 This is State Tech Hawaii, Community Matters here. And gentlemen and ladies, we are live in Honolulu, Hawaii. I'm your host, Prince Dyches, and this is the Prince of Investing. As you guys can see already, we've got a very, very interesting topic today. We're going to be talking about cryptocurrencies and the stock market. Can the cryptocurrency market excel with the stock market not excel, right? So with that, I have a very, very special guest with us called All The Way Live. He's from New Jersey, Wall Street, 40 year Wall Street veteran, Uncle James Gordland. He's been here plenty of times. He's sat down with us. So we're going to sit down with him and we're going to have this discussion. We're going to talk about cryptocurrencies because it had a wild, wild day today. Not today, but this week. We had a wild week where we see a massive sell-off and all the other great stuff like that. The stock market hit an all-time high. Cryptocurrency is kind of crashing. So that's what we want to talk about. So without further ado, let me introduce my guest, Mr. James Gordland. How is it going today, sir? How are you? How are things going with you? I'm very excited to be on here tonight. Oh, yeah, definitely. It's always a pleasure to have you back. How is everything out there on Wall Street, per se? Very cold. Very cold. Yes. Very cold. But a very exciting week. I mean, we were up, I guess last week, we were up 1,000 points in one week. So it's, and we were up 5,000 points last year, which is pretty much unheard of. I believe the market's been up since inauguration day, about 31%, which is the most, the stock market's been up any time ever since FDR was sworn in. So it's an amazing move. The Trump bump that we originally talked about has turned into the Trump jump. It's like really, and I think, and again, I think we're just getting going. I think it's just getting, just getting moving here. Okay. And as you guys may know, we was talking about the Trump bump, and we was talking about doing President Trump's, he was elected back in November. We spoke about what we kind of thought the market would do, and you was very bearish. He was very bullish on the market back then. And you know, I would have to say, you were right, because the market has done some pretty astronomical things so far since Trump's been in office. Yeah, it's, it's been on a tear, I would say, it's interesting. That's true. Very surprising. And I think about it is the cryptocurrency market. We know last year, he had an amazing year, 2,000%, and you know, it's been very volatile. He had an all-time high last month, like 20,000 per coin. But just earlier this week, we've seen a 50% sell-off, where it tested around about 9,000 per coin, and I think right now it's around 11,000. And my question that I asked you, and the reason why I was like, hey, you know, we got the stock market all-time high. Cryptocurrency market is very volatile. Now we all know there is nothing else out there asset-wise that's probably going to have the possibility of doing what cryptocurrencies are doing with that much volatility. So, my question was, can the cryptocurrency market excel without the stock market excel? That's a good question. I think, first of all, you've got to retrace a little bit of what's really going on in the cryptocurrency markets, as well as the underlying technology, which is called the blockchain. And I think the first problem is, and my position on this has evolved quite a bit. I think one of the big things, if we want to go backwards a little bit, is I remember when the internet broke in about 1994, 93, 94, it started to hop. And very quickly, a person like myself could very easily see how the internet was going to change our lives dramatically. It was going to kind of level the playing field, give everyone access to a lot of information very rapidly. Of course, information does not necessarily mean wisdom, but nonetheless, we did get access, you know, inexpensively and very quickly. Now the cryptocurrency market, or Bitcoin, let's just say, because that is really the first and the big one. I had a lot of issues at the beginning because I couldn't quite figure out, like it just didn't seem to me, well, I thought it was interesting, and I thought there was things about it that made a lot of sense. I just couldn't see that sort of change like it was going to change the way I was going to live that way. And I think the issue is that you have to separate the Bitcoin market from the underlying blockchain technology, which is what this is really all about. Blockchain is a revolutionary technology. It is going to change a lot of things. The simple way to explain it is that blockchain is basically bridging what I would call the trust gap. Traditionally, we use intermediaries like banks, financial institutions, government agencies, to be an intermediary to assure, like when two parties got together to make transactions, that those transactions were going to be fair and equitable. I mean, capitalism in a free society basically functions on the idea because we have trust. You emailed me the other day and said, hey, you want to come on the show? Well, I know you and I trust like you're like, I know this is like what sort of what I'm going to get myself into on the show, so I'm very eager to come on the show and talk to you and say, you know, because I know what to expect. I know the kind of questions you're going to ask. I know that you're a very fair host, those kind of things. So we have a, we've built up trust because we know each other over time. Well, one of the things that's happened over, say, the last 40 years and particularly has accelerated dramatically over the last 15 and more so since the 2008 financial crisis is that the trust gap has widened dramatically. People don't trust anything anymore. They don't trust the media. They don't trust the government. They don't trust the police. They don't trust anybody. And you know, so it's what the blockchain does is it creates a series of data. It links them together like in blocks and each piece of data cannot be tampered with. It's secure. So when you see, like nowadays, if I go on the internet and I say, I see you're trying to sell a car and you're in Hawaii and you're trying to sell me a car and you show a picture on the internet, I look at it and I'm like, that looks pretty cool. I'm going to give you the benefit of the doubt, but I'm like, I'm in the Ronald Reagan mode. Ronald Reagan always said, trust, but verify, but I still want to make sure that car is really the car I'm going to buy if I send you some money. Like there's still a gap there that we have to fill. Now, if you use the blockchain to represent many different cars that are for sale, because each bit of data is not, you can't tamper with it because it's encrypted and they're all linked together, it creates this environment where what I see is what it is. And it bridges that, the trust gap, and it doesn't allow for anything to sort of interfere with that. Now, the reason I bring that up first is because cryptocurrencies or Bitcoin is a use of the blockchain. And in reality, I think calling them currencies is kind of a misnomer, the Bitcoin market or any of these cryptocurrency markets, but let's talk about Bitcoin. The Bitcoin market is like a network and it's like any sort of social network. It's like Facebook or it's like Twitter or it's like, but the Bitcoin network is a network of people who are agreeing that the Bitcoin hosts a stored value for a future transaction. What we're having now, what you see is like the network, I think I mentioned this to you when we were talking in emails one time, there's a law called Metcalfe's Law. And Metcalfe's Law, I'm going to break it down like really simply. So Metcalfe's Law basically says a network's value is measured by the number of unique users that participate in that network. So for example, Facebook has a value, the value is really based on the idea that a billion different people are on Facebook showing pictures of their grandkids and talking about politics and trying to get you to go to parties at night and whatever else they're doing and talking about baseball and all the fun stuff and talking about the stock market. And this is the value of Facebook. It's all if Facebook only had 100 users, its value would be much less. So Bitcoin is a network just like Facebook, but the networks, the currency in that network or what moves around is the value of the Bitcoin, which basically all it says is, hey, if I see that car that you have for sale in Hawaii and I look at the blockchain and I know it's verified because I see that it's really the car it says it is and all the statistics and whatever the mileage and everything matches and the VIN number and all that stuff is all there, I can give you say three Bitcoin for that and I'm going to get the car. Now I got the car and you have that stored value in your hand for a future transaction. So when you ask me stuff like what is it independent of the stock market? Yes, it's a it's a it's a non correlated asset. They used to say this with gold like gold, although gold used to be kind of an inverse correlated asset or in other words, if the stock market went up, gold went down. If the stock market went way down, gold would often shoot up because it kind of was emblematic of crises and particularly people would run to gold because at the end of the day, if the world comes to an end, I can take some gold coins and put them in my pocket and run out of here and like maybe I'll need them and I can trade for food later on. Now, a lot of this with Bitcoin has been sold on us or pushed a lot of people early on. It was like every libertarian's fantasy. It was like, hey, we have this global currency, it's independent of governments and all this stuff. And again, like I think I told you the first time that we were on the show and we talked about Bitcoin, I said, what happens if the internet goes off for three days? What happens if you lose your power? What happens if maybe the Bitcoin, the blockchain can't be affected by a virus or be hacked? But what happens if my computers get hacked and I can't access the blockchain? Like, so there's a lot of issues with it. Frankly, if the world comes to an end, there's not going to be electricity and there's not going to be the internet. So that idea is kind of, I think, fallacious anyway. The other problem with Bitcoin is to think that it could grow without government oversight, I think is silly. What's happening already you saw this week? What happened this week that precipitated the sell-off? China started to clamp down. South Korea banned Bitcoin sales because people were borrowing, mortgaging their houses and buying Bitcoin. And now it's one thing if you're going to be a wild-eyed speculator, like the US government and the SEC and from what I see with the regulators and the Trump administration probably has pretty much a hands-off they said, listen, you, Prince, if you want to buy Bitcoin and play around with your money, that's fine. But if a lot of people start borrowing money from banks to buy Bitcoin, then we're going to step in because that's going to threaten the banking system. If we learned anything from 2008, one, we learned that the banking system, basically the whole trust that linked the banking system together was destroyed and has not been restored. Nobody trusts anything about the banking system. They don't trust banks. They don't trust the loans. They don't trust the regulators. They don't trust the rating agencies. There's no, this has never recovered from 2008. And the governments don't want to see this happen again. The other problem you're going to have is that if you look at the blockchain itself, the underlying technology under Bitcoin, you're going to see that over time that blockchain becomes so large it needs a lot of computing power to run it and a lot of electricity. So the volume, the size of the volume of that amount of use is automatically going to put Bitcoin under some kind of government supervision. I mean, other commodities are people trade gold and silver, people trade oil and gas, people trade orange juice futures, people trade pork bellies. They're all like under some kind of government supervision. And to me, I think Bitcoin is like a separate asset class that may or may not be permanent, but I think the underlying technology is what makes this really cool. It's the blockchain. And there's many applications for the blockchain other than these sort of cryptocurrencies. There's a lot of other things you can do with it. And some of them are really interesting. For example, one of the big problems after the crisis in 2008 is there's a lot of issues with clear title on homes because there was so much confusion in 2008 and there were two or three mortgages on one piece of property and there were things blended together stuck in things called CDOs collateralized debt obligations that they pile tons of mortgages into. So nobody really knows who owns some of these houses and who does it. Well, you could use the blockchain and put all the titles on the blockchain. And then the blockchain would make sure that in order, if you bought this house, it would speed up a real estate transaction dramatically and give you clear title to that house very quickly. And you know, James, that's a thing, you know, some very cool points, you know, some people say, hey, well, you know, Prince, he's not a Bitcoin fan. He's not a Bitcoin advocate or what not, whatever the case may be. But one of the things that you did, I wrote down a couple of things here. You separated Bitcoin from the blockchain. That was one thing something very interesting happened today with blockchain and stock market. I know two ETFs that were launched today to track blockchain technology, right? I'll be doing video about those later. So it was so now you can actually invest into blockchain blockchain technology via ETF, maybe not so the crypto currency. And we spoke about the crypto currencies. If I'm getting this correctly, you said that what gives a network is value is the people that are using it and, you know, things like that. You said that pretty much is decentralized and that people can utilize it to you know, people have a trust with them with each other. But now this is the thing, you just said government oversight that we just saw in South Korea, we just saw in China, and that you're saying, hey, it's only a matter of time before it happens here. I mean, come Tuesday, we saw Bitcoin companies just eliminate themselves, just no more a word of the case may be. Now, my thing is, if the government intervenes like you can see in the future, wouldn't that devalue Bitcoin? Because the whole purpose is that this is decentralized currency, that the government gets involved, the SEC gets involved and provides some type of oversight. What value does that bring to the Bitcoin? Well, see, this goes back to my my original thesis is that Bitcoin is not a currency. Bitcoin is a system of barter. And it's like a delayed, delayed gratification. So instead of I want to buy a car from you. And in the old days, you would have said, okay, if you want my car, you know what I want? I want your motorcycle. And I want that I want that leather jacket you have. And I'll trade you that for my car. Well, now, what we do is I say, hey, I have how about I give you two Bitcoin for your car? You'll say no, I want three. And I really want the car. So I say, okay, and I transfer you the Bitcoin and you transfer me title to the car. But but really what we did is we bartered for the car. But you did instead of getting like a motorcycle or some other product, you got sort of a an ability to it to in the future trade for some other product. So I just bought your car and you may say, you know what, I don't want a car anymore, but I want two motorcycles. I want a dirt bike to go on the off road. And I want to get myself a big Harley that I want to drive. I want to go in Hawaii and drive around out in the sun once in a while when I'm off from work. And so you might it might take you months to find the two motorcycles that you want to buy. And then you're going to you're going to basically take our transaction and you're going to play it forward and buy you're going to you're going to trade, you're going to take the Bitcoin and trade it for two motorcycles. So it's it's not really a currency. This is this is what I I think it's a totally new asset class. It is not a currency. That doesn't mean I don't like it and doesn't mean I think it's a bad thing. But what I think is going to happen is the government's going to say, Hey, wait a minute, just like a barter exchange, you need to there's taxes, we need to get our Uncle Sam or anybody else wants to get their fingers in there because they have a lot of bills to pay and they want to, you know, they want to get their hand in there. And if they see it's easy money, maybe what they'll do is they'll have a transaction tax. Maybe maybe there's they just want to make sure that when you do Bitcoin transactions, you you fill out your schedule where like you do capital gains, you'd have to fill out the same kind of schedules for that. Like there's I just think it's a whole different asset class. It's not like gold or silver. It's not an alternative for currencies. It's not a currency, but it's something in the middle. It's like, it's just a stored value that a lot of people, for example, you also have competing crypto currencies. So just, yes, just like you have competing currencies. So now what does that mean? Maybe Bitcoin is just getting weak because the other cryptocurrencies are taking up more, they're getting more market share. Maybe not. They also, if you look at the charts, they all kind of sold down at the same time. Yeah, they seem to be very in sync with each other. And I think it's crypto currencies are like one particular outcome of the blockchain technology. Other ones may be deeds and property titles. Other, there may be, for example, one of the things I think you saw with those ETFs that you're talking about is a guy named Glenn Hutchinson, who's the co-founder of Silver Lake. And he's like, I think he's on the board of the New York Fed. He's a big Wall Street dude and he's been around a long time. There's a huge article in the Financial Times where he talks about how he wants to play Bitcoin and he says he doesn't want to invest in the currencies. He wants to invest in, instead of investing like in mining gold and trying to find the gold, he wants to invest in all the equipment it takes to get the gold out of the ground. And so he's looking for alternative, like what do you do with, in other words, what else are you going to do with the blockchain? What can you do with it? It creates a way to make very secure transactions and high trust transactions, which would speed up real estate transactions, maybe stock transactions, maybe wiring money around the world, like for people who say, you know, like for example, we have a lot of foreigners who live in the United States and they send money back to their home country because they send money back to mom. I do, I live in the United States and my own mother calls me sometimes and says, hey, can I borrow some money? Can you put some money in my checking account? I'm a little tight. She's a little old lady. So if I have the money, I run to the bank and try to put it in there. Well, through blockchain, it's a very secure, inexpensive way for some, say, say a cleaning lady in the United States who's from Guatemala to send money back to her family in Guatemala. Well, I got a question. I got to ask you the hard question. As a time roll, will James Foreland invest into Bitcoin? And would you recommend it? Not recommend, like I give you some advice, but would you invest into Bitcoin? Yes or no? Oh, boy, that's the pressure is on. Well, I'm always torn between two things. I am torn between my huge fascination for the technology and thinking it's really cool. And the fact that when I look at Bitcoin and I go to my local bar on happy hour and buy my $2 beer, my bartender is now a cryptocurrency expert and she's trying to tell me that I should invest in it. So that kind of scares me. Now, with these big sell-offs, you heard that you know the Joe Kennedy story right before the stock market crash. He was getting a shoe shine and the shoe shine guy recommended stocks. And Joe Kennedy figured if the shoe shine guys are recommending stocks now, it's time to get out of the market. It's way over, boy. And he called his broker and sold everything about a month before the crash in 29. It may be a legend, but that story rings true all the time. It's always like it just and it doesn't mean these people aren't smart or they're not nice or they're not good people or whatever, but they're just not experienced. And I've noticed like, what am I seeing? If you go on Facebook now, you see everybody from a guy who used to be a plumber is now suddenly a cryptocurrency expert. And it just that kind of stuff scares me to death. It terrifies me. The positive flip side to that is in general, most Wall Street people are against Bitcoin. And you got to answer now, will Jane Portland sell Wall Street people against Bitcoin? And they were also the same people were against the internet. They thought the internet was BS. So it's looking very tempting to me to get involved. I'm still a little like the problem is, is like a day like today or this week when you see a big sell off, it looks like because of some kind of government intervention. And those things are very hard to make money against because they're so arbitrary. And so that means the trading is very difficult. And I'm not a person who likes to I, I like to look at my odds if my odds are, if I could buy a stock for a dollar and I think it can go up to $10, I say, well, I can only lose a dollar can only go to zero. But if I'm right, it can go to $10. To me, that's a good the odds are like that's a that's a good transaction to make. But when I look at Bitcoin right now, and I think who knows, like at 11,000 or whatever it is, 11,563 or whatever it was, what's the bottom is the bottom 2000 is the bottom 1000 is the bottom zero. Now, I would refer again, I think I told you this a long time ago about my early internet investing in 1994. I told the story right about Amazon. Now Amazon had gone public blown up and then sold back off again, kind of like Bitcoins doing now. So now we're starting to see the real deal. And this is this is making me very excited, because now I'm starting to see, okay, the hype, the initial hype is off the rose. A lot of people got burned who didn't think they could get burned. And so now we're going to see who like, like, like, if you're a baseball fan, you always say you find out who all the real men are after the All-Star break. That's when everything really happens. Before the All-Star break, everybody hits 400 after the All-Star break. It's like, that's a whole it's a whole different season. It's like it's like a second season. And pretty much all of the stuff washed out. It may have, I'm not sure yet, but it may have. And I think that I think that there's it's very interesting. Now, if Bitcoin was really a substitute reserve currency, given the fact that the United States might the government might get shut down over the weekend, you think it would go up. Gold did. Now, I'm not one of these people. I think this whole like the sky is falling because the government's going to close. I mean, that's just nothing's going to happen. Because you guys are going to get paid no matter what. You know, you might not get paid tomorrow, but you'll get you'll get all your money back. And it's and it's and Trump already said he's not going to close any national parks like they did before he's going to make sure they stay open. So for somebody like me, if I wanted to go to see the Lincoln Memorial, I could still go to the Lincoln Memorial. Like, I don't really like, I don't need to, I don't really, I'm not somebody who has to deal with the government on a regular basis. And I try to stay away from the government as much as possible so I can help it. So, you know, if the IRS is closed for a couple of weeks, I really not going to know. I don't think anybody's going to cry over that. So, but you would think it would have jumped, but it didn't because all these bigger issues like regulation and stuff. And see, this is the other problem with investing right now. As much as I think it's, it's really interesting. It's kind of like wild wild West territory now, because there is no parameters. We don't know. I guess it's because we're getting out getting out on our time here. We got to get rid of that. No problem. But which one would you prefer? Good question. Bitcoin or the blockchain? Which one is James Boyle going to buy? Well, I'm going to be looking at the blockchain technology, definitely, to look for ways companies that are using it for new technologies. That's where I think the money is, period. And but I might, that doesn't preclude me from wanting to speculate a little bit in Bitcoin maybe, but I think, I think the big money is going to be made in the people who figure out how to use blockchain to do all kinds of things. That's the big money. All right. Well guys, there you have it. That's James Boyle. And he's calling all the way in from Wall Street out there in New Jersey. I want to say thank you for being on. Thank you guys for tuning in each and every week. Don't forget to like, subscribe, comment, share button, all other great stuff. Have you may get the Surrounded Globe? Until the next podcast video cartoon or whatever you see me do Goop Around the Globe. My name is Prince Dykes. This is Prince of Investing. Peace. Be safe. I'm out and thank you.