Cryptonites - Episode 1 - Glen Goodman on Crypto Trading, Market Analysis and the Future of Bitcoin
Zero. Crypto community and blockchain buddies, across the globe, welcome, to kryptonite's, the, no BS blockchain, channel built with the community, for, the community and tonight, we have an amazing guests, glen goodman the shares guy thank you so much for coming tonight glenn yeah it's good to be here it's a pleasure to be with you so Glennon let us know a little bit about yourself, obviously you've done a lot in the UK you're, hopping from conference to conference giving, amazing, keynotes, to educate. The community, so. Please let us know your story okay. Well I've been a trader for a long time but. I actually started, off as a TV, reporter, first, for the BBC, and then for ITV, News so, I was doing that for many years but, because I was a business, correspondent, for some of that time that. Kind of got me into trading, I got really interested in trading I got. Into it I started trading I made a lot of mistakes. Yada-yada. I'll tell you a bit more about that later on about the the horrific failures, that I started off with which quite frankly most, people who get into trading and particularly. Anybody who's been in crypto currency probably knows about that about success. And failure, but. Eventually I started. Learning how to do it properly and, I started making a, lot of money and so. By, about. Six, seven. Years ago I realized well I'm making more money trading than I am through my job and it doesn't. Show any signs of stopping so, I decided, to quit my job and, trade. And that coincided. Very nicely with, the birth of cryptocurrency, or, just after the birth so, I started trading Bitcoin, initially, of course and then got into other cryptocurrencies. Started. Discovering some of the smaller dodgy. Exchanges. And. Traded. Like mad and then basically. At, the end of 2017. And, this is my claim to fame that's. At, the end of 2017 I'd built up a big. Facebook page and I. Made a video. Showing my followers, that. I felt, that, now. Was, probably, the end of the good times the. Party, was over and. I. Kind, of warned them to be extremely careful from that, moment on and that. Just, happened to coincide quite. Nicely with the peak of the boom, so. We're following that I got. Asked to buy. A publishing. Company to write a book which. Is coming out shortly called the crypto trader all about my experiences. And giving step-by-step, guidance for, how, to get into trading cryptocurrency and how to do it sensibly without. You know while keeping the profits and not like losing. Most, of them like most people it doesn't that's very cool so much information so many questions I want to ask you just based on what you said but, one. Thing that's really cool about you Glenn is a lot of the people here in this space you and you asked them when, did you enter this space oh I started, investing in Bitcoin in 2012. And they tend to boast a little bit uh not. A little bit actually they tend to boast a lot about how, cool they are and how successful. They've been in trading but you're not afraid to show the vulnerable, side that, you've learned through your mistakes or through failures so if you don't mind telling. Us a little bit about that failure and and what kind of lesson you've learned through. That particular, context, okay well I would say that, when. I made, that call in late 2017, that, the party was probably over bla bla bla that wasn't just sheer luck that, was the result of 15 years of trading experience of. Successes. And failures and, and through, those failures I kind. Of learned how to know what markets, are doing what are the signs that the good times are coming to an end and all, of that stood me in good stead as it turned out but at, the time when, I was going through hell in, the, early years at times you. Know obviously, you. Know what it's like when you're learning a hard lesson you, don't really think oh it's gonna be great in 15 years time when I reap, the benefits, of this lesson it's just it's just hell so, yeah I'll tell you when I first started, I.
Started. Trading shares initially. And. It was at the height of the dot-com boom, I was very young and me and a few of my friends were really into it everybody, was talking about calm. This is around about the year 2000. When. Everything. Got very exciting. For companies, like Amazon, but millions, of other or. Hundreds, of other companies. Besides, we're, also seeing their valuations. Just, saw and most. Of those companies. You, won't hear about now so, basically. I got a call from a friend of mine who was working for a really cool startup, there was called gameplay, and the idea. Was that they were going to be pioneers in, the world of online gaming, well they already were pioneers, and. Online. Gaming at the time was a brand new thing now we know now online, gaming is massive and lots, of companies have made enormous amounts, of money out of it and even back then it was kind of obvious this is once, internet, speeds get get a bit faster, this is there's gonna be no stopping this online gaming thing so of course there's no brainer you've got to buy the shares of this company gameplay that my friend worked for he, invited, me to go around and look at their premises they had a five story office, block in London where they had like old-school, arcade, machines, people. Rolling around on rollerskates you, know it's kinda sound. Familiar it's gonna be. The. First the first version, of the crypto boom basically, so so. Yeah I got totally sucked in I didn't, have much in the way of savings, because I was very young but I had a few thousand pounds and I put it into game, play bought. Those shares and they. Were soaring, they were I think they doubled, pretty quickly and, I you know I felt like I must be a genius. I'm, just, making money I can't stop making money it's just too easy and then, basically. The dot-com, crash began, but we didn't know it was the dot-com crash I thought it was just a blip just, the blips oh okay so suddenly. I've got less. Money than I started with that's weird because I had double, a minute ago so, I phone up my friend and he's like yeah I know that, price is absolutely plummeted. Which is amazing. So, we used to talk on the phone a lot in those days it's. Amazing. Because it means that we can buy more, shares in gameplay even cheaper and I was like yeah you're right, this is just an opportunity, so, you know I had a bit, more savings, left over that I hadn't invested yet so I put them into game play as well all, I kept. Basically. This just repeated. It's a couple of weeks later the shares of hard again he's phoning me up saying, we got to put all the rest of our money every last scrap of our money so I put everything I had into, the game plane shares which had gone so low because they were absolute. Bargain now, obviously, because they've fallen so far so that's the way I saw it and of course all this will sound very familiar to, most, novice investors, because they all think like that they all think it was a bargain it's fallen, so it's even more of a bargain it's fallen again so it's even more of a bargain so you just keep buying more and more. What. Happened eventually was, the, shares that had been I think at their peak more than 10 pounds per share, ended. Up at 1p. Per, share and. But, even then I thought oh well it's alright because they'll come apart again you know they'll come back again but they don't come back again what happens when a company gets that cheap is somebody, buys them for like a quit, you, know somebody buys the entire company, for whatever it was a few. Thousand, pounds and your. Shares, are compulsorily, purchased. From you at one p each so. I basically have my thousands, and thousands of pounds I had ten pounds, I got, back. But. That's amazing, because you know a lot of people when they capitulate, and I, know, people from the dot-com, era that once they lost their money they just completely stopped, investing, yes afraid, I Google my friends they all still y'all stop right. I. Had the bug you know I just there, was something about it I think it was the defeat of one. Of those people where I play a lot of video games always, have and if. I'm defeated I just I have, to beat that game you know if I have to have another go and try, harder, next time so I started, learning and reading a lot of books a lot, of really, old trading, books from the 1950s. And earlier like, the classics, I started, really trying to understand. Everything that was about this trading, game and you know the first thing I read in virtually all these books was you, know haha you're an idiot for that thing you just did with gameplay it was kind of number one less so.
That's Kind of number one lesson in in my, book which is being, published shortly as well because, if. You. Never ever-- that, lesson number one of trading never ever hold, on to a losing investment, just, don't do it there's no reason to do it it always feels, like the thing to do is either too hot hold on or huddle as we know a cool thing or, even to buy even more but. The problem is you never know, whether. That. Decline. Is ever going to end you just don't just or not even dare, I say it was something like Bitcoin, while it's falling, you, just don't know if that, fall is going to lead a complete disaster, or whether, Bitcoin will recover and this. Interview, could start, looking very old in a couple of years time because, I'd say oh maybe it will cease, to exist but of course maybe Bitcoin will become more massive than ever as well and so there are trading techniques, that I teach. In my book that can help you to basically get around those risks so that you can make money kind of either way and you don't have to just worry, about is it gonna go to zero and not be able to sleep the whole time because you've got all your money tied up in something, that's just falling and falling and falling yeah that's a great lesson I want to definitely ask you more questions related. To lessons, that you can help especially, you know the rookies or new people who want to enter this basin and they're a bit afraid of you, know losing their money and stuff like that so after you ask you some more questions relate, to that but one, question I want to ask you is obviously, after every. Bubble burst there, tends to be emerging. Companies or in this sense for example the fang's talks at, the dot-com bubble did. You happen to enter, either, Facebook, Amazon, Netflix. Or, Google at the time where the dot-com bubble was recuperating, or, recovering, at that stage I got I was certainly, trading, in an, hour of tech stocks during. That period once they'd started, recovering yeah, so, I mean, I'd love to say I, bought. I put all my money into Amazon, in, 2003. I've. Just left it there ever since I mean, you know that's, that's the ridiculous, thing isn't it is that if, you, could go back in a time machine I wouldn't bother with trading, techniques, and analysis, and all of that I just buy a bunch of Amazon and just hold it but you know you go to sleep and wake up ten years later, coca-cola. You know I bought that in the nineteen thirties that share, and just never done anything else really the problem is of course hindsight, is 20/20. And whilst, it's, obvious, now that Amazon was gonna conquer the world if you go back through, news archives, and read articles about Amazon, in 2003. 2004. There were enormous question, marks over it absolutely, I mean it never made a profit it never made a profit until pretty recently but, at the time that was kind of unthinkable. The whole dot-com, crash was. Caused, by. Everybody, suddenly realizing. That, come, these companies weren't making any profits, and probably, never would and so, everybody. Suddenly lost faith and everything, crashed and of course Amazon, was no exception, to that Amazon wasn't making profits either it was just growing and growing but, not actually, getting anything back for its shareholders, and and.
And. That as I say was just not the dumb thing at the time times, have changed since then you, know 10 15 years on now we kind of thing is perfectly normal for a company not to make any profits no who cares because, if your own Amazon shares you your chairs have risen massively, in value and that's all that matters, but, it didn't feel that way back then so, you, know that again there are lessons there for crypto, traders, and crypto investors. You've. Got to realize that what seems like a normal situation, now. 15. Years down the line you'll look back and you've got God that that, wasn't, normal at all or you. Know that that coin that everybody, said was definitely. Not going to succeed the one coin that, everyone said was definitely gonna fail happens, to be the one that's conquered, the world you know that's. What will happen I guarantee you in 10-15, years because it's just what always happened that's super interesting there's another question I want to ask I'm gonna throw. Out the order of my questions, and we're gonna freestyle, this because you have so many interesting topics. That are surfacing, and I'd love to ask you questions you, were talking, about how, some. People invest, in companies that are not even profitable, that, tends, to be a bit of a trend these days these growth stocks, and companies, like you said Netflix. Back in a time or Tesla. What. Is your take in terms of generations. Is this, a generational. Thing or, have you noticed any, differences. Correlations. When, you compare maybe let's say baby boomers, Generation. X or recently Millennials are they different and their way of investing, based on your experience or observations, yeah I think there. Is real, generation. Gaps going on. Well. First up the Millennials, did something, that for previous generations, would. Have been absolutely, unthinkable. What. They did was they, started investing. In icos, where, you're, not a shareholder and you, don't actually have any rights over, the future direction of the company you're. Never gonna get dividends because dividends, usually. Don't exist, in any form in when. You invest in an ICO you're basically just handing over your money and praying and, whilst. That may well reap, dividends, for many people, in many investments, Swiss bog obviously. Is. Dreams. Maybe. But, that's that's the the interesting thing is that previous generations, any previous, generation would, just go this you, can't do that. Legal. Right over the shares of the company you want to be able to phone up the chief executive, and complain. And say I am a shareholder and, this is just I don't like the way you're moving this company, forward you, know but, basically. The, Millennials, were willing to give up all of those rights in, the hope of, getting. Capital, growth for. Their tokens, and I think that that's a perfectly valid way of doing things even though I've been around the block a few times and, and I should be stuck in the old ways I'm not I appreciate. The new ways of doing things which is why I got into crypto, you, know pretty much as soon as I discovered, it and and, I've loved it ever since so. Yeah I mean that's one massive difference, between, the generations. Also. Investing. Goes in different trends, right so, the. Baby boomers, were, into things like buying funds. In. America, then called the mutual funds, or in England, you've got investment. Trusts. Things. Like that and it was all about funds. And. Then, the. Next generation on from the baby boomers, they, got into comm, shares they were buying in. Individual, shares and then, about ten years after that suddenly everybody became obsessed with FX, trading. FX was. Nuts in Japan as well retail. On a retail level as well and people would just go nuts margin. Leveraged trading, and exactly. Well because the technology, had kind of caught up with it and allowed it so a whole new generation of, traders. Grow. Up on FX, which is a completely, different game altogether because, of course shares they, tend to go up over the long term like as a group, and likewise. I would like to think cryptocurrencies, as a group, will go up over the long term a I've been doing so far it. Might not feel like it right now but over. The period that they've all existed, it's been a kind of a long, long upward, trend and hopefully. That will continue but with FX which. As I say the previous generation, got into it's, like it can go up it can go down there's no up or down you turn the graph upside down and down is up and up is down I mean it's. A it's a completely different way of doing things altogether so, the people who've grown up with FX, trading tend, to think very differently in terms of how they trade now their, whole attitude to investment, so I find, it absolutely fascinating and, very exciting, that, the Millennials, and even younger than the Millennials, have got into.
Crypto. In the way that they did a. Lot. Of them will be nursing, losses. Right now but just like my gameplay, loss hopefully. A lot of them won't be put off trading, and we'll learn some lessons, read, some useful, stuff like, a book like mine well. My not. Mine actually not a book like mine they read my book and no, other. Excellent. Traders, and you, know it's, a baptism, of fire it always is that, is a really cool analysis, I love how you broke that down from funds and, moving, into shares and moving into actual. Effects. Like you said because in Japan a lot of people say that the reason why crypto took off so, extremely. Fast is because. Of that conversion, of FX traders that suddenly got interested, in crypto. Assets because it's kind of like the penny stocks it feels like something that if I find the right penny stock it's gonna blow up I'm gonna make massive gains kind, of like the leveraged trading and within the FX platform. So, do. You see that as a connection. Yeah, like so many of the FX traders were telling me in Japan that they were losing, lots of retail investors because, they saw this kind of as a new game of, gambling. Or betting on, something that could have. Exponential, growth do you see that transition, that's interesting, that's a very different perspective that you, saw that side of things because virtually, everybody I've dealt with as much as my, facebook page that I set up a few years ago as it, grew massively, during the boom and and became, well, for a period it became the biggest trading. Page in the world it. Still might be but I don't I can't say definitely because, I haven't checked all the others to see how many followers they got but it, became a pretty, big deal for a while and I was having you know deluge, with messages, and people. Wanting to talk to me about trading and I'd say at, least nine out of ten of them had never traded at. All apart, from some. Of them had traded cryptocurrency but certainly, there. Were very few who came from FX but, I guess because of where you worked at the time the business you were in you saw that kind of thing it's really interesting because you know Japanese culture is very risk-averse, so you'd, wonder why are there so many FX. Traders in Japan in a risk-averse culture, so I'd always asked my friends I lived there for the past decade, and they, would always say they'd say listen I don't want to put money in a stock that may bring me an average you know 5 to 8% a, year while.
I Can do something crazy have, fun with FX and maybe, get. Crazy. Capital, gains you know at the end of the day so they they see it as a game, I guess in some ways I mean. What. Was fascinating. Noticed. Facebook. Ads for, trading platforms, now by law they. Have to put. The percentage, of their clients who lose money, and. Reliably. Across, all the different platforms, that. Are, regulated. In. My territory they. Have. About. An 80% loss. On average, not that the average person loses, 80 percent of their money but that 80 percent of the, accounts, that are open are losing. Money not making, money, and bear in mind most of those are doing effects, and that kind of thing they're not just normal, investors. In shares of retail investors in shares they're. Doing FX they're doing Treasuries, they're doing all kinds of kind of complex, thought the stuff that frankly. Largely. Should be left to the professionals and, I. Can say that because 80% of these people it's. Kind of it stands, to reason that it's. A difficult difficult game, whereas. Buying shares rather, like buying cryptocurrencies, because, there's a natural direction of flow which is up yeah, then, it's. Somewhat, I would. Say it's easier, exactly, but it there's, that there's a kind of there's. More hope to it put it that way whereas FX, people. Try and they try again and they try again and you, know I cheated a couple of guys who asked me to help them they've been trading FX for, 10 years just ordinary, guys but they were doing it in their spare time and they. Had lost money all. The time every, year for, a decade but, there was still they still wanted, sky if, I can just make, a few changes I know I can make money on it I, don't, know but the statistics show and there have been big studies done on this sadly. The statistics, showed that traders. Who lose money, and. Don't. Make massive changes to their strategy, generally. Carry on losing, money forever, right. However experience, they get if you're making, basic. Errors which most traders do and they're. Kind of stuck in your head these basic errors and you just keep repeating them, in a kind of Groundhog, Day you will just always lose money year after year after year and that's what sadly, happens to a lot of people so, history keeps on repeating itself, repeating itself and instead of changing.
And Being flexible and creating a new strategy new, goals and your approach to trading. Exactly. So, so. Get them into positive, ways. Of behaving so that is a perfect. Transition, for the next question so if I'm a newbie, I'm a beginner in this space what. Are a few, pieces of advice that you could give to that person on how to be. Ready for trading in terms of strategy, goal setting what, are some important, lessons. You learn through your failures that, can help new people on this space all right I mean the number one thing and I have that kind of, you. Know front and center in my book and. Repeat it quite a lot is. Old. Wall Street Maxim frankly, which is cut your losses run, your profits, and it's very easy to say it, actually doesn't appeal to most, novice investors, because they think, that they want to do the other way around when they've got some profits they want to take those profits quickly, and when, they've got losses, they want to hold on because, it will probably go back up again you, know but. Actually. Nearly. All successful, traders do it the other way round when, they have a loss they're, out of there quickly and when. They're making a profit within. Reason, they try and let it run for as long as possible, until they feel like ok we really have come to the end of a trend here so, those. Are the kind of two most basic rules, for most, traders and, some. People say to me well not, all traders trade successfully like, that look at Warren Buffett he holds on to things that are losing money and he's the richest, trader in the world I. Think he's still the richest trader certainly one of the few the, fact is that he, also follows, the trends, but he follows them over the very very long term so, he just takes a longer-term view than. Your average trend, follower but ultimately, he's still doing the same thing which, is just buying. Something which he believes is on a long-term upward, trajectory and, that inevitably, will, go to the sky eventually and, he, so, he kind of he. Huddle's, but he's not huddling, in vain, hope like. A lot, of crypto modelers, have done he, is, invested. In things that you. Know are either sure, things or as close to being sure things as humanly. Possible and unfortunately. In the crypto space that just isn't, the reality it's not a sensible, way to behave, because. We. Just don't know which Kryptos will be the biggies you, know I again. Another lesson, I really. Should point out at this point it is a very important, one that I stress in my book is that you just don't know which ones are going to be successful and it's. Always been that way take the dot-com, boom once again, back. In 1995. Netscape. Done if you remember Nets of course yeah completely. Disappeared, right yeah Netscape, was the browser. $5.99. I think was a 99%, of, people were, using Netscape, to browse the web right, and that was in 1995. Seven, or eight years later only 2%, of people, were using Netscape, and then of course it it pretty much to all intensive purposes cease, to exist shortly. After half so back in 1995. If, you wanted to invest in Internet things I mean Netscape, was like Netscape, is that. Right. It's like a household, name yeah everybody's, heard of it it's, captured, the market, completely it, has a total, monopoly over the, market, it's, like what could possibly go wrong and yet, look what happened to it and there are any number of. Other examples of course we could give like AOL my. Space my. Space, in. America, Friendster. Friends, - yeah. Friends. Reunited which. Was just a big UK thing, for a while everybody, was on Friends Reunited this, is all course before Facebook. Everyone, was meeting their old school buddies through, Friends, Reunited. And that. Company was sold to a news, provider that I happen to be working for at the time for hundreds, of millions of pounds and then, that that investment, turned out to be virtually worthless so. You know, okay. You could carry on going back through history with just countless examples of, the same kind of thing and I'm sorry to, all the young people who've got Bitcoin in their head or ripple, in their head or aetherium, and they're just like yes, this is definitely going, to succeed, there is no definitely, and you have to basically.
Trade, In a sensible fashion really. You might end up like me and gameplay, and, it's not a nice place to be absolutely. Absolutely, so that is a bit, scary reference on people because they're thinking oh what, if my Bitcoin were theory amor the main crypto assets will eventually die any new crypto acid will surface and in take over most of the market share do. You have any, personal. Preferences. With, regards to crypto, assets any coins or tokens that you still feel will, not be Netscape or will not be a myspace, at, this, point or is it too difficult to tell, obviously. You cannot productive fiction future we don't have a crystal ball. I. Mean. Look if you were going to if, you forced, me to say. A name. Or, that some names of things that are most likely to succeed then, at this point I. Would. I would have to say the biggest names because. All other things being equal the ones. That already have some household, brand value. Like. Amazon, back in the day, by. 1998. It was already pretty well known yes, and, that did count for something, that it was well known it, didn't count for everything's Netscape, found out an AOL found out but, it does count for something and the fact that bitcoin, is already entrenched, in most people's heads, throughout. The world as like the cryptocurrency I mean let's face it most people haven't even heard of any other cryptocurrency, that's. Gotta count for a lot but. Of course we know that there are just so many technological, limitations. To Bitcoin and, I, know that you're going to be interviewing other people who have, stuff, to say about that and who are working on ways to mitigate those various, fundamental, problems. With Bitcoin, those efforts, are still ongoing but, those efforts are still not at the point where you can just get it yeah they've solved the problem, win it yeah it's still hard to say at this point exactly so, so yeah I'd have to say the big names Bitcoin. Because. Of its name Ripple. Because. It's supported, by so many large institutions. Who are able to plow money, in and plow kind of expertise. In. Aetherium. Has. Had some of the shine come off it obviously over the past couple of years I. Got. Very excited about it I still. Kind of believe that Vitalik. Boot. Aryan is is a true, genius I mean he just Wowz me every time he opens his mouth so I still have kind of something faith that, he'll pull some rabbits out of hats and, just, make this thing what. It has clearly, the potential to be obviously. Is not looking too great for a theorem at the moment but yeah if people watch this video in a few years time hopefully, they'll go yeah, cerium. Went, on to amazing, things cross. Fingers it's an amazing project and, I love the way theorem try to decentralize, everything, I remember seeing an interview with vitalik saying we, should decentralize. Our parties like, every Syrian party should have external. People in there somewhere, so yeah, really, cool mindset great projects, when, it comes to Bitcoin a lot, of people say that it's not necessarily, the fastest, or best, that wins the competition if we look at McDonald's. They have more market share than any other burger place but maybe a local burger joint may actually have better burgers, or for. Instance Toyota, is not they weren't the best cards, you, have Mercedes, BMW, more beautiful, more powerful cars, but. They have the most market share or up until recently when Nissan merged well the classic example, that people often bring up is VHS, and Betamax. That. Has to be before your talk wears before my time as well. There. Was this big war of the, formats right, um, you, may have heard about so you. Had VHS, like. Tapes. For video for home video and you. Know you would go to the video shop and you, could get VHS, tapes or you could get Betamax, tapes they, were like two options and people have beat some axe machines in their homes and. The, interesting thing is that by, most people's reckoning, by most experts reckoning Betamax, tapes were far superior right. VHS, tapes were a bit grainy and a bit rubbish as we know from having if you've ever watched any look were I'm sure you have they're just you, know they have the little. Lines. Across the bottom or the fuzziness, and horrible. Horrible but, VHS, one yeah they just just. Destroyed, Betamax, pushed, it out of the retail market completely but what's interesting is as a TV reporter, working, for the BBC working, for ITV news for years and years beta, is the Stan or was the standard, now I used beta tapes all to tell all the cameramen with the big cameras on their shoulders they're using beta so absolutely, so, you know they don't anymore because of their big, we've.
Now Got a little memory cards but you know for a very long time for decades they, were using beta. Because it was far far better but. VHS. It, won even though it was a bit rubbish so I mean you know it just goes to show so, maybe. Something. What-what, an LC on my making I suppose I'm kind of saying that Bitcoin, maybe is a bit like VHS. It's kind of it's already the famous one and so, it might just pick, up popular, momentum, even though it has many limitations. Especially. If people, manage, to solve some of those semi, solve some of those limitations I don't. Know but there are some great projects, are some really good projects, yeah that just just, wipe the floor with Bitcoin. Yeah and that does, make me think ok so nobody's, heard of these projects. I've. Worked with a couple of them and I'm just like blown away by some. Of the technology, graft technology. And you know good. Stuff is out there I don't I don't want to start shilling. For verse I've, been involved with so I won't start going into that now but but, yeah there is some good stuff out there and maybe, just, maybe if. They market themselves right, then they could be Bitcoin, killers, there's, one thing that I really loved about what you said is when, you talk about valuation. Models you know one of our employees. Actually our co-founder, at SU spark was interviewed, by London, school economics and one student asked, him but. Don't you think that crypto, assets, do not fit, any, valuation. Model out there he. Actually. Answered a question with, a question, and his, question was is. It that crypto. Assets. Do. Not fit the valuation, models or is it that the valuation models do not fit crypto assets well I think that the efforts that have been made so far to form fundamental. Valuation, models tend to be based on network, effects, yes Metcalfe's. Law for example right yes. They're. Looking at network effects and network. Effects, are you, know to anybody who doesn't know just, basically. The value of a network Metcalfe's, law says, that the the, value, of a network is is related. To how, many people are using are using it exactly, and then, there's a multiplier - yeah and then yeah you have a multiplier, effect there are some nice nice pictures, that are stuck in my book, telephones, will link, together which were used with the original, mega floor but anyway the point about it is the, problem, with it for me is that, network. Effects as we've just seen with Bitcoin during the crash is that. It's, kind of a chicken and egg situation which. Comes first the full in valuation or the, reduction, in in, the. Amount of people using, the network it's like the two kind of feed off each other, and so, you end up with virtuous. Circles, upwards. And vicious circles, downwards, in the valuations. There's nothing really solid, like, earnings, to. Hang on to you know a company can. See its share price plummet. But, it's still making really good profits, that that happens all the time and so then you can say well that those shares are cheap from. A fundamental, point of view they. Can still get cheaper of course as I saw with game, play mind you it wasn't making profits that was the problems but the. Point is that it, gives you an anchor doesn't it so these shares are fundamentally. Cheap because, the company is making tons of profits but the shares have gone down a lot because of the stock markets crashed right, whereas with the cryptocurrency market, if you're saying well, the valuation, of Bitcoin.
Is Based, on how many people are using it the problem is when the price starts crashing, less. People use it and that causes the price to fall further and then less people use it and then the two tend to go down together, and they go up together which, is a very different thing from, the way that fundamentals. Work, with shares, absolutely. So in terms of the fundamentals, as of course as you know we have the discounted, cash flow we, have this kind of dividend models p/e ratios, which. Are the more traditional, kind of valuation models. Okay. So that that smartass. LSE. Student, was, probably right in the sense that we just haven't worked out what a good valuation, model is but considering, that you, know thousands, of the finest brains in the world are, involved with cryptocurrency and nobody is yet come up with a model that really comes. Anywhere close to price, earnings, ratio, for shares tells. Me that. Probably. Probably, the problem is unsolvable, which, is why I'm stuck. With technical, analysis, for the time being as my as my. For, at least for finding, good, cause the main tool and most of the experienced, investors, out there or, traders, actually, usually, recommend, technical analysis, probably for the same reason is, they can't really find a good fundamental, analysis, but I do have a question when. It comes to for example. Recently. The exchange tokens, they've been exploding. Right since January, by Nance coin Kobe, token, ku coin because. These companies not. Only they have massive, treasury they, have great profit, margins they're actually making a lot of money could. There be some, sort of fundamental, analysis. Applied. To the exchange tokens because the utilities, are clearly connected within, their ecosystem, and is. That, one of the reasons why these tokens. Or cones coins, are blowing up recently but, I think again you'd I mean to some degree that's, an interesting, point and you and you've got a good point there but. The problem remains, similar. In the sense that you. Know the the finance. Is own coin for example, yes it's gone up massively in value and yes the company as far as we know is doing very well and making lots, of profits, or it certainly should be considering, how many people are using the platform to, to, trade but. Let's. Say it started. Let's, say it had fewer users if fewer, people were. Using the buy Nance platform, then. The. Price of the of the tokens would probably, fall because they're just be less demand for them and. Profits. Of the company, would probably, fall. Commensurately. They'd probably fall as well at the same time so, again you have these kind of all the things go down and all the all the metrics go down at the same time all the metrics, go up at the same time, which. Again makes it very difficult to find any point where you go these are cheap because. If, the, if the tokens, are going to be cheap probably the company's making less profits and probably less people are using the platform so, are they cheap if if, that's happened, do, you know what I mean okay. There's, a possibility, there could be a divergence, between between.
Them And then. We could start thinking, yeah maybe there is a fundamental, basis here if they, I'm. Kind of yet to see a real-life example, of that happening in a moment it's still not very clear yet right but it is interesting right since they have a product they are making money they're profitable, they are great treasury their, financial licenses, it does. It feel a bit more secure, or. Do you think for people from a traditional, world when they know these well. They don't have access to the financial documents, but does it feel a little bit more secure do you think, so I mean there was an interesting report out recently wasn't, there about how. A lot of exchanges. Are favoring. The graphic. 95%. Was it something yeah. I. Mean that kind of frizzy terrified. Box but. To, be fair by, Nance was one of the, exchanges. That was mentioned as this, looks like real volume are seeing here not, the faked volume, that a lot of the other exchanges, were doing so that. Gives a certain amount of confidence you're, right the fact that people, are seriously, analyzing. Their platform, and going yeah this looks like the real deal to, me. Nonetheless. Though, at. This point in time and things might, may change very significantly, in the next year or two but at this point in time even with the, reassurance of certain licenses. And a degree, of regulation, the. Platform's we're talking, about and the. Fact that they're making profits. Or not is still kind, of somewhat hazy compared. To say a company like Amazon or any any, American, company or, there's, listed, or any developed, world company that's listed on an exchange and, they have proper accounts, and they have you, know everybody can see how much money they're making and, where cash flow is the cash flow an issue and you know we can see the ins and outs whereas all these platforms are, basically, to, some degree closed books, apart. From say coin base, and. A. Couple of others but, the, the, big ones like finance the most popular, ones they changed your stick changes, you. Know I don't want to say anything bad about them because I don't I don't really, know that much about well. Nobody knows how they operate internally, which, is half the problem but you're right there close books so it's it's hard to say right it's still there's. No clear, path that fundamental, analysis yet although it may reassure, a few psychologically. May be to know that okay, they only have let's say two to 300 employees, operating.
Huge. Cash flow great. Profit margin so maybe some people might feel a little, more secure I don't know. Yeah. But also the way that a, ayios. Have. Taken over to some degree from I see oh yeah. The. Ayios, are, for. Those who don't know. The. Issuance, of tokens, but doing, it through a platform, like Beynon so by Nance kind of organizes, the whole thing and that. Provides, a degree of reassurance, because we know that by Nance exists, and it's a real thing if they're actually human, beings working. Within it whereas the problem with I cos initially, was half the time you didn't know okay so you don't know which were the real projects, and which were the scam 'bridge whether they would list or nod whether it be a tiny exchange or not there's so many question, marks to those type of, yeah. That's super interesting did this, has been an amazing, experience there's, so much key information gems. In there I really, look forward to your book by the way so do you mind telling us a little bit more about your book when it's gonna be out there's, so much more information and we definitely need to continue this conversation one, of these days it's been a great, great journey so, anything you like to share about. We've. Got. Because. It's being published in May and at. This point we're still in March but, I've got the cover. Beautiful. The, cryptic trader, very. Now anyone can make money trading Bitcoin, and other cryptocurrencies, it. Wasn't, my idea I should say to put a picture of my face on the front that. Was the publishers, the publishing, company insisted, on it do they put makeup on your. Okay. Guys so please have a look at the crypto, trader it will be out. We. Really look forward to it this has been absolutely. Stellar thank you so much for all the wealth of information I'm, sure many people out there learned so much about trading, and I. Really look forward to seeing your book being released in May really. Can't wait can I get a free copy yeah. Thank. You so much for everything today guys, definitely have a look at Glen's, book the crypto trader it's gonna be a huge success and, definitely, stay tuned for, the next episode, of kryptonite's, thank, you very much have a great night. Hey. Stop. Stealing my trading strategies, if you want to build your own trading strategies, predict. Learn and earn Bitcoin with zero risk definitely. Have a look at our committee app it's tons of fun. You.