Bizarro World Podcast,
with Nick and Gerardo
Jan. 31, 2022
Volatility and selling have been the theme in the stock market to start the new year. We talk about why and what you can do about it.
Neil Young taking on Joe Rogan over supposed covid misinformation perfectly exemplifies the current cultural turning in the US.
Prayer apps are sending their users' messages to a higher power, for profit.
And Chris Curl's Crypto Cycle is now open for membership. We have him on as a guest to discuss the current state of crypto and meta investments.
Table of Contents
0:00 Intro
2:02 Why Markets Have Been So Volatile in January
8:15 Neil Young vs. Joe Rogan Exemplifies Current Cultural Shift
13:30 The Big Business of Prayer Apps
21:10 Gold & The Dollar
23:14 Introducing Chris Curl's Crypto Cycle
Gerardo Del Real: Markets are going wild. Jerome is stuttering and stumbling. Cryptos crashing, Neil Young got the boot. He messed around and found out it's all about the Benjamins. The world's going crazy. I am Gerardo Del Real along with my co-host, Mr. Nick Hodge. This is episode 154 of Our Therapy session, otherwise known as Bizarre World. Mr. Hodge, it's crazy out there, how are you?
Nick Hodge: I'm old enough to remember when girls gone wild, Gerardo. People used to go with cameras to the spring break destinations and sell tapes of that online. And now people buy NFTs and tickets to watch virtual bands instead of half naked girls on the beach. We're going to talk about some of that stuff. I'm doing really good, better than the markets have been doing. I told you to sell your equity exposure in the past couple of weeks. I hope you did that.
Gerardo Del Real: Well, I've done two things. I don't have, as you know, much broad indices equity exposure. So most of my exposure tends to be concentrated either in real estate, which is long-term. That's a long-term edge against inflation, and fiat currencies and everything that goes along with that. And then the bulk of the rest of my portfolio is resource-based, which actually, despite the recent price action today and yesterday in gold and silver, has done pretty well. Companies that are hitting milestones discoveries that are proving themselves out of it at a time.
And look, again frankly, without being braggadocious about it, we've got some private deals right now in store that are just appetizing, appetizing at current levels. So, no, great times if you have the access, great times if you have the wherewithal to be able to withstand the volatility, and really great times if you did as you did, which was, take some of that cash out from that manage money that you had, and start allocating a little bit at a time, and pulling that out before this most recent crash.
Why Markets Have Been So Volatile in January
Let's get right into your call a couple of weeks ago, when you started telling everybody, to lighten up on your equity exposure in the broader indices if you can't withstand a quarter or two, pull back, right? It's very obvious now from the Fed statement yesterday that they're fucking winging it. Right? They're winging it. They're hoping they can tighten once, and I think they will. They're hoping maybe they can squeeze a second height there. I don't think they get past hike number two. And I think the market's going to throw the tantrum that reminds Jerome exactly who's in charge. But I do believe there will be volatility along the way there, and I wrote as much this morning.
Nick Hodge: I'm not sure what the question is, but a hat tip, I guess, first of all to Keith McCullough and Hedgeye for identifying what they call the quads and the quad shifts, saying that we were approaching what they would call a quad four. And so, I've said before, I use that in my framework to make capital allocations decisions, as many other people do. And so we started taking tech profits towards the end of 2021, selling the SPDR Technology Trust (NYSE: XLK) in December. And of course, the bottom falling out of the NASDAQ, down more than 10% in the past month. And so, there's places that have held up well.
We talked about real estate last week. Housing has been a bit soft, but some of the other defensives have held up really well, particularly consumer staples, which I was pointing to. Things that you have to put in your mouth every day, including cigarettes. Altria (NYSE: MO) reported their earnings this week was actually up. And so it's a defensive environment. You mentioned volatility. There's not a lot to do when volatility is like it is right now, above a 30 handle, which I believe it closed at, if I look at the chart. Yeah, right above 30.
So, I was looking to do a bit of shorting, the sectors that I was saying look like shit. I'm not a shorter. I don't sell short, but I'll buy a short ETF or a short fund. It got away from me a little bit today. I didn't get my orders filled for that. And I guess what I'm saying is that, these short term fluctuations are happening very fast. I still don't think the markets have a lot of conviction one way or the other. Fucking Jerome didn't have any conviction one way or the other. He was just like "eh, fuck it".
Gerardo Del Real: Stuttering Jerome.
Nick Hodge: "We'll wait and see, but we're really concerned about inflation." So I'm giving you a non-answer, but inflation's still really high. S&P and NASDAQ are already in correction, if not bear market territory. You should have lightened up your exposure. It feels good to be in a significant portion of cash, to be able to pick off the things I want. You should be buying this gold dip, I was buying Kirkland Lake (NYSE: KL) this week. I was buying Wheaton Precious (NYSE: WPM) this week, and I was buying one of your favorite royalty recommendations as well. So lots of things out there to buy. And if you don't have to buy anything, is the last thing I guess I would say. It's all fine to wait because I don't think the selling is over yet.
I know this is a long answer. Sorry, Gerardo. We've been mentioning GDP and you got a good GDP print, right? The economy growing at 7% in the Q4. Similar to, as I was saying, earnings growth are still good. Earnings growth are still above 25% in the S&P. But the rate is down. The earnings growth is still above 25%, but that's coming down. And the GDP is at 7%, but that's coming down from the peak in the third quarter and the fourth quarter too. You'll see a slow down here in the first quarter, I'm pretty sure. And so a precarious spot for the markets to be and a defensive place, for sure. And so precious metals, I think, is the place to look at for now.
Gerardo Del Real: I like precious metals. I like critical metals. The electric metals, the battery metals, I really like those right now. I think there's an opportunity there, not a coincidence for writing a check for a world class palladium-platinum-nickel-rhodium-gold asset that I think is going to do really, really well. You had an oil deal recently that... Has that closed yet, Nick?
Nick Hodge: It hasn't closed, no, but they've stopped taking expressions of interest. So, that has passed.
Gerardo Del Real: Okay. And then that was, you put in a dollar, you get back four, I think in maybe three to six months' time, right?
Nick Hodge: That's the idea. It helps that energy is still holding up relatively well.
Gerardo Del Real: Mm-hmm (affirmative). You're looking at buying a bank?
Nick Hodge: Yes. We're buying private bank with Mr. Rule, who's putting in $15 million of his own money, along with Frank Trotter who ran EverBank before. Yeah. Putting my personal capital into that, and recommended it to accredited investors as well. And so one way to avoid volatility is to own assets that are still private, I suppose.
Gerardo Del Real: Right. And going public at a premium, right?
Nick Hodge: Sure.
Gerardo Del Real: And with a clear path towards profitability as it relates to the share price. And so, again, there's many different ways to make money with this volatility. Being in the broader indices for the next couple of quarters, I don't think is going to be the best way, unless you are a phenomenal stock picker. I think it's going to get a lot more challenging without that perceived backstop. Because again, the fed, be absolutely clear, the fed is tapering. That means it's still buying mortgage back securities. It hasn't reversed. It's not selling into the market that they're inflating, they're just buying a little bit less.
And so, again, up until it's been rhetoric. Jerome didn't convince me, but we'll see. I'll give them the benefit of the doubt on one or two rate hikes. And then I think then all asset classes are off to the races again, because I think the market's going to call its bluff again.
Nick Hodge: I think he's going to have to cave. Yeah.
Neil Young vs. Joe Rogan Exemplifies Current Cultural Shift
Gerardo Del Real: I like it. We have to talk to Joe Rogan and Neil Young, because we talk often about the fourth turning and we talk about these generational shifts that happened, whether it's war, or economically, or sociately, and I thought this one was just a mwah. It looked... Neil Young is an epic songwriter, a classic singer. I can see why in his world, he's going, "I am the fucking man. So you either take that other man-child off of your Spotify network, with his own version of the truth, or you can lose my catalog forever, baby." And Spotify said, "Mwah, adios. It's all about the Benjamins, baby. You got to go."
Tidal, which is my favorite subscription streaming service, was brilliant in picking him up immediately. And so when I opened my Tidal app this morning to stream my morning music, the very first thing that I saw was the very best of Neil Young, right on the front. And they made it a point to get out there on social media, and let everyone know, Neil Young is more than welcomed out here in the Tidal world. So interesting to me to see Jay-Z's streaming service being so quick on the draw with that, interesting that Neil Young thought he had the career capital and the legend capital, which he should have. If I was Neil Young, you're damn right, I would put it on the table as well and say, "Hey, I don't like that guy." I wouldn't do that. But you know, if I'm Neil Young. Not happening, buddy. You got to look at the numbers, and when you look at the viewers that Joe Rogan has, when he has better viewership than CNN and Fox, and all of these other networks put together, and you see what he does for Spotify, you can agree or disagree with that man's opinions. Some of his takes I love, some of his takes I laugh at, some of his takes, I know he's saying it just to get a rise out of people. And it's funny that people don't see through a lot of that. But again, everybody's allowed to have their own opinion, obviously, right? Opinions are opinions for a reason. I thought it really interesting that it was so quick for Spotify to say, "You can go." It didn't take that long.
Nick Hodge: Oh, you remember the record deal or the huge deal they gave Joe Rogan to come bring the podcast to Spotify. I've got no dog in this fight. I don't stream. I listen to my little satellite radio on my way to work and that's about it. But yeah, everything you said is spot on, quintessential for the Fourth Turning, embodiment of the click culture that we're in and the ad dollars matter. And Joe Rogan's got more followers and is more popular right now. And what's a rocker from the '60s and 70s. The Southern man don't need him around anyhow.
And it's interesting, it made me think back to the Lynyrd Skynyrd and Neil Young, he's not one to shy away from clashes. And at the end of the day, those two entities, Neil Young and Lynyrd Skynyrd... Really, this was the last big culture wars in the '60s, right? When Neil was saying that, "Southern man, better check yourself, go read that Bible that you're talking about all the time, look what you're doing." And Lynyrd skynyrd was saying, "We don't need you around, anyhow." Basically that was Sweet Home Alabama style.
You mentioned the entertainment value. It's sort of like professional wrestling. On one of their last tours Lynyrd Skynyrd's Van Zant was wearing a Neil Young t-shirt. They weren't the enemies really, that I think they used to sell a lot of music, but at the end of the day, respected each other and their music. So I don't know what their personal beef is, or if there is a personal beef between Neil Young and Joe Rogan, but it's certainly interesting that the way it played out, that dollars matter, like you said, take it to the bank. And what I else I was thinking about is the whole cancel culture and the banning of Twitter accounts for misinformation or whatever it is, which is still going on in a very real way. And it's just interesting that Spotify chooses to back him and also speaks to why Joe Rogan's audience is so strong, right, because of the muzzling and because of the lack of real reporting from real media. And so speaks to the power of really alternative media now and alternative ways to get it out, which is one of the pillars of the things we always say, that classic institutions are falling, right? Whether that's conventional music, entertainment, media, or rock stalwarts like Neil Young.
The Big Business of Prayer Apps
Gerardo Del Real: Religion.
Nick Hodge: We'll get to religion in a second.
Gerardo Del Real: Any chance I get to beat up religion. And again, hey, with all due respect to everyone's faith, it's not you I'm against, it's the institutions that allow for the perversion of your faith, just to be absolutely clear for anybody that's listening or watching this podcast. I respect every faith. It's when the institution uses your faith, and your goodwill, and your good deeds to manipulate those that may be easily manipulated, and use that institution to further non-consensual harm on human beings, and oftentimes kids, I have a serious problem with that aspect of the institution.
The same wayI love law enforcement that truly upholds the rule of law, but also holds themselves up to that strict standard. I am so supportive of our law enforcement community, the part of it that does it the right way, and as you know, so hyper critical of the part that does not. Because again, I come from a place, and my parents live in a place, where I know what it's like when the rule of law no longer exists. It's whoever has the best, biggest, and most weapons. And so, yeah, roundabout way to get back to beating on religion for a little bit.
Nick Hodge: Well, you talk about how it's the institutions, right? It's actually the perfect segue, because I wanted to talk about the big business of prayer apps. I don't know if that's where you were really going with that, but-
Gerardo Del Real: That's where I was going. Got my prayer hands emoji. Is that it? I don't do emojis. I don't know.
Nick Hodge: Feeling blessed. Raised hands. Let me tell you about the prayer apps, which I didn't even know were a thing, but oh boy, I learned about this week. So, oh, that's a nice espresso container there.
Gerardo Del Real: I'll leave it up to you all to guess what's in there.
Nick Hodge: Oh, there you go.
Gerardo Del Real: Espresso.
Nick Hodge: Well, you could put a little shot, in Italian it would be corretto if we put a little liquor in there, right? That's your cafe corretto... anywy.
Gerardo Del Real: It's a little early. Before we talk about prayer apps, I can see CVS has siesta hours now because of the labor shortage and the supply chain shortage.
Nick Hodge: Interesting.
Gerardo Del Real: So like in Mexico-
Nick Hodge: Little nap in the afternoon. Yeah, sure.
Gerardo Del Real: Yes. So, I go to my local CVS here about four days ago and they're closed from 1:30 to 2:30 or something like that every day now.
Nick Hodge: That's crazy. Well, maybe they can get one of Tesla's robots and we'll get everybody staffed up here in a little bit.
Gerardo Del Real: Or get on the prayer app and find more people to work.
Nick Hodge: Pray for some employees. Well, their message will certainly get out. Let me tell you about this. So-
Gerardo Del Real: Tell me about this.
Nick Hodge: Obviously privacy on the internet is going out the window. You talk about something in your kitchen and you're immediately getting ads for it on Instagram, for example. We know the big apps are listening. We know they're tracking all the clicks, the conversations, et cetera. One thing I didn't know about was prayer apps. And so I just wanted to talk about them on the podcast, because it's-
Gerardo Del Real: Let me get comfortable. Let me get comfortable. Go get my popcorn.
Nick Hodge: Let me just tell you about them.
Gerardo Del Real: I am all ears, sir.
Nick Hodge: So there's one called prayer.com and has lots and lots of users, and people take to these prayer apps to pray. They either join groups that are sympathetic to what they're praying about, the trouble with their marriage, kids that are addicted, loss of loved ones, trouble with money, whatever it is. And they either have the Bible read to them, which James Earl Jones will do to you for 59.99 a year on pray.com.
Gerardo Del Real: His actual voice?
Nick Hodge: Yep. He'll read you the Bible. That's like the premium kicker. That's what you're paying for. That's the premium upsell, $60 a year. But anyway, you can also just pray into the app. And so Buzzfeed did a... Let me stop for a second. It's one of the last bastions of real intimacy on the internet. If you're praying into an app, you're telling them your most deepest secrets. You wouldn't do that on a public Facebook post or Instagram. Because those are your best snapshots. Those are the highlights of your life. You don't post the bad stuff. But all the real stuff would go into a prayer app. So-
Gerardo Del Real: Do you think Matt Gaetz uses a prayer app?
Nick Hodge: Oh man, we'll have to get to him on another episode because I haven't read about it. But what you said is true, the guy seems to be turning. Anyway, let me get through this because it is big business.
Gerardo Del Real: Yes. Sorry.
Nick Hodge: So, now Silicon Valley and venture capital's coming into it because they're figuring out that one of the last places to get real data from people is through religion. And brick and mortar religion is on the way out, not only because of COVID, people congregating, but brick and mortar religion is just on the way out to general, if you look at the polls and the people who claim to be religious. But these apps are on the rise, and they're being backed by venture capital money. Like Peter Thiel has one for Catholics. And there's another group that has one. Peter Thiel's is called Hallow, H-A-L-L-O-W.
And so all these apps are emerging. And what Buzzfeed learned is that they're selling the data to advertising groups and Facebook and stuff. So they had this one example of a lady whose son had just died and husband had committed suicide, and she was in these groups and praying to this app. And they're selling the data. So people can sell them ads or use it to, like you were saying, manipulate people into doing certain things. So, anyway, it's fascinating to me that prayer and religion has become big business. But don't think it's just the fault of the advertisers. Let's talk about religion in general, because it was just a couple of weeks ago we talked abut wads of cash being found in a religious institution in Texas.
So the concept of monetizing your congregation is not new. You always pass around the basket. Whether or not the contents of that basket is going to the poor on the corner or the pocket of the preacher is always up for debate. It's what has always fascinated me about religion. It's no secret that large institutions like the Roman Catholic Church are some of the richest in the world. And so-
Gerardo Del Real: A practice as old as prostitution itself.
Nick Hodge: That's it. If religion exploiting... No, I shouldn't and say exploiting, these people are passing around the basket in the brick and mortar church and the churches aren't getting money through the traditional avenues. Here it seems, this is the new digital extraction via religion, and the investors, at least venture capitalists, are all too eager to join up on it. So pray.com seemed to shift around some of the privacy policy language after this report came out. They didn't respond to comment for some of the report.
And then you had the preachers out there saying, and the pastors saying that this shouldn't be used for profit purposes. And then me, in my views on religion, thinking religion is spiritual and between you and an entity or you and a God or being, why the fuck do you have to pray into an app to begin with? And so anyway, lots of blame to go all the way around, but certainly a perfect story for Bizarro World.
Gold & The Dollar
Gerardo Del Real: So many thoughts, so little time. We're going to keep people on their toes. We're going to pivot back to gold and the dollar. Gold, once again, falls below the $1,800 mark. Does what I think matter? No. All that matters is where you allocate capital and how that does for you. I believe this is a short-term pullback. I actually think holding right around that $1,800 level, despite the dollar surging and blowing through that 97 mark, which again, I mentioned a few weeks. I thought this would happen and as capital looks for safe harbor and gets confused, I thought the dollar would strengthen up. It has.
I don't think it's sustainable in the mid- to long-term, but in the short term, we could see a move to 98 before it turns back. But I actually think again, I think that this is all healthy for the precious metal space. Thoughts on that, Nick. Does it matter at the end of the day? If you're buying into the right deals and companies are delivering, you're going to get rewarded sooner or later, depending on your risk tolerance. Does it matter what the gold price does in the short term?
Nick Hodge: Well, I think it's a buying opportunity in the short term, as we mentioned earlier. You've often said that you expect the dollar and bonds and gold to go up hand in hand. And so you're seeing a scenario where that could potentially play out now. It might involve soft stocks for a little bit, but there's so much capital out there, and we'll talk about NFTs in a second, that a short flight to safety is going to come back into gold. Yeah. Like I said, I was buying gold stocks and I think that you're going to have money coming into that sector as it decides where to go. Look at me, for example, sitting in a lot of cash, as we discussed, personally deploying some of that into gold. I don't think I'm alone in that respect. And so I'd like to think we're just a little bit ahead of everybody.
Introducing Chris Curl's Crypto Cycle
Gerardo Del Real: I'd like to think you're right, but we'll see. Knock on wood, right? Time will tell, time will tell. I have a girlfriend in the metaverse.
Nick Hodge: Well, you asked permission last week. It sounds that it was granted.
Gerardo Del Real: I found the workaround.
Nick Hodge: What is that?
Gerardo Del Real: So I'm not married in the metaverse.
Nick Hodge: Ah.
Gerardo Del Real: So my real-world wife is my metaverse girlfriend, because why wouldn't I? She's gorgeous. She loves me. She deals with my crazy self. So I just decided in the metaverse... I'm not married, baby. I just got a girlfriend. She's my wife in real life, but we're getting along great in the metaverse.
Nick Hodge: Awesome. Does she have an avatar?
Gerardo Del Real: A couple.
Nick Hodge: Well, what are they?
Gerardo Del Real: Oh, that's a secret, Nick. I can't tell you. We got to link up in the metaverse. I can't tell you metaverse secrets in the real world. It's not the way the metaverse works. And look, jokes aside, I have no fucking idea how the metaverse works. I tend to be a simple guy. I ask simple questions. I invest on simple premises. I try to work hard. I try to be diligent. I try to speak with people that are much smarter than I, hence the reason that we have a podcast where Mr. Nick Hodge gives you the thoughtful insight, to articulate intelligent opinions that he does every week. And, luckily, somehow I end up bouncing into good situations that end up doing well for me and those around me. And I'm thankful for all of that.
But when it comes to this metaverse stuff, as a capitalist, I completely understand the profit motive, and I see the way it's going to be rolled out and monetized. But I can't really explain to you the stocks to go to, or give you an educated breakdown about what it encompasses and where the opportunities really are. I see the trend. I understand how it'll be monetized on a very broad macro level. But when you get into the nuts and bolts, I couldn't tell you a thing. I happen to benefit the way that you happen to benefit, from a gentleman that is incredibly well versed in the metaverse and crypto.
And I saved the crypto conversation because I do want to talk cryptos and where we're at, and if there's still opportunities within that space, you and I, our company is going to pony up very shortly within days, $50,000, and we're going to hand it over to this gentleman and say, "Hey, you seem you still think there's some opportunities out there despite the falling knife that most people perceive. Go make it work and let's see if it dances." So, I'm excited to bring Chris Curl on to have a conversation. Would you like to introduce Chris, Nick, and give people an overview of his background and how he's been brilliant at doing what he does, and why the heck we're giving him $50,000 of our own cash to go do it again, hopefully.
Nick Hodge: I would. And let me also state that the metaverse, the crypto-verse, the whole sector is still very new and evolving, and being applied differently in different areas of technology, virtual reality and gaming and entertainment and decentralized finance. And so every time I read about it, there's something new to learn and it's tough to keep up with it if you're not dedicating most of your time to it. There's lots of investment opportunities, not just in the coins and the tokens, but in crypto projects and in tokenization, in NFTs, in funds and ETFs related to the space and in maybe even collectibles, depending on how they gravitate towards using this technology.
And so we needed someone to write reports and write a publication for us. It's evolving fast. So some of the stuff is tough to wrap your mind around, and he seemingly understands it intuitively. Like, there's digital bands now that people go to see. I was going to talk about Strawberry Prince, which is like The Gorillaz, if you remember them. They're real people, but they appear on stage in the metaverse with their avatars, which are all digital skins. And they also play games and have hangouts and stuff like this. And they have tens of millions of followers in Japan. But then there's also like the gimmicky and, I don't know about that aspect of it, where you look at some things and you're like, ah, I don't know about that. That doesn't make a whole lot of sense.
Like some of the NFTs, for example, not the ones that are NFTs for their own sake, where you're buying a piece of art, but ones where they're seemingly made up and the example this week would be John Lennon's stuff. So his son is NFT-ing. It's actually not even any of his stuff. He's just recording a story about the stuff. So one of the example is a note Paul McCartney wrote John Lennon. You don't get the note if you buy this NFT at auction, you get the audio visual thing of John Lennon's son talking about why the note is important. And they're expected to sell for $30,000 apiece, and you don't get the actual item.
So some of that stuff is like a head scratcher. How does that benefit anybody? Or how is that adding value? Or why would someone pony up for that? Those are the questions that I ask Chris. And he's already educated me a lot, and even some tax stuff, which he'll be writing about and talking about as it comes to taxable events for selling crypto. So, anyway, he's in the waiting room. We're going to bring him in because we told you by the end of January that we'd be taking orders for his premium service, Crypto Cycle.
Gerardo Del Real: Is he in a real waiting room or like a metaverse waiting room?
Nick Hodge: Well, if it's online, it's metaverse. He's in a digital meta waiting room. But anyway, we'll be taking orders. By the time you see this, our premium paid members will have had the chance to take some discount spots, and then we'll be opening up a wider membership. And as you say, we'll be putting that $50,000 to work a little bit at a time, not just in cryptos, but maybe even some NFTs. So, let's bring Chris in and see if we can talk to him.
Chris Curl: Well hello.
Nick Hodge: Oh, hi there. How long you been waiting, Chris? Sorry to keep you waiting so long.
Chris Curl: About half hour. I've been over here minting Solana NFTs while I waited. So it wasn't too bad.
Nick Hodge: Well, let's-
Gerardo Del Real: I'll give you $10 million for one of those right now, Chris.
Chris Curl: Right. Sold.
Gerardo Del Real: I heard that's how they do it.
Chris Curl: Well, that's what I'm hoping for. I'm trying to mint where I feel like there's value. I've got Mike Tyson's Punch Out going on behind me.
Gerardo Del Real: I was just going to ask you.
Chris Curl: One of the greatest boxing video games ever made.
Gerardo Del Real: Hands down. All right.
Chris Curl: I'm venerating Mike Tyson, Kid Dynamite himself, because he is also super bullish on Solana and Solana NFTs. He's fully in. So, I'll be shouting out to Mike Tyson right now.
Nick Hodge: Awesome. Well, Gerardo said you got to pump up your NFTs and that's exactly right. And despite the pullback in crypto prices, the chatter about the space isn't going anywhere. Jimmy Fallon was just talking up his NFTs on the Late Show this week. So, Chris, thanks for jumping on the call.
Chris Curl: Sure. Thanks for having me on.
Gerardo Del Real: Appreciate it, Chris.
Nick Hodge: We're excited to launch your Crypto Cycle premium newsletter here in the next couple of days, and just wanted to have you on to talk about the crypto space in general. So it's a good thing that I'm a procrastinator and that it took us a bit to get our accountsturned, because here we are instead of Bitcoin, $60-some thousand, it's Bitcoin $30-some thousand. Just talk to us a little bit about your current sentiments on the space and let's have a conversation about it as we gear up to take orders for this product over the coming days and weeks.
Chris Curl: Sure. Well, as everyone knows, cryptocurrencies are an incredibly volatile asset class. So this sort of thing happens all the time. And as I was writing in an article back in the beginning of January, 80% of the time, if not more, Bitcoin follows the S&P 500 very closely, it tracks it. And as Bitcoin becomes a more mature and established asset class, it mirrors it even closer, especially to the upside. So what you're seeing, and what you saw at the beginning of January, is essentially a bearish divergence of Bitcoin, when the S&P 500 was sitting new all time highs Bitcoin was dropping and that damaged market sentiment. And that was not a good sign.
I was pulling out of my Bitcoin positions around that time. And of course, since then it's dropped down to as low as $33,000. It's regained a lot of that, but, yeah, there's generally a lot of uncertainty in the markets right now, and it's not just Bitcoin. Bitcoin at this point is tracking the stock market and the stock market is not looking super confident. So that's where we are right now. The capital flow from stocks is heavily integrated with the Bitcoin market, and this affects all the other cryptocurrencies because Bitcoin sort of pulls them all along. It's the one with the largest market cap, it's the original, the OG. So the other altcoins and other cryptocurrencies follow with it.
But what's been interesting is, with all of this volatility and all these coins that have just been dumping over the last month, you've seen NFTs surging. So NFTs really don't seem to have been negatively impacted by this trend. So that's interesting. In this space, there's always going to be some aspect of the market that's doing well, and in this case, it's NFTs. And that's why I'm still bullish on Solana NFTs. I think they're undervalued, especially compared to Ethereum NFTs which are, of course, going for crazy amounts of money.
And there's even an unconfirmed rumor circulating right now, that OpenSea, which is the largest NFT marketplace in the world, that's where everybody's buying their NFTs, that they'll actually be incorporating Solana NFTs in the near future. So that would be huge.
Nick Hodge: Do they only sell Ethereum NFTs right now?
Chris Curl: Well, currently, yeah. I think they have some cross-compatibility with some really small blockchain, but yeah, essentially it's only Ethereum.
Nick Hodge: What's your question, Gerardo?
Gerardo Del Real: Yeah, it's probably a dumb one, but I'm just curious because it's the way my brain processes stuff. So, in the gold space, there seems to be a school of thought that says, if you like gold, you can't like cryptos, and if you like cryptos, you can't like gold. There's only one way to invest. You got to be in one sector or the other, or you're a hypocrite or what have you. Which I think is complete nonsense. But is it similar with the NFT crowd and the crypto crowd? Are there groups where the NFT crowd is maybe more of the bougie of the alternative asset classes versus maybe the crypto crowd that considers itself the true rebels? Or is that just nonexistent?
Chris Curl: Yeah. I haven't seen that personally. No.
Gerardo Del Real: Good.
Chris Curl: I think you have in crypto, the biggest delineation is going to be Bitcoin maximalists, who just think Bitcoin is the only legitimate cryptocurrency and everything else is a shit coin, is garbage and nobody should even be paying attention to it. So that almost becomes a cult, the red laser eye cult, the guys who have their profile pics with the red lasers sticking out.
Gerardo Del Real: Yeah. Yeah.
Chris Curl: The Bitcoin maximalists, and that group I think can be toxic. I think they're incredibly narrow-minded when it comes to all the potential that there is in the cryptocurrencies space. Needless to say, those guys hate things like dogecoin and any meme coins. That makes them very angry.
Gerardo Del Real: So, the cult divide is more within the Bitcoin and everybody else? That's the equivalent.
Chris Curl: That's what I've seen. Yeah.
Gerardo Del Real: Interesting. Very interesting.
Nick Hodge: Talk to me about how the cryptos relate to the NFTs. So when you say an Ethereum NFT versus Solana NFT, you and I have talked about this a little bit. But it's really confounding for me and I think a lot of other people. So let's start with how those two things relate to each other. And then I have a couple of other questions.
Chris Curl: Sure. So, all that NFT is, it's a nonfungible token, so it is a token on a blockchain. So it's an ERC 20 token, for instance, for Ethereum. Ethereum allows... I don't know how many tokens there are on Ethereum that are launched off, and built on the Ethereum blockchain. Like Shiba Inu, for instance, the meme coin. That's an ERC 20 token, an Ethereum token. And all of these NFTs that are launched that you can buy on Opensea, are Ethereum tokens. But similarly, other layer one blockchains like Avalanche or Solana also have many tokens and NFTs as well. So really Solana NFTs just haven't really caught on yet because there aren't a lot of big marketplaces for them yet and they just haven't really reached public consciousness. But yeah, they're just as legitimate as an Ethereum NFT.
Nick Hodge: Does minting an NFT relate to the minting of currencies, when someone says, a kid in the Philippines is going to take a picture of himself and mint in NFT, how does that relate to the minting of the currency?
Chris Curl: Well, in my experience when it comes to minting NFTs, usually it's essentially an NFT launch and these are usually a set of five to 10,000 NFTs, and they're using those randomized, algorithmic software programs to create a collectible set, some of which are much rarer than others. So, essentially what you're doing is, when it launches, you're able to connect your wallet and then use a certain amount of the underlying asset, let's say, one Ethereum or one Sol. You're using that asset to then mint a randomly generated, basically NFT, based on that randomized algorithm. So that gives it the lottery aspect and that's what draws people in because it's like, Hey, if I mint this thing, I have a chance, maybe it's one in a million, but I have a chance of getting that really rare trait that makes the NFT very valuable.
Nick Hodge: So bridge the gap for me to the NFTs that we were just talking about before we brought you on, which was John Lennon's son is just talking about some of Lennon's stuff. Like I said, there was a letter that Paul McCartney sent him and you can buy this NFT. You don't get the actual letter, you don't get the copy of the letter, you just get an NFT of John Lennon's son talking about the letter. So does that have any value in your mind, and how is that different from one of these, I would say, cartoonish or minted releases that you were just talking about?
Chris Curl: Yeah. Well, that's a good question, and I haven't delved into that world partly because obviously stuff like that is going for a lot of money.
Nick Hodge: Right.
Chris Curl: That is a lot to me like what we've seen happen in the fine art world over the last 60 years. My dad was an art dealer back in the early 1960s. He'd go to Europe and just buy up a bunch of really cheap art, original art, and take it back to America and sell it for more. But at that time, I don't think he could have ever imagined single art pieces selling for millions of dollars. And now it's just getting even more absurd. So, it's hard to really put a hard value on something like a handwritten note, an NFT of a handwritten note by Paul McCartney from Hey Jude and stuff like that, it's really hard to quantify it. I haven't really delved into that space. And I have trouble... If a painting can sell for a $100,000,000, I don't see why an NFT of a note written by Paul McCartney can't sell for, I don't know, a few $100,000.
Gerardo Del Real: Let me ask you something, Chris. Yeah, just a quick question. So when I have a due diligence checklist to see if a company is fraudulent or the stock is a pump, there's a bullet point checklist that I have. Share structure, management, asset, jurisdiction, you go down the line, right? And that helps me vet the real opportunities from the fraudulent ones, or the ones that have no chance in hell of ever becoming profitable. Do you have a similar process for vetting out the fraudulent aspect, whether it's NFTs or crypto, is there a process that you use to vet that out before you actually allocate your own capital?
Chris Curl: Well, I mean, I definitely like to see utility. So, utility is number one when it comes to cryptocurrencies. And if you're getting in on something super early, you want to make sure that they have a white paper that is good, that is sound, that has a good strategy and a good roadmap. And you want to make sure that... I like to see faces and names. I don't like anonymous dev teams. I like to actually know that somebody's putting their name and their face on something so that they're accountable. Anybody can just create a website and launch a token on Ethereum or Binance Smart Chain, and not put their face out there and then just pull all the liquidity out after the market cap gets higher. So I think there's a certain amount of accountability if someone has their name and face out there. I like to look for that. But I think utility and transparency are the two things I look for the most.
Gerardo Del Real: Okay.
Nick Hodge: What do you expect in the first couple of weeks of this premium service? So it'll be the first week of February, people are starting to sign up. First issue comes out on February 2nd. Where would you first be looking to deploy capital into the space given the current setup in the market?
Chris Curl: Yeah. So the markets are definitely a little shaky right now. We just saw a large drawdown in equities. We saw a large drawdown in cryptocurrencies market. I do feel as long as we don't see the stock market crashing over a long period of time, I do see Bitcoin staying above $30,000. We may retest down in that $30,000 range. If we do, and we're not in a macro environment where, oh my gosh, the stock market is just crashing for forever, which I can't imagine will really happen, we'll be buying up some Bitcoin, we'll be buying up Ethereum. And if Ethereum's at $2,000, it's a buy. If Bitcoin's at $30,000, it's a buy. I don't think there's any question about that.
But I do think that, for the first couple of weeks, I'm already focusing on showing people how to get into Solana. So, we're going to be buying some NFTs there and we're going to be getting into some of these smaller DeFi projects and stuff. We're going to be showing them how we're going to be moving capital around from Coinbase. We're going to be buying stablecoins, transferring them, and buying some of these coins on smaller exchanges and even some decentralized exchanges. So I'm going to have videos, just showing what I do, what I'm buying and how to do it.
Gerardo Del Real: I'm going to have more to talk about with the crypto babes. I'm so excited.
Chris Curl: All of those very real Twitter profiles.
Gerardo Del Real: Right. Right. The metaverse. We'll be at the metaverse next.
Chris Curl: It'll be definitely all real people, I'm sure.
Nick Hodge: I think the educational component is huge. So we've already got a series put together that we're calling the CryptoU series. There's a crypto 101, 201, 301. It explains the evolution of the sector, the evolution of the altcoin space and NFTs and decentralized finance movement. There's a glossary of several dozen terms to help you get acclimated to the space, and frankly, what the fuck people are talking about half the time with some of this stuff. And then how to set up the different exchanges and wallets, which can sound a bit foreign and which you've helped me do already.
So we'll be doing screengrab videos, showing how to open up accounts, and then showing how to just navigate the space. Because it can sound a little overwhelming when you're talking about trading to a stablecoin and holding that on a different wallet. Once you see it done, and if you can follow someone do it on the screen, it makes much more sense. And I think we'll just start to wrap it up there. So we don't want to give away all the goods. I was editing the first issue just before we started to record.
Like I said, that'll be out Wednesday, February 2nd. Premium Crypto Cycle Issues every other Wednesday from there on out. And then of course trade alerts whenever we're buying some cryptos or NFTs with that real money that we're putting to work. And of course that will be tracked on a portfolio as well. So, what else before we get out of here, besides saying that we're excited to finally get started with Crypto Cycle and put real money to work and show people how to participate in the space?
Chris Curl: Yeah. I agree with everything. I'm really excited to get it launched. I'm already making some of these screengrab videos. I'm just going to show people exactly what I'm doing, but I think it's going to be really educational. I think it's going to be a lot of fun. And I think that we're getting pretty close if we haven't already hit the bottom of the market. So this should be a really good accumulation period. And it was probably pretty fortuitous that we're launching it now. So yeah, I think we'll have some really good entry positions and I think the next year should be a fun ride.
Gerardo Del Real: Another lucky break, Nick.
Nick Hodge: Well, people are ready. We've been building a waitlist for the past couple of months and that's grown nicely. We'll be deploying out to that very shortly. And people have been calling our sales team as well to try to sign up before we actually officially launch it. So folks are definitely excited about it and, and we're excited about it as well. Send us out of here, Gerardo.
Gerardo Del Real: I got to share a story. There's a gentleman who was a retired army Sergeant, who decided that he was going to take $3 and buy a Mega Millions prize lottery ticket. And this military vet of 32 years, 32 years, Mr. Gabriel Fierro, plays the fortune cookie numbers and he ends up winning $4 million. So I thought, given the current state of NFTs, the conversation about art, how you can read someone's note and sell it for $30,000, but not actually have to give away the note. It's the new lottery, baby.
Chris Curl: Yeah. There's huge aspect of that too, without a doubt.
Gerardo Del Real: So good for Gabriel Fierro. Chris, jokes aside, I'm excited for your service. I'm excited. I feel I learned something today just listening to this. I'm really excited for all the workshops, the webinars, the videos that I see in your future. It's going to be a fun, fun ride. It's been interesting, everybody. I'm Gerardo Del Real along with Mr. Chris Curl and my co-host, Mr. Nick Hodge. This was episode 154 Bizarro World. Have a great week, everyone. Be kind to each other out there.
Nick Hodge: Pray for higher crypto prizes.
Chris Curl: Buy Grimacecoin.
Gerardo Del Real: Watch what you say on your prayer app.
This transcript is unedited. Please excuse grammatical errors and run-on sentences.