Tiffany Grant welcomes Lark Davis, a seasoned cryptocurrency expert, to discuss the fascinating world of bitcoin and investment strategies in the crypto market. Lark shares his journey into crypto, starting in 2017, and emphasizes the importance of viewing bitcoin as a hedge against inflation and fiat currency devaluation.

He introduces the concept of dollar-cost averaging as a simple and effective strategy for investing in bitcoin, highlighting its impressive long-term returns compared to traditional assets. With the recent availability of Bitcoin ETFs, Lark provides insights on how new investors can easily get involved without the need for constant trading.

Join Tiffany and Lark as they explore the potential of bitcoin and how to navigate this exciting asset class.

Check out the full show notes: https://moneytalkwitht.com/investing/bitcoin-insights-from-lark-davis/

Takeaways

• Lark Davis emphasizes the importance of understanding the fundamentals before investing in cryptocurrencies like Bitcoin.
• Dollar cost averaging is a practical and effective strategy for investing in Bitcoin over time.
• The cryptocurrency market is a new asset class that has created many millionaires amid its volatility.
• Investing in Bitcoin can serve as a hedge against inflation and the debasement of fiat currencies.
• Learning about Bitcoin through podcasts and books is essential for informed investing decisions.
• Bitcoin offers unique advantages over gold, including verifiability and scarcity, making it an attractive asset.

Links referenced in this episode

• coinbase.com (affiliate link)
• binance.com
• kraken.com

Support this Podcast

Copyright 2024 Tiffany Grant

You know what it is? That's right. It's time to talk money with your money nerd and financial coach. Now tighten those purse strings and open those ears.

It's the Money Talk with Tiff podcast.

Hey, everyone. I am so excited because I have Lark Davis on the line.

And Lark Davis, he is a crypto OG and I wanted to talk to him about cryptos, particularly bitcoin and his investment strategy when it comes to those, so. Hey, Lark, how are you doing?

Good. Thanks for having me on.

Yes, thank you so much for gracing us with your presence. So, before we hit record, I was just telling you I like for experts to come on and talk about this type of stuff.

And, you know, we had the conversation and you were like, you know, I've been in the game for a very, very long time. So when did you get started with crypto and how did you get started?

I was like, ah, I need money for beer this weekend. There's no money for bitcoin. Classic mistake. Fast forward a few years. I'd kind of kept it on the peripheral vision of things I paid attention to.

So we're in a really new era with cryptocurrencies as an asset class. I know there's been tech stocks and ETFs were kind of a new asset class and all this kind of stuff, and that's all happened in the last few decades.

Okay, sure. But as a fundamentally New technology that also acts as its own asset class.

The cryptocurrency market is a very interesting and vibrant place and has made probably, I don't even know, a gargantuan amount of millionaires out of this, especially for earlier investors who have believed and had conviction over time.

So it's been a great space to work in over the years and I've had a lot of fun and it's something that's always continually challenging me and gives me something to talk about because it's such an interesting industry.

Yeah, for sure. And I just want to dive in a little bit because it was very new back then. Right. And not much was known about it. So how did you get over?

Like, did you have any fear with investing? Like, how did you figure out how much you wanted to invest? Like, how did that whole thought process go?

It's interesting because crypto was really my first investment. I've diversified out since then. I own metals and stocks and stuff. Right. But crypto is really my first foray into investing and I just went all in.

I didn't have very much money at the time, but I just said, you know what, this is the thing, I'm going to go all in and let's just see what happens. And I started off with buying a little bit of bitcoin and I said, okay, well now what?

And then you start going down the rabbit hole of okay, what are all these other coins and what's all the other stuff going on there? And I think one of the lessons that you learn very quickly is that especially if you're an investor, it doesn't have a huge amount of time. Now.

I haven't looked back, but I think for the regular person getting into the cryptocurrency market or looking at as an asset class they want to diversify into is you don't need to do everything. If you look just at the returns of bitcoin over the years, it's phenomenal. This year alone, it's up over 2x versus the S&P 500.

It's performed phenomenally well.

And anybody basically who has bought bitcoin in the last four to five years is likely in profit right now, except for a few people who bought in March. But that'll probably sort itself out in the not so distant future.

So it's a very interesting asset class from the perspective of just the returns over time. And you can just keep it simple and you can just buy bitcoin.

Gotcha, Gotcha. Yeah.

And let's talk about keeping it simple, because one thing I shared with you was, you know, I don't invest in crypto because I don't want to sit here and day trade, which is like keeping up with the markets, buying and selling all day, just to make sure I make a profit. And so how are you able to pull this off for a long term? Like, what is your investment strategy around bitcoin in particular?

Bitcoin in particular is a super fascinating asset class. And not to say there's not a lot of other super interesting stuff in crypto, because there is.

But here's the simple way to do bitcoin, and it has to come down to understanding of what you're betting against when you're buying bitcoin. And that essentially is fiat currency. Fiat currency, as we know, is all destined for doom. It's all being printed into oblivion.

The US Dollar has been a big victim of this in the past four to five years, where they've printed unbelievable sums of money. And it's debased the currency.

And with $35 trillion in debt, and with the US adding another trillion dollars every three months or so, the only way that they can repay that debt is massive currency debasement. They're not going to balance the budget and magically start finding the money for it. The only way they can repay it is by massive debasement.

And when you realize that that there's an infinite amount of fiat currency, suddenly an asset class that has a maximum of 21 million coins ever becomes a very interesting alternative. And so when you're buying bitcoin, you have to understand you're not just buying a speculative investment. You're essentially exiting from fiat.

And if you can take that sort of mentality that this is a hedge against the insanity of fiat currencies, much in the way that gold might be. Except bitcoin is a modern version of gold. It's more spendable, more diversible, more diverse, divisible. It's got verifiable on chain supply.

We don't know how much gold there is in the world. We don't know how much gold's technically held everywhere. Right. Or how much is in the ground and all that kind of stuff. A lot of variables with gold.

So there's all these sort of issues that come in when you're looking at the old gold, Bitcoin as the new gold has so many features that makes it very, very attractive. And so one of the easiest ways to be doing bitcoin is just a simple dollar cost averaging strategy.

You know, if you go and look and I've run the numbers so many times, and it's so interesting, and here's just. It's an approximate example, but it gives you a pretty good idea of the savings power of Bitcoin.

And that includes buying the top of the last cycle at $69,000 and running it all down and buying the top at $74,000 back in March, you would still be up massively by a dollar cost averaging strategy. During that same amount of time, the fiat currency has lost nearly half of its value.

So the value proposition for bitcoin is incredibly clear in my mind. This is a novel new technology. The most important technology in the cryptocurrency asset space shares many of the similar properties as gold.

In a simpler dollar cost averaging strategy, realizing that dollar is going to be worthless at some point or they're going to continue to be more debased over time, versus Bitcoin, which is basically mathematically programmed to keep going up due to its scarcity of supply and the rising demand.

Okay, so that makes complete sense. You can kind of use bitcoin as like a hedge against inflation. It kind of sounds like, essentially, if.

You, if you like gold or if you like the idea of gold, Bitcoin is a very attractive asset class because it's worth 1 15th, 1 16th the market cap of gold, maybe even less. Maybe it's gold. Gold worth now $20 trillion total market cap. Bitcoin's worth a 20th of the market cap of gold.

But it has many of the similar properties which make gold awesome. But it has many new properties which make it even better than gold.

If somebody's listening, they're like, okay, Lark, I'm convinced I want to get into bitcoin. Where do I start? What would you say?

Start learning. First and foremost, go listen to some podcasts, read some. There's some great books on bitcoin, the bitcoin standard, stuff like that.

You know, listen to a Michael Saylor podcast, right?

Listen to some intelligent people talk about it and try to understand the concept a little bit, because it's important to understand what you're investing in. See, because it is A new asset class. And all people understand the intricacies of it. It's a very volatile asset class.

And if you're investing in Bitcoin and you're going to see it go down 20, 30, 40, 50% and have wild swings, okay, and then they'll go up by that much and more.

So you have to understand there's massive volatility, but you will get shaken out during that volatility if you don't understand what you've invested in. So I would say go and learn, learn, learn, learn, learn. Find out what's going on.

And then once you spent those hours, sort of what we like to say in the crypto space is orange pilling yourself. Once you've orange peeled yourself a little bit, then it's time to start thinking about, okay, how do I want to buy Bitcoin?

And there's two primary ways that you can do that these days. You can either buy Bitcoin directly through an exchange like Coinbase or Binance or Kraken or many other exchanges that are available out there.

And you can even set up automatic payments with many of these exchanges.

So you just automate it, you know, put that $50 payment in a week or whatever it's going to be for you and just that's what you do every Friday, get your paycheck or whatever. Just take the money out of the bank. There it goes.

Awesome, awesome. And I'm glad that you mentioned that people should learn more about it because, you know, I always quote Warren Buffett.

He's like, if you don't fully understand something, then don't invest in it. And I feel like that is pretty solid advice when it comes to anything.

It's important, it's important when the other thing I want to say is now we have Bitcoin ETFs by the way.

So if you don't want to go the route of getting a cryptocurrency exchange account on Coinbase or whatever, but you already have a brokerage account with basically any major brokerage in the world, you can now buy a Bitcoin ETF product which is backed by real underlying Bitcoin. So that's the important thing. It's not paper, it's actual Bitcoin backing up those Bitcoin ETFs.

So that's a very easy, user friendly way for people to buy it too. Same logic applies the dollar cost average. Don't think about it too much. Just it's, it's your inflation hedge.

It's got an incredible track record of heavy outperformance versus major indexes and gold and all that kind of stuff currently this year lagging behind. But I think we're going to see it catch up in a pretty dramatic way.

Yes, yes, I agree with that. And I'm over here. Like, you know, my audience, they know that I don't invest in crypto yet.

But you are making some very good points and I'm really considering it at this point. So, Lark, if people were interested in learning more about crypto or learning more about you, where could they find you?

The best places to come are over on x or on YouTube. Just look up Lark Davis, make sure it's the official account. We've got the Blue Tick over on X and find me on YouTube there as well.

And just we're posting daily content, massive amounts of content every day. We're doing daily videos and all kinds of educational information and we're throwing some memes and having some good times too.

So definitely check it out for sure, for sure.

And I'll make sure I have all of that information in the show notes for our audience.

Thank you so much, Lark, for coming on the show today and just going over bitcoin and cryptocurrency in general and letting us know that there are ETFs available now.

Thanks so much for having me.

All right, bye.

Thank you for listening, joining and being a part of the Money Talk with Tiff podcast this week.

You can check Tiff out every Thursday for a new Money Talk podcast, but if you just can't wait until next week, you can listen to previous podcast episodes at Money Talk with or follow Tiff on all social media platforms at Money Talk with T. Until next time. Spend wise by spending less than you make a word to the money wise is always sufficient.