me at that stage, I said, look, if I was to play Bitcoin, the way that I would do it is I put money that I'm not afraid to lose in it. And then when I double my money, I'll take it out, I'll take half of it out. So what's staying in there is free capital that I can watch that accumulate with zero risk to myself um and you know as it were this friend of mine um who had

his money in bitcoin he put it all in mount gox which went down and he lost it all so people forget that bitcoin bitcoin as an entity has done spectacularly well over the last 12 years but for individual investors there were people that lost everything so it was right to be cautious at the beginning um but over time as bitcoin progresses you know so i'm sitting here i 2012 we've got a run-up we get a collapse i'm saying i was fine it's all over this thing's going and going away right it's it's dead now except it's not right we get up the the run-up 2016 and the what was the second halving um and we get another we get another run up um in in in prices through 2016 through 2017 and then it crashes again but now this time it's gone a little bit more mainstream

i mean at this point my nephew's asking me about it so it's gone a little bit more mainstream people are aware of it but again if the bubble crashes and and even early 2018 probably 2019 i'm i'm writing pieces saying, look, there is a risk of Bitcoin literally going to zero. And for me, the reason is that it's not about the model of Bitcoin, right? Bitcoin has proven that it is anti-fragile. It has proven that if society collapses today, 20 years from now, a thousand years from now, archaeologists will dig up hard drives that will contain blockchains of of some description right i think i think it is anti-fragile enough to to to really be sustainable and i thought that even then what i didn't know what i wasn't sure of and what what

made it a less viable mainstream investment for me was the fact that it was what hadn't been proven is the demand side of it this is the supply side was beautifully designed the demand side usually when you see a bubble and you see a collapse in an asset that is that derives its value purely from a network effect you usually see a complete collapse in the underlying right it goes to zero. Now, when I saw that happen the first time, I thought, okay, that's fine. The second time, okay, that's fine. When something that you do not expect happens three times in a row, you've got to start adjusting your assumptions. And that's where I am now, because now what has been proven to me is that the demand side for Bitcoin is as,

maybe not as stable as the supply side. The supply side is durable. The demand side is quite durable. It has been for 12 years. It's proven that it can sustain several cycles. And I think that's why many financial analysts are addressing their view. Yeah. In terms of Bitcoin today, obviously, a lot of people are comparing it to gold, right? And kind of this digital gold narrative. I think it's really interesting that you had this framework where it was like, look, the supply side is programmatic, it's transparent, it's kind of beautifully designed, as you described. The demand side was kind of the question. And so if we zoom out a little bit, we're obviously in a pandemic-induced kind of economic crisis, if you will. And there's been

government intervention. There's been all sorts of interest rate manipulation and quantitative easing. Do you think that the confidence that you have in the demand is driven by that macro environment really pushing people to like inflation hedge assets? Or do you think it's something else that has kind of opened your eyes to where that demand is and will be in the future? Yeah, I think we're getting into that territory of sort of gold versus Bitcoin. And I think it is a very interesting question, right? Because Bitcoin has been set up to model gold on the supply side and at the same time has been is a reaction to the fears about fiat currency but there are big big differences between gold and bitcoin right um the first the first that i

would highlight is is that there are differences in how bitcoin acts at the moment to how gold act so let's say let's say i am a i'm a either a you know i'm a professional investor or i'm investing my old money right i've got a portfolio of assets that i expect to act a certain way and if i have gold in there now it does a certain job it has a certain volatility it has a certain correlation to other assets uh it you know it it acts as a risk on a rather risk off play if i yank out the gold and i put in bitcoin bitcoin does a completely different job bitcoin is much more volatile it is much its correlation to other assets is a lot different and it's a lot more risk on than gold is so so just yanking out one and putting in the other one i even though the

the debate is set up that way i don't think that's how most people i don't i there are certainly some people, we've both spoken to people on Twitter that have said this, right? I've sold all my gold and I've gone into Bitcoin. And I think that's fair enough. And this is probably people that owned quite substantial part of their holdings was in gold. So they had a certain expectation for it. And if you are awaiting the collapse of the dollar system, then that is something that makes sense. But if you are a pension fund manager, then that's not how you look at your assets. And I think there are other things that they have in common. There are other commonalities between gold and Bitcoin. Bitcoin, there's one thing people forget about

gold, is that the supply side is almost perfectly inelastic, right? If there's a spike in demand for gold, a little bit comes from the recycling market. But for the most part, the above ground supply stays stable. And what is out there, that doesn't change, which makes it quite a unique asset. But that's something that Bitcoin does as well. Its supply stays stable through spikes. And that's why you see these big movements in price. The other two things I'd like to highlight that they have in common is that they quite

poor are the bitcoin the bitcoin guys are gonna hate me for this but they are quite they they're not great units of exchange right at this moment people don't tend to use them for transactions we saw in 2017 that the network buckled under it and the same for gold you don't you don't spend your gold right you use it as a store of wealth the other main thing that they have in common is that both of them are veblen goods right so a normal good if the price of the the underlying goes up people buy less of it yeah a veblen good if the price of the underlying goes up people get excited and they buy more right we see this in 2017 with bitcoin we see it in 2020 winning with gold price goes up being on the front page and the retail investor is suddenly saying

hey look at gold gold's going up and they start buying it so so you know um i think that's those are the things that they have in common so you know that makes it that makes it very interesting but when we start talking about this idea of a store of wealth which is the big selling point that i that i hear being pushed for bitcoin at the moment what is this what is the store of wealth store of wealth is something that you buy with the expectation that it will keep its value in real terms right before inflate or after inflation it buys the same amount as it did yesterday nobody's making that argument about bitcoin right people are saying bitcoin is going up now something that's going up in value it's not a bad place to put your wealth it's not a bad

place to store your wealth but that's not what we understand with a store of wealth right a store of wealth is something slightly different you know this i'm not telling you anything new but i just i kind of want to explain where my thought process comes from right and and and how how i see them So where – not in gold right in gold gold's not a great store of wealth either because it because it fluctuates uh really treasury you know inflation-adjusted treasuries is kind of the only thing out there or maybe oil oil is a better you know buy a barrel of oil and store it for five years you will have a much better read on inflation generally but i think

i think the way that i think bitcoin is is um bitcoin's slightly different right now, Bitcoin is a speculative play on the hope that it will someday be gold, on the hope that it will someday be. And I think that's valid. I think it's an important. But if you're a fund manager, or if you're buying shares for your own account or whatever, right, and you spot this new up and coming company, right? And you think this, I mean, they you know what's their market you know the annual turnover now is uh 100 million or something and you're saying someday this company's going to kill apple right where does that fit in your portfolio do you sell all of your apple shares and buy this company you don't do you what you

do is you go you go sell some of these other venture cap speculative assets and that's where it sits and that's what i'm saying i'm saying that in a well-designed portfolio that uh you know with with various caveats if you are the person that that has a long enough time frame blah blah blah both gold and bitcoin has a space in your portfolio and they split in very different places they do very different things you need to understand what both of them do but right now i didn't used to think so six months ago a year ago i did not think that bitcoin was a viable asset for a private investor approaching his pension today, I think 1%, 2%, 3%. Why not? I'll tell you what. I used to think that Bitcoin was like a lottery ticket. I could throw money

in there and lose it all, and the upside's potentially spectacular. Now, if I hear somebody's buying lottery tickets i'd be like what are you doing put your money in bitcoin instead because because if you're gonna you know that speculative money that money that you're hoping is gonna pay off massive someday that should really be in crypto yeah i love the framework that you use let's talk about um kind of the macro environment moving into 2021 and kind of the outlook for both gold and bitcoin how do you view maybe let's say the federal reserve and other central banks around the world? Are they going to keep printing money and injecting liquidity? And how did these inflation hedge assets work? Oh, man, like they've got a choice, right? I mean, they've not got a

choice. There is no way that the central banks are able to let the companies fail that are ready to fail at this point, right? There's no way that the central banks could just say, look, we so i don't think there's any question about it uh the the eurozone it feels trapped um it feels trapped in negative rates i don't see where they're coming out um but you know at the same time have you looked at a long-term chart of uh 30-year treasury yields right But the progression since the 1970s, yields have been falling and falling and falling. Ray Dalio is another guy that's big on gold, big on Bitcoin these days. Big on Bitcoin, but I mean, he's changed his mind.

And I think the reason is that they are realizing that yields can only go so low, right? and quantitative easing is a trap that people can't get out of it's a really it's it's a hard one i so the macro environment is difficult i do think that going into 2021 you know we're at the bottom of an economic cycle we must be because you can't you can't imagine a bigger economic contraction than the one we had and what do you what's historically what's been the best thing mainstream asset to buy at the bottom of economic cycle is stocks there's always been stocks right you buy stocks at the bottom of the cycle you wait until we get late cycle and then you get into your bonds i mean if you are somebody with perfect foresight and blah blah um but that's

difficult um so i think i think in the near term macro cycle yeah i think we spend we spend higher from here on out but i but i do think the central banks have put them they've given themselves an interesting trap um now inflation which you brought up whether the whether the market-based measures and the um and the official cpi you know inflation readings whether those are correct that's an that's an entirely different different question right i mean things like house prices are not included in there and i don't know about you but my accommodation is my biggest monthly expense so leaving that out of the equation is it makes no sense um but we're at an interesting point there's this what's the old saying you know um buy when there's blood in the streets

it's a bit crude it's a bit crude it feels a bit crude today especially but But I do think that right now, this is the moment that the future Ray Dalios, the future hedge fund superstars, the future billionaires, by that point, probably trillionaires, that generation is being created today. The guys who make the good calls today, they are the ones that we're going to be talking about 10 years and 20 years from now. I couldn't agree more. It's really funny. I just went and looked at a friend of mine or somebody I know on Twitter, Charlie Bilello, I think is how you pronounce his name, posted this chart. And it was basically the 10-year returns of different asset classes. You mentioned about stocks. The US small cap stocks basically returned. It was like 10.9% compounded annually for the last decade. The US large caps compounded at about 13%. And then the NASDAQ 100 compounded at 20%, right? For a whole decade. So all three of those sound pretty good.

But then when you look at Bitcoin, Bitcoin was compounding at over 200% annually for a decade. And so I think that it's really interesting when you start to kind of compare, you know, equity-like returns, but basically on steroids with something like gold, which only compounded at about 2.2% annually for a decade, right? And so it's kind of this idea of how much of past performance will we see in future performance, right?

And how indicative is that versus kind of the belief that, hey, the quote-unquote returns in US dollar value have already been captured by those that were early. And basically from here on out, you know, it just goes flat. I tend to think that's not going to happen, but definitely an argument that some people are making. Yeah. And I think that's why the wider investment community is picking up on this. We at Bloomberg, we are definitely covering Bitcoin a lot more because our readership

want it, right? The investment funds, they are starting to realize that it's never going to go away. They're looking at these returns. They are salivating because they can't have owning bonds at this stage you're saying yeah i'm getting zero yield how where am i expecting those yields to fall too so i'm looking for alternative assets um and they are looking to gold and they are looking to bitcoin and they are looking to venture cap and spax and all sorts of you know but i can ask you a question sure you know the debate the debate about uh the bitcoin versus blockchain right So, should I be in blockchain companies as opposed to in Bitcoin? Where do you stand on that?

Do you think that Bitcoin is the ultimate use case? Yeah, well, so I think there's a little bit of a nuance to this conversation. So, there's Bitcoin. There's what I'll call blockchain or protocol-based product services. And then there's the infrastructure companies, right? And so where I've chosen to invest capital and raised money into funds and went and deployed, you know, over $100 million is this idea of putting a very material percentage, double digit percentage into Bitcoin specifically, and then taking the balance of those funds and investing in the equity of the infrastructure companies, right? So you can think of it as investing in exchanges like Coinbase or kind of financial product companies like BlockFi, kind of payment processors like Zap with their product Strike, those types of businesses, right? But again, the idea here is you want to basically get exposure to an entire ecosystem.

And so having direct exposure to Bitcoin, the way that I think of Bitcoin, and basically we talked about it too, we've got public pensions that are LPs in our fund and kind of very conservative type investors, was look, yes, you can go speculate on the price of an asset, a currency like Bitcoin, but that would be like speculating on the price of the US dollar, the euro, the yen, whatever. But the way I view it is those investors are actually getting exposure to Bitcoin, the payment system. And if you think of the annualized or annual transaction volume on the Bitcoin network, it was more than PayPal, Venmo, or Apple Pay did last year. So last year, Bitcoin was used more from a transaction volume standpoint than those three products. Now, if I want to own PayPal, the payment system, I go buy PayPal stock. If I want to own Amazon AWS, I go buy Amazon stock or Facebook social graph, I go buy Facebook stock. But if I want to own the Bitcoin network, there's no stock to go buy. There's no centralized kind of organization.

And so instead, what I've got to do is I got to buy Bitcoin, the asset, because as demand increases, the price of that individual asset will rise. So there's some causation there. And so I think that becomes a really interesting kind of new framework when you get into these like decentralized products or decentralized organizations. And so Bitcoin by far is the winner. No one's going to compete with Bitcoin, I think, when it comes to kind of decentralized and separation of state and money. And I think that's going to be the foregone conclusion or winner there. Now, there's taking those same principles of decentralization. I think you're going to see decentralization across the spectrum.

what scares me a little bit in kind of, you know, DeFi and some of this other stuff is there's a lot of financial engineering going on. And so it remains to be seen how sustainable are the current iterations, some of them will succeed, some of them will fall to the wayside, just like you saw, you know, many other market cycles. So it'll be interesting to kind of see how this plays out. But I think my highest conviction, you know, idea is really Bitcoin. And so I've chosen to put, you know majority of my net worth there and and also invest a lot on behalf of our investors as well i'll tell you this um the the idea but we didn't really talk about the network effect the network effect i mean that is effectively what i was talking about the the the demand side of

bitcoin that is to me is the it's the network effect and uh there's this saying in the bitcoin community that it happens slowly and then all at once and it it was a bit like that for me because my my initial turning point is when i went to a i was invited to speak at a conference on bitcoin in malta um malta delta right spoken malta delta and i went out there and the i met cz at binance and i met uh i met nick zarbo but i didn't meet him there i met him somewhere else anyway the point is i sat i sat in that room with the people and i was like the amount of human ingenuity that is being poured into this it's clearly clearly these people are staking their lives on it right their careers their livelihoods it's a high conviction trade for these people and i was like

clearly they are seeing something that i am not dismissing it at this stage feels foolish and then shortly after that we had the collapse in prices i think um i might have got the timeline slightly wrong there but you know so if i somebody i know what the internet's like and somebody's going to check me up like oh malta was before or after the crash or something you know it's like but but but um the the and i think that's where i am now i think i think that i bitcoin if you allocate to this space bitcoin is by far the front runner it's the strongest it's got the network getting it being overtaken is going to be really hard so i think for most people whatever they decide to allocate the majority should be bitcoin and the rest should be split

between whether it's your front runner coins or whether it is you know with a massive caveat that This is not financial advice, and you've got to first decide whether Bitcoin is right for you, for your portfolio, what your – how much money you have and when you're retiring and all of those things. But yeah, no, I think we see eye to eye. So this has been really useful to me. Absolutely. Let's look at kind of 2021 and beyond. What do you think happens to gold, and what do you think happens to Bitcoin? Gold is – gold is going to have a tough time, I feel like.

You think so? I think so. I think, I think gold had such a fantastic run up. Um, and you know, you could see it squeeze. Uh, I started turning cause I'm not, um, I, you know, I, I turned bullish. The run up in gold probably might have been my best financial call ever. I'm so, so happy with what happened there. I called gold long. I was short gold, short gold going, going into late 20, 2018. And then there There was this bit of a short squeeze on COMIX, and I saw this is happening. And then people thought you had the inversion of the yield curve, and you had, then eventually,

the coronavirus, which was a trigger that nobody was expecting. But I kept my long call all the way through 2000, and at that point, I started becoming a bit more skeptical. I'll tell you why. There are more forces at play in the gold market than purely the whole fiat debate. There are other forces at play, and one of those forces is that idea that we were talking about earlier, the Veblen good. When it goes up, it goes up a lot because people get excited, but people bought into

ETFs. ETFs built up 3,500 tons of gold. as much as a year's worth of mine supply it's significantly higher than was the case post 2008 2011 and 11 and if you look at etfs so most financial assets right when you see a drawdown in them you see you see right it's it's like a they call it a random walk right you see one up day one massive down day two up days massive down day whatever um that's not true ETFs. ETFs, you get directional flow in ETFs. If one day was up, statistically, the next day is more likely to be an up day than a down day. So that makes gold a trending asset. And that flow

has turned lower. We see the 50-day moving average on the price turning lower. We see the 100-day turning lower. I don't know. I'm not winning many friends either in the Bitcoin market or in the gold market today, but I feel like gold's going to test the low 1700s and maybe 15. Yeah. I tend to think that gold is not going to have as great of a run as Bitcoin, obviously, but I also tend to think that people are underestimating this idea that an entire generation of people are basically dropping gold and going to buy Bitcoin. Whether they should or not is up for debate, but they're going to do it. They're already starting to do it. And I also think what becomes really interesting is this idea that Bitcoin's market cap today at $350

billion, give or take, and gold sitting at $8-9 trillion, those are going to flip. And not necessarily just because Bitcoin is going to appreciate a bunch and kind of eclipse gold's market cap. But I also think gold's going to help it out by having a contraction in that market cap over some period of time. And it might not be significant, but I definitely do think we're going to see that capital shift. And it's just the classic, when an idea's time has come, there's not going to be any stopping it. And I think that it's just captured the mind of an entire generation. Never fight youth because they're going to outlive you. Yeah. you know that's honestly that's my philosophy now i'm like if the young people are going to do

something i mean i'm going to be old and dead and they're still going to be doing it and telling them not to do it's pointless um so i honestly i think so i think i think you're right i think eventually something like bitcoin becomes the store of value for the internet generation or the You know, but all of our assets are digital. Why should our stores of wealth? And Bitcoin has proven that it is not going away. So yeah, I'm completely on board with that idea. I couldn't believe any more than you. All right, let's get into the kind of final questions. I ask the same two questions to everyone before I wrap up, and then you'll get to ask me one question to end it. The first is, what's the most important book that you've ever read? gosh um jonathan livingston seagull why that one so so the book comes in two parts people it was it was a book that i read when i was 18 and it was it was it changed my life right the book comes in two parts the first the first half says that

the purpose of life is to search seek perfection and the second half is that the perfect thing to search for is love or to to perfectly love um a lot yeah and and uh so funny i was um i was playing tennis with my kids the other day and uh i um started raining and there was a homeless guy sitting under a bit of shelter and we went and you know found shelter with this homeless guy and he had this book it was like two weeks ago you had this jonathan levinston seagull lying there and i was like it was just such a flashback to this moment when i read it in my youth anyway thanks for that question i really enjoyed answering i love that story uh aliens are you a believer or a non-believer wow

aliens among us no but the universe is so big how can you not there's gonna if there's not something out there by god are we special right you know that tends to be my thought process yeah did you see did you see um elon musk's uh tweet the other day about the great filter right uh that really got me thinking anyway i loved it uh yeah that's uh i there's got to be life out there for sure uh you could ask me one question to finish up what you got for me if you couldn't invest in cryptocurrencies where would you put your money So my whole investment philosophy is basically go to the edges of society and find the contrarian ideas that are going to become consensus ideas. And so pretty much I hold very few traditional

assets. I own no public stocks other than GBTC and a retirement account. I hold a little bit of real estate, but nothing that's really significant. Pretty much everything is in Bitcoin and in early stage startups. And I think the thought process, somebody who's a very well known angel investor once told me, he said, look, 80% of his net worth is in, uh, early stage startups. And the way he thinks about it is he's basically went out and found the most creative, uh, smartest, ambitious teams that he possibly could. And he's given them money and tasked them with growing his wealth. And so I tend to think that that, uh, that philosophy aligns a lot with me. Um, and it's just this idea of looking for highly asymmetric type payoffs, right? Uh, I'm a

young guy. I could take the risk. And, uh, and I tend to think that's a, uh, a pretty strong way to invest. So it'd either be just more early stage startup investing, or maybe I'd focus on a specific sector that's contrarian today, but likely to become consensus over time. Can I ask you another question? Can I shoot? Okay. So listen, basically, I look at your media platform and your presence, and I'm slightly awestruck by the fact that you were able to build up this you know because you have a loyal informed um intelligent audience that are that are you know highly engaged and you did it without the backing of a media name which you know it's it's one thing to to to to get a couple you know a few twitter followers if you if you've got the backing of the

bbc or bloomberg or whatever it's another thing to do it all off your own back what's the secret of your success, man? Yeah. I don't know necessarily if there's some secret, right? It's just years and years of doing the same thing consistently. And I also think the one thing that helps me is, you know, there's a lot of people who create content on the internet. There's very few people who also at the same time are investing, you know, hundreds of millions of dollars into companies and cryptocurrencies, et cetera. And so I always tell people like, if you're just creating content on the internet and you've got no substance to back it up, then basically you're no different than the talking head on television, right? Because they're doing the same thing.

They're sharing their opinion, they're creating content, but they have no kind of skin in the game. I think for me, having that substance and skin in the game, and then having some pretty early success there where a couple of companies I invested in very early in their life cycle end up being worth over a billion dollars and kind of all of that lends legitimacy to what I think. Now, again, I'm wrong all the time, right? Just like everybody else. But I do think that that stuff kind of helps um and it replaces the need to have the backing of a media organization because you basically have the backing of um you know kind of the investment activities and so right right you know i'm figuring it out alongside everybody else but uh uh so far so good yeah

well you're doing it faster than most i think thank you so much uh where can we send people to find you on the internet or find more of your work hey man um just being on here is fantastic for me um they can find me on twitter i'm at ed van der walt it's not the easiest surname to remember but i'm i'm ed van der walt uh if they want to look me up um yeah that'd be great thank you listen thank you for taking the time to do this i'm uh i'm excited that we've got you on the on the bitcoin train now so keep up uh keep up the good work i'll have to do this again in the future thank you