Why Beating the Market Is Hard and How Advisors Add Value

Speaker: 00:00:12

Go!

2

: 00:00:18

Ryan Nauman Market Strategist Zephyr:

Welcome everyone to Zephyr's Adjusted

3

: 00:00:20

for Risk podcast from the shores of

Lake Tahoe I am Ryan Nauman the market

4

: 00:00:25

strategist here at Zephyr Markets are

as e as efficient as ever which makes

5

: 00:00:32

it hard to consistently beat the market

my next guest is an industry expert who

6

: 00:00:38

has a very interesting investment thesis

in regards to beating the market which

7

: 00:00:43

includes an asset class that can be

somewhat polarizing But first this episode

8

: 00:00:49

is sponsored by the award-winning Zephyr

which helps investment professionals

9

: 00:00:54

make more informed investment decisions

on behalf of their clients All right

10

: 00:00:59

enough from me Let's go ahead and move

on to the star of the show I'd like to

11

: 00:01:03

give a very warm welcome to Mike Willis

Mike is the CEO and co-founder of Cyber

12

: 00:01:11

Hornet ETFs Mike thank you so much for

coming on the show It's an honor to

13

: 00:01:17

have you I'm really excited about this

conversation and I think our audience is

14

: 00:01:22

gonna learn a lot It's gonna be a good

one Where can you please tell us a little

15

: 00:01:26

bit more about yourself in Cyber Hornet

16

: 00:01:30

Mike Willis CEO & Co-Founder Cyber Hornet ETFs:

Sure.

17

: 00:01:30

Thanks Ryan for letting me be here.

18

: 00:01:33

I started out trading my way through

grad school, got my MBA in finance

19

: 00:01:37

out at Cal Poly in California.

20

: 00:01:40

Went to work initially for Smith Barney

Pain, Weber, UBS as a senior Vice

21

: 00:01:45

President of investments at UBS before

I went independent, started my own RIA

22

: 00:01:49

and then eventually my own Rick, which

is a registered investment company

23

: 00:01:54

to enable mutual fund creation and.

24

: 00:01:59

You know, along the way the goal

was always to beat the s and p 500.

25

: 00:02:03

It was, you know, and, and

before that it was, you know, to

26

: 00:02:06

find the holy grail of trading.

27

: 00:02:08

I've been trading for 30 years and.

28

: 00:02:11

I like to say I've been in Trad five

for 30 years in Defi for seven years.

29

: 00:02:16

I became a Bitcoin seven years

ago, and I think it's a fun blend

30

: 00:02:21

to have and, and that of course is

the the origin of the ETF company.

31

: 00:02:26

But walking back a little bit, we.

32

: 00:02:30

We set out to beat the market

and realized along the way that

33

: 00:02:33

the market was already winning.

34

: 00:02:35

And there are other ways that advisors

can create value for their, their

35

: 00:02:38

clients that we think is even better

than just trading their portfolios.

36

: 00:02:43

But the asset allocations obviously

play a big role in the performance.

37

: 00:02:48

The quarterly reviews, the keeping

their, their clients on track with their.

38

: 00:02:54

Their investment plans because

really that's, I think that's really

39

: 00:02:58

the, the best thing you can do.

40

: 00:03:00

Put the math in their favor with the, the

different asset allocations you're using,

41

: 00:03:04

and then let compounding of interest and

just your, your discipline in keeping

42

: 00:03:09

them focused on their, their investment

plan and not, not deviating from it,

43

: 00:03:15

is I think how an advisor can bring

the most value to their, their clients.

44

: 00:03:20

Ryan: Mike you're exactly correct We

focus here at Zephyr a lot about that

45

: 00:03:24

Ryan Nauman Market Strategist Zephyr:

asset allocation and how important

46

: 00:03:26

is studies show that 90 or 95 of the

variation in a portfolio's return

47

: 00:03:32

depends on the asset allocation

right So it's very important

48

: 00:03:36

Ryan: I love that you brought that

up Also let's go back to you your you

49

: 00:03:41

and the creation of Cyber Hornet ETFs

What at what point when you had your

50

: 00:03:45

own were you like All right let's

go ahead and I'm gonna create my own

51

: 00:03:49

Rick now all right My own platform

for investment management and create

52

: 00:03:55

Mike Willis: Yeah, that

was a fun evolution.

53

: 00:03:57

What happened?

54

: 00:03:58

I had my account minimum

was a million dollars.

55

: 00:04:01

After I left the wirehouses, I only

took 37 clients with me so that you

56

: 00:04:06

know, I could focus on them and.

57

: 00:04:09

I, you know, I, I work in a, a white

collar world, but really live in a, in

58

: 00:04:13

a blue collar world, my friends are blue

collar and they'd come up and say, Hey, I

59

: 00:04:17

have 25,000, or I have $50,000 to invest.

60

: 00:04:20

You know, what should I do?

61

: 00:04:21

Can you help me?

62

: 00:04:23

And it was kind of difficult, you know,

telling 'em they didn't meet my minimum

63

: 00:04:27

and, and so I couldn't work with them.

64

: 00:04:29

And so, as I.

65

: 00:04:31

As I progressed, I realized it just

wasn't, my answers weren't setting

66

: 00:04:35

well with me, and so I decided I really

wanted what I was doing to be available.

67

: 00:04:41

The, the asset management I was doing

to be available to, you know, anyone

68

: 00:04:45

on, on down to a thousand dollars.

69

: 00:04:47

So.

70

: 00:04:47

That was the, the origin of

going down the mutual fund path.

71

: 00:04:52

And actually from a compliance

standpoint, there were some benefits

72

: 00:04:55

because advisors know how much

compliance is now required to, to

73

: 00:04:59

go from one mutual fund to the next.

74

: 00:05:02

And there were some efficiencies for

being in a, in a, in a mutual fund.

75

: 00:05:07

Where you could trade on the inside and,

and if you can get around the barriers

76

: 00:05:11

of entry of prospectuses and SEC filings

and, you know, all the other things.

77

: 00:05:17

It, it made it, it made, it made

it, we were able to offer our

78

: 00:05:23

strategies to anyone, and that

was, that was initially the.

79

: 00:05:30

The catalyst for going in that direction.

80

: 00:05:33

But I can tell you that also in

: 2013

81

: 00:05:37

beat the s and p for seven years,

and then in: 2013

82

: 00:05:43

The s and p was up over 30%.

83

: 00:05:44

We were up about half that for

our clients and really recognize

84

: 00:05:51

that here, you know, we had.

85

: 00:05:53

I'd invested, you know, thousands of

hours into our portfolios and here, you

86

: 00:05:58

know, the cheap, one of the cheapest

products in the market beat us handily

87

: 00:06:02

and then the next year as well.

88

: 00:06:04

So we, we shifted at that point and

realized that we wanted to use the

89

: 00:06:09

s and p 500 as the backbone and add

value to our clients in other areas,

90

: 00:06:13

because that was where we could make

the most significant impact for them.

91

: 00:06:18

And we went out, we found, we got the.

92

: 00:06:21

Index ticker symbol, which

hadn't been picked up yet.

93

: 00:06:25

We got the s and p 500 license so that we

could offer that to the public and then.

94

: 00:06:31

The rest is kind of history.

95

: 00:06:33

When crypto hit the market and we realized

that Wall Street was in transition to

96

: 00:06:38

tokenization and, and decentralization and

blockchain and being a new asset class,

97

: 00:06:46

we got excited about that and wanted

to incorporate that incorporated into

98

: 00:06:51

the, you know, the champion of Tradify,

which we consider the s and p 500 index.

99

: 00:06:56

We just felt like it needed a

crypto kicker to it to kind of

100

: 00:07:00

bring it into the 21st century.

101

: 00:07:03

And so we, we added that

25% kicker of crypto.

102

: 00:07:06

But also on the flip side, we think

it's crazy to jump in a hundred

103

: 00:07:11

percent into crypto because most people

can't handle that kind of volatility.

104

: 00:07:15

Investors we found can handle about

30, down 30%, but, but south of that,

105

: 00:07:20

they start really getting nervous and

burning up the advisor's phone calls.

106

: 00:07:24

And, and down 50 it's, they're probably

out and down 60 might be a lawsuit.

107

: 00:07:29

So we, we, we came up with the 75 25

blended strategy to give advisors a way

108

: 00:07:36

to kind of buffer that volatility of the

new asset class and keep their, their

109

: 00:07:42

clients in this crypto space for the

long term, which we think we're still

110

: 00:07:46

early and there's a lot of upside left.

111

: 00:07:49

Ryan: Yeah that's fantastic Mike And

we're gonna touch on a lot of that here

112

: 00:07:53

shortly but you're exactly right Mark like

you said in: 2013

113

: 00:08:02

beat the markets whether especially now

with it being so highly concentrated if

114

: 00:08:07

you're underweight those know for a while

to make seven names or mega tech or AI

115

: 00:08:13

you're gonna underperform then you have

technology technologies making markets

116

: 00:08:19

more efficient So it's really hard to

beat the market like you said even back

117

: 00:08:24

then probably harder now So why do you

feel you just mentioned that one of

118

: 00:08:29

your strategies was to add a kicker to

the S&P 500 being crypto being Bitcoin

119

: 00:08:36

Why do you feel adding crypto to the

S&P 500 index gives investors the best

120

: 00:08:41

opportunity to beat the market number

one And number two how surprised were you

121

: 00:08:47

that the index ticker was still available

122

: 00:08:51

Mike Willis: Yeah, I.

123

: 00:08:53

I wanna hit that one first.

124

: 00:08:54

So when I phoned, I phoned in and,

and asked the NASDAQ for INDE.

125

: 00:09:01

And of course, all all

mutual funds end in X.

126

: 00:09:04

And so I asked if it was

available and they said yes.

127

: 00:09:07

And I said, okay, I'd like to reserve it.

128

: 00:09:09

And I, I think I, I think I.

129

: 00:09:14

I, I think I, I led on that it was, I

was amazed that it was still available

130

: 00:09:18

and the person at the other end was

like, you know, what does it even mean?

131

: 00:09:21

Why would this be important?

132

: 00:09:23

And you know, we only have $10

trillion in the index fund space

133

: 00:09:27

and spend the hottest, you know,

the fastest growing space on Wall

134

: 00:09:31

Street for probably 25 years.

135

: 00:09:33

So, of course it was exciting to be to

have that ticker symbol still there.

136

: 00:09:38

And, you know, the, the, the

tradify companies of, you know,

137

: 00:09:41

Vanguard wanted their tickets to

start with V and, and on and on.

138

: 00:09:46

Infidelity F of course.

139

: 00:09:48

So they kind of got caught up in

that, I think, and they didn't

140

: 00:09:51

realize, you know, like an ETF.

141

: 00:09:53

I think those companies realized early

on that ticker symbols were important,

142

: 00:09:58

but from a mutual fund standpoint, I

think they just didn't think it was.

143

: 00:10:03

And I think that's where the, the

opportunity was for us to jump on it.

144

: 00:10:06

And at some point here.

145

: 00:10:08

The rest of our products are ETFs,

but the one, our index s and p

146

: 00:10:11

500 portfolio is a mutual fund.

147

: 00:10:15

And when, at some point in the future

when there's five letter tickers

148

: 00:10:19

available in the ETF space, we'll, we,

we might consider converting that at that

149

: 00:10:23

point, but, so we were super excited.

150

: 00:10:26

I remember telling my dad at

the time, I said, Hey, we just

151

: 00:10:29

made a million dollars today.

152

: 00:10:30

And he goes, what happened?

153

: 00:10:31

Tell me what happened.

154

: 00:10:32

Oh, no, he was in my car.

155

: 00:10:33

I actually came outta, I

FedExed it to the nasdaq.

156

: 00:10:37

Our payment for it.

157

: 00:10:38

And I got back in the car and I go,

well, that FedEx worth a million dollars.

158

: 00:10:41

And he goes, what was it?

159

: 00:10:43

And so I told him, and so yeah, I think,

and, and to, to a vanguard, I mean,

160

: 00:10:48

it's worth a hundred million dollars.

161

: 00:10:49

I mean, just think if they slapped

that ticker on their total stock

162

: 00:10:52

market index fund that has $1.7

163

: 00:10:55

trillion in its V-F-I-A-I-X or some,

some ticker, nobody's gonna remember.

164

: 00:11:00

They put I-N-D-E-X on that and they

start, they, they brand it as, you know,

165

: 00:11:05

index, having being a household name,

you know, you're now available in one,

166

: 00:11:11

easy to remember, ticker introducing

index, your favorite index fund in one.

167

: 00:11:15

Easy to remember particular.

168

: 00:11:16

So I, I mean, I, to us we're

small, so it's not, of course

169

: 00:11:19

not worth that much yet.

170

: 00:11:20

But I can tell you this,

when advisors find out.

171

: 00:11:23

That we have the index ticker symbol.

172

: 00:11:25

They always go crazy.

173

: 00:11:26

And we have, you know, index hats that

we give out to, to certain advisors

174

: 00:11:31

and, and they just, they love 'em.

175

: 00:11:32

So,

176

: 00:11:33

Ryan: I

177

: 00:11:34

Mike Willis: what was

178

: 00:11:34

the, the the second question, or it

was, your first question was what?

179

: 00:11:38

Ryan: No and that's perfect Mike because

I have a lot of guests on ETF providers

180

: 00:11:44

on that are And they talk about how

hard it is to create a ticker And they

181

: 00:11:49

realize like how important it is So it

just when I heard that's a ticker for

182

: 00:11:54

your mutual fund it's that's fantastic

183

: 00:11:56

Mike Willis: so important.

184

: 00:11:57

It's, I mean, I've been a collector

all my life of art and different

185

: 00:12:00

things, and so ticker symbols

are kind of just right up there.

186

: 00:12:03

You know, if you go out to Dubai

and, and Bahrain they, ticker symbols

187

: 00:12:09

are really important out there.

188

: 00:12:10

In fact, like licenses on.

189

: 00:12:14

Cars the one, one sold for, you

know, millions of dollars just

190

: 00:12:18

because they, they really value the,

you know, the license plate and,

191

: 00:12:23

and, and essentially what's on it.

192

: 00:12:25

And of course, it's like ai.com

193

: 00:12:28

just sold for $70 million.

194

: 00:12:29

There's.

195

: 00:12:30

There's literally tickers going, I call

them tickers, but they're just, you

196

: 00:12:33

know, letters on license plates selling

for millions of dollars in Dubai, and

197

: 00:12:38

I see it no different on Wall Street.

198

: 00:12:40

You know, sticky tickers make

a difference in marketing.

199

: 00:12:44

And one of the things we were able to get

with our 75 25 platform, we got triple B.

200

: 00:12:50

For Bitcoin, triple E for Ethereum,

triple S for Solana and Triple X for XRP.

201

: 00:12:55

So it's really easy to remember.

202

: 00:12:57

And and they're all 75 25,

so they're built on a 75%

203

: 00:13:01

foundation in the s and p 500.

204

: 00:13:04

And then we have that crypto component

at 25% that we rebalance monthly.

205

: 00:13:10

Ryan: Yeah Awesome Mike We should

probably I should probably should get

206

: 00:13:15

us back on track talking about your the

strategy and beating the market but I

207

: 00:13:20

love just these stories about creating

a company the tickers and what goes into

208

: 00:13:26

it It's a lot of fun So going back to the

first question you just mentioned that

209

: 00:13:34

at first it was very hard to beat the

market: 2013

210

: 00:13:39

the market harder now maybe than ever

to beat the market You realize that

211

: 00:13:45

adding crypto and in your case 25 to

the S&P 500 gives you that kicker that

212

: 00:13:52

extra juice to potentially beating the

market So why do you feel adding crypto

213

: 00:13:57

to the S&P 500 500 gives investors that

best opportunity to beat the market

214

: 00:14:02

versus maybe using options to produce

income or other vehicles why crypto

215

: 00:14:09

Mike Willis: Yeah, I think there's a

lot of different ways you can a lot of

216

: 00:14:13

different strategies you can implement

that are creative and and smart In our

217

: 00:14:19

world, what we're looking at here is.

218

: 00:14:22

We don't like to use leverage.

219

: 00:14:24

We like to just own the position outright.

220

: 00:14:27

So that, that eliminates

derivatives from our pool.

221

: 00:14:32

So we're looking at, okay, what,

what, what's the grand champion of all

222

: 00:14:36

indexes on, on the trad five world?

223

: 00:14:38

Well, we think that's the s and p 500.

224

: 00:14:41

Then from a crypto standpoint.

225

: 00:14:44

There's, there's hundreds of thousands of

tokens actually out there on the market,

226

: 00:14:48

so we only start paying attention to them

when the public has, when the investors

227

: 00:14:53

have pushed them up into the top 10.

228

: 00:14:55

And that's when we start to pay attention

to the crypto positions that we think.

229

: 00:15:00

Our shareholders should

also pay attention to.

230

: 00:15:04

And right at the top, of course, the grand

champion in the digital space is Bitcoin.

231

: 00:15:08

And then you have Ethereum, Solana,

XRP, sers, and there's some others.

232

: 00:15:13

So what we, we think blockchain

is here to stay, and we think that

233

: 00:15:24

was proven over what we think.

234

: 00:15:26

We call the the three waves of Bitcoin,

and the first wave into Bitcoin was

235

: 00:15:30

that unregulated wave that was paved

by the pioneers and early adopters.

236

: 00:15:35

And they went out and kicked, scratched,

and fought their way into the most

237

: 00:15:41

crazy different, you know, digital

wallets with public and private keys

238

: 00:15:45

on unregulated exchanges opening these

accounts, having nobody to call if they

239

: 00:15:50

accidentally send it to the wrong place.

240

: 00:15:53

But these were the pioneers

that that got Bitcoin early on.

241

: 00:15:57

And then your second about a trillion

dollars came in over a 15 year period.

242

: 00:16:01

Then two years ago, the SEC.

243

: 00:16:04

Made Bitcoin legal in a

regulated exchange in your, your

244

: 00:16:09

brokerage account through ETFs.

245

: 00:16:11

And so that we, we call that the

second wave of, of into Bitcoin.

246

: 00:16:16

And that, you know, set all records

with, with new asset classes for ETFs.

247

: 00:16:21

And then the third wave is what

we're in now, and we think that's

248

: 00:16:24

the, the institutional wave.

249

: 00:16:26

And specifically to this call, the,

the 300,000 plus financial advisors

250

: 00:16:31

who are gatekeepers to $30 trillion

in assets really haven't started.

251

: 00:16:35

Recommending crypto yet.

252

: 00:16:36

So when people say we miss Bitcoin,

we're late, we, we disagree,

253

: 00:16:41

we think we're still early.

254

: 00:16:43

Most advisors have no idea what the

difference between Bitcoin, Ethereum,

255

: 00:16:46

Solana, XRPR, and those are the top

four cryptocurrencies on the market.

256

: 00:16:52

So, you know, we're not late,

you know, we're way early here.

257

: 00:16:56

And so our goal is to, we don't think

advisors need to become experts in crypto

258

: 00:17:02

to incorporate it in their portfolios.

259

: 00:17:04

The, the statistics are showing

20 to 30% of their clients

260

: 00:17:08

are buying crypto around them.

261

: 00:17:09

So this gives them a way to satisfy

that crypto demand, keep the assets

262

: 00:17:14

in-house, and protect your, your

fiduciary risk by buffering it

263

: 00:17:18

with a 75% s and p 500 foundation.

264

: 00:17:23

Ryan: Yeah Mike that's fantastic A couple

of things that I was late to get into

265

: 00:17:27

crypto I did I had a bunch of guests on

talking about Bitcoin really for the first

266

: 00:17:33

few years I didn't really understand it

I'm not gonna invest in something I didn't

267

: 00:17:37

understand Then I kept doing more research

It was like the impacts at Bitcoin and

268

: 00:17:43

I specifically just used Bitcoin has on

the efficient frontier on the efficient

269

: 00:17:49

frontier every one of those portfolios

100 portfolios had some slice of Bitcoin

270

: 00:17:55

in it whether it's the most conservative

to the most aggressive it just opened my

271

: 00:18:01

eyes yeah there's more benefits to it than

just price appreciation When you put it

272

: 00:18:06

into a client portfolio or an investment

portfolio diversification increases that

273

: 00:18:11

diversification which is so important

too going back to asset allocation that

274

: 00:18:16

we talked about earlier So there's that

part And then now let's talk a little bit

275

: 00:18:21

about the performance my crypto winners

upon us Bitcoin's down what as we're

276

: 00:18:28

talking now 13 this year down nearly

40 from its high What's been the cause

277

: 00:18:34

of this crypto winter and this pullback

278

: 00:18:38

Mike Willis: Yeah, I would go, the

first thing I would say is this.

279

: 00:18:41

I started tracking Bitcoin was at a buck.

280

: 00:18:43

I had three screens up.

281

: 00:18:46

I've always been at stock traders,

so it, I was curious about this new

282

: 00:18:51

cryptocurrency and so I watched it.

283

: 00:18:53

I, I watched it go from

one to a hundred back down.

284

: 00:18:56

I watched it go up to 300 and back

down up to a thousand and back down.

285

: 00:18:59

And when it finally hit about 7,000,

I decided to do some my due diligence

286

: 00:19:04

on it, because up until then, when my

clients ask about it, I said, well.

287

: 00:19:08

If a coder can create it, then

another coder can counterfeit it.

288

: 00:19:11

So I'm just not interested.

289

: 00:19:13

And that kept me away.

290

: 00:19:15

But once I did the deep dive and I had

committed a hundred hours to that deep

291

: 00:19:20

dive, and I was only, I probably 15 hours

in, and I, I, I was just, I couldn't

292

: 00:19:25

believe, I didn't look at it sooner.

293

: 00:19:27

Because once you understand the

cryptography and some of the

294

: 00:19:31

core principles of it, it, it's

mind blowing and you'll see why.

295

: 00:19:35

Why crypto heads get so excited about

it and why, you know, it even gets

296

: 00:19:39

religious to a lot of those guys.

297

: 00:19:42

But I will say this, the new the new

wave of people coming into Bitcoin

298

: 00:19:47

really don't understand the, the

original core principles of it.

299

: 00:19:50

The scarce digital asset.

300

: 00:19:52

It's a, it's a bear asset.

301

: 00:19:53

You can own no trusted third parties.

302

: 00:19:57

It's peer to peer.

303

: 00:19:58

I can, I can actually send you a thousand

dollars without it touching a bank.

304

: 00:20:01

So.

305

: 00:20:03

And there's many more of

these, these principles.

306

: 00:20:05

You know, it's, it's the monetary

policy is regulated by code, not

307

: 00:20:10

by people, you know, changing their

minds or the fed, which we have

308

: 00:20:13

no idea who they actually are.

309

: 00:20:15

And so there's, there's great reasons

to own crypto in your portfolio.

310

: 00:20:20

I think however, the

newbies coming in are.

311

: 00:20:23

They don't understand the core

principles, but they understand it

312

: 00:20:27

more as a new technology and they're

treating it like a tech stock.

313

: 00:20:30

So it does trade the, the new the

new volume coming into Bitcoin

314

: 00:20:35

over the last several years.

315

: 00:20:37

Very different from the first wave

of Bitcoin in terms of behavior

316

: 00:20:42

and reasons for coming in.

317

: 00:20:44

With that said, I'll,

I'll tell you a story.

318

: 00:20:46

We were hiring people recently.

319

: 00:20:49

One of the people we hired bought

Bitcoin actually at a penny, and

320

: 00:20:54

they sold it at a dollar because they

thought the US government would shut

321

: 00:20:59

it down when it got to a dollar 'cause

it would compete with the US dollar.

322

: 00:21:03

So obviously that didn't happen.

323

: 00:21:04

We have another person in the

office, our CTO bought it at a buck.

324

: 00:21:09

Sold it at a hundred dollars.

325

: 00:21:11

'cause that was a nice, you know,

they went, that's pretty good.

326

: 00:21:13

That's a good return.

327

: 00:21:15

So I think when Bitcoin hit a

hundred thousand dollars here.

328

: 00:21:20

I think that's another

one of those numbers.

329

: 00:21:22

And when it didn't hold, I mean it went

up to 1 26 and then it came back down and

330

: 00:21:25

I think people got scared when it, and

when it breached under a hundred thousand

331

: 00:21:30

and they were like, you know what?

332

: 00:21:31

We've had a nice little run here.

333

: 00:21:33

It looks like you know, this might be it.

334

: 00:21:36

And so they sold out of it, but what's

also happening at the same time here.

335

: 00:21:43

The technicals I think,

are important to bring up.

336

: 00:21:46

And if you look at the crypto winter of

: 2022

337

: 00:21:51

you, but we just didn't we just didn't

get it together for you in time, but.

338

: 00:21:56

The, the head and shoulders pattern is

almost identical to the crypto winter that

339

: 00:22:01

we had a couple years ago, four years ago.

340

: 00:22:04

And so we're tracking it almost verbatim.

341

: 00:22:07

And so from a technical standpoint,

we could churn for a while here.

342

: 00:22:10

But what's coming when I

say for a while, you know.

343

: 00:22:14

Three to nine months.

344

: 00:22:15

But it is a sharper version of 2022.

345

: 00:22:19

So it's very possible we're gonna get

a V recovery since it's been more of a

346

: 00:22:22

V-shape and not a U-shape crypto winter.

347

: 00:22:26

So we'll just have to wait and see.

348

: 00:22:27

But I will say this, so technically

we could go down, breach the

349

: 00:22:31

$50,000 level, even though we're

up about 30% off the bottom here.

350

: 00:22:36

The recent bottom, the.

351

: 00:22:39

The possibility of going back, taking

out the 50,000 stops and then, and

352

: 00:22:45

then resuming the rally is very

possible from a technical standpoint.

353

: 00:22:49

Fundamentally speaking though,

this, there's only 21 million coins.

354

: 00:22:53

We've already mined 20 million of 'em.

355

: 00:22:55

That threshold was hit about a month

ago, so there's like a million coins left

356

: 00:22:59

and at some point when the music stops,

we all know how musical chairs works.

357

: 00:23:04

And there's only so many chairs.

358

: 00:23:07

So that's why investors who really

understand crypto and realize,

359

: 00:23:12

look, this is not only a scarce,

this is, this is digital gold.

360

: 00:23:16

It's a scarce digital asset.

361

: 00:23:18

It, you can trans, I mean,

I've carried gold and silver.

362

: 00:23:21

I've been a gold bug and a silver bug.

363

: 00:23:23

And I can tell you it's difficult

to move around the world.

364

: 00:23:26

And it's much easier to move a

Bitcoin than it is a bar of gold.

365

: 00:23:30

I can tell you that much.

366

: 00:23:32

Ryan: Yeah The the carry cost is a

lot cheaper for Bitcoin right so it's

367

: 00:23:38

interesting that you brought up more

of the technical point of it cyclo like

368

: 00:23:42

you said broke 100,000 120 and a very

good point that you made that maybe

369

: 00:23:47

people are like All right let's take

some profits off the table and who knows

370

: 00:23:52

what's next great point Mike So what

will take it to end do you think You

371

: 00:23:56

said maybe it could breach 50 would that

be a point on the technical side or is

372

: 00:24:03

there something more fundamental that

you think could end this crypto winner

373

: 00:24:09

Mike Willis: Well, I think just

in the last month you've seen

374

: 00:24:12

a lot of AI hacks in crypto.

375

: 00:24:13

And so I think that stalled things

with Bitcoin jumped off the,

376

: 00:24:17

the, the, the recent bottom here.

377

: 00:24:19

It looks like it's off and running and it

very well could be 'cause the fundamentals

378

: 00:24:23

are only getting stronger and stronger

when you have a scarce digital asset

379

: 00:24:27

where you can't print more of them.

380

: 00:24:30

You know, there's a reason, one of the

big reasons that, that Bitcoiners came

381

: 00:24:34

about is they felt like the US dollar.

382

: 00:24:37

Was because there is no limit to

how many dollars can be produced and

383

: 00:24:42

they're no longer backed by gold.

384

: 00:24:44

What we saw happen during COVID with

$10 trillion being printed, you know,

385

: 00:24:50

burgers went from eight bucks to 20 bucks.

386

: 00:24:53

And that's a problem because if you

saved, saved up your whole life and

387

: 00:24:58

you had a million dollars in the bank.

388

: 00:25:00

It's now 75, you know,

$750,000, you lost 25% minimum.

389

: 00:25:06

And some people would say you lost a

lot more than that in purchasing power.

390

: 00:25:10

So, Bitcoiners, the, the

neat thing about Bitcoin is.

391

: 00:25:16

At the minimum, it's a competition to the,

the monopoly on money the, the governments

392

: 00:25:21

have had for at least recent memory.

393

: 00:25:24

And so at a minimum, it should help

create a more efficient and competitive

394

: 00:25:29

monetary system at a maximum if all

fiat currencies throughout history

395

: 00:25:37

have always, once they've gone off.

396

: 00:25:39

The gold standard or

whatever was backing them.

397

: 00:25:41

They've all gone to zero at some point.

398

: 00:25:43

So we all talk about the great

reset, what does that look like?

399

: 00:25:47

And so Bitcoin is a hedge against the

financial, current financial system

400

: 00:25:50

failing, even though now it trades

like a, a tech stock at some point.

401

: 00:25:55

When the core principles are understood

by the masses, it will bifurcate and

402

: 00:26:01

it will not trade in, in correlation

with the stock markets, in my opinion.

403

: 00:26:05

But the reason it is now is you just have

such a huge wave of people that own it.

404

: 00:26:10

For other reasons, you know, not,

not for the original core reasons.

405

: 00:26:14

So what would cause it to rebound?

406

: 00:26:16

I think clarity in the,

the regulatory environment.

407

: 00:26:20

You know, there's some, there's some

bills on Capitol Hill that could bring

408

: 00:26:23

clarity that would allow institutions.

409

: 00:26:27

And compliance, the compliance within

these institutions to allow people

410

: 00:26:32

within the organization to, to bring

it into certain portfolios that

411

: 00:26:37

right now it can't be allowed in.

412

: 00:26:39

And that's happening on a, a

weekly, monthly basis every month.

413

: 00:26:43

There's somebody, some new announcement

about a new bank or a new brokerage

414

: 00:26:47

house that is allowing their, their

brokers or clients to own crypto.

415

: 00:26:51

So the fundamentals keep getting better.

416

: 00:26:54

The technicals are what they are.

417

: 00:26:56

You know, this is part of a new

technology Every four years, crypto goes

418

: 00:27:01

through these at least up until now,

these massive crypto, crypto winters.

419

: 00:27:06

But when you go back over the last,

you know, two since inception.

420

: 00:27:11

And certainly the last 10 years

crypto at least Bitcoin's been

421

: 00:27:15

the, the best performing asset

class, I think across all markets.

422

: 00:27:21

Ryan: Yeah

423

: 00:27:22

Mike Willis: Yeah, very

good stuff there, Mike.

424

: 00:27:23

So you mentioned earlier

about the adoption.

425

: 00:27:28

And,

426

: 00:27:29

you know

427

: 00:27:29

retail, investor institutions,

retail financial advisors, investors.

428

: 00:27:35

Do you feel that financial advisors in the

retail investor space has fully adopted

429

: 00:27:40

or accepted crypto as an asset class?

430

: 00:27:43

Came an asset class

431

: 00:27:45

Over a year ago.

432

: 00:27:46

Do you think they fully

accepting crypto yet or no?

433

: 00:27:49

Retail, yes.

434

: 00:27:52

Advisors, definitely not.

435

: 00:27:54

We're finding maybe 5% of advisors are

incorporating into their portfolio so far.

436

: 00:27:59

So 95% are not.

437

: 00:28:02

And that's exciting to us because,

you know, advisors are gatekeepers

438

: 00:28:06

to 30 trillion in assets.

439

: 00:28:08

So that's gonna unlock at

some point because, you know.

440

: 00:28:12

BlackRock was against Bitcoin for,

you know, over 10 years before and,

441

: 00:28:18

and, and adamantly and so were some

of the other large institutions.

442

: 00:28:22

I think Goldman Sachs.

443

: 00:28:24

You know, called it Tulip Mania, you

know, and now they just announced a

444

: 00:28:28

month ago that they're, they're coming

out with their own Bitcoin, ETF.

445

: 00:28:32

So we're going through that, that

normal cycle that new technologies go

446

: 00:28:36

through, where you throw mud at them

to begin with, or fud or say, you know,

447

: 00:28:41

if you remember what the internet,

oh, that's just for pornography

448

: 00:28:44

and you know, all this other stuff.

449

: 00:28:45

And then we found out there

was a lot, a lot of cool things

450

: 00:28:48

you could do with the internet.

451

: 00:28:49

And it wasn't just criminal activities.

452

: 00:28:51

Same thing with, with.

453

: 00:28:53

Cryptocurrencies that, you know, initially

they just said it's criminal activities,

454

: 00:28:57

but turns out there's a lot of cool

things you can do with cryptocurrency

455

: 00:29:01

that goes way beyond some of that stuff.

456

: 00:29:04

And now that the institutions are

adopting it, the advisors have

457

: 00:29:07

to look at it and they all, they

will in our opinion, because when

458

: 00:29:11

BlackRock says it's an asset class,

fidelity says it's an AC asset class.

459

: 00:29:15

Goldman says it's an asset class.

460

: 00:29:16

Morgan Stanley just announced they're

coming out with their own Bitcoin, ETF.

461

: 00:29:20

These are.

462

: 00:29:21

This is it.

463

: 00:29:22

It will, it will permeate into the advisor

space and that $30 trillion will unlock.

464

: 00:29:28

And that's another reason

we think we're still early.

465

: 00:29:32

Ryan: Awesome Mike Fantastic Thank you

so much for coming on It's an honor to

466

: 00:29:37

have you on really fun conversation I

learned a lot a lot of stuff to unpack

467

: 00:29:42

here I'm probably gonna go back and watch

this a couple different times to fully

468

: 00:29:46

get it all So thank you so much Mike

for coming on the show and sharing such

469

: 00:29:51

great insight Where can our audience get

more information about CyberHornet ETFs

470

: 00:29:58

Mike Willis: Cyber Hornet etfs.com

471

: 00:29:59

is our website.

472

: 00:30:00

Ryan: Awesome

473

: 00:30:01

Mike Willis: Mike, thank you so much.

474

: 00:30:02

Ryan: much I'll include those

links in the show notes as well

475

: 00:30:05

Mike Willis: So everyone can,

476

: 00:30:06

Ryan: get

477

: 00:30:07

Mike Willis: access to those.

478

: 00:30:08

Ryan: resources

479

: 00:30:09

Mike Willis: Thank you everyone.

480

: 00:30:10

Ryan: listening to this episode of

Zephyr's Adjusted for Risk Podcast You

481

: 00:30:14

can watch all of our other podcasts

on the Zephyr YouTube channel as well

482

: 00:30:19

as on Spotify and wherever else you

get your podcasts Thank you very much

483

: 00:30:24

and have a great rest of your week

484

: 00:30:25

Mike Willis: Thank you, Ryan.