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Can you create wealth for generations?
Episode 5413th June 2022 • Generation Bitcoin • McIntosh
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Is it possible to create a legal framework that not only protects your bitcoin but allows it to grow in value? I believe so and on today's podcast I discuss how we can do that.

News and Links

Stacker News Post

https://stacker.news/items/35089

https://bitcoinist.com/exploited-bayc-discord-admin-leads-to-150-eth-heist/

https://cointelegraph.com/news/gillibrand-and-lummis-state-that-most-altcoins-are-securities

https://www.coindesk.com/policy/2022/06/07/key-us-senators-introduce-bill-outlining-sweeping-plan-for-future-crypto-rules/


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I can be reached by email at mcintosh@genwealthcrypto.com and on twitter at @McIntoshFinTech. My mastodon handle is @mcintosh@podcastindex.social. Looking forward to hearing from you!

Website

https://genwealthcrypto.com

Music Credits

Protofunk by Kevin MacLeod

Link: https://incompetech.filmmusic.io/song/4247-protofunk

License: https://filmmusic.io/standard-license

The following music was used for this media project:

Music: Ethernight Club by Kevin MacLeod

Free download: https://filmmusic.io/song/7612-ethernight-club

License (CC BY 4.0): https://filmmusic.io/standard-license

Artist website: https://incompetech.com

Transcripts

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Hey, everyone.

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No one on this podcast is a financial advisor, and all information presented on this podcast

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is for informational purposes only.

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Now that we have the legal stuff out of the way, let's jump on in.

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Welcome to the Generational Wealth with Cryptocurrency podcast.

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I'm your host, Macintosh.

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Today we're going to talk about long-term wealth management.

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The tea is hot, and the market is dumping.

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I don't want to make light of it, but I don't think, at least to our listeners, this is

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entirely unexpected.

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The market is down quite a bit.

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Right now, as we record, we sit at $25,500 and roughly $50.

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We touched all the way down to $24,915 on the chart that I'm looking at.

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It looks like it might possibly be the bottom for now.

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We will see.

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There's not a whole lot between where we're at and $22,000, or actually closer to $23,000

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at this point.

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That would be the famous 200-week simple moving average that we have discussed before.

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If you recall, when we break the 50-week moving average, we touch the 200-week moving average

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typically.

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We have seen that multiple times in the past with Bitcoin.

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Ethereum, actually, I did not realize this, but Ethereum is even closer from what I'm

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looking at, the 200-week simple moving average on it is at $1,200 roughly, and we are actually

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pressing down towards it.

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We are at $1,358 right now.

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The bottom looked like it was at $1,304, which to me, from my charts, was more of a psychological

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level of $1,300 than anything else.

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I didn't see any Fibonacci levels or anything like that.

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So that is the market update.

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I'm afraid, as I said, it's just not looking good right now.

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We were down again for the week by quite a bit.

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The stock market is still in freefall.

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It's just the way things are right now.

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I do not think this is going to straighten out for any of this until they hit these 200-week

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SMAs and maybe even go lower.

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What can you do during this time, and this is not the bulk of this episode, we've got

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other things to talk about, but what can you do?

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You can do what we've always talked about.

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You can DCA.

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You might want to accumulate to buy at certain levels, like 200-week moving average, roughly.

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Let's see, I can tell you what the 200-week moving average is for Bitcoin right now.

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Flip over to that real quick, and there should be right about, right about, oh, I don't think

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I have that one turned on, sorry, there it is.

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Currently it is sitting at $22,416 at least on Bybit, so my suggestion would be, actually

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this is not Bybit, this is an index trading, so my suggestion would be you might want to

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set levels somewhere around there if you're going to kind of buy in at that level.

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I think it's a pretty safe bet at this point that we're heading down that way.

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That's certainly not financial advice, but you might not, you might, that's basically

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an alternative view.

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You could just DCA, don't worry about it, just buy whatever you're going to buy, or

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you can kind of set that aside and then wait for it to hit that level and buy, but here's

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the thing that you want to keep in mind, when it hits that level it might very quickly bounce

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and you may miss your opportunity, so you have to be very careful about that.

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All right, let's move on to the meat of today's episode.

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So earlier this week I actually had a work conference up in Manhattan actually in New

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York City.

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I took the opportunity to go down to Wall Street actually and visit the bull, there's

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a very famous statue of a bull down there, and I took a couple pictures of it, might

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throw one up on Twitter if you're following me on Twitter, McIntoshFintech, but while

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I was there I took the opportunity to ask a question on Stacker News.

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As you guys know, I sometimes post on Stacker News, I was going to do it regularly, frankly

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that just hasn't worked out, but in this case I posted a question and I'm actually going

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to read this question, we're going to discuss it.

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I was honestly looking for comments, I got comments, a number of them, and it gave me

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quite a bit of insight I guess you could say into people's thoughts.

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And I think there's some validity to some of what was said on here, some of it was just

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frankly funny, some of it was maybe even a little bit rude, but I guess that's the internet

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these days.

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So the question is this, let's make a hypothetical example, let's say you've accumulated one

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bitcoin, okay, most of us if we've been in for a few months and we've been conscientious

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about buying, DCAing, and it's going to take a while, but with hard work you can accumulate

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one bitcoin.

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Now that may seem like a difficult task to do, but it is possible I believe for most

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people.

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It may take you stretching yourself frankly, but let's say you've accumulated one bitcoin,

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you believe that 10 years from now, 2031, excuse me, 2032, the years are flying by,

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it could be worth a million dollars in today's money and I think that's very important because

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we don't know what the future will hold, I mean it's worth a million dollars in today's

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US dollar value, purchasing power if you want to put it that way.

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Now that's a lot of money for a lot of people.

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How can we maintain that for long-term generational money?

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I don't want to sell that bitcoin for a million dollars and then go out and blow it, right,

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buy some fancy cars, you could go through a million dollars believe it or not very very

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quickly, right, buy some nice cars, maybe get too big a house, all of a sudden you turn

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around and your money's all gone.

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What are some ways that bitcoin could be safely maintained over the long term and hopefully

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grown in value?

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So in other words, I don't necessarily just want to put this on a hardware wallet, I want

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to potentially be able to have it grow over time, like when you used to put money in the

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bank and you would get 5% interest on that and then over time it would grow in value.

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That doesn't really work that way anymore.

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But what if we could do that with bitcoin, would that be possible?

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So we're looking at safely maintaining it, we're looking at hopefully growing it and

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I do have some ideas and I'm going to discuss that.

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Some of the ideas that came up were, you know, I don't know, they were new, they were different.

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All right.

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And I will put a link in the show notes to this by the way.

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And I'm not going to read all these answers.

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Some of them were just kind of silly.

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Some of them were, I didn't really agree with to be honest, but I may read part of their

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questions maybe.

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For example, one person said generational wealth comes from foundations, make it physically

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impossible to spend the money or move it out of investments for your children.

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And then they said, or brainwash your children and to always put in the family business first

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and never selling it.

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That's the two ways old money families from Europe stayed rich for generations.

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Now I don't really agree with the second one.

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Now I have children, I have several children and first of all brainwashing implies things

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that I don't really care to do to my children, but the reality is my children are different

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from me and I can teach them principles and I can teach them fundamentals and foundations

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and give them a path, but they are going to go out and choose their own way.

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And their way may not be, they may not understand, they may not believe in Bitcoin.

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So within a few years after I'm gone, they may take that and squander it so to speak.

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Okay that's certainly possible, but let's look at the first one, foundations.

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Now I'm a little out of my depth on some of this, I'll be honest, although I basically

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understand a foundation and a trust, they're both somewhat similar.

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You put assets, whether that's, it could be a number of things actually, in this case

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it would be a Bitcoin or multiple Bitcoins, whatever, and it manages it.

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Now there's a legal structure for that, you can set it up for charities, you can set it

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up for your children, for their children and for the people that follow after you so to

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speak, and that's all managed in a legal manner and they cannot go in and change that so to

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speak.

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They're not given the ability to do that.

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So that's certainly one way and that was kind of the way that I had been thinking about

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it.

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Okay, so another reply was, I think you can do in a trust whatever you want, old money

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has in the laws of their trust that all money is invested in stocks or real estate.

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That's probably true.

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These are the kind of the investments that we're talking about traditionally.

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You could make your trust with Bitcoin and Lightning node or mining hardware.

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So if I understand what they're saying here correctly, basically the trust or the foundation

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would actually run a Bitcoin Lightning node or multiple Lightning nodes and mining hardware.

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And I like that from the sense that both of those theoretically are going to give you

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more Bitcoin over the long term.

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Right now with current mining hardware, higher end hardware, you would get about, I want

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to say 0.15 and please don't quote me on this, but I believe it's 0.15 Bitcoin per year per

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mining unit and that's not accounting for electricity and hosting costs.

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So anyways, I like that because it should over the long term continue to generate income

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that could be dispersed.

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So maybe you build up your one Bitcoin and you use that to fund the mining hardware,

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which certainly you could run more than one unit.

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And that's going to be generating basically this, think about it.

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If I had 10 mining hardware units, then they're going to be generating 1.5 Bitcoin a year

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and that if certainly a Bitcoin over a million dollars a year, that's a lot.

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Now I'm not saying that a unit could generate that much Bitcoin in 10 years.

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I don't know.

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That remains to be seen, but I hope that makes sense.

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I hope you see where that's going.

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Again, this is creating a long-term stream of money.

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And this person went on to say, why would you even want to dictate what your children

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and descendants do?

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I'm not, I don't know.

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I'm not sure where they're coming from.

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He says, is it unethical?

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What if they want to blow it basically?

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And I just don't agree with that.

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If I create the money, if I create the wealth, I have every right to be able to determine

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how that's spent.

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I may want to give it all to charity and then my children get nothing.

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Or I may choose to, what I don't want to do, my wife and I actually have conversations

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about this quite a bit.

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We don't want to give our children so much that they kind of just, how can I put this?

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They don't have to work.

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They don't have to, they're trust fund babies.

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I don't know what else, and that's kind of a derogatory term, but it kind of fits.

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They don't do anything.

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They just take the money from the trust and they blow it.

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They spend it all.

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I want my children to have a good life and I want them to have opportunities maybe that

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I didn't even have, but I do want them to work because there's a lot of value in work.

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And I don't want them out blowing it on hookers and cocaine basically, as this person implied

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would be perfectly acceptable.

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That's not okay to me.

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They make their own money.

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I suppose they can do that.

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That's their moral choice at that point.

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But I don't see anything wrong with providing guidelines for that.

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And I do know that most people, if you hand them a bunch of money, let's say my wife and

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I, you know, we were to basically create a million dollars of wealth in our lifetime

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and we die and we divide that up among our children with no restrictions, no preparation,

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no nothing.

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The reality is most likely that money is going to be gone in a few years and that's not what

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I want.

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Another person said providing high value service to stackers, meaning people who stack Bitcoin.

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I like the answer in a sense, but at the same time, basically you're building a business.

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If I'm doing that, if I had a business that I developed during my lifetime, which is a

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possibility, then maybe I could put that somehow in that trust and use that to generate the

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income.

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So that's not a bad idea at all and it's certainly not one I'd even thought of.

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So this person gave me a good reply.

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This might be something straight from, this might be straight from something Sailor, Michael

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Sailor has said, and I'll explain who he is in just a second, but you could have a large

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multi-sig or multi-signature wallet.

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I'm having to fill in a little bit on what they're saying here, maintained by a foundation's

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board or a board of some kind of trust.

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Okay, so this is what we're talking about.

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Michael Sailor, by the way, he's the CEO of MicroStrategy.

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They're one of the largest Bitcoin holders in the world.

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By the way, it does look like we are getting a little bit of a bounce here.

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It's 25.7, so we've almost come up $1,000 from the bottom at this point, getting close

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to it.

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So maybe we'll have a small bounce up to 30K or something like that.

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We'll just have to see, kind of get us back in that range or we may have a short term

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bounce and then dump again.

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All right, anyways, back to what we were talking about.

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Michael Sailor, very large amount of Bitcoin, and I believe he has said this kind of thing,

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but you could have, like you said, a multi-sig wallet maintained by the foundation's board.

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The thing about that, and there's nothing wrong with that.

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It's a very conservative approach, but that approach, if you just put it in a wallet,

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let's say I have one Bitcoin, let's say that Bitcoin is worth a million dollars.

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It's still not generating income, so eventually it will be gone, whether it's my children

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or their children or their children's children.

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I am truly trying to think of potentially long-term hundreds of years, and maybe I shouldn't

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be.

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I don't know, but I do know that there are families, typically European families, who

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they had built up wealth hundreds of years ago, and they do have it set up so that their

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ancestors are, in a sense, taken care of.

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I do see that opportunity potentially with Bitcoin.

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All right, moving on.

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In a world where we have other types of covenants, perhaps you could explicitly restrict on what

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timeline and how the Bitcoin is spent.

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You certainly could through the foundation or the trust.

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He says, or she or she, I don't know, I remember hearing that generational wealth is exhausted

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in three generations on average, and I want to spend just a second on this.

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To me, this makes pursuing generational wealth seem like a losing battle, and time is better

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spent investing in quality time with your future generations.

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Look, I agree with the stat.

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I've heard it before.

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Typically that wealth that's passed down is gone within a very short period of time.

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I do know that there are people who are able to maintain it over a long period of time,

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and that is with things that typically they're creating dividends or it's some type of real

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estate holding that's growing in value.

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There's something like that there, okay?

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There has to be.

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But I'm going to dispute this person a little bit.

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I'm not working on this any harder than I'm working on anything else, so I'm not sacrificing

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my family for this, and what I am doing is very potentially giving them an opportunity

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in what I believe is going to be a very difficult world.

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I do not think things are going to be easy for a long time, and preparing them, giving

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them the ability to not live in poverty potentially, I think is not a bad thing.

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So even though I had to be careful about balancing my work-life thing, that's actually separate

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from this.

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I'm not going to take a huge amount of my time, and so I just honestly straight up disagree

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with the person about that, but I appreciate their input, and it was some valuable information

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there.

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So let's see.

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Now here's another thing.

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I'm going to touch on this briefly.

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I don't know enough about it to be honest, but I will say this.

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I think the idea is the same for everyone with a lot of assets nowadays, i.e. pre-crypto-rich.

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You borrow against them, the assets, and repay the loans with what your assets are producing

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or their appreciation.

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Okay, so here's the thing.

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When you borrow against an asset, when you make a loan, that loan is not taxable.

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So if it's a large enough amount, you can make $100,000, $200,000 loan for the year,

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and it's basically tax-free.

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This is one of the ways that people who are wealthy maintain that wealth and minimize

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their taxes.

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The idea is if I have a real estate asset, I borrow against it, and then I repay it with

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the money that that asset is producing, or I repay it through the appreciation.

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That part I don't quite get because I'm really chewing into my capital if I do that, if it's

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not appreciating very much at least.

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But I could borrow against Bitcoin.

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Right now Bitcoin's all over the map, right?

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And we see this as we talk.

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It's down from $69,900 down to $25,000.

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It may go lower.

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Well, I believe it's going lower.

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It might certainly go higher.

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We don't know.

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But at some point, Bitcoin will stabilize when its value is found, whatever that value

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may be.

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Now, I think that value will be a lot higher.

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And then I could take a loan out against it.

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Maybe I can live on $50,000 a year after I retire.

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Let's just say that as an example.

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I could borrow $50,000 against my Bitcoin.

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And then my Bitcoin, which I'm also mining, I can generate or, well, I'm using on the

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Lightning Network, for example, I can use that to repay that loan.

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I don't know if all that would work or how much Bitcoin would be required.

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But it's certainly done, as I said, by people who are wealthy.

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Look, if you're at that level, you're definitely going to be getting financial advice from

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a financial planner and not from the dude on the podcast.

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But I'm just trying to give you guys ideas.

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All right.

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It does actually look like we're getting a pretty good bounce here.

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So maybe we have found the bottom for now.

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Very interesting.

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All right.

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So that's really what I wanted to cover in the main part of this podcast.

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Just give you guys some ideas.

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I would hope you're doing this for long-term wealth.

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That kind of is the point of the podcast.

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And I want you to look beyond, I want to make some money and pass it on to my kids.

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And maybe that's all you want to do, and that's okay.

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You may need to do a trust or a foundation for them.

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But when I say generational wealth with cryptocurrency, I mean generational wealth.

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And I've been thinking about that for a long time.

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And I am solidifying my thoughts around that and about how I want to pursue that.

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Now, I'll be honest, I will probably be pursuing it through mining of crypto.

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I look to be doing that because Bitcoin mining is not going to go away and it's going to

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go on for the next hundred and twenty odd years.

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So there's a long-term opportunity there.

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All right.

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Just some stuff to think about.

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Let's talk about the news.

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There's certainly been some news.

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This actually came up last week before I, maybe even before I recorded this podcast.

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I had not talked about it.

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But I don't think any of our listeners probably had the Board 8 Yacht Club NFTs.

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If you do, please let me know.

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Maybe you could gift it to me.

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That'd be terrific.

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But regardless, there was a hack of the Board 8 Yacht Club.

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It was done through social media.

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It was done through Discord, Telegram.

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And it's just another warning that you need to be careful on the internet.

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So apparently it was done through Discord, actually.

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And there was a fraudulent link posted by one of the community managers.

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Their account actually got hacked.

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And then the hacker posted a link on the Discord channel claiming a free mint.

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And it was just a phishing link.

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And so they stole, it was something like 150 ETH worth of, or 150 ETH.

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So it was a lot of money.

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In my opinion, the responsibility for this lies directly with Board 8, with that community

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manager and the people who hired him, which was the Board 8 Yacht Club or whoever it is,

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the company behind them.

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Simple, that's all there is to it.

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If you have this kind of thing, you can keep NFTs off chain.

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You do not have to be super careful when you're clicking on links and that kind of thing.

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Make sure you know where they're coming from.

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All right.

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I did want to take a minute and discuss the regulation that's moving through the US federal

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government about cryptocurrency.

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So it's looking like, well, we don't know whether it'll be passed or not, but this bill

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is gaining traction by Senators Gillibrandt and Loomis.

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And I hope I'm saying Senator Gillibrandt's name correctly.

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But one of the things that came out as part of this in some conversation, and it doesn't

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actually say where, but they did say that Bitcoin and Ethereum, they consider commodities

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while the rest are considered, at least most of the rest are considered securities.

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This is something we might want to explore on an individual episode, but it's a very

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important distinction between commodities and securities.

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Commodities would not be covered under the SEC and they're treated differently.

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Now I wanted to point that out.

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I will make a link to it in the show notes, but I also wanted to talk about, I do want

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to talk about the bill itself.

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There's two, I think, there's a second important thing.

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One of the things besides this discussion about how they fall under SEC jurisdiction,

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they're actually saying that it would fall under the CFTC.

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I'm not exactly clear on who, I think that's the commodities, it must be commodities watchdog.

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It's basically the SEC for commodities.

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But one of the hugely important things, and that might not be proper English, but it's

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super important, is that their bill is going to liberate what they call small scale purchases

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of goods and services by making transactions of less than $200 tax free.

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Wow, Bitcoin is a currency.

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That's an amazing thought, right?

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That was its original purpose, despite what people believe sometimes.

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So to me, that's a super important thing.

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I would love to see that.

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And I encourage y'all, I have encouraged y'all in the past, whenever chance you get to be

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using Bitcoin with the Lightning Network, with the Strike app, with these cash app,

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with these different apps, to use it as a currency.

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But why?

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Well, a number of reasons, but specifically it's going to, as more and more people do

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that, it's going to increase the exposure of Bitcoin and it's going to create more

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market cap, essentially, as more and more people do that.

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So I personally think that's super important.

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But the bill in and of itself is simply going to give a lot of validity to the crypto market.

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So this is a super important bill.

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I hope it gets through.

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I hope it gets through.

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We will see what happens with that in the coming weeks or months.

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I don't know how long it will take, to be honest.

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Who knows?

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They go on vacation.

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They come back.

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I don't know.

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I can't keep up with Congress and their schedules and so on and so forth.

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So there you go.

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That's the news.

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Not a whole lot other than, as we said, the markets in a free fall.

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We'll see where it goes.

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Please view this as a time of you can buy cheap, do not capitulate, do not sell.

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I do not care how low Bitcoin goes.

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Bitcoin is not going away.

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If it goes down and hits $9,000, it's just a tremendous buying opportunity because it

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will go up from there.

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In fact, it may go way, way up.

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The Generational Wealth Cryptocurrency Podcast supports Podcasting 2.0.

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It's a value for value podcast.

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No sponsors, no advertising.

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You can support the podcast in three ways, time, talent, and treasure.

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If you want to support the podcast and have some time or talent, I could use some help

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with such things as chapters for the podcast, transcriptions, and probably a few other things.

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Treasure is just what it sounds like.

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If you find the content valuable, you can support the podcast by streaming stats from

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a Podcast 2.0 app or sending support via PayPal to macintosh@genwealthcrypto.com.

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There is a link for that actually on the homepage now.

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You should get a Podcasting 2.0 app for the optimal listening experience at newpodcastapps.com.

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By the way, I just want to stop right there really quick.

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Some really exciting stuff is going on.

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We've got live podcasts now, which is supported by multiple apps.

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We're also starting to see video being supported as a format.

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What I'm looking at doing, and especially if we're going to be in this crypto winter

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for a while, I'm going to take some time to hopefully set up a video setup so that we

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can stream it via video.

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I don't know how all that works out at this point, but I think it would be a good way

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to help you guys out because there are times when I would just love to show you a chart

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or this kind of thing.

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Give us a lot of people want a video experience versus just audio, so we'll see.

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Anyways, if you like the content, I would love it if you would tell your friends about

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Generation Wealth Cryptocurrency Podcast.

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Thanks for being here, everybody.

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I hope this has been helpful, and I would love to hear from you.

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I'm on Twitter at McIntoshFintech.

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You can reach me by email at McIntosh at GenWealthCrypto.com.

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Of course, the generational wealth website is at GenWealthCrypto.com.

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Now go out and make it a great week.

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