Hey everyone meet kevin here. Welcome back to another episode of the meet kevin show. Today we have genvyev dector with us and she is a cfa. She's got some incredible insights on a crypto, and especially now with the disaster happening in ukraine.

This could end up being, as she says, a watershed moment for crypto, so we've got about 15 minutes here and i want to get as much information as i can. Thank you so much for being here. Hopefully i didn't mess up your last name. Thank you.

So much and the link to her newsletter is linked down below for grit capital. Welcome aboard amazing to be here, and you did a great job on my name, yay, all right, so uh watershed moment. What does this mean for retail investors is? Is now the time to really start getting serious about uh considering getting into either the main coins? You know bitcoin ethereum and the alts uh. Is it still early? Why is this such a watershed moment? What's happening, what are you seeing out there? Okay, i'd like to use this quote to explain where we're at with with bitcoin and crypto in general.

As one of my favorite philosophers, german philosophers are arthur schopenhauer and he says that all truths pass through three stages, so first it is ridiculed. Secondly, it is violently opposed, and third, it's accepted as self-evidence, so with crypto and bitcoin in general. I think we're somewhere between phase two and phase three and with what's going on in russia and ukraine right now, uh, you know, you've got a situation where a massive country has just been disconnected financially um from the world and its citizens are seeing their savings, whether It's cash in the bank or stock holdings uh pretty much evaporate and you know i was looking at the holdings in russia of crypto and there's something like 12 of all. Crypto holdings are held by by russians, so they have been holding crypto ahead of this um.

But we've seen the crypto markets rally um last week, uh, you know when russia invaded ukraine, uh crypto started to well, initially it went down and then it started to go up and it's actually up 11. Since then it was actually the third best performing asset. In february volatility was number one, energy was number two and crypto is number three wow yeah so is. Is this potentially then i mean? Is it? Is it too late, then or, and and how do you go about allocating this into a traditional portfolio? Is this something: where do you have to be a maximalist be all in or or what do you usually recommend? No, no! No! No! I so i'm originally from the world of stocks, so i was a portfolio manager for the better part of 10 years um.

So i was a manager of small caps and and private equity, so i i lived in the speculative world, but still traditional world um. What i recommend to people. This is how i've made money over my career um is use the 80 20 rule. So 80 of your capital should be in sleep at night things.

I know you're big into real estate kevin so stuff you can, you can touch stuff. You live in your house, real estate or stocks in large cap stocks and then the other 20. This is where you want to do your high risk stuff um, where you can actually lose all your money, so you've got to be prepared right. So it's not for everybody, but if you're going to play, if you're going to play crypto, it's got to be 20 or less.

This is still an extremely volatile asset. Um and especially, you know, there's 17 000 crypto coins out there and i think, probably most of them, maybe only a few dozen will survive uh over time, no different than the dot-com uh bus. When most companies went broke because most of them aren't even real um they're, just you know excuses for for hype, so i would say to anybody out there less than 20 of your portfolio in anything risky like crypto. Now this morning, uh federal reserve, chairperson jerome powell, kind of punted on cbdc's that they've put out.

You know for commentary that they're waiting for congress and it sounds honestly like it's going to take years before the american government actually does anything along with the fed when it comes to crypto. Does that matter i mean, i know we need regulation. I just heard the sec is going after nft creators for potentially violating securities rules uh. How much are we in the wild west and does that just create opportunities for us, or is this something to be fearful of? I mean there's always going to be fear in the marketplace.

I think regulation is a good thing. I think when you get clarity, you get bigger market participants, so you get. You know. Pension funds, institutions allocating capital um.

When you get clarity - and unfortunately you know the sec hasn't been very clear with companies, you know, i don't know if you remember coinbase, when they were going public uh, they were going to launch a loan product and the sec came out and said that you know. Unfortunately, we think this is a security, but we're not really going to tell you much or what to do, and so coinbase was like. Okay, damn it like. We want to go public, so we're going to just pull this loan product, so they pulled it um.

But then, a couple weeks ago we did get some clarity, because another uh crypto exchange that had had a loan product similar to the one coinbase was trying to launch in the marketplace. Um actually settled a 100 million dollar settlement with the sec and a whole bunch of states, uh, yeah block five. Sorry, i missed the name, and so i think that gave a lot of the crypto community, some clarity on what's allowed and what's not allowed um. So we are like i said in that phase of like the violently opposed.

You know there is still opposition now. What do you think the responsibility of of the centralized exchanges is having you know, considering? Let's say russia, for example, some crypto exchanges are saying: hey we're, not letting people in russia use them to sort of escape the sanctions potentially, whereas you have binance saying come to us, we'll take everyone. Even if you aren't russian, you know they're always trying to be sort of the d5 of c5. What's your take on that i mean what responsibility does cepha have here if any? Well, if you know certain citizens have been sanctioned internationally and they're on, you know an interpol list or whatnot and they're a no-fly zone in terms of traditional finance or crypto exchanges.

Then those individuals should not be allowed. They would you know, exchanges need to kyc the accounts. You know know your client know where the money's coming from um, and so i just think that those specific people should not be able to open accounts, but to ban entire. You know, countries and citizens.

That is, you know, completely opposes the whole um reason why crypto exists in the first place, so i i would not be favoring that at all in any shape or form that makes sense, and - and i mean the more regulation we get - it seems like the more We also start pushing over to d5, but then we also see a lot of risk in d5. How do you fit the d5 into that 20 risk allocation? You know there are some d5 protocols where people are looking at these 40 to 50 percent apy, sometimes more sometimes less, and it's just like it's mind. Blowing i mean hey if you're uncertain about stocks, throw your money into some of these things yielding 20. 30.

40 percent, but it all comes with risk. So how do you balance that yeah the default? The du5, is definitely the wild wild west um. I think that area is gon na see massive amounts of regulation um. I would say that anybody entering it and thinking that they're getting these you know risk-free returns, that they don't exist, and i think the other bigger problem is just like how much exposure there is in these markets and how much leverage there is in these markets, because You know leverage limits are are not regulated there, and so we have like no idea it kind of in a way.

It reminds me a little bit of like the cds's um back during the housing crisis and, like all these, you know these tranches of mortgage-backed securities. That had no, i mean i'm i'm over blowing it a little bit, but i i think the point is just like where you don't know the exposure and you don't know you know the counterparty exposure and who's exposed to what and you know where you get these Situations where all ratios go to one, which is quite scary, um. You know, i think the crypto market's too small at this point to really be a massive threat like that. I think it's like 1.4 trillion at this point.

So it's still not you know it's one. You know one point: four percent of the us stock market in equivalent size, so it's it's not massive, but i think this is somewhere where you know we need to start tracking this stuff because uh it could down the road. You know be a big problem, so maybe not so much of a greater financial crisis level problem like the housing market and mortgage market was where 10 trillion was, like you said, through default swaps, turned into 100 trillion uh. This is still kind of small, but how about risk for like stable coins, because you brought up that counterparty risk in the leverage you know i go into, let's say: usdc and they're like oh yeah, it's fdic backed up per dollar sure until you lend it out And then it's lent out 30 40 50 times and what, if they default, and the next person defaults in sort of a larger crisis.

Your stablecoin, which is sort of sold to people as a high-yield savings account, could essentially be worth zero. How much of a real risk is that yeah that's a real risk? It also sounds a lot like um. Some of these you know clearing houses in the us that say they you know, have stock on hand, but they don't because they've lent it out and they've lent it out and they've lent it out and next thing you know you get a massive gamma short squeeze Called gamestop so um yeah, it's a it's a bit. It's a it's! A it's a it's a it's an issue um! I also think there's like the fdic limits, i'm not an expert by any means on these, but they cover you know: crypto uh, that's in hot! Wallets, like you know, on the exchanges, uh stuff that's taken off might not be covered.

I don't know how all that works, so yeah, there's there's definitely risk and you know you've seen it before. Not your not your keys, not your coin right, there's also those risks where these exchanges are still getting hacked um and you know, there's still a lot of you know cowboy-like behaviors going on so be careful. I i actually sorry i was going to interject there. I actually lost money on an exchange at one point and it forced me actually to go all you know really risk risk-free, but i bought my bitcoin and my ethereum through an etf that i hold in canada now um, which is a little bit less risky than Holding it through an exchange which they won't approve here in the united states, because they're stupid not yet yeah, not yet so what about uh a politics? So how does politics play into our crypto investments? We've got a midterm cycle coming up in the united states.

What do you see, maybe in canada? What do you, research about the united states in terms of democrat republican, or are they all just as clueless about it, who's? Better who's? Worse, oh, i don't want to get into those kinds of politics um. You know. I grew up in a political household and i listen to my parents fight over uh these issues for long, not crypto, but just you know sure politics in general, and i vow to myself. I'm, like you know what i'm gon na get into finance, because when you get into finance, you always know who's right, because the stock market will tell you, are you up or down so so, not necessarily like uh? Oh democrats get in.

They go for the marijuana stocks and solar. Is there that kind of division like oh republicans, oh get into you, know military stocks or whatever like in crypto? Have you noticed anything like that? I haven't actually noticed that, but again i'm up in canada and you know we're kind of fair weather when it comes to politics up here. Uh everybody pretty much falls down the middle except for a handful, so yeah. No.

I couldn't comment on that. Okay, no worries: what about the mining companies so you've got hud 8 mining great company. I've had them on the channel two or three times now. What do you think about the miners and and how much of an allocation would you give to them? One of the big concerns that i'd love for you to talk about that i have is, you know you might have a company that has essentially uh 20 of their market cap in actual bitcoin and then the other per 80 is really just the potential of the Mining like there's no underlying asset there right so you're paying this premium because they're mining and the potential of future revenue.

How much is too much like when do you stop paying for for that future cash flow, basically yeah, so in canada, so hud? It's a canadian company. We were the first ones in canada to actually list a lot of these crypto miners. There was like this huge boom, like back in, i would say, 2017 2018 and everyone was like. Oh, my god, we got to own these miners because we want the exposure to bitcoin and ethereum, and you know kind of as to your point like they mine these coins.

They have them on their balance sheet. There's like great upside. If things happen, and then people realize wait a second, these are just like a bunch of equipment like with expensive. You know, in some cases expensive electricity.

In some cases, not more cases um, you know geothermal um and energy efficient, but it kind of like lost its luster because it it was easy to understand what these companies do right. It's like they make money during certain parts of the cycle, no different than than oil and gas drillers. You know when the price is high, they make money when the price is low, they don't, and so these things are very sick, not cyclical. These things are very volatile, um, and so for me i don't i don't.

I don't hold them, because i don't find them interesting in any sort of way. There's not really any moat, except for first mover advantage and uh capital. So i don't i don't. I don't hold them, i'm more interested in digging down into the altcoin space, and this is why, on monday, our firm grid capital launched a crypto newsletter.

I wanted to wait for the market to pull back, so you know it's down 40 from its all-time highs, but it's still up 3x over the last 18 months, but it's down 40 and i've seen this happen before in 2017. When the market pulled back - and it was fantastic opportunity to get in, although it sucked for about 18 months uh but for for an investor, this is when you want to go hunting. So i'm going hunting for altcoins and i am going to put my portfolio manager hat on and really analyze these uh these projects and and make some bets on. You know what i think could be 10x opportunities and you know like i said before, or they could go to zero.

Don't want to want to sugarcoat it. How deep do you go down the coin market cap list? Are you top 20 alts? Are you going? You know 20 to 200. Are you going 200 plus like? Where are you hunting? What's your criteria and any particular ones you want to mention, so i'm going to do the top 20 for sure i'm going to get i'm going to really get in there and really understand them. But then the next thing that i'm going to do is i'm going to lean heavily on my crypto contacts.

So, like i mentioned back in 2017, i got into the crypto space our firm held uh, the biggest institutional crypto road show um in canada. We were the first to really put this theme on the map um, and so i i created a lot of contacts in the space um. We also hosted a huge conference, the first security coin conference uh in the world actually down in bahamas, and so then i got into more like international connections, so i'm gon na be leaning on my community to really help me decipher. What's good, what's bad, what's junk! So i've got some learning to do because you know i don't have.

I don't have all the answers and i've really just been in bitcoin and ethereum and and one other altcoin for the last little. While can you tell us which one that is yeah? I actually wrote about it on monday uh, it's called the sxcoin um and you can check it out on coin market caps about 400 million. They are market cap, they are the biggest now uh betting blockchain platform in the world. Um and their volumes have been going up up up up, and this was an accidental investment.

So back in 2017, i made a lot of investments in private companies. Pretty much a lot of them. Uh went to zero, some of them went public were minors like we were talking about before, and then this one in particular survived um and they pivoted a couple times, but then they created this platform and it's really taken off. So i would encourage everybody to read the article we put out on monday.

It's on our sub stack. We've got the number one uh free finance newsletter on sub stack for finance, so check it out. Yeah check that out. I've got that linked uh down below right.

Here any final thoughts: uh, it's uh, we're out of time any final thoughts, any remaining catalysts, anything else. You want to mention and again uh check out uh your newsletter, which you can sign up for for free and check out and preview right here in the description. Yeah no thanks for having me on uh follow me on twitter at grector as well. I like to get funny uh funny on there because finance uh, nobody said it had to be serious right, let's learn and have fun and laugh yeah.

You had a great one about the uh. What was it the most expense take me to an expensive dinner and it was in the parking lot of a gas station. Well, i actually have a i have a date tonight, so maybe that's where i'm going to be taken too, so there you go well. Thank you so much stand by for one.

Second, i'm gon na end the live stream. Folks, if you found this helpful, consider sharing the video thanks so much for being here and we'll see in the next one. Bye.